Posted 8:37 PM by Robert

Mother (Gray Lady) Superior Jumps The Gun, Again

New York Times editorial "Crumbs for Africa" published June 8, 2005:

President Bush kept a remarkably straight face yesterday when he strode to the microphones with Britain's prime minister, Tony Blair, and told the world that the United States would now get around to spending $674 million in emergency aid that Congress had already approved for needy countries. That's it. Not a penny more .... It's no surprise that Mr. Bush's offer was greeted with scorn in television broadcasts and newspaper headlines around the world. "Bush Opposes U.K. Africa Debt Plan," blared the headline on the AllAfrica news service, based in Johannesburg...

New York Times front webpage article June 9, 2005:

The United States and Britain have reached an agreement on how the billions of dollars that the world's poorest nations owe to international lenders can be erased, removing the last impediment to an accord long sought by the richest nations, a senior official involved in the negotiations said Thursday. .... The plan would free 18 countries, most of which are in Africa, from any obligation to repay the estimated $16.7 billion they owe the international lenders, said the official, who requested anonymity because a formal announcement of the agreement had not been made. The debts will be written off by the lenders in an effort to allow the debtor countries to start fresh, get their books in order and eventually be able to borrow again for economic development, health, education and social programs, rather than simply to repay existing loans. Mr. Bush had [previously] signaled his willingness to go along with writing off the debts in principle...

So Mr. Bush had signaled his willingness to go along with writing off the estimated $16.7 billion in principle? Yet it was "no surprise" to the Times that "Bush Opposes U.K. Africa Debt Plan" blared from the headlines of the AllAfrica news service? And knowing about that Presidential indication in principle just wasn't enough for the Times' editorialists to wait even one day before asserting that the most the US and the Administration would contribute to Mr. Blair's Africa requests was $674 million in emergency aid that Congress had already approved for needy countries. That's it. Not a penny more.

The Times just can't wait a day to bash Bush, even where their bashing contradicts their actual knowledge of his agreements in principle.

Posted 9:12 AM by Robert

Stories From The Edge Of The Precipice

"Draw your chair up close to the edge of the precipice and I will tell you a story."
-F. Scott Fitzgerald, The Crack-Up (1945)

The euro fell near its nine-month low against the dollar today. For the moment that should help calm down European politicians who see the "strong" euro as a major economic burden in their export-led economies. The fact is that the recent rise of the euro against the dollar has been a political disaster across much of Europe, especially Germany and Italy. But the cause of that rise suggests that much worse may lie ahead for Europe if the euro survives and prospers relative to the dollar:

Asian central bank buying of euro-denominated assets ... has been a significant factor in the currency's 56 per cent rally against the dollar in little more than three years. With banks worried about the long-term health of the US dollar amid rocketing deficits, central banks cut the proportion of their forex reserves held in dollars from 67 per cent at the start of the millennium to 64 per cent at the end of 2003, according to the International Monetary Fund, with Russia and the Organisation of the Petroleum Exporting Countries leading the way.

Conversely, the proportion held in euros has risen from 13.5 per cent at the end of 1999 to 19.7 per cent in December 2003, and is almost certainly above 20 per cent now.

"The relative outperformance of the euro has been largely driven by increased interest in diversifying reserves," says Simon Derrick, head of currency research at Bank of New York.

In the short run, the euro's fall against the dollar will harm US exporters and those, such as Warren Buffett, who have bet large against the dollar.

Although there has recently been some talk of the possible end of the euro, Bob Mundell, the Nobel Prize-winning economist and originator of the concept of an optimal currency area believes "There is less chance that Emu will be disbanded than there is of a collapse of the dollar."

A good deal of media ink and ingrams have been spent describing the consequences (often in silly, lurid and unlikely detail) of a "collapse of the dollar" to the United States. Paul Krugman, for example, is fond of such imagery.

