Saturday, June 27, 2015

A Greek Referendum on Creditor Demands: Orchestrated Impediments to Reaching the People

On June 27, 2015, Greek Prime Minister Alexis Tsipras announced a referendum on whether Greece should accept additional austerity in the form of tax increases and pension cuts as demanded by the state’s creditors. Putting the ultimatum from lenders to a popular vote translates into political theory as governmental sovereignty—the portion retained by the E.U. state—voluntarily submitting to the popular sovereign, which is the more fundamental sovereignty in any democracy. “Our responsibility is for the future of our country. This responsibility obliges us to respond to the ultimatum through the sovereign will of the Greek people,” Tsipras said in a televised address.[1] More abstractly, deferring to the people on a major policy question is the responsibility, or duty, of any democratically-elected government. Sadly, few heads of government and legislatures even acknowledge this duty, let alone act on it. In this essay, I address the Greek case as a way of illustrating a few of the drawbacks of appealing to popular sovereignty through a referendum, while still holding that the duty itself is valid. I contend in particular that Tsipras’s Greek opponents, E.U. officials, and the state’s lenders (through government officials in other E.U. states) intentionally sought quite disrespectfully to manipulate Greece’s popular sovereign by distorting the question on the referendum to get a “yes,” or “oxi” result. That is, federal and state officials in the E.U. sought to scare and confuse the popular sovereign of one state—bullying, in effect, the basis of democracy itself for power and money.

 Greece's PM Tsipras looking rather fatigued after meetings on the bailout. (John Thys AFP/Getty)

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.

Wednesday, June 17, 2015

Ethnic Groupings in the European Parliament: A Function of Rhetoric

L’extreme droit a formé un autre parti fédéral. The anti-E.U. party officially announced on June 16, 2015, is named “Europe of Nations and Freedoms.” A label can say a lot about a party’s principles. In this case, the overriding point is that the E.U. is supranational. That is to say, the Union is an international organization. Closely behind is the secondary point that freedom resides at the national level, otherwise known as the level of the states. Even though the supporting state parties were at the time typically labeled as extreme—the extreme right—the main-stream media in the E.U. reporting on the new party used rhetoric subtly undergirding the principles.

Le Pen and Wilders toasting their new ethnic group in the European Parliament.  
(Source: Geert Wilders)

Deutsche Welle, for example, repeatedly refers to the new party as a “group in the European Parliament.”[1] Governments, after all, have parties, and the E.U.’s “assembly” can hardly be considered a legislature—so goes the party-line. Accordingly, the PVV’s Geert Wilders tweeted, “The formation of a group in the European Parliament has succeeded!”[2] Le Pen’s FN put out a statement referring to “a political grouping . . . within the EU assembly.”[3] Both “grouping” and “assembly” intimate an international forum rather than a legislative body whose representatives are elected by citizens directly rather than appointed by states and representing them.

That “Euroskeptic and right-wing parties came out top in the European Parliament elections in May 2014” is to say that the national parties did well. The reference is not to the parties in the Parliament. “In France,” for example, Deutsche Welle reports that “FN garnered more votes than any other party.”[4] The night before the announcement of the new “grouping” in the Parliament, Florian Philippot, vice president of the FN, told Reuters, “We were five and it’s been possible to add two other nationalities to form a group.”[5] Clearly, he was not referring to an ethnically-diverse group of people. The linguistic stretch alone belies the veracity of the rhetoric and its underlying principles.

Imagine the confusion were a new party formed in the U.S. House of Representatives with members from seven states and the rhetoric were similar to that being applied to the chamber’s counterpart in the E.U. A headline such as, “Seven ethnicities have formed a group in the House of Representatives,” would naturally be taken as referring to the Congressional Black Caucus joining forces with other such groups in the House. Of course, race is distinct from ethnicity, but distortive rhetoric in American politics is not the point of this essay. Rather, my point is that a new party in the European Parliament is not somehow akin to the Congressional Black Caucus.

Moreover, a recognized party in a legislative body is not “a grouping.” Nor is the European Parliament an international assembly, for states (a.k.a. nations in the European context) are not represented. Ironically, the word “Congress” comes from the French, le congrès, which can mean “conference”—as in an international conference. The Continental Congress, which was the federal institution from 1776-1781 in the U.S., was indeed a conference, as the thirteen sovereign nations sent delegates to represent those states at a level viewed at the time as international rather than national. It would be une erreur formidable to imply that the E.U. states were still sovereign states at the time of the new party’s announcement, and thus that the E.U. was somehow an international organization with legislative groupings rather than parties.  

