Wednesday, March 04, 2015

Chevron or Dole in King v Burwell?

by Michael Dorf

In the aftermath of the King v. Burwell oral argument, what I have previously called "SCOTUS kremlinology" now commences: Lawyers and law professors will dissect every question asked by the various Justices and even matters analogous to the seating arrangements--such as the fact that CJ Roberts was mostly quiet during the argument, with one critical exception, to which I'll return below. I like to play this game too but I'm going to resist in order to suggest that there is a critical argument towards which Justice Kennedy's questions gestured, but that, for institutional reasons, SG Verrilli was not well positioned to make quite as forcefully as it might have been made.

The plaintiffs and the government each argued that they respectively should win the case under both the plain meaning of the statutory text and its meaning understood in context. I think it's nonetheless fair to say that the government's argument relied more on context, whereas the plaintiffs' argument relied more on (somewhat isolated) text. Indeed, even Justice Scalia, who was quite obviously sympathetic to the plaintiffs' position, didn't seem to buy attorney Michael Carvin's argument that the ACA works perfectly well--indeed better!--without subsidies on federally run exchanges than with them; Justice Scalia instead expressed the view that Congress messes stuff up all the time but that's no reason to disregard plan statutory language.

Meanwhile, SG Verrilli expressed the view that, read in light of overall context, the statute is clear that it authorizes subsidies on federal exchanges. That's an argument for affirming based on a different rationale from the one offered by the Fourth Circuit in the proceedings below. That court found that as used in 26 § 36B(c)(2)(A)(i), the crucial term "an Exchange established by the State under section 1311" was unclear, but that pursuant to step 2 of Chevron, the IRS construction of the term to include federal exchanges was reasonable. By contrast, SG Verrilli argued that the government should win at Chevron step 1.

And it's not surprising that he did so. In just about his only intervention on issues other than standing, CJ Roberts asked the SG whether a victory under Chevron step 2 would mean that a future administration could reach a contrary conclusion, finding that subsidies are not available on federal exchanges. SG Verrilli put up some resistance, saying that--in light of the disastrous consequences--such a construction might be unreasonable, but given that avoidance of those same disastrous consequences is part of what informs his conclusion that the government should win at Chevron step 1, if the Court were to reach Chevron step 2 (say, in reviewing an IRS change of heart under a future Republican president), that might not be enough to deem this approach unreasonable.

It thus might appear that in order to win the case on terms that bode well for the long-term survival of the ACA, the SG had to persuade the Court that § 36B(c)(2)(A)(i) is not merely ambiguous but that, when read in overall context, it clearly means what the government says it means. I think he has a decent argument for that conclusion, but it's hardly a slam-dunk.

Nonetheless, the government can win big even if a majority of Justices find that the language is ambiguous. The key would be to win not on the basis of Chevron deference but on the basis of the South Dakota v. Dole plain statement rule. For if the Court holds that, in light of Dole, subsidies are available on federal exchanges, then no future Administration could undo that result (absent repeal of the ACA by a sympatico Congress).

South Dakota v. Dole sets forth conditions on conditional spending by Congress, one of which
states that "if Congress desires to condition the States' receipt of federal funds, it must do so unambiguously." (Internal quotations and citations omitted.) By its terms, that test doesn't apply to  § 36B(c)(2)(A)(i), because it is a provision governing the tax liability of individuals rather than governing the states' receipt of federal funds. However, the logic of Dole and the anti-commandeering case, New York v. United States, very strongly point in the direction of applying it in the present context.

Indeed, at one point Justice Alito asked SG Verrilli directly whether reading § 36B(c)(2)(A)(i) as the plaintiffs proposed would render the law unconstitutionally coercive. Justice Kennedy's earlier line of questions to Mr. Carvin indicated that he thought the answer was yes. However, because SG Verrilli was aware of his obligation to defend the statute if attacked on that ground, what he said was it would be a "novel" question. He then started to say something like if the Court thinks that's a difficult constitutional question, then the Court should invoke the canon of constitutional avoidance and reject the plaintiffs' reading, but Justice Kennedy interrupted him and made the point for him.

And that seems right to me. NY v. US says that Congress can't simply direct a state to pass a law (such as the one needed to set up a state exchange) but that Congress can do so if it conditions the state's receipt of funds on passing a law, so long as it satisfies the Dole rules regarding conditional spending. The "novel" question is whether Congress can evade NY/Dole's requirements by threatening to withhold money (here in the form of tax subsidies) from the citizens of a state rather than from the state itself. The whole logic of NY strongly suggests a negative answer, and that's the way that Justice Kennedy appeared to be leaning.

