Abuse of Presidential Power? Posner

The Bush Administration, especially in the person of Vice President Cheney, had an expansive view of presidential authority. It was articulated as an interpretation of the Constitution, in particular Article II, which is about the presidency. Truman similarly took an expansive view of presidential authority when he seized the steel industry during the Korean War, but the seizure was overturned by the Supreme Court. (The Bush Administration had a mixed record in the Supreme Court in defending its expansive view of presidential authority, which centered on antiterrorist policy.) Clinton used administrative regulation to try to get around the Republican Congress with which he had to deal after the 1994 election. Other Presidents, notably Lincoln, were prepared in emergency circumstances to violate the Constitution, as when Lincoln suspended habeas corpus at the outset of the Civil War; it is reasonably clear that the Constitution authorizes only Congress to suspend habeas corpus.

 

There is a third type of questionable exercise of presidential power, which consists of publicly demanding that a private firm or industry or other entity conform to the President’s desire, without pretending that the President has the legal authority to require such conformity. (This overlaps with but is distinct from the concept of the presidential “bully pulpit”—the President’s power to appeal directly to the people for support of his policies.) In April 1962, for example, President Kennedy publicly denounced U.S. Steel and the other major steel companies for announcing a stiff price increase to offset the cost of a collective bargaining agreement that it had signed with the United Steelworkers union. He backed up his denunciation by threatening an antitrust investigation and made the threat credible, or at least frightening, by having his brother (the Attorney General) dispatch FBI agents to “interview” the top steel executives. The Administration had encouraged the collective bargaining agreement and was incensed at U.S. Steel’s attempt to offload the cost of it on consumers. A price increase is a normal response to higher labor costs, but the President considered it a slap in the face—his face. His public denunciation of the steel industry worked; the industry backed down and the antitrust investigation was called off.

 

President Obama has used this device of extra-legal presidential intimidation more frequently, probably, than any President. In the spring of last year he told General Motors to fire its chief executive officer, Rick Waggoner. He had no authority to do that, and didn’t pretend that he did. Waggoner went. Last month the President ordered British Petroleum to put billions of dollars into an escrow account for payment of claims for losses caused by the BP oil leak in the Gulf of Mexico. He did not pretend to have any legal authority to order this, but BP quickly complied—as it did with the President’s insistence that it cut its dividend in order to be sure of having enough money to pay all the claims that might be made against it and the fines that might be imposed on it. And the President’s criticisms of Wall Street bonuses may have been decisive in the decision of Goldman Sachs to scale down the bonuses it was intending to award for the firm’s highly profitable 2009.

 

Should a President use the prestige (one might even call it the “moral authority”) of the office, and his ability to command public attention, to obtain compliance with demands made by him on the business community that are not backed by law? I think not, apart from any distaste one may have for bullying. It makes business subject to two regulatory regimes. One is a legal regime, created by Congress and by the regulatory agencies to which Congress delegates a portion of its own constitutional regulatory power. The other is a kind of “people’s democracy” regime, in which government stirs up public anger to force businesses to comply with extra-legal government demands. This second regulatory regime operates without rules, and so subjects business to potentially debilitating uncertainty in the sense of a risk that cannot be quantified. We know from Keynes and other students of uncertainty that a common and often the sensible response to uncertainty is to freeze, in the hope that the uncertainty will dissipate over time, or to take active steps to reduce the uncertainty. Both are options for business faced with the threat of presidential wrath. A business can hire less, invest less, and build up its cash balances as a hedge against adversity. It can also redouble its lobbying and other influence activities in an effort to neutralize or deflect threats of extra-legal regulation. Neither is a healthy response; the first is downright pernicious, especially in a depression or recession, or the early stages of economic recovery. Both are responses that the threat of presidential bullying encourages.

 

Many of the President’s legislative initiatives, in particular the health reform law, the just-enacted financial regulatory reform law, and the credit card law of last year, have increased the uncertainty of the economic environment for business. These laws really haven’t settled anything; it will take years of regulatory implementation before their full impact can be determined. But in addition business has to deal with the unpredictable exercise by the President of an uncanalized extra-legal authority to bend business to his wishes.

 

It is no wonder that the economic recovery appears to be progressing so slowly.

Comments

[Tom Rekdal]

There have been so many examples of "extra-legal" presidential "bullying" that one finds it difficult to generalize. Not all seem to me to be manifestly unreasonable. Given the scale of legal claims against BP, for example, it hardly seems excessive to demand that they create an escrow account of $20 billion and cut their dividend as a sign of good faith. The ultimate cost to them will almost certainly be higher.

