The right answer to the same-sex marriage question is to remove government from the marriage business altogether.  That’s a legislative matter, however, and not something the courts should decree. Until then, because state and federal laws confer benefits based on marital status, the equal protection provisions of the Fifth and Fourteenth Amendments require that same-sex couples not be subject to discrimination in receipt of those benefits. But that issue was not addressed by the U.S. Court of Appeals in California—a state that permits gay unions and does not discriminate against such unions in conferring “marital” benefits. The specific issue the court decided was whether the label “marriage” could attach to heterosexual but not homosexual partnerships. Quite properly, the court ruled that it could not. That’s a narrow but important step in the right direction. But it does not settle the more significant question whether states may grant benefits to heterosexual couples while granting less or no benefits to homosexual couples.

In fact, there’s a negative aspect of the court’s ruling, which essentially declared Prop 8 unconstitutional because California went further than other states in allowing civil unions. The court held there’s no rational basis for allowing such unions but requiring that they carry a different label. That’s quite different from invoking the Equal Protection Clause to forbid a state from denying gays a right to the benefits of marriage. That issue didn’t arise because California grants such benefits to gays. Regrettably, other states may be dissuaded from following the California civil union model because their voters wish to limit the definition of “marriage” to exclude gays. In this instance, the better may become the enemy of the good.

Gay Marriage Still Has an Uphill Climb is a post from Cato @ Liberty - Cato Institute Blog

Back in 1993, when Whitney Houston hit #1 with “I will always love you”, there was something that California-based state schooling advocates didn’t love at all: a school voucher ballot initiative. Much was written on the subject, and in 1994 a booklet was published summarizing the arguments for and against (Voices on Choice, K. L. Billingsley, ed.). In today’s School Choice Week installment, we’ll hear from those who were agin’ it.

Maxine Waters, United States Congress (D, Los Angeles):
“Contrary to claims, school choice will be devastating for urban, minority, and poor students who desperately need quality education.”

Delaine Eastin, California State Representative (D, Fremont):
“Having schools without [government] standards won’t improve learning.” Private school choice “won’t teach more kids how to read and write.”

Well, actually… U.S. private school choice programs usually do improve student achievement significantly in one or more subjects, and they have never been shown to have a negative impact on student achievement. The domestic scientific evidence to that effect was collected and summarized last March by Greg Forster, for the Foundation for Educational Choice. I do have one quibble with the report (it doesn’t count the insignificant findings in studies that have at least one significant finding, as is standard practice in literature reviews) but even after addressing it the aforementioned statements would still hold true.

Heck, even the few choice programs that don’t currently seem to be raising test scores are substantially raising students’ graduation rates–and doing it at substantially less cost to taxpayers than the state schools.

What’s more, when we cast a wider net and look at scientific studies comparing government and independent schools within countries all over the world, the results are even more dramatic.  In fact, it is the least regulated, most market-like schools that most consistently outperform state-run monopoly school systems such was we have in the U.S.

Delaine Eastin:
“[T]his initiative allows schools to fail. But it does nothing to protect taxpayers when they do. When public school systems go belly up as a result of the voucher initiative, the courts are likely to rule that taxpayers will be stuck with the tab—and it won’t be cheap.”

Modern private school choice programs have been operating around the country for as long as twenty years, and I know of no case in which they have been found to increase the total burden on taxpayers. In fact, the only systematic studies of the issue find that these programs save taxpayers money—sometimes quite a bit of it. Florida’s legislature has studied the fiscal impact of that state’s k-12 scholarship donation tax credit program, and found it to save $1.49 for every $1 it reduces revenues. That’s a nearly 50% return.

What’s more, the program has been found in two separate studies to both improve achievement of students who remain in public schools and to improve achievement of students who receive scholarships to attend private schools. It’s not hard to fathom why: on average, private schools spend thousands less per pupil than does the public school monopoly.

Warren Furutani, past president, Los Angeles City Board of Education:
“It is no coincidence that dollars are being pulled from our underfunded, overburdened school system at the same time our governor and the president of this nation are pushing vouchers and choice.”

Um… Yeah… About that claim that “dollars were being pulled” from “underfunded” public schools in California. I just happen to have the actual spending trend handy:

So, not only were these Status Quo Stalwarts unable to correctly predict the future, they had some difficulty accurately describing the present. Oh, and while thrifty school choice programs around the country have been improving student achievement and attainment, it’s hard to say the same for the California’s state education monopoly.

Status Quo Stalwarts, Meet Reality
[School Choice Week Blast from the Past, Pt. 2!] is a post from Cato @ Liberty - Cato Institute Blog

I’ve written before about whether California is the Greece of America, in part because of crazy policies such as overpaid bureaucrats and expensive forms of political correctness,

And we all know that California has one of the nation’s greediest governments, imposing confiscatory tax rates on a shrinking pool of productive citizens.

So it is hardly surprising that the Golden State is falling behind, losing jobs and investment to more sensible states such as Texas.

But not everybody is learning the right lessons from California’s fiscal and economic mess.

There’s a group of crazies who want to increase the top tax rate by five percentage points, an increase of about 50 percent. And they have made Kim Kardashian the poster child for their proposed ballot initiative.

