Kevin Drum

Trump Solicitor General Noel Francisco would like to get rid of the Consumer Financial Protection Bureau. Fair enough. Lots of conservatives don't like it. But if he wants the Supreme Court to do this he has to provide them with a reason.

That reason, it turns out, has to do with funding. The CFPB is permanently funded (by the Fed) up to a maximum amount each year, not by an annual appropriation from Congress. Francisco thinks that's unconstitutional, even though the Fed itself is funded much the same way. More to the point, practically every "mandatory" program in the US government is funded this way: Social Security, Medicare, Medicaid, unemployment insurance, SNAP, WIC, etc. These are all entitlement programs, meaning that if you qualify you're entitled to them. Funding is guaranteed for everyone who's entitled.

Likewise, Congress did clearly pass a law appropriating money to the CFPB. That's not at issue. So what's the problem? Francisco had his day in court yesterday and it didn't go well:

As several justices repeatedly pointed out during their increasingly frustrating interrogation of Francisco, Trump’s former solicitor general had a difficult time pinning down why, exactly, he thinks the CFPB is unconstitutional.

Mainly he complained that CFPB isn't appropriated a fixed sum, but a cap:

But, as both Solicitor General Elizabeth Prelogar and many of the justices pointed out, there are gobs of federal laws — both modern and historical — that permit a federal agency to spend up to a specified cap.

Later he brought up the point that CFPB has a perpetual funding stream:

This is a common feature of US appropriations that also stretches back 230 years. Most federal spending is perpetual, including Social Security and Medicare....But his attempts to limit the scope of his argument produced baffled responses from many of the justices, several of whom were quite open about the fact that they couldn’t even understand the lines Francisco was trying to draw.

....While some members of the Court’s right flank initially appeared open to Francisco’s arguments, their patience seemed to thin as the argument went on. In his last exchange with Francisco, for example, Thomas asked the former Trump solicitor general to complete a sentence for him: “Funding of the CFPB violates the Appropriations Clause because ...”

You would think this is enough to produce an easy unanimous decision. The Constitution requires Congress to appropriate money. Congress did appropriate money, and it did so in the most common possible way.

But it appears there's likely to be one holdout. Not Clarence Thomas, because he's a loon who has goofy ideas, but our old pal Sam Alito, out of pure partisan hackery. It figures. We can only hope none of the other eight justices give him the satisfaction of not having to howl into the wind all alone.

Should Democrats have provided Kevin McCarthy with the votes he needed to stay on as Speaker of the House? After all, it's not as if they're likely to get someone better in his place. I think Matt Yglesias has the right read on this:

My view on this is that Democrats should have been willing to bail McCarthy out in exchange for a very very very low price ... but he had to offer them *something* and as I understand it he didn't.

— Matthew Yglesias (@mattyglesias) October 3, 2023

Not only did McCarthy offer them nothing, he explicitly said he didn't expect their help. Under the circumstances—and given the serial betrayals they've endured from him—it's hard to see why they'd break tradition and vote for him.

Nonetheless, apparently McCarthy's supporters in the House are furious at Nancy Pelosi for not doing more to help him out. Patrick McHenry is the new acting Speaker and he's already hard at work:

NEWS - As one of his first acts as the acting speaker, Rep. Patrick McHenry ordered former Speaker Nancy Pelosi to vacate her Capitol hideaway office by Wednesday

“Please vacate the space tomorrow, the room will be re-keyed"

w/ @DaniellaMicaela https://t.co/iRqbztb0Wu

— Nicholas Wu (@nicholaswu12) October 3, 2023

What a dick.

In other news, Steve Scalise, the #2 Republican in the House, has announced that he'll be running for Speaker. I fully support his candidacy. It's about time that people with multiple myeloma had some representation in our nation's highest offices.

No more Kevin McCarthy. For now, at least. Eight Republicans voted to toss him out of the speakership, and along with 208 Democrats that produced a vote of 216-210 in favor of "vacating the chair."

Of course, now comes the hard part: finding an alternate Speaker who can command virtually unanimous support within the Republican caucus. That seems all but impossible, but I suppose there has to be someone.