Other examples of Obama "bullying" are little more than efforts to channel public rage, which are not entirely lacking in value.

The larger question that both Posner and Becker raise is whether such interventions do not create unacceptable levels of business uncertainty, impairing their investment decsisions. This seems unlikely to me. Few people make important decisions based solely on what legal rules permit them to do, and this is even less likely the higher one rises in the political and economic hierarchy.

[Hyena]

The idea that the economy is recovering slowly because business is concerned about the President seems profoundly silly. Between Eurozone mayhem, a Chinese slowdown, weak demand at home and continuing declines in home values due to poor consumer credit quality, I think there are plent of perfectly normal explanations about.

In fact, if you wanted to make a case that arbitrary presidential power does anything to the economy, you would be better off arguing that it improves it. After all, business leaders love how China operates re business and that is arbitrary power to an extent Americans have not experienced in the post-war period.

[PR]

wtf?!?

My four yr old son can create a better argument to blame obama for the protracted recession that we continue to experience.

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[Vivian Darkbloom]

This is an important and timely post. I'm very dismayed by the tendency of the current administration to exercise unofficial executive power to "bully" others into conforming to its desires. This is inappropriate use of the executive branch, it is undemocratic and it is extra-legal. Fundamentally, it demonstrates the arrogance of power. This post lists a few of the instances in which executive power has been inappropriately used, but the list is by no means complete. The authors could have mentioned the administration running roughshod over bankruptcy rules in the auto industry takeover. It could also have mentioned the heavy handed treatment of Goldman Sachs that recently forced them to pay $550 million fine--they had no reasonable legal recourse. Winning a drawn out legal challenge would have been more expensive than settling. It could have mentioned the fact that the administration claimed the sanction for failing to purchase healthcare insurance is a "fine" during the debate over the health care bill (itself inappropriate coercion not only in substance but the manner used to enact that bill). They now argue that is is a "tax" when the matter is before the courts. Of course, there is the shameful shakedown of BP that circumvented the established legal process. The list goes on.

Presidents and their administrations should use their moral authority to provide leadership and encourage appropriate behavior and on some occasions the "bully pulpit" is an appropriate characterization. But, where to draw the line? I suggest the line should be drawn when executive strong-arm tactics are used to circumvent the power given to other branches of government or reserved to the states or the people. In particular, the executive branch should not be used to circumvent the legal process, particularly when it is done to further partisan agendas. Sadly, this is the common thread running through all the above examples.

I wish the president would use his moral authority to encourage kids to study harder, to eat more healthy food and to avoid reckless personal behavior rather than using it to compel citizens (corporate or not) to forgo their legal rights, especially the right of legal recourse.

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In reality, we often complain about unfairness of God and are negligent about the most precious gift He gives us.

[Kevin McGilly]

More twaddle from Posner. Presidents, presidential advisers, cabinet secretaries, Senators, Congressman - all of them jawbone businesses to do things, and businesses jawbone them. There is *nothing* unusual or improper in the administration and BP working together to devise a practical framework for resolving claims against BP. This was in BP's interest.

Calling this bullying is just more incendiary hyperbole from a man who should be "judicious" in his tone.

[MAV]

GM fired Waggoner because the government was ultimately going to effectively own it - the government merely exercised its rights as a stakeholder to demand a change in management like any other large stakeholder would.

We can construct a similar story with respect to the government and BP, whose liabilities to the government grow with each gallon of oil spewed.

Is it really bullying to demand a change in corporate behavior if you're a de facto creditor?

[Brian Davis, Austin, TX]

So impeach him, already, if anybody thinks they have the votes. Obama's NEGOTIATED escrow deal with BP, together with enlisting Feinberg to run a people-friendly claims process, was the one time I've been a little bit proud of Obama as President. A Congressman from my State, "Shakedown" (or Barnett Shale gas, take your pick) Joe Barton, came across like a frat brat. Frankly, I don't see what Obama did on the fund being at all one-off from something Ronald Reagan and Ed Meese would have cooked up, if the Macondo disaster had happened on their watch. Leaders always have their fans and their detractors, but leaders get results.

I agree with the comment that Wagoner was already a goner; it's a shame he couldn't take a hint. I do think, however, that the Federal Judicial Branch blew it in the Chrysler and GM bankruptcies by letting the UAW muscle in ahead of the secured bondholders, in violation of the "absolute priority" rule. Nobody in our system has a claim to virtue or correctness on every occasion.