I’m relatively clueless about popular culture, but even I’m aware that there is a group of people know as the Kardashian sisters. I don’t know who they are or what they do, but I gather they are famous in sort of the same way Paris Hilton was briefly famous.

And they have cashed in on their popularity, which may not reflect well on the tastes of the American people, but it’s not my job to tell other people how to spend their money.

But not everybody share this live-and-let-live attitude, which is why the pro-tax crowd in California produced this video.

I suppose I could criticize the petty dishonesty of the proponents, since they deliberately blurred of the difference between “tax rates” and “taxes paid.”

Or I could expose their economic illiteracy by pointing out that higher tax rates would accelerate the emigration of investors, entrepreneurs, small business owners, and other rich taxpayers to zero-tax states such as Nevada.

But I won’t do those things. Instead, like the Nevada Realtors Association and Arizona Business Relocation Department, I’m going to support this ballot initiative.

Not because I overdid the rum and eggnog at Christmas, but because it’s good to have negative role models, whether they are countries like Greece, cities such as Detroit, or states like California.

So here’s my challenge to the looters and moochers of the Golden State. Don’t just boost the top tax rate by five-percentage points. That’s not nearly enough. Go for a 20 percent top tax rate. Or 25 percent. After all, think of all the special interests that could use the money more than Ms. Kardashian.

And if somebody tells you that she will move to South Beach or Las Vegas, or that the other rich people will move to Texas, Wyoming, or Tennessee, just ignore them. Remember, it’s good intentions that count.

In closing, I apologize to the dwindling crowd of productive people in California. It’s rather unfortunate that you’re part of this statist experiment. But you know what they say about eggs and omelets.

By the way, here’s some humor about the Golden State, including a joke about the bloated bureaucracy and a comparison with Texas.

Will the Last Job Creator to Leave California Please Turn Off the Lights? is a post from Cato @ Liberty - Cato Institute Blog

The Los Angeles Times has a good article on California’s move to require Amazon and other out-of-state retailers to collect taxes for it. Good because it accurately portrays what’s happening. Many such stories will say that California is seeking to tax Amazon. In fact, says the headline, “California Tells Online Retailers to Start Collecting Sales Taxes From Customers.”

You see, Californians generally don’t pay their “use taxes“—the alternative to sales taxes, for things brought into the state from outside. If the tax authorities tried to collect use taxes, going door to door to tally up the goods that haven’t yet been taxed, there would be bedlam.

So they want out-of-state companies that sell into California to collect the taxes that the state’s residents would pay. But in 1992, the Supreme Court found in a decision called Quill v. North Dakota that states can’t require out-of-state retailers to collect taxes for them. Doing so would create too great a burden on interstate commerce.

If an Internet retailer has a significant presence in a state, then the state can require the retailer to collect and remit sales taxes. (It’s no longer interstate commerce—get it?) So Amazon and other retailers are doing the sensible thing: shedding ties to California, such as with their affiliate marketers. Reports the Times:

Amazon and online retailer Overstock.com Inc. told thousands of California Internet marketing affiliates that they will stop paying commissions for referrals of so-called click-through customers. … Both Amazon in Seattle and Overstock in Salt Lake City have told affiliates that they would have to move to another state if they wanted to continue earning commissions for referring customers.

The natural result of California doing yet more to make the state uninhabitable for business comes at the end of the story. Californians who earned and spent money in California as part of the Internet remote sales ecosystem plan to move elsewhere:

One affiliate, Ken Rockwell of San Diego, the owner of a 12-year-old photography website, said he planned to move out of state. “Will it be Las Vegas or Scottsdale or Ensenada?” he said. “It’s a question of where, not if.”

In the Quill case, the Supreme Court invited Congress to change the rule that it laid down. If it saw fit, Congress could permit states to export their tax responsibilities to businesses in every other state. But this would cut off the healthy tax competition you see happening in the area of remote sales; both taxes and tax collection burdens would rise.

Profligate and tax hungry states like California are desperate to overturn Quill in the courts or through the Congress. Here’s hoping they fail.

California Wants Amazon to Tax Californians is a post from Cato @ Liberty - Cato Institute Blog

Much of the response to the study I released last week has focused on the relative academic performance rankings of California’s charter school networks. That wasn’t the point of the study, which focuses on whether or not philanthropy + charter schooling can replace venture capital and competitive markets as a mechanism for scaling-up the best education services. Rather than try to fight the tide, I thought I’d just share the relevant rankings in an easy-to-link form, and once the debate about them dies down we can return to the larger policy point.

With that in mind, the first table below lists the top 15 charter school networks in terms of performance on the California Standards Tests, adjusted for student factors and peer effects. For comparison, two non-charter schools are included: the academically selective elite public prep schools Gretchen Whitney and Lowell–both of which feature in most lists of the top public schools in the country. There are 68 networks with the necessary data, but the lowest grant rank is 61 because eight of the networks received no philanthropic funding at all.

Next is a list of the charter networks that philanthropists have invested-in most heavily, with a view to replicating their models. Notice the minimal overlap? I repeat this comparison in the study with Advanced Placement test performance, and find the same pattern (it’s just slightly worse).

