Cato: For the Purposes of the Fourth Amendment, Does it Matter Where Your Email Is Stored?

People use email for many things: to collaborate at work, catch up with old friends, share baby pictures, or, sometimes, to coordinate the operations of an international narcotics trafficking ring. The federal government believes certain Microsoft-hosted email accounts were used for this last purpose and is demanding Microsoft provide them access to the communications stored within.

The Stored Communications Act (SCA) governs federal law enforcement’s authority to search email and other electronic records. They must obtain a warrant, subject to constraints similar to those imposed by the Fourth Amendment, and then provide an opportunity for the target company (e.g. Microsoft here) to contest the warrant.

Microsoft chose to contest the warrant in this case on the ground that the emails in question are stored on servers in Ireland, arguing that federal law enforcement may not claim jurisdiction over the entire globe. The federal government argues that the happenstance of the server’s location is invisible to the user, who, while sitting in his apartment in Manhattan (or wherever), is oblivious to whether his email server is in Galway or Yonkers. Because this is an important and recurring question, the Supreme Court decided to step in and sort the matter out.

Read more at https://www.cato.org/blog/purposes-fourth-amendment-does-it-matter-where-email-stored

Cato: Privatizing Federal Grazing Lands

The federal government owns 640 million acres of land—mainly in the West—which is 28 percent of land in the United States. For more than a century after the nation’s founding, the federal government aimed to sell or give away western lands to individuals, businesses, and state governments. But by the turn of the 20th century, federal policy came under the sway of progressives, who favored increased federal control.

Progressives had a misguided notion that federal ownership would be efficient and environmentally sound. Broadly speaking, they were wrong. Experience has shown that federal agencies mismanage land from both economic and environmental perspectives, as discussed here and here. The solution is to devolve ownership of most federal land to the states and private sector.

The Bureau of Land Management (BLM) owns about 250 million acres of land, of which about 160 million acres are used for livestock grazing. Cato scholar Steve Hanke championed BLM land privatization as an economist for President Ronald Reagan. He proposed that ranchers be allowed to buy the grazing land that they currently rent from the BLM.

Privatization would create benefits by securing property rights. Currently, ranchers are uncertain about their future access to the federal grazing lands they use, so they have incentives to overstock the lands and disincentives to make capital improvements. Privatization would allow ranchers to plan for the best economic and environmental rangeland management over the long term.

Read more at https://www.cato.org/blog/privatizing-federal-grazing-lands

Cato: Colorado: Where Anyone Can Squelch Political Speech

With school board elections approaching, Tammy Holland purchased ad space in her local paper to inform her neighbors about their available options when it came time to vote. For this brazen exercise of her free speech rights, Ms. Holland found herself forced to expend considerable time and resources to defend her actions in court, twice. You might wonder how this could happen in a “free” country that ostensibly enjoys the blessings of the First Amendment. Unfortunately, Colorado’s byzantine system of campaign and political finance regulations not only turn a blind eye to First Amendment concerns, but actively incentivizes politically motivated, retaliatory litigation.

Colorado is unique in being the only state to effectively outsource enforcement of its campaign finance regulations by allowing “any person who believes” that campaign finance laws are being violated to “file a written complaint with the secretary of state.” Filing a complaint triggers a litigation process culminating in a court hearing before an Administrative Law Judge, much like a trial. After Ms. Holland was dragged into court on the whim of individuals who took issue with her speech, Campaign Integrity Watchdog (CIW)—an outside group that was not a party to the litigation—filed a motion requesting the court seal otherwise public records because they contain information related to campaign finance settlements. If the court grants CIW’s request, the public will never be able to access vital information about how these cases are resolved. In an effort to protect the public’s right to know, Cato has joined the Reason Foundation to file an objection to CIW’s motion.

Read more at https://www.cato.org/blog/colorado-where-anyone-can-squelch-political-speech

Cato: Eighth Circuit Makes Tangled Mess of Hair Braiding Case

Readers of this blog may recall Cato’s filing an amicus brief for an appeal in the Eighth Circuit supporting two Missouri women’s challenge to state requirements that they become licensed as cosmetologists or barbers before being allowed to work as African-style hair braiders. Obtaining the mandatory license from the Missouri Board of Cosmetology & Barber Examiners entailed undergoing a minimum of 1,000 hours of mostly irrelevant training and passing an exam with both written and “practical” (term used loosely) components.

Not only is over 90 percent of the required training completely inapplicable to the practice of African-style hair braiding, but seven of the nine board members are barbers, cosmetologists, or cosmetology school owners with a direct financial incentive to limit competition.

None of that mattered to the three judges on the Eighth Circuit panel, who yesterday after a full year of foot-dragging issued a perfunctory opinion upholding the district court ruling in the board’s favor. Instead of finally providing two aspiring entrepreneurs their day in court before a neutral arbiter, this ruling continues the pattern of courts’ violating bedrock due-process principles by rubber-stamping occupational regulations under the flimsiest of rationales.

Read more at https://www.cato.org/blog/eighth-circuit-makes-tangled-mess-hair-braiding-case

Cato: Oregon Returns One of Two Kids It Seized From Low-IQ Couple

Amy Fabbrini and Eric Ziegler of Redmond, Oregon have not been accused of abuse or neglect, and “both have standard high school diplomas,” reported Samantha Swindler in The Oregonian this summer. But the state of Oregon deems their IQs to be too low and has seized their two sons in what has turned into a four-year battle. 

I was a guest in August on Glenn Beck’s radio show to discuss the case. The Blaze summarizes:

"Essentially, the state doesn’t have to prove anything definite to take away a child; the argument is that they are going by the expert’s recommendation for what’s best just in case something could happen. In Fabbrini’s case, her estranged father has told authorities that she is an unfit mother; however, people closer to her have vouched for her ability to parent.

“If they [authorities] want to take your child, they’ve got him,” Olson said….

“It’s been called [‘worst-first’] thinking,” he explained. “If you’re in the child protection business, then, you know, everything looks like a danger. … You always think the worst possible thing could happen.”"

Read more at https://www.cato.org/blog/oregon-returns-one-two-kids-it-seized-low-iq-couple

Cato: Not Everything Professionals Say Is “Professional Speech”

Like all states, California has licensed medical centers of every kind. One particular type, often known as a “crisis pregnancy center,” provides pregnancy-related services with the goal of helping women to make choices other than abortion. Based on opposition to these centers, the California legislature enacted a law, the FACT Act, requiring licensed clinics “whose primary purpose is providing family planning or pregnancy-related services” to deliver to each of their clients the following message: “California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women.” But the law also creates an exception for clinics that actually enroll clients in these programs—so, in effect, the law applies only to clinics that oppose the very program they must advertise.

Several of these crisis pregnancy centers sued to block the law, arguing that it violated their First Amendment rights by forcing them to express a message to which they are opposed. But the U.S. Court of Appeals for the Ninth Circuit upheld the law, holding that it regulates only “professional speech” and therefore should be reviewed under a more deferential standard, rather than the normal strict judicial scrutiny that applies to laws compelling speech. The Supreme Court agreed to review that ruling in a case called National Institute of Family and Life Advocates (“NIFLA”) v. Becerra. Cato has filed a brief urging the justices to correct the lower court’s flawed reasoning.

Read more at https://www.cato.org/blog/not-everything-professionals-say-professional-speech

Cato: Defendants, Not Their Attorneys, Should Decide Whether to Admit Guilt

Criminal defense is personal business. A criminal defendant may never face a more momentous occasion than his trial, nor one where his decisions have greater personal consequence. For this reason, the Constitution not only mandates rights for the accused but also secures a defendant’s autonomy in the exercise of those rights: “The Sixth Amendment does not provide merely that a defense shall be made for the accused; it grants to the accused personally the right to make his defense.” Faretta v. California, 422 U.S. 806, 819 (1975).

Robert McCoy sought to exercise his autonomy on one of the most fundamental decisions a defendant can possibly make—whether to admit or deny his own guilt before a jury. On trial for his life, McCoy made an informed, intelligent, and timely decision to maintain his innocence and put the state to its burden. But that decision was not respected. Over McCoy’s express objection, the trial court permitted his attorney, Larry English, to tell the jury that McCoy was guilty of murder. With the court’s approval, English even purported to relieve the state of its burden to prove McCoy guilty of murder beyond a reasonable doubt. Following this brazen violation of McCoy’s autonomy, the jury returned a unanimous verdict for first degree murder and sentenced McCoy to death.

The Louisiana Supreme Court upheld McCoy’s conviction, and effectively treated his insistence on deciding for himself whether to admit or deny guilt as a claim for ineffective assistance of counsel. But that framing elides the fundamental interest at issue here. In a capital case with overwhelming evidence, it may be tactically advantageous to admit guilt, with the hope of avoiding the death penalty at the sentencing phase. But the issue is not whether such a strategy is reasonable; it is whether a mentally competent defendant, fully informed of his situation, may decide for himself whether to maintain innocence and demand the state prove his guilt beyond a reasonable doubt.

Read more at https://www.cato.org/blog/defendants-not-their-attorneys-should-decide-whether-admit-guilt

Cato: Border Patrol Checkpoints Do Not Work—End Them

Data from a new Government Accountability Office (GAO) report shows that interior checkpoints manned by Border Patrol agents are a poor use of resources, at least from an enforcement perspective. Border Patrol checkpoints would have to have apprehended about 100,000 to 120,000 more illegal immigrants from FY2013-2016 than they actually did to justify the man-hours spent occupying them by agents. Even those who support expanding immigration enforcement along the border should recognize that checkpoints are a waste of scarce border security resources.

