Today is the day, as a bipartisan amendment comes to the Senate floor delaying draconian price controls on debit card transaction fees from Dodd-Frank’s Durbin Amendment, that the Senate has an opportunity to save consumers, community banks, and credit unions from a train wreck that will have a more direct effect on their finances than the much-hyped debt ceiling default.
In voting this afternoon on a one-year delay of the Durbin Amendment and study of its effects on consumers and small banks and credit unions, sponsored by Sen. Jon Tester (D-Mont.) with Republican such as Sen. Jon Kyl (R-Ariz.) signing on, the Senate also has the opportunity to save the retail industry from shooting itself in it collective foot with its massive but short-sighted lobbying effort to keep these price controls in place. With the Durbin Amendment mandating below-cost price caps of no more than 12 cents for the interchange fee, or swipe fee a merchant groups call it, that banks will be able to charge retailers to process debit card transactions, Washington has — in the words of syndicated columnist Deroy Murdock — “declared war on debit cards.”
But even though this war was instigated by big merchants such as Wal-Mart, Walgreens and Home Depot and retail trade association such as the Retail Industry Leaders Association and Food Marketing Institute, retailers themselves are going to be among the casualties of this war as the debit card system slows down and even breaks down due to the ill-effects of the Durbin price controls. New developments show that both consumers and retailers, particularly smaller ones, will lose.
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In response to calls by lawmakers for the Fairness Doctrine and related measures to be permanently removed from the Federal Register, FCC Chairman Julius Genachowski stated that he plans to do just that. We’ve previously discussed the merits (or the lack thereof) of the Fairness Doctrine, but it bears repeating that the regulation burdens free speech instead of invigorating it. It has no place in a free society with a vibrant media marketplace.
FCC Commissioner Robert McDowell echoed these sentiments in a recent speech:
Suffice it to say that political speech is core protected speech under the First Amendment, and the Fairness Doctrine is patently unconstitutional. The FCC decided as much in 1987 when everyone assumed the FCC killed it. We thought that this monster’s dead and stinking corpse was left to rot in a government graveyard. Instead, it appears that the Commission merely opted not to enforce the rule. Its words still defile the pages of the CFR, and we should erase it with a repeal order immediately.
While Mr. Genachowski’s rumored move would certainly be a step in the right direction, there is still much progress to be made in thwarting the FCC’s other efforts at speech regulation. Under the guise of ensuring “programming is responsive to needs of local communities,” the FCC is considering various broadcast localism proposals, including the creation of permanent community advisory boards that broadcasters would be required to consult on local needs and issues. The FCC is also exploring the possibility of requiring broadcasters to operate a studio in their community of license. These rules hinder broadcasters more than they benefit communities, and in fact can operate as a barrier to entry for minority broadcasters and other small outfits.
The FCC should leave broadcasting to the experts instead of imposing regulations that cause more problems than they solve.
As part of its broader attack on safeguards against false accusations, the federal Education Department is urging colleges to strip students and faculty of the right to cross-examine their accusers in disciplinary proceedings over alleged sexual harassment. In an April 4 letter from Assistant Secretary for Civil Rights Russlynn Ali, the Education Department said that it “strongly discourages schools from allowing the parties personally to question or cross-examine each other during the hearing.”
This is perverse, since the subjective nature of the legal definition of harassment means that there is no category of cases in which cross-examination is more useful or essential to ensure due process. To legally qualify as sexual harassment under Title IX, or racial harassment under Title VI, speech must be severe and pervasive enough to create a hostile learning environment for the listener, and interfere with the listener’s education, both in subjective and objective terms, according to court rulings like the Supreme Court’s 1999 Davis decision. Transitory offense is not enough. If the accuser admits on questioning that she did not really view the offensive speech as being a “big deal,” or was not shocked or surprised by it, that probably rules out the existence of a subjectively hostile environment. Indeed, a federal appeals court dismissed a racial harassment claim for just that reason in Newman v. Federal Express Corp., 266 F.3d 401 (6th Cir. 2001).
But a wrongly-accused person can’t establish that lack of a subjectively-hostile atmosphere without questioning the accuser, and may not be able to show that the accuser wasn’t greatly impacted by the speech without cross-examining the accuser about its alleged effect on her and her studies, such as whether she continued to enjoy her college experience after overhearing the allegedly “harassing” remarks.
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Mounting evidence shows that the auto bailouts weren’t worth it. They have been far more costly, and less successful, than claimed, as even liberal commentators now have admitted. The Washington Post fact-checker criticizes President Obama’s phony accounting on the auto industry bailout: “What we found is one of the most misleading collections of assertions we have seen in a short presidential speech. Virtually every claim by the president regarding the auto industry needs an asterisk, just like the fine print in that too-good-to-be-true car loan.”
