Update On The Disaster Of Crony Capitalism In New York

Here in high tax New York, the City continues to grow and prosper (although at a slower pace than low tax places like Texas and Florida), but upstate is a different story.  Who exactly wants to take on a tax burden almost as high as New York City, only to find yourself living, for example, in Utica?  In the upstate region, the population has been in absolute decline since 2010, and according to data compiled by the Empire Center, the decline only seems to be accelerating in the more recent years.  What to do?

For our New York City-dominated, progressive political culture, the idea of cutting taxes and regulations and trying to create a good business climate upstate is completely beyond the pale.  That leaves as the main alternative the idea, essentially, of bribing companies to move to, or remain in, upstate locations.  In other words, crony capitalism.  

Not that we are the only state engaged in this idiotic practice, but the scale of it in New York is quite breathtaking.  Compared to a total state annual budget of about $147 billion, of which about $105 billion comes from state funds and only $75 billion from all taxes, the state government lavishes about $8 billion per year on what are euphemistically called "economic development initiatives."  The annual $8 billion puts New York in the number one spot among the states for such largesse, which I guess should surprise no one.  Look into the matter, and you find that there are many dozens of projects and grants and handouts -- and yet you struggle to find even one that is anything other than a total failure.

Here is a round up dated June 7 from the Democrat & Chronicle (an affiliate of USA Today).  The headline is "NY spends $8B each year on job programs. So where are the jobs?"  

New York's economy . . . pours at least $8 billion a year — more than any state in the nation — into dozens of job-creation programs that haven't met their goals.  A six-month-long investigation by the USA Today Network in New York found myriad problems with the state's economic-development efforts, ranging from under-performing programs to a lack of transparency on how taxpayers' money is spent.  And despite the spending, the labor force outside New York City continues to shrink.

The investigative report is loaded with one dispiriting example after another.  I'll give you just a taste:

In late 2015, New York announced a sweeping agreement to save four Kraft-Heinz production plants across upstate, vowing to invest $20 million to save the 940 jobs.  Now, less than two years later, [in] the small town of Campbell in the Southern Tier . . . [e]fforts are teetering to keep open a Kraft cheese plant in the community of fewer than 3,700 people, and the company announced in May it will continue to look for a new buyer until August, leaving 330 jobs in the balance. . . .  

In December, Austrian computer chip maker ams dropped plans for a multi-billion technology campus in Utica with SUNY Poly. A nearly $5 billion SUNY Poly deal with IBM and other computer-chip makers ended in 2016, and now some of the equipment from the sprawling nanocenter in Albany is being auctioned off.  In Batavia, unrelated to SUNY Poly, a massive yogurt plant owned by Muller Quaker Dairy with Pepsi shuttered last year after three years and after hoping to create 200 jobs, leaving one of the largest dairy producing plants in the nation vacant.

And so forth.  But all of this pales next to the Big One, known as the "Buffalo Billion," which is the state-funded effort to turn around the economy of the state's second largest city with a big billion bucks of taxpayer loot.  I previously reported on how it was going in two posts last year, one in July and the other in September.   Things were bad then.  But, you won't be surprised to learn, they have since gotten far worse.  A guy calling himself Montana Skeptic has a long write-up June 26 at a site called Seeking Alpha (requires registration).  The post is titled "Tesla Has Stiffed New York State On The Riverbend Factory."

To jog your memory, I'll repeat some of the background.  Super crony capitalist Elon Musk somehow convinced the credulous New York functionaries to devote some $750 million of the "Buffalo Billion" to just one facility -- a brand new, (supposedly) state-of-the-art factory to make nifty-difty solar panels and solar roof tiles.  The facility is called the "Riverbend Factory" after its location along the Buffalo River.  To avoid getting the taxpayers on the hook for things like losses and loan guarantees and liabilities, our sophisticated representatives decided on a structure where they would just build the factory at complete taxpayer expense and lease it to Musk's company SolarCity for $2 per year.  Well, actually, the lease was not with SolarCity, but with an essentially asset-free sub of SolarCity called Silevo.  SolarCity (actually Silevo) then made a series of promises to New York, the most important being to hire and retain 4,900 employees and to spend at least $5 billion in capital, operating expenses, and other costs over ten years.

