January 2012

LibertyWeek 34: Michelle Minton Conquers the World

by Richard Morrison on March 17, 2009

in CEI Projects, Podcast

Your regular hosts Richard Morrison and Cord Blomquist are joined by special guest co-host Michelle Minton for Episode 34 of the LibertyWeek podcast. We begin by finding that Twitter has conquered every aspect of society, the White House is waging war on the economy and New Yorkers are defending themselves against beer taxes. We next investigate the questionable management of the AIG bailout in Scandal Watch and handicap Chicago’s chances for snagging the 2016 summer games in Olympic News.

Congratulations to FreeStateNH (The Free State Project) for winning the honor of Tweet of the Week™!

Left-Wing Attorney General Ashamed of End to Discrimination

by Hans Bader on March 17, 2009 · 1 comment

in Legal, Politics as Usual, Sanctimony

A federal appeals court recently upheld an injunction barring a county official from continuing to prevent people from voting based on their race. The unanimous ruling in United States v. Brown (5th Cir. 2009) was a victory for the Justice Department, which brought the case back during the Bush Administration.

But Eric Holder, Obama’s new attorney general, is ashamed of the decision, and his Justice Department is keeping mum about it. The Justice Department refused even to issue a press release announcing the decision, even though it is customary to issue press releases after all Justice Department wins.

Why the deafening silence? Because the victims of the blatant and massive voting discrimination in Noxubee County, Mississippi, were whites prevented from casting ballots in Democratic primaries by the black political boss who ran the county. (A few blacks also had their voting rights violated).

Holder’s attitude is so small-minded and parochial that it is an embarrassment to the Justice Department.

It has been more than 30 years since a unanimous Supreme Court ruled in McDonald v. Santa Fe Trail Transportation Company (1976) that all races — including whites –are covered by the civil-rights laws. That ruling, which allowed white employees to challenge their race-based firing, was authored by the Supreme Court’s first black justice, Thurgood Marshall, who had earlier successfully argued the landmark case of Brown v. Board of Education, which struck down school segregation in 1954.

But apparently, the principles of the liberal icon Thurgood Marshall are just too “right-wing” for this left-wing administration. (And for many left-wing “career” Justice Department employees in the Voting Rights Section and Civil Rights Division, who refused to work on the suit against voting discrimination in Noxubee County because the victims were white. Only because of the persistence of Bush appointees like Hans Von Spakovsky did this case ever see the light of day).

Holder is simply blind to reality. He can’t accept the reality of even blatant discrimination against white people. Meanwhile, he also refuses to accept the possibility of innocence when white people are accused of hate crimes, citing examples of white people being acquitted in state court as a justification for passing a broad new federal hate-crimes law, which would allow people found not guilty in state court to be retried in federal court.

Ironically, Holder claims that Americans are a “nation of cowards” on matters of race.

Mexico wants to keep on trucking

by Fran Smith on March 17, 2009

in International, Labor, Trade

Mexico said it would impose tariffs on about 90 U.S. exports in retaliation for a recent bill that violates the North America Free Trade Agreement by restricting Mexican trucks from transporting goods in the U.S.

The spending bill signed last week cancels a pilot program allowing Mexican trucks to carry their cargo in the U.S.  Unions, especially the Teamsters, have campaigned against the program — and against NAFTA.  President Obama, when he was campaigning for the Democratic nomination, had said he wanted to renegotiate the trade agreement, which includes Canada and Mexico — the number one and number three trading partners with the U.S.  Although he has weakened his rhetoric on that since his election, his trade agenda does call for adding more worker and environmental protection provisions to pending and future trade deals and to “seek ways to improve NAFTA.”

The restriction on Mexican trucks comes after the “Buy American” provisions in the recent stimulus bill, which has been labeled protectionist by U.S. trading partners. Brazil’s President Luiz Inácio Lula da Silva, in a visit to the U.S. last week, warned against rising U.S. and world protectionism, which he said would hurt poor countries the most.

With news coverage like this…

by Ivan Osorio on March 17, 2009

in Economy, Labor

…does organized labor need a PR operation? In today’s Politico, Jeanne Cummings repeats — without qualification — the half-truth that supporters of the so-called Employee Free Choice Act (EFCA) have been peddling recently: that EFCA would give workers the choice of whether to organize through a secret ballot election or through a card check procedure, in which employees sign union cards out in the open, usually at the urging of union organizers.

