Americans with Attitudes: Smuggling in Colonial America

posted by George H. Smith at http://www.libertarianism.org/publications/essays/excursions/americans-attitudes-smuggling-colonial-america

Since the seventeenth century American commerce had been regulated by a complex system of British laws. The basic idea behind this “mercantile system,” as Adam Smith called it—or “mercantilism,” as it was later called—was fairly simple. The colonies were to produce raw materials, many of which could be shipped only to Britain, and Britain, in turn, would produce finished products to sell to the colonies.
During the 1720s and 1730s, while Robert Walpole was the English Prime Minister, many of the trade laws were loosely enforced, if at all. Walpole’s motto, “Let sleeping dogs lie,” was reflected in his attitude toward the American colonies. A free-trader at heart, Walpole allowed the Board of Trade, the enforcement arm of mercantilism, to languish. And to the important position of Secretary of State for the Southern Department, Walpole appointed the like-minded Thomas Pelham, Duke of Newcastle.
The Duke of Newcastle was responsible for American affairs. More interested in the patronage of his office than in enforcing commercial regulations, Newcastle pursued a policy which the Irish statesman Edmund Burke later called “salutary neglect.” That is to say, Newcastle pretty much left the colonies alone, allowing customs officials to take bribes in exchange for looking the other way. In the view of Burke and other proponents of free trade, this neglect—or “corruption,” as some called it—allowed both Americans and Britons to prosper. It was said that Newcastle had a closet-full of unopened dispatches from colonial governors who were complaining about American lawlessness.
As a result of salutary neglect, smuggling was rampant in the colonies, and most Americans saw nothing wrong with it. They did not look kindly on government interference with their commercial activities. They agreed with Thomas Jefferson that free trade is a “natural right.”
For example, in 1756 and 1757, some 400 chests of tea were imported into Philadelphia, but only sixteen were imported legally. Indeed, three-quarters or more of the tea consumed by Americans was illegal. In 1763, the British government estimated the value of commodities smuggled into the colonies at 700,000 pounds annually, an enormous sum at that time.
The preference for inexpensive tea was not peculiar to Americans. Over half the tea consumed in England was smuggled, and English smugglers, like their American counterparts, could get quite indignant when their free-trade activities were interrupted by government. Consider this reaction of an English smuggler when his vessel was boarded and his men arrested by Captain Bursack of the Speedwell, a British revenue cutter. The captain of the smugglers was not aboard when this happened, but he made his feelings known in a letter to Captain Bursack:

Sir: Damn thee and God damn thy two purblind eyes thou bugger, thou death-looking son of a bitch. O, that I had been there (with my company) for thy sake when thou tookest them men of mine on board the Speedwell cutter on Monday, the 14^th of December. I would drove thee and thy gang to Hell where thou belongest, thou Devil incarnet. Go down, thou Hell Hound, unto they kennel below and bathe thyself in that sulphurous lake that has been so long prepared for such as thee, for it is time the world was rid of such a monster. Thou art no man but a devil, thou fiend. O Lucifer, I hope thou will soon fall into Hell like a star from the sky, there to lie unpitied and unrelented of any for ever and ever, which God grant of his infinite mercy. Amen.

The period of salutary neglect came to end during the Seven Years’ War (1756-63)—known in America as the French and Indian War—when many American merchants engaged in trade with the French. Trading with the enemies of Britain during wartime was something of a tradition among the colonials. During an earlier war, for instance, American merchants used neutral ports in the Caribbean to exchange their provisions for French molasses, while bribing customs officers to obtain false clearance papers.
One method of trading with the enemy was especially popular in Rhode Island, the smuggling capital of America. Flags of truce were used to exchange prisoners, and merchants found that these could be purchased at reasonable prices from colonial governors. Then, after hiring some men who spoke French to pose as prisoners, and sailing under flags of truce, American merchants traded with the French West Indies. In 1748, an American wrote to a correspondent in Amsterdam:

The sweets of the French trade by way of flags of truce has put me upon turning my navigation that way, which is the most profitable business I know of. But, my friend, of this you must not lisp a word.

This illegal trade continued during the Seven Years’ War, especially during its later phase when inhabitants of the French West Indies were desperate for food. Merchants from Newport, Boston, New York, Philadelphia, and other ports carried foodstuffs to the enemy for handsome profits.
Pennsylvania’s wartime governor, William Denny, conducted a brisk trade in flags of truce. He sold so many that by 1759 the flags were traded openly on the New York market.
This wartime commerce with the enemy infuriated British military commanders, but it was difficult to stop. Smugglers were typically acquitted by sympathetic American juries, and informing on a smuggler could prove dangerous. When a New Yorker wrote an article that implicated two justices of New York’s Supreme Court in the nefarious traffic, newspapers refused to print it. Then the informer was hauled in a cart through the streets, pelted with filth, and thrown in jail.
Americans continued their smuggling ways after the close of the Seven Years’ War in 1763. An English writer commented on the widespread violation of trade laws:

It was a matter of astonishment to observe what little care was taken to enforce the laws. The breaches openly committed against the Acts of Trade, and the shameful prostitution of office which prevailed in most of the ports on the Continent, could not escape the notice of the most superficial observer. The merchants had commonly undertaken these voyages which afforded the greatest prospect of gain, without any further regard to their illegality than that the Custom House must be silenced, by what means was but too obvious.

The loyalist Peter Oliver, former Chief Justice of the Superior Court of Massachusetts, recalled with horror how religious and upstanding merchants smuggled with a clear conscience. One prominent merchant, after sailing his ship full of contraband into Boston Harbor, would appear at the customhouse before it opened in the morning. He would raise a hand and swear that anything else he swore that day would be untrue. Then, after the customhouse opened for business, this merchant would swear before an officer that his contraband-laden ship contained no contraband.
Oliver related how another merchant solved the problem of swearing under oath that he was not smuggling:

Another Captain boasted, that he had evaded the law, by writing two manifests of his cargo, one of which contained the contraband goods he had on board, and in the other manifest those goods were left out. He then went to the customhouse and stuck the true manifest in the sleeve of that hand which he was to hold up in swearing, and delivered the false manifest to the Officer, and swore the manifest to be a true one, meaning that which was in his sleeve.

In 1763, Prime Minister George Grenville cracked down on bribery and illicit trade. Eight warships and twelve armed sloops were sent to patrol American waters and pull in smugglers. Previously, many customs officers had remained in England while sending low-paid underlings to America to do the dirty work. Grenville ordered these officers to take up their posts in America or resign. They would be fired immediately if they neglected their duties.
Grenville was just getting started. Customs duties had been designed to regulate the flow of trade, not to raise revenue. Indeed, the trade laws cost four times more to enforce than they brought in, so Grenville set to work on a long list of proposals to raise revenue and curtail smuggling. In 1764, Parliament enacted these proposals, commonly called the Sugar Act, into law.
Six sections of the Sugar Act dealt with new taxes, and over forty additional sections were devoted to far-reaching changes in commercial regulations, including rigorous methods of enforcement. These regulations were a bureaucratic nightmare that greatly increased the cost of doing business and, in some cases, made compliance for merchants engaged in intercolonial trade nearly impossible. Any small vessel engaged in inland trade would probably be guilty of some violation or other, even when there was no criminal intent. This left the door open for racketeering by customs officers who lined their pockets by seizing vessels for technical violations.
The Sugar Act facilitated this abuse by implementing new guidelines for prosecuting accused smugglers. The owner of a seized vessel had to pay the cost of his trial in advance or forfeit everything. Even if he was exonerated, the owner could not recover these court costs. Nor could he sue a customs officer, so long as the judge certified that the seizure had been made with probable cause. To make matters worse, the government did not have to present evidence of fraud. The owner was presumed guilty and had to prove his innocence.
Armed with these legal weapons, some customs officers declared open season on American commerce. Such was the case with the rapacious Daniel Moore, Collector of Customs for Charleston. Moore harassed small merchants in South Carolina ports. When some merchants sued Moore and won, he vowed revenge, declaring that he would “sweat the merchants at law with their own money.”
Moore was as good as his word. He seized a small vessel, the Active, and dragged its owner into a vice-admiralty court, which operated without a jury. The owner of the Active was cleared of all charges; but Moore, according to the judge, had seized the vessel with probable cause, so the owner was assessed court costs in the amount of 150 pounds—nearly double the value of the vessel itself. This is what Moore meant by sweating merchants at law with their own money.
Even rigorous enforcement of the Sugar Act could not always shield customs officers from the wrath of irate Americans. This was especially true in Rhode Island where, unlike most other colonies, the governor was elected by popular vote, not appointed by the Crown. Moreover, when a customs officer caught a smuggler red-handed he had to face a judge and prosecuting attorney who were native Rhode-Islanders—men sympathetic to the cause of free trade. The judge might call a trial on short notice when he knew the customs officer was far away and unable to testify, thereby resulting in a dismissal for lack of evidence. Or if a judge had no choice but to convict a smuggler and confiscate his ship, he might later sell the vessel back to the smuggler for a fraction of its true value. But the simplest way to keep the wheels of commerce turning was to grease the eagerly outstretched palms of customs officers.
As these and many similar examples illustrate, Americans who had grown accustomed to decades of “salutary neglect” deeply resented the post-war efforts of the British government to impose taxes—especially when those taxes were raised for the express purpose of maintaining 10,000 British troops in the colonies. As much as historians delight in tracing the influence of political philosophers, such as John Locke, on American thinking, there can be little doubt that no sophisticated ideological foundation was needed to motivate many Americans to evade British laws and even to resist their enforcement with violence.
So why did so many average Americans eventually leave their homes to fight against the British? One perspective was given by Captain Preston, an American who had fought the British at Concord on April 19, 1775. In 1842, this ninety-one-year-old veteran was interviewed by a twenty-one-year-old reporter. The young reporter apparently expected to hear stories of unjust taxes and oppression, and of revolutionaries schooled in theories of liberty. What he got was far different, and more to the point:

