• How Pols Wring Money From Businessmen: Chicago Example

    The other day, I posted an extraordinary story of abusive political power.

    ZipDialog Post: Your property? Yeah, right, pal. I got friends who want it

    First, the story in a nutshell. Then, the larger meaning.

    Alderman Bullies Property Owner to Help a Friend

    Chicago Alderman Proco Joe Moreno wanted to help a business [Double Door Music Hall] that had contributed to his campaign coffers. So he told Brian Strauss, a firefighter and property owner, to rent his building to the business or suffer the consequences. When Strauss refused to comply, Moreno made good on his threats, downzoning Strauss’s building and scuttling multiple attempts to sell the property.

    Strauss is now suing, arguing that Moreno’s abuses of his aldermanic powers violate Strauss’ rights under the Fifth and Fourteenth Amendments. –Reason blog (Link here)

    Fortunately, some of the strong-arm tactics were caught on cellphone video.

    It has also been investigated and reported by CBS2 Chicago, but largely missed by the local media.

    Chicago politicians acting badly is a “dog bites man” story in Chicago, just as it is in New Orleans or New Jersey–but not Minneapolis. Some jurisdictions are actually pretty honest; the voters demand it and toss out the miscreants.

     

    The Larger Meaning, Beyond the Usual Chicago Political Stench

    The larger meaning of the Moreno story is that politicians who can impose costly rules and regulations (or waive them), who can violate property rights and contractual rights with ease (or respect them) can use that discretion to extract benefits for themselves or their campaigns.
    If I, as an alderman, can prevent Chick-Fil-A or Walmart from erecting a store in my ward, as Alderman Moreno also did, then I can either
    • Extract donations from Chick-Fil-A or Walmart
    • Extract donations from their potential competitors or others who don’t like them, such as grocery owners and their unionized workers in Walmart’s case.

    Those political uses of weak property rights illustrates something significant–well beyond Chicago.

    When most people think of strong property rights, they think (correctly) that they are essential for economic growth. Why invest if the state can come and steal your profits?

    What they miss is a second implication: strong property- and contractual-rights constrain overreach by the state.

    That’s why FDR had to knock them down in 1937. They were blocking his New Deal programs, which had been ruled unconstitutional because they violated citizens’ economic rights.

    FDR told the Supreme Court Justices that, if they didn’t rule his way in the future, he would pack the court with more judges who favored him. This threat went beyond traditional appointments; there were no Constitutional limits on how many judges sit on the Supreme Courts, just as, at the time, there was only a norm (not a law) saying Presidents could not run for a third term. Faced with FDR’s threat, the judges caved in and began ruling New Deal programs were just fine with them.

    Aldermen use the same logic in a slightly different way: they say, I already have the power to crush you. So, give to me or I will.

    Bottom Line

    Whether the rights are free speech, free association, property, or contract, the message is the same. The state will overreach unless its limits are well-specified and institutionalized.

    That’s a Core Western Value. It ought to extend even to Chicago aldermen.

  • Your property? Yeah, right, pal. I got friends who want it

    The headline: “Chicago Alderman Who Told Businessman to ‘Come Back To Me On Your Knees’ Sued for Abuse of Power (Reason’s Hit and Run blog)

    Chicago Alderman Proco Joe Moreno wanted to help a business [Double Door Music Hall] that had contributed to his campaign coffers. So he told Brian Strauss, a firefighter and property owner, to rent his building to the business or suffer the consequences. When Strauss refused to comply, Moreno made good on his threats, downzoning Strauss’s building and scuttling multiple attempts to sell the property.

    Strauss is now suing, arguing that Moreno’s abuses of his aldermanic powers violate Strauss’ rights under the Fifth and Fourteenth Amendments. –Reason blog

    The story Reason reports is grotesque.

    The key for outsiders to understand: Chicago alderman hold tremendous power to zone buildings within their ward. That power to zone translates, naturally, into campaign donations from people with zoning needs.

