Archive for February, 2011
The Internet Kill-Switch Debate
Experienced debaters know that the framing of an issue often determines the outcome of the contest. Always watch the slant of the ground that debaters stand on.
The Internet kill-switch debate is instructive. Last week, Senators Lieberman (I-CT), Collins (R-ME) and Carper (D-DE) introduced a newly modified bill that seeks to give the government authority to seize power over the Internet or parts of it. The old version was widely panned.
In a statement about the new bill, they denied that it should be called a “kill switch,” of course–that language isn’t good for their cause after Egypt’s ousted dictator Hosni Mubarak illustrated what such power means. They also inserted a section called the “Internet Freedom Act.” It’s George Orwell with a clown nose, a comically ham-handed attempt to make it seem like the bill is not a government power-grab.
But they also said this: “The emergency measures in our bill apply in a precise and targeted way only to our most critical infrastructure.”
Accordingly, much of the reportage and commentary in this piece by Declan McCullagh explores whether the powers are indeed precisely targeted.
These are important and substantive points, right? Well, only if you’ve already conceded some more important ones, such as:
1) What authority does the government have to seize, or plan to seize, private assets? Such authority would be highly debatable under any of the constitutional powers kill-switchers might claim. Indeed, the constitution protects against, or at least severely limits, takings of private property in the Fifth Amendment.
and
2) Would it be a good idea to have the government seize control of the Internet, or parts of it, under some emergency situation? A government attack on our private communications infrastructure would almost certainly undercut the reliability and security of our networks, computers and data.
The proponents of the Internet kill-switch have not met their burden on either of these fundamental points. Thus, the question of tailoring is irrelevant.
I managed to get in a word to this effect in the story linked above. “How does this make cybersecurity better? They have no answer,” I said. They really don’t.
No amount of tailoring can make a bad idea a good one. The Internet kill-switch debate is not about the precision or care with which such a policy might be designed or implemented. It’s about the galling claim on the part of Senators Lieberman, Collins and Carper that the U.S. government can seize private assets at will or whim.
Senator Toomey’s Legislation Would Protect Financial Markets During a Debt Limit Showdown
There will be several pivotal fiscal policy battles this year and the fight over the debt limit may be the most crucial.
This is a “must-pass” piece of legislation, so it will be a rare opportunity for fiscal conservatives in the House to impose some much-needed spending restraint.
But it’s also a high-stakes game. If Obama (or Reid) refuses to accept the fiscal reforms approved by the House and there is a stalemate, the 
federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending).
In a bit of reckless demagoguery, the Treasury secretary even says it would mean default — which could cause instability in financial markets.
To preclude that possibility, Senator Toomey of Pennsylvania has a proposal to protect the “full faith and credit” of the United States by requiring the federal government to make interest payments a top priority. Writing for Bloomberg, I opine about the Senator’s proposal.
…the federal government is expected to collect more than $2.1 trillion of tax revenue this year, while interest payments on the publicly held debt will only be about $200 billion. So even without an increase in the debt limit, the Treasury Department will have more than enough revenue to cover its interest obligations and avoid a default. That being said, financial markets are sometimes spooked by uncertainty. And since Treasury Secretary Timothy Geithner began making some irresponsible statements about the risks of default, there is growing interest in legislation by Senator Pat Toomey, a Republican of Pennsylvania, to alleviate the market’s fears. Quite simply, Toomey’s bill would require the federal government to fulfill obligations to bondholders before making any other disbursements. …If the Toomey legislation is adopted, fiscal reformers will have a powerful weapon at their disposal. Secure in the knowledge that default no longer is a possibility, they can be much tougher in their negotiations with the politicians who favor the status quo. This explains the attacks against the Toomey plan. Some even argue that the law requires the government to pay Chinese bondholders (gasp!) before it pays Social Security recipients. This is demagoguery. The federal government will collect more than enough revenue to finance the majority of budgeted outlays. Social Security checks will be disbursed, unless the Treasury secretary decides otherwise. In any event, the attack is rather hollow since it’s almost always made by people who say that default would be a cataclysmic event. What they really mean, it seems, is that deficits, debt and default are bad, and only higher taxes are the solution. That’s what this debate is all about. We have a fiscal crisis caused by too much spending, not too little taxes. Restraining the size and scope of government is contrary to the interests of the iron quadrangle of politicians, interest groups, lobbyists and bureaucrats who benefit from ever- expanding government.
