<?xml version="1.0" encoding="UTF-8"?> <rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" ><channel><title>OpenMarket.org &#187; Regulation</title> <atom:link href="http://www.openmarket.org/category/regulation/feed/" rel="self" type="application/rss+xml" /><link>http://www.openmarket.org</link> <description>The Competitive Enterprise Institute Blog</description> <lastBuildDate>Sat, 11 Feb 2012 05:30:58 +0000</lastBuildDate> <language>en</language> <sy:updatePeriod>hourly</sy:updatePeriod> <sy:updateFrequency>1</sy:updateFrequency> <generator>http://wordpress.org/?v=</generator> <item><title>The STOCK Act&#8217;s Muzzle and How to Fix it in Conference (Update)</title><link>http://www.openmarket.org/2012/02/10/the-stock-acts-muzzle-and-how-to-fix-it-in-conference-update/</link> <comments>http://www.openmarket.org/2012/02/10/the-stock-acts-muzzle-and-how-to-fix-it-in-conference-update/#comments</comments> <pubDate>Fri, 10 Feb 2012 18:02:21 +0000</pubDate> <dc:creator>John Berlau</dc:creator> <category><![CDATA[Features]]></category> <category><![CDATA[Regulation]]></category> <category><![CDATA[Sanctimony]]></category> <category><![CDATA[Transparency]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=51183</guid> <description><![CDATA[My colleagues David Bier and Ryan Radia contributed to this post. Per the scenario in a previous post, it’s April 2012. You are a conscientious congressional staffer who still takes seriously the need to be a steward of taxpayers’ money. (Yes, I know for a fact, there are more than a few of these folks around [...]]]></description> <content:encoded><![CDATA[<p><a class="post_image_link" href="http://www.openmarket.org/2012/02/10/the-stock-acts-muzzle-and-how-to-fix-it-in-conference-update/" title="Permanent link to The STOCK Act&#8217;s Muzzle and How to Fix it in Conference (Update)"><img class="post_image alignright" src="http://www.openmarket.org/wp-content/uploads/2009/02/capitolmoney.jpg" width="300" height="200" alt="Post image for The STOCK Act&#8217;s Muzzle and How to Fix it in Conference (Update)" /></a></p><p><em>My colleagues David Bier and Ryan Radia contributed to this post.</em></p><p>Per the scenario in a previous <a href="http://www.openmarket.org/2012/02/06/the-stock-acts-muzzle-how-insider-trading-bill-could-shut-down-grassroots-communication/">post</a>, it’s April 2012. You are a conscientious congressional staffer who still takes seriously the need to be a steward of taxpayers’ money. (Yes, I know for a fact, there are more than a few of these folks around on Capitol Hill.) You are watching closely events surrounding an “omnibus” or “minibus” spending bill deemed even by conservative Republican members as “must-pass” because it funds the military as well as other parts of government.</p><p>Suddenly, you hear about an outrageous earmark about to be slipped into the bill that would enrich a Fortune 500 company. You decide to alert a network of fiscal watchdogs you’ve met with over the years to wage an instant campaign against this piece of corporate welfare.</p><p>You have all the information in the e-mail and are about to hit “send.” But then you remember something from a briefing you attended a couple days ago. The subject was the STOCK (Stop Trading on Congressional Knowledge) Act – aimed at stopping “insider trading” by members and employees of Congress – that your boss and nearly every other member of Congress voted into law in February.</p><p>At the time, you didn’t think the law would affect you since the only trading you do is indirect, through your mutual funds and pension. You were surprised to learn, however, that you now have a broad “duty of confidentiality” that encompasses not just trading on “material, nonpublic information,” but disclosing information to those who might.</p><p>You sit back and think, “It is indeed possible that someone I send this to could buy stock in the company, or could short the company based on the coming outrage.” You stare at the computer screen wondering how virtually no one noticed how this law could have potentially criminalized an act of whistleblowing as abetting “insider trading.”</p><p>Such a scenario is almost certain if House and Senate versions of the STOCK Act are not modified before a final bill is sent to President Obama. The House <a href="http://www.cbsnews.com/8301-503544_162-57373937-503544/stock-act-passes-in-house/">passed</a> the <a href="http://docs.house.gov/billsthisweek/20120206/BILLS-112s2038-SUS.pdf">bill </a>yesterday with a 417-2 vote after a similarly overwhelming 96-3 Senate vote last week.  Both bills must go to “conference” to produce a final identical bill to be voted on by both houses, giving members an opportunity for a fix to help make sure that whistleblowing and routine communication with outside groups from being caught in the law’s web.</p><p><span id="more-51183"></span></p><p>The legislation gained steam after a series of revelations in conservative author Peter Schweizer’s best-selling book, <a href="http://www.amazon.com/Throw-Them-All-Peter-Schweizer/dp/0547573146/ref=sr_1_1?ie=UTF8&amp;qid=1328451954&amp;sr=8-1"><em>Throw Them All Out</em></a>, that pointed out that many members of Congress regularly trade stocks and options, sometimes after receiving sensitive information. A “60 Minutes” report based on some of Schweizer’s findings propelled the issue into the spotlight, with President Obama calling on Congress in the State of the Union to ban “insider trading” among its members and staff.</p><p>But lost in the justifiable outrage about politicians’ perks is discussion about how provisions in the bills would actually work. Among the most important things to know about the STOCK Act is that  by specifically applying “material, nonpublic information” rules that govern officers and directors of a corporation to Congress, the  bill would bar in many instances the disclosure of such information as well as trading on it.</p><p>The bills specifically impose a “duty of confidentiality” on members of Congress and their staffs. They state that “each Member of Congress or employee of Congress owes a duty arising from a relationship of trust and <strong>confidence</strong> [emphasis added] to the Congress, the United States Government, and the citizens of the United States with respect to material, nonpublic information.”</p><p>The term “confidence” in the context of securities law does not mean faith in a particular institution &#8212; indeed it would be difficult to legislate confidence in Congress or any branch of government — but rather keeping matters in confidence. And under the “duty of confidentiality” imposed with regard to publicly-traded companies, many have been prosecuted for sharing information as well as trading on it.</p><p>A so-called “tipper,” <a href="http://www.ebaughlaw.com/publications/TJBL_article.pdf">wrote</a> attorney Nelson Ebaugh in the <em>Texas Journal of Business Law,</em> “is exposed to insider trading liability for simply communicating material, nonpublic information even if he did not personally use the information to trade in the company’s securities.” Ebaugh added that courts are split on whether a “personal benefit” is even required for guilt.</p><p>Ebaugh and other experts have argued that insider trading rules have been applied so broadly to such “tippers” of corporate information that they inhibit disclosure about corporate wrongdoing. If these rules were applied to information about upcoming congressional action, it would have serious, if not more severe, effects in muzzling whistleblowers.