The legislation doesn’t prohibit the traditional process of elections and secret ballots. If a majority of workers want to proceed that way, they still could.

Cummings leaves out an important detail: if the union lets them.

EFCA imposes no time limit on the period during which union organizers may collect signatures on cards and no limit on how and where they may do so. Organizers can go back to try to get workers to sign again and again, and wherever they can — including at workers’ homes.

As a result, unions will have zero incentive to turn in cards until they get the requisite 50 percent-plus-one of employees to sign, which requires the National Labor Relations Board to certify the union as exclusive employee bargaining agent.

Therefore, while EFCA may not explicitly prohibit secret ballot organizing elections, it makes secret ballots a dead letter through the legal organizing regime it sets up. Under EFCA, the choice of whether to hold an election will rest with union organizers alone, who always prefer card check.

On the other hand, Cummings is correct to note that EFCA opponents, seeing the bil losing support, should not celebrate yet. She also presents a good summary description of the debate, and how it has shifted. This isn’t over by a long shot.

Economic Illiteracy’s Here Again

by Ivan Osorio on March 16, 2009

in Culture, Economy, Zeitgeist

For all the comparisons of President Obama to Franklin Delano Roosevelt, it’s worth pondering just how deep the similarities can go. If we’re lucky, hopefully not very — at least not if some of FDR’s then-Hollywood boosters are any indication of the prevailing thought of the time, as the short film below shows. (Thanks to Margaret Griffis for the tip.)

Bailouts for Liars, Illegal Aliens, and Undeserved Bonuses

by Hans Bader on March 15, 2009 · 3 comments

in Bailout Watch, Economy, Employment, Labor, Legal, Politics as Usual, Stimulus to Nowhere

Insurance giant AIG, bailed out by taxpayers for $170 billion, is using taxpayer money to pay executives in the division that brought it to the brink of collapse millions of dollars in bonuses! (AIG may have hoped its donations to liberal politicians, such as $103,100 to Sen. Chris Dodd (D-CT) in 2008 alone, would shield it from scrutiny).

The Senate voted down an amendment by Jeff Sessions (R-AL) that would have kept federal stimulus money from hiring illegal aliens, resulting in up to 300,000 jobs being filled by illegal aliens rather than citizens.

In an unrecorded voice vote, the House of Representatives voted down a proposed amendment to keep people who lied on their loan applications from receiving federal bailout money. The vote was unrecorded so that liberal lawmakers in conservative districts (who camouflage themselves as supposedly-conservative “Blue Dog” Democrats) could hide their vote from their constituents. The stimulus package funds groups like ACORN, which helped spawn the mortgage crisis by promoting “liar loans,” and which has an extensive history of financial fraud and vote fraud.

Federal spending commitments for bailouts now exceed $8 trillion, including a “stimulus” package that the Congressional Budget Office admits will actually shrink the economy “in the long run,” and that guts the 1996 welfare reform law (contradicting Obama’s claims in his 2008 campaign ads that he supported welfare reform — even though he had fought to undermine welfare reform while in the Illinois legislature).

Law professor Ronald Rotunda, co-author of a treatise on constitutional law, doubts the constitutionality of the stimulus package’s “bypass” provisions.

Meanwhile, healthy banks that sold shares to the federal government only under pressure from the Treasury Department (which argued that they should accept federal money so that unhealthy banks also taking federal money would not thereby be stigmatized as a result) are being harassed by liberal lawmakers like Barney Frank (D-Mass.) for spending much smaller sums than AIG on deserving managers and employees, and for failing to make risky mortgage loans to people with bad credit.

Money is pouring into the Washington, DC area, as up to 250,000 new bureaucrats will be hired as a result of the explosion in federal spending (Obama has pushed through more spending in his first 60 days in office than Bush spent on the entire Iraq War, and federal deficits are at unprecedented levels, something that not even the proposed massive tax increases will fix).

