Archive for January, 2011
Thomas Stays the Course, Scalia Returns to the Fold
A bit lost in last week’s legal news regarding a majority of states now suing over Obamacare, the House voting to repeal Obamacare, and the anniversary of Citizens United, was the first interesting Supreme Court decision of the term. Most notably, Justices Scalia and Thomas continued their valiant struggle to limit the scope of the constitutional misnomer that is “substantive due process” doctrine.
The case was NASA v. Nelson, a suit challenging the background checks for perspective NASA contractors as violating an evanescent constitutional right to informational privacy. The Court ruled unanimously against the challengers, with Justice Alito writing for the majority that, regardless whether such a right exists, it was not violated by the government’s probing questions on sexual history and mental health.
Justices Scalia and Thomas rightly found problems with this essentially useless ruling. Scalia, joined by Thomas, concurred in the result but wrote separately to say that if a right doesn’t exist then the Court should just say so. He would have simply held that there is no constitutional right to “informational privacy”:
I must observe a remarkable and telling fact about this case, unique in my tenure on this Court: Respondents’ brief, in arguing that the Federal Government violated the Constitution, does not once identify which provision of the Constitution that might be. The Table of Authorities contains citations of cases from federal and state courts, federal and state statutes, Rules of Evidence from four states, two Executive Orders, a House Report, and even more exotic sources of law…. And yet it contains not a single citation of the sole document we are called upon to construe: the Constitution of the United States…. To tell the truth, I found this approach refreshingly honest. One who asks us to invent a constitutional right out of whole cloth should spare himself and us the pretense of tying it to some words of the Constitution.
In the course of his typically entertaining opinion we see Scalia back to his old self, caustically lambasting the “infinitely plastic concept of ‘substantive’ due process” and suggesting that it is “past time for the Court to abandon this Alfred Hitchcock line of our jurisprudence.”
English Anti-Tax Haven Ideologues Are Just as Foolish and Ignorant as their American Cousins
There’s a supposed expose’ in the U.K.-based Daily Mail about how major British companies have subsidiaries in low-tax jurisdictions. It even includes this table with the ostensibly shocking numbers.
This is quite akin to the propaganda issued by American statists. Here’s a table from a report issued by a left-wing group that calls itself “Business and Investors Against Tax Haven Abuse.”
At the risk of being impolite, I’ll ask the appropriate rhetorical question: What do these tables mean?
Are the leftists upset that multinational companies exist? If so, there’s really no point in having a discussion.
Are they angry that these firms are legally trying to minimize tax? If so, they must not understand that management has a fiduciary obligation to maximize after-tax returns for shareholders.
Are they implying that these businesses are cheating on their tax returns? If so, they clearly do not understand the difference between tax avoidance and tax evasion.
Are they agitating for governments to impose worldwide taxation so that companies are double-taxed on any income earned (and already subject to tax) in other jurisdictions? If so, they should forthrightly admit this is their goal, notwithstanding the destructive, anti-competitive impact of such a policy.
Or, perhaps, could it be the case that leftists on both sides of the Atlantic don’t like tax competition? But rather than openly argue for tax harmonization and other policies that would lead to higher taxes and a loss of fiscal sovereignty, they think they will have more luck expanding the power of government by employing demagoguery against the big, bad, multinational companies and small, low-tax jurisdictions.
To give these statists credit, they are being smart. Tax competition almost certainly is the biggest impediment that now exists to restrain big government. Greedy politicians understand that high taxes may simply lead the geese with the golden eggs to fly across the border. Indeed, competition between governments is surely the main reason that tax rates have dropped so dramatically in the past 30 years. This video explains.
Does the Tea Party Care about Liberty?
Alex Pareene of Salon makes some fair points in his posting, “Tea Partiers don’t actually care about ‘liberty.’” It’s disappointing to hear that New Mexico Tea Partiers booed Gary Johnson’s support for legalizing marijuana. And it’s true that a new poll shows Tea Partiers pretty strongly against marriage equality. But the poll does show them just a smidgen more supportive than either conservatives or Republicans. And other polls (click “Social Issues” on the left) have shown somewhat more support among self-identified Tea Party supporters, or a clear division between libertarian-minded and culturally conservative Tea Partiers. In general, Tea Party activists — organizers and people who attend events — seem somewhat more libertarian than people who simply tell pollsters they consider themselves to be members or supporters of the Tea Party movement.
Tea Party groups have declined invitations to criticize federal court rulings on gay marriage. They have studiously avoided taking positions on social issues, even when social conservatives stomp their feet and demand that the Tea Party start talking about abortion and gay marriage.
