To see how little is left of one of our most important rights, the freedom of association, look no further than to today’s unanimous decision by the Washington State Supreme Court upholding a lower court’s ruling that florist Baronelle Stutzman was guilty of violating the Washington Law Against Discrimination (WLAD) when she declined, on religious grounds, to provide floral arrangements for one of her regular customer’s same-sex wedding. The lower court had found Stutzman personally liable and had awarded the plaintiffs permanent injunctive relief, actual monetary damages, attorneys’ fees, and costs.
This breathtaking part of the Supreme Court’s conclusion is worth quoting in full:
"We also hold that the WLAD may be enforced against Stutzman because it does not infringe any constitutional protection. As applied in this case, the WLAD does not compel speech or association. And assuming that it substantially burdens Stutzman’s religious free exercise, the WLAD does not violate her right to religious free exercise under either the First Amendment or article I, section 11 because it is a neutral, generally applicable law that serves our state government’s compelling interest in eradicating discrimination in public accommodations."
We have here yet another striking example of how modern state statutory anti-discrimination law has come to trump a host of federal constitutional rights, including speech, association, and religious free exercise. It’s not too much to say that the Constitution’s Faustian accommodation of slavery is today consuming the Constitution itself.
Consider simply the freedom of association right. That liberty in a free society ensures the right of private parties to associate, as against third parties, and the right not to associate as well—that is, the right to discriminate for any reason, good or bad, or no reason at all. The exceptions at common law were for monopolies and common carriers. And if you held your business as “open to the public” you generally had to honor that, though you still could negotiate over services.
Read more at https://www.cato.org/blog/freedom-association-takes-another-hit
2017-04-29
Cato: Washington Supreme Court Unanimously Treads on Important Freedoms
Today the Washington Supreme Court unanimously upheld the fines against florist Baronelle Stutzman for refusing to sell flowers to a long-time customer for his same-sex wedding. Even though the court acknowledged that Stutzman “has served gay and lesbian customers in the past for other, non-wedding-related flower orders,” it found that she had violated the state’s public-accommodations law. In doing so, it rejected her claims regarding the freedom of speech, association, and religious exercise in the face of a legal requirement that businesses not discriminate on the basis of sexual orientation.
I’m still working through the opinion, but it’s all pretty standard – and disappointing – stuff. Notably the court cites and rejects Cato’s brief regarding the freedom of expression, indeed rejecting even the idea that floristry is an expressive art.
Read more at https://www.cato.org/blog/washington-supreme-court-unanimously-treads-important-freedoms
I’m still working through the opinion, but it’s all pretty standard – and disappointing – stuff. Notably the court cites and rejects Cato’s brief regarding the freedom of expression, indeed rejecting even the idea that floristry is an expressive art.
Read more at https://www.cato.org/blog/washington-supreme-court-unanimously-treads-important-freedoms
2017-04-28
Cato: You Shouldn’t Be Criminally Liable If You Don’t Have a Guilty Mind
Todd Farha, CEO of WellCare Health Plans, was convicted of knowingly executing a fraud by submitting false expenditure reports to the state. However, the district court decided that “knowingly” didn’t actually have to mean that Farha knew that the reports were false, but only that in submitting the reports Farha acted with “deliberate indifference” as to whether they were accurate. Essentially, a non-lawyer was convicted for being insufficiently cautious in adopting an interpretation of an ambiguous regulatory statute.
The U.S. Court of Appeals for the Eleventh Circuit upheld Farha’s conviction even in the absence of the required statutory mental-state element (what lawyers call mens rea). The appellate court decided, in agreement with the district court, that deliberate indifference toward falsity may stand in for knowledge of falsity. The practical implication is that the court lowered the mens rea standard and used a civil standard of liability to a criminal case. (You can be liable in a civil lawsuit even if you’re not guilty for criminal-punishment purposes.)
Cato has now filed a brief supporting Farha’s request that the Supreme Court review his case. The lower court’s holding is out of step with precedent, with bedrock principles of statutory interpretation regarding the mental-state elements of a criminal offense, and with common sense notions of justice. The most egregious aspect of the ruling is that mens rea elements are seen as so crucial to the criminal law that the Supreme Court has been willing to read them into a statute when the statute is silent regarding necessary mental state.
Read more at https://www.cato.org/blog/you-shouldnt-be-criminally-liable-you-dont-have-guilty-mind
The U.S. Court of Appeals for the Eleventh Circuit upheld Farha’s conviction even in the absence of the required statutory mental-state element (what lawyers call mens rea). The appellate court decided, in agreement with the district court, that deliberate indifference toward falsity may stand in for knowledge of falsity. The practical implication is that the court lowered the mens rea standard and used a civil standard of liability to a criminal case. (You can be liable in a civil lawsuit even if you’re not guilty for criminal-punishment purposes.)
Cato has now filed a brief supporting Farha’s request that the Supreme Court review his case. The lower court’s holding is out of step with precedent, with bedrock principles of statutory interpretation regarding the mental-state elements of a criminal offense, and with common sense notions of justice. The most egregious aspect of the ruling is that mens rea elements are seen as so crucial to the criminal law that the Supreme Court has been willing to read them into a statute when the statute is silent regarding necessary mental state.
Read more at https://www.cato.org/blog/you-shouldnt-be-criminally-liable-you-dont-have-guilty-mind
2017-04-27
Cato: Don’t Block the Education Secretary, End the Department of Education
Newly sworn-in Secretary of Education Betsy DeVos tried, and eventually succeeded, to visit a Washington, D.C., public school Friday morning. As warned by her opponents after she was confirmed by a razor-thin margin on Tuesday, she was met by protesters who intended to make good on the threat to block her at every turn. In this case, literally: according to videos like this, they physically tried to prevent her from entering the building.
The opposition to DeVos, as I’ve suggested over the last several weeks, has been over the top and, frankly, unfair. It also hasn’t done much to improve the sick state of the national political dialogue.
That said, there may be no one more sympathetic to objections to federal education meddling than me. Indeed, if the school refused to let DeVos visit because it did not want the disruption or political theater, I’d have been all for it.
But there is a way more constructive way to solve the problem of dangerous or unwanted federal intervention than blocking schoolhouse doors: work to end the federal Department of Education.
This does not, by the way, mean ending the federal role in keeping states and districts from discriminating in their provision of education, but that is much more properly a Justice Department responsibility.
Read more at https://www.cato.org/blog/dont-block-education-secretary-end-department-education
The opposition to DeVos, as I’ve suggested over the last several weeks, has been over the top and, frankly, unfair. It also hasn’t done much to improve the sick state of the national political dialogue.
That said, there may be no one more sympathetic to objections to federal education meddling than me. Indeed, if the school refused to let DeVos visit because it did not want the disruption or political theater, I’d have been all for it.
But there is a way more constructive way to solve the problem of dangerous or unwanted federal intervention than blocking schoolhouse doors: work to end the federal Department of Education.
This does not, by the way, mean ending the federal role in keeping states and districts from discriminating in their provision of education, but that is much more properly a Justice Department responsibility.
Read more at https://www.cato.org/blog/dont-block-education-secretary-end-department-education
2017-04-26
Cato: Court Ruling on Executive Order: Bad Legal Work All Around
This is a dog’s breakfast of a ruling on a dog’s lunch of an executive order. Somehow the Ninth Circuit judges manage to write 29 pages without discussing the heart of the matter: whether the Immigration and Naturalization Act, specifically section 1182, gives the president the power to do what he did. Nebulous discussions of due process may be nice (or not) but they’re superfluous if the president went beyond his statutory authority. But apparently the court didn’t care about that.
And of course this whole mess could’ve been avoided if the executive order had gone through proper interagency review in the first place, as well as being more narrowly tailored. As it stands, it’s both over- and under-inclusive. It’s over-inclusive because it sweeps in green card and other visa holders who’ve already gone through “extreme vetting,” as well as non-threatening graduate students and sick kids. It’s under-inclusive because it doesn’t even attempt to target the actually risky pool of nationals from non-covered countries (including European ones) who may have become radicalized—and doesn’t offer any concrete reforms to the visa- or refugee-vetting systems that could actually diminish the risk of terrorism on U.S. soil.
Read more at https://www.cato.org/blog/court-ruling-executive-order-bad-legal-work-all-around
And of course this whole mess could’ve been avoided if the executive order had gone through proper interagency review in the first place, as well as being more narrowly tailored. As it stands, it’s both over- and under-inclusive. It’s over-inclusive because it sweeps in green card and other visa holders who’ve already gone through “extreme vetting,” as well as non-threatening graduate students and sick kids. It’s under-inclusive because it doesn’t even attempt to target the actually risky pool of nationals from non-covered countries (including European ones) who may have become radicalized—and doesn’t offer any concrete reforms to the visa- or refugee-vetting systems that could actually diminish the risk of terrorism on U.S. soil.
