MISSION: U.S. Veteran and Author Revealing Reality with Daily Reading / Sharing of Select, Intelligent, and Informative Articles, Columns, and Commentary.
The Fed's Money Trap
The Federal Reserve, and therefore the economy, is caught on the horns of a dilemma of our own making.
ZIRP (zero interest rate policy) and the aggressive pumping of money (upwards of $85 billion a month) into the financial system have tripled our money supply.
If it weren't for nearly stagnant money velocity (MZ), we would be seeing inflation / CPI in the 20% range or more.
This disruption of the money supply has sent confusing signals to both markets and Main Street, distorting prices and misallocating resources as the newly created dollars search for opportunities to earn a return.
Housing is perhaps the canary in the coal mine telling us that things are not going well and danger is close by.
New housing starts, while showing some improvement, are still quite weak perhaps even stalling out. We now see a return to the Adjustable Rate Mortgage, a financial vehicle at least partially at fault for exacerbating the housing bubble.
Recently doctorhousingbubble had a terrific article on this strange phenomenon:
"At the same time, we find out that the home ownership rate continues to fall reaching a multi-decade low while rental vacancies slowly decline. All of this of course makes sense given a supply constrained market and a massive amount of investor buying over the last few years adding rental properties to the market (taking off market potential single-family homes for actual purchase). What is troubling about the data is the difficulty for first-time buyers to enter into this odd market. Having a larger share of our market as renters might make sense given economic constraints of household incomes yet it should be abundantly clear who the big winners were from all the Quantitative Easing that has occurred. Welcome to rental nation."
An increase in home prices but a recent and very pronounced slump in housing starts and softening demand for new mortgages! What's up with that? Essentially we are seeing banks sit on vacant properties and then very deliberately slow walk foreclosures through the system in order to both keep retail prices high by lowering inventories and to protect their balance sheets. In essence, if banks should err by releasing too many homes into the marketplace, housing prices will decline and so will the value of their assets, potentially putting them at risk of insolvency. At the same time, new housing is very soft, as too many young couples are both priced out of the market and are slogging through adverse economic currents that limit both opportunity and growth of income.
But now a new element has injected itself into the mix. Rising interest rates.
The most important number in the economy may be the yield on the ten year treasury. Factoring out the imbecility of the Jimmy Carter years, historically a 10 year yield has been around 5%. Now take a good look at the graph below. Notice that yield basically hit bottom last year. Frankly, it really could not go much lower than it was without going nearly zero, which is impractical.
Folks, rates really have no place to go but up. In the last few weeks the yield on a 10 year treasury has climbed significantly, and it seems on pace to break into 3% in the moderate future. But here is the fix we find ourselves in: it seems rates will have to come up, but if they do (and the side question is how much and how quickly), it will increase the cost of borrowing money for the government, potentially blowing up our budget and starting a debt spiral (see Greece for specific details). Rising rates also impact business investors, and private citizens.
What does this mean for housing? Basically rising rates mean purchasers can afford less home, meaning either prices have to come down or risky loans have to be pushed into the system.
If rates do not go up, a severe disconnect develops between the bond markets and the economy itself. Eventually the bond vigilantes will saddle their horses and as history has shown, they will have their way, and in the process destabilize arrogant governments. It has happened before, sometimes to the point of collapse.
Damned if we do. Damned if we don't.
This is what happens when we elect leaders who brazenly ignore mathematics and the laws of economics.
Math wins.
We lose.
And you can take that, my friends, to the bank.
When Government Acts Illegally
Today's lead editorial at The Wall Street Journal ("Congress's ObamaCare Exemption") is a breakthrough in the battle against big, corrupt government.
Someone in the conservative media has finally summoned the strength to call government's illegal actions "illegal." As the editorial states:
Conservatives seem to have a mental block, some psychological abhorrence to using the "I" word when
government breaks the law, which it does every day and in many ways affecting millions of Americans.
We hear about government "overreach" and "lawlessness." Conservatives will write that the Obama administration is undermining the rule of law, or the Constitution. In using those terms, however, we pull our punches and soften the blows.
When President Obama says he won't wait for Congress to act, and has turned his presidency towards an unconstitutional dictatorship, he is acting illegally. Republicans in Congress have yet to mutter the "I" word about Obama's actions. Instead, they pussyfoot around in ways that show weakness if not cowardice in the face of Obama's illegal "transformation" of our republican form of government.
