Archive for June, 2011
The Myth of the Senior Transit Rider
According to Transportation for America — which is largely a shill for the transit industry — the nation is about to face a new crisis: a shortage of mobility “options” for retiring baby boomers. According to a report published by the group on June 14, “By 2015, more than 15.5 million Americans 65 and older will live in communities where public transportation service is poor or non-existent.”
The appropriate answer to that, of course, is “So what?” Most seniors don’t ride transit. Census data show that more than 12.5 percent of all Americans are over 65, yet data from the American Public Transportation Association show that only 6.7 percent of transit trips are taken by senior citizens. The average American rides transit less than 34 times a year; the average senior citizen less than 18 times a year.
Putting that into perspective, the 2009 National Household Travel Survey says Americans over 65 take an average of 1,168 trips per year, nearly all by automobile. Transit serves only 1.5 percent of those trips. This survey of the travel habits of more than 300,000 people also found that senior citizens travel an average of 8,250 miles a year by car. Transit carries seniors an average of less than 100 miles a year, or about 1.1 percent of the total of transit and auto travel.
DeMint on the Economic Development Administration
Last week, I wrote about reauthorization of the Economic Development Administration, which is currently being debated on the Senate floor. Sen. Jim DeMint (R-SC) wrote an op-ed in today’s Wall Street Journal that cites Cato’s work on the EDA.
DeMint correctly notes that the mistaken rationale behind the EDA’s creation during the Great Society is the same as the Obama administration’s $814 billion stimulus bill: government programs can solve economic problems. Instead, both have been massive wastes of taxpayer money.
After doing an able job of listing some of the EDA’s faults — and acknowledging that he was wrong to have supported the program in the past — DeMint concludes that members of Congress should be “actively finding ways to reduce spending” given the mounting debt problem. He’s absolutely right, although the EDA should be abolished even if the federal budget were in surplus.
Republicans in particular need to put more effort into targeting specific agencies and programs for termination instead of, say, just issuing constant press releases complaining about the Senate Democrats’ lack of a budget proposal. Note that the EDA reauthorization bill passed out of the Senate Environment & Public Works Committee on a voice vote. That means that all of the committee’s Republicans went along with it. See here for a list of the EPW committee’s members.
A Hospital Drug Shortage Made In Washington
As readers may know, I’ve been beating the drum for a while on the increasingly dangerous shortages that doctors are encountering in the availability of common, off-patent drugs used in hospital and clinical settings, including drugs that are important in chemotherapy, anesthesia, and infection control. Among the reasons for the shortages: the Food and Drug Administration has toughened its regulation of pharmaceutical makers in ways that lead to manufacturing line shutdowns and withdrawals from production.
John Goodman has a must-read blog post at Health Affairs Blog on the mounting crisis, amplified by a post by George Mason economist Alex Tabarrok at Marginal Revolution, getting into further specifics. In particular:
• 246 drugs are now considered to be in shortage, a record high, and the number has been rising for years. Rationing of scarce chemotherapy drugs is now making a difference in which patients have a chance at survival. In the absence of familiar compounds, doctors are falling back on inexact substitutes, sometimes more dangerous and less effective.
• After “tainted drugs” scares a few years ago, the FDA stepped up its Good Manufacturing Practice regulations, which control the production of pharmaceuticals. In particular, it now proclaims zero tolerance, barbed by tough fines, for many technical infractions whose actual impact on patient risk is at best doubtful, and it is unafraid of shutting down production lines again and again for retooling until its regulations are satisfied to the letter. It also changes its formulation and manufacturing requirements often, with scant forgiveness for makers who have trouble retooling to the new specifications quickly.
• Remarkably, the feds have inserted themselves into the role of central planners of drug output. Goodman:
For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.
That the results might include many unpleasant surprises will surprise only those unfamiliar with the record of a century of central planning failure.
Magna Carta Day
The liberties we Americans enjoy were hard-won over the centuries. Today we mark a major event in that struggle, the day in 1215 when English barons presented King John with a written list of rights they demanded he recognize. Known ultimately as Magna Carta, the Great Charter, it was a compact between the barons and their king, a political effort by subjects to secure their liberty by placing their ruler under the rule of law, thus limiting arbitrary power.
The charter has gone through several iterations, but it drew in part from the common law rights, especially rights of property, that judges in the king’s courts had been finding from reason and custom as they decided controversies the king’s subjects brought before them. What Magna Carta did was bring those same rights against the king. Most important for us today was the promise found in clause 29:
No freeman shall be taken or imprisoned or deprived of his freehold or of his liberties or free customs, or outlawed, or exiled, or in any manner destroyed, nor shall we go upon him, nor shall we send upon him, except by a legal judgment of his peers or by the law of the land.
