The Difference Between Being Smart And Being Dumb

EXTRAORDINARY, SOPHISTICATED AND NUANCED INTELLIGENCE

DUMB YOKEL

Really, it's a great thing about the internet that you can quickly go back and find a definitive record of what people have said in the past.  And using this facility, we can get a handle on the significant difference between the really, really smart people and the rest of us ordinary nobodies, hicks and yokels.

Take Barack Obama.  Obviously, he's really, really smart.  Indeed, he's so smart that he's bored by having to deal with all the lesser lights around him.  The famous recognition of his greatness is from his right-hand-woman and close aide Valerie Jarrett, quoted in the David Remnick biography:

“I think Barack knew that he had God-given talents that were extraordinary. He knows exactly how smart he is. … He knows how perceptive he is. He knows what a good reader of people he is. And he knows that he has the ability — the extraordinary, uncanny ability — to take a thousand different perspectives, digest them and make sense out of them, and I think that he has never really been challenged intellectually. … So what I sensed in him was not just a restless spirit but somebody with such extraordinary talents that had to be really taxed in order for him to be happy. … He’s been bored to death his whole life. He’s just too talented to do what ordinary people do.”

You may remember 2012 as the year with the then-highest gasoline prices on record.  According to this report from the AAA, gas prices averaged $3.60 nationwide for the full year, and earlier in the year were closer to $4.  And Barack Obama was running for re-election.  On February 23 of that year, he gave a speech at the University of Miami that covered the subject of high energy prices.  You'll enjoy some of these excerpts:

You know there are no quick fixes to this problem [of high gas prices].  You know we can’t just drill our way to lower gas prices. . . .  So what does this mean for us?  It means that anybody who tells you that we can drill our way out of this problem doesn’t know what they’re talking about, or just isn’t telling you the truth.

And then there are those really, really stupid Republicans:

You can bet that since it’s an election year, [the Republicans are] already dusting off their 3-point plan for $2 gas.  And I’ll save you the suspense.  Step one is to drill and step two is to drill. And then step three is to keep drilling.  (Laughter.)  We heard the same line in 2007 when I was running for President.  We hear the same thing every year.  We’ve heard the same thing for 30 years.  Well, the American people aren’t stupid.  They know that’s not a plan. . . .

Because Obama is not stupid at all, and indeed is really, really smart, he was completely confident that the right strategy to lower energy prices was to move away from hydrocarbons and replace them with things like solar and wind:

The potential of a sustained, all-of-the-above energy strategy is all around us.  Here in Miami, 2008, Miami became the first major American city to power its city hall entirely with solar and renewable energy.  Right here in Miami.  (Applause.) . . . . On a typical day, the wind turbine at the Miami-Dade Museum can meet about 10 percent of the energy needs in a South Florida home, and the largest wind producer in the country is over at Juno Beach.

According to the AAA here, the nationwide average price of regular gasoline today is $1.715 -- actually well below the $2 goal that Obama was talking about in February 2012.  And how did we get there?  One and only one way:  drilling.  Anybody who thinks that solar or wind or some other kind of renewable had anything to do with it is completely delusional.

Then there was Sarah Palin.  The famous quote from her is "Drill, baby, drill," actually uttered at multiple places and on multiple occasions.  Here's an example from 2010.  Dumb yokel!

Remember that socialism means putting all the important economic decisions in the hands of the really, really smart people.

Is It Possible For A Rational Person To Support Hillary?

I know you are thinking that it is not possible, but remember that it is becoming increasingly likely that Hillary's general election opponent will be Donald Trump.  David Harsanyi at The Federalist has put together what might be called the thinking person's reasons to support Hillary over Trump in the general election.  The title is "Why President Trump Would Be A Bigger Disaster Than Hillary."  OK, it's a rather low bar.  See what you think.

The main idea is that Hillary is so grating and annoying that she will make everybody hate her and thereby enhance the prospects for conservative principles to advance over a longer term.

