Weekly Hit & Run Archive 2008 December 1-31
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Work at Reason.tv
Reason.tv—the online video journalism project of the Reason Foundation, the nonprofit publisher of this website—is seeking talented individuals interested in advancing the message of Free Minds and Free Markets through video journalism and related multimedia productions.
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Resourcefulness, a willingness to pick up miscellaneous tasks, and reliability are a must. The ideal candidate will also have a strong interest in libertarian ideas, the field of documentary filmmaking or video journalism, and familiarity with shooting and/or editing.
Applicants at any level of experience will be considered. Please submit a resume and cover letter to Amy Pelletier at amy.pelletier@reason.org by December 10, 2008.
The Great Automaker Bailout: A Question of When, Not If
So the folks behind the Big 2.5 Amerian automakers—GM, Ford, and Chrysler—are angling for $34 billion from the feds to keep 'em going for some period of time into the future.
Much drama in Congress this past week centered on this shameful spectacle (as with the financial sector bailout, the American people seem less giving with their tax dollars than Congress. About 61 percent are against the idea.)
Here's Rep. Barney Frank (good on Internet gambling, medical marijuana, one or two other things, and pretty awful on everything else) sizing up the situation, according to Reuters:
Frank, the Massachusetts Democrat who chairs the House of Representatives Financial Services Committee, said the economy would be devastated if an automaker were forced into bankruptcy or shut down.
"In the midst of the worst economic situation since the Great Depression it would be an unmitigated disaster," he told a hearing with the CEOs.
Frank said there was a "pretty broad consensus" among committee members to assist Detroit, which he called a step forward. But that sentiment alone "doesn't quite get us there," and said he would be talking with other lawmakers about the form of a bailout bill.
For those of us who oppose bailouts (of the financial sector, the auto industry, the corporate dry cleaning mafia, home mortgage owners, you name it), that sounds pretty heartening, doesn't it? Frank doesn't have the votes, despite a "pretty broad consensus" in a Democratically controlled Congress.
But it's not like the Bush administration and, one assumes, most of the weak-spined Republicans in Congress who ended voting for the Paulson plan, are really against a bailout. They just want it to come from a different pile of money:
The White House refuses to carve out for Detroit some of the $700 billion bailout it is already showering on Wall Street and the banks, saying that money is intended only to help stabilize the financial sector.
Bush said he was concerned about taxpayer money going to companies that may not survive but said modification of the fuel-efficiency loans could help worthy auto companies.
"It is important that Congress act next week on this plan," he told reporters.
In other words, Bush wants to pull the auto bailout dough from an existing $25 billion Department of Energy program to help U.S. automakers create more fuel-efficient cars.
And here's a preview of a plan that will almost certainly carry the day, a Washington-style compromise, meaning everybody gets something, and the taxpayers are stuck with a bill about as good-looking as a Pontiac Aztek:
Michigan Republican Rep. Thaddeus McCotter proposed a $25 billion automaker bridge loan drawn half from the TARP [Troubled Asset Relief Program, a.k.a. the Paulson-pushed bailout] and half from the Energy Department program.
Asked about such a compromise on Thursday, Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, called it "a reasonable idea," although just one of many.
And a special note for those of you who plan on living into 2009: Remember, the odds have got to be at least 50/50 that whatever gets done now will get redone once President Obama actually takes office and starts to worry about the bottom falling out on the collectible plate market.
Recently at Reason.tv: Bailouts, Talk Shows, Bill Clinton, Obama and Energy, and Much More
Where's Sock Puppet's Bailout?: The great, unlamented mascot of the tech bubble bust, Pets.com's Sock Puppet, comes to Washington with his paw out.
The Reason.tv Talk Show with Nick Gillespie and Michael C. Moynihan. Guests on episode five include Reason editor in chief Matt Welch and the Cato Institute's David Boaz talking about 40 years of Reason magazine, the future of the libertarian movement, and just how godawful the past two months have been for "Free Minds and Free Markets."