Border Patrol agents man checkpoints within 100 miles of the U.S. border where they can stop motorists, inquire about immigration status, and enforce other laws. Checkpoints are a significant risk to civil liberties and are expensive to run. Supporters argue that checkpoints are effective at enforcing federal laws against illegal immigration and drugs, although Border Patrol officials state that they are more concerned about the former. However, the number of illegal immigrant apprehensions, drug seizures by weight, and the deployment of Border Patrol man-hours to checkpoints show that they are not a good use of resources if the goal is to enforce immigration and drug laws.

Figure 1 comes from data reported by the GAO for FY2013-2016. About 9.4 percent of all man-hours worked by Border Patrol were at checkpoints but they only apprehended 3.1 percent of all illegal immigrants apprehended and 5.4 percent of all marijuana seized by weight, at best. At worst, Border Patrol apprehended only 1.9 percent of all illegal immigrants at checkpoints (this same number estimate is not reported for marijuana seizures). This means that Border Patrol agents would have to have apprehended 101,219 to 120,978 more illegal immigrants from FY2013-2016 at checkpoints than they actually did in order for their expenditure of man-hours to be proportional to their apprehensions.

Read more at https://www.cato.org/blog/border-patrol-checkpoints-do-not-work-end-them

Cato: LaHood: Make Bus Riders Pay for DC Rail Fix

Washington Metro should raise bus fares and cut service as a part of a plan to restore its rail system to its former greatness, recommends a report by former Secretary of Transportation Ray LaHood. The report hasn’t been released yet–in fact, it has apparently been sitting on the Virginia governor’s desk for several weeks–but the Washington Post obtained a copy just in time for the report to have no influence on Virginia’s recent election.

Parts of the report are predictable, such as a recommendation that Metro obtain a source of “dedicated funds,” meaning a tax dedicated to it so it won’t have to be responsive to local politicians. However, LaHood’s mandate was to come up with a specific funding source acceptable to regional political interests, and he failed to do so.

What was not predicted was a finding that Metro “offers more [vehicle-hours of] service per rider than other large transit agencies.” Based on this finding, LaHood recommended cutting back service. The report notes that service levels were “average when compared to peers” until the opening of the Silver Line led to increased service hours coinciding with a decline in ridership.

So as the Silver Line has not only hurt the rail system, LaHood now recommends that Metro fix the problem by cutting back on service. But he does not recommend cutting back on Silver Line service. Instead, LaHood wants Metro to cut back on bus service (which he says is also above average) and raise bus fares. Ironically, this echoes my recent commentary noting that transit agencies often pay for the high cost of rail by cutting bus service.

Another of LaHood’s findings is that Metro’s costs are “average” compared with its peers. But, as former Indianapolis mayor Stephen Goldsmith once noted, you can’t find out whether a public agency’s costs are reasonable by comparing it with other public agencies; you need to compare it with private operators. For example, Denver’s RTD contracts out half its buses to private operators that consistently charge RTD about 52 to 53 percent of the amount RTD spends running its own buses.

LaHood could have recommended that Metro contract out its bus service. In 2016, it spent $15 per vehicle-revenue mile operating its buses. Denver’s RTD spent $11 per vehicle-revenue mile on its buses, but paid private contractors less than $6 per vehicle-revenue mile on the buses they operated. Based on this, Metro’s costs may be “average” but are not reasonable.

Rather than save money by contracting out service, LaHood wants bus riders, who are disproportionately black, to pay more for less service in order to make up for Metro’s incompetence in managing its rail system. Meanwhile, he did not propose to raise fares for rail riders, who are disproportionately white.

Read more at https://www.cato.org/blog/lahood-make-bus-riders-pay-dc-rail-fix

Cato: Much Ado Abood the First Amendment

After a year of contentious negotiations between Illinois Governor Bruce Rauner and the American Federation of State, County, and Municipal Employees, Council 31 (“AFSCME”), the parties reached a bargaining impasse in early 2016. As a result, the governor attempted to institute reforms over AFSCME’s objections, with the union then suing to thwart implementation. Caught in the middle of this power struggle was Mark Janus, a state employee who was compelled to subsidize the union’s efforts despite his personal opposition to its position (and non-membership). These forced exactions, known as “agency fees,” essentially provide workers in the 25 states that allow them with a Hobson’s choice: Either sacrifice your First Amendment rights by funding political advocacy you may not like, or find another job.

The Supreme Court precedent allowing this unjust scenario, Abood v. Detroit Board of Education (1977), has become quite controversial. Twice in the past five years, the Court has explicitly questioned its central holding that mandatory agency fees are constitutional, and two terms ago the Court split 4-4 on the issue of whether to overturn Abood outright. Mr. Janus’s case finally provides the Court with a golden opportunity to restore the First Amendment liberties of the country’s public-sector workers. One of the union’s central arguments is that stare decisis should keep Abood in place. Stare decisis is a legal doctrine whereby courts are bound by their own precedents because of the reliance interests that have built up around them; sometimes it’s more disruptive to society to get a ruling right than to allow a possibly erroneous ruling to stand.

Because only constitutional amendments can check the Supreme Court’s constitutional rulings, however, and given that it’s increasingly hard to enact constitutional amendments, stare decisis is at its weakest when constitutional rights are being violated. In fact, when judges find that certain prudential factors weigh in favor of overturning precedent, judges have a duty to correct those past constitutional mistakes.

Read more at https://www.cato.org/blog/much-ado-abood-first-amendment

Cato: The Pernicious Doctrine of “Accusation Equals Guilt”

Equating mere allegations of misconduct with definitive evidence is a growing habit in the United States.  That tendency is most prevalent regarding national security matters, and the trend has been building since the onset of the so-called war on terror following the 9-11 attacks.  Conservatives are especially prone to assert that “terrorists” are not entitled to constitutional rights, even if they are American citizens.  The obvious problem with that argument is that until a fair and impartial trial is held, the individuals in question are merely accused terrorists.  The whole point of due process is to determine whether a defendant is guilty or not.

Alarmingly, George W. Bush’s administration asserted the authority to jail suspected terrorists without trial or even a hearing before an independent tribunal.  In the case of Jose Padilla, an American citizen apprehended at Chicago’s O’Hare International Airport, the government designated him an “enemy combatant” and held him (as well as inflicted torture) for nearly four years at a military prison in South Carolina before bringing charges to a grand jury.  Even then, the administration’s belated application of due process occurred only in response to the U.S. Supreme Court’s prodding.

It would be a mistake, though, to assume that only right-wing leaders embrace the notion that accusation equals guilt.  The Obama administration escalated its predecessor’s contempt for due process.  President Bush merely asserted his alleged authority to imprison American citizens without trial.  President Barack Obama asserted an authority to execute such people without trial.  That point was underscored when he authorized a September 2011 drone strike that killed radical Islamic cleric Anwar al-Awlaki, an American citizen, in Yemen.  A separate strike the following month killed Alwaki’s 16-year-old son.

Read more at https://www.cato.org/blog/pernicious-doctrine-accusation-equals-guil

Cato: Private Forums for Political Speech

Congress is considering the Honest Ads Act, an effort to force disclosure of political advertising on the Internet. We ought to be skeptical anytime Congress seeks to manage a private forum for purposes of improving political speech. I will return to my skepticism in a later post. For the moment, I want to examine how the managers of that private forum have responded to the bill.

Facebook has announced a host of changes to its advertising marketplace, attempting to forestall regulation by satisfying congressional concerns through private action. Facebook is acting to counter a threat of regulation and that itself is disturbing. We do not wish to see Facebook bullied into actions that run counter to their own inclinations. Yet, Facebook also has a history of seeking to satisfy its users, and it is possible that such business motives are at work. Perhaps we should avoid for now deciding that Facebook has been coerced. That said, there is good reason to believe that self-regulation can address the concerns of lawmakers more effectively than government action.

The Honest Ads Act is purportedly intended to reduce the ability of foreign governments to meddle in our elections while providing voters with access to information about the source of advertisements. Targeted advertisements, which appear only to users who match certain profiles, are of particular interest to legislators.

Read more at https://www.cato.org/blog/private-forums-political-speech

Cato: How Time Can Move Backward For Immigrants Waiting for Green Cards

Many Americans want immigrants to “get in line.” But they cannot do so on their own. They need to get a sponsor, either a U.S. citizen family member or a U.S. employer, to petition the government to grant them permanent residency (a “green card”). Even if immigrants do obtain sponsors, there isn’t just one line to get into. Rather, immigrants have separate lines based on the type of sponsorship and their country of origin, and these lines all move at different speeds. Even two immigrants working in essentially the same position whose employer petitions for them on the same day can end up receiving their green cards decades apart if they were born different places.

How America still discriminates based on nationality:

This bizarre fact is a consequence of the racist history of U.S. immigration law. In 1921, Congress created the first quota on legal immigration (the “worldwide limit” ). Three years later, it created limits for individual nationalities (the “per-country limits”). The per-country limits give each nationality a share of the worldwide limit. If nationals of a certain country use up their share of the green cards, they have to wait, and immigrants from other countries get to skip ahead of them in line. (And no, Congress made sure that immigrants can’t evade the per-country quotas by getting citizenship somewhere else. Birthplace is all that matters.)

Initially, the per-country limits openly discriminated against “undesirable” immigrants, defined as Asians, Africans, and Eastern Europeans (mostly Jews). But in 1965, Congress made the per-country limits uniform across countries. Today, no country can receive more than 7 percent of the worldwide limit in any green card category. But this reform just shifted the discrimination toward nationalities with the highest demand for green cards. The goal here was not any less racist. The debates over the law abounded with “liberals” reassuring conservatives that America wouldn’t be flooded with Asians.

In order to apply for a green card, green cards must be available under both the worldwide limit and the per-country limit for the relevant category. After their sponsors petition for them to receive a green card, immigrants wait in line to apply for the green card themselves. The State Department releases a green card bulletin every month to inform immigrants of which ones can apply that month. Immigrants whose sponsor petitioned for them before a certain date—called the “priority date”—can apply. Everyone else must continue to wait.