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    Strauss’ family has owned the building housing Double Door since the 1960s. It’s in a now-popular area. According to Strauss, Double Door had violated their lease and he wanted to evict them.

    That’s when Alderman Moreno, the recipient of campaign donations from Double Door, stepped in–with rage and power:

    “I’m tired of hearing about the sympathy of you and your family,” the alderman reportedly told Strauss and his attorney at one meeting. “Double Door is going to be in that building, there will never be another tenant in there, there will never be another sign on that building.”

    Over the coming months, Moreno—in meetings brokered and attended by staffers for Chicago Mayor Rahm Emanuel—tried to get Strauss to sell his building to Double Door for $7 million, despite its market value of nearly $10 million.

    When that failed, the alderman started introducing downzoning proposals for Strauss’s property that would have made it off limits for most business uses. In June 2017, Moreno even tried to reclassify the building as a residential unit, which would prohibit practically all commercial uses.

    That failed, but in September the city council did pass a downzoning ordinance, which prevents Strauss from converting his property to a general restaurant, a bar, or even, ironically, its previous use as concert venue.

    In a very public, and very disturbing, encounter with Strauss, Moreno made clear his zoning changes were all about extracting concessions.

    “You can come back to me on your knees, which is going to happen,” he raged. “It’s gonna be an empty building with no income for you or your family.” –Reason blog

    In fact, Strauss has tried to sell but he says three sales have fallen through because of the zoning changes.

    Now, he’s suing, saying that Moreno’s “extreme and outrageous” conduct amounts to a taking of his property without due process.

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    CBS2 Chicago investigated. Their findings confirm Moreno’s bullying behavior, some of it caught on cell phone video.

    Their headline: [CBS] 2 Investigators: Alderman Threatens To Ruin Landlord’s Business

    In the video, Moreno says he’s upset over the “tragedy” of the club’s closing.

    “It’s a part of life,” Strauss says.

    “Right,” Moreno says. “And part of life is also that you’re not going to have a tenant in here for three years.”

    The fight reportedly stems from Moreno wanting to keep the Double Door, a campaign donor, in the building. –CBS2 Chicago

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    Another news investigation, this one by a former Inspector General for the city, has reached the same basic conclusions (Project Six investigations)

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    Comment: If the story reported by Reason and CBS2 is true, then the alderman’s conduct was “extreme and outrageous”–and utterly true to form for Chicago city government.

    Alderman have extensive control over zoning in their wards. Fellow aldermen defer to each other, enjoying the benefits of reciprocity and fearing anything that would undermine it.

    Their power to zone translates into the power to raise donations from anybody with real estate interests.

    It’s the circle of life in politics.

    My question: Why is this only a civil case? The actions alleged ought to be investigated as possible felonies by federal attorneys. (Expecting state attorneys to do such investigations of fellow pols is crazy talk.)

    Thanks to Tom Elia for this story.

  • Trump Campaign worker, Carter Page, Won’t Talk to Senate Intel Committee

    Politico reports that Page will invoke his Fifth Amendment rights against self-incrimination.

    He was a low-level aide in the Trump Campaign and never met the boss. He did, however, have connections with Russia, though he has repeatedly denied he did their bidding.

    A former naval-officer-turned-energy consultant, Page came under fire last year after reports emerged that he had met with high-level associates of Russian President Vladimir Putin in Moscow in 2016. While Page denied those meetings occurred, the Trump campaign distanced itself from the adviser not long after, with former officials saying that Page and Trump had never met. –Politico

    Comment:  It is unclear if his refusal is related to the Mueller investigation, but it could well be. Page, Mike Flynn, and Paul Manafort are all in the crosshairs, according to media reports.

    Anybody facing potential indictments would be advised by lawyers not to say anything.

    Page is a small fish. Presumably, Mueller’s team would want information from him, but it is not clear if he has any or knows about others approached by the Russians.

  • State Street Corporation, which erected the “Fearless Girl” statue on Wall Street, settles lawsuit for pay discrimination

    Boston’s State Street, one of the country’s largest financial institutions, agrees to pay $5 million to settle a federal complaint about pay discrimination against female and black executives (Boston Globe)

    The sum is peanuts for a major bank, but it gives the company a black-eye in an area it has staked out: larger roles for women.