But what would a real, protracted swoon of the dollar against the euro do to Europe? As the above quoted article indicates, the possibility of such a swoon is from a practical standpoint in the hands of Asian central bankers. The dollar will swoon against the euro if and only if those bankers choose to "diversify" out of the dollar into the euro - in the limit refusing to accept the dollar as a "reserve currency" at all and refusing to buy dollar denominated assets. In the case of such a "diversification away from the dollar" there are essentially two practical possibilities: either (1) Europe gives a lot of euros to Asia in exchange for Asian goods or (2) Europe does not do that.

This is where one gets a good picture of the differences between the European and American economies. Possibility (2) is what has been happening during the limited anti-dollar diversification that Asian central bankers have engaged in so far. For example, the eurozone accounts for only 12 per cent of Japanese exports. The current near-crisis in much of Europe suggests that even this limited diversification has pushed up the euro substantially thereby suppressing the export sector of many European economies. Those export sectors are large and European economies are much more rigid than the US economy. Suppression of the European export sector is causing long-term structural unemployment in Europe, which is largely the cause of the gathering political crisis. If the euro has a much bigger "victory" of this variety, Europe would probably find itself in political and economic chaos with unemployment rates at or near levels seen in the depression*.

What about possibility (1)? This is what the US is doing: running a very big trade deficit while flooding the earth with dollars that the Asian central bankers hold as "reserves." For example, the South Korean central bank holds about $100 Billion. What happens if Europe does the same thing?

Well, in that case the euro will not soar (or, in the New York Times' bizarre universe, claim "victory"). But the EU countries trade among themselves. It is likely that a big EU trade deficit with Asia would correspondingly suppress the EU export sector to some extent. But, even more, such a big trade deficit would suppress the domestic sector of the EU as a whole - by displacing sales of EU-created goods in the EU itself. That is what has happened in the US as a result of its big Asian trade deficits. But, again, the US compensates with its internal economic flexibility - and US unemployment has not soared. The same flexible response to major trade deficits would almost certainly not happen in Europe. European workers displaced from their jobs as a result of Asian imports would mostly just stay unemployed, essentially forever. Once again, Europe would probably find itself in political and economic chaos with unemployment rates at or near levels seen in the depression.

Of course, a strong swoon of the dollar against the euro would also have consequences in the US. Interest rates would rise for a time. The federal budget would have to be trimmed (Democrats and some Republicans would say taxes must be raised). A recession, perhaps. Then it would all be over and the US would probably re-equilibrate by shifting manufacturing back to this country, etc.

But not Europe - at least that is my opinion and prediction. The rigid European system would probably enter serious, long term crisis.

But then, they're heading there anyway.
________________________________
* The European Central Bank could, of course, just print and sell euros as the Asian central banks are buying euros. But, aside from undermining world confidence in the ECB, the Asian banks would then be buying those euros from the ECB with dollars, so this pretty much nets out as the European Central Bank buying the dollars that the Asians are turning down in their posited "diversification" effort. The prospect of the European Central Bank purchasing for "reserve" perhaps hundreds of billions of American dollars that the Asian central banks have refused - thereby financing the American life style and "twin deficits" in order to save the sacred European "system" from the turmoil of mass structural unemployment - is just too exquisite to accept as a practical, realistic possibility. I suppose stranger things have happened. I can't think of any at the moment, but I'm sure they're out there.

... Aren't they?

Posted 11:04 PM by Robert

Privileges For Hire, Arguments By The Yard, Agendas As Far As The Eye Can See

Ted Olson is a fine attorney capable of spinning very good arguments. He is now representing TIME magazine and its reporter, Matt Cooper, who is facing jail time for contempt for his refusal to divulge his sources in the Plame case. To hear Mr. Olson tell it, First Amendment law in this area is obscure and the Court should fix that:

The principal reason supporting intervention by the Court at this time is that no one, whether journalist, lawyer, source or judge, can say with confidence what the law is. And much of that confusion derives from the Court itself: 33 years ago in the case of Branzburg v. Hayes, the Court issued a 5-4 decision casting doubt on whether the First Amendment provides protection for reporters' confidential sources. The narrow majority included an enigmatic concurring opinion by Justice Lewis Powell, resulting in confusion and conflicting lower court opinions on the subject ever since.

