January 2012

U.S. District Judge Jed Rakoff of New York sentenced convicted felon Anurag Dikshit, the co-founder of PartyGaming.com, to a meager year of probation and indicated his skepticism about the legal basis for Dikshit’s prosecution. The action follows a string of court cases that paves a legal precedent for the presumption that online gambling is in fact not illegal under any United States federal laws.

Once upon a time, Anurag Dikshit was the wealthiest man in Gibraltar. At 26 years old, he was asked by the founder of PartyGaming to write the program that would allow people worldwide to compete against one another in online games of poker.  In 2006, he was ranked as the 207th richest man in the world by Forbes magazine (by 2009, he was ranked at 701). But it all came crashing down in 2008 when the U.S. Department of Justice began prosecuting operators of online casinos that accepted wagers from American citizens.

In an attempt to buy leniency from the U.S. agency, Dikshit turned himself in, pleaded guilty to the charged of illegal Internet betting, and paid a fine of $300 million to the U.S. authorities. Dikshit’s actions angered many supporters of legal online gambling in the U.S., who have insisted for years that no federal laws prohibit citizens from engaging in online poker.

After several years’ delay, Dikshit finally received his incredibly lenient sentence, which included no jail time (he could have received up to two years in prison). The leniency did not seem to come as a result of Dikshit’s cooperation with U.S. authorities, but rather Judge Rakoff’s question of whether or not the man should have been prosecuted in the first place. According to observers, the hearing highlighted the extreme confusion of how U.S. law applies to online poker.

Judge Rakoff questioned why only Dikshit had been prosecuted, despite his cooperation and the known fact that PartyGaming’s other founders and current shareholders, Russ DeLeon and his wife Ruth Parasol, are currently living in Europe.

“Nobody else has been indicted,” said Judge Rakoff. “It has been two years since this defendant began cooperating, what’s going on?”

The lenient sentence adds to the building legal precedent in the United States that seems to exempt online poker from any of the possible laws banning online wagering. First there was the question of whether or not the 1961 Wire Act applied to online gambling, which U.S. judges and a U.S. district attorney suggested that it does not, as well as whether or not poker is a game of skill, which would exempt the activity from the Unlawful Internet Gambling Enforcement Act (UIGEA). Several cases have been decided in the last two years that set the precedent to consider poker as a game of skill.

Tech:

FCC’s net neutrality plan faces growing chorus of bipartisan opposition:
“As the Federal Communications Commission (FCC) prepares to vote next week on a set of rules that will give the federal government the power to regulate news and information content online, members of Congress are stepping up their opposition. The takeaway? Almost everyone opposes what has been termed “net neutrality” except, as the December 21 vote is expected to show, the majority of the FCC’s five commissioners.”

Google Lets You Dumb Down Your Search Results With “Reading Level” Filter:
“Google has added a new advanced search filter named “reading level” to the advanced search page. I reported this at the Search Engine Roundtable after spotting a thread at the Google Web Search Help forum where a Google Web Search product manager somewhat announced this feature.”

Global Warming / Environment / Energy:

Go Green, KILL PEOPLE! (Crowder Visits Mexico):
Video

Insurance / Gambling:

Judge Questions Online Gambling Prosecutions At Dikshit Hearing:
“Judge Jed Rakoff called into question US prosecutors on Thursday at the sentencing of former PartyGaming co-founder Anurag Dikshit. The admitted felon received no jail time in a case that has spanned several years and led to many questions about online poker laws in the US.”

Health / Safety:

First HIV ‘cure’ comes with a very big catch:
“In a rare victory against AIDS, German scientists say that three years after a unique stem cell transplant was tried on a patient, “cure of HIV has been achieved in this” man. This is the first time anyone has been pronounced cured of the disease. But as New Scientist notes, their radical therapy strategy offers no hope for the tens of millions of people around the world with the lethal virus.”

Economics:

Ron Paul Appears Poised to Irk the Fed Chief:
“A congressman from Texas, long a dissident critic of the Federal Reserve, is scheduled to become the chairman of a House panel with jurisdiction over the central bank. It promises to be a miserable time for the Fed chairman as he is peppered with hostile questions at oversight hearings and with legislation to force complete audits of Fed operations.”