    The settlement comes only months after the financial giant received plaudits for sponsoring the “Fearless Girl” statue near Wall Street in Manhattan as part of its effort to get more women placed on the boards of public companies.

    In March, an office within the Department of Labor found that State Street had discriminated against women at the senior vice president, managing director, and vice president levels by paying them less than men in similar positions. The agency also claims the company paid black employees less than similarly positioned white employees.

    The pay practices covered a two-year period and affected 305 female executives and 15 black vice presidents, the government said. –Boston Globe

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  • ZipDialog Roundup for Thursday, September 28

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    Republican Tax Plan: The Essential Features

    The details still need to be worked out through negotiations.

    It is a 9-page framework at this stage, more detailed than previous releases but still not a fleshed-out bill.

    Key features:

    • Lower corporate tax rates: Nominal rates cut significantly–to 20%
      • Whether actual rates for Company X or Company Y are lowered depend on whether previous deductions are eliminated.
    • Fewer personal brackets
    • Much bigger standard deduction for each individual or family
      • Big benefit to lower-income earners
    • Many fewer deductions
    • Keeps big deductions for mortgages, charity, and medical
    • Repeals the Alternative Minimum Tax,
      • Initially meant for a few rich individuals but now affects millions of taxpayers
    • Eliminates the Estate Tax (“death tax”)
    • Repeals deduction for state and local taxes (very contentious)
    • Keeps a special carve-out for hedge fund called “carried interest” (very contentious)

    ◆ The Essential Politics 

    First, the goal is growth, even if it raises projected budget deficits.

    Second, everybody is making hypocritical arguments.

    • The Democrats doubled the country’s debt over the Obama Administration. Now, they are complaining about deficits.
    • The Republicans screamed about debt and deficits during the Obama Administration. Now, most of them say deficits are less important than growth

    Third, the main political arguments are conventional and obvious for both sides.

    • Democrats: “This will only help the rich” (redistribution argument)”
    • Republicans: “Everybody wins when the economy grows faster” (growth argument)

    The New York Times weights in reliably with this analysis headline: Trump Tax Plan Benefits Wealthy, Including Trump. Most analysts agree with this regressive-distribution effect, at least in the initial proposal.

    Big Court Threat to Public Employee Unions (USA Today)

    The Supreme Court agreed Thursday to hear a challenge to the so-called “fair share” fees public employee unions collect from non-members, posing a major threat to organized labor.

    Unlike the past three times the court has considered similar cases, its five-member conservative majority appears poised to rule that workers opposed to union representation cannot be forced to pay for collective bargaining and other benefits. –USA Today

    Comment: The Republicans really want to weaken the public unions, as Scott Walker’s campaign in Wisconsin showed.

    The unions know it and uniformly support Democratic candidates.

    The legal argument by conservative and moderate union members is that so much of what these unions do is inherently political that the members’ free-speech rights are trampled by forcing them to pay union dues as a compulsory aspect of working at, say, a public school or Department of Motor Vehicles.

    My guess: Compulsory union fees will be ruled unconstitutional violations and national membership in public-employee unions will drop significantly, following the Wisconsin pattern.

    The biggest impact will be on K-12 school policy in the states.

    There will be a longer-term impact in other areas since weaker unions cannot stop the rise of autonomous busses or autonomous lawnmowers and floor cleaners, which will give cities and states more service for less money.

    Megyn Kelly: No thanks, say critics and potential guests, after her terrible start (Washington Post)

    Stars now shying away from interviews after Jane Fonda mess

    Megyn Kelly said on the first episode of her new NBC morning show, which aired Monday, that for years she’d “dreamed of hosting an uplifting show.”

    But just three episodes in, her celebrity guests seem to find the show anything but uplifting. Kelly’s penchant for speaking her mind, regardless of how her words might be perceived, caused two of her celebrity guests to speak out against the host after their respective appearances.