Every one of the above networks received substantially more grant funding individually than the top three highest achieving networks… combined.

Ranking the Charter School Networks is a post from Cato @ Liberty - Cato Institute Blog

Florida Governor Rick Scott deserves a big round of applause for dealing a major setback to the Obama administration’s costly plan for a national system of high-speed rail. As Randal O’Toole explains, the administration needed Florida to keep the $2.4 billion it was awarded to build a high-speed Orlando-to-Tampa line in order to build “momentum” for its plan. Instead, Scott put the interests of his taxpayers first and told the administration “no thanks.”

That’s the good news.

The bad news is that the administration is going to dole the money back out to 22 passenger-rail projects in other states. Florida taxpayers were spared their state’s share of maintaining the line, but they’re still going to be forced to help foot the bill for passenger-rail projects in other states.

Here’s Randal’s summary:

Instead, the Department of Transportation gave nearly $1 billion of the $2.4 billion to Amtrak and states in the Northeast Corridor to replace worn out infrastructure and slightly speed up trains in that corridor, as well as connecting routes such as New Haven to Hartford and New York to Albany. Most of the rest of the money went to Midwestern states—Illinois, Iowa, Minnesota, Michigan, and Missouri—to buy new trains, improve stations, and do engineering studies of a few corridors such as the vital Minneapolis-to-Duluth corridor. Trains going an average of 57 mph instead of 52 mph are not going to inspire the public to spend $53 billion more on high-speed rail.

The administration did give California $300 million for its high-speed rail program. But, with that grant, the state still has only about 10 percent of the $65 billion estimated cost of a San Francisco-to-Los Angeles line, and there is no more money in the till. If the $300 million is ever spent, it will be for a 220-mph train to nowhere in California’s Central Valley.

Why should Floridians be taxed by the federal government to pay for passenger-rail in the northeast? If the states in the Northeast Corridor want to pick up the subsidy tab from the federal government, go for it. (I argue in a Cato essay on Amtrak that if the Northeast Corridor possesses the population density to support passenger-rail then it should just be privatized.)

I don’t know if taxpayers in Northeast Corridor would want to pick up the federal government’s share of the subsidies, but I’m pretty sure California taxpayers wouldn’t be interested in footing the entire $65 billion for their state’s high-speed boondoggle-in-the-works. As I’ve discussed before, the agitators for a national system of high-speed rail know this:

If California’s beleaguered taxpayers were asked to bear the full cost of financing HSR in their state, they would likely reject it. High-speed rail proponents know this, which is why they agitate to foist a big chunk of the burden onto federal taxpayers. The proponents pretend that HSR rail is in “the national interest,” but as a Cato essay on high-speed rail explains, “high-speed rail would not likely capture more than about 1 percent of the nation’s market for passenger travel.”

According to the Wall Street Journal, congressional Republicans aren’t happy that the administration is taking Florida’s money and spreading it around the country:

Monday’s announcement drew criticism from House Republican leaders, who questioned both the decision to divide the money into nearly two-dozen grants around the country—instead of concentrating it into fewer major projects—and the fact that many of the projects will benefit Amtrak, the federally subsidized passenger-rail operator.

I heartily agree with the Amtrak complaint, but I’m not sure why as a federal taxpayer I should feel better about instead “concentrating [the money] into fewer major projects.” Subsidizing passenger-rail is no more a proper role of the federal government than education or housing. Unfortunately, for all the criticisms of the Obama administrations and the constant talk about spending cuts, Republicans don’t appear to possess much more desire to limit the scope of the federal government’s activities than the Democrats.

See this Cato essay for more on fiscal federalism.

High-Speed Rail and Federalism is a post from Cato @ Liberty - Cato Institute Blog

Just a decade ago in Palazzolo v. Rhode Island, the Supreme Court rejected the idea that those who buy property subject to burdensome regulations lose the right the seller otherwise has to challenge those regulations. The Court ruled that the Takings Clause does not have an “expiration date.”

Sadly, not all government authorities or courts took Palazzolo to heart. In 1997, Daniel and Susan Guggenheim bought a mobile home park that, at the time of purchase, was in “unincorporated territory” of Santa Barbara County, California. The Guggenheims did not challenge the county’s 1979 rent control ordinance but instead challenged the 2002 adoption of that ordinance by the City of Goleta when the city incorporated the Guggenheims’ land.

The Ninth Circuit essentially limited Palazzolo to its particular facts and circumstances, deciding to convert the established three-factor test for regulatory takings (Penn Central) into a one-factor test focused solely on “investment-backed expectations.” The court did this largely on the premise that the Guggenheims did not present an “as-applied” challenge — as Palazzolo did — to the ordinance’s application to their mobile home park, but instead filed a facial challenge to the constitutionality of the ordinance itself. As a result, the Ninth Circuit turned two Supreme Court precedents on their head and put that “expiration date” on the Takings Clause in this case.

Significantly, the Ninth Circuit isn’t alone in its misapplication of Palazzolo; the Federal Circuit in CRV Enterprises v. United States (in which Cato will also be filing a brief) also recently issued an opinion severely narrowing Palazzolo‘s scope and deepening a circuit split.

