In foreign deals, is half a loaf acceptable?

These days, “half a loaf is better than none” seems to be the rule for major international agreements. 

The old English proverb is very much alive.  Just look at three current negotiations. 

One is on track to a conclusion.  Congress gave the president the authority to enter into trade agreements subject only to its “fast track” approval – a simple yes or no vote.  The majority Republicans and a few Democrats were willing to give the president, this one and the next, what amounts to a blank check.

Why?  The new law permits President Obama to conclude the negotiations on the Trans-Pacific Partnership, a deal involving countries all around the rim of the Pacific Ocean.  But not China.

The idea is to allow the U.S. to continue to play a dominant role in the Pacific area and not allow China, which has obvious expansion goals, to assert its leadership.  The other TPP participants are clearly worried about Chinese intentions, designed to displace the U.S., so they want the TPP.

But the TPP has some serious defects, including one by which panels of lawyers will have the power to make decisions about American trade actions instead of leaving disputes to the courts.  This approach was invented because the court systems in some countries were not reliable.  But some argue it encroaches on U.S. sovereignty.

Is it worth taking that risk in order to block China’s ambitions to dominate the Pacific region?  That was the real choice that had to be made with the result being a potentially significant sacrifice to achieve a strategic gain.

Then, there are the negotiations with Iran.  Without necessarily agreeing with Israeli Prime Minister Benjamin Netanyahu about the degree of the Iranian threat, it seems clear that Iran wants a nuclear deal, not because of a desire for Middle East peace, but to get relief from sanctions imposed on it by other countries.

A deal with Iran should produce tighter controls on its ability to develop nuclear weapons, at least for a number of years.  But its attitude during negotiations has made it obvious that it is likely to try to undercut the effects of an agreement by hidden nuclear development. 

If Iran wanted nuclear capability simply to produce electricity and not bombs, it would hardly have made the negotiations so difficult.

But a deal would make it much tougher for Iran to do what it wants, though not impossible.  The agreement would not change Iranian intentions.  It could build other threatening weapons.

Is it worth gaining significant but not total control of nuclear development in Iran, a country seeking to dominate its region, in return for lifting the crippling sanctions?  That’s the “half a loaf” trade-off.

A congressional review of the deal would almost certainly resolve itself into a debate if the risk were worth the gain.  If other countries are willing to lift their sanctions, they might force the U.S. to take half a loaf.

Then, there’s the situation in Greece in which the U.S. is not a central player.

On one side is Greece, which lived beyond its means thanks to loans from its European neighbors, piled on more debt instead of cutting it, and then resisted Europe’s demands for budget cuts that would severely damage its economy as a condition for getting more bailout money.

On the other side are the other countries using the euro, the single currency of the eurozone, a group of most members of the European Union.  They want to keep Greece in the eurozone, but they do not want to set a precedent of bailing out members in trouble, especially when a country has brought on its own problems.

Greece is gambling that the eurozone countries will settle for half a loaf.  It would adopt some cutbacks demanded by its partners, but probably not enough to satisfy their toughest demands.  The others would give in, the Greek government seems to believe, to preserve European unity even at the risk of more bailouts.

In each of these cases, the judgment about whether to take half a loaf is entirely up to the more powerful party to the deal.  It must decide if the risk of insisting on its demands is likely to produce concessions by the other side.  Or would its insistence blow a deal out of the water, resulting in unfavorable events taking place beyond its influence.

It is always easy for critics to insist on hanging tough.  They seldom bear the responsibility if things go wrong.  What’s really tough is making the “half a loaf” decision.

Vetomania: A Battle for Power between Legislature and Governor

Maine Gov. Paul LePage is adding to the constitutional changes that politicians are making to government.  He has set out the veto every bill the Legislature presents for his signature.

LePage probably does not oppose all of the proposed laws, but he seeks to require the Legislature, in which the Senate is controlled by his fellow Republicans and the House is controlled by the Democrats, to pass all bills by a veto-proof, two-thirds majority.

Above all, LePage’s vetoes highlight a battle for political power between the legislative and executive branches of government much more than a battle between the parties.

