Another Gay Rights Victory

The gay rights movement is on a roll. First, the Obama administration repealed DADT. Now, the Obama administration will no longer defend Section 3 of the Defense of Marriage Act (DOMA) in court. DOMA was passed in 1996 (yes, right around the time we got the DADT policy). Section 3 is the portion of the law that defines marriage as being between one man and one woman. It was ruled unconstitutional by a Federal district court in July 2010, and this week, the Obama administration announced they would no longer defend the law.

I’ve posted previously about gay rights and I won’t go through my full position (gay marriage bans run astray of the 14^th amendment). Suffice it to say that I think gay people should enjoy full equal legal rights including legal marriage, though I don’t think a church should have to marry gay couples if it doesn’t want to (I differentiate between legal and religious marriage). I agree with the Obama administration’s conclusions about the unconstitutional nature of DOMA Section 3. This is a monumental victory for the gay rights movement. It’s not over yet, though.

The Obama administration deserves some praise for getting this one right. Hehe…combine the gay rights victories (DADT and DOMA) with my recent thumbs-up to Obama for endorsing the death of the GE alternate engine for the F35, and I’ve probably praised Obama more in the past 2+ months than I have in the past 2+ years. You might even think Obama’s converted me. :-p In all seriousness, I’m fiercely critical of the Obama administration’s missteps, but that cuts both ways because I’ll also gladly give the credit when they get it right. I think the best part of Obama's legacy will be the progress made on gay rights during his presidency.

I’m also interested in the political considerations. From Obama’s perspective, this is a win-win. I think he’s wanted this to happen, so it’s a personal win for him. It’s also a political win because he can energize his base by saying, “Not only did we repeal DADT, like I promised during the 2008 election, but we’re killing DOMA. I did what I promised and then some.” It will also diffuse some criticism Obama’s received from the gay rights movement for what’s essentially political double-speak (or hypocrisy). Up until now, Obama has argued that DOMA Section 3 was unconstitutional, yet his administration has continued to defend it. That’s no longer a valid criticism, and should help galvanize his left-wing base for the 2012 election. Personally, I think he’ll have to do more to energize the left-wing base if the 2010 election was any indication. This is also probably why he’s digging in so aggressively with regards to the, “Assault on unions,” (his words) that’s going on in Wisconsin. Combine this effort to invigorate the base with his attempts to look like he’s coming to the center on economic matters in hopes of picking up some independent and marginally-attached voters, and I think it’s very obvious that Obama’s ramping up the reelection efforts.

So how will the GOP respond? Honestly, I think (and hope) they’ll pretty much let this one go without turning it into a brawl. It’d be wise for them to do so. Sure, you’ll probably see some social conservatives come out and decry Obama’s decision as an assault on American family values and/or they’ll have a bout of the judicial hypocrisy I recently discussed. However, I expect this will be fairly minimal because the political risks would be too great for the GOP to take an aggressive stand against Obama’s actions here.

I think the Tea Party influence will temper the GOP response and keep the social conservatives in check. The Tea Party’s main focus seems to be economic/fiscal policy. Though some of them are social conservatives themselves, my impression is they view social issues (gay rights, abortion, the environment, etc.) as secondary to economic/fiscal policy. There’s also a significant libertarian element to the Tea Party, an element that wants limited government that butts out of an individual’s everyday life and generally allows people to live their lives. Combine the primary/secondary focus dynamic with the libertarian dynamic, and I suspect they’ll largely sit this one out.

That said, just as the democrats have done repeatedly in the past, the GOP has also previously blown my mind (several times) by doing some very stupid things that I couldn’t have seen coming without a working crystal ball. So, we’ll see what happens.

Extension:

I thought more about this, and something else dawned on me. I think the democrats realized that the gay rights movement was gaining too much momentum and they could no longer count on the gay vote as solid democrat votes. There is a small movement within the GOP called the Log Cabin Republicans who advocate for gay rights that's been gaining momentum within conservative circles. I think the democrats feared they were losing their grip on the gay vote and have reacted to firm it up.

Fighter Engines and Obama’s New Budget

President Obama just put out his new budget. I have my thoughts and I’ll share them. It’s what I do.

First, I must commend Obama, Secretary of Defense Gates, and those in Congress who were finally successful at killing the General Electric/Rolls Royce spare engine for the F35 fighter. Pratt and Whitney won the contract fair and square, but Congress has still funded the development of the GE/RR alternate engine.

Full disclosure before I continue. Pratt and Whitney is part of United Technologies Corporation, of which I’m an employee and I’m long UTC stock (ticker UTX).

