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[Bank of England] Frontrunning: August 1
  • Global stocks hit highest in a year but banks take shine off Europe (Reuters)
  • Fed’s Dudley Warns It Is Premature to Rule Out an Interest-Rate Increase This Year (WSJ)
  • Fed’s Kaplan Says September ‘On the Table’ If Data Support (BBG)
  • Europe's stress tests fail to ease investors' bank sector worries (Reuters)
  • Trump’s Attacks on Khan Family Roil Race But May Not Alter It (BBG)
  • Father of Slain Soldier Volleys Back at Donald Trump (WSJ)
  • Clinton says Russia behind DNC hacking, draws line to Trump (Reuters)
  • Russia says accusations it was behind DNC email hack are insulting (Reuters)
  • Islamic State calls on members to carry out jihad in Russia (Reuters)
  • Celgene Accused of Using Charities in ‘Scheme to Gain Billions' (BBG)
  • Hunt for Returns Reaches Pakistan (WSJ)
  • A $400 Billion Influx Squeezes U.S. Bond Market’s Safest Asset (BBG)
  • Abe's Japan Spending Package Likely to Come Up Light  (WSJ)
  • More Companies Are Choosing a Sale Over an IPO (WSJ)
  • The Fragile U.S. Economy Now Facing a Slowdown in Building Boom (BBG)
  • China stakes a strong claim in the Greek electricity landscape (Kathimerini)
  • Goldman Bond Deals With 1MDB Under Singapore Central Bank Review (BBG)
  • U.S. judge to weigh halt to North Carolina transgender bathroom law (Reuters)
  • Britain’s scientists are freaking out over Brexit (WaPo)
  • Turkey captures 11 involved in bid to seize Erdogan during coup attempt (Reuters)

 

Overnight Media Digest

WSJ

- Federal Reserve Bank of New York President William Dudley argued for continued caution over the path of U.S. interest rates, given uncertainty over the global outlook, but warned that traders who have been ruling out an interest-rate increase later this year are growing too complacent. http://on.wsj.com/2ar4Y5E

- China's homegrown ride-hailing champion, Didi Chuxing Technology Co, has reached a deal to acquire Uber Technologies Inc's China operations, people familiar with the deal said, marking an end to their bruising competition for passengers. http://on.wsj.com/2ar5O2o

- Pope Francis said the inspiration for terrorism wasn't Islam but a world economy that worshiped the "god of money" and drove the disenfranchised to violence. "Terrorism grows when there is no other option, and as long as the world economy has at its center the god of money and not the person, "the pope told reporters late Sunday as he returned to the Vatican from a five-day visit in Poland. "This is fundamental terrorism, against all humanity." http://on.wsj.com/2akIL7H

- A hot-air balloon hit at least one electrical transmission line before all 16 people on board died in a fiery crash in Central Texas on Saturday, prompting accident experts to delve into weather conditions, pilot actions and equipment issues, according to the first official release of information by federal investigators. At a Sunday press conference in the middle of a rural pasture bisected by power lines and towers about 30 miles south of Austin, Robert Sumwalt, the on-scene member of the National Transportation Safety Board, said preliminary indications pointed to some type of collision between a portion of the balloon and part of that electrical grid. http://on.wsj.com/2aVmihm

 

FT

* High-profile British Treasury Minister Jim O'Neill, a former Goldman Sachs chief economist, could quit his post over Prime Minister Theresa May's new approach to Chinese investment, the Financial Times reported, citing a friend of O'Neill.

* Ride-hailing service Uber will invest $500 million in an ambitious global mapping project to wean itself off dependence on Google Maps and pave the way for driverless cars, the Financial Times reported on Sunday.

* U.S. bank Goldman Sachs was asked to provide details of any paid work it has done for Tina Green, the wife of retail tycoon Philip Green, as British Members of Parliament continue to evaluate the banks involvement in Green's decision to sell BHS for 1 pound.