John Gartner: In Search of Bill Clinton. Gartner, a psychologist and author of The Hypomanic Temperament has written an in-depth, heavily reported account of the man who will once again be haunting the White House, this time as husband to the new Secretary of State. What makes Bill Clinton tick? And more important, what makes him explode?
Robert L. Bradley, Jr.: Obama's Enron Problem. Capitalism at Work author and former Enron insider explains how President-elect Barack Obama's alt-energy plans are so much hooey that borrow from the tactics of one of the most-reviled corporations in U.S. history. And how Gov. George W. Bush helped make Enron into the phoney-baloney behemoth it became.
For more Reason.tv, including all the award-winning documentaries from the Drew Carey Project, embed codes, links to related articles and sites, go here now.
Gotcha!
Like Mark Draughn, I've been somewhat skeptical of Barry Cooper, the former drug cop turned pitchman for how-to-beat-the-cops videos. He comes off as more of a huckster than a principled whistle-blower, which I think does the good ideas he stands for (police reform) more harm than good.
But damn. I have to hand it to him. This might be one of the ballsiest moves I've ever seen.
KopBusters rented a house in Odessa, Texas and began growing two small Christmas trees under a grow light similar to those used for growing marijuana. When faced with a suspected marijuana grow, the police usually use illegal FLIR cameras and/or lie on the search warrant affidavit claiming they have probable cause to raid the house. Instead of conducting a proper investigation which usually leads to no probable cause, the Kops lie on the affidavit claiming a confidential informant saw the plants and/or the police could smell marijuana coming from the suspected house.
The trap was set and less than 24 hours later, the Odessa narcotics unit raided the house only to find KopBuster’s attorney waiting under a system of complex gadgetry and spy cameras that streamed online to the KopBuster’s secret mobile office nearby.
To clarify just a bit, according to Cooper, there was nothing illegal going on the bait house, just two evergreen trees and some grow lamps. There was no probable cause. So a couple of questions come up. First, how did the cops get turned on to the house in the first place? Cooper suspects they were using thermal imaging equipment to detect the grow lamps, a practice the Supreme Court has said is illegal. The second question is, what probable cause did the police put on the affidavit to get a judge to sign off on a search warrant? If there was nothing illegal going on in the house, it's difficult to conceive of a scenario where either the police or one of their informants didn't lie to get a warrant.
Cooper chose the Odessa police department for baiting because he believes police there instructed an informant to plant marijuana on a woman named Yolanda Madden. She's currently serving an eight-year sentence for possession with intent to distribute. According to Cooper, the informant actually admitted in federal court that he planted the marijuana. Madden was convicted anyway.
The story's worth watching, not only to see if the cops themselves are held accountable for this, but whether the local district attorney tries to come up with a crime with which to charge Cooper and his assistants. I can't imagine such a charge would get very far, but I wouldn't be surprised to see someone try.
Here's some local media coverage:
Forrest Ackerman, R.I.P.
A great resource and treasure to Los Angeles and the wider world of popular culture promotion and archiving has died at age 92. For them that don't know of him, from the AP obit:
Forrest J Ackerman, the sometime actor, literary agent, magazine editor and full-time bon vivant who discovered author Ray Bradbury and was widely credited with coining the term "sci-fi"......
Although only marginally known to readers of mainstream literature, Ackerman was legendary in science-fiction circles as the founding editor of the pulp magazine Famous Monsters of Filmland. He was also the owner of a huge private collection of science-fiction movie and literary memorabilia that for years filled every nook and cranny of a hillside mansion overlooking Los Angeles.
Ackerman has certain notorieties the obit doesn't get into, including his agent/friend relationship with fellow sci-fi guy and Scientology founder L. Ron Hubbard; Ackerman was the kind of guy who had so many interesting connections and links in many fascinating worlds that one wishes one had taped dozens of hours of his reminiscences. (When he held court during the tours of his old Ackermansion, which I participated in a handful of times, the flirty, courtly Ackerman tended to tell the same tales and puns about things like having his first issue of Amazing Stories leap off an L.A. newsstand at him and anecdotes about Karloff and the like. I never had the heart to go visit him in his diminished circumstances in the "mini-Ackermansion" written of in the AP obit, where he retreated after having to sell the big house. The last time I saw him was when, and I felt no small pride at this, he came to Skylight Books to attend a reading by me and fellow contributors to the Science Fiction Film Reader.)