Where is the Democratic pro-growth message?:
“Two Democrats take a look today at the electoral catastrophe of the midterms and ask a good question of their compatriots. Jay Eisenhofer serves on the DSCC Majority Trust and Richard Schiffrin chaired Hillary Clinton’s finance committee in Pennsylvania, and partner on an essay at AOL’s Politics Daily that warns their party that they have lost the mainstream of political thought by focusing on redistributive policies and social engineering to impose their concept of fairness on Americans. If the party doesn’t rethink its policy and public-relations approach, it risks long-term marginalization:”

Senate Dem leader drops nearly $1.3T spending bill:
“After wrestling with – and finally abandoning – a 1,900-page catch-all spending bill stuffed with more than $8 billion in home-state projects known as earmarks in Washington and pork in the rest of the country, Senate leaders need to come up with a measure to keep the federal government running into early next year.”

Bill preventing big tax hikes heads to Obama:
“A massive bipartisan tax package preventing a big New Year’s Day tax hike for millions of Americans is on its way to President Barack Obama for his signature.”

Food prices rise sharply – and there’s more to come:
“For the first time since 2008, inflation is hitting consumers in the stomach.”

Legal:

Pro-WikiLeaks hackers may be hard for U.S. to pursue:
“Attorney General Eric Holder said last week he was “looking into” it but there are enormous challenges finding, moving, investigating and finally convicting those the United States might accuse.”

House GOP may require constitutional test for all new legislation:
“Insofar as this sort of thing might encourage the public to think more critically about constitutional limits on government, I like it. Insofar as it’s aimed at reining in Democratic legislative excess … I don’t get it.”

Court Rebuffs Obama on Warrantless Cell-Site Tracking:
“A federal appeals court on Wednesday rejected the Obama administration’s contention that the government is never required to get a court warrant to obtain cell-site information that mobile-phone carriers retain on their customers.”

Labor:

Judge: Kaiser Withheld Wages, Benefits From Workers Who Left SEIU:
“An administrative law judge recently ruled that Kaiser Permanente violated federal labor regulations by withholding scheduled raises and other benefits from 2,300 workers in Southern California who voted to leave the Service Employees International Union-United Healthcare Workers West earlier this year, the Sacramento Business Journal reports.”

Transportation/ Land Use:

Dems: High-speed train refusal could cost taxpayers:
“Two Democratic state lawmakers are asking Gov.-elect Scott Walker to explain how he’ll pay for certain train-related expenses after the Republican refused federal funds that would have covered them.”

An ill-informed left-wing group, the Center for Science in the Public Interest, is suing McDonald’s in California to ban toys from Happy Meals. It is bringing a class-action lawsuit on behalf of “an activist employed by the California government to advocate the ingestion of vegetables, though some pains seem to have been taken to obscure this connection,” abetted by the gullible liberal media, which continue to depict her as just a “random” California mom.

San Francisco earlier banned Happy Meals, even though the meals in San Francisco’s own public schools are less healthy than at McDonald’s.

Why is the plaintiff in the suit against McDonald’s suing? She claims that “[b]ecause of McDonald’s marketing, her daughter has frequently pestered her into purchasing Happy Meals, thereby spending money on a product she would not otherwise have purchased,” and that “when she said no, her kids became disagreeable” and “pouted.”  If that’s a basis for suing, then, as Walter Olson notes, “McDonald’s isn’t the only company that should worry. Other kids pout because parents won’t get them 800-piece Lego sets, Madame Alexander dolls and Disney World vacations. Are those companies going to be liable too?”

The Center for Science in the Public Interest is the left-wing group that has ignorantly disparaged “normal food items such as baked potatoes, hamburgers, pizza, pork chops, and bacon as unhealthy. Never mind that a baked potato has only 100 calories, gives you 30 percent of your day’s supply of vitamin C (more than a banana), some protein, and many important minerals.”

