Archive for April, 2011
Even University Presidents Are Bound by the Constitution
Few could imagine a more troubling free speech and due process case than that of Hayden Barnes.
Barnes, a student at Valdosta State University in Georgia, peacefully protested the planned construction of a $30 million campus parking garage that was the pet project of university president Ronald Zaccari. A “personally embarrassed” Zaccari did not take kindly to that criticism and endeavored to retaliate against Barnes — ignoring longstanding legal precedent, the Valdosta State University Student Handbook (a legally binding contract), and the counsel of fellow administrators. Zaccari even ordered staff to look into Barnes’s academic records, his medical history, his religion, and his registration with the VSU Access Office!
The district court found that Barnes’s due process rights had indeed been violated and denied Zaccari qualified immunity from liability for his actions. Now on appeal, Cato joined a brief filed by the Foundation for Individual Rights in Education on behalf of 15 organizations arguing that qualified immunity is inappropriate here given Zaccari’s brazen violation of Barnes’s constitutional rights to free speech and due process. As stated in the brief, the “desire of some administrators to censor unwanted, unpopular, or merely inconvenient speech on campus is matched by a willingness to seize upon developments in the law that grant them greater leeway to do so.” The brief thus asks the Eleventh Circuit to affirm the denial of qualified immunity on both First Amendment and due process grounds.
First, the immense importance of constitutional rights on public university campus is due in no small part to the reluctance of school administrators to abide by clearly established law protecting student rights. Second, Zaccari knew or should have known that his actions violated Barnes’ rights and were illegal retaliation against constitutionally protected speech.
Qualified immunity is intended to protect public officials who sincerely believe their actions are reasonable and constitutional, not those who willfully and maliciously ignore well known law in a determined effort to deprive another of constitutional rights. A denial of qualified immunity here would vindicate those rights and reinforce school administrators’ obligation to protect and abide by them.
The case of Barnes v. Zaccari will be heard by the Eleventh Circuit this spring or summer. Thanks to legal associate Nicholas Mosvick for his help on the brief and with this post.
The Obama Administration’s FOIA Compliance
Jim Harper has done a lot of work on the Obama administration’s efforts to be more transparent, especially with regard to “sunlight before signing,” earmark data, and FOIA compliance. The Obama administration could do a lot more on the FOIA front.
The Transactional Records Access Clearinghouse (TRAC) recently added a FOIA Project, which lists all FOIA requests that have become the subject of federal litigation since October 1, 2009. This includes an interactive FOIA Map that lets you zoom in and locate lawsuits across the United States.
TRAC has proven an invaluable resource for tracking federal government activities, and has been litigating FOIA requests for years. A recent Supreme Court decision, Milner v. Department of the Navy, reduced the ability of government agencies to withhold data under FOIA exemptions. Undeterred, an Immigration and Customs Enforcement official “informed TRAC that those who had requested and been denied access to documents under the FOIA prior to the court’s ground-breaking decision was rendered had no right to obtain them.” More details are available here.
It’s pretty bad when ICE is hiding behind procedural barriers to sidestep FOIA requests; it’s another ballgame entirely at the Department of Homeland Security. DHS officials tried to turn the objective standard of FOIA — disclosure to one is disclosure to all — into a subjective one, looking into the political beliefs of the requester to avoid embarrassment for DHS. An email trail shows how a former Obama staffer asked DHS employees to redact “politically sensitive” details from FOIA releases. Obama officials defended DHS’s FOIA policy in congressional hearings, and a DHS attorney tried to remove exhibits from the hearings. His explanation:
“As counsel for DHS, I object to counsel for the committee’s refusal to allow exhibits they had shown to the witness and that all are e-mail messages from DHS personnel to DHS personnel on their official DHS-issued accounts and use of e-mail services. These are not committee records, these are, rather, DHS records; and so there is no reason the committee should be able to prevent us from taking them, since they have shown them to the witness and used them in this interview.”
The Obama administration declared that it would be “the most open and transparent in history.” It is falling well short of the mark.
The Strange Case Against ECPA Reform
The Senate Judiciary Committee held hearings last week on the need to reform the increasingly badly outdated Electronic Communications Privacy Act, the 1986 legislation that governs how the cops conduct telephone and Internet surveillance in criminal investigations. Two officials from two different government agencies offered up rather strikingly different testimony.
Cameron Kerry of the Commerce Department acknowledged what legal scholars and technologists have been saying for years: The law’s byzantine and inconsistent standards—which provide wildly varying levels of protection for the same e-mail as it’s being composed, sent, received, read, and archived—are wholly out of touch with the ways we actually use technology today. The distinctions the law draws make no real sense in principle, and are confusing and needlessly burdensome to Internet companies in practice.