It's a damn shame that Ackerman had to sell off his stunning collection of SF literary and movie memorabilia off piecemeal; it would have made for a fabulous historical artifact kept intact as a museum. Ray Bradbury, who credits Ackerman with launching his career, told the L.A. Times back in 2003:
It has been quite a future, and quite a past, and Ackerman knew and kept track of it all. As an amateur accumulator of the beloved and meaning-soaked detritus of our pop pasts and futures, I admired and envied Ackerman and am sad that all those haunted, thrilling, amazing, startling, astounding memories he held are as scattered to the akashic record as his physical collection.
Lock 'Em Up and Throw Away the Key
Does the Commander in Chief have the constitutional authority to order the indefinite detention of someone living in the United States? As The New York Times' Adam Liptak reports, the Supreme Court agreed today to hear the case of Al al-Marri, a citizen of Qatar who was studying computer science at Illinois' Bradley University when he was arrested in December 2001. As Liptak writes:
Eighteen months later, when Mr. Marri was on the verge of a trial on credit card fraud and other charges, President Bush declared him an enemy combatant, moving him from the custody of the Justice Department to military detention. The government says Mr. Marri is a Qaeda sleeper agent sent to the United States to commit mass murder and disrupt the banking system.
The case, which will probably be argued in the spring, will present the Obama administration with several difficult strategic choices. It can continue to defend the Bush administration's expansive interpretation of executive power, advance a more modest one or short-circuit the case by moving it to the criminal justice system.
Whole thing here. Back in July, Robert Levy looked at the Court's landmark ruling on habeas corpus and Guantanamo Bay, and in June Gene Healy chronicled the radical expansion of executive power from the Founding era to the George W. Bush administration.
U.S. Manufacturing Is Dead, Right?
Wrong, says urban theorist Joel Kotkin, in a column excoriating any kind of bailout for the Big Three automakers.
Indeed, until the globalization of the financial crisis, American manufacturing exports were reaching record levels. Overall, U.S. industry has become among the most productive in the world – output has doubled over the past 25 years, and productivity has grown at a rate twice that of the rest of the economy. Far from dead, our manufacturing sector is the world's largest, with 5% of the world's population producing five times their share in industrial goods. [...]
Fortunately, the Big Three do not represent the entire picture of American manufacturing. Even within the Great Lakes region, Wisconsin, which ranks second in per capita employment in manufacturing, has held onto most of its industrial employment due to its large, highly diversified base of smaller-scale specialized manufacturers.
If Congress and President Obama want to figure out how to restart our industrial economy, they need to travel not to Detroit but to an alternative universe that includes the South and Appalachia, where most of the new foreign-owned auto manufacturers have clustered. States like Alabama, with the second-largest per capita concentration of auto-related jobs, as well as South Carolina, Tennessee, Kentucky, Georgia and Mississippi, have been growing these high-wage jobs for a new generation. In the process, they have brought unprecedented opportunity to some of the nation's historically poorest regions.
Kotkin's reason archive here.
A Holy War for Delicious Naan
If you have a spare six hours, be sure to sit down with Larissa MacFarquhar's never ending, hagiographic profile of Shock Doctrine author Naomi Klein in this week's New Yorker. There is plenty of material to boil the blood, though I particularly liked this bit, when Klein explains how the so-called "Tipton Three" ended up being captured on a battlefield in Afghanistan:
While they were waiting for the interview to start, the interviewer, a young man in a black T-shirt, asked her what she'd been doing lately. She told him that she'd been working on the movie version of "The Shock Doctrine," which was being made by the director of "Road to Guantánamo."
"Did you see ‘Road to Guantánamo'?" she asked.
"No. I heard about it, though."