If that is done out of respect for the American institution of the presidency, rather than some lesser motive, then it is actually disrespectful. Our constitutional institutions have been protected by the blood of patriots, and we dishonor them and the Constitution that they fought to defend by being anything less than candid and accurate.
Before the American Revolution, the British Parliament declared that certain acts of the King in contravention of the laws were "illegal." Some 19th century judicial opinions in America used the "I" word in describing actions of government that violated the Constitution.
We conservatives like precedent. There is precedent for calling out government's illegalities.
It is up to conservatives on the outside to change the lexicon. We haven't yet. Conservatives cannot properly address and treat the problem until we admit what it is. When government breaks the law and violates the Constitution, that is 'illegal.'
Page Printed from: http://www.americanthinker.com/blog/2013/08/when_government_acts_illegally.html at August 05, 2013 - 10:38:52 AM CDT
Someone in the conservative media has finally summoned the strength to call government's illegal actions "illegal." As the editorial states:
"This latest White House night at the improv is also illegal. OPM has no authority to pay for insurance plans that lack FEHBP contracts, nor does the Affordable Care Act permit either exchange contributions or a unilateral bump in congressional pay in return for less overall compensation. Those things require appropriations bills passed by Congress and signed by the President."
Conservatives seem to have a mental block, some psychological abhorrence to using the "I" word when
government breaks the law, which it does every day and in many ways affecting millions of Americans.We hear about government "overreach" and "lawlessness." Conservatives will write that the Obama administration is undermining the rule of law, or the Constitution. In using those terms, however, we pull our punches and soften the blows.
When President Obama says he won't wait for Congress to act, and has turned his presidency towards an unconstitutional dictatorship, he is acting illegally. Republicans in Congress have yet to mutter the "I" word about Obama's actions. Instead, they pussyfoot around in ways that show weakness if not cowardice in the face of Obama's illegal "transformation" of our republican form of government.
If that is done out of respect for the American institution of the presidency, rather than some lesser motive, then it is actually disrespectful. Our constitutional institutions have been protected by the blood of patriots, and we dishonor them and the Constitution that they fought to defend by being anything less than candid and accurate.
Before the American Revolution, the British Parliament declared that certain acts of the King in contravention of the laws were "illegal." Some 19th century judicial opinions in America used the "I" word in describing actions of government that violated the Constitution.
We conservatives like precedent. There is precedent for calling out government's illegalities.
It is up to conservatives on the outside to change the lexicon. We haven't yet. Conservatives cannot properly address and treat the problem until we admit what it is. When government breaks the law and violates the Constitution, that is 'illegal.'
Page Printed from: http://www.americanthinker.com/blog/2013/08/when_government_acts_illegally.html at August 05, 2013 - 10:38:52 AM CDT
The Front Man of Lawlessness
The Front Man
Conservatives have for years attempted
to put our finger upon precisely why Barack Obama strikes us as queer in
precisely the way he does. There is an alienness about him, which in
the fever swamps is expressed in all that ridiculous Kenyan-Muslim
hokum, but his citizen-of-the-world shtick is strictly sophomore year —
the great globalist does not even speak a foreign language. Obama has
been called many things — radical, socialist — labels that may have him
dead to rights at the phylum level but not down at his genus or species.
His social circle includes an alarming number of authentic radicals,
but the president’s politics are utterly conventional managerial
liberalism. His manner is aloof, but he is too plainly a child of the
middle class to succumb to the regal pretensions that the Kennedys
suffered from, even if his household entourage does resemble the
Ringling Bros. Circus as reimagined by Imelda Marcos when it moves about
from Kailua Beach to Blue Heron Farm. Not a dictator under the red
flag, not a would-be king, President Obama is nonetheless something new
to the American experience, and troubling.
It is not simply the content of his political agenda, which, though wretched, is a good deal less ambitious than was Woodrow Wilson’s or Richard Nixon’s. Barack Obama did not invent managerial liberalism, nor has he contributed any new ideas to it. He is, in fact, a strangely incurious man. Unlike Ronald Reagan, to whom he likes to be compared, President Obama shows no signs of having expended any effort on big thinkers or big ideas. President Reagan’s guiding lights were theorists such as F. A. Hayek and Thomas Paine; Obama’s most important influences have been tacticians such as Abner Mikva, bush-league propagandists like the Reverend Jeremiah Wright, and his beloved community organizers. Far from being the intellectual hostage of far-left ideologues, President Obama does not appear to have the intellectual energy even to digest their ideas, much less to implement them. This is not to say that he is an unintelligent man. He is a man with a first-class education and a business-class mind, a sort of inverse autodidact whose intellectual pedigree is an order of magnitude more impressive than his intellect.