This was a unique vote since it was based on geography versus party. Those who have GE/RR facilities in their districts (GOP leadership John Boehner and Eric Cantor) were the most ardent supporters of the GE/RR engine, while those who have UTC facilities in their districts (John Larson) were the strongest opponents. The GE/RR supporters claim that we can’t give UTC a monopoly on such a big engine contract and that having two engines developed would save money because it would encourage competition. There’s so much wrong there that I don’t even know where to begin.

First, developing two engines versus one means you’ll likely double your engine development costs or so. Second, you have to consider additional costs to the F35 program with regards to designing the F35 to accommodate two engines, like aircraft redesigns and more testing. Third, the military would have to be able to deal with two engines, meaning, among other things, they’d need to have two sets of spares on-hand and their mechanics would have to know two engines. The alternative would be not spending the extra money and ending up with far more grounded fighters because the right parts aren’t in the right place. To the military, that is completely unacceptable and it would be a nightmare. Whether it’s cost structure, logistics, or performance is moot. The GE/RR argument is complete nonsense. Common sense proves them wrong unless they’re able to develop an engine for a ridiculously cheap price. I somehow doubt GE/RR would think similarly if the roles were reversed. I also wonder whether GE thought having Jeff Immelt in the Obama administration would help.

Ok, back to the rest of the budget. Obama decided to offer up a budget that does absolutely nothing to entitlements (Social Security and Medicare), which is beyond ridiculous. Usually, defense is also held sacred, but the spare engine example challenges that for now. Entitlements account for about 60% of the budget and defense another 20%. We can’t get our fiscal house in order if we leave 60-80% of the budget completely untouched. There’s that darn common sense again. Granted, waiting on entitlements isn’t entirely unjustified because comprehensive entitlement reform requires a lot of time and analysis, but I somehow doubt that’s the real reason.

I think Obama’s angling for the 2012 election and is trying to preserve his chance at reelection by not rocking the boat. The problem is we’ve seen this movie before during the Clinton presidency. Obama’s gameplan goes something like this.

1. Talk tough on debt and promises to cut spending. (It’s all talk and this budget shows that).

2. Wait for the GOP to criticize the budget, expecting strong attacks due to the Tea Party’s influence (check).

3. Challenge the GOP to trim, particularly entitlements.

4. Criticize the GOP cuts.

5. Challenge the GOP to shut the government down and hope they do it like they did in 1995.

6. Paint the GOP as the party of Ebenezer Scrooge and the Grinch (before they became nice). The democrats will team with their liberal media allies to do this.

7. Wait for the GOP to concede and bless a budget that’s way too big for them, but only a bit too small for the democrats.

8. Ignore entitlement reform because that’s the next government’s problem.

9. Hope for an economic recovery.

a. If it happens, take the credit.

b. If it doesn’t happen, demonize people like me who contend that Obama’s policies are destined for failure. It doesn’t matter whether we use logic, facts, analysis, history, or whatever else. Obama and the liberal media can’t let such things get in the way of a good story.

10. Win reelection.

That gameplan and this budget won’t fix things. I don’t want to see a replay of 1995 because that’ll lead to this continued replay of the 1930’s. Does Obama and/or the GOP have what it takes? I hope so.

Views on Private and Public Unions Part 2: Wisconsin

In part 1, I laid out my general views of private and public unions. Here in part 2, we’re going to look at this Wisconsin situation in a bit more detail.

Wisconsin’s governor, republican Scott Walker, has proposed a bill that President Obama has called, “An assault on unions.” So what would Walker’s proposal do?

1. End collective bargaining rights for nearly all of the state, local, and county workers (excluding firefighters, police, and state patrol).
2. Prevent unions from seeking pay increases above inflation without voter approval via referendum.
3. Prevent unions from requiring members to pay dues.
4. Force unions to hold annual votes to stay organized.
5. Make public workers pay half of their pension costs and at least 12.6% of their healthcare costs, increasing the average public worker’s share of their pension and healthcare costs by 8%.

I don’t think #1 will hold up because I think it would run astray of the Constitution (1st amendment rights to assembly and petition). Aside from that, I’m all for the rest of the measures. #3 and #4 would make it harder for public unions to exist, too.

In looking at #2, if we’re seeing middle class incomes stagnate, why should public union workers be spared from that? They should have to share the pain. This logic also applies to #5. Frankly, they’d still be getting a sweet deal under #5 compared to the private sector workforce and they have exactly zero grounds to complain. Hear me out.

