Power & Market
The Justice Department Inspector General is expected to release on Thursday its report on alleged FBI misconduct during the 2016 presidential campaign. Trump supporters and opponents are already pre-spinning the report to vindicate or undercut the president. Unfortunately, the report will not consider fundamental question of whether the FBI’s vast power and secrecy is compatible with American democracy.
According to some Republicans, the FBI’s noble history was tainted by its apparent favoritism for presidential candidate Hillary Clinton. Democrats have gyrated over the past 18 months, first blaming the FBI for Clinton’s loss and then exalting the FBI (along with former FBI chief and Special Counsel Robert Mueller) as the best hope to save the nation.
In reality, the FBI has been politically weaponized for almost a century. The FBI was in the forefront of the notorious Red Scare raids of 1919 and 1920. Attorney General Mitchell Palmer reportedly hoped that arresting nearly 10,000 suspected radicals and immigrants would propel his presidential campaign. Federal Judge Anderson condemned Palmer’s crackdown for creating a “spy system” that “destroys trust and confidence and propagates hate.” He said, “A mob is a mob whether made up of government officials acting under instructions from the Department of Justice, or of criminals, loafers, and the vicious classes.”
After the Palmer raids debacle, the FBI turned its attention to U.S. senators, “breaking into their offices and homes, intercepting their mail, and tapping their telephones,” as Timothy Weiner noted in his 2012 book, “Enemies: The History of the FBI”. After the FBI’s political espionage was exposed, Attorney General Harlan Fiske Stone, warned in 1924, “A secret police system may become a menace to free government and free institutions because it carries with it the possibility of abuses of power which are not always quickly comprehended or understood.” Stone fired the FBI chief, creating an opening for J. Edgar Hoover, who would head the FBI for the next 48 years. Hoover pledged to cease the abuses but the outrages mushroomed.
In the 1948 presidential campaign, Hoover brazenly championed Republican candidate Thomas Dewey, leaking allegations that Truman was part of a corrupt Kansas City political machine. In 1952, Hoover sought to undermine Democratic presidential candidate Adlai Stevenson by spreading rumors that he was a closet homosexual.
Read the full article at The Hill
Before Kitchen Confidential made him a celebrity, Anthony Bourdain was a real chef, working upscale New York kitchens at places like the Supper Club and Sullivan’s. Bourdain’s style is not to everyone’s taste, but he knows how to manage a restaurant crew. A chef, after all, is not primarily an artist, but a manager, facing the same set of organizational challenges — delegation, incentives, monitoring — as any administrator.
I mention this because I recently stumbled upon an interview with Bourdain in the July 2002 Harvard Business Review. Despite several attempts by interviewer Gardiner Morse to get Bourdain to endorse creativity, spontaneity, and empowerment in the kitchen, Bourdain remains an unreconstructed devotee of Escoffier’s “brigade system,” a sort of culinary Taylorism in which each member of the cooking staff has a fixed place in the production chain, a very narrow job description, and an obligation to obey his chef de partie (section leader) and the head chef without question.
Q: There’s been a trend in business to move away from hierarchies and empower workers, but you’ve embraced a very rigid staff structure and an old style of management with great success. Why do you think it works?
A: You’re defined by the job you do, not by whatever . . . predilections you have. . . . And to have any delusions that you’re better than anyone else, however true that might be as far as your technical skills are concerned, is not allowed. Your commitment is to the team effort. Everyone lives and dies by the same rules.
You have a tremendous amount of personal freedom in the kitchen. But there’s a trade-off. You give up other freedoms when you go into a kitchen because you’re becoming part of a very old, rigid, traditional society — it’s a secret society, a cult of pain. Absolute rules govern some aspects of your working life: obedience, focus, the way you maintain your work area, the pecking order, the consistency of the end product, arrival time.
This is a case where the advantages of hierarchy — the need for fast, coordinated decision-making, the ability to internalize externalities, the possession of “decisive knowledge” by the top decision-makers, and the like — appear to outweigh the high-powered incentives and Hayekian knowledge benefits of decentralization. Look for a future Foss-Klein paper (with Nils Stieglitz) discussing this tradeoff more systematically.