Note first the broad terms of clause 29: that enabled it to apply not just to the issues at hand but to varied future situations. Second, notice that only “freemen” were protected. The barons came to realize, however, that if their rights were to be maintained against the king, they would need the cooperation of all classes. Thus, the charter came in time to protect “common” liberties.
Each of those issues has informed the American experience. First, Magna Carta itself inspired our Founders to limit power through a written document, our Constitution. Second, clause 29 is captured in the Fifth Amendment, which provides that no person shall be deprived of life, liberty, or property, without due process of law. And third, Magna Carta’s capacity to grow is reflected by the post-Civil War inclusion of the Due Process Clause in the Fourteenth Amendment. That brought the Bill of Rights to bear not only against the federal government, its original limit, but against the states as well. We owe much to this English inheritance.
Cross-posted at the National Constitution Center’s Constitution Daily.
Justice Thomas and That Which Is Not Seen
Featured prominently on the front page of yesterday’s USA Today is Justice Clarence Thomas’s stony visage. The accompanying article by Joan Biskupic purports to be a “look back” at Thomas’s near two decades on the Court. In reality, the article is a thinly veiled hit piece on Thomas’s principled commitment to originalism, his understanding of the proper role of the judiciary, and his belief in the law.
Keying on Thomas’s “hard line” on criminal defendants, the article spends most of the time listing a rogues gallery of Thomas opinions that have been carefully chosen to pull at the heart strings and incense readers unfamiliar with the principles that stand behind Thomas’s positions. The gallery includes:
- denying re-sentencing to a convicted drug dealer who had “entered rehabilitation and turned his life around”;
- dissenting in a case “involving a Louisiana prisoner who had been shackled and punched by guards as a supervisor looked on”;
- dissenting from a “decision against Alabama’s practice of chaining prisoners to outdoor hitching posts and abandoning them for hours without food or water”;
- writing the majority opinion in Connick v. Thompson (in which Cato filed a brief supporting the defendant) holding that “a former death row convict could not sue prosecutors who had failed to turn over blood evidence that could have shown his innocence in a separate armed robbery and led him to testify on his behalf in a murder trial”; and
- writing separately in the controversial Citizens United case to argue that rules requiring individuals and corporations to disclose their campaign spending violate the First Amendment.
In the wake of such a depressing litany of seeming heartlessness, it’s easy to imagine Justice Thomas cackling like a malevolent super-villain as the world burns around him. No doubt many people think the Court’s conservative wing are little better than black-robed Lex Luthors.
While I certainly don’t agree with every decision of Justice Thomas, including some listed in the article, Biskupic does not even try to account for, with an expert quote or otherwise, why Justice Thomas takes the positions he does.
In 1850, famed French Classical Liberal essayist Frederic Bastiat penned perhaps his most famous piece, That Which is Seen, and That Which is Not Seen. In it he criticizes poor economists who analyze only the immediate, “seen” effects of a policy proposal but ignore the extended, secondary effects that are “not seen.” Bastiat wrote:
In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference — the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.
Bastiat’s wise words can apply equally to those good judges who understand the extended effects of their rulings and those bad judges who ignore those extended effects in order to focus only on that which is seen. Justice Thomas is in the former category. He has always understood that every Supreme Court ruling affects more than just the parties before the Court, no matter how sympathetic and heartbreaking those parties may be.
Barack Obama, Luddite?
In the video clip above, President Obama blames America’s current unemployment problem on… automation. ATMs and airport kiosks are singled out.
These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.
If you do more than just think for a second — if you read an economic history book, for instance — you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.
There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment, if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.
Update:
For those having trouble viewing the video, here is a transcript of the relevant Q&A:
Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?
A: [....] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.
Copyright, Innovation, and Empiricism
If you like innovation, and if you’re interested in intellectual property, you probably already know about the Committee on the Impact of Copyright Policy on Innovation in the Digital Era. That’s a group assembled by the National Academies to, well, analyze the impact of copyright policy on innovation in the digital era.
Long-standing consensus holds that copyright, by creating artificial scarcity in information goods, allows creators to enjoy rewards from their creations sufficient to justify creating them. In other words, copyright’s incentive structure encourages creation and innovation, the end result being more and better information goods for the society to enjoy.
Information technologies such as digitization and the Internet are rejiggering the balance that copyright is supposed to strike and casting doubt on the consensus about copyright in some quarters. Technological change has driven down the cost of producing and distributing many creative works quite dramatically. This improves the profitability offered to creators by copyright’s protections, so maybe less such incentive to create is required. Except that the same technologies also permit copying of works on a quite large scale, which reduces the benefits available to creators.