 

NYT

- Didi Chuxing, the largest ride-hailing service in China, plans to buy Uber China, the Chinese arm of the American ride-sharing giant, in a deal that values the new company at about $35 billion. http://nyti.ms/2aBWKH9

- HBO's new president of programming Casey Bloys said that "Game of Thrones" would conclude after its eighth season, and he acknowledged that next season's summer premiere date would mean the show would not be eligible for the 2017 Emmys. http://nyti.ms/2aBXZq3

- A consortium of Chinese investors led by the game company Shanghai Giant Network Technology said it would pay $4.4 billion to Caesars Interactive Entertainment for Playtika, its social and mobile games unit. http://nyti.ms/2aBYgck

 

Britain

The Times

British taxpayers could bear the burden of 2.5 billion pounds ($3.30 billion) even if the Hinkley Point bill is dropped. EDF, the French energy giant, has already invested 2.5 billion pounds in developing the site for the nuclear plant. (http://bit.ly/2aUwzdM)

A three-member International Olympic Committee (IOC) panel will have the final say on which Russian athletes can compete at the Rio Games, reviewing all decisions taken by the international federations. The IOC earlier this month set criteria for Russians to be eligible to compete in Rio after revelations of state-backed doping in the country. (http://bit.ly/2aUx5ID)

The Guardian

The Bank of England is almost certain to cut benchmark borrowing costs when it sets policy on Aug. 4. This kind of quantitative easing could be used by policymakers to give an extra boost to the economy after the Brexit vote. (http://bit.ly/2aUxpaj)

Bernard Hogan-Howe, the Metropolitan Police commissioner, said Britain is well-equipped to prevent terror attacks, but it remained a question of 'when, not if' there would be an attack. His comment came in light of the recent Islamic State attacks on European countries. (http://bit.ly/2aUyiQt)

The Telegraph

A large number of workers could be denied flexible access to their final salary pension funds if a bill to allow companies to ditch their pension promises is passed by the government.(http://bit.ly/2aUyPSl)

Sky News

British Prime Minister Theresa May's first important order of business was meeting the bosses of four companies subject to inquiry by the Serious Fraud Office. She met with the chiefs of Barclays, GlaxoSmithKline, Rolls Royce and Tesco - each of which is being investigated for alleged wrongdoing. (http://bit.ly/2aUyQpu)

The deal worth 79 billion pounds ($104.32 billion) between SABMiller and Anheuser-Busch InBev remains to be voted on by shareholders of SABMiller. The board of SABMiller intends to persuade shareholders to approve the terms of the deal. (http://bit.ly/2aUzNxM)

The Independent

Former British Prime Minister David Cameron has reportedly offered knighthoods and other such titles to prominent campaigners from the Remain camp. Four cabinet members - Michael Fallon, David Lidington, Philip Hammond and Patrick McLoughlin - could be awarded knighthoods as well. (http://ind.pn/2aUCEXK)

The recent surge in anti-immigration hate crimes in Britain after the Brexit vote has occurred mostly in areas that strongly voted to leave the European Union. Statistics show hate crimes are on the rise in Eurosceptic areas of Britain. (http://ind.pn/2aUDaVr)

Published:8/1/2016 7:11:27 AM
[Bernie Sanders] Hillary Clinton's Top VP Pick Lets Big Banks Know He's In Their Corner

Submitted by Deirdre Fulton via CommonDreams.org,

Sounding another alarm for progressives wary of the Democratic establishment's support for Wall Street, the man said to be leading the pack of potential Hillary Clinton running mates - Virginia Sen. Tim Kaine - has just this week sent a clear message to big banks: He's in their corner.

Kaine, who is reportedly Bill Clinton's favorite for the vice presidential slot, signed onto two letters on Monday pushing for financial deregulation - letters that show the Clinton camp "how Kaine could be an asset with banking interests on the fundraising trail," according to David Dayen at The Intercept on Wednesday.

