Monday, April 30, 2012

Trout Season - Opening Day

Mount Shasta from the Fall River
For the past several years I have started trout season somewhere in Northern California either in the Sierra or on some other river near my home.  Opening day is rarely a good day for fishing.   Often the bug growth, which makes for exciting fishing, has simply not started enough to make it interesting.  The fish are a bit slower - so the real point is to get out on the water.

This year the group I go with fished the Fall river which is in northeastern California.   The Fall meanders through a valley that has spectacular sights - on a clear day you can see Mount Shasta and Mount Lassen and at this time of the year, even with the meagre rain we have had this season, there is snow on many peaks.

The author on the water - with friend and guide
The weather on Saturday was perfect, if a bit windy.  Most of the day was spent on stripping line back into the boat - you present your fly and let the current take it downstream and then strip the line back into the boat - often to a musical beat (uneven is best - many people swear by Mary had a little lamb).   Fishing was light and most of what we got were "dinks" - smaller sized fish.   I think among the six of us we landed only three that were more than 12".   What seemed to work was leeches - although I did try a run with nymphs.  When I am having a slow day I use it to try a bunch of strategies.   Sometimes you find what the fish are interested in.   My partner in the boat used only three flys all day.

When the day is not great on fishing, I tend to snap a lot of photos.  My current fishing camera (which is water proof) is a Canon D-10.   I like most of what the camera does - it is a pretty good point and shoot.  What I do not like (and I think I understand why this was done) is that it does not have a viewfinder (it uses an LED to both compose the picture and view the image).   I assume that for those who use the thing underwater that a viewfinder would be inconvenient.   But for capturing exactly what you want outside of water a viewfinder is far superior.

This part of the state (with the Sacramento, the Pit, the McCloud, Hat Creek and the Fall) should be one of the major destinations for fishing.   But it is remote enough so that it is still very low key.

Monday, April 23, 2012

The New Robber Barons

Joel Kotkin has spent a career figuring out things well most of the rest of us recognized that there was an issue to be thought about.   In Saturday's WSJ there was an interview with this forward thinker.    Joel, who I came to know when he wrote about the folly of trying to redesign American business along the Japanese model (when everyone else was writing books about how the Japanese model).   In one sense his caution (that the Emperor had no clothes - keiretsu - which literally means a headless combine) was that the hierarchies of Japanese industry would not work in the new economy of the 1980s.

But this interview is different.  Kotkin's thesis is that California is not working.  There is plenty of evidence.   In the last two decades California has had 4 million more people leave the state than come to it.  That certainly is not the history of the state that I grew up in.  But two decades of essentially one party rule have allowed all sorts of nonsense to take place.   California has energy prices that are 50% higher than the rest of the country.  It has  perennial budget deficit that dwarfs state budgets in many other states. It has a public employee base that has instituted a huge sinecure of public pensions that are a bit more generous than Croesus could have expected in tribute.  It led the country in establishing a punitive system of torts, environmental regulation and planning restrictions that have made housing in key areas of the state prohibitively expensive.

So what has all this melange of policies produced?   He argues that the effects of all these things have had caused little change on the people who support the ruling elites.   But the average person in the state had been buffeted (no pun intended but the Sage of Omaha would be quite at home with most of the nonsense  Kotkin describes) into moving.   A young family whose combined income is $250,000 has a hard time in finding a house and in paying bills in many areas of the state. Smart growth has argued that the bureaucrats know better than the consumer and have tried to force people who cannot afford a million dollar fixer upper - into multi-family housing.  Thus, the policies have created an almost permanent underclass while actually leaving the wealthy untouched.   If you have ever read the muck-raker's discussion of the Robber Barons - there are amazing parallels.   But in this case instead of capitalism run wild this is government gone wild.   You should read the interview by clicking on Kotkin's name at the start of this post.

iBooks Author - publishing disintermediation

In the 1980s I learned a term called disintermediation - which described the process whereby many of us quit using financial intermediaries to conduct our business.   We began to use new financial products where we were the direct consumer.   But the term has a wider application.  Since I first encountered the term (the Merriam Webster dictionary dates the word to 1976) there have been a lot of markets that have disintermediated.