Cato filed an amicus brief supporting the Guggenheims’ request that the Supreme Court review the Ninth Circuit decision and reaffirm its decision in Palazzolo. The brief argues the Supreme Court should review the case because: (1) a rule that allows the transfer of title to immunize government regulation from constitutional or other legal challenge expands government power and diminishes property rights; (2) the Ninth Circuit “flouts” the rule of Palazzolo; and (3) this case — as well as CRV Enterprises — indicates the need for the Supreme Court to settle the spreading confusion about Palazzolo.

Otherwise, the existence of a “post-enactment” rule will create a “massive uncompensated taking” from small developers and investors that would preserve and enhance the rights of large corporations. The ability of property owners to challenge government interference with their property is essential to a proper understanding of the Fifth Amendment; the Court must reestablish the principle that transfer of title does not diminish property rights.

Thanks to legal associate Nick Mosvick and former legal associate Brandon Simmons (acting as our outside counsel in this case) for their work on this case, Guggenheim v. City of Goleta.

The Takings Clause Has No Expiration Date is a post from Cato @ Liberty - Cato Institute Blog

This is a big week for private property rights.  Two epic eminent domain struggles are playing out on opposite sides of the country. 

First, National City, California, is ground zero for eminent domain abuse.  City officials declared several hundred properties blighted even before conducting a blight study that was riddled with problems. The city wants to seize and bulldoze a youth community center (CYAC) that has transformed the lives of hundreds of low-income kids, so a wealthy developer can build high-rise luxury condos:

CYAC has numerous volunteers, including local law enforcement officers, providing free mentoring in boxing as well as academics.  The gym is famous for getting kids off the street and back into school.  As Rick Reilly explained in a feature in Sports Illustrated (boy, how I miss his inside-back-page column):

You know what, Mayor? National City doesn’t need more luxury condos. It needs good men like the Barragans teaching kids respect for neighbors and property, manners you could use a little of yourself.

And if you kick the Barragans out so some slick in Armani can buy a bigger yacht, I hope your car stereo gets jacked—weekly—by a kid who would’ve otherwise been lovingly coached on their jabs and their math and their lives.

Question: Can you declare politicians blighted?

This week, the gym’s battle is in trial before the Superior Court of California.  Represented by the Institute for Justice (who else?), a victory will help protect private property far beyond National City and clarify the use and misuse of blight designations.

Second, moving to the other side of the country, we go to Mount Holly, New Jersey:

Mount Holly is another classic case of “Robin Hood-in-Reverse.”  Officials have been dismantling a close-knit community known as the Gardens for the last decade so a Philadelphia developer can bulldoze the area and build more expensive residential properties.

Homeowners in the Gardens are primarily minorities and the elderly.  The row-style houses are being torn down while still attached to occupied homes, and officials refuse to offer the remaining homeowners replacement housing in the new redevelopment.  Further, owners are being offered less than half the amount it would cost to buy a similar home blocks away.

Here, IJ just launched a billboard campaign and did a study that concludes the eminent domain abuse project may result in a loss of a million taxpayer dollars a year, or one-tenth of the Township’s budget.

I previously wrote about eminent domain shenanigans here and you can read more from Cato on property rights here.

March Madness: Eminent Domain Abuse Goes Coast-to-Coast is a post from Cato @ Liberty - Cato Institute Blog

Assorted media clips worth catching up with over the holiday:

• You’ve probably seen the ongoing scandal about how local officials used the southern California city of Bell to enrich themselves at taxpayer expense. A Los Angeles Times investigation finds that the city was milking small tradespeople too: “Legal experts point to a lack of due process and judicial oversight in hundreds of ‘civil compromises,’ in which plumbers, carpet cleaners and bottle-gatherers paid up to $1,000 for alleged code violations.”
• “To get the check, you’ve got to medicate the child”: a horrifying Boston Globe series exposes how the incentives created by the federal SSI dependent disability program result in the overdiagnosis of disability among school-age kids. The result can be lifelong dependency, especially when grown kids realize that entering the labor force would make their families worse off by losing the “disability money.” [first, second, third parts, more]
• A U.S. Congressman ousted by Ohio voters in last month’s election is suing a PAC that campaigned against him, saying its unfair ads deprived him of his “livelihood” [Cincinnati Enquirer, Politico]
• The supposedly poisoned town of Hinkley, Calif., made famous by the Julia Roberts vehicle Erin Brockovich, turns out to have cancer rates a bit below the average, a new epidemiological study finds [more];
• Aside from the morality aspects, there are really good reasons not to steal a meerkat (via).

Recommended Reading is a post from Cato @ Liberty - Cato Institute Blog

Writing at CNN, my colleague Jeffrey Miron puts his finger on one reason for the disappointing defeat of California’s Prop 19:

Prop 19 failed also because it overreached. One feature attempted to protect the “rights” of employees who get fired or disciplined for using marijuana, including a provision that employers could only discipline marijuana use that “actually impairs job performance.” That is a much higher bar than required by current policy.

Like so many other developments in employment law in recent years, this would have chipped away at the basic principle of employment at will, which holds that in the absence of a contract specifying otherwise, either party to an employment relation may end that relation at any time for any reason or for no reason at all.