Two final points are worth noting. First, in the past I (and many others) have criticized SG Verrilli's performance in high-stakes cases, including the last ACA case. Here he did a great job. His inability to seize the lifeline offered by Justice Kennedy with both hands was occasioned by the institutional constraint I've noted, not by any lack of competence--and even then, he did embrace the suggested constitutional avoidance argument.

Second, Justice Alito tried to head off the conditional spending point by noting that there wouldn't be a severe notice problem: Congress would not be pulling the rug out from the states because they could simply set up their own exchanges after a ruling by the Supreme Court. But this argument is doctrinally non-responsive. Under Dole, if a condition is not expressed clearly, it doesn't exist; it doesn't get converted to a phase-in. Moreover, the point of requiring a clear statement in a conditional spending measure is partly to give fair notice to the states, but that's not its only point. The clear statement rule for conditional spending also seeks to leverage the political safeguards of federalism: If Congress really wants to put financial pressure on the states to do its bidding, then it must do so clearly and in the open, so that the states can attempt to use their political power to block it in Congress before it goes into effect; not just by refusing to take the money.

Tuesday, March 03, 2015

Text All The Way Down: Why the Government Should Prevail in King v. Burwell

By Eric Segall

I had the pleasure of debating Professor Jonathan Adler of Case Western Reserve at the University of Pennsylvania on Monday afternoon on the issue of King v. Burwell and the legality of federal subsidies on federal exchanges (because of weather he had to appear via Skype). As usual Jonathan was civil and classy and I thoroughly enjoyed the back and forth. The debate was sponsored by the American Constitution Society and the Federalist Society as well as the law review. Our dueling essays can be found here.

There has been so much written about the case, by so many talented people, that I just want to add emphasis to one point that has not received nearly enough attention. Many scholars who believe the government should win the case have repeatedly emphasized that Professor Adler and the plaintiffs are focusing too much on the phrase “established by the state” in Section 1311 of the Act and not enough on the rest of the law and its myriad provisions making clear that the iconic “three-legged stool” was supposed to be the hallmark of the insurance exchanges regardless of whether the websites were run by the state or federal governments. I agree with all that but the case, properly analyzed, is actually much simpler and resort to overall context is unnecessary.

Professor Adler and the plaintiffs have somehow convinced lower courts and even many academics that there is a provision in the ACA that says federal subsidies are only available on state exchanges and it is up to the government to prove otherwise by reference to other provisions in the statute or the context of the law. But, there is no such provision and, ironically, there is part of the law that says exactly the opposite—that subsidies are in fact available on federal exchanges. Properly analyzed, the case should start and end there, unless it creates absurd results to allow such subsidies on federal exchanges (which no one is arguing).

Section 1321 of the ACA requires the Secretary of HHS to create health exchanges in states which refuse to create their own exchanges. This is not debated by anyone. Thus, the inquiry must start with Section 1321. Throughout my debate with Professor Adler, and for that matter, in social media, in law reviews, and in blogs, Professor Adler has tried to focus attention on Section 1311 as the place to start. But, looking at the law in the proper order shows why the government should win.

What kind of exchange does HHS have to create under Section 1321? The answer, found in the same section, is an exchange “such” as the one mentioned in 1311. Are federal subsidies available on Section 1311 exchanges? Yes. Does HHS have to create that kind of exchange? Yes. Case over.

Professor Adler’s response to this argument during our debate was that a 1321 exchange is established by the federal government not a state and subsidies are only available on exchanges “established by a state.” But the law does not say that. It does say “qualified” consumers may obtain federal subsidies on an “exchange established by the state” but nowhere does it say subsidies are only available on such exchanges. 

What the law does say, however, with startling clarity, is that, if a state chooses not to create an exchange (where subsidies would be available), HHS must create that (or such) exchange. It is only by looking at Section 1311 first, which is inappropriate, that anyone could reasonably think subsidies aren’t available on the exchanges created by HHS.

If we do turn to context, Professor Adler’s and the plaintiffs’ theory of the case requires the belief that Congress required the federal government to set up health insurance exchanges that have nothing to do with the entire point of the ACA (to make health insurance more, not less, affordable). Normally thoughtful people like my former professor James Blumstein of Vanderbilt, have written entire pieces ignoring this anomaly on the basis that the law explicitly says subsidies are either 1) only available on state exchanges or 2) are prohibited on federal exchanges. But the law says neither and thus Blumstein’s essay, like so many others written about the case, is based on an entirely false premise.  