Over 80% of private companies no longer offer pensions, so most private workers are on a 401k plan. The average 401k has workers receiving a 50% match on their first 6% of contributions, yielding a 3% employer match. So, the worker is paying at least 66% of their retirement funding. If the worker puts in more than 6%, the worker’s percentage of contribution increases because the employer match is capped. If a worker puts in 12% instead of 6%, they still get the 3% from the employer, the contribution totals 15%, but the worker has now funded 80% (12/15). The public workers can’t complain.

As for healthcare, the private sector is shifting over to HSAs, and under those, the worker bears 100% of the costs of healthcare up to a set level, at which point the insurance company starts to cover some (typically 80% and the worker is on the hook for the other 20%). The public workers can’t complain here, either.

You might say, “Well, Tim, government workers make less than private sector workers.” That hasn’t been true in my lifetime, according to the chart below.

Public sector workers now make significantly more than their private sector counterparts (this is only state and local – federal workers do even better), plus there’s the added insult of increased tax burdens on us to pay for their excessive salaries and benefits. I got this chart from the Cato Institute’s Chris Edwards, found here. It’s a great read that I may discuss in the future.

The Wisconsin protests have resulted in several school districts being forced to close down because so many teachers ditched work to go protest. This is outrageously unacceptable. To quote Michelle Malkin, “Only striking government teachers could win federal praise for not doing their jobs.” I always thought education should put children first. Someone please tell me how such shameful and deplorable conduct is putting children first.

Also, since we’re talking about more hypocrisy, how is it that the democrats can plead for more civility in public discourse in the wake of the Arizona shooting and then praise such lawlessness? The liberals also contend Walker is retaliating at unions that didn’t support his campaign. That may be true, but even so, isn’t this just the flip side of Obama’s GM bailout that was a boon for the unions? It’s a dirty game that cuts both ways.

Lastly, their Wisconsin congressmen have gone into hiding to prevent the establishment of quorum, thereby preventing a vote and effectively paralyzing the legislature. I can’t say I ever recall seeing that. It’s an interesting tactic, to say the least. It’s blatantly obstructionist and has that, “I don’t like what’s going on, so I’m going to take my ball and go home,” feel to it.

I hope the GOP successful in Wisconsin. This will embolden others, like New Jersey’s Chris Christie, to continue fighting to remind public sector workers that they are civil servants whose salaries are paid by the taxpayers, not civil overlords.

Links: http://www.cato.org/pubs/journal/cj30n1/cj30n1-5.pdf

Part 2 Extended:

What troubles me is the ticking time bomb of un(der)funded liabilities on government balance sheets (national, state, and local). Unions negotiating with politicians creates a win-win for both of them at the expense of the taxpayers and the... government's long-term financial viability. Unions get sweet pay and benefits for their workers (especially benefits because these costs can be easily hidden and kicked down the road for future governments to pay), the politicians get campaign dollars and votes, and the taxpayers get screwed.

The demise of GM shows us what happens to an entity when the unions are allowed to run amok. In that case, I blame GM's management more for not being tougher in negotiation, failing to look out for the company's well-being, then fielding an uncompetitive product mix.

In this case, I blame the politicians more than the unions because they're the ones failing to do what they're elected to do (represent all voters). Self-interest drives the union to get the best deal they can, just as it should drive government/management to not give away the homestead. The government, like GM's management, has failed to fulfill its end of the bargain to look out its own best interests and long-term financial viability.

Who's looking out for the taxpayers and who's looking out for our governments' financial well-beings? It should be the politicians, but they're not.

I can't think of a way to fix the process, so the only viable solution is to eliminate the need for the process. Even more significant concessions from the union wouldn't solve the underlying problem. It'd be akin to treating the symptoms versus the disease. Personally, I'm open to other solutions if they're put forth and actually solve the underlying problem. I just don't see any other way.

A state/local government default/bankruptcy wouldn't be the end of the world, but it would be a heck of a lot more painful for everyone and it would take much longer to recover from. I don't view that as an acceptable solution when other measures can be taken to stave it off.

Obviously, to accept my argument, one must accept my underlying assumptions, namely the severity and root cause of the problem along with the desire to avoid default/bankruptcy. Interestingly, rendered irrelevant is my view on public sector pay/benefits/job security outpacing all of that in the private sector (public or private, I think the overwhelming majority work hard and do good work).