The result of this is his utterly predictable approach to domestic politics: appoint a panel of credentialed experts. His faith in the powers of pedigreed professionals is apparently absolute. Consider his hallmark achievement, the Affordable Care Act, the centerpiece of which is the appointment of a committee, the Independent Payment Advisory Board (IPAB), the mission of which is to achieve targeted savings in Medicare without reducing the scope or quality of care. How that is to be achieved was contemplated in detail neither by the lawmakers who wrote the health-care bill nor by the president himself. But they did pay a great deal of attention to the processes touching IPAB: For example, if that committee of experts fails to achieve the demanded savings, then the ball is passed to . . . a new committee of experts, this one under the guidance of the secretary of health and human services. IPAB’s powers are nearly plenipotentiary: Its proposals, like a presidential veto, require a supermajority of Congress to be overridden.
IPAB is the most dramatic example of President Obama’s approach to government by expert decree, but much of the rest of his domestic program, from the Dodd-Frank financial-reform law to his economic agenda, is substantially similar. In total, it amounts to that fundamental transformation of American society that President Obama promised as a candidate: but instead of the new birth of hope and change, it is the transformation of a constitutional republic operating under laws passed by democratically accountable legislators into a servile nation under the management of an unaccountable administrative state. The real import of Barack Obama’s political career will be felt long after he leaves office, in the form of a permanently expanded state that is more assertive of its own interests and more ruthless in punishing its enemies. At times, he has advanced this project abetted by congressional Democrats, as with the health-care law’s investiture of extraordinary powers in the executive bureaucracy, but he also has advanced it without legislative assistance — and, more troubling still, in plain violation of the law. President Obama and his admirers choose to call this “pragmatism,” but what it is is a mild expression of totalitarianism, under which the interests of the country are conflated with those of the president’s administration and his party. Barack Obama is the first president of the democracy that John Adams warned us about.
Democracy never lasts long,” Adams famously said. “It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.” For liberal regimes, a very common starting point on the road to serfdom is the over-delegation of legislative powers to the executive. France very nearly ended up in a permanent dictatorship as a result of that error, and was spared that fate mostly by good luck and Charles de Gaulle’s patriotism. Long before she declared her infamous state of emergency, Indira Gandhi had been centralizing power in the prime minister’s office, and India was spared a permanent dictatorship only by her political miscalculation and her dynasty-minded son’s having gotten himself killed in a plane wreck. Salazar in Portugal, Austria under Dollfuss, similar stories. But the United States is not going to fall for a strongman government. Instead of delegating power to a would-be president-for-life, we delegate it to a bureaucracy-without-death. You do not need to install a dictator when you’ve already had a politically supercharged permanent bureaucracy in place for 40 years or more. As is made clear by everything from campaign donations to the IRS jihad, the bureaucracy is the Left, and the Left is the bureaucracy. Elections will be held, politicians will come and go, but if you expand the power of the bureaucracy, you expand the power of the Left, of the managers and minions who share Barack Obama’s view of the world. Barack Obama isn’t the leader of the free world; he’s the front man for the permanent bureaucracy, the smiley-face mask hiding the pitiless yawning maw of total politics.
#page#In an important sense, the American people have no political say in the health-care law, for example, because Congress did not pass a law reforming the health-care system; instead, Congress passed a law empowering the Obama administration, through its political appointees and unelected time-servers, to create a new national health-care regime. The general outline of the program is there in the law, but the nuts and bolts of the thing will be created on the fly by President Obama and his many panels of experts. There are several problems with that model of business, one of which is that President Obama, and more than a few of his beloved experts, have political interests. The partisans of pragmatism present themselves as disinterested servants of the public weal, simply collecting the best information and the best advice from the top experts and putting that into practice. Their only political interest, they would have us believe, is in helping the public understand what a great job is being done for them. Consider President Obama’s observation that his worst mistake in his first term was “thinking that this job was just about getting the policy right. . . . The nature of this office is also to tell a story to the American people that gives them a sense of unity and purpose and optimism, especially during tough times.” (It never seems to have entered into the president’s head that he might have got the policy wrong.) But of course there is a good deal more to politics than that. For example, the president would very much like the unemployment problem to be somewhat abated by the time of the 2014 congressional elections, but he knows that this is unlikely to happen with employers struggling under an expensive health-care mandate that he has not told enough of a story about. And so he has decided — empowered to do so by precisely nothing — that the law will not be enforced until after the elections. Neither does the law empower him arbitrarily to exempt millions of his donors and allies in organized labor from the law, but he has done that too.