A few weeks ago Apple offered a free piece of software called iBooks Author.   It is really not very revolutionary, at first glance.   Like Pages, or iMovie, or iDVD, it is a piece of authoring software, offered for free, that allows an individual to create a book using a set of templates (or build your own) for all sorts of purposes.  The blurb around it suggested this would be a wonderful way for individuals to author textbooks.   When I first saw the software, I thought of at least one other use.  I am in the process of designing a book about my family's history for my children and grandchildren.   The template system allows someone with minimal creativity to put together attractive materials using someone else's structure. The beauty of this software is that it can include text, photos, video, weblinks, and almost any other kind of media.

The metaphor here is not new.  There have always been "vanity" presses.   And a few years ago Amazon began a process whereby individuals could self publish pretty easily.  (There are some other services that will allow you to do that too - Lulu is the easiest).  But what iBooks Author does is give you the tools to do all of this offline with relative ease.

So yesterday afternoon, in honor of my older grand-daughter's second birthday, I put together a short book in the voice of our new dog (who formerly lived at her house) telling about his adventures with us.   Like most Apple products, I avoided the tutorial and dove right in.  I am sure the first version of a project took me a bit longer than the second one will.  But the process was simple and straightforward.

The end result can be saved to a PDF or can actually be published through iTunes either as a free e-Book or as one that actually has a sales price.  To be able to publish to iTunes you need to have an additional (free) piece of software that formats the book into iTunes format and runs you through the legal issues of authoring a book (like assuring that you do not use copyrighted material).  

Unlike iMovie or Pages or any of the other authoring tools - this software has a tremendous possibility to disintermediate  markets, first the textbook market - where authors and students are not well served by the intermediary publishers who take their cut.   At the same time, it offers the ordinary individual who has some creative desire to be their own publisher.   Most of those publications will not see much distribution. I expect the dog book - when it goes up on iTunes to have total sales under 10.  But some will.   And that will make the publishing business all the more interesting.

Tuesday, April 17, 2012

Pikkety-Saez Tax Policy

On this income tax day I wanted to discuss the income tax.  Two economists (Thomas Pikkety and Emmanual Saez) produced a paper at the turn of this century which argued that income distribution in the US had deteriorated from a fairness perspective.  Over the last decade their work has been widely publicized including in support of things like the Buffett rule.  Thomas Pikkety, who now resides in Paris, has even argued that the ideal rate for upper income taxpayers would be between 15 and 40 percent higher than that proposed by the president.

There are two flaws in their research.   First, their definition of income is a bit too narrow.  Indeed there has been some movement among higher and lower income people in the last couple of decades (BTW - that has happened in a lot of countries who have very different tax structures).  Alan Reynolds points out many of the oddities of the data set they use.   While there are legitimate disagreements about the national income accounts and how to use them you should not take Pikkety and Saez's assumptions on their face.

But second, the perspective ignores the substitution effect.  The tax code is gargantuan.   That is in part because every little interest has forced a provision into the code to solve their "problem."   Raising rates never generates as much money as supporters suggest it will.   That is because as you move up the income curve you have a lot more discretion about compensation - that is especially true for things like capital gains.   If rates are too high, I simply will sit on the gains I have accumulated in a stock or other asset.

So how do you solve the problem?  There are two ways.  First, one could index the capitalization of capital - so that before you paid taxes on gains (or losses) you would calculate the effects of inflation on the asset.   That was tried once (in 1954) and discussed at the beginning of the 1986 Tax Act.  But it was dismissed as entirely too complicated.