Gee, that sounds not so good. Everyone is so confused.

But isn't it odd, then, that the Court didn't seem so confused when it construed Branzburg in a more recent case, Cohen V. Cowles Media Co., 501 U.S. 663 (1991), this way:

Neither does the First Amendment relieve a newspaper reporter of the obligation shared by all citizens to respond to a grand jury subpoena and answer questions relevant to a criminal investigation, even though the reporter might be required to reveal a confidential source. Branzburg v. Hayes, 408 U.S. 665 (1972).

Does the Court need to say it any more clearly than that? Just a few months previously the Court had already said unanimously in University Of Pennsylvania V. EEOC, 493 U.S. 182 (1990)

The case we decide today in many respects is similar to Branzburg v. Hayes, 408 U.S. 665 (1972). In Branzburg, the Court rejected the notion that under the First Amendment a reporter could not be required to appear or to testify as to information obtained in confidence without a special showing that the reporter's testimony was necessary.

And a few years before that the Court had said in Dun & Bradstreet, Inc. V. Greenmoss Builders, 472 U.S. 749 (1985):

We explained in Branzburg v. Hayes, 408 U.S. 665 (1972) that "the informative function asserted by representatives of the organized press" to justify greater privileges under the First Amendment was also "performed by lecturers, political pollsters, novelists, academic researchers, and dramatists." Id., at 705. From its inception, without discussing the issue, we have applied the rule of New York Times to nonmedia defendants. See New York Times, 376 U.S., at 254 , n., 286; Henry v. Collins, 380 U.S. 356 (1965); Garrison v. Louisiana, 379 U.S. 64 (1964). And this Court has made plain that the organized press has a monopoly neither on the First Amendment nor on the ability to enlighten. First National Bank of Boston v. Bellotti, 435 U.S. 765, 782 (1978) See also Pell v. Procunier, 417 U.S. 817 (1974) (press has no independent First Amendment right of access to prisons). Cf. Buckley v. Valeo, 424 U.S. 1, 48 -49 (1976) (the idea that government can restrict the speech of some elements of society to enhance the relative voice of others is "wholly foreign" to the First Amendment).

But, see, Mr. Olson tells us that existing First Amendment law is just unclear on the question of whether a reporter for the media is different from the rest of us, and whether such a reporter has special privileges under the Fist Amendment to keep sources secret.

He's actually able to say such things without breaking into laughter. That's one of the reasons why they pay him the big bucks.

On the other hand, there is the question of why the Journal ran this item, which is essentially a piece of a brief Mr. Olson has been paid to file for his media clients.

Posted 10:29 AM by Robert

On Dope III

Suppose I spend my weekends manufacturing meth amphetamine from common cold remedies in my basement lab and providing it to school kids from a sidewalk stand in front of my house.

Do the editorial writers at the Wall Street Journal and all the other critics of Gonzales v. Raich really want to spend their time explaining why the federal government cannot stop me from doing that because the Commerce Clause is not that broad? Do they want to explain to the public why a 60-year-old Supreme Court precedent had to be over ruled to get to that result?

Or would those critics prefer explaining in detail why the "interstate commerce component" of my little operation is just so much more substantial than the interstate commerce component of the Raich operation involving people who grow dope in their back yard and provide it to people having a doctor's prescription? Is the fact that my cold remedy base came through channels of interstate commerce supposed to make the difference - but the commercial fertilizer used by the dope growers is not enough "interstate contact?" Does the fact that my customers are children and not adult cancer patients make my operation "interstate commerce?" Or perhaps it's the doctor's prescription that does the trick? And, then again, perhaps the difference would have something to do with the California law that explicitly approves of medical marijuana (but not meth amphedimines) - so that the federal prohibition on such marijuana use would be valid in, say, Utah, but not good in California? A kind of 21st Century "nullification doctrine?" Is that how the Constitution works in the minds of these critics?

I'm just dying to know.

