Alex Kozinski, a federal appellate judge on the Ninth Circuit, has just published a powerful critique of the American criminal justice system in the Georgetown Law Journal (titled “Criminal Law 2.0”). He begins, “much of the so-called wisdom that has been handed down to us about the workings of the legal system, and the criminal process in particular, has been undermined by experience, legal scholarship, and common sense.”
Here are the common myths that he goes on to persuasively debunk:
1. Eyewitnesses are highly reliable
2. Fingerprint evidence is foolproof
3. Other types of forensic evidence are scientifically proven and therefore infallible
4. DNA evidence is infallible
5. Human memories are reliable
6. Confessions are infallible because innocent people never confess
7. Juries follow instructions
8. Prosecutors play fair
9. The prosecution is at a substantial disadvantage because it must prove its case beyond a reasonable doubt
10. Police are objective in their investigations
11. Guilty pleas are conclusive proof of guilt
12. Long sentences deter crime
Judge Kozinski continues: Because the items listed above are untrue, there are “reasons to doubt that our criminal justice system is fundamentally just….I think it’s fair to assume–though there is no way of knowing–that the number of exculpations in recent years understates the actual number of innocent prisoners by an order, and probably two orders, of magnitude.”
Read more at http://www.cato.org/blog/criminal-law-20
2015-09-30
Cato: An Unnecessary Indictment of Dylann Roof
Today, the Justice Department indicted Dylann Roof on 33 federal hate crime charges for the killings of nine people at Emanuel A.M.E. church in Charleston last month. This indictment is entirely unnecessary.
Hard as it may be for some to imagine now, there was a long time in this country when racially and politically motivated violence against blacks was not prosecuted by state and local authorities. Or sometimes, as in the case of Emmett Till—the young boy from Chicago who was lynched in Mississippi for allegedly being too forward with a white woman—prosecution was a farce and the perpetrators were acquitted.
But in the present case, South Carolina authorities moved quickly and effectively to catch Roof and did not hesitate to charge him with nine counts of murder. This was South Carolina’s duty and their law enforcement officers have appeared to perform professionally and competently.
The Department of Justice should be more judicious with its funds and resources. The opportunity costs of a duplicative prosecution takes resources away from crimes that fall more appropriately in the federal purview, such as interstate criminal enterprises and government corruption. Today’s indictment is federal meddling in a case the state already has under control.
Read more at http://www.cato.org/blog/unnecessary-indictment-dylann-roof
Hard as it may be for some to imagine now, there was a long time in this country when racially and politically motivated violence against blacks was not prosecuted by state and local authorities. Or sometimes, as in the case of Emmett Till—the young boy from Chicago who was lynched in Mississippi for allegedly being too forward with a white woman—prosecution was a farce and the perpetrators were acquitted.
But in the present case, South Carolina authorities moved quickly and effectively to catch Roof and did not hesitate to charge him with nine counts of murder. This was South Carolina’s duty and their law enforcement officers have appeared to perform professionally and competently.
The Department of Justice should be more judicious with its funds and resources. The opportunity costs of a duplicative prosecution takes resources away from crimes that fall more appropriately in the federal purview, such as interstate criminal enterprises and government corruption. Today’s indictment is federal meddling in a case the state already has under control.
Read more at http://www.cato.org/blog/unnecessary-indictment-dylann-roof
Cato: Police Misconduct — The Worst Case in July
Over at Cato’s Police Misconduct web site, we have selected the worst case for the month of July. It was the case involving Officer Eric Paull.
Paull worked as a sergeant for the Akron Police Department. He also taught a course on criminal justice at the University of Akron. One of his students was a single mom. According to news reports, the woman (name withheld) says they started a romantic relationship. But after a year or so, that relationship turned ugly and violent. After he beat her up on a Thanksgiving holiday, Paull told her that he was legally “untouchable.”
She believed him–so she did not file a complaint right after the beating. Instead, she just tried to avoid him. But Paull stalked her and her boyfriends, using police databases to discover addresses, phone numbers, and vehicle information. Paull would also text pictures of himself holding his gun and leave bullets on their automobiles. There were threats to kill the woman and her boyfriend. The woman did lodge complaints with the police and would later obtain a protective order, but the police department seemed indifferent. Paull would not stop.
Read more at http://www.cato.org/blog/police-misconduct-worst-case-july-0
Paull worked as a sergeant for the Akron Police Department. He also taught a course on criminal justice at the University of Akron. One of his students was a single mom. According to news reports, the woman (name withheld) says they started a romantic relationship. But after a year or so, that relationship turned ugly and violent. After he beat her up on a Thanksgiving holiday, Paull told her that he was legally “untouchable.”
She believed him–so she did not file a complaint right after the beating. Instead, she just tried to avoid him. But Paull stalked her and her boyfriends, using police databases to discover addresses, phone numbers, and vehicle information. Paull would also text pictures of himself holding his gun and leave bullets on their automobiles. There were threats to kill the woman and her boyfriend. The woman did lodge complaints with the police and would later obtain a protective order, but the police department seemed indifferent. Paull would not stop.