Obama cites various figures of jobs allegedly saved through the bailout. But he’s playing deceptive numbers games that take credit for jobs actually created by foreign car manufacturers that didn’t participate in the bailout. As the Washington Post’s Charles Lane earlier noted, Obama’s jobs figures cite jobs created by the foreign competitors of GM and Chrysler, and their competitors’ auto dealers, including “not only the Detroit 3, but also all of the plants operated by foreign car makers in the U.S., the entire supply chain and all car dealerships around the country!”
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In response to my recent blog post about BitCoins, several commenters offered responses to my objections. Today I will address these considerations as well as others I came across during my research.
Objection: My refutation was circular or my refutation was just an assertion that BitCoins are worthless.
This isn’t the case. I suspect many people interested in BitCoins may have some training in computer science, so I’ll use an analogy from that field to briefly restate my argument. If you aren’t familiar with computer science, feel free to skip ahead to the next paragraph. The value of a currency can be thought of as the result of a recursive algorithm, where the value on day n depends on the value on day n-1, with some adjustments. The problem with BitCoins is that there is no base case because BitCoins have no use outside of being traded around. This means that existing BitCoin “prices” are essentially arbitrary numbers with no grounding in anything real, mentally or physically.
I am not asserting that BitCoins are “worth nothing.” It would be more accurate to say that BitCoins are nothing. Government fiat monies can get away with this for reasons I describe below, but none of these considerations apply to the case of BitCoin for the very same reasons that BitCoin is intriguing, i.e. that it is without a central managing authority, that people don’t have to use it if they don’t want to, etc. More on this below.
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MIT’s Peter Diamond has withdrawn his nomination to the Board of Governors of the Federal Reserve System. I earlier explained how Diamond’s nomination by President Obama benefited from an ideological double-standard, and how his presence on the Board would have violated the regional-balance requirements of Section 10-1 of the Federal Reserve Act. Diamond’s supporters note that he is a really smart guy, which is legally irrelevant, and also ignores the fact that Diamond “lacks relevant experience in crucial areas of Fed policy.” It’s also true that Diamond is an old-fashioned big-government liberal who supported the stimulus, inflationary monetary policy, bailouts, and the Fannie-Freddie model of GSEs. But his support for liberal big-government policies was hardly the only reason for opposing him, and his supporters’ failure to address the legal objections to his nomination, like Section 10-1 of the Federal Reserve Act, is quite telling.
In the battle between international brewing giants SABMiller and ABInBev, Wisconsin craft brewers could bear the heaviest burden. On May 31, the state legislature’s Joint Finance Committee approved a measure to be added to the state’s budget proposal which would prevent brewers from owning distributorships and retail licenses in Wisconsin. This means that if you’re a brewer, you can’t also sell alcoholic beverages to customers or retail shops.
The biggest backer of the bill is SABMiller, or as it is known in the US, MillerCoors. They have been pushing the measure, they say, in order to protect the vitality of Wisconsin beer in the face of a hostile invasion from their main national competitor, AB InBev, aka Anheuser-Busch. InBev has reportedly begun a nationwide campaign to purchase distributors in many states, something that MillerCoors says threatens all other brewers’ ability to get their beers in bars and on shelves. That’s the line that MillerCoors is peddling, but craft brewers in Wisconsin say they, and their ever increasing presence in the beer market, is the true target of the proposal.
While the text of the measure has not been made available to the public yet, the proposal would reportedly remove brewers’ current right to own wholesaler and retail licenses. Brewers of less than 300,000 barrels annually will still be able to self-distribute, but current brewers and new wholesalers would be required to have 25 independent retail customers prior to being granted the right to distribute. According to a MillerCoors spokesperson, these new rules would also prevent small brewers from banding together to form their own distributorship. In addition to all of that, the measure would prevent brewers from owning retail licenses, meaning that they could have a brewpub, but they would only be allowed to sell their own product. Breweries that already own retailing outlets would be allowed to retain one.
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Last Wednesday, three people were arrested in Orlando for giving food to homeless people in a local park. They violated city regulations that require “groups to obtain a permit and limits each group to two permits per year for each park within a 2-mile radius of City Hall.” The rules apply to events that give food to over 25 people; the arrestees fed about 40 people.
Their charitable work could cost them each a $500 fine and up to six months in jail. All three are affiliated with a group called Food Not Bombs that regularly gives meals to homeless people. The Wednesday event that led to the arrests was a deliberate resistance to the ordinance. Hopefully they will succeed in overturning it; the last thing government should do when people try to help each other is get in the way.
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