May 15, 2024 / by 

 

Mark Sanford Goes Galt

Clearly Jon Meacham and his deputy editors at Newsweek could use a refresher course in compelling journalism from their sister ship test proctors at the Stanley Kaplan Corporation. Newsweek, you see, has just seen fit to publish a lengthy interpretation of Ayn Rand by none other that Appalachian Trail aficionado Mark Sanford.

The Fountainhead is a stunning evocation of the individual and what he can achieve when unhindered by government or society. Howard Roark is an architect who cares nothing about the world’s approval; his only concerns are his integrity and the perfection of his designs. What strikes me as still relevant is its central insight—that it isn’t “collective action” that makes this nation prosperous and secure; it’s the initiative and creativity of the individual. The novel’s “second-handers,” as Rand called them—the opportunistic Peter Keating, who appropriates Roark’s architectural talent for his own purposes, and Ellsworth Toohey, the journalist who doesn’t know what to write until he knows what people want to hear—symbolize a mindset that’s sadly familiar today.

Yeah, because the guy using state money to fly himself around the globe to meet his Latin lover, while his wife and children are back in the government paid for Governor’s mansion, ought to be talking about second hand leeches.

When the economy took a nosedive a year ago—a series of events that arguably began when the government-sponsored corporations Fannie Mae and Freddie Mac went broke—many Americans, myself included, watched in disbelief as members of Congress placed blame on everyone and everything but government. This wasn’t new in 2008. It’s an act we’ve seen over and over since the beginning of the New Deal in 1933. For that reason, I think, those passages in Atlas Shrugged foreshadow what might happen to our country if there is no change in direction. As Rand shows in her book, when the government is deprived of the free market’s best minds, it staggers toward collapse.

Uh huh, how convenient. Sanford pegs Fannie and Freddie as the ultimate culprits without noting that, while government sponsored, they are privately run enterprises. Nor noting that the reason the GSEs failed is from the complete hash of the financial markets made by the anti-regulatory, free wheeling, Randian geniuses populating Wall Street and the “financial products” markets that Sanford so adores.

Then there is this:

There is one more major flaw in Rand’s thinking. She believed that man is perfectible—a view she shared with the Soviet collectivists she hated. The geniuses and industrial titans who retire to Galt’s hidden valley create a perfect society based on reason and pure individualism; and Galt himself, in the 57-page speech near the book’s end, explicitly denies the existence of original sin. The idea that man is perfectible has been disproved by 10,000 years of history. Men and women are imperfect, or “fallen,” which is why I believe there is a role for limited government in making sure that my rights end where yours begin.

Crikey. Sanford found the temerity to actually argue that Rand’s “one major flaw” is the one which would condemn self serving puerile lotharios, like himself, who abdicate even their personal responsibilities to wife, children and workcraft. Sanford also neglects to mention that Rand’s objectivism is, by definition, pretty much anti-religion. As Gore Vidal once said, Ayn Rand is an:

…odd little woman [who] is attempting to give a moral sanction to greed and self interest, and to pull it off she must at times indulge in purest Orwellian newspeak of the “freedom is slavery” sort. … it is gratuitous to advise any human being to look out for himself. You can be sure that he will. It is far more difficult to persuade him to help his neighbor to build a dam or to defend a town or to give food he has accumulated to the victims of a famine. But since we must live together, dependent upon one another for many things and services, altruism is necessary to survival. To get people to do needed things is the perennial hard task of government, not to mention of religion and philosophy. … Ayn Rand’s “philosophy” is nearly perfect in its immorality…

And so it is. Then again, this is a perfect snapshot of the intellectual and moral duplicity that lies at the heart of the C-Street mentality to which Sanford and so many other fiscal scolds in Washington adhere to.

Heck, why should I have all the fun? It is audience participation Friday! Everybody here knows Rand, Sanford and C-Street; read Sanford’s Newsweek tripe and dissect in comments!


Little Legal Recourse For Artists’ Rage Against Musical Torture

One of the obvious questions from the announcement of the musicians Rage Against Musical Torture, and one that several people have been asking, is what avenues of legal recourse do the musicians have? It turns out remarkably few, if any.

A look at the recent case of Jackson Browne v. John McCain demonstrates why. Here is a link to the complaint in Browne v. McCain; as you can tell, Plaintiff Browne pled four causes of action for the wrongful use of his music. The four counts are copyright infringement, vicarious copyright infringement, violation of the Lanham Act and violation of state law (California) right to publicity. (You can see the court’s rulings upholding the viability of these counts at the links provided here).

The lead count of copyright infringement is based upon 17 USC 501 et seq. The specific triggering conduct is delineated in 17 USC 106-122. Unlike in Browne, there really is no provision of the applicable law that comes into play. In Browne, there was an appropriation for use in a campaign commercial, that was broadcast on television and the internet, and the conduct happened in the United States; none of that is the case, unfortunately, for the musicians here. There was no “commercial use”, there was no “secondary broadcast”, and the putative conduct did not occur within the United States.

The key here is the nature of the use. As horrid as the conduct of using the artists’ music for torture is, there is no evidence that the governmental actors, whether soldiers, CIA or contractors, obtained the music illegally. Furthermore, there is no evidence that they used the music for a “commercial purpose”. It was not broadcast, nor was it played in a public setting; there is legally little to nothing to distinguish what was done from a person playing his boom box or stereo too loud in his apartment building. In short, there does not seem to be a “copyright infringement”. The same rationale explains why there is no apparent RIAA violation. Also, since there was no cognizable copyright violation, there was no “vicarious copyright infringement” as was present in Browne.

