The Failure of Checks and Balances

Our constitution uses three branches and checks and balances between them to prevent tyranny. While all members of all branches take an oath to uphold the constitution, they also have specific powers that they alone exercise and specific powers to restrain the other branches. We have elites checking and balancing other elites. We'll define elites in more detail later.

The constitution also includes lessons learned over centuries from other governments. The most important is civilian (President) control of the military. This was not by chance, and it was not inevitable. General Washington had many opportunities to operate independently of congress during the Revolutionary War and choose not to do so, a fact widely observed at the time. All educated people knew what followed when Julius Caesar crossed the Rubicon.

The civilians and military staff are mutually dependent on each other, the former providing funds and legitimacy, and the latter providing expertise and capability. It is arguable that civilian control of the military is one elite checking another. It's also fair to say that military leaders have a fundamentally different outlook than civilians. There is not as much dissimilarity of outlook among the Executive, Legislative, and Judicial branches, although they do differ. You might say that the key difference between the military and civilians is functional, in the same way that engineers, artists, and therapists have different and specific expertises. Yet the military mind comes more fundamentally from the habit of breaking taboos (or at least they were taboos before Rambo and the Terminator) that every child learns: don't kill and don't break things.

The political elite have a fundamental ethos in the same way. We can describe some of the elements of this ethos by contrast with other professions, other personal tendencies. First, the political elite believe they have a mandate to govern. They were elected by a process that most citizens believe to be fair. They are in some sense Right, and the people agree that they are Right. Second, a corollary of the first, they have a mandate to change what is wrong: to throw out the incompetent, the ineffective, the wrong-headed, the uncompassionate. Third, they are important, because everyone tells them so. Constituents, lobbyists, and the like-minded in the press and in their party are all eager for their support. Fourth, they have the constitution on their side. The power of all branches has expanded from the language of the constitution, but incrementally, so that their claim to power can be shown to be descended from the constitution.

The executive power to wage war (usually undeclared by Congress), congressional power beyond the enumerated powers (they are all "necessary and proper" of course), and the judicial activism of the last several decades are examples of this expanded power. It was theoretically possible for the branches to check each other, but they did not.

The military has fought over 200[i] wars in the life of our republic, but only eleven have been declared by Congress. The Congress has the power of the purse; why did they not stop the President? Congress has expanded its power well beyond the enumerated powers. To take one example, not in dispute by most in government nor by citizens either, the commerce clause is the authority for the federal government to enact environmental regulations. Why have the other branches not restrained Congress? The Federal courts enacted specific remedies, including government expenditure of specific amounts of money, to remedy discrimination in Kansas City schools. Why didn't the executive try to reclaim its executive authority and Congress it's power to tax and spend?

Part of the problem is that when one branch is weak, albeit temporarily, the other branches take advantage. The Nixon period is a good example. Yet, there is in the American system no way to counteract the inertia of those times, unlike the Parliamentary system. Margaret Thatcher changed more in the U.K than Reagan did in the U.S. precisely because the U.K. system allows whole sections of law to be thrown out if one majority so decides. Many majorities, not just one (an over-simplification), are required in the U.S. Congress belonged to the other party during Reagan's administration.

Another part of the problem is that while the three branches have different interests, their interests are not different enough. They are all political elites. Here is an excellent description of the political elite.

One of the most important sociological laws is the "Iron Law of Oligarchy": every field of human endeavor, every kind of organization, will always be led by a relatively small elite. This condition will hold sway everywhere, whether it be a business firm, a trade union, a government, a charitable organization, or a chess club. In every area, the persons most interested and able, those most adaptable to or suited for the activity, will constitute the leading elite. Time and again, utopian attempts to form institutions or societies exempt from the Iron Law have fallen prey to that law: whether it be utopian communities, the kibbutz in Israel, "participatory democracy" during the New Left era of the late 1960s, or the vast "laboratory experiment" (as it used to be called) that constituted the Soviet Union. What we should try to achieve is not the absurd and anti-natural goal of eradicating such elites, but in Pareto's term, for the elites to "circulate." Do these elites circulate or do they become entrenched?[ii]

Of course, our elites have circulated, although the supporters of term limits may say, "not enough." Even with term limits in California and the circulation resulting from it, the list of those in politics doesn't change much. The congressional elite circulate, by moving to lobbying firms, to regulatory agencies, to judgeships, or to ambassadorships -- only death, not merely disability, takes them out of the political Jacuzzi.