</p><p>In addition to the e-mail to activists from the beginning of this article, conference calls and off-the-record meetings with ideological activists, such as the famed “Wednesday meeting” created by conservative activist Grover Norquist and similar gatherings organized by liberals, could also be curtailed. In the corporate word, the Securities and Exchange Commission has cracked down on what it calls “selective disclosure” to analysts. As a result, under Regulation Full Disclosure, most public companies put information about conference calls on their web site and/or post the recorded call for all to hear.</p><p>Following this precedent, if the STOCK Act is passed, the SEC may require meetings and calls in which Congress members and staffers participate to be open to the public or not occur at all. The result would be less outflow of information from Congress and a less-informed public.</p><p>Fortunately, some simple language &#8212; a “mens rea” or “guilty mind” requirement &#8212; could be added in conference to help ensure the new rules don’t inhibit the free flow of information necessary for accountability in Congress. A clause could be added stating something like:</p><p>“Nothing in this subsection shall be construed to impose liability on Members of Congress or employees of Congress for acts of disclosing material, nonpublic information to nonaffiliated third parties, unless the Member of Congress or employee of Congress discloses the information to a nonaffiliated third party:</p><p>(A)               As a means for making a private profit;</p><p>(B)               With knowledge that the recipient of the information, or persons acting in concert with the recipient of the information, intend to use the information for purposes of making a private profit;”</p><p>The First Amendment is also threatened by a measure added to the Senate bill by Sen. Charles Grassley (R-Iowa) that would require so-called political intelligence (an oxymoron if there ever was one!) firms to register as lobbyists.  But these firms do not lobby for legislation, but merely gather information for investors, businesses, and sometimes, as University of Minnesota law professor Richard Painter <a href="http://www.legalethicsforum.com/blog/2012/02/senate-adds-flawed-political-intelligence-amendment-to-insider-trading-bill.html">points out</a>, non-profits such as churches and unions. The work that they do is not that different from the news gathering of high-priced investment magazines and newsletters for wealthy subscribers, which no one doubts have First Amendment protection.</p><p>As Sen. Joseph Lieberman (I-Conn.) <a href="http://thehill.com/blogs/floor-action/senate/208591-senate-adopts-amendment-to-require-political-intelligence-operatives-to-register-like-lobbyists-">said</a> on the Senate floor, “We are ultimately dealing with First Amendment rights here, and ought not to legislate until we are prepared to do so in a reasoned way.” Fortunately, the House bill did not contain Grassley’s amendment, but Grassley and Democrats will fight to reinsert the measure in the conference bill.</p><p>The exposes of Schweizer and others raise serious issues about power and privilege that need to be addressed. The STOCK Act contains some sensible measures, such as more rapid and specific disclosure of investment holdings. Unfortunately, the “political intelligence” provision of the Senate bill and the “duty of confidence” in both bills would muzzle the communication necessary for sunlight and reform. For the sake of transparency and accountability, this potential muzzle must be lifted.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/10/the-stock-acts-muzzle-and-how-to-fix-it-in-conference-update/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>Good News/Bad News On Human Spaceflight Regulation</title><link>http://www.openmarket.org/2012/02/09/good-newsbad-news-on-human-spaceflight-regulation/</link> <comments>http://www.openmarket.org/2012/02/09/good-newsbad-news-on-human-spaceflight-regulation/#comments</comments> <pubDate>Thu, 09 Feb 2012 16:42:49 +0000</pubDate> <dc:creator>Rand Simberg</dc:creator> <category><![CDATA[Features]]></category> <category><![CDATA[Regulation]]></category> <category><![CDATA[Space]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=51094</guid> <description><![CDATA[In a bill passed last week authorizing the Federal Aviation Administration for another year, the moratorium on regulation of the safety of spaceflight participants, in place since 2004, was extended for another three years, but not as long as proponents in industry had hoped: Section 827 of the bill (on page 318), tucked away in [...]]]></description> <content:encoded><![CDATA[<p><a class="post_image_link" href="http://www.openmarket.org/2012/02/09/good-newsbad-news-on-human-spaceflight-regulation/" title="Permanent link to Good News/Bad News On Human Spaceflight Regulation"><img class="post_image alignleft" src="http://www.openmarket.org/wp-content/uploads/2010/10/space2.jpg" width="300" height="200" alt="Post image for Good News/Bad News On Human Spaceflight Regulation" /></a></p><p>In a bill passed last week authorizing the Federal Aviation Administration for another year, the moratorium on regulation of the safety of spaceflight participants, in place since 2004, was <a href="http://www.spacepolitics.com/2012/02/02/final-faa-bill-includes-partial-extension-of-cslaa-provision/" target="_blank">extended for another three years</a>, but not as long as proponents in industry had hoped:</p><blockquote><p>Section 827 of the bill (on page 318), tucked away in the “Miscellaneous” section of the bill between sections on air passenger screening privacy and air transportation of lithium batteries, extends the current restriction on safety regulations, but only to October 1, 2015. The joint statement of managers of the conference report provides a few more details, on page 152 of the PDF document: “Nothing in this provision is intended to prohibit the FAA and industry stakeholders from entering into discussions intended to prepare the FAA for its role in appropriately regulating the commercial space flight industry when this provision expires.”</p></blockquote><p>The current moratorium, which was due to expire at the end of this calendar year, was put in place by the 2004 Commercial Space Launch Amendments Act, which prohibited the FAA from regulating passenger safety for a period of eight years (its ability to license launches for the protection of uninvolved third parties was not affected). The idea was that the technology was insufficiently well understood by anyone, including the putative regulators, to put in place regulations that wouldn&#8217;t stifle industry development and innovation, given all the different approaches (vertical takeoff and landing, horizontal takeoff and landing, air launch, hybrid rockets, liquid rockets, etc.). The model proposed instead was on the basis of informed consent, in which participants would be given all information available on the design and operations of the vehicle, and make their own assessment of the risk, and whether or not it was worth it.</p><p>The problem was that everyone had envisioned more rapid progress, but in the seven years since, not a single commercial passenger flight has occurred, due to <a href="http://www.spaceref.com/news/viewpr.html?pid=26119" target="_blank">development problems with Scaled Composites&#8217; SpaceShipTwo propulsion</a>, and the financial crisis starving some of the other fledgling companies of funds needed for development. Accordingly, the industry had been pushing for Congress to extend the moratorium for another eight years to gather more needed experience to intelligently inform regulations, except this time the clock wouldn&#8217;t start when the bill passed, but rather when the first commercial passenger spaceflight occurred, to prevent the problem that arose from the first bill.