(By the way, Washington, D.C. now has the highest AIDS rate in America — a rate of more than 3%, higher even than most of Africa, qualifying as a “generalized and severe epidemic.” Congress has plenary power over the District, but neglects its most basic oversight functions, resulting in a thoroughly incompetent D.C. city government).

Meanwhile, the economy faces a “litigation tax” from an explosion in lawsuits, as a result of recent changes in employment law, trial-lawyer earmarks in the stimulus package (such as HIPAA lawsuits), and a proliferation of products liability lawsuits resulting from anticipated anti-preemption bills in Congress, and the Supreme Court’s newfound reluctance (perhaps in response to liberal victories in the 2008 election) to limit runaway lawsuits in state courts.

Online gambling increases despite “ban”

by Michelle Minton on March 13, 2009

in Odds & Ends

There are plenty of reasons to dislike Financial Services Committee Chairman Barney Frank. But there is at least one reason to throw him a scrap of praise: He took a principled stand opposing attempts to ban internet gambling and he’s apparently sticking with it. Sure, he doesn’t apply the same principles consistently and throughout his policy decisions, but when it comes to gambling on the internet he’s the only lawmaker calling it like it is.

After the shamefully vague Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) passed in the late night hours (buried in the unrelated Port Safety Act) before congress recessed, Frank immediately came out against it, “The fundamental point is this,” Frank declared in statement on his website, “If an adult in this country, with his or her own money, wants to engage in an activity that harms no one, how dare we prohibit it because it doesn’t add to the GDP or it has no macroeconomic benefit.”

Since its passage, an ever increasing number of academics, politicians, and industry members have come out against UIGEA. The arguments of those opposing UIGEA have varied, but a popular and effective argument in light of the economic crisis is the potential for tax revenue that congress might draw from the lucrative online gaming industry. Barney Frank who will reintroduce a measure to repeal UIGEA, legalize and tax internet gaming as any other legitimate business, again had principled words for his fellow lawmakers using tax revenue as an excuse.

“Has it become the role of this Congress to prohibit any activity that an adult wants to engage in voluntarily if it doesn’t add to the GDP or make us more competitive?” Frank stated. Later he asserted that UIGEA was unlikely to prevent online gambling, certainly not of those who abuse it. “Prohibition didn’t work for alcohol; it doesn’t work for gambling.”

Frank, and others asserting the ineffectiveness of UIGEA seem to have be right.  Focus on the Family, the conservative organization that had been a staunch supporter of UIGEA was forced to admit that it isn’t tempering gambling at all and that, in fact, gambling on the internet has increased since its passage.

The principle is simple, if an activity is legal in some cases and people want to do it, the government can try to stop them but all it will do is create a black market where there aren’t any consumer protections. Like the prohibition of alcohol before it, consumer bans just don’t work. Like Frankie said, if American adults want to gamble in the privacy of their home, with their own funds, nobody (especially not Congress which is gambling with trillions in tax payer money at the moment) should have the right to stop them.

The Socialism that Dare not Speak its Name

by Ivan Osorio on March 13, 2009 · 2 comments

in Economy, Labor, Personal Liberty, Zeitgeist

“Socialism” is dead, according to Matthew Dallek, writing in the Politico. I put the term in quotes, because what Dallek defines as socialism is so very narrow, that most gradients of socialistic policies are bound to escape his definition.

Even amid the current economic emergency, there is no viable Socialist Party in the United States, nor is there a serious socialist movement, as there was when Socialist candidate Eugene V. Debs won nearly 1 million votes in both the 1912 and 1920 presidential elections and when Socialists won more than 1,000 state and local elected offices nationwide a century ago. Most socialists and communists were expelled from America’s labor unions during the early Cold War.

Moreover, millions of voters under 35 have no direct experience with socialism as adults. Thus, it’s hard for them to see how socialism poses any kind of a threat to democratic capitalism. In their adult lifetimes, the Berlin Wall was a historic site, and détente lacked all meaning in foreign affairs. But the pseudo-controversy about Obama’s allegedly socialistic tendencies is particularly surreal because even CPAC heroes William F. Buckley Jr. and Ronald Reagan muted, and mostly abandoned, the liberal-as-socialist trope in the early-to-mid-’60s.