The alternative is to lower rates below what the average taxpayer pays.  That is the wisdom of the capital gains exclusion.  And the evidence is that if you set it correctly, people actually are more willing to liquidate their investments in line with their wishes rather than tax policy considerations.

If the highest income individuals can decide when to take income (including income on capital gains) then raising rates is unlikely to raise much revenue.    The graph above gives you an idea why the Buffett rule or some variation proposed by Pikkety is pure folly.

Cartagena Hookers, GSA and Sugar

From my point of view it is amusing how surprised people seem to be about the scandals in GSA and with the US officials who engaged prostitutes in Cartagena and then refused to pay.    The GSA story is a recurring one.   The procurement arm of the federal government, every once in a while, gets caught peddling influence or buying things for outrageous prices.  (This administration seems to have done those things simultaneously.)  From the stories here the current (and some now former) officials seem to have been particularly corrupt in their soirĂ©e in Las Vegas and they do seem to have taken some bribes - but this is not the first time.   The idiot who formerly ran the agency, Martha Johnson, was bold enough to claim that the "gross misuse of taxpayer dollars" that was described  in an Inspector General's report was actually just something left over from the prior administration.  What would you expect from a senior administration official where the CEO (the President) has constantly claimed that every ill (deficits and slow return to employment) came from George Bush.   The conference that blew more than $800,000 and was described their use of government funds as "excessive, wasteful, and in some cases impermissible."

Then there is the story about a dozen or so Secret Service and military personnel who engaged hookers in Cartagena, where prostitution is legal, and refused to pay.   While that reflects a general callousness toward ethics what bothered me more was the President's remarks where he said conferences like the hemisphere one he and the other officials were spending gave him a chance to hunt out new vacation spots for the first family.  So the purpose of international conferences is to figure out where the first family is going next at our expense?

Now how does sugar come into the equation?   Easy.   Since the start of the Castro regime our government has "protected" us from communist sugar as well as cigars and other commodities.   In reality, the rationale for the tariffs on Cuban products are based on the same principles that the first two issues are based on - when government gets to large a couple of things happen.   First, because there is no price discipline, individuals inside and outside of the government tend to seek "rents" from government.  Second, as government begins to be more powerful, the rule of law (and indeed the standards of ethics in society) begins to diminish.   Ms. Johnson and the deputies who planned their Vegas extravaganza had no clue that funding on party on OPM was not OK.  After all, these "hard working" bureaucrats deserve a junket.  The dozen or so members of the protection detail for the President I am sure were outraged that they actually had to pay for a service.   The sugar growers think nothing of imposing small costs on all of us so they can reap big rewards.   In all cases these kinds of things begin from the idea that the officials or the people who come to government to reset the equation are entitled to being treated just a bit better.   We should not be surprised, but if government were smaller, this would not happen as often.

Sunday, April 15, 2012

Good Friends, Great Art

On Friday night we had the chance to go to the opening of a new art gallery in San Miguel de Allende which features the art of Federico Correa.  (Click on his name to see his site) Our friends in San Miguel told us that the gallery would be opening and we knew we had to be there.

When we first saw the space - which is on San Francisco - off the Jardin - in an historic building - it looked ok - but in the ensuing months the gallery has taken on some real improvements.   The opening was well attended - and the party before and after was a great weekend.   Federico's work involves some pain, some humor and lots of color.

A lot of Federico's work is large.  But he also displayed some smaller pieces including the Jackrabbit on the right.  These were made out of scrap lumber.  They are playful and colorful.  Federico has a lot of education in art but there is a mix between his training and his inspiration.  Both are evident in his work.

As a result of the opening he was asked to do a show in Zacatecas.  That will come in a couple of months.    I am intrigued by a couple of things here.  First, the intensity of his commitment to his art is inspiring.   Second, like any other commodity, an artist needs to think about both the creation of value and how to market his work.   A gallery does that - but there is a lot more involved.  Matching his work with people who would be interested in purchasing it is not an easy proposition.   In November we had the chance to tour his studio - he has thousands of works (a comment on the passion that he brings to his work).   And from his comments and those of his partner (Don Bell) he seems singularly committed to his task - often working on a motif for a period of time just to figure out where it will go and then like a writer with brushes refining the original idea(s) until they come to some kind of sense.   I had not realized how iterative his profession actually is.

