Archive for July, 2010
Senators (Finally) Press Kagan about ObamaCare
Back in May, I suggested:
Senate Judiciary Committee members should be sure to ask Solicitor General and Supreme Court nominee Elena Kagan, during her upcoming confirmation hearings, whether she or her office played any part in crafting ObamaCare or the administration’s defense to the lawsuits challenging that law. If Kagan helped to craft either, that would present a conflict of interest: when those lawsuits reach the Supreme Court, she would be sitting in judgment over a case in which she had already taken sides…
If Kagan played a role in drafting ObamaCare or formulating the administration’s legal defense, and is confirmed by the Senate, propriety would dictate that she recuse herself from any challenges to that law that reach the high court.
Committee members didn’t ask her those questions during the hearings, as The Wall Street Journal explains. Fortunately, a letter to Kagan from all seven Republicans on the committee has (exhaustively) remedied that oversight.
Kagan has already told the committee she would recuse herself from any case in which she “participated in formulating the government’s litigating position.” Given that she appears to take an expansive view of Congress’ power to regulate interstate commerce, the best possible outcome for opponents of ObamaCare would probably be for Kagan to join the Court but recuse herself from cases challenging that law.
That would also be the worst possible outcome for the administration. In fact, universal coverage is so important to the Left that if Kagan would leave them with one less pro-ObamaCare vote on the Court, I wouldn’t be surprised to see President Obama withdraw her nomination. He could then appoint someone as ideologically reliable as Kagan, but who could actually defend the president’s signature accomplishment.
This could get interesting.
Filed under: Cato Publications; General; Health Care; Law and Civil Liberties
Sunlight Before Signing: ‘Expected’ Is not ‘Pending’
Early this month, I reported on President Obama’s recent moves to implement Sunlight Before Signing and improvements in his Sunlight Before Signing average. The news is good, though we’ll pause here to highlight a small quibble with White House practice.
The essence of the president’s promise to post bills online for five days was to give the public a chance to review the legislation coming to him from Congress for a decent interval before he signs it. If Whitehouse.gov consistently posts all bills Congress passes, as promised, the public will develop a consistent practice of taking a last look before it becomes law.
One day, the national crowdsourcing effort may turn up an error or a late-coming provision that causes the president to send a bill back to Congress for retouching. Its influence overall will be to discourage members of Congress from slipping last-minute, parochial amendments into bills that they know will become law just hours later.
A White House practice of posting bills before they come down Pennsylvania Avenue would frustrate development of the habit of public review. If bills are posted prematurely, ordinary Americans who do not follow the day-to-day of the legislative process will see their time wasted when they review the early version of a bill only to find that it is later amended by Congress. People will shy away from participating in public review of bills coming to the president.
This is currently the risk with H.R. 4173, the Restoring American Financial Stability Act of 2010, Congress’ plan to revamp financial services regulation in the United States. It was posted on Whitehouse.gov June 30th, the day that the House-Senate compromise on the bill passed the House, and it is the only bill on the “Pending Legislation” page at this writing. But the Senate did not agree to the conference report at that time, and the bill may see changes before it passes, or it may fail to pass altogether.
We credited the White House with a Sunlight Before Signing “win” when it posted the DTV Delay Act for five days after final passage, even though it wasn’t five days after presentment—the formal step in which Congress passes a bill to the president. This is because a bill will be unchanged after final passage. The public can review it confident that it is in its final form.
This is not the case with the financial services regulation revamp. The bill should not be getting sunlight on the White House’s web site while it still sits in Congress. A bill that the White House expects to receive is not “pending” in a sense consistent with President Obama’s Sunlight Before Signing pledge to voters and the public.
What Is a ‘Strong’ Defense?
The good people at the Stimson Center’s Budget Insight blog invited me to contribute a guest post discussing the Sustainable Defense Task Force report Debt, Deficits, & Defense: A Way Forward. Here’s an excerpt:
The most common response [to the report] has been some sympathy for our argument that military spending should be subjected to the same scrutiny that should be applied to other government spending. There are still a fair number of people, however, who share our concern about the deficit, but who counter “But I want a strong defense.”
Who doesn’t?
The task force report was written with a single consideration in mind: in what ways, and where, could we make cuts in military spending that would not undermine U.S. security?
[...]
A leading conservative in the Senate, Tom Coburn (R-OK) wrote that the deficit reduction commission “affords us an opportunity to start some very late due diligence on national defense spending… [as well as] reduce wasteful, unnecessary, and duplicative defense spending that does nothing to make our nation safe.”
Read the rest here.