    The most recent was Jane Fonda, whom Kelly pressed to discuss her plastic surgery. –Washington Post

    Comment: One problem is that Fox viewers think she “betrayed” her network and thus her “side.”

    A second is that she was always better at hard-news interviews than soft-focus ones. But her new time slot is tailored for morning uplift, not hard news.

    Third, some media critics have said that she is the kind of woman who appeals more to male viewers than female viewers. But the morning audience is heavily female.

    NBC gave her bucket loads of cash and removed a steady program to give her a slot. They must be slashing their wrists.

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  • US Senate Race in Alabama: Roy Moore Wins Republican Primary

    Defeats incumbent Senatorial appointee, Luther Strange, despite Trump’s endorsement

    “Big Luther,” as Trump nicknamed him, was saddled with trouble from the beginning.

    He was appointed to office and many Alabama voters thought the decision was corrupt.

    It was made by the embattled, embarrassed, and now-departed Gov. Bentley.

    Somehow, the investigation of Bentley was stopped by the State AG’s office, headed by Strange. It’s not hard to figure what most people thought of that.

    Still, Strange was the incumbent, was endorsed and funded by Sen. Majority Leader, Mitch McConnell, and, thanks to McConnell, received Trump’s endorsement.

    Trump and Pence made trips to Alabama but never attacked Moore and, in fact, said they would support him in the general election. Moore is not so appealing to a general population but is still likely to win in a Deep Red State.

    Backed by Steve Bannon and the populist wing, Moore’s win is a “victory for Trumpism but not for Trump.” The president will take some (small) comfort from that. And he’ll be leery of opposing that movement again at the ballot box.

    Who is the Big Loser, Besides Luther Strange?

    Who is the big loser? Mitch McConnell.

    He loses twice over. First, he loses a reliable vote in the Senate. Roy Moore is a loose cannon (though he lacks much firepower). Assuming he wins the seat, he won’t be a reliable vote any more than Mike Lee or Susan Collins.

    Second, ole Mitch is not going to enjoy his talks with Trump. He got Trump to endorse a loser. Trump is gonna love that. Mitch couldn’t get his own guy over the finish line and managed to associate Trump with the thing he hates most: losing. And, of course, Mitch cannot get key legislation passed. Trump is gonna treat him like road kill, restrained only by his desperate need to pay tax cuts and tax reform.

    Moore is Less

    As for Moore, he is

    • Dumb as a box of rocks, which doesn’t seem to faze Alabama Republican voters
    • Knows nothing about public policy, which takes some doing for a man who has been in public office for years
    • Considered by Alabama Republicans to be the authentic voice of populist anger and religious fervor.

    It was this last point–populist fury and Moore’s identification with it–that led to his victory.

    Expect to hear plenty from the Democrats about the “rule of law” in our country. They will move to exploit Moore’s flat refusal to remove the Ten Commandments from a court building, despite being to do so by a Federal Court. We’ve been through that issue before in our country. It was decided right the first two times. Moore’s refusal to obey a legitimate court order is despicable. It got him booted off the Alabama State Supreme Court but was apparently a feather in his cap politically. Uggh.

    With all those deficits, it tells you a lot about the primary electorate’s mood that he won. And it tells you a lot about how conservative Alabama is that Moore is favored to win the General Election.

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  • ZipDialog Roundup for Saturday, September 23

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    ◆ John McCain puts a dagger in the heart of “repeal and replace.” Won’t support bill of his close friend, Lindsey Graham (New York Times)

    Comment: There is still a thin path, but it is only a sliver since several Republicans are likely “no” votes.

    Even if the Senate passes something, it might not make it through the House.

    If this bill fails, as expected, then Congress will move onto tax reform and tax cuts.

    Trump in his element: Gives a rousing speech to enthusiastic crowd in Alabama, offers strong support to underdog Senate candidate, Luther Strange (Al.com)

    Comment: Strange is running behind former Alabama state judge, Roy Moore, who redefines the word “controversial.”