Read more at http://www.cato.org/blog/police-misconduct-worst-case-july-0
2015-09-29
Cato: Loretta Lynch Confirmed as Attorney General
After one of the longest confirmation processes in the history of the Attorney General’s office, Loretta Lynch was confirmed by the Senate today as Eric Holder’s successor.
From a criminal justice perspective, whether Lynch will embrace or abandon Holder’s position on state-level drug legalization and his announced commitment to reforming civil asset forfeiture are two questions that spring immediately to mind.
Loretta Lynch zealously defended civil asset forfeiture during her confirmation hearings, and was a devoted practitioner of it as a U.S. Attorney in New York. One of her seizure cases, that of the Hirsch brothers [$], garnered widespread attention and condemnation, and helped spur the nationwide calls for reform to which Eric Holder responded.
Read more at http://www.cato.org/blog/loretta-lynch-confirmed-attorney-general
From a criminal justice perspective, whether Lynch will embrace or abandon Holder’s position on state-level drug legalization and his announced commitment to reforming civil asset forfeiture are two questions that spring immediately to mind.
Loretta Lynch zealously defended civil asset forfeiture during her confirmation hearings, and was a devoted practitioner of it as a U.S. Attorney in New York. One of her seizure cases, that of the Hirsch brothers [$], garnered widespread attention and condemnation, and helped spur the nationwide calls for reform to which Eric Holder responded.
Read more at http://www.cato.org/blog/loretta-lynch-confirmed-attorney-general
Cato: Sec. Clinton’s Criminal Justice Reform Proposals
Today, presidential candidate Hillary Rodham Clinton addressed criminal justice reform in a speech at Columbia University. Earlier in the week, the Brennan Center released a book with chapters from politicians across the political spectrum discussing the need for criminal justice reform, and Secretary Clinton contributed one of them. Now that the Democratic front-runner has joined Republican presidential aspirants in addressing reform, criminal justice appears to be a significant 2016 campaign issue.
Three of Clinton’s policy suggestions are problematic.
First, and perhaps the one that will get the most headlines, she called for making police body cameras “the norm everywhere,” by using federal grants and matching funds. Putting aside the considerable price tag to subsidize the roughly 18,000 American law enforcement agencies to buy body cameras, how officers use those cameras and how law enforcement uses their data must be of utmost concern. As my colleague Matthew Feeney noted in a blogpost yesterday, the proposed body camera policy in Los Angeles would allow officers to review body camera footage before giving statements on use of force incidents. That policy would not serve transparency interests, but instead police officer self-interest.
Throwing money for cameras to local police departments as a solution to police transparency may sound good in theory, but making it work will be much more difficult in practice.
Read more at http://www.cato.org/blog/sec-clintons-criminal-justice-reform-proposals
Three of Clinton’s policy suggestions are problematic.
First, and perhaps the one that will get the most headlines, she called for making police body cameras “the norm everywhere,” by using federal grants and matching funds. Putting aside the considerable price tag to subsidize the roughly 18,000 American law enforcement agencies to buy body cameras, how officers use those cameras and how law enforcement uses their data must be of utmost concern. As my colleague Matthew Feeney noted in a blogpost yesterday, the proposed body camera policy in Los Angeles would allow officers to review body camera footage before giving statements on use of force incidents. That policy would not serve transparency interests, but instead police officer self-interest.
Throwing money for cameras to local police departments as a solution to police transparency may sound good in theory, but making it work will be much more difficult in practice.
Read more at http://www.cato.org/blog/sec-clintons-criminal-justice-reform-proposals
Cato: Montana Reins in Civil Asset Forfeiture
It’s been a nice few weeks for civil liberties in Montana. On the heels of the nation’s most comprehensive restrictions on police militarization, Montana Governor Steve Bullock (D) has signed a bill reforming civil asset forfeiture in the state.
HB463 requires a criminal conviction before seized property can be forfeited, requires that seized property be shown by “clear and convincing evidence” to be connected to the criminal activity, and bolsters the defenses for innocent owners by shifting the burden of proof to the government.
The effort was spearheaded by State Representative Kelly McCarthy (D), who credited the work of the Institute for Justice and other civil liberties organizations for bringing the abuses of civil asset forfeiture to light.
Read more at http://www.cato.org/blog/montana-reins-civil-asset-forfeiture
HB463 requires a criminal conviction before seized property can be forfeited, requires that seized property be shown by “clear and convincing evidence” to be connected to the criminal activity, and bolsters the defenses for innocent owners by shifting the burden of proof to the government.
The effort was spearheaded by State Representative Kelly McCarthy (D), who credited the work of the Institute for Justice and other civil liberties organizations for bringing the abuses of civil asset forfeiture to light.