This is a remarkable thing. The health-care law gives the executive all sorts of powers to promulgate regulations and make judgments, but it does not give the executive the power to decide which aspects of the law will be enforced and which will not, or to establish a different timeline from the one found in the law itself. For all of the power that Congress legally has given the president in this matter, he feels it necessary to take more — illegally.
The president and his admirers dismiss concern over this as so much chum for the talk-radio ravers, but it is no such thing. The job of the president is to execute the law — that is what the executive branch is there to do. If Barack Obama had wanted to keep pursuing his career as a lawmaker, then the people of Illinois probably would have been content to preserve him in the Senate for half a century or so. As president, he has no more power to decide not to enforce the provisions of a duly enacted federal law than does John Boehner, Anthony Weiner, or Whoopi Goldberg. And unlike them, he has a constitutional duty to enforce the law. Representative Tom Cotton says that the president’s health-care delay makes a deal on immigration less likely — if the president can simply decline to enforce the provisions of a law he fought for, why trust him to enforce provisions of a law he is accepting only as a compromise? Representative Cotton must also of course have in mind the fact that after Congress had unequivocally rejected another piece of immigration reform, the so-called DREAM Act, that the president had supported, he simply instituted it unilaterally, as though he had the authority to declare an amnesty himself. He then did away with criminal-background checks for those to be amnestied, also on his own authority. Strangely, the order to halt background checks came down on November 9, 2012, the same day that John Boehner said Republicans would seek a compromise on immigration reform.
In a similar vein, President Obama has refused to cut off foreign-aid funds to the Egyptian government, though he is required by law to do so in the event of a coup d’état, which is precisely what happened in July in Egypt. It might be embarrassing for the president to punish the Egyptian military and the grand mufti of al-Azhar for their overthrow of the unpopular Mohamed Morsi, but the law does not make exceptions for presidential embarrassment. The president is not legally empowered to assassinate American citizens, but he has done so, after going through the charade of drawing up a legal argument under which he judged himself entitled to do what the Constitution plainly prohibits. The law also prohibits the president and his allies from using the instruments of government to persecute their rivals, but that is precisely what the IRS has been up to for several years, as it turns out. And not just the IRS: Tea-party activist Catherine Engelbrecht was subject to an IRS audit, two FBI visits, an OSHA investigation, and an ATF inspection of her business (which does not deal in A, T, or F). And although the IRS has no statutory power to collect Affordable Care Act–related fines in states that have not voluntarily set up health-care exchanges, Obama’s managers there have announced that they will do so anyway.
#page#The president not only ignores the law but in some cases goes out of his way to subvert it. The U.S. military carried out the killing of Osama bin Laden, but the records of that event have been removed from military custody, where they are subject to inquiries under the Freedom of Information Act, and moved to the CIA, where they can be kept in secrecy. He has attempted to make “recess appointments” when Congress is not in recess and has been stopped from doing so by the federal courts, which rightly identified the maneuver as patently unconstitutional.
There exists a federal law called the Religious Freedom Restoration Act, which restricts the federal government’s power to force Americans to violate their consciences. The Obama administration is forcing an abortifacient mandate upon practically all U.S. employers, in violation of that law. Kathleen Sebelius, the secretary of health and human services, who is responsible for drafting those regulations, received a number of letters from lawmakers arguing that the mandate she was contemplating violated the law; she proceeded anyway — without so much as getting an opinion from her departmental lawyer.
Congress’s supine ceding of its powers, and the Obama administration’s usurpation of both legal and extralegal powers, is worrisome. But what is particularly disturbing is the quiet, polite, workaday manner with which the administration goes about its business — and with which the American public accepts it. As Christopher Hitchens once put it, “The essence of tyranny is not iron law; it is capricious law.” Barack Obama makes a virtue out of that caprice, having articulated for his judicial nominees not a legal standard but a political standard requiring sympathy for politically favored groups: African American, gay, disabled, old, in his words.