It was no doubt inevitable that the proposition would fare poorly among self-identified conservatives and older voters. But the “users’ rights” provisions were enough to raise doubts even among liberty-minded thinkers like David Henderson, who predicted that by signaling hostility toward freedom of association, such provisions would “make the drug-legalization hill even steeper.”

Marijuana of course remains illegal under federal law, which means that its consumption would at one and the same time have been 1) protected under employment-discrimination rules, and 2) illegal and subject to prison sentences. If this paradox seems vaguely familiar, maybe it’s because not that many years ago — before the Supreme Court’s 2003 decision in Lawrence v. Texas — there were localities where consenting homosexual conduct was simultaneously protected under one set of laws, and unlawful under another. Indeed, there were more than a few advocacy groups that worked to promote the new controls over employer decisionmaking and yet never troubled themselves to work for repeal of the still-on-the-books anti-gay prohibitions. If the goal is to achieve social peace, however, rather than wage constant culture war on each other, you’d think the “leave people alone” message would hold more appeal than the “fall in line or you’ll hear from our lawyers” message.

Jeffrey Miron surmises, no doubt rightly, that the problem of undislodgeable tenured stoners in the workplace would be more the exception than the rule. Yet it’s worth noting that the issue has already arisen in various lawsuits in which workers with a doctor’s note recommending marijuana use have contested firings. Lawyers have also eagerly cobbled together suits over related issues, as with this class action noted less than two years ago at my other website, Overlawyered:

Starbucks’s job application asked prospective baristas if they’d been convicted of a crime in the past seven years and added for “CALIFORNIA APPLICANTS ONLY”, at the end, that minor marijuana possession convictions more than two years old didn’t have to be disclosed, in accord with a state law along those lines. Entrepreneurial lawyers then tried to steam-press $26 million or so out of the coffee chain on the following theory: that the clarification was placed too far down the application after the original question; that Starbucks had therefore violated the California Labor Code; and that each and every Starbucks job applicant in California since June 2004, perhaps 135,000 persons, was owed $200 in statutory damages regardless of whether they had suffered any harm. Per John Sullivan of the Civil Justice Association of California, the lawyers also took the position that “it didn’t matter that two of the three job applicants who signed on as named plaintiffs testified in court that they read the entire application and knew they didn’t have to mention a marijuana conviction (which neither had anyway!)” The court refused to certify the class and made the following observations (courtesy CJAC blog):

* “There are better ways to filter out impermissible questions on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants. Plaintiffs’ strained efforts to use the marijuana reform legislation to recover millions of dollars from Starbucks gives a bizarre new dimension to the every day expressions ‘coffee joint’ and ‘coffee pot.’”… “The civil justice system is not well-served by turning Starbucks into a Daddy Warbucks.”

Ilya Somin at Volokh Conspiracy notes that “the case against the War on Drugs and other ‘morals’ regulations is very similar to the standard conservative critique of economic regulation.” But if a much-needed rollback of morals regulation is made the excuse for an expansion of economic regulation, there may be grounds to wonder whether the goal is truly freedom at all.

Prop 19, Employment at Will, and Social Peace is a post from Cato @ Liberty - Cato Institute Blog

Here’s some recent commentary on California’s Prop. 19 ballot initiative:

• Today, New York Times columnist Nicholas Kristof makes the case against the war on cannabis.  Although there is no mention of Cato, Kristoff mentions the work of our senior fellow, Jeff Miron, and links to our report on the Budgetary Impact of Ending Drug Prohibition.  Kristoff also mentions Portugal’s drug decriminalization policies and links to a Time Magazine article that highlights the Cato report on that subject by Glenn Greenwald.
• Nick Gillespie and Matt Welch make the case that Prop. 19 is the most important item before the voters in this election cycle.  Even more important than whether Barbara Boxer can continue her work in the Senate?  Yes, read the whole thing.  Dan Mitchell has additional thoughts here.
• George Soros is in the news for helping the Prop. 19 effort with a one million dollar contribution.  He explained his reasons for supporting Prop. 19 in a Wall Street Journal op-ed.

For additional Cato scholarship on drug policy, go here.

Prop. 19 Roundup is a post from Cato @ Liberty - Cato Institute Blog

“These kids today and their violent [blank]….” This refrain has been around for as long as there have been kids – and elders to shake their fists at them. In the 19th century, dime novels and “penny dreadfuls” were blamed for social ills and juvenile delinquency. In the 1950s, for example, psychologist Fredric Wertham’s attack on comic books – in his bluntly titled book Seduction of the Innocent – so ignited the national ire that Congress held hearings on the cartoon menace. In response, the comic book industry voluntarily adopted a ratings system. Similarly, backlash against the movie industry and the music industry (e.g., Tipper Gore’s attack on gangsta rap) caused those respective industries to also adopt voluntary ratings systems.

The videogame industry also adopted an effective and responsive ratings system after congressional hearings in the early ’90s. Thinking this ratings system ineffective, however, California passed a violent videogame law, which prohibits minors from purchasing games that are deemed “deviant,” “patently offensive,” and lacking in artistic or literary merit. The gaming industry challenged the California law and the Ninth Circuit struck it down on First Amendment grounds.