Read more at https://www.cato.org/blog/how-time-can-move-backward-immigrants-waiting-green-cards-4

Cato: Supreme Court Should Protect Federalism against Pests Both Rodential and Congressional

Does the federal government enjoy plenary power to regulate every aspect of corporeal existence, down to the rodents living in your backyard? People for the Ethical Treatment of Property Owners (PETPO), an organization of concerned citizens from Utah, say no, and want the Supreme Court to hear them out.

Article I of the Constitution lists the federal legislative powers: Congress may only act pursuant to one of these enumerated powers. One of these powers is the regulation of commerce “among the several states.” Starting with the New Deal, however, Congress has increasingly looked upon that power as a license to do whatever it likes. And for decades, the courts rubber-stamped these increasingly expansive federal intrusions into areas traditionally reserved to the states.

But in a series of cases, starting with 1995’s United States v. Lopez, the Supreme Court began to push back, reaffirming that federal regulation under the Commerce Clause must be, well, commercial. Recall that while Chief Justice John Roberts ultimately saved Obamacare by transmogrifying the individual mandate into a tax, he and the Court majority rejected the government’s arguments regarding the Commerce and Necessary and Proper Clauses.

That brings us to the current case. The Utah prairie dog, which resides only within a small corner of southwest Utah, has no commercial value: there is no market for it—they make terrible pets—or any product made from it. Moreover, the current population is large and expanding. Yet it is listed as “threatened” under the federal Endangered Species Act.

Read more at https://www.cato.org/blog/supreme-court-should-protect-federalism-against-pests-both-rodential-congressional

Cato: The Myth of Public-Sector Unions’ “Free Rider” Problem

Last month, the Supreme Court’s agreed to review Janus v. American Federation of State, County, and Municipal Employees, Council 31 (Cato filed a brief in support of the plaintiffs). The case is a First Amendment challenge to the “agency fees” that must be paid to a public-sector union by non-members. As a matter of existing First Amendment law, no employee may be compelled to join a union or contribute money to fund a union’s direct political activities, such as political ads. In roughly 22 states (the 28 “right-to-work” states outlaw agency fees), unions may compel non-members to pay agency fees that (ostensibly) only reflect the cost of the union’s representational activities, such as bargaining over wages and working conditions. The agency fee is the product of the Supreme Court’s decision in Abood v. Detroit Board of Education (1977), in which the Court prohibited public-sector unions from compelling non-members to support political speech, but allowed for the compelled support of the union’s other “non-political” activities.

The plaintiff in Janus—like the 2015 Friedrichs case that stalemated after Justice Scalia’s death (in which Cato also filed a brief)—claims that, for public employees, the distinction in Abood between “political” and “non-political” is illusory because the terms and conditions of public employment are inherently a matter of public concern. A teachers union negotiates with a school system over salaries and benefits packages, merit pay versus seniority, the standards for teacher evaluation, and the controversial “tenure” provisions that in some states make it nearly impossible to fire even serial abusers. Each of these represents a core, political issue in education policy, and a teacher who believes that, say, merit-based pay systems would improve the quality of teaching in the school system (where perhaps her own children may attend) can currently be forced to fund negotiations against it.

Abood upheld the agency fee based, in part, on the “free rider” rationale. The Court reasoned that, since unions are required expend resources for dissenters’ benefit, dissenters may be required to cover that expense because otherwise they would get a free ride on the supposed union gravy train. Recently, in Slate, attorney Daniel Horwitz—drawing on the argument of a pair of law professors—took the issue a step further, claiming that forcing unions to represent free riders is unconstitutional. Horwitz argues that unions should not have to abide by the duty of fair representation—meaning they have to fairly represent the interests of both members and non-members—if non-members are not made to pay (that is, if Mr. Janus wins). But unions aren’t compelled to abide by the duty of fair representation; they choose to when they become the exclusive bargaining representative.

Read more at https://www.cato.org/blog/myth-public-sector-unions-free-rider-problem

Cato: Florida’s Regulatory Takings Are for the Birds

As any child of five can tell you, taking a toy away in exchange for the promise of some future benefit does not change the fact that the toy was taken in the first place. This is also true of real property: A token gift of potential unknown value in no way changes the character of the initial taking. Under Supreme Court precedent, when all value of real property is regulated away, a taking has occurred and just compensation is due.

Gordon and Molly Beyer found themselves in just such a situation when they were informed that the nine-acre island in the Florida Keys they bought in 1970 for $70,000, intending to build a retirement home, had been reclassified as a bird rookery, requiring them to leave it in its natural state. Their island was zoned for general use at the time of purchase, but various regulatory actions restricted use over the years until the Beyers were informed that their property rights had quite literally gone to the birds. In exchange for the loss, they were awarded 16 nonmonetary, rate of growth ordinance (ROGO) points that might be sold to another property owner who wished to develop their land.

The Beyers pursued administrative review and inverse-condemnation proceedings, where a state court ultimately determined that no uses other than primitive camping and picnicking were allowed on the property, but that no taking had occurred. This was because the Beyers had no reasonable, investment-backed expectations for use of their property and because the award of ROGO points satisfied any expectations they had (if this is confusing to you, you’re not alone).

Read more at https://www.cato.org/blog/floridas-regulatory-takings-are-birds

Cato: A Self-Determination Façade: The Kurdish Referendum

On September 25, 2017, Iraqi Kurds voted in favor of independence from Iraq in a historic referendum. Out of the 3.3 million Kurds and non-Kurds who voted, 92% voted in favor of independence, which is not surprising. The international community’s reaction is also not surprising: Iraq, Turkey, Iran, Russia, France,  and the United States were all against the referendum, cautioning the Kurdish leadership about the regional impact from various strategic angles. In its quest to secure more non-Arab allies, Israel is the only country that has backed the referendum. The international community’s lack of support is seen as hypocritical by the Kurds, and may very well be. The United States in particular is wary of the creation of new states and their regional impact that tends to increase instability rather than reduce it, like in the case of South Sudan. While discouraging a population from seeking self-determination is thorny—even illiberal—the Kurdish referendum has two important outcomes that should not, be ignored.

First, the referendum has sent a dangerous mixed signal to other populations seeking independence and territorial sovereignty. Currently there are no administrative channels in place that will facilitate Kurdistan’s secession from Iraq—and it certainly cannot be called Kexit in the same vain as Brexit, the nickname for the UK’s vote to exit the EU. For example, Iraq still controls the Kurdistan Region of Iraq’s (KRI) air space and immediately following the referendum, instituted a flight ban from the region’s two international airports. KRI is not economically independent, and the referendum may have actually decreased its chances of becoming so. Even though Kurdistan has been producing 600,000 barrels of oil per day, an impressive feat for a landlocked region surrounded by hostile neighbors, low oil prices gravely impacted the development of its public sector that continues to remain weak and corrupt. Also, Kurds still hold Iraqi passports, and will most likely continue to be Iraqis officially for years to come, if not decades. So how exactly secession will happen is not clear. Therefore, it would be beneficial for other independence-seeking populations like Palestinians, Kashmiris, and Catalonians to pay close attention to how Kurdish independence unfolds, if at all. So then why was the referendum done now? There is speculation that the Kurdistan region’s president, Masoud Barzani of the Kurdistan Democratic Party, wanted his legacy to be putting Kurds on an internationally mandated path to independence. But Kurds are divided; while a majority of them want independence, many feel that is was not the right time, such as the “No for Now” campaign. In the presence of strong criticism from the international community, the referendum’s claim of providing a mandate for Kurdish independence is also questionable.

Read more at https://www.cato.org/blog/self-determination-facade-kurdish-referendum

Cato: In Afghanistan, the Withdrawal of U.S. Troops Is Long Overdue

Donald Trump announced a mini-surge of U.S. forces into Afghanistan a month ago. This week the Long War Journal reported the Taliban now control or contest 45 percent of Afghanistan’s districts, up from 40 percent three months prior, which was an increase from 34 percent a year earlier, and you get the idea. The Taliban control more territory today than at any point since 2001, and they have the momentum.

Sixteen years after invading Afghanistan, toppling the Taliban, and routing Al Qaeda elements there, U.S. goals remain as far out of reach as ever.

However, rather than surge additional forces and fall victim to the “sunk cost” fallacy, the U.S. should withdraw military forces and re-align objectives to the threat and national interests. During his August speech, Donald Trump defended the surge by saying, “our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made, especially the sacrifices of lives.” His emotional appeal implied that grieving Gold Star families should be the nation’s impetus for continued involvement in the Afghan war (which would also lead to more families who would experience that ultimate loss).

Instead of defending a surge on the basis of efforts already spent, U.S. policy towards Afghanistan should rely on the 16 years of data available since initiation of the war on terror. All of that data strongly communicates two points: 1) the terror threat to Americans remains low and 2) a strategy that emphasizes military power will continue to fail.

Read more at https://www.cato.org/blog/afghanistan-withdrawal-us-troops-long-overdue

Cato: Federal Pay Outpaces Private Pay in 2016

The Bureau of Economic Analysis (BEA) has released data on worker compensation for 2016. The data show that wages and benefits for federal-government workers grew faster than for private-sector workers last year. Federal workers now receive 80 percent more compensation, on average, than do workers in the U.S. private sector. I am including federal civilian workers here, not those in the uniformed military.

Average wages for federal workers increased 2.0 percent in 2016, which outpaced the average private increase of 1.3 percent. Federal workers had average wages of $88,809 in 2016, or 49 percent more than the average wages of private workers of $59,458.

However, the federal advantage in overall compensation (wages + benefits) is even larger because of gold-plated federal benefits, such as pension benefits. Total compensation for federal workers increased 2.5 percent last year, on average, more than double the 1.2 percent increase for private workers.

As a consequence, average federal compensation in 2016 was $127,259, which was 80 percent higher than average private compensation of $70,764. The federal advantage of 80 percent is up from just 50 percent in 2000.