People claim that McDonald’s makes poor people fat by selling them cheap greasy food, but its customers aren’t that poor (even so-called “poor” people in America have significant disposable income, which is why they often pay $3.69 for a Big Mac, when they could easily buy a McDonald’s double-cheeseburger that’s almost as big and has as much meat for a mere $1.19, even in “poor” places like the inner city).  And its food isn’t particularly fatty: a Big Mac or a Quarter Pounder is a lot leaner and healthier than many dishes people cook at home like Quiche Lorraine.  I am not poor, and I periodically feed my 3-year old daughter cheeseburgers or double-cheeseburgers without being nagged to do so (although she certainly enjoys them).

New fast food restaurants were recently banned in South Los Angeles, based on a kooky “food apartheid” claim by the Los Angeles City Council.  Never mind that baked goods are a bigger source of calories for kids than fast-food items like pizza, and that some people lose weight eating at McDonald’s, like me, Soso Whaley, and a Richmond man who lost 86 pounds.  A court recently blocked a class-action lawsuit against McDonald’s over obesity.

While liberal busybodies are suing McDonald’s, they are using federal funds to subsidize the opening of an International House of Pancakes in Washington, D.C., and the development of high-calorie foods to benefit agribusinesses.

1. John Boehner’s teary 60 Minutes interview has provoked commentary on “when it’s okay for men to cry.”

2. Wikileaks is inspiring new advertising campaigns for feminine hygiene products.

3. The South Carolina Department of Education is pushing gender-segregated classrooms.

4. The case for foie gras.

5. What would you choose for your last meal on earth? An artist recreates and photographs the final meals of death row inmates.

“Odd couple.”  That’s how a Forbes report just described a pairing of former Nader/Public Citizen attorney Alan Morrison and University of Chicago Law School Prof. Richard Epstein.  The duo, along with Stanford Law professor Kathleen Sullivan, has filed an amicus brief with the U.S. Supreme Court in support of CEI’s constitutional challenge to the 1998 tobacco settlement.  Meanwhile, another amicus brief by prominent legal experts urges the Court to consider the settlement’s antitrust implications.

CEI has petitioned the Court to hear the case, arguing that the $200 billion tobacco deal between 46 state attorneys general and major tobacco companies violates the Compact Clause (Article I, Section 10), which requires states to get the approval of Congress for any multi-state compact.

The Morrison amicus brief argues that “the lower courts in this and other similar cases have not properly understood the meaning of the Compact Clause …  and have not understood its place in the federalism provisions of the Constitution.”

While Morrison, Epstein and Sullivan do not take a position on whether the tobacco settlement is sound public policy, they argue that the MSA is “subject to the Compact Clause and that to allow States and private companies to enter an agreement of this type and with this massive impact, without approval of Congress, threatens to create an imbalance in our federal system.”

Moreover, “that imbalance can produce serious harms to both non-participating States and the Federal Government, in addition to the economic harm to competitors of the tobacco companies that are parties to the MSA and to consumers of tobacco products.”

The second amicus brief, written by George Mason University law professors Todd J. Zywicki and Joshua D. Wright and by attorney C. Boyden Gray (counsel of record), urges the Court to hear the case due to the “wide-spread and entrenched nature of the national tobacco cartel” arising from the settlement. Specifically, the brief focuses on the question of whether state immunity from antitrust laws (known as “Parker immunity”) applies to a “cartel-facilitating arrangement with significant interstate effects.”

A third amicus brief in support of CEI’s petition was filed by Freedom Holdings, a discount cigarette producer.

Read more about the case, S&M Brands v. Caldwell, Docket no. 10-622
See: “Odd Couple Files Brief Against Tobacco Settlement,” by Daniel Fisher

In his ruling striking down Obamacare’s individual mandate (requirement that people buy health insurance), Judge Hudson in Richmond declined to strike down the rest of the law, believing that the unconstitutional part of Obamacare, which violated constitutional federalism constraints, could be severed from the rest of the law. But the health care law lacks a severability clause, and lawyer Ken Klukowski filed a brief in Florida’s challenge to Obamacare explaining why the entire law should logically be struck down. In Reason, Peter Suderman explains why even if Obamacare is not struck down in its entirety, the courts should at least strike down some other provisions that are related to the individual mandate, such as Obamacare’s ban on insurers taking into account pre-existing conditions.