Why will graft always be with us? The Republicans could credibly claim in 1993 that they were less corrupt than Democrats. Of course they were! They had been out of power for decades. The Republicans are now having corruption problems of their own now. Change the decade, and the pendulum swings back. The parties are only temporarily less corrupt than the other. Government corrupts. When a political elite is Right, and another political elite is thought to be Wrong, any tactic is justified. Our constitution prevents a congressman from being criminally liable for anything said on the floor of Congress. Why? Because our founders observed legislatures using the criminal code for political purposes. Yet, despite the constitutional protection, the criminal code is used in creative ways (e.g. independent counsel law) to "get" the other side. Thus each side needs more power, more money, more staff, and more votes to both defend against and defeat the other side. The war chest on each side only grows, never grows smaller.

Here is the question we should consider. Do we need a different kind of check on the political elite, just as the political elite is different kind of check on the military? Who is qualified, and who should be trusted to be this check?

Plato had an answer. Aristotle had the same answer. Philosophers have the wisdom that political elites lack. As students, we study and discuss this in all seriousness, even as we say that we "take into account" ( we have to consider all sides) that Plato and Aristotle were philosophers and perhaps had self-serving interest. Of course they were self-serving. Yet, it begs the question we raised. "Who else is qualified and trusted to check our elites?"

To contradict Pareto in the quote above, the elite can never check other elites, even if they circulate. Only non-elites can check the elite.

We have such a non-elite. They are called voters. They are ineffective. They weigh in every two years, and tune out the rest of the time. Even if they read the newspaper, an increasing rarity in the U.S., they necessarily spend a small fraction of their time on political affairs if they are interested at all. They have lives to lead, jobs to do, kids to raise. The Public Choice school holds that voters are being rational by not voting.

Part of the problem is that voters choose only every two years. This is not frequent enough, or in sufficient detail to be more than a gross control. Voters can "throw the bums out" but they have to know that their candidate is a bum. Our legislators are excellent at voting both ways, opining both ways on an issue. They have different political messages for different segments of the electorate. Any check that doesn't address legislative detail will fail, as all methods have failed until now.

When I was in college I simultaneously took Control Theory in the engineering school and Samuelson-in-a-semester in Economics. For an engineering project I modeled the dynamic cobweb found in Samuelson. The dynamic cobweb is a diagram describing the phenomenon found in agriculture and other economic endeavors where 1) producers make too much of a good, which 2) depresses prices, which 3) incentivizes them to make less of the good, which 4) cause high prices, which then incentivizes them to (back to 1) make more of the good, which 2) reduces prices, etc. This is an unstable system, as farmers have known for millennia. This is not that different from voters electing someone, watching them get corrupt, and electing their opposite two years later, who in turns becomes corrupt. In my project, I found that reducing the period between stages makes the system more stable. This is theoretical support for futures markets in commodities. Without many more greenhouses than we have now, there is little that can be done to reduce the cycle time in agriculture. There are good reasons to keep the term of office at two years or more.

Is there some way to harness the wisdom of the electorate, such that we don't require everyone to be a legislator? We don't want incompetent legislators, which most voters would be. We don't want the evils of pure democracy, which voters with legislative power would create. Is there a way to use the electorate as a real-time check on the political elite? I'll answer this in a later post.