Read more at https://www.cato.org/blog/federal-pay-outpaces-private-pay-2016

Cato: Senate Passes a Pentagon Budget, but a BCA Trainwreck Looms

By a vote of 89-8, the Senate yesterday passed a $700 billion defense budget. That isn’t particularly newsworthy. As the New York Times reported, “The vote marked the 56th consecutive year that Congress has passed the defense policy bill—a point of personal pride for Senator John McCain, the Arizona Republican who chairs the Senate Armed Services Committee.”

The important story is that Sen. McCain et al. have no plan for actually raising the necessary funds, either through more taxes, cuts elsewhere, or more debt. Previous budget fights played by the rules—compromising to abide by the bipartisan Budget Control Act caps on discretionary spending. Willfully ignoring the BCA elephant in the room, as the Senate just did, runs the risk of a government shutdown and/or sequestration.

The Trump administration opened the Pentagon funding floodgates when it debuted a $668 billion budget request earlier this year. Trump made good on his promise to rebuild the military by cutting deeply from non-defense accounts, thus creating the illusion of fiscal discipline. But he also called for increasing the BCA defense caps.

At the time, Sen. John McCain declared Trump’s budget “dead on arrival” because it cut too deeply from these other programs. He also declared the Defense Department increase to be insufficient. It was never clear how McCain would square that circle.

It still isn’t. It appears that he expects someone else to solve the BCA problem, or that it will magically disappear.

Read more at https://www.cato.org/blog/senate-passes-pentagon-budget-bca-trainwreck-looms

Cato: Reversible Lanes, Not Trains

In the days before Hurricane Irma made landfall in Florida, the state ordered 6.3 million people to leave their homes. As people in the rest of the nation watched videos and photos of bumper-to-bumper northbound traffic on Interstates 75 and 95, while the southbound lanes were nearly empty, most had one of two reactions. Some said, “If only Florida had large-scale passenger train service that could move those people out,” while others asked, “Why aren’t people allowed to drive north on the empty southbound lanes?”

The aftermath of the storm has already opened a debate over what Florida should do to increase its resilience in the future: build more roads or build more rail lines. The right answer is neither: instead, state transportation departments in Florida and elsewhere need to develop emergency plans to make better use of the transportation resources they already have.

Rail advocates like to claim that rail lines have much higher capacities for moving people than roads, but that’s simply not true. After the San Francisco earthquake of 1906, the Southern Pacific Railroad moved 300,000 people–free of charge–out of the city in what was probably the largest mass transportation evacuation in American history. While impressive, it took the railroad five days to move all of those people on three different routes. Even accounting for improvements in rail capacities in the last century, moving 6 million people out of south Florida by rail would take weeks, not the four days available between Florida’s first evacuation orders and the arrival of Hurricane Irma.

At the same time, the state of Florida could have done more to relieve congestion on major evacuation routes. The most it did was to allow vehicles to use the left shoulder lanes on part of I-75 and part of I-4 (which isn’t even a north-south route), but not, so far as I can tell, on I-95. What the state should have done, since there was very little southbound traffic, was to open up all but one of the southbound lanes of I-75 and I-75 to northbound traffic.

Read more at https://www.cato.org/blog/reversible-lanes-not-trains

Cato: Dream Act Inexplicably Excludes Legal Immigrant Dreamers, Requires Applicants Violate the Law

President Trump will support legislation to provide legal status to young immigrants who, as he said on Twitter, “have been in the country for many years through no fault of their own—brought in by parents at young age.” The legislation with the most cosponsors in the House and the Senate that would do so is titled the Dream Act. The proposal would help many unauthorized immigrants who deserve help, but for reasons that I cannot explain, the Dream Act prioritizes them above legal immigrant children in virtually the same position who meet all the eligibility criteria.

Most high-skilled immigrants initially enter the United States on temporary H-1B visas. H-1B workers can bring with them their spouses and minor children. As I have explained before, H-1B children live here, attend U.S. schools, grow up and attend U.S. universities, but on their 21st birthday, they lose their legal status, and the law requires them to self-deport if they cannot find another temporary legal status. Most stay at least for a few years longer by switching to a student visa, but this status prohibits work and expires again as soon as they graduate, leaving them in the same position they were before.

These children were “brought in by their parents” through “no fault of their own” and have “been in the country for many years”—the three criteria that President Trump mentioned for his dreamer legislation, yet the Dream Act, which would provide permanent residency, explicitly excludes them. This is not an oversight. The authors—Senators Graham and Durbin in the Senate—had to write that the law would apply only to a person “who is inadmissible or deportable from the United States” (p. 4) or who is in “temporary protective status,” which is typically given to unauthorized immigrants who can’t be deported due to a crisis in their home country.

In other words, the only way for legal dreamers to obtain status under this bill would be to somehow find a way to violate the law in order to become “deportable.” Even then, the Dream Act makes applicants ineligible if they have violated the rules of a student visa (p. 5), which most legal immigrant dreamers have to switch to when they turn 21 to avoid deportation, unless the Secretary of Homeland Security decides that it is necessary for “humanitarian purposes or family unity” or “otherwise in the public interest” to allow them to apply. Who knows whether he would decide that in any particular case? Few legal immigrants would take the chance that he wouldn’t and risk being deported and banned from the United States for life.

Read more at https://www.cato.org/blog/dream-act-inexplicably-excludes-legal-immigrant-dreamers

Cato: Congress’ Illegal ObamaCare Exemption and Its Nixonian Defenders

Thousands of members of Congress and congressional staffers are benefiting from an illegal scheme that gives Congress special treatment both by exempting them from the harshest part of ObamaCare and by providing them each up to $12,000 in benefits that federal law prohibits them from receiving. Last week, the Heritage Foundation’s John Malcolm and I furnished additional evidence that the government officials who implemented this scheme violated federal criminal laws. (Malcolm is a former deputy assistant attorney general in the Department of Justice’s Criminal Division.) Few government officials or legal scholars are willing to defend this scheme. Those who are nevertheless have been unwilling to comment on these new revelations or to offer a legal basis for this scheme. At least one seems to suggest that, because the executive branch did it, it must be legal.

In brief, the Obama administration violated numerous federal laws, including criminal laws, to provide thousands of dollars of benefits to members of Congress for the purpose of preventing members from voting to change ObamaCare. Martha Stewart went to jail for less. Congress has proven unwilling to investigate this obvious fraud, precisely because members of Congress from both parties benefit from it. The Trump administration has kept this illegal arrangement going for the same reason the Justice Department has not investigated the crimes committed implementing it: the beneficiaries of this fraud are extremely powerful and united in their determination both to perpetuate it and to hide it from voters.

The scheme is illegal, as Malcolm and I explain, in part because it relies on Congress enrolling in coverage through the District of Columbia’s small-business Exchange (also known as a “SHOP” Exchange), even though both federal and D.C. law prohibit employers with more than 100 workers from participating in SHOP Exchanges. Congress employs thousands upon thousands of people. Congressional officials falsified the applications they submitted to the D.C. SHOP Exchange on behalf of the House and Senate by claiming each employs fewer than 100 people. All by themselves, those false statements are prosecutable under 18 U.S.C. § 1001, with each count exposing the responsible officials to up to five years in prison.

Malcolm and I found that after those false statements became public in late 2014, D.C. dropped the employer-size question from its SHOP Exchange applications. At a minimum, this means D.C. officials were not enforcing the limits federal and D.C. law place on SHOP Exchange participation. It also has the appearance of a cover-up: after congressional officials made potentially prosecutable false statements about Congress’ eligibility for a federal program, D.C. officials stopped asking all applicants about that eligibility criterion. And when those officials continued to make other false statements on their applications, the D.C. government just stopped requiring applications entirely. Finally, we found Congress has since admitted to D.C. that it employs thousands of people and that D.C.’s SHOP Exchange has never turned down any employer for participation based on the employer’s size.

Read more at https://www.cato.org/blog/congress-illegal-obamacare-exemption-its-nixonian-defenders

Cato: Stop Forcing Wedding Vendors—or Anyone Else—to Create Expressive Art for You

While same-sex couples ought to be able to get marriage licenses—if the state is involved in marriage at all—a commitment to equality under the law can’t justify the restriction of private parties’ constitutionally protected rights like freedom of speech or association. Masterpiece Cakeshop, a bakery in Lakewood, Colorado, declined to bake a cake for the wedding of Charlie Craig and David Mullins. Jack Phillips, the shop’s owner, considers himself to be both an artist and a committed Christian whose faith permeates his art. Consistent with that faith, he will not create cakes marking events or ideas that violate his beliefs, such as cakes celebrating Halloween, incorporating hateful or vulgar messages, or celebrating any marriage that he believes is contrary to biblical teaching. While he refused to make the wedding cake, he did offer to make the couple any other cake they might like. Craig and Mullins responded by filing a charge of sexual orientation discrimination with the Colorado Civil Rights Commission, which found that Jack violated the Colorado Anti-Discrimination Act and rejected his First Amendment defenses, saying that baking and decorating custom wedding cakes does not constitute artistic expression. The Colorado Court of Appeals affirmed and the U.S. Supreme Court agreed to hear the case. Cato has filed an amicus brief supporting Masterpiece Cakeshop and urging the Court to vindicate Americans’ right not to speak.

