The European Debt Crisis Redux...

Author: Satyajit Das

The half-life of solutions to Europe’s debt problem is getting ever shorter.
Recent hopes have relied on the ostensible success of the European Central Bank’s (“ECB”) LTRO – Long Term Refinancing Operation, more appropriately termed the Lourdes Treatment and Resuscitation Option. In December 2011 and February 2012, the ECB offered unlimited financing to European banks at 1% for 3 years replacing a previous 13-month program. Banks drew over Euro 1 trillion under the facility – Euro 489 billion in the first round and Euro 529.5 billion in the second. Participation amongst European banks was widespread, especially in the second round where around 800 banks used the facility.
The funds borrowed were used to purchase government bonds, retire or repay existing more expensive borrowings and surplus funds were redeposited with the ECB. The first entailed banks borrowing at 1% purchasing higher yielding sovereign debt, such as Spanish and Italian bonds that paid 5-6%. This allowed banks to earn profits from an officially sanctioned carry trade – known as the Sarko trade after the French President.
The LTRO provided finance for both beleaguered sovereigns and banks, which need to raise around Euro 1.9 trillion in 2012. It helped reduce interest rates for countries like Spain and Italy. It also helped banks covertly build-up capital, via the profits earned through the spread between the cost of ECB borrowings and the return available on sovereign bonds.
The LTRO was very clever, effectively monetising debt (printing money) without breaching European Treaties or the ECB’s charter.
The sheer weight of money – at one Euro 500 note per second it would take 63 ½ years to count Euro 1 trillion- proved successful. Financial market sentiment was overwhelmingly positive feeding a large rally in global stock markets and other risky assets.
As subsequent events have exposed, there were always reasons to be cautious.
The LTRO facility is for 3 years. It assumes that the conditions will normalise within that period. It is not clear what happens if that is not the case.
Economist Walter Bagehot advised that in a crisis central banks should lend freely but at a penalty rate and secured by good collateral. The ECB does not appear to have quite understood Bagehot’s commandment. The rate is below market rates, amounting to a subsidy to banks. The ECB and Euro-Zone central banks have loosened standards, agreeing to lend against all manner of collateral. In effect, the ECB is now functioning as a financial institution, assuming significant credit and interest rate risks on its loans.
If the European Financial Stability Fund (“EFSF”) was a Collateralised Debt Obligation, the ECB increasingly resembles a highly leveraged bank.
The ECB balance sheet is now around Euro 3 trillion, an increase of about 30 percent just since Mario Draghi took office in November 2012. It is supported by its own capital (scheduled to increase to Euro 10 billion) and the capital of Euro-Zone central banks (Euro 80 billion). This equates to a leverage of around 38 times.
Critically, the LTRO cannot address fundamental issues.
It does not reduce the level of debt in problem countries, merely finances them in the short-run. Europe is relying on its austerity program to reduce debt. As Greece demonstrated and Ireland, Portugal, Spain and Italy are demonstrating, massive fiscal tightening when combined with private sector reduction in debt merely puts the economy into recession. As public finances deteriorate rather than improve, it results in an increase not decrease in public debt.
Ultimately, it may be necessary to go Greek. Debt restructuring may be needed to achieve the required reduction in the public borrowings for many countries. Interestingly, financial markets price the risk of a Spanish debt restructuring at around 30-35%.
The LTRO does not improve the cost or availability of funding for the relevant countries beyond an immediate short term fix.
Government bond purchases financed by the LTRO artificially decreased the interest rates for countries, such as Spain and Italy. Unless additional rounds of LTRO are offered, interest rates are likely to return to market levels.
The real increase in liquidity available to support sovereign borrowings was lower than Euro 1 trillion. Perhaps only one third of the LTRO loans and maybe as little as Euro 115 billion were directed to this purpose. Banks used the bulk of funds to repay their own borrowings. As debt becomes due for repayment through the year, banks may need to sell sovereign bonds purchased with the funds drawn under the LTRO. Unless market conditions normalise and banks regain access to normal funding quickly, this will place increasing pressure on sovereign funding and its cost.
With European countries facing heavy refinancing programs in 2012 and beyond, the ability to raise funds at reasonable rates remains important. Existing bailout programs assume countries like Portugal and Ireland will be able to resume financing in money markets normally from 2013.
Events complicate the ongoing commercial financing of European banks and sovereigns. The need for collateral to support ECB funding makes other investors de facto subordinated lenders reducing their willingness to lend or increasing the cost. In the Greek restructuring, European Central Banks and official institutions were exempted by retrospective legislation from loss while other investors suffered 75% writedowns. This has reduced investor willingness to finance countries considered troubled.
European banks already have large exposures to sovereign debt, which has increased since the start of the LTRO. Spanish banks are thought to have purchased around Euro 90 billion, a jump of around 26% to Euro 220 billion. Italian banks are thought to have purchased Euro 50 billion, a jump of 31% to Euro 270 billion. A similar rise in government bond holdings has occurred in Portugal and Ireland. As interest rates on these bonds have increased, buyers now have large unrealised mark-to-market losses on these holdings.