1.Le Pen’s FN to Form Far-right Group in EU Parliament,” Deutsche Welle, 16 June 2015.
2. Ibid.
3. Ibid.
4. Ibid.
5. Ibid.

Monday, June 15, 2015

Dish Network and the U.S. Government Dominating Colorado: A Court Ruling on Marijuana

The Colorado Supreme Court ruled on June 15, 2015 that Brandon Coats, a quadriplegic medical marijuana patient from Colorado who had been fired by Dish Network in 2010 for using the drug while at home and off-duty, was not protected under the state's "lawful activities statute." According to the Court, “Colorado’s ‘lawful activities statute,’ the term ‘lawful’ refers only to 14 those activities that are lawful under both state and federal law. Therefore, employees 15 who engage in an activity such as medical marijuana use that is permitted by state law 16 but unlawful under federal law are not protected by the statute.”[1] This reasoning seems pretty solid, though if we unpack use and consult with the company’s own rationale, the case is considerably messier. In fact, the problem may reside with the American federal system itself, in which case an erroneous judicial decision could be expected.

According to the Huffington Post, “(t)he arguments from both Dish's and Coats' attorneys centered on the question of what exactly constitutes "lawful" use of medical marijuana outside of the workplace -- and how such use can be considered lawful when federal law still classifies marijuana as an illegal substance, even though the state of Colorado has legalized its use both medically and recreationally.”[2]

Meghan Martinez, the attorney for Dish Network, had argued before the Supreme Court that whether or not Coats was ever impaired at the workplace was not the issue. Instead, the point was the "use" itself, which she defined as having THC in a person’s system. "He tested positive, had THC in his system," Martinez said. "We are alleging that he was using THC at the workplace. The definition of use is in the medical marijuana act [Colorado's Amendment 20]. It's the employment of something, the longstanding possession of something. He smoked marijuana while at home, but he crossed the threshold [to his office] with THC in his system. The use is the effects, it's the THC, it's the whole point of marijuana. So when he came to work, he was using."[3] Using in this sense is distinct from impairing.

Because inactive THC can remain in a person’s system for up to 90 days, the definition of “use” in Colorado’s Amendment 20 is problematic if impairment is assumed to apply. According to Martinez, the issue was never about whether the THC was impairing Coat’s work. Instead, he was violating federal law even while he was at work. Therefore, the issue is not that of how far managers can go into their employee’s life outside of work.

However, the company’s own stated rationale for the drug tests implies impairment. “To ensure a safe and productive work environment, Dish Network reserves the right to administer nondiscriminatory, unannounced random drug testing," the company drug policy reads. "No employee shall report to work or be at work with alcohol or with any detectable amount of prohibited drugs in the employee’s system. Any violation of this statement of policy will result in disciplinary action up to and including termination.”[4] Specifically, impairment is implied in such use as would get in the way of “a safe and productive work environment.” Nothing is said about ensuring a workplace environment in which people are not breaking a federal law. In other words, the company’s position is internally contradictory as to which sense of use is relevant.

From Coats’ perspective, impairment would be the only basis on which the managers could justifiably terminate his employment based on the drug-test. “The mere presence of THC is not proof of impairment,” his attorney Michael Evans said in his arguments to the Court.[5] In fact, Coats, who worked at the company as a telephone operator, was a good employee. “I think he was late twice, but that was the extent of any discipline,” Evans told reporters in 2014.[6] Not only had Coats not detracted from a productive work environment; it sounds like he advanced it. “Put that in your pipe and smoke it!,” he could have told the manager firing him.

As for the matter of illegal use, the contradictory Colorado and U.S. laws on medical marijuana were itself the problem. In upholding the trial court’s decision in favor of Dish Network, the appellate judge had ruled that federal law trumps state law on marijuana.[7] Were preemption applicable on any federal law, then the very notion of enumerated powers would be moot. In other words, the judge’s statement ignores the point that federal powers are not unlimited, but, rather, are limited, as enumerated, whereas those of the states are residual.[8]

In regard to medical and even recreational marijuana-use in Colorado, the antipodal U.S. law could arguably be said to apply to the drug in interstate commerce and in going to and from the U.S., rather than within Colorado.

