Yesterday, the Michigan Senate passed anti-bullying legislation that has anti-bullying legislators, activists, and sympathizers outraged. Why? Because at the insistence of some in the legislature, it includes a provision protecting religious speech.

A video of State Senator Gretchen Whitmer (D-East Lansing) has already gone viral, with the senator railing that  ”as passed today, bullying kids is okay if a student, parent, teacher or school employee can come up with a moral or religious reason for doing it.” Similarly, Time columnist Amy Sullivan asks ”why does Michigan’s anti-bullying bill protect religious tormentors?”

I’ll tell you why: because as odious as one might find the religious beliefs of many people, they are entitled to freedom of speech the same as anyone else. That is a basic American right, and all the desire in the world to protect kids from hearing things that might make them feel badly must not change that. Abridge that right, and any speech becomes imperiled if a majority simply deems it unacceptable. And the legislation in question does not protect bullying—if that is defined as physical assaults or threats of such assaults—for religious reasons. It only states that the legislation ”does not prohibit a statement of a sincerely held religious belief or moral conviction of a school employee, school volunteer, pupil, or a pupil’s parent or guardian.”

Of course, being on the receiving end of constant pronouncements that you are doomed to Hell or something similarly hideous would almost certainly become difficult, if not impossible, to bear. It shouldn’t be something that any child is subjected to in school. But how do you balance protecting children against people’s fundamental right to speak?

The answer is that despite all the lofty talk of “democracy” and other empty rhetoric behind public schooling, you cannot protect everyone equally in a government school. No matter what policy a public school or district adopts, government will pick winners and losers. That’s why the only solution to a quandary such as this is educational freedom: Give control of education funding to parents, let them choose among independent schools run by free educators, and enable people to choose schools that share their values. Then all people can select educations for their children that comport with their values and needs, and without government deciding who is more, or less, equal than whom.

Indignant over Free Speech Trumping Bullying Protection? Support Choice is a post from Cato @ Liberty - Cato Institute Blog

The legal battle against Obamacare has hit the appellate court level.  In October, a district court in Detroit granted the government’s motion to dismiss a lawsuit brought by the Thomas More Law Center and four individuals.  The judge there endorsed the government’s theory that federal power under the Commerce Clause could reach the decision not to buy health insurance because that decision had a substantial effect on interstate commerce.  The plaintiffs have appealed that ruling to the U.S. Court of Appeals for the Sixth Circuit, and Cato, joined by Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a brief supporting that appeal.

We argue that the outermost bounds of existing Commerce Clause jurisprudence — the “substantial effects doctrine” – prevent Congress from reaching intrastate non-economic activity regardless of whether it substantially affects interstate commerce. Nor under existing law can Congress reach inactivity even if it purports to act pursuant to a broader regulatory scheme. Even the district court recognized that “in every Commerce Clause case presented thus far, there has been some sort of activity. In this regard, the Health Care Reform Act arguably presents an issue of first impression.” What Congress is attempting to do here is quite literally unprecedented. “The government has never required people to buy any good or service as a condition of lawful residence in the United States.” Cong. Budget Office, The Budgetary Treatment of an Individual Mandate to Buy Health Insurance 1 (1994).

Nor has it ever said that people face civil penalties for declining to participate in the marketplace. Even in the seminal New Deal case of Wickard v. Filburn, the federal government claimed “merely” the power to regulate what farmers grew, not to mandate that people become farmers, much less to force people to purchase farm products. Finally, even if not purchasing health insurance is considered an “economic activity” — which of course would mean that every aspect of human life is economic activity — there is no legal basis for Congress to require individuals to enter the marketplace to buy a particular good or service. It is no more “proper” under the Necessary and Proper Clause for the federal government to “commandeer” individuals than to “commandeer” state officials.

Just consider our brief an early Christmas present to liberty.

