Property Rights

Post image for More Bipartisan Opposition to Obama Administration’s Move to Block Airline Merger (Including Rahm Emanuel)

Another day, another round of public bipartisan opposition to the Obama Department of Justice’s lawsuit to block the pending American Airlines and US Airways merger. In today’s edition, a coalition of big city mayors wrote to Attorney General Eric Holder expressing their collective concern that blocking the merger will harm their cities’ economic growth and airline industry employees. The letter concludes:

By attempting to block the proposed combination, the Department has needlessly added to the uncertainty that these employees and their families must endure and has put jobs at risk.

Our cities rely on the airline industry to support existing businesses, attract new businesses and to keep our local economies moving forward. e health and well-being of our cities and our citizens depends on this combination moving forward.

For these reasons, we ask you to settle your lawsuit with American Airlines and US Airways and allow the combination to proceed.

It was signed by seven mayors: Patsy Kinsey (D-Charlotte), Michael Nutter (D-Philadelphia), Greg Stanton (D-Phoenix), Mike Rawlings (D-Dallas), Betsy Price (R-Fort Worth), and Carlos A. Gimenez (R-Miami-Dade County). In a surprising twist, former Obama White House chief of staff and current Democratic Chicago Mayor Rahm Emanuel also signed the letter.

It was announced this afternoon that Oklahoma Attorney General Scott Pruitt (R) intends to file an amicus brief supporting the merger, which will likely be joined by other states.

I previously noted the dwindling support for the Justice Department’s deeply flawed lawsuit and recommended two real pro-competitive policy reforms Congress and the president ought to pursue. President Obama’s most important constituency, organized labor, has strongly opposed the merger lawsuit since its filing. As the ranks of opponents from both sides of the aisle grow, it is becoming unclear what the Obama administration hopes to accomplish by continuing forward with its misguided attack on the American Airlines-US Airways merger.

Post image for Judge Rules Federal Government Cannot Close County Park in Shutdown

Earlier, I wrote about the federal government’s use of the federal government shutdown as an excuse to close many private businesses. Those were businesses that lease federal land, operate on it, or are surrounded by it. They were shut down by the government even though such businesses were not closed in previous government shutdowns (and even though many federal civilian employees are still on the job), suggesting that such closures were likely illegal.

A federal judge in Virginia ruled on October 9 that the federal government could not close a county park that it did not even run. That ruling involved a county-managed park, not a privately managed park, but as a Washington Post story notes, “it might inspire similar legal actions” to reopen other facilities closed by the federal government.

Here is an excerpt from the Post’s October 10 story about Judge Liam O’Grady’s ruling granting a temporary restraining order against the National Park Service:

Fed up that the federal shutdown was keeping them off their practice fields, a group of young lacrosse players in Northern Virginia challenged the government in court. And at least for now, they won. A federal judge on Wednesday ordered the National Park Service to immediately reopen Langley Fork Park in McLean — which was closed Oct. 1 — and allow the boys and girls of the McLean Youth Lacrosse organization organization back onto the fields. . .A spokeswoman for the Fairfax County Park Authority, which manages the park, said officials removed the temporary barriers at the park Thursday morning after receiving the Park Service’s permission. . .McLean Youth Lacrosse’s lawsuit does not affect other closed national parks and monuments across the country. Still, it might be somewhat embarrassing to federal officials, who have been accused of closing facilities unnecessarily to exaggerate the shutdown’s impact. And it might inspire similar legal actions.

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Young people often don’t realize that government shutdowns used to be common, until the middle of the Clinton administration. The George W. Bush presidency was an exception to the rule. The Miami Herald’s Glenn Garvin debunks some of the myths promoted by “the chattering classes” (such as left-leaning Washington Post and New York Times columnists) to people too young to remember earlier shutdowns, and people with bad memories.