Reporter: “Captain Preston, did you take up arms against intolerable oppressions?”
Preston: “Oppression? I didn’t feel them.”
R: “What, were you not oppressed by the Stamp Act?”
P: “I never saw one of those stamps. I certainly never paid a penny for one of them.”
R: “Well, what then about the tea tax?”
P: “I never drank a drop of the stuff; the boys threw it all overboard.”
R: “Then I suppose you had been reading Harrington or Sidney or Locke about the eternal principles of liberty?”
P: “Never heard of ‘em. We read only the Bible, the Catechism, Watts’ Psalms, and the Almanac.”
R: “Well, then, what was the matter? And what did you mean in going to this fight?”
P: “Young man, what we meant in going for those redcoats was this: We always had governed ourselves, and we always meant to. They didn’t mean we should.”

President Obama's Top 10 Constitutional Violations

by Ilya Shapiro at www.cato.org

One of the biggest political changes that 2011 brought — in large part due to the tea parties and their effect on the 2010 election — is the centrality of the Constitution to our public discourse. Lawmakers and citizens no longer consider simply whether a given bill or policy proposal is a good idea but whether it is constitutional. "Where does the government get the power to do that?" is often critics' rallying cry.

That's a healthy development. For far too long, even in those rare moments when politicians were faced with constitutional concerns, they've had the attitude Nancy Pelosi did when asked about the authority for Obamacare's individual mandate: "Are you serious?" Because, of course, constitutional arguments are the last refuge of the scoundrel who has no good policy arguments to make or political power to levy.
And so it's a good thing that Americans are taking their founding document seriously. After all, the Constitution is the font of all federal power. Its carefully crafted structural provisions that we learned about in grade school, such as the separation of powers and checks and balances, are not merely an application of political theory.
"Federalism is more than an exercise in setting the boundary between different institutions of government for their own integrity," Justice Anthony Kennedy wrote for a unanimous Supreme Court earlier this year. "By denying any one government complete jurisdiction over all the concerns of public life," Kennedy continued, "federalism protects the liberty of the individual from arbitrary power." If the federal government acts outside the scope of its delegated and carefully enumerated powers, then it's no better than an armed mob.
The Obama administration and its allies in Congress have perpetrated more than their share of such mob-like actions. While it's hard to narrow them down, here's my stab at the government's top 10 constitutional violations since President Obama took office.
1. The individual mandate
No list of President Obama's constitutional violations would be complete without including the requirement that every American purchase health insurance, on penalty of civil fine. The individual mandate is unprecedented and exceeds Congress's power to regulate interstate commerce. If it is allowed to stand, Congress will be able to impose any kind of economic mandate as part of any kind of national regulatory scheme. Fortunately, the Supreme Court has a chance to strike this down during its current term.
2. Medicaid coercion
The Court will also be taking up Obamacare's massive intrusion on federal-state relations in the form of a coercive Medicaid expansion. The law compels states to drastically increase their Medicaid expenditures and reorganize their health care bureaucracies, on penalty of losing all (not just additional) Medicaid funds. No state contemplated such a program when it signed onto Medicaid — Arizona was the last to join, in 1982 — and now no state can afford to withdraw. Indeed, even if some withdrawal mechanism existed, withdrawn states' taxpayers would still be funding complying states' Medicaid programs. As the Supreme Court held in South Dakota v. Dole, there comes a point when "the financial inducement offered by Congress might be so coercive as to pass the point at which pressure turns into compulsion."
3. The Independent Payment Advisory Board (a.k.a. "The Death Panel")
IPAB is the group of 15 presidential appointees who, beginning in 2014, are tasked with reducing Medicare spending. Any decisions IPAB makes automatically become law that can only be overridden by a three-fifths majority vote in the Senate. Unlike other federal agencies, IPAB is subject to no external review — no public notification in advance of proposed rules or opportunity for comment, no administrative guidelines and no judicial review. Medicare comprises about 13 percent of the federal budget, so that's an awesome amount of power for Congress to delegate to unelected executive-branch bureaucrats. Indeed, it's so basic a violation of traditional separation of powers that there's no historical analog. The Goldwater Institute has filed a strong lawsuit challenging this (yet another) unprecedented aspect of Obamacare, which will continue wending its way through the lower courts regardless of how the Supreme Court rules on the individual mandate and Medicaid-coercion issues.
4. The Chrysler bailout
Building on the Bush administration's illegal use of TARP funds to bail out the auto industry, the Obama administration bullied Chrysler's secured creditors — who were entitled to "absolute priority" — into accepting 30 cents on the dollar, while junior creditors such as labor unions received much more. This subversion of creditor rights violates not just bankruptcy law but also the Constitution's Takings and Due Process Clauses. This blatant crony capitalism — government-directed industrial policy to help political insiders — discourages investors and generally undermines confidence in American rule of law.
5. Dodd-Frank
Intended to remedy weaknesses in the U.S. financial system — ensuring transparency and accountability — the Dodd-Frank financial "reform" empowered unlimited, unreviewable and often secret bureaucratic discretion. The administrative bodies the legislation created face no constraints on the exercise of arbitrary authority. For example, the Treasury Department now has broad and essentially unchecked power to seize banks and other financial entities that it determines are unsound but "too big to fail." The new Consumer Financial Protection Bureau and Financial Stability Oversight Council, meanwhile, craft, execute and interpret their own law. Due process and separation of powers issues abound.
6. The deep-water drilling ban
Following the Deepwater Horizon oil spill, the Interior Department issued a blanket six-month moratorium on new oil and gas drilling in the Gulf of Mexico. A federal judge struck down that moratorium as arbitrary and capricious, but the government issued a new order to replace the one that was struck down. That order was subsequently withdrawn, but the judge was so shocked by the administration's conduct that he found the government in civil contempt of court.
7. Political-speech disclosure for federal contractors
In April of this year, President Obama released a draft executive order (still pending) that would require businesses with federal contracts to disclose independent expenditures on federal elections (political speech independent of candidates and parties). This order is intended to undermine the Supreme Court's Citizen United decision — allowing independent expenditures by corporations, unions and other associations — by discouraging federal contractors and their executives from engaging in political speech. Citizens United held that such expenditures do not enable the kind of quid pro quo corruption that campaign finance laws are allowed to regulate, so this draft executive order shows contempt for the First Amendment by chilling protected speech.
8. Taxing political contributions
Earlier this year, the IRS tried to muzzle political speech by asserting that donations to certain nonprofit advocacy groups (so-called 501(c)(4) organizations) would be subject to the gift tax. Historically, the IRS has not applied the gift tax in this way — donations to advocacy groups are not likely to be used to circumvent the estate tax — and when the IRS previously tried to tax political donations, it was rebuffed by the courts on the grounds that such transfers are not gifts (i.e., the donor is getting something in return). The IRS has since backed down, but the suspicion remains that it was trying to chill the political speech of those opposed to President Obama's policies, in violation of the First Amendment.
9. Graphic tobacco warnings
Late last year, the FDA issued regulations requiring cigarette manufacturers to display graphic warnings on all packs of cigarettes that must cover at least 50% of the packaging and graphically portray tobacco-related illnesses. These warnings violate the First Amendment because the government is compelling the cigarette manufacturers to discourage their customers from buying their lawful products. Last month, a federal judge blocked the new regulation, which was due to go into effect in January, but the administration is appealing.
10. Health care waivers
The Department of Health and Human Services has granted nearly 2,000 waivers to employers seeking relief from Obamacare's onerous regulations. Nearly 20 percent of these waivers went to gourmet restaurants and other businesses in Nancy Pelosi's San Francisco district. Nevada, home to Senate Majority Leader Harry Reid, got a blanket waiver, while Republican-controlled states like Indiana and Louisiana were denied. Even beyond the unseemly political favoritism, such arbitrary dispensations violate a host of constitutional and administrative law provisions ranging from equal protection to the "intelligible principle" required for congressional delegation of authority to cabinet agencies. Unlike 17th-century English monarchs, American presidents were not granted dispensing powers: As we've seen, the power to suspend a legal requirement can and will be used to arbitrarily favor the politically connected. Moreover, most of these waivers were never authorized by Congress in the first place!