</p><p><span id="more-51094"></span></p><p>Though George Nield, head of the FAA office that regulates spaceflight, had wanted the moratorium to end, John Mica, the chairman of the transportation committee on the House side, was amenable, and the extension was included in the House version for months, but it was not in the Senate version, with reports of opposition by a single Senate staffer, and the bill was held up in conference committee for many weeks resolving other, unrelated issues.</p><p>Apparently, there was some danger that it would fall out completely, but House Whip Kevin McCarthy apparently went to bat for the industry (Mojave, California, where several of these companies operate, is in his district). He had written <a href="http://www.ridgecrestca.com/opinions/x2018891343/McCarthy-talks-commercial-space-flight" target="_blank">an op-ed</a> a few weeks ago advocating the extension, and last week, in a press release with the Commercial Spaceflight Federation, <a href="http://kevinmccarthy.house.gov/index.php?option=com_content&amp;view=article&amp;id=682:mccarthy-action-ensures-commercial-spaceflight-innovators-can-continue-to-grow-and-expand-222012&amp;catid=41:2012-press-releases" target="_blank">took credit</a> for getting the partial extension, though apparently it was a compromise.</p><p>But at least it buys time for the industry to continue to develop their vehicles without the uncertainty that had been hanging over their heads about new rules next year (<a href="http://www.xcor.com/" target="_blank">XCOR Aerospace</a> expects to start flying its <a href="http://www.xcor.com/products/vehicles/lynx_suborbital.html" target="_blank">Lynx rocketplane</a> late this year, and <a href="http://www.armadilloaerospace.com" target="_blank">Armadillo Aerospace</a> and <a href="http://scaled.com/projects/model_339_spaceshiptwo" target="_blank">Scaled Composites</a> expect actual flights into space, though without passengers). And the short extension, if nothing else, buys time to try to get the full eight years with the first-flight trigger, in a new Congress.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/09/good-newsbad-news-on-human-spaceflight-regulation/feed/</wfw:commentRss> <slash:comments>2</slash:comments> </item> <item><title>Even Liberal Reporters Sour on Stimulus-Funded California Rail Boondoggle</title><link>http://www.openmarket.org/2012/02/08/even-liberal-reporters-sour-on-stimulus-funded-california-rail-boondoggle/</link> <comments>http://www.openmarket.org/2012/02/08/even-liberal-reporters-sour-on-stimulus-funded-california-rail-boondoggle/#comments</comments> <pubDate>Wed, 08 Feb 2012 23:34:11 +0000</pubDate> <dc:creator>Hans Bader</dc:creator> <category><![CDATA[Economy]]></category> <category><![CDATA[Mobility]]></category> <category><![CDATA[Politics as Usual]]></category> <category><![CDATA[Stimulus to Nowhere]]></category> <category><![CDATA[Zeitgeist]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=51084</guid> <description><![CDATA[Even reporters at the famously-liberal Los Angeles Times have soured on California&#8217;s $100 billion-plus rail boondoggle, whose cost will far outstrip whatever the state will get from the $800 billion stimulus package to build it.  But the paper&#8217;s editorial board, which supported the stimulus package, continues to back the project, which has ballooned in cost [...]]]></description> <content:encoded><![CDATA[<p></p><p>Even reporters at the famously-liberal <em>Los Angeles Times</em> have soured on California&#8217;s $100 billion-plus rail boondoggle, whose cost will far outstrip whatever the state will get from the $800 billion stimulus package to build it.  But the paper&#8217;s editorial board, which supported the stimulus package, continues to back the project, which has ballooned in cost from $33 billion to over $100 billion.  (Managing to see the bright side of even the most pernicious government waste, the paper&#8217;s board cited other boondoggles with approval, like Boston&#8217;s disastrous Big Dig project, which resulted in motorist fatalities. It praised that infamous project for replacing &#8220;what used to be an expressway&#8221; with “a downtown park&#8221;, despite the fact that it caused “severe delays&#8221; for motorists and had a skyrocketing price tag of more than $15 billion.)</p><p>But as its own reporter, Steve Lopez, recently <a href="http://www.latimes.com/news/local/la-me-0201-lopez-highspeedtrain-20120131,0,6514526.column">noted</a>, there is no telling how much the project will ultimately cost, or when it will actually be completed:</p><blockquote><p>The projected completion date has gone from 2020 to 2033. The anticipated cost has ballooned to as high as $117 billion, and no one seems to have a clue where the bulk of the money would come from. The state auditor and the state Legislative Analyst&#8217;s Office have raised serious concerns, and the rail authority&#8217;s own peer review group said the project represents &#8220;an immense financial risk&#8221; to the state. And two weeks ago, the railroad authority&#8217;s top executive resigned.To top it off, a poll last fall said nearly two-thirds of registered voters would run this train off the rails if they had a chance to vote again.</p></blockquote><p>The rail project won&#8217;t even be useful or economically viable once it&#8217;s finished, since travelers will be able to travel more cheaply by road or air than by taking the train.  As syndicated columnist <a href="http://www.advicegoddess.com/archives/2012/02/03/dumb_and_dumber.html">Amy Alkon notes</a>, &#8220;this is a totally unnecessary train (and I say that as a train lover). It&#8217;s $59 from LA to SF on Southwest if you book in advance,&#8221; less than a train ticket will likely cost.  And although the project is misleadingly called a &#8220;high-speed&#8221; rail project, it turns out that &#8220;the train couldn&#8217;t really run high speed&#8221; after all.</p><p>As Tim Cavanaugh noted in <em><a href="http://reason.com/blog/2012/02/02/if-theyre-saying-100-billion-that-means">Reason</a></em>, the Los Angeles Times reporter, Steve Lopez, had</p><blockquote><p>the good fortune to answer to the newsroom rather the opinion section, where bullet-train <a href="http://reason.com/blog/2012/01/31/la-times-gets-its-cheops-busted-sides-wi">belief still reigns as supremely</a> as it does in Gov. Jerry Brown&#8217;s rumpus room. The important thing is that one more prominent Golden State blowhard is sealing the case against the vacant and bankrupt high-speed rail project. . . . In a piece I missed earlier this month entitled <a href="http://articles.latimes.com/2012/jan/07/opinion/la-ed-rail-20120107">&#8220;Keeping faith with California&#8217;s bullet train,&#8221;</a> the ed board praised the High-Speed Rail project because it is similar to Boston&#8217;s notorious Big Dig and the building of the pyramids by slaves.</p></blockquote><p>The Obama Administration still supports this boondoggle even though it has been criticized by other liberal newspapers like the <em>Washington Post</em>.  That paper, which has not endorsed a Republican for President since 1952, criticized the project in an editorial entitled “<a href="http://www.washingtonpost.com/opinions/californias-high-speed-rail-system-is-going-nowhere-fast/2011/11/08/gIQAKni2IN_story.html">California’s High-Speed Rail System Is Going Nowhere Fast</a>.”