LePage is open about his intentions.  He believes his 2014 reelection means the Legislature should bend to his will.  He discounts the voters’ will in electing members of the Legislature, which is supposed to make the laws.

He says legislators have wasted his time, so he is wasting theirs by levying his vetoes.  He may also be wasting the state’s reputation and taxpayer dollars to pay for extra legislative sessions.

There are other problems with “vetomania.”  Bills that should get a second look, where LePage’s opposition may make sense, are swept into the override wave as the Legislature asserts its rights.  And bills that should be enacted, even in his view, though they fell short of a two-thirds vote on passage, may be wiped away by a failure to override.

He has tried to use the pocket veto, holding bills without his signature until ten days after the Legislature adjourns.  But he faces the problem that it has not quit for the year.  In fact, it is possible that the Legislature will keep itself in session permanently, making pocket vetoes impossible.  Will his move end up before the Supreme Court or in the legislative investigation of his actions?

LePage’s veto moves would follow GOP precedent in Congress, where President Obama is blocked from making the kind of recess appointments to office envisaged by the Constitution, by the simple means of never having a recess.

His actions parallel the increased growth in the use of the filibuster in the U.S. Senate, which blocks votes on hundreds of bills without the consent of 60 senators.  In Maine, the Democrats at one time similarly created false ends to legislative sessions to get around the customary two-thirds agreement on the state budget.

Government has always depended on understandings, written and unwritten, about how participants would behave so that it could function.  Breaking historic understandings by insisting on the unreasonable application of the federal and state constitutions could threaten the American political system. 

When political splits get that wide, can the system survive?

Politics, personality dominate Supreme Court decisions

It happens every June.

The third of the three branches of government becomes, for a week or two, the most important.  That’s when the U.S. Supreme Court issues its decisions on major issues it has considered since last October.

This year, the Supreme Court made several such decisions, the most widely known being the validation of the Affordable Care Act and the recognition of same-sex marriage as a right.

In opposing the same-sex marriage ruling, Chief Justice John Roberts asked, “Just who do we think we are?” 

People who follow the Court think they know.  It is composed of two teams: the conservatives, justices appointed by Republican presidents, and the liberals, justices appointed by Democratic presidents.  It’s like two teams in a sports competition.  Or the two parties battling in Congress.

Just as it always has, the Court has been acting as a legislative body.  While, in the words of one its most important historic decisions, its job is “to say what the law is,” the Court has long been motivated by political, not purely legal, considerations.

It could be argued that the Court has increasingly acted as a political body not as a judicial authority.

“A system of government that makes the People subordinate to a committee of nine unelected lawyers does not deserve to be called a democracy,” wrote Justice Antonin Scalia in opposing the Court’s decision on same-sex marriage.  It is hard to argue with that position.

In the ACA case, he wrote about “the American people’s decision to grant Congress ‘all legislative Powers’ enumerated in the Constitution.”  He went on, “They made Congress, not this Court, responsible for both making laws and mending them.”

These are the kinds of statements made by Court justices like Scalia, when they are on the losing side of a Court decision.  But, despite his belief that the Court should not replace the Congress, he was part of the five-judge majority when it got deeply into legislation.

In 2006, Congress passed an extension of the 1965 Voting Rights Act, which gave the federal government the right to approve changes in state election laws in parts of the country with a history of denying African-Americans and other minorities the right to vote, a power known as preclearance.   The Senate vote was 98-0; the House vote was 390-33.

Just six years later, the Court, by a 5-4 vote, tossed out preclearance.  Several states immediately changed their laws, making it more difficult for African-Americans to vote and, in effect, showing the need for the rejected procedure.

It appears that the political beliefs of the justices are expected to dictate their reasoning in making decisions, not “what the law is.”  When Roberts agreed with the liberals in interpreting the ACA, he was immediately attacked by conservatives for abandoning them.

When the four liberals were in the majority recently, they were joined by Justice Anthony Kennedy, an appointee of President Ronald Reagan.  Perhaps he practices an older form of conservatism than the other four conservatives apply, allowing him to view issues somewhat differently.