By contrast, James Baker of the Justice Department was eager to sing the praises of ECPA in its current form, and to raise FUD (that’s “Fear, Uncertainty, and Doubt for the non-geeks) about reforms proposed by the Digital Due Process Coalition, a group of civil liberties advocates and tech companies that are urging Congress to update the law. Let nobody say that DOJ is behind the curve on technology: Baker’s testimony is almost totally virtual, a simulation of a real argument, worthy of the Matrix. But as with Oakland and cyberspace, when you look a little more closely, there’s no there there.
A surprising amount Baker’s time was devoted to establishing that electronic records—whether e-mail contents, Internet “metadata,” or cell phone location information—are often useful to investigations. Well, of course they are! So are phone wiretaps! So are physical searches of homes! There wasn’t really any doubt about that, was there? They’re useful, of course, precisely because they tend to reveal private information about people’s activities. The question is what standard is appropriate, and whether that standard should exhibit some kind of basic consistency, both with respect to a single communication at different stages, and across technologies.
Unaccountable Prosecutors
John Thompson served 18 years in prison, 14 on death row. Shortly before his scheduled execution, evidence of his innocence surfaced. Evidence that was held by the prosecution, but kept from the defense. When the prosecution tried to convict Thompson again, a new jury returned a not guilty verdict in 35 minutes. In a New York Times op-ed, Thompson writes,
I just want to know why the prosecutors who hid evidence, sent me to prison for something I didn’t do and nearly had me killed are not in jail themselves. There were no ethics charges against them, no criminal charges, no one was fired and now, according to the Supreme Court, no one can be sued.
Read the whole thing.
A Higher Obligation
At least one federal official takes seriously his oath to uphold the Constitution and the First Amendment.
Also, he is – how shall I say this – cool.
Challenging the Trade-Deficit Orthodoxy
Tomorrow morning the U.S. Commerce Department will release its monthly report on U.S. exports, imports, and the trade balance. That’s a safe bet, barring some unforeseen calamity. An almost equally safe bet is that if the trade deficit in February shrank, it will be hailed as good news for the economy, and if the deficit grew, it will be greeted as bad news.
Either way, the consensus will be wrong. As I explain in a Cato study released today, the prevailing creed that “Exports are good, imports are bad,” and therefore a rising trade deficit is a drag on the U.S. economy, is wrong in theory and in practice.
The creed is wrong in theory because imports do not “subtract from growth in GDP,” as a simplified version of Keynesianism would lead us to believe. In fact, imports are not a factor in calculating GDP, which after all measures gross domestic product. Nor do imports represent a “leakage” of demand abroad. The same dollars that flow abroad to buy imports quickly return to purchase either U.S. exports or U.S. assets.
It’s wrong in practice because the past 30 years show no negative effect of a rising trade deficit on U.S. economic performance. In fact, my analysis finds that
Since 1980, the U.S. economy has grown more than three times faster during periods when the trade deficit was expanding as a share of GDP compared to periods when it was contracting. Stock market appreciation, manufacturing output, and job growth were all significantly more robust during periods of expanding imports and trade deficits.
You can read the full study here: “The Trade-Balance Creed: Debunking the Belief that Imports and Trade Deficits are a ‘Drag on Growth.”
“The Largest Annual Spending Cut in Our History”?
In this week’s Britannica column, I look at the claims being made for the budget cuts in the weekend deal:
“The largest annual spending cut in our history,” President Obama said. Speaker of the House John Boehner called it the “largest real dollar spending cut in American history.” Saturday’s front-page, upper-right headline in the Washington Post proclaimed:
BIGGEST CUTS
IN U.S. HISTORYThe story went on to say that Obama “said the cuts would be painful but necessary.”
NPR’s Andrea Seabrook reported, “The Republicans got big, big cuts.”
And are they?
Please. It’s a cut of $38 billion in a budget of $3,819 billion. That’s 1 percent. That’s a rounding error in federal budgeting….
That same budget table shows that federal spending fell from $92.7 billion in 1945 to $55.2 billion in 1946, to $34.5 billion in 1947, and to $29.8 billion in 1948 (and all without any of the job losses that we’re told would result from modest reductions today). Check out also the drop in spending from 1919 to 1922, even larger in percentage terms….
The fundamental point here is that federal spending rose by more than a trillion dollars during Bush’s first seven years, and then by almost another trillion in barely three fiscal years. And then we had a titanic battle over whether to trim $38 billion.
The idea that the Democrats “have shown that they heard the message that government spends too much” or that the Republicans—the party that increased federal spending by a trillion dollars while nobody was looking during the Bush years—have “imposed a small-government agenda on Washington” is ludicrous.