If applying the law as written is truly important to the Justices, the Court will find that Section 1321 of the ACA explicitly requires the Secretary of HHS to create a federal health insurance exchange just like the one mentioned in Section 1311 (where federal subsidies are required for qualified consumers). Any other interpretation of Section 1321 changes the plain meaning of the ACA beyond recognition.

Is the Best Path to Prosperity Too Boring to Talk About? Tom Palley Doesn't Think So

-- Posted by Neil H. Buchanan

During the Great Recession and its punishing aftermath, the most obvious place to begin any policy discussion was with government spending and taxing, aka fiscal policy.  Fiscal policy can seem boring (especially the tax part), but it is actually quite easy to describe its flesh-and-blood importance.  Whether to provide extended benefits to unemployed workers, to give tax credits to home buyers, to pay for infrastructure spending, to provide funds to states to prevent teacher layoffs, to cut taxes on businesses and the rich in the hope that their prosperity will trickle down on everyone else, and so on, are the debates that drive U.S. politics (and, I suspect, politics everywhere).  In one way or another, we are always asking how the government should use its powers to spend (or not) and tax (or not), such that people's lives are improved.

In the background of all such discussions is the financial system.  When the Federal Reserve reached the point where it had reduced short-term interest rates effectively to zero, it was left with two policy levers: (1) "quantitative easing," which was essentially a way to indirectly decrease the interest rates that the Fed does not control directly, and (2) making sure that the financial system would be stable enough to support the recovery and to make sure that the post-recovery boom (still just around the corner!) would not lead to another crash.

But the Fed, and monetary policy, really are boring.  Most people cannot become especially agitated about the Fed, because it is all too abstract.  ("Why do I care what the Federal Open Market Committee said about the long-term path of the fed funds rate?")  Most people, that is, but not all.

On the right, although most of the current Republican Party is as bored with monetary policy as is the rest of the world, there is rising anti-Fed fervor, due to what must now be called the Rand Paul Wing of the party.  That wing has always existed, but with Paul now emerging as the golden boy of movement conservatives (winning the otherwise-meaningless presidential preference poll at last week's Conservative Political Action Committee conference), the anti-Fedsters are in their glory.

The problem is that the right-wing critique of the Fed is nonsense.  Ever since the U.S. went off the gold standard in the 20th Century, there has been a group of people who are sure that the Fed is up to no good.  Fed conspiracy theorists exist on the left as well (and were trying to influence the Occupy movement a few years ago), but it is on the far right where anti-Fed fervor thrives.  There is no serious anti-Fed politician on the left, much less one as influential as Paul is on the right.

And Paul's recent attempt to intimidate the Fed by "auditing" it is insanity.  For an excellent description of how well audited the Fed already is -- and, more importantly, for a fun take-down of Paul's special brand of crazy -- readers should check out Matt O'Brien's recent "Clueless in Kentucky: Rand Paul’s ideas about the Fed make absolutely no sense," in the Washington Post.  (I have also posted some thoughts along these lines here on Dorf on Law, e.g., here and here.)

None of this, of course, means that the Fed is a perfect institution.  Indeed, it is designed to be a creature of Wall Street, insulated from popular meddling by a process that puts conservative insiders in positions of power.  If anything, the Fed (and even more, the European Central Bank) has been subject to capture by people who are solely interested in fighting inflation, even when inflationary threats are imaginary, and who are uninterested in having the central bank try to reduce unemployment or enhance long-term growth.

That Ben Bernanke (a Republican) and Janet Yellen (a Democrat) have engaged in policies that anger some people on Wall Street does not make them lefties.  They are open-minded pragmatists, and they have been able to see that the Fed has the latitude and the responsibility to do what it can to minimize the damage of the 2008 crisis.  They still, however, are (or were, in Bernanke's case) part of a system in which a premature move to restore monetary austerity is the default position.

Tom Palley, an economist who is a policy advisor at the AFL-CIO, provides a useful analysis of how that default position harms the economy, and how it can be changed.  (He has provided his analysis both as an op-ed and as an academic policy paper.)  Palley reminds his readers that the Fed is legally required to try to achieve full employment, and he advocates a "test the waters" method of setting monetary policy that would do just that.  Essentially, this means that the Fed would take an expansionary approach, even as the economy continues to improve, until it finds the point at which we have reached full employment, and respond to any inflationary pressures only once they have become apparent (rather than the preemptive approach favored by Wall Street and its backers).