• This kind of thing never used to happen. Actually, it used to happen all the time. What’s unusual is the quiet stretch since the last shutdown, when Newt Gingrich and Bill Clinton were facing off in 1995. Before that, there were 18 shutdowns in 19 years as various Congresses and presidents squabbled over raising the national debt limit. My personal favorite is the one in 1982, when Congress didn’t feel like working late to pass a spending bill the night before the new fiscal year started. The Republicans were all going to a barbecue at the White House, while the Democrats had a $1,000-a-plate fund-raising dinner to attend.

• Well, it wouldn’t happen if not for all these crazy ideologues who’ve been elected the last few years. In the old days, Ronald Reagan and Tip O’Neill would have just had a drink after work and settled everything.

More likely they would have broken some bottles over one another’s heads. The federal government shut down seven times while Reagan was president and O’Neill speaker of the House. No wonder, the way they talked about each other.

O’Neill called Reagan “an absolute and total disgrace” and added that it was “sinful that this man is president of the United States.” Reagan, in his diary, wrote that budget negotiations with the speaker were an ordeal because “Tip O’Neill doesn’t have the facts of what was in the budget. Besides he doesn’t listen.”

• Maybe arguments over spending are inevitable. But it’s just plain wrong to hold laws on other subjects hostage to debt-ceiling negotiations, the way the Republicans are doing with Obamacare.

Over the years, government shutdowns have been triggered by attempts to change the laws on, among other things, abortion, civil rights, welfare, oil-drilling and which government agency’s economic forecast should be used for budget planning. And even if you think debt-ceiling fights should be restricted just to spending issues, the fact is that virtually everything Congress or the president does can be turned into a spending issue, because it all requires funding. . . . The Founding Fathers not only foresaw but approved of this tactic. . . . James Madison, one of the principal authors of the Constitution, was quite explicit: ‘This power over the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure.’”

(Boldface added for emphasis; more myths discussed at this link). People who think government used to be better at avoiding shutdowns and defaults are forgetting about past episodes of government dysfunction, like in 1979 “when the Treasury defaulted for two weeks over a debt limit increase delay and technical problems with its computers. It caused a 60-basis point rise in interest rates that lasted for years, according to academic research.” In 1979, Democrats controlled the presidency and both houses of Congress, so you can’t blame that default on the Tea Party.

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Post image for Some Genuine Vindictiveness in Park Closings

The Washington Times story on the attempted forced shut down of the Pisgah Inn on the Blue Ridge Parkway in North Carolina may provide some insight into the attitudes of the National Park Service in shutting down private concessionaires on federal lands that still have open access for the public.

NPS chief spokesman said: “NPS [is]a single entity….We do not believe it is appropriate or feasible to have some parts of the system open while other parts are closed to the public.”

If other words, if we suffer, you suffer. Appears to be some genuine vindictiveness there.

Perhaps NPS is worried that if the public sees how well the private concessionaires are running campgrounds, picnic areas, hotels, stores, bookshops and properties such as the Claude Moore Colonial Farm in McLean, Va., which was closed even though it takes no federal money and has no federal employees — they might begin to wonder why we don’t simply privatize all the National Parks and National Forests. Where is the constitutional authority for the Feds to raise trees and own campgrounds anyway?  And there is certainly nothing inherently unique or difficult about these things that make it so the private sector cannot do them. Indeed, the private sector does them much better. Ask your local timber company when was the last time it let forests die from insects, beetles or disease or burn down in catastrophic wildfires.

And perhaps instead of Republicans introducing bills to provide lost pay to furloughed non-essential Federal employees, they should provide for reimbursement for forcibly closed private concessionaires. With the money to come form budgets of NPS and USFS.

 PJ Media’s Bryan Preston reported Wednesday that the “White House [is] ordering hundreds of privately run, private funded parks to close,” using the government shutdown as an excuse (even though most federal employees remain on the job): “Warren Meyer of Phoenix, AZ, is owner and president of Recreation Resource Management, Inc. RRM employs about 400-500 camp workers and managers across about a dozen states. It is one of a handful of companies that have been managing national parks and campgrounds as tenants for years, through previous government shutdowns including the last one in 1995-1996. Those previous shutdowns never closed any of the parks managed in this way, but the current shutdown threatens closure.”  But this time, it’s different: “They are shutting all of us down ASAP.  Marching orders straight from the White House,” says Meyer.