Hillary, as you may have noticed, does not have the charisma of Barack Obama. Not only will she be divisive and ethically compromised, but Hillary will also galvanize the Right. Her presidency — even more now that she’s dropped the pretense of centrism — would reinforce the traditional ideological distinctions we’ve debated for years. Republicans would almost certainly unite against her agenda, which will be little more than codifying Obama’s legacy — a collection of policies that half the country still hates.  She won’t be able to pass anything substantive.      

But couldn't Trump accomplish at least something useful?  Harsanyi doubts it; and, frankly, so do I.  Excerpt:

[In a Trump presidency,] the temptation in Congress to follow Trumpism — a philosophy based on the vagaries of one man — will be strong. Trump’s inclination is never to free Americans from the state (“we’re gonna take care of everybody!”) but rather to do a better job administering the state through great deals and assertive leadership. Or, everything the Founders didn’t want the presidency to be.     

Unfortunately the promise of Trump is not that he will rein in the overreaching state for the benefit of everyone, but rather that he will turn the tables so that now the state will be used by us against them.

There is little question Trump would abuse power. In some way, it’s the point of his candidacy. The thing that gets his admirers excited. “Finally, someone who will use the IRS for us. Someone who will circumvent Congress for us. Obama gets everything; why shouldn’t we?”

It's not a prescription for long-term success in a closely divided country.  Sooner or later, the other side will be back in control, and will take revenge.

And finally, there's the question of whether Trumpism will actually be to the benefit of what appears to be his core constituency, namely the angry and largely blue-collar voter.

There’s a difference between caring about the plight of working stiffs and embracing isolationism, high tariffs, and other policies that would destroy their long-term prospects. Is everyone supposed to surrender to mercantilism because it makes 30 percent of angry voters feel better?

None of these are bad points.  But Harsanyi is definitely being a bit of a contrarian just for the purpose of generating some controversy and discussion.  (OK, I might do a little of that from time to time myself.)  Just a few counter-points to consider:

• The one area of policy where Trump has actually proposed a plan in some detail is the income tax, where his plan (if adopted -- a big if) would simplify things and shrink collections significantly.  He also has no particular loyalties to the bureaucracy, and rails against the debt.  Isn't there at least some chance that he would try to push at least a little to shrink the government or, perhaps, grow it more slowly?
• Trump is on to the fact that climate alarmism is a scam.
• How will a President Trump react to the poverty scam, that is, the fact that governments spend about $1 trillion per year (federal share, about $700 billion) to fight poverty without ever reducing poverty in the slightest?  I would have at least some hope that he would direct some attention in this direction.  And clearly Hillary would not -- her loyalties are to the bureaucrats and interest groups that are on the receiving end of all that government largesse.  Of course, so far in his campaign Trump has not expressed any interest in these issues.  GW Bush never turned any attention to these issues either, although one may say that he was pre-occupied with foreign policy.
• Any Hillary nomination to the Supreme Court would be a disaster.  Would Republicans be willing to leave Supreme Court vacancies open for years?  With Trump, there's at least a little hope; although I'm not sure at this point that he even understands what the issues are with Supreme Court appointments.

Don't Worry, Raising The Minimum Wage Just Passes Out Free Money With No Downside

The minimum wage is one of those public policy questions where the two contrasting ways of looking at the world stand in all their irreconcilable glory.  On one side, progressives have gotten up a huge head of steam lately for their proposals to more-than-double the current federal minimum wage to $15.  Bernie Sanders is a leading proponent.  See also San Francisco, Seattle, and of course my own home town of New York (the "Fight for 15!").  (Hillary Clinton advocated a minimum wage of $12 at one of the debates back in November, although it's not clear why if $12 is good $15 wouldn't be better.  Is there some magic crystal ball that tells you when you have crossed an invisible line and an increase suddenly stops being beneficial and starts harming the intended beneficiaries?  Hey, how about $100?)  Whether $12 or $15, the idea is that it's basically free money, much of it going to the poor or less-well-off, with no downside.  Over on the other side of the ideological spectrum, conservative pundits and think tanks see a huge downside for young and low-skill workers getting priced out of their first toe-hold in the job market.  The progressives accuse these writers of merely providing cover for rich people and business interests trying to hold down their wage costs on the backs of the poor.