But he may have been put off by Scalia’s style.  Scalia takes wild swings at those with whom he disagrees.  In the same-sex marriage case, he discussed the religious affiliations of the justices, suggesting that another group might decide the matter differently.  That kind of argument is almost unheard of.

And Scalia called the reasoning of the Court majority “the mystical aphorisms of a fortune cookie.”  In another case, he called a fellow justice’s reasoning “gobbledy-gook.” 

It is not surprising that Kennedy recently noted that courts have “the judicial duty to base their decisions on principled reasons and neutral discussions, without scornful or disparaging commentary.”

Scalia seems to believe that his fellow justices will ignore his insults and agree with him on issues.  That should be how they react, but it’s not a certainty.

His approach echoes in Maine, where GOP Gov. Paul LePage attacks legislators of both his own party and Democrats.  Maybe he would have greater legislative success if he were more cooperative and less confrontational.  This year, LePage was the loser in his battles with the Legislature.

As the nine-member Supreme Court continues to make major decisions with broad effect, many people have lost respect for it.  A national survey in 2001 revealed 62 percent with a favorable view of the Court.  By 2014, its favorable rating in the same survey was 44 percent, lower than the unfavorable rating.

By taking over role of Congress and engaging in personal attacks, justices hardly promote respect for the Court.

Secrecy makes “citizens” into government’s “subjects”

What do these have in common?

The congressional consideration of new trade negotiating authority for the president.

The development of the Maine biennial budget.

The National Security Agency collection of data on Americans’ communications.

Answer: they were all conducted in secret.

In the Gettysburg Address, Lincoln spoke of “government of the people, by the people and for the people.”  When it’s quoted these days, the emphasis in placed on “of,” “by” and “for,” when reportedly Lincoln placed the emphasis three times on the word “people.”  Say it aloud and you will see a big difference.

Now, it seems that government is meant to be “for the people,” but not “of” or “by” us.  Government takes care of us, while we are largely excluded from the process.

The so-called Fast Track trade negotiating authority is supposed to allow President Obama to agree to the Trans-Pacific Partnership deal free from later congressional amendments.  But members of Congress now can only look at the proposed agreement in secret and cannot even take notes much less tell citizens about what they read.

Extensive public debate about the TPP supposedly undermines Obama’s bargaining position.  We more or less have to trust him and the fast readers in Congress to get a good deal with as little harm as possible.

The new Maine budget, which finally became public just shortly before it was adopted, was negotiated in secret.  One member said discussions were “sensitive,” apparently inhibiting some legislators from public deal-making.  Obviously, compromises had to be made, but leaders did not want the public to see the actual trade-offs.  Voters had to accept that legislators had made the best deal for them.

As for the NSA, it wanted access to our phone and email records to protect us, but it could not tell us, as that would tip us off.  And it did not want secret judicial review, because that was not as efficient.   We were expected to trust government to take care of us.

All of these moves may have been in violation of transparency or other laws.  Even worse, they violated the democratic system.

The Constitution is venerated as the basis of our government and, according to its first three words, was made by “We, the people.”  And every law passed in Maine begins: “Be it enacted by the People of the State of Maine.”

The people are the sovereign under our system, but the government has taken on that character and the people look much more like its subjects.

With the exception of the relatively unusual town meeting form of government, a country the size of the United States cannot have direct democracy, where the people themselves make the laws and rules.  We have a representative democracy, which we define as a republic.

The problem arises when the representatives begin to see a gap between themselves and the people who put them in office to represent their interests.  While average citizens cannot follow the details of every piece of legislation, that’s no excuse to keep them from access to the details.

Clearly, this creates a governing process a lot less efficient than a dictatorship.  But democracy is supposed to be messy, even inefficient.  That helps guarantee change can be carefully considered and people will have the time to listen to a debate on issues before action is taken in their name.

Under a system in which the people cannot read every proposal, two institutions have a special responsibility.  One is government itself, which needs to ensure that its actions are conducted in public. 