It seems that in December 2016 SolarCity (and its parent Tesla) basically bailed on the deal, and proceeded to sign a series of agreements with Panasonic under which Panasonic would take over and operate the factory, making who knows what.  There have been public disclosures of the deal, including in SEC filings.  No reason is given for SolarCity bailing, but Montana Skeptic suspects that the reason is that they could not get the technology to work.  A statement about the transaction from Governor Cuomo (which Montana Skeptic calls "utter nonsense") somehow spun the transfer to Panasonic as a good thing for New York:

[T]his agreement further cements Western New York’s position as a national leader in clean power technology and cutting-edge innovation.   

The Gov omitted just one small thing from his effusive praise of the agreement:  Panasonic explicitly declined to assume any of SolarCity/Silevo's obligations to the state, including the business about the 4,900 jobs and the other business about the $5 billion investment.  Here is the paragraph from the Panasonic agreement:

It is understood that (Panasonic) has no direct obligations or rights under the (Riverbend Agreement). If SolarCity is required to reimburse, refund, or otherwise return any financial benefits received under the (Riverbend Agreement), Tesla will have the sole obligation to pay such amounts directly to (New York State).

But of course, those obligations of "Tesla" are actually obligations of Silevo.  Good luck collecting on any of that!

Who knows, Panasonic may even succeed with this venture.  It might help that they are paying way below market rent, but we don't know because the amount of rent that Panasonic is paying to Tesla is not disclosed.  Anyway, where we are now is that the New York taxpayers are completely out $750 million, and we have a completely speculative upside that maybe Panasonic will hire some people or make some investment.  Great!

By the way, Montana Skeptic discloses in his article that he is short Tesla.  You may want to take that into account in evaluating his version of the events.  However, as far as I can see, in this situation Tesla has taken New York State to the cleaners.

It's Not Possible To Have A Rational Debate About Healthcare In The Political Arena

The genius of the private property/free exchange system (aka "capitalism") is that nobody other than the people who make things or provide services needs to know all the complexities of how the things are made or the services provided.  Least of all government bureaucrats.  An automobile may be a very complex thing to make, but to buy one all you need to know is how much it costs and whether you like this particular model better than the alternatives.  But then you get into the things provided by the government, which in recent times have come to include healthcare as Exhibit A.  Now all of a sudden government bureaucrats are supposed to know everything about how to provide care for heart conditions or diabetes or dementia or whatever in a cost effective way, and also simultaneously without ever putting anyone at financial risk.  And equally the public is now required to know enough about healthcare policy to participate in a political debate and to figure out whose proposals to support in the next election.

Frankly, it's just not possible for our political system -- or indeed for any conceivable political system -- to have a rational debate on such a complex subject.  Political actors need to appeal to marginal, often poorly-informed voters who pay attention sporadically if at all.  In the best case, debate on a complex issue gets condensed into slogans and epithets that almost always fail to capture the significant arguments.

And boy, are we a long way from the best case!  Looking over what prominent Democrats have had to say recently about Republican efforts to restructure Obamacare, you could be forgiven if you came to the conclusion that that entire side of the debate consists of accusing the Republicans of being murderers.  Am I exaggerating?  Let's take some examples:

Hillary Clinton, June 23 (tweet):  "Forget death panels. If Republicans pass this bill, they're the death party." 

Bernie Sanders, June 23 (tweet):  "Let us be clear and this is not trying to be overly dramatic: Thousands of people will die if the Republican health care bill becomes law."

Elizabeth Warren, May 4 (tweet):  "Families will go bankrupt.  People will die."