Obamacare Reaches Its First Appellate Court is a post from Cato @ Liberty - Cato Institute Blog

In 2006, Michigan Gov. Jennifer Granholm told citizens, “In five years, you’re going to be blown away by the strength and diversity of Michigan’s transformed economy.” When those words were uttered, Michigan’s unemployment rate was 6.7 percent. It’s now almost 13 percent.

Although Michigan’s economic doldrums can’t entirely be pinned on Granholm, her fiscal policies have not helped, such as her higher taxes on businesses.

The Mackinac Center’s Michael LaFaive explains why Granholm’s grandiose proclamation in 2006 hasn’t panned out:

In this case, Gov. Granholm was promoting her administration and the Legislature’s massive expansion of discriminatory tax breaks and subsidies for a handful of corporations. The purpose and main effect of this policy is to provide “cover” for the refusal of the political class to adopt genuine tax, labor and regulatory reforms, which they shy away from because it would anger and diminish the privileges and rewards of unions and other powerful special interests.

LaFaive’s colleague James Hohman recently pointed out that “Michigan’s economy produced 8 percent less in 2009 than it did in 2000 when adjusted for inflation. The nation rose 15 percent during this period.”

Granholm has written an op-ed in Politico on how federal policymakers can “win the race for jobs.” This would be like Karl Rove penning an op-ed complaining about Obama spending too much. Oh wait, bad example.

Granholm advises federal policymakers to create a “Jobs Race to the Top” modeled after the president’s education Race to the Top, which as Neal McCluskey explains, has not worked as she claims. Granholm’s plan boils down to more federal subsidies to state and local governments and privileged businesses to develop “clean energy” industries.

Typical of the dreamers who believe that the government can effectively direct economic activity, Granholm never considers the costs of government handouts and central planning. A Cato essay on federal energy interventions explains:

The problem is that nobody knows which particular energy sources will make the most sense years and decades down the road. But this level of uncertainty is not unique to the energy industry—every industry faces similar issues of innovation in a rapidly changing world. In most industries, the policy solution is to allow the decentralized market efforts of entrepreneurs and early adopting consumers figure out the best route to the future. Government efforts to push markets in certain directions often end up wasting money, but they can also delay the development of superior alternatives that don’t receive subsidies.

Granholm recently received “Sweden’s Insignia of First Commander, Order of the Polar Star for her work in fostering relations between Michigan and Sweden to promote a clean energy economy” from His Majesty King Carl XVI Gustaf. Unfortunately, her prescription for economic growth would be a royal mistake.

Bad Advice from Gov. Polar Star is a post from Cato @ Liberty - Cato Institute Blog

The passage of Obamacare heralded an important discussion on whether the Constitution places any effective limits on federal power and, in particular, where Congress gets the constitutional warrant to require every person to enter the private marketplace and buy a particular good or service.  This is a healthy discussion to have, including in the courts.  

Today’s ruling in Michigan, dismissing the Thomas More Law Center’s challenge to the individual mandate, while disappointing to those of us who believe that the government lacks the power to commandeer people to engage in transactions — “economic mandates,” as it were — is but one of many legal decisions we can expect on the way to the Supreme Court’s ultimate resolution of this important issue.  Indeed, this summer we saw a ruling by a federal judge in Virginia allowing that state’s legal challenge to the individual mandate and other aspects of the health care legislation to proceed.  And last month, a federal judge in Florida heard arguments in a similar lawsuit brought by 20 other states — a decision on which we can expect later this fall.  Other serious cases continue in Arizona, Missouri, Ohio, the District of Columbia, and elsewhere.

Perhaps most notable about the Michigan opinion, however, is the scant space spent on the serious Commerce Clause arguments on which hundreds of pages have been filed in these cases by top lawyers, legal experts, and academics (including Cato – yes, I’m heavily vested in this litigation).  After granting that the plaintiffs had standing and that the case was ripe for adjudication, and rejecting the government’s odd Anti-Injunction Act defense, Judge Steeh takes only seven and a half pages to reject the plaintiffs’ arguments — half of which is spent reciting existing doctrine.  It is as if the court merely issued a “placeholder” opinion, pending a “real” resolution on appeal.