After the Supercommittee?

by Daniel J. Mitchell at www.cato.org

Taxpayers just dodged a bullet. Even though Republicans on the so-called supercommittee were willing to break their promises and support a tax hike, a 1990-style budget deal was not possible because Democrats demanded too much and offered too little in exchange.

This is good news for fiscal responsibility. Simply stated, any agreement would have been a typical inside-the-Beltway pact featuring real tax hikes and empty promises of future spending cuts. And if the 1990 tax-hike deal is any indication, that would have resulted in more red ink rather than less.
Moreover, the supercommittee's failure means that we get sequestration, which is a budget-wonk term for automatic reductions in the growth of spending.
Not that we should get too excited. The way the law is written, these automatic cuts don't begin until 2013. Even more important, they're "cuts" only if you use dishonest Washington budget math. In reality, spending will climb by nearly $2 trillion by 2021 if we have a sequester. Without the sequester, it will increase by about $2.1 trillion, so at least there could be a small shift in the right direction.
But the sequester isn't a sure thing. It might be derailed if pro-defense Republicans link arms with pro-redistribution Democrats and vote to cancel the money-saving provision.
Hawks on Capitol Hill correctly complain that defense would be disproportionately affected because the Pentagon accounts for less than one-fourth of the federal budget but would have to absorb about one-half of the sequester. As such, the defense budget would climb by only about $90 billion over the next ten years, which may wind up being less than inflation.
It does not require much imagination to see how a coalition could be formed to spend more money. President Obama has threatened to veto any legislation to cancel the sequester, but nobody believes him. And even if he were serious, politicians on Capitol Hill could do a back-door repeal of the sequester by padding other spending bills.
Another threat is that the crowd in Washington may resuscitate one of the many tax-hike plans that were proposed earlier this year. This includes the Gang of Six, Simpson-Bowles, and Domenici-Rivlin.
These plans are dangerous because many Republicans (regardless of the no-tax-hike pledge) are susceptible to a deal so long as something is being done to address entitlement costs and so long as the tax hikes are not based on class-warfare ideology. And all of the aforementioned plans satisfy these criteria.
To understand what's really happening, it helps to discard the usual Republican and Democrat labels and realize that there are several different camps in Congress, none of which has the ability to push through policy measures without help from at least one other group..
The hard-left ideologues: This group of congressional crazies shares the views of the Obama administration, Paul Krugman, and the Occupy Wall Street crowd. They want much bigger government with no real entitlement reform and lots of class-warfare tax hikes. Think Greece.
The rational Left: This is the most accurate description of the Gang of Six, Simpson-Bowles, and Domenici-Rivlin. They accept bigger government, but are willing to at least tinker with entitlements and also want to raise taxes in ways that don't do as much damage. Think Sweden.
The big-government Republicans: These are the so-called compassionate conservatives, who side with the rational Left if they get some political cover but sometimes will support smaller government if they get pressure. Think England.
The Reaganites: Mostly the members of the House Republican Study Committee and Senate Steering Committee, they support fiscal restraint, entitlement reform, and lower taxes. Think Hong Kong.
In this admittedly oversimplified analysis, every group is willing in certain situations to join forces with the adjoining group. This is why some of the tax-hike plans pose a clear and present danger. There are plenty of big-government Republicans, for instance, who are willing to ally themselves with the rational Left and support a big tax hike. Fortunately, Obama and the hard Left are saving us from that fate.
While this seems like a very discouraging situation for fiscal conservatives, the 2012 elections almost surely will bring in more Reaganites. This doesn't preclude an alliance of the rational Left and big-government Republicans, but it does make it more difficult (thank God for Grover's tax pledge).
Shifting from theory to reality, the real challenge for fiscal conservatives is figuring out how to adopt something akin to the Ryan budget. That means no tax increases, genuine spending cuts, and real entitlement reforms (i.e., not the policies promoted by the rational Left, such as unsustainable price controls or back-door tax hikes via means testing).
Sadly, there is no way for such a budget to be enacted in 2011 or 2012. And it may not happen in the four years after that. That would be both frustrating and worrisome — particularly since every year of delay brings us closer to European-style fiscal chaos.
But for fiscal conservatives there is no possible compromise with either the hard Left or the rational Left. Both of those camps want bigger government. Both want higher taxes. And both oppose real entitlement reform. The only real debate on the Left is how quickly to race in the wrong direction.

Let the Boss Decide What to Do

by Patrick Basham at www.cato.org

If the nation's public health mandate is to produce a significantly lower level of obesity in the near term, the use of discrimination by employers is a perfectly logical and defensible instrument to employ in such a war on fat. The painful and inconvenient truth is that any rapid reduction in the number of obese Americans would require the private sector to discriminate against, rather than in favor of, the obese.

Instead of expensive lawsuits, counterproductive fat taxes and endless lists of (ignored) nutritional information, we should allow employers, insurers and other institutions to act toward the obese as they see fit.
The thinner path was first mapped out in 2002, when Southwest Airlines initiated a policy of requesting that its largest passengers — those who require two seats on an airplane — purchase two tickets. This was a common sense solution to a growing problem, one that was achieved without government interference or fiat. However, today many states are preventing private health insurers from charging overweight and obese clients higher premiums, which effectively removes any financial incentive for maintaining a healthy lifestyle.
Why is employer-driven discrimination the correct approach? First, this policy would place the costs for being overweight squarely on individuals, giving them stronger incentives to slim down. Second, since most employers want a healthy workforce, it would give them an incentive to help employees control their weight, perhaps by restricting what is served in the company cafeteria, or offering exercise facilities.
Such marketplace-driven discrimination is clearly within the rights of private sector employers. If it turns out that such discrimination actually, if mistakenly, punishes otherwise productive and healthy employees, the marketplace will punish the discriminating company. Morale among overweight employees will plummet and competing firms will reap the economic benefit of retaining, hiring and indulging the obese, especially if consumers are also morally offended and choose to vote with their wallets against such discriminatory practices.
The decision to discriminate — or not — is a decision for each individual employer to make according to his or her own economic calculation and moral judgment. Critically, the employer should exclusively bear and enjoy the respective costs and benefits of that private decision.

FDA Considers Mandatory Salt Reductions

Posted by Walter Olson at http://www.cato-at-liberty.org/fda-considers-mandatory-salt-reductions/


With little publicity, the federal Food and Drug Administration has begun laying groundwork for one of the more audacious regulatory initiatives of the Obama administration: mandatory reductions in the salt content of processed foods in the supermarket aisle and at restaurants.
In a September 15 “Request for Comments, Data, and Information” (PDF) published in the Federal Register, the FDA solicits from the public “comments, data, and evidence relevant to the dietary intake of sodium as well as current and emerging approaches designed to promote sodium reduction.” Among the specific ideas it has in mind: setting federally prescribed “targets” for “stepwise” reductions in the amount of salt allowable in various foods, the phased nature of the reductions indicated because consumers’ “taste preference for sodium is acquired and can be modified.”
Various government programs (notably in Mayor Bloomberg’s New York City) already arm-twist producers into supposedly voluntary reductions, but the FDA notice hints broadly that voluntary measures will not suffice. Its public comment period ends next Tuesday, November 29; let’s hope the agency gets an earful from citizens about the importance of freedom and consumer choice.
As I noted last month in a Cato podcast with interviewer Caleb Brown, the FDA’s new initiative plunges it deeper into social engineering than it has gone in the past. It’s one thing to limit adulteration or contamination of foods, or the use of mysterious chemical additives; it is another to order the reformulation of recipes to reduce intake of a substance that 1) occurs naturally in virtually all foods; 2) is beneficial to health in many circumstances; and 3) has been sought out and purposely added to the human diet through recorded history.
As the FDA acknowledges, salt is far more than a flavor enhancer, capable of such miracles as turning vegetable soup into something small children will gladly eat. It also continues to be (as it has been through history) vital in preventing a wide range of bacterial spoilage and food poisoning dangers in the food supply. It also assists with texture, appearance, and shelf life. Consumers notice when it is missing, as Campbell’s found when it was forced by lagging sales to restore salt to its Select Harvest soup line, and as H.J. Heinz found when it faced a consumer revolt in Britain after reformulating its HP Sauce at the urging of the British government (see Telegraph and Daily Mail accounts).
As I noted a while back, the government’s dietary advice has changed often through the years, and its recommendations in retrospect have regularly proved to be unfounded and even damaging. Sure enough, reports have begun to come out that the salt panic has been exaggerated and may even pose some health dangers of its own. “New review questions benefit of cutting down on salt,” reported Reuters about a new review of more than 160 scientific studies published in the American Journal of Hypertension. “It’s time to end the war on salt,” per a July Scientific American article by Melinda Wenner Moyer.
And as for post-Thanksgiving dieting? As Reader’s Digest points out, eating more produce and less processed food is known to be a healthy step, and will much reduce your sodium intake. In the mean time, you can file comments here about whether you’d like to go on making these choices yourself, or have FDA Commissioner Margaret Hamburg make them for you.