Read more at http://www.cato.org/blog/montana-reins-civil-asset-forfeiture
2015-09-28
Cato: Fifth Time’s a Charm? Why the Court Should Strike Down the Armed Career Criminal Act as Unconstitutionally Vague
The Armed Career Criminal Act (ACCA) increases the minimum criminal penalty for defendants convicted of illegal firearm possession who also have three prior violent crime convictions. While the Act lists many crimes as qualifying as “violent”—such as burglary, arson, and extortion—it also contains a catch-all provision, a “residual clause,” that includes crimes that “otherwise involve conduct that presents a serious potential risk of physical injury to another.”
While that language may seem clear, its precise meaning has bedeviled courts for decades. In fact, Johnson v. United States represents the fifth time since 2007 that the Supreme Court has been asked to clarify what the residual clause means. For example, does drunk driving count? How about fleeing from officers in a high-speed chase? Even though the high court only hears about 75 cases per year—and it rarely revisits a law within such a short time-span—the ACCA’s residual clause keeps coming back. As Justice Antonin Scalia quipped in the last such case, “We try to include an ACCA residual-clause case in about every second or third volume of the United States Reports.” Justice Scalia’s comment came in a dissent in which he argued that the residual clause is unconstitutionally vague, and it seems that the rest of his colleagues paid attention. This is the second time this term that this case will be argued before the Court.
Last November, the issue was whether merely (illegally) possessing a short-barreled shotgun is a crime that fits into the residual clause. In January, however, the Court ordered that the case be re-argued on the larger question of whether the residual clause is itself unconstitutionally vague. Apparently, in discussing the law for the fifth time, the justices got tired of trying to answer questions that Congress should have addressed by writing a clearer law.
Read more at http://www.cato.org/blog/fifth-times-charm-why-court-should-strike-down-armed-career-criminal-act-unconstitutionally
While that language may seem clear, its precise meaning has bedeviled courts for decades. In fact, Johnson v. United States represents the fifth time since 2007 that the Supreme Court has been asked to clarify what the residual clause means. For example, does drunk driving count? How about fleeing from officers in a high-speed chase? Even though the high court only hears about 75 cases per year—and it rarely revisits a law within such a short time-span—the ACCA’s residual clause keeps coming back. As Justice Antonin Scalia quipped in the last such case, “We try to include an ACCA residual-clause case in about every second or third volume of the United States Reports.” Justice Scalia’s comment came in a dissent in which he argued that the residual clause is unconstitutionally vague, and it seems that the rest of his colleagues paid attention. This is the second time this term that this case will be argued before the Court.
Last November, the issue was whether merely (illegally) possessing a short-barreled shotgun is a crime that fits into the residual clause. In January, however, the Court ordered that the case be re-argued on the larger question of whether the residual clause is itself unconstitutionally vague. Apparently, in discussing the law for the fifth time, the justices got tired of trying to answer questions that Congress should have addressed by writing a clearer law.
Read more at http://www.cato.org/blog/fifth-times-charm-why-court-should-strike-down-armed-career-criminal-act-unconstitutionally
Cato: Missouri Bill Would Keep Most Police Camera Footage From Public View
One week after it was reported that Ferguson, Missouri police officer Darren Wilson would not be indicted for killing of Michael Brown, President Obama announced that the federal government would spend $75 million on police body cameras. Wilson was not wearing a body camera when he shot Brown at least six times, and some have reasonably suggested that if Wilson had been wearing a body camera during his interaction with Brown that it would have been easier to determine if Brown’s killing was a justified or unjustified use of force.
Police in Missouri were in the news again after recently released dash camera footage revealed that an officer warned colleagues who were arresting a suspect that the camera was live before it was suddenly turned off. Both Brown’s killing in August and the footage of the April 2014 arrest highlight not only the fact that body cameras would provide investigators looking into allegations of police misconduct with valuable evidence, but also that there needs to be clear policies in place that relate to police and the cameras they use.
One lawmaker in Missouri proposed legislation that would make law enforcement camera footage policy clearer, but it should worry anyone concerned with law enforcement accountability and transparency.
Read more at http://www.cato.org/blog/missouri-bill-would-keep-most-police-camera-footage-public-view
Police in Missouri were in the news again after recently released dash camera footage revealed that an officer warned colleagues who were arresting a suspect that the camera was live before it was suddenly turned off. Both Brown’s killing in August and the footage of the April 2014 arrest highlight not only the fact that body cameras would provide investigators looking into allegations of police misconduct with valuable evidence, but also that there needs to be clear policies in place that relate to police and the cameras they use.
One lawmaker in Missouri proposed legislation that would make law enforcement camera footage policy clearer, but it should worry anyone concerned with law enforcement accountability and transparency.