As I noted earlier in The Washington Examiner, “To justify preserving the rest of the law, the judge cited a 2010 Supreme Court ruling that invalidated part of a law — but kept the rest of it in force. But that case involved a law passed almost unanimously by Congress, which would have passed it even without the challenged provision. Obamacare is totally different. It was barely passed by a divided Congress, but only as a package. Supporters admitted that the unconstitutional part of it — the insurance mandate — was the law’s heart. Obamacare’s legion of special-interest giveaways that are ‘extraneous to health care’ does not alter that.” In short, Obamacare’s individual mandate is not “volitionally severable,” as case law requires.

Moreover, even if a single unconstitutional provision could be severed from Obamacare to preserve the remainder, that would not fix its other constitutional violations. The individual mandate, which exceeds Congress’ power under the Interstate Commerce Clause, is not the only unconstitutional provision in the health care law. Obamacare also violates the Tenth Amendment through Medicaid expansion provisions that transgress spending-clause limits applicable to federal-state programs, as I explain in an amicus brief for two governors in Florida v. HHS.

Law Professor James Blumstein, a constitutional and healthcare expert and advisor to Gov. Phil Bredesen (D-Tenn.), makes a different, but powerful, constitutional argument here that is also based on the Constitution’s spending clause.

Earlier, I discussed some of the bad effects of Obamacare on patients, employers, consumers, and the insurance market.

Everyone wants our transportation systems to be safe. But safety must also be balanced with respecting the privacy of citizens, and not wasting money on things that do not make us safer. Sometimes, our safety overlords do things that utilize scarce resources (including taxpayer dollars!) that seem mind-bogglingly dumb.

See WMATA’s recent decision to begin randomly screening bags in D.C. Metro stations.

The inspections are expected to take only minutes and are designed to be non-intrusive, as police will randomly select bags or packages to check for hazardous materials using ionization technology as well as K-9 units trained to detect explosive materials. Carry on items will generally not be opened and physically inspected unless the equipment indicates a need for further inspection.

Anyone who is randomly selected and refuses to submit their carry-on items for inspection will be prohibited from bringing those items into the station. Customers who encounter a baggage checkpoint at a station entrance may choose not to enter the station if they would prefer not to submit their carry-ons for inspection.

This is absurd. If we ever get to the point where there is someone in the D.C. area wanting to bomb the Metro station, none of these measures will have even a remote chance of stopping them. Let’s say you’re going to bomb the metro rail. Don’t enter the station where the cops are checking for explosives.That was hard to figure out.

We’ve had some very dumb attempted terrorist attacks, but I suspect most terrorists could figure out one of the 3,000 different ways to get around these randomized bag searches. They note that Boston and New York have “successfully” implemented this program, though there is no definition of what “success” means here.

Furthermore, this is just going to anger D.C.-area residents who ride the Metro. Washington’s Metrorail system, as of late, has been reliably unreliable. Many days, Twitter is abuzz with the #wmata hashtags documenting how 20 minute commutes have turned into hour long commutes.

UnsuckDC Metro recently (there is a blog dedicated solely to this topic) posted some troubling news regarding the (lack of) functionality of the escalators. It turns out that there are a number of problems with the way escalator repairs are handled which have led to them consistently breaking down, and injuring people in some instances.

WMATA: throwing your hands up in the air and claiming that the escalators weren’t built for the outdoors isn’t a satisfying response. Why would you build an escalator that wouldn’t work well in the outdoors when it’s going to be outdoors 365 days per year? There are also many indoor escalators that are out of order for months at a time.

Despite all of these problems, their resources are being put into random bag checks which will do next to nothing. Hurray!

Over at National Journal‘s Transportation Experts blog, Fawn Johnson asks whether or not high-speed rail has become a new political football in the United States. Governors-elect Walker (Wisc.) and Kasich (Ohio) ran on decidedly anti-rail platforms. They were also involved in several very public disputes with the Obama administration’s Department of Transportation, which ultimately led to the president’s decision to redirect ARRA (stimulus) funds out of high-speed rail projects in Wisconsin and Ohio.

