Archive for June, 2011
Court Extends Commercial Speech Protections
In an important but little-noted First Amendment case decided Thursday, Sorrell v. IMS Health Inc., the Supreme Court correctly invalidated a particular regulation of commercial speech but unfortunately left intact the general doctrine that distinguishes and privileges noncommercial speech. Justice Kennedy authored the 6-3 decision (joined not just by the “conservatives” but also Justice Sotomayor) that struck down a Vermont law prohibiting the sale of information about doctors’ prescription histories as making viewpoint-based speech restrictions in violation of the First Amendment.
In so ruling, the Court effectively affirmed a Second Circuit decision (involving a similar Connecticut law) I discussed previously. Cato filed amicus briefs in both the Second Circuit and Supreme Court.
The Supreme Court first found that Vermont’s law is subject to heightened scrutiny—not simply the “intermediate” scrutiny typically applied to restrictions on commercial speech—because, on its face, it enacts content- and speaker-based burdens on protected expression. It then rejected the two justifications for the statute the state had asserted: (1) that it is necessary to protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship; and (2) that it is integral to the achievement of policy objectives—namely, improved public health and reduced healthcare costs.
That’s fine as far as it goes, but it leaves open the possibility for broader restrictions on speech, such as if a state wanted to prohibit all prescription-related speech, not just that by data-mining companies to pharmaceutical companies who would use it to tailor their marketing efforts. Our Supreme Court brief, in contrast, argued that the Court should abandon the unworkable distinction between commercial and noncommercial speech established in the 1980 case of Central Hudson Gas & Electric v. Public Service Commission.
The Central Hudson rule should be abandoned in favor of strict scrutiny of all speech restrictions because innovative and valuable commercial expression deserves full First Amendment protection. For more on our preferred approach, see this blogpost.
Still, even as Sorrell v. IMS Health doesn’t entirely eliminate the commercial speech doctrine, the Court does make clear that information—even commercial information sold for commercial purposes—is more than a mere commodity (Vemont had likened it to beef jerky). Commercial speech provides valuable information to the marketplace; by definition, the more such information consumers receive, the better-informed decisions they can make.
$1 Trillion in Phony Spending Cuts?
In the Washington Post Friday, Ezra Klein partly confirmed what I fear the Republican strategy is for the debt-limit bill—get to the $2 trillion in cuts promised through accounting gimmicks. As I have also noted, Klein says that there is about $1 trillion in budget “savings” ($1.4 trillion with interest) to be found simply in the inflated Congressional Budget Office baseline for Iraq and Afghanistan. Klein says, “I’m told that a big chunk of these savings were included in the debt-ceiling deal” that Rep. Eric Cantor (R-VA) and Sen. Jon Kyl (D-AZ) are negotiating with the Democrats.
Republican leaders have promised that spending cuts in the debt-limit deal must be at least as large as the debt-limit increase, which means $2 trillion if the debt-limit is extended to reach the end of 2012. In a Daily Caller op-ed, I noted that you can find $1 trillion in “savings” from this phony war accounting and another $1 trillion by simply pretending that non-security discretionary will stay flat over the next decade.
There is more evidence that few, if any, real spending cuts are being discussed. One clue is that the media keeps quoting Joe Biden essentially saying that it was easy to reach agreement on the first $1 trillion in cuts.
The other suspicious thing is that the media keeps floating trial balloons for specific tax hikes, but I’ve seen very few trial balloons for specific spending cuts. Friday, the Washington Post story on the debt discussions mentions all kinds of ideas for raising taxes on high earners. A few days ago, news stories revealed that negotiators were talking about changing tax bracket indexing to create annual stealth increases in income taxes. The only item I’ve seen being discussed on the spending side is trimming farm subsidies.
If Republican and Democratic lawmakers were really discussing major spending cuts, then the media would be full of stories mentioning particular changes to entitlement laws to reduce benefits and stories about abolishing programs widely regarded as wasteful, such as community development grants.
I hope I’m wrong, but this is starting to look a lot like the phony $100 billion spending cut deal from earlier this year.
Sean, Rush, Greta, Glenn, Bill: When you get Republican leaders on your shows, get them to promise that they won’t use phony baseline accounting like war costs to reach the $2 trillion in cuts. The budget and the nation desperately need real cuts and real government downsizing.
Where Is Barack Obama Now That We Need Him?
Back in the day (February 2008), a senator named Barack Obama said, “I opposed this [Iraq] war in 2002. I will bring this war to an end in 2009. It is time to bring our troops home.”