Dallek seems fairly passionate over what is essentially a semantic point, one which he seems to argue is crucial for Republicans to understand if they are to regain political viability. Call me a stickler for words, but policies that would nationalize entire industries — from airport screening to health care — or socialize risk — from corporate bailouts to subsidized insurance — are socialistic by any sensible definition. You don’t need to embrace an ideology in toto to move in the direction of its vision of society.

Furthermore, you don’t need to define an ideology by its most vicious manifestation to recognize elements of it when they appear. There are other strands of socialism beside Soviet-style communism.

Ultimately, Dallek’s argument seems to rest on the notion that if you just don’t label somethign as “socialist,” then it isn’t.

Which would be great comfort to Teamsters President James Hoffa, who, in the Detroit News, offers an unusual definition of democracy.

Sen. Robert Wagner of New York sponsored the law in 1935 that bears his name. The Wagner Act recognized the right of workers to form unions. Wagner understood that the difference between despotism and democracy is not the secret ballot, but whether workers have the right to bargain collectively.

Not free elections, not a free press, not private property, but the ability to form and join unions. By that definition, PRI-era Mexico and Peron-era Argentina would qualify as exemplars of democracy. I’ll give Hoffa the benefit of the doubt as to whether he’s making a sloppy omission here, but taking his statement at face value, such a definition of democracy rests on redistribution as a core value and is therefore socialistic, at least in part.

In his article, Hoffa argues in favor of the Employee Free Choice Act (EFCA), which, contrary to his protestations, would make secret ballot elections in union organizing a dead letter. Also part of EFCA is a provision that carries a socialistic trait: loss of control over one’s private property.

As former National Labor Relations Board members Peter Hurtgen and John Irving note in The Wall Street Journal, EFCA’s binding arbitration provision would empower a federally appointed arbitrating panel to impose a contract if a newly organized company and the union are unable to reach a contract after 120 days to an enormous extent.

An arbitration panel’s power to dictate terms is virtually limitless. Such panels could impose uncompetitive wage rates and unworkable work rules. Arbitrators could also impose mandatory union dues and discharge for failure to pay.

Arbitration panels are by definition a stranger to the work place. Yet real, private agreements are products of the needs, desires, capabilities and resources of the negotiating parties who are anything but.

In effect, this would mean that a business owner would lose an enormous amount of control over an important area of his own business, which would erode his right to dispose of his property, at least to some extent.

This may all seem over the top to some, but I don’t see any need to mince words, and neither did F.A. Hayek.

Fore more on EFCA, see here.

An Explosion of Litigation

by Hans Bader on March 13, 2009 · 1 comment

in Bailout Watch, Economy, Employment, Healthcare, Labor, Legal, Politics as Usual, Precaution & Risk, Privacy, Regulation, Stimulus to Nowhere

Already burdened by $8 trillion in new federal spending commitments and the likelihood of higher taxes to pay for bailouts, pork, and welfare, the economy now faces an additional threat: an explosion of litigation.

Even liberal Washington Post columnist Michael Kinsley can’t stand the Supreme Court’s liberal 6-to-3 ruling in Wyeth v. Levine, which let a patient sue an innocent drug maker for an injury caused by a physician’s assistant who disregarded repeated warnings by the drug maker. (The ruling indirectly “will cost lives“). As Kinsley notes,

“Diana Levine, a professional guitarist, showed up at the hospital for the second time in one day complaining of . . . hours-long spasms of ‘retching’ and ‘vomiting.’ She was injected with an anti-nausea drug called Phenergan. The label on Phenergan says six times, in different ways, some of them in boldface capital letters, that if Phenergan gets into the arteries, the result can be disastrous. Nevertheless, a physician’s assistant used the wrong method of injection, and Levine’s arm turned gangrenous and ultimately had to be amputated.”

“The drug company Wyeth has sold Phenergan, with Food and Drug Administration approval, since 1955. The official question in Wyeth v. Levine, decided last week by the Supreme Court (the quotes above are from Justice Samuel Alito’s dissent), was whether that federal government approval “pre-empts” a Vermont jury ruling in favor of Levine. The court said no. A more interesting question is: How did we end up with such a crazy system for making important decisions? . . .”