For what it's worth, I continue to think this someone could be Kevin McCarthy, risen from the dead. We'll see.

These are the San Jacinto mountains at the start of spring. I took this picture near the middle of a loop off I10 that goes from Banning to Idyllwild and then out to Palm Desert.

I just finished reading Number Go Up, Zeke Faux's tale of the rise and fall of crypto. For the most part it's an engaging book but not a surprising one. Basically, crypto is a scam, and every crypto company is running pretty much the same scam. Details aside, the book didn't change my view of crypto much.

Except for one thing: pig butchering. This refers to an online scam where people contact you via text message and slowly lure you into buying and selling crypto. After a few small trades they talk you into a big trade—and then they steal the money and you never hear from them again.

So far that's nothing especially unique. But it turns out that pig butchering is mostly conducted by people in Cambodia who are kidnapped and forced into it. They're kept locked up and beaten if they don't make their quotas.

That's shocking, but still not too surprising, perhaps. What's really flabbergasting is this:

This is a picture from the book. It's a view of "Chinatown," a section of Sihanoukville in southern Cambodia. This entire compound is filled with kidnapped slaves who are forced to perform pig butchering on an industrial scale.

There are about 6,000 slaves toiling away in Chinatown producing something like $600 million in illicit proceeds. And that's just one compound. Put them all together and God only knows how many people are involved in this. Hundreds of thousands, probably, generating tens of billions of dollars.

This is the kind of thing that would probably sound like a dumb conspiracy theory if you heard it from a friend. But it's real.

Persistent inflation is killing the Democratic Party:

But here's a question: Why is inflation such an intense issue? In round numbers, prices have gone up 20% since the start of the pandemic and wages have also gone up 20%. For most of us it's a wash.

But that's not how most people see it. They react sharply to higher prices but seem to practically forget about wage increases. Why? I'm honestly not sure, but I can toss out a few possibilities:

• Prices are in people's faces all the time. The price to fill up a tank of gas, for example, hits you every week or so. Wage increases come once a year and are buried in a pay stub.
• People overreact to the small number of items that have gone up the most. So they vaguely think that prices have doubled because they were shocked at the price of eggs.
• Wage increases are viewed as a reward for hard work, not as something designed to keep up with inflation. So they "don't count."
• For some reason, people remember prices but don't remember their own earnings. My grandfather once complained that roasting chickens were really expensive these days. They used to cost a dollar. "Sure," my mother told him, "and back then you earned $3,000 a year." He'd sort of forgotten that.
• Price inflation, even if on average it's the same as wage inflation, still forces you to cut back on certain items. This is a pain in the ass and probably a source of family irritation.
• The media reports price inflation constantly. They never report wage inflation.

What else?

New JOLTS hiring and quits data was released today, and August was about the same as the previous month. Here's total hiring minus total separations:

This represents the net number of new workers. It's been heading steadily down for two years and is getting dangerously close to zero. Then again, it almost did get to zero in March and then rebounded. So who knows what it will do over the next few months?

Job openings were up, but the trend has been steadily down for over a year. Still, openings remain an impressive 2 million above their pre-pandemic level. Maybe companies could fill more of those openings if they tried raising their pay a bit.

Hey, does anyone remember this?

House Oversight Committee Chairman James Comer (R-KY) indicated the IRS whistleblowers testifying in the investigation into Hunter Biden...are willing to hand over foreign transactions paperwork that could prove President Joe Biden was involved in a criminal bribery scheme.

...."We suspect that the Bidens had offshore bank accounts and that today was a huge development that will open up a new door for us to move forward in our investigation," the Kentucky Republican added, saying he believes there’s "easily" $25 million to $30 million or more tied to the Biden family in foreign business dealings.

