January 2012

Censoring Critical Blogs as “Harassment” Would Violate the First Amendment

by Hans Bader on April 30, 2009 · 3 comments

in Odds & Ends

Under a recently-introduced bill, H.R. 1966, bloggers would face up to two years in prison if they “harass” public figures by criticizing them in a “severe, repeated, and hostile” manner, and thereby cause them “substantial emotional distress.”

U.C.L.A. Law Professor Eugene Volokh, the author of a First Amendment treatise, has concluded that the bill is unconstitutional. I agree, as I explain here. As a federal appeals court noted in DeJohn v. Temple University (2008), “there is no harassment exception to the First Amendment’s free speech clause.” Speech that causes emotional distress can be protected,as the Supreme Court made clear in barring a lawsuit by Jerry Falwell over an offensive parody.

Under this bill, a blogger like Emile Zola, the courageous writer who exposed an anti-semitic witchhunt a century ago in the infamous Dreyfus Affair through his repeated and “vehement public” denunciations of public officials, would be subject to prosecution. His “severe, repeated, and hostile” denunciations resulted in many public figures being discredited and removed from office, which no doubt caused them “substantial emotional distress.”

The bill is a telling example of how the American Left has turned against free speech and civil liberties. The bill’s sponsor, Linda Sanchez (D-CA), and nearly all of her 14 co-sponsors are liberals. All of them backed the federal hate-crimes bill passed by the House yesterday, which is designed to allow people who have been found innocent in state court to be reprosecuted in federal court. (That bill has been criticized by four members of the U.S. Civil Rights Commission, including law professor Gail Heriot, and by civil libertarian Wendy Kaminer. Advocates of the federal hate-crimes bill once cited the defendants in the Duke Lacrosse case, who were innocent, as an example of people who should be prosecuted in federal court).

As a student at the University of Virginia in November 1990, I witnessed a four-hour long speech by a racist, anti-semitic demagogue from the Nation of Islam. When no one else would do so, perhaps for fear of physical retaliation, I and my friends Arshad and David repeatedly and publicly denounced the speech — and the head of U.Va.’s Black Student Alliance (BSA), who sponsored and celebrated the speech. Our criticism no doubt struck the BSA’s head as “severe, hostile, and repeated,” and caused him “emotional distress,” since he transferred to Hampton State University in the middle of his third year in college after being ostracized by outraged students. (46 people of all different races came up to me and thanked me for my criticisms, but no one wanted to do so publicly, lest they be accused of “racism” or receive threats from Nation of Islam supporters, as my friend David did. My friend Arshad, a Bangladeshi Muslim who criticized the speech and the Nation of Islam as a “heretical expression of race hatred,” was left alone, probably because it is harder to brand a racial minority as being racist).

LibertyWeek 40: Keepin’ It on the CL

by Richard Morrison on April 30, 2009 · 1 comment

in CEI Projects, Podcast

CEI Studios Producer Drew Tidwell joins regular hosts Richard Morrison and Cord Blomquist for Episode 40 of LibertyWeek. We start with discussion of the Obama administration’s plan to (further) regulate the credit card industry, scandalous shenanigans on Craigslist and the prospect of carbon dioxide cap and trade legislation in Congress. We then move on to the necessity of TVs and the FCC, why it pays to be crafty in Beer News and finally a multimedia blitz from the London 2012 Olympics.

Advice for Conservatives

by Ryan Young on April 30, 2009 · 6 comments

in Culture, Personal Liberty, Politics as Usual, Zeitgeist

Cato Institute President Ed Crane says to conservatives, you’re doing it wrong. I couldn’t agree more.

Conservatives are supposed to be the opposition to progressives. Their problem is that opposing something requires philosophical disagreement. At heart, left and right are variations of the same theme.

There are three main currents of conservative thought. All three have their progressive analogues:

Supply-side conservatives have a laser-like focus on tax cuts and economic growth. Both are good things, true. But they forgot about spending, and about philosophy. Means became ends. Hence the Reagan deficits and the Bush spending explosion.

Look at the deficits, philosophical as well as fiscal, of the new administration’s First One Hundred Days. Congress and President Obama have quickly established serious supply-side credibility.

Then there are neo-conservatives. Crane says, “All they give us is a war against a country that never attacked us and schemes for ‘national greatness’ like going to Mars.”

Not too different from progressive clarion calls for our country to unite under a common purpose, however vaguely defined. Or the push for mandatory volunteering programs, formerly known as the draft.

Finally, there are social conservatives. Often deeply religious, they can sometimes be less than tolerant of other people.  They are the right-wing equivalent of the green movement.

Environmentalism is really a conservative philosophy at heart, anyway. At a fundamental level, greens want to conserve, both in the Rousseauian sense and in the Burkean sense.

Conservatives are in no shape to be a viable opposition movement. They resemble their enemy too much.