Although making cakes may not initially appear to be speech to some, it is a form of artistic expression and therefore constitutionally protected. There are numerous culinary schools throughout the world that teach students how to express themselves through their work; couples routinely spend hundreds or even thousands of dollars for the perfect cake designed specifically for them. Indeed, the Supreme Court has long recognized that the First Amendment protects artistic as well as verbal expression, and that protection should likewise extend to this sort of baking—even if it’s not ideological and even if done to make money. The Court declared nearly 75 years ago that “[i]f there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion, or force citizens to confess by word or act their faith therein.” W.Va. Board of Education v. Barnette (1943). And the Court ruled in Wooley v. Maynard—the 1977 “Live Free or Die” license-plate case out of New Hampshire—that forcing people to speak is just as unconstitutional as preventing or censoring speech. The First Amendment “includes both the right to speak freely and the right to refrain from speaking at all” and the Supreme Court has never held that the compelled-speech doctrine is only applicable when an individual is forced to serve as a courier for the message of another (as in Wooley). Instead, the justices have said repeatedly that what the First Amendment protects is a “freedom of the individual mind,” which the government violates whenever it tells a person what she must or must not say. Forcing a baker to create a unique piece of art violates that freedom of mind.

Read more at https://www.cato.org/blog/stop-forcing-wedding-vendors-or-anyone-else-create-expressive-art-you

Cato: Legal Battle Between Oil Companies Raises Structural Constitutional Issues

When Oil States Energy Services, LLC filed its patent-infringement suit against Greene’s Energy Group, LLC in federal court back in 2012, the far-reaching negative consequences of the new America Invents Act (AIA) were not yet readily apparent. As the private dispute between these parties has wound its way through the AIA’s legal labyrinth in the subsequent half-decade, however, the structural problems inherent in this new administrative scheme have become increasingly obvious.

The passage of the AIA has resulted in a substantial transfer of power from the judiciary to the executive branch through the creation of the Patent Trial and Appeal Board (PTAB), an administrative-law body housed within the Patent and Trade Office (PTO) and vested with the extraordinary power to cancel already-issued patents. Although Congress has constitutional authority to determine the kinds of inventions that merit patents, patents themselves (whatever their legislatively determined scope and strength) are and have always been a form of private property. Patents cannot properly be characterized as public rights, as they neither involve the government setting conditions under which it waives its own sovereign immunity nor implicate a statutorily created cause of action that was unknown at common law. Patents are thus necessarily subject to the same protections as a piece of privately held land—and disputes over patents must be handled in the same manner as disputes over other kinds of property, with full judicial review rather than some lesser administrative process.

Read more at https://www.cato.org/blog/legal-battle-between-oil-companies-raises-structural-constitutional-issues

Cato: Congress Risks the Constitution in New Jersey Sports Betting Case

The Professional and Amateur Sports Protection Act (PASPA), which Congress passed in 1992, forbids states from “authorizing” sports betting “by law.” As every middle-schooler learns, however, our Constitution establishes dual sovereignty between the states and the federal government. And as the Supreme Court most recently held in New York v. United States (1992) and Printz v. United States (1997), the Constitution forbids Congress from “commandeering” state officials to serve federal ends, whether by forcing states to enforce federal laws or to pass new state laws (or to refrain from repealing old ones), which is exactly what PASPA does.

In 2011, New Jerseyans voted overwhelmingly—two to one—to legalize sports betting in a 2011 referendum. The next year, the state legislature responded to the will of the people by enacting a law allowing sports wagering at casinos and racetracks. The four major professional sports leagues, plus the National Collegiate Athletic Association (NCAA), sued under PASPA to prevent the state from moving forward and legalizing sports betting. In 2016, the U.S. Court of Appeals for the Third Circuit ruled for the NCAA, reasoning that if the state were to repeal its pre-PASPA sports gambling laws, they would be “authorizing” the activity “by law,” which was forbidden by PASPA. Unwilling to be forced to continue enforcement of a law overwhelmingly rejected by its populace, New Jersey appealed to the Supreme Court.

Read more at https://www.cato.org/blog/congress-risks-constitution-new-jersey-sports-betting-case

Cato: Bad Economics and Hurricane Harvey

Disasters seem just about the worst possible time to discuss economic concepts. Ask Forbes columnist Tim Worstall, whose column on “price gouging” in the aftermath of Hurricane Harvey has purportedly been removed from their site.

At times of human suffering, a host of people apparently consider it crude to discuss the best response, if that response incorporates the functioning of a market economy. Yet for those of us who worry about outcomes rather than platitudes, it is incumbent to denounce bad ideas, and seek to propose better ones. Natural disasters such as Hurricane Harvey reap enough destruction, emotional and physical, without compounding it with policies that make things worse.

Read more at https://www.cato.org/blog/bad-economics-hurricane-harvey

Cato: A Second Attack on the Dual-Sovereignty Exception to the Double Jeopardy Clause

In 1993, a Pennsylvania jury found Willie Tyler not guilty of murder but guilty of conspiracy to intimidate a witness. He was sentenced to “two-to-four years” and paroled in 1994. Two years later, a federal grand jury issued a four-count indictment against Tyler after Justice Department officials deemed he could be subject to a “retrial” on federal charges. He was convicted on all four counts and sentenced to a life term.

Following an appeal, second trial, and conviction, the case was remanded for reconsideration and a third trial was ordered. In the subsequent appeal of this third trial, Tyler challenged his 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, the state and federal governments are allowed to both prosecute someone for the same act.

Cato has joined the Constitutional Accountability Center in filing a brief urging the Supreme Court to review Tyler’s case and overturn this misguided “dual sovereignty” exception—as we did last December in Walker v. Texas, which presented the same issue. 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/second-attack-dual-sovereignty-exception-double-jeopardy-clause

Cato: You Should Be Able to Vindicate Federal Property Rights in Federal Court

In 2012, various properties in Van Buren County, Michigan became subject to foreclosure for property tax delinquencies. In 2014, the properties were subject to an order of foreclosure and were auctioned off to satisfy the delinquencies. Wayside Church owed $16,750 in back taxes on a parcel it used as a youth camp. When the property was sold for $206,000, Van Buren County kept the $189,250 in surplus as required by Michigan’s General Property Tax Act. Other taxpayers were similarly situated. For example, Myron Stahl and Henderson Hodgens had their properties auctioned for $68,750 to pay a $25,000 debt and $47,750 to pay a $5,900 debt, respectively.

Michigan law doesn’t recognize a right to surplus proceeds from tax sales, so the property owners sued in federal court, alleging that the county violated the Fifth Amendment’s Takings Clause when it kept the surplus proceeds from the sale of their properties. The district court dismissed the suit, precisely because Michigan law doesn’t recognize a right to surplus proceeds in such cases. On appeal, a divided Sixth Circuit dismissed the case for lack of jurisdiction. Citing the Supreme Court’s ruling in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985), the court held that plaintiffs’ failure to first pursue avenues of relief in state court barred the door to federal court.

Wayside Church and the other property owners filed a petition asking the Supreme Court to take the case and clarify takings law. Along with the National Federation of Independent Business, Southeastern Legal Foundation, and Prof. Ilya Somin, Cato has filed an amicus brief supporting that petition. We argue that this case provides an excellent opportunity to preferably overrule, but at least reconsider, Williamson County’s requirement that a property owner must first sue in state court to ripen a federal takings claim.

Read more at https://www.cato.org/blog/you-should-be-able-vindicate-federal-property-rights-federal-court

Cato: Fresh Thinking on Occupational Licensing

Occupational licensing started with the idea that jobs with serious consequences – doctors being the prototypical example – require some sort of government certification and oversight. But that rather innocuous motivation has ballooned into a harmful and unsustainable state of affairs.

From laws requiring licenses to braid hair to ones requiring licenses for floral design and casket manufacturing, occupational licensure has put barriers in the way of people who wish to do non-dangerous jobs and has done little to protect consumers. Instead, it’s frequently used as a way for politically well-connected people and state licensing boards to freeze out their competition, a textbook example of regulatory capture. The end result makes it harder for people to find fruitful employment, particularly low-income workers who often don’t have the time or money to get licenses.

Fortunately, the Supreme Court has offered some hope for those who don’t want needless barriers thrown their way when they want to make a living. In 2014, the Court held in North Carolina State Board of Dental Examiners v. Federal Trade Commission that a licensing board that had banned non-dentists from offering teeth-whitening services had violated federal antitrust laws – and that all licensing boards do the same when they engage in anticompetitive practices. (This was incidentally the first and only case in which Cato filed a brief supporting the federal government.) The Court further clarified that licensing boards have antitrust immunity if they’re subject to “active supervision” by the state in question.

States can get around this requirement by simply rubber-stamping everything done by the licensing boards, undermining the intended procompetitive effects of the decision in the process. In addition, there are valid concerns that the decision undermined state sovereignty in light of the fact that under Parker v. Brown, 317 U. S. 341 (1943), the Sherman Antitrust Act doesn’t apply to state government agencies.

Read more at https://www.cato.org/blog/occupational-licensing-bad

Cato: To Apply the Fourth Amendment in the Digital Age, Go Back to Its Text

Timothy Carpenter and Timothy Sanders were convicted in federal court on charges stemming from a string of armed robberies in and around the Detroit area. They appealed on the ground that the government had acquired detailed records of their movements through cell site location information (“CSLI”) from their wireless carriers in violation of the Fourth Amendment. The U.S. Court of Appeals for the Sixth Circuit turned their appeal aside, finding that “[t]he government’s collection of business records containing these data … is not a search.”

The Fourth Amendment states that “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.” Presumably, when called on to determine whether a Fourth Amendment violation has occurred, courts would analyze the elements of this language as follows: Was there a search? Was there a seizure? Was any such search or seizure of “their persons, houses, papers, [or] effects”? Was any such search or seizure reasonable?

In cases involving familiar physical objects, they usually do. In harder cases dealing with unfamiliar items such as communications and data, however, courts retreat to the Supreme Court’s “reasonable expectation of privacy” doctrine that emerged from Katz v. United States (1967). The Court has decided to review the important criminal-procedure and digital-privacy issues here.

Read more at https://www.cato.org/blog/apply-fourth-amendment-digital-age-go-back-its-text

Cato: USPS: A Giant Distortion Machine

The U.S. Postal Service (USPS) is a major business enterprise operated by the federal government. It has a legal monopoly over first-class mail, which prevents entrepreneurs from competing to improve quality and reduce costs.