    Besides the usual kind words for “Big Luther,” Trump underscored two points.

    1. Strange had given him crucial support on legislation without making demands (Trump emphasized the Senator’s loyalty to him, Trump, and not to Mitch McConnell).
    2. Strange is sure to win in the General Election; Moore is far less certain to win, though Trump said he would back him in the general.

    Handling Sexual Assault Investigations on Campus: Sec. of Ed. Betsy DeVos Reverses Obama-Era Policy (New York Times)

    The nub of the matter: Under Obama, standards of proof were lowered significantly. DeVos is allowing colleges to raise the standard, once again, to “clear and convincing evidence.”

    DeVos on Friday scrapped a key part of government policy on campus sexual assault, saying she was giving colleges more freedom to balance the rights of accused students with the need to crack down on serious misconduct.

    The move, which involved rescinding two sets of guidelines several years old, was part of one of the fiercest battles in higher education today…

    The most controversial portion of the Obama-era guidelines had demanded colleges use the lowest standard of proof, “preponderance of the evidence,” in deciding whether a student is responsible for sexual assault, a verdict that can lead to discipline and even expulsion. On Friday, the Education Department said colleges were free to abandon that standard and raise it to a higher standard known as “clear and convincing evidence.” –New York Times

    The Obama Administration lowered the standard unilaterally, without the normal discussion associated with regulatory changes. They simply sent colleges a “dear colleagues” letter of advice that effectively told them what they had to do to keep their federal funds.

    FIRE, the Foundation for Individual Rights in Education, hailed DeVos’ decision: “Dear Colleague: It’s over! Education Department rescinds controversial 2011 letter”

    Comment: It is fitting that the Obama Administration skirted all procedural restrictions to impose its policy. That’s exactly what Campus Kangaroo Courts do.

    Second, since colleges can now set their own standards of proof, expect the battle to shift there. Administrators are in total control of these campus investigations, so the wrongly-accused students’ main hope will be federal courts.

    Responding to the Opioid Crisis: CVS will limit prescriptions to 7-day supply (CNN)

    Comment: The scale of the emergency is staggering.

    Every three weeks, the number of Americans who die from drug overdoses equals the deaths in the Twin Towers.

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  • Hillary says “It’s time to abolish the Electoral College,” calls it “Godforsaken”

    Says it in her book (p. 388). Repeats it in CNN interview with Anderson Cooper. (CNN)

    Oh, drat! Those pesky Constitutional limitations.

    But has anybody asked what the Electoral College thinks of Hillary?

    No, sir!!

    Until ZipDialog.

    ZD has asked and discovered the Electoral College has strong views.

  • ZipDialog Roundup for Wednesday, September 13

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    ◆ Bad as Hurricane Irma was, it could have been even worse

    Homeowners’ preparations and evacuations meant relatively few deaths.

    As for the physical damage, it is huge but still smaller than feared. One way to see that is to look at insurance company stocks.

    Today, they are UP. Chicago Tribune headline: Stocks jump as relieved investors buy banks, insurers, tech

    Small insurers, especially ones that do a lot of business in Florida, climbed. … Larger insurers also rallied. … Travel-related companies rose as investors felt their businesses won’t take such a big hit.  –Associated Press via Chicago Tribune

    The most immediate problem now: restoring electric power to millions of homes.

     Apple makes a big noise with its rollout. $1k for new phones. Market is unimpressed (Wall Street Journal, subscription)

    Comment: Students at elite universities will use the new phones to send selfies at demonstrations against inequality.

     Study: Over 90% of MSM reports on Trump are negative, same as previous studies (Washington Times)

    Comment: To be fair, they do actually hate him.

     Trump’s travel bans finally made it to the Supreme Court, which affirmed the President (Washington Times)

    The ruling, which stays a decision from the 9th Circuit, keeps some 24,000 refugees from entering the US, at least temporarily.=

    Good economic news: Middle-class incomes in US for 2016 were highest in history (in real terms)  (Washington Post)

    These figures from the Census Bureau cover the final year of Pres. Obama’s tenure.