Reckless IRS Regulation Would Put Foreign Tax Law over American Tax Law and Drive Investment out of the United States
I’m not a big fan of the IRS, but usually I blame politicians for America’s corrupt, unfair, and punitive tax system. Sometimes, though, the tax bureaucrats run amok and earn their reputation as America’s most despised bureaucracy.
Here’s an example. Earlier this year, the Internal Revenue Service proposed a regulation that would force American banks to become deputy tax collectors for foreign governments. Specifically, they would be required to report any interest they pay to accounts held by nonresident aliens (a term used for foreigners who live abroad).
The IRS issued this proposal, even though Congress repeatedly has voted not to tax this income because of an understandable desire to attract job-creating capital to the U.S. economy. In other words, the IRS is acting like a rogue bureaucracy, seeking to overturn laws enacted through the democratic process.
But that’s just the tip of the iceberg. The IRS’s interest-reporting regulation also threatens the stability of the American banking system, makes America less attractive for foreign investors, and weakens the human rights of people who live under corrupt and tyrannical governments.
This video outlines five specific reasons why the IRS regulation is bad news and should be withdrawn.
I’m not sure what upsets me most. As a believer in honest and lawful government, it is outrageous that the IRS is abusing the regulatory process to pursue an ideological agenda that is contrary to 90 years of congressional law. But I guess we shouldn’t be surprised to see this kind of policy from the IRS with Obama in the White House. After all, this Administration already is using the EPA in a dubious scheme to impose costly global warming rules even though Congress decided not to approve Obama’s misguided legislation.
As an economist, however, I worry about the impact on the U.S. banking sector and the risks for the overall economy. Foreigners invest lots of money in the American economy, more than $10 trillion according to Commerce Department data. This money boosts our financial markets and creates untold numbers of jobs. We don’t know how much of the capital will leave if the regulation is implemented, but even the loss of a couple of hundred billion dollars would be bad news considering the weak recovery and shaky financial sector.
As a decent human being, I’m also angry that Obama’s IRS is undermining the human rights of foreigners who use the American financial system as a safe haven. Countless people protect their assets in America because of corruption, expropriation, instability, persecution, discrimination, and crime in their home countries. The only silver lining is that these people will simply move their money to safer jurisdictions, such as Panama, the Cayman Islands, Hong Kong, or Switzerland, if the regulation is implemented. That’s great news for them, but bad news for the U.S. economy.
In pushing this regulation, the IRS even disregarded rule-making procedures adopted during the Clinton Administration. But all this is explained in the video, so let’s close this post with a link to a somewhat naughty – but very appropriate – joke about the IRS.
When Too Much Money’s the Problem…
Last Friday’s PBS NewsHour included a debate between NYT columnist David Brooks and WaPo columnist Ruth Marcus on the budget fights on Capitol Hill. Marcus was sitting in for NewsHour regular Mark Shields, whose comments I find thoughtful and worth contemplating. Unfortunately, on Friday Marcus didn’t meet Shield’s standard.
In discussing House Budget Committee chair Paul Ryan’s proposal that Medicaid be converted to a block grant program with the states taking a broader administrative role, Marcus offers:
RUTH MARCUS: The cuts in here are so dramatic. They are so painful. And they — and many of them are focused — I know this is not his intention, but he turns, for example, Medicaid, which is the health-care program for poor people, into a block grant. You give it to states.
But then it just doesn’t grow enough to deal with the increase in health-care costs. Well, what happens to these people?
Is she serious!?
Marcus seems not to understand that government subsidies to health care consumption, in the form of such programs as Medicare and Medicaid as well as employer tax exclusions for health insurance benefits, contribute to the rapid growth in health care costs. That is, by flooding the health care market with government money, the market ends up with many dollars chasing few worthwhile health care products, which results in rising health care prices. Moreover, the subsidies siphon away health care resources from the private-payer health care market, causing cost in that sector to increase rapidly as well.
Subsidies aren’t the only government policies contributing to rising health care costs. Government restrictions on the supply of health care services also play a role. Among those supply restrictions are the ban on drug importation, a very costly and difficult new-drug testing regime, and unnecessarily restrictive licensing of health care professionals.
The rapid rise in health care costs is primarily the consequence of government policies. For Marcus to say that we should maintain the current subsidy system for health care because, without it, Medicaid patients won’t be able to keep up with health care cost increases is … well … not very good commentary.
John McCain: Citizens Shouldn’t Interfere in Politics
Campaign finance “reform” advocates like Sen. John McCain are often heard to complain that official candidates’ ads can get lost in the clutter of ads from independent groups — as if the election belonged to the candidates, not the people. Now McCain has taken this theme a step further: He doesn’t like think tanks interfering in politicians’ decisions. George Will reports from Phoenix on the Goldwater Institute’s criticism of a $197 million municipal subsidy to a businessman in the National Hockey League:
John McCain, who holds the Senate seat once occupied by Barry Goldwater but does not hold Goldwater’s views about governmental minimalism, calls the institute’s actions “disgraceful” and “basically blackmailing”: “It’s not their role to decide whether the Coyotes should stay [here] or not.” Well.