I describe the postal system’s inefficiencies here, and discuss how European countries have privatized their systems and/or opened them to competition.

In this country, privatization is needed more than ever because the USPS is increasingly distorting the booming package delivery business. My study discusses USPS cross-subsidies between its mail and package activities, and a recent article in the Wall Street Journal explored the problem further.

Josh Sandbulte argued that the USPS gives Amazon an unfair advantage over brick-and-mortar firms:

"The U.S. Postal Service delivers [Amazon’s] boxes well below its own costs. Like an accelerant added to a fire, this subsidy is speeding up the collapse of traditional retailers in the U.S. and providing an unfair advantage for Amazon.

… The 2006 Postal Accountability and Enhancement Act made it illegal for the Postal Service to price parcel delivery below its cost. But with a networked business using shared buildings and employees, calculating cost can be devilishly subjective.

… An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam."

In a response to Sandbulte here, the USPS claims that they do not cross-subsidize. The solution for this dispute? Privatize the USPS, repeal the monopoly, and let competitive markets decide on product pricing.

Read more at https://www.cato.org/blog/usps-giant-distortion-machine

Cato: Even Poor People Should Be Allowed to Make Bail

Maranda O’Donnell was arrested for driving with a suspended license and bail was set at the prescheduled amount of $2,500, which she could not pay. Ms. O’Donnell was not alone in having bail set at an amount that could not be paid. Robert Ford’s bail was set at $5,000 for misdemeanor theft of property and Loetha McGruder’s bail was set at $5,000 for the misdemeanor of giving a false name to a police officer. There are many other such examples; all of these bail amounts were set according to a predetermined schedule based on the offense. None of the defendants could afford the bail and so were forced to stay in jail.

According to one report, 81% of misdemeanor arrestees in Harris County (Houston), Texas, were unable to post bail at booking, and 40% were never able to post bail. Ms. O’Donnell sued Harris County and various government officials on behalf of herself and all others similarly situated for violating the Fourteenth Amendment’s Due Process and Equal Protection Clauses by setting bail amounts higher than defendants could pay, which detained indigent people much longer than those financially able to pay.

The federal district court found that the predetermined bail schedule was treated as a “nearly irrebuttable presumption in favor of applying secured money bail at the prescheduled amount.” Further, the court found that Harris County did not even provide “timely hearings” to prove their inability to pay or even the reasons why defendants were being denied a bail they could paid. The court issued a preliminary injunction ordering the county to release misdemeanor defendants on personal bond—not secured by cash in advance—within 24 hours of being arrested.

Read more at https://www.cato.org/blog/even-poor-people-should-be-allowed-make-bail

Cato: When Police Misread Tea Leaves They Violate the Fourth Amendment

Police militarization and excessive force have become increasingly pressing issues in American society. Fortunately, the Denver-based U.S. Court of Appeals for the Tenth Circuit – Justice Neil Gorsuch’s old stomping ground – held yesterday that innocent victims of improper police procedures during dynamic drug raids have some protections. Even if the court didn’t fully address the issues Cato raised in our brief, the ruling in Harte v. Board of Commissioners of Johnson County, Kansas is a step forward.

In 2011, Robert Harte and his two children visited a garden store to buy tomatoes for his 13-year old son’s school project. Little did they know that Sergeant James Wingo of the Missouri State Highway Patrol was watching the store and recording the license plate numbers of the visitors, assuming that they were there to buy marijuana despite little evidence for that assumption. The Johnson County Sheriff’s Office then examined the Hartes’ trash on two occasions, finding about an ounce of “saturated plant material.” Because they evidently couldn’t tell the difference between tea and marijuana, they field-tested the substance, which tested positive for marijuana.

In an inspiring display, the police launched a military-style raid the Hartes’ home. At 7:30 in the morning, they pounded on the Hartes’ door, forced Mr. Harte to the ground when he answered, and searched their home for three hours. As it became increasingly clear that there was no marijuana in the house, the police started to search for “any kind of criminal activity,” a far greater sweep than what a warrant to search for “marijuana” and “drug paraphernalia” allows. Heaping further indignities on the family, the officers also left canine units in the house longer than necessary to give them extra training. The police apparently wanted to turn lemons into lemonade by retroactively turning an early-morning drug raid – that didn’t find any drugs, lest we forget – into a training exercise.

Read more at https://www.cato.org/blog/when-police-misread-tea-leaves-they-violate-fourth-amendment

Cato: D.C.’s Rule Requiring a “Good Reason” to Carry a Gun Struck Down

The District of Columbia has suffered another defeat in its decades-long effort to restrict gun rights.

Today the D.C. Circuit Court of Appeals struck down the District’s “good reason” requirement, which obliges individuals to demonstrate a special need before being allowed to carry a gun.

Some background: the District banned all handgun possession, including in the home, in 1976.  That policy was ruled unconstitutional in the Heller I decision in 2008, which held that the 2nd Amendment protects an individual right to have a handgun in the home for self-defense. The District responded to Heller I by banning the public carrying of handguns.  That ban was ruled unconstitutional in Palmer v. District of Columbia in 2014 (Cato’s own Tom Palmer was the named plaintiff in that case). The District was undeterred, and responded to the Palmer ruling by requiring permit applicants to provide a “good reason” why they should be allowed to carry.

The “good reason,” as defined by the D.C. government, is incredibly narrow. Simply being concerned about crime, or living/working in a crime-ridden area of the city does not suffice. Effectively the only people capable of meeting the D.C. test are those working in extraordinarily high-risk occupations or people who have received substantive, specific threats against them.

Read more at https://www.cato.org/blog/dcs-rule-requiring-good-reason-carry-gun-struck-down-again

Cato: Statues

Why should a city, state, or federal government put statues in public parks?  Doing so addresses no plausible market failure, while using taxpayers funds and, as demonstrated tragically over the past few weeks, generates controversy, polarization, and violence. Thus governments should take down all statues, regardless of their political implications.

This is not “erasing” history but instead leaving it where it belongs, in the hands of private actors and mechanisms.  Historians, textbook authors, universities, learned societies, the History Channel, and many other individuals and organizations can all present their own views of history and battle for the hearts and minds of the public.  Government statues are government putting its thumb on the scale, which is one step down the slippery slope of thought control.

Read at https://www.cato.org/blog/statues

Cato: Government Businesses Can’t Simply Take Over Property They’ve Been Unable to Buy

For many years, Violet Dock Port had owned and operated a docking facility that stretched along a mile of the Mississippi River in St. Bernard Parish, Louisiana. As a private business, Violet was in economic competition with the local Port Authority, which also owns and operates riverfront property.

In 2007, the Port Authority took an interest in Violet’s land and tried to negotiate a purchase, but those negotiations failed. If this had been a normal negotiation between two private market participants, the Port Authority would have had only two options at that point: improve its offer or walk away. But instead it decided to appeal to its status as a public agency and claim that it required Violet’s land for “public use.” Invoking Louisiana’s eminent domain power to complete the deal by force, the Port Authority took over Violet’s business and eliminated its competition.

Violet has challenged this taking in state court, and the case has now reached the Louisiana Supreme Court. Cato has joined the National Federation of Independent Business Small Business Legal Center, Southeastern Legal Foundation, and Louisiana Association of Business and Industry on an amicus brief urging the state supreme court to strike down this taking under both the federal and Louisiana constitutions.

Under both constitutions, private property can only be taken by eminent domain if it is for a true public use. But a taking that is solely for the purpose of eliminating private competition is not a legitimate “public use.” There is nothing public-minded about destroying a private-sector business for the benefit of a public enterprise, and no reason to believe that such an agglomeration will help consumers or the economy. Indeed, the state’s economic arguments are dangerously broad because they could apply just as much to a private company that wished to eliminate competition.

Read more at https://www.cato.org/blog/government-businesses-cant-simply-take-over-property-theyve-been-unable-buy

Cato: Lucia v. SEC: The D.C. Circuit Divided Against Itself

Earlier this week, the D.C. Circuit court issued a surprising decision in Lucia v. SEC. The case addresses whether administrative law judges (ALJs) are “inferior officers” and are therefore subject to the appointments clause. But the heart of the case is far less wonky than it seems. The question is really this: what makes a judge a judge? If a person has the power to ruin a company, bankrupt a person, force the person to give up a lifelong profession, and bar the individual from interacting with friends and former colleagues, and if the person does this wearing a black robe and sitting amidst the trappings of court of law, is that person an officer? Because ALJs do all of this and more. Their decisions about whether evidence is admissible and their determinations about whether a witness is lying have a profound effect not only on the hearings over which they preside, but over any subsequent appeal. If this much authority and discretion are not enough, what on earth is?

It seems the judges, who sat en banc to hear the case (a rare occurrence, signaling a case of particular import), could not agree. They split right down the middle and deadlocked. The earlier decision will stand…for now. The case is almost assuredly bound for the Supreme Court. But until the High Court takes it up (and while it seems this is the sort of case they would take, there are no guarantees on that front), the D.C. Circuit’s earlier ruling, finding that ALJs are not inferior officers but “mere employees” will stand.

Read more at https://www.cato.org/blog/lucia-v-sec-dc-circuit-divided-against-itself

Cato: Even Sex Offenders Have Constitutional Rights

On Monday, the Supreme Court ruled that a North Carolina preventing sex offenders from accessing social media and other websites – without any attempt to tailor restrictions to potential contact with minors – violated the First Amendment. But restrictions on the freedom of speech aren’t the only unconstitutional deprivations sex offenders face.

In 1994, Minnesota passed what has become arguably the most aggressive and restrictive sex-offender civil-commitment statute in the country. The Minnesota Sex Offender Program (MSOP) provides for the indefinite civil commitment of “sexually dangerous” individuals, over and beyond whatever criminal sentence they may have already completed.