The end result is that the two sides come up with exactly opposite policy prescriptions and promote their own vision as the best way to help poor and low income people.  But both can't be right.  If your goal is that poor and low-income people should have the best possible shot at success in life, then which is it -- raise the minimum wage, or not (or lower it, or eliminate it)?

In January I went to a program on the minimum wage put on by the Manhattan Institute.  The main presenter was a guy named Douglas Holtz-Eakin, an economist who is current head of something called American Action Forum and has a long list of former positions that include director of the CBO and advisor to the McCain campaign.  Here is a link to some of Holtz-Eakin's research on the effects of the minimum wage.  Holtz-Eakin pointed out that increases in the minimum wage lead to wage increases for some but unemployment for others.  However, the large majority of minimum wage workers are in non-poor households (where they are second and third earners), so much of the "benefit" from a minimum wage increase goes to the non-poor, while much of the harm goes to those at the very bottom, particularly those trying to get their first jobs.  You might agree or disagree with Mr. Holtz-Eakin, but it's hard to see him as a shill for business interests trying to save wage costs, as opposed to a serious guy trying to see what would actually work best for the poor.

Is having the minimum wage price you out of the labor market actually a serious problem for anybody?  An editorial in today's New York Times has some data that ought to be rather troubling for the advocates of big minimum wage increases.  Of course, the New York Times itself is one of those advocates; but somehow they don't recognize or mention the significance of the data they cite to that debate.  (Why am I not surprised?)

The title of the Times editorial is "The Crisis of Minority Unemployment."  The principal data on which the editorial relies comes from a recent (January 2016) report from something called the Great Cities Institute of the University of Illinois at Chicago.  The title of the report is "Lost: The Crisis Of Jobless and Out Of School Teens and Young Adults In Chicago, Illinois, and the U.S."   (pdf)  The Times summarizes the most troubling finding of the report as follows:

[The Great Cities Institute report] found that in Los Angeles and New York City about 30 percent of 20- to 24-year-old black men were out of work and out of school in 2014. The situation is even more extreme in Chicago, where nearly half of black men in this age group were neither working nor in school; the rate was 20 percent for Hispanic men and 10 percent for white men in the same age group.   

The data are not broken out for other cities.  But one would have to think that if nearly half of black male 20 to 24-year-olds in Chicago are neither in school nor working, that the numbers would have to be even worse for the even-more-serious basket-case cities like Detroit, Baltimore and St. Louis.

Now, what is the explanation for these huge figures for idleness of young black men, other than that they have been priced out of the labor market by the minimum wage?  There may be some explanations that can explain parts of the phenomenon, but, I would suggest, not the massive numbers revealed in this report.  (Hypotheses could include: (1) some could be engaged in off-the-books and/or illegal money-making activities not reflected in government data; (2) some could be receiving sufficient government benefits that they don't see a need to work even though jobs are available at the current minimum wage and even above, or accepting work could cause their benefits to decrease.)

In any event, we know that the New York Times believes that the correct explanation is that these young people have been priced out of the labor market.  How do we know that?  Because the Times uses this editorial to advocate for a government program to subsidize employers to hire the young people in question:

[T]here are strategies, which Congress has rejected, that could help rescue a generation of young men from failure and oblivion. Among these is the employment subsidy program that was passed as part of the Recovery Act in 2009. It created more than 260,000 temporary jobs for young people and adults. Governors and employers were ecstatic. But Republicans in Congress denounced the program as useless a year later and blocked proposals that would have extended it.  

Oh, those evil Republicans!  But I thought, New York Times, that employers were indifferent to the cost of wages for low-level employees, at least up to the level of $15 per hour.  What am I missing?  It seems that that principle applies only in the absence of an opportunity to create a new government program and employ a bunch more bureaucrats to administer it.