Palley, though clearly a man of the left (see, e.g., here), is hardly describing anything radical.  There is no equivalence here between the frothing anti-Fed right and the left critique of the Fed's policy mix that Palley describes.  He is simply saying that the Fed has the ability (and the legal mandate) to change the way it sets policy, such that it could set the stage for real prosperity, by supporting increased hiring as a way to push up wages, and thus to support the return of a vibrant middle class.

As the title of this post indicates, however, talking about this path to prosperity runs the risk of simply being too boring to talk about.  One man became President by repeating ad nauseam, "Read my lips: No new taxes," and then he lost his presidency by agreeing to increase taxes.  It is doubtful that anyone will win the Presidency on the platform, "Read my lips: The Fed is too conservative in setting monetary policy."

Still, Palley's economic analysis is right.  And he might even be right about the politics.  If someone on the left-ish side of the Democratic Party wants to back an idea that would genuinely help to support long-term growth in incomes and prosperity, she or he must understand that the Fed alone holds the ability to enhance or undermine everything else that we might do to help the middle class.  Carefully reading Palley's work would be a good place for that politician to start.

Monday, March 02, 2015

King v. Burwell Pre-Mortem: The Spending Clause Question

by Michael Dorf

So much has been said already about the statutory interpretation issue in King v. Burwell (which will be argued on Wednesday), that I thought it might be worth jumping ahead a bit to consider an issue that might arise in the event that the Court finds that ACA subsidies are not available on federal exchanges. I think that this would be the wrong outcome of the case, but it is a live possibility, and thus worth some thought.

What would happen after a ruling for the petitioners? With political pressure already building on mostly Republican governors and state legislators, some would probably establish state exchanges. But probably not all. The ideological opposition to the ACA in some states--and perhaps more importantly, in the Republican primary electorate--is so strong that even though it would make no economic sense, there would be states that do not run state exchanges, perhaps leading to the dreaded "death spiral" of the federal exchanges for those states.

However, even before it came to that, might the objecting states be able to argue that, in light of King (as imagined here), the ACA is impermissibly coercive? Here's how the argument would go:

Money for federal subsidies comes from taxes collected nationwide, but is only distributed to people in states that have established their own exchanges. That arrangement puts states to a terrible choice: Either cross-subsidize health exchanges in other states or establish their own exchanges, which they have a constitutional right not to do, because--under New York v. United States--Congress may not force the states to enact legislation.

Under the current case law, that argument is a loser. NY v. US expressly acknowledges that while Congress may not directly "commandeer" state legislatures, it can offer them financial inducements, via conditional exercises of the Spending power. Moreover, in 1937, in Steward Machine Co. v. Davis, the SCOTUS upheld, as a valid exercise of the Spending power, a regime of unemployment insurance that worked more or less the same way: If states put into place unemployment insurance meeting federal requirements, then employers collecting unemployment premiums got 90% of that rebated as a federal tax credit. There, as in the hypothesized post-King world, the regime created a large benefit for private actors in states that did the federal bidding. But this financial inducement was not found to be unconstitutionally coercive.

Accordingly, if the argument I'm imagining here had been made prior to the 2012 ruling in NFIB v. Sebelius, I would have said it's a clear loser. I think it still loses, but not quite as decisively now, in light of the Court's ruling--inexplicably 7-2 on this point--that conditions on the expansion of Medicaid in the ACA were so hard to resist as to constitute impermissible coercion under the Spending Clause. That aspect of the case arguably marked a shift in the Court's jurisprudence towards greater skepticism of conditional spending.

I nonetheless think that even the Roberts Court would reject the hypothesized Spending Clause challenge as different from the successful challenge to the Medicaid expansion in NFIB on three grounds. First, there's less money at stake here, and the dollar figures--both in absolute terms and as a percentage of state budgets--seem to matter. Second, here, as in Steward Machine but unlike in NFIB, the federal subsidies go to in-state private actors rather than to the state itself, and are thus less of a temptation to the state. And third, the Court in NFIB thought it significant that Congress attached new conditions to receipt of new money as well as money under the prior program. Although Justice Ginsburg's dissent explained persuasively why this was a nonsensical classification, the majority thought it significant, and nothing like it would be true of the state exchange subsidy that would come into play after a ruling for the petitioners in King.