The next common count to proceed in these situations is via the “Lanham Act“. Here, again, the facts simply do not truly reach the scope of the claim. There is no legal basis for asserting that the restricted use made of the artists’ music would create confusion or imply that the artists approved of the torture; and, again, the conduct was not done in a public setting or performance. There just is not a federal trademark infringement for false association or false endorsement.

The last count in the Browne complaint was a pendant claim for state (California) law violation of “right to publicity”. This is a state law claim and, unfortunately, the known conduct occurred outside of the territorial United States. There is no hope of making out a state common law tort under these circumstances.

There are two general concerns at play here as well, statute of limitations and subject matter jurisdiction. Under 17 USC 507, all of the copyright/fair use type of issues bear a statue of three years for civil claims and five years for criminal violations (if applicable, which they do not seem to be). The known conduct seems to be outside of the statute period by now, even if a cognizable claim were able to be made out.

As to subject matter jurisdiction, the first question is whether or not the government is capable of being sued for any of the misuse to start with. The US government cannot be sued without its consent and, somewhat surprisingly, the government, pursuant to 28 USC 1498, has so consented to suit. The bigger problem is territorial jurisdiction because the known acts occurred primarily, if not exclusively, outside of the United States. Even Guantanamo would appear to be excluded here. Although the Supreme Court, in Rasul v. Bush, permitted jurisdiction for purposes of the grand writ of habeas corpus, the decision clearly appears limited to that writ. That conclusion is supported by the historic Eisentrager decision (see the discussion here as well). The bottom line is that even were it possible to argue a valid claim exists, it seems highly unlikely a US federal court would accept jurisdiction of the claim.

What is needed for the artists to be able to protect their works, and their good name, out of this situation is an international “Doctrine Of Moral Rights” allowing them to have a justiciable interest in the moral manner in which their work is used. Indeed there is just such an international law, and it is embodied in what is known as “The Berne Convention“. Under the Article 6 of the original (read French) iteration, there is a moral rights protection for authors and artists in the “right of integrity” of their works. This gives the artist an enforceable right against “mutilation or distortion that would prejudice the author’s honor or reputation”. In French law, this right is called “droit au respect de l’oeuvre” and is mentioned in Article 6 of the French Law No. 57-298 of 11 March 1957. This has been at times, in various European courts, construed as a right of an artist to not have his work used for an immoral purpose including, arguably, torture.

Unfortunately, although the US is a signatory to the Berne Convention, it does not recognize this extended moral “right of integrity” above and beyond the copyright, trademark and fair use law discussed above, which leaves the Rage Against Torture artists clean out of luck it seems. A case that appears as close to on point as can be found is Shostakovich v. 20th Century-Fox, 80 N.Y.S.2d 575, aff’d, 87 N.Y.S.2d 430 (1949). In Shostakovich, the court said:

The wrong which is alleged here is the use of plaintiffs’ music in a moving picture whose theme is objectionable to them in that it is unsympathetic to their political ideology. The logical development of this theory leads inexcapably [sic] to the Doctrine of Moral Right. There is no charge of distortion of the compositions nor any claim that they have not been faithfully reproduced. Conceivably, under the doctrine of Moral Right the court could in a proper case, prevent the use of a composition or work, in the public domain, in such a manner as would be violative of the author’s rights. The application of the doctrine presents much difficulty however. With reference to that which is in the public domain there arises a conflict between the moral right and the well established rights of others to use such works. Clemens v. Belford Clark & Co., [14 F. 728 (1883)]. So, too, there arises the question of the norm by which the use of such work is to be tested to determine whether or not the author’s moral right as an author has been violated. Is the standard to be good taste, artistic worth, political beliefs, moral concepts or what is it to be? In the present state of our law the very existence of the right is not clear, the relative position of the rights thereunder with reference to the rights of others is not defined nor has the nature of the proper remedy been determined. Quite obviously therefore, in the absence of any clear showing of the infliction of a wilful injury or of any invasion of a moral right, this court should not consider granting the drastic relief asked on either theory. The motion is accordingly denied in all respects.

Notably, the plaintiff in Shostakovich also sued in France and was successful there. Is there any hope in foreign courts for the artists here? Probably not. Iraq and Afghanistan are not signatories to the Berne Convention. Cuba is, but it seems unlikely that Cuba’s courts could successfully be accessed and utilized for the conduct at Guantanamo, and it seems beyond unlikely the US government would honor a judgement from a foreign country under this theory, whether from Cuba or any other country.

In short, there does not appear to be any valid avenue for damage recovery or injunctive relief to the harmed artists for the wrongful appropriation of their music by the US government for use in its torture program. What the artists can do is to seek the truth via the FOIA action, a process they have started. The other thing they, and you, can do is to speak out in objection to the illegal torture and detention scheme of the United States government. If you wish to join with the artists, and the generals, in voicing your objection to torture visit the CloseGitmoNow website.


More Insane Rantings from the Crazy Man in the Attic

Someone let Dick “PapaDick” Cheney out of his undisclosed location last night–they even gave him an award for being a “keeper of the flame.” In spite of the fact that the press is covering it as another serious attack from Cheney, I find it pretty laughable.

How else to treat a speech, for example, in which PapaDick boasts that Rummy got this “flame-keeper” award before him?