Views on Private and Public Unions Part 1: General Views

Wisconsin’s in the news, and not just because their Packers beat my Steelers in the Super Bowl. The GOP governor and Congress want to pass a bill that will dramatically reign in Wisconsin’s public sector unions. Before I go there in Part 2, I’ll lay out some of my general views. I have a mixed view of unions. I’ll start private and go public.

On one hand, they were responsible for some very positive advances in workers’ rights throughout the 19th and 20th centuries. I don’t think they’re as broadly necessary as they once were. A much more extensive legal framework to protect workers’ rights is in place today (OSHA, for example), though in certain organizational settings, a union is still vital. For example, my girlfriend’s father is a union worker. Basically, it’s his job to make the final decision whether parts for jet turbine engines are safe to use. If he wasn’t union, then the organization could put pressure on him to sign off on something he shouldn’t in the interest of being able to use the part versus scrapping it. Being in the union protects him greatly from such tactics. I encounter similar pressure in my own job on the design side versus his pressures on the manufacturing side, but it’s nothing like what he deals with, so it’s not necessary for me to be a union worker.

On the other hand, if unions are allowed to have too much power, then nothing good comes of it for anyone. Look at General Motors. Ultimately, it was GM’s management that led to its downfall. They made two crucial mistakes. First, they fielded an uncompetitive product mix and failed to react to the gas price surge. Second, they allowed the company to have an uncompetitive cost structure. This contributed greatly to the first issue. GM couldn’t make the profits they needed by selling smaller cars, so they had to push big cars. Why was their cost structure uncompetitive? Simply put, they allowed the unions to run amok. They gave the unions far more than they deserved and far more than GM could afford. Supposedly, the unions were acting in the workers’ best interests, but were they really doing that if they were getting short-term gains that clearly proved unsustainable (and fatal) for GM in the longer term? Methinks not.

GM’s management didn’t take the hard line in negotiations that they had to take, and as a result, we the taxpayers bailed out GM. The structure of the bailout also infuriates me because the bondholders and stockholders got completely screwed. Obama and friends wanted to give the unions their piece, in the process turning bankruptcy law upside down. The GM bailout was a give-away to the unions at the expense of the owners. Karl Marx and company would be proud, but I digress.

Before we go public, I’d like to discuss union legalities. I see unions as legitimate entities, and laws restricting their formation can run astray of the 1st amendment (right of assembly, and also petition in the case of public unions). That said, I’ve never liked the idea of workers having to join a union as a condition of employment. That’s an infringement on the worker’s individual rights. I’ve never been a union worker, and I’ve turned down jobs because of such requirements. Why should I have to join if I don’t want to? Also, the vote for workers to decide to union up must remain unanimous, otherwise voter intimidation would lead to a fraudulent election. It’s also interesting to note that union representation is concentrated in the public sector. In 2008, 38% of state and local workers were union, according to the Cato Institute, five times the private sector level.

There’s one major difference between the public and private unions. The public unions are made up of public workers, also known as civil servants. We as taxpayers pay their salaries, and as a result, they are there to serve us. We do not serve them. If we did, they’d be called civil overlords or whatever. Elected officials are also civil servants. They serve us, not the other way around (both parties should take note of this vital point). The Founding Fathers generally viewed jobs in public office as an honor and a service to America, not as an entitlement or career. Don’t get me wrong, they deserve fair compensation and work conditions as all workers do, but everyone should remember that they’re civil servants rather than civil overlords.

Hypocrisy in Opinions of the Judicial System

I recently wrote about how Federal judges Henry Hudson of Virginia and Roger Vinson of Florida got it right when they ruled Obamacare is unconstitutional. I think Vinson and Hudson got it right. I also recently wrote about hypocrisy in how the media is relating Ronald Reagan to Barack Obama. I think it’s hypocritical to praise Obama for being like Reagan as though it’s a good thing (and it is) when the media so passionately hated Reagan during and after his presidency. Today, I’m stringing the two together.

I’m taking this opportunity to call out both the conservatives and the liberals for their blatant hypocrisy and ignorance about the judicial system. When the judge rules their way, that’s a tremendous success and the system doing what it’s supposed to do, namely act as a check and balance against tyranny. However, when the ruling goes against them, they condemn the system and ‘activist judges legislating from the bench’. The ruling is demonized as indicative of a corrupt system needing change. They also claim the judges are playing politics and going against the will of the people (I’ve never understood the latter because, by design, one function of the judicial system is to ensure the rights of the minority by interpreting the law correctly even if it’s not a popular with majority).