Read more at https://www.cato.org/blog/court-ruling-executive-order-bad-legal-work-all-around
2017-04-25
Cato: The Right to Hope for Jury Nullification
Jae Lee came to the United States legally as a child but never became a citizen. In 2009, he pled guilty to a drug crime after his lawyer assured him that he could not be deported as a result. The lawyer was wrong, because the conviction made Lee subject to mandatory removal.
When Lee learned of this mistake, he asked the court to vacate his plea so he could instead face trial, arguing that his counsel’s assistance was ineffective. The district court denied this motion because of the overwhelming evidence against Lee, ruling that his conviction at trial was so certain that his counsel’s bad advice didn’t actually harm him, particularly given the much longer prison sentence he would receive if convicted after trial.
The U.S. Court of Appeals for the Sixth Circuit agreed that a jury wasn’t needed to determine Lee’s guilt and that denying the “chance to throw a Hail Mary at trial is not prejudicial” and therefore doesn’t violate Lee’s Sixth Amendment right to a jury trial. The court reasoned that that the only chance Lee had was acquittal by “jury nullification” and thus such a gambit was so irrational—and the idea of nullification so antiquated—that it is not to be allowed.
Lee is now pressing the matter at the Supreme Court, which has agreed to hear his argument, which Cato is supporting with this amicus brief. The idea of an independent jury’s nullification power is encompassed in the original meaning of the Sixth Amendment. Colonists frequently viewed juries as a shield against the crown, as juries frequently protected defendants against unjust and oppressive laws.
Read more at https://www.cato.org/blog/right-hope-jury-nullification
When Lee learned of this mistake, he asked the court to vacate his plea so he could instead face trial, arguing that his counsel’s assistance was ineffective. The district court denied this motion because of the overwhelming evidence against Lee, ruling that his conviction at trial was so certain that his counsel’s bad advice didn’t actually harm him, particularly given the much longer prison sentence he would receive if convicted after trial.
The U.S. Court of Appeals for the Sixth Circuit agreed that a jury wasn’t needed to determine Lee’s guilt and that denying the “chance to throw a Hail Mary at trial is not prejudicial” and therefore doesn’t violate Lee’s Sixth Amendment right to a jury trial. The court reasoned that that the only chance Lee had was acquittal by “jury nullification” and thus such a gambit was so irrational—and the idea of nullification so antiquated—that it is not to be allowed.
Lee is now pressing the matter at the Supreme Court, which has agreed to hear his argument, which Cato is supporting with this amicus brief. The idea of an independent jury’s nullification power is encompassed in the original meaning of the Sixth Amendment. Colonists frequently viewed juries as a shield against the crown, as juries frequently protected defendants against unjust and oppressive laws.
Read more at https://www.cato.org/blog/right-hope-jury-nullification
2017-04-24
Cato: Cutting Legal Immigration Won’t Help Low-Skilled American Workers
Senators Tom Cotton (R-AR) and David Perdue (R-GA) recently introduced the Reforming American Immigration for Strong Employment (RAISE) Act. If it were to become law, RAISE would cut legal immigration by 50 percent over the next ten years by reducing green cards for family members of U.S. citizens and lawful permanent residents, slashing refugees, and eliminating the diversity visa lottery. These goals are in line with President Trump’s stated objective to cut legal immigration in most categories.
The RAISE Act’s goal is to increase wages for lower-skilled Americans by reducing the supply of lower-skilled immigrants. Their press release argues that the “generation-long influx of low-skilled labor has been a major factor in the downward pressure on the wages of working Americans, with the wages of recent immigrants hardest hit.” Under such a worldview, only a drastic reduction in green cards and the supply or workers can raise American wages - and it’s not crazy.
The National Academy of Sciences’ (NAS) exhaustive literature summary on the economic effects of immigration concluded that: “When measured over a period of 10 years or more, the impact of immigration on the wages of native-born workers overall is very small. To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills.” Although the effect is small, RAISE seeks to take advantage of the finding in the academic literature by inferring that if an increase in the supply of workers slightly lowers some wages then a decrease in that same supply will do the opposite.
Read more at https://www.cato.org/blog/cutting-legal-immigration-wont-help-low-skilled-american-workers
The RAISE Act’s goal is to increase wages for lower-skilled Americans by reducing the supply of lower-skilled immigrants. Their press release argues that the “generation-long influx of low-skilled labor has been a major factor in the downward pressure on the wages of working Americans, with the wages of recent immigrants hardest hit.” Under such a worldview, only a drastic reduction in green cards and the supply or workers can raise American wages - and it’s not crazy.
The National Academy of Sciences’ (NAS) exhaustive literature summary on the economic effects of immigration concluded that: “When measured over a period of 10 years or more, the impact of immigration on the wages of native-born workers overall is very small. To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills.” Although the effect is small, RAISE seeks to take advantage of the finding in the academic literature by inferring that if an increase in the supply of workers slightly lowers some wages then a decrease in that same supply will do the opposite.
Read more at https://www.cato.org/blog/cutting-legal-immigration-wont-help-low-skilled-american-workers
2017-04-23
Cato: Why Trains in Europe Function So Badly
Over at KiwiReport, a writer named Serena Carsley-Mann asks a good question: “Why do trains in America function so different from trains in Europe?” Unfortunately, she mistakenly thinks the problem is that “trains in America function so badly.”
In fact, America has the most efficient rail system in the world. It is European trains that function badly. I’ve discussed this before in my blog, but since writers like Carsley-Mann continue to get it wrong, it is worth repeating.
According to a Pew study, freight shipped by truck uses about ten times as much energy, and emits far more greenhouse gases, per ton-mile than freight shipped by rail (see page 2). Because rail cars weigh more, per passenger, than automobiles, rail’s comparative advantages for passengers are much smaller, and unlike trucks it will be very easy for cars to close the gap: a Prius with a average of 1.67 occupants, for example, is more energy efficient than almost any Amtrak train. Thus, to save energy, it is better to dedicate rail lines to freight rather than to passengers.
This is what the United States has done, but it is exactly the opposite of what Europe has done. According to a report from the European Union, 46 percent of EU-27 freight goes by highway while only 10 percent goes by rail, while in the U.S. 43 percent goes by rail and only 30 percent by road. Thus, we’re using our rail system far more effectively than Europe. This is not just from an energy view but also from a consumer-cost view, as rails cost less than trucks for freight but more than cars for passengers.
Read more at https://www.cato.org/blog/why-trains-europe-function-so-badly
In fact, America has the most efficient rail system in the world. It is European trains that function badly. I’ve discussed this before in my blog, but since writers like Carsley-Mann continue to get it wrong, it is worth repeating.
According to a Pew study, freight shipped by truck uses about ten times as much energy, and emits far more greenhouse gases, per ton-mile than freight shipped by rail (see page 2). Because rail cars weigh more, per passenger, than automobiles, rail’s comparative advantages for passengers are much smaller, and unlike trucks it will be very easy for cars to close the gap: a Prius with a average of 1.67 occupants, for example, is more energy efficient than almost any Amtrak train. Thus, to save energy, it is better to dedicate rail lines to freight rather than to passengers.
This is what the United States has done, but it is exactly the opposite of what Europe has done. According to a report from the European Union, 46 percent of EU-27 freight goes by highway while only 10 percent goes by rail, while in the U.S. 43 percent goes by rail and only 30 percent by road. Thus, we’re using our rail system far more effectively than Europe. This is not just from an energy view but also from a consumer-cost view, as rails cost less than trucks for freight but more than cars for passengers.
Read more at https://www.cato.org/blog/why-trains-europe-function-so-badly
2017-04-22
Cato: John McCain: America’s Foreign Policy Loose Cannon
President Trump’s testy telephone conversation with Australian Prime Minister Malcolm Turnbull quickly produced a reaction from one ubiquitous U.S. player on foreign policy issues, Arizona Senator John McCain. He contacted Australia’s ambassador in Washington to assure him of Washington’s undying devotion to the U.S. alliance with Australia and to that country’s security and well-being. The implicit message was that Canberra should not take Trump or his actions seriously. In so doing, McCain basically anointed himself as America’s shadow president, with the right and obligation to bypass the elected president and conduct relations with foreign governments and other parties.
His actions were entirely inappropriate. Granted, Trump’s conduct toward Turnbull deserves no praise. During the telephone call, a dispute arose over refugee policy, and an angry Trump reportedly berated the Australian leader and abruptly cut the scheduled one-hour session short after 25 minutes. Such behavior was that of a petulant adolescent rather than the expected behavior of a president of the United States.
Nevertheless, the Constitution empowers the president and his appointees to conduct America’s foreign policy. Even senators are not authorized to undercut their authority by engaging in direct, free-lance diplomacy with foreign leaders. Yet that is what McCain did.