Constitutions do not impress the co-author of the McCain-Feingold assault on the First Amendment (his law restricts political speech). But the institute’s job — actually, it is every Arizonan’s job — is to protect the public interest. A virtuoso of indignation, McCain is scandalized that the institute, “a non-elected organization,” is going to cause the loss of “a thousand jobs.” McCain’s jobs number is preposterous, as is his intimation — he has been in elective office for 28 years — that non-elected people should not intervene in civic life.
NHL Commissioner Gary Bettman agrees with McCain that the world is out of joint when people can second-guess the political class: “It fascinates me that whoever is running the Goldwater Institute can substitute their judgment for that of the Glendale City Council.” He will learn not to provoke [former Cato policy analyst Darcy Olsen, now president of the Goldwater Institute], who says, “It happens to fascinate me greatly that the commissioner thinks a handful of politicians can substitute their judgment for the rule of law.”
The Kiss-Your-Sister Budget Deal Is Finalized, but Claudia Schiffer Still Ain’t Your Sibling
There were reports about 10 days ago that the crowd in Washington reached a budget deal, for the remainder of the 2011 fiscal year, with $33 billion of cuts. That number was disappointingly low. I wrote at the time that if this was a kiss-your-sister deal, we didn’t have any siblings that looked like Claudia Schiffer.
I knew it was unrealistic to expect the full $61 billion, but I explained that $45 billion was a realistic target.
We now have a new agreement, which supposedly is final, and the amount of budget cuts has climbed to $38 billion. So our sister is getting prettier, but she still isn’t close to being a supermodel. Here are the highlights (or lowlights) from the New York Times story.
Congressional leaders and President Obama headed off a shutdown of the government with less than two hours to spare Friday night under a tentative budget deal that would cut $38 billion from federal spending this year. …the budget measure would not include provisions sought by Republicans to limit environmental regulations and to restrict financing for Planned Parenthood and other groups that provide abortions.
As with all deals (such as last December’s agreement extending the 2001 and 2003 tax cuts), there are good and bad provisions. The good news is:
- President Obama, before the current fiscal year began last October 1, wanted a $40 billion increase for these “discretionary” programs. Cutting $38 billion may not be a big number, but it is a step in the right direction. And it is the first time fiscal policy has moved in the right direction in at least 10 years.
- There will be no funding for additional IRS agents. This is a nice victory. Implementing Obamacare would require as many as 16,000 new tax bureaucrats to harass the American people, so at least that process will be stalled.
- A school choice program for Washington, DC, has been restored, thus reversing President Obama’s disgusting decision to kill the program and sacrifice poor black children to advance the greedy interests of the teacher unions.
Now let’s look at the less desirable parts of the agreement.
- Total spending jumped by almost $2 trillion during the Bush-Obama spending binge, so a $38 billion cut is almost too small to mention.
- Left-wing organizations such as Planned Parenthood will continue to feed at the public trough, something that should be objectionable to everyone, regardless of your views on abortion.
- Obamacare is not repealed (not that I ever thought that was possible) and there is no restriction on the EPA’s unilateral assertion that is has regulatory power to implement radical Kyoto-style global warming policies.
I will have more comments this week about what happens next. Suffice to say that this was just one battle in a long war.
The 2012 budget resolution, for instance, will be a key test of fiscal responsibility, but in this case the debate will be about $trillions rather than $billions. The debt limit vote will an opportunity for some much-needed reform of the budget process. And it is quite likely that there will be another potential shutdown fight when it is time to put together appropriations bills for the 2012 fiscal year, which starts October 1.
$61 Billion in Cuts vs. Prior Spending Increases
Republicans and Democrats are currently battling over $61 billion, or less, in federal spending cuts for the remainder of the current fiscal year. The chart below puts that figure in perspective. It shows the annual increases in total federal outlays each year over the last decade.
The average annual increase in federal spending over the last decade was a huge $170 billion, which is almost three times larger than the proposed $61 billion cut. In 2009, federal spending leaped $384 billion in a single year, or six times more than this year’s relatively tiny cut.
(The data are from the CBO. I’ve taken TARP spending per CBO out of the figures for 2009-2011 because it distorts the actual spending path. In particular, 2009 outlays included $151 billion in TARP, but outlays in 2010 and 2011 reversed out $135 billion of that, because the program ended up costing much less than originally expected.)
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