So should we all get behind some kind of government subsidy program so that young black men can get their first jobs at a decent wage even as employers pay little?  Can you see any flaws in this idea?  Let me suggest a couple:  (1) The subsidy becomes an effective additional marginal tax on any wage increases the young men may earn, effectively dragging down their ability to see any return for themselves if they work hard and succeed.  (2) Some group of government-favored and government-connected employers get big checks to have some numbers of young black men working on their premises.  Without doubt they will game it to their benefit.  Certainly, it will be to their advantage to keep these young men working, and at low wages, in order to keep the government checks coming.

There are reasons why $1 trillion of annual government anti-poverty spending never reduces poverty by even a single person.  The purpose of every government program is to continue and grow the program; and that requires that the supposed beneficiaries remain forever in their dependent status.  This program would be no different because it can't be any different.

Sorry, but there is no better option than letting the market set a price for labor at which the market clears.  That may mean that young black men get their first toe-hold at a very low level, but it is by far the best way for them to have the maximum opportunity to get started early, to move up quickly, and to avoid dependency.

The Latest In The Endless Series Of Bank Shakedowns

For third world countries, we often use the word "kleptocracies" -- countries where the entrenched leaders get the funds to enrich themselves and pay off their supporters by regularly shaking down and stealing from anyone who gets a business going.  In such countries, the leaders and their supporters can get rich, often very rich.  For the ordinary people, this is a prescription for abject poverty.  Extreme examples would be the Congo and Haiti.  We would never allow anything like that here -- would we???

A couple of years ago I got interested in the string of vast settlements that federal prosecutors were scoring against the big banks -- Citi, JPM Chase, Bank of America, and Wells Fargo, among others.  A few years after the financial crisis of 2008 - 09, it seemed like vast new settlements against these entities were coming down once every few weeks.  I admit I may be more skeptical than most on many things, but still I would generally give the benefit of the doubt to the federal prosecutors on any given matter, at least until I go and look into it.  So I started going around to web sites and reading some of the settlements.  That led to the origin of my "Phony Prosecutions" tag.  This post  from July 2013 lists a couple of dozen settlements between the government and the big banks ranging from $50 million to $25 billion between just 2011 and 2013.

It was reading the settlement documents that really opened my eyes.  Not that the banks never did anything that would make them subject to fair criticism.  But it was clear that they were in fact repeatedly paying billions upon billions of dollars on the very thinnest of charges.  In the early 2000s then-New York AG Eliot Spitzer had shaken down the likes of Citibank and Merrill Lynch for a few hundred mil each on completely phony charges (having investment banking and market research in the same institution!), and had taught the world of prosecutors that these banks cannot risk a trial and will always pay.  And Spitzer became governor, largely on his totally undeserved reputation as "the sheriff of Wall Street" -- only to fall immediately in a prostitution scandal (the "Luv Gov").  (By the way, he's caught in a new prostitution scandal in just the past few days.  Who would have suspected that it could happen to such a nice guy?)

Anyway, all this history comes to mind with the big settlement with Morgan Stanley announced last week by the Federal Justice Department and the states of New York and Illinois.  Here is the Justice Department announcement; and here is the one from the state of New York.  Morgan Stanley is paying some $2.6 billion to the feds, and another $550 million to New York (plus a few shekels to Illinois, but at this point who's counting?).

So, is there anything to this, or is it just a shakedown?  Let's look at the documents.  Supposedly the wrongdoing of MS, and the reason for the settlement, is misrepresentations made by MS in selling mortgage-backed securities back in the run-up to the financial crisis:

As acknowledged by Morgan Stanley in a detailed statement of facts that is a part of this agreement (and is quoted below), the company made representations to prospective investors about the characteristics of the subprime mortgage loans underlying its RMBS – representations with which it did not comply.      

OK, what exactly?  Here's the first one:

In particular, Morgan Stanley told investors that it did not securitize underwater loans (loans that exceeded the value of the property).  However, . . .  Morgan Stanley ignored information – including broker’s price opinions (BPOs), which are estimates of a property’s value from an independent real estate broker – indicating that thousands of securitized loans were underwater, with combined-loan-to-value ratios over 100 percent.  From January 2006 through mid-2007, Morgan Stanley acknowledged that “Morgan Stanley securitized nearly 9,000 loans with BPO values resulting in [combined loan to value] ratios over 100 percent.”      