The following month, under fire from Hillary Clinton, he reiterated, ”I was opposed to this war in 2002. . . . I have been against it in 2002, 2003, 2004, 5, 6, 7, 8 and I will bring this war to an end in 2009. So don’t be confused.”
Indeed, in his famous “the moment when the rise of the oceans began to slow” speech on the night he clinched the Democratic nomination, he also proclaimed, “I am absolutely certain that generations from now we will be able to look back and tell our children that . . . this was the moment when we ended a war.”
So now the Congressional Budget Office looks at the plans of President Barack Obama and reports:
In 2010, the number of U.S. troops (active-duty, reserves, and National Guard personnel) deployed for war-related activities averaged about 215,000, CBO estimates. In the alternative scenario presented here, the number of military personnel deployed for war-related purposes would decline over a five-year period to an average of 180,000 in 2011, 130,000 in 2012, 100,000 in 2013, 65,000 in 2014, and 45,000 in 2015 and thereafter.
That would indeed be an improvement. But it just doesn’t seem like “I will bring this war to an end in 2009 [and] bring our troops home.”
(H/T [on the CBO quote, not the despairing memory of the original Obama]: Ezra Klein)
Update: In the Sunday Washington Post, David Fahrenthold found some more differences between Senator Obama and President Obama on the debt limit, judicial nominations, and war powers.
Two Votes on Libya
The House of Representatives has taken two votes on the war in Libya. In the first, the House voted 295 to 123 against authorizing the war. 70 Democrats voted or 36 percent of the caucus voted against authorization. That’s pretty impressive given that the Secretary of State made a personal appeal to her fellow partisans prior to the vote. Eight Republicans said “yes” to war in Libya, a smaller number than I would have expected. Partisanship, deficits, and elections do matter, I suppose.
On the other hand, the House also refused to cut off most funding for the war by a vote of 180-238. Some 36 Democrats voted to cut off most funding; 144 Republicans joined them. This bill was said to be gaining strength but in the end, not nearly enough votes came over. It may be that the Obama administration will think this vote was better than expected and take heart.
Nonetheless, these votes may make a difference, even though they do not force the President to do anything in particular. A new book, After the Rubicon, by Douglas Kriner argues that Congress can affect how and how long a president pursues an unauthorized war. Specifically, congressional resistance to a war can help turn the public against a president’s policy. (Something like that happened in Somalia.) A new poll shows the war in Libya is losing public support: 46 percent of the public now disapprove of the endeavor.
Over the next few weeks, the Senate will take up the question of Libya. Will the President find a majority in that chamber to vote against the direction of public opinion? Or will a majority of senators heed the public’s view of this unpopular, unauthorized war?
Hayek on C-SPAN, Gillespie and Welch at the Hayek Auditorium
Sunday night at 8 on C-SPAN: Brian Lamb interviews Russell Roberts and John Papola about their Hayek-Keynes rap videos.
And Thursday afternoon at 4: Nick Gillespie and Matt Welch of Reason magazine, Reason.tv, Reason.com, and the vast Reason enterprises launch their new book The Declaration of Independents: How Libertarian Politics Can Fix What’s Wrong with America at a Cato Book Forum with a multimedia presentation in the Hayek Auditorium.
“In a world where our [political] choices are limited to John Boehner and Nancy Pelosi, the survivors envy the dead,” they write. But that’s not the world they actually see. They argue that despite our stunted politics, despite national bankruptcy, despite the war on drugs, revolutionary innovators have changed our world over the past 40 years: Vaclav Havel and the Plastic People of the Universe, Herb Kelleher and Southwest Airlines, Tiger Woods and the breakdown of categories, the personalization of media, and much more. It’s just politics that is resisting freedom and choice. And now millions of voters are trying to break out of stagnant political choices. Gillespie and Welch see a “future so bright, we gotta wear shades.”
At Marginal Revolution, Tyler Cowen writes, “This is the up-to-date statement of libertarianism. Not warmed-over right-wing politics, but real, true-blooded libertarianism in the sense of loving liberty and wanting to find a new path toward human flourishing.” Come see if he’s right.
This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this past week:
- On the National Labor Relations Board’s recent meddling: The idea that a small regulatory board in D.C. should try to centrally plan $1 billion of private business investment is crackers.
- After finally being booted from office in November, ex-Rep. Jim Oberstar reemerges to voice his support for reauthorizing the Economic Development Administration. The EDA should be booted too.
- The numbers in the Congressional Budget Office’s latest long-term budget forecast are new but the message is the same: the budget is on an unsustainable path.