For a full journal of the opening and all the people who squeezed into the space on Friday night click on the word JOURNAL (above).  The new iPhoto for the iPad has a feature which I have begun to love called Journal which can organize a set of photos and then post them to the web.   I like the program but it was great to be back in San Miguel and to spend a couple of days with our friends there.

Patience and the TSA - an unresolvable conflict

We just got back from San Miguel after a wonderful time at the opening of the Gallery of Federico Correa (More on that later).  We got to see the contrast between two agencies of the federal government in less than a few minutes.   Houston Bush is a big airport and has Global Entry - I have written about that before. Today, my wife also used her second time through and together we spent about 40 seconds in customs. We had no checked bags so we got out into the re-entry portion of the airport quickly.  But then because of lousy signage we got stuck in the side of the security entry with no elite access.    That part of the TSA operation was a mess.  Hundreds of people and a couple of shouting idiots repeating again and again the same instructions.   In all it took about 25 minutes to get through to the secure section of the airport.   That is unacceptable.   I realize the TSA thinks it is doing a job but unlike Global Access, it is poorly organized.  In yesterday's Wall Street Journal the former head of the TSA made a series of sound suggestions about how to make this horrible agency a bit more accountable and efficient.  I doubt that the current agency leaders will heed the suggestions - but they should.

Thursday, April 12, 2012

Coming Home

Last night we came back to San Miguel de Allende after a five month break.   When we got into town - for the opening of a friend's art gallery - I immediately felt at home.  This morning I went out on a walk and it was almost as if I had not left.  During the day we took an acquaintance around the city and showed him all sorts of stuff.  Again, it was like I had not left.

The picture is of a corner near the Jardin - it is a corner that I must have passed 60 times during the month we lived here.  But I never noticed the detail before last night.   Thus, something so familiar is at once surprising.

Wednesday, April 11, 2012

Romney's Win and Santorum's Withdrawal

The announcement of a "suspension" of campaign by Rick Santorum was not a surprise.  Although he won a lot of primaries, he was not on a path to victory so he merely confirmed the inevitable.

But I have three comments about the current state of the race for president.

#1 - The notion that Romney is not a true conservative and Santorum is - is nonsense.   I am not sure how to define a "true" conservative except in the terms that President Reagan used.   And by that definition - a Strong National Defense, Reducing the size and scope of government and a commitment to the values of American exceptionalism - Romney is clearly a true conservative.   I understand there may be question among the hardcore social conservatives that he is not vocal enough about abortion.   But his positions on the Ryan budget and a host of other issues should give anyone who is concerned about the presidency of Obama - a feeling of comfort.

#2 - I am not sure whether Santorum is a "true" conservative.  Sure he is great according to the social conservatives - he speaks out on issues like abortion.    But like George W. Bush - he seems like a big government conservative.  In one debate when talking about how to limit funding for Planned Parenthood (which would in turn reduce the size of the federal budget) he bragged that he created a new Title in the law to fund abstinence programs.   What utter nonsense for a conservative.   If I am skeptical about government in general why should I trust the creation of a new program, paid for by taxes, to support my point of view.

#3 - Santorum's speech was a bit odd - As I was driving to the airport yesterday I got to hear his announcement.   He spent a lot of time talking about disabled people that worked in his campaign.  I also think it was a bit arrogant.  Ultimately the election in November will be about whether the American people have lost trust in the President (I certainly have) and whether they believe Gov. Romney will do better (after watching three years of regulatory excess and class warfare I am ready for something different).   But part of his speech should have a) looked forward (which he did but clumsily) and b) responded to the errors of the current president (in part helping his now former opponent).   Unfortunately that never seemed to happen and then he went on to another compelling story.