Mandatory Medical Malpractice Caps Hurt Patients

by Shirley Svorny at www.cato.org

The U.S. Senate is set to consider on the Republicans' Jobs Through Growth Act, which contains a section aimed at reforming medical malpractice by imposing caps on economic and non-economic damages similar to those in place in Texas. Texas limits non-economic and exemplary (punitive) damages in all cases, and limits what relatives can get in cases of wrongful death. An obvious disturbing consequence is that caps reduce compensation to severely-injured individuals. Caps would hurt consumers in a second way — lower damage awards would reduce medical professional liability insurers' financial incentives to reduce practice risk.

Much of the protection consumers have against irresponsible and negligent behavior on the part of health care providers hinges on oversight and incentives created by the medical professional liability insurance industry. A nationwide shift to caps could result in more cases of negligence and substandard care.
Support for caps comes from individuals who see the medical malpractice system as broken, largely based on anecdotal observations. Everyone seems to have heard a story of a high verdict to a plaintiff whose claim was not valid. Yet, careful studies suggest these cases are anomalies, and the court system generally works. While there are no statistics for the country as a whole, based on the existing evidence, we can say confidently that a good chunk of initial claims (likely more than three-quarters) do not move forward because no negligence was involved. The vast majority of cases that do move forward settle.
This means that court signals from earlier trials are clear. If court awards were random, one would expect many more cases to go to court as there would be an expectation of an award even where there was no negligence. Many cases go to court because plaintiffs think they have a case when they do not. We know this because plaintiffs rarely win; less than a quarter of all cases that go to court are resolved in favor of the plaintiff. At least one study found court findings of negligence lined up with assessments by impartial reviewing physicians.
Critics of the legal system point out that many cases of negligence are not reported or adjudicated. However, every review has found claims are concentrated among a very small subset of physicians; less than five percent of physicians are responsible for the overwhelming share of claims. Even if a large percentage of negligent actions are not reported, it would seem that the present system works in identifying physicians whose practice patterns put patients at risk.
For the system to work to reduce practice risk, malpractice premiums must be experience rated — physicians who exhibit risky behaviors must face higher malpractice insurance premiums than their less-risky peers. The conventional wisdom among health policy experts has been that experience rating does not occur. But this is not true: high-risk physicians pay up to 500% more for insurance than their less-risky peers.
Insurance companies specialize. Some only insure physicians with spotless records. Others, the surplus lines carriers, specialize in underwriting the highest-risk physicians — at any given time between two and ten percent of practicing physicians. As one broker put it, because it is so costly, being forced into the surplus lines market gets a physician's attention and motivates efforts to reduce practice risk.
New procedures are often left to surplus lines carriers to underwrite, adding a layer of oversight to the introduction of new procedures such as Lasik eye surgery and laparoscopic gallbladder surgery. On rare occasions, carriers deny coverage, which precludes affiliation with most hospitals and health maintenance organizations — which effectively means these really risky physicians are forced out of practice, which is exactly the desired result.
Beyond individual underwriting to identify at-risk physicians, the medical professional liability insurance industry makes significant contributions to risk reduction in other ways. Companies offer premium discounts to physicians who take risk management seminars. The Physicians Insurers Association of America's Data Sharing Project identifies risky practice patterns. High insurance premiums motivated anesthesiologists to evaluate the risk associated with their practice patterns. As a result, anesthesiology is much safer than it used to be. Some insurers visit physician offices to evaluate safety and risk.
In 1992, when Congress tried to "help" community and migrant health centers by taking on their malpractice risk, many of the health centers resisted, lamenting the loss of the risk-management services the private carriers supplied.
Under the current system, liability motivates these efforts to reduce risk. Reducing liability, as caps do, is rarely a good idea in any situation. Placing caps would reduce malpractice insurers' incentives to oversee physician practice patterns and reduce incentives to manage risk in our health care system, and make health care that much riskier for all of us.

Should Thomas or Kagan Recuse Themselves Over ObamaCare?

Posted by Roger Pilon at http://www.cato-at-liberty.org/should-thomas-or-kagan-recuse-themselves-over-obamacare/


Today POLITICO Arena asks:

Should either Justices Thomas or Kagan recuse themselves from the ObamaCare case?

My response:
Justice Thomas is the easier case, because he had no involvement in the ObamaCare legislation or legal strategy, nor did his wife. As Tevi Troy commented in yesterday’s POLITICO, citing “alumni of the White House Counsel’s Office from several administrations,” Thomas’s ”wife’s activities would come into play only if she had a financial interest at stake in the case, which she does not.” And as Marcia Coyle and Tony Mauro noted in Monday’s National Law Journal, citing DePaul Law School’s Jeffrey Shaman, “Twenty-five years ago, they might have said judges should control their wives. But she has a right to her own life.”
Justice Kagan is a closer call. We already know her sentiments about ObamaCare from her breathless email to Harvard Law’s Laurence Tribe: “I hear they have the votes, Larry!!” But the real question is how closely she was involved in developing the legal strategy for defending the law – as head of the Justice Department office charged with that responsibility. As The Hill reported yesterday, “Emails show that Kagan’s office mounted an early and aggressive effort to prepare for legal challenges to the individual insurance mandate, but the records released so far do not contradict Kagan’s statement that she was not directly involved in the planning.” The operative words are “so far,” which is why House Judiciary Committee Chairman Lamar Smith, as POLITICO reported yesterday, “has asked the Obama administration to provide documents and internal correspondence on … Kagan’s role in defense of the health reform law.”
In the end, of course, recusal is the justice’s call. But especially in a case as important as this, the public deserves to know the facts.

The Broccoli Test

by Michael D. Tanner at http://www.cato.org

We should give it to the GOP presidential candidates.

Call it the broccoli test.
During oral arguments before the Court of Appeals for the District of Columbia Circuit on the constitutionality of Obamacare's health-insurance mandate, the Obama administration's lawyer, Beth Brinkmann, was asked whether a federal law requiring all Americans to eat broccoli would be constitutional.
"It depends," she replied. But she could certainly envision cases where it would be.

That makes her only slightly less certain than Supreme Court justice Elena Kagan, who was asked the same question during her confirmation hearings. Kagan, who will help decide the fate of Obamacare's mandate, had no doubts that a broccoli mandate would be constitutional.
Of course, it is unlikely that Congress will be mandating eating broccoli anytime soon — though given the Obama administration's ongoing concern over what we eat, who knows? But it perfectly illustrates the stakes in the Supreme Court's upcoming decision on the mandate's constitutionality.
The Left wants to pretend that this is just a case about health-care policy. You can't get to universal coverage without a mandate, they warn. Striking down the mandate may leave millions uninsured.
Those claims are debatable to say the least. But the question of the mandate is much bigger than health policy, good or bad. How the court decides will fundamentally define the boundary between government power and individual autonomy.
After all, if a government can order you to buy insurance, what can't it do?
As even the judges upholding the mandate's constitutionality have acknowledged, the government's lawyers have never been able — and have rarely tried — to articulate any limiting principle to Congress's power.
At the D.C. Circuit hearing, Brinkmann was asked whether people making more than $500,000 could be required to buy cars from General Motors to keep it in business.
"I would have to know much more about the empirical findings," she replied.
Today, we have a federal government that consumes 25 percent of GDP — and it's on its way to 42 percent by 2050. It is a government that intrudes on virtually every aspect of our daily lives — mandating, penalizing, incentivizing, criminalizing, or cajoling us to behave in a way that government thinks is best for us. If something is good, it should be required. If something is bad, it should be banned.
This ever bigger, pricier, and more intrusive government has been constructed by both the Left and Right, who want to use government to impose their versions of fairness, morality, and economic efficiency. Remember, many of the same people who are calling for the Court to strike down the individual mandate cheered when the Court upheld the federal government's right to overrule California's medical-marijuana law or struck down Oregon's right-to-die initiative.
That is why it is particular troubling that the current frontrunners for the GOP presidential nomination, Mitt Romney and Newt Gingrich, both supported a health-insurance mandate. Romney insists that he supported only a state mandate, not a federal one, which avoids the constitutional threat. But his continued defense of a state-level mandate as "a conservative idea," betrays an unhealthy affinity for government intrusion into individual decision-making. Gingrich, on the other hand, now disavows his previous support for the mandate, saying that he now believes it to be unconstitutional and unworkable. But his critique often sounds like a technocrat's objection to the outcome, rather than an understanding of the threat to liberty. And, unlike Romney, when Gingrich supported a mandate, he supported a federal one.
We can certainly hope that the Supreme Court will strike down the individual mandate and establish a firewall against unlimited government power. But regardless of how the Court ultimately rules, we should demand more. Every candidate, for every political office, should be asked what they believe is the proper role for government and where they think government power ends.
After all, a government big enough to give you everything you want, is a government big enough to make you eat broccoli.