This was on July 19th. A week later Jesse Watters excitedly announced on Fox News that he had "just discovered that the Biden family, possibly Joe Biden himself, has offshore bank accounts." Watters careened right past the fact that even Comer only said he "suspected" there were foreign bank accounts, and then plunged into a furious narrative about bribery and treason that became ever more divorced from reality with every minute it continued:

Once you start zeroing in on foreign, foreign bank accounts, foreign lobbying, foreign agents, foreign business partners, foreign policy, foreign deals...this looks more and more like a bribery ring, and remember, bribery is specifically named as an impeachable offense in the Constitution.

I hardly need to say that there was zero evidence for this, right? Even the IRS whistleblowers—whose credibility has taken a beating recently—said only that they had evidence related to "foreign transactions." The rest of the story is literally invented out of nothing.

Anyway, it's now been more than two months since these damning documents were supposedly going to be handed over. So far: nada. The documents were supposed to be given to the Ways and Means Committee, but last week its Republican chairman struggled to answer any questions about Joe Biden's alleged misdeeds, never mind a blockbuster revelation about foreign bank accounts.

As usual, there's nothing here. The whistleblowers have handed over nothing. Hunter Biden's collection of companies are all boringly legitimate. They are registered in Delaware. His money was mostly deposited in a Wells Fargo account. And queries to Hong Kong and the Cayman Islands, the most likely locations of foreign accounts, have turned up nothing.

There are no offshore shell companies. There are no foreign bank accounts. Joe Biden has not taken $30 million in bribes. But you knew that already, didn't you?

Why are so many Republicans opposing further aid to Ukraine? Paul Krugman says it's not about the money:

The answer is, unfortunately, obvious. Whatever Republican hard-liners may say, they want Putin to win. They view the Putin regime’s cruelty and repression as admirable features that America should emulate. They support a wannabe dictator at home and are sympathetic to actual dictators abroad.

I think the answer is simpler than this: Over the past 40 years, Democrats have generally opposed Republican wars (Grenada, Nicaragua, Gulf War, Iraq) and Republicans have generally opposed Democratic wars (Kosovo, Libya, Ukraine). The only big exception has been the bipartisan support for the Afghanistan War, though even there Democrats lost enthusiasm for it sooner than Republicans did.

Note that "opposed" doesn't mean "unanimously opposed." Rather, the party in power has typically supported its president while the opposition has been split. That's exactly what's now happening with Ukraine, which makes it very normal. There's not much reason to look any further.

Get out the popcorn. Rep. Matt Gaetz—archenemy of Speaker Kevin McCarthy for some reason—has finally followed up on his threat to file a motion to remove McCarthy from the speakership. A vote will be held later this week.

Gaetz needs 217 votes to oust McCarthy.¹ Obviously he won't get anywhere near that number from Republicans, but traditionally the opposing party votes unanimously against the majority party's candidate. So all Gaetz needs are the 212 Democrats in the House plus five Republicans. But Democrats have options:

If Democrats were to vote against Mr. McCarthy — as is almost always the case when a speaker of the opposing party is being elected — Mr. Gaetz would need only a handful of Republicans to join the opposition to remove him, which requires a simple majority vote. But Mr. McCarthy could hang onto his gavel if Democrats vote to support him, simply skip the vote altogether or vote “present.” In that situation, Democrats who did not register a vote would lower the threshold for a majority and make it easier to defeat Mr. Gaetz’s motion.

So there are two big questions. First, will Democrats help McCarthy? Second, if they don't, does Gaetz have the votes he needs?

As near as I can tell, there's no consensus on either question. Democrats have mostly kept their cards close to the chest. On the one hand, McCarthy averted a government shutdown over the weekend by working with Democrats, so maybe they owe him. On the other hand, they're pretty pissed off at McCarthy for opening an impeachment inquiry against President Biden. So who knows? This question also hinges on whether McCarthy can offer Democrats something in return for their support.

As to the second question, no one knows. It doesn't seem like five votes is a high hurdle, but so far we haven't heard from four more Republicans (in addition to Gaetz himself) who have said unequivocally that they'll vote to remove McCarthy.

In the meantime the two sides are mostly engaging in trash talk. Stay tuned.

¹I think so, anyway. The House currently has two vacancies, so Gaetz only needs a majority of 433 members, not the usual 435.