Read more at http://www.cato.org/blog/missouri-bill-would-keep-most-police-camera-footage-public-view
Cato: Police Officers Must Keep the Cameras Rolling
Recently released dash camera footage of an arrest in St. Louis, Missouri offers an example of the disturbing flippancy with which cameras can be turned off during police interactions with the public.
According to a police report, on the evening of April 10, 2014, officers Nathaniel Burkemper and Michael Binz stopped a silver Ford Taurus after it made an illegal U-turn and “abruptly parked.” Only minutes earlier, 911 operators had received calls reporting shots fired. One of the calls mentioned a silver car with big rims.
Footage from the dash camera on Burkemper and Binz’s cruiser shows that shortly after the Ford Taurus pulls over, Binz moves to the passenger side of the vehicle, where he searches and handcuffs the passenger. Burkemper speaks to the driver, Cortez Bufford. Burkemper filed a report stating that he smelled marijuana and that both Bufford and his passenger did raise their hands when asked. However, Bufford reportedly “became agitated.”
Read more at http://www.cato.org/blog/police-officers-must-keep-cameras-rollings
2015-09-27
Cato: Quiet Change Expands ATF Power to Seize Property
A quick glance at the Federal Register (Vol. 80, No. 37, p. 9987-88) today reveals that Attorney General Eric Holder, who earned cautious praise last month for a small reform to the federal equitable sharing program, has now delegated authority to the Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to seize and “administratively forfeit” property involved in suspected drug offenses. Holder temporarily delegated this authority to the ATF on a trial basis in 2013, and today made the delegation permanent while lauding the ATF for seizing more than $19.3 million from Americans during the trial period.
Historically, when the ATF uncovered contraband subject to forfeiture under drug statutes, it was required to either refer the property to the DEA for administrative forfeiture proceedings or to a U.S. Attorney in order to initiate a judicial forfeiture action. Under today’s change, the ATF will now be authorized to seize property related to alleged drug offenses and initiate administrative forfeiture proceedings all on its own.
The DOJ claims this rule change doesn’t affect individual rights (and was thus exempt from the notice and comment requirements of the Administrative Procedure Act) and that the change is simply an effort to streamline the federal government’s forfeiture process. Those who now stand more likely to have their property taken without even a criminal charge may beg to differ.
Read more at http://www.cato.org/blog/quiet-change-expands-atf-power-seize-property
Historically, when the ATF uncovered contraband subject to forfeiture under drug statutes, it was required to either refer the property to the DEA for administrative forfeiture proceedings or to a U.S. Attorney in order to initiate a judicial forfeiture action. Under today’s change, the ATF will now be authorized to seize property related to alleged drug offenses and initiate administrative forfeiture proceedings all on its own.
The DOJ claims this rule change doesn’t affect individual rights (and was thus exempt from the notice and comment requirements of the Administrative Procedure Act) and that the change is simply an effort to streamline the federal government’s forfeiture process. Those who now stand more likely to have their property taken without even a criminal charge may beg to differ.
Read more at http://www.cato.org/blog/quiet-change-expands-atf-power-seize-property
2015-09-26
Cato: Merely Saying “I Do” Multiple Times Shouldn’t Be a Crime
Saying “I do” and calling someone your spouse who legally isn’t shouldn’t be a crime, but it can be in Utah. While polygamy—being lawfully married to multiple people—isn’t legal in any state, due to its unique history, Utah has some of the strictest anti-bigamy laws in the country. Which probably makes starring in a reality TV show based on your plural marriage not the best idea for Utahns.
Nevertheless, TLC’s Sister Wives revolves around Kodi Brown, his four partners (Meri, Janelle, Christine, and Robyn), and their 17 children. While Kodi is only legally married to one of women, he claims he is in a “spiritual union” with each of the others, and describes all four as his wives—and that puts the Browns on the wrong side of Utah’s bigamy law. The day after the show premiered in 2010, local authorities announced they were investigating the family.
Because the potential sentences are quite severe (five years for each of the women, and up to 20 years for Kodi), the Browns took preemptive action, filing a federal lawsuit challenging the constitutionality of Utah’s law. The district court agreed. In granting the Brown’s motion for summary judgment, the court held that because the law criminalizes “spiritual cohabitation” (arrangements where the participants claim to be part of multiple religious marriages, but make no attempt to obtain state recognition), it violated the First and Fourteenth Amendments, and was “facially unconstitutional.” The state has appealed that ruling.
Read more at
Nevertheless, TLC’s Sister Wives revolves around Kodi Brown, his four partners (Meri, Janelle, Christine, and Robyn), and their 17 children. While Kodi is only legally married to one of women, he claims he is in a “spiritual union” with each of the others, and describes all four as his wives—and that puts the Browns on the wrong side of Utah’s bigamy law. The day after the show premiered in 2010, local authorities announced they were investigating the family.