Government Unions — beyond Wisconsin
As Scott Walker in Wisconsin and other governors try to rein in the soaring costs of government employee pay and pensions, the Cato study ”Vallejo Con Dios: Why Public Sector Unionism Is a Bad Deal for Taxpayers and Representative Government” takes on new relevance. Here’s the executive summary:
High rates of unionization in the public sector have led to very high labor costs in the form of generous collective bargaining contracts. Now state and local governments are under increasing financial pressure, as a worsening national economy has led to decreased revenues for states and municipalities—many of which remain locked into the generous contracts negotiated in more flush times. Thus, as businesses retrench, governments find themselves in a financial straitjacket. In addition, as government unions grow stronger relative to private-sector unions, their prevalence erodes the moderating influence of the market on the demands that unions make of employers.
Now, as an economic downturn threatens state and local government revenues, officials who want to keep their fiscal situations under control would do well to look skeptically at public-sector bargaining—especially since the existing political checks on it have proven ineffective. Public officials should eschew public-sector bargaining when possible, or at the very least, seek to limit its scope.
As keepers of the public purse, legislators and local council members have an obligation to protect taxpayers’ interests. By granting monopoly power to labor unions over the supply of government labor, elected officials undermine their duty to taxpayers, because this puts unions in a privileged position to extract political goods in the form of high pay and benefits that are much higher than anything comparable in the private sector.
This paper shows how the unionization of government employees creates a powerful, permanent constituency for bigger government— one that is motivated, well-funded, and organized. It also makes some recommendations as to how to check this constituency’s growing power—an effort that promises to be an uphill struggle.
Indeed it does. The study makes another point that is worth keeping in mind during these battles. Many discussions of government unions, such as this one on Friday’s Newshour, tacitly or explicitly assume that we’re talking about teachers, police officers, and firefighters. But the study notes:
Of course, while these “heroic” public servants are the ones who are most visible in public disputes over collective bargaining, a large number of unionized state and local employees fall into more mundane categories such as secretaries, middle managers, engineers, administrative law judges, school custodians, and cafeteria workers.
When Should Courts Overturn Precedent?
Cato legal associate Nick Mosvick and I explain that Citizens United overturned one 20-year-old court decision in the name of restoring an older tradition upholding First Amendment rights, in a new article about to be published in the (Chapman University Law School) Nexus Journal of Law & Public Policy.
Here’s the abstract:
Stare decisis is an important doctrine with deep roots in the common law. It “promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827 (1991). Indeed, our interest in the law’s stability and predictability, and the reliance interests produced by judicial decisions, sometimes dictate that incorrect legal rulings be maintained — because the social disruptions from correction outweigh the benefits of reaching better decisions.
Still, stare decisis is neither an “inexorable command,” Lawrence v. Texas, 539 U.S. 558, 577 (2003), nor a “mechanical formula of adherence to the latest decision,” Helvering v. Hallock, 309 U.S. 106, 119 (1940). Instead it is a prudential policy, one in which courts have to decide, based on factors such as the correctness, antiquity, and workability of the legal regime a precedent created, whether to overturn their earlier rulings. As Chief Justice Roberts put it in his Citizens United concurrence, “abrogating the errant precedent, rather than reaffirming or extending it, might better preserve the law’s coherence and curtail the precedent’s disruptive effects.” 130 S. Ct. 876, 921 (2010) (Roberts, C.J., concurring).
And so the Court in Citizens United found that both Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), and the part of McConnell v. FEC, 540 U.S. 93 (2003), that relied on it were not worthy of preservation. They created an arbitrary and increasingly irrational campaign finance system that was an aberration of restrictions in a sea of protections for political speech.
Moreover, then-Solicitor General Elena Kagan abandoned Austin’s speech-equality rationale during oral argument, undercutting any possible reliance interests. Only by overturning precedent could the Court contribute to the stable and orderly development of the law. This article will explain the role stare decisis played in Citizens United and build on the Chief Justice’s concurrence to describe the current state of the doctrine.
Thanks to Larry Solum for featuring us on his Legal Theory Blog.