"Let's be really clear: It should be disqualifying for any potential Democratic vice presidential candidate to be part of a lobbyist-driven effort to help banks dodge consumer protection standards and regulations designed to prevent banks from destroying our economy."

 

—Charles Chamberlain, Democracy for America

The news should "disqualify" Kaine from the ticket, one prominent progressive group declared Thursday.

The first missive, signed by 16 Democrats and every Republican senator, calls on the Consumer Financial Protection Bureau (CFPB) to exempt community banks and credit unions from certain regulations.

As Dayen explains:

While this seems benign, tailoring rules that exempt large classes of financial institutions leaves consumers vulnerable to deceptive practices. A rule of this type could allow community banks and credit unions to sell high-risk mortgages or personal loans without the disclosure and ability to pay rules in place across the industry.

The second letter (pdf) deals with even bigger regional institutions, as it is aimed at helping "major firms including Capital One, PNC Bank and U.S. Bank, all of which control hundreds of billions of dollars in assets," according to the Huffington Post.

Signed by Kaine and three other Democratic senators—Mark Warner (Va.), Gary Peters (Mich.), and Bob Casey (Pa.)—the letter to Federal Reserve Chair Janet Yellen, Comptroller of the Currency Thomas Curry, and Federal Deposit Insurance Corporation chair Martin Gruenberg "argues that it is unfair for these large banks to be required to calculate and report their liquidity?a critical measure of risk?on a daily basis," HuffPo's Zach Carter continues.

"This distinction is applied unevenly across regional institutions despite similar risk profiles, simply by virtue of an asset threshold," the letter reads.

Or, as Carter puts it, translating the senators' bottom line: "just because they're big, doesn't mean they should be regulated more closely."

Kaine for VP provides "a perfect example of why the party needs to create policies and pick candidates who reflect the will of the voters, not the will of elites and special interests that the superdelegate system has come to embody."

 

—Diane Russell, Maine State Representative

But in fact, Dayen points out, "[i]n an interconnected financial system, a large regional bank that gets into trouble has as much chance of creating ripple effects as a mega-bank. It's unclear why they should be exempted from regulations deemed appropriate for all facets of the financial sector."

On top of these salvos on behalf of the banking industry, the Huffington Post notes that Kaine did not sign onto a third letter sent Wednesday from 28 senators urging the CFPB to crack down on abusive payday lenders and in turn, protect consumers. 

That all this took place while Kaine is presumably being vetted for VP "could show potential financial industry donors that he is willing to serve as an ally on their regulatory issues," Dayen wrote, especially because Clinton has been pushed to the left by Bernie Sanders on Wall Street.

Given existing concerns around Kaine's support for the Trans Pacific Partnership and other so-called "free trade" deals, plus his mixed record on reproductive rights and now new proof of his bending to bankers, it's no wonder RootsAction co-founder and Bernie Sanders delegate Norman Solomon told Common Dreams on Wednesday that choosing the Virginia senator or someone like him "would be a very pronounced middle finger to the 13 million people who voted for Bernie."

Indeed, in a press statement on Thursday, critics of the Democratic Party's superdelegate system said Kaine's position at the top of the VP list provides "a perfect example of why the party needs to create policies and pick candidates who reflect the will of the voters, not the will of elites and special interests that the superdelegate system has come to embody."

"Superdelegates are the embodiment of a system that is rigged in favor of the powerful at the expense of the powerless," said Maine state representative Diane Russell, who originated an amendment to abolish superdelegates that will be taken up by the DNC Rules Committee on Saturday, "and there isn't a more powerful industry in America than the big banks."

And Democracy for America executive director Charles Chamberlain said in a statement Thursday:

"Let's be really clear: It should be disqualifying for any potential Democratic vice presidential candidate to be part of a lobbyist-driven effort to help banks dodge consumer protection standards and regulations designed to prevent banks from destroying our economy."