Let me make it perfectly clear that I have no problem with people disagreeing with court rulings on legal grounds (I often do). I’m also ok with people who think the system needs to be changed even when it’s yielding results they agree with. I disagree with the need for major reform, instead thinking that it may need some minor tweaks, but it’s still a reasonable and non-hypocritical line of thought due to consistency.

I didn’t see any conservatives complaining about judicial activism when Obamacare was declared unconstitutional. I also have seen plenty of liberals condemn the judges as activists who are playing politics and taking the law into their own hands. On the flip side, when judges were ruling that outlawing gay marriage was unconstitutional, liberals said the legal system provided justice for all while conservatives quickly attacked these judges for being activists and ruling against the will of the people. This hypocritical line of thinking is completely nonsensical. It shows the media’s and politicians’ contempt for us as viewers/voters. They think we’re stupid and lack memory. It’s also hypocritical when conservatives/liberals attack each other for criticizing activist judges after they just did it themselves on a different issue.

Ignorance about the judicial system among politicians also bugs me. A while back, Sarah Palin was asked to name one Supreme Court ruling she disagreed with. Her basic response was, “Gosh, the Supreme Court has reviewed so many cases.” Seriously? At the very least, name a case. She’s a social conservative, so she could’ve easily said Roe v. Wade on abortion. It’s a well-know case and wouldn’t have been a shocking or original answer, but at least she would’ve named a case. Bush v. Gore on the 2000 presidential election would probably be the liberal equivalent.

To be fair, Palin is not alone. Chuck Schumer, the democrat senator from New York, recently said, “[…] we have three branches of government. We have a House. We have a Senate. We have a President.” He forgot the Judicial branch. Plus, the House and Senate are both part of the Legislative branch. I hope it was a joke, but I doubt it.

In case you’re curious, I’d say Kelo v. New London, CT. It’s a somewhat obscure eminent domain case from the 2000’s. The Supreme Court sided with the town 5-4. It resulted in a broad expansion of the government’s eminent domain powers, which allows the government to take private property (usually land) for public use, provided it pays the owner a fair price. It is outlined in the 5th amendment, “[…] nor shall private property be taken for public use, without just compensation.”

When I criticize the ruling, I say why the Supreme Court got it wrong and how dangerous of a precedent it is for personal property rights, but it’s not indicative of a flawed system where judges are out of line. I don’t condemn the judges for being activists and I don’t say the judicial system should be reformed. Critics have the right to say those things. I just take issue with their hypocrisy if they’re only selectively calling for major reform only when they disagree with the ruling.

A Brief Case for Ronald Reagan as America's Best President in the 20th Century

Sunday, 5 February 2011, marked what would have been Ronald Reagan’s 100th birthday were he still alive. I view Reagan as the greatest American president of the 20th century. This should be no surprise. In case you’re curious, I choose Washington in the 18th century and Lincoln in the 19th century. I’d even say Reagan should be added to Mount Rushmore. Most people I meet seem to think FDR trumped Reagan for 20th century greatness. Both presidents certainly inherited awful circumstances from their predecessors, Herbert Hoover and Jimmy Carter.

I’d rate FDR and Reagan roughly even in terms of foreign policy. FDR led us to victory in World War 2 and Reagan led us to victory in the Cold War, though the final successes of both were seen during their successors’ presidencies, namely Harry Truman and Papa Bush. They both had monumental victories, but each also had blunders. FDR’s stemmed mainly from not being aggressive enough with tariff reduction and Reagan’s most notable was the Iran Contra affair. Either way, both FDR’s and Reagan’s foreign policy successes far outweighed their failures. I’m not going to try to argue one was better.

So, if they were equal on foreign policy, how can I say Reagan was greater than FDR? Simple – domestic policy. FDR’s New Deal programs not only failed to end the Great Depression, they actually made the Great Depression worse and longer than it had to be. I’ve contended previously that World War 2 ended the Great Depression, but Truman’s post-war policies enabled the post-depression recovery. FDR’s fiscal policy was not sound and neither was monetary policy during the 1930’s.

Reaganomics, on the other hand, was one half of the recipe that killed stagflation. Reagan cut a lot of taxes in the name of supply side economics. The father of supply side economics, Andrew Mellon, was the Secretary of the Treasury throughout the 1920’s. Mellon relentlessly slashed tax rates and the results were a prospering economy and increased government tax revenues. Yes, lower tax rates yielded higher tax revenue. Reaganomics had similar results.