Read more at https://www.cato.org/blog/john-mccain-americas-foreign-policy-loose-cannon
His actions were entirely inappropriate. Granted, Trump’s conduct toward Turnbull deserves no praise. During the telephone call, a dispute arose over refugee policy, and an angry Trump reportedly berated the Australian leader and abruptly cut the scheduled one-hour session short after 25 minutes. Such behavior was that of a petulant adolescent rather than the expected behavior of a president of the United States.
Nevertheless, the Constitution empowers the president and his appointees to conduct America’s foreign policy. Even senators are not authorized to undercut their authority by engaging in direct, free-lance diplomacy with foreign leaders. Yet that is what McCain did.
Read more at https://www.cato.org/blog/john-mccain-americas-foreign-policy-loose-cannon
2017-04-21
Cato: Democrats Should Be Heartened by Betsy DeVos
Unless something unexpected happens, tomorrow the United States Senate will vote on Betsy DeVos to be the next U.S. Secretary of Education. And if you are a Democrat sweating through nightmares over what a Trump administration will do to education, you should be pretty comfy with what DeVos has said she’d like to see happen under her watch. As she stated repeatedly in her confirmation hearing, she would not use federal power—and certainly not secretarial power—to impose anything, including school choice, on unwilling states and districts.
But isn’t the vote expected to be as close as last night’s Super Bowl at the end of regulation, with all Dems voting against DeVos and Vice President Mike Pence delivering the final, overtime vote for her? Yup.
You see, over the decades, Democrats, with copious help from Republicans, have tried to make the U.S. Department of Education what it was not originally intended to be, and what with absolute certainty it cannot constitutionally be: a national school board. This vision was exposed in a comment by Senator Patty Murray (D-WA), ranking member of the Health, Education, Labor and Pensions committee, when she warned all who were suffering through the festival of misinformation and grandstanding that was DeVos’s confirmation hearing, that if approved DeVos would “oversee the education of all of our kids.”
Read more at https://www.cato.org/blog/democrats-should-be-heartened-betsy-devos
But isn’t the vote expected to be as close as last night’s Super Bowl at the end of regulation, with all Dems voting against DeVos and Vice President Mike Pence delivering the final, overtime vote for her? Yup.
You see, over the decades, Democrats, with copious help from Republicans, have tried to make the U.S. Department of Education what it was not originally intended to be, and what with absolute certainty it cannot constitutionally be: a national school board. This vision was exposed in a comment by Senator Patty Murray (D-WA), ranking member of the Health, Education, Labor and Pensions committee, when she warned all who were suffering through the festival of misinformation and grandstanding that was DeVos’s confirmation hearing, that if approved DeVos would “oversee the education of all of our kids.”
Read more at https://www.cato.org/blog/democrats-should-be-heartened-betsy-devos
2017-04-20
Cato: Trump’s Exclusion of Immigrants from Specific Countries Is Not Legal
President Trump issued an executive order on Friday that includes a ban on the entry of virtually all nationals from several countries. The same day, the New York Times published my argument that the portion of the ban that bars immigrants or legal permanent residents violates the law, which bans discrimination against immigrants based on national origin.
Andrew McCarthy of National Review Online was kind enough to take the time to publish a response (“Trump’s Exclusion of Aliens from Specific Countries Is Legal”). Because Mr. McCarthy’s article demonstrates significant confusion over my argument, the facts, and the laws at issue, it surprised me to see National Review editor Rich Lowry also cite it favorably. Despite the weakness of its analysis, the piece provides me an opportunity to clarify and reinforce some aspects of my argument that brevity required me to excise from the Times.
1. The Constitution gives the power to make immigration laws to Congress. Mr. McCarthy writes:
"Under the Constitution, as Thomas Jefferson wrote shortly after its adoption, “the transaction of business with foreign nations is Executive altogether.” … In the international arena, then, if there is arguable conflict between a presidential policy and a congressional statute, the president’s policy will take precedence in the absence of some clear constitutional commitment of the subject matter to legislative resolution."
In other words, the president can ignore congressional limits in this area. He cites case law in which courts describe the president’s foreign affairs powers with respect to relations with foreign governments as expansive, but cites no case that concludes the president can ignore Congress to exclude immigrants. It is reminiscent of President Nixon’s famous argument that “when the president does it, that means it is not illegal.” It is Congress, not the president, that makes immigration law. “[O]ver no conceivable subject is the legislative power of Congress more complete than it is over… the admission of aliens,” ruled the Supreme Court in Oceanic Steam Navigation Co. v. Stranahan.
Mr. McCarthy had no problem defending this view when the actions at issue were President Obama’s, which were also justified based on “security,” but now adopts it to defend President Trump’s. As my Cato colleagues wrote at the time, “it is not for the president alone to make foundational changes to immigration law—in conflict with the laws passed by Congress and in ways that go beyond constitutionally authorized executive power.”
Read more at https://www.cato.org/blog/trumps-exclusion-immigrants-specific-countries-not-legal
Andrew McCarthy of National Review Online was kind enough to take the time to publish a response (“Trump’s Exclusion of Aliens from Specific Countries Is Legal”). Because Mr. McCarthy’s article demonstrates significant confusion over my argument, the facts, and the laws at issue, it surprised me to see National Review editor Rich Lowry also cite it favorably. Despite the weakness of its analysis, the piece provides me an opportunity to clarify and reinforce some aspects of my argument that brevity required me to excise from the Times.
1. The Constitution gives the power to make immigration laws to Congress. Mr. McCarthy writes:
"Under the Constitution, as Thomas Jefferson wrote shortly after its adoption, “the transaction of business with foreign nations is Executive altogether.” … In the international arena, then, if there is arguable conflict between a presidential policy and a congressional statute, the president’s policy will take precedence in the absence of some clear constitutional commitment of the subject matter to legislative resolution."
In other words, the president can ignore congressional limits in this area. He cites case law in which courts describe the president’s foreign affairs powers with respect to relations with foreign governments as expansive, but cites no case that concludes the president can ignore Congress to exclude immigrants. It is reminiscent of President Nixon’s famous argument that “when the president does it, that means it is not illegal.” It is Congress, not the president, that makes immigration law. “[O]ver no conceivable subject is the legislative power of Congress more complete than it is over… the admission of aliens,” ruled the Supreme Court in Oceanic Steam Navigation Co. v. Stranahan.
Mr. McCarthy had no problem defending this view when the actions at issue were President Obama’s, which were also justified based on “security,” but now adopts it to defend President Trump’s. As my Cato colleagues wrote at the time, “it is not for the president alone to make foundational changes to immigration law—in conflict with the laws passed by Congress and in ways that go beyond constitutionally authorized executive power.”
Read more at https://www.cato.org/blog/trumps-exclusion-immigrants-specific-countries-not-legal
2017-04-19
Cato: Five Reasons Congress Should Repeal Trump’s Immigrant & Refugee Ban
President Trump signed an executive order yesterday that would ban all Syrian refugees and almost all refugees from all countries from entering the United States for six months, while cutting the overall annual limit for refugees in half and banning for at least 90 days all immigration from seven majority Muslim countries. It implies that this ban could continue indefinitely for certain countries. These policies will not improve national security and will undermine America’s efforts to combat Islamic extremism and terrorism around the world.
1) The order violates the law. Under the Immigration Act of 1965, the president may not refuse to give visas to immigrants coming to live in the United States permanently due to their nationality. The provision is unequivocal in stating that no person may “be discriminated against in the issuance of an immigrant visa because of the person’s race, sex, nationality, place of birth, or place of residence.” While this does not apply to temporary visitors or refugees, I have previously explained in detail why the president cannot legally enforce this order against immigrants who are sponsored by employers or family members in the United States.
2) Refugees and immigrants from Muslim-majority countries are not a serious threat to Americans. The order would ban all people entering the United States from Iraq, Iran, Syria, Somalia, Sudan, Libya, and Yemen, and yet no terrorist from these places has carried out a lethal attack in the United States. Indeed, no Libyans or Syrians have even been convicted for planning such an attack. Moreover, the likelihood of being killed by any refugee from any country is just 1 in 3.64 billion a year. This discrimination is arbitrary and cannot be rationally justified based on a assessment of the risk. It is worth remembering that German Jews were turned away on a similar pretense that they could be Nazi spies—only to be killed in death camps.
3) The order aids the Islamic State. ISIS has said that it wishes to “compel the Crusaders to actively destroy the gray zone themselves,” forcing Western Muslims to “either apostatize… or [emigrate] to the Islamic State and thereby escape persecution from the crusader governments and citizens.” They want this overreaction. The only thing keeping ISIS from imploding are its new recruits which makes winning the propaganda war critical. Accepting refugees deprives ISIS of human resources. The Caliphate’s main source of income is the people it extorts. One refugee told the Times. “ISIS would not let us leave. They said, ‘You are going to the infidels.’” What could be more important than making the “infidels” more popular than ISIS?