Bribes to Brazil to Continue
An amendment to end what Congressman Barney Frank (D-MA) rightly called “lunacy” failed this afternoon in a depressing show of cowardice on cotton subsidies. The amendment [Amendment No. 89] would have ended payments to Brazilian [yes, sic] cotton farmers that cost U.S. taxpayers $150 million a year. The House rejected the amendment 183 to 246.
Republicans — those stalwart fiscal conservatives! — voted 75 in favor and 164 against. The Democrats showed more courage and voted in favor of the amendment 108 to 82. (These numbers are according to C-SPAN; I will post an update if they prove to be incorrect).
The deal on cotton is one of the more shameful aspects of U.S. trade policy. As I blogged last year, U.S. taxpayers are paying millions of dollars to Brazilian farmers in a deal to ward off retaliatory tariffs Brazil has the right to impose on U.S. goods. That right was granted them by the World Trade Organization in the face of the United States’ continued failure to bring its cotton subsidy program into line with its obligations to other WTO members. Rather than cut off the subsidies to the powerful cotton lobby, though, the United States Trade Representative instead opted to do a deal with the Brazilian government. (No bribes for the poor African cotton farmers also harmed by the price-suppressing effects of U.S. subsidies, though.)
The Hill article (linked to in the first paragraph of this post) points out that some members (presumably the Republicans who voted against the amendment) were concerned that ”the move [to cease the payments to Brazil] could create a trade war if Brazil decided to retaliate.” It doesn’t seem to occur to those concerned members that one way to avoid a trade war would be to abide by international obligations and cease subsidizing U.S. cotton farmers. It would also shave a few million from that huge deficit about which they profess to be concerned.
This Week in Government Failure
Over at Downsizing Government, we focused on the following issues this week:
- Despite the record $1.6 trillion deficit this year, and the consensus that exploding spending and debt is pushing the nation toward catastrophe, the Obama administration completely chickened-out on spending reforms in its new budget.
- The George W. Bush administration ushered in a new era of big government. The Obama administration has built on Bush’s profligacy, and the president’s new fiscal 2012 budget proposal would further cement the trend.
- Obama’s new budget proposes slightly more discretionary and entitlement spending for next year than did his last budget!
- Like countless other individuals and interest groups, state and local government officials have become addicted to federal taxpayer money. This addiction has encouraged irresponsibility and profligacy at all levels of government.
- It’s important to explore the costly failures of big spending programs such as the stimulus because the next time the economy goes into a downcycle the Keynesians, sadly, will be back on Capitol Hill pushing their expensive solutions and further bankrupting the nation.
R.I.P. Bill Monroe, a First Amendment Champion
Bill Monroe, who was moderator for NBC’s Meet the Press for about 10 years, has died at 90. The Washington Post does a fine job with his long career, from his pro-civil-rights journalism in Lousiana in the 1950s to his years with NBC and Meet the Press.
I want to draw attention to his longtime advocacy of extending the First Amendment to broadcasting. Actually, I’m sure he thought that the First Amendment did cover all forms of the news media — but he knew that Congress and the courts didn’t see it that way, so he wanted an explicit amendment to make that clear. Because his articles on this topic were published in the pre-Internet Dark Ages (yes, children, there are great ideas not online), I can’t link to any of them.
He spoke at the Cato Institute in 1984 on the topic:
The First Amendment sets up a clear-cut independence of press from government as the journalistic principle most vital to the American people. But the existing regulatory approach to broadcasting offers exactly the opposite formula: government guidance and government rules to protect the American people from independent journalism. The First Amendment idea and the regulation idea are mortal enemies.
And in 2007 he briefly reprised the argument in the letters column of the Washington Post, concluding:
Broadcasters are also open to government pressure through the Federal Communications Commission, whose members are appointed by the president. Newspapers are specifically protected against government interference by the granite wall known as the First Amendment.
When the present form of broadcast regulation was set up early in the previous century, nobody understood what powerful instruments of news and information would evolve from the primitive radio stations of that day. Now that we do understand it, we can repair that historic mistake. We can extend the clear, stirring language of the First Amendment to equal protection for freedom of the electronic media. The problem of allocating broadcast licenses does not have to cost the American people the benefit of free broadcasting.
R.I.P.