As with the sovereigns, the LTRO does not solve the longer term problems of the solvency or funding of the banks, which now remain heavily dependent on the largesse of the central banks. It is a government sponsored Ponzi scheme where weak banks are supporting weak sovereigns who in turn are standing behind the banks – a process which can be best described as two drowning people clinging to each other for mutual support.
The LTRO has not materially increased the supply of credit to individuals and businesses. The money is being used by banks to finance themselves as they reduce borrowings by selling off assets to reduce dependence on volatile funding markets. The LTRO does little to promote desperately needed economic growth in the Euro-Zone.
The initial euphoria faded as a number of concerns re-emerged, manifesting themselves in the form of increasing rates on Spanish and Italian debt which now hover around the key level of 6.00% per annum.
Increasingly poor economic growth figures from Europe pointed to a lack of growth and progress on debt reduction.
Attempts to reduce Spain’s deficit has proved problematic. Both Spain and Italy have deferred balancing their budget in the face of a deteriorating economic outlook. It is unclear which markets fear most -Spain and Italy not achieving its targets through savage spending cuts resulting in higher debt or achieving its target putting their economies into an even deeper recession and increasing debt.
The difficulties faced by both Spanish Prime Minister Mariano Rajoy and Italian Prime Minister Mario Monti in implementing labour reforms have highlighted the resistance to structural change. Increasing protests in many countries point to the political difficulty in implementing the agreed austerity measures.
The problems of the banking system have resurfaced. Spanish banks’ bad and doubtful debts have increased, as the Iberian property bubble deflates.
Increased reliance by Spanish and Italian banks on financing from central banks has heightened concern. Spanish bank borrowings from the ECB increased to over Euro 300 billion in March from Euro 170 billion in February. Lending to Spanish banks now accounts for nearly 30% of total ECB lending. Italian banks have also been heavy borrowers, a reminder of the linkage between banks and their sovereigns.
Reluctance to increase the inadequate European firewall sufficiently to deal with potential problems means policy options are limited. At around Euro 500 billion in available funds, the bailout fund is short of the Euro 1 trillion sought by the International Monetary Fund and G-20 or Euro 2-3 trillion thought necessary by financial markets. German leaders have repeated their unwillingness to increase the fund to the necessary size, arguing, probably correctly, that no firewall will be adequate.
Poorly judged and ill-timed comments by ECB President Draghi about the absence of need for further LTRO funding and planning for an exit drew attention to the fragility of the position and ongoing risks. The comments were driven by Bundesbank’s unease at the ECB’s policy. The market reaction forced Mario Draghi to retract comments about an early exit from emergency funding. As rates continue to rise, Benoit Coeure, the French ECB board member, promoted a new round of direct purchases of Spanish bonds to reduce yields.
The failure of the LTRO to decisively solve European problems is unsurprising. Confidential analyses prepared by European Union officials and distributed to ministers meeting at the Copenhagen meeting in March 2012 concluded that the Euro 1 trillion in loans was a “reprieve”, rather than a solution.
Rather than take the time afforded to move on other fronts, European leaders reverted to type. Spanish Finance Minister Luis de Guindos opined that: “We are convinced that Spain will no longer be a problem, especially for the Spanish, but also for the European Union”. It was eerily reminiscent of his predecessor Elena Salgado who almost exactly one year earlier on 11 April 2011 said: “I do not see any risk of contagion. We are totally out of this”. The optimism was echoed by French President Nicolas Sarkozy who was confident that the Euro-Zone had “turned the page”. Italian Prime Minster Mario Monti stated that the “financial aspect” of the crisis had ended.
The European debt crisis is not over. Fundamental problems – debt levels, trade imbalances, problems of the banking sectors, required structural reforms, employment and economic growth – remain.
Beyond the German favoured remedy of asphyxiating austerity to either cure or kill the patient, Europe is rapidly running out of ideas and time to deal with the issues. As the real economy stalls and debt problems continue, the most likely policy actions may come from the ECB – an interest rate cut to near zero and further liquidity support, perhaps even full-scale quantitative easing. Bailout funds may be channelled to recapitalise Spanish banks, as a means of helping Spain without resort to a full-blown bailout package.
It is doubtful whether any of these steps will work.
European politicians and citizens want a quick return to a period Spaniards now refer to as cuando pensábamos que éramos ricos which translates to “when we thought we were rich”. Official policies and action are focused on deferring rather than dealing with the problem. Unfortunately, that means the inevitability of meeting the same problem somewhere down the road.
John Maynard Keynes observed in The Economic Consequences of the Peace that each action designed to bring closure to one crisis sows the seeds of greater economic, political and social problems. Europe is living the truth of that statement one day at a time.