I’m told that among those you’ve recognized before me was my friend Don Rumsfeld. I don’t mind that a bit. It fits something of a pattern. In a career that includes being chief of staff, congressman, and secretary of defense, I haven’t had much that Don didn’t get first. But truth be told, any award once conferred on Donald Rumsfeld carries extra luster, and I am very proud to see my name added to such a distinguished list.

From that auspicious start, Cheney launches into a screed against Obama for shutting down missile defense in Czech Republic and Poland–he complains that Obama did not stand by the agreements that Cheney and Bush made.

Most anyone who is given responsibility in matters of national security quickly comes to appreciate the commitments and structures put in place by others who came before. You deploy a military force that was planned and funded by your predecessors. You inherit relationships with partners and obligations to allies that were first undertaken years and even generations earlier. With the authority you hold for a little while, you have great freedom of action. And whatever course you follow, the essential thing is always to keep commitments, and to leave no doubts about the credibility of your country’s word.So among my other concerns about the drift of events under the present administration, I consider the abandonment of missile defense in Eastern Europe to be a strategic blunder and a breach of good faith.

It is certainly not a model of diplomacy when the leaders of Poland and the Czech Republic are informed of such a decision at the last minute in midnight phone calls. It took a long time and lot of political courage in those countries to arrange for our interceptor system in Poland and the radar system in the Czech Republic. Our Polish and Czech friends are entitled to wonder how strategic plans and promises years in the making could be dissolved, just like that – with apparently little, if any, consultation.

But he moves directly from that complaint to complaining that Obama is honoring the commitment Bush made to withdraw our troops from Iraq.

Next door in Iraq, it is vitally important that President Obama, in his rush to withdraw troops, not undermine the progress we’ve made in recent years. Prime Minister Maliki met yesterday with President Obama, who began his press availability with an extended comment about Afghanistan. When he finally got around to talking bout Iraq, he told the media that he reiterated to Maliki his intention to remove all U.S. troops from Iraq. Former President Bush’s bold decision to change strategy in Iraq and surge U.S. forces there set the stage for success in that country. Iraq has the potential to be a strong, democratic ally in the war on terrorism, and an example of economic and democratic reform in the heart of the Middle East. The Obama Administration has an obligation to protect this young democracy and build on the strategic success we have achieved in Iraq.

Don’t worry. I wasn’t really expecting any intellectual consistency from Dick Cheney.

Cheney’s complaints about Obama’s Afghanistan policy in this speech are getting a lot of press. What no one else wants to mention, though, is Cheney’s refutation of Obama’s complaint that the Bush Administration never really had a real Afghan strategy. Cheney refutes that, you see, by noting that they conducted a strategic assessment of Afghanistan in Fall 2008, seven years after committing troops to Afghanistan.

Recently, President Obama’s advisors have decided that it’s easier to blame the Bush Administration than support our troops. This weekend they leveled a charge that cannot go unanswered. The President’s chief of staff claimed that the Bush Administration hadn’t asked any tough questions about Afghanistan, and he complained that the Obama Administration had to start from scratch to put together a strategy.

In the fall of 2008, fully aware of the need to meet new challenges being posed by the Taliban, we dug into every aspect of Afghanistan policy, assembling a team that repeatedly went into the country, reviewing options and recommendations, and briefing President-elect Obama’s team.

Hahahaha!! Cheney believes that developing an Afghan strategy in an attempt to force Obama’s hand can make up for the seven years during which he oversaw the complete neglect of the war against the people who actually hit us on 9/11.

I also note that Cheney neglected to mention–not even once, not even in a speech talking about “new challenges” from the Taliban–Pakistan. Perhaps that’s because Cheney was personally in charge of our Pakistan policy for the last three years of the Bush Administration, during which period that country became the source of the real instability in the region.

And, in case you’re wondering, Cheney also doesn’t mention the number of arrests of alleged terrorists, including Najibullah Zazi. I guess that’s because doing so would have made it hard to argue–as PapaDick does–that you can’t fight terrorists using a law enforcement approach. And Dick has to make that argument, of course, so as to justify his long screed in favor of torture. Note how closely this screed matches that which has shown up anonymously in the press.

Then there’s the matter of how to handle the terrorists we capture in this ongoing war. Some of them know things that, if shared, can save a good many innocent lives. When we faced that problem in the days and years after 9/11, we made some basic decisions. We understood that organized terrorism is not just a law-enforcement issue, but a strategic threat to the United States.

At every turn, we understood as well that the safety of the country required collecting information known only to the worst of the terrorists. We had a lot of blind spots – and that’s an awful thing, especially in wartime. With many thousands of lives potentially in the balance, we didn’t think it made sense to let the terrorists answer questions in their own good time, if they answered them at all.

The intelligence professionals who got the answers we needed from terrorists had limited time, limited options, and careful legal guidance. They got the baddest actors we picked up to reveal things they really didn’t want to share.

There’s the conflation of the information collected from KSM using torture (which KSM has said included a number of lies) with the information collected using rapport-based intelligence.

In the case of Khalid Sheik Muhammed, by the time it was over he was not was not only talking, he was practically conducting a seminar, complete with chalkboards and charts. It turned out he had a professorial side, and our guys didn’t mind at all if classes ran long. At some point, the mastermind of 9/11 became an expansive briefer on the operations and plans of al-Qaeda. It happened in the course of enhanced interrogations. All the evidence, and common sense as well, tells us why he started to talk.

There’s the insistence that Cheney kept us safe–ignoring, of course, all the attacks on our allies.

