2015-01-03

Cato: Supreme Court Should Remove Kafka-esque Burden to Vindicating Property Rights

In order to create better telecom infrastructure, New York state law gives private telecom firms the power to take private property in exchange for just compensation. Verizon used this power to build terminal boxes on thousands of pieces of private property, thus essentially permanently occupying a part of the properties. Verizon is one of a few companies that enjoy this extraordinary, state-granted privilege to build things on other people’s property without their permission.

Those companies, however, must compensate the owners (at least theoretically) for these sorts of takings of property. Kurtz v. Verizon New York, Inc. arises from a putative class action alleging that Verizon failed to compensate 30,000-50,000 property owners for building terminal boxes on their property. Although Verizon is required to give property owners their “full compensation rights,” the plaintiffs argue that the company continuously flouts this requirement “as a matter of corporate policy and practice,” thus violating both the plaintiffs’ rights to procedural due process—for example, by not even notifying them that their property was being taken—and their Fifth Amendment rights to not have their property taken for public use without just compensation.

The U.S. Court of Appeals for the Second Circuit, however, ruled that the plaintiffs couldn’t proceed with their claims because of a case called Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985), in which the Supreme Court ruled that plaintiffs with takings claims have to seek relief from state courts before proceeding with a federal claim. Otherwise, the case will be dismissed for being not “ripe”—not ready for a federal court to hear the case.

Read more at http://www.cato.org/blog/supreme-court-should-remove-kafka-esque-burden-vindicating-property-rights

Cato: Police Misconduct: The Worst Case in October

Over at Cato’s Police Misconduct website we have identified the worst case for the month of October.

The worst police misconduct of October goes to the officers who shot David Hooks in his own home during a drug raid based on an invalid warrant and the tip of an informant who was allegedly high on meth.  The informant, Rodney Garrett, had just stolen a vehicle from the Hooks’ home when he was either arrested or turned himself into the police (reports vary).  Garrett told police that the 20g bag of meth he had had been stolen from Hooks’ pickup truck.

That same night, the Laurens County Drug Unit pushed through a warrant based primarily on Garrett’s word, and at 10:55 pm, executed a no-knock warrant despite the fact that the warrant did not authorize one–at a home that the police knew had just previously been burglarized two nights earlier. Hooks’ wife Teresa saw armed, hooded figures in black rushing towards the back door and woke her husband, thinking the burglars had returned.  David Hooks got his gun, and when the SWAT team knocked in the back door without announcing their presence, he didn’t even have the opportunity to get a shot off before officers fired between 16 and 18 rounds, killing him.

Read more at http://www.cato.org/blog/police-misconduct-worst-case-october-0

Cato: U.S. Should Talk to North Korea, Whoever Is in Charge

Power is like quicksilver.  It often slips through the fingers of those attempting to grasp it.  Who is in power in North Korea?  Maybe 31-year-old Kim Jong-un.  Maybe not.

The Democratic People’s Republic of Korea’s Kim disappeared from public view for 40 days.  On his return Pyongyang only released undated still photos.

There’ve been no untoward troop movements or party conclaves in the North, though some other signs seemed conflicting.  Whoever reigns, there is little reason to hope for nuclear disarmament.

To the contrary, the North appears to be increasing production of fissile material, moving ahead on ICBM development, and upgrading rocket launch facilities.  Even a seemingly secure Kim, the “Great Successor” whose father concocted the North’s “military first” policy, would hesitate challenging the armed services by trading away its most important weapon.

Yet there are signs of change elsewhere.  The economy appears to be growing, with more consumer goods evident, especially in Pyongyang.

Read more at http://www.cato.org/blog/us-should-talk-north-korea-whoever-charge

Cato: Should Republicans Restore the Judicial Filibuster?

When Republicans take control of the Senate in January, should they revive the judicial filibuster that Democrats instituted in 2003 when George W. Bush was president, but ended last November when Republicans were filibustering Obama nominees? That heads-I-win-tails-you-lose question probably answers itself, but the background is a bit more complicated.