As Preston noted, “The campgrounds are self-sufficient and receive no federal funding. No government employees staff or manage the parks. The management companies pay the National Park Service out of the funds they generate from operating the thousands of campgrounds. So . . . the shutdown is puzzling to Meyer.”  Earlier, Meyer wrote:

[T]oday, we have been told by senior member of the US Forest Service and Department of Agriculture that people ‘above the department’, which I presume means the White House, plan to order the Forest Service to needlessly and illegally close all private operations. I can only assume their intention is to artificially increase the cost of the shutdown as some sort of political ploy.  The point of the shutdown is to close non-essential operations that require Federal money and manpower to stay open. So why is the White House closing private operations that require no government money to keep open and actually pay a percentage of their gate revenues back to the Treasury? We are a tenant of the US Forest Service, and a tenant does not have to close his business just because his landlord goes on a vacation.

Earlier, as Preston notes, the National Park Service barricaded the World War II Memorial in Washington, D.C. (an unmanned outdoor memorial that has historically been open 24 hours a day), and closed a self-sufficient living history farm in Virginia, as we discussed earlier.  It also reportedly shut down restaurants and hotels on public land, expelling guests.

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Over a year ago, I highlighted an eminent domain abuse case in Virginia. To recap: The Norfolk Redevelopment and Housing Authority and Old Dominion University conspired to seize private property to support ODU’s expansion efforts. One affected property owner, Bob Wilson, was justifiably upset by the land grab and hung a banner on the side of his business protesting the city’s actions. City inspectors then found the banner to be too large, ordering Wilson to remove the banner or face a $1,000 per day fine. Wilson fought both the eminent domain condemnation and the banner take-down order, being represented by our friends at the Institute for Justice in the latter case.

Wilson’s First Amendment case is still pending, but fortunately he is now only fighting one battle against government overreach. Last week, the Virginia Supreme Court ruled that the city’s condemnations of property owned by Wilson and others was illegal, reversing a lower court ruling. ODU was ordered to return the property it had received through seizure to its rightful owners. The ruling now threatens other ODU land grabs, which have become endemic under the university’s aggressive expansion plans.

In a post-Kelo world, there is often little hope for those seeking to protect their property rights. Thank you, Virginia Supreme Court, for providing a bright spot in the otherwise dreary property rights landscape.

Post image for We Must Take a More Active Role in Challenging the FCC

On September 9, 2013 I entered the E. Barrett Prettyman Court house, which houses the federal Court of Appeals for the District of Colombia Circuit. It was 8:30am and in one and a half hours, oral arguments in Verizon v. FCC were slated to begin.

I assumed that arriving an hour before the doors would open would be time enough to get a seat for the case. However, I encountered a line of over a hundred people already waiting to enter the courtroom, and by the time I entered the court room, space was limited to standing room only.

As oral arguments proceeded, the panel asked a litany of questions about the question whether the FCC’s Open Internet Order treats broadband providers as common carriers. The arguments seemed rather esoteric, focusing on specific sections within the Order and the Telecommunications Act of 1996.

This was natural for a courtroom, and yet, it was rather strange to not hear questions about the FCC’s attempt at assigning itself ancillary authority over the Internet. What has seemed absent from much of the discussion about net neutrality is a serious opposition from the public to regulators self-implementing authority to manage the Internet.

In 2010, the FCC explored redefining broadband Internet from information technology to telecommunications technology in order to establish control over the industry. Content distributors, of course, supported the motion, but a majority of respondents were against the expansion. The FCC ceased exploration soon after.

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Supreme-Court“Disparate impact” is a term in anti-discrimination law for when a neutral policy happens to affect minorities more than whites. One example is a standardized test that whites pass at a higher rate than some minority group, even though test scores are calculated the same way for members of all races. Disparate-impact is most commonly discussed in the context of hiring and school admissions. But in fact it can also play a role in financial melt-downs. Government can use the “disparate-impact” notion to pressure banks and mortgage companies into engaging in risky, race-conscious lending,

It’s for that reason the Competitive Enterprise Institute recently joined in an amicus brief filed by the Pacific Legal Foundation in a pending Supreme Court case, Township of Mount Holly v. Mt. Holly Gardens Citizens in Action, Inc. The question presented is whether federal agencies can inject race-conscious “disparate-impact” considerations into laws that were intended to be colorblind bans on racial discrimination, such as the Fair Housing Act.