[NEH]

There are times when the President and his advisors must utilize a broad interpretation of the Powers of the Presidency under Article II to deal with the contingencies and problems that are inherent in any Socio/Politico/Economic system. To not due so, could well result in the death and destruction of the Nation. As for Lincoln's temporary suspension of Habeas Corpus, the Copperheads and Vallandigham would have surely ended the War and split the Nation. Between North/South, Slave/Free, Agricultural/Industrial. Something that clearly goes against the "Oath of Office" that Lincoln took on assuming office (sometimes Presidents get caught in Catch 22 situations or in the Horns of a Dilemma). I am surprised that Washington and his use of the Army to suppress treason and to collect taxes during the "Whiskey Rebellion" wasn't brought up as an example of the abuse of Presidential Power. Such are the political realities that the President must act upon.

As for Obama, as President, has he opted to Nationalize the Economy and create an Economic Order similiar to what the Chinese have created? Using the Power of the Presidency to pressure various groups to toe the line on Policy is nothing new. Although, it may very well create resistance to Policy (via vanity, arrogance, will, misplaced power, etc.) and the actions of "Stonewalling", "Dragging of Feet", etc. and outright resistance to Policies.

Is there any doubt to the reasons for the slow recovery? In the latest news, Singapore's economy is racing ahead at a 15% recovery rate. Meanwhile the average American worker is being driven into penury and economic collapse. The question now becomes when are we going to begin acting as Americans working in the interest of all Americans instead of little narrow interest groups who are out trying to screw each other over and feather their own little nests?

[Gordon Longhouse]

I agree with those who denounce this post for its superficial analysis of the reason the US risks a double dip recession.

It is not a question of Obama having "stirred up" public anger: clearly he is responding to public anger. To the extent that anyone can be said to have stirred things up the you should look to the usual suspects in the tabloid TV business who insist that the President "do something" and "be strong" in circumstances in which their is little for the President (and government) to do and strength is not called for.

Likewise much of the the ill considered parts of the financial regulation are equally a response partially on the part of Congress to "do something" and "stand up to Wall Street". Rather than denouncing this or that political actor or action, Posner should be criticizing the abysmal quality of public debate today.

[Jake]

Judge Posner hits the nail on the head. Lacking any clue as to responsible leadership and public policy, Obama resorts instead to attacking the private sector -- and all others who disagree with the administration's irrational and aimless directives.

Listen to unfiltered statements from the Obama administration -- for example, live broadcasts on C-SPAN, as opposed to edited versions of the truth offered by the broadcast networks, MSNBC, CNBC, and even Fox. Any person of reasonable education, or even reasonable curiosity, must recognize that the public statements of the Obama administration amount to a diktat that 2+2=5. Taking the optimistic view, Orwell was right. The darker view is that the highest public officials are dedicated to the proposition that Big Brother is right.

We are at a very sad point in the history of our Republic.

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[blake]

Really? You don't think that a firm requiring massive government intervention to survive is in a different situation than a normal firm? It's kind of like living with your parents after you are 18, sure you have the right to do what you want, but not in their house. His demands seem limp wristed to me when compared with the normal market response of bankruptcy. Ya, Obama lacks the authority to tell them what to do, but he very much has the authority to enforce the law, which would be far more onerous to these actors than being bullied a bit.

[NEH]

Jake, Oh Really? the "Administrtion's irrational and aimless Policy Directives"? What of the irrational, aimless, if not immoral actions by the Financial Industry's actions, not too mention, Business and Industry's irrational and aimless actions of "Outsourcing & Offshoring" which has created and fueled this Crisis and hamstrung the Nation's ability to jump start its Economy by gearing up its productive capacity?

Any Recovery in the past has always been driven by the reanimation of its Productive Capacity and getting people back to work. Remember, individual consumption accounts for seventy percent of the Economy. And no one purchases when they are out of work or in fear of losing their job.

[S Bayer]

Of the three laws you cite as "the President's legislative initiatives", only the financial regulatory reform law originated in the executive branch, where Congress did use Secretary Geithner's 600-page draft as the basis for its own 2300-page opus. The health care and credit card laws were wholly the work of Congress, with the President stepping in on occasion to resolve intra-party disputes.