Copyright violation is utterly rampant today. You probably violate copyright law many times a day (subject to arguable fair use rights) when you forward around emails with jokes, pictures, and videos in them, for example. The copyright violations that “matter,” of course, are the ones that undercut the living of those who have made production and distribution of copyrighted works their business or source of financial support.
A further complication: Copyright may do more than simply encourage new creation. It may impede the development of new works because creators can’t use existing copyrighted works to create more. Artists today can’t stand on the broad shoulders of artists from the 1960s, ’70s, and ’80s. If they are to riff on existing cultural themes, they have to use the shoulders of artists from the 1860s, ’70s, and ’80s, whose works are in the public domain.
This is the thicket into which the committee wades. Happily, it’s holding the copyright consensus up to the light and doing some empirical study of the role that copyright has in innovation. Gathered at a Web site for the project are a series of papers that authors presented at a panel last week, including:
- Economic Effects of Copyright: The Empirical Evidence So Far, by Christian Handke
- Bye, Bye, Miss American Pie? The Supply of New Recorded Music Since Napster, by Joel Waldfogel
- The Impact of Digitization on Business Models in Copyright-Driven Industries: A Review of the Economic Issues, by Lisa Cameron and Coleman Bazelon
- Online Access and the Scientific Journal Market: An Economist’s Perspective, by Mark J. McCabe
- Copyright‐Protected Assets in the National Accounts, by Rachel Soloveichik and David Wasshausen
These are but a few of the many subjects that economic study should explore if we are to fully understand the effects of copyright and other intellectual property laws. There’s no time like the present for the studying to begin.
Wisonsin Supreme Court Upholds State Law Curtailing Collective Bargaining Powers
Ruling just a week after hearing oral arguments in the case, the Wisconsin Supreme Court has overturned a lower-court ruling that had struck down the law. Though other challenges are foreseen, the law reining-in collective bargaining powers for public school employees and other state workers is now likely to go into effect — at least for the time being.
Collective bargaining was always a bad idea for workers employed by a state-run monopoly, because it lacks the checks and balances of the private sector. When UPS went on strike, customers could — and did in great numbers — shift their business to FedEx, DHL and others. But taxpayers must keep paying for the public schools despite their rising costs and collapsing productivity.
Still, it is unlikely that this measure will control public school costs as well as many observers hope. I explain why in a feature story I wrote for the current (June) issue of The American Spectator. It’s on newstands now, and should also be up on the Spectator‘s website within the next few days. [Hat tip for the breaking news to Bill Evers].
Perhaps Another Reason the White House Isn’t Pushing Elizabeth Warren…
One of the biggest inside-the-Beltway battles continues to be over the nomination of Elizabeth Warren to head the newly created Consumer Financial Protection Bureau. Recently the White House floated the name of Raj Date, one of Ms. Warren’s hand-picked staffers at the CFPB, as a substitute. Many on all sides of the issue continue to wonder why the White House doesn’t just nominate Warren and make Republicans (and not a few Democrats) vote against her. After all she appears to be beloved on the Left.
Perhaps the White House already knew what I had suspected, but only recently confirmed: that Professor Warren is neither as well known or liked as commonly believed. A recent poll in Massachusetts by Democratic pollsters Public Policy Polling, who tend to over-sample Democratic voters, found about as many respondents had a unfavorable view of Warren as favorable, 21% vs.17%. And that’s in left-leaning Massachusetts. I have to imagine the results look even less favorable for Warren in places like Montana (maybe Jon Tester could tell us). Perhaps less surprising is that over 60% had no opinion, probably because they had no idea who she is, and this in a state where she might run for Senate. (I’d probably poll 90% plus not knowing who I was, and I’d like to keep it that way.)
Obviously we shouldn’t read too much into any one poll. But I think this helps remind us that sometimes what Washington cares about does not really matter much to those outside the Beltway.
Shooting for State Sovereignty
On October 1, 2009, Montana passed the Montana Firearms Freedom Act, the purpose of which was to regulate guns manufactured and kept within Montana state lines under a less restrictive regulatory regime than federal law provides. That same day, to ensure that Montanans could enjoy the benefits of this less restrictive state regulation, the Montana Shooting Sports Association filed a declaratory judgment claim in federal court.
The lawsuit’s importance is not limited to Montana, as seven other states have passed laws similar to the MFFA and 20 states have introduced such legislation. The goal here is to reinforce state regulatory authority over commerce that is by definition intrastate, to take back some of the ground occupied by modern Commerce Clause jurisprudence.