Read more at https://www.cato.org/blog/five-reasons-congress-should-repeal-trumps-immigrant-refugee-ban
1) The order violates the law. Under the Immigration Act of 1965, the president may not refuse to give visas to immigrants coming to live in the United States permanently due to their nationality. The provision is unequivocal in stating that no person may “be discriminated against in the issuance of an immigrant visa because of the person’s race, sex, nationality, place of birth, or place of residence.” While this does not apply to temporary visitors or refugees, I have previously explained in detail why the president cannot legally enforce this order against immigrants who are sponsored by employers or family members in the United States.
2) Refugees and immigrants from Muslim-majority countries are not a serious threat to Americans. The order would ban all people entering the United States from Iraq, Iran, Syria, Somalia, Sudan, Libya, and Yemen, and yet no terrorist from these places has carried out a lethal attack in the United States. Indeed, no Libyans or Syrians have even been convicted for planning such an attack. Moreover, the likelihood of being killed by any refugee from any country is just 1 in 3.64 billion a year. This discrimination is arbitrary and cannot be rationally justified based on a assessment of the risk. It is worth remembering that German Jews were turned away on a similar pretense that they could be Nazi spies—only to be killed in death camps.
3) The order aids the Islamic State. ISIS has said that it wishes to “compel the Crusaders to actively destroy the gray zone themselves,” forcing Western Muslims to “either apostatize… or [emigrate] to the Islamic State and thereby escape persecution from the crusader governments and citizens.” They want this overreaction. The only thing keeping ISIS from imploding are its new recruits which makes winning the propaganda war critical. Accepting refugees deprives ISIS of human resources. The Caliphate’s main source of income is the people it extorts. One refugee told the Times. “ISIS would not let us leave. They said, ‘You are going to the infidels.’” What could be more important than making the “infidels” more popular than ISIS?
Read more at https://www.cato.org/blog/five-reasons-congress-should-repeal-trumps-immigrant-refugee-ban
2017-04-18
Cato: Trump’s Wall Plan Is Disgraceful, Belligerent, and Disastrous
Regardless of whether wall construction is funded through a discriminatory tariff on imports from Mexico or the border adjustment taxes envisaged in the GOP tax proposal, U.S. consumers and taxpayers will be flipping the bill. The very idea of building the wall in the first place is a disgrace, but demonizing our neighbors and hatching plans that could subvert the Mexican economy and put another Venezuela on our southern border, is belligerent and potentially disastrous.
Hitting all Mexican imports with a 20% tariff is, unfortunately, something the president could do. Under the Constitution, Congress is authorized to regulate foreign commerce, which includes imposing tariffs. But over the years, Congress has delegated some of that authority to the president through various statutes. All of those statutes require that some condition be met (findings of a surge in imports; subsidized imports; unfair foreign practices that hurt U.S. companies; national security crises; public health or safety threats, etc.) before restrictions can be imposed. Sometimes the restrictions are limited in magnitude and duration, sometimes not. Sometimes the actions are subject to judicial review, sometimes not.
Read more at https://www.cato.org/blog/trumps-wall-plan-disgraceful-belligerent-disastrous
Hitting all Mexican imports with a 20% tariff is, unfortunately, something the president could do. Under the Constitution, Congress is authorized to regulate foreign commerce, which includes imposing tariffs. But over the years, Congress has delegated some of that authority to the president through various statutes. All of those statutes require that some condition be met (findings of a surge in imports; subsidized imports; unfair foreign practices that hurt U.S. companies; national security crises; public health or safety threats, etc.) before restrictions can be imposed. Sometimes the restrictions are limited in magnitude and duration, sometimes not. Sometimes the actions are subject to judicial review, sometimes not.
Read more at https://www.cato.org/blog/trumps-wall-plan-disgraceful-belligerent-disastrous
2017-04-17
Cato: Campaign-Finance Rules Chill Speech Unrelated to Election Campaigns
In 2014, the Independence Institute—a Colorado think tank—wanted to run a radio advertisement supporting the Justice Safety Valve Act, a bill granting federal judges greater discretion in sentencing nonviolent offenders. The text of the ad asked listeners to “call Senators Michael Bennet and Mark Udall”—Colorado’s two senators at the time—and tell them to support the bill.
But under the Bipartisan Campaign Reform Act of 2002 (BCRA, better known as McCain-Feingold), any organization that spends at least $10,000 on “electioneering communications” in one year is required to make several public disclosures, including “the names and addresses of all contributors who contributed an aggregate amount of $1,000 or more” toward the advertisement. Further, an “electioneering communication” is defined as any broadcast that “refers to a clearly identified candidate for Federal office” within 60 days of a general election. Since Udall was running for reelection that year, the ad would have qualified even though it had nothing to do with Udall’s campaign.
The Independence Institute challenged the rule as an unconstitutional burden on its First Amendment right to speak on issues of public concern. After losing before a three-judge district court, the Institute has now appealed directly to the Supreme Court. Cato, joining the Institute for Justice, has filed a brief urging the Court to grant the case a full hearing on the merits.
We make two broad points. First BCRA’s disclosure provision is undeniably content-based, which should subject it to strict scrutiny under the First Amendment (meaning the government needs to provide a compelling justification). The law applies only if a speaker chooses to make reference to a candidate for office, so the law expressly draws distinctions based on the expressive content of speech.
Read more at https://www.cato.org/blog/campaign-finance-rules-chill-speech-unrelated-election-campaigns
But under the Bipartisan Campaign Reform Act of 2002 (BCRA, better known as McCain-Feingold), any organization that spends at least $10,000 on “electioneering communications” in one year is required to make several public disclosures, including “the names and addresses of all contributors who contributed an aggregate amount of $1,000 or more” toward the advertisement. Further, an “electioneering communication” is defined as any broadcast that “refers to a clearly identified candidate for Federal office” within 60 days of a general election. Since Udall was running for reelection that year, the ad would have qualified even though it had nothing to do with Udall’s campaign.
The Independence Institute challenged the rule as an unconstitutional burden on its First Amendment right to speak on issues of public concern. After losing before a three-judge district court, the Institute has now appealed directly to the Supreme Court. Cato, joining the Institute for Justice, has filed a brief urging the Court to grant the case a full hearing on the merits.
We make two broad points. First BCRA’s disclosure provision is undeniably content-based, which should subject it to strict scrutiny under the First Amendment (meaning the government needs to provide a compelling justification). The law applies only if a speaker chooses to make reference to a candidate for office, so the law expressly draws distinctions based on the expressive content of speech.
Read more at https://www.cato.org/blog/campaign-finance-rules-chill-speech-unrelated-election-campaigns
2017-04-16
Cato: I’ll Take Unconstitutional Prosecutions for $1000, Alex
In 2011, federal authorities charged Calvin Walker, a Texas electrician, with 37 counts of fraud. Eighteen months later, Walker accepted a plea deal in exchange for all charges being dropped. That should have been the end of his legal saga. Yet two years later, Walker was again indicted for exactly the same alleged fraud, only this time by state authorities. He challenged this second prosecution as a violation of the Fifth Amendment, which guarantees that no person shall “be twice put in jeopardy of life or limb” for the same offense. But under a strange exception to the Double Jeopardy Clause created by the Supreme Court 60 years ago, both the state and federal governments are allowed to prosecute someone for the same act.
Cato has joined the Constitutional Accountability Center in filing a brief urging the Supreme Court to review of Walker’s case and overturn this misguided “dual sovereignty” exception. We make three principal arguments. First, none of the Framers would have contemplated such a large exception to Double Jeopardy protection. Even before the Founding, English jurist and legal theorist William Blackstone wrote that it was considered a “universal maxim of the common law of England, that no man is to be brought into jeopardy of his life, more than once, for the same offence.” And in congressional debates before the enactment of the Fifth Amendment, Rep. Roger Sherman observed that “the courts of justice would never think of trying and punishing twice for the same offence.”
Read more at https://www.cato.org/blog/ill-take-unconstitutional-prosecutions-1000-alex
Cato has joined the Constitutional Accountability Center in filing a brief urging the Supreme Court to review of Walker’s case and overturn this misguided “dual sovereignty” exception. We make three principal arguments. First, none of the Framers would have contemplated such a large exception to Double Jeopardy protection. Even before the Founding, English jurist and legal theorist William Blackstone wrote that it was considered a “universal maxim of the common law of England, that no man is to be brought into jeopardy of his life, more than once, for the same offence.” And in congressional debates before the enactment of the Fifth Amendment, Rep. Roger Sherman observed that “the courts of justice would never think of trying and punishing twice for the same offence.”