</p><p>As we noted earlier, the small fraction of the stimulus package that was earmarked for transportation was <a href="http://www.openmarket.org/2012/01/24/stimulus-was-designed-to-provide-pork-and-payoffs-not-to-revive-the-economy/">devoted disproportionatel</a>y to laying the groundwork for wasteful <a href="../2012/01/24/2010/10/28/obama-pumps-more-money-into-high-speed-rail-boondoggles/">“high-speed” rail boondoggles</a> that are not actually “high” in speed. These multibillion dollar rail boondoogles would <a href="../2012/01/24/2011/09/07/obama-infrastructure-stimulus-union-payoff-filled-with-rail-boondoggles-and-pork/">provide work</a> at <a href="http://www.heritage.org/research/reports/2010/09/infrastructure-stimulus-spending-pandering-to-organized-labor">inflated wages</a> for <a href="../2012/01/24/2010/11/22/minnesota-afl-cio-pushes-for-wisconsin-high-speed-rail/">politically-powerful unions</a>. But these projects are expensive <a href="../2012/01/24/10/28/obama-pumps-more-money-into-high-speed-rail-boondoggles/">white elephants</a> that would be <a href="../2012/01/24/2010/10/28/obama-pumps-more-money-into-high-speed-rail-boondoggles/">used by very few travelers</a> at an enormous <a href="../2012/01/24/2010/10/28/obama-pumps-more-money-into-high-speed-rail-boondoggles/">cost per mile</a>, and <a href="../2010/10/28/obama-pumps-more-money-into-high-speed-rail-boondoggles/">not enable</a> trains to go anywhere near as fast as they do in Europe, Japan, or China. (Other union-backed provisions in the stimulus package <a href="http://www.examiner.com/scotus-in-washington-dc/stimulus-package-kills-jobs-by-igniting-trade-war-with-canada-and-mexico">wiped out jobs</a> in America’s export sector.)</p><p>Obama relied on exaggerated claims to push through the stimulus package, claiming it was needed to prevent an “<a href="http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4571678/Barack-Obama-warns-economic-stimulus-delay-would-bring-disaster.html">irreversible decline</a>” in the economy,  even though the Congressional Budget Office <a href="http://www.washingtontimes.com/news/2011/nov/22/cbo-stimulus-hurts-economy-long-run/?page=all">admitted</a> <a href="http://www.washingtontimes.com/news/2011/nov/22/cbo-stimulus-hurts-economy-long-run/">that</a> the stimulus package would <a href="http://www.npr.org/blogs/money/2009/02/cbo_stimulus_shrinks_economy.html">shrink</a> the economy “<a href="../2012/01/24/2009/02/10/stimulus-package-shrinks-economy-expands-welfare-rolls/">in the long run</a>.” Even an old-fashioned Keynesian stimulus might have been something that America could not afford at a time of record deficits. The Congressional Budget Office, ignoring various flaws in the stimulus package, argued that it would boost the economy in “the short run.” But even the CBO conceded that the stimulus would <a href="http://www.examiner.com/scotus-in-washington-dc/stimulus-package-harms-economy-the-long-run-congressional-budget-office-says">shrink economic output in “the long run</a>” by increasing the national debt and thus <a href="../2012/01/24/2009/03/20/obama-budget-explodes-debt-taxes-cbo-admits/">crowding out</a> private investment.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/08/even-liberal-reporters-sour-on-stimulus-funded-california-rail-boondoggle/feed/</wfw:commentRss> <slash:comments>1</slash:comments> </item> <item><title>Yes, Pensions Did Help Push American Airlines into Bankruptcy</title><link>http://www.openmarket.org/2012/02/06/yes-pensions-did-help-push-american-airlines-into-bankruptcy/</link> <comments>http://www.openmarket.org/2012/02/06/yes-pensions-did-help-push-american-airlines-into-bankruptcy/#comments</comments> <pubDate>Mon, 06 Feb 2012 18:36:44 +0000</pubDate> <dc:creator>Ivan Osorio</dc:creator> <category><![CDATA[Economy]]></category> <category><![CDATA[Employment]]></category> <category><![CDATA[Labor]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=51007</guid> <description><![CDATA[I generally hold John Tamny’s analysis of economic matters in high regard, so I was surprised to find his take on the American Airlines bankruptcy to be oddly lacking. In his latest Forbes column, Tamny argues that it wasn’t its pension obligations, but monetary policy, specifically the weak dollar, that pushed American Airlines into bankruptcy. [...]]]></description> <content:encoded><![CDATA[<p></p><p>I generally hold John Tamny’s analysis of economic matters in high regard, so I was surprised to find his take on the American Airlines bankruptcy to be oddly lacking.</p><p>In his latest <a href="http://www.forbes.com/sites/johntamny/2012/02/05/american-airlines-bankrupt-victim-of-weak-u-s-dollar-policies/">Forbes column</a>, Tamny argues that it wasn’t its pension obligations, but monetary policy, specifically the weak dollar, that pushed American Airlines into bankruptcy.</p><p>The immediate reason he cites is high fuel prices, which are caused by the fact that oil is priced in dollars in the global market. High fuel prices have hit nearly all airlines hard, not just American. As Tamny himself notes, “Southwest Airlines was one of the few carriers that properly hedged its exposure to fuel prices that were set to go through the roof.”</p><p>What does set American Airlines apart is its pension and labor costs.</p><p>American’s pension liabilities are so enormous, at $10 billion, that to deny they were a major factor in the airline’s bankruptcy is contrarian to the point of absurdity. Tamny argues that those liabilities didn&#8217;t drive American to bankruptcy based on the notion that they would have been reflected in the airline&#8217;s stock price. However, that argument fails in the face of the dodgy accounting which many unionized companies with defined benefit pensions apply to those pensions. Information cannot get out into the market when it is suppressed or obscured.</p><p>Then there are labor costs, on which <a href="http://www.star-telegram.com/2011/12/02/3567530/american-airlines-pensions-in.html">American spends $800 million more</a> a year than its main competitors.</p><p>Finally, there’s the problem of management decisions that simply go awry. In that regard, last weekend’s interview of <a href="http://online.wsj.com/article/SB10001424052970204573704577186851991292064.html?KEYWORDS=alaska+airlines">Alaska Airlines CEO Bill Ayer</a> in <em>The Wall Street Journal</em> is worth reading. All too often, airlines place too much focus on gaining greater market share—usually through debt-fueled growth—and not enough on common sense strategies such as working to reduce per-mile costs.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/06/yes-pensions-did-help-push-american-airlines-into-bankruptcy/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>U.S. v. Jones and the Future of Privacy</title><link>http://www.openmarket.org/2012/02/03/u-s-v-jones-and-the-future-of-privacy/</link> <comments>http://www.openmarket.org/2012/02/03/u-s-v-jones-and-the-future-of-privacy/#comments</comments> <pubDate>Fri, 03 Feb 2012 21:27:46 +0000</pubDate> <dc:creator>Nicole Ciandella</dc:creator> <category><![CDATA[Legal]]></category> <category><![CDATA[Tech & Telecom]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50914</guid> <description><![CDATA[Last week, the Supreme Court handed down a decision in United States v. Jones. The Court held unanimously that because D.C. police entered a suspect’s car without a valid warrant or reasonable suspicion, they violated the suspect’s Fourth Amendment rights. But in the course of the decision, the Court raised &#8212; and ultimately failed to [...]]]></description> <content:encoded><![CDATA[<p><a class="post_image_link" href="http://www.openmarket.org/2012/02/03/u-s-v-jones-and-the-future-of-privacy/" title="Permanent link to <em>U.S.</em> v. <em>Jones</em> and the Future of Privacy"><img class="post_image alignleft" src="http://www.openmarket.org/wp-content/uploads/2012/02/Supreme-Court.jpg" width="389" height="288" alt="Post image for <em>U.S.