The district court granted the government’s motion to dismiss, however, and MSSA appealed to the Ninth Circuit. Now on appeal, Cato has joined the Goldwater Institute to file an amicus brief supporting the MSSA and arguing that federal power does not preempt Montana’s ability to exercise its sovereign police powers to facilitate the exercise of individual rights protected by the Second and Ninth Amendments. More specifically, for federal law to trump the MFFA, the government must claim that the Commerce and Necessary and Proper Clauses give it the power to regulate wholly intrastate manufacture, sale, and possession of guns, which MSSA argues is a state-specific market distinct from any related national one.
Our brief argues that federal preemption would violate the “letter and spirit of the Constitution” and that heightened judicial scrutiny is required whenever the federal government invokes an implied power to override state sovereignty. The MFFA should not be preempted because: (1) principles of state sovereignty limit federal power; (2) preemption would violate the federalism framework established in National League of Cities v. Usery; and (3) preemption would not allow state sovereignty to serve its role as a proper check of federal power. The Supreme Court has made clear that Congress is not the sole venue for states and individuals to seek protection from federal overreach and so this case is fundamentally a dispute over federalism—which should allow for state regulation of local matters to flourish in concert with federal power over “truly national” concerns.
Allowing preemption here would have the perverse effect of allowing the federal government to regulate “states as states” while impairing states’ ability to operate in areas of traditional governmental functions. The Ninth Circuit should thus find that district court committed reversible error in dismissing the lawsuit and, as a result, MSSA should be allowed to pursue its case beyond the pleadings stage.
The Ninth Circuit will hear the case of Montana Sports Shooting Association v. Holder in late summer or early fall.
Why Is Virginia Gov. Robert McDonnell Implementing ObamaCare?
I ask this question in today’s Richmond Times-Dispatch:
Virginia Republican Gov. Bob McDonnell…says Obamacare is unconstitutional and therefore illegitimate. Yet he has created a state commission to study whether Virginia should implement an illegitimate law. Since the answer does not appear self-evident to commonwealth officials, let’s walk through the reasons Richmond should refuse to create any new health-care bureaucracies.
Didn’t this guy take an oath to support the U.S. Constitution?
My First Year Battling Obamacare
Most people are by now familiar with the broad strokes of the lawsuits challenging Obamacare: more than 30 cases around the country allege, among other claims, that the federal government lacks the constitutional authority to require people to buy a product (the individual health insurance mandate)—and the only way to avoid the mandate is to become poor. After decisions going both ways in the district courts, we are now at the appellate stage in five of those suits, including Virginia’s and the Florida-led 26-state effort.
Those who follow developments in constitutional law are also familiar with the broad legal arguments being made: that the power to regulate interstate commerce, even when read in the context of the power to make laws that are necessary and proper to executing that specified commerce power, does not include the power to force someone to engage in economic activity—to create, in effect, the commerce being regulated. Not even during the height of the New Deal did the government require this, and there are no parallels in the Civil Rights Era or since. (And also that Congress can’t do this under the taxing power for various reasons that I won’t go into here; even those courts ruling for the government have rejected the taxing power assertion.)
Finally, those who follow Cato are probably aware that I’ve been spending a good part of my time since Obamacare’s enactment in March 2010 in this area: filing briefs, writing articles, debating around the country, appearing in the media. And I’m not alone; our entire Center for Constitutional Studies has been involved in various capacities. Indeed, Cato Chairman Bob Levy himself produced a very useful Primer for Nonlawyers about what is the clearly the central constitutional and public policy debate of our generation.
Well, if anyone cares to peek beyond the curtain of how Cato’s legal efforts against Obamacare have evolved, I have an article on that forthcoming in the Florida International University Law Review. Here’s the abstract:
This article chronicles the (first) year I spent opposing the constitutionality of Obamacare: Between debates, briefs, op-eds, blogging, testimony, and media, I have spent well over half of my time since the legislation’s enactment on attacking Congress’s breathtaking assertion of federal power in this context. Braving transportation snafus, snowstorms, and Eliot Spitzer, it’s been an interesting ride. And so, weaving legal arguments into first-person narrative, I hope to add a unique perspective to an important debate that goes to the heart of this nation’s founding principles. The individual mandate is Obamacare’s highest-profile and perhaps most egregious constitutional violation because the Supreme Court has never allowed – Congress has never claimed – the power to require people to engage in economic activity. If it is allowed to stand, then no principled limits on federal power remain. But it doesn’t have to be this way; as the various cases wend their way to an eventual date at the Supreme Court, I will be with them, keeping the government honest in court and the debate alive in the public eye.
Read the whole thing, titled “A Long Strange Trip: My First Year Challenging the Constitutionality of Obamacare.”
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