Read more at https://www.cato.org/blog/ill-take-unconstitutional-prosecutions-1000-alex
2017-04-15
Cato: Supreme Court Takes on the Empire State’s Language Police
In Federalist 10, James Madison warned of “a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens or to the permanent and aggregate interests of the community.” These groups—“factions” in Madison’s terms—come together to seek concentrated benefits from favorable legislation and regulation rather than competing in the marketplace, while spreading the costs throughout society.
While Madison conceded that such interests could not be stopped completely, he suggested that certain steps could be taken to mitigate the “effects” of these groups, and the damage that they can do to the public interest. The First Amendment is one such protection.
The New York legislature, however, ignored the First Amendment rights of both merchants and consumers when—at the behest of the credit-card lobby—it passed a law restricting how retailers can convey pricing schemes, as well as the public’s right to know about them. New York’s no-surcharge law—like those in 10 other states—insulate credit-card companies from consumer knowledge about who is actually causing the higher prices on goods when they use their credit card (“swipe fees”). The law does this not by restricting the merchants’ ability to charge different prices as between cash and credit payments—that’s legal everywhere—but by regulating the communications about the different prices.
To put it simply: the law allows merchants to offer “discounts” to cash-paying customers, but makes it a crime to impose economically equivalent “surcharges” on those who use plastic. By mandating how these merchants convey their pricing structure, New York is restricting speech on the basis of its content, which would seem to be an obvious First Amendment violation.
Read more at https://www.cato.org/blog/supreme-court-takes-empire-states-language-police
While Madison conceded that such interests could not be stopped completely, he suggested that certain steps could be taken to mitigate the “effects” of these groups, and the damage that they can do to the public interest. The First Amendment is one such protection.
The New York legislature, however, ignored the First Amendment rights of both merchants and consumers when—at the behest of the credit-card lobby—it passed a law restricting how retailers can convey pricing schemes, as well as the public’s right to know about them. New York’s no-surcharge law—like those in 10 other states—insulate credit-card companies from consumer knowledge about who is actually causing the higher prices on goods when they use their credit card (“swipe fees”). The law does this not by restricting the merchants’ ability to charge different prices as between cash and credit payments—that’s legal everywhere—but by regulating the communications about the different prices.
To put it simply: the law allows merchants to offer “discounts” to cash-paying customers, but makes it a crime to impose economically equivalent “surcharges” on those who use plastic. By mandating how these merchants convey their pricing structure, New York is restricting speech on the basis of its content, which would seem to be an obvious First Amendment violation.
Read more at https://www.cato.org/blog/supreme-court-takes-empire-states-language-police
2017-04-14
Cato: The IRS Believes All Bitcoin Users are Tax Cheats
The Internal Revenue Service has filed a “John Doe” summons seeking to require U.S. Bitcoin exchange Coinbase to turn over records about every transaction of every user from 2013 to 2015. That demand is shocking in sweep, and it includes: “complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.” And every single transaction:
"All records of account/wallet/vault activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, the names or other identifiers of counterparties to the transaction; requests or instructions to send or receive bitcoin; and, where counterparties transact through their own Coinbase accounts/wallets/vaults, all available information identifying the users of such accounts and their contact information."
The demand is not limited to owners of large amounts of Bitcoin or to those who have transacted in large amounts. Everything about everyone.
Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.
If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.
Read more at https://www.cato.org/blog/irs-believes-all-bitcoin-users-are-tax-cheats
"All records of account/wallet/vault activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, the names or other identifiers of counterparties to the transaction; requests or instructions to send or receive bitcoin; and, where counterparties transact through their own Coinbase accounts/wallets/vaults, all available information identifying the users of such accounts and their contact information."
The demand is not limited to owners of large amounts of Bitcoin or to those who have transacted in large amounts. Everything about everyone.
Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.
If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.
Read more at https://www.cato.org/blog/irs-believes-all-bitcoin-users-are-tax-cheats
2017-04-13
Cato: Washington DC Progressives Fight to Preserve Gas Stations
The number of gas stations in the United States has fallen by nearly 30 percent in the last two decade and the DC government says it is determined to arrest that decline, at least in this jurisdiction. Why it feels this way is a complete mystery, and that it has taken action on this front is absurd.
It is easy to surmise why we have fewer gas stations: more stringent regulations on underground gas tanks increased the cost of operating a station and spurred many operators to close their doors in the late 1990s. Also, many gas station operators these days see selling gas as primarily a way to attract a lot of shoppers to their store and are willing to cut their margin to the bone to get those ancillary sales. As a result, the average fuel sales (and non-fuel sales) of gas stations has been growing steadily. The days of a mom and pop station selling gas, fixing cars, and selling a little candy by the cashier are long gone.
In Washington DC, the number of gas stations has been further reduced by the sharp increase in real estate prices. The opportunity cost of operating a station jumps when the land would be much more profitable with a multi-story building on it instead of gas pumps.
Few people see this economic evolution towards fewer gas stations as a bad thing in and of itself: The economy today looks vastly different than the economy four decades ago–there are many more restaurants, fewer music stores, and a wide variety of entities today that didn’t even exist in the 1970s and 1980s. Few people across the country complain that it is difficult to buy gas–because if there were an excess demand, there would be an incentive for an entrepreneur to build a gas station.
Nevertheless, Washington DC has a Gas Station Advisory Board that must approve all station closings, and there is a good chance it will stand in the way of a developer hoping to convert a gas station into condos in tony Dupont Circle.
Read more at https://www.cato.org/blog/washington-dc-progressives-fight-reserve-gas-stations
It is easy to surmise why we have fewer gas stations: more stringent regulations on underground gas tanks increased the cost of operating a station and spurred many operators to close their doors in the late 1990s. Also, many gas station operators these days see selling gas as primarily a way to attract a lot of shoppers to their store and are willing to cut their margin to the bone to get those ancillary sales. As a result, the average fuel sales (and non-fuel sales) of gas stations has been growing steadily. The days of a mom and pop station selling gas, fixing cars, and selling a little candy by the cashier are long gone.
In Washington DC, the number of gas stations has been further reduced by the sharp increase in real estate prices. The opportunity cost of operating a station jumps when the land would be much more profitable with a multi-story building on it instead of gas pumps.
Few people see this economic evolution towards fewer gas stations as a bad thing in and of itself: The economy today looks vastly different than the economy four decades ago–there are many more restaurants, fewer music stores, and a wide variety of entities today that didn’t even exist in the 1970s and 1980s. Few people across the country complain that it is difficult to buy gas–because if there were an excess demand, there would be an incentive for an entrepreneur to build a gas station.
Nevertheless, Washington DC has a Gas Station Advisory Board that must approve all station closings, and there is a good chance it will stand in the way of a developer hoping to convert a gas station into condos in tony Dupont Circle.
Read more at https://www.cato.org/blog/washington-dc-progressives-fight-reserve-gas-stations
2017-04-12
Cato: Government Shouldn’t Retaliate Against Politically Active Citizens
The First Amendment guarantees the right to speak freely without fear of official retribution. One aspect of this right is that a government agency may not punish someone for speaking out, supporting a candidate, or running in an election. Allowing such retribution would be to allow the government to extort citizens into supporting a particular political orthodoxy.
But such extortion is exactly what happened in Nebraska. Robert Bennie, a financial advisor, became active in the Tea Party movement in 2010. Before then, he had never received any disciplinary action from the Nebraska Department of Banking and Finance, a regulatory agency that monitors brokerage advertisements for compliance with financial regulations. After Bennie became politically active, the Department suddenly began a campaign of investigations and threatening letters, despite the fact that Bennie remained fully compliant with all regulations.
Suspecting that these developments were retaliation for his political stands, Bennie sued the Department. Both the district court and the U.S. Court of Appeals for the Eighth Circuit agreed with Bennie that the government took an adverse action against him that was motivated in part by his First-Amendment-protected speech. And yet the courts nonetheless denied Bennie any relief, imposing yet another hurdle: the “ordinary firmness” test.
Under this test, a court must find that the adverse government action was “severe enough to chill a person of ordinary firmness from continuing to speak.” The district court found that the Department’s actions were not “severe enough” to meet this threshold, a holding which the Eighth Circuit affirmed.
Read more at https://www.cato.org/blog/government-shouldnt-retaliate-against-politically-active-citizens
But such extortion is exactly what happened in Nebraska. Robert Bennie, a financial advisor, became active in the Tea Party movement in 2010. Before then, he had never received any disciplinary action from the Nebraska Department of Banking and Finance, a regulatory agency that monitors brokerage advertisements for compliance with financial regulations. After Bennie became politically active, the Department suddenly began a campaign of investigations and threatening letters, despite the fact that Bennie remained fully compliant with all regulations.
Suspecting that these developments were retaliation for his political stands, Bennie sued the Department. Both the district court and the U.S. Court of Appeals for the Eighth Circuit agreed with Bennie that the government took an adverse action against him that was motivated in part by his First-Amendment-protected speech. And yet the courts nonetheless denied Bennie any relief, imposing yet another hurdle: the “ordinary firmness” test.