 

"Our presidential ticket cannot beat the billionaire bigot by simply being not-Donald Trump," he added. "To win in November, our ticket needs to have an unquestionably strong record in the fight against income inequality, one of the defining issues of the 2016 election."

Published:7/22/2016 1:26:18 AM
[Florida] Black Lives Matter Activist DeRay McKesson Arrested In Baton Rouge

For the third consecutive day, protests against police violence (and less so the deadly retaliation by Micah Johnson) continued on Saturday night across America and shut down key roadways and transportation arteries in a number of U.S. cities on Saturday, resulting in mass arrests. The protests stretched into early Sunday morning in Baton Rouge and St. Paul, where tensions are most raw after the deaths of Alton Sterling in the Louisiana city and of Philando Castile in a St. Paul suburb.

While thousands of mostly peaceful demonstrators flooded the streets of major U.S. cities again Saturday night, a protest in St. Paul took a particularly violent turn, with participants hurling Molotov cocktails, fireworks, rocks, glass bottles, concrete slabs, and bricks at riot gear-wearing police officers.  Police said on Twitter that people on an overpass were "throwing objects at officers, dumping liquid on officers" and others were throwing rocks and rebar. Police were heard telling the crowd, "leave the interstate now or you'll be subject to a use of force" shortly after 10:30 p.m. Police blamed "aggressors" for throwing objects at officers, and said police were using "marking rounds." Five officers were injured, and two were taken to the hospital. All are expected to be okay.

Authorities used smoke bombs when 200 protesters refused to leave the roadway just after midnight. By 12:45 a.m. Sunday, police said they were clearing debris from the road in order to reopen the highway.

Between the demonstrations in Baton Rouge and St. Paul alone, there were more than 200 arrests.

But the most notable overnight arrest was that of DeRay McKesson, one of the leaders and most prominent activists of the Black Lives Matter protest movement, who as WaPo reports, was arrested in Baton Rouge, where he traveled earlier Saturday "to demonstrate in solidarity with residents angered by the recent death of Alton Sterling after an officer-involved shooting that was captured on video." McKesson was taken into custody around 11 p.m.

Activist DeRay McKesson is taken into police custody during a protest along
Airline Highway in front of the Baton Rouge Police Department headquarters

“The officers won’t give their names,” said Brittany Packnett, a co-founder with McKesson of the group Campaign Zero, a prominent activist collective. “He was clearly targeted.” She later tweeted that 100 people were arrested in Baton Rouge. There was no immediate official confirmation of that figure.

Packnett said McKesson was using his smartphone to live-stream the ongoing protests when police began forcibly dispersing the crowds. As McKesson and a group of about eight people walked down the street, an officer approached him and told him that he had been “flagged” and that if he left the sidewalk again he would be arrested. Moments later, she said, two officers forcefully arrested McKesson.

“They tackled him. One officer hit the top of his body and another officer the bottom,” Packnett said. The altercation knocked the phone from McKesson’s hand, ending his live broadcast of the demonstration, she said.

Blurry video of the moments before McKesson was taken into custody provided to The Washington Post captures his verbal exchange with the officers.

“The police continue to just provoke people,” McKesson said after an officer yells to a group of people that if they step on the roadway they will be arrested. Then an officer says the man in the “loud shoes” has been “flagged”: “You in them loud shoes, if I see you in the road, if I get close to you, you’re going to jail,” an officer can be heard saying on the video. In response, Packnett says, “We’re on the shoulder. There is no sidewalk, sir.”

McKesson is known for wearing a pair of red Nike sneakers and a blue vest to all protests he attends.

Activists continued to talk as they walked up the side of the street. Moments later, an officer’s voice is heard. “City police, you’re under arrest.” “What?!” McKesson exclaims. “I’m under arrest y’all.” Then the video and audio feed cuts out.

In a text message from police custody, McKesson said he and 33 others were in custody together, wrists tied, and being taken to a police precinct.