While I don’t discount the likelihood that a decent chunk of the recent Republican outrage over these projects is partisan and manufactured, some of it is certainly sincere. Transportation Secretary Ray LaHood recently said, “There are no Democratic or Republic bridges, there are no Democratic or Republican roads.” He conveniently left out railroads, as the current high-speed rail program is largely the product of Democratic design (there is limited Republican support that primarily comes from Big Porkers like Ray LaHood, a former Republican congressman from Illinois).

There is plenty of sanctimony over on the blog, with PIRGy types nearly in tears over the thought of losing passenger rail projects that will primarily cater to wealthy urbanites. There are also plenty of bogus claims from rent-seekers and railfans. Andy Kunz, president of the U.S. High Speed Rail Association, is predictably full of it. He cites our alleged addiction to foreign oil as a reason to support the administration’s high-speed rail plan. He implies that these new trains of the future will somehow drastically diminish America’s demand for petroleum. Of course, putting faith in this narrative requires assuming that the trains will operate at capacity, that the proposed low-density corridors are actually meeting some unmet transportation demand, and ignoring the fact that these trains would be driven by diesel power cars or locomotives. Even then, it is unclear if U.S. petroleum demand would be significantly impacted. The Independent Institute’s Gabriel Roth smacks down Kunz over his logic-impaired assessment:

There is much misinformation on the capacity of transport modes. Andy Kunz asserts that “a single high speed rail line can carry the equivalent of a 10-lane freeway”. But one freeway lane can carry over 1,800 fifty-seat buses an hour. Six hundred such buses could carry 30,000 seated passengers an hour while occupying only one third of the capacity of one lane. How many seated passengers an hour can be carried on a High-Speed rail line, which requires each train to travel on dedicated right-of-way with miles of empty space in front of it?

As I said, I don’t doubt that there is some partisan cynicism at play in these recent dust-ups over Obamarail. But it is starting to appear that politicians and the public are simply more educated about these “high-speed” trains to nowhere, and are making their voices heard.

This is a Live Blog of a Thomson Reuters Event on “Fixing the World Economy.” The speakers are Dominique Strauss-Kahn, International Monetary Fund and Chrystia Freeland, from Thomson Reuters.

11:50am: We are about 10 minutes before this event begins. I’m going to be very surprised if I hear any arguments for the Federal government and world organizations doing less, not more.

11:56am: Chrystia Freeland is preparing her questions next to me.

12:03pm: Because of the snow, they said they’ll start the show at 12:10pm.

12:13pm: The event is starting.

12:19pm: Freeland claims that we are talking with one of the most influential men on the economy.

12:21pm: Strauss-Kahn claims that the package that Ireland approved is going to work.

12:24pm: Statements will be made about Greece tomorrow.

12:26pm: It doesn’t appear that Strauss is too sympathetic to taxpayers who don’t want to bailout the banks. He claims there needs to be “a balance.”

12:40pm: Chrystia Freeland is continuing her nonsense in favor of the Estate Tax. Newbusters trashed her today for it.

12:41pm: Q: If Strauss-Kahn was the dictator, would he support more stimulus? Strauss-Kahn wants as much stimulus as possible.

12:46pm: Strauss-Kahn implies that each country working to fix its own domestic economy isn’t good for the world economy.

12:51pm: Strauss-Kahn argues that It is a dream to think that all the economic problems will be solved simply by dealing with Chinese trade imbalance.

12:53pm: Q: What will be the situation for Spain in 2011? A: Prospects are good, but they face a lack of confidence in banking sector. “I don’t see the risk for Spain will be that big in particular.”

12:59pm: Q: How do you deal with the opaqueness of information with China? A: Strauss-Kahn argues that many countries are analogous. Greece didn’t have accurate or useful information. With regard to China, Strauss-Kahn claims that voluntary actions have been taken to investigate its financial sector. We will have the results in the Spring.

1:03pm: Strauss-Kahn argues that the IMF tries to be evenhanded with all Countries.

1:05pm: Strauss-Kahn doesn’t even have time to think about whether he will be the next President of France.

1:10pm: Pat Garofalo of Center for American Progress will now be discussing the event with Michael Moynihan of Reason.com

1:22pm: The segment is about to start.

1:25pm: Michael Moynihan argues that the discussion was vague. Chrystia Freeland is already starting to interrupt. Moynihan argues that many of the banks in Ireland should be let go.