Activist judge – it means different things to different people…

Benjamin A. Neil

Towson University

Abstract

This paper explores the application or misapplication, as it were, of the term “activist

judge”. Much has been written about the concept. However, there is currently little agreement as

to the real definition of the term or its overall use as to members of the judiciary. It is hoped, that

this discussion will shed some light on the continuing dichotomy of the terminology and its

application.

Keywords: activist judge, restrained judge, liberal, conservative, judges

Introduction

One of Alexander Hamilton’s arguments for the new Constitution in the 1700’s, was that

the judiciary would be the “weakest” branch of government. By 1996, however, presidential

candidate Bob Dole said in a speech that federal judges are a president’s “most profound

legacy.” It has been argued that in two centuries, the weakest branch has become a most

profound legacy because judges have taken from the people control of the most significant issues

that affect our culture, communities and families. (Jipping , 2009)

The people themselves should have the power to decide the laws enacted by their

elected representatives without judicial interference or imposition. Most Americans, however,

are not alarmed by this loss of liberty because they do not understand the Constitution or the

American system of government. The National Constitution Center (Sept. 2, 1998) recently

found that 41% of American’s do not know the number of branches of government, and onequarter

cannot identify a single right guaranteed by the First Amendment. While only 35% of

teenagers know the first three words of the Constitution, 59% can name the Three Stooges.

The Restrained Judge – Servant of the Law

Columnist Thomas Sowell cut through all the distractions and misleading rhetoric when

he wrote: The real issue is not the number of judges but what kind of judges. There exist two

basic choices, a restrained judge who is a servant of the law, or an activist judge who is the

master of the law. (See: Jipping, supra)

A judge’s most important task is interpreting the law. Since the law (whether a statute, a

regulation, or the Constitution) already exists, interpreting it is simply determining what it

means. The meaning of individual words determines the outcome of cases and, therefore,

determines how the government conducts itself.

A restrained judge believes that the meaning of these words already exists, that the

meaning came from the legislatures or the people who enacted those words into law in the first

place, and the judge’s job is to find it. Activist judges, in contrast, pursue their own agendas and

believe they can give those words any meaning they choose. A restrained judge takes the law as

he finds it, while the activist judge believes he can make it up as he goes along. America’s

founders described a restrained judge as one who uses “judgment” and an activist judge as one

who uses “will.”

In explaining why the judiciary should be the weakest branch of government, Alexander

Hamilton explained that if judges should be disposed to exercise will instead of judgment, the

consequences would equally be the substitution of their pleasure to that of the legislative body.

That is another way of saying that restrained judges allow the people to run the country while

activist judges take over that job themselves. (Hamilton, 1788)

Restrained judges allow people to make the law and the people’s values to define the

culture. The people are meant to decide issues such as public safety, educational standards, or

whether or not religion plays a significant role in public life. Activist judges take that freedom

away from the people and dictate these and other issues, typically with liberal and secular values.