Originally published January 18th, 2008 on Organization and Markets
Just two weeks after President Trump pulled the US from the Iran nuclear agreement, his Secretary of State, Mike Pompeo, issued 12 demands to Iran that could never be satisfied. Pompeo knew his demands would be impossible to meet. They were designed that way. Just like Austria-Hungary’s ultimatum to Serbia in July, 1914, that led to the beginning of World War I. And just like the impossible demands made of Milosevic in 1999 and of Saddam Hussein in 1991 and 2003, and so many other times when Washington wanted war. These impossible demands are tools of war rather than steps toward peace.
Secretary Pompeo raged at Iran. The mainstream news media raged at Iran. Trump raged at Iran. But then a strange thing happened: nothing. The Iranians announced that they remained committed to diplomacy and would continue to uphold their end of the nuclear agreement if the Europeans and other partners were willing to do the same. Iranian and European officials then sought out contacts in defiance of Washington in hopes of preserving mutually-beneficial emerging commercial relations.
Washington responded to the European snub by threatening secondary sanctions on European companies that continued doing business with an Iran that had repeatedly been found in compliance with its end of the bargain. Any independent European relationship with Iran would be punished, Washington threatened. But then, again, very little happened.
Rather than jump on Washington’s bandwagon, German Chancellor Angela Merkel made two trips to Russia in May seeking closer ties and a way forward on Iran.
Russia and China were named as our prime enemies in the latest National Security Strategy for the United States, but both countries stand to benefit from the unilateral US withdrawal from the Iran deal. When the French oil company Total got spooked by Washington threats and pulled out of Iran, a Chinese firm eagerly took its place.
It seems the world has grown tired of neocon threats from Washington. Ironically the “communist” Chinese seem to understand better than the US that in capitalism you do not threaten your customers. While the US is threatening and sanctioning and forbidding economic relations, its adversaries overseas are busy reaping the benefits of America’s real isolationism.
If President Trump’s canceled meeting with North Korea’s Kim Jong-Un remains canceled, North and South Korea have shown that they will continue with their peacemaking efforts. As if Washington was no longer relevant.
I’ve often spoken of the unintended consequences of our aggressive foreign policy. For example, President Bush’s invasion of Iraq only helped Iran – our “enemy” – become more dominant in the Middle East. But it seems new consequences are emerging, and for the neocons they must be very unintended: for all of its bellicosity, threats, demands, sanctions, and even bombs, the rest of the world is increasingly simply ignoring the demands of Washington and getting on with its own business.
While I am slightly surprised at this development, as a libertarian and a non-interventionist I welcome the growing irrelevance of Washington’s interventionists. We have a far better philosophy and we must work hard to promote it so that it can finally be tried after neocon failure becomes obvious to everyone. This is our big opportunity!
After Pointlessly Groping Countless Americans, the TSA Is Keeping a Secret Watchlist of Those Who Fight Back
"I need a witness!" exclaimed the security screener at Ronald Reagan Washington National Airport. Because I had forgotten to remove my belt before going through a scanner, he explained, I must undergo an "enhanced patdown." I told him that if he jammed his hand into my groin, I'd file a formal complaint. So he summoned his supervisor to keep an eye on the proceedings.
I thought of this exchange last week when the New York Times revealed that the Transportation Security Administration has created a secret watchlist for troublesome passengers. The TSA justified the list by saying that its screeners were assaulted 34 times last year, but did not release any details about the alleged assaults.
Naturally, the TSA's official definition of troublemaking goes well beyond punching its officers. According to a confidential memo, any behavior that is "offensive and without legal justification" can land a traveler on the list, as can any "challenges to the safe and effective completion of screening." Anyone who has ever "loitered" near a checkpoint could also make the list. So could any woman who pushes a screener's hands away from her breasts.