Ever So Quietly, National Standards Spread
Today’s advocates of national education standards certainly learned from the standards debacle of the 1990s, in which detailed standards were widely released — and widely hated. Be upfront and vocal with the public about what you are doing, they learned, and national standards will never exist. That’s why advocates have kept their efforts awfully hush-hush — no DC unveiling of final standards; a rushed, federally-coerced time line for adoption; and almost no willingness to discuss the research on standards. It also hasn’t hurt that just bigger issues — economic stagnation, wars, oil spills — have eaten all the reporting space. Unfortunately, the result is that with “little…fanfare” (registration required) 23 states have already adopted the Common Core State Standards, and several more are expected to do so before August 2 — the day they have to adopt them to stay competitive for federal Race to the Top funds.
And the slope keeps getting more slippery. Would-be national standardizers have been even more quiet about needing national tests to make their standards useful than they’ve been about the standards themselves. But those tests — federally backed, of course — are coming. In addition, the Common Core folks started with language arts and mathematics because those subjects — as long as you don’t pinpoint much reading material – are relatively uncontroversial. But guess what? The National Research Council just released preliminary material for national science standards, an effort purposely timed to coincide with Common Core.
So national standards keep slowly constricting. But there is resistance. A new assessment of the Common Core math standards suggests that, well, the standards might not really be as good as those of leading nations. (Too bad so many states gave analysts no more than a nanosecond to assess the standards before adopting them. But, then, they were just following the the feds’ adopt-now-for-big-bucks lead.) Even more hopeful — because ultimately the problem isn’t the quality of the standards, but the ruinous centralization they will bring — is that there are many candidates running for federal office who, according to Education Week, actually acknowledge the Constitution, care about good education, and are calling for the feds to get out of the nation’s classrooms. Now, they almost certainly don’t represent a mass revolt against the U.S. Department of Education, but their presence offers at least some hope that the nation is coming to realize that as it fixated on health care, Afghanistan, and bailouts, the feds were stealthily setting the groundwork to take over their schools.
Such a realization can’t come a moment too soon.
Show Me the Money
A number of economists have been warning about the Federal Reserve’s easy-money policy, but defenders of the central bank often ask, ”if there’s an easy money policy, why isn’t that showing up in the form of higher prices?” Thomas Sowell has an answer to this question, explaining that people and businesses are sitting on cash because anti-business policies have dampened economic activity.
Not only has all the runaway spending and rapid escalation of the deficit to record levels failed to make any real headway in reducing unemployment, all this money pumped into the economy has also failed to produce inflation. The latter is a good thing in itself but its implications are sobering. How can you pour trillions of dollars into the economy and not even see the price level go up significantly? Economists have long known that it is not just the amount of money, but also the speed with which it circulates, that affects the price level. Last year the Wall Street Journal reported that the velocity of circulation of money in the American economy has plummeted to its lowest level in half a century. Money that people don’t spend does not cause inflation. It also does not stimulate the economy. …Banks have cut back on lending, despite all the billions of dollars that were dumped into them in the name of “stimulus.” Consumers have also cut back on spending. For the first time, more gold is being bought as an investment to be held as a hedge against a currently non-existent inflation than is being bought by the makers of jewelry. There may not be any inflation now, but eventually that money is going to start moving, and so will the price level.
I do my best to avoid monetary policy issues and certainly am not an expert on the subject, so I asked a few people for their thoughts and was told that perhaps the strongest evidence for Sowell’s hypothesis comes from the Federal Reserve’s data on “Aggregate Reserves of Depository Institutions” – specifically the figures on excess reserves. This is the money that banks keep at the Federal Reserve voluntarily because they don’t have any better options. As you can see from the chart, excess reserves shot up during the financial crisis. But what’s important is that they did not come back down afterwards. Some people refer to this as “money on the sidelines” and Sowell clearly is worried that it will have an impact on the price level if banks start circulating it. That doesn’t sound like good news. On the other hand, it’s not exactly good news that banks are holding money at the Fed because there are not enough profitable opportunities.
What this really tells us is that the combination of easy money and big government isn’t working any better today than it did in the 1970s.
U.S. DOT: “Crash Data Suggest Driver Error in Toyota Accidents”
The Wall Street Journal reports:
The U.S. Department of Transportation has analyzed dozens of data recorders from Toyota Motor Corp. vehicles involved in accidents blamed on sudden acceleration and found that at the time of the crashes, throttles were wide open and the brakes were not engaged, people familiar with the findings said.