For example, while I was driving eastward across Nebraska after marijuana had been legalized in Colorado, a Nebraska trooper pulled me over because I had not used my turn-signal to shift lanes on the interstate highway. After strangely asking me about my writings, as if they would play any role in my having failed to use my turn-signal after passing a car, the policeman looked me straight in the eyes and asked,

“Are you trafficking marijuana or guns?”

I was stunned at the young man’s assumption of equivalence. I would be very concerned if someone were trafficking guns, but actually indifferent were someone transporting pot. The last thing I wanted to do was to give a Nebraska cop a lesson on category mistakes—his mentality was so very strange, or distorted, in my reckoning. So I offered to have him look in the car, which he did before sheepishly telling me I could go. Cultural differences between the states do indeed exist!

That a Nebraska policeman would enforce a federal law on an interstate highway makes perfect sense, even were the matter at hand legal under Nebraska law. Similarly, the lawful use of marijuana within Colorado does not extend to taking the drug into another state, or abroad for that matter. 

When the federal authority is tied back to its enumerated powers, moreover, the fact that the federal and state laws on marijuana conflict is no longer a problem; rather, both can co-exist within the larger federal system. Indeed, one of the virtues of federalism is its feature of accommodating cultural differences that cannot but exist between country-size states in an empire-scale union. If federal preemption is applicable to any extant federal law, then the accommodating feature is eclipsed by the desire for “one size fits all.”

Adopting a still wider scope, I detect overreaching both by the company and the federal government in that case. The latter’s marked tendency during the twentieth century to take more and more authority at the expense of the state governments is of the same urge, I submit, that prompts managements to encroach on their employees’ lives away from work even on matters that do not impact their work. Such overreaching can become a way of doing business and governing, such that a presumption attaches to it. That is to say, even a slight pulling back on the reins can trigger furious rage, as in how dare you!, even though the expression would be more accurately directed to the people who are encroaching as if doing so were their right. The real loser in the case in Colorado may be balance itself.

1.  No. 13SC394, Coats v. Dish Network, June 15, 2015.
3.  Ibid.
4.  Ibid.
5. Ibid.
6.  Matt Ferner, “Employers Can Fire You For Using Marijuana, But Brandon Coats’ Case Could Change Everything,” The Huffington Post, March 24, 2014.
7.  Ferner, “Employer Can Fire Medical Marijuana Patients.”  See also the appellate decision.
8.  The Tenth Amendment of the U.S. Constitution.

Tuesday, June 2, 2015

Americans on How Political Campaigns Are Funded: A Black Hole in the Center of the Political System

Considering the widening cultural and political divides in American society that were on full display in Congress during the first half of the 2010s, uncovering a general will stretching across partisan lines as well as across a the continent and beyond would proffer a rare opportunity for significant legislative output. Furthermore, such a case would enable us to assess whether the elected representatives of the People were indeed representing, and, if so, whom. That is to say, the political distance between the People and their political class could be measured. I contend as respecting the stance of the People on money in politics and public governance, much unity and, unfortunately, much distance can be discerned, at least as of the end of May 2015 when a New York Times/CBS News telephone-poll was taken.

Evincing a unity striking not only in its singularity, but also given the partisanship on the topic then in the Congress, more than four in five Americans said that “money plays too great a role in political campaigns,” and two-thirds said “that the wealthy have more of a chance to influence the elections process than other Americans.”[1] By a significant margin, Americans said “they reject the argument . . . that political money is a form of speech protected by the First Amendment.” That even self-identified Republicans were evenly split suggests that The New York Times does not overstep in generalizing to characterize Americans, rather than the poor or Democrats, for instance, as rejecting the money-as-speech judicial doctrine. In fact, 75 percent of self-identified Republicans said they support more disclosure by outside groups, and Republicans were almost as likely as Democrats to favor further restrictions on campaign donations.

Nevertheless, Republican Congressional leaders had “blocked legislation” to require more disclosure by political nonprofit groups that were not required to reveal their respective donors. Furthermore, “some prominent Republicans” in Congress were calling “for legislation to eliminate existing caps on contributions.” As startling as the amount of daylight visible between the political class and the rank and file in the Republican Party itself is, the distance between the governed and their governors is even more grave, considering that the people doing the legislating happened to be elected.