Tony Soprano Meets the Antidumping Law
Forget all the high-minded rhetoric about “fair trade” and “level playing fields.” Discount the apple-pie claims that the antidumping law protects good American companies and their hard-working employees from unscrupulous, predatory, foreign cheaters. Those are just some of the myths that have sustained the costly antidumping status quo for decades.
If the American public were familiar with all of the sordid details of the antidumping case concerning wooden bedroom furniture from China (which I called a Poster Child for Reform back in 2004), they would be angry and ready to change the law. Well, on Tuesday, the Wall Street Journal did its part by running a story about how U.S. producers of wooden bedroom furniture have been extorting cash from their Chinese competition in exchange for dropping pursuit of even higher antidumping duty rates at the Commerce Department.
The Journal reported that about $13 million was paid to a group of 20 U.S. furniture makers between 2006 through 2009, and that a much larger, but unspecified, amount of money went to pay the U.S. firms’ lawyers.
Surprisingly, this practice is not illegal. Charlotte Lane, one of six commissioners at the U.S. International Trade Commission, which presides over antidumping investigations and sunset reviews, said, “I cannot figure out for the life of me how they are legal.” And her colleague, Commissioner Dan Pearson added that these settlements create “additional costs and distortions” in furniture trade, “with little evidence that these distortions have yielded any benefits to the industry overall, the U.S. consumer, or the U.S. taxpayer.”
But this practice is nothing new. It’s been going on in the shadows for several years in other cases as well. Bill Silverman, a trade lawyer who represents furniture retailers and importers, offered: “Everybody in the industry in the U.S. and China understands that these payments are clever shakedowns.” Back in 2006, I wrote about similar “shakedowns” with hundreds of exporters from several countries in the shrimp antidumping cases (toward the end of the paper under the subheading, “A Sign of Things to Come?”)
I Believe the Children Are My Mealticket…
Not knowing what’s in any given person’s heart, it’s impossible to say this definitively. However, being very familiar with generally self-interested human nature, it is reasonable to be highly dubious.
Dubious about what? That striking…er, “sick” …teachers in Wisconsin, and especially their union reps, have the welfare of children foremost in mind as they skip school to protest possible crimps on union monopolies and calls for teachers to contribute more for their benefits. Yet that is what Milwaukee Teachers’ Education Association President Michael Langyel would have us believe, at least if this quote from a Fox News article is accurate:
If people say the only way to solve this budget crisis is to take away from people who are working hard, they are wrong. We believe that we have a right to have a fair wage for our hard work. More importantly, the collective bargaining process allows us to positively impact school policy issues. We are the advocates for our students, and we will maintain our voice in defending our students.
Now I feel a little sick.
There is nothing inherently wrong with trying to get well compensated (though the portrayal of teachers as just trying to get a “fair wage” is a little rich given that on an hourly basis they make more than such professionals as accountants and insurance underwriters). But please, spare us the heroic tripe about this being about “defending” students. Teachers paying relatively little for their benefits, and even worse, allowing unions to maintain a monopoly over teachers — some of whom probably deserve to get paid much more than the union-negotiated rate — is not at all about defending students. It’s about teacher, and especially union, self-interest, pure and simple.
ObamaCare’s New Freedom
Earlier this month, President Obama’s HHS Secretary Kathleen Sebelius took to the Washington Post‘s op-ed page to reassure everybody that ObamaCare “puts states in the driver’s seat” and “gives states incredible freedom to tailor reforms to their needs.”
One grows weary of exposing the brazen falsehoods this administration incessantly and unconscionably peddles about its corrupt, unconstitutional, and irredeemable health care law. But here I go again: the very idea that ObamaCare puts states in the driver’s seat is nonsense. States already had the power to enact all the taxes, mandates, and price controls that ObamaCare expects them to implement — and to make what few choices ObamaCare leaves them.
If you want to know what Incredible Freedom really means, look to Wisconsin, where President Obama — who is evidently bored with the federal budget — has inserted himself into a state budget dispute, as David Boaz has noted.
As it turns out, Incredible Freedom means you are free to do exactly what President Obama wants.
The Washington Post reports on talk of federal bailouts for states (like Wisconsin) that are struggling with huge deficits and unfunded liabilities in their state pension and retiree health care programs. However:
The White House has dismissed such speculation, saying states have the wherewithal to raise taxes, cut programs and renegotiate employee contracts to balance their books.