Where else to turn, then? Crane sums up his own philosophy in two sentences. “Politics is about man’s relationship to the state. That relationship, to be healthy, should be minimal.”

I think we’ve found a winner.

That’s exactly why CEI, Cato, Reason, and other classical liberal groups are so important.  We see through the left-right false dichotomy, and we get the word out. Nowhere does this matter more than in a democracy. In the long run, the people get what they want, good or bad.

The last several elections have proven that in some years, people want bad conservative policies. In other years, people want bad progressive policies.

We can do better. CEI, and our philosophical allies, exist to see that we do.

Chrysler bankruptcy an opportunity to reject Obama nationalization

by John Berlau on April 30, 2009 · 2 comments

in Bailout Watch, Culture, Features, Politics as Usual

In the next 48 hours, Chrysler is expected to file for bankruptcy because, according to press reports, a significant minority of its creditors object to the Obama administration’s planned takeover in which the government and unions would own a majority stake. The Obama administration hopes to persuade the court to ratify and rubber-stamp its plan.  But the bankruptcy courts should exercise independent judgment instead, as they do in any typical bankruptcy case.

The expected Chapter 11 bankruptcy filing of Chrysler LLC is an action that probably should have happened months ago. It could have spared all involved the chaos of the ”political bankruptcy” we have seen unfold. The process of a judicial bankruptcy will bring a needed check to the Obama administration reorganization plan that heavily favors unions, at the expense of bond and debt holders.

The hedge funds that refused to be strong-armed into the Obama plan should not be blamed for asserting the interests of the investors they represent; investors that could include pension funds that serve middle-class families. The bankruptcy court should be allowed to be impartial and not be pressured to automatically take the plan offered by the Obama team. It should weigh the interests of all involved, using Chapter 11 precedent, and decide accordingly what each party is entitled to, as bankruptcy courts normally do.

The merger of Chrysler and Fiat the government has pushed is pure “industrial policy” of the type that led to stagnation in Japan and other nations where it has been practice. It may not be the most viable choice for Chrysler to specialize in smaller cars. Rather, a merger combination between Chrysler and General Motors with a concentration on larger vehicles such as SUVs may be the best option. This alliance had been discussed for years but was shelved because of concerns it might run afoul of antitrust laws.

The Obama administration should lift any antitrust barriers to effective reorganization — and suspend planned increases in the Corporate Average Fuel Economy standards that would be detrimental to Chrysler and other carmakers – but otherwise stay neutral as to the form the reorganization takes.

The relatively smooth process of recent large Chapter 11 bankruptcies, such as that of mall owner General Growth Properties, shows that far from being “disorderly,” judicial bankruptcies are far more orderly than taxpayer bailouts in unwinding and reorganizing insolvent companies. The judicial bankruptcy process should be given a chance to work in the case of Chrysler and any other companies that follow suit.

See also, my article in the American Spectator comparing the bankruptcy of General Growth Properties to that of the automakers.

Detroit, D.C.

by Ivan Osorio on April 30, 2009

in Bailout Watch, Economy, Labor

Today’s Wall Street Journal further drives home the difficult position in which the United Auto Workers, Chrysler, and General Motors are likely to find themselves as a result of the UAW becoming part owner of GM and majority shareholder of Chrysler. First, the lead editorial notes the political risks inherent in the arrangement:

Some Treasury officials have told the media that 50% government ownership is important to ensure that taxpayers get repaid for the $16.2 billion in Treasury loans. But this is false logic. Taxpayer-shareholders are likely to be far better off with a smaller stake in a truly private company that is better insulated from political meddling. Private owners are more likely than the Treasury or the unions to try to run the company for profit, and so increase its equity value over time. Treasury says it would be a hands-off owner, but that hardly seems plausible and in any case that would merely leave the UAW in control. At the next labor contract bargaining session, the union would sit on both sides of the table.

And former Journal Detroit correspondent Paul Ingrassia points out the conflicting incentives that the UAW will have to control after it assumes such a huge stake in the two troubled automakers (which Holman Jenkins also mentioned this week) — as well as the irony of it all.

Having burdened the Detroit companies for decades with restrictive work rules, enormous health-care obligations and generous retiree benefits, the United Auto Workers union will now end up controlling two of them. Specifically, the UAW will own 55% of Chrysler and 39% of General Motors, where only the government will have a larger ownership interest.

Assuming that negotiations over the next few days or weeks don’t change things, it’s hard to know whether this outcome is perversity or poetic justice. The UAW finally will end up having a direct stake in the survival and prosperity of General Motors and Chrysler — even though the union’s shares in the companies will be held by special trust funds instead of by the UAW itself.

Whether the union’s rank and file will recognize its interest in the companies and act accordingly is another matter. Consider that one of the terms of Chrysler’s pending deal with the union is that workers won’t receive overtime pay until they work more than 40 hours in any given week.