I have said before that “The tea party is not a libertarian movement, but (at this point at least) it is a libertarian force in American politics. It’s organizing Americans to come out in the streets, confront politicians, and vote on the issues of spending, deficits, debt, the size and scope of government, and the constitutional limits on government. That’s a good thing. And if many of the tea partiers do hold socially conservative views (not all of them do), then it’s a good thing for the American political system and for American freedom to keep them focused on shrinking the size and cost of the federal government.” That still seems a valid point: Whatever views individual Tea Partiers may hold on an array of issues, as the Tea Party they are organized to constrain taxes, spending, deficits, debt, and the size of government, and that’s a libertarian direction.
Pareene seems simply wrong when he triumphantly ends his post with this supposedly damning quotation from Cato:
(A post from the Cato Institute makes its cheerful willingness to abandon the non-economic planks of its platform explicit: “Candidates and representatives hoping to appeal to the Tea Party, we argue, need to focus on a unifying economic agenda that takes into account this strong libertarian undercurrent.”)
Just read the quotation. My colleague David Kirby is saying that Republicans should avoid divisive social issues — presumably meaning abortion, gay marriage, and projects like the Terri Schiavo intervention — lest they lose the support of libertarian-leaning Tea Party activists. That is, he’s urging the Republican Party to abandon its non-libertarian agenda in order to unify a broad coalition of conservatives, libertarians, and independents. Pareene seems to have misread it.
Kathy Bates Takes on Drug Legalization
The new NBC drama “Harry’s Law” has a preposterous premise, but it does give Kathy Bates a chance to chew some scenery. In the pilot — to be repeated tonight at 8 p.m. — she’s defending a young black man facing jail time for drug possession. And she unleashes a tirade against the drug war and against an outmatched prosecutor. Conservative bloggers have complained because Bates’s character Harriet “Harry” Korn said that the idea of drug decriminalization ”was first raised by conservative Republicans . . . when the party had thinkers, before it was hijacked by the likes of Rush Limbaugh.” (Exchange begins at about 24:00 in the episode.)
Looking for video of her courtroom speech, I found this excellent discussion from Inimai Chettiar and Rebecca McCray of the ACLU. I yield the floor to them:
While the opening few minutes are a bit absurd (Harry’s first client is a third-time drug offender who literally lands on her after jumping off a building), the show’s pilot brings to light the serious problem of overincarceration in our country.
In her closing argument to a jury in defense of a young man charged with cocaine possession (minutes 27-31 of the episode), Harry delivers a touching and evidence-based appeal to the jury and argues that incarceration is not the appropriate way to deal with drug offenders. She points out:
“[S]tudy after study after study has shown that when you take kids like Malcolm [her young black client] and you stick them in jail, you increase the likelihood that they’ll remain addicts, or wind up homeless, or worst of all become more hardened and career criminals. When it comes to drug abuse, treatment is seven times more cost effective than incarceration. Seven times. It’s an indisputable fact.”
Since television statistics can often be far from the truth, we did a little research. It seems the show’s “seven times” statistic may be based on a 1994 reportcommissioned by the White House’s Office of National Drug Control Policy. Several recent studies also show that treatment is far more cost effective than incarceration for drug offenses. Drug offenses, especially possession, are often indicative of addiction. And addiction, more than being a criminal offense, is something that can be treated. Treatment rehabilitates drug offenders at a lower cost, allowing them to become productive members of society. Incarcerating someone is expensive. And as Harry so effectively points out, prison “neither treats nor trains nor rehabilitates” — it merely risks making someone more dangerous and likely to commit crimes in the future. Harry is right: these are the facts.
In one of the more poignant moments in her speech, Harry argues that “intrinsic to justice is humanity. Humanity couldn’t call for this young man to be locked up — it simply couldn’t.” It’s true. Not only is it inhumane to lock up people who are addicted to drugs, it’s unreasonable and fiscally irresponsible.
Taxpayers spend almost $70 billion a year on corrections and incarceration. There are 1.6 million Americans in prison — that is triple the amount of prisoners we had in 1987 — and 25 percent of those incarcerated are locked up for drug offenses. When those who are incarcerated are released, they earn approximately 40 percent less than they did before entering prison — that means their economic mobility is almost half of what it was before incarceration. In times of a global economic crisis, do we really want to spend this much money locking up small time offenders? And do we really want to lock up such a large chunk of our labor force and decrease their future earning potential when it could serve as a drag on our future economic recovery? And on top of all this, it’s proven ineffective to imprison people for drug offenses — incarceration doesn’t fix the problem of drug addiction.