And the novel conclusion we gain from this curt disposition is that Congress can now regulate people’s “economic decisions,” as well as do anything that is part of a “broader regulatory scheme.”  If the Supreme Court eventually upholds the kind of reasoning Judge Steeh used here, nobody would ever be able to claim plausibly that the Constitution limits federal power.  Finding the individual mandate constitutional would be the first interpretation of the Commerce Clause to permit the regulation of inactivity — requiring an individual to engage in economic activity. 

The federal government would then have wide authority to require Americans engage in activities of its choosing, from eating spinach and joining gyms (in the health care realm) to buying GM cars.  Or, under Judge Steeh’s “economic decisions” theory, Congress could tell people what to study in school or what job to take.  That may be the unfortunate state of the law in a few years — once the Supreme Court has weighed in, and I doubt it would ever go so far in any event — but it is not up to district courts to extend constitutional doctrine on their own.

Michigan Court Wrong on Obamacare, Even Exceeds Its Own Powers is a post from Cato @ Liberty - Cato Institute Blog

Michigan is facing a projected $2.8 billion state budget shortfall. As a result, Governor Granholm has cut $212 million from state public school spending — rousing the ire of parents and education officials around the state. But if Michigan merely converted all its conventional public schools to charters, without altering current funding formulas, it would save $3.5 billion.

Here’s how: the average Michigan charter school spends $2,200 less per pupil than the average district school — counting only the state and local dollars. Put another way, Michigan school districts spend 25 percent more state and local dollars per pupil, on average, than charter schools. Sum up the savings to Michigan taxpayers from a mass district-to-charter exodus and it comes to $3.5 billion.

Anyone who wants to check that calculation can download the Msft Excel 2007 spreadsheet file I used to compute it. It contains both the raw data from the relevant NCES Common Core of Data files, and all the calculations. Among other things, it shows total per pupil spending and the pupil teacher ratio for every charter school and every public school district in the state. (Unlike certain climatologists, some of us researchers not only keep our data around, we’re actually happy to share them).

Journalists who have questions about this file are welcome to get in touch. Note that it is also viewable, I believe, with the free OpenOffice spreadsheet program, though I haven’t tested that.

How Michigan Could Save $3.5 Billion a Year is a post from Cato @ Liberty - Cato Institute Blog

Governments love to promise benefits.  But politicians prefer not to have to raise the funds necessary to provide the promised services.  The result for nationalized medical systems is political rationing … and long waiting lists.  The Mackinac Institute, located in Michigan, has produced a series of videos on Canadians speaking about how their system works.  The British Columbia Automobile Association even developed medical access, or wait list, insurance, before abandoning the program under pressure.

In Canada You Need Wait-List Insurance! is a post from Cato @ Liberty - Cato Institute Blog

As I mentioned yesterday, the U.S. Supreme Court surprised many people by ordering a reargument in the case of Citizens United v. Federal Election Commission. Specifically, the Court called for the parties to the case to address the question of overruling Austin v. Michigan Chamber of Commerce.

The Court decided Austin v. Michigan Chamber of Commerce in 1989.  The state of Michigan had prohibited corporations from spending money on electoral speech. In the case in question, the Chamber of Commerce wished to pay for an advertisement backing a candidate for the House of Representatives. The Chamber took this action on its own and not in tandem with the candidate or his party.  Paying for the ad was a felony under Michigan law.

A majority of the Court in 1989 said the Michigan law did not violate the First Amendment. However, the majority had a problem. Previous cases permitted limits on funding electoral speech only in pursuit of a compelling state interest: the prevention of quid pro quo corruption or its appearance. The Court had also ruled that independent spending by groups could not corrupt candidates.