California now seeks to overturn the lower court’s ruling by arguing that violent videogames deserve an exemption from First Amendment protection. Cato’s brief supports the videogame manufacturers and highlights not only the oft-repeated and oft-overblown stories of the “seduction of the innocent,” but the less-repeated stories of the effectiveness and preferability of industry self-regulation.

We show that not only does self-regulation avoid touchy First Amendment issues but that entertainment industries take self-regulation very seriously. Moreover, evidence from the Federal Trade Commission shows that the existing videogame ratings system works more effectively than any other regulatory method. Adding a level of governmental control, even if were constitutional, would be counterproductive.

The case of Schwarzenegger v. Entertainment Merchants Association will be argued November 2 (coincidentally election day).

Regulator, Leave Those Kids Alone is a post from Cato @ Liberty - Cato Institute Blog

I’m a guest on tonight’s John Stossel program on the Fox Business Network, on the subject of the consequences of the twenty-year-old Americans with Disabilities Act (ADA). The show was shot live to tape yesterday in New York and was fascinating throughout; even those who think they know this subject well will learn a lot. I’m also quoted in John’s latest syndicated column on the same issue.

Among the highlights of the taping: a disabled-rights lobbyist defended several extreme applications of the law, including the notion that it might be appropriate to force networks to hire someone who suffers from stuttering as on-air television talent. We also shed some light on the state of California’s up-to-$4,000-a-violation bounty system for freelancers who identify ADA violations in Main Street businesses, and the case for at least requiring complainants to give business owners notice and an opportunity to fix an ADA violation before suing. (The disabled-rights lobby has managed to stifle that proposal in Congress for years.) Also mentioned: the suit against the Chipotle restaurant chain recently covered in this space.

Other recent coverage of the ADA here and here.

On Tonight’s John Stossel Show (FBN) is a post from Cato @ Liberty - Cato Institute Blog

California just adopted effective next year a requirement that all new one- and two-family dwellings include indoor sprinkler systems. Other states are debating similar mandates, spurred by changes to national building code standards. Earlier legal mandates have required the inclusion of smoke alarms and carbon monoxide alarms, but the cost of those devices is relatively minor, whereas full-blown sprinkler systems add measurably to the cost of a new home, as well as posing challenges in such areas as maintenance, aesthetics, and risk of property damage through accidental activation.

It will surprise not a single reader of these columns, I suspect, to learn that the fire sprinkler industry has been a major force in pushing the new mandate. As for the opposition, home builders have managed to mount a bit of resistance — New Jersey, for example, saw the current depressed state of the residential construction business as reason to postpone its mandate for a year. But the builders are pretty much on their own in the fight, since future buyers of new homes are a group with no organized political presence whatsoever.

Real estate blogger Christopher Fountain writes that he’s “never heard of a home buyer voluntarily ordering this equipment when building a house, so it sounds to me like one more instance of people who know better dictating to those who don’t.” Exactly. A South Carolina paper quotes a state official as saying if buyers feel priced out of the new home market by the cost of the mandate, they have other ways to save money “such as choosing less expensive flooring or countertops, or not installing yard sprinklers”. Easy to make someone else’s budget decisions for them, isn’t it? And shouldn’t the “affordable housing” community be taking more of an interest?

Guess Who’s Behind the New Fire-Sprinkler Mandates is a post from Cato @ Liberty - Cato Institute Blog

Moody’s has announced that it will change its methods for rating debt issued by state and local governments.  Politicians have argued that its current ratings ignore the historically low default rate of municipal bonds, resulting in higher interest rates being paid on muni debt, or so argue the politicians.

First this argument ignores that the market determines the cost of borrowing, not the rating.  And while ratings are considered by market participants, one can easily find similarly rated bonds that trade at different yields.

Second, while ratings should give some weight to historical performance, far more weight should be given to expected future performance.  Regardless of how say California-issued debt has performed in the past, does anyone doubt that California, or many other municipalities, are in fiscal straights right now?

Last and not least, politicians have no business telling rating agencies how to handle different types of investments.  We’ve been down this road before with Fannie Mae and Freddie Mac.  During drafting of GSE reform bills in the past, politicians put constant pressure on the rating agencies to maintain Fannie and Freddie’s AAA status.

The gaming over muni ratings illustrates all the more why we need to end the rating agencies govt created monopoly.  As long as govt has imposed a system protecting the rating agencies from market pressures, those agencies will bend to the will of politicians in order to protect that status.  As Fannie and Freddie have demonstrated, it ends up being the taxpayers and the investors who ultimately pay for this political meddling.

Moody’s Caves In to Political Pressure on Municipal Bonds is a post from Cato @ Liberty - Cato Institute Blog

U.S. News & World Report’s columnist Paul Bedard reports that Transportation secretary Ray LaHood told him that it’s fun playing Santa Claus to states and cities around the nation.

So let’s take a look at some recent examples of DOT gift-giving with federal taxpayers’ money:

• DOT’s Federal Highway Administration helped restore an old brewery in Petosi, Wisconsin with a $450,000 gift. That should make taxpayers want to drink.