And it's not confined to the party's headline septuagenarians.  Bob Unruh at wnd.com had a big roundup of quotes on May 9, including the following:

Washington Post headline:  “Repealing the Affordable Care Act will kill more than 43,000 people annually.”

DNC Chair Tom Perez:  “Trump and Republicans will own every preventable death, every untreated illness and every bankruptcy that American families will be forced to bear if this bill becomes law."

Kurt Eichenwald (senior Newsweek writer):  “I hope every GOPr who voted 4 Trumpcare sees a family member get long term condition, lose insurance & die.”

Think Progress:  “Approximately 17,000 people could die in 2018 who otherwise would have lived if a House Republican health proposal endorsed by the Trump administration becomes law."

You could go on with this literally as long as you want.  My reaction is, is this really the best they've got?  By the way, you won't be surprised to learn that these numbers for supposed excess deaths do not come from counting up anyone who can actually be individually identified.  Rather, they are based on statistical output of advocacy-driven observational studies.  Is there any reality to this at all?

Well, we're now a good three years into the full implementation of Obamacare.  Surely by now there should be some good statistics out there showing that Americans have become healthier, or that longevity has improved, or something like that, right?  Actually, it's the opposite.  James Freeman of the Wall Street Journal notes the lack of evidentiary support for health improvements from Obamacare in his Best of the Web column yesterday, "Why Didn't Obamacare Make Us Healthier?"    Freeman quotes from a December 8, 2016 New York Times article:

American life expectancy is in decline for the first time since 1993, when H.I.V.-related deaths were at their peak. But this time, researchers can’t identify a single problem driving the drop, and are instead pointing to a number of factors, from heart disease to suicides, that have caused a greater number of deaths.  A study on mortality rates released on Thursday by the National Center for Health Statistics showed that Americans could expect to live for 78.8 years in 2015, a decrease of 0.1 from the year before. The overall death rate increased 1.2 percent — that’s about 86,212 more deaths than those recorded in 2014.

Attributing those 86,000 excess deaths to the advent of Obamacare is just as fair as the use of flaky observational studies by Clinton, Sanders, Warren, et al.  But don't expect any apology from them.

If you want a more detailed scholarly analysis, Oren Cass had a long piece for the Manhattan Institute back in February, anticipating the barrage of unsupported "death" claims, titled "Will Repealing Obamacare Kill People?"   He makes a number of good points, although nothing with the punch of "People will die!!!!!"  Long excerpt from the abstract:

Studies showing positive effects from health-insurance coverage focus on private insurance, not Medicaid.

• In Oregon, researchers studied the effects of expanding Medicaid coverage and found no improvement in health outcomes. Numerous other studies support this finding for specific conditions and procedures, for Medicaid expansions and for public health spending generally.
• Where studies do find that Medicaid has a positive effect, it is for pregnant women and young children— groups whose coverage was not expanded by the ACA.

A statistical claim that the ACA saves large numbers of lives should be supported by evidence that it has reduced mortality rates; yet the opposite occurred.

• In 2015, age-adjusted mortality rose and life expectancy declined in the United States for the first time since the early 1990s.
• Nor is it the case that states adopting the ACA’s optional Medicaid expansion performed better than those rejecting it; to the contrary, mortality in 2015 rose more in Medicaid expansion states.
• Despite implementation of the ACA, there were 80,000 more deaths in 2015 than had mortality continued to decline during 2014–15 at the same rate as during 2000–2013.

And even these two rebuttals don't get to the most important issue in my view, which is simply that socialism doesn't work.  To discuss repeal of Obamacare in terms of excess deaths or lack thereof supposedly directly attributable to presence or absence of "insurance" coverage is implicitly to accept the basic socialist fallacy.  That fallacy is this:  We know that the government, by passing out money or handing out or mandating benefits, can make any one person or small group of people better off; therefore, it follows that the government can make everybody better off by indiscriminately handing out money and benefits to all.  In the context of Obamacare, ignoring the socialist fallacy leads to ignoring the downside to the people of the trillions of dollars of additional expenditures for marginal if any health benefits.  It means ignoring the downside of further concentration of power in Washington.  It means ignoring the distortions and inefficiencies that a Washington-controlled system injects into healthcare markets.  It means ignoring the likelihood of decreased innovation in the healthcare system as providers figure out that their time is better devoted to gaming government payment systems and regulations than to developing better methods of care.