Revisiting the ‘Christmas Tree Tax’

Posted by Tad DeHaven at http://www.cato-at-liberty.org/revisiting-the-christmas-tree-tax/


Three weeks ago, a national commotion erupted when the Drudge Report headlined a story from the Heritage Foundation on the Obama administration’s implementation of a new tax on Christmas trees. I noted here that the 1996 legislation enabling the U.S. Department of Agriculture to implement the tax received most of its support from Republicans, including co-sponsor John Boehner.
The National Taxpayers Union gives a tidy explanation of how the law almost led to the “Christmas Tree Tax”:

The Federal Agriculture Improvement and Reform Act of 1996 permitted producers of agricultural commodities such as beef, pork, or popcorn to create what are known as research and promotion programs, or “checkoffs.” These are analogous to unions: producers pay “dues” to the checkoff which works to fund research and advertising efforts on behalf of the industry represented. Board members are appointed by the Secretary of Agriculture who also has authority to enforce dues-payment. Because the dues are government-coerced, they are essentially taxes passed on to consumers.
There are currently 18 checkoff programs. And while the Obama administration quickly stopped the Christmas tree tax checkoff program from going into effect, there are still other agricultural commodity groups, such as the hardwood lumber industry, pushing for their own checkoff. There are also efforts to allow the creation of non-agricultural commodity checkoffs.

NTU notes that now another Republican wants to create a similar scheme at the Department of Commerce:

Congressman John Shimkus (R-IL) introduced H.R. 3395 to create the Concrete Masonry Products Board to promote and market concrete products. The Board would be made up of representatives of the concrete industry appointed by the Secretary of Commerce. Producers and importers of concrete masonry would initially be assessed $0.01 per concrete masonry unit sold in the United States. The Board will have authority to change the assessment rate, but it can be no higher than $0.05 per unit. The Secretary of Commerce would have authority to levy late-payment and interest charges on those producers who fail to remit an assessment.

That would be the same John Shimkus who received a “Taxpayer Hero” award from the Council for Citizens Against Government Waste in October. Carrying water for a special interest at the expense of consumers is not what I would consider to be an act of heroism. Worse, granting this authority to the Department of Commerce would add another layer of cement to the foundation (pun intended) of a bureaucracy that one former Commerce secretary derided as “nothing more than a hall closet where you throw in everything that you don’t know what to do with.” Fortunately, the bill only has two co-sponsors (Republican Rep. Richard Hanna of New York is one of them), so it’s probably not going anywhere.
Republicans who say they want smaller government should walk the talk by introducing legislation that would eliminate agencies and programs. For example, Rep. Mike Pompeo (R-KS) has introduced legislation to abolish Commerce’s Economic Development Administration. Otherwise, they’re just part of the problem, or—in the case of Shimkus and Hanna—they make matters worse.
See here for more on downsizing the Department of Commerce.

Things to Be Thankful For

Posted by David Boaz at http://www.cato-at-liberty.org/things-to-be-thankful-for-2/


Not long ago a journalist asked me what freedoms we take for granted in America. Now, I spend most of my time sounding the alarm about the freedoms we’re losing. But this was a good opportunity to step back and consider how America is different from much of world history — and why immigrants still flock here.
If we ask how life in the United States is different from life in most of the history of the world — and still  different from much of the world — a few key elements come to mind.
Rule of law. Perhaps the greatest achievement in history is the subordination of power to law. That is, in modern America we have created structures that limit and control the arbitrary power of government. No longer can one man — a king, a priest, a communist party boss — take another person’s life or property at the ruler’s whim. Citizens can go about their business, generally confident that they won’t be dragged off the streets to disappear forever, and confident that their hard-earned property won’t be confiscated without warning. We may take the rule of law for granted, but immigrants from China, Haiti, Syria, and other parts of the world know how rare it is.
Equality. For most of history people were firmly assigned to a particular status — clergy, nobility, and peasants. Kings and lords and serfs. Brahmans, other castes, and untouchables in India. If your father was a noble or a peasant, so would you be. The American Revolution swept away such distinctions. In America all men were created equal. Thomas Jefferson declared “that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” In America some people may be smarter, richer, stronger, or more beautiful than others, but “I’m as good as you” is our national creed. We are all citizens, equal before the law, free to rise as far as our talents will take us.
Equality for women. Throughout much of history women were the property of their fathers or their husbands. They were often barred from owning property, testifying in court, signing contracts, or participating in government. Equality for women took longer than equality for men, but today in America and other civilized parts of the world women have the same legal rights as men.
Self-government. The Declaration of Independence proclaims that “governments are instituted” to secure the rights of “life, liberty, and the pursuit of happiness,” and that those governments “derive their just powers from the consent of the governed.” Early governments were often formed in the conquest of one people by another, and the right of the rulers to rule was attributed to God’s will and passed along from father to son. In a few places — Athens, Rome, medieval Germany — there were fitful attempts to create a democratic government. Now, after America’s example, we take it for granted in civilized countries that governments stand or fall on popular consent.
Freedom of speech. In a world of Michael Moore, Ann Coulter, and cable pornography, it’s hard to imagine just how new and how rare free speech is. Lots of people died for the right to say what they believed. In China and Africa and the Arab world, they still do. Fortunately, we’ve realized that while free speech may irritate each of us at some point, we’re all better off for it.
Freedom of religion. Church and state have been bound together since time immemorial. The state claimed divine sanction, the church got money and power, the combination left little room for freedom. As late as the 17th century, Europe was wracked by religious wars. England, Sweden, and other countries still have an established church, though their citizens are free to worship elsewhere. Many people used to think that a country could only survive if everyone worshipped the one true God in the one true way. The American Founders established religious freedom.
Property and contract. We owe our unprecedented standard of living to the capitalist freedoms of private property and free markets. When people are able to own property and make contracts, they create wealth. Free markets and the legal institutions to enforce contracts make possible vast economic undertakings — from the design and construction of airplanes to worldwide computer networks and ATM systems. But to appreciate the benefits of free markets, we don’t have to marvel at skyscrapers while listening to MP3 players. We can just give thanks for enough food to live on, and central heating, and the medical care that has lowered the infant mortality rate from about 20 percent to less than 1 percent.
A Kenyan boy who managed to get to the United States told a reporter for Woman’s World magazine that America is “heaven.” Compared to countries that lack the rule of law, equality, property rights, free markets, and freedom of speech and worship, it certainly is. A good point to keep in mind this Thanksgiving Day.
This article originally appeared in the Washington Times in 2004 and was included in my book The Politics of Freedom.

A Very American Harold & Kumar

Posted by David Boaz at http://www.cato-at-liberty.org/a-very-american-harold-kumar/


In honor of the release of A Very Harold & Kumar 3D Christmas, I revisit my thoughts from 2008 on the film series’ view of freedom in America:
The movie Harold & Kumar Go to White Castle was celebrated mostly as a “stoner” movie: smart young Asian guys smoke pot and get the munchies. When I finally got around to watching it, it was funnier than I expected. And very near the end of the movie, after an all-night road trip in which they encountered more obstacles than Odysseus, when Harold finally gives up and says he can’t make the last leg of the epic journey to White Castle, came this wonderful speech from Kumar:

So, you think this is just about the burgers, huh? Let me tell you, it’s about far more than that. Our parents came to this country, escaping persecution, poverty and hunger. Hunger, Harold. They were very, very hungry. They wanted to live in a land that treated them as equals, a land filled with hamburger stands. And not just one type of hamburger, okay? Hundreds of types with different sizes, toppings, and condiments. That land was America! America, Harold! America! Now this is about achieving what our parents set out for. This is about the pursuit of happiness. This night . . . is about the American Dream! Dude, we can stay here, get arrested, and end our hopes of ever going to White Castle. Or, we can take that hang glider and make our leap towards freedom. I leave the decision up to you.