In fact, in a post I rushed into print yesterday morning I mangled some elementary filibuster facts, which I partially corrected late in the day after a reader kindly alerted me to the error. I’m tempted to say that an impostor was writing under my name, but the better explanation perhaps is too little sleep from following overnight election returns. In any event, it turns out that Harry Reid, having gone “nuclear” by ending the judicial filibuster a year ago is in no worse shape going into the next two years, as I’d initially implied, than he would have been had he kept it in place. It’s after that, if there’s a Republican president, that he’ll no longer have the filibuster at hand.

So what’s going on here? Let’s start at the beginning. Article I, section 5 of the Constitution says that “Each House may determine the Rules of its Proceedings.” As students of the subject know, those rules can be arcane. And they change, about which there are also rules. The filibuster is a case in point. It’s nowhere in the Constitution, and it’s changed over the years. On the merits, a good case can be made on either side of the practice. In general, it can keep bad (or good) laws from being enacted—or bad (or good) laws from being removed. In the abstract, therefore, it’s a wash. Empirically, it depends on the history of its use—and where you sit.

Read more at http://www.cato.org/blog/should-republicans-restore-judicial-filibuster

Cato: Can a State Punish You for Advertising Your Business Without a License?

Under Ohio law, it isn’t illegal to buy gold, it isn’t illegal to sell gold, and it isn’t illegal to talk about buying and selling gold. But—and it’s a significant “but”—if you talk about buying gold, you’re not allowed to actually buy any. At least not without a license.

That’s right: in Ohio, it’s illegal for anyone who advertises a willingness to buy gold to do so without a license. Obtaining and maintaining that license isn’t easy, or cheap. Licenses must be renewed every year, and license holders have to make daily reports to the police detailing their purchases. This law creates a two-tiered system: dealers who have complied with the onerous licensing regime may freely advertise their businesses, while others can’t so much as put up a sign reading “We Buy Gold” without facing criminal prosecution and fines of up to $10,000 per transaction.

Read more at http://www.cato.org/blog/can-state-punish-you-advertising-business-without-license

Cato: Yes, Florida, the Constitution Protects Property Rights

David and Susan Kentner own residential lots along San Carlos Bay in Sanibel, Florida. Because their property is along the high-tide line, the Kentners enjoy an age-old common-law right to build docks over the water abutting their property, subject to reasonable regulation. But Sanibel passed an ordinance forbidding the Kentners and others from taking advantage of this common-law right. The city claimed that the ordinance was necessary to protect seagrass, which it called an “invaluable natural resource.”

Whether or not seagrass is invaluable, the city passed the ordinance without considering whether seagrass was actually present in the areas subject to the ordinance and whether modern technology could effectively be used to avoid harming the seagrass. Moreover, there is evidence that the city passed the ordinance in order to satisfy the aesthetic preferences of certain interest groups and to enhance the property values of other dock-holders. On top of that, in 2006 the city issued itself an exemption to build a dock in San Carlos Bay, explaining that it should be allowed to build a dock because no seagrass was found on the site.

Read more at http://www.cato.org/blog/yes-florida-constitution-protects-property-rights

2015-01-02

Cato: U.S.-Mexico Sugar Agreement: A Tribute to Managed Markets

The U.S. Department of Commerce (DOC) announced Oct. 27 that it had reached draft agreements with Mexican sugar exporters and the Mexican government to suspend antidumping and countervailing duty (AD/CVD) investigations on imports of sugar from that country.  Commerce has requested comments from interested parties by Nov. 10, with Nov. 26 indicated as the earliest date on which the final agreements could be signed.  Given the obvious level of consultation by governments and industries on both sides of the border leading up to this announcement, it’s reasonable to presume that the agreements will enter into effect within a few weeks.

Suspension agreements that set aside the AD/CVD process in favor of a managed-trade arrangement are relatively rare.  They sometimes are negotiated when the U.S. market requires some quantity of imports, and when the implementation of high AD/CVD duties would be expected to curtail trade severely.  This would have been the case, assuming the duties actually had entered into effect.  However, as this recent blog post indicates, it’s not at all clear that the U.S. International Trade Commission (ITC) would have determined that imports from Mexico were injuring the U.S. industry.  A negative vote (a vote finding no injury) by the ITC would have ended these cases and left the U.S. market open to imports of Mexican sugar.