Because the potential sentences are quite severe (five years for each of the women, and up to 20 years for Kodi), the Browns took preemptive action, filing a federal lawsuit challenging the constitutionality of Utah’s law. The district court agreed. In granting the Brown’s motion for summary judgment, the court held that because the law criminalizes “spiritual cohabitation” (arrangements where the participants claim to be part of multiple religious marriages, but make no attempt to obtain state recognition), it violated the First and Fourteenth Amendments, and was “facially unconstitutional.” The state has appealed that ruling.
Read more at
2015-09-25
Cato: Third Greek Bailout Is Not the Charm
Nearly a month ago Greek voters rejected more economic austerity as a condition of another European bailout. Today Athens is implementing an even more severe austerity program.
Few expect Greece to pay back the hundreds of billions of dollars it owes. Which means another economic crisis is inevitable, with possible Greek exit (“Grexit”) from the Eurozone.
Blame for the ongoing crisis is widely shared. Greece has created one of Europe’s most sclerotic economies. The Eurocrats, an elite including politicians, journalists, businessmen, and academics, determined to create a United States of Europe irrespective of the wishes of European peoples.
European leaders welcomed Athens into the Eurozone in 2001 even though everyone knew the Greek authorities were lying about the health of their economy. Economics was secondary.
Unfortunately, equalizing exchange rates cemented Greece’s lack of international competitiveness. Enjoying an inflated credit rating, Greece borrowed wildly and spent equally promiscuously on consumption.
Greece could have simply defaulted on its debts. However, Paris and Berlin, in particular, wanted to rescue their improvident banks which held Athens’ debt.
Thus, in return for tough loan conditions most of the Greek debt was shifted onto European taxpayers through two bail-outs costing roughly $265 billion. Greece’s economy has suffered, and the leftwing coalition party Syriza won Greece’s January election. Impasse resulted at the end of June as the second bailout expired.
Athens denounced its creditors for insisting on repayment. Prime Minister Alexis Tsipras criticized “ultimatums, blackmail and fearmongering.”
But writing off Greek debt would require European governments to confess their financial folly to their taxpayers. Restructuring Greek debt also would set off similar demands from other heavily indebted states.
Read more at http://www.cato.org/blog/third-greek-bailout-not-charm
Few expect Greece to pay back the hundreds of billions of dollars it owes. Which means another economic crisis is inevitable, with possible Greek exit (“Grexit”) from the Eurozone.
Blame for the ongoing crisis is widely shared. Greece has created one of Europe’s most sclerotic economies. The Eurocrats, an elite including politicians, journalists, businessmen, and academics, determined to create a United States of Europe irrespective of the wishes of European peoples.
European leaders welcomed Athens into the Eurozone in 2001 even though everyone knew the Greek authorities were lying about the health of their economy. Economics was secondary.
Unfortunately, equalizing exchange rates cemented Greece’s lack of international competitiveness. Enjoying an inflated credit rating, Greece borrowed wildly and spent equally promiscuously on consumption.
Greece could have simply defaulted on its debts. However, Paris and Berlin, in particular, wanted to rescue their improvident banks which held Athens’ debt.
Thus, in return for tough loan conditions most of the Greek debt was shifted onto European taxpayers through two bail-outs costing roughly $265 billion. Greece’s economy has suffered, and the leftwing coalition party Syriza won Greece’s January election. Impasse resulted at the end of June as the second bailout expired.
Athens denounced its creditors for insisting on repayment. Prime Minister Alexis Tsipras criticized “ultimatums, blackmail and fearmongering.”
But writing off Greek debt would require European governments to confess their financial folly to their taxpayers. Restructuring Greek debt also would set off similar demands from other heavily indebted states.
Read more at http://www.cato.org/blog/third-greek-bailout-not-charm
Cato: Sugar and the TPP
How much Australian sugar should be allowed to enter the U.S. market? That’s a key question the U.S. government must answer prior to concluding the Trans-Pacific Partnership (TPP) negotiations. The United States is the largest sugar market in the TPP, consuming about 11 million metric tons (MMT) per year. It also is the largest producer (7-8 MMT) and importer (3 MMT) in the group. Australia generally is believed to be the most cost-competitive sugar producer among the12 TPP nations. It also is the largest exporter, annually shipping 3-4 MMT to other countries.
To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities. Australian sugar producers understandably want to redress that omission. Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.
The U.S. sugar program includes a price-support level for raw cane sugar of 22.25 cents per pound ($490/MT), with refined sugar supported at 26 cents. Those levels effectively have been raised more than 10 percent to around 24.7 cents ($545/MT) and 30-32 cents, respectively, under the trade-restricting terms of the recent settlement agreement in the antidumping/countervailing-duty (AD/CVD) dispute involving imports from Mexico. (For more on U.S.-Mexico sugar issues, see here and here.) Mexico is the largest supplier of U.S. sugar imports, generally providing between 1.0-1.5 MMT per year. Suffice it to say that the agreement between the U.S. and Mexican governments will limit the amount of sugar Mexican producers can export to the United States, and also force that sugar to be sold at higher prices.