A startling admission. Perhaps someone in the White House can pull Sebelius aside and explain that states also had the wherewithal to enact all the “reforms” that ObamaCare imposed on them. States already were “in the driver’s seat. They already had the power “to tailor reforms to their needs.”
Then along came ObamaCare.
Two, Three, Many Wisconsins
Newly elected Wisconsin governor Scott Walker has introduced what he calls a “budget repair” plan that would, among other things, require state employees to pay about 5.8% toward their pension (about the private sector national average) and about 12% of their healthcare benefits (about half the private sector national average) and restrict the collective bargaining powers of government-employee unions. In response, as many as 25,000 state workers and their supporters have been protesting in and around the state Capitol.
Today the Washington Post reports in a banner headline,
Obama joins Wisconsin budget battle
Yes, the president of the United States is inserting himself into a medium-sized state’s battle over how to balance its budget. And not just the president, but his entire political machine and its national labor union allies:
President Obama thrust himself and his political operation this week into Wisconsin’s broiling budget battle, mobilizing opposition Thursday to a Republican bill that would curb public-worker benefits while planning similar action in other state capitals.
Obama accused Scott Walker, the state’s new Republican governor, of unleashing an “assault” on unions in pushing emergency legislation that would nullify collective-bargaining agreements that affect most public employees, including teachers.
The president’s political machine worked in close coordination Thursday with state and national union officials to mobilize thousands of protesters to gather in Madison and to plan similar demonstrations in other state capitals….
By the end of the day, Democratic Party officials were working to organize additional demonstrations in Ohio and Indiana, where an effort is underway to trim benefits for public workers. Some union activists predicted similar protests in Missouri, New Jersey and Pennsylvania….
The White House political operation, Organizing for America, got involved Monday, after Democratic National Committee Chairman Timothy M. Kaine, a former Virginia governor, spoke to union leaders in Madison, a party official said.
The group made phone calls, distributed messages via Twitter and Facebook, and sent e-mails to its state and national lists to try to build crowds for rallies Wednesday and Thursday, a party official said.
It’s always easier to organize special interests than unorganized taxpayers. It wouldn’t be easy to get 25,000 taxpayers, who have lives and jobs and a variety of concerns, to rally at the state capital for budget reform. And it won’t be easy for one governor and Wisconsin’s Republican legislators to fight the entire national Democratic Party, the AFL-CIO and other giant unions, and the Obama machine.
But maybe if other governors took up the same battle, if Gov. Chris Christie in New Jersey and Gov. Rick Scott in Florida and Gov. Brian Sandoval in Nevada and Gov. Tom Corbett in Pennsylvania — and even Gov. Andrew Cuomo in New York and Gov. Jerry Brown in California, both of whom are smart enough to know why their states are running multi-billion-dollar deficits — take on the government unions, then maybe the Washington-based political machines won’t have the capability of responding everywhere at once. Two, three, many Wisconsins!
By the way, the strikingly uncivil posters comparing Governor Walker to Hitler and Mubarak, and the classic “Don’t Retreat, Reload” slogan along with Walker’s picture in cross hairs, take on greater relevance with the revelation that there’s so much support and organization of these protests coming from sophisticated national politicos.
Really Wrong Door Raid
The DEA and San Francisco Police Department conducted a really wrong door raid:
The SFPD and DEA found no piles of marijuana money at 243 Diamond St., one of six addresses raided simultaneously in San Francisco that morning. Instead, they found Clark Freshman, who rents the penthouse at the two-unit building. Freshman, a UC Hastings law professor and the main consultant to the television show Lie to Me, was put into handcuffs while in his bathrobe as agents searched, despite Freshman’s insistence that they had the wrong place and were breaking the law…
Soon they may be called defendants in a lawsuit. A furious Freshman has pledged to sue the DEA and the SFPD for unlawful search and seizure of his home…
[Officer] Biggs describes 243 Diamond as a “two-story, one-unit” building in the warrant. There’s no mention of Freshman or Larizadeh’s son-in-law or seven-months pregnant daughter who were detained in the downstairs unit that morning. But property records — and a quick visual scan of the property — reveal it to be a three-story, two-unit building. That mistake alone may be enough to invalidate the search warrant.
Read the whole thing. Professor Freshman’s closing quote is priceless. (H/T Uncle)
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