It’s even more ineffective (and inhumane) to lock up our kids who are addicted to drugs — as Harry points out, doing so is akin to throwing them away — thereby increasing the likelihood they will have lives filled with inhumane prison conditions, mental health problems, lack of economic opportunity, and continued addiction. And by imprisoning our children for drug offenses, we risk creating a cycle that may prevent their kids from having brighter futures. One in every 28 children in this country has a parent behind bars, up from one in 125 just 25 years ago. We are sacrificing these children’s lives as well. Just as we increasingly can’t afford the cost of incarceration, we can’t afford to lose our kids and our country to the cycle of incarceration and poverty.
The show’s perspective isn’t necessarily profound, but it is pleasant to hear Harry’s words cut through the din of fear-driven plotlines that have for so long been a staple in popular television crime dramas.
Bonus libertarian point: The title “Harry’s Law” reminds me of “Harry’s War,” a 1981 movie about the depredations of the IRS.
State Corporate Welfare Programs Under Fire
One positive outcome of the recession, as the states struggle to find revenue to spend, is that state subsidies to businesses are facing increased scrutiny.
This week the New York Times reported that states are looking at reducing or ending programs that hand out taxpayer money to television and movie producers. In Pennsylvania, some last-minute handouts from outgoing governor Ed Rendell are under fire, including a $10 million state grant to rehabilitate a former Sony plant for new tenants. According to the Commonwealth Foundation’s Nate Benefield, this is the fourth time Pennsylvania taxpayers have subsidized the site:
Sony moved out in 2007, despite getting more than $40 million in corporate welfare under Gov. Robert P. Casey to come to Pennsylvania, then another $1 million grant under Rendell to stay in the state—a mere two years before shutting down its plant.
Before Sony, the site was occupied by Volkswagen, which got $70 million in state aid in the 1970s under Gov. Milton Shapp. This was touted as a great success — until Volkswagen moved out in 1987, after 10 years of operation.
Pennsylvania is merely renting jobs with this “economic development” spending, burdening other businesses with higher taxes. Hopefully, Gov. Tom Corbett can learn from the failed policies of the past and work on improving the state’s economic climate rather than trying to pick winners.
This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this week:
- It should be clear that we, as a society, would be better off abandoning efforts to socially engineer a specific homeownership rate, either for the population in general or by racial group.
- The GOP should insist on the $100 billion in initial cuts they promised, and also demand passage of a legal cap on overall federal spending.
- Perhaps we should start calling farm subsidies “landowner subsidies.”
- How much money do federal taxpayers lose to food stamp fraud each year? Nobody really knows.
- A new House rule requires members of the 112th Congress to cite specific constitutional authority when introducing any new bill or program. A brief summary of how the General Welfare, Commerce, and Necessary and Proper Clauses was understood by the Framers is in order.
If They Gave Out Awards for Good Policy Design…
…the folks in South Carolina would be top contenders for the gold.
Here’s the thing: all the evidence shows that educators are human beings like the rest of us and that education benefits from the same market freedoms and incentives that have driven progress in every other field. So how do you unleash those market forces so that our kids have the best shot at fulfilling their potentials? For a start:
- You minimize regulation on what and how teachers teach.
- You make it easy for families to choose whichever schools (or homeschooling) they deem best for their kids.
- You encourage people to pay directly for their own children’s education to the greatest extent possible, reserving third-party payment (which is inherently problematic) to an as-needed basis
As a result, schools compete for the privilege of serving each and every child and they are attentive to parents’ demands because otherwise their livelihoods will suffer. Parents, in turn, become more invested in their children’s education—both literally and figuratively—because suddenly they have the power to exercise their educational responsibilities, and they expect to get value for the money they spend.
There are already a few school choice programs around the country that move in this direction, but a bill under consideration in South Carolina would do a better job than any of them. First, it offers tax cuts to parents who personally shoulder the cost of their own kids’ education, and those cuts are more meaningful in size than the ones currently offered in Illinois and Iowa. As Milton Friedman (and Pliny the Younger) rightly said: people are most careful spending their own money on their own families. Second, it extends its benefits to homeschoolers, which few other choice programs do. Third, it provides tuition assistance to low-income families through nonprofit scholarship organizations (SGOs) that are funded by private tax-creditable donations—better than any other system of third-party education aid.
