Kevin Drum - June 2013

No, the Supreme Court Probably Didn't Signal the Imminent End of Gay-Marriage Bans Today

| Wed Jun. 26, 2013 4:34 PM EDT

Greg Sargent reports that some supporters of gay marriage are excited by a "tell" buried in today's Supreme Court decision on DOMA. Here it is:

State laws defining and regulating marriage, of course, must respect the constitutional rights of persons, see, e.g., Loving v. Virginia, 388 U.S. 1 (1967); but, subject to those guarantees, “regulation of domestic relations” is “an area that has long been regarded as a virtually exclusive province of the States.”

Loving struck down state laws against interracial marriage, so the idea here is that the court might be suggesting that someday it will strike down laws against gay marriage too.

Maybe. But I'm not sure I'd read that much into this. The court is basically expressing a tautology: If we decide something is a constitutional right, then state laws have to respect that constitutional right. Unfortunately, that really doesn't say anything about whether or not the court will declare same-sex marriage a constitutional right anytime soon. It just says that if they do, then states will have to go along. Needless to say, we already knew that.

But who knows? Maybe my Supreme Court Kremlinology is just rusty.

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Sugar Industry Getting a Sweet Deal From Uncle Sugar

| Wed Jun. 26, 2013 4:01 PM EDT

The Wall Street Journal reports today that three giant sugar companies received more than half of all sugar loans in the past year. But there's trouble brewing:

Disclosure of the loan recipients comes as domestic sugar prices are trading around four-year lows, raising concerns that some processors—who turn sugar cane or sugar beets into the sweetener—may not be able to repay what they owe.

....During the past nine years, the government has lent $8.8 billion to sugar processors. The 2012 loans were granted with an interest rate of 1.125% to 1.250%, depending on the month in which they were issued....In case of a default, a processor would pay the government back in sugar rather than cash; the sugar is then typically sold by the USDA at a loss.

I'll bet college students wish they could get a deal like that. Instead they'll soon be getting their loans at 6.8 percent—with no allowance whatsoever for default until the day they die, let alone the possibility of repaying the government in used textbooks or something. Let us all now take a moment to marvel at our national priorities.

Quote of the Day: Nobody Cares About Federalism

| Wed Jun. 26, 2013 1:07 PM EDT

From Justice Anthony Kennedy, writing for the majority in United States vs. Windsor:

The class to which DOMA directs its restrictions and restraints are those persons who are joined in same-sex marriages made lawful by the State....This opinion and its holding are confined to those lawful marriages.

In a nutshell, Kennedy says the Constitution doesn't forbid states from banning same-sex marriage. But if a state allows same-sex marriage, the federal government can't refuse to recognize it. Marriage is a state concern—in fact, it's literally a textbook example of a state concern—not a federal one. Taken as a whole, this ruling was as pure a defense of federalism as we've seen in a while.

So why did all the conservative justices oppose it? Answer: Because no one actually cares about federalism. It's merely a convenient veneer when you prefer one outcome over another. Yesterday state sovereignty was of crucial concern when conservatives gutted the Voting Rights Act. Today, they couldn't care less about it.

The Big Problem With the Supreme Court's Prop. 8 Decision

| Wed Jun. 26, 2013 11:32 AM EDT
Davis Baker, 24, center, of Phoenix, Arizona, celebrates two Supreme Court rulings Wednesday that broadened marriage equality.

In today's other decision on gay marriage, the Supreme Court declined to allow supporters of California's Proposition 8, which banned gay marriage, to appeal their case in federal court. Supporters could defend Prop 8 in the initial suit in California, the court said, because California recognized their standing, but they aren't allowed to appeal their loss because they don't have appellate standing according to federal rules. Since a district court had previously ruled Prop. 8 unconstitutional, this means the issue has been decided. Gay marriage is legal in California.