</em> v. <em>Jones</em> and the Future of Privacy" /></a></p><p>Last week, the Supreme Court handed down a decision in <em><a href="http://www.nytimes.com/interactive/2012/01/24/us/24scotus-text.html?ref=us">United States v. Jones</a></em>. The Court held unanimously that because D.C. police entered a suspect’s car without a valid warrant or reasonable suspicion, they violated the suspect’s Fourth Amendment rights. But in the course of the decision, the Court raised &#8212; and ultimately failed to answer &#8212; a pivotal question about the future of privacy in America: <strong>Does the Fourth Amendment provide protection against warrantless electronic data collection and surveillance? </strong></p><p>A great deal rests on the answer to this question. In order to fully enjoy the conveniences of the modern world, people today have voluntarily opted into GPS tracking on their mobile devices and in their vehicles. They’ve opted for E-Z Pass electronic tolling; for debit cards instead of cash; and for cloud web services instead of local storage. Most of us leave digital footprints, and we accept that it’s possible for someone to learn a lot about us from our footprints. But we’re also loathe to think that this information could be accessed by the government without probable cause.</p><p>The Supreme Court’s decision in <em>U.S. </em>v.<em> Jones</em> did not establish protections for electronically accessed information. The justices did, however, address today’s driving Fourth Amendment concerns, and they speculated on how recent jurisprudence will shape tomorrow’s digital age protections.</p><p><span id="more-50914"></span></p><p align="center"><strong>The Fourth Amendment</strong></p><p>The Fourth Amendment reads:</p><blockquote><p>The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.</p></blockquote><p>The amendment is rooted in 18<span style="font-size: 11px;">th</span> century English common law. Several U.S. Supreme Court decisions (including <em>U.S. </em>v.<em> Jones</em>) cite the 1765 English case <em><a href="http://caselaw.lp.findlaw.com/data/constitution/amendment04/01.html">Entick </a></em><a href="http://caselaw.lp.findlaw.com/data/constitution/amendment04/01.html">v.</a><em><a href="http://caselaw.lp.findlaw.com/data/constitution/amendment04/01.html"> Carrington</a></em> as an influential antecedent to the 1787 amendment. The Court in <em>Entick</em> sided with a writer whose private papers had been seized by the King’s messengers. In the decision, presiding Justice Lord Camden famously wrote, “[t]he great end, for which men entered into society, was to secure their property.” 95 Eng. Rep. 807 K.B. 1765.</p><p>But over the next two centuries, Fourth Amendment protections in America expanded to cover more than “property” in the 18<span style="font-size: 11px;">th</span> century <em>Entick</em> sense of the word.</p><p>In the landmark <em><a href="http://www.law.cornell.edu/supct/html/historics/USSC_CR_0389_0347_ZS.html">Katz </a></em><a href="http://www.law.cornell.edu/supct/html/historics/USSC_CR_0389_0347_ZS.html">v.</a><em><a href="http://www.law.cornell.edu/supct/html/historics/USSC_CR_0389_0347_ZS.html"> United States</a></em> case of 1967, the Supreme Court held that the Fourth Amendment protected citizens’ “reasonable expectations of privacy.” In that case, FBI agents had attached a recording device to a public telephone booth in order to eavesdrop on Charles Katz, who used the phone booth to transmit illegal gambling wagers. The Court ruled that even though Katz was in public, and even though his personal property hadn’t been trespassed upon, the agents had violated Katz’ Fourth Amendment protections.</p><p>In the majority opinion, Justice Stewart wrote that the Fourth Amendment “protects people, not places.” By entering a phone booth alone and closing the door behind him, Katz had seemingly attempted to ensure that his phone call wasn’t heard by the public. Stewart wrote that the FBI’s surveillance had “violated the privacy upon which [Katz] justifiably relied while using the telephone booth and thus constituted a search and seizure within the meaning of the Fourth Amendment.” In a concurrence, Justice Harlan wrote:</p><blockquote><p>The point is not that the booth is “accessible to the public” at other times, but that it is a temporarily private place whose momentary occupants’ expectations of freedom from intrusion are recognized as reasonable.</p></blockquote><p>The Supreme Court went on to apply Justice Harlan’s “reasonable expectation [of privacy]” standard in several Fourth Amendment cases after the 1967 Katz decision. <em>E.g.</em> <em>Bond </em>v.<em> United States</em> (2000); <em>California </em>v.<em> Ciraolo</em> (1986); <em>Smith </em>v.<em> Maryland</em> (1979).</p><p align="center"><strong>Background of <em>United States v. Jones</em></strong></p><p>Antoine Jones was a D.C. nightclub owner who became the target of a narcotics investigation in 2004. Police obtained a warrant permitting them to attach a GPS tracker to a Jeep owned by Antoine Jones’ wife. The warrant stipulated that the tracker must be installed within ten days and in the District of Columbia. But police didn’t install it until the eleventh day, and they did it while in the state of Maryland.</p><p>For the next four weeks, investigators used the GPS device to track Jones’ movements, amassing over 2,000 pages of locational data. The data connected Jones to the location of a stash house which was found to contain $850,000 in cash, 97 kilograms of cocaine, and one kilogram of cocaine base. Police then arrested Jones on narcotics charges.</p><p>Before trial, Jones’ lawyers filed a motion to suppress the data obtained by GPS tracker, noting that investigators’ warrant was not valid at the time of the GPS installation. The D.C. District Court granted the motion, excluding data obtained from the tracker while the Jeep was parked in Jones’ garage, while ruling that the rest of the tracking data was admissible at trial since Jones didn’t have a reasonable expectation of privacy while he was driving out in the open on public streets Jones was subsequently convicted of conspiracy to distribute and sentenced to life in prison.</p><p align="center"><strong><em>United States v. Jones </em></strong><strong>Decision</strong></p><p>All nine justices agreed that the police had violated Antoine Jones’ Fourth Amendment protections. But the justices disagreed about <em>why</em> the GPS tracking was a Fourth Amendment violation.</p><p>In the majority opinion, Scalia presented the case in the framework of <em>Entick</em> v.<em> Carrington</em>—a simple case of government trespass on private property for the purpose of gathering information. The police had violated the Fourth Amendment when they trespassed into Jones’ Jeep in an attempt to collect evidence on him.  Therefore, Scalia argued, Jones’ expectation of privacy while driving on public streets was irrelevant. Scalia wrote:</p><blockquote><p>It may be that [tracking someone] through electronic means, without an accompanying trespass, is an unconstitutional invasion of privacy, but the present case does not require us to answer that question.</p></blockquote><p>Scalia was joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Sotomayor.</p><p>Justice Alito agreed with the outcome, but disagreed with the majority’s rationale. In his concurring opnion, he argued that <em>Jones</em> could not be decided like <em>Entick </em>&#8211; that is, it couldn’t be framed as a physical search upon private property, since the trespassory act of installing a GPS did not in itself constitute a search within the meaning of the Fourth Amendment.</p><p>For Alito, the <em>Jones</em> case hinged on precisely what Scalia dismissed as irrelevant: whether Jones’ reasonable expectations of privacy were violated by police actions. Alito answered yes, in this instance, they were &#8212; but only because of the significant length of time (four weeks) during which Jones was electronically tracked. He wrote:</p><blockquote><p>[R]elatively short-term monitoring of a person’s movements on public streets accords with expectations of privacy that our society has recognized as reasonable. But the use of longer term GPS monitoring in investigations of most offenses impinges on expectations of privacy.