• DOT is sending $116,000 to Calaveras County, California to restore a train that operated in the 1920s.

• Dolgeville, New York intends to use DOT stimulus money to repair sidewalks even though the village acknowledges that the new sidewalks will have to be torn up and replaced again due to impending water and sewage line upgrades. Keynes would be particularly proud of this one. Last year the city received a $1 million gift from DOT for the “installation of period street lights, trees, accent pavers, street furniture and sidewalk improvements” on the city’s Main Street.

• Cascade County, Montana plans on spending $75,000 of DOT money on the Montana Museum of Railroad History.

• The Michigan Department of Transportation plans on spending $5 million in federal DOT money on a bunch of projects that are of unquestionable national importance: cobblestone streets in Grand Rapids; exhibits at the Detroit Science Center; rehabilitating the historic Quincy and Torch Lake Railroad Engine House in the Upper Peninsula; a bridge for bicyclists and pedestrians over the Clinton River in Utica and bike racks at several locations in Wayne, Oakland, and Macomb counties.

• Boone County Regional Airport in Arkansas plans on using $50,000 in DOT money to market SeaPort Airlines. Fly, fly away taxpayer money.

These projects might be worthwhile, but they should be paid for by the local interests who can best judge their worth.

In his 1932 book, Congress as Santa Claus, constitutional scholar Charles Warren offered a prescient warning on the dangers of federal subsidization of state and local affairs:

The continuance of this practice of shifting to the National Government responsibility for payment for matters which formerly were dealt with by individual initiative, by community cooperation, by voluntary organizations, or by local or State governments – the continuance of this practice of making drafts on the National Treasury to carry out purposes not within the enumerated or implied powers of the National Government will inevitably have two results.

So far as these Government donations consist of direct appropriations for private or local interests, they will deaden and finally destroy the eagerness or willingness of State Governments and local communities to pay for their own needs. So far as they take the shape of the so-called Federal Aid laws for local projects to be matched by local appropriations, they will have ‘a tendency to induce excessive expenditures by State and municipal governments, with top-heavy bond issues and oppressive local taxation.’

I doubt in Warren’s worst nightmares could he have envisioned the examples of DOT spending above, let alone the existence of a $90 billion federal Department of Transportation.

Ray LaHood as Santa Claus is a post from Cato @ Liberty - Cato Institute Blog

One of the more common complaints I hear about illegal immigration is that low-skilled workers from Mexico and Central America allegedly bring with them a wave of crime and incarceration expenses, especially to southern California.

Those complaints are hard to square with the mounting evidence that immigrants, even low-skilled, illegal immigrants, are no more prone to commit crimes than native-born Americans. The latest data point comes from Los Angeles, where the Wall Street Journal reports this morning: “Violent crime in Los Angeles hit its lowest level in more than half a century last year, one of a growing number of U.S. cities reporting its streets were remarkably safe in 2009.”

I tried to connect the dots on immigration and crime in a recent article I wrote for Commentary magazine, titled “Higher Immigration, Lower Crime.” My conclusion was entirely consistent with the latest crime report from Los Angeles:

As a rule, low-skilled Hispanic immigrants get down to the business of earning money, sending remittances to their home countries, and staying out of trouble. In comparison to 15 years ago a member of today’s underclass standing on a street corner is more likely waiting for a day’s work than for a drug deal.

Los Angeles Crime Rate Declines Again Despite Complaints about Immigrants is a post from Cato @ Liberty - Cato Institute Blog

The state of California recently received $60 million in U.S. Department of Labor stimulus funds to upgrade its 23 year-old unemployment benefits system. But according to the Associated Press, California is yet to spend $66 million it received from Labor in 2002 to upgrade its system. The price tag isn’t whopping by federal standards, but it is another reminder of the need to return to fiscal federalism.

Apparently, the Department of Labor couldn’t care less:

The federal government has no plans to sanction or fine California for not completing the original technology upgrade. The Labor Department said it was more concerned that new stimulus funding is used in a way that will allow more workers to qualify for unemployment assistance.

At the same time, California’s unemployment insurance fund is $7.4 billion in the red, which has forced it to “borrow” $4.7 billion from the federal government. According to an editorial in the Oakland Tribune, California increased the generosity of its unemployment benefits when the economy was healthy, but now that the economy is stagnant spendthrift policies are creating a fiscal crisis.

Alan Reynolds reminds that the federal stimulus package “bribed states to extend benefits — which have now been stretched to an unprecedented 79 weeks in 28 states and to 46 to 72 weeks in the rest.” When you subsidize something you get more of it—federal subsidies prompt more state subsidies to the unemployed, which generates more unemployment. Alan concludes that “the February stimulus bill has added at least two percentage points to the unemployment rate.”

California’s unemployment rate of 12.5 percent is the state’s highest since the end of the Great Depression. Once again we see that when the line of responsibility between federal and state government is blurred, the result is more of both and poor policies compounded.

California Illustrates Need to Revive Federalism is a post from Cato @ Liberty - Cato Institute Blog

Kids often have a tremendous sense of entitlement. Well, there are a lot of kids in California colleges — and running them.