Government recognized public pressure to know more and enacted Freedom of Information and Freedom of Access laws.  As positive as the open government concept was, it has gradually lost its luster.  Exception after exception has found its way into the law, always for the good reasons cited by its proponents, but almost never in the public’s interest.

The other is the media, the so-called fourth branch of government, which has the job of reporting back to the people on what government is doing and conveying to government public reaction.

To assist citizens, the media should continually highlight every occasion when government seeks to do business out of the public view.  This means bird-dogging government daily, not once or twice a year, and trying to dig out the story.

Instead, media has often become part of the government mechanism, keeping matters and sources secret so that it can tap those sources again later. 

But “later” may be too late in governing “for the people.”

Greek crisis: euro's too weak, dollar's too strong

“That was Greek to me.”  These words, written by Shakespeare in 1599, means something is too hard to understand.

Now, it applies to Greece itself.  What’s all the fuss about and does it matter to us?

The answer to the second question: your job could depend on how the Greek financial crisis is settled.  The answer to the first question reveals a high stakes story of the games countries play.

Greece financed both government and private sector expenses with a lot of borrowing to cover shortfalls in domestic taxes and company income.  In its most celebrated problem, the Greek  government turned a blind eye to tax evasion by the wealthy.

The country uses the euro as its currency.  The euro is the common currency of 19 member countries of the European Union.

But the euro does not work like the U.S. dollar, which is backed by the ability of the Congress to raise taxes to pay off federal debt.  The American currency is backed by the whole country. 

The euro’s strength depends on support from each participating country.  They pledge to keep their economies strong and avoid excessive debt, which in turns creates confidence in the common currency. 

Each country using the euro must report on the amount of public debt, but Greece intentionally filed false reports.  It borrowed much more than it should.

When it could not longer keep up with payments on its debt, Greece turned to other euro countries to be bailed out.  It asked for new loans from them to pay off older loans.

Here’s the key difference with the dollar.  In the U.S., the federal government raises its own funds and determines tax and money policies.  In the euro zone, each country acts independently.  Germany, as the richest country, must raise from its citizens a big chunk of what goes to Greece.

In return for new loans, Germany and others asked Greece to cut back on public spending, increase tax collection, trim pensions, and take other measures to reduce debt.  The International Monetary Fund also made loans to Greece with the same conditions.  The U.S. contributes 18 percent of IMF resources, so it has a stake in the crisis.

To obey the loan conditions, Greece cut spending back so far that it fell into a deep recession with high unemployment.  That made it even more difficult to repay its loans.  Now, it needs more bailout help to avoid defaulting on the first bailout loans.

The more it gets into debt and struggles to make payments through cutbacks harming its economy, the more Greece seems to be in a downward spiral.  As a result, it is really wants bailout funds that don’t have to be repaid.  Other countries and the IMF refuse and insist that Greece make tougher moves to put its house in order.

If this seemingly impossible situation cannot be resolved, Greece will default on its debt to European countries and the IMF.  Then, it would no longer use the euro as its currency – causing the so-called “grexit.”  It would return to its national currency, the drachma, worth little in international finance.

Because Greece is a relatively small country using the euro, the European currency would survive its departure.  But the world would have been put on clear notice that the euro is backed only by good intentions, not by mutual commitment.

The euro has taken on the characteristics of a true international currency, accepted in trade and 

finance as a so-called “reserve” currency.  The U.S. dollar has played that role for decades.  The grexit could cause a loss of confidence in the euro, making the dollar more valuable in world commerce. 

In fact, that has already begun to happen, and each euro equals fewer dollars.  The U.S. stock market seems befuddled by the twists of the Greek crisis story and swings with the latest news from Europe’s negotiations.

A “strong” dollar sounds better than it really is.  If the dollar becomes expensive in other currencies, meaning its takes more local currency to buy a dollar, American exports become more expensive in that currency. 

The U.S. wants and needs more jobs, and many will come from producing goods and services for export.  A stronger dollar not only will undermine efforts to create more export-related jobs, it can cost American jobs now dependent on sales abroad.

American industry and labor have a major stake in the Greek crisis and the euro’s revival.  For now, the U.S. waits on the sidelines as the crisis plays out.