The Big Short

I just watched the 2015 movie The Big Short, which is a retelling of hedge fund manager Michael Burry’s recognition, before anyone else, of the housing crisis that set off the 2008 market crash. It is quite a good movie, well worth watching. But it is depressing in what it reveals of the level of fraud and greed in Wall Street and in the government.

Of course the government – meaning us taxpayers – bailed out the banks in 2008-2009. But in the end no banker was ever charged (in fact there were millions in bonuses paid out to those who caused the crash – and paid out of the taxpayer bailout money!), nothing happened to the credit rating agencies who participated in the fraud, nothing happened to the government regulators who looked the other way, and the banks which were deemed to be “to big to fail” are now bigger than ever (only 10 banks now account for more than 70% of US banking activity). In other words, as usual those with good Washington connections got away scot-free, and even got richer. This isn’t a partisan issue; the problem grew under the Bush administration, and the bailout and subsequent failure to punish anyone came under the Obama administration, so both Republicans and Democrats were complicit in this.

Along the same lines, there is much fuss among Democrats about Trump (supposedly) not paying any taxes for the past ten years. It is outrageous if true, but in fact it is minor compared to the huge corporations who regularly don’t pay any taxes, including in 2018 Chevron, Delta Airlines, IBM, Gannett Publishing, Whirlpool, Eli Lilly, FedEx, Honeywell, Halliburton, Starbucks, Amazon, and at least 80 more. (see here for an incomplete 2018 list, or here for a 2019 list). Not that they have done so illegally – they are simply using the many loopholes that have been provided for them by a complicit Congress, often in return for generous campaign contributions to various politicians.

Politics has always been a dirty business, with scandal and corruption inevitable where so much power and money is concentrated. Trump was elected in 2016 because a sizeable proportion of the population thought they were being screwed by the system – and they were right, but probably had no idea just how many ways they were being screwed. We may get Biden for this next administration, but while he isn’t quite the sociopath or egomaniac that Trump is, he is nevertheless tainted by the way his son used his connections to enrich himself in China and the Ukraine. And of course Congress will remain as tainted as ever by campaign contributions from corporations and special interest groups, for which favors in return are expected.

I am normally an optimist (I was once accused by a colleague of being a “malignant optimist”), but I find the sleaze and corruption of Washington politics these days to be depressing.  Politicians lying is one thing - that is more or less expected in politics – but the way the Washington elite manage to protect one another from the consequences of their many misdeeds is really frustrating. Whoever wins this next election, things in Washington won't really change. If Biden wins there will be welcome changes in style, but the underlying corruption won't change no matter what campaign promises are made  - there are too many people and institutions involved and on the take. 

Amy Coney Barrett opening statement

Amy Coney Barrett has released her opening statement to the Senate Judiciary Committee, which will begin hearings tomorrow on her nomination to the Supreme Court. The two most important paragraphs, in my opinion, are the following (emphasis mine):

I also clerked for Justice Scalia, and like many law students, I felt like I knew the justice before I ever met him, because I had read so many of his colorful, accessible opinions. More than the style of his writing, though, it was the content of Justice Scalia's reasoning that shaped me. His judicial philosophy was straightforward: A judge must apply the law as written, not as the judge wishes it were. Sometimes that approach meant reaching results that he did not like. But as he put it in one of his best-known opinions, that is what it means to say we have a government of laws, not of men.

and

Courts have a vital responsibility to enforce the rule of law, which is critical to a free society. But courts are not designed to solve every problem or right every wrong in our public life. The policy decisions and value judgments of government must be made by the political branches elected by and accountable to the People. The public should not expect courts to do so, and courts should not try.

As I have written in other posts, I fully agree with this position. Policy ought to be the exclusive providence of elected representatives. If the law is incorrect, Congress should repair or repeal it – it is not the providence of unelected judges to “revise” or “re-interpret” or “repair” laws to fit their own ideological leanings. The fact that Congress is sometimes slow to act, or thoroughly dysfunctional, as it is right now, does not in any way change this.

And in fact that might indeed mean that someday Roe vs Wade might get overturned. Even Justice Ginsberg, a staunch liberal who was a strong supporter of abortion rights, agreed in public that the Constitutional basis on which it was decided (the “right to privacy” imputed to the due process clause in the fourteenth amendment, even though “right to privacy” is not mentioned at all in the amendment) was highly questionable.

For those who are interested, the actual wording of that clause is:

 "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”

As you can see, it is a pretty big stretch from that wording to some Constitutional “right to privacy”, and then another big stretch to get from “right to privacy” to Roe vs Wade.  This is a case where I agree with Justice Ginsberg on the outcome but think the Constitutional basis for the ruling was pretty thin.

I actually don’t think it is very likely that the Court will overturn this ruling, even if Barrett joins the Court, but if it does, it will be because the Constitution, as written including amendments, provides no legal basis for this ruling, nor are there any federal laws passed by Congress that support it. There ought to be. I support abortion rights, and think the imposition of an abortion ban is an illegal imposition by federal law of a religious belief, which is explicitly forbidden by the Establishment Clause of the First amendment to the Constitution, and ought to be the real Constitutional basis for a Roe vs Wade-type ruling.