UPDATE: It's interesting to observe that Justice Thomas' dissent makes no attempt to distinguish Wickard whatsoever. In fact, the only mention of Wickard in that dissent is this: This Court has regularly entertained as-applied challenges under constitutional provisions, see ... Wickard v. Filburn, 317 U. S. 111, 113-114 (1942). His dissent would over rule Wickard sub silentio. At least he is honest and coherent - if subtle.

On the other hand, Justice O'Connor's attempt to distinguish Wickard is an embarrassment. Marijuana is California's largest cash crop - and plenty of it is grown on land somebody calls "home." Her assertions to the contrary are just bizarre and lacking in common sense, and she slides embarrassingly between references to "home grown marijuana" and "medical marijuana" - almost as if she thinks they're more or less the same thing, as in this frenzied passage:

There is simply no evidence that homegrown medicinal marijuana users constitute, in the aggregate, a sizable enough class to have a discernable, let alone substantial, impact on the national illicit drug market--or otherwise to threaten the CSA regime. Explicit evidence is helpful when substantial effect is not "visible to the naked eye." See Lopez, 514 U. S., at 563. And here, in part because common sense suggests that medical marijuana users may be limited in number and that California's Compassionate Use Act and similar state legislation may well isolate activities relating to medicinal marijuana from the illicit market, the effect of those activities on interstate drug traffic is not self-evidently substantial.

Among many things missing from her analysis is any explanation of why "medical marijuana" or even "home grown marijuana" (whatever that is) are entitled to the kind of special consideration that, for example, is denied to the class of all dope that one specific person, personally grows in his back yard. She admits that no person could argue that the federal government is bereft of authority over his stash just because he and it, alone, do not substantially affect interstate commerce. So why do the classes of "medical marijuana" or even "home grown marijuana" somehow have special dignity entitled to be considered on their own? She never says.

It is probably no accident that the Wall Street Journal editorial noted above praises Justice Thomas' dissenting opinion, but does not even mention that of Justice O'Connor. The less said about that mess, the better.

Those of us who desire sharp restrictions on Wickard should be sleeping better that Justice O'Connor did not prevail. If she had succeeded on the pale arguments she present in her dissent, those who seek to expand liberal control of the federal courts would have been handed a powerful weapon: Don't let conservatives put people on the federal courts who will write opinions like Justice O'Connor's indefensible effort in Raich. That argument alone could make the difference in control of the Senate.

Posted 10:11 AM by Robert

On Dope II

For some reason, much of the blogosphere (here and here) and the mainstream media continue to obscure the legal significance of the Supreme Court ruling, as with this Associated Press story, which repeats as (incorrect) fact bizarre opinions of the ACLU's Mr. Hopper quoted in the prior related post:

Local and state officers handle nearly all marijuana prosecutions and must still follow any state laws that protect patients.

The ruling does not strike down California's law, or similar ones in Alaska, Colorado, Hawaii, Maine, Montana, Nevada, Oregon, Vermont and Washington state. However, it may hurt efforts to pass laws in other states because the federal government's prosecution authority trumps states' wishes.

It is certainly correct that the federal government will not be seen arresting many cancer patients for smoking dope; the federal government also does not arrest many cancer patients taking the quack cancer pseudo-remedy, laetrile.

But that is far from saying that the Court's ruling is unlikely to change things in a big way for current users of "medical marijuana." Yes, it is literally correct that the Court's ruling does not strike down California's Compassionate Use Act, the medical-marijuana initiative adopted by the state's voters nine years ago (or other similar laws). Literally correct but highly misleading. The Court ordered the Ninth Circuit to consider other challenges to the application of federal drug law. But there is no other serious challenge to the applicability and validity of the federal law and therefore the invalidity of the California initiative. The losing plaintiffs/respondents in the Court’s case also raised a substantive due process claim and a medical necessity defense, neither of which the Ninth Circuit even reached. But that's not surprising because those are not serious issues (although a contrary ruling from another nutty Ninth Circuit panel could gum things up for another short while). The substantive due process claim is a formless, baseless "Hail Mary," and the "medical necessity" defense would apply to any drug over which the state and the federal government differ - and the Court is not about to gut the drug regulatory system over this issue. In any event, such a defense would not shield the doctors, clinics and other suppliers of medical marijuana (and their co-conspirators) even if this "medical defense" argument were accepted on the narrow facts of this case. Even the now-overturned Ninth Circuit decision implicitly acknowledges the insubstantiality of these other claims because federal courts are loathe to over rule federal law on Constitutional grounds if any other grounds exist - but the Ninth Circuit based its decision on the Constitutional argument. What's left is a mere mopping up operation.