None of these things can really be directly measured.  We can't really say that x thousand additional people will die, nor that everyone will be y dollars worse off.  All we can do is look to places like the Soviet Union, Venezuela or Cuba to see how the socialist model gradually undermines the productive and innovative capacity of society, not the least in the healthcare area.   

Do You Know The Difference Between "Settlers" And "Immigrants"?

In our very inter-connected world, in any given year many people move from one political jurisdiction to another.  Such a move may be motivated by a large number of reasons -- economic (seeking a more prosperous or less expensive life), physical security (seeking to avoid strife and conflict), religious (seeking to be nearer to religious sites or co-religionists), weather, health, etc.  Most people who move to another country go by the name of "immigrants" in their new homes, but some go by the name of "settlers."   Do you know how to tell the difference?

I know that you probably think this is a silly question.  After all, everybody knows that "immigrants" are good, whereas "settlers" are bad.  Back in the 1980s, "settlers" was the term applied to whites who lived in apartheid-era South Africa, inspiring the slogan "one settler, one bullet" from their adversaries.  Today, the word "settler" is the term used to describe those, mostly Jews, who have moved into the territories (mainly known as East Jerusalem and the West Bank) taken by Israel in the 6 day war of 1967.  

On the subject of "immigrants," the United States has approximately 33 million or so of the legal variety, and another estimated 11 million of the "undocumented" (illegal) variety.  The combined total of about 44 million is more than 13% of current U.S. population.  In the United States, immigrants of the legal variety are entitled to essentially all of the rights and privileges of the native-born (exception: an immigrant cannot vote until becoming a citizen).  For purposes of buying or renting property in the United States, even legal residency is not a requirement.  Literally anybody can do it.  From HG.org:

Unlike many countries that only allow land sales to those with citizenship in the country, the United States treats sales of real estate to foreigners almost the same as sales to citizens. The only limitations are usually imposed by homeowners associations, condominium associations, cooperatives, or other forms of community associations.     

And for renters?  In my home town of New York, we have a Human Rights Law that protects aspiring tenants from "discrimination" based on "immigration status" -- definitely including the "status" of "illegal."  According to DNAInfo here on Thursday, the City is even now investigating a landlord in the Corona neighborhood of Queens who allegedly "illegally harass[ed prospective] tenants" by "post[ing] a sign in his apartment building saying he wouldn't re-sign leases unless tenants showed their immigration papers."  Obviously, we mustn't have that.  After all, these people are immigrants.  We need to treat them as equals in every respect, even the ones in the country illegally. 

On the other hand, if we were talking about "settlers" the situation would be very different.  Currently I am spending the week in the country of Israel.  As we all know, the international community has with near-unanimity condemned the Israeli "settlers."  Most famously, back in December the UN Security Council passed a resolution declaring that the Israeli settlements were "a flagrant violation under international law."  That resolution became unanimous when the U.S., in the waning days of Obama and Kerry, failed to veto it, as the U.S. had vetoed comparable resolutions in the past.  

In preparation for our trip to Israel, our friends suggested that we see a new documentary movie "The Settlers," then recently released and playing in a theater in Greenwich Village.  The film was, to say the least, not favorable to the position of the Israeli settlers in the occupied territories.  Many unhappy Palestinians appeared in the film, saying things like (paraphrase) "these have been our lands for many generations."  

But, I kept asking, can't anyone now just buy or rent some land or a house or an apartment and move in?  That's the way it works where I come from, and nobody really says a word about it (beyond the general issue for some that the overall level of immigration is too high).  In the Borough of Queens, where one of my daughters lives, they say that some 800 languages are spoken -- and everybody seems to be getting along just fine.  (Check out this map of Queens showing languages by neighborhood.)   