Escaping persecution, poverty, and hunger . . . to find ample food and unlimited choices . . . the pursuit of happiness . . . the American Dream. Yes, I think writers Jon Hurwitz and Hayden Schlossberg were on to something.
And then in the sequel, Harold & Kumar Escape from Guantanamo Bay, after another improbable road trip, the fugitive youths literally dropped in on George W. Bush’s Texas ranch. In the increasingly fantastic plot, the president invited them to join him in hiding from the scary Cheney, shared his pot with them, and then promised to clear up the unfortunate misunderstanding that landed them in Guantanamo Bay. An uninhibited but still skeptical Kumar said, “I’m not sure I trust our government any more, sir.” And President Bush delivered this ringing libertarian declaration:

Hey, I’m in the government, and I don’t even trust it. You don’t have to trust your government to be a patriot. You just have to trust your country.

Harold & Kumar: more wisdom than a month of right-wing talk radio. Hurwitz and Schlossberg get what America is about.

Feds Palling Around With Mexican Cartels

Posted by Juan Carlos Hidalgo at http://www.cato-at-liberty.org/feds-palling-around-with-mexican-cartels/


Two years ago the Washington Post reported that the Immigration and Customs Enforcement agency brought dangerous Mexican drug traffickers to the U.S. who, while continuing their criminal activities in Mexico and the U.S., also served as informants to the federal authorities in their war on drugs.
In June, Operation Fast and Furious came to light where the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) allowed suspicious straw-purchasers of firearms to buy weapons in the U.S. and smuggle them into Mexico. The purpose was to track the guns all the way to the ultimate buyer—a Mexican drug trafficking organization. Overall, the ATF facilitated the purchase of hundreds of guns by Mexican cartels. Many were later found in crime scenes in Mexico, including one where a U.S. Border Patrol agent was assassinated.
On Sunday, the New York Times reported that the Drug Enforcement Agency has been laundering millions of dollars for Mexican cartels. The goal of the undercover mission is to follow the money all the way up to the top ranks of the criminal organizations. However, as the NYT notes, “So far there are few signs that following the money has disrupted the cartels’ operations and little evidence that Mexican drug traffickers are feeling any serious financial pain.”
So there we have it: in the name of the war on drugs, the federal government has provided safe havens to Mexican drug traffickers, facilitated their purchase of powerful firearms, and has even laundered millions of dollars for the cartels.
After spending millions of dollars toward fighting the drug war in Mexico, the United States has little to show for its efforts. It seems Washington is becoming more desperate each year to produce new leads and results. These three incidents display a stunning lack of foresight and borders on the federal government aiding the Mexican drug cartels, with little to show in return. The unintended consequences of these programs aimed at dismantling the cartels would be laughable were it not for the thousands that have died in Mexico’s drug related violence.
It is time for the United States to rethink the war on drugs and consider policies that will successfully undermine the Mexican drug cartels.

Fun with Grammar

Posted by David Boaz at http://www.cato-at-liberty.org/fun-with-grammar/


Juliet Eilperin at the Washington Post writes:

Less than a week before U.N. negotiators convene in South Africa for a new round of talks aimed at forging a global climate pact, a hacker has released an apparent second round of e-mails from the University of East Anglia in Britain that seek to portray climate scientists in a negative light.

Now let’s break that sentence down. Could it really be the e-mails from the climate catastrophists that “seek to portray [themselves] in a negative light”? Surely not. Rather, it appears that the sentence was intended to read something like this:

…a hacker believes that the apparent second round of e-mails from the University of East Anglia that he released today portray climate scientists in a negative light.

If there’s any embarrassment to the writers of the e-mails, after all, surely it was not intended. In any case, it’s not the release of the e-mails that might “portray [some] climate scientists in a negative light,” it’s the e-mails themselves.
More on the original Climategate here. Ongoing posts at this climate-skeptic website. And as you hear terms like “skeptics,” “deniers,” and so on, remember what Pat Michaels wrote in the 2009 Cato Handbook for Policymakers:

Leading politicians and media figures are insisting that Congress make
global warming a very high priority. Global warming is indeed real, and human activity has been a contributor since 1975.
But global warming is also a very complicated and difficult issue that
can provoke very unwise policy in response to political pressure. In 2005, for instance, Congress clearly made a very bad decision about climate change when it mandated accelerated production of ethanol. Critics had argued then that corn-based ethanol would actually result in increased carbon dioxide emissions. An increasing body of science has since verified this position. Further, corn-based ethanol is responsible in part for the skyrocketing price of corn, soybeans, rice, and wheat since the mandates began.
Although there are many different legislative proposals for substantial
reductions in carbon dioxide emissions, there is no operational or tested suite of technologies that can accomplish the goals of such legislation. Fortunately, and contrary to much of the rhetoric surrounding climate change, there is ample time to develop such technologies, which will require substantial capital investment by individuals.

He’s a skeptic about the predictions of catastrophic and imminent threats, not about the existence of modest global warming.

Promoting U.S. Exports and the Rule of Law in Russia

by Daniel Griswold at www.cato.org

Although global trade talks are going nowhere, the ministerial meeting of World Trade Organization members in Geneva next week will accomplish at least one item of major importance: admitting Russia to the club. Whether U.S. companies can reap the benefits of a more open Russian market will depend on the repeal of a U.S. law that has become an awkward relic of the Cold War.

The law is the 1974 Jackson-Vanik amendment, which was aimed at forcing the Soviet Union to allow Jews to emigrate by withholding "normal trade relations" (NTR) access to the U.S. market. Even though Jackson-Vanik never worked as intended, the law remains on the books two decades after the Soviet Union expired, requiring Congress to renew Russia's NTR status annually.
Granting Russia permanent normal trade relations (PNTR) by repealing Jackson-Vanik is key to promoting bilateral trade. If the law remains in effect, Russia will join the WTO within the next month or so, but U.S. companies will be denied the enhanced access to Russia's market that the U.S. government and other WTO members negotiated in Russia's accession protocol. That would be a costly mistake.
Russia remains by far the largest economy and the only member of the Group of 20 still outside the WTO. Russia's increasing economic (if not political) liberalization in recent years has coincided with a sharp increase in U.S. exports. Russia is an especially promising market for U.S. computer software and hardware, civilian aircraft, heavy machinery used to extract resources and U.S.-raised beef and poultry.
Opponents of granting PNTR point to Russia's abuse of health and safety measures to protect its agricultural sector, its lack of intellectual property protection and restrictions on civil and political liberties. Each of those concerns is real, but withholding PNTR will not address any one of them.
In fact, granting PNTR will allow the U.S. government to use the organization's dispute settlement mechanism to challenge any Russian violation of its WTO commitments. Any continued use of regulations as disguised trade barriers could be challenged under the WTO's sanitary and phytosanitary agreement. Violations of intellectual property would be open to challenge through the agreement on trade-related aspects of intellectual property.
As for human rights, it is a simple historical fact that trade policy has proved to be an ineffective tool for imposing fundamental political changes in other countries. The World Trade Organization was not set up to enforce human rights but more narrowly to promote trade liberalization among its members. Promoting respect for human rights around the world is a worthy cause, but threatening to withdraw trade access for an entire nation is not a proper human rights tool.
Just as WTO member governments pursue a wide range of trade policies, they also represent a wide range of political regimes. Of the organization's 153 members, more than 20 are at least as repressive of civil and political liberties as Russia, as measured in the annual survey by Freedom House. The list of WTO members that, like Russia, are classified as "not free" includes Bahrain, Cambodia, Chad, China, Cuba, Egypt, Jordan, Oman, Qatar, Rwanda, Saudi Arabia, Vietnam, the United Arab Emirates and Zimbabwe. It would be inconsistent with the spirit of the WTO, as well as established U.S. policy, to oppose Russia's membership in the organization because of its restrictions on political and civil freedoms.
On balance, the United States would benefit more from having Russia in, rather than out of, the transparent, multilateral and rules-based trade system. While no results can be guaranteed, granting Russia permanent normal trade relations would expand the freedom of American companies to reach new customers while further encouraging Russia's uncertain progress toward a more open, modern and globally integrated economy.

Should You Need a License to Hang Curtains?