As a result, judicial selection is the most important issue in national politics today. (Jipping,

supra)

The Activist Judge – Master of the Law

The common term today is “activist judges.” Activist federal judges have declared

themselves the power over state legislatures, school boards and city councils. As a result, the

federal government grows ever more invasive, as the states become ever more subservient.

Congressman Ron Paul explains that Federal judges are undermining republican

government by imposing their preferred politics on states and local governments, instead of

respecting the policies adopted by those elected by, and thus accountable to, the people. “Some

may claim that an activist judiciary that strikes down State laws at will expands individual

liberty” said Paul. Proponents of this claim overlook the fact that the best guarantor of true

liberty is decentralized political institutions, while the greatest threat to liberty is concentrated

power. This is why the Constitution carefully limits the power of the Federal government over

States. He goes on to say,“Courts that are free to overturn State laws at the whim of a judge or

from the pressure of an activist group’s lawsuit literally nullify the 10th Amendment’s

Limitations on Federal power”. (DeWeese,2006)

Judicial activism has also been described as legislating from the bench. According to

judicial analyst and former superior court Judge Andrew Napolitano, There is no such thing as an

activist judge. An activist judge is one who’s ruling you disagree with. And if you agree with

what the judge has done, you call them heroic and honest.

The job of the judicial branch is to interpret the law whether it is unclear or in question.

When laws or rulings of lower courts are challenged, Supreme Court justices must examine the

law and determine if the intention of the law has been upheld. Often, justices must determine

whether federal or state laws are constitutional, or if Congress has passed a law without any

constitutional authority to do so, judicial rulings then become the basis for future legal

arguments- this is known as legal precedent, or “case law.” “To conservatives, activist judges are

those who permit or compel activity in which the opinion of conservatives can only be done in

the legislative branch,” Judge Napolitano said. “To liberals, activist judges are judges who

prevent the government from doing the things the Legislature wants to do.”(Napolitano, 2006)

So the core of the argument is the rule of the judiciary. Supreme Court justices are

appointed for life. The reasoning behind lifetime tenure is that sometimes justices must make

decisions that are unpopular or counter to the will of the majority. Because they are not elected,

they are free to uphold the law in spite of potential political fallout. Chief Justice William

Rehnquist said, judges should uphold the laws, regardless of whether that makes them popular or

not.

Legislating from the Bench

Fairleigh Dickinson University in their PublicMind poll [March 15, 2006] asked the

question,”Are the federal and state courts legislating from the bench?” The surprising results of

the poll were that Americans, regardless of whether they classify themselves as independent,

Democrat, Republication, liberal, moderate, or conservative, believe that the courts are

overstepping their role as interpreters of the law. 75 percent believe that legislating from the

bench is a serious problem in federal courts, and 67 percent believe it is a problem in state courts.

These results coincide with a separate CBS poll in which 77 percent believe that a judge’s

personal ideology should not affect judicial decision – making.

The American Bar Association President Robert J. Gray Jr. denounced as “politically

motivated” attacks against judges stemming from high profile cases, saying that they highlight

the lack of civility in contemporary public discourse regarding the role of judges in American

justice. “The draconian stance against the judiciary by some of this country’s lawmakers is

troubling,” said Gray. The role of the judiciary is clear. Federal and state judges are charged with

weighing the facts of a case and following the law, responsibilities they carry out with great

dignity and sensitivity. Bitter partisanship over nominations to the federal bench and the vitriolic

attacks on allegedly “Activist” judges may change, according to Gray. (Gray,2005)

Justin Daar wrote in the “American Chronicle” that we have lost faith and confidence in

our judiciary system to do what is right. Judicial activist judges have turned our legal system into

a sick mockery of justice to the point where many people would rather keep quiet and accept

whatever injustices are meted out on them rather than take their chances in a perverse game of

‘judicial’ roulette.( Daar, 2005)

Alexander Hamilton addressed the issue of judicial activism and how it would be

prevented under the new American Constitution in “Federalist Paper 81.” Hamilton wrote,

“Particular misconstructions and contraventions of the will of the legislature may now and then

happen; but they can never be as extensive as to …..affect the order of the political system. This

may be inferred with certainty…from [the judiciary’s] total incapacity to support its usurpations

by force.”