In assessing the powers of the Presidency, be sure to note that Mr. Obama's well-known opposition to the individual mandate had no influence whatsoever with Congressional health care reformers. You might also reflect on the fate of the Administration's very first legislative initiative: a bill that Mr. Geithner drafted in March of 2009 that would have permitted the government to put AIG into bankruptcy while guaranteeing its life insurance contracts. Speaker Pelosi promised (and delivered) expedited action. In the Senate, however, Chairman Dodd simply ignored it.

The press may, in its cartoon version of events, confuse the legislative and executive branches. Rest assured, United States Senators do not.

[edgar "JJ"MOLINA]

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Bruner's view of a learner actively constructing meaning from the earliest ages holds significant implications for curriculum design, classroom activities, teacher and student responsibilities, and the role of the school library.

Spiral Curriculum
To address readiness, structure, sequence, and motives, Bruner introduced the spiral curriculum, “in which ideas are first presented in a form and language … which can be gasped by the child, ideas that can be revisted later with greater precision and power until, finally, the student has achieved the reward of mastery” (Bruner, “On Knowing” 107). In this design, students return to topics throughout their academic careers, continually building upon what they have already learned as they develop and mature.

spiral.gif

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Discovery Learningpullquote-discovery.gif
Bruner advocated a “discovery learning” approach to education, “Permitting the student to put things together for himself, to be his own discoverer” (“On Knowing” 82). “Discovery… is in its essence a matter of rearranging or transforming evidence in such a way that one is enabled to go beyond the evidence … to new insights” (Bruner, “On Knowing” 82).

Several attributes characterize discovery learning (Bicknell-Holmes and Hoffman 314-15):

* The creation, integration and generalization of knowledge through exploration and problem solving.
* Interest-based activities in which the learner exercises some control over the sequence and frequency
* Activities that strive to integrate new knowledge with the learner's existing knowledge base
* Emphasis on learning rather than content
* Recognition of the importance of "failure" as a tool for examination, reflection, and refocused efforts
* Involvement of students in higher levels of cognitive processing, such as synthesis, evaluation, extrapolation, and analysis
* Integration of feedback opportunities into instruction or activities

Discovery occurs through a continuous process of representing things. First students need an opportunity to manipulate. When learning about measurement, for example, students can begin by pacing off a yard or measuring with a ruler. Then by reflecting on and comparing their actions, students can discover and devise formulas for measurement to represent and simplify their actions. In fact, Bruner claimed that discovery is a byproduct of making things simpler (“On Knowing” 100).

Methods for offering discovery learning can include (Bicknell Holmes and Hoffman 315-319):

* Case-based learning: Students learn vicariously through stories or vignettes pullquote-power.gif
* Incidental learning: Students learn through fun, game-like activities, such as a game show or a crossword puzzle
* Exploring: Students learn through an organized question-and-answer session with the instructor and other students
* Reflection: By modeling the instructor or online system, students learn how to ask better questions
* Simulation: Students learn by practicing skills or witnessing their application in a realistic but artificial environment

Discovery learning offers multiple benefits (Bruner, "On Knowing" 83-95):

* Increased intellectual potency: Mastering a variety of problem-solving techniques and using them to transform information
* Intrinsic rewards: Feelings of increased awareness and understanding that sustain students and provide gratification during independent problem-solving.
* Learning the heuristics of discovering: Practicing problem-solving and identifying the underlying skills that can be applied to new situations.
* Conserving memory: Organizing knowledge around one’s own interests and cognitive structures, thereby increasing the likelihood that knowledge can be retrieved for later use

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teacher-video.gifTeacher’s Role
Bruner cautioned against a solely lecture-oriented instructional approach: “Teaching by telling [is] out of the context of action” (qtd. in Presno). Instead, teachers should use a variety of instructional|approaches consistent with the cognitive development of their students. For example, a teacher wanting transcript.gifto help children learn about dinosaurs could ask students to construct models of dinosaurs (enactive); they might watch a film about or involving (iconic); or they could consult reference texts and then discuss their findings (symbolic) (Hollyman).