Posted by Ilya Shapiro at http://www.cato-at-liberty.org/should-you-need-a-license-to-hang-curtains/


The latest example of liberty-reducing occupational licensing schemes comes to us from Florida, where a law restricts the practice of interior design to people the state has licensed. Those wishing to pursue this occupation must first undergo an onerous process ostensibly in the name of “public safety.”
In reality, the law serves as an anti-competition measure that protects Florida’s current cohort of interior designers. Our friends at the Institute for Justice have pursued a lawsuit against the law but lost their appeal in the Eleventh Circuit.
Cato has now joined the Pacific Legal Foundation on an amicus brief asking the Supreme Court to review that ruling. The lower court got it wrong not just with respect to the right to earn a living, however, but also on First Amendment grounds.
That is, interior design, as a form of artistic expression, is historically protected by the First Amendment. Indeed, interior designers are measured primarily on the value of their aesthetic expression, not for any technical knowledge or expertise. This type of artistry is a matter of taste, and the designer and client usually arrive at the end result through collaboration and according to personal preferences. Thus, the designer-client relationship has little in common with traditionally regulated professions such as medicine, law and finance, where bad advice can have real and far-reaching consequences—but even then, the Supreme Court has emphasized the First Amendment implications of placing “prior restraints” on expression through burdensome licensing schemes.
Instead of following that precedent, however, the circuit court carved out a constitutionally unprotected exception for “direct personalized speech with clients.” Florida’s “public safety” justification is similarly weak, given that the state has presented no evidence of any bona fide concerns that substantiate a burdensome licensing scheme that includes six years of higher education and a painstaking exam—instead relying on cursory allegations that, for example, licensed designers are more adept at ensuring that fixture placements do not violate building codes.
Finally, the Eleventh Circuit’s ruling disregarded the infinite array of auxiliary occupations the Florida law subjects to possible criminal sanctions: wedding planners, branding consultants, sellers of retail display racks, retail business consultants, corporate art consultants, and even theater-set designers could all get swept in. The state has already taken enforcement actions against a wide spectrum of people who are not interior designers, including office furniture dealers, restaurant equipment suppliers, flooring companies, wall covering companies, fabric vendors, builders, real estate developers, remodelers, accessories retailers, antique dealers, drafting services, lighting companies, kitchen designers, workrooms, carpet companies, art dealers, stagers, yacht designers, and even a florist. This dragnet effect also suggests that the law is too broad to survive constitutional scrutiny.
The Court will likely decide by the end of the year (or early 2012) whether to take this case of Locke v. Shore.

Another Look for Huntsman

by Michael D. Tanner at www.cato.org

Despite the supposed inevitability of Mitt Romney, many conservatives are clearly still looking for an alternative for the Republican nomination. Newt Gingrich has become the latest to hold that title, but, as Gingrich's liberal positions on everything from health care to TARP become better known, conservatives are likely to go shopping again.

One wonders, therefore, if a conservative case could be made for former Utah governor Jon Huntsman, as has been suggested by several conservative columnists recently, including George Will, Jim Pethokoukis, and Joe Scarborough. Indeed, it is interesting that Huntsman was so quickly dismissed as a RINO, when many of his positions actually appear to be to the right of both Romney and Gingrich.
On health care, for example, Huntsman flirted with an individual mandate — unfortunately, a lot of conservatives did when the idea was being pushed by the Heritage Foundation — but, unlike Romneycare, the plan he ultimately developed for Utah did not include one. It did, however, include a new regulatory bureaucracy called "the portal," a less onerous version of President Obama's health-insurance exchanges or Mitt Romney's Connector. Note that "less onerous" does not mean "good idea." On the other hand, Huntsman did not support the Medicare prescription-drug benefit that both Romney and Gingrich backed.

On education, Huntsman clearly has a better record than either Romney or Gingrich. While both of them backed No Child Left Behind and continue to push for greater federal involvement in education, Huntsman opposed NCLB, saying, "We need to take education to the local level, where parents and local elected officials can determine the destiny of these schools." He actually signed a bill that gave Utah's educational standards priority over NCLB, letting education officials in Utah "ignore provisions of federal law that conflict with the state's program." And he pushed through a substantial school-choice program in Utah.
Huntsman also appears to be to the right of both Gingrich and Romney on key economic issues such as taxes, spending, and entitlement reform. He has backed a truly bold plan for tax reform, a flatter tax that eliminates nearly all distortionary deductions and loopholes, while slashing rates. He would reduce the top personal income tax rate to 23 percent, and the corporate rate to 25 percent. The plan has been praised by the Wall Street Journal, which called it "certainly better than what we've seen from the frontrunners."
While he has not signed the Americans for Tax Reform "No Tax Pledge," he joined his fellow Republicans in rejecting even a ten-to-one spending-cut-to-tax-hike deal for deficit reduction.
When it comes to cutting spending, Huntsman is not exactly Ron Paul, but he's not bad compared with most of his other GOP competitors. Huntsman would cap federal spending at 18 percent of GDP. By comparison, Romney has called for a 20 percent spending cap, while Gingrich has made no specific commitments to a level of spending cap. On entitlements, Huntsman, unlike Romney and Gingrich, has explicitly embraced Paul Ryan's Medicare-reform plan. He is vaguer on Social Security reform, but has spoken positively of benefit cuts, including means-testing and raising the retirement age. That's not as good as personal accounts — Huntsman hasn't taken a position on them yet — but it's a reasonable first step.
Huntsman's gubernatorial record suggests reasons for both optimism and concern on tax and spending issues. He sought to replace Utah's graduated income tax with a flat tax, cut the state's food tax in half, and attempted to eliminate the state's capital-gains and corporate-franchise taxes. However, his record is not nearly as good on the spending side of the ledger. During his time in office, he proposed spending hikes in excess of 6 percent annually, well above the growth in Utahans' personal incomes. In fact, measured in terms of percentage growth, Huntsman was one of the biggest-spending governors in the nation. Overall, he received a grade of B on the Cato Institute's fiscal report card for governors. That beats the C that Cato awarded Mitt Romney.
On foreign policy, Huntsman has called for a less interventionist policy. He would move from a nation-building stance in Afghanistan to a counterterrorism approach with a smaller U.S. footprint, accelerating troop withdrawals. He is a strong free-trader and has opposed Romney's mindless demagoguery on China trade.
The policy objections to Huntsman that one hears most from conservatives are about his positions on global warming and gay rights. On global warming Huntsman is clearly out of step with many conservatives both in backing the idea of anthropogenic warming and in calling for government action to combat it. Although he had backed away from his earlier support for cap-and-trade, there is ample reason to be suspicious of how he would govern on this issue. Still, is his position appreciably worse than, say, Newt Gingrich's?
Huntsman also supports civil unions for gay couples. While this may upset some social conservatives, it is well within the mainstream for most American voters. Indeed, with voters increasingly supportive of gay marriage, Huntsman may be the GOP candidate least out of touch on the issue.
But for many conservatives, Huntsman's biggest flaw appears to be a question not of policy positions but of attitude. Huntsman seems so enamored of hearing good things about himself on Morning Joe or in the New York Times editorial pages that it drives him to pick unnecessary fights with the GOP base. He often seems contemptuous and dismissive of those who disagree with him. One can't help feeling that he regards broad swaths of the Republican electorate as ignorant hicks. This is probably unfair — and when it comes to unbridled arrogance, no one can top Newt — but it does raise legitimate concerns about whether a President Huntsman would be willing to take positions that earned him criticism from the establishment press.
Clearly Huntsman would not be an ideal candidate for conservatives. But given the big-government tilt of both Gingrich and Romney, they may want to at least kick the tires on this model.

Another Romneycare/Obamacare Similarity: Earning Their Sponsors Insurance-Company Love

Posted by Michael F. Cannon at http://www.cato-at-liberty.org/another-romneycareobamacare-similarity-earning-their-sponsors-insurance-company-love/


I’ve been meaning to post this article from OpenSecrets.org that sheds light on the claim that either Obamacare or its twin, Romneycare, somehow “get tough” on insurance companies:

Health Insurance Industry Opens Check Books for Mitt Romney, Barack Obama

Research by the Center for Responsive Politics shows that President Barack Obama and his GOP rival Mitt Romney, the former governor of Massachusetts, are the only two presidential candidates to have raised more than $40,000 from the health insurance industry so far this election cycle…
Both men have favored health care policies that include an individual mandate for people to purchase private insurance plans. Romney did so as governor of Massachusetts, and Obama did so as part of the health care reform package he signed into law last year…
Such mandates are supported by the insurance industry, which stand to benefit from increased customers as well as from government subsidies that help enroll people who could not otherwise afford insurance.
Romney, in fact, has received more than five times as much money from the health insurance industry than any other GOP presidential candidate, according to the Center’s research.

That should weigh on the minds of states that are considering whether to create the health insurance “exchanges” that will implement Obamacare’s individual mandate and subsidies for insurance companies.