One might well ask: Wasn’t it always that way? Well, no. Often enough, the union negotiated production quotas in local plant contracts that workers could fill in five or six hours a day — after which any work they did qualified for overtime pay. Now you understand one key reason why Detroit has arrived at this unhappy juncture.

That two of the major protagonists in this sorry history — the UAW and the federal government — are gaining more power over GM and Chrysler gives little reason for optimism about the companies’ future. More political manipulation is the last thing troubled companies need, and the  new  ownership structures now being finalized for GM and Chrysler are unlikely to avoid it. By seeking private financing, Ford may be about to dodge a bullet.

Civil Rights Commission Members Urge “NO” Vote on Federal Hate Crimes Bill

by Hans Bader on April 29, 2009 · 2 comments

in Features, Legal, Nanny State, Personal Liberty, Politics as Usual, Sanctimony

Four members of the U.S. Civil Rights Commission urged Congress not to pass the federal hate crimes bill (LLEHCPA). In an April 29 letter to Congressional leaders, they point out that it would circumvent Constitutional protections against double jeopardy, giving the federal government the power to reprosecute people in federal court even after they have been found innocent of rape and other “hate crimes” in state court:

“We believe that LLEHCPA will do little good and a great deal of harm. Its most important effect will be to allow federal authorities to re-prosecute a broad category of defendants who have already been acquitted by state juries–as in the Rodney King and Crown Heights cases more than a decade ago.”

“We regard the broad federalization of crime as a menace to civil liberties. There is no better place to draw the line on that process than with a bill that purports to protect civil rights.”

“While the title of LLEHCPA suggests that it will apply only to “hate crimes,” the actual criminal prohibitions contained in it do not require that the defendant be inspired by hatred or ill will in order to convict. It is sufficient if he acts “because of” someone’s actual or perceived race, color, religion, national origin, gender, sexual orientation, gender identity or disability. Consider:

*Rapists are seldom indifferent to the gender of their victims. They are virtually always chosen “because of” their gender.

*A robber might well steal only from women or the disabled because, in general, they are less able to defend themselves. Literally, they are chosen “because of” their gender or disability.”

“If all rape and many other crimes that do not rise to the level of a “hate crime” in the minds of ordinary Americans are covered by LLEHCPA, then prosecutors will have “two bites at the apple” for a very large number of crimes.”

We wrote earlier about how backers of the federal hate-crimes bill want to use it to reprosecute people who have already been found innocent, and to prosecute people whom state prosecutors decline to charge because the evidence against them is so weak. Supporters of the bill have given only lame rationalizations for why state not-guilty verdicts should not be respected. (Some of the bill’s supporters have even made the strange claim that the defendants in the Duke Lacrosse case, whom the North Carolina attorney general later admitted were actually innocent, should have been reprosecuted in federal court).

Such reprosecutions fall within a loophole in Constitutional protections against double jeopardy known as the “dual sovereignty” doctrine. But ironically, they violate Article 14 of the International Covenant on Civil and Political Rights — a treaty that many of the bill’s backers harp on to push liberal causes, such as restrictions on the death penalty and antiterrorism measures. Article 14′s ban on double jeopardy has no “dual sovereignty” loophole, unlike the U.S. Constitution. That is an additional reason to be skeptical of the hate-crimes bill, which is known as the Local Law Enforcement Hate Crimes Prevention Act of 2009 (LLEHCPA, H.R. 1913).

The Civil Rights Commissioners signing the letter were law professor Gail L. Heriot; former Office for Civil Rights head Gerald A. Reynolds; former Justice Department lawyer Todd Gaziano; and National Labor Relations Board member Peter N. Kirsanow. The letter was addressed to House Speaker Nancy Pelosi, and Congressmen John Boehner, Eric Cantor, James Clyburn, and Steny Hoyer.

Washington Swallows Detroit, Gives UAW a Piece

by Ivan Osorio on April 29, 2009

in Bailout Watch, Economy

The United Auto Workers’ (UAW) loud complaining that they’re being asked to bear a disproportionate share of the costs of restructuring the Big Three begs the question: How much is their fair share to bear? As Holman Jenkins notes, in his Wall Street Journal column, the UAW may not like the answer.

The two parties that turned the Big Three into a perennially limping freak of unwritten industrial policy now will take formal ownership of their handiwork. The United Auto Workers (UAW) would own 39% of GM. The federal government would own 50%. The creditors will be shafted with just 10%. (In the Chrysler plan being discussed, labor would own 55%, making it effectively a subsidiary of the UAW.)

The day after any such settlement is finalized, the clock will start ticking down to the next collective-bargaining session between a monopoly UAW and what remains of the Big Three — though now the UAW would be sitting on both sides of the table.