Got that?  Now check out this article from Peter Wallison (of AEI) summarizing the history of sponsorship of subprime and specifically high loan-to-value lending by Fannie and Freddie in the full decade running up to the financial crisis.  After reviewing pressure on the GSEs in the 90s from the Clinton administration (particularly HUD Secretary Andrew Cuomo -- fancy that, he's the current NYS gov) he then gets to the changes that occurred in underwriting criteria:

As early as 1995, the GSEs were buying mortgages with 3 percent down payments, and by 2000 they were accepting loans with no down payments. They were also compromising other underwriting standards, such as borrower credit scores, to find the subprime and other nontraditional mortgages they needed.

Now really, in a world of 3% and even 0% downpayment mortgages aggressively promoted by the government, was there really anybody in the world who didn't realize that many of them were immediately "underwater" on day one (due to even a slightly aggressive appraisal or just a slight difference of opinion as to value), let alone that essentially all of them would be "underwater" as soon as the market turned south by even a couple of percent?  This is a "fraud" that justifies a $3.2 billion settlement?

Oh, wait a minute.  Let's check on who gets the money.  Supposedly the reason for the settlement is that the buyers of the mortgage-backed securities were defrauded.  So they're getting the money, right?  Wrong!  The Justice Department announcement describes the settlement amount as a "civil penalty" under the Financial Institutions Reform, Recovery and Enforcement Act.  The business about a wrong to investors is all a charade.  The government is pocketing the money.  But at least as to the federal piece, there's nothing that explicitly says they're giving the money to their political supporters.  And how about the state of New York?

The settlement includes $550 million – $400 million worth of consumer relief and $150 million in cash – that will be allocated to New York State.  The resolution requires Morgan Stanley to provide significant community-level relief to New Yorkers, including loan reductions to help residents avoid foreclosure, and funds to spur the construction of more affordable housing. Additional resources will be dedicated to helping communities transform their code enforcement systems, invest in land banks, and purchase distressed properties to keep them out of the hands of predatory investors.    

Yes, they are very clearly going to pass out some $400 million to their political supporters and cronies, as yet unnamed.  We have officially become a kleptocracy.

UPDATE, February 21:  Paul Sperry, late of the Hoover Institution (and author of a 2011 book "The Great American Bank Robbery" on the same subject as this post) , has an op-ed in today's New York Post titled "Bank CEO reveals how Obama administration shook him down."  Sperry interviews Michael Carpenter, recently-departed CEO of Ally Bank.  Ally is the former GMAC, and hence one of the largest players in the auto finance business.  Ally recently did a $100 million settlement with the CFPB, essentially conceding to racial discrimination in setting interest rates for auto loans.  No current CEO of a major bank would dare say a bad word about the government overlords, but having left his former employer, Mr. Carpenter speaks his mind.  He describes the CFPB investigation that led to the settlement as "abuse [of] power," "holding the bank's business hostage," "coerced," and "trumped up," among other similar adjectives.  Essentially, Ally was required to and did make all lending and credit decisions based on data from which race of the borrower was excluded, and didn't even have that information in its records; but the government purported to find discrimination by a process of having its "experts" infer race from things like last name and zip code.

Well, $100 million is chump change as these things go.  I'm sure that current management of Ally is relieved to have gotten off so easy, although Sperry suggests that CFPB's real game is to force level interest rates on the auto-lending industry, thus making borrowers with better credit subsidize borrowers with worse credit.   Meanwhile, refund checks are going out to the supposedly overcharged borrowers.  The implicit message: "We, the Obama administration and the Democrats, have caught the evil bankers ripping you off and are giving you your money back."  Nothing like stirring up a little racial resentment to keep your voters loyal.  Racial healing?  Since when was that an important value?

Now that Hillary Clinton has explicitly joined Bernie Sanders in running against "the banks" for alleged crimes that can't even be named or specified, I guess we can expect lots more of this going forward if one of them wins the White House.  For those thinking of supporting one of them, I would suggest that you can get an idea of the cost to your economy of having a government kleptocracy by taking a look at the success of some of the countries where they have that system.  If not Haiti and the Congo, how about a Venezuela, or an Argentina?  Once rich, now poor.