Read more at http://www.cato.org/blog/us-mexico-sugar-agreement-tribute-managed-markets

Cato: Report Concludes that Yucca Mountain Is Safe

For decades, the federal government has struggled with the issue of storing waste from commercial nuclear reactors and defense-related nuclear activities. The government has spent billions of dollars planning for nuclear waste disposal, but the creation of a permanent storage site is years behind schedule due to federal mismanagement and safety concerns. A new report confirms that the current proposed site, Yucca Mountain in Nevada, is safe for use.

The United States has more than 65,000 metric tons of spent nuclear fuel with the volume expected to double by 2055. The Nuclear Waste Policy Act of 1982 aimed to create a permanent disposal site for radioactive waste by 1998. After many studies, Yucca Mountain was chosen as the single national disposal site in 1987, and engineers and construction crews went to work. Between 2001 and 2007 the project’s total life-cycle cost estimate increased from $77 billion to $106 billion, measured in constant 2012 dollars.

Read more at http://www.cato.org/blog/report-concludes-yucca-mountain-safe

Cato: Managed Trade for Sugar from Mexico?

Mexican Economy Secretary Ildefonso Guajardo was in Washington this week arguing on behalf of an agreement to suspend the U.S. antidumping/countervailing duty (AD/CVD) investigation against imports of sugar from Mexico.  The case will soon enter its final phase, with the U.S. International Trade Commission (ITC) expected to determine early next year whether the U.S. sugar industry has been injured by imports from Mexico.

In the context of North American sugar politics, an agreement to suspend the AD/CVD process and implement a managed-trade arrangement makes some sense.  Both U.S. and Mexican sugar industries already are more or less wards of the state, or at least are very heavily guided and controlled by their respective governments.  Both governments have given indications that they are interested in settling this dispute.  The history of bilateral sugar trade has been dominated by government intervention rather than by free-market economics.  It seems almost natural to take the next obvious step by allowing Mexican sugar to enter the United States only under terms of a suspension agreement (i.e., with the quantity limited or the price set high).

Read more at http://www.cato.org/blog/managed-trade-sugar-mexico

Cato: Letting it Go: Ukraine’s Frozen Future

Secretary of State John Kerry met late yesterday in Paris with Russian Foreign Minister Sergei Lavrov. Though somewhat overshadowed by Kerry’s meetings with Iran, the meeting nonetheless provided some fascinating clues as to where the Ukraine crisis is headed.

First, international tensions over Ukraine seem to be slowly relaxing, although violence continues to mar the ceasefire in the Donbas itself. Russian troops are withdrawing from the border, as specified in the Minsk Protocol. The United States is making encouraging noises about the possibility of sanction removal. More importantly, Kerry made a clear point of emphasizing Russian-American cooperation and announced that the two countries would engage in intelligence sharing on ISIS.  This represents a major about-face for the Obama administration, which just six months ago said its goal was to “isolate President Vladimir Putin.” It seems that faced with the difficulty of managing simultaneous conflicts – something the White House is not good at – officials are opting for a more conciliatory approach to Russia.

Read more at http://www.cato.org/blog/let-it-go-ukraines-frozen-future

Cato: China’s Curious Restraint

Beijing’s behavior on the international stage over the past few months has been surprisingly restrained—in marked contrast to an earlier, lengthy period of assertive, if not abrasive, conduct toward its neighbors. Not too long ago, policymakers in the United States and throughout East Asia were alarmed by China’s initiatives. Beijing’s territorial claims in the South China Sea were breathtakingly broad, leading to nasty incidents with the Philippines, Vietnam, and other nations.  Even worse were the confrontations between China and Japan over islands in the East China Sea, along with Beijing’s unilateral proclamation of an extensive Air Defense Identification Zone in that same area, which led to a surge of tensions with Japan, South Korea, and the United States.

Two developments illustrate the new, less confrontational trend in China’s policy. One is Beijing’s concerted diplomatic courtship of such countries as South Korea, Vietnam, and Sri Lanka. As I discuss in a recent article in China-U.S. Focus, even such longstanding rivals as Japan and India have been recipients of this Chinese “charm offensive.”