Reaganomics was just one half. The other half was Paul Volcker’s willingness as Federal Reserve Chairman to raise rates high enough to kill inflation, then lower rates once it was clear inflation was under control. Volcker was a holdover from the previous administration. Sound fiscal policy from Reagan was combined with sound monetary policy from Volcker. In essence, Volcker killed the ‘flation’ and Reagan killed the ‘stag’.

A couple footnotes. First, just as Reagan cannot be fully credit for Volcker’s monetary policy successes, FDR cannot be fairly blamed for his Federal Reserve’s monetary failures. However, Reagan does deserve credit for creating the political climate that made Volcker’s actions possible. Second, Reagan and FDR initially faced two distinctly different economic crises, stagflation versus deflation, making an apples-to-apples comparison difficult. But, once Volcker killed inflation and once the early 1930’s deflation panic subsided, both FDR and Reagan had moribund economies. Granted, FDR’s was in way worse shape than Reagan’s, but results still matter. Reagan’s policies worked and FDR’s didn’t. An intriguing historical what-if would be seeing how Reaganomics would fair against the Great Depression. In any event, with foreign policy being largely equal and Reagan winning in domestic policy, it’s pretty reasonable to say that Reagan was the greatest 20th century president.

While we’re on the topic of Reagan, the media has put in quite the effort recently to paint Obama as a more Reagan-like figure, as though that’s a good thing (and it is). I find this fascinating because, from what I know of the news during Reagan’s presidency (admittedly not much first-hand knowledge because I had just turned six years old when Reagan left office in 1989), the liberal media hated Reagan passionately. It was pretty much exclusively liberal media before Rush Limbaugh, Fox News, and the internet were there to act as some counterbalance to the media’s liberal bias.

This report is interesting reading for all. It’s basically the greatest hits collection of the anti-Reagan crowd, so they’ll like it. The pro-Reagan crowd gets a glimpse of how truly hated Reagan was by the media.

And, people like me who are often critical of the media for blurring the line between information and opinion get plenty of ammunition to back our critique. Yes, I criticize both sides for this and Fox is just as guilty for the conservatives as their liberal brethren. I’ll post more on this in the future, too.

Links: http://www.mrc.org/specialreports/uploads/Reagan2011.pdf

Obamacare, the Constitution, and the Politicians

Obamacare’s been in the news a lot lately. Does it truly improve our healthcare system while reducing costs and our debt? I don’t know, but for now, that’s irrelevant.

Obamacare has been ruled unconstitutional by not one, but two federal judges. Virginia Federal judge Henry Hudson first ruled Obamacare was unconstitutional due to the individual mandate. This requires an individual to buy health insurance or pay some penalty. I contend this runs astray of the Commerce Clause. In Article 1, Section 8, Congress is only empowered to regulate, “Commerce […] among the Several States,” or interstate commerce. It does not apply to intrastate commerce, as health insurance presently is. If you can’t buy health insurance across state lines, it’s not interstate commerce and it’s intrastate commerce (this could be circumvented by allowing insurance purchases across state lines – the GOP needs to be careful what it wishes for). Even without that nuance, Hudson ruled it was too great of a reach of federal power to mandate a person to engage in commerce against their will, and I concur. Obama also attempted to justify it as a tax, which is nonsense because it was deliberately structured not to be a tax.

However, Hudson only declared the individual mandate unconstitutional. The rest of the bill was untouched. Florida Federal judge Roger Vinson wasn’t so merciful. Vinson also ruled the individual mandate was unconstitutional. Yet, Vinson further ruled that the individual mandate was the centerpiece of the bill. Without the individual mandate, much of the rest of the bill could not work, and as a result, the entire bill was ruled unconstitutional. Note that Vinson didn’t directly issue an order to cease and desist on preparations for Obamacare’s implementation. But, his ruling that the individual mandate is unconstitutional and the centerpiece of the law should be sufficient to act as a cease and desist order.

Vinson said he couldn’t ascertain what parts of the bill could work with or without the individual mandate because the bill is so complicated, so he struck the whole bill down. Vinson added that he didn’t feel it was his place (and he didn’t feel qualified) to try to understand such a complex bill and what aspects required the individual mandate. Thus, it must go back to Congress and the White House to work out. Vinson got it right.

He also cites the lack of a severability clause in the bill to justify his position. A severability clause is commonly included in legislation. It basically says that if a certain portion of the law is declared unconstitutional, the rest of the law remains untouched. Obamacare did not have a severability clause. It did at one point in the legislative process, but it was removed from the final version of the bill.