Why Doesn't South Korea Defend the United States?

by Doug Bandow at www.cato.org

Seoul is the political and industrial heart of the Republic of Korea. The metropolitan area holds half of the country's population. Amid the city's bustle the threat from the so-called Democratic People's Republic of Korea seems far away, but Seoul's suburbs lie just 25 miles south of the demilitarized zone, within range of North Korean artillery and Scud missiles. Hence the North's latest threat to turn Seoul into a "sea of fire,"

South Korea became a defense dependent of Washington decades ago. Like America's other alliances around the globe, the "mutual" defense treaty with Seoul does not protect the U.S. Given the South's recent economic success, Americans should ask: When will this prosperous and populous friend begin defending America?
U.S. troops have been in South Korea for 61 years. Washington first intervened to reverse the North's invasion of the ROK in 1950. Three years later the fighting ended in an armistice, with no peace treaty ever reached. Since then American troops have formed a military tripwire to ensure Washington's involvement in any new war.
However, Seoul has precious few responsibilities in return. ROK forces never have been stationed in America. There were never plans for the South to assist the U.S. if the latter was attacked by the Soviet Union. No South Korean ships patrolled the sea lanes and no South Korean aircraft guarded the sky.
In the early days there was little the ROK, an impoverished dictatorship, could do. Seoul could not protect itself, let alone anyone else. But then, Washington should not have maintained the fraud that the security tie was mutual.
The South since has joined the first tier of nations. It obviously can do more, much more. Nevertheless, the treaty remains a one-way relationship. The ROK occasionally has contributed to Washington's foolish wars of choice, such as Vietnam and Afghanistan, in order to keep American defense subsidies flowing. But this is no bargain for the U.S., which is expected to protect Seoul from all comers.
Of course, it might be too much to expect even a wealthier South Korea to help protect the U.S. After all, no nation poses a serious threat to America. Russia has a nuclear deterrent, little more. China is expanding its military, but remains far behind us. Every other potential adversary is a comparative military pygmy: Cuba, Burma, Iran, North Korea. Indeed, Washington's "defense" budget has little to do with defense—of the U.S., at least. America spends far more to protect its allies, such as the ROK.
However, Seoul should at least defend itself if not the U.S.
One of the attributes of a serious nation is handling its own security. In the past, at least, no great and influential nation would subcontract its defense to another country. Doing so would make one a dependent, even a puppet. Early Americans were willing to assert themselves against great odds in both the American Revolution and the War of 1812.
Yet the ROK continues to rely on Washington. Indeed, South Korean troops would be under U.S. command in war, an arrangement that was supposed to change next year. However, at Seoul's request that transfer has been postponed until 2015. With 40 times the GDP of the North and twice the population, the South continues to plead helplessness in the face of potential aggression. It is as if the peninsula had a special geographical force field which prevented the country to the south from ever matching the military of the nation to the north.
Of course, the problem is the one-way U.S. defense guarantee, not a mystical force field. As long as Washington politicians force American taxpayers to underwrite the ROK's defense, why should Seoul burden its own citizens? It is a great deal—for the South, which can spend much less on the military.
Even under President Lee, who has pressed for more military outlays, the South's defense budget has lagged behind threats. Reported the Congressional Research Service: "Defense Reform 2020 calls for defense budget increases of 9.9% each year, but the Lee Administration reduced the increase to 3.6% for FY2010, citing economic pressures." Bruce Klingner of the ROK-friendly Heritage Foundation has written of "defense budget shortfalls" by the ROK.
Although these advantages of being a defense dependent are obvious, America's military presence creates costs for the South as well. Hosting 28,500 mostly young men from another country and culture isn't easy. Indeed, two recent rapes by American service personnel triggered protests and discussion about revising the Status of Forces Agreement. But such problems are inevitable when a nation asks another country for aid.
Most important, the South's defense remains in outside hands. As guarantor of the ROK's security, the U.S. inevitably will meddle in South Korean affairs. Yet in a crisis, Washington will do what Washington believes to be in its interest, not the South's interest.
Still, just as alcoholics hate to give up liquor, South Koreans are unlikely to give up their defense free ride. Doing without an American tripwire would mean either achieving a modus vivendi with the DPRK, which seems unlikely, or spending more to bulk up forces for both defense and retaliation, which would be politically unpopular.
Unfortunately, the American people have to pay more because Washington treats the South as an international welfare dependent. And the problem is getting worse. Despite the budget crunch at home, the Obama administration has been expanding defense aid to the South.
For instance, on his recent visit to the South, Defense Secretary Leon Panetta discussed a joint response to any future North Korean provocation. He explained: "We have an alliance. We can provide strong and effective responses to those kinds of provocations if we work together." The U.S. is "prepared to defeat the North" if war occurs, added the secretary, using "the full range of capabilities, including the U.S. nuclear umbrella, conventional strike and missile defense capabilities." Finally, he asserted, "These efforts deter North Korean aggression by demonstrating that we have the will and the means to defend the ROK."
The Defense Department also is relocating U.S. forces from Seoul's Yongsan base to U.S. Army Garrison Humphreys to the south. This will cost several billion dollars, which makes sense only if the deployment is eternal. Moreover, the Pentagon has been planning to "normalize" the tours of American military personnel in South Korea, implementing longer stays and allowing troops to bring families. This step indicates that the American garrison is a permanent part of the South Korean landscape.Some South Koreans even are calling for reintroduction of U.S. tactical nuclear weapons in the South.
But there is no defense justification for preserving Washington's security commitment to the ROK. The Cold War is over, South Korea is far stronger than the North, and neither China nor Russia would support Pyongyang in a new war. As former Defense Secretary Robert Gates observed, anyone advocating another land war in Asia should "have his head examined." Military commitments should reflect geopolitical realities; alliances should be a means, not an end. Today, however, Washington appears determined to maintain alliances simply to have alliances, whether or not they benefit America.
Alliance advocates occasionally defend the alliance in terms of ChinaWashington Times editorial page editor Brett M Decker claimed that "The rapid militarization of the People's Republic of China makes the decades-old alliance between the Republic of Korea and the United States just as important as ever." But the ROK is unlikely to act as a cheerful member of a new containment ring around the PRC. Seoul might like to be defended in the unlikely event that Beijing moved to swallow the peninsula. However, no South Korean government is likely to make itself a permanent enemy of the PRC by backing Washington in a conflict elsewhere, say over Taiwan.
Indeed, the Roh Moo-hyun government insisted that American forces based in the ROK could not be used elsewhere in the region without its consent. The Lee government has a better relationship with Washington and adopted an ambiguous compromise which might allow American forces in the South to deploy, though not operate, from their bases. But maybe not. The U.S. can count on nothing in a crisis.
Beyond China it is hard to imagine how the alliance could act like the"lynchpin of not only security for the Republic of Korea and the United States but also for the Pacific as a whole." More sensible would be to leave the Japanese and South Koreans to overcome old antagonisms and create a relationship that could act as a security foundation for what is, after all, their region.
In 2009 the U.S. and ROK produced a Joint Vision for the Alliance which proposed greater cooperation in a lot of other areas, including counter-terrorism, anti-piracy, and development. But none of these activities require a military alliance, security guarantees, and military deployments by America. Indeed, such agreements would be most effective if implemented by equals, not superior and dependent.
Some advocates of permanent defense subsidies for Seoul point to the DPRK's nuclear program. There is no easy answer to the threat of North Korean nuclear proliferation. But promising to shield the South from a DPRK nuclear attack is not costless. Maintaining a nuclear umbrella entangles the U.S. in unpredictable Northeast Asian disputes which pose no vital interest to America. Indeed, should the North develop even a crude ICBM and accompanying nuclear warhead, the U.S. would have to contemplate sacrificing Los Angeles for Seoul, a bad deal for America.
In any case, Washington's garrison in the ROK does not constrain the North's nuclear ambitions; to the contrary, there are now 28,500 nuclear hostages nearby for Pyongyang to target. The North's nuclear program actually is yet another compelling reason for America to bring home its troops.
Moreover, it might be better for the South to have its own nuclear deterrent than for the U.S. to stay involved. Although Washington is dedicated to the principle of nonproliferation, U.S. policymakers should consider whether guaranteeing that North Korea alone among smaller power possesses a nuclear arsenal is a good policy. The effect is a bit like domestic "gun control"—only the bad guys end up armed. The prospect of nuclear weapons in the hands of the ROK (and Japan) also would get China's attention, encouraging Beijing to take tougher action against the North's nuclear activities.
To coin a phrase, it is time for a change. Some Americans have reacted in anger against South Koreans who criticize America. For instance, columnist Dennis Prager called the ROK "the most ungrateful country in the world." He proposed a South Korean referendum: "The beauty of such a plebiscite is that if a majority of the South Korean people wants American troops out, we have no moral obligation to stay there."
But Americans have no moral obligation to stay in any case. Washington should deploy troops based on the interest of the U.S., not of other nations.
Washington should begin a quick and complete withdrawal of forces from the South. The Lee government recently received the ROK's first AWACS plane, with three more to assembled in South Korea. Washington should sell Seoul whatever other conventional weapons the latter desires. The Obama administration already has discussed selling drones to the South, and should accede to the South's request to adjust the bilateral treaty limiting the range of ROK missiles.
There still will be issues upon which the two governments can cooperate, but Washington should eschew the kind of "benefit inflation" which seems to permeate Washington today. A couple years ago the White House announced that the two countries "are building an Alliance to ensure a peaceful, secure and prosperous future for the Korean Peninsula, the Asia-Pacific region, and the world." The world?
America's alliance with the ROK once made sense. Sixty years ago. It is time to end military welfare for South Korea and other countries around the world. Iraq is not the only country where American troops should be home by Christmas.