[i] Collier, Ellen C, Instances of Use of United States Forces Abroad, 1798 - 1993 http://www.history.navy.mil/wars/foabroad.htm
[ii] Rothbard, Murray N, Bureaucracy and the Civil Service in the United States, Journal of Libertarian Studies, 11:2 (Summer 1995), pp. 3-75, http://www.mises.org/

Poverty-level income is irrelevant

Poverty has been defined as income below a certain amount for several decades. Several commentators have pointed out that despite rising GDP and per capita income, the number of those in poverty has changed little. This essay will concern how our policies have perpetuated poverty in fact, leaving aside whether we have perpetuated poverty by the current widely-used, income-based definition. The argument doesn't not follow traditional Democrat/Republican paths, but is more holistic. I will argue that addressing poverty as an income problem is self-defeating, that addressing it systemically from the expense side is healthier in several senses, and that our political system makes this relative health improbable to achieve in the near term.

Poverty comes in several guises. There is an economic poverty, which I define as low income-minus-expenses, and on which I will concentrate. There is a status poverty, that Indians understand well (caste distinctions), and that fascinates Tom Wolfe in our own culture. There is an emotional, perhaps even moral, poverty, which would define the underclass as Charles Murray's writings suggest. I mention these different forms to acknowledge that poverty is multi-dimensional, endemic, and will probably "always be with us" due to genetic and social variation. We have little direct control over non-economic poverty, because we have little control over the driving forces that cause it in either other people or, most importantly, ourselves.

Economic poverty, defined as low income-minus-expense, is caused by our actions via government.

The problem starts with our solution: if poverty is cause by lack of income, let's give the poor money. For people who are less poor, let's give them less money. While money is good at least as a short-term medicine for poor people, doing so traps them in poverty. Why is that?

People trying to rise out of poverty face high marginal tax rates. Current, these rates are on the order of 15-30% when all taxes are considered. The exact rate varies depending on whether the person is married or has children. That is, for every dollar they earn, they pay high portions of that extra dollar in taxes. There is an additional higher marginal expense that has the effect of higher marginal taxes, in the form of reduced subsidies for expenses. Higher income causes reduced rent, food, and medical subsidies, for an additional effective tax rate of another 40-50%. Only when income reaches about $25,000, does the total marginal effective tax rate come down to normal.

There is thus an incentive not to increase one's income. Two actions cause this result: 1) giving a subsidy, together with 2) taking it away as income increases. Now let's look at the rent , food, and medical subsidies. Why do we have these?

Rent subsidies are part of a larger system. Every renter has a landloard, who bought the building, pays the mortgage, and pays for repairs, marketing, etc. Every landlord has a real estate market s/he bought the building in, and in which s/he will eventually sell the building back into. As homeowners we, too, are part of that real estate market. Rent subsidies have the immediate effect of helping the poor afford an apartment, and also have the effect of keeping the landlord profitable The landlord is thus willing to hang to his building for a higher price, because commercial real estate prices tend to be a multiple of the income derived from it. In turn, this tends to keep all real estate prices higher, since "comps," that is the prices of comparable properties, strongly affects prices. This begs the question of who exactly we are helping by subsidizing housing.

Food subsidies are part of a larger system. One of the relics of depression efforts to keep all prices high is food price supports. In addition to price supports, there are billions of dollars of agricultural subsidies. Thus food stamps are a grand bargain between agricultural states and the advocates for the poor. Food is more expensive than it needs to be, thus the poor need subsidies to afford it. Because the poor can now afford food, there is no moral or financial need to reduce food prices.

Medical subsidies are part of a larger system. Although this is starting to change in a small way (e.g. health savings accounts) we have a veterinarian system of medicine. That is, the patient isn't the payer. Since it is someone else's dollars paying for care, we care less about the price. Paradoxically, while the cost of health care is increasing, the income of physicians is stagnating or decreasing, because the intermediaries between doctors and us have significant control of the flow of care and dollars. As long as our care is subsidized, prices will remain high, thus providing a moral justification for medical subsidies for the poor (Medicaid). We pay taxes to keep the poor healthier, so we can justify our own subsidies for health insurance.