Eight years into the effort, one thing we know is that the enemy has spent most of this time on the defensive – and every attempt to strike inside the United States has failed. So you would think that our successors would be going to the intelligence community saying, “How did you did you do it? What were the keys to preventing another attack over that period of time?”

Instead, they’ve chosen a different path entirely – giving in to the angry left, slandering people who did a hard job well, and demagoguing an issue more serious than any other they’ll face in these four years. No one knows just where that path will lead, but I can promise you this: There will always be plenty of us willing to stand up for the policies and the people that have kept this country safe.

On the political left, it will still be asserted that tough interrogations did no good, because this is an article of faith for them, and actual evidence is unwelcome and disregarded. President Obama himself has ruled these methods out, and when he last addressed the subject he filled the air with vague and useless platitudes. His preferred device is to suggest that we could have gotten the same information by other means. We’re invited to think so. But this ignores the hard, inconvenient truth that we did try other means and techniques to elicit information from Khalid Sheikh Muhammed and other al-Qaeda operatives, only turning to enhanced techniques when we failed to produce the actionable intelligence we knew they were withholding. In fact, our intelligence professionals, in urgent circumstances with the highest of stakes, obtained specific information, prevented specific attacks, and saved American lives.

I’m most fascinated, though, by the desperation of this passage: the appeal to the “legal underpinnings and safeguards” and the claim to “moral bearings.”

In short, to call enhanced interrogation a program of torture is not only to disregard the program’s legal underpinnings and safeguards. Such accusations are a libel against dedicated professionals who acted honorably and well, in our country’s name and in our country’s cause. What’s more, to completely rule out enhanced interrogation in the future, in favor of half-measures, is unwise in the extreme. In the fight against terrorism, there is no middle ground, and half-measures keep you half exposed.

For all that we’ve lost in this conflict, the United States has never lost its moral bearings – and least of all can that be said of our armed forces and intelligence personnel.

Is it possible the crazy man in the attic realizes his attempts to convince others that he is anything but a torture-hungry monster just sound crazier and crazier as he babbles on?


Rage Against Musical Torture

On Tuesday, I reported a new campaign to close Gitmo (the campaign website is now live). Today, a bunch of musicians are the joining the National Campaign against Torture to FOIA information on how music was used in the government’s torture program.

Pursuant to the Freedom of Information Act (FOIA), I hereby request the following:

All documents, including but not limited to intelligence reports, briefings, transcripts, talking points, meeting minutes, memoranda, cables, audio/visual recordings and emails produced by the Central Intelligence Agency concerning the use of loud music as a technique to interrogate detainees at U.S.-operated prison facilities at Guantanamo, Iraq and Afghanistan during 2002-the present.

The documents we seek include but are not limited to records that contain explicit references to the following bands or songs, among any other bands or songs mentioned:

AC/DC

Aerosmith

Barney theme song (By Bob Singleton)

The Bee Gees

Britney Spears

Bruce Springsteen

Christina Aguilera

David Gray

Deicide

Don McClean

Dope

Dr. Dre

Drowning Pool

Eminem

Hed P.E.

James Taylor

Limp Bizkit

Marilyn Manson

Matchbox Twenty

Meatloaf

Meow mix jingle

Metallica

Neil Diamond

Nine Inch Nails

Pink

Prince

Queen

Rage against the Machine

Red Hot Chili Peppers

Redman

Saliva

Sesame street theme music (By Christopher Cerf)

Stanley Brothers

The Star Spangled Banner

Tupac Shakur

If you regard any of this material as potentially exempt from the FOIA’s disclosure requirements, I request that you nonetheless exercise your discretion to disclose them.  As you know, President Barack Obama has called upon all agencies to “adopt a presumption in favor of disclosure, in order to renew their commitment to the principles embodied in FOIA, and to usher in a new era of open Government.” As the FOIA requires, please release all reasonably segregable, nonexempt portions of documents.  To permit me to reach an intelligent and informed decision whether or not to file an administrative appeal of any denied material, please describe any withheld records (or portions thereof) and explain the basis for your exemption claims.

Among the musicians joining the campaign are Trent Reznor and Tom Morello whose music is among those used in the government’s torture program. As Morello says, “The fact that music I helped create was used in crimes against humanity sickens me – we need to end torture and close Guantanamo now.” And Jackson Browne–fresh off his victory against McCain and the Republican party for stealing his music–is also joining the campaign.

Me, I hope we can recruit Barney and Big Bird to join the campaign.

This part of the campaign is a great way to show how our nation’s practice of torture perverts our everyday culture.


Rahm’s Greg Craig Campaign

How many stories–transparently sourced to Rahm Emanuel and predicting Greg Craig’s demise–have to appear before people start asking why Rahm is so persistently targeting Craig? Today’s NYT story follows on at least three other stories of the same genre (one, two, three). And it hides Rahm’s tracks even less than the earlier examples from the genre. There’s the on the record quote from Rahm.

“The president believes he has done a very good job and continues to do a very good job,” Mr. Emanuel said. “The notion that you’re going to blame him is ridiculous. He didn’t create Guantánamo. He is trying to work within the system to meet the president’s goal.”

There’s the blame on Rahm for trimming Craig’s portfolio on high profile issues.

At moments, it has looked as if Mr. Craig’s authority has been trimmed back. Rahm Emanuel, the White House chief of staff, assigned Pete Rouse, a senior adviser with deep ties to Capitol Hill, to oversee Guantánamo issues.