So, as we head into the oral argument on Wednesday, I still expect the government to win; and if the government loses, a state that tried the Spending Clause argument I've previewed here would likely lose. However, I have less confidence in those expectations than my doctrinal analysis should predict, simply because, over the last decade and a half I and other liberals have repeatedly been surprised by the Rehnquist and then the Roberts Court taking seriously or accepting arguments that we thought were off the wall.

Saturday, February 28, 2015

Midtown with Monroe (Guest Post by James Sample)

Editor's Note: Thursday brought the sad news that Professor and former Dean of Hofstra Law School Monroe Freedman died. Freedman was widely regarded as the father of legal ethics as a legal academic discipline. Here is a personal remembrance by his colleague, Professor James Sample.

The second time that I went to law school the classroom was a car.

Campus was a daily grind of gridlock.

The professor was my passenger.

Professor’s curriculum consisted of intellect and integrity; of laughter and love.  Curricular entry points were as vast as the globe and entirely at Professor’s discretion.

Student was Driver.  Despite persistent preparation, Student was invariably ill-equipped to be entirely alone on Socratic Island.  

And yet, for Student, the education was glorious.  Why?  Because Professor was Monroe Freedman.

Occasionally, Professor-Student discussions proved so engaging; so engrossing; that our Driver-Passenger goals suffered inadvertent, but highly actual, detours.  It is with particular sadness and joy alike that I will always remember one such occasion.

While driving east from Monroe’s apartment on 38th Street, we were engaged in such a feverish debate over a judicial recusal question that we actually missed the Midtown Tunnel.  Neither Driver nor Passenger realized the error until the classroom was perpendicular to a portion of campus we hadn’t previously graced — the East River.

During the consequent series of 90 degree turns by blushing Driver, Professor provided levity and perspective. Laughing as much as speaking (and what a great laugh he had) he observed that while we certainly were not the first to miss a Manhattan turn, he was absolutely certain that we were the first people in New York history to miss the Midtown Tunnel due to an animated judicial recusal discussion.

On the spectrum of distracted driving, texting behind the wheel is a trifle relative to driving while discussing with Monroe.  I was profoundly privileged to repeatedly commit the offense.

Monroe was particularly fond of pointing out the alarming regularity with which lawyers and reporters sought our respective opinions as to the same judicial ethics controversies and thereafter publicly memorialized our sometimes opposing conclusions.

No matter what the text of such articles actually said, my anxiety-consumed mind read, in them, the academic analog of a New York Post headline: “Lightweight Disagrees with Legend! Crowd boos!"

Over time I came to realize that Monroe, embodying the best of academe, not only did not resent, but actually relished these awkwardly-public disagreements. He mined them for their teachable potential and as fresh material for his good-natured needling.

As a scholar, as a lawyer, and as a colleague, Monroe was Mickey Mantle.  He didn’t have to acknowledge, much less take interest in a comparatively light-hitting minor leaguer trying to secure a roster spot.  That Monroe nonetheless always took that interest says much about the man.

Monroe’s massive contributions to the law have been and will be well-documented by scores of scholars, students, family and friends.

For today, in this space, I merely say thank you. The second time that I went to law school it lasted just a year, but the lessons, a lifetime. The professor was a giant and a gentleman. And for the rest of my days, whenever I see the Midtown Tunnel, Monroe Freedman will be on my mind.

Friday, February 27, 2015

Fish, Health Insurance, and Overcriminalization: A Comment on Yates v. United States

by Michael Dorf

Wednesday's SCOTUS decision in Yates v. United States  is interesting for what it may say about King v. Burwell--the challenge to the subsidies on federal exchanges to be argued next week--but also, as I'll explain shortly, because of a point made by Justice Kagan in dissent.

In Yates, the Court held that a fisherman who tossed his illegal catch into the sea to prevent federal authorities from confirming his law violation did not violate a statute forbidding the "destr[uction]" of "a tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States  . . . ." Did the Court say that fish are sentient beings, someones not somethings, and thus not tangible objects? I--along with the other vegan bloggers here at DoL--can only wish.

No, Justice Ginsburg--writing for a plurality of herself, Justice Breyer, Justice Sotomayor, and Chief Justice Roberts--said: "A fish is no doubt an object that is tangible; fish can be seen, caught, and
handled, and a catch, as this case illustrates, is vulnerable to destruction." Nonetheless, the plurality found that Congress did not mean for the statutory provision, which was enacted to combat corporate and financial accounting deception, to apply to cases like Yates. The surrounding linguistic context and purposes motivating the Sarbanes-Oxley Act indicate that for purposes of this statute, "tangible object" is best "read to cover only objects one can use to record or preserve information, not all objects in the physical world."