But the film studiously avoided addressing the question of why people can't just buy or rent property and move in as legitimate immigrants.  While here in Israel I have tried to investigate the answer to that question.  The Israeli view appears to be that almost all of the settlements are on land that either (1) was legitimately purchased from a prior Palestinian owner, or (2) was unoccupied land that had no prior registered owner, and therefore was owned by the state and is OK for anyone to occupy and then seek legitimate status.  There have been a few notable cases where land was acquired illegally (generally from someone who fraudulently claimed to be the owner, but did not have proper title), and in those cases the settlements have been forcibly removed.

So the question is, should the Israeli government forcibly prevent anyone who is not a Palestinian Arab from moving into the disputed territories (East Jerusalem and the West Bank)?  The argument most commonly advanced for the pro side of that question is that doing so would assist the "peace process," by leaving clean boundaries to enable negotiators to divide up territories for a prospective "two state solution."  Maybe.  But to favor that, you would have to believe that the "two state solution" is actually going to happen imminently, and also that, once implemented, a two state situation with clean ethnic and religious separation between the states would be stable and successful.  I don't believe either of those things.    

Why does the same principle that applies to the United States and Europe, and calls for us to accept large numbers of immigrants of all cultures and religions on an ongoing basis, and allow them to live among us wherever they choose, not also apply to the Palestinians and, for that matter, to everyone else?  No reason that I can see.

Meanwhile, the prosperity in modern-day Israel is quite remarkable.  In almost every respect -- appearance, architecture, prosperity, climate -- the cities of Tel Aviv and Haifa are remarkably comparable to the big coastal cities of California like Los Angeles and San Diego.  Here is a picture of Tel Aviv from a raised spot along the Mediterranean coast:

Yes, that first (domed) building in the foreground is a mosque.  And here is a picture of Haifa from a high spot (the Bahai garden on Mount Carmel) overlooking the town:

In my naivety I would think that the Palestinians would want to get with the program that seems to be working so well, but that is not their current agenda.

People Are Starting To Catch On To The "100% Renewable Energy" Scam

Have you heard of a guy named Mark Jacobson?  He's the trendy Stanford professor who has written a couple of big pieces claiming that having the United States get 100% of its energy from nothing but wind, water and solar power by 2050 is no problem at all.  In fact (according to Jacobson) it's "low cost."  For example, here's a link to one of his big pieces, a 2015 opus titled "Low-cost solution to the grid reliability problem with 100% penetration of intermittent wind, water, and solar for all purposes."   This was published in the Proceedings of the National Academy of Sciences.  Hey, there's some serious "peer review" going on there!  

Jacobson is also the "brains" behind an enviro organization pushing 100% renewable energy called the "Solutions Project."  (Slogan: "Together, we can make renewable energy a reality for everyone – 100% for 100%.")  Celebrities with their names and pictures on the organization's website include Leonardo DiCaprio and Mark Ruffalo.  California Governor Jerry Brown is full in for Jacobson's program.  This is big time stuff.

Actually, you need to have only the tiniest hint of bullshit radar to know that this guy is full of it.  It takes about ten minutes with one of Jacobson's papers to realize that his pronouncements are pure fantasy, made without any serious consideration of the engineering problems of making electricity work 24/7/365 with almost entirely intermittent sources, let alone any serious consideration of the cost of what he is proposing.