Similarly, after Mr. Craig started the search that produced the Supreme Court nomination of Justice Sonia Sotomayor, Mr. Emanuel assigned the confirmation fight to Ronald A. Klain and Cynthia Hogan, aides to Vice President Joseph R. Biden Jr. with long experience handling judicial appointments.

In both instances, White House officials said that Mr. Craig remained involved but that it made sense to tap people with political backgrounds to manage political issues, particularly since Mr. Craig had so many other duties, like scrutinizing legislation, vetting appointees and selecting judges.

And there’s the description of Rahm’s juvenile taunts going back to the Lewinsky days.

He studied law at Yale with Bill and Hillary Rodham Clinton and joined the Clinton White House in 1998 to fight impeachment. Longtime aides resented the newcomer. When the announcement of his appointment described Mr. Craig as the “quarterback” of the impeachment defense, some Clinton aides, including Mr. Emanuel, derisively referred to him as “QB.” (All these years later, Mr. Emanuel said he liked and respected Mr. Craig.)

Mind you, this particular version of the Rahm-attacks-Craig story seems like it may be pushback, perhaps the beginning of a campaign to pre-empt the firing of Craig as a scape-goat for the Administration’s failure to meet its Gitmo deadline next January. In fact that’s precisely what Human Rights Watch’s Tom Malinowski suggests is happening.

“To make Greg the fall guy, if that indeed is what they’re doing, is profoundly disingenuous,” Mr. Malinowski said.

Nevertheless, the narrative is always the same: Rahm attacking Craig for perceived failures relating to Gitmo and torture.

I understand the Village may like these conflict stories. But at some point, the persistence of these repeated stories become the story. After all, how many times do journalists have to grant anonymity to help hide the Administration’s real stance on torture and Gitmo?


Rattner’s Bailout

One key to reading Steve Rattner’s long narrative on his role in the auto bailout is this passage:

I was stunned by the suggestion that the government, GM’s only source of fresh capital, was somehow out of bounds for asking for the resignation of a CEO who had lost $13 billion of taxpayer money in three months and was now asking for more. But rightly or wrongly, the concept of Washington extending its iron fist to an industrial icon proved unnerving to more than just the Wall Street Journal editorial page.

It’s a thoroughly uncontroversial statement, presented as it is out of context. Of course the government had a right to ask Rick Wagoner to step down. Of course it made sense to ask for the resignation of a failed CEO sucking at the federal teat.

What didn’t make sense, of course, is that similar demands were never made on Rattner’s own industry, the finance industry, when it not only sucked far more federal dollars but laid the final straw that broke the auto industry’s back. And Rattner, who describes the outraged response to his complete lack of automotive experience as well as his close friendship with Jimmy Lee, who managed the Chrysler negotiations for JP Morgan Chase, seems utterly oblivious to that double standard (in spite of the frequency with which it was raised by those complaining about the bailout). Rattner mocks the arrogance of GM’s top management–with their private elevator–but doesn’t note that the auto execs, but not the bank execs, were forced to give up some of those perks by the government.

Which is another way of saying that the rest of the narrative tells of Rattner’s team’s shrewd use of financial arm-twisting to pull off the fast-track bankruptcies, without giving much confidence that the auto task force ever came to understand the auto industry well enough to weigh what came next. Did the auto task force really not understand the auto supply chain going into the bailout, with its huge impact on the economy? Did the task force really not know that Chrysler had no product in the pipeline? Did the task force really only weigh Fiat based on Sergio Marchionne’s “drive to win” and Fiat’s “advanced products … small, stylish cars and fuel-sipping engines,” with no consideration of Fiat’s own quality problems, not to mention how long it takes to adapt a European car to the US market? Was the task force unaware that GM’s huge debt load came partly from attempts (however inadequate) to conduct a turnaround? Did the task force really not account for the political meltdown that dealer shutdowns would cause–and did they really not factor the need for shutdowns both into brand turnaround and the need for bankruptcy? Does Rattner really believe the halo effect of a car like Prius or the Volt is no more than PR?

In short, even after the auto task force pulled off what I consider a least worst solution, I’m not convinced Rattner, at least, fully understands the market.

Which means this is a very informative narrative about how the banksters pulled off the auto bailout–a perfectly targeted story for Fortune’s readership. But just as much it is a testament to the ignorance of the banksters–not only about the real economy, but of how their own management is just as horrible and arrogant as that of the auto industry.


Durham’s Investigation and the Non-Exempt IG Files

This is rather interesting.

Remember that the ACLU FOIA on the torture tapes covered several things: documents describing what the torture tapes originally depicted and documents discussing the torture tapes, both of which Judge Hellerstein recently said could be withheld to protect the CIA’s torture methods. (Well, okay, he said it protected sources and methods.)

Then there were the documents that discussed the actual destruction of the torture tapes. And the CIA has just determined that parts of 100 Inspector General documents are not exempt from FOIA–but cannot be released because doing so would hinder John Durham’s investigation into the torture tapes.

As required by this Court’s order of September 2, 2009, the CIA has conducted a line-by-line review of approximately 100 responsive OIG documents and processed these documents to identify any non-exempt information for release. The CIA has determined that certain of these 100 documents contain information that is not covered by any FOIA exemptions that may be asserted by the CIA. The CIA has been informed, however, that release of the information in question from the OIG documents would interfere with the ongoing criminal investigation of Special Prosecutor John Durham into the destruction of the videotapes.

This information must be fairly innocuous–if it described the actual content of the videotapes or could be claimed to be pre-decisional or attorney work product, the CIA would claim a FOIA exemption. But the information is either directly relevant to Durham’s investigation or the CIA is making shite up again.