The results suggest that some drivers who said their Toyota and Lexus vehicles surged out of control were mistakenly flooring the accelerator when they intended to jam on the brakes.
Maybe it’s rude to say “I told you so,” but yes: I told you so, as did others including Ted Frank, Megan McArdle, Michael Fumento, and Ronald Bailey.
To be sure, investigators agreed that one high-profile California crash, in which a family of four was killed in a loaner Lexus, was caused by floor mat “entrapment” of the accelerator pedal, a freakishly rare (and avoidable) event. But that does little to vindicate the trial-lawyer-allied “safety advocates” we heard from this spring, many of whom consistently downplayed floor mat theories because they were useless in explaining the great majority of the cases lawyers wanted to sue over.
Can we now look forward to the stream of apologetic stories from major news organizations that bought into theories about mysterious electronic defects in the cars? Or will the media add another chapter to its long record of gullibility on these matters?
First Amendment 1, Censorship 0
Today, we celebrate a free speech victory in the Second Circuit Court of Appeals in New York. In the case of Fox Television v. Federal Communications Commission, the three-judge panel struck down the FCC’s indecency policy for being “unconstitutionally vague” and “creating a chilling effect that goes far beyond the fleeting expletives issue” (e.g., stray f-bombs) that was at the heart of this case.
The case was before the Second Circuit after it was remanded by the Supreme Court last year. Cato adjunct scholar Robert Corn-Revere, acting in his capacity as partner at Davis Wright Tremaine, is lead counsel for co-petitioner CBS. Bob wrote an article for last year’s Cato Supreme Court Review in which he characterized the case as the first act of many that will in the networks’ fight for free speech. He also argued a related case before the Third Circuit in February.
It should go without saying that free speech is a bedrock principle of our nation. Unfortunately, it must indeed be said — over and over again — to the FCC and other governmental agencies who wish to quash speech for whatever purported and often arbitrary reasons. It’s absurd to think that the foundation of the republic is so fragile that the American people must be protected from the random scatological references of Nicole Richie.
Congrats to Bob and the many lawyers on the case for their hard-fought victory today, and we wish them luck in their continuing fights for freedom of speech.
You can read the Second Circuit’s decision here.
Evolution and Liberty
Political scientist Larry Arnhart heads this month’s Cato Unbound. He argues that libertarians need to integrate biological evolution into their thinking about human cultures and even politics.
More provocatively, he claims that the “a Darwinian science of human evolution supports classical liberalism.” This is the case, he argues, even though
market competition differ[s] radically from biological competition. Biological competition is a zero-sum game where the survival of one organism is at the expense of others competing for the same scarce resources. But market competition is a positive-sum game where all the participants can gain from voluntary exchanges with one another. In a liberal society of free markets based on voluntary exchanges, success depends on persuasion rather than coercion, because we must give to others what they want to get what we want. Smith concludes: “It is precisely in a free society that Social Darwinism does not apply.”
Our genes, however, help get us to where we are, and understanding their contribution to the formation of societies and institutions is one of the most important projects in evolutionary biology, helping to bridge the gap between the hard sciences and the social sciences.
To borrow a phrase used by Karl Popper and later by Daniel Dennett, in a free society, we may allow our ideas to die in our stead, in the course of experimenting with them, debating, and innovating within a framework of laws and rights. This ability is made possible by a set of inheritances — genetic, epigenetic, and cultural — that help make us who we are.
As usual, we have a panel of fascinating commentators lined up for the rest of the week, starting with science-blogging superhero PZ Myers, followed by eminent behavioral scientist Herbert Gintis, and rounded out by pathbreaking anthropologist Lionel Tiger. Stop by during the rest of the month for what’s sure to be a stimulating discussion.
Should the U.S. Restrict Immigration?
Recent debates about Arizona’s new immigration law have taken as self-evident that immigration restrictions are good policy, with the only question being which level of government should enforce the law, and how. Yet the case for immigration restrictions is far from convincing.
Advocates of these restrictions rely on four possible arguments. First, that immigration dilutes existing languages, religions, family values, cultural norms, and so on. Second, that immigrants flock to countries with generous social welfare programs, leading to urban slums and inundated social networks. Third, that immigration can harm the sending country if the departing immigrants are high-skilled labor. Fourth, that immigration lowers the income of native, low-skill workers.
All of these arguments are wrong, overstated, or misguided. Immigration may change cultural values or norms, but nothing suggests this is a negative. Many societies flourish because they have incorporated new businesses, cultures, foods, and so on. More important, immigrants normally assimilate to the pre-existing culture provided government policy does not segregate them from the rest of society. In the past rich countries have incorporated large immigration flows with modest adjustment costs. Many of these immigrants lived in difficult conditions at first, but within a generation they achieved middle class status or better.