And it is also true that the Court did not strike the laws of states other than California. It did not strike those laws down because those laws were not challenged in the case before the Court. So what? The ruling makes Supremely clear beyond reasonable doubt that all existing medical marijuana laws are voidable as contrary to federal law and the Supremacy Clause of the US Constitution. In other words, anyone with legal standing - including the US Department of Justice and lots of other people - may now go to federal court and have those state laws actually declared invalid. Mrs. Raich, one of the plaintiffs/respondents said she would continue to use the marijuana that was prescribed by her doctor and is grown for her by friends. That's all very well and good, but her doctor should contemplate where he or she will be upon losing the right to prescribe any drugs at all pursuant to federal government enforcement actions, and, as for her friends, well, federal minimum security prisons aren't all that bad as those things go.

Some things are going to change a good deal. For example, many clinics now exist in California to supply those who present the proper prescription and identification under California's Compassionate Use Act. The Court's decision overturned a 2003 ruling by federal Ninth Circuit Court of Appeals that shielded those clinics and that Act from the reach of federal drug enforcement. That injunction and its shield are now gone. It is very likely that these clinics will be shut down. Indeed, the federal government had already moved against such clinics. Those enforcement efforts will now probably be revived and intensified. Moreover, state officials facilitating the operations of such clinics now run a clear risk of being subject to federal conspiracy and aiding and abetting charges. Is that consistent with the AP/UCLA claim that "state officers ... must still follow any state laws that protect patients?" Not unless one construes "protect patients" to include actions that keep them from exposure to the Reefer Madness of medical marijuana.

Those clinics do serve some cancer patients. But, contrary to both mainstream media and blogosphere suggestions, the clinics already serve many people who are not at all sick and seriously undermine federal drug enforcement efforts (whether such efforts should be made by the federal government or any government is another question). Many such prescriptions are bogus. For example, the Man Without Qualities knows people who avail themselves of such clinics in Los Angeles with prescriptions allegedly for treatment of serious anorexia from which they do not suffer.

As for the blogosphere, claims such as those that the five-member majority of the Court simply does not take federalism seriously and the like are just hyperbolic and, worse, politically naive - almost childish. On a practical level, one should seriously ponder any argument that leads one to the conclusion that Justice Kennedy simply does not take federalism seriously. This is just irresponsible and naive. He is not my favorite Justice, but he does take federalism seriously - as his votes in both United States v. Lopez, 514 U. S. 549, and United States v. Morrison, 529 U. S. 598 quite clearly demonstrate. It's a fact. Those who think otherwise should just used to it, and not rely on such a rhetorical crutch to spare themselves the exertion of understanding why Justice Kennedy took a different direction in this case.

In addition, no intellectually honest person could believe that the Court could have sided with the Ninth Circuit without over ruling the notorious Wickard v. Filburn, 317 U. S. 111, 128-129 (1942). If federal authority under the Commerce Clause can reach one's right to grow and distribute wheat, it reaches one's right to grow and distribute dope. Of course, the Ninth Circuit didn't admit that - but that's the kind of thing that makes the Ninth Circuit an intellectually dishonest national laughing stock. The Supreme Court does not want to follow that particular lead.

This is not the case to over rule Wickard, regardless of how one feels about Wickard. My own belief is that Wickard is too broad. But there can hardly be a worse case in which to challenge a key decision expanding Congressional power and the legitimacy of the New Deal and the welfare state that this one. As noted above, the California law already in fact actually does broadly and directly undermine federal regulation efforts by allowing many people with bogus prescriptions to obtain medical marijuana. Indeed, my own personal, anecdotal evidence suggests that many of the people voting for this initiative actually intended exactly that result. Aside from any theoretical problems with the argument that there is no federal authority here (and there are plenty - as Justice Scalia correctly points out in his concurrence), a decision upholding the state law would have placed a wedge between two major conservative blocs: libertarians and social conservatives. There are lots of issues that could serve as bases for narrowing Wickard on which those two blocs are in complete accord. Let's make a Supreme Court case out of one of those.