The reaction was quick: news of McKesson’s arrest exploded on social media, with more than 100,000 tweets before dawn using the hashtag #FreeDeray. Many urged people to call Baton Rouge police and demand his release.

As CNN's Brian Stetler noted after the arrest, "when you have someone that is relatively well-known and now trending on twitter, it does create more attention both for the protests and for the arrests."

A police spokesman confirmed his arrest to The Advocate newspaper, but did not elaborate on potential charges and did not return a request for comment from The Post. As Saturday night became Sunday morning, there was no word on what charges McKesson might be facing. But a website for a local jail showed that McKesson was an inmate there as of Sunday. McKesson called a friend in Baltimore around 5:30 a.m. and told her he was in okay physical condition but did not know when he would be released, the friend told The Post.

* * *

Meanwhile, protests continued around major US cities.

The St. Paul protesters, who kicked off the night at 8 p.m. from the governor's mansion, forced the closure of Interstate 94. Some threw objects and dropped liquids from overpasses on officers below. Others directed laser pointers at officers. Police responded shortly after midnight with inert, glass balls and smoke to clear about 200 demonstrators who were blocking the interstate, which opened early Sunday morning. Pepper spray was also used on some protesters.

Protester Mike Martin told The Associated Press he was pepper sprayed by a police officer on a pedestrian bridge overlooking the interstate. He claimed he was trying to move the crowd along and keep the peace. "I guess I wasn't moving fast enough for him," Martin said. "He just got it out and bam, I saw a cloud. It's burning pretty bad."

In Baton Rouge masses of people also took to the streets. Demonstrators gathered at the convenience store where Sterling was shot before making their way to the Baton Rouge police department and the state Capitol. Baton Rouge resident Marie Flowers, who lives in the same neighborhood where Sterling was killed, came to the protest with her three children. "Black boys are being killed and this is just the culmination of what has been going on for decades," she told The AP. According to East Baton Rouge Sheriff public information officer Casey Hicks, there 101 arrests overnight related to the protest.

About 1,000 protesters faced off against riot gear-wearing police officers, while shouting "No justice! No peace!" Members of the New Black Panther Party for Self Defense were also present, shouting "Black Power" and raising their fists. The protests died down a little after midnight.

Two weapons were confiscated, according to a police spokesman.

It was during this protest that McKesson was arrested.

Other cities where demonstrators took to the streets per ABC:

New York, N.Y.: Hundreds of people descended upon Union Square and marched uptown, chanting "Black lives matter" and "No justice, no peace." By the end of the demonstration, about 1,000 people had taken part. An NYPD spokesman said there were 20 arrests. The charges were unknown.

Philadelphia, Pennsylvania: Hundreds of people took part in a six-hour march to two police precincts, shouting slogans while facing off with officers.

Pittsburgh, Pennsylvania: Several hundred people, some of whom were affiliated with Black Lives Matter, broke off from the city's 200th anniversary parade to march from Point State Park to the county courthouse.

Newport, Rhode Island: More than 150 people gathered in downtown Newport to listen to Black Lives Matter speakers.

Fort Lauderdale, Florida: Hundreds of Black Lives Matter supporters marched throughout the city, stopping outside a Broward County jail, where prisoners banged on windows in support. Other demonstrations were held in neighboring West Palm Beach and Miami. 

San Antonio, Texas: Shortly before 10 p.m. local time, someone had shot at the San Antonio Police Department headquarters, leaving no one injured, but police leaders anxious given the slayings of five officers in Dallas on Thursday.

Salt Lake City, Utah: Black Lives Matters supporters gathered in the city's downtown, where speakers addressed racial inequality and police violence.

San Francisco, California: Several roads and ramps to get on and off the Bay Bridge were blocked by demonstrators, who kicked off their march from the city's Hall of Justice. And in central California, hundreds of people blocked intersection in Fresno.