The democrats were not paying attention and I have no sympathy (either that or the GOP pulled a fast one on them, and for that they should be commended if that is indeed the case). It’s what the democrats get for trying to quickly pass a 906-page bill (HR3590’s final page count) without allowing sufficient time for review and debate. No time was provided to analyze and debate a (relatively) stable version of the bill. As Nancy Pelosi said, “We have to pass the bill so you can see what’s in it.”

Also, the GOP-controlled House of Representatives recently passed a law to repeal Obamacare. It was mostly along party lines, though a couple democrats joined the GOP. In the Senate, the GOP effort to repeal Obamacare was defeated along party lines. It’s a largely symbolic measure because even if it did pass the Senate, Obama would certainly veto the repeal, and the GOP doesn’t have the votes to override the presidential veto. This will be an issue for the 2012 election.

These rulings do not surprise me in the least. I’ve been saying all along to anyone who would listen that not only was the individual mandate unconstitutional, but the lack of a severability clause would be the death of the bill. It turns out I was right. As a result of this, you’ll also note that, throughout this entire post, I referred to Obamacare as a ‘bill’ rather than a ‘law’. With Vinson’s ruling, it’s no longer a law.

I have little doubt that this will end up in the Supreme Court. Hopefully, they’ll get it right and strike down the unconstitutional power grab that is Obamacare.

Groundhog Day and Presidents

America looked to Punxsutawney Phil today. No shadow means spring’s near. If he sees his shadow, then we get six more weeks of winter. That’s an absolutely dreadful thought considering how much snow I already have. It’s about three feet deep in my yard, with snowbanks of six feet or higher near the driveway and roads. Historically, the groundhog’s accuracy is over 50%. Groundhog Day is also my dad’s favorite holiday. I’ll share his enthusiasm if the little guy proves right that spring’s coming soon.

“Groundhog Day” was also a movie starring Bill Murray. He relived Groundhog Day over and over again, repeating the same basic series of events over and over, as though it was on an endless loop. Not exactly Bill Murray’s finest movie, but it sets the stages perfectly for the transition from Punxsutawney Phil to Barack Obama, Jimmy Carter, and FDR.

What do Phil and Groundhog Day have to do with three democrat presidents? I’ve long held the belief that history repeats itself and, as Pearl Jam sang in “Nothingman”, “He who forgets is destined to remember.”

Barack Obama’s presidency feels like a replay of a bad blend of Carter’s foreign policy debacles and FDR’s economic missteps. I’ve had that feeling before. However, because of the recent flare-ups in the Middle East and Africa and because Carter had his own economic issues, a comparison of Carter and Obama now has more legitimacy. I wasn’t alive during Carter’s presidency from 1977-1981, so I’m going off accounts from history books and people who lived it.

The mainstream media has beaten to death the comparison of Carter’s Iran versus Obama’s Egypt. I mentioned that if America mishandles Hosni Mubarak’s (expected) departure from power in Egypt and events don’t go favorably for us, Obama could have his own Iran debacle like Carter had with the Shah and Ayatollah Khomeini. In general, beyond Egypt and Iran (and especially with Russia), I also view the foreign policy of both Obama and Carter as weak and timid. I remarked in my State of the Union review that, for some reason, I can’t take Obama seriously when he tries to sound tough on foreign policy. FDR’s foreign policy wasn’t exactly perfect, but his shortcomings were different, due to tariffs rather than revolutions.

Second, each president had less than ideal economic conditions to work with and neither deserves credit for properly addressing them. Also, though I’d argue that the economic climate Obama inherited from Junior Bush is more like what FDR inherited from Herbert Hoover rather than what Carter inherited from Gerald Ford, all three inherited weak/deteriorating economies. I’d add that it was strong Federal Reserve leadership, not White House leadership, that saved the day for both Carter and Obama. In FDR’s case, I’d credit World War 2 and Truman’s post-war leadership for ending the Great Depression, rather than FDR’s New Deal. Hopefully, I won’t be crediting World War 3 and someone else’s leadership for snapping us out of the Great Recession.

Back to Carter, who had stagflation in his time. This combination of stagnant growth and powerful inflation is an economic killer. Prior to Paul Volcker becoming chairman of the Federal Reserve in 1979, the government let inflation spiral out of control, and it was Volcker who broke the back of inflation by jacking the Fed rates to nearly 20% over the next couple years, setting the stage for a new wave of prosperity for America.