We have to some extent been here before. It is a testament to the success of free-market ideas that it is impossible to imagine President Obama making the announcement that President Richard Nixon did on August 15, 1971: “I am today ordering a freeze on all prices and wages throughout the United States.” President Nixon created not one but two IPABs, the Pay Board and the Price Commission, which were to be entrusted with managing the day-to-day operations of the U.S. economy. President Nixon, too, was empowered by a Congress that invested him with that remarkable authority, through the Economic Stabilization Act of 1970, whose provisions were to be invoked during times of economic emergency. There was no economic emergency in 1971, but it is a nearly iron-clad rule of the presidency that powers vested will be powers used. That President Obama has adopted President Nixon’s approach but limited himself to health care might be considered progress if he had not adopted as a general principle one of Nixon’s unfortunate maxims: When the president does it, it isn’t illegal. President Nixon’s lawlessness was sneaky, and he had the decency to be ashamed of it. President Obama’s lawlessness is as bland and bloodless as the man himself, and practiced openly, as though it were a virtue. President Nixon privately kept an enemies list; President Obama publicly promises that “we’re gonna punish our enemies, and we’re gonna reward our friends.”
Barack Obama’s administration is unmoored from the institutions that have long kept the imperial tendencies of the American presidency in check. That is partly the fault of Congress, which has punted too many of its legislative responsibilities to the president’s army of faceless regulators, but it is in no small part the result of an intentional strategy on the part of the administration. He has spent the past five years methodically testing the limits of what he can get away with, like one of those crafty velociraptors testing the electric fence in Jurassic Park. Barack Obama is a Harvard Law graduate, and he knows that he cannot make recess appointments when Congress is not in recess. He knows that his HHS is promulgating regulations that conflict with federal statutes. He knows that he is not constitutionally empowered to pick and choose which laws will be enforced. This is a might-makes-right presidency, and if Barack Obama has been from time to time muddled and contradictory, he has been clear on the point that he has no intention of being limited by something so trivial as the law.
It is not simply the content of his political agenda, which, though wretched, is a good deal less ambitious than was Woodrow Wilson’s or Richard Nixon’s. Barack Obama did not invent managerial liberalism, nor has he contributed any new ideas to it. He is, in fact, a strangely incurious man. Unlike Ronald Reagan, to whom he likes to be compared, President Obama shows no signs of having expended any effort on big thinkers or big ideas. President Reagan’s guiding lights were theorists such as F. A. Hayek and Thomas Paine; Obama’s most important influences have been tacticians such as Abner Mikva, bush-league propagandists like the Reverend Jeremiah Wright, and his beloved community organizers. Far from being the intellectual hostage of far-left ideologues, President Obama does not appear to have the intellectual energy even to digest their ideas, much less to implement them. This is not to say that he is an unintelligent man. He is a man with a first-class education and a business-class mind, a sort of inverse autodidact whose intellectual pedigree is an order of magnitude more impressive than his intellect.
The result of this is his utterly predictable approach to domestic politics: appoint a panel of credentialed experts. His faith in the powers of pedigreed professionals is apparently absolute. Consider his hallmark achievement, the Affordable Care Act, the centerpiece of which is the appointment of a committee, the Independent Payment Advisory Board (IPAB), the mission of which is to achieve targeted savings in Medicare without reducing the scope or quality of care. How that is to be achieved was contemplated in detail neither by the lawmakers who wrote the health-care bill nor by the president himself. But they did pay a great deal of attention to the processes touching IPAB: For example, if that committee of experts fails to achieve the demanded savings, then the ball is passed to . . . a new committee of experts, this one under the guidance of the secretary of health and human services. IPAB’s powers are nearly plenipotentiary: Its proposals, like a presidential veto, require a supermajority of Congress to be overridden.
IPAB is the most dramatic example of President Obama’s approach to government by expert decree, but much of the rest of his domestic program, from the Dodd-Frank financial-reform law to his economic agenda, is substantially similar. In total, it amounts to that fundamental transformation of American society that President Obama promised as a candidate: but instead of the new birth of hope and change, it is the transformation of a constitutional republic operating under laws passed by democratically accountable legislators into a servile nation under the management of an unaccountable administrative state. The real import of Barack Obama’s political career will be felt long after he leaves office, in the form of a permanently expanded state that is more assertive of its own interests and more ruthless in punishing its enemies. At times, he has advanced this project abetted by congressional Democrats, as with the health-care law’s investiture of extraordinary powers in the executive bureaucracy, but he also has advanced it without legislative assistance — and, more troubling still, in plain violation of the law. President Obama and his admirers choose to call this “pragmatism,” but what it is is a mild expression of totalitarianism, under which the interests of the country are conflated with those of the president’s administration and his party. Barack Obama is the first president of the democracy that John Adams warned us about.