The possibility that immigration puts pressure on the welfare state is a reasonable concern, although existing evidence does not suggest this is a major problem. In any case, the possibility that a generous social safety net might encourage immigration is a reason to moderate this safety net, rather than a reason to restrict immigration. Indeed, expanded immigration might create pressure to keep the welfare state modest.
The risk that immigration drains high-skilled labor from poor countries is real, but this kind of immigration has positive impacts on the sending country that mitigate against any negatives. The possibility of migration to a high-wage country generates an incentive to acquire education, and only some of those educated actually leave. The threat of a brain drain nudges poor countries away from bad policies-such as excessive tax rates-that generate the brain drain in the first place. Many immigrants send remittances to friends or relatives in their country of origin. Plus, if borders were really open, many immigrants would seek education abroad but return to their home country, knowing they could leave if economic factors so dictated. Similarly, with open borders many immigrants would pursue temporary stays in higher wage countries. Temporary migration is common in many countries now, and was common in the U.S. before the tightening of immigration rules in the 1910s and 1920s. Temporary migration raises fewer of the standard concerns than permanent migration, while still helping many people in low-wage countries.
Concern for the poor, assuming this includes the poor in other countries, argues for vastly expanded immigration since many potential immigrants are much poorer than the natives whose wages they might depress. Only a bizarre view of equity favors people earning the minimum wage in rich countries over people near starvation in developing countries.
The conclusion that open borders is the best immigration policy is all the stronger because attempts to restrict immigration have their own negatives. These include the direct costs of border controls, the creation of a violent black market for immigration, and incentives for corruption. Further, immigration may have beneficial effects on productivity by fostering competition and introducing new ideas, approaches, business models, products, and so on. At the same time, many people in receiving countries enjoy the influence of new cultures. Immigrants also work at jobs for which the native supply is small.
Reasonable people can argue that immigration should increase gradually to moderate the transition costs. But any reasonable balancing implies vastly expanded immigration relative to current levels. This would improve the welfare of poor people in other countries far more than foreign aid.
C/P at psychologytoday.com
Free Trade Begins at Home
When pundits discuss “free trade,” most people think of international trade, eliminating tariffs, import quotas, and the like. That’s because the Constitution’s Commerce Clause — the one Congress has been using and abusing for decades — grants the government the power to “make regular” trade between the several states. For example, Oklahoma can’t ban imports of beef from coming across the Red River and New York can’t have a different licensing regime for long-haul tracks entering from New Jersey rather than Pennsylvania.
While this commerce- (and liberty-) enhancing feature of our federal system has required a Supreme Court reminder for traditional wine retailers in recent years, Americans have generally taken for granted that buying and selling products between American jurisdictions is perfectly normal.
It may surprise you to learn, then, that in Lake Elmo, Minnesota, proprietors of a 40-year-old family farm that yields flowers, pumpkins and Christmas trees, are facing fines and 90-day jail sentences for attempting to sell their products in that town. The reason? Part of their farm lies outside city limits, and in Lake Elmo it’s illegal for farmers to sell products — even from their own land — unless they were grown within the city. You can view a short video about their story here:
Thankfully, our friends at the Institute for Justice are stepping up to defend these folks for making a living by engaging in domestic free trade. This blatant protectionism is harmful and foolish when practiced with foreign trading partners, and is all the more repugnant when practiced against one’s own neighbors who provide the community with valuable goods and services. That these law-abiding entrepreneurs face potential jail time for the crime of “selling produce across city lines” is anathema to the Constitution.
You can read Cato’s work on agricultural free trade here
Time to End the “Gore Tax”
When the Telecommunications Act of 1996 passed, section 254 was dubbed the “Gore Tax” by detractors of the policy and the then-Vice President whose project it was.
A system of cross-subsidy that was implicit in the old AT&T was made explicit as a tax on interstate telecom services—euphemistically referred to as a “contribution”—and expanded to reach to a small universe of sympathetic interests—more accurately, the telecommunications providers serving those interests.
The amount of the “contribution” would be set by the Federal Communications Commission. That is, the agency would set the level of taxes on telecommunications, then hand out the money it produced by taxing. (I wrote previously about the Taxpayers Defense Act (House -105th Congress, House – 106th, Senate – 106th), introduced in recognition that this is taxation without representation.)