But this decision bothers me. The problem is that both the executive and legislative branches in California declined to defend Proposition 8 in court. This left it to the proponents of Prop. 8 to do so, but the Supreme Court decided today that they don't have a "personal stake" in the law, no matter how deeply they feel about it. I think the dissent gets at the core problem here:

The Court's reasoning does not take into account the fundamental principles or the practical dynamics of the initiative system in California, which uses this mechanism to control and to bypass public officials—the same officials who would not defend the initiative, an injury the Court now leaves unremedied. The Court's decision also has implications for the 26 other States that use an initiative or popular referendum system and which, like California, may choose to have initiative proponents stand in for the State when public officials decline to defend an initiative in litigation.

In California, it's routine for the people to pass initiatives that neither the governor nor the legislature supports. In fact, that was the whole point of the initiative process when it was created. In cases like these, of course the governor and legislature are going to decline to defend the law in court. With today's decision, the Supreme Court is basically gutting the people's right to pass initiatives that elected officials don't like and then to defend them all the way to the highest court in the land.

To me, this has neither the flavor of justice nor of democratic governance, regardless of whether I like the outcome.

UPDATE: I originally wrote that the California Supreme Court had ruled Prop 8 unconstitutional. It was actually a federal district court that did that. Apologies for the error. The text has been corrected.

The Economy Is Even More Sluggish Than We Thought

| Wed Jun. 26, 2013 10:15 AM EDT

And now for some bad news. In April, the BEA announced that GDP had grown 2.5 percent in the first quarter of the year. Not great, but not too bad. At the end of May, that was revised down a tick to 2.4 percent. Today, in its final estimate, the hammer was dropped:

The U.S. economy grew at a slower pace than previously estimated in the first quarter as consumer spending and business investment were revised sharply downward, amid signs the pace of growth is likely to have slowed in recent months.

The nation's gross domestic product, the broadest measure of all goods and services produced in the economy, grew at a 1.8% annual rate from January through March....The first quarter's revision was due largely to personal consumption expenditures that notched lower to a 2.6% gain from 3.4%. Consumer spending, which accounts for two-thirds of economic output, largely drove overall gains in the first three months of the year.

So, that economic recovery that you thought was proceeding pretty sluggishly? Well, it's proceeding even more sluggishly than you thought. Apparently the fiscal cliff had a pretty big effect after all. I can't wait to see how the sequester affected second quarter growth.

DOMA Dies a Well-Deserved Death

| Wed Jun. 26, 2013 10:03 AM EDT

I see this morning that President Kennedy has decided to repeal the Defense of Marriage Act, signed into law by President Clinton in 1996. So it's now official: laws that screw blacks are OK, but laws that screw gays aren't. Some progress, eh?

UPDATE: Commenter cdflower says, "This is a mighty sour way to greet a truly monumental day for a large group of people who have suffered legal and legislative bigotry."

Point taken. The truth is that I'm still feeling pretty sour about yesterday's VRA ruling, and pretty sour about Justice Anthony Kennedy's role as de facto judge, jury, and executioner on cases like these. Nonetheless, this really is a great day for gays; for those of us with gay family and friends; and for the country. I apologize for being sour about it.

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Chart of the Day: We Might Be Starting Up a New Housing Bubble

| Tue Jun. 25, 2013 11:00 PM EDT

My favorite indicator of out-of-whack housing prices has always been the price-to-rent ratio. The rationale behind keeping an eye on it is pretty simple: rent is basically the return you get from investing in a home, so if the price of buying a home goes way up but the rent doesn't, it means the return on investment from housing is declining. However, the only reason to make an investment with a low return is because you're betting that the value of the home itself will keep rising, and at some point that simply makes no sense. Why should the value of a home keep rising if it remains a low return investment? Basically, you're betting on a bubble.