    Median household income rose to $59,039 in 2016, a 3.2 percent increase from the previous year and the second consecutive year of healthy gains, the Census Bureau reported Tuesday. The nation’s poverty rate fell to 12.7 percent, returning nearly to what it was in 2007 before a financial crisis and deep recession walloped workers in ways that were still felt years later. –Washington Post

    Seattle Mayor, Ed Murray, resigns after fifth person comes forward accusing him of child-sex abuse (Seattle Times)

    The latest accuser: Murray’s cousin. He had been a teenager, like the others.

    The computer scandal engulfing House Democrats continues to widen. Latest news: the IT contractor used a secret server, tried to hide it, and then falsified what was on it (Daily Caller)

    Imran Awan, the Pakistani IT aide who worked closely with Rep. Debbie Wasserman Schultz, also used Dropbox to back up data, which is illegal for Congressional data.

    Awan had access to all emails and office computer files of 45 members of Congress who are listed below. Fear among members that Awan could release embarrassing information if they cooperated with prosecutors could explain why the Democrats have refused to acknowledge the cybersecurity breach publicly or criticize the suspects. –Daily Caller

    Comment: This scandal receives almost no coverage. That’s a scandal, too.

     

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  • ZipDialog Roundup for Sunday, Sept. 10

    Articles chosen with care. Your comments welcomed.
    Linked articles in bold purple

    Everyone is awaiting the damage from Hurricane Irma as it moves up the Florida coast. 

    The advance preparation seems well handled, especially because the eye of the hurricane drifted further west than initial forecasts.

    Now we wait to see

    1. The scale of the devastation and the breadth of storm
    2. The help given in the immediate aftermath, and
    3. The long-term recovery effort

    Comment: Both short-term and long-term relief will have to be done in the presence of similar damage in Texas from Harvey.

    Since we all criticize the government when things go badly, we need to praise them when things go well, as they have (so far) in these two storm-response efforts.

    Half-right: NYT headline is “Bound to No Party, Trump Upends 150 Years of Two-Party Rule

    The reference is to Pres. Trump’s three-month deal with “Chuck and Nancy” (Schumer and Pelosi) to extend the US debt ceiling and provide relief funds for Hurricane Harvey. Republican lawmakers wanted a longer extension and are furious.

    Comment: The headline is partly right when it says Trump is “bound to no party.” He is not bound to the R’s ideologically. But he is bound to them practically since the D’s don’t agree with him on most big issues, aside from infrastructure spending and trade protection.

    Hillary, surprisingly, says she didn’t expect to lose. Ya think? Says the loss left her “gobsmacked” (Fox News)

    Comment: The inauthenticity of that word–gobsmacked???–hints atone reason she lost.

    Does anybody really think that would have been her genuine feeling? 

     Immigration: Harvard Law prof. Noah Feldman: “Trump’s Right: Immigration is Congress’s Mess” (Bloomberg)

    Liberals should keep in mind an important constitutional principle: Immigration is supposed to be the province of Congress, not the executive. The belief that the president has ultimate immigration power can lead to terrible results — like Trump’s travel ban against six majority-Muslim countries, also powered by the mistaken idea that immigration policy should be set by executive order.

    The Framers of the Constitution thought about immigration, and wanted Congress in charge. Article I, Section 8, which enumerates Congress’s authorities, confers the power “to establish a uniform rule of naturalization.” –Noah Feldman

    Comment: Feldman is absolutely right. Trump’s threat to act if Congress does not is as lawless as Obama’s DACA action, which Obama himself had said would be unconstitutional before he did it anyway.

    It is depressing to see people on all sides of the political spectrum so determined to get policy outcomes they desire that they ignore well-established constitutional safeguards.

    Those safeguards are there for good reasons.

    Media bias: National survey of senior cities shows a stunning 99.2% “believe the media wants President Trump to fail.” (Washington Examiner)

    Comment: The media is reaping what it has sown–and sown for decades.

    The only difference today is that, thanks to the WWW, there are sites to call them out on it.

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