We were in dire straits when Obama took over, as the financial crisis was pretty much full speed ahead. As with Carter, it was the chairman of the Federal Reserve, this time Ben Bernanke, who was the mastermind behind pulling America out of the economic death spiral. Bernanke was slow to react to the crisis, something I was critical of him for at the time and in reflection, but once he woke up, he pulled out all the stops and deserves the credit. Ironically enough, Obama pulled Volcker out of retirement to act as an economic advisor.

In all fairness, I can’t criticize either president for not solving those specific crises because it took central bank policy, not executive policy, to do it. Also, I can’t blame them for the troubles they inherited. I can, however, criticize them for implementing policies that were headwinds rather than tailwinds for recovery. That and the strong Federal Reserve leadership saving the day are the main parallels I see between Obama’s and Carter’s presidencies on economic matters.

Happy Groundhog Day.

Global Upheaval and Why it Matters in the USA

Egypt, along with several other nations throughout Africa and the Middle East, has plummeted into chaos. Tunisia had its president ousted, Jordan’s king sacked and replaced his cabinet, and it’s tense in Yemen. On a positive note, the citizens of the Sudan recently voted to split the nation in two, which will hopefully end the bloodshed. So, why does all of this matter to the USA? Let’s focus mainly on Egypt here.

First and foremost is the question of who will emerge with control of Egypt. If the government falls, the Muslim Brotherhood is probably the only other entity that could take over. Conservatives in America tend to portray them negatively, citing their history of violence and ties to terrorist organizations like Hamas and al Qaeda. Liberals in America tend to portray them positively, citing their lack of recent violence and ties to Egyptian colleges, unions, and social programs (those three are also strongly liberal blocks in America; possibly a coincidence). As usual, the truth likely lies somewhere in between. I think there are both peaceful, non-threatening elements and violent, threatening elements within the Muslim Brotherhood.

Will Egypt will become to Obama (and US foreign policy) what Iran was for Jimmy Carter? I don’t know, but here’s how I’m pondering the question. There are some key differences and similarities, and three assumptions factor in. First, one must make an assumption about whether the Hosni Mubarak and/or Egyptian government maintains power or whether someone else takes over, like the Muslim Brotherhood. Second, one must make an assumption about how dangerous the Muslim Brotherhood truly is. Third, one must then make assumptions about how America would react based on the first two assumptions.

Thus, worst-case scenario, if the government falls, the Muslim Brotherhood is dangerous, and America screws up, then Obama absolutely could have his own Iran debacle like Carter had with the Shah and Ayatollah Khomeini. Under this scenario, odds are our friends in Israel would be in even more danger. On the flip side, the best case scenario is stability with a peaceful Egypt and Middle East. I don’t know what happens.

Who controls Egypt matters because of the Suez Canal. This is a big deal because it connects the Gulf of Suez to the Mediterranean Sea, dramatically shortening sea travel by creating a shortcut that allows boats to avoid sailing around all of Africa to move to/from Europe (see the maps below courtesy of howstuffworks.com). Shuttering/restricting the Suez Canal would have disastrous economic implications. This would dramatically increase the costs of trade for Europe, Asia, and Africa. The sputtering Eurozone economy needs a trade bottleneck like I need more snow (record snowfalls throughout New England this year). It could even be the next stage of the ongoing European economic debacle.

For America, it would increase trade and energy costs because of how much oil we get overseas. I had a talk about this with a friend over the weekend. We both agree on the need to break dependence on Middle Eastern oil. Where we differ is the timeline and how best to implement that. I contend that developing domestic oil production is the best short-term plan while we build our infrastructure for other cars (hybrid, electric, even natural gas versus gasoline/diesel), while he contends we should skip the drilling and just go straight to other cars and renewable energy. My concerns stem primarily from technological maturity and economics, but I’ll make that a separate post.

Lastly, the protesters in Egypt were communicating primarily through the internet with sites like Facebook and Twitter. The Egyptian government killed the internet. Google has teamed with Twitter to provide Egyptians with an audio, telephone-based version of Twitter.

I worry that these actions by the Egyptian government would inspire our government to try something similar. Last June, the “Protecting Cyberspace as a National Asset Act of 2010” came before the Senate courtesy of Joe Lieberman and Susan Collins. It passed the Homeland Security Committee in December, but died with the new Congress. Collins intends to reintroduce it. Don’t forget about the FCC’s recent passage of net neutrality, and don’t forget about Congressman Bob Brady’s bill in the wake of the Arizona tragedy to outlaw the use of certain imagery to describe politicians and judges. Free speech advocates like myself have plenty to worry about, and I’ll talk more about this later, too.

The bottom line is Egypt matters a lot more than one might think. Let’s keep an eye on it.