The solution is to reduce everyone's cost, both for us and the poor. The kinds of solutions that do this have been discussed ad nauseum, for over a century. There are focused constituencies who have prevailed in the political marketplace to maintain high prices at everyone's expense. This is called corporate welfare. This is called plain old welfare. The public choice people have shown how broad interests with low concern cannot defeat narrow interests with critical concern. The problem is endemic.

No society has solved the problem of poverty in free, developed economies anywhere on the planet. No one has solved the problem of complicity of the non-poor in poverty in free, developed economies anywhere on the planet. It isn't clear whether these two problem are 1)insoluble (perhaps Tom Wolfe's view, or perhaps he merely observes), or 2) correctible through the power of government (Liberal view for 100 years), or 3) correctible through greater freedom from government (Hayek, Von Mises view), or 4) correctible through better legal systems or other social engineering (i.e. not invented yet).

Poverty-level income is irrelevant

Poverty has been defined as income below a certain amount for several decades. Several commentators have pointed out that despite rising GDP and per capita income, the number of those in poverty has changed little. This essay will concern how our policies have perpetuated poverty in fact, leaving aside whether we have perpetuated poverty by the current widely-used, income-based definition. The argument doesn't not follow traditional Democrat/Republican paths, but is more holistic. I will argue that addressing poverty as an income problem is self-defeating, that addressing it systemically from the expense side is healthier in several senses, and that our political system makes this relative health improbable to achieve in the near term.

Poverty comes in several guises. There is an economic poverty, which I define as low income-minus-expenses, and on which I will concentrate. There is a status poverty, that Indians understand well (caste distinctions), and that fascinates Tom Wolfe in our own culture. There is an emotional, perhaps even moral, poverty, which would define the underclass as Charles Murray's writings suggest. I mention these different forms to acknowledge that poverty is multi-dimensional, endemic, and will probably "always be with us" due to genetic and social variation. We have little direct control over non-economic poverty, because we have little control over the driving forces that cause it in either other people or, most importantly, ourselves.

Economic poverty, defined as low income-minus-expense, is caused by our actions via government.

The problem starts with our solution: if poverty is cause by lack of income, let's give the poor money. For people who are less poor, let's give them less money. While money is good at least as a short-term medicine for poor people, doing so traps them in poverty. Why is that?

People trying to rise out of poverty face high marginal tax rates. Current, these rates are on the order of 15-30% when all taxes are considered. The exact rate varies depending on whether the person is married or has children. That is, for every dollar they earn, they pay high portions of that extra dollar in taxes. There is an additional higher marginal expense that has the effect of higher marginal taxes, in the form of reduced subsidies for expenses. Higher income causes reduced rent, food, and medical subsidies, for an additional effective tax rate of another 40-50%. Only when income reaches about $25,000, does the total marginal effective tax rate come down to normal.

There is thus an incentive not to increase one's income. Two actions cause this result: 1) giving a subsidy, together with 2) taking it away as income increases. Now let's look at the rent , food, and medical subsidies. Why do we have these?

Rent subsidies are part of a larger system. Every renter has a landloard, who bought the building, pays the mortgage, and pays for repairs, marketing, etc. Every landlord has a real estate market s/he bought the building in, and in which s/he will eventually sell the building back into. As homeowners we, too, are part of that real estate market. Rent subsidies have the immediate effect of helping the poor afford an apartment, and also have the effect of keeping the landlord profitable The landlord is thus willing to hang to his building for a higher price, because commercial real estate prices tend to be a multiple of the income derived from it. In turn, this tends to keep all real estate prices higher, since "comps," that is the prices of comparable properties, strongly affects prices. This begs the question of who exactly we are helping by subsidizing housing.

Food subsidies are part of a larger system. One of the relics of depression efforts to keep all prices high is food price supports. In addition to price supports, there are billions of dollars of agricultural subsidies. Thus food stamps are a grand bargain between agricultural states and the advocates for the poor. Food is more expensive than it needs to be, thus the poor need subsidies to afford it. Because the poor can now afford food, there is no moral or financial need to reduce food prices.