If enacted, this program will not only provide a wonderful new range of educational options to South Carolina families, it will save taxpayers millions due to the tremendous inefficiency of the existing state-run monopoly school system. That combination of improved education options and reduced tax burden will in turn attract new businesses to the state, spurring economic growth. All in all, a pretty darn good deal.
Sunlight Before Signing at Mid-Term—Above 50%!
During his campaign for the presidency, then-Senator Barack Obama (D-Ill.) said he would post the bills Congress sent him online for five days before signing them. It was a basic transparency promise that would help prevent rushed legislation containing parochial amendments, unexamined earmarks, and errors. This and other promises brought hails of applause.
It was his first broken promise. President Obama signed the “Lilly Ledbetter Fair Pay Act of 2009” into law the day after it reached him.
I’ve tracked the promise on this blog, and in my November post noted President Obama’s improvement in 2010 over what can only be characterized as a lousy start. In the first year of his term, 2009, the president received 124 bills from Congress and signed a dismal 6 of them—only 4.8%.
On January 20, we reached the mid-point of President Obama’s term, and his mid-term Sunlight Before Signing stats can be announced. With a strong showing on the flurry of bills passed at the end of the 111th Congress, the president’s Sunlight Before Signing percentage has inched just above 50%.
Of 381 bills that should have been posted on Whitehouse.gov after President Obama received them, 192 were actually posted. That’s 50.393% if you like going beyond the decimal.
Here’s a summary table, showing year-by-year the bills presented, the one emergency bill not subject to posting, and bills properly posted. After the jump, you can see bill-by-bill how the president did with Sunlight Before Signing.
| Number of Bills | Emergency Bills | Bills Posted Five Days | |
|---|---|---|---|
| 2009 | 124 | 0 | 6 |
| 2010 | 258 | 1 | 186 |
| Overall | 382 | 1 | 192 |
‘Why Your Boss Should Be Able To Fire You Over Facebook’
Suzanne Lucas, who blogs as Evil HR Lady, isn’t really evil, she’s just uncomfortably candid about many workplace truths that her fellow HR professionals tend to gloss over.
One of those truths is that in general no one owes you tenure in your job, even if you do it well. In our society, the principle of employment at will is still (fortunately) given much legal weight, meaning that an employment relationship continues only if both sides want it to.
And a consequence of that might just be that the law creates no right to slag your employer on your Facebook page one evening and demand that your employer overlook it the next morning:
So, why am I in favor of companies being able to terminate an employee for online behavior? (These things, of course, aren’t limited to Facebook. Myspace, Twitter, and blogs are all good candidates for firing). Here are 3 Reasons.
Easy firing=easy hiring. I want companies to hire people. In fact, my fondest wish is that all my readers who are searching for jobs find one this year. The more restrictions government places on terminating employees, the more hesitant companies are to hire new people.
Bad judgment isn’t limited to online behavior. Companies need employees they can trust to make good decisions. If you lack the critical thinking skills to say, “Hmmm, if I post that my boss is a jerk, my boss just might find out about it,” then you probably lack the critical thinking skills to do your job. Yes, people vent. But the internet is not private. And anyone who thinks they can trust all their 476 friends to keep something quiet isn’t someone I want on my staff.
Companies should be able to presume loyalty. I know, I know, your company doesn’t care much about your career and they have no problem firing you, so why should you care about them? Because they pay you to care about them….
You can read the whole thing, including the rest of her reasoning, here.
OECD: ‘Cyberwar’ Overhyped
(HT: Schneier) Here’s a refreshingly careful report on cybersecurity from the Organization for Economic Cooperation and Development’s “Future Global Shocks” project. Notably: “The authors have concluded that very few single cyber-related events have the capacity to cause a global shock.” There will be no cyber-”The Day After.”
Here are a few cherry-picked top lines:
Catastrophic single cyber-related events could include: successful attack on one of the underlying technical protocols upon which the Internet depends, such as the Border Gateway Protocol which determines routing between Internet Service Providers and a very large-scale solar flare which physically destroys key communications components such as satellites, cellular base stations and switches. For the remainder of likely breaches of cybsersecurity such as malware, distributed denial of service, espionage, and the actions of criminals, recreational hackers and hacktivists, most events will be both relatively localised and short-term in impact.
The vast majority of attacks about which concern has been expressed apply only to Internet-connected computers. As a result, systems which are stand-alone or communicate over proprietary networks or are air-gapped from the Internet are safe from these. However these systems are still vulnerable to management carelessness and insider threats.