Sunday, April 08, 2012

Tax Fantasies

Sac Bee Cartoon - not related to the story
The Bee had a story yesterday titled "If Taxpayers Paid Up, the Deficit Would Disappear."   The Franchise Tax Board has estimated that $10 billion in state taxes go unpaid and the Board of Equalization estimates that an additional $2.3 billion in sales taxes do not get paid.  Were this true it would be a major story, but chalk this one up to absurd assumptions - fantasy.

Here are some claims made by tax analysts.  #1 - The Legislative Analyst found in a report that wage income gets reported about 90% of the time if it is withheld and only about 70% if it the tax is not withheld.     That might be close to correct.  The 10% breach on withheld income should get caught if the FTB is efficient - but a 90% compliance rate is pretty darn good.   I suspect that if one were able to separate out all the gray money payments that the non-withheld income gets reported at about the same rate.  In other words a lot of the non-reported income comes from things like drug deals.  The tax agencies claim they do not count illegal activity in the under-reporting statistics but that is a questionable claim.

#2 - A federal study found an 83.6% compliance rate (which in my estimation is still pretty good) for paying taxes that are due.  The federal study found that the major cause of under-reporting was precipitated by a small amount of direct fraud and a larger percentage of what they described as under-reporting.  Sure there are taxpayers who claim outrageous amounts for donations of used goods (even some former presidents) but those losses are minor.  There may be some evasion but I think a lot of the problem comes from complexity - it is hard to know what is the right thing to do.

#3 - The USE tax - under California law a taxpayer is required to pay the equivalent sales tax on something which was bought outside the state.    Tax agencies count that as evasion.  Saner people argue that taxes should not follow you anywhere.  The Use Tax concept is confused (and confusing).

Perfect tax compliance is a fantasy.  It began to be talked about when Stanley Surrey (President Johnson's Assistant Secretary for Tax Policy) began to formulate the notion of "tax expenditures."   That idea posited that just like appropriations we could track the value of changes in the tax code from an "ideal" frontier as if they were cash - were they not in the code the government would receive more dough.  The problem with the theory is that is needs to assume that all wealth is created by government.   While some people believe that no thinking person does.   At about the same time that Surrey was writing all the rage in tax was a book by Nicholas Kaldor (An Expenditure Tax) which argued that the most perfect tax system would count all flows into and out of a person (for example, the increase in valuation of one's house).  Amazon's summary says "This work explores the idea that the taxation of individuals should be based upon their expenditure, not on their income. It argues that if progressive taxation were levied this way, we could move towards an egalitarian society and improve efficiency and the progress of the economy."  The book was great theory but impossible to implement in real life.

Kaldor even had some influence on the task force that President Reagan convened at the beginning of the process that resulted in the 1986 Tax Reform Act.   In the first draft of the Bluebook (which was the comprehensive proposal for the changes) a Kaldoresque proposal was present for home appreciation.  Reagan and other politicians quickly realized that would not fly politically.

So what can we say about tax compliance and how to improve it?   First, government officials should assume there will always be some inefficiency in any system.   It is not possible (and probably not desirable) to get 100% compliance.  It is silly to assume that if everyone paid their "fair share" in taxes that the deficit(s) would be eliminated - the deficits come primarily from spending not from revenues.   If we matched our spending with our revenues we would not have a problem - but we don't.

Second, simplicity breeds compliance.   By simplifying the tax system (especially in the income tax) more people are likely to comply.   Tax loss carry forwards may look like good politics but they are terrible for conformity.

Third, the integration of data systems (the article mentions that the FTB matches no income tax filings with car registrations surmising that if you register a $100,000 car with no income, you probably are doing a bit of fudging) will continue and should help to assure that compliance is as good as it can be.