So the majority needed a novel rationale for approving Michigan’s suppression of speech. The majority concluded that speech funded by corporations would distort the democratic process and that the state could prohibits such outlays to prevent harms done by “immense wealth.” In other words, the Austin majority tried to redefine “corruption” as “inequality of influence.” That revision had its own set of problems. Buckely v. Valeo, the Ur-decision in campaign finance, had excluded equality as a compelling state interest justifying regulation of campaign finance.

It is easy to see why the Buckley Court had rejected equality of influence as a reason for restricting political speech. Imagine Congress could prohibit speech that had “too much influence.” But how could that be determined? A majority in Congress would be tempted to suppress speech that threatened the power of that majority.  Paradoxically, the equality rationale would strengthen those who already held power while vitiating representative government. The First Amendment tries to prevent that outcome.

In last year’s decision in Davis v. FEC, the Court again rejected the equality rationale for campaign finance laws.  More and more the Austin decision is looking like bad law.

Justices Kennedy and Scalia, both current members of the Court, wrote dissents in Austin. Justice Thomas has called for Austin to be overruled in other contexts.  Neither Justices Roberts nor Alito is likely to vote to uphold Austin (or the relevant parts of McConnell v. FEC for that matter). But it would seem that either or both of them were unwilling to strike down a precedent without a formal hearing. That hearing will come on September 9 with a decision expected by Thanksgiving.

Almost six years after the Court utterly refused to defend free speech in McConnell v. FEC, the Roberts Court may be ready to vindicate the First Amendment against its accusers in Congress and elsewhere.

The Roberts Revolution to Come is a post from Cato @ Liberty - Cato Institute Blog

This morning I blogged on the wave of state governments giving away taxpayer money to businesses in the name of “creating jobs.”  One of the examples I mentioned is the Michigan Economic Development Corporation (MEDC), a state program that exists to generate press releases to provide cover for the state’s lamentable fiscal policies.

Michael LaFaive at the Mackinac Center for Public Policy in Michigan was kind enough to send me a recent report he wrote on the folly of state subsidies to businesses.  State officials like to solicit studies from local universities that just happen to conclude that such-and-such government program is creating X number of jobs.  (Of course, in the rare occurrence that a study doesn’t come back with what the bureaucrats were expecting, such study will likely disappear into thin air.  I’ve seen that happen first hand.)  Michael’s paper deconstructs a study on the purported benefits of Michigan’s film maker subsidies, which was prepared by Michigan State University at the behest of the MEDC.  A quote he cites from a 2006 study on tourism-related economic development programs nails it:

“Most economic impact studies are commissioned to legitimize a political position rather than to search for economic truth. Often the result is mischievous procedures that produce large numbers that study sponsors seek to support a predetermined position.”

If you read nothing else, read the section on page 4 entitled “Why Government Subsidies Won’t Save Michigan’s Economy.”  The reasons apply to all fifty states, not just Michigan.

Press Release Economics in Michigan Picked Apart is a post from Cato @ Liberty - Cato Institute Blog

A couple weeks ago, I blogged about the foolishness of press release economics: states “creating” jobs by handing out taxpayer money to select businesses.  I concluded by saying that “journalists should be on the lookout for more press-release economics schemes coming from the states as revenues remain tight and politicians become desperate to demonstrate they’re “doing something.”  Journalists should examine a state’s tax structure when a taxpayer giveaway is announced to see if perhaps the governor is masking economic-unfriendly fiscal policies.”

Sure enough, the Pew Center’s Stateline.org has an article up detailing the efforts of state governors dealing with the recession by giving businesses taxpayer money to “create” jobs.  Of course, it would make more sense for a state to simply reduce the tax and regulatory burden on a businesses looking to expand or relocate operations within its borders.  But then state politicians might miss out on the short-term benefit of issuing fluffy press releases that are particularly helpful when a state is bleeding jobs.