- The CBO’s projections show that the long-term debt problem is not a balanced one—it is caused by historic increases in spending, not shortages of revenues.
- It’s a sad commentary on the size and scope of the federal government that I would get into an argument with a senator—a Republican, no less—over a federally backed loan to a pizza shop.
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An Economic Policy That Also Causes Cavities
I nearly dropped my sugar bowl in my Froot Loops this morning when I saw that Senator Sheldon Whitehouse (D-RI) had introduced a bill to provide a temporary tax credit to firms hiring previously unemployed workers.
IANAE (I am not an economist), but even I know that if you drop the cost of hiring workers, you will get a few more workers hired until the cost of employing them rises again. The net result, after the tax credit expires, would be a return to unemployment for an equivalent number of workers.
Sure, letting businesses keep a bit more of the money they earn would provide a small stimulative effect, but that too would expire, and it’s nothing like the strengthening you’d get from a permanent tax reduction under which planning and investment could be based on lower tax rates/cost of labor.
It all left me headache-y and listless, or maybe that was the after-effect of my sugar-laden breakfast. Come to think of it, a temporary tax break and sugar cereals are similar. For whatever short burst of energy they produce, it’s followed by listless unease. Healthy food and lower taxes build strong people and economies.
The PA Senate, not House, Is Blocking the Expansion of School Choice
Republicans in Pennsylvania’s House, which has been reluctant to take up a controversial Senate voucher bill, have been on the receiving end of an intense lobbying campaign for vouchers.
I am all for grassroots groups putting pressure on lawmakers to do the right thing. But amidst all the sound and fury, those pursuing vouchers with such single-mindedness seem to have missed one very important fact; the House already did the right thing. They passed a massive expansion of the existing, successful, and uncontroversial education tax credit program by a massive margin (only 4 percent opposed).
The Educational Improvement Tax Credit program is vastly superior to all of the voucher bills under consideration. It has shockingly broad bipartisan support. It was easily expanded in the House. But for some reason, the Senate will not take it up.
There are good reasons for Republicans and Democrats in the House to oppose all of the voucher bills. There is no good reason for the Senate to refuse to expand the education tax credit program.
So, I have a few questions for the activists pounding away for vouchers.
Why not melt the Senate phone lines instead of the House? Why is a new, inferior voucher program more important than expanding the better, less controversial, more cost-effective tax credit program?
Resurrect DC Choice, Bury the Lede
A Washington Post story from a couple of days ago touts survey results showing a majority of DC parents — 53 percent — finally giving the DC public schools a decent grade. That is, to be fair, a big story. But it certainly isn’t the most overwhelming finding in the survey. That you find mentioned deep in the article:
This year, Congress approved an extension of a federal program that provides vouchers to help students from some low-income D.C. families attend private or parochial schools. The survey found that nearly 70 percent of parents with children in the system support such tuition aid. Overall, nearly two-thirds of residents back vouchers, with positive sentiment higher among African Americans.
Perhaps even more interesting is that support for charter schools — the “it” choice reform because charters are still public schools — is downright tepid in comparison:
Residents remain ambivalent about the rapidly growing public charter sector, which serves 28,000 students. Forty-one percent consider the independently operated charters better than regular public schools; 42 percent say they are about the same. The favorable rating rises to a slight majority, however, among residents younger than 30.
The people of DC overwhelmingly want real, private-school choice. That’s the news about DC education that everyone should know!
The War in Libya and Limited Government
As Congress begins (perhaps!) to hold up its end of the invitation to struggle over the Libyan adventure, Chris Preble, Gene Healy and I have prepared a video explaining what’s at stake in this latest American war.
Federal Jobs Programs Don’t Work
In a 1975 interview, Nobel prize-winning economist Milton Friedman said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
In writing and editing essays on www.DownsizingGovernment.org, I see that mistake in department after department. It is an important reason why policymakers find it so hard to control their spending appetites. They want to believe that programs work, and so they internalize the bedtime stories sold to them by program advocates.
In Politico today, I examine federal employment and job training programs. From FDR to Obama, and from Reagan to Ryan, policymakers have wanted to “do something” to help labor markets. However, jobs programs are not a proper exercise of federal power under the Constitution, and they simply haven’t worked very well despite decades of renaming, retooling, and reinventing.
Podcast on Internet Privacy and Do-Not-Track
This podcast, put together by the high-performance folks at the Performance Marketing Association, is a pretty good exploration of privacy and proposals to create a “do-not-track” system for the World Wide Web. Though I do use the word “hedonic” at one point, which is a bit much…
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