</p></blockquote><p>Alito was joined by Justices Ginsburg, Breyer, and Kagan.</p><p>Justice Sotomayor, writing a solo concurrence, agreed with the majority that <em>Jones</em> could be decided on the matter of police trespass. But she, like Alito, also believed that the GPS surveillance of Antoine Jones violated Jones’ reasonable expectations of privacy.</p><p>Sotomayor explained that GPS tracking allows the government to easily and inexpensively create a “precise, comprehensive record” of a person’s movements, which can then be stored and “efficiently mine[d]” for information for years to come. She explained:</p><blockquote><p>The net result is that GPS monitoring—by making available at a relatively low cost such a substantial quantum of intimate information about any person whom the Government, in its unfettered discretion, chooses to track—may “alter the relationship between citizen and government in a way that is inimical to democratic society.”  <em>United States v. Cuevas-Perez</em>, 640 F. 3d 272, 285 (7th Cir. 2011) (Flaum, J., concurring).</p></blockquote><p>Sotomayor was thus the lone justice who suggested that GPS tracking even in the short term may violate a person’s reasonable expectations of privacy because of the exhaustive nature of the technology itself.</p><p>But Sotomayor went further: She suggested that warrantless electronic surveillance of a person may violate the Fourth Amendment even if that person had <em>voluntarily agreed</em> to be tracked by a third party &#8212; say, his car security company or cell phone provider. Sotomayor argued that in the digital age, people share private information with third party companies but retain a reasonable expectation of privacy in that information. She wrote:</p><blockquote><p>I for one doubt that people would accept without complaint the warrantless disclosure to the Government of a list of every Web site they had visited in the last week, or month, or year. But whatever the societal expectations, they can attain constitutionally protected status only if our Fourth Amendment jurisprudence ceases to treat secrecy as a prerequisite for privacy.</p></blockquote><p>Sotomayor’s pro-privacy musings are hopefully an indication of the Court’s jurisprudence to come. But because the majority did not address these issues, the holding in <em>Jones </em>does almost nothing to fortify Fourth Amendment protections for the digital age concerns expressed by Sotomayor and Alito.</p><p align="center"><strong>The Future of Fourth Amendment Protections</strong></p><p>Post-<em>Jones</em>, the question remains: Does the Fourth Amendment provide protection against warrantless electronic data collection and surveillance? In 2010, the Sixth Circuit ruled in <em>United States</em> v.<em> Warshak</em> that government agents violated Steven Warshak’s Fourth Amendment rights when they compelled his ISP to turn over private emails without first obtaining a warrant. The Supreme Court, however, has yet to hear a case presenting that issue.</p><p>Until the Supreme Court expands Fourth Amendment protections to electronically transmitted and stored information &#8212; or until Congress sees fit to <a href="http://news.cnet.com/8301-13578_3-57368025-38/supremes-to-congress-bring-privacy-law-into-21st-century/">update the Electronic Communications Privacy Act</a> &#8211; our information remains subject to discretionary government seizure.</p><p>Pundits have complained that the digital age has wrought the death of privacy &#8212; but perhaps, to paraphrase Justice Sotomayor, what we’re experiencing isn’t the death of privacy, but only the death of <em>secrecy</em>. As long as the Court acknowledges that secrecy is not a prerequisite for privacy, we may happily retain our constitutional right to privacy in the information-sharing years to come.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/03/u-s-v-jones-and-the-future-of-privacy/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>CEI Podcast for February 2, 2012: The FDA&#8217;s Latest Power Grab</title><link>http://www.openmarket.org/2012/02/02/cei-podcast-for-february-2-2012-the-fdas-latest-power-grab/</link> <comments>http://www.openmarket.org/2012/02/02/cei-podcast-for-february-2-2012-the-fdas-latest-power-grab/#comments</comments> <pubDate>Thu, 02 Feb 2012 20:52:02 +0000</pubDate> <dc:creator>Ryan Young</dc:creator> <category><![CDATA[Health and Illness]]></category> <category><![CDATA[Healthcare]]></category> <category><![CDATA[Podcast]]></category> <category><![CDATA[Regulation]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50886</guid> <description><![CDATA[Fellow in Consumer Policy Studies Michelle Minton breaks down the FDA's behind-the-scenes push to regulate dietary supplements nearly as strictly as prescription drugs.]]></description> <content:encoded><![CDATA[<p></p><p><a href="http://www.libertyweek.org/2012/02/02/february-2-2012-the-fdas-latest-power-grab/">Have a listen here</a>.</p><p>Fellow in Consumer Policy Studies <a href="http://cei.org/expert/michelle-minton">Michelle Minton</a> breaks down the FDA&#8217;s <a href="http://thehill.com/blogs/congress-blog/campaign/207695-michelle-minton-fellow-competitive-enterprise-institute">behind-the-scenes</a> push to regulate dietary supplements nearly as strictly as prescription drugs.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/02/cei-podcast-for-february-2-2012-the-fdas-latest-power-grab/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>Regulation of the Day 208: Re-Booking Flights</title><link>http://www.openmarket.org/2012/02/02/regulation-of-the-day-208-re-booking-flights/</link> <comments>http://www.openmarket.org/2012/02/02/regulation-of-the-day-208-re-booking-flights/#comments</comments> <pubDate>Thu, 02 Feb 2012 18:58:59 +0000</pubDate> <dc:creator>Ryan Young</dc:creator> <category><![CDATA[Mobility]]></category> <category><![CDATA[Regulation]]></category> <category><![CDATA[Regulation of the Day]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50876</guid> <description><![CDATA[A new Department of Transportation regulation limiting re-booking fees caused one airline to add a $2 "Department of Transportation Unintended Consequences Fee" on every ticket to recoup its lost revenue from being forced to hold more empty seats.]]></description> <content:encoded><![CDATA[<p></p><p>Four of air travelers&#8217; five <a href="http://www.usnews.com/news/blogs/washington-whispers/2011/11/16/tsas-bid-to-make-nice-with-travelers-crashes">biggest complaints</a> are about the TSA. Right up there on the list with everyone&#8217;s favorite sexy-searchers has to be airlines&#8217; habit of nickel-and-diming customers for checked baggage, blankets and pillows, and most anything else that isn&#8217;t bolted to the cabin floor.</p><p>This business practice, called unbundling, does help keep ticket prices low, as I&#8217;ve previously <a href="http://inertiawins.com/2010/02/09/the-economics-of-charging-for-airline-amenities/">explained</a>. But it&#8217;s still annoying; people are transaction-averse.</p><p>The Department of Transportation, knowing a good PR opportunity when it sees one, recently passed a rule forbidding one type of extra charge. Airlines may no longer charge re-booking fees if passengers re-book their flights within 24 hours of first purchasing them. Many passengers will no doubt welcome the change. The trouble, which the DOT does not acknowledge, is that it isn&#8217;t free. CNN&#8217;s Aaron Cooper <a href="http://www.cnn.com/2012/02/01/travel/spirit-fee/index.html?hpt=hp_t3">explains</a>:</p><blockquote><p>The airline says the regulation forces them to hold the seat for someone who may or may not want to fly. As a consequence, someone who really does want to fly wouldn&#8217;t be able to buy that seat because the airline is holding it for someone who might or might not end up taking it.