Published:7/10/2016 7:17:54 AM
[World] Confirmation Chaos and Constitutional Corruption

Ilya Shapiro

Within hours of hearing the news of Justice Antonin Scalia’s passing, Senate Majority Leader Mitch McConnell announced that his caucus would not be holding any hearings or votes on a replacement nominee until after the election. “Let the people decide” became the rallying cry of the Republican majority, and all of the party’s members on the Senate Judiciary Committee signed a letter pledging fidelity to the #NoHearingsNoVotes plan.

When President Obama announced the nomination of Judge Merrick Garland a month later, nothing really changed: this wasn’t about the nominee’s qualifications, but an argument from the political principle that the gaping hole left by a jurisprudential giant shouldn’t be filled until the voters in a polarized nation — who reelected Obama in 2012 but then handed the Senate to the GOP in 2014 — could have their say.

This seemed like unprecedented obstructionism, though historically plenty of judicial nominees have never gotten hearings or votes, and the last time that a Senate confirmed a nomination made by a president of the opposing party to a high-court vacancy arising during a presidential election year was in 1888. Indeed, under recent Republican presidents, Democratic senators ranging from Joe Biden to Chuck Schumer to Harry Reid announced that they wouldn’t consider any new nominees until after the election.

That’s literally their prerogative: Just like the Senate can decline to take up a bill passed by the House, or a treaty signed by the president, it can surely decide how to exercise its constitutional power to “advice and consent” on judicial nominations. This is purely a political matter, with the Senate staking out how it wants to exercise its power and the voters being the ultimate judges, as it were, of that tactic. Indeed, if the Senate decided not to confirm any nomine to any position, it could do so — and likely pay a high political price unless the president were so compromised as to lack any popular legitimacy whatsoever.

Why the Push to Fill the Vacancy?

Why has it come to this? Why all the focus on one office, however high it might be? Sure, it’s an election year, but that doesn’t mean that governance grinds to a halt. If Secretary of State John Kerry died or resigned, it would certainly be a big deal — with Republicans grilling his would-be successor on President Obama’s foreign-policy record — but there’s no doubt that the slot would be filled if someone with generally appropriate credentials were nominated. Even a vacancy in the vice-presidency wouldn’t last unduly long, though Republicans would jockey to extract concessions for not having Speaker Paul Ryan be President Obama’s designated successor (even if for mere months).

But of course executive appointments expire at the end of the presidential term, while judicial appointments long outlast any president. To take an extreme example, an important ruling on donor-list disclosures was made this past April by a district judge appointed by Lyndon Johnson. Justice Scalia himself served nearly 30 years, giving President Reagan legal-policy agenda a bridge well into the 21st century. And let’s not forget that the Scalia-less Supreme Court stands starkly split 4-4 on so many controversial issues: campaign-finance law, the Second Amendment, religious liberty, executive and regulatory power, to name just a few. In this already bizarre 2016 election, legal pundits have finally gotten their wish that judicial nominations are firmly among the top campaign issues.

If we want to have the rule of law, we need judges to interpret the Constitution faithfully and strike down laws when government is exceeding its authority.

Moreover, this year marks the 25th anniversary of the bitter confirmation hearings of Justice Clarence Thomas. HBO aired a reenactment called “Confirmation,” which itself was controversial, reopening old political wounds regarding its portrayal of what Thomas referred to as a “high-tech lynching.” Justice Thomas received the narrowest Supreme Court confirmation in more than a century, 52-48 — and this less than four years after the failed nomination that ushered in the poisonous modern era of confirmation battles, that of Judge Robert Bork in 1987.

Senate Democrats had warned that nominating Bork would provoke a fight unlike any President Reagan had faced over judges — after Scalia’s unanimous confirmation the previous year. And so, the very day that Reagan nevertheless announced this pick, Ted Kennedy went to the floor of the Senate to denounce “Robert Bork’s America,” which is a place “in which women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens’ doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of the Government, and the doors of the Federal courts would be shut on the fingers of millions of citizens.” It went downhill from there, as the irascible Bork — with an irascible beard — refused to adopt the now well-worn strategy of talking a lot without saying anything. A few years later, Ruth Bader Ginsburg would refine that tactic into a “pincer movement,” refusing to comment on specific fact patterns because they might come before the Court, and then refusing to discuss general principles because “a judge could deal in specifics only.”