For children and legal precedents alike, it is better to come into the world without one's parents fighting bitterly over the legitimacy of one's birth.

Posted 2:32 PM by Robert

A Bad Case Of Projection

Senator Hillary Clinton says:

"I can tell you this: It's very hard to stop people who have no shame about what they're doing. It is very hard to tell people that they are making decisions that will undermine our checks and balances and constitutional system of government who don't care. It is very hard to stop people who have never been acquainted with the truth."

She should know. It worked for her and her husband!

But should she be laying out her Presidential campaign strategy like this so far in advance?

Posted 9:26 AM by Robert

On Dope

The Supreme Court just held that Federal regulation can and does criminalize "medical marijuana" notwithstanding state laws that purport to protect users from the federal ban on the drug. The decision itself is a predictable reversal of yet another Ninth Circuit distraction. It was also predictable that Justice Stevens would take advantage of this case to endorse the notorious and questionably written Wickard v. Filburn, 317 U. S. 111, 128-129 (1942).

But what was not predictable, and what is by far the most interesting aspect of this Supreme Court decision, is the line up of the Justices. Justices O'Connor filed a dissenting opinion, in which Rehnquist and Thomas joined as to all but it's final two paragraphs (paragraphs constituting a vague, opaque, almost incoherent and arguably sweeping endorsement of states' rights), Justice Thomas filed his own dissenting opinion and Justice Scalia filed a "concurrence in the judgment" emphasizing his view that "activities that substantially affect interstate commerce are not themselves part of interstate commerce, and thus the power to regulate them cannot come from the Commerce Clause alone. Rather ... Congress's regulatory authority over intrastate activities that are not themselves part of interstate commerce (including activities that have a substantial effect on interstate commerce) derives from the Necessary and Proper Clause."

The Court's recent decisions restricting the power of the Commerce Clause have attracted a good deal of controversy. Justice O'Connor is often seen as a "swing" vote on the Court. But today's decision indicates that she is willing to go vastly further in restricting this central power of Congress than what has been seen to date, probably much further than any other justice is willing to go.

Also of note were some reations to the decision, including this one:

Alan Hopper, an American Civil Liberties Union attorney, said that local and state officers handle 99 percent of marijuana prosecutions and must still follow any state laws that protect patients. "This is probably not going to change a lot for individual medical marijuana patients," he said.

What this comment suggests is that either Mr. Hopper needs to read the Supremacy Clause of the Constitution (it is often quipped that the ACLU never reads any part of that document other than very selected portions of the Bill of Rights) and/or that he has a highly personal interest in marijuana issues. In any event, Mr. Hopper is completely wrong when he suggests that local and state officers must still follow state laws that protect patients where those state laws contradict the federal ban. This decision is going to change plenty for individual medical marijuana patients - starting with the shut down of various facilities dispensing medical marijuana that have recently opened in California. What has Mr. Hopper been smoking?

Does Mr. Hopper also think that local and state officers must still follow state laws that protect racially segregated public schools? Or that Supreme Court rulings to the contrary probably are not going to change a lot for individual public school students?

Posted 7:27 PM by Robert

Maybe We Won't Have To Have This Particular Dust Up After All

From the Washington Post:

In recent months, a number of researchers have begun to assemble intriguing evidence that it is possible to generate embryonic stem cells without having to create or destroy new human embryos. The research is still young and largely unpublished ... Yet the gathering consensus among biologists is that embryonic stem cells are made, not born -- and that embryos are not an essential ingredient. That means that today's heated debates over embryo rights could fade in the aftermath of technical advances allowing scientists to convert ordinary cells into embryonic stem cells.

I'd really like to see it fade.