Democracy never lasts long,” Adams famously said. “It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.” For liberal regimes, a very common starting point on the road to serfdom is the over-delegation of legislative powers to the executive. France very nearly ended up in a permanent dictatorship as a result of that error, and was spared that fate mostly by good luck and Charles de Gaulle’s patriotism. Long before she declared her infamous state of emergency, Indira Gandhi had been centralizing power in the prime minister’s office, and India was spared a permanent dictatorship only by her political miscalculation and her dynasty-minded son’s having gotten himself killed in a plane wreck. Salazar in Portugal, Austria under Dollfuss, similar stories. But the United States is not going to fall for a strongman government. Instead of delegating power to a would-be president-for-life, we delegate it to a bureaucracy-without-death. You do not need to install a dictator when you’ve already had a politically supercharged permanent bureaucracy in place for 40 years or more. As is made clear by everything from campaign donations to the IRS jihad, the bureaucracy is the Left, and the Left is the bureaucracy. Elections will be held, politicians will come and go, but if you expand the power of the bureaucracy, you expand the power of the Left, of the managers and minions who share Barack Obama’s view of the world. Barack Obama isn’t the leader of the free world; he’s the front man for the permanent bureaucracy, the smiley-face mask hiding the pitiless yawning maw of total politics.
#page#In an important sense, the American people have no political say in the health-care law, for example, because Congress did not pass a law reforming the health-care system; instead, Congress passed a law empowering the Obama administration, through its political appointees and unelected time-servers, to create a new national health-care regime. The general outline of the program is there in the law, but the nuts and bolts of the thing will be created on the fly by President Obama and his many panels of experts. There are several problems with that model of business, one of which is that President Obama, and more than a few of his beloved experts, have political interests. The partisans of pragmatism present themselves as disinterested servants of the public weal, simply collecting the best information and the best advice from the top experts and putting that into practice. Their only political interest, they would have us believe, is in helping the public understand what a great job is being done for them. Consider President Obama’s observation that his worst mistake in his first term was “thinking that this job was just about getting the policy right. . . . The nature of this office is also to tell a story to the American people that gives them a sense of unity and purpose and optimism, especially during tough times.” (It never seems to have entered into the president’s head that he might have got the policy wrong.) But of course there is a good deal more to politics than that. For example, the president would very much like the unemployment problem to be somewhat abated by the time of the 2014 congressional elections, but he knows that this is unlikely to happen with employers struggling under an expensive health-care mandate that he has not told enough of a story about. And so he has decided — empowered to do so by precisely nothing — that the law will not be enforced until after the elections. Neither does the law empower him arbitrarily to exempt millions of his donors and allies in organized labor from the law, but he has done that too.
This is a remarkable thing. The health-care law gives the executive all sorts of powers to promulgate regulations and make judgments, but it does not give the executive the power to decide which aspects of the law will be enforced and which will not, or to establish a different timeline from the one found in the law itself. For all of the power that Congress legally has given the president in this matter, he feels it necessary to take more — illegally.
The president and his admirers dismiss concern over this as so much chum for the talk-radio ravers, but it is no such thing. The job of the president is to execute the law — that is what the executive branch is there to do. If Barack Obama had wanted to keep pursuing his career as a lawmaker, then the people of Illinois probably would have been content to preserve him in the Senate for half a century or so. As president, he has no more power to decide not to enforce the provisions of a duly enacted federal law than does John Boehner, Anthony Weiner, or Whoopi Goldberg. And unlike them, he has a constitutional duty to enforce the law. Representative Tom Cotton says that the president’s health-care delay makes a deal on immigration less likely — if the president can simply decline to enforce the provisions of a law he fought for, why trust him to enforce provisions of a law he is accepting only as a compromise? Representative Cotton must also of course have in mind the fact that after Congress had unequivocally rejected another piece of immigration reform, the so-called DREAM Act, that the president had supported, he simply instituted it unilaterally, as though he had the authority to declare an amnesty himself. He then did away with criminal-background checks for those to be amnestied, also on his own authority. Strangely, the order to halt background checks came down on November 9, 2012, the same day that John Boehner said Republicans would seek a compromise on immigration reform.