And while there is technically a system in place whereby committed individuals can petition for release or a loosening of their restrictions, in the more than 20 years that the MSOP has existed, only one person has ever been fully discharged (someone in the program for offenses committed as a minor, and he was only discharged after a court challenge). As Craig Bolte, one person committed in the MSOP, has testified, there is a distinct feeling that “the only way to get out is to die.”

The Supreme Court has held that states have the authority to commit individuals against their will outside the traditional criminal justice context, but only for the purpose of keeping genuinely dangerous people off the streets while undergoing rehabilitative treatment. Punishment and deterrence are legitimate goals exclusively of the criminal justice system, so any deprivation of liberty for either of those two purposes must follow only from that system, with all the procedural protections our Constitution requires.

Read more at https://www.cato.org/blog/even-sex-offenders-have-constitutional-rights

Cato: Lucia and PHH: Two Cases, Two Arguments for Constitutional Principles

It’s not often an appellate court agrees to re-hear a case en banc—that is, reexamine a decided case with all active judges participating—and when it does, usually it’s because the case is of particular importance.  Today the federal appeals court in D.C. heard two such cases, and both address fundamental issues of due process and constitutional integrity.  Heavy and exciting stuff.  Cato filed amicus briefs in both cases, given their potential impact on core principles of liberty and the rule of law.

The first case, Lucia v. SEC, considers the role of the Administrative Law Judge (ALJ).  While the case was nominally about whether ALJs are inferior officers, and therefore subject to certain constitutional appointment and removal proceedings, at its heart is the question: what makes a judge a judge?

Most Americans expect that if the government is going to haul them in for alleged wrongdoing, they’ll at least have their case heard by an impartial judge, with all the usual legal protections.  And this is what Americans should expect.  Unfortunately, some federal agencies operate differently, using their own internal administrative proceedings, with their own ALJs, to determine if someone has broken the rules, and to impose a fine or other punishment.

The vast majority of ALJs work for the Social Security Administration, determining whether individuals are eligible for benefits.  As Lucia’s lawyer pointed out in argument today, there is a big difference between ALJs determining whether someone will receive something from the government, as the Social Security Administration’s ALJs do, and determining whether the government will take something from someone.

ALJs who oversee adversarial proceedings, such as those at the SEC along with a handful of other agencies, exercise a level of discretion and carry out responsibilities almost indistinguishable from those of judges in federal court.  The SEC has argued that the crucial difference is that ALJs’ decisions are not technically final until the Commissioners themselves have signed off on them.  But while the Commissioners review the ALJs’ application of the law, they do not review what is known as “findings of fact” or the admissibility of evidence.  That means that the ALJs are the only people who decide what documents and testimony will be used to prove the case, listen to the witnesses and decide whether they’re telling the truth, and determine what “really” happened.

Read more at https://www.cato.org/blog/lucia-phh-two-cases-two-arguments-constitutional-principles

Cato: Betting on Freedom: The Federal Ban on States Legalizing Sports Gambling

Have you ever played fantasy sports for money? Have you ever participated in your office March Madness pool? Well, if you did, you may have broken federal law, which is quite ridiculous. If you’ve bet on your local jai alai match, though, that was probably safe.

In sports gambling, as is so often the case with many things, the law is not keeping up with our behavior and attitudes. There’s a growing movement to modernizing our gambling laws, including some new coalitions, such as the American Sports Betting Coalition (ASBC), and at least one case pending at the Supreme Court. That case, Christie v. NCAA, is a challenge to the constitutionality of the Professional and Amateur Sports Protection Act of 1992 (PASPA). Cato supported the petition, which will be discussed by the justices next week.

PASPA outlawed sports betting, with the exception of horse racing and jai alai (obviously), in most states. In classic, horse-trading style, carve outs were made for Oregon, Delaware, Montana, and Nevada. Even worse, the law prohibits states from “authorizing” sports gambling “by law,” which should be regarded as a violation of states’ rights protected by the Tenth Amendment—but the Third Circuit didn’t see it that way. The irony, of course, is that 44 states and 47 jurisdictions (D.C., U.S. Virgin Islands, and Puerto Rico) all have government-run lotteries, because evidently those governments are okay with gambling that benefits their budgets.

By overturning the restrictive federal ban on sports betting, states will be empowered to make their own decision about whether or not to allow it. If states were able to make their own laws about sports betting, areas where it is allowed could see economic growth sparked by increased tourism and an increase in betting-related jobs, as well as other industries springing up around this new frontier of economic possibility. Oxford Economics—one of the world’s leaders in global forecasting and quantitative analysis—has estimated that legal sports betting could add $14 billion to the national economy, generate up to $27 billion in total economic impact, and support 152,000 American jobs. In addition to these economic benefits, overturning such a ban would give states and local law enforcement the ability to oversee legal gambling, thus taking power from dangerous underground gambling rings.

At its root, this is an issue of federalism; people in cities and towns across America should be able to decide for themselves if sports betting is something they want for their communities. Many of them do; nearly 7 in 10 Americans believe that the issue should not be left to the federal government, and 72 percent of avid sports fans support the legalization of sports betting.

Read more at https://www.cato.org/blog/betting-freedom-new-coalition-legalize-sports-gambling

Cato: Experts and the Gold Standard

Many mainstream economists, perhaps a majority of those who have an opinion, are opposed to tying a central bank’s hands with any explicit monetary rule. A clear majority oppose the gold standard, at least according to an often-cited survey. Why is that?

First some preliminaries. By a “gold standard” I mean a monetary system in which gold is the basic money. So many grains of gold define the unit of account (e.g. the dollar) and gold coins or bullion serve as the medium of redemption for paper currency and deposits. By an “automatic” or “classical” gold standard I mean one in which there is no significant central-bank interference with the functioning of the market production and arbitrage mechanisms that equilibrate the stock of monetary gold with the demand to hold monetary gold. The United States was part of an international classical gold standard between 1879 (the year that the dollar’s redeemability in gold finally resumed following its suspension during the Civil War) and 1914 (the First World War).

Why isn’t the gold standard more popular with current-day economists? Milton Friedman once hypothesized that monetary economists are loath to criticize central banks because central banks are by far their largest employer. Providing some evidence for the hypothesis, I have elsewhere suggested that career incentives give monetary economists a status-quo bias. Most understandably focus their expertise on serving the current regime and disregard alternative regimes that would dispense with their services. They face negative payoffs to considering whether the current regime is the best monetary regime.

Here I want to propose an alternative hypothesis, which complements rather than replaces the employment-incentive hypothesis. I propose that many mainstream economists today instinctively oppose the idea of the self-regulating gold standard because they have been trained as social engineers. They consider the aim of scientific economics, as of engineering, to be prediction and control of phenomena (not just explanation). They are experts, and an automatically self-governing gold standard does not make use of their expertise. They prefer a regime that values them. They avert their eyes from the possibility that they are trying to optimize a Ptolemaic system, and so prefer not to study its alternatives.

Read more at https://www.cato.org/blog/experts-gold-standard

Cato: Governments Shouldn’t Even Fund Schools

Education reporters frequently make the claim that government ought to fund and operate educational institutions because schooling is a public good. However, since schooling fails both conditions required for a public good to exist, schools should not be publicly operated.

Schooling is Not a Public Good

According to the economic definition, a public good is non-rival in consumption and non-excludable. The first condition means that one individual’s consumption of the good does not hinder others’ abilities to use the product. Schooling fails this condition since students take up seats when receiving an education. The second condition means that the producer of the good is unable to exclude non-payers. Schooling fails this part of the definition since school leaders can prevent students from attending their institutions, if necessary.

Since schooling is not a true public good, the basic free-rider problem does not exist. This is important because it means that government does not need to operate schools or force residents to pay for them.

A Merit Good?

When journalists claim that schooling is a public good, I believe they actually mean to say that education is a merit good since it produces positive externalities. When an educational product is purchased, both the consumer and the provider benefit, as in all other voluntary transactions. However, the rest of society may also benefit if schooling actually creates citizens that are more educated. This argument leads many scholars to support government subsidization of schooling.

Read more at https://www.cato.org/blog/governments-shouldnt-even-fund-schools

Cato: Another Bleak Day for Property Owners

Property owners have long suffered under the Supreme Court’s erratic rulings. It got worse today. In Murr v. Wisconsin, the Court ruled against the owners, 5-3, with Justice Kennedy writing for the majority, Chief Justice Roberts writing a dissent, joined by Justices Thomas and Alito, Thomas writing a separate dissent, and Justice Gorsuch taking no part. The problem isn’t simply with the majority’s holding and opinion, it’s with the dissent as well. Only Thomas points in the right direction.

This was a regulatory takings case arising under the Fifth Amendment’s Takings Clause, which prohibits government from taking private property for public use without just compensation. In separate conveyances in 1994 and 1995, the Murrs, four siblings, inherited two contiguous lots on the St. Croix River that their parents had purchased in 1960 and 1963. The parents had built an ancestral home on the first lot. They bought the second for investment purposes.

The trouble began in 2004 when the Murrs sought to sell the second lot, valued at $410,000, and use the proceeds to upgrade the ancestral home. But they were blocked by a 1975 local zoning ordinance that treated the two lots as one, even though they had long been deeded and taxed separately. Under the ordinance they had to sell the lots together or not at all. Out $410,000, the Murrs sued, claiming that the ordinance had deprived them of their right to sell their property.

Here it gets complicated. In a 1992 decision, Lucas v. South Carolina Coastal Council, a 5-4 Court held that David Lucas was entitled to compensation after an ordinance prohibiting him from building on his property effectively wiped out all of its value. The problem with this “wipeout” rule, of course, is that most regulations leave at least some value in the property. When Justice Stevens called the rule “arbitrary” since “the landowner whose property is diminished in value 95% recovers nothing,” Justice Scalia, writing for the Court, responded tersely, “Takings law is full of these ‘all or nothing’ situations.”