Banks have been under pressure from lawmakers and regulators to give loans to minorities with bad credit to avoid liability for “racially disparate impact,” and to provide “affordable housing” and promote racial “diversity.” For example, the Obama administration has ratcheted up such pressure, demanding targeted banks make preferential loans to minorities with bad credit, notes Investor’s Business Daily. Such pressure played a key role in triggering the mortgage crisis, judging from a story in The New York Times. For example, “a high-ranking Democrat telephoned executives and screamed at them to purchase more loans from low-income borrowers, according to a Congressional source.” The executives of government-backed mortgage giants Fannie Mae and Freddie Mac “eventually yielded to those pressures, effectively wagering that if things got too bad, the government would bail them out.” (which in fact happened, at enormous expense to taxpayers).

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netneutralityToday, Monday, September 9, 2013, the U.S. Court of Appeals for the D.C. Circuit will hear oral arguments in Verizon’s challenge of the Federal Communications Commission’s December 2010 Order on “Preserving the Free and Open Internet.” This “Before Net Neutrality Eats The World” series has explored fundamental issues at stake; I’m wrapping it up today.

(At lunchtime today, you’ll be able to stream a TechFreedom/International Center for Law & Economics luncheon panel reacting to the proceedings.)

The Internet is still relatively new as an economic and cultural phenomenon, and it has been a full eight years since the Federal Communications Commission’s (FCC) Internet Policy Statement of 2005 that created this long and drawn out net neutrality distraction.

During this unfortunate detour and waste of resources, the runup to the case represented a unique opportunity in business and political history to build an intellectual and consumer case against infrastructure socialism, and for network property rights.

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(Note: On September 9, the U.S. Court of Appeals for the D.C. Circuit will hear oral arguments in Verizon’s challenge of the Federal Communications Commission’s December 2010 Order on “Preserving the Free and Open Internet.” This series explores fundamental issues at stake.)

The Federal Communications Commission’s (FCC) references to homeland security in the Order (p. 17963) insist that nothing supersedes or limits the ability of a provider to cope with threats or emergency needs:

Commenters are broadly supportive of our proposal to state that open Internet rules do not supersede any obligation a broadband provider may have—or limit its ability—to address the needs of emergency communications or law enforcement, public safety, or homeland or national security authorities…. Broadband providers have obligations under statutes such as the Communications Assistance for Law Enforcement Act, the Foreign Intelligence Surveillance Act, and the Electronic Communications Privacy Act that could in some circumstances intersect with open Internet protections, and most commenters recognize the benefits of clarifying that these obligations are not inconsistent with open Internet rules.

Here I’m leaving alone what I regard as overwhelming need for the statutes FCC mentions to be overhauled to protect individuals from unconstitutional searches and general snooping; I’m focusing solely on FCC’s implication that security and net neutrality are not enemies.

In reality, everything about net neutrality influences the broader evolution of networks-as-assets, prioritization of emergency information, and cybersecurity; indeed, few conceivable policies would supersede such concerns more. In the extreme, if only authenticated networks that discriminated against every packet were the way to have infrastructure security, the Order would clearly conflict with such objectives; it can likewise obstruct interim measures.

There’s little appreciation in the Order for the fundamental, elemental importance of proprietary control over networks to combat security threats and assure general reliability and growth flexibility. For those we need, not neutrality, but a plethora of overlapping wired and wireless communications networks, redundancy schemes, cyber-insurance, information sharing standards not dictated by Washington, and more projects that don’t even exist yet. (See “Cybersecurity Finger-pointing: Regulation vs. Markets for Software Liability, Information Security, and Insurance,” CEI Issue Analysis, May 31, 2005.)

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