</p></blockquote><p>In other words, there will be more empty seats, which costs the airline potential revenue. Passengers will also have a harder time finding a seat on nearly-full flights. That&#8217;s why Spirit Airlines, a low-fare airline that practices an extreme form of unbundling, is adding a $2 &#8220;Department of Transportation Unintended Consequences Fee.&#8221; Re-bookers&#8217; gains come at everyone else&#8217;s loss.</p><p>It isn&#8217;t often that businesses stand up to regulators. More and more, they can be seen holding hands and gazing into each others&#8217; eyes while dreams of increased budgets and decreased competition dance through their heads.</p><p>That&#8217;s why Spirit&#8217;s pointed sense of humor here is refreshing. The DOT isn&#8217;t taking too kindly to Spirit&#8217;s Economics 101 lesson, but then again, they&#8217;re the ones who forgot about tradeoffs. They&#8217;re everywhere.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/02/regulation-of-the-day-208-re-booking-flights/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>Nine Years Of Space Policy Disaster</title><link>http://www.openmarket.org/2012/02/01/nine-years-of-space-policy-disaster/</link> <comments>http://www.openmarket.org/2012/02/01/nine-years-of-space-policy-disaster/#comments</comments> <pubDate>Wed, 01 Feb 2012 22:43:35 +0000</pubDate> <dc:creator>Rand Simberg</dc:creator> <category><![CDATA[Space]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50821</guid> <description><![CDATA[On the ninth anniversary of the loss of the Columbia space shuttle, I have some thoughts on what&#8217;s happened since, over at PJMedia: The problem was that after the ISS was complete, without the Shuttle, the U.S. would have no capability to reach it, and there would be a “gap” in capability until some sort [...]]]></description> <content:encoded><![CDATA[<p></p><p>On the ninth anniversary of the loss of the Columbia space shuttle, I have some thoughts on what&#8217;s happened since, over at PJMedia:</p><blockquote><p>The problem was that after the ISS was complete, without the Shuttle, the U.S. would have no capability to reach it, and there would be a “gap” in capability until some sort of replacement was developed. At the time of the announcement, the “Crew Exploration Vehicle” (CEV) was the proposed means, but it wasn’t expected to be ready until 2014, resulting in a “gap” of at least three years, and probably longer. When Mike Griffin replaced Sean O’Keefe in 2005, he rolled out a concept called Constellation, which included the CEV, renamed at that time Orion. It also included a new rocket for it, that had not been anticipated in the original Bush plan, called Ares I, despite the fact that existing rockets, such as the Atlas V or Delta IV, could have done the job. Griffin even originally claimed that his plan would reduce the gap, being ready by 2011.</p><p>Unfortunately, the design chosen was flawed, and ran into technical difficulties immediately, increasing its costs and stretching its schedule. Because there had not originally been plans for a new launcher, there wasn’t sufficient budget to support it, and other budgets, in science and technology, and the hardware actually needed to get back to the moon, were raided to feed the rocket disaster. The schedule was slipping more than a year per year, and by 2009, when the Augustine Committee was convened to evaluate the situation, it moved rightward to 2017, with only a low probability of hitting that operational date.</p><p>Meanwhile, we are totally dependent on the Russians for both transportation to and from the ISS, and for emergency lifeboat services, for which (unsurprisingly) they have been increasing the cost since the Shuttle was belatedly retired last summer, and shipping taxpayer funds overseas to them. Worse, each time we give them a new contract, we have to waive the Iran North-Korea Syria Non-Proliferation Act which prohibits trade with countries who aid those nations in the development of missiles and nukes, because Russia continues to help Iran with both.</p><p>Worse yet, while they have been flying for decades, their space systems have proven unreliable just at the point at which we have attained such total dependence. Last summer and fall, they had multiple launch failures, and then a failed Mars probe in November, which recently entered the atmosphere with a load of toxic propellants, but fortunately seems to have fallen into the ocean. And now, they’ve delayed their next ISS flight because they have leaks in the pressurized Soyuz crew module.</p></blockquote><p>And Congress continues to underfund the only solution that can provide us with multiple competitive companies, and eliminate our reliance on thee Russians &#8212; Commercial Crew &#8212; while demanding that NASA waste billions on an unneeded giant rocket with no funded mission that will probably never fly, but provides jobs in the right states and districts. Next year, it will be a decade, and the <a href="http://pjmedia.com/blog/new-space-policy-questions-and-advice-for-mitt/" target="_blank">low-information level of the space-policy debate of the last few days</a> in Florida would indicate that it&#8217;s unlikely to get better any time soon.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/01/nine-years-of-space-policy-disaster/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>12 More Law Schools Sued for Defrauding Their Students; Many More Class-Action Lawsuits Expected</title><link>http://www.openmarket.org/2012/02/01/12-more-law-schools-sued-for-defrauding-their-students-many-more-class-action-lawsuits-expected/</link> <comments>http://www.openmarket.org/2012/02/01/12-more-law-schools-sued-for-defrauding-their-students-many-more-class-action-lawsuits-expected/#comments</comments> <pubDate>Wed, 01 Feb 2012 22:06:34 +0000</pubDate> <dc:creator>Hans Bader</dc:creator> <category><![CDATA[Economy]]></category> <category><![CDATA[Employment]]></category> <category><![CDATA[Labor]]></category> <category><![CDATA[Legal]]></category> <category><![CDATA[Regulation]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50842</guid> <description><![CDATA[The Chronicle of Higher Education reports that a team of eight law firms have just &#8220;sued a dozen more law schools across the country, accusing them of luring students with inflated job-placement and salary statistics and leaving graduates &#8216;burdened with debt and with limited job prospects.&#8217; The lawyers . . . said they planned to [...]]]></description> <content:encoded><![CDATA[<p></p><p>The <em>Chronicle of Higher Education</em> <a href="http://chronicle.com/article/12-More-Law-Schools-Face/130602/">reports that</a> a team of eight law firms have just &#8220;sued a dozen more law schools across the country, accusing them of luring students with inflated job-placement and salary statistics and leaving graduates &#8216;burdened with debt and with limited job prospects.&#8217; The lawyers . . . said they planned to file 20 to 25 new lawsuits every few months . . . the lawsuits had been filed on behalf of a total of 51 graduates, and each suit was seeking class-action status. The targets of the latest round of lawsuits&#8221; include  &#8220;Brooklyn Law School,&#8221; &#8220;Chicago-Kent College of Law,&#8221; &#8220;DePaul University College of Law,&#8221; &#8220;Golden Gate University School of Law,&#8221; &#8220;Hofstra Law School,&#8221; &#8220;University of San Francisco School of Law,&#8221; &#8220;Widener University School of Law,&#8221; and several others. As the Chronicle notes, &#8220;Disgruntled law-school graduates who can&#8217;t find jobs are increasingly <a href="http://chronicle.com/article/Crisis-of-Confidence-in-Law/129425/" target="_blank">taking their complaints to court</a>, asserting that the schools duped them into enrolling with misleading statistics about their chances of landing well-paying jobs when they get out. Last year <a href="http://chronicle.com/article/In-Lawsuits-Graduates-Accuse/128596/" target="_blank">similar lawsuits were filed</a> against New York Law School, Thomas M. Cooley Law School, and Thomas Jefferson School of Law.