The chart below, from Calculated Risk, shows the price-to-rent ratio (indexed to 1998 = 1.0) for the past few decades. Obviously things got way out of control from 2002 through 2006, and by 2012 it looked as though average house prices had retreated to reasonable levels. However, for the past 18 months the price-to-rent ratio has been rising fairly sharply. It's too early to say that we're in any kind of danger zone yet, but it's worth staying vigilant. Given the weakness of the recovery and the weakness of income growth, it's hard to think of too many good reasons that home values should be outpacing rents by very much.

Compare and Contrast: Laws That Protect White Voting vs. Laws That Protect Black Voting

| Tue Jun. 25, 2013 7:52 PM EDT

In 2008, the Supreme Court decided Crawford vs. Marion County Election Board. Previously, the state of Indiana had passed a statute requiring voters to show photo ID at polling places, something that was likely to disproportionately hurt black turnout. Indiana's justification for the law was its interest in preventing voter fraud, something that they were unable to demonstrate even a single case of. Nonetheless, the court upheld the law under this reasoning:

If a nondiscriminatory law is supported by valid neutral justifications, those justifications should not be disregarded simply because partisan interests may have provided one motivation for the votes of individual legislators. The state interests identified as justifications for SEA 483 are both neutral and sufficiently strong to require us to reject petitioners’ facial attack on the statute. The application of the statute to the vast majority of Indiana voters is amply justified by the valid interest in protecting “the integrity and reliability of the electoral process.”

Today, the Supreme Court decided Shelby County vs. Holder, an attack on the "preclearance" requirement of the Voting Rights Act. In 2006, Congress renewed the Act for 25 years, and after considering voluminous evidence decided not to make changes to the formula for deciding which states require preclearance for changes to their voting regulations and which ones don't. Nonetheless, the court overturned the law:

Congress did not use the record it compiled to shape a coverage formula grounded in current conditions. It instead reenacted a formula based on 40-year-old facts having no logical relation to the present day. The dissent relies on “second-generation barriers,” which are not impediments to the casting of ballots, but rather electoral arrangements that affect the weight of minority votes. That does not cure the problem. Viewing the preclearance requirements as targeting such efforts simply highlights the irrationality of continued reliance on the §4 coverage formula, which is based on voting tests and access to the ballot, not vote dilution. We cannot pretend that we are reviewing an updated statute, or try our hand at updating the statute ourselves, based on the new record compiled by Congress.

Note the difference. In Crawford, where the target is a law that's likely to disenfranchise black voters, the bar for constitutionality is almost absurdly low. Regardless of what the real motives of the lawmakers are, or what the likely effect of the law is, it's valid if the state merely asserts a "neutral justification." That's it.

But in Shelby County, where the target is a law designed to protect black voters, the bar for constitutionality is suddenly much higher. Even though the Fifteenth Amendment gives Congress the unconditional right to enact legislation designed to prevent states from abridging the right to vote "on account of race [or] color," the court ruled that, in fact, Congress is quite fettered after all. It cannot decide to simply renew a law that it thinks is working well. Instead, it's required by the court to update its formulas to satisfy the court's notions of what's logical and what isn't.

So here's your nickel summary. If a law is passed on a party-line vote, has no justification in the historical record, and is highly likely to harm black voting, that's OK as long as the legislature in question can whomp up some kind of neutral-sounding justification. Judicial restraint is the order of the day. But if a law is passed by unanimous vote, is based on a power given to Congress with no strings attached, and is likely to protect black voting, that's prohibited unless the Supreme Court can be persuaded that Congress's approach is one they approve of. Judicial restraint is out the window. Welcome to the 21st century.

A Carbon Tax Is the Big Issue Burbling Under the Surface of Obama's Plan to Regulate Power Plants

| Tue Jun. 25, 2013 12:43 PM EDT

President Obama hasn't given his big climate speech yet, but the bullet points have been released and I think it's fair to say that everyone thinks the biggest deal is his executive order telling the EPA to establish carbon pollution standards for both new and existing power plants.