Read more at http://www.cato.org/blog/chinas-curious-restraint

Cato: Promoting Democracy in Hong Kong: Combining Prudence with Idealism

Hong Kong is part of China.  But administered separately from the rest of the People’s Republic of China, the territory respects civil liberties while hosting the world’s freest economy.

Demonstrators are pressing Beijing to make good on its promise of  democratic rule and free elections.  But the PRC will not, indeed, cannot, give residents of Hong Kong what it refuses to give the rest of its citizens.  The city’s future depends on finding a compromise that preserves Hong Kong’s freedom and peace.

The British colony grew out of imperial China’s weakness.  London seized Hong Kong Island, then the Kowloon Peninsula, and later “leased” the New Territories.  In 1997 the latter’s 99-year term ran out.  At which point Beijing was legally entitled to take back the New Territories.

Dividing Hong Kong would have been a practical nightmare.  And Beijing might not have continued to honor territorial cessions forced more than a century before.  So in 1984 London agreed to the full territory’s return.

Read more at http://www.cato.org/blog/promoting-democracy-hong-kong-combining-prudence-idealism

Cato: Unsettling Cotton Settlement at the WTO

Last week the U.S. government settled a long-running trade dispute with Brazil, winning taxpayers the privilege of continuing to subsidize America’s wealthy cotton farmers in exchange for our commitment to subsidize Brazilian cotton farmers, as well. That’s right! We get to pay U.S. cotton farming businesses to overproduce, export, and suppress global prices to the detriment of Brazilian (and other countries’) cotton farmers provided that we compensate the Brazilians to the tune of $300 million.

Some background. Ten years ago, in a case brought by Brazil, the WTO Dispute Settlement Body ruled that the United States was exceeding its subsidy allowances for domestic cotton farmers and that it should bring its practices into compliance with the relevant WTO agreements. After delays and half-baked U.S. efforts to comply, Brazil sought and received permission from the WTO to retaliate (or, in WTO parlance, to “withdraw concessions” because opening one’s own market in a world of mercantilist reciprocity is, perversely, considered a cost or concession). Under the threat of such retaliation, instead of bringing its cotton subsidies into WTO compliance, the U.S. government agreed to pay $147 million per year to Brazilian farmers so that it could continue subsidizing U.S. farmers beyond agreed limits. That arrangement prevailed for a few years until the funds were cut during the budget sequester earlier this year – an event that triggered a renewed threat of retaliation from Brazil, which now has been averted on account of last week’s $300 million settlement.

Read more at http://www.cato.org/blog/cotton-tobacco-settlements-will-expedite-wtos-corrosion

Cato: Yes, Fixing Higher Ed Means Eliminating Federal Aid

National Review Online is in the midst of its “education week” – including offerings by yours truly and Jason Bedrick – and today brings us a piece by AEI’s Andrew Kelly on how to fix our higher ed system. Unfortunately, while he largely nails the problems, he stumbles on the solution.

Kelly is absolutely right when he criticizes the Obama administration for demonizing for-profit colleges – see my piece for the evidence that for-profits are not the problem – while simultaneously observing how odd it is for conservatives to decry as some great violation of free-market ideals attacks on institutions that get the vast majority of their funds through Washington. He is also right that the entire ivory tower is awash in waste and failure, and all institutions – for-profit or putatively not-for-profit – are self-interested money-grubbers. Finally, he correctly notes that it is a big problem that by far the largest student lender is the Bank of Uncle Sam, who basically gives to anyone who can breathe.

Read more at http://www.cato.org/blog/yes-fixing-higher-ed-means-eliminating-federal-aid

Cato: Should Intellectual Property Be in Trade Agreements?

After I complained recently that arguments for including intellectual property (IP) in trade agreements needed to specify what level of protection is desirable, Tom Giovanetti responded by asking for my view on a more basic question: Should IP—regardless of the level of protection—be in trade agreements at all? My colleague Bill Watson has previously set out a political argument for removing it, which is that achieving free trade is becoming very difficult when IP issues get inserted into trade negotiations. Let me add to his argument the following: If IP is in, then there is really no boundary to what can be in, and the result is trade agreements that look like “global governance” agreements.