Yet for the first several years after Jacobson started publishing his nonsense, it seemed like the whole world was giving him a pass.  I guess that so many people just want to believe so badly that all critical thinking gets suspended.  The first hint I saw of a crack in the dam came back in March, when a publication called Renewable and Sustainable Energy Reviews published a piece by B.P. Heard, et al., called "Burden of Proof:  A comprehensive review of the feasibility of 100% renewable-electricity systems."  I covered that piece in a post in April titled "Finally, Some Critical Thinking On The Subject Of The Feasibility Of Renewables."   The underlying article was not focused solely on Jacobson, but reviewed some 24 studies that had claimed, to one degree or another, to demonstrate the feasibility of 100% renewable electricity systems.  But the review was particularly critical of Jacobson, finding that his pieces "did not apply simulation processes to their own, different proposed systems, nor did they address the uncertainties, challenges and limitations articulated in their supporting references or related critiques. . . ."   

Well, now it seems like this particular dam may have just burst.  Steven Hayward at Powerline reports on a new article out in none other than PNAS specifically focusing on Jacobson's work and finding it, let us say, deficient.  (Or, to quote Hayward's pithy summary of the new piece, "Jacobson is full of crap.")  The title of the new PNAS piece is "Evaluation of a proposal for reliable low-cost grid power with 100% wind, water, and solar," and the authors are Christopher T.M. Clack with a long list of co-authors.

You can get a clue as to where Clack, et al., are going by reading their abstract.  Excerpt:

[W]e point out that this work used invalid modeling tools, contained modeling errors, and made implausible and inadequately supported assumptions. Policy makers should treat with caution any visions of a rapid, reliable, and low-cost transition to entire energy systems that relies almost exclusively on wind, solar, and hydroelectric power. 

Ouch!  But actually, those are the polite words in the piece.  For example, what are some of those "inadequately supported assumptions" to be found in Jacobson?  Here's one that I particularly enjoy:

The system in [Jacobson's piece linked above] assumes the availability of multiweek energy storage systems that are not yet proven at scale and deploys them at a capacity twice that of the entire United States’ generating and storage capacity today.

Multi week energy storage for the entire United States?  How much would that cost, pray tell?  Needless to say, Jacobson does not attempt such a calculation, nor does the Clack, et al., critique.  But the intrepid Manhattan Contrarian did take a look in this October 2016 post at an energy storage system for New York City that our genius Mayor Bill de Blasio is buying to provide a big 30 seconds of backup power for the City.  The cost is $14.4 million.  Multiplying by 120 (to get an hour) and then by 24 (to get a day), I calculated the cost of energy storage for one day's electricity for New York City to be around $41.5 billion.  So how about multi week?  Two weeks' worth would be 14 times the $41.5 billion, or $581 billion.  Since New York City is around 2.5% of the population of the U.S., you can multiply by around 40 to get the full cost for multi week storage for the country.  That would be around $23 trillion -- far more than a full year's GDP for the whole country.  But don't worry -- Jacobson has a new system ("underground thermal energy storage") that hasn't been invented yet, let alone tried at scale, that he thinks can do the job for less.  No problem!

And how about one more random assumption from Jacobson:

The [Jacobson] study . . . also makes unsupported assumptions about widespread adoption of hydrogen as an energy carrier, including the conversion of the aviation and steel industries to hydrogen and the ability to store in hydrogen an amount of energy equivalent to more than 1 month of current US electricity consumption.       

All airplanes to run on hydrogen?  Millions of tons of enormously volatile and explosive hydrogen (i.e., the HIndenberg) stored all over the place?  No problem there either!

As Hayward notes in conclusion, "Jacobson is regarded as a joke by most of his Stanford colleagues."  Likely true.  It's about time a few of them spoke up.  But now, is there any hope of making any progress with California's politicians and celebrities?

The Important Work Of International Agencies: Keeping The Poor Poor

With so much craziness going on around Washington, the Manhattan Contrarian has had barely any time lately to keep up with the efforts of the international and UN bureaucracies in their never-ending fight to keep the poor poor.  In the case of the IMF, there hasn't been a good Manhattan Contrarian take-down since an April 2013 post titled "The Dopes At The IMF Continue Their Advocacy For Bigger Government."  