Analysis of cybsersecurity issues has been weakened by the lack of agreement on terminology and the use of exaggerated language. An “attack” or an “incident” can include anything from an easily-identified “phishing” attempt to obtain password details, a readily detected virus or a failed log-in to a highly sophisticated multi-stranded stealth onslaught. Rolling all these activities into a single statistic leads to grossly misleading conclusions. There is even greater confusion in the ways in which losses are estimated. Cyberespionage is not a “few keystrokes away from cyberwar”, it is one technical method of spying. A true cyberwar is an event with the characteristics of conventional war but fought exclusively in cyberspace.
The hyping of “cyber” threats—bordering on hucksterism—should stop. Many different actors have a good deal of work to do on securing computers, networks, and data. But there is no crisis, and the likelihood of any cybersecurity failure causing a crisis is extremely small.
Union Membership Continues Its Long Decline
According to a report out this morning from the U.S. Labor Department, the number of American workers belonging to labor unions declined again in 2010, continuing a long slide that began in the 1950s.
The number of unionized workers in the private sector fell by 339,000 last year, while the number in the government sector fell by 273,000. The share of private-sector workers belonging to a union dropped to 6.9 percent in 2010, the lowest “union density” in more than a century.
Union leaders are running out of excuses. They can’t simply blame a slowly recovering economy; the number of non-union workers employed last year actually increased by a small amount. And they can’t blame a hostile federal government; President Obama and the Democratic Congress that organized labor helped elect in 2008 tried to give unions just about everything they wanted during the 111th Congress.
The seeds of organized labor’s decline lie within the movement itself. Private sector unions are literally pricing themselves out of America’s increasingly competitive and open markets.
As I pointed out in an article [PDF] for the Cato Journal last year, unions are effective at raising wages and benefits for their members, but not at raising productivity. The result is a “union tax” on certain U.S. companies and sectors, a tax that puts them at a competitive disadvantage against non-unionized firms, resulting in a long-term loss of market share and reduced employment for union members.
Unless America’s private-sector unions change their approach and work more collaboratively with employers in the marketplace, they will continue to commit slow suicide.
A Year After Citizens United, Campaign Finance Back at the Court
As Caleb noted earlier, today marks the one-year anniversary of Citizens United, a case I first thought ”just” concerned some weird regulation of pay-per-view movies, but turned out to be about asserted government power to ban political speech — including books and TV commercials — simply because the speaker was not one individual but a group (in corporate or or other associational form). See also this op-ed by ACLU lawyer Joel Gora.
Roger similarly noted the continuing discussion in Congress and elsewhere about the public financing of elections. As it turns out, the Supreme Court has agreed to hear a challenge to such a system, specifically Arizona’s Clean Elections Act. Brought by our friends at the Institute for Justice and the Goldwater Institute and supported by our brief at the cert petition stage, this lawsuit challenges a law that aimed to “clean up” state politics by creating a system for publicly funding campaigns.
Participation in the public funding is not mandatory, however, and those who do not participate are subject to rules that match their “excess” private funds with disbursals to their opponent from the public fund. That is, if a privately funded candidate spends more than her publicly funded opponent, then the publicly funded candidate receives public “matching funds.”
Whatever the motivations behind the Clean Elections Act, the effects have been to significantly chill political speech: privately funded candidates changed their spending — and thus their speaking — as a result of the matching funds provisions. In elections, where there is no effective speech without spending money, matching funds provisions such as those at issue here diminish the quality and quantity of political speech.
In 2008, however, the Supreme Court struck down a similar part of the federal McCain-Feingold law in which individually wealthy candidates were penalized for spending their own money by triggering increased contribution limits for their opponents (Davis v. FEC, in which Cato also filed a brief). Even this modest opportunity for opponents to raise more money was found to be an unconstitutional burden on political speech.
Cato’s latest brief thus asks the following question: Whether Arizona may give a publicly funded candidate extra money because a privately funded opponent or his supporters have, in the state’s judgment, spoken too much. We highlight Davis and numerous other cases that point to a clear answer: if the mere possibility of your opponent getting more money is unconstitutional, then the guarantee that your opponent will get more money is even more so. Allowing the government to abridge political speech in this fashion not only diminishes the quality of political debate, but ignores the fundamental principle upon which the First Amendment is premised: that the government cannot be trusted to regulate political speech for the public benefit. Moreover, the state cannot condition the exercise of the right to speak on the promotion of a viewpoint contrary to the speaker’s.
The case is McComish v. Bennett, consolidated with Arizona Free Enterprise Club’s Freedom Club PAC v. Bennett. The Court will hear it March 28, with a decision expected by the end of June.
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