Read more at http://www.cato.org/blog/sugar-tpp
To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities. Australian sugar producers understandably want to redress that omission. Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.
The U.S. sugar program includes a price-support level for raw cane sugar of 22.25 cents per pound ($490/MT), with refined sugar supported at 26 cents. Those levels effectively have been raised more than 10 percent to around 24.7 cents ($545/MT) and 30-32 cents, respectively, under the trade-restricting terms of the recent settlement agreement in the antidumping/countervailing-duty (AD/CVD) dispute involving imports from Mexico. (For more on U.S.-Mexico sugar issues, see here and here.) Mexico is the largest supplier of U.S. sugar imports, generally providing between 1.0-1.5 MMT per year. Suffice it to say that the agreement between the U.S. and Mexican governments will limit the amount of sugar Mexican producers can export to the United States, and also force that sugar to be sold at higher prices.
Read more at http://www.cato.org/blog/sugar-tpp
Cato: Wisconsin’s Unfair Sales Act and the Folly of Antidumping Laws
A Michigan-based supermarket trying to expand into Wisconsin has come up against an absurd law against selling products at “unfairly low” prices. As reported by MLive, the Meijer grocery store chain is facing complaints that its grand opening sales violated Wisconsin law for offering products at prices below cost. Why is that bad?
The official rationale behind Wisconsin’s Unfair Sales Act of 1939 is revealing:
"The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce. Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression."
Some of these are simply a consequence of any market competition, a process that inevitably results in some companies failing. But the idea that there is something uniquely harmful called “unfair competition” that occurs once a product is sold below cost is just false. There are many reasons companies sell certain products at certain times for less than the cost of production. For example, grand opening sales and seasonal sales are ordinary forms of competition. It’s common in many retail sectors to use a low-priced “loss leader” product to draw customers into your store hoping they will buy other high-priced items as well.
Read more at http://www.cato.org/blog/wisconsins-unfair-sales-act-folly-antidumping-laws
The official rationale behind Wisconsin’s Unfair Sales Act of 1939 is revealing:
"The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce. Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression."
Some of these are simply a consequence of any market competition, a process that inevitably results in some companies failing. But the idea that there is something uniquely harmful called “unfair competition” that occurs once a product is sold below cost is just false. There are many reasons companies sell certain products at certain times for less than the cost of production. For example, grand opening sales and seasonal sales are ordinary forms of competition. It’s common in many retail sectors to use a low-priced “loss leader” product to draw customers into your store hoping they will buy other high-priced items as well.
Read more at http://www.cato.org/blog/wisconsins-unfair-sales-act-folly-antidumping-laws
2015-09-24
Cato: Washington Arrests Foreign Soccer Officials as It Sanctions the World
It’s hard not to feel satisfaction at the indictment of soccer officials for apparently corrupting the globe’s Beautiful Game—soccer in America but football to most of the world. Yet emotional satisfaction is a bad basis for government policy. While the U.S. is not the only nation to assert extraterritorial jurisdiction, it does so more often and more broadly than anyone else.
Moreover, punishing foreigners creates future risks. Someday Americans might get indicted by other nations for “crimes” committed in the U.S.
How did Washington become the world’s policeman and prosecutor in the case of soccer? The sport remains a modest phenomenon in America. Most of the alleged crimes involve foreigners acting overseas.
The impact in the U.S. is less than that on almost every other nation on earth, since virtually everywhere the sport commands greater loyalty from a larger percentage of the population. Nevertheless, some of the criminal acts took place in America and the corruption affected interstate (and foreign) commerce, the boilerplate justification used by Uncle Sam for regulating most everything.
As American power has grown, so has Washington’s willingness to apply its laws to the rest of the world. Washington has routinely abducted foreigners overseas for drug offenses. Perhaps the most extreme example was the 1989 invasion of Panama, after which ousted dictator Manuel Noriega was transported to America and convicted of violating U.S. drug laws.
Even more problematic has been the Justice Department crusade to turn foreign banks into arms of the IRS. The U.S. has gone after Swiss banks with the greatest enthusiasm, paying informants, filing criminal prosecutions, and imposing multi-billion dollar fines for accepting deposits from Americans. Yet citizens of Switzerland and the rest of the world have no moral obligation to help fill Uncle Sam’s coffers to finance more waste and wars.
Read more at http://www.cato.org/blog/washington-arrests-foreign-soccer-officials-it-sanctions-world
Moreover, punishing foreigners creates future risks. Someday Americans might get indicted by other nations for “crimes” committed in the U.S.
How did Washington become the world’s policeman and prosecutor in the case of soccer? The sport remains a modest phenomenon in America. Most of the alleged crimes involve foreigners acting overseas.
The impact in the U.S. is less than that on almost every other nation on earth, since virtually everywhere the sport commands greater loyalty from a larger percentage of the population. Nevertheless, some of the criminal acts took place in America and the corruption affected interstate (and foreign) commerce, the boilerplate justification used by Uncle Sam for regulating most everything.