Our government has a series of institutional checks and balances that keep any one of the

three branches from superseding the others. The checks and balances between the Legislative

and Executive Branches are well known. But what Hamilton is writing about is the lesser known

check of the President over the Supreme Court. As outlined in Articles II and III of the

Constitution. The Supreme Court is dependent upon the Executive Branch, as is the Congress, to

“execute” their wishes. Nothing gets done unless the President agrees.

The Supreme Court can decide whatever they want about anything and nothing is going

to happen unless the President agrees to execute that decision. Political convention states that the

rulings of the Supreme Court are executed by the President as a matter of course, however, there

is no Constitutional requirement that this must be done. It has been done before, in 1832

President Jackson refused to execute the Supreme Court ruling in the case of Worchester v.

Georgia, and the Court responded by not issuing a similar ruling for the rest of Jackson’s term.

Tom DeWeese, Publisher and Editor of the DeWeese Report and President of the

American Policy Center had this to say, “Activist judges have been a plague on American liberty

for decades. Many of their rulings, based more on political ideology and political agendas then

on the rule of law and the actual provisions of the United States Constitution, are undermining

and destroying the reserved powers of the states under the Tenth Amendment to the Constitution

and the guarantee of a republican form of government to each and every state under Article IV of

the Constitution. Activist judges are destroying state autonomy and local self-government and

are a threat to individual liberty.”

The Current State of Affairs

Now, there is a looming danger that federal judges with political agendas will use their

bench powers to overturn voter-approved ballot measures and state legislative efforts regarding

such public policy issues as the legal definition of marriage. All of this is in pursuit of a radical

agenda of political centralization, statist public policy and social engineering profoundly hostile

to Constitutional democracy and individual liberty. (DeWeese, 2006)

The current climate of hostility to the judiciary cannot be written off as a product of the

lunatic fringe. Attacks on “activist judges”--- a phrase that, like “the elites”, has become a code

word for liberals. The truth is that the real issue is not the activism of judges but the principles

upon which they are acting. Justices Roberts and Alito now form a voting bloc with Anthony

Scalia and Clarence Thomas. All are in fact, activist judges on behalf of right-wing ideology.

(Jacoby, 2006)

The most activist court? The Rehnquist Court, which in terms of the annual average

number of federal statutes overturned by the Court ranks first. When it comes to rejecting state

and local statutes, the late Warren Court was second most activists in American history. Here we

see liberal activism, strongest in fact during the Great Society period and into the Burger period

before fading. As the reconstituted Court slowly grew more formable to the state of the law. But

the Rehnquist Court wasn’t far behind. Modern conservatives have tried to curtail the liberal

activism they inherited from the Warren Court, while simultaneously seeking to develop a new

conservative activism of their own. (Keck,2004)

Whether a court decision is activist has nothing to do with which direction it leans

politically. Before 1937, the Supreme Court was activist in the conservative direction. That was

just as wrong as the later liberal activism. Judges who are committed to judicial restraint are

simply committed to letting the democratic process work. Under the Constitution, a few basic

traditional rights are protected from change by the legislative branch. All other questions of

policy are subject to the democratic process.(Meyer,2008)

Even though the term “judicial activist” has dominated public debate over courts for a

generation; there is no consensus on its meaning. Political scientists opt for objective criteria,

saying that anytime judges strike down statutes or policy decisions by elected branches --- no

matter how uncontroversial their reasons --- it is an instance of “activism”. ( Savage, 2009 )

Senator John McCain lashed out at liberal judges for making law rather than interpreting

the Constitution and ripped the current Supreme Court for injudicious decisions. He said

“America’s courts have strayed far from the edict of the Founding Fathers, who laid out, ‘not just

guidelines,’ not ‘helpful suggestions,’ but a clear set of limits.” “The moral authority of our

judiciary depends on judicial self-restraint, but this authority quickly vanishes when a court

presumes to make law instead of apply it. A court is hardly competent to check the abuses of

other branches of government when it cannot even control itself”, Mr. McCain stated. However,

Barack Obama’s criteria for a good justice is someone who shares “Ones deepest values, one’s

core concerns, one’s broader perspectives on how the world works.” (Curl,2008)

