Bain's Back

Newt tried to warn the GOP primary voters, but they wouldn't listen.

Not that you can really blame them--after all, Newt wasn't exactly a good alternative. Nor was anyone else in the GOP primary field. But they were warned.

Six months ago, I wrote a piece on Newt's attacks on Mitt Romney's leadership at Bain. As I argued back then, that debate revealed the tension between two basic ideological components of the Reagan coalition that have always been at odds: traditional values and free markets (especially the amoral changes that result from the unrestrained activities thereof).

Today, all the political commentators are in a tizzy over when exactly Romney gave up control over Bain, and whether he is responsible for decisions made between 1999 and 2002. That's interesting in a micro-, inside-the-Beltway kind of way, I suppose. But I still think the important question is why Romney is trying so hard to distance himself from those business activities.

The answer lies, I think, in that tension.

The reason Romney is so intent on claiming that he had nothing whatsoever to do with Bain's business decisions after 1999 is that the company was involved in sending jobs overseas. In free market terms, that's entirely justifiable. If there's more profit from cheap labor overseas, away go the jobs. But it also violates traditional values like patriotism and support for working families. Politically, that's dicey.

Back in January, rather than address that tension, Romney did what Romney does: he took the easy way out. Gingrich made the moral argument: "Just because you have the right to do something, doesn't mean it's the right thing to do." Romney did not engage Newt on substance, he did not try to explain why what might seem like unsavory business practices were in fact "the right thing to do." Instead, he accused Gingrich of putting "free enterprise on trial."

The consequence of that decision is that Romney failed to either 1) embrace the idea that there should be moral restraints on business by agreeing with Gingrich or 2) counter that idea and argue that while sending American jobs overseas in search of greater profits hurts some people in the short run, it serves the greater good in the long run.

Had Romney done either, he'd be in a position to fight today's attack from the Obama campaign. Instead, he did what he always does: he ducked the question, he refused to take any clear stand.

I wrote in January that Newt was warning Republican voters, "if they nominate Mitt Romney, [they] are handing this potent political issue to President Obama, and with it, possibly, an essential component of Republican political success over the last 30 years."

That's where we are today. If, as some people are suggesting, Romney were now to disown those practices openly, he would be accused (rightly) of flip-flopping and adopting Newt's old position, the one he described as putting free enterprise on trial. If he were to defend them openly, as others suggest, he would alienate working class voters who might otherwise vote for him.

So what does he do? Neither. He just says that he had nothing to do with those practices because he had left Bain already, so he does not need to pass judgment on them either way. That's why he is so intent on saying he left Bain in 1999--so he can avoid taking a stand.

I believe that is why this incident may end up hurting Romney badly. The specific issues--when did he leave Bain, what do the SEC documents mean--are too arcane for most voters to follow. But people know when someone is afraid to take a stand. They see it when someone can't give a straight answer to a simple question. They sense when someone has something to hide.

Right now, everything about Romney's words and behavior sends those signals to voters.

He either failed to see the importance of Newt's critique in January, or he saw it and ignored it because of his short-term focus on getting the nomination. Regardless, his failure to address it honestly then is costing him now, and as a result, my conclusion then seems even more apt now:

"If Obama can take advantage of Romney's moral blindness and regain a significant number of Reagan Democrats, he will win re-election. If he can go further and recapture the mantle of the moral dimension of politics, he can realign American politics and fracture the Reagan coalition."

FDR Got Things Done. So Has Obama.

Sunday was a bad day for FDR in the New York Times Sunday Review section.

Ross Douthat, showing a level of understanding of the New Deal that I would find deficient in an undergraduate, used FDR to bash President Obama's decision to pursue health care reform. Bill Scher used FDR's allegedly cozy relationship with corporate heads to praise Obama. Both showed how little they understand about the politics of the 1930s.

Douthat's argument is that, despite the Supreme Court ruling upholding the constitutionality of the Affordable Care Act, Obama was foolish to pursue it early in his first term--that choice, he says, was "disastrous." His evidence for that is that the legislation is "deeply unpopular." (Douthat never deigns to evaluate the actual merits of the legislation. Evidently that is not important--timing is all.)

Douthat says the law is unpopular not because people don't understand it (the usual Democratic argument) but because of the timing. See, people are just mad that Obama pushed this legislation before the economy improved enough. "By turning from economic crisis management to sweeping social legislation before the crisis had actually abated, Obama made himself look more ideological than practical and more liberal than pragmatic." Evidently Obama did this by pursuing a goal he had explicitly campaigned on (the nerve!) and by embracing Republican ideas (eschewing a public option and accepting the individual mandate instituted by Mitt Romney in Massachusetts).