As American power has grown, so has Washington’s willingness to apply its laws to the rest of the world. Washington has routinely abducted foreigners overseas for drug offenses. Perhaps the most extreme example was the 1989 invasion of Panama, after which ousted dictator Manuel Noriega was transported to America and convicted of violating U.S. drug laws.
Even more problematic has been the Justice Department crusade to turn foreign banks into arms of the IRS. The U.S. has gone after Swiss banks with the greatest enthusiasm, paying informants, filing criminal prosecutions, and imposing multi-billion dollar fines for accepting deposits from Americans. Yet citizens of Switzerland and the rest of the world have no moral obligation to help fill Uncle Sam’s coffers to finance more waste and wars.
Read more at http://www.cato.org/blog/washington-arrests-foreign-soccer-officials-it-sanctions-world
Cato: African Free Trade Zone Is Good News - If Properly Implemented
According to the South African newspaper Mail and Guardian, “African leaders on Wednesday signed a potentially historic, 26-nation free-trade pact to create a common market spanning half the continent, from Cairo to Cape Town. The deal on the Tripartite Free Trade Area (TFTA) is the culmination of five years of negotiations to set up a framework for preferential tariffs easing the movement of goods in an area that is home to 625-million people…. The deal will integrate three existing trade blocs – the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa (Comesa) – whose countries have a combined gross domestic product (GDP) of more than $1-trillion.”
“Potentially historic” is the right term for what could be a greatly beneficial agreement. African parliaments will have two years to ratify the agreement – and that is the easy part. Proper implementation and enforcement will be much more difficult in countries with deeply underdeveloped institutions of rule of law and protection of private property. Still, the TFTA is a step in the right direction, for it signals an important ideological shift on the part of the African elite. Historically, African governments have been deeply skeptical of free trade and capitalism. Instead, they preferred protectionism and state-led development. To the extent that they were interested in trade, the African governments emphasized access to Western markets, while eschewing liberalization of their own. The consequences were catastrophic.
Read more at http://www.cato.org/blog/african-free-trade-zone-good-news-properly-implemented
“Potentially historic” is the right term for what could be a greatly beneficial agreement. African parliaments will have two years to ratify the agreement – and that is the easy part. Proper implementation and enforcement will be much more difficult in countries with deeply underdeveloped institutions of rule of law and protection of private property. Still, the TFTA is a step in the right direction, for it signals an important ideological shift on the part of the African elite. Historically, African governments have been deeply skeptical of free trade and capitalism. Instead, they preferred protectionism and state-led development. To the extent that they were interested in trade, the African governments emphasized access to Western markets, while eschewing liberalization of their own. The consequences were catastrophic.
Read more at http://www.cato.org/blog/african-free-trade-zone-good-news-properly-implemented
Cato: Supreme Court to Consider Ending Forced Public-Sector Union Dues
Today, the U.S. Supreme Court announced that it would hear Friedrichs v. California Teachers Association, which asks the court to consider whether compulsory public-sector union dues violate the First Amendment right to free speech–which includes the right to be free from compulsory speech. The Cato Institute filed an amicus brief supporting the petitioners’ request that SCOTUS hear the case.
In 26 states, public-sector unions can force non-members to pay dues anyway. As I noted last year:
"The unions contend that these compulsory dues are necessary to overcome the free rider problem (non-union members may benefit from the collectively-bargained wages and benefits without contributing to the union), but plaintiffs in Friedrichs v. California Teachers Association point out that numerous organizations engage in activities (e.g. – lobbying) that benefit members and non-members alike without giving such organizations the right to coerce non-members to pay. That’s especially true when the individuals who supposedly benefit actually disagree with the position of the organization."
But even if unions could demonstrate that the dues were necessary to prevent freeriding, the U.S. Supreme Court held in Harris v. Quinn last year that “preventing nonmembers from freeriding on the union’s efforts” is a rationale “generally insufficient to overcome First Amendment objections.” Federal law allows dues-payers to opt out of the portion dedicated to express political activities (e.g. - lobbying), but the petitioners argue that public-sector collective bargaining itself is inherently political.
Read more at http://www.cato.org/blog/supreme-court-consider-ending-forced-public-sector-union-dues
In 26 states, public-sector unions can force non-members to pay dues anyway. As I noted last year:
"The unions contend that these compulsory dues are necessary to overcome the free rider problem (non-union members may benefit from the collectively-bargained wages and benefits without contributing to the union), but plaintiffs in Friedrichs v. California Teachers Association point out that numerous organizations engage in activities (e.g. – lobbying) that benefit members and non-members alike without giving such organizations the right to coerce non-members to pay. That’s especially true when the individuals who supposedly benefit actually disagree with the position of the organization."