Some Thoughts On Justice Scalia

I met Antonin Scalia on several occasions, all of them Federalist Society events.  Sometimes he had spoken; sometimes he was just attending a cocktail party.  Always he was in good spirits, laughing, joking, and engaging in energetic conversation.  I have read many dozens of his opinions, and learned a lot from them.

It seems that many on the left are glad to see Justice Scalia dead.  Here is a collection of tweets from left-leaning journalists, including one from Tomas Rios calling him a "monster," and one from Silvia Killingsworth (Managing Editor of the New Yorker) celebrating that he is in hell.  

I'm reminded of the famous exchange involving Ben Franklin recorded by James McHenry at the close of the constitutional convention in 1787.  An unidentified woman asked Franklin, "What have we got -- a Republic or a Monarchy?" and Franklin responded, "A Republic, if you can keep it."  Somehow, we have kept it, or most of it, for two centuries.  But today, the Left thinks it has an idea far better than a Republic, namely rule by enlightened elites who have the power to impose complete fairness and justice on the world by their fiat.  Scalia more than anyone else stood in the way of that vision, for which he earned unrelenting hatred from many.

Living in Manhattan, I've had plenty of occasion over the years to hear highly educated people express their scorn for Justice Scalia.  Often, I would ask them to name particular opinions of his with which they disagreed, and of course that usually caught them speechless.  All they would really know was that the New York Times hated him, or, occasionally, that he was opposed to abortion.  But of course, Scalia was not on the Court when it established the constitutional right to abortion, nor did he ever have the opportunity to overrule it.

But how about just basically standing up for civil liberties and for constitutional separation of powers?  I would think that pretty much everybody out of the government has an interest in having the Supreme Court do a good job with those things.  But somehow many on the Left see their interests as completely aligned with the government.  You mean someday they could turn on me?  Don't be ridiculous!

Today, I will take up just one of the lesser-known areas where Scalia stood up for the rights of Americans against a too-powerful government, namely the area of prosecutions under vague criminal statutes.  The explosion of federal criminal statutes in the last forty or so years (today there are over 4000 federal crimes, and no one even has an exact count) has given virtual carte blanche to the prosecutors to go after anyone they don't like, or whose conviction could advance the prosecutor's career.  Readers here know that this is a recurring topic -- see the tag for phony prosecutions.   Of course, when the prosecutors go after a large company or bank, that entity will always settle, so the case never gets to the Supreme (or any other) Court.  

Anyway, somehow Scalia got the idea that the American people are entitled, as part of "due process of law" to fair notice in statutes passed by Congress of what conduct is deemed criminal.  Back in the eighties, when Scalia was first appointed to the Court, the big thing for prosecutors was a statute from the 70s called the Racketeer Influenced Corrupt Organizations Act, or RICO.     RICO criminalized what it called the "pattern of racketeering activity."  Do you know what that means?  Not only was the term vague to the point of meaninglessness, but it also sought to reverse centuries of jurisprudence that prevented prosecutors from introducing prior bad conduct to prejudice the jury against you in the current matter, and even to make the prior bad conduct part of the current crime.  In a concurrence in a 1989 case called H.J., Inc. v. Northwestern Bell, Scalia wrote the following:

No constitutional challenge to this law has been raised in the present case, and so that issue is not before us. That the highest Court in this land has been unable to derive from this statute anything more than today's meager guidance bodes ill for the day when that challenge is presented.      

That line was rightly interpreted as an invitation to make a challenge to RICO as void for vagueness, at which point it would fall completely.  And thus that one line promptly took most of the wind out of the prosecutors' RICO spinnaker.  The RICO statute has been far less used by prosecutors since.  However, the statute is still on the books. 