In a similar vein, President Obama has refused to cut off foreign-aid funds to the Egyptian government, though he is required by law to do so in the event of a coup d’état, which is precisely what happened in July in Egypt. It might be embarrassing for the president to punish the Egyptian military and the grand mufti of al-Azhar for their overthrow of the unpopular Mohamed Morsi, but the law does not make exceptions for presidential embarrassment. The president is not legally empowered to assassinate American citizens, but he has done so, after going through the charade of drawing up a legal argument under which he judged himself entitled to do what the Constitution plainly prohibits. The law also prohibits the president and his allies from using the instruments of government to persecute their rivals, but that is precisely what the IRS has been up to for several years, as it turns out. And not just the IRS: Tea-party activist Catherine Engelbrecht was subject to an IRS audit, two FBI visits, an OSHA investigation, and an ATF inspection of her business (which does not deal in A, T, or F). And although the IRS has no statutory power to collect Affordable Care Act–related fines in states that have not voluntarily set up health-care exchanges, Obama’s managers there have announced that they will do so anyway.
#page#The president not only ignores the law but in some cases goes out of his way to subvert it. The U.S. military carried out the killing of Osama bin Laden, but the records of that event have been removed from military custody, where they are subject to inquiries under the Freedom of Information Act, and moved to the CIA, where they can be kept in secrecy. He has attempted to make “recess appointments” when Congress is not in recess and has been stopped from doing so by the federal courts, which rightly identified the maneuver as patently unconstitutional.
There exists a federal law called the Religious Freedom Restoration Act, which restricts the federal government’s power to force Americans to violate their consciences. The Obama administration is forcing an abortifacient mandate upon practically all U.S. employers, in violation of that law. Kathleen Sebelius, the secretary of health and human services, who is responsible for drafting those regulations, received a number of letters from lawmakers arguing that the mandate she was contemplating violated the law; she proceeded anyway — without so much as getting an opinion from her departmental lawyer.
Congress’s supine ceding of its powers, and the Obama administration’s usurpation of both legal and extralegal powers, is worrisome. But what is particularly disturbing is the quiet, polite, workaday manner with which the administration goes about its business — and with which the American public accepts it. As Christopher Hitchens once put it, “The essence of tyranny is not iron law; it is capricious law.” Barack Obama makes a virtue out of that caprice, having articulated for his judicial nominees not a legal standard but a political standard requiring sympathy for politically favored groups: African American, gay, disabled, old, in his words.
We have to some extent been here before. It is a testament to the success of free-market ideas that it is impossible to imagine President Obama making the announcement that President Richard Nixon did on August 15, 1971: “I am today ordering a freeze on all prices and wages throughout the United States.” President Nixon created not one but two IPABs, the Pay Board and the Price Commission, which were to be entrusted with managing the day-to-day operations of the U.S. economy. President Nixon, too, was empowered by a Congress that invested him with that remarkable authority, through the Economic Stabilization Act of 1970, whose provisions were to be invoked during times of economic emergency. There was no economic emergency in 1971, but it is a nearly iron-clad rule of the presidency that powers vested will be powers used. That President Obama has adopted President Nixon’s approach but limited himself to health care might be considered progress if he had not adopted as a general principle one of Nixon’s unfortunate maxims: When the president does it, it isn’t illegal. President Nixon’s lawlessness was sneaky, and he had the decency to be ashamed of it. President Obama’s lawlessness is as bland and bloodless as the man himself, and practiced openly, as though it were a virtue. President Nixon privately kept an enemies list; President Obama publicly promises that “we’re gonna punish our enemies, and we’re gonna reward our friends.”
Barack Obama’s administration is unmoored from the institutions that have long kept the imperial tendencies of the American presidency in check. That is partly the fault of Congress, which has punted too many of its legislative responsibilities to the president’s army of faceless regulators, but it is in no small part the result of an intentional strategy on the part of the administration. He has spent the past five years methodically testing the limits of what he can get away with, like one of those crafty velociraptors testing the electric fence in Jurassic Park. Barack Obama is a Harvard Law graduate, and he knows that he cannot make recess appointments when Congress is not in recess. He knows that his HHS is promulgating regulations that conflict with federal statutes. He knows that he is not constitutionally empowered to pick and choose which laws will be enforced. This is a might-makes-right presidency, and if Barack Obama has been from time to time muddled and contradictory, he has been clear on the point that he has no intention of being limited by something so trivial as the law.
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