Medical subsidies are part of a larger system. Although this is starting to change in a small way (e.g. health savings accounts) we have a veterinarian system of medicine. That is, the patient isn't the payer. Since it is someone else's dollars paying for care, we care less about the price. Paradoxically, while the cost of health care is increasing, the income of physicians is stagnating or decreasing, because the intermediaries between doctors and us have significant control of the flow of care and dollars. As long as our care is subsidized, prices will remain high, thus providing a moral justification for medical subsidies for the poor (Medicaid). We pay taxes to keep the poor healthier, so we can justify our own subsidies for health insurance.

The solution is to reduce everyone's cost, both for us and the poor. The kinds of solutions that do this have been discussed ad nauseum, for over a century. There are focused constituencies who have prevailed in the political marketplace to maintain high prices at everyone's expense. This is called corporate welfare. This is called plain old welfare. The public choice people have shown how broad interests with low concern cannot defeat narrow interests with critical concern. The problem is endemic.

No society has solved the problem of poverty in free, developed economies anywhere on the planet. No one has solved the problem of complicity of the non-poor in poverty in free, developed economies anywhere on the planet. It isn't clear whether these two problem are 1)insoluble (perhaps Tom Wolfe's view, or perhaps he merely observes), or 2) correctible through the power of government (Liberal view for 100 years), or 3) correctible through greater freedom from government (Hayek, Von Mises view), or 4) correctible through better legal systems or other social engineering (i.e. not invented yet).

Federalist 51

Federalist 51 is where Madison said, "If men were angels, no government would be necessary."

In the very next paragraph, he says, "In framing a government that is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed, and in the next place, force it to control itself."

The great difficulty indeed. We have proof, after 200 years in operation, that our constitution has not succeeded in controlling government. The federal government is out of control is several senses. First, the Constitution cannot control its agents, congresspeople. Corruption is the most basic of agent diseases, and is largely absent from American government, at least as compared with other governments. More subtle than corruption are the diseases of agency that the public choice people describe. More subtle yet is the passive aggressiveness that characterize our agents tendency to delegate politically risky choices to regulatory agencies it creates. No self-drafted law can control the creative subtlety of our congresspeople.

It's not the size of government I dislike but the manner in which we got here. Government spending at all levels has increased dramatically, of course. Contributing to the increase is accounting rules that are bent to allow spending to increase before it is backed by tax revenue. An even greater contributor is the absence of actuarial intelligence or cognizance from our representatives.

Second, the Constitution cannot control our judges. Although the constitution does not say that federal courts can declare laws unconstitutional, Federalist 78 and Marshall in Marbury v Madison articulate this power and responsibility well. In the case of Marshall, it is done in some detail. It is impossible to recognize Marshall's stated process in today's Supreme Court decisions, yet Marbury v Madison is taught in high school as a major event and decision at the founding.

Actually, Marbury v Madison came 12 years after the founding, and not another law was struck down as unconstitutional until Dred Scott 50 years later. Some precedent. And Marbury v Madison would be called today "passive aggressive;" Marshall claimed the power to declare laws unconstitutional while endorsing the dirty work of the new (Jefferson) administration. Judicial Review power has been used heavily since the Civil War, but the methods of judicial review are new -- created by creative judges and creative nominators and confirmers of judges.

This is not an argument for "Originalist" interpretation of the constitution, although we might be better off if that were to occur. It is rather an argument to support Hamilton's Federalist 78 prediction that "the judiciary, from the nature of its functions, will always be the least dangerous to the political rights of the constitution." One can argue that the judiciary has indeed been dangerous by "legislating from the bench." However, I would argue that the judiciary has always done what the executive and legislative branches wanted, albeit with occasional delays of a decade or two. The judiciary can only be a temporary check on the other branches. This is key learning of 200 years.

I would also argue that judicial checks on the legislature are in the nature of legal content rather than legal process. Each house of the legislature makes their own rules, and these rules may or may not contribute to representing the people to the best of their ability.