Determination of Policy and Law

All judges hold their offices “on good behavior.” They freely take an oath to uphold the

constitution of their various states and the U.S. Constitution. In taking their oaths, such jurists

understand that they have no authority to rewrite the foundational laws of this republic by

judicial fiat. Yet, from the U.S. Supreme Court down to a variety of state courts, that is exactly

what they have been doing…. and they have been doing it with impunity. They have come to

behave like judicial brigands crawling over the gunwales of the ship of state with daggers in their

teeth, intent on storming the wheelhouse of our democracy. The only way to bring chronic

judicial outlawry to an end is to hold the perpetrators of this historic societal crime to account by

removing them from office. (Wilson,2008)

Elected legislators, not unelected judges should determine policy and law. The

conservative majorities under Chief Justices William Rehnquist and John Roberts have

overturned or gutted more legislation than any Supreme Court in more than 70 years; the

Constitution should be strictly constrained, without straying beyond its original intent and

explicit wording. The greatest damage in the past generation to the concept of returning power to

the states has been the reinvigorated doctrine of federal pre-emption, whose champion is icon

Roberts. Under this doctrine, even long-standing state control has been subordinated to the

dictates of the federal government.

Another conservative icon, Justice Antonin Scalia voted that federal power invalidated

the California medical marijuana law and the Oregon assisted – suicide law, even though both

represented the direct expression of the will of the people by initiative and referendum. Judges

make decisions by following the law, not their personal agenda or views shaped by their life

experience.

Most judges, conservative or liberal; try to be impartial, but legal issues are complex, and

judges are human. The default position in a close case is invariably influenced by one’s life

history and present beliefs. It is not believable, for example, that consciously or unconsciously,

Justice Scalia’s strong conservative and religious beliefs played no role in his violating his

federalism principles to vote to invalidate state medical marijuana and assisted-suicide laws.

Probably two of the most activist decisions in our judicial history were the Brown v.

Board of Education and Loring decisions of the Supreme Court. Brown prohibited government –

enforced segregation in our schools, and Loring invalidated statutes in 16 states that prohibited

consenting black and white adults from marrying each other.

On the other hand, the 1857 Dred Scott case by the Supreme Court was the quintessential

strict constructionist decision, both by its method and its explicit wording. Justice Roger Taney

wrote that his generation might not approve of slavery, but the people who wrote the

Constitution did, and therefore, absent a constitutional amendment, slavery would be forever

enshrined in our laws. Even Justice Scalia has admitted that the Dred Scott decision was an utter

disaster for the judiciary and the country. Yet it was, by every definition, a strict conservative

decision. (Wachtler and Gould, 2009)

Complaints Concerning Judicial Activism

Complaints about judicial activism have plagued Supreme Court confirmation hearings

for decades. Justice Sandra Day O’Connor fielded dozens of questions on judicial activism in

1981. Justice Stephen Breyer was urged to resist the siren calls of judicial activism in 1994. The

term appears 56 times in the record of Justice Ruth Bader Ginsburg’s confirmation hearings, and

it seemed omnipresent at the Roberts and Alito hearings.

But what does “judicial activism” mean? To borrow from Justice Antonin Scalia, it often

“doesn’t mean anything. It doesn’t say whether you’re going to adopt the incorporation doctrine,

whether you believe in substantive due process. It’s totally imprecise. It’s just nothing but fluff.”

Without context or a clear definition, a charge of judicial activism is an empty epithet, the

legal equivalent of calling someone a jerk. It hampers the exchange of ideas and lowers the level

of public debate, wasting time (and pages) that could be devoted to serious discussion of the

issues. With appropriate context and clarity, however, the term can be a valuable tool for a

meaningful discussion about the judicial role. (Kmiec,2009)

Criticism of the U.S. Supreme Court often centers on allegations that the Court decisions

reflect inappropriate “judicial activism”. Hundreds of law review articles every year address the

issue, (Kmiec,2004) (noting that the term had been discussed in over five thousand articles since

1990.) While the popular press also commonly critiques so-called activist decisions. (See

id.@1443 n.8. “In the past decade (from 1994 to August 2004), “judicial activism’ and its

cognates have appeared 163 times in the Washington Post and another 135 times in the New

York Times.”)