Concurring in the judgment, Justice Alito reached the same conclusion but largely eschewed reliance on the subjective motives of the Congress that enacted Sarbanes-Oxley, focusing more narrowly on the linguistic context.

What are the implications for King? There the question is how much of the broader linguistic context and background congressional purpose should be deemed relevant to construing the seeming limitation of federal subsidies for "an Exchange established by the State." Under the methodology applied by the plurality in Yates, the answer would appear to be "a lot of it." That's important because the vote of one of the conservatives is needed to get to five, and based on his vote in NFIB v. Sebelius, CJ Roberts appears to be the most likely one.

Nor is the Chief's Yates vote a fluke. He is probably the least textualist, most intentionalist of the current conservatives when it comes to statutory interpretation--as also indicated by his opinion for the Court last year in Bond v. United States (as I discussed here and in a column and other posts linked therein). The government should win in King, unless (as I put it last July) textualism runs amok. Yates confirms that CJ Roberts is barely a textualist at all, much less a textualist run amok.

But if Yates is potentially good news for the government about the Chief's statutory interpretation predilections, might it also be unexpected bad news about Justice Kagan--whose vote had almost surely been counted as nearly certain to find that subsidies are available in King? After all, Justice Kagan wrote the Yates dissent for herself and Justices Scalia, Kennedy, and Thomas. She (and they) found that the plain language prevailed.

The short answer is that there really isn't much of a methological dispute between the plurality (plus Justice Alito) and the dissent in Yates. Justice Kagan writes: "I agree with the plurality (really, who does not?) that context matters in interpreting statutes. We do not 'construe the meaning of statutory terms in a vacuum.'" That might seem like a departure from the textualist philosophy of Justices Scalia and Thomas, but it isn't. Justice Scalia has been saying for decades that textualism isn't literalism or strict constructionism. Everyone thinks context matters.

When all is said and done, then, Yates probably doesn't say much about how any of the Justices in King will vote. I predict that any Justices who conclude that subsidies are not available on federally established exchanges will say that this result comports with the context and purpose of the statute as a whole. They'll be wrong, of course, but they'll think they're right, and they certainly won't say the key snippet of text stands in isolation from the rest of the law.

To my mind, what makes Yates an interesting case is the little lecture that Justice Kagan delivers at the end of the opinion. She says that the plurality/majority are driven to what she regards as an erroneous construction of the statute because they understandably want to limit the ill effects of overcriminalization. She writes:
I tend to think, for the reasons the plurality gives, that §1519 is a bad law—too broad and undifferentiated, with too-high maximum penalties, which give prosecutors too much leverage and sentencers too much discretion. And I’d go further: In those ways, §1519 is unfortunately not an outlier, but an emblem of a deeper pathology in the federal criminal code. But whatever the wisdom or folly of §1519, this Court does not get to rewrite the law. 
This form of judicial rhetoric is familiar. Indeed, I remarked upon it just last week in my first post on Judge Hanen's opinion enjoining the Obama Administration's deferred action program. The most famous examples appear in constitutional cases--as when Justice Stewart, dissenting in Griswold v. Connecticut, called the state ban on contraception use "an uncommonly silly law." Justice Thomas quoted that language in his dissent in Lawrence v. Texas. In those cases, as in statutory cases like Yates, the protesting judge or Justice reminds the reader that her job is simply to say what the law is--that finding a law constitutional or that it means something unpopular does not imply that the judge or Justice favors the law or its construction on policy grounds.

Familiar though this rhetorical move is, as I said in my first post on Judge Hanen's ruling, it has a doth-protest-too-much ring about it. After all, anybody who is sufficiently sophisticated to read a Supreme Court opinion or other lengthy judicial opinion already knows that judges are supposed to distinguish between their legal judgment and their all-things-considered political judgment. So why the need for the reminder?

The answer, I think, is that the very fact that these cases are contested by other competent jurists belies the claim that "the law made me do it." Did Justice Stewart really think the contraception use ban was silly? If so, why didn't he find a way to agree with Justice Douglas and the Griswold majority? If he really thought the law left him no room for a contrary judgment, wasn't he saying that the Justices who came out the other way were lying? Put differently, "the law made me do it" is only superficially an affirmation of formalism. It is better seen as a formalist expression of the anxieties to which legal realism gives rise.