In any case, I have devoted much time recently on learning how we got where we are and what some of the ideas are for fixing the system. My interest is long-term, in decades, not what can be achieved in this political cycle. My interest is not in which political party is in charge. My interest is in how the system can be made to be more easily self-correcting -- that while crises are always the driving force for reforms, we should make it possible for less life-threatening (read: liberty-threatening) crises do the job. My task is a naive one, and I accept the challenge.

Section 2 of 21st amendment deleted

"The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited."

The 21st amendment couldn't be clearer. It is specific to alcohol and specific to state vs federal context.

I like the result of today's 5-4 decision, because I would prefer the freest possible flow of commerce between the states. But the cost was yet another judicial revision to the constitution. Maybe we should make reading a prerequisite for appointment to the courts.

http://www.heartbone.com/no_thugs/constitution.htm

The entitlement society

Leon Panetta wrote an opinion piece for the Monterey Herald this weekend under the title, "Where is the battle for ideas?" He suggested framing the left vs right debate in terms of five dualities, such as "Protect 'Guaranteed Benefits' vs. 'Private Accounts' for social security. As long as promised benefits grow faster than GNP grows, there WILL be an (unhappy) end to this short-sightedness.

His dualities are derivative, derivative of more fundamental conflicts such as "the entitlement society" vs the sans-safety net societies of Eastern Europe and China. Or such as free markets vs mercantilism (government-subsidized business). Or government bureaucracy vs entrepreneurialism, of either profit or nonprofit kind. Or the relative power of the judiciary and legislature.

Panetta's dualities assume away all the important questions about our governance, particularly those that will determine our national competitiveness four decades hence.

Keyword test

Let's check out how well keywords are found. eDrama Learning is the company I founded in 1998 to build an (emotion and) conversation simulator. We designed about 20 characters that represent customer service challenges and present those characters to the learner. The learner types what s/he wants to say to the character (customer), who replies with both text and body language and facial expression showing emotion. Some customers are pretty nice, but most are difficult in some specific way.

The technology is for sale, by the way; I've moved on to other things. eDrama is trademarked in the area of training and education.

News..

Nothing much new here. Kids are out of school and lounging. Alex isn't quite, actually. He and two of his friends are pursuing an idea that invoves designing a new symbol language for plotting brain function based on both brain physiology as we know it and some concepts from psychology. It's part of 'neural sceince' which appears to be a very new field of research because, 1) there are 'schools of thought' and, 2) everyone has his/her own language or symbology for describing the links between the brain and psychology. Alex is abusing my Univ. library card and internet journal access privileges. If anyone is tracking these things, they must think I've jumped Departments.

We just got back from the Crossroads Guitar fesitval in Dallas. It was put together by Eric Clapton and included Santana (disappointing), Joe Walsh, Larry Carlton, Vince Gill, Buddy Guy, BB King, ZZ top, James Taylor and a few others I didn't know. A 12 hour concert. I can now die because I've heard Eric Clapton play Layla.

Elicia's birthday was yesterday. We saw Harry Potter. Nice movie with familiar personages.

Sherry and I have been working, mostly trying to write. In the evenings I've been transferring our Hi-8 movies to DVDs using the Apple (excellent!) iMovie and iDVD. My Hi8 camera, which is on it's last leg, is hooked to my miniDV camera, which has a video translation mode (bought it for that) which then is output on firewire to my laptop where iMovie captures it. I then do the editing, titling, etc. and send it to iDVD to burn the DVD. Each 2-hour Hi8 tape must be put on two DVDs, since the latter only take 1 hour each. The main constraint is disk space. Two hours of video is 20gb. iDVD need another 10gb to assemble and translate that to DVD. My laptop also sucks a lot of air when doing the DVD translation.

I'm already looking forward to having us together this Christmas in Texas, if we can all swing it. Jim, there are some fine glass blowers in San Antonio, so maybe we can do a side trip.