I'll wait for more details to comment further, except for one thing: one of the key issues here is what Obama's real goal is. Does he really want the EPA to create new regs? Or does he want to use the threat of new regs as leverage to get Congress to pass a carbon tax of some kind? Probably the former, but you never know. Back when the cap-and-trade bill was being debated in 2010, one reason for guarded optimism was the fact that even Republicans might prefer it to the alternative, which was crude EPA regulation of power plants. In the end, that turned out not to be enough. Republicans apparently weren't convinced that the EPA would really go through with tough new rules.

But now that changes. If Obama and the EPA are serious, then utility operators are going to get increasingly nervous as the rules work their way through the system and start to look like they're really going to happen. At that point, will Republicans relent and agree to a bill that sets a carbon tax (or cap-and-trade limits) in return for a congressional halt on new EPA regs?

No one knows, of course. But to me, this is the key issue burbling under the surface of Obama's announcement today. Are his new regulations just what they seem, or are they really a bargaining chip for a carbon tax? Stay tuned.

A Brief Interlude About Grass and Clay in the Tennis World

| Tue Jun. 25, 2013 12:16 PM EDT

Keith Humphreys wants to know what's up with tennis and all the different surfaces it's played on:

Think how shocked we would be if a professional basketball team announced that they were changing the surface of their floor from wood to cement and were also going to raise their rim by six inches. We expect consistency in the conditions of basketball, ice hockey and bowling, but not tennis.

Is there a sport that allows as much variation in the game under the same name? The only one I could think of is baseball, in which a stadium can have artificial turf versus grass and the outfield fences can be arranged in a variety of ways.

Are there other examples of sports that are really multiple, different versions of a game? And are any of them as variable as is tennis?

I wouldn't put baseball (or football or soccer or cricket) in the same league. Changes from grass to artificial turf, along with the modest differences in the size of the playing field, don't make nearly as much difference as tennis surfaces. Clay and grass are practically different games in the tennis world.

In theory, a sport like golf or bicycle racing might qualify, since the field of play is wildly different from week to week. In practice, though, it doesn't really seem to make that much difference. Some golf courses favor long hitters, just as some bicycle races favor climbers, but the results seem to be much less systematic than tennis.

However, I think the surface difference in tennis is starting to decline. In the 90s, when serve-and-volley players still roamed the earth, Wimbledon and the French Open really were like two different sports. One set of folks won on grass, the other set won on clay. Pete Sampras, the best player of his era and one of the best of all time, never even made the finals of the French and only got to the semis once. Conversely, Gustavo Kuerten, who won the French three times, only made it past the third round of Wimbledon once.

But as playing styles converge, this is becoming less of an issue. Before long, it's likely that virtually everyone on the tour will be playing the same basic power game: big looping forehand and killer two-handed backhand, with everyone pinned behind the baseline about 90 percent of the time. When everyone plays the same game, they're all at the same advantage (or disadvantage) on all surfaces. That's why Roger Federer routinely gets to the finals of the French and even won once (a year when Rafael Nadal lost early) and why Nadal has done the same at Wimbledon. Surface is less of a factor than it used to be, and this trend will almost certainly continue.

Which, in a way, makes the argument for standardizing surfaces stronger than ever. It'll never happen—not soon, anyway—but the sport would probably be better off if grass and clay disappeared and tournaments all moved to a moderately fast artificial surface of the type used at the U.S. and Australian Opens. Those are always my favorite tournaments, because anyone can win and they don't disqualify a big chunk of the field right from the get-go.

As near as I can tell, I'm one of the few who loved watching serve-and-volley tennis on grass, especially when there was a contrast of playing styles (Borg-McEnroe, Becker-Lendl, Sampras-Agassi). But that's pretty much gone the way of the dodo, and with it the reason for playing on grass at all. But it was nice while it lasted.

(And why am I writing about this? I guess I'm just trying to take my mind off the Supreme Court's Voting Rights Act decision. Even though I expected it, I'm feeling pretty morose about the whole thing.)