Another criminal statute long in Scalia's sights has been the so-called "honest services fraud" statute ("deprivation of the intangible right to honest services" -- does anybody have the slightest idea what that means?).  This is the statute most often used to prosecute sitting politicians.  In the 2010 Skilling decision, the Supreme Court found the honest services statute too vague to support Skilling's prosecution, which was thrown out, but left the statute standing by the device of purporting to limit it to cases involving bribes or kickbacks.  Scalia wrote a concurrence saying that the statute should have been invalidated in its entirety.  As Harvey Silverqlate points out here, today that statute is a principal underpinning of convictions of many prominent politicians, including former Governor Bob McDonnell of Virginia.

More on other areas where Scalia has been important over the next several days.   

Will The Courts Save Us From EPA's Madness?

Late in the day on Tuesday, the Supreme Court stayed enforcement of EPA's so-called "Clean Power Plan" rule, otherwise known as the biggest-in-history see-how-far-we-can-push-the-envelope-and-get-away-with-it power grab by EPA, which seeks to "transform" the means of generation of electricity in the U.S. and shut down the coal industry.  That evening, I was asked to submit an op-ed to one of the mainstream outlets (USA Today) explaining the legal side of the Supreme Court's action.  I stayed up late to write it, but needless to say, they never ran it.  So it's a lucky thing for you that you read Manhattan Contrarian.  Here is what I submitted:

In 1984 the Supreme Court, facing a barrage of challenges to complex regulatory initiatives from the federal agencies, announced in a case called Chevron that it would generally defer to the agencies in matters of interpretation of the scope of their powers.  Big mistake.  Chevron was catnip to the agencies, who have treated it as an invitation to search through their lengthy statutes to find some basis --any basis -- to expand their bureaucratic fiefdoms. 

No agency has gone farther with wildly overreaching statutory interpretations, nor sought to seize unauthorized control of greater swaths of the economy, than EPA.  For decades the Supreme Court calmly deferred while EPA went from mission creep to mission run, and then, with the advent of the Obama administration, to mission sprint.  With each judicial success EPA was only incentivized to make its next power grab bigger and then yet bigger.  The latest EPA usurpation is a Guinness Book Of World Records-worthy piece of bureaucratic chutzpah known euphemistically as the "Clean Power Plan" (CPP), a massive rule finalized last October. 

Yesterday [Tuesday] the Supreme Court drew the line, and stayed enforcement of the CPP pending resolution of litigation brought by a legion of challengers that included electric utilities, energy producers, and some twenty-six states.

The Obama administration has publicly admitted that the intent of the CPP is to "transform" the generation of electricity in the United States -- in the face of a statute that nowhere talks about granting such a power.  In over 300 pages of nearly incomprehensible regulatory newspeak, the CPP effectively requires closure of all or nearly all coal-fired power plants in the country, and their replacement with new facilities that must include large amounts of far-more-expensive and hugely unreliable "renewables" like wind and solar.  Coal-fired power plants currently provide about 35% of all electricity in the country, with high reliability and rock bottom cost.  Some states (such as West Virginia) get nearly all their electricity from coal.  The CPP, in defiance of basic principles of federalism, simply orders those states, against the will of their elected officials, to start imposing these enormous costs on their citizens.  And, until the Supreme Court granted its stay, EPA would have required the states to comply on a schedule which could only be met if multi-billion dollar decisions were made and funds committed before the legality of the rule could be tested in court. 

The most remarkable thing about the CPP is the total lack of either statutory or scientific basis for EPA's action.  Its view is that it needs neither when it has embarked with messianic zeal on a crusade to "save the planet" from the dangers of carbon dioxide. 

As its supposed statutory support, EPA invokes a section of the Clean Air Act (section 111) that not only is inapplicable on its face, but that also contains a prohibition against its use as to sources already regulated under another section (112) -- which these sources are. 

For scientific support, EPA relies on what it calls "lines of evidence" that, to its mortal embarrassment, have been thoroughly invalidated by the failure of real-world evidence to support its projections of climate doom.  Its models for projecting warming have been shown to be fantasy by nearly two decades of flat global temperatures; and the physical mechanism by which EPA claims the warming is to occur has been demonstrated absent by the lack of any "hot spot" in the tropical troposphere.  And even EPA's crazy climate models can't project any benefit from the supposed emissions reductions of the CPP beyond a few hundredths of a degree -- well within the margin of error of any world temperature measurement system we can devise.