I’m interested in this because of the OIG’s review of the Office of General Counsel’s review of the torture tapes–and because of Jay Rockefeller’s attempts to get more information on precisely that subject. After all, Jay Rock’s request for that information would be non-exempt, as would discussions within OIG of whether or not to respond to him. And those discussions would have taken place in 2005, just before the torture tapes were destroyed.


Ezra: Workers Don’t Understand So an Excise Tax Will Work

Ezra has another “workers don’t understand” post arguing for the benefit of the excise tax to fund health care.

There’s good reason to think that if health-care costs can be tamed, wages will rise. But one of the big problems in health-care reform is that workers don’t understand this connection. They think of health-care coverage as a “benefit,” rather than a form of compensation engaged in a fairly zero-sum competition against their wages.

To make his argument, Ezra does the following:

  • Appeals to the foundational faith of the discredited economics profession
  • Shows a correlation while ignoring other factors to imply causation
  • Argues that papers arguing one thing prove their inverse

Given that we’re about to engage in a big battle between the House funding (taxing millionaires) and the Senate funding (excise tax on employer-based health care), I thought it worth examining this more closely–as well as focusing on recent changes in employers’ choices which may–if we have the kind of crappy recovery many people expect–moot all the data that Ezra draws on.

First, the blind faith of economists.

Earlier in the day, I’d been talking to MIT economist Jon Gruber about this issue. “There are a few things economists believe in our souls so strongly that we have a hard time actually explaining them,” he said. “One is that free trade is good and another is that health-care costs come out of wages.” To put it another way: Economists are pretty united on this point. A firm’s compensation for its workers is pretty static, and if relatively more goes to health-care costs, relatively less will go to wages, and vice-versa.

Three things should have tipped Ezra off that this was not a strong argument. First, anytime an expert says, “well, I can’t explain this, I just believe it,” it’s a good sign the expert isn’t drawing on rational argument to support this foundational faith. Furthermore, the yoking of this foundational faith to the value of free trade ought to be another tip-off–so-called free trade, in practice, hasn’t worked out so well for workers in this country. Also note what Ezra is doing: in this quote, at least, Gruber asserts only that “health care comes out of wages,” but from that Ezra asserts a two way relationship, claiming that wages also come out of health care. Perhaps elsewhere in their discussion Gruber offered proof that employers pass on health care savings to employees, but that’s not in the post as written.

Now look at Ezra’s graph, which he honestly admits shows a correlation, not a causation.
do_lower_health-care_costs_mean_higher_wages_(2)

Note, first of all, the discrepancy between his title and his graph, which he explains “charts the percent growth in the median household income versus the percent growth in health-care costs since 1990.” Ezra’s not showing (as his title would suggest) the relationship between actual wages and health care costs. He’s showing the relationship between wage growth and health care cost growth. [Update: JTMinIA explains why the raw data v. rate of change doesn’t affect the correlation, but that the correlation doesn’t show a neat match either. Thanks for the correction.] What he shows is that in a period when health care costs have always gone up, wages have sometimes decreased and sometimes increased, but that wages have never gone up as fast as health care costs. I’d need to see the underlying data, but that suggests to me that while health care costs and wages might be related, there is clearly not a one-to-one correlation between them.

And of course, this shows they “might be related.” You’d want to look–at a minimum–at how the relative scarcity of labor plays into this (which might relate to health care costs but also likely relates partly to economic growth) and a bunch of other factors as well. As Ezra correctly points out, growing GDP doesn’t necessarily translate into higher wages. That’s partly because employers have not passed on profits gained through recent productivity gains. But they’ve managed to do that because of increasing labor insecurity. So how does that factor in? Is it instead the case that the relentless increase in health care costs (there have never been “savings” in this period) have transformed the employer-employee relationship and so long as health care costs go up, at whatever rate, employers will never have to pass on “savings” to employees?

Ezra’s also looking only through 2007. You’d also want to look at the last year and a half–which is a point I’ll return to.

Then there are the studies Ezra cites.

There is, in other words, very good evidence that employers pass health-care savings onto employees. A Rand study by Dana Goldman, Neeraj Sood and Arleen Leibowitz examined a particular firm’s response to a period of premium increases and found that “about two-thirds of the premium increase is financed out of cash wages and the remaining one-thirds is financed by a reduction in benefits.” Another study by Katherine Baicker and Amitabh Chandra found that a 10 percent increase in premiums “results in an offsetting decrease in wages of 2.3 percent,” which is fairly impressive given that income is much higher than health-care premiums.

Look at the logical structure of this paragraph:

  1. “Employers pass health-care savings onto employees” [which is a transition from the previous paragraph]
  2. Two-thirds of a premium increase is financed out of wages
  3. A 10% increase in premiums results in a 2.3% decrease in wages

To support his transitional sentence that employers pass on health-care savings to employees, Ezra links to two studies that show something else: that when health care costs increase, employers pay for it out of wages. That is, the studies are making the reverse argument, showing only that increased health care costs result in lower wages.

And just so we know what we’re talking about, here’s the second half of the abstract from the second study:

We estimate that a 10 percent increase in health insurance premiums reduces the aggregate probability of being employed by 1.6 percent and hours worked by 1 percent, and increases the likelihood that a worker is employed only part-time by 1.9 percent. For workers covered by employer provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3 percent. Thus, rising health insurance premiums may both increase the ranks of the unemployed and place an increasing burden on workers through decreased wages for workers with employer health insurance and decreased hours for workers moved from full time jobs with benefits to part time jobs without.