“What happened to Diana Levine is a tragedy and a scandal. But what did Wyeth do wrong? Is there any way the company could have stayed out of trouble? It’s unlikely. Phenergan has been legal for half a century. (If you Google the word “Phenergan,” the results include pages containing an ad for Phenergan online.) So if you can’t get them for the product itself, you nail them for a “failure to warn.” The basic fiction at the heart of the whole system of regulation by lawsuits is that people read and act on warning labels. But the FDA approved Wyeth’s original warning label and every change since. “Not good enough,” said a Vermont jury, and, incredibly, a majority of the Supreme Court agreed.”

The arbitrary litigation fueled by this decision will cost lives over the long run by discouraging medical innovation, notes Gordon Crovitz in the Wall Street Journal. Jim Copland and Paul Howard call the counterproductive Wyeth decision “a ‘cure’ worse than gangrene.”

Ted Frank calls the Wyeth decision the most anti-business decision in more than 40 years. Yet, amazingly, the liberal New York Times, which wants even more lawsuits, accused the Supreme Court of “reflexive deference to corporations“!!!

Greg Conko observes that the jury’s decision was baseless and undermined the FDA’s labeling process. “The physician’s assistant injected Phenergan into Ms. Levine’s artery, in direct contravention of six label warnings against arterial injection. More or sterner warnings against arterial injection would not have prevented Ms. Levine’s injury.” “FDA made a regulatory decision that the benefits of IV injection outweighed the risks, and the agency permitted the product to be labeled accordingly. . . letting a Vermont jury penalize Wyeth for not ruling out IV injection on Phenergan’s label is tantamount to letting a group of laymen over-rule FDA’s expert opinion regarding safety.” Yale Law School’s Peter Schuck similarly criticizes the Supreme Court’s decision.

Don’t expect any help from Congress. Incredibly, it is moving to abolish what little limits there currently are on state court lawsuits that undermine federal drug-labeling requirements. The day after the Wyeth decision, trial lawyer allies like Rep. Henry Waxman (D-Cal.) proposed legislation to completely abolish any preemption of such lawsuits, even in the exceedingly narrow circumstances where the Supreme Court admits preemption is appropriate.

Drug and device lawyers explain the Wyeth decision as being partly the judiciary’s reaction to the 2008 election, when liberal politicians friendly to lawsuits, and hostile to (often mythical) “deregulation,” made big gains. As the humorist Finley Peter Dunne noted a century ago, the Supreme Court reads election returns.

Workplace lawsuits also will rise. A costly comparable-worth bill backed by the Administration, the Paycheck Fairness Act, passed the House earlier this year on a largely party-line vote. And a law that largely eliminates the statute of limitations in pay-discrimination cases, the Lilly Ledbetter Fair Pay Act, was signed by Obama in January. Obama made false claims about the Supreme Court decision the Ledbetter law overturned (and the facts of that case), and broke campaign promises he made by signing it into law without the opportunity for public comment.

Obama also backs the so-called Civil Rights Restoration Act, which would radically rewrite federal discrimination law in several ways, such as scrapping limits on punitive damages (and allowing them in situations never before permitted by any federal court), and making schools liable for many more instances of “peer harassment” by students (increasing the pressure on colleges to adopt speech codes).

Other “radical employment law changes will create lots of work for attorneys,” according to the National Law Journal.

The economy-shrinking stimulus package Obama signed also contains multiple provisions creating new grounds for lawsuits. It contains increased damages and state attorney-general rights to sue under the burdensome and expensive HIPAA law, which contributed to the Virginia Tech shootings, has impeded public safety, and causes billions of dollars in losses due to pointless red tape. The stimulus package also contains vague and expansive whistleblower provisions allowing suits over actual or perceived wrongdoing.

The Administration also shows no interest in tempering the excesses of a law Obama supported, the Consumer Product Safety Improvements Act, which has shut down thrift stores and entire industries, and gives state attorney generals and their trial lawyer allies broad new powers to bring lawsuits over toys, clothes, and books, resulting in children’s books being thrown out and pulled from library shelves by the thousands.

Obama on Earmarks and Pork-Barrel Spending

by Cord Blomquist on March 13, 2009

in Video, Zeitgeist

[youtube:http://www.youtube.com/watch?v=aeJ9gE-FA0Q 285 234]

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