In a Bruner classroom, the teacher is transformed from the “sage on the stage” to the “guide by the side.” Specific teacher behaviors include:pullquote-goodteacher.gif

* Identifying the key elements of an academic discipline
* Designing activities and tools matched to students’ cognitive abilities
* Translating information into the learner’s mode of representation
* Constructing interesting, challenging exercises that incite curiosity and create a motivation to learn
* Activating problem solving by modeling trial and error, curiosity, and enthusiasm
* Facilitating the student’s reflection and recoding processes by providing aids and dialogues
* Helping the students see relationships and patterns
* Leading students to develop concepts and make sense of operations
* Coaching students to discover principles for themselves
* Interacting one-on-one with students
* Providing timely feedback and reinforcement

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Student’s Role
According to Bruner, “The student is not a bench-bound listener, but is taking a part in the formulation and at times may play the principal student-video.gifrole in it” (“On Knowing” 83). Student behaviors in a discovery-learning classroom include:

* Participating in the knowledge-getting process
* Testing hypotheses
* Interacting with the environment
* Solving problems
* Developing generalizations transcript.gif
* Engaging in dialogue and collaborating with the teacher and other students
* Creating products such as new ideas, solutions, processes, presentations, blogs, or research papers.

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The School Library
Attention to Bruner's three modes of learning can be seen in many school library programs. In elementary schools, for example, teacher librarians use such enactive strategies as:

* Readers theater
* Felt-board stories pullquote-librarian.gif
* Having students insert shelf markers after they take a book

Iconic approaches at this level include:

* Computer searching with visual catalogs (e.g., KidsClick!) that use pictures to represent search categories
* Using signs and pictures to navigate in the library
* Designing graphic organizers to guide information gathering

In middle school and high school, as students begin to employ the symbolic mode, librarians:

* Introduce students to more complex resources that depend on reading ability
* Help students construct search statements using Boolean operators based on mathematic principles
* Teach students how to evaluate and compare research tools to select the best option for a given problem

Our challenge, though, is to offer instruction that incorporates all three learning modes even after students have begun to use symbolic thinking. We must balance lecture (symbolic mode) with demonstrations (iconic mode) and opportunities for students to conduct experiments by handling online and print materials (enactive mode).

Discovery learning demands such balance. And library instruction, during which students are generally engaged in a search about a new or unfamiliar topic, is naturally suited to it. Discovery learning in the library could engage students in:

* Developing their own classification schemes
* Analyzing unsuccessful searches and proposing new approaches
* Performing the same search on multiple search engines, identifying the differences in result sets, and making inferences about how the search engine works
* Journaling the research process to identify obstacles and propose ideas for overcoming them
* Comparing web pages to determine the aspects that indicate the level of quality and reliability
* Debating the merits of various search tools (e.g., Wikipedia vs. Grolier Online).

[Aaron Thacker]

You characterize President Obama's interactions with BP and Goldman as instances of the government stirring up public anger to drive its anti-business agenda. However, in both of these instances, it seems to me that there was plenty of public anger long before Mr. Obama spoke and that his demands actually functioned to blunt that anger by making it seem that some remedy was at hand. If I were BP or Goldman, I think I might well prefer this to whatever legislation could result if this public anger were left unchecked.

In any event, I see little in these actions that would create broad regulatory uncertainty for any significant percentage of the economy -- unless you have contributed to a devastating financial or environmental crisis, I don't think you can expect a stern call from President Obama.

Finally, it is interesting to juxtapose this call for limiting the President's power to speak to corporations (which, absent a threat of government action, is all that we're talking about here) with the judiciary's recent discovery of a broad right for corporations to speak to government.

[Anonymous]

I don't understand where these denunciations of Presidential Power abuses were when the previous administration was violating citizens fourth amendment rights, preventing detainees from petitioning for writs of habeus corpus, and torturing prisoners in secret prisons. But thanks for defending liberty, however late and weakly you come to it.

[Charles Pacer]

Prof. Posner's distaste for bullying and intimidation is understandable, but may reflect the requirements of practice rather than actions taken in violation of law.

If there was an express misuse or implied abuse of power by the Administration acting under color of law, then the seemingly mundane aspects, narrowly but thoroughly scrutinized, could be important.

E.g., did the administration and/or the intimidated parties communicate by wire, travel across state lines to meet ...?

[Eric Olsen of Why Every President Sucked]

preach! a great warning to watch against presidential usurping.

[David Canham]

Did you really say that a "peoples democracy" is a BAD thing??

[Web Design Norwich]

Another great article, really interesting read. Thanks for sharing!

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[Brian]

Good post. I am astonished, however, that you failed to mention the President's recent meeting with CEOs of various insurance companies that'll be affected by the health-care bill, in which he warned them that they'd have to "justify unreasonable premium increases." That sounds an awful lot like President Kennedy's intimidation of the steel companies in 1962, to me.