&#8221;</p><p>As I noted earlier, much of what law schools <a href="http://www.openmarket.org/2012/01/23/law-schools-teach-junk-exaggerate-their-students-job-prospects/"><em></em>teach their students is useless drivel, and law schools routinely exaggerate</a> their students&#8217; job prospects. Accordingly, there is <a href="http://truthonthemarket.com/2011/09/20/hans-bader-on-abolish-law-school-requirement-keep-the-bar-exam/">no reason to require people to attend law school</a> before sitting for the bar exam. As law professor Paul Campos notes, <a href="http://andrewsullivan.thedailybeast.com/2011/12/is-legal-education-bullshit.html">legal education is often a rip-off</a>, since the typical law professor has little real-world experience practicing law, and “knows nothing about being a lawyer.&#8221; But since most states <a href="http://overlawyered.com/2012/01/law-schools-roundup-12/">require</a> people to attend law school before sitting for the bar exam, law schools have been able to increase tuition by nearly <a href="http://www.openmarket.org/2011/05/25/mind-boggling-increase-in-tuition-since-1960-even-as-students-learn-less-and-less/">1,000 percent since 1960</a> in real terms. For its part, the Obama Education Department has implemented policies that <a href="http://www.openmarket.org/2012/01/27/obama-fosters-the-skyrocketing-tuition-he-criticized-in-his-state-of-the-union-address/">encourage colleges to jack up tuition and charge</a> students even more, even as college students are learning <a href="http://washingtonexaminer.com/blogs/opinion-zone/2011/01/students-learn-less-education-spending-skyrockets-big-decline-reading-and">less and less</a>.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/01/12-more-law-schools-sued-for-defrauding-their-students-many-more-class-action-lawsuits-expected/feed/</wfw:commentRss> <slash:comments>0</slash:comments> </item> <item><title>Oklahoma Moves to Keep Big Labor in Check</title><link>http://www.openmarket.org/2012/02/01/oklahoma-moves-to-keep-big-labor-in-check/</link> <comments>http://www.openmarket.org/2012/02/01/oklahoma-moves-to-keep-big-labor-in-check/#comments</comments> <pubDate>Wed, 01 Feb 2012 19:12:45 +0000</pubDate> <dc:creator>Jack Mann</dc:creator> <category><![CDATA[Labor]]></category><guid isPermaLink="false">http://www.openmarket.org/?p=50837</guid> <description><![CDATA[Oklahoma taxpayers might be able to breathe a little bit easier this year thanks to two important pieces of legislation making their way through the state capitol. A proposed amendment to the state’s constitution would enjoin any Oklahoma municipality not “to become indebted or contractually obligated, in any manner, or for any purpose” without the [...]]]></description> <content:encoded><![CDATA[<p></p><p>Oklahoma taxpayers might be able to breathe a little bit easier this year thanks to two important pieces of legislation making their way through the state capitol.</p><p>A <a href="http://e-lobbyist.com/gaits/OK/SJR75">proposed amendment to the state’s constitution</a> would enjoin any Oklahoma municipality not “to become indebted or contractually obligated, in any manner, or for any purpose” without the express approval of the municipality’s governing body, the municipal officer charged with budgetary oversight by the governing body, or a majority of the municipality’s citizens.</p><p>The amendment’s sponsor, Senator David Holt (R-Oklahoma City), <a href="http://www.oksenate.gov/news/press_releases/press_releases_2012/pr20120126b.html">has dubbed it the “Lincoln Amendment”</a> because it “enshrines in our state’s Constitution a basic premise of American democracy &#8212; that our government is by the people and for the people, just as Lincoln said at Gettysburg.”</p><p>From Senator Holt’s office:</p><blockquote><p>Recently, Oklahoma was ranked the <a href="http://workplacechoice.org/state-map/">most anti-taxpayer state in the entire southern United States</a> by the <a href="http://www.cei.org/">Competitive Enterprise Institute</a>. This was primarily because in Oklahoma, the wishes of local taxpayers and their elected representatives are routinely trumped when it comes to spending tax dollars, causing local governments to take on expenses they cannot afford, resulting in service cuts or requests for more taxes. The Lincoln Amendment is a response that shifts the power of the purse back where it belongs, to the taxpayers.</p></blockquote><p>The state Senate is also considering the <a href="http://opea.org/Websites/opea/images/2012/SB1498_INT.pdf">Oklahoma Paycheck Protection Act</a>, which would amend the state code so that the state’s Office of Personnel Management can only direct payroll deductions to an organization if “the primary or core function of the organization is nonpolitical and nonpartisan.” The bill would also prohibit Oklahoma school districts from directing payroll deductions to teachers’ unions, and would prevent Oklahoma municipalities from writing union payroll deductions into employment contracts.</p><p><span id="more-50837"></span></p><p>Oklahoma badly needs this measure to prevent unions from using money taken directly from teachers, firefighters, police officers and municipal employees for political causes. Making it illegal for Oklahoma’s OPM to send money directly to a union would absolutely ensure a public employee’s right to free association by protecting their right to stay out of union politics.</p><p>These critical measures are desperately needed to set Oklahoma’s fiscal house in order. <a href="http://mercatus.org/sites/default/files/publication/RhodeIsland_NorcrossVanMetre_WP1143.pdf">According to George Mason University’s Mercatus Center</a>, “several states including Illinois, New Jersey, Connecticut, <strong>Oklahoma</strong>, Indiana, Louisiana and West Virginia are slated to run out of assets to fund pension benefits by the end of the decade.” [Emphasis added.]</p><p>This problem is exacerbated when municipalities have the authority to ink plush pension deals with employees despite their limited taxation authority. According to that same Mercatus study, in Rhode Island “unfunded municipal pension liabilities currently exceed municipal revenues by $2.6 billion” and the town of Central Falls, Rhode Island, is currently in receivership.</p><p>Taken together, these bills will fundamentally redefine the relationship between the State of Oklahoma its employees. Employment contracts will be subject to more oversight and public employee unions will no longer be able to use Oklahoma’s Office of Personnel Management to raise money.</p><p>Oklahoma lawmakers are prepared to endow taxpayers with real protection against immoderate public employee compensation and to curb the influence of public employee unions by forcing them to justify their activism to their members instead of siphoning taxpayer funds to fuel their political ambitions.</p><p>Hopefully other states lurching toward insolvency will follow Oklahoma’s example, Sooner rather than later.</p> ]]></content:encoded> <wfw:commentRss>http://www.openmarket.org/2012/02/01/oklahoma-moves-to-keep-big-labor-in-check/feed/</wfw:commentRss> <slash:comments>1</slash:comments> </item> </channel> </rss>
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