Under this test, a court must find that the adverse government action was “severe enough to chill a person of ordinary firmness from continuing to speak.” The district court found that the Department’s actions were not “severe enough” to meet this threshold, a holding which the Eighth Circuit affirmed.
Read more at https://www.cato.org/blog/government-shouldnt-retaliate-against-politically-active-citizens
2017-04-11
Cato: Common Myths About Marijuana Legalization
This coming Tuesday, nine states will consider ballot initiatives that legalize marijuana for medical or recreational purposes under state law. Twenty-five states have already legalized marijuana for medical use, and four have legalized fully, and polls suggest many or most of the new initiatives will pass. Opponents nevertheless make strong claims about adverse consequences from existing and proposed legalizations. We argue, based on the evidence, that such claims are exaggerated, misleading, or outright false.
Legalizing marijuana dramatically increases use: Several countries (Portugal, the Netherlands, Australia, and part of the U.K.) have liberalized their marijuana laws with little or no impact on marijuana use. Research on U.S. medical marijuana laws suggests that adult marijuana use has increased only modestly. Preliminary data in Colorado and Washington, the two first states to legalize recreational marijuana, display similar trends in use before and after legalization.
Legalizing marijuana increases other substance use: Whether legalization affects other substance use depends on whether new consumers progress to drugs such as cocaine or heroin (the gateway effect) and whether existing consumers substitute marijuana for other substances. No scientifically convincing evidence supports the gateway hypothesis for marijuana. In fact, some research suggests that users substitute from alcohol toward marijuana after liberalization. Rates of cocaine use appear unchanged in the wake of recreational marijuana laws. Research on medical marijuana laws shows little impact on alcohol or cocaine use.
Read more at https://www.cato.org/blog/common-myths-about-marijuana-legalization
Legalizing marijuana dramatically increases use: Several countries (Portugal, the Netherlands, Australia, and part of the U.K.) have liberalized their marijuana laws with little or no impact on marijuana use. Research on U.S. medical marijuana laws suggests that adult marijuana use has increased only modestly. Preliminary data in Colorado and Washington, the two first states to legalize recreational marijuana, display similar trends in use before and after legalization.
Legalizing marijuana increases other substance use: Whether legalization affects other substance use depends on whether new consumers progress to drugs such as cocaine or heroin (the gateway effect) and whether existing consumers substitute marijuana for other substances. No scientifically convincing evidence supports the gateway hypothesis for marijuana. In fact, some research suggests that users substitute from alcohol toward marijuana after liberalization. Rates of cocaine use appear unchanged in the wake of recreational marijuana laws. Research on medical marijuana laws shows little impact on alcohol or cocaine use.
Read more at https://www.cato.org/blog/common-myths-about-marijuana-legalization
2017-04-10
Cato: Could It Be Unconstitutional to Raise the Obamacare “Tax” for Not Purchasing Health Insurance?
As many predicted, especially us at Cato, the Affordable Care Act is beginning to make health insurance less affordable for many Americans. Part of the problem, in a nutshell, is precisely what my colleague Michael Cannon described in 2009, the young and the healthy avoiding signing up for health insurance and choosing to pay the fine, or, as Chief Justice John Roberts would call it, a tax.
MIT economist Jonathan Gruber, often described as an architect Obamacare, recently said that some of these problems can be alleviated by increasing the “tax” on those without insurance. “I think probably the most important thing experts would agree is we need a larger mandate penalty,” said Gruber.
Depending on how high the penalty goes, there could be a constitutional problem with that. In the opinion that converted the “penalty” into a constitutional “tax,” Chief Justice Roberts described the characteristics of the “shared responsibility payment” that made it, constitutionally speaking, a tax rather than a penalty. One of those characteristics is that the penalty was not too high: “for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the ‘prohibitory’ financial punishment in Drexel Furniture.” In Drexel Furniture, also known as the Child Labor Tax Case, the Court struck down a 10 percent tax on the profits of employers who used child labor in certain businesses. One reason the Court struck it down was because its “prohibitory and regulatory effect and purpose are palpable.”
Read more at https://www.cato.org/blog/could-it-be-unconstitutional-raise-obamacare-tax-not-purchasing-health-insurance
MIT economist Jonathan Gruber, often described as an architect Obamacare, recently said that some of these problems can be alleviated by increasing the “tax” on those without insurance. “I think probably the most important thing experts would agree is we need a larger mandate penalty,” said Gruber.
Depending on how high the penalty goes, there could be a constitutional problem with that. In the opinion that converted the “penalty” into a constitutional “tax,” Chief Justice Roberts described the characteristics of the “shared responsibility payment” that made it, constitutionally speaking, a tax rather than a penalty. One of those characteristics is that the penalty was not too high: “for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the ‘prohibitory’ financial punishment in Drexel Furniture.” In Drexel Furniture, also known as the Child Labor Tax Case, the Court struck down a 10 percent tax on the profits of employers who used child labor in certain businesses. One reason the Court struck it down was because its “prohibitory and regulatory effect and purpose are palpable.”
Read more at https://www.cato.org/blog/could-it-be-unconstitutional-raise-obamacare-tax-not-purchasing-health-insurance
2017-04-09
Cato: Not So Fast on a Universal Child Benefit
Sam Hammond and Robert Orr of the Niskanen Center have published a very thoughtful paper proposing the establishment of a Canadian-style Universal Child Benefit. They make a compelling argument that replacing the current mish-mash of child-centered social welfare programs with a single cash benefit would be both more efficient and more humane than what we have today. But, before we get carried away and rush down the road to another new entitlement, there are many questions that need further exploration.
Hammond and Orr call for the elimination of eight existing programs (the dependent tax exemption, the portion of food stamps (SNAP) going to child recipients, five separate school nutrition programs, and the dependent care credit). They would also fold the existing Child Tax Credit (CTC) into their new benefit. This would free up $147.5 billion annually, allowing for a $2,000 per child cash grant on a budget-neutral basis. The benefit would be phased out for incomes above $75,000 for single heads of household and $110,000 for a married couple.
There are several important advantages to this approach. First, cash is almost always preferable to in-kind programs. Cash payments are transparent, treat recipients like adults, and allow for greater flexibility of individual preferences and circumstances. Moreover, the shift to cash will help break up the concentrated lobbying power of special interests who benefit from in-kind programs, reducing the constant pressure to increase benefits. In general, as I have argued, we should be transitioning our entire social welfare system to cash.
Second, Hammond and Orr’s approach would treat families more equitably. For example, current benefits reward parents who purchase external child care services, but do not benefit traditional stay-at-home parents. Existing programs also tend to benefit those individuals, often more educated and even middle-class, who have the time and expertise to navigate the bureaucracy, rather than those families most in need. A universal child benefit would extend benefits to many who have not been able to access them.
Read more at https://www.cato.org/blog/not-so-fast-universal-child-benefit
Hammond and Orr call for the elimination of eight existing programs (the dependent tax exemption, the portion of food stamps (SNAP) going to child recipients, five separate school nutrition programs, and the dependent care credit). They would also fold the existing Child Tax Credit (CTC) into their new benefit. This would free up $147.5 billion annually, allowing for a $2,000 per child cash grant on a budget-neutral basis. The benefit would be phased out for incomes above $75,000 for single heads of household and $110,000 for a married couple.
There are several important advantages to this approach. First, cash is almost always preferable to in-kind programs. Cash payments are transparent, treat recipients like adults, and allow for greater flexibility of individual preferences and circumstances. Moreover, the shift to cash will help break up the concentrated lobbying power of special interests who benefit from in-kind programs, reducing the constant pressure to increase benefits. In general, as I have argued, we should be transitioning our entire social welfare system to cash.
Second, Hammond and Orr’s approach would treat families more equitably. For example, current benefits reward parents who purchase external child care services, but do not benefit traditional stay-at-home parents. Existing programs also tend to benefit those individuals, often more educated and even middle-class, who have the time and expertise to navigate the bureaucracy, rather than those families most in need. A universal child benefit would extend benefits to many who have not been able to access them.
Read more at https://www.cato.org/blog/not-so-fast-universal-child-benefit
2017-04-08
Cato: Courts Should Stop Approving Unfair Class Action Settlements
Class actions play a vital role in our legal system. These lawsuits are often the only vehicle for injured plaintiffs to receive compensation when a defendant’s wrongs are widely dispersed and it would be impractical for a single individual to sue.
Yet the process of settling these suits is subject to perverse incentives on the part of the lawyers representing the injured parties. Class counsel often will seek the largest portion of the settlement award for themselves—structuring the settlement to maximize attorney fees—at the expense of class members.