Tuesday, April 03, 2012

Knut Wicksell, SCOTUS and our Constitutional Law Professor

Yesterday the President commented "For years, what we've heard is the biggest problem on the bench was judicial activism or the lack of judicial restraint, that an unelected group of people would somehow overturn a duly constituted and passed law..."    POTUS was evidently trying to influence SCOTUS.   It follows a line of reasoning adopted by the left in recent days about the inappropriateness of courts overturning "commerce" related laws adopted by legislative bodies.  To me a lot of this harkens back to the grumpiness that FDR expressed when the Supreme Court rejected a lot of his New Deal programs.

It is stunning how little this President seems to know about Constitutional theory, for one who claims to have taught Constitutional law at one point.    A key principle of our system is the inherent tension between the three branches of government.   Each has some role in the other.   For example, the President nominates but the Senate confirms nominees to key positions in the executive branch.   Included in that role is the confirmation of court nominees.    At the same time the court, beginning soon after the founding of the Republic has the authority to overturn laws which are outside the powers expressly granted to the Congress, in its powers to make laws.   Article 1, Section 8 has a set of enumerated powers.

Knut Wicksell was a Swedish economist who taught in the late 19th and early 20th century.  Some have called him the economist's economist.   While he wrote a lot about the role of the state (and its proper role in redistribution of income - something this president should be interested in) he also wrote about the inherent logic of collective decisions.   James Buchanan, the 1986 Nobel Laureate in Economics, rediscovered this range of Wicksell's theories while doing a post-doc at University of Chicago.   Wicksell theorized that decisions made in legislative bodies faced the dangers of cyclicality if they were not taken with care.   If you have a very close decision in a legislative body it is likely to be brought back again and again.  But if you get a larger percentage of members to support the idea - that is less likely to happen.  

Obamacare was adopted with very narrow margins. (Just 7 votes in the House)  For whatever reason, the majority democrats chose not to include any GOP members in their decision.  The democrats claimed at the time that it was "impossible" to get the GOP members to participate in a meaningful way.   No one said making tough decisions is simple.   But the danger for any legislative body that chooses to make decisions like the ones used to adopt Obamacare is that without reasonable consensus you get into all sorts of decisions 

It is utter nonsense to argue that the Supreme Court does not have a role in determining whether Obamacare fits within the powers authorized to the federal government.  

Sunday, April 01, 2012


I was in the Gym today in the Men's locker room and was surprised by the comment of one of the guys in there.  He had his young son with him and looked up at the TV which had the Fox news channel on.  He said, to his son, "that channel lies constantly."  I was bothered by that characterization not because I wanted to defend Fox but because it is indicative of the way many people look at the media.

I am not a big fan of any of the cable news outlets.  They tend to play up issues in ways that are not helpful to thinking about things carefully.  That is not just true for MSNBC, Fox, CNN and the other wannabes in the cable news business - I think it often applies to NPR.   The last couple of weeks on the Travon Martin case is a good demonstration of the problem.

We know at this point that a young Black kid was walking through a neighborhood and was shot by a neighborhood watch person.   We also know that the police in the jurisdiction have not charged the neighborhood watch person (a George Zimmerman).    Today on one of NPRs programs they had two people talking about what should be done.  One said he thought that Mr. Zimmerman should be convicted immediately.    There is clearly a tragedy attached to this event, a young man was shot and killed while returning from a convenience store.   But a lot of the other details are in question.  Evidently Martin had been suspended from school recently.   Mr. Zimmerman had a permit to carry his weapon.  Martin was unarmed.  Zimmerman claims that Martin attacked him and he responded in kind.   There are allegedly witnesses to the events that lead to Martin's death.    But beyond that we do not have a clear picture of the events.   With those facts in view, we should let the legal system sort the issue out.   Was the use of force excessive?    The idiot on NPR had started with a conclusion - without having any direct knowledge about the full range of facts in the case.   The second NPR person had a larger social agenda that would be applied to any situation without regard to the specific facts in the case.