1:29pm: Chrystia Freeland throws in abject nonsense that Strauss-Kahn argued that top tax breaks don’t stimulate the economy. 1) She was talking about the Estate Tax, not an overall discussion on the tax; 2) He simply brushed it off originally as being part of the package. There was no overall discussion of the top tax breaks.

1:31pm: Moynihan argues that most of the new tax bill is pretty good.

1:37pm: Q: Why continue the Irish bailout if nobody thinks it will work. A: Well, EU has no other plan.

1:41pm: Q: World Economy has gotten worse since IMF. Should we end it? A: Moynihan is not for ending the IMF. He’s not going to comment on the gold standard.

1:43pm: The End.

Tech:

Approval of Internet traffic rules likely-analysis:
“Contentious Internet traffic rules facing a vote next week are likely to be adopted without radically veering from a proposal unveiled earlier in the month, telecommunications policy analysts said on Wednesday.”

Warrant Needed to Get Your E-Mail, Appeals Court Says:
“The government must obtain a court warrant to require internet service providers to turn over stored e-mail to the authorities, a federal appeals court ruled Tuesday.”

French Watchdog Warns Google on Dominance:

Global Warming / Environment / Energy:

California’s Man-Made Drought:
“California has a new endangered species on its hands in the San Joaquin Valley—farmers. Thanks to environmental regulations designed to protect the likes of the three-inch long delta smelt, one of America’s premier agricultural regions is suffering in a drought made worse by federal regulations.”

Insurance / Gambling:

US Lawmakers And Mainstream Media Still Missing the Point With Online Gambling:
“It has taken the mainstream media several years before they caught up to the online poker movement that is taking place in the US. For years, the media disregarded online gambling, tossed it aside as if the millions of Americans that were playing at online casinos did not exist.”

Health / Safety:

McNanny-Staters Sue McDonalds:
“The CEO of McDonalds told the Center for Science in the Public Interest to go pound non-fat, sodium free sand over the summer, but they’re back with a lawyer this time:”

Economics:

Year of bullying, bluff and bailouts leaves euro fighting for its life:
“Inside a freezing, derelict military barracks on the crest of a hill in the middle of Germany, Bernd Niesel single-handedly carries on with his labour of love.”

Only business can put Obama back on top:

Mao’s Great Leap to Famine:
“The worst catastrophe in China’s history, and one of the worst anywhere, was the Great Famine of 1958 to 1962, and to this day the ruling Communist Party has not fully acknowledged the degree to which it was a direct result of the forcible herding of villagers into communes under the “Great Leap Forward” that Mao Zedong launched in 1958.”

Legal:

VA Attorney General: If We Lose, Government ‘Will Be Able to Order’ US to Buy Anything:
“Virginia Attorney General Ken Cuccinelli told CNSNews.com that the federal government will be able to “order” individuals to purchase any product or service if the individual mandate in health care law is determined to be constitutional by the Supreme Court.”

Lorrillard Tobacco Faces $71 Million Settlement for Cigarette Giveaways to Children:
“Lorillard Tobacco Co, has been found guilty of attempting to entice African American children to become smokers, by giving out free cigarettes. The jury hearing the case has awarded $71 million in compensatory damages to the estate of a woman who died of tobacco-related lung cancer, and her son.”

Labor:

The SEIU’s Dishonest Attack on Wall Street Banks:
“There are plenty of reasons to dislike Wall Street. A common complaint is that banker pay is simply outrageous. There are very legitimate ways to formulate arguments about why this could be a problem for an economy. But instead of adopting a sensible approach to complaining about Wall Street pay, a new piece of propaganda called “Big Banks Bonus Bonanza,” (.pdf) written by a coalition of progressive groups, including the Service Employees International Union (SEIU) relies on half-truths to sensationalize Wall Street compensation.”

Transportation/ Land Use:

What Kelo Wrought:
“The Supreme Court won’t hear an appeal in an eminent domain case pitting Columbia University against Manhattan business owners whose land they’re stealing. And hardly anyone cares:”

High price derails some U.S. bullet Trains:
“An Obama administration initiative that aims to create jobs and economic growth has been derailed in some states while it speeds along in others.”