In so writing, Scalia was citing a 1978 decision, Penn Central v. New York, which gave us a balancing test that nobody understands, least of all Justice Brennan who crafted it.  There that Court held that its test must be applied to “the parcel as a whole,” not to some portion of it. Combined with Lucas, that makes all the difference in the world for the Murrs. If their lots are treated separately, as they have always been except for this ordinance, virtually all value in the second has been wiped out and the Murrs, under Lucas, are entitled to compensation for the taking. But with the two lots combined as one, value remains, so the state can escape paying the Murrs any compensation. Thus, the question before the Court was whether the state could do that simply by treating the two lots as one.

Read more at https://www.cato.org/blog/another-bleak-day-property-owners

Cato: California’s Fishy Licensing Fees

One of the liberties protected by the Constitution is the right to do business in other states, on the same terms as companies based in those states. That right is enshrined in the Privileges and Immunities Clause of Article IV, section 2, one of the handful of individual rights that the Framers saw fit to safeguard even before the Bill of Rights was enacted. In fact, ensuring the opportunity to do business out-of-state on equal terms with a state’s residents was one of the principal motivations for holding the Constitutional Convention in the first place. But the U.S. Court of Appeals for the Ninth Circuit has condoned California’s violation of that right.

California enacted a set of commercial-fishing license fees that require nonresidents to pay several times more than residents. The system is explicitly discriminatory, harshly regressive, and intentionally protectionist. The Supreme Court and the Fourth Circuit, in substantively identical circumstances, have ruled these kinds of provisions to be impermissible: States must charge license fees equally to residents and nonresidents alike, or else bear the burden of justifying their discrimination (which California has made little real effort to do). But an en banc majority of the Ninth Circuit quite literally imposed the opposite rule. Not only did it uphold California’s discrimination, but it supported its holding with guesstimates of tax payments and rough calculations of economic costs that the state itself had never supplied. The result is conflict between two federal circuits and an open door for new methods of discrimination that the Constitution has always forbidden.

Read more at https://www.cato.org/blog/californias-fishy-licensing-fees

Cato: Stadium Boondoggles Spread to the Minor Leagues

In Prince William County, Virginia, just south of Washington, the board of supervisors is about to decide whether to issue $35 million in bonds to build a new baseball stadium for the Potomac Nationals, a Class A affiliate of the Washington Nationals. The board just rejected a proposal to let the taxpayers vote on the issue.

Art Silber, the retired banker who put up $300,000 to buy the team in 1990, estimates that it’s now worth $15 to $25 million. But-

"“Right now, we have the worst ballpark in the league and one that probably ranks in the bottom 10 of organized baseball’s 160,” he said. “At the new ballpark, the visibility will be extraordinary. Naming rights alone will pay for a lot of the stadium.”

He can only imagine what the team will be worth."

Seems like an excellent profit opportunity for a business worth tens of millions of dollars. But he has a better plan: If the county doesn’t pony up, he will sell the team, and new owners will move it.

The county found a consulting firm to produce, as it has done for many governments, an optimistic economic analysis: It suggests that a new stadium would generate 288 jobs, $175 million in economic impact, and $4.9 million in tax revenue over a 30-year lease. Similar studies have proven wildly optimistic in the past. In 2008 the Washington Post reported that Washington Nationals attendance had fallen far short of what a 2005 study predicted. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed Nationals stadium subsidy, “The wonder is that anyone finds such figures credible.”

Read more at https://www.cato.org/blog/stadium-boondoggles-spread-minor-leagues

Cato: More School Choice, Less Crime

One of the original arguments for educating children in traditional public schools is that they are necessary for a stable democratic society. Indeed, an English parliamentary spokesman, W.A. Roebuck, argued that mass government education would improve national stability through a reduction in crime.

Public education advocates, such as Stand for Children’s Jonah Edelman and the American Federation for Teachers’ Randi Weingarten, still insist that children must be forced to attend government schools in order to preserve democratic values.

Theory

In principle, if families make schooling selections based purely on self-interest, they may harm others in society. For instance, parents may send their children to schools that only shape academic skills. As a result, children could miss out on imperative moral education and harm others in society through a higher proclivity for committing crimes in the future.

However, since families value the character of their children, they are likely to make schooling decisions based on institutions’ abilities to shape socially desirable skills such as morality and citizenship. Further, since school choice programs increase competitive pressures, we should expect the quality of character education to increase in the market for schooling. An increase in the quality of character education decreases the likelihood of criminal activity and therefore improves social order.

Read more at https://www.cato.org/blog/self-interested-schooling-choices-improve-social-order

Cato: Trump’s No Good Very Bad Arms Deal

Tomorrow Congress will vote on resolutions of disapproval in response to Trump’s recent arms deal with Saudi Arabia. If passed, Senate Resolution 42 and House Resolution 102 would effectively block the sale of precision guided munitions kits, which the Saudis want in order to upgrade their “dumb bombs” to “smart bombs.” A similar effort was defeated last year in the Senate. How should we feel about this vote?

Before the ink was dry President Trump was busy bragging about his arms deal with Saudi Arabia, a deal that he claimed would reach $350 billion and would create “hundreds of thousands of jobs.” The sale bore all the hallmarks of Trump’s operating style. It was huge. It was a family deal—brokered by his son-in-law, Jared Kushner. It was signed with pomp and circumstance during the president’s first international trip. But most importantly, as with so many of his deals, the deal was all sizzle and no Trump Steak.™

Trump’s arms deal with the Saudis is in fact a terrible deal for the United States. It might generate or sustain some jobs in the U.S. It will certainly help the bottom line of a handful of defense companies. But from a foreign policy and national security perspective, the case against selling weapons to Saudi Arabia is a powerful one for many reasons.

1. The deal will deepen U.S. complicity in Saudi Arabia’s inhumane war in Yemen.

In an almost three-year long intervention into the Yemeni civil war to defeat the Houthi rebels and to destroy the local Al Qaeda franchise (Al Qaeda in the Arabian Peninsula—AQAP), the Saudis have demolished much of Yemen with little concern about the consequences. NGOs have documented case after case of the Saudis attacking civilian targets—the United Nations estimates over 10,000 civilians have died to date—and millions of Yemenis now suffer at the brink of starvation under increasingly desperate and unhealthy conditions. Tragically, the Saudis now seek American firepower to help them break the stalemate that has emerged on the ground in Yemen.

Read more at https://www.cato.org/blog/trumps-no-good-very-bad-arms-deal

Cato: To Be Liable for Fraud, You Have to Have Actually Defrauded Someone

Stream Energy is a retail gas and electrical energy provider whose business model allows prospective salesmen to purchase the right to sell its products and to recruit new salesmen. In 2014, some former salesmen brought a class-action lawsuit against Stream for fraud, alleging that the company’s business model constituted an illegal pyramid scheme.

But unusually for a fraud claim, the plaintiffs argued that they didn’t need to identify any specific misrepresentations made by Stream that might have convinced particular class members to become salesmen. Instead, the plaintiffs claimed that simply offering membership in an illegally structured business would be fraud in and of itself, even if people joined with full knowledge of all risks and benefits.

A federal district court in Texas certified the class, so Stream appealed that decision to the U.S. Court of Appeals for the Fifth Circuit. A three-judge panel reversed the district court, holding that a class could not be certified because each plaintiff must individually prove that he was subject to a misrepresentation. But the entire Fifth Circuit then reheard the appeal and ruled for the plaintiffs. The court didn’t rule on whether Stream was in fact engaged in an illegal pyramid scheme, but did affirm the class certification, accepting the plaintiff’s theory that a single proof of illegal structuring would prove a fraud against every one of Stream’s salespeople.

Read more at https://www.cato.org/blog/be-liable-fraud-you-have-have-actually-defrauded-someone

Cato: Courts Shouldn’t Join the #Resistance

Last week’s travel-ban ruling by the U.S. Court of Appeals for the Fourth Circuit is a travesty. Not because the underlying policy is anything to write home about. As I wrote when the second executive order came out in March, “[r]efugees generally aren’t a security threat, for example, and it’s unclear whether vetting or visa-issuing procedures in the six remaining targeted countries represent the biggest weakness in our border defenses or ability to prevent terrorism on American soil.” But the judiciary simply can’t substitute its own policy judgment for that of our elected representatives, no matter how well-informed judges may be or how misguided they think our political leaders may be.

Indeed, what’s going on here isn’t a sober legal analysis – incredibly, the majority opinion contains no discussion of the relevant statutory text, or of the scope of executive power in light of congressional policy (the so-called Youngstown Steel analysis) – but a wholesale rejection of Donald Trump. Essentially, the court ruled that anything the current president does, at least in the areas of immigration and national security, is de facto (and therefore de jure) illegitimate. The judiciary has joined the #resistance.

Read more at https://www.cato.org/blog/courts-shouldnt-join-resistance

Cato: Dollars per Vote in the 2016 Election

In the early days of the 2016 election cycle pundits were expecting the most expensive election ever. There were predictions of a $2 billion Hillary Clinton campaign and a $5 billion total for all presidential candidates. In the end, the campaigns spent less than expected, and less than in 2008 and 2012, and the winning candidate spent much less than the runner-up. “News” is supposed to be something unexpected, yet I haven’t seen many headlines about the drop in campaign spending and the dramatic revelation that money doesn’t always win.

Of course, in every election the bigger amounts are government spending. When politicians vote or promise to give money to students, the elderly, farmers, automobile companies, defense contractors, and other voting blocs, political considerations are certainly part of the decision-making process. When presidential candidates promise free college or a trillion dollars for infrastructure construction, they are clearly understood to be appealing for votes. When Republicans vote for $60 billion in “Hurricane Sandy recovery aid,” including money for Alaskan fisheries and activist groups, aren’t they buying votes?

Read more at https://www.cato.org/blog/dollars-vote-2016-election