Under the program, subsidies go in four directions: to high-cost telecom users, such as those in remote locations; to low-income telecom users; to schools and libraries; and to rural health care efforts. Surprise, surprise! The program has grown over the years, and it has been plagued by allegations of corruption and misuse.
To its credit, the House Energy and Commerce Committee has been doing some oversight, and it recently sent a letter asking the FCC to provide some data on the program. The FCC has responded, and the results are striking.
The FCC’s list of the top ten recipients and the subsidies they received in 2007, 2008, and 2009 show hundreds of millions of dollars going to large telecom firms, more than a billion each to AT&T and Verizon.
A state by state list of subsidies under each of the four universal service programs also shows each state’s “contribution” and whether it was a net winner or loser. The total “dollar flow” is negative by some $187 million in 2009. That’s the money that went to administrative expenses—essentially Washington, D.C.’s take.
Then there’s the shocking list of the largest per line subsidies. Westgate Communications in Washington state received $301,966 in 2009 to support 17 subscribers to their services—a subsidy of $17,763 per line. Adak Eagle Enterprises in Hawaii received $23,945,376 for 2,192 customers, a subsidy of $10,926 per customer. Subscription news service TechLawJournal notes that the top five per line subsidies are all in states with representation on the Senate Commerce Committee.
Folks with the biggest heart-to-brain ratio might interpret this as good news: People who otherwise might not have telecommunications services are getting it! But even a big-heart might recognize the brainiac/green-eyeshade perspective. These subsidies do at enormous cost what might be done better and cheaper with competition and innovation. Utterly top-class communications can be delivered anywhere in the United States—pretty much anywhere in the world—for far less than $10,000 per customer per year.
Equally importantly, people who live in remote areas have no just claim that others should pay for their communications, just as people in areas with expensive housing have no just claim that rural folk should pay their rent.
Section 254 was a bad policy at the outset, and these data manifest that. Expensive government “universal service” programs should be eliminated so that unhampered competition in the private telecommunications market can deliver cost-effective telecom services everywhere they are supposed to be. That would satisfy both the hearts and the brains among us, and it would do so justly.
Calling in the World Court against the Gun Trade
Just before the holiday I sent off to Encounter Books the manuscript of my next book, tentatively titled Schools for Misrule: Law Schools and an Overlawyered America. One of the themes the book explores is how, after years of arguing that courts should read the U.S. Constitution as requiring the adoption of the liberal policy agenda of the moment (welfare rights, free health care, or whatever), cutting-edge law school thinking now promotes the idea that international human rights law requires the adoption of that same agenda. Thus the U.S. Supreme Court ruled in San Antonio v. Rodriguez (1973) and Milliken v. Bradley (1974) that the U.S. Constitution does not mandate (respectively) “Robin Hood” school finance redistribution and school busing across district lines; now it’s argued that both decisions need to be revisited and overturned as contrary to (ever-evolving) conceptions of international human rights. Similarly, there are said to be internationally recognized rights to government-provided housing, day care, and even (at least in Europe) tourism.
These notions are at odds with longstanding ideas of sovereignty and national independence, as held by (among many others) the Founders of this Republic. That they could also pose more direct dangers to individual liberty is suggested by a news item that drew only passing attention a few weeks ago: Chicago Mayor and long-time anti-gun advocate Richard Daley convened an assembly on global issues at which (per the Chicago Sun-Times) he “convinced more than a dozen of his counterparts from around the world to approve a resolution urging ‘redress against the gun industry through the courts of the world’ in The Hague.” According to another local news report, Daley “said American gun manufacturers should be held responsible in the World Court, since American-made guns are used in violent crime elsewhere in the world.” Philadelphia Mayor Michael Nutter and the mayor of Mexico City were among those endorsing the idea. David Kopel at Volokh Conspiracy has much more on the conditions that would have to be met for the World Court to assert jurisdiction.
Chicago and its mayor were in the Second Amendment spotlight most recently with the McDonald case, in which the U.S. Supreme Court struck down the city’s ultra-strict anti-gun ordinance as in violation of the Bill of Rights. But the real antecedent of Daley’s latest idea was the late-Nineties litigation ginned up by anti-gun advocates and trial lawyers on behalf of three dozen cities and counties, which mostly fared poorly in court, yet still, through sheer cost-infliction, very nearly achieved its goal of off-the-statute-books gun control through litigation). That litigation campaign was decisively rejected and stopped in its tracks by Congress in the Protection of Lawful Commerce in Arms Act, signed by then-President George W. Bush in 2005. In other words, Daley is seeking an international end run around both the Bill of Rights and the democratically expressed will of the American people. Aren’t Chicago voters tired of this yet?
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