Douthat's points are self-evidently wrong on the surface, but he deepens his errors by claiming the authority of history. "This was not a mistake the icons of the liberal past made," he intones. "Franklin Roosevelt spent two years defining himself as a Depression fighter before he set out to establish Social Security."

To call this point simplistic would be an understatement.

FDR announced his intention to implement Social Security in June 1934, 15 months into his presidency. He signed it into law in August 1935, 29 months into his presidency.

Obama signed the Affordable Care Act in March 2010, 14 months into his presidency. According to Douthat, 15 months is the difference between political success and political disaster. This is not an argument. It is an assertion without evidence or logic.

More to the point, Douthat's praise of FDR ignores the rather significant fact that FDR had hardly ended the Great Depression when he pushed for Social Security. In fact, he pushed it because the first New Deal had failed, recovery was sluggish, and he was under political pressure to do something, anything, so he could point to successes going into the 1936 election. FDR didn't push for Social Security because the "economic crisis" had passed, as Douthat implies, but because it hadn't.

Scher's argument is a little better. His point is that Obama is to be commended, not criticized, for working with corporate interests on health care. Obama has been unfairly criticized by liberals, Scher says, who neglect how much their heroes FDR and LBJ did the same thing.

It is true that, as Scher says, FDR "was quite adept at bargaining with corporations" in the First 100 Days. What he neglects to note is that the major policy he negotiated with business, the National Recovery Act, is almost universally considered an abject failure.

FDR's most notable successes came after he stopped trying to appease big business. He learned that his attempts to do so were futile, since they excoriated him anyway. By August 1934, they had formed the anti-FDR Liberty League and dedicated their efforts to defeating him in 1936. So much for "bargaining."

After business turned on him, FDR not only passed Social Security, but the Wagner Act (which established union rights) and the WPA (which created jobs for the unemployed). These liberal policies were passed over the objections of businessmen, not by compromise with them.

Scher's point, however, is still a reasonable one: "most of the time politics is exasperating and irritating, not euphoric and cathartic." That's true, and it is also true (though Scher doesn't note it) that FDR returned to a detente with business when American involvement in World War II loomed.

I have no idea whether FDR would have, in Obama's shoes, pushed for health care in his first year in office, or if he would have sought to appease drug companies and the Chamber of Commerce whenever he did it. What I do think I know is that he would be proud of Obama for having gotten it done.

FDR's commission on Social Security recommended including health insurance as part of that program, but FDR feared (probably correctly) that it would be too much for Congress to swallow.

But he did not give up on the idea. In January 1944, when he proposed his postwar political agenda, the "Economic Bill of Rights," he included the following: "The right to adequate medical care and the opportunity to achieve and enjoy good health."

In short, we owe the very idea of health care as a right to FDR. Given that fact, and his own rather flexible approach to politics, I rather doubt he would care very much how--or when--Obama got it done. FDR got things done. So has Obama.

John Roberts and The Case of Dred Scott v. Madison

Last March, I wrote a post about the Court's consideration of the health care law. My point then was that it was possible for a judicial victory to turn into a political defeat. That could still be the case, if the Court's ruling upholding it motivates the conservative base that is so viscerally opposed to the Affordable Care Act. Already, in an echo of the reaction to the Brown v. Board decision, some in the blogosphere are calling for the impeachment of Chief Justice John Roberts.

My major concern in the original post was that the Court's conservative wing would overreach, much like Roger Taney did in the Dred Scott decision in 1857. The temptation had to be great. The conservative movement is nearly unanimous in its rejection of the act, and even the so-called "moderate" swing vote, Justice Anthony Kennedy, was prepared to throw out the entire law.

It seems, however, that John Roberts was sensitive to that danger. Certainly he could have sided with the four conservative justices in this case. But he didn't. Why?

My good friend Bill Carleton wrote the following in a comment to my original post:

What you say reminds me of a CSPAN documentary I just saw about the workings of the Supreme Court. The current Chief Justice, John Roberts, is heard in a voice over, as the camera pans the portraits of prior Chief Justices, remember the lesson of Taney - don't be THAT man.