Sadly, this sort of self-dealing on the part of class counsel is exactly what happened in Blackman v. Gascho. The case centers on a consumer class action filed against Global Fitness Holdings LLC, alleging that the between 2006 and 2012, the company sold gym memberships and incorrectly charged fees pertaining to cancellation, facility maintenance, and personal-training contracts. A group of plaintiffs sued Global Fitness over the fees, and the parties entered into a “claims-made” settlement.
Read more at https://www.cato.org/blog/courts-should-stop-approving-unfair-class-action-settlements
Yet the process of settling these suits is subject to perverse incentives on the part of the lawyers representing the injured parties. Class counsel often will seek the largest portion of the settlement award for themselves—structuring the settlement to maximize attorney fees—at the expense of class members.
Sadly, this sort of self-dealing on the part of class counsel is exactly what happened in Blackman v. Gascho. The case centers on a consumer class action filed against Global Fitness Holdings LLC, alleging that the between 2006 and 2012, the company sold gym memberships and incorrectly charged fees pertaining to cancellation, facility maintenance, and personal-training contracts. A group of plaintiffs sued Global Fitness over the fees, and the parties entered into a “claims-made” settlement.
Read more at https://www.cato.org/blog/courts-should-stop-approving-unfair-class-action-settlements
2017-04-07
Cato: A Constitutional Amendment to Re-Empower the States
When the Framers designed our federalist system, they assumed that the federal government would be limited to those powers actually enumerated in the Constitution and that it would exercise those powers only when authorized by statute. Further, to give the states some say in the drafting of these statutes, one half of the federal Congress—the Senate—was elected by the state legislatures themselves and designed to reflect the interests of the state governments.
Today, none of these elements of our original design remain. The Supreme Court has allowed the federal government to control nearly limitless activities, supposedly as an exercise of its power to regulate interstate commerce. The executive branch acts as its own de facto legislative branch, “interpreting” statutes through executive actions and agency rulemaking to unilaterally give itself the powers it wishes to exercise. And after the passage of the Seventeenth Amendment, senators are now elected by popular vote, meaning there is no longer any direct link between the state and federal governments. The result of these three changes is that states have less power than ever – and there’s not much they can do about it.
To solve that problem, Representatives Rob Bishop (R-UT) and Cathy McMorris Rodgers (R-WA) recently introduced the “Re-Empowerment of the States Amendment,” a proposal that would allow two thirds of the state legislatures to repeal any “Presidential Executive order, rule, regulation, other regulatory action, or administrative ruling issued by a department, agency, or instrumentality of the United States.”
Read more at https://www.cato.org/blog/constitutional-amendment-re-empower-states
Today, none of these elements of our original design remain. The Supreme Court has allowed the federal government to control nearly limitless activities, supposedly as an exercise of its power to regulate interstate commerce. The executive branch acts as its own de facto legislative branch, “interpreting” statutes through executive actions and agency rulemaking to unilaterally give itself the powers it wishes to exercise. And after the passage of the Seventeenth Amendment, senators are now elected by popular vote, meaning there is no longer any direct link between the state and federal governments. The result of these three changes is that states have less power than ever – and there’s not much they can do about it.
To solve that problem, Representatives Rob Bishop (R-UT) and Cathy McMorris Rodgers (R-WA) recently introduced the “Re-Empowerment of the States Amendment,” a proposal that would allow two thirds of the state legislatures to repeal any “Presidential Executive order, rule, regulation, other regulatory action, or administrative ruling issued by a department, agency, or instrumentality of the United States.”
Read more at https://www.cato.org/blog/constitutional-amendment-re-empower-states
2017-04-06
Cato: There’s No Constitutional Right to a Taxi Monopoly
On Friday, the U.S. Court of Appeals for the Seventh Circuit handed down a pair of rulings rejecting the argument that taxi companies somehow have a protected property right in their monopolies. The opinions—both penned by Judge Richard Posner—are perhaps the courts’ strongest rebuke yet of taxi cartels’ desperate attempts to stay relevant in an Uber world, with Posner describing their claims as having “no merit” and “border[ing] on the absurd.” It’s nice to know that—in the Seventh Circuit at least—losing your monopolistic cartel due to technological disruption is not considered to be a constitutional violation.
In one case, Illinois Transportation Trade Association v. City of Chicago, incumbent taxi companies sued Chicago for allowing app-based ridesharing companies such as Uber and Lyft to operate, asserting that the city’s decision to allow such companies to enter the market without being subject to the same regulations covering traditional taxis constituted an unconstitutional taking of their property without just compensation (and also somehow violated the Fourteenth Amendment’s Equal Protection Clause).
In the other case, Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, taxi companies sued Milwaukee for eliminating the hard cap on the number of taxi medallions in circulation, opening the market up to any applicant who met the requirements. Like in the Chicago case, the plaintiffs argued that the loosening of regulations to allow new market entrants violated the Takings Clause.
In both cases, the plaintiffs’ arguments more-or-less boiled down to: “We made a deal with the city years ago where we were promised monopoly control over this market. The government’s failure to protect that monopoly constitutes an eminent domain-style taking.” This is, of course, as the court described, an absurd argument. “‘Property’ does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening.” No one is entitled to a government grant of monopoly power.
Read more at https://www.cato.org/blog/theres-no-constitutional-right-taxi-monopoly
In one case, Illinois Transportation Trade Association v. City of Chicago, incumbent taxi companies sued Chicago for allowing app-based ridesharing companies such as Uber and Lyft to operate, asserting that the city’s decision to allow such companies to enter the market without being subject to the same regulations covering traditional taxis constituted an unconstitutional taking of their property without just compensation (and also somehow violated the Fourteenth Amendment’s Equal Protection Clause).
In the other case, Joe Sanfelippo Cabs, Inc. v. City of Milwaukee, taxi companies sued Milwaukee for eliminating the hard cap on the number of taxi medallions in circulation, opening the market up to any applicant who met the requirements. Like in the Chicago case, the plaintiffs argued that the loosening of regulations to allow new market entrants violated the Takings Clause.
In both cases, the plaintiffs’ arguments more-or-less boiled down to: “We made a deal with the city years ago where we were promised monopoly control over this market. The government’s failure to protect that monopoly constitutes an eminent domain-style taking.” This is, of course, as the court described, an absurd argument. “‘Property’ does not include a right to be free from competition. A license to operate a coffee shop doesn’t authorize the licensee to enjoin a tea shop from opening.” No one is entitled to a government grant of monopoly power.
Read more at https://www.cato.org/blog/theres-no-constitutional-right-taxi-monopoly
2017-04-05
Cato: Some Reasons Why Colombians Rejected the Peace Deal
President Juan Manuel Santos won the Nobel Peace Prize today for his efforts to reach a peace deal with the FARC guerrillas in Colombia, despite the fact that the agreement was rejected by a slim majority of voters last Sunday. The outcome of the plebiscite was definitely a stunner. No one saw it coming, not even the most enthusiastic opponent of the deal. But a closer inspection of the peace negotiations reveals that the writing was on the wall.
The main reason why nobody expected the NO campaign to win was the entirely one-sided coverage of the peace deal by the local media, something that was largely echoed by their international peers. For many years, the most important domestic outlets in Colombia have been under the government’s sway, downplaying the hardline adopted by the FARC during the negotiations and portraying the opponents of the deal as “far-right” or “enemies of peace.” There was little coverage of the real grievances that a significant number of Colombians had with the concessions given to the FARC and the low popularity of President Juan Manuel Santos.
On top of the biased media coverage, the government spent millions of dollars in publicity and in what Colombians commonly call “mermelada” (the outright use of public funds to get votes through pork and political patronage)—a practice that Santos is very fond of. Moreover, the YES campaign had the strong support of international actors, from the Cuban and the U.S. governments to the United Nations. Even Pope Francis promised to visit Colombia if the deal was backed by voters.
Despite all the odds, when faced with the biased question “Do you support the final accord to end the conflict and to construct a stable and lasting peace?” 50.24% of those who went to the polls said NO. Why?
Read more at https://www.cato.org/blog/some-reasons-why-colombians-rejected-peace-deal
The main reason why nobody expected the NO campaign to win was the entirely one-sided coverage of the peace deal by the local media, something that was largely echoed by their international peers. For many years, the most important domestic outlets in Colombia have been under the government’s sway, downplaying the hardline adopted by the FARC during the negotiations and portraying the opponents of the deal as “far-right” or “enemies of peace.” There was little coverage of the real grievances that a significant number of Colombians had with the concessions given to the FARC and the low popularity of President Juan Manuel Santos.
On top of the biased media coverage, the government spent millions of dollars in publicity and in what Colombians commonly call “mermelada” (the outright use of public funds to get votes through pork and political patronage)—a practice that Santos is very fond of. Moreover, the YES campaign had the strong support of international actors, from the Cuban and the U.S. governments to the United Nations. Even Pope Francis promised to visit Colombia if the deal was backed by voters.