Even hundreds of judicial decisions have decried judicial activism. While there is no

intrinsic reason why an activist judiciary is inevitably or inherently problematic, the phrase

typically carries a very negative connotation—at least in modern discourse. (Sunstein,2005)

(observing that for some the “word” activist isn’t merely a description” but is “always an

insult”.) Not all forms of judicial activism are universally condemned. Some of the decisions for

which the Supreme Court is generally applauded, such as Brown v. Board of Education (347

U.S. 483 (1954), were in some respect activist decisions. (Roosevert III, 2006)

Ronald Dworkin has extolled the virtues of an activist judiciary in the protection of

constitutional rights. (Brubaker,1984) Judicial activism is arguately “a way for a Court to line up

for its obligation to serve as citadel of the public justice.” (Brown,2002) While this defense of

activism certainly resonates, it presumes that Justices embrace a certain honest sincerity

regarding constitutional interpretation, as opposed to a more result-oriented ideological

approach.

Critics of judicial activism challenge this sincerity and claim that activist judges simply

impose their policy preferences on society, without electoral accountability or fidelity to the

Constitution. (Marshall,2002) As calls to rein in the activist judiciary have entered popular

discourse, however, the term “activism” has become devoid of meaningful content as it often

reflects nothing more than an ideological harangue. Nevertheless, the underlying concern – that

activist judges may act improperly – is legitimate in light of our commitment to democratic

values. Yet to evaluate this concern, we need both a precise definition of judicial activism and

more rigors in its testing.

At the core of the criticisms of judicial activism lies a concern that the judiciary is acting

outside its proper judicial role. Some complain that the activist judiciary is acting “like a

legislature” instead of a court. (Kmiec, id @ 1471, Judges are labeled judicial activists when they

“legislate from the bench”) Exactly what it means for a court to “act like a legislature” is less

clear. Sometimes, the criticism suggests the Court is creating law rather than applying it. Indeed,

the key objection is that an activist Court somehow acts non-judicially. As Justice Black noted

in objection to a right to counsel ruling, “we are deciding what the Constitution is, not from what

it says, but from what we think it would have been wise for the Framers to put in it.” (U. S. v.

Wade, 1967, 388 U S 218, 250) Such “non-judicial” behavior is the form of action that must be

reflected in a social scientific measure of judicial activism.

The term “judicial activism” apparently is an effective rhetorical tool in ideological

argument, but no consensus exists regarding its specific meaning. Instead, the phrase is used as

an epithet to bludgeon legal and political opponents. (Segal and Spaeth,1993). As Judge

Diarmuid F. O’scannlain observes, “judicial activism is not always early detected. Because the

critical elements of judicial activism either are subjective or defy clear and concrete definition.”

(O’scannlain, 2000)

Judge Frank H. Esterbrook suggests that the term is “empty” and simply a “mask” for the

critic’s own substantive position on the court. While Justice Scalia has characterized criticisms of

judicial activism as “nothing but fluff”.( Law, 2002) The most common standard for evaluating

judicial activism is the extent to which judges invalidate legislative enactments. Judge Richard

A. Posner suggests that a basic element of judicial activism is a court’s willingness to act

contrary to the will of the other branches of government, as in striking down a statute. ( Posner,

1996)

Sunstein contends that it is best to measure judicial activism by seeing how often a court

strikes down the activity of other parts of government, especially those of Congress. (Sunstein,

2005, supra, p. 42.43) Judicial activism is in fact “most often associated with judicial

invalidation of decision by elected representatives.” (Marshall,2002)

Political scientists generally contend that the most dramatic instances of a lack of judicial

restraint – or conversely, the manifestation of judicial activism – are decisions that declare acts

of Congress and, to a lesser extent, those of state and local governments unconstitutional.(Segal

and Spaeth 2002, supra) This standard is commonly invoked and probably the most common

measure of judicial activism. (Peters,1997)

Overturning or ignoring applicable precedent may also constitute a form of judicial

activism.(Kmiec,2004) When Justices overturn precedent they more clearly trammel the actions

of their predecessors than the privileges of the coordinate branches, but these decisions are often

challenged as activist, given the general standard of judicial fealty to precedent. The framers of

the Constitution considered precedent to derive from the nature of judicial power, and intended

that it would limit the judicial power delegated to the courts by Article III of the Constitution.