Nearly 25 years ago, a Los Angeles Times reporter innocently and accurately invoked the “M” word in describing the domestic auto sector, noting that the arrival of Japanese auto plants was “threatening the UAW’s traditional monopoly on labor in the domestic auto industry.”

The erosion of the Big Three’s market share since then has really been the erosion of the market for monopoly labor-produced cars. The UAW standard tactic, “pattern bargaining,” which it pursues without embarrassment, would have gotten Bill Gates thrown in jail under the antitrust laws.

In practice, monopoly bargaining generally leads to an adversarial relationship between a company’ s management and the union that represents its employees, so it will be interesting to see how the UAW “sitting on both sides of the table” affects this dynamic. On the one hand, its members would still expect the UAW to gain the highest pay and benefits possible. On the other, as a major partial owner, it would have very strong incentives to keep costs down to help increase profits.

In the public sector, two parties sharing the same goal is common, since government agency administrators and the unionized employees they supervise both want to justify getting more money from taxpayers, who can’t go elsewhere. Car buyers, however, can go take their business elsewhere.

Fix Social Security; Unleash Capital

by Ivan Osorio on April 29, 2009

in Deregulate to Stimulate, Economy

In RealClearMarkets.com, Fred Smith and I explain how the seemingly forgotten — but still important — goal of Social Security reform can help unleash capital, now that the U.S. economy desperately needs it.

Whole thing here.

Fed Policies Contradict Each Other

by Ryan Young on April 29, 2009

in Economy, Employment

My CEI colleague Seth Bailey and I have this letter in today’s Financial Times:

Sir, Henry Kaufman frets that “libertarian dogma led the Fed astray” (April 28). Congress, not free-market ideology, is the real culprit.

One reason is mission creep. The Fed’s original job was to keep inflation low by keeping the money supply in check. That’s it. The Humphrey-Hawkins Act of 1978 expanded that mission to include keeping unemployment low.

Low-inflation monetary policy and low-unemployment monetary policy contradict each other. If the Fed keeps inflation low, then it cannot lower unemployment rates through an artificial inflation-induced boom. If the Fed wants to lower unemployment, it must forgo low inflation. Worse, since a bust always follows an inflationary boom, business cycles become more volatile.

The results speak for themselves. The Fed can control inflation – if left free from political interference. But it cannot also accomplish its other missions, especially through the un-libertarian means of manipulating price levels. Where is the libertarianism?

Ryan Young and Seth Bailey,
Research Associates,
Competitive Enterprise Institute,
Washington, DC, US

Specter Switches Parties, Cementing Liberals’ Filibuster-Proof Control of Senate

by Hans Bader on April 28, 2009

in Bailout Watch, Economy, Features, Politics as Usual, Stimulus to Nowhere

Contradicting earlier claims, Pennsylvania Senator Arlen Specter has switched to the Democratic Party, cementing the liberals’ filibuster-proof majority on most issues in the Senate.

What is strange about this is that the reason Specter gave for leaving the Republican Party was not social issues (Specter is socially liberal, not just on things like abortion, but also on racial preferences, which are unpopular with the general public and moderate voters), but rather his vote for the bloated $800 billion stimulus package, which will actually shrink the economy in the long run.

It’s not as if Obama has ended Bush’s lackluster record on the economy. Indeed, he’s appointed figures involved in the devastatingly costly Bush bailouts, like Treasury Secretary Tim Geithner, who “missed early signs of the crisis,” and helped ruin Indonesia’s economy, to high posts in his Administration.

Now, Obama is busy catering to the United Auto Workers union, at taxpayer expense, in the Detroit auto bailout. As Larry Kudlow notes,

“The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.

Meanwhile, top Obama adviser Valerie Jarrett opened the door wide on CNN yesterday to bank nationalization and CEO firings. Unfortunately, my take that the economic stress tests are a political stalking horse for more government ownership, more government control of the banks, and more government disruption of shareholder rights and normal corporate governance looks to be coming true.”

Obama has been a profligate big-spender. He claimed his $800 billion stimulus package was needed to avert “irreversible decline.” But the Congressional Budget Office concluded before and after its passage that the stimulus package will actually cut the size of the economy in the long run.

The stimulus package also guts welfare reform, which Specter voted for in 1996 and has claimed to support.

Obama’s budgets don’t add up, either, piling up $9.3 trillion in red ink, according to the Congressional Budget Office, a staggering $2.3 trillion more than Obama claimed, and more than double the deficits under the Bush baseline.

Liberal Republicans are claiming that the Republican Party should be a “big tent” that welcomes big spenders like Specter. But historically, the “big tent” was a concept designed to enable the GOP to compete in socially liberal parts of the country by offering socially-liberal, fiscally-conservative candidates — not an excuse for supporting big spending (like Obama’s) that goes even beyond Bush’s record of “fiscal profligacy.”

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