Stateline notes that “You’d never know Michigan has the nation’s highest unemployment by visiting the Michigan Economic Development Corporation’s Web site, which trumpets a string of successes in recent months that have resulted in thousands of jobs in a state battered by the decline of auto manufacturing.”  And in neighboring Indiana, the state’s economic central planners are celebrating the “creation” of 50 jobs at a corndog and fritter manufacturer.  Anyone familiar with Hoosier waistlines knows there’s no shortage of corndogs in the state to justify taxpayers having to subsidize their production.

However, Stateline reports that Wisconsin officials are targeting Minneapolis-St. Paul manufacturers with a study that shows relocating to west central Wisconsin would save the Minnesota businesses millions of dollars due to lower worker’s compensation costs, corporate income taxes, and property taxes.  Whatever else Wisconsin’s economic development bureaucrats are up to, this is the right idea.

States “Creating” Jobs – One Corndog at a Time is a post from Cato @ Liberty - Cato Institute Blog

With the Obama administration preferring to rely on politics rather than the law to “fix” the auto industry, bondholders have discovered that the new politics of this administration is quite a bit more brutal than the old politics practiced by the Bush administration.

Henry Payne and Richard Burr write of “gangster government” using not just demagogic public attacks on greedy bondholders but apparent threats of regulatory sanction to get its way in bankruptcy court.  They explain:

The holdout debtholders sought the refuge of the courts, where decades of bankruptcy law promised that secured lenders would receive just compensation for their investment. But then Obama called in his fixers.

In his April 30 news conference, Obama singled out Chrysler’s self-described “non TARP lenders” as “speculators” who sought to imperil Chrysler’s future for their own benefit. “I do not stand with them,” Obama thundered. “I stand with Chrysler’s employees and their families and communities. . . . (not) those who held out when everybody else is making sacrifices.” Michigan Democratic allies like Sen. Debbie Stabenow and Rep. John Dingell piled on, calling the lenders “vultures.”

Then, on Detroit radio host Frank Beckmann’s show May 1, a lawyer for the lenders, Tom Lauria, chillingly revealed how “one of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

Lauria later confirmed the threats came from Rattner and that the target was Perella Weinberg, which had suddenly withdrawn its opposition after the president’s April 30 press conference.

The White House denied the threats, but Business Insider subsequently reported that “sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.”

“The sources, who represent creditors to Chrysler,” continued the Insider story, “say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking ‘end justifies the means’ group they have ever encountered. . . . Both were voters for Obama in the last election.”

The idea of the White House–with the IRS and SEC at its disposal–threatening investment firms should have sent off alarm bells in America’s newsrooms. Inexcusably, the media establishment largely ignored the hardball tactics. This is the same media that has doggedly reported on President Bush’s U.S. attorney firings and the post-9/11 interrogations of terrorist suspects.

I have no opinion on who should get what as part of Chrysler’s bankruptcy — other than that the taxpayers shouldn’t be paying for America’s version of lemon socialism so common around the world.  But crude political interference by the political authorities in Washington in a bankruptcy case erode the rule of law and administration of justice.  If Obama and company believe that the end justifies the end when it comes to handing the auto companies over to favored interests, who among us is safe from similar action by this or another administration in the future?

“Gangster Government” at Work is a post from Cato @ Liberty - Cato Institute Blog

Here’s Michigan state representative Paul Opsommer (R) on the Department of Homeland Security’s “Enhanced Driver’s License,” which contains a radio frequency identification chip with a long read range:

Expect the Department of Homeland Security to tell you what a great thing they are doing by allowing you the ability to buy these RFID licenses. They create the problem, provide a solution that is the cheapest for them and most risky for you, and then expect you to like it. But RFID is not mandated by Congress, and if enough states stand up for themselves the policy will be changed. Michigan needs to say no and do just that.

“Enhanced Driver’s License” Snake Oil is a post from Cato @ Liberty - Cato Institute Blog