That is, this study argues that as health insurance premiums increase, people lose their jobs or become underemployed. Which sort of goes back to my point about the relationship between wages and health care costs: one of the things we need to factor in is the labor supply, because one of the things this study, at least, shows is that increasing health care costs has an effect on the labor supply.

One more thing. These studies are both from 2005. So Ezra’s working with his own data through 2007 and studies from 2005.

Which brings me to Ezra’s assertion that “workers don’t understand” how all this works. Now, he promises to explain that assertion later, and I assume he will make a thorough argument on that point.

But any assertion that “workers don’t understand” what is happening in today’s labor market would need to account for the way the recession is changing the employer-employee relationships drastically, in ways that employers, at least, claim will be permanent. There is some evidence that employers are trying to wring profits out of cuts in both benefits and pay.

Some shifts in the employer-employee relationship have been building for years, but the recession, by making companies acutely cost-conscious, has accelerated them.

“I think we’ve entered into a fundamentally new era,” says David Lewin, of the Anderson School of Management at the University of California, Los Angeles. He describes employers as “leery of long-term commitments,” including both benefits and pay increases.

Now, at least where I live in fly-over country (which, as the economic clusterfuck of the country, may be exceptional), when employers send out letters saying “profit is down so we’re cutting health care” followed a few months later by big layoffs, employees are acutely aware that employers consider benefits and wages as means to achieve profitability. Workers are acutely aware that rising health care costs are leading to job insecurity. And for many employees in this market, it’s not a question of either/or. It’s a question of the package employers (sometimes with employee input) choose as a total cut.

And one of the reasons this is important to discussions about the excise tax is that the changes excise tax proponents forsee in the future, when the excise tax begins to hit Chevy plans, are already happening on an accelerating scale.

This can mean eliminating programs. The percentage of employers offering health-care benefits is 60% this year, down from 63% in 2008 and 69% in 2000, according to the Kaiser Family Foundation.

In a survey by Hewitt last winter, 19% of large employers said they planned to move away from directly sponsoring health-care benefits over the next five years.

In the meantime, workers’ share of health costs is headed up. For next year, 63% of employers that offer health coverage plan to increase employees’ share of the expense, according to a survey of 1,500 employers by another consulting firm, Mercer.

One vehicle is the high-deductible plan. Twelve percent of employers offer such a plan today, up from 4% in 2005, the Kaiser Family Foundation says.

Now, frankly, I don’t pretend to know how these rapid changes will affect projections on the excise tax, though my guess is that it’ll mean the government will be paying much higher subsidies than they expect because there will be a lot more people who don’t get health care through work (particularly if the Senate plan’s lack of a mandate survives). And that by the time employers cut benefits in response to the excise tax in 8 years or so, many of the acceptable cuts to health care will have already have been made, meaning the cuts made to stay under the excise tax will have unacceptable health care outcomes. But, since health care reform auto-enrolls employees, employees may be stuck paying for an employer-sponsored but not funded plan that they cannot afford.

But let’s go back.

What it appears that Ezra has proven is that when health care costs go up, people lose hours and jobs, which drives down wages. He also appears to show that wages never go up as quickly as health care costs. And more recent data seems to suggest that that process may be accelerating–and that employers may be cutting both health care and wages/jobs  in a drive for profitability.

It seems that most people agree that the excise tax will increase health care costs, eventually even on the Chevy plans.

Doesn’t that suggest, then, that one of the possible outcomes of the excise tax is increased job losses?


More Proposed Oversight from John Conyers

John Conyers has been busy. In addition to drafting bills to improve FISA and PATRIOT (more on that later), he has introduced three more bills that would improve Congressional Oversight of the Executive.

The Department of Justice Inspector General Authority Improvement Act of 2009

This Act will authorize the Department of Justice Inspector General to investigate attorney misconduct within the Department of Justice. Under current law, all allegations of wrongdoing by the Department of Justice attorneys are required to be investigated by the by the department’s Office of Professional Responsibility, rather than the Inspector General. In contrast with the statutorily independent Inspector General, the Office of Professional Responsibility is supervised by the Attorney General.

This limitation on authority does not exist for any other agency Inspector General. The Department of Justice Inspector General Authority Improvement Act of 2009 will make the authority of the Department of Justice Inspector General consistent with that of all other agencies and will prevent future abuses and politicization within the Department.

DOJ’s Inspector General, Glenn Fine, has been pushing for this authority for some time (and not just because it would give him more authority). It fixes two problems that exist right now–one, that lawyers in DOJ are not held legally responsible in the same way as others might be, because they escape IG oversight (and often benefit from quiet settlements on complaints handled by OPR). And, more importantly, the current situation (in which OPR–which reports to the Attorney General–conducts investigations of lawyers) makes it almost impossible to investigate the actions of the Attorney General or his close allies. Alberto Gonzales was able to put off investigations into the US Attorney scandal for some time this way.

The Inspector General Authority Improvement Act of 2009

This Act will provide the Inspectors General of the various agencies the authority to issue subpoenas for the testimony of former employees or contractors as part of certain investigations. Under current law, a critical witness can avoid being interviewed by an Inspector General, and thus seriously impede an investigation, by simply resigning from the agency.

The bill contains important limitations on an Inspector General’s subpoena power in order to prevent abuse or damage to ongoing investigations.  Most prominently, an Inspector General cannot issue a subpoena if the Department of Justice concludes in a particular case that the taking of a deposition would interfere with civil or criminal litigation.