Returning to Tom’s question, I should say at the outset that Tom doesn’t really say explicitly why IP should be in trade agreements. He doesn’t explain how IP rules fit within the general concept of trade liberalization, or what scope he sees for trade agreements. What are his limits for what should be covered in trade agreements? I’m really not sure. Instead, the main focus of Tom’s argument for including IP in trade agreements seems to be that the United States exports lots of IP-related goods, and therefore it is in the nation’s interest to have IP rules in there.

Read more at http://www.cato.org/blog/should-intellectual-property-be-trade-agreements

Cato: Little Evidence Supports the FDA’s Proposed Food Label Rules

In the upcoming issue of Regulation magazine, Robert Scharff, associate professor in the Department of Consumer Sciences at the Ohio State University, and Sherzod Abdukadirov, research fellow in the Regulatory Studies Program at the Mercatus Center at George Mason University, argue that the FDA’s two proposed rules on food nutrition labeling are supported by little evidence and should be scrapped.

The food labeling rule would, as Scharff and Abdukadirov explain, result in a number of changes “involving both formatting and content changes to labels, increases in recordkeeping, and new analytic requirements.” The second rule, the serving size rule, would affect packages that contain a small number of servings.

Read more at http://www.cato.org/blog/little-evidence-supports-fdas-proposed-food-label-rules

Cato: Amtrak Shouldn’t Get to Write Its Own Ticket

Article One, Section One of the Constitution vests “all legislative powers” in Congress. The sovereign power to make laws comes from the people, so their representatives—Congress—should make those laws.

It sounds simple enough, but once the federal government started ballooning in size and regulating everything under the sun, that simple understanding had to go. There was too much governing for Congress to handle on its own, so the courts adjusted, allowing a proliferation of government agencies to exercise lawmaking power, within certain guidelines.

Read more at http://www.cato.org/blog/amtrak-shouldnt-get-write-its-own-ticket

Cato: The Federal Government and American Indians

As research for this essay on the Bureau of Indian Affairs, I visited the Smithsonian National Museum of the American Indian (NMAI). I found virtually no information useful for my project.

I stopped by the museum information desk on the way out and said something to the effect, “There is very little here about the relationship between Indians and the federal government, yet that relationship is central to the story of American Indians over the last two centuries.” A few months ago, I emailed a similar complaint to the head of the NMAI, and he did kindly respond to me.

Read more at http://www.cato.org/blog/federal-government-american-indians

Cato: The World Needs More Energy, Not Less

This week, a few major media outlets covered my take on the effectiveness and judiciousness of President Obama’s call, at the U.N. Climate Summit, for all countries of the world to make pledges of how and how much they are going to reduce their national carbon dioxide emissions. It should be no surprise that I think such actions would be ineffective and imprudent.

My biggest criticism is that not all countries of the world are at the same stage of energy development. While the developed nations may have all the energy supplies they want and need, most developing countries do not. So, while developing countries pursue  “luxuries” like indoor lighting and clean cooking facilities (not to mention improved sanitation), developed countries are awash in the luxury of debating whether to alter the relative components of their fuel mix in hopes that it may (or may not) alter the future course of the climate.

Read more at http://www.cato.org/blog/world-needs-more-energy-not-less

Cato: Long-Term Solutions to the Ukraine Crisis

As I argued in a piece over at Forbes yesterday, western sanctions to roll back Russian action in Ukraine have been largely ineffectual. These sanctions - including asset freezes and visa bans – are ‘targeted’ at those suspected of having influence on Putin. Yet the sanctions, designed to be minimally painful for European states, are toothless - the majority of individuals sanctioned have only a minimal role in policy – and they won’t fix the long-term problem.

Over 150 individuals have been sanctioned by the United States and European Union, including 65 Ukrainian rebels, whose inclusion is presumably intended to inhibit their ability to wage conflict. The remainder are Russian, but most have no access to the corridors of power. Anatoly Sidorov, for example, the Commander of Russian military units in Crimea, is likely uninvolved in the policy formulation process. Other names are stranger, such as Ramzan Kadyrov, head of the Chechen republic. No doubt, he’s a trenchant proponent of the rebels, but he doesn’t influence Russian policy. In all, I estimate only a small proportion of those included in joint sanctions are actually involved in high-level decisionmaking.

Read more at http://www.cato.org/blog/long-term-solutions-ukraine-crisis