Yet with neither statutory nor scientific support, until stopped yesterday by the Supreme Court, EPA marched forward to impose tens and hundreds of billions of dollars of costs on the American people.  Without doubt, there is that frisson of excitement that the bureaucrat can get from forcing the yokels in coal-dependent states like West Virginia, Ohio, Kentucky and Georgia to pay double and triple for their electricity.  Now, at least the basis for that power grab will be tested by the courts before it can be put into effect.  And with a hard look at the statute and the science, there is even a likelihood that the courts will save us from EPA's madness.    

Further thoughts (that I didn't have room for within the constraints of an op-ed submission):

(1) Many have pointed out that this is the first time that the Supreme Court has issued a stay of this nature enjoining the government from putting into effect a regulation of general applicability.  True enough.  But it is important to understand that this stay comes against a background of several cases where EPA literally taunted the Supreme Court with arguments that prior precedents make it such that "we can do as we please and there is nothing anybody can do about it."  Those precedents include both the Chevron case mentioned above, and also precedents relating to finality that would leave EPA rules in place during court challenges while they do enormous harm, even if they are later vacated. 

• In a 2012 case called Sackett, the Sacketts had a house under construction in a residential neighborhood when the EPA determined that their lot was part of the "waters of the United States," and issued a compliance order requiring the Sacketts to remove the foundation, restore the lot, and give EPA access.  EPA imposed a $75,000 per day fine for each day the Sacketts did not comply.  When the Sacketts attempted to challenge the EPA determination in court, EPA took the position that the compliance order was not "final agency action," and therefore the courts had no jurisdiction, even as the fines mounted.  And the Ninth Circuit agreed! The Supreme Court reversed and held that the Sacketts' court challenge could proceed.
• In a 2015 case, Michigan v. EPA, the Supreme Court struck down another recent EPA rule regulating power plants, this time relating to emissions of mercury, on the ground that EPA had not conducted a sufficient cost-benefit analysis.  The very next day, in an official agency blog post, EPA boasted that the Supreme Court's decision was effectively a nullity.  The reason: the mercury rule had not been stayed during the years of litigation, and during that time the "majority" of power plants had already complied.  Then, on remand, the DC Circuit declined to vacate the rule based on the representation that nearly everyone was in compliance, even though the Supreme Court had declared the rule unlawful.

One might see how the Supreme Court's patience with EPA could be wearing thin.

(2) Where will this matter now go?  The Supreme Court's stay means that there will be no enforcement of the rule during the remainder of the Obama administration.  A new Republican President could very well just withdraw EPA's CPP rule, and that would end the matter.  But assuming that that does not happen, it's clear that the courts are highly polarized on this one.  The Supreme Court's order granting the stay was 5 to 4, with the usual "conservatives" in favor and the usual "liberal" judges dissenting.  It's clear to me that the latter four are committed to the cause of "saving the planet," and that to them that cause trumps any and all other considerations like: whether the statute gives EPA this authority, whether EPA's action is constitutional, how many billions this might cost, whether electric bills of the poor might be doubled or tripled, whether there is actually any evidence that increasing CO2 has warmed the atmosphere, whether even if CO2 is warming the atmosphere this rule would make any measurable difference, and anything else.

(3) As usual, the New York Times editorial on the subject provides a perfect window into the groupthink of the Left that informs the dissenting four Supreme Court justices.  

The Supreme Court’s extraordinary decision on Tuesday to temporarily block the Obama administration’s effort to combat global warming by regulating emissions from power plants was deeply disturbing. . . .

But does the Clean Air Act, let alone the Constitution, give EPA authority to do what it has done?

The rule is based on the Clean Air Act — which, as the court has already made clear in multiple cases, gives the federal government broad authority to regulate a range of pollutants, including carbon emissions from power plants.       

Love that deep analysis!  Anyway, I don't think the New York Times is going to convince the majority five Supreme Court justices, any more than I am ever going to convince the New York Times.