The point of all this is twofold.  First, all cable news bothers me - these sources care little about news and a lot about presentation.   Second, while I am negatively disposed to NPR, CNN, MSNBC and the rest, let me hold my tongue around impressionable folk like this guy's son.  Our republic would benefit if we were more willing to listen to other points of view, even if they are presented as "news."

The Health Care Hearings in SCOTUS

During the week that the Supreme Court considered Obamacare there has been an increasing band of supposed liberals arguing for restraint.   For example, on March 27 the NYT intoned "In ruling on the constitutionality of requiring most Americans to obtain health insurance, the Supreme Court faces a central test: whether it will recognize limits on its own authority to overturn well-founded acts of Congress."   They go on to claim that the Court should not reject "established constitutional principles that have been upheld for generations."    They then go on to state that "Congress has indisputable authority to regulate national markets and provide for the general welfare through its broad power to tax. Nothing about the mandate falls outside those clearly delineated powers."  (emphasis added)    Indeed, in Article 1, Section 8 Congress is granted the authority "To regulate Commerce with foreign Nations, and among the several States" - but for anyone who has read the entire document that power is not absolute.   Could Congress have adopted a government run health program? Of course, but the body politic would not have accepted such an intrusion into the markets.   The question before the Supreme Court is not dealing with whether Congress has power to regulate markets, but whether it has absolute authority.

In an article in the Sacramento Bee today, they quote two law professors, supposedly conservative (one Charles Freid a former Solicitor General) who say the court should not overturn the bill.   Both claim that SCOTUS should not not intrude on decades of precedent because it has not over-turned laws relating to commerce for decades.   That is an odd understanding of the powers of the Supreme Court. One should mention that both Freid and Douglas Kmeic (who makes the same argument) endorsed Obama in 2008.

The Bee also had an article this morning which among other things mentions a mandate (that they claim upholds the Obama mandate for purchase of health insurance) which says hospitals must offer uncompensated care to indigents.   That mandate is tied to the acceptance of federal funds, a much different issue.  One could also make the argument that the prior mandate should have been over-turned.  It certainly has contributed to many of the problems in the way Americans spend for healthcare.

There were four items of interest in the case for me (besides the eventual outcome).   First, the current Solicitor General was not up to his job - as one conservative wag commented Donald Verrilli may not have been able to "defend the indefensible."  Paul Clement, for the other side, seemed quite good. Second, I am bothered that former Harvard Dean and current member of the court (and former Obama Solicitor General) Elena Kagan did recuse herself from this issue.   That would have been proper.  It is clear in her prior administration role that she participated in beginning to build the defense of this law and by any standard of judicial ethics she cannot judge this law impartially.   Third,  what interested me most about this case was the high level of interest that it generated among average citizens.  I am not sure if the SCOTUS site had a counter on the number of downloads of the tapes - but I bet between those and the talk and writing - this is the most transparent I think I have seen a major court action.  Finally there was a lot of tut-tutting about Justice Scalia's comment about having to read the length of the bill.  Scalia's point was not about the need to slog through this monstrosity but whether any 2700 page bill can pass the test of reasonableness.

In the end, we must now wait to see how the justices sort out the issues.  Some speculated that if Justice Kennedy voted to uphold the statute that the Chief Justice might well vote with him (making a 6-3 decision).   From listening to the questioning, it is pretty clear that the four liberal justices will not deliberate on the merits of the issue and that they will vote to uphold.   It is also pretty clear that at least three of the conservatives will vote to declare the law unconstitutional.   From my perspective, I hope that at least five justices can vote against this bill.  Health care is an important issue which deserves more careful consideration than was given in the "Affordable" Care Act.

Law Professor and Instapundit author Glenn Reynolds concluded "Seems to me they should just knock down the whole thing and let Congress do whatever it wants next. If that turns out to be inconvenient, well, there’s a good reason not to pass unconstitutional legislation, isn’t it?"