The memo would be more accurate if it stated that anyone who fails to unquestioningly submit to all the TSA's demands would be found guilty of insubordination. As an attorney for the American Civil Liberties Union, Hugh Handeyside, told the Washington Post, the policy gives the agency wide latitude to "blacklist people arbitrarily and essentially punish them for asserting their rights." Rep. Bonnie Watson Coleman (D-New Jersey) expressed similar worry. "I am concerned about the civil-liberty implications of such a list," she said.
The watchlist would seem less perilous if the TSA were not one of most incompetent agencies on Earth. After a series of undercover tests at multiple airports across the country, the Department of Homeland Security concluded last year that TSA officers and equipment had failed to detect mock threats roughly 80% of the time. (In Minneapolis, an undercover team succeeded in smuggling weapons and mock bombs past airport screeners 95% of the time.) An earlier DHS investigation found the TSA utterly unable to detect weapons, fake explosives and other contraband, regardless of how extensive its pat-downs were.
According to the TSA, travelers can take consolation in the certainty that its agents will never assault them. But Americans have filed thousands of complaints that suggest otherwise, claiming screeners used excessive force or inappropriately touched them. How many have been fired as a result? It's hard to say: When I asked the TSA, they told me to file a Freedom of Information Act request.
Read the full article at the Los Angeles Times
Secrecy is a knavery entitlement program. Thanks to the ludicrously named Congressional Accountability Act of 1995, victims of alleged sexual harassment by members of Congress receive secret taxpayer-funded settlements. That means constituents rarely learn that their tax dollars underwrite their representatives’ allegedly roaming hands. More than $17 million has been spent in payoffs to congressional employees who filed workplace grievances.
At the same time an iron curtain of secrecy descended on much of official Washington, the feds multiplied their intrusions against everyone else. While the National Security Agency is vacuuming up Americans’ private data, federal agencies made the decision more than 50 million times to classify documents in 2016. The Freedom of Information Act, one of the underrated bulwarks of self-government, has become largely a mirage in recent decades.
The more information the government withholds, the easier it becomes to manipulate public opinion. By revealing only details that buttress the administration’s policies, citizens are prevented from assessing the latest power grabs or interventions. As a federal appeals court warned in 2002:
“When government begins closing doors, it selectively controls information rightfully belonging to the people. Selective information is misinformation.”
Trump won the presidency in 2016 in part because of Americans’ disgust and distrust for Washington. By perpetuating the vast majority of official secrecy and creating new cloaks, Trump is missing his best shot against what he calls the Deep State. Sunlight would be far more effective at draining the swamp than Trump’s huffing and puffing.
Read the full article at The Hill
Surprise, surprise! With the peso continuing to drop like a stone against the U.S. dollar, Argentina has appealed to the IMF for emergency credit. In requesting the bailout, President Macri cited the sudden emergence of global factors beyond his control for the current plight of the peso.
During the first two years [of his administration] we have had a very favourable global context, but today that is changing, global conditions are becoming increasingly complex due to several factors: interest rates are rising, oil is rising, currencies of emerging countries have been devalued, all variables that we do not control.
But this is a load of baloney. As I pointed out in my post yesterday, the slide of the peso is due to one and only one thing: the enormously high rate of growth of the money supply since Macri took office in December 2015. The money growth rate exceeded 45% year over year during the first three quarters of 2017 and has never fallen below 25% during Macri’s tenure. Rather than requesting aid, which will guarantee more currency crises in the future, President Macri needs to call a halt to central bank intervention in the foreign exchange markets and allow the peso to depreciate and reveal the true extent of past monetary inflation. If he then implements a credible program—and at this point, only a shock program will be considered credible—to bring inflationary monetary policy to an end, the currency crisis will cure itself.
The crusade for greater gun control received another PR victory today with an op-ed by retired Supreme Court Justice John Paul Stevens in the New York Times calling for the repeal of the 2nd Amendment.