You probably have heard about the University of California Regents voting yesterday for a 32-percent tuition hike over the next two years. Not surprisingly, many students are angry, some enough that they were arrested protesting outside the Regents’ meeting.

Now, a 32 percent hike over two years isn’t small. But here’s the thing: California has typically charged students very little relative to both state taxpayer funding and national averages. As you can see in the chart below, which uses data from the State Higher Education Executive Officers, net per-pupil tuition revenue (meaning revenue from tuition minus any state financial aid) in California has hovered around $1,200 over the last 25 years, and has only gone up about $18 per year. Meanwhile, state taxpayers have been shelling out around $7,300 per pupil per year. So state taxpayers have been furnishing the vast majority of funding for California college students, and students have done very little to make up the vast gulf between what they pay and what taxpayers shell out.

How does California compare to the rest of the nation? On average for all states, net per-pupil revenue from students has risen from just about $2,000 to $4,000, putting the ever-growing average around $3,000, or close to three times what Golden State students have been furnishing. Funding from state and local taxpayers, meanwhile, has been just slightly lower nationally than in California.

So California students have been getting a heck of a deal, which is no doubt one among many reasons the state is on fiscal life support. Sooner or later bills come due, and that has left the state little choice but to make students pay more for the education of which they are by far the biggest beneficiaries.

Naturally — but still shamelessly — students are acting like victims now that the decrepit gravy train is slowing down a bit.  Unfortunately, the adults in charge of California colleges are also naturally — but perhaps even more shamelessly — stoking student anger so that they don’t have to do things that make their jobs less pleasant.

Despite the utterly unsustainable taxpayer funding for higher education that California has doled out for decades, for instance, UC president Mark Yudof had no qualms about declaring that:

We’re being forced to impose a user tax on our students and their families. This is a tax necessary because our political leaders have failed to adequately fund public higher education.

Last I checked, what a customer pays for a service is called a “price” not a “tax.” A tax is what has been used to make taxpayers bear by far the biggest part of California’s higher education burden while students have furnished but a token amount. And please don’t give us the “failed to adequately fund” line. UC Berkeley Chancellor Robert Birgeneau has been happily trotting out that disproven dreck in a grab for federal taxpayer dollars at the same time it has been discovered that he’s been pushing millions of dollars intended for academics and other purposes to Berkeley athletics.

It’s hard enough to accept the underfunding bit when the data clearly show it not to be the case. It’s even harder when college leaders spend their precious dollars on water polo and golf.

It’s time in California for the adults to stop acting like kids, and for the kids to start paying their share. But don’t get your hopes up, at least in higher education. It seems that no one there is without a shameless sense of entitlement.

California Grubbing is a post from Cato @ Liberty - Cato Institute Blog

On Sunday, the Washington Post ran an op-ed by the chancellor and vice chancellor of the University of California, Berkeley, in which the writers proposed that the federal government start pumping money into a select few public universities. Why? On the constantly repeated but never substantiated assertion that state and local governments have been cutting those schools off.

As I point out in the following, unpublished letter to the editor, that is what we in the business call “a lie:”

It’s unfortunate that officials of a taxpayer-funded university felt the need to deceive in order to get more taxpayer dough, but that’s what UC Berkeley’s Robert Birgeneau and Frank Yeary did. Writing about the supposedly dire financial straits of public higher education (“Rescuing Our Public Universities,” September 27), Birgeneau and Yeary lamented decades of “material and progressive disinvestment by states in higher education.” But there’s been no such disinvestment, at least over the last quarter-century. According to inflation-adjusted data from the State Higher Education Executive Officers, in 1983 state and local expenditures per public-college pupil totaled $6,478. In 2008 they hit $7,059. At the same time, public-college enrollment ballooned from under 8 million students to over 10 million. That translates into anything but a “disinvestment” in the public ivory tower, no matter what its penthouse residents may say.

Since letters to the editor typically have to be pretty short I left out readily available data for California, data which would, of course, be most relevant to the destitute scholars of Berkeley. Since I have more space here, let’s take a look: In 1983, again using inflation-adjusted SHEEO numbers, state and local governments in the Golden State provided $5,963 per full-time-equivalent student. In 2008, they furnished $7,177, a 20 percent increase. And this while enrollment grew from about 1.2 million students to 1.7 million! Of course, spending didn’t go up in a straight line — it went up and down with the business cycle — but in no way was there anything you could call appreciable ”disinvestment.” 

Unfortunately, higher education is awash in lies like these. Therefore, our debunking will not stop here! On Tuesday, October 6, at a Cato Institute/Pope Center for Higher Education Policy debate, we’ll deal with another of the ivory tower’s great truth-defying proclamations: that colleges and universities raise their prices at astronomical rates not because abundant, largely taxpayer-funded student aid makes doing so easy, but because they have to!

It’s a doozy of a declaration that should set off a doozy of a debate! To register to attend what should be a terrific event, or just to watch online, follow this link.

I hope to see you there, and remember: Don’t believe everything your professors tell you, especially when it impacts their wallets!

Lies Our Professors Tell Us is a post from Cato @ Liberty - Cato Institute Blog