History of Confirming Justices

Confirmation processes weren’t always like this. The Senate didn’t even hold public hearings on Supreme Court nominations until 1916 — and that innovation was driven by the unusual circumstances of (1) the resignation of a justice (Charles Evans Hughes) to run against a sitting president (Woodrow Wilson) and (2) the first Jewish nominee (Louis Brandeis). It wouldn’t be until 1938, with (also-Jewish) Felix Frankfurter, that a judicial nominee actually testified at his own hearing. In 1962, the part of Byron White’s hearing where the nominee himself testified lasted less than 15 minutes and consisted of a handful of questions, mostly about the Heisman-runner-up’s football-playing days.

What’s changed? Is it TV and social media, the 24-hour news cycle and the viral video? Is it that legal issues have become more ideologically divisive? No, it isn’t that there’s been a perversion of the confirmation process, increasingly demagogic political rhetoric, or even the use of filibusters. Those are symptoms of the underlying problem, a relatively new development but one that’s part and parcel of a much larger problem: constitutional corruption.

As government has grown, so have the laws and regulations over which the Court has power. All of a sudden, judges are declaring what Congress can do with its great powers, what kind of law the executive branch can write into the Federal Register, and what kinds of new rights will be recognized.  As we’ve gone down the wrong jurisprudential track since the New Deal, the judiciary now has the opportunity to change the direction of public policy more than it ever did. So of course judicial nominations and confirmations are going to be more fraught with partisan considerations.

This wasn’t always a problem — in the sense that partisanship didn’t really mean that much other than rewarding your cronies. It’s a modern phenomenon for our two political parties to be so ideologically polarized, and therefore for judges nominated by presidents from different parties to have notably different views on constitutional interpretation.

Under the Founders’ Constitution, under which the country lived under for its first 150 years, the Supreme Court hardly ever had to strike down a law. If you read the Congressional Record of the 18th and 19th centuries, Congress debated whether legislation was constitutional, much more than whether it was a good idea. Debates focused on whether something was genuinely for the general welfare or whether it only served, for example, the state of Georgia. “Do we have the power to do this?” was the central issue with any aspect of public policy.

In 1887, Grover Cleveland vetoed an appropriation of $10,000 for seeds to drought-stricken Texas farmers because he could find no constitutional warrant for such action. In 1907, in the case of Kansas vs. Colorado, the Supreme Court said that “the proposition that there are legislative powers affecting the nation as a whole although not expressed in the specific grant of powers is in direct conflict with the doctrine that this is a government of enumerated powers.”

The Changing Role of Judges

We also had a stable system of unenumerated rights that went beyond those listed in the Bill of Rights to those retained by the people per the Ninth Amendment. The Tenth Amendment was similarly redundant of the whole structure: the idea is that we have a government of delegated and enumerated — and therefore limited — powers.

Judges play much larger roles today. The idea that the General Welfare Clause says that the government can essentially regulate any issue as long as the legislation fits someone’s conception of what’s good — meaning, that you get a majority in Congress — emerged in the Progressive Era and was codified during the New Deal. After 1937’s so-called “switch in time that saved nine” — when the Supreme Court began approving grandiose legislation of the sort it had previously rejected — no federal legislation would be struck down until 1995. The New Deal Court is the one that politicized the Constitution, and therefore too the confirmation process, by laying the foundation for judicial mischief of every stripe — be it letting laws sail through that should be struck down or striking down laws that should be upheld.