Of course Stevens' hostility to gun rights is nothing new. As he notes in the piece, he was one of the four dissenters on the District of Columbia v. Heller and is one of the most prevenient legal voices to argue that the 2nd Amendment was meant to apply exclusively to militias and not citizens. When defending this view, he has referred to the work of popular contemporary historians such as Joseph Ellis, to try to bring "context" to the discussion. This is, in part, due to Stevens' larger judicial philosophy that relies on "original intent" rather than "original public meaning" - which leads him to try to search through letters and correspondence of the Founding Fathers justify a position, rather than simply looking at what the text of the Constitution was understood to have said. (Naturally his disagreements with Justice Scalia on this matter did not prevent the two from agreeing on several very bad decisions.)
The obvious problem with this is that the Founding Fathers did not share a homogenous world view, and therefore you can find conflicting interpretations among the leading voices of the era. While Stevens grounds his narrow view of the Second Amendment on James Madison's work on militias in the Virginia Constitution, the Constitution was certainly not ratified based on the limited perspective of Mr. Madison. Of course, the fact that this debate continues to this day is simply another example of the dangers of relying on the Constitutional interpretation for individual rights.
The most unfortunate aspect about Stevens opinion is that it's hardly a radical one in the modern legal climate. This is exactly why it's a bad idea to allow a group of unelected, isolated scholars in black robes be the deciding authority on the proper size and scope of government.
The solution? Abolish the Supreme Court, or at least aim to dramatically reduce its influence.
As Ryan McMaken wrote following the death of Justice Scalia:
We’re told by pundits and politicians from across the spectrum how indispensable, awe-inspiring, and absolutely essential the Supreme Court is. In truth, we should be looking for ways to undermine, cripple, and to generally force the Court into irrelevance.
With the expected eulogies for Scalia among his supporters, we’re being berated with the idea that Scalia was an “originalist” who stuck doggedly to the clear text of the Constitution as imagined by its authors. In truth, Scalia was no originalist, since, if he had been one, he would have rejected the whole notion of judicial review, which is itself a total innovation and fabrication dreamed up by Chief Justice John Marshall. Absolutely nowhere does Article III of the Constitution (the part that deals with the court, and is half a page long) give the court the power to decide on what can be legal or not in every state, town, village or business of the United States. Moreover, as Jeff Deist notes today, the Court’s powers we so blithely accept as fait accompli are mostly made up:
- The concept of judicial review is a fabrication by the Court, with no basis in Article III.
- Constitutional jurisprudence is not constitutional law.
- The Supreme Court is supreme only over lower federal courts: it is not supreme over other branches of government.
- Congress plainly has constitutional authority to define and restrict the jurisdiction of federal courts.
But don’t look for many in Washington to admit this any time soon. The Supreme Court serves a very important function in centralizing federal power in DC and in the hands of a small number of senior federal personnel. And how convenient it is for members of the ruling classes to influence and access these guardians of the federal government's intellectual respectability: the members of the court, presidents, and senators are all generally all members of the same socio-economic class, send their children to the same elite schools, and work and live together in the same small social circles. At the same time, this closed social and professional circle also helps to diminish the influence of those outside the Washington, DC bubble.
If it wished to, Congress could overhaul the Court this afternoon. Nothing more than simple legislation would be necessary to radically change or completely abolish the lower federal courts. Congress could decide what topics fall under the lower courts' jurisdiction, and thereby limit the Supreme Court’s jurisdiction as well. Congress could also decide that the Supreme court is made up of one justice or 100 justices.
Indeed, since the Supreme Court is nothing more than a legislature, why not make it one? Why not make SCOTUS a body of 50 “judges,” with the understanding that the Senate will not ratify any appointment which does not hold to the rule that each state gets a judge on the Court? Politics and ideology prevent this, but no Constitutional provision does.
While some Constitutionalists still cling to the romantic notion of the Supreme Court as a check on the Federal legislature, American history is very clear on this matter. The Supreme Court has mainly served as a tool for centralizing power in Washington, and it should be viewed with as much suspicion as any other branch of the Federal government.