Thursday, February 26, 2015

The Insecurity of the Orthodox Economist

-- Posted by Neil H. Buchanan

My new Verdict column, "Education Is Everything, but It’s Not the Only Thing," was published today.  In it, I discuss the different ways in which education matters to economic outcomes, and the ways in which it does not.  I close the article by reminding readers that economic outcomes are hardly the be-all and end-all of education.  I might pick up on that latter topic in a future column or a Dorf on Law post, but for now, I will let today's column stand on its own.  I encourage everyone to read it.

Here, I will pick up on the theme of my Dorf on Law post from earlier this week.  There, I commented (yet again) on the closed-mindedness of the modern economics profession and, in particular, its failure to live up to anything close to the standards of a science (much less a field devoted to free academic inquiry).  The basic problem is that current economists are not open to differing modes of analysis, because they are sure that stylized rational-actor modeling is the only correct way to "do economics."

Longtime readers of this blog might recall that I wrote extensively about this state of affairs in a series of posts last Spring.  In one of those posts, "Which Jerks Would You Rather Hang Out With? (Economics Edition)," I described the difference between "orthodox" and "heterodox" economists, the latter having been effectively pushed out of all of the top economics departments during the 1970's and 1980's, with the purge continuing into the lesser departments in the 1990's, to the point where there are now only a tiny number of outposts for heterodoxy in the world of economic academia.

Generally speaking, the intellectual purge happened on purpose, but not based on any coherent plan (at least, so far as we know).  That is, the people who began to try to drive out the heterodox were generally politically conservative, so they viewed it all as an ideological purge that they could mask by calling it a matter of "science."  Meanwhile, the orthodox economists who might have been ideologically sympathetic to the heterodox simply sat on their hands, in part because even liberal orthodox economists truly believe that it is they who are doing real economics, and that the heterodox were losing because heterodoxy is unworthy.

The process was essentially a matter of orthodox economists taking control, slowly but steadily, of all of the levers of power.  Editorships of top journals were given to people who rejected out of hand any heterodox work.  The editors are quite open about it, too, telling authors that their work must fall within the orthodox framework in order even to be considered for publication.  Once publication outlets had been nailed down, the hiring of heterodox economists became a losing cause, which meant that graduate students would be told (reasonably) that they would be committing career suicide if they were to write heterodox work.

At that point, economics departments became closed societies in which everyone could honestly say that they do not know any economist who is not doing orthodox work, which must mean that everyone who is doing heterodox work is not a "real economist."  As many people have noted, the ultimate insult from an economist is to describe someone's work as sociological.

In the face of that onslaught, it is actually amazing that any heterodox economists exist at all.  Indeed, most of them are plying their trade outside of economics departments: public policy schools, law schools, some business schools (strangely enough), think tanks, labor unions, and so on.  Still, there have been some hardy bands of heterodox economists who have tried to defend redoubts within economics departments.  Inevitably, however, it seems that every fortification will ultimately fall.

In my post last May, I noted the rather infamous case of the University of Notre Dame (the football school in Indiana), which had long housed a vibrant economics department that was home to both orthodox and heterodox economists.  As the 1990's ended, the orthodox economists enlisted the university's administration in a concerted effort to drive out the heterodox.  This first resulted in a formal split of the department into two separate departments in 2003, a Department of Economics and Econometrics that was for the orthodox, and a Department of Economics and Policy Studies that was for the heterodox.  By 2009, the university had announced that it would close the heterodox department entirely.

An earlier example of this pattern happened at the University of Sydney in Australia two decades earlier, a split that was especially acrimonious.  In general, however, such open hostilities are rare.  The external norms change, and in rather short order, the orthodox drive out the heterodox.

Even so, new examples occasionally arise.  A reader of Tuesday's post directed me to a report on some recent ugliness in the University of Manitoba's economics department, where a long-term happy detente (with a department that was 2/3 orthodox and 1/3 heterodox) was tossed aside by an aggressive new orthodox department chair (backed by the university's president).

That report, written by a special committee of the Canadian Association of University Teachers, is a depressing read.  Essentially, it documents what happens when orthodox economists decide to start flexing their muscles.  The intellectual insecurity of the orthodox economists there came out in verbal bullying, sneering comments about the heterodox, threats to people who do not vote "the right way" on departmental matters, intimidation of graduate students, and so on.  The report describes these incidents with care, but for anyone who has seen this kind of thing in person, the report's understated tone still evokes a chilling recognition of how academic bullies work.