Again, this seems like a response to the Bush scandals–not least the way some of the culprits in the US Attorney scandal refused to cooperate with Glenn Fine (or the way John Ashcroft has refused cooperation with all torture and illegal wiretapping IG investigations).

The Disclosure of Presidential Declassification of Intelligence Information Act of 2009

The bill will require the President to inform, within 15 days, the relevant congressional committees whenever intelligence has been declassified. The bill also expresses the Sense of Congress that additional notice should be provided to the Director of National Intelligence, the Archivist of the United States, and the heads of the applicable elements of the intelligence community.

I will follow up on this one to see what the logic behind it is. But for the moment, I’m going to call it the Valerie Plame Insta-Declassification Bill. After all, if Dick Cheney George Bush had been required to reveal whether he had insta-declassified her identity within 15 days, it would have made it very clear whether Cheney’s order to Libby to leak it was nominally legal or whether Cheney and Libby violated the IIPA. But this law would have also made it harder for Bush to warmonger on Iraq, since every time they insta-declassified info to leak to Judy Judy Judy, they would have had to admit that fact.

Frankly, I expect both Republicans, the Administration, and some Democrats to balk at this bill. But we might have fun in the interim.


House Judiciary Committee to Propose PATRIOT and FISA Reforms

John Conyers, Jerry Nadler, and Bobby Scott just introduced bills that will provide needed reforms to PATRIOT and FISA while reauthorizing most of the sunsetting authorities this year.

From the Committee press release, the PATRIOT bill does the following.

Title I:  Patriot Act Related Amendments

Roving Wiretaps

• Clarifies roving wiretap laws in order to ensure that the government only conducts surveillance on a single, identifiable target.

Section 215 Orders

• Improves the standard for issuing a Section 215 order by requiring specific and articulable facts to show that the tangible things sought are relevant to an authorized investigation, other than a threat assessment.

• Provides recipients of Section 215 orders with the ability to immediately challenge both the underlying order and any gag order associated with it.

• Facilitates compliance with already existing minimization procedures to ensure proper safeguards pertaining to information collected via Section 215 orders.

• Prohibits a request for Section 215 records to a library or bookseller for documentary materials that contain personally identifiable information concerning a patron.

Criminal “Sneak and Peak” Searches

• Adopts safeguards against abuse of searches where notice to subject of search is delayed by shortening the initial 30 day delay period to 7 days, requiring that any application for an extension in the 7 day delay be made by the Senate confirmed US Attorney in the district where the delayed notice warrant was originally obtained, and removing ability to obtain delay by merely alleging that notice would “otherwise seriously jeopardize an investigation or unduly delay a trial.”

Pen Register and Trap and Trace Device

• Requires more specificity in the application for pen register and trap and trace and establishment of minimizations procedures.

Nationwide Court Orders

• Allows a provider of electronic communication service or remote computing service to challenge a subpoena, order, or warrant requiring disclosure of customer communications or records in either the district in which the order was issued or the district in which the order was served.

Audits, Reports, and Sunsets

• Requires annual Inspector General audits and reports to Congress on the use of Section 215 orders, NSLs, and Pen Registers and Trap and Trace Devices through the end of 2013.

• Provisions pertaining to Section 215, NSLs, and roving wiretaps will sunset on December 31, 2013.

Lone Wolf

• Allows the Lone Wolf provision to sunset at the end of this year (December 31, 2009).

Title II: NSL Reform

• Ensures that the FBI can obtain basic information without a court order, but also adds reasonable safeguards.

• Improves the issuance standard for NSLs by requiring specific and articulable facts showing that there are reasonable grounds to believe that the information sought pertains to a foreign power or agent of a foreign power, and requires the FBI to record them in a written certification.

• Improves procedures which provide an opportunity for an NSL recipient to challenge the NSL itself and any gag order associated with it.

• Authorizes meaningful, constitutionally sound judicial review of NSLs and associated gag orders.

• Requires the Attorney General to authorize the use of any information acquired or derived from an NSL in a criminal proceeding.

• Requires the Attorney General to establish minimization and destruction procedures to ensure that information obtained pursuant to an NSL regarding persons who are no longer of interest in an authorized investigation is destroyed.

And the FISA bill does the following:

H.R. 3846, FISA Amendments Act of 2009 Brief Summary

Telecommunications Immunity

• Repeals the retroactive immunity provision in the FISA Amendments Act of 2008, leaving it to the courts to determine whether telephone companies that complied with the illegal warrantless wiretapping program acted properly under the laws in effect at the time and therefore deserve immunity.

Bulk Collection

• Prevents the government from using the warrantless collection authorities of the FISA Amendments Act of 2008 to conduct “bulk collection,” which could include the collection of the contents of all communications between the United States and the rest of the world.

Reverse Targeting

• Places additional limits on the warrantless collection authorities of the FISA Amendments Act of 2008 to ensure that they are not used as a pretext when the government’s real goal is to target the Americans with whom the ostensible foreign target is communicating.

Use of Unlawfully Obtained Information

• Limits the government’s use of information about U.S. persons that is obtained under FISA Amendments Act of 2008 procedures that the FISA Court later determines to be unlawful, while still giving the FISA Court flexibility to allow such information to be used in appropriate cases.

Protections for International Communications of Americans

• Permit unfettered acquisition of foreign-to-foreign communications and of communications of suspected terrorists into or out of the United States, while creating safeguards for communications not related to terrorism that the government knows have one end in the United States.

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