(Anastasoff v. United States, 2000, 223 F. 3rd. 898 @ 900, Vacated as moot en banc, 235 F. 3rd

1054). Regularly overruling or distinguishing away precedent might therefore be considered

inappropriate judicial activism. The Justices have themselves occasionally criticized their

brethren for judicial activism in ignoring the Court’s precedents. (Kimel v.Fla. Bd of Regents,

(2000) 528 US 62, pg 98,99,Stevens, J. dissenting.); Engle v. Isaac, 456 US. 107 @ 137 (1982)

(Brennan, J. dissenting).

Another form of judicial activism involves not the decision but the opinion or remedy.

Writing an unnecessarily broad opinion with applicability beyond the unique circumstances of

the case before the Court might be considered activist. Alternatively, the nature of relief ordered

might appear to have an “activism” dimension. In some cases, courts have involved themselves

in the “day - to – day running of public institutions” or demanded public expenditures amounting

to millions of dollars.” (Young, 2002) These seemingly activist judicial measures, regardless of

whether the underlying decision invalidated a statute or overturned a precedent. They certainly

assume power generally reserved for other governmental institutions.

Judges fail to act within their proper role when they engage in “result – oriented judging”,

whereby their decisions are driven by their ideological preferences concerning substantive case

outcomes (e.g., liberal Justices preferring liberal policy outcomes and conservative Justices

preferring conservative outcomes.) (See, Kmiec, id @ 1475. 1476) As a result, based on

ideological predispositions, a liberal Justice would rule in favor of criminal defendants’ rights,

whereas a conservative Justice would oppose such rights. Such ideological judging has been

called “the essence of judicial activism.” (O’scannlain, supra @23,“When a judge is swayed by

his own sentiment rather than considerations of deference, predictability, and uniformity, he fails

by definition to apply the law faithfully.”)

What the Studies Show

Jeffrey Segal and Harold Spaeth also reviewed Supreme Court declarations of

unconstitutionality, examining votes in 170 cases between 1986 and 1998 in which the Court

found a law unconstitutional. The vast majority of the Justices displayed a significant ideological

effect—liberal Justices voted to strike conservative laws and uphold liberal ones, while

conservatives on the Court ruled the opposite. (Segal and Spaeth ,2002)

In a more recent publication in the Journal of Empirical Legal Studies, Rorie Spill

Solberg and Stefanie Lindquist analyzed Justices’ votes to invalidate state and federal legislation

for the period from 1986 to 2000. (Solberg and Lindquist, 2006)

This study focused on whether the conservative Justices’ expressed desire to protect

states’ rights via an enhanced federalism doctrine actually structured their exercise of judicial

review, or whether their votes to invalidate state and federal legislation were better explained in

terms of the ideological direction of the statute at issue (id. @ 237). The authors found that the

Justices’ preference for certain substantive policies trumped their professed concern for

deference to state law and legislative policy. (Id)

In another recent study, Lori Ringhand conducted an analysis of the data summarized in

Gewintz and Golder’s New York Times editorial.(Ringhand, 2007) She confirmed their finding

that the conservative Justices of the Rehnquist Court were distinctly more likely to invalidate

federal legislation and overturn precedent than the liberal Justices. (See Ringhand, pg 7-8, 27) In

addition, Ringhand expanded on the limited editorial to find that the Court’s liberal Justices were

more likely to invalidate state legislation. (Id.pg 17- 19). However, she concluded that the

conservatives would overturn state legislation to advance conservative ends (Id pg 23) and even

did so in the most legally contestable cases.(Id.pg. 22.23)

Conclusion

To date, the empirical research exploring judicial activism has only scratched the surface.

This research is limited in part because it focuses primarily on one dimension of judicial activism

involving the invalidation of legislative enactments. (Cross and Lindquist,2007) There is much

more that needs to be dome before a definitive answer can be given as to what the term ‘activist

judge’ really means. It leaves one to ask, “activist as compared to what?”.

Like many catchwords, ‘activist judge’ has acquired so many different meanings that it

obscures more than it reveals. Abandonment of the term not being a viable option, clarification

becomes imperative.