This is not about the tired old debate about “activism” versus “restraint.” So long as we accept that judicial review is constitutional and appropriate in the first place — how a judiciary is supposed to ensure that the government stays within its limited powers without it is beyond me — then we should only be concerned that a court “get it right,” regardless of whether that correct interpretation leads to the challenged law being upheld or overturned. For that matter, an honest court watcher shouldn’t care whether one party wins or another. To paraphrase John Roberts at his confirmation hearings, the “little guy” should win when he’s in the right, and the big corporation should win when it’s in the right. The dividing line, then, is not between judicial activism and judicial restraint (passivism?), but between legitimate and vigorous judicial engagement and illegitimate judicial imperialism.

In that light, the recent confirmation battles — whether you look at Bork, Thomas, the filibustering of George W. Bush’s lower-court nominees, or the scrutiny of Sonia Sotomayor’s “wise Latina” comment — are all a logical response to political incentives. When judges act as super-legislators, senators, the media, and the public want to scrutinize their ideology and treat them as if they’re confirming lifetime super-politicians — and rightfully so.

Judges as Super-legislators

Sure we can tinker around the edges of the appointment process with bipartisan commissions, or have set terms or fixed retirement ages — or we could have scheduling requirements for when hearings and votes have to occur after a nomination — but all that is re-arranging the deck chairs on the Titanic. And the Titanic is not the judicial-nominations process, but rather the ship of government. The fundamental problem is the politicization not of the process but of the product, of the role of government, which began with the Progressive Era politically and was institutionalized during the New Deal.

Justice Scalia described this phenomenon in his dissent from the 1992 abortion ruling in Planned Parenthood v. Casey:

[T]he American people love democracy and the American people are not fools. As long as this Court thought (and the people thought) that we Justices were doing essentially lawyers’ work up here — reading texts and discerning our society’s traditional understanding of that text — the public pretty much left us alone. Text and traditions are facts to study, not convictions to demonstrate about. But if in reality our process of constitutional adjudication consists primarily of making value judgments; if we can ignore a long and clear tradition clarifying an ambiguous text … then a free and intelligent people’s attitude towards us can be expected to be (ought to be) quite different. The people know that their value judgments are quite as good as those taught in any law school — maybe better.

Enforcing the Founding Document

Ultimately judicial power is not a means to an end, be that liberal, conservative or anything else, but instead an enforcement mechanism for the strictures of the founding document. We have a republic, with a constitutional structure intended just as much to curtail the excesses of democracy as it was to empower its exercise. In a country ruled by law and not men, the proper response to an unpopular legal decision is not to call out the justices at a State of the Union address but to change the law or amend the Constitution.

Any other method leads to a sort of judicial abdication and the loss of those very rights and liberties that can only be vindicated through the judicial process — which by definition is counter-majoritarian. Or it could lead to government by black-robed philosopher kings. Even if that’s what you want, why would you hire nine lawyers for the job?!

So if we want to have the rule of law, we need judges to interpret the Constitution faithfully and strike down laws when government is exceeding its authority. Depoliticizing the judiciary is a laudable goal, but that’ll happen only when judges go back to judging rather than merely ratifying the excesses of the other branches while allowing infinite intrusions into economic liberties and property rights. Until that time, it’s absolutely appropriate to question judicial philosophies and theories of constitutional interpretation — and to vote accordingly.

Regardless of what happens to the Garland nomination or who’s president come January 2017, the battle for control of the third branch of government will continue — as will the attention paid to the resulting confirmation battles.

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review.
Published:6/28/2016 8:50:36 AM
[Socialism] NPR + NYT: A Recipe for Cluelessness (John Hinderaker) What happens when a National Public Radio host interviews a New York Times reporter on the subject of Venezuela’s economic collapse? You get a perfect storm of cluelessness. The host is Terry Gross, the guest is New York Times reporter Nicholas Casey, and the program is Fresh Air. Gross asks Casey about the utter disaster that Venezuela has become. Casey understands the depth to which Venezuela has fallen–he lives in Published:6/11/2016 7:46:24 PM
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