A"Rockefeller Republican" turned populist? He stands alone in the rain outside the White House. (Getty Images)

It should come as no surprise, therefore, that The New York Times observes from the poll that “Americans appear to be as inured to the role of money in campaigns as they are disillusioned by it, expressing a deep cynicism about the willingness of elected officials to fight the system they inhabit or to change the rules they have already mastered.” A majority of Americans were pessimistic that campaign rules would be improved. The conflict of interest that Americans believed that their elected representatives were actively exploiting dovetails with the role of money in politics at the time because the representatives and their “paymasters” had written the rules! At the very least, both parties knew how to “work the rules” in their respective, and, mostly joint, interests.

In business theory, “agency costs” are incurred by someone (i.e., the principal) who has hired another person (i.e., the agent) to the extent that the latter does not do the will of the former. The principal not only loses out because the job isn’t getting done, but also must spend additional time and energy to get the agent to get the job assigned done. Perhaps the agent finishes the job, but skews it to be more in the agent’s own benefit. If the principal’s benefit is less as a result, this loss is also an agency cost. This theory can be applied to politics.

When a supermajority of an electorate want a law passed but those voters’ own elected representatives (i.e., agents) refuse, the principals incur agency costs. Moreover, when a People want one system of governance and the political class ensconced in another one—the current one in which that class benefits (and therefore has a conflict of interest in)—the People suffers agency costs. In terms of democratic theory, the governmental sovereignty is suspect rather than legitimate from the standpoint of popular sovereignty (i.e., the general will of the People as a people).

I contend that the political class’s continued exploitation of the conflict of interest is a significant factor in the distance that had widened between the governed and the elected governors. “Candidates for political office are not in it just to serve the people; they also want the prestige and the perks,” said one respondent in the poll. The New York Times reports that in follow-up interviews, respondents “described political leaders as a kind of class apart.” Mixing “public life and personal enrichment,” elected officials were in the habit of taking “frequent flights on the private planes of billionaires” and going on “junkets paid for by corporate lobbyists and foreign governments,” all while ostensibly doing the people’s business.

Moreover—and this is where it gets really important—some of those polled “expressed a profound alienation from their own government. They said they did not expect elected officials to listen to them. They described politics as a province of the wealthy.” Incredibly, “they said they sometimes did not feel informed enough to come to an opinion about the candidates.” In spite of “being inundated with political advertising,” they said they were repulsed by the billions of dollars” behind it. In short, a significant part at least of the electorate had tuned out, given up, and lost hope. It would appear that popular sovereignty can commit suicide, rather than continue to endure a sordid political class—humiliatingly the People’s agents—and the related self-aggrandizing deep pockets who shamelessly put their private interest above the public weal. Abstractly stated, popular sovereignty can simply choose to give up, rather than even recognize the bill that would be required to pay in order to take back the wayward governmental sovereignty. I suppose the latter can be like a black hole, sucking in power and money even as the universe itself becomes unhinged from its outer walls and begins to collapse into itself. So narrow-minded, so greedy with its ruddy, fat hands, can a black hole be that it consumes the very conditions of its existence.

Incremental change, or “reform,” is not the way to correct such a dysfunctional system as a political class at odds with its principals (as well as principles) in a democracy; the class’s paymasters would only subvert the “reforms” in all but name. The Dodd-Frank Financial Reform Act of 2010, for example, merely tweaked with the problem of systemic risk by raising reserve requirements on the largest banks; the proposal to break up the five largest banks predictably got nowhere. The People were led to believe that holding more in reserves would make a difference in an inter-bank credit freeze an amid short-selling. Meanwhile, Wall Street would continue to fund the Congressional re-election campaigns of the law’s “writers” and supporters.

The superiority of the popular sovereign (i.e., the People) over the entrenched governmental sovereign (i.e., the political class) is evinced in the poll in that 39% said fundamental changes are needed in the way political campaigns are funded in the United States, and a whopping 46% said the system should be completely rebuilt. That, my friends, is an astonishing find in American politics. Almost half of the popular sovereign believed that the way its agents are selected had to be completely rebuilt. Beyond mere statute, such a “big picture” standpoint is constitutional in nature. Unfortunately, the political class would almost inevitably have its say, even a veto, on any proposed constitutional amendments—even any in which elected officials have a conflict of interest. The wish to completely rebuild the way campaigns for elected office are run may be like hoping that a universe take back its power from the black hole at ground zero already dominating even space and time.

[1] Nicholas Confessore and Megan Thee-Brenan, “Poll Shows Americans Favor Overhaul of Campaign Financing,” The New York Times, June 2, 2015. All of the quotes in this essay are from this source.