It would seem that Roberts thought exactly that. Taney's overtly political decision tarnished the reputation of the Court for years. By avoiding a 5-4 decision in which all 5 votes to overturn the greatest achievement of a Democratic president came from justices appointed by Republican presidents, Roberts may have avoided becoming THAT man.

But as observers on the right and left have noted, he did so in a rather odd way--by effectively agreeing with the dissenters on many of the substantive points, particularly on the matter of the Commerce clause. Some people see this as a stealth attempt by Roberts to set the stage for more significant limitations on the power of Congress in the future.

George Will, for example, argues: "Conservatives won a substantial victory" in the case. Since reformers have used the Commerce clause to expand government power since the New Deal, the argument goes, Roberts has served the larger cause by putting limits on the use of the Commerce clause, which Will, of course, thinks is all to the good.

Pamela S. Karlan, writing in the New York Times, sees the same thing but from the opposite political perspective. Karlan fears that Roberts "laid down a cache of weapons that future courts can use to attack many of the legislative achievements of the New Deal and Great Society."

In short, the argument is that in exchange for allowing this law to stand (barring a political decision by a future president and Congress to repeal it), Roberts has established the ground work for a revolution in constitutional law that might limit significantly the power of Congress under the Commerce clause.

If this is indeed Roberts' game, then instead of pulling a Dred Scott, he decided to pull a Marbury v. Madison. In the latter, Chief Justice John Marshall ruled against the short-term interests of his political party, the Federalists. As Gordon Wood puts it in Empire of Liberty, Marshall's early tenure as Chief Justice showed "his strategy of retrenchment and conciliation and his genius for compromise while at the same time asserting the authority of the Court."

Federalists lost the bitter presidential election of 1800 to Thomas Jefferson, but in the lame-duck session of Congress between the election and Jefferson's inauguration, the now-repudiated Federalist majority passed the Judiciary Act of 1801, which outgoing President John Adams signed into law only weeks before he was to leave office. The law was a rather overt power grab--it created new circuit courts, and Adams immediately appointed Federalist judges to them. It was meant to preserve Federalist power in the judicial branch after the party had lost the Congress and the Presidency. In 1802, Jefferson's Republicans repealed the 1801 act.

In the meantime, one of the last-minute judges appointed by Adams, William Marbury, sued to receive his commission, which the new Republican administration had refused to deliver. Marshall was under a great deal of pressure. Federalists wanted him to rule that the Republican repeal of the 1801 act had been unconstitutional. Republicans warned that a blatantly political ruling by a Federalist judge would reveal the partisan nature of the Supreme Court and require Congressional action to rein it in.

Chief Justice John Marshall

Marshall's decision brilliantly solved his problem. He ruled that Marbury had a right to the commission, and that the Jefferson administration had no right to deny it to him.

So, Jefferson lost, right? Not really. Marshall also ruled that Marbury had based his petition for relief to the Court on a provision of the 1789 Judiciary Act, and that provision, Marshall said, was unconstitutional. Thus the Court had no power to order that Jefferson's Secretary of State, James Madison, deliver the commission.

So, Jefferson won, right? Not really. He thought the idea of judicial review was undemocratic, and said that if the Courts alone had the power to rule on constitutionality of laws, it "would make the judiciary a despotic branch." But since he had "won" the case on those grounds, Jefferson was put in the position of accepting--at least indirectly-- the validity of judicial review.

In the short run, Marshall gave the administration a political victory. In the long run, he established the precedent of judicial review, which is not explicitly stated in the Constitution, but is the greatest power the Court has. But not challenging the Jefferson administration directly, Marshall maintained the reputation of the Court and enhanced its power.

The parallels to what Roberts did last week are obvious. He too resisted the pressure of the political party that nominated him to the Court. He too handed that party a short-run defeat. He too (at least somewhat) rehabilitated the Court's reputation.

Whether or not he has also set the stage for a conservative judicial revolution, such as Will hopes for and Karlan fears, depends entirely on future Courts and future decisions.

But Roberts does seem to have decided--at least for now--that he'd rather be Marshall than Taney. We should all be grateful for that. But for George Will's hopes and Pamela Karlan's fears to be borne out, Roberts would have to some day pick up those judicial "weapons" and use them against the New Deal and Great Society.

For the record, though John Marshall effectively created the Court's power of judicial review, he served on the Court for more than 30 years after Marbury v. Madison and never used it to invalidate another law passed by the United States Congress. In fact, no Court used it for that purpose until 1857, when Roger Taney used it in the Dred Scott decision. Hopefully, John Roberts will remember that, too.