But Dan Mitchell at his International Liberty blog helpfully reminds in a post last week ("More Economic Malpractice From The IMF") that the incompetent bureaucrats at the IMF are very much still at it.  It seems that IMF head Christine Lagarde gave a big speech in Brussels about a week ago, misleadingly titled "Building a Virtuous Cycle."  The theme of the speech was that what the poor countries of the world need to do is increase tax rates and tax collections so as to bring more resources in their countries under the control of the government.  Why?  Because government will use the resources so much more effectively than the private sector ever could.  I'm not making this up.

Of course, when Lagarde said these things she spoke in IMF-bureaucrat-speak, a strange language bearing only passing resemblance to English, and actually much closer to the Newspeak of Orwell's 1984.  Excerpt:

[W]e are here to discuss an equally powerful tool for global growth — domestic resource mobilization. . . .  [T]axes, and the improvement of tax systems, can boost development in incredible ways. . . .  So today, allow me first to explain the IMF’s commitment to capacity development and second, to outline strategies governments can use to generate stable sources of revenue…the IMF has a third important developmentmission — capacity development. . . .  [T]he focus of our event today — enabling countries to raise public tax revenues efficiently.

Get into that new IMF vocabulary!  "Domestic resource mobilization"!  "Capacity development"!  "Strategies to generate stable sources of revenue"!  All of these, needless to say, are just alternative ways of stating the Holy Grail of the IMF, which is more taxes extracted from the citizenry and handed over to the bureaucrats.

And the proof that more taxes and bigger government will lead to better "resource mobilization" and improved economic performance?  Mitchell calls it the "triumph of anti-empiricism."  All actual evidence is to the contrary.  

However, don't forget that the famous economist Paul Samuelson, in a 1943 book chapter titled "Full Employment After the War," claimed to have discovered a mathematical proof of something called the "full employment multiplier," a system by which a government could expand its country's economy by increasing both taxes and spending in equal amounts.  Of course, that is the same book chapter in which Samuelson made the single most disastrously wrong economic prediction of all time, namely the prediction that, if the government cut spending commensurate with the huge military demobilization coming after World War II, "then there would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced."  As we all know, they did cut the spending, and what happened was the greatest economic boom in the history of the world.

Seventy-four years later, Lagarde continues to advocate for increased taxation and government spending as the route to economic salvation.  How is this even possible?

Can The President Be Criminally Prosecuted For Exercising His Constitutional Duties? Further Thoughts

The "attack leak of the day" is the lead story in today's Washington Post: "Special counsel starts investigating Trump for possible obstruction of justice, officials say."    This time we have no fewer than five anonymous sources ("Five people . . . speaking on the condition of anonymity. . . .").  Really, is there any Democratic Party member or holdover employee in the government at this point who is not engaged in attack leaking against the President?  Of course, attack leaks are just as likely to be complete baloney as to have any truth in them -- as obvious examples, the dozens of attack leaks insinuating that the FBI and national security services were investigating "collusion" between the Trump campaign and Russia have all proven to be completely false, after dominating MSM front pages for months.   

So what is the possible "obstruction of justice" here?  That Trump asked Comey to go easy on Michael Flynn?  Let's take the worst possible case: suppose that Trump directly ordered Comey as follows:  "I order you to drop the investigation of Flynn right now and to transfer everyone working on it to other tasks."  Can that possibly be an obstruction of justice, given that the prosecutorial discretion function of the government belongs to the President?  

Those arguing that direct exercise by the President of the executive's prosecutorial discretion function can theoretically constitute "obstruction of justice" uniformly cite supposed "rules" or "protocols" of the Justice Department that set up a kind of a wall to insulate the prosecutorial function from political influence.  There's certainly nothing in the Constitution about this, nor in the laws that I can find, nor even in regulations adopted via the Administrative Procedure Act.  Looking around to try to find the basis for this extra-constitutional principle, I find this February 17 article by Jane Chong at Lawfare.  Chong traces the current protocol for Justice Department independence from presidential interference to a 2009 memo written by then AG Eric Holder.  Hey, current AG Sessions hasn't officially revoked the memo yet!  And so now a memo of the prior AG is to be the basis for a criminal investigation of the President of the United States? 