Despite all the odds, when faced with the biased question “Do you support the final accord to end the conflict and to construct a stable and lasting peace?” 50.24% of those who went to the polls said NO. Why?
Read more at https://www.cato.org/blog/some-reasons-why-colombians-rejected-peace-deal
2017-04-04
Cato: Why Refugees Find Jobs Faster in the U.S. Than Germany
Since Germany first accepted more than a million asylees into its country, the successes and failures of the decision were bound to reverberate around the world. Yet despite this openness at the borders, Germany remained stubbornly closed inwardly, delaying the integration of the people it chose to accept. Most importantly, it retained employment restrictions that prevent asylum seekers from obtaining the jobs they need to survive. Fortunately, America has a much better system with much greater success.
In 2015, Germany waited the longest of any country in Europe to restrict the flow of asylum seekers from the Middle East. Yet once they arrived, the asylees who immediately sought work in Europe’s largest economy were greeted by bureaucracy. The law initially forbade asylees from seeking work for 9 months after their arrival, but was reduced to 3 months in November 2014. Then, inexplicably, at the height of the inflows, the German government banned working if the asylee was forced to stay a reception center, which could be up to 6 months.
After the initial waiting period, asylees did not receive unrestricted employment authorization. Instead, they would have to find a “concrete” job offer—i.e. a firm must promise to hire them if the permit is granted—then apply for authorization. Even then, companies can only hire them during the first 15 months if the jobs are offered first to EU residents, and the federal labor department agrees that no one was willing to take. They also set asylee wages, which can price out low-skilled workers.
The hoops don’t end there. Asylees still have to get the approval of the immigration office at the municipal level. Under the law, it would take four years before they could compete equally with EU citizens.
Read more at https://www.cato.org/blog/why-refugees-find-jobs-faster-us-germany
In 2015, Germany waited the longest of any country in Europe to restrict the flow of asylum seekers from the Middle East. Yet once they arrived, the asylees who immediately sought work in Europe’s largest economy were greeted by bureaucracy. The law initially forbade asylees from seeking work for 9 months after their arrival, but was reduced to 3 months in November 2014. Then, inexplicably, at the height of the inflows, the German government banned working if the asylee was forced to stay a reception center, which could be up to 6 months.
After the initial waiting period, asylees did not receive unrestricted employment authorization. Instead, they would have to find a “concrete” job offer—i.e. a firm must promise to hire them if the permit is granted—then apply for authorization. Even then, companies can only hire them during the first 15 months if the jobs are offered first to EU residents, and the federal labor department agrees that no one was willing to take. They also set asylee wages, which can price out low-skilled workers.
The hoops don’t end there. Asylees still have to get the approval of the immigration office at the municipal level. Under the law, it would take four years before they could compete equally with EU citizens.
Read more at https://www.cato.org/blog/why-refugees-find-jobs-faster-us-germany
2017-04-03
Cato: Of Millionaire “Fugitives” and the Rule of Law
Megaupload.com was once the 13th most popular website on the internet, with more than 82 million unique visitors and a billion total page views during its seven-year operation. The site allowed people to store files on the cloud for later use—and some users inevitably stored copyrighted TV shows, films, songs, and software. In 2012, the U.S. government charged the site’s owner, Kim Dotcom, and its operators with conspiracy to commit copyright infringement. The defendants are currently resisting extradition to the United States (Dotcom lives in New Zealand), as is their right under extradition treaties.
In 2014, the seemingly frustrated government moved to seize the defendants’ considerable assets in a civil-forfeiture action, claiming that the assets are probably connected to the alleged criminal activity. The government had a major problem, however, as the assets that they were seeking to seize were not located in the United States, but in Hong Kong and New Zealand. Under traditional rules of in rem jurisdiction—a legal theory that allows courts to gain jurisdiction over property—the court must have “control” over the property to entertain the claims, which the district court did not have in this case.
The district court, however, ignored fundamental principles of statutory construction, and agreed with the government’s argument that a federal statute—conferring only venue to the district courts in cases where property was located outside of the United States—also expanded the court’s jurisdiction and fundamentally altered the traditional requirement that courts have control over the property to assert jurisdiction over it.
This misreading of the statute also created a serious constitutional issue under Article III. It is a fundamental constitutional rule that federal courts can’t issue mere “advisory” opinions. When a court lacks control over property located in a foreign country, it necessarily relies on another sovereign to enforce that order, making it advisory as to how the other sovereign should enforce the judgement.
Read more at https://www.cato.org/blog/millionaire-fugitives-rule-law
In 2014, the seemingly frustrated government moved to seize the defendants’ considerable assets in a civil-forfeiture action, claiming that the assets are probably connected to the alleged criminal activity. The government had a major problem, however, as the assets that they were seeking to seize were not located in the United States, but in Hong Kong and New Zealand. Under traditional rules of in rem jurisdiction—a legal theory that allows courts to gain jurisdiction over property—the court must have “control” over the property to entertain the claims, which the district court did not have in this case.
The district court, however, ignored fundamental principles of statutory construction, and agreed with the government’s argument that a federal statute—conferring only venue to the district courts in cases where property was located outside of the United States—also expanded the court’s jurisdiction and fundamentally altered the traditional requirement that courts have control over the property to assert jurisdiction over it.
This misreading of the statute also created a serious constitutional issue under Article III. It is a fundamental constitutional rule that federal courts can’t issue mere “advisory” opinions. When a court lacks control over property located in a foreign country, it necessarily relies on another sovereign to enforce that order, making it advisory as to how the other sovereign should enforce the judgement.
Read more at https://www.cato.org/blog/millionaire-fugitives-rule-law
2017-04-02
Cato: You Have a Constitutional Right to Record Public Officials in Public
Millions have watched cellphone videos of police violating Americans’ rights. United States Customs and Border Protection (“CBP”) is trying to make sure the same doesn’t happen to them by banning video and photography—not in secure spaces or regarding special operations, but out in the open in the ordinary court of business.
In a case out of California, two citizens were taking pictures of border crossings from public sidewalks of what they believed were environmental problems and unlawful searches. CBP agents saw them, arrested them, seized their cameras, and deleted their pictures. The district court acknowledged that the recordings were protected by the First Amendment but found the government’s reasons for suppressing them to be so compelling that individual constitutional rights could be ignored in the name of national security.
Now before the U.S. Court of Appeals for the Ninth Circuit, Cato has filed an amicus brief supporting the photographers’ ability to record government officials in public. Americans have a First Amendment right to record law enforcement agents because it’s a way of accurately depicting government operations. The ability to describe government operations allows citizens to criticize those actions and petition for redress of grievances—a core purpose of the First Amendment. Even a Homeland Security report on “Photographing the Exterior of Federal Facilities” recognizes “that the public has a right to photograph the exterior of federal facilities from publically accessible spaces such as streets, sidewalks, parks and plazas.”
Read more at https://www.cato.org/blog/you-have-constitutional-right-record-public-officials-public
In a case out of California, two citizens were taking pictures of border crossings from public sidewalks of what they believed were environmental problems and unlawful searches. CBP agents saw them, arrested them, seized their cameras, and deleted their pictures. The district court acknowledged that the recordings were protected by the First Amendment but found the government’s reasons for suppressing them to be so compelling that individual constitutional rights could be ignored in the name of national security.
Now before the U.S. Court of Appeals for the Ninth Circuit, Cato has filed an amicus brief supporting the photographers’ ability to record government officials in public. Americans have a First Amendment right to record law enforcement agents because it’s a way of accurately depicting government operations. The ability to describe government operations allows citizens to criticize those actions and petition for redress of grievances—a core purpose of the First Amendment. Even a Homeland Security report on “Photographing the Exterior of Federal Facilities” recognizes “that the public has a right to photograph the exterior of federal facilities from publically accessible spaces such as streets, sidewalks, parks and plazas.”
Read more at https://www.cato.org/blog/you-have-constitutional-right-record-public-officials-public
2017-04-01
Cato: The “Pardon Snowden” Case Just Got Stronger
Yesterday, the Department of Justice Inspector General (DoJ IG) issued a long overdue Congressionally-mandated report on FBI compliance with the PATRIOT Act’s Section 215 “business records” provision between 2012 and 2014. It is the first such report issued that covers the initial period of Edward Snowden’s revelations about widespread domestic mass surveillance by the federal government. Since his indictment for leaking the information to the press, Snowden’s lawyers have argued that he should not be prosecuted under the WW I-era Espionage Act because his revelations served the public interest. The DoJ IG report provides the clearest evidence yet that Snowden’s lawyers are correct.
Read more at https://www.cato.org/blog/pardon-snowden-case-just-got-stronger
Read more at https://www.cato.org/blog/pardon-snowden-case-just-got-stronger
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