But even if unions could demonstrate that the dues were necessary to prevent freeriding, the U.S. Supreme Court held in Harris v. Quinn last year that “preventing nonmembers from freeriding on the union’s efforts” is a rationale “generally insufficient to overcome First Amendment objections.” Federal law allows dues-payers to opt out of the portion dedicated to express political activities (e.g. - lobbying), but the petitioners argue that public-sector collective bargaining itself is inherently political.
Read more at http://www.cato.org/blog/supreme-court-consider-ending-forced-public-sector-union-dues
2015-09-23
Cato: Rand Paul’s “No” on Trade Promotion Authority Gets It Backwards
Not entirely unsurprisingly, the Senate failed to reach cloture on Tuesday, falling eight votes shy of the 60 needed to start the timer on debate over Trade Promotion Authority (TPA), which will be needed to conclude the Trans-Pacific Partnership (TPP) negotiations and bring it to a timely vote in Congress. The cloture vote concerned two of four pieces of trade legislation voted out of the Finance Committee two weeks ago (TPA and Trade Adjustment Assistance). Senate Majority Leader Mitch McConnell excluded the other two bills, which contain language that would attract Democratic support. So, while I wouldn’t bet the ranch on TPA’s passage, there’s still room for horse trading.
Read more at http://www.cato.org/blog/rand-pauls-no-trade-promotion-authority-gets-it-backwards
Read more at http://www.cato.org/blog/rand-pauls-no-trade-promotion-authority-gets-it-backwards
Cato: How a WTO Meat Labeling Dispute Could Prompt Congress to Change a Bad Law
After losing again at the World Trade Organization, U.S. regulations mandating country of origin labels (COOL) on meat may finally end. Driven by the possibility that Canada and Mexico could retaliate with increased tariffs, Congress has already begun consideration of a bill to repeal the protectionist program. If COOL regulations are indeed repealed, American consumers, meat packers, and retailers owe a debt to the WTO’s dispute settlement system.
In the latest WTO decision, the United States lost its appeal of a report originally issued last October. At that time, I wrote about how the WTO process can help alter the political dynamics in ways that favor free market reform.
Read more at http://www.cato.org/blog/how-wto-meat-labeling-dispute-could-prompt-congress-change-bad-law
In the latest WTO decision, the United States lost its appeal of a report originally issued last October. At that time, I wrote about how the WTO process can help alter the political dynamics in ways that favor free market reform.
Read more at http://www.cato.org/blog/how-wto-meat-labeling-dispute-could-prompt-congress-change-bad-law
Cato: Is the TPP a Huge Deal or No Big Deal?
As more journalists and commentators discuss the Trans-Pacific Partnership, we’ve seen very conflicting descriptions of the agreement. For some, the TPP isn’t about trade at all but about giving power to corporations and ending U.S. sovereignty, or about containing China and building U.S. influence in Asia. When commentators do focus on the potential economic impact of the agreement, they either describe the TPP as a very big deal or as a very small one. It all depends on your perspective.
My colleague Simon Lester has written about problems in how GDP gains from the TPP have been estimated. I’d like to take issue with a different figure commonly cited to bolster the idea of the TPP’s hugeness—that the 12 countries involved account for almost 40% of global GDP. This number is correct but highly misleading as a gauge of the TPP’s economic significance.
For one thing about 22.5% of global GDP comes from the United States. So, one could claim accurately that the U.S.–Jordan Free Trade Agreement covers almost a quarter of the global economy. Also, most of the remainder comes from Canada and Mexico, with whom the United States already has a free trade agreement. In fact, the United States has free trade agreements with all but five countries in the TPP negotiations.
The only large economy country in the TPP that the United States doesn’t already have a free trade agreement with is Japan. So, if you’re going to measure the “size” of the TPP, it would be best understood as a U.S.–Japan free trade agreement. That’s a pretty big deal, actually, but it’s not two-fifths of the world.
Read more at http://www.cato.org/blog/tpp-huge-deal-or-no-big-deal
My colleague Simon Lester has written about problems in how GDP gains from the TPP have been estimated. I’d like to take issue with a different figure commonly cited to bolster the idea of the TPP’s hugeness—that the 12 countries involved account for almost 40% of global GDP. This number is correct but highly misleading as a gauge of the TPP’s economic significance.
For one thing about 22.5% of global GDP comes from the United States. So, one could claim accurately that the U.S.–Jordan Free Trade Agreement covers almost a quarter of the global economy. Also, most of the remainder comes from Canada and Mexico, with whom the United States already has a free trade agreement. In fact, the United States has free trade agreements with all but five countries in the TPP negotiations.
The only large economy country in the TPP that the United States doesn’t already have a free trade agreement with is Japan. So, if you’re going to measure the “size” of the TPP, it would be best understood as a U.S.–Japan free trade agreement. That’s a pretty big deal, actually, but it’s not two-fifths of the world.
Read more at http://www.cato.org/blog/tpp-huge-deal-or-no-big-deal
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