So, if exercising the prosecutorial discretion function to fail to prosecute an obvious crime for blatantly political purposes can be "obstruction of justice," can there be any more clear-cut example of same than Eric Holder's dropping of the prosecution of New Black Panther Party members for their voter intimidation scheme in 2008 in Philadelphia?  From Fox News, June 30, 2010:

J. Christian Adams, now an attorney in Virginia and a conservative blogger for Pajamas Media, says he and the other Justice Department lawyers working on the case were ordered to dismiss it.  "I mean we were told, 'Drop the charges against the New Black Panther Party.'"

Did Holder take orders from President Obama in deciding to drop that prosecution?  The Justice Department stonewalled production of emails between Justice and "high-level Obama political appointees" in the White House.  So we will never know the answer to the question.  But in any event, the matter was treated as a political issue -- and appropriately so.  I never saw anyone suggest that Holder -- let alone Obama -- could be prosecuted for "obstruction of justice" for declining to charge, no matter how blatant the crime and no matter how political and self-serving and baseless the decision not to charge.

But I digress.  There actually are some good reasons to maintain a level of separation between the political forces of the White House and the prosecutorial functions of the Justice Department. Not the least of those reasons is to encourage a degree of confidence on the part of the public that the criminal processes are being used fairly and not for political vendettas.  Maintaining the separation is also thought to be generally good for a president politically, because the voters could hold the President accountable for misusing the prosecutorial function against political enemies.  But notice that those considerations apply minimally, if at all, to a decision not to prosecute somebody.  And in any event, it is purely the President's decision whether he wants to maintain the separation, or alternatively breach it and suffer the political consequences.

For those interested generally in the law of whether it can be a crime when a governmental executive exercises his constitutional powers in a way the other side doesn't like, there is a recent case where these issues were considered extensively.  The case arose in the state of Texas, and involved the prosecution of then-governor Rick Perry (now he is the Secretary of Energy) over alleged crimes that arose when Perry exercised his power under the Texas constitution to veto an appropriation of money by the legislature to the office of an official with whom he had clashed.  In 2014, the Travis County, Texas (that's the county where Austin is located) prosecutor charged Perry with the crime of "misuse of government funds" for committing this act.  I covered the subject in a post titled "The Perry Prosecution And Giving Prosecutors The Benefit Of The Doubt."   

In my post I called the Perry prosecution "blatantly outrageous overreaching."  But Perry continued under the cloud of the prosecution until his case reached the Texas Court of Criminal Appeals in 2016.  (This is Texas's highest court for criminal matters.  In effect they have two Supreme Courts.)  That court threw out the prosecution.  Although I did not do a follow up post on the Perry case when it was thrown out, Eugene Volokh of the Volokh Conspiracy did.  Eugene also submitted an amicus brief in the case in support of Perry -- a brief joined by a who's who of law professors.  You will not be surprised that Alan Dershowitz was one of them.  From Volokh's summary of the Texas court opinion (mostly a quote of the opinion itself):

“The [Texas] Constitution does not purport to impose any restriction on the [governor’s] veto power based on the reason for the veto, and it does not purport to allow any other substantive limitations to be placed on the use of a veto.” Therefore, “The Legislature cannot directly or indirectly limit the governor’s veto power. No law passed by the Legislature can constitutionally make the mere act of vetoing legislation a crime.” And other state courts were right to say that “courts may not examine the motives behind a veto or second-guess the validity of a veto.”  

Hard to see how that same logic does not apply to a prospective prosecution of Trump for exercising the prosecutorial discretion function to decline to prosecute, or the general executive function of firing people.

Meanwhile the madness continues.  Am I the only one in the country who thinks that the President is entitled to have a Justice Department and an FBI who work for him and are not engaged in a constant guerrilla war to undermine the duly elected executive and his administration?