And like all bullies, these guys are afraid.  They are afraid because their answers to heterodox critiques are circular.  They are afraid because real scientists laugh at their pretensions.  They are afraid because at least some of them know that philosophers of science long ago exposed the unscientific nature of the discipline.  (Many do not know this, of course, because their professors would never consider it worthwhile to have their students read such things.)  And they are afraid because, as I noted in my post on Tuesday, they know that many of the most revered members of their discipline have terrible track records in explaining the world, and especially in providing ideas about how to make the economy work better for everyone.  What better way to deal with one's fears than to lash out at those who see the bullies for what they really are?

Wednesday, February 25, 2015

Immigration Ruling Part 5: Deferred Action in Congress

by Michael Dorf

My new Verdict column could be considered the fourth installment in a series on the ruling by Judge Hanen enjoining the Obama policy of expanded deferred action for undocumented immigrants. In Part 1, I criticized Judge Hanen's over-the-top rhetoric and questioned his bottom line about the reviewability of the agency action at issue, but, noting how unreviewable presidential power not to enforce the law should trouble progressives even more than it troubles conservatives, I concluded that the opinion had a silver lining. In Part 2, Professor Buchanan explained how that silver lining might be deployed if and when the debt ceiling shenanigans return next fall. Part 3 was a magnum opus by Professor Kalhan, which revealed how Judge Hanen either misrepresented or misunderstood immigration law and that therefore, contrary to the ostensibly limited ruling, the opinion was anything but "narrowly crafted."

The Verdict column is Part 4. It offers general readers an explanation of the administrative law issues; notes that the government is now pursuing both an emergency stay from Judge Hanen and an appeal to the Fifth Circuit; and evaluates additional options. The government could proceed with a notice-and-comment rulemaking. It could withdraw the executive order but pursue the same policy anyway (given what Judge Hanen says about formalization and discretion). Or President Obama could fold and go back to Congress for comprehensive immigration reform.

That last option is, of course, not serious. The Republican Congress is not going to pass comprehensive immigration reform on President Obama's watch. On the contrary, Congress is deadlocked over whether to fund the Dep't of Homeland Security past Friday, when its current funding runs out. The House passed a funding bill that includes an override of the President's deferred action program. Senate Democrats want a "clean bill." Yesterday Senate majority leader Mitch McConnell offered a clean bill if there were also a debate on a clean bill to invalidate the deferred action program. However, Democrats were balky, saying that they want some assurance that the House would also pass a clean bill. The smart money for now appears to be betting on a clean stopgap measure funding DHS for a few months or maybe only weeks, at which point the whole farce plays out again.

Judge Hanen's ruling does not appear to have affected the politics. One might have thought that House Republicans would soften in their insistence on tying DHS funding to overriding the deferred action program because they have gotten what they want by judicial means: the deferred action program is not going into effect. One might also have thought that Senate Democrats would soften in their opposition to a DHS bill that overrides deferred action for the same reason. But it hasn't worked out that way for what I suspect are two reasons.

First, there remains the possibility that the Obama Administration will win on appeal. Given this possibility, it would be premature for Republicans to think they don't need a congressional override and it would be likewise premature for Democrats to throw in the towel.

Second, it looks as though this is a fight that both sides want to have. In general, immigration is a tough issue for Republicans. House members in safe seats with large white majorities can afford to be--and many are--very tough on immigration. That stance harms the Republican Party elsewhere and nationally but on this issue, as on others, the party leadership has great difficulty getting individual House members (and many Senators) to place the national party's interest over the individual members' electoral interests. Even members of Congress who might otherwise be inclined to moderation are sufficiently fearful of a primary challenge from the extreme right to lean far right on immigration (and various other issues).

But while the Republican national leaders generally would prefer to avoid calling attention to their members' positions on immigration, they appear eager to have this particular fight because they think they can make it about executive overreach, rather than about immigration.

This strikes me as a tactical mistake. As I noted in Part 1 and elsewhere, the Republicans may have base motives but they are not wrong that the mere invocation of "prosecutorial discretion" should not be sufficient to shield presidential non-enforcement of the law. But that is an argument that strikes me as far too sophisticated for typical voters. Yes, Republicans and their allies can also use the claim that "President Obama thinks he's a king" to mobilize their base, but he won't be on the ballot again and the sort of people who are mobilized by this kind of claim are easily mobilized by lots of other messages too. A typical voter will see this fight as over immigration--the Democrats' turf.

If I'm right--and I really have no expertise in political analysis, so I could well be wrong--the Republicans will fold here before the Democrats do. At that point, perhaps I'll write Part 6.