"It's excellent-it's intercut between interviews with the Tipton Three"-three young British men who were held in Guantánamo for two years-"and they're just, like, blokes, you know? The best moment in the film was when one of them suggests going to Afghanistan because they've got massive naans there. That was the reason."
Read that again. These three religious zealots ended up in a warzone a month after the 9/11 attacks because Afghanistan is notorious for its huge naan bread.
Now. Either Klein is the most credulous writer working today or she is willfully distorting the story of the these three bozos (And as one London Times columnist wrote, if their "account is to be believed then these three are either the luckiest or unluckiest men in Britain, and certainly among the stupidest."). I haven't seen the Michael Winterbottom film, and, from what I have read, I would doubtless agree with his argument that the case was poorly handled from the get go, but this doesn't mean that these Keystone Talibianistas are telling the truth. Klein might want to look beyond the Road to Guantanamo film and see that one of the three recently admitted that did he indeed visit a terror training camp, where he trained with weapons. As The Guardian noted after this rather consequential revelation, "None of [this new evidence] justifies or excuses his sub-legal and subhuman treatment in Guantanamo, but it does raise some questions about the portrayal, in some quarters of the media, of the Tipton Three as blameless heroes."
Johan Norberg debunked The Shock Doctrine in reason here.
New at Reason: Jonathan Blanks on Plaxico Burress and Mandatory Minimums
Last weekend, New York Giants wide receiver Plaxico Burress inadvertently shot himself in the leg at a New York City nightclub and now faces a mandatory minimum sentence on each of two felony weapons charges. And while there's no question that Burress should have handled himself differently, writes Jonathan Blanks, an individual’s actions should always be judged on an individual basis—not by the opportunistic politicians that pass mandatory minimum laws.
John Walters' Well-Kept Secret: 'Our Drug Policy Is a Success'
Drug czar John Walters marks the 75th anniversary of Repeal Day in today's Wall Street Journal by rehashing his argument that the government is (finally!) winning its war on the intoxicants that, unlike alcohol, remain illegal:
Our policy has been a success—although that success is one of Washington's best kept secrets.
Reported drug use among eighth, 10th and 12th graders has declined for six straight years. Teen use of cocaine, marijuana and inhalants is down significantly, while consumption of methamphetamine and hallucinogens like LSD and Ecstasy has all but collapsed.
The number of workplace tests that are positive for cocaine is down sharply, to the lowest levels on record. Even the sudden spike of meth use—remember the headlines from just a few years ago?— has yielded to a combination of state and federal regulations controlling meth ingredients.
As usual, Walters does not make a serious attempt to show that declines in reported drug use under the Bush administration have anything to do with its policies. And even if we accept his post hoc, ergo propter hoc reasoning, the numbers do not support his claim of success. Survey data for the last few decades indicate that drug use has gone up and down with no apparent relationship to changes in personnel or policy. In the Monitoring the Future Study, for example, the percentage of high school seniors reporting illegal drug use in the previous month peaked in 1997, four years before George W. Bush took office. And Walters is wrong when he claims that "reported drug use among eighth, 10th and 12th graders has declined for six straight years." There was an uptick in reported drug use among both sophomores and seniors between 2006 and 2007. Does he want to take credit for that as well?
Hallucinogen use by teenagers, which Walters brags "has all but collapsed," has been falling more or less steadily since 1995, three years into the first term of an administration that Walters has repeatedly blasted as soft on drugs. The National Survey on Drug Use and Health (NSDUH) indicates that cocaine use, which Walters implies has fallen sharply under Bush, has been essentially flat since 2002, the first year of the survey. According to the National Household Survey on Drug Abuse, the pedecessor to the NSDUH, cocaine use fell from the mid-1980s to the early '90s and was essentially flat through 2001. Methamphetamine use has been falling since 1999 among eighth-graders, since 2000 among sophomores and seniors, and since 2001 in the general population 12 and older. Evidently the Bush administration's drug policies are so effective they work retroactively. Or maybe Walters counts a decrease in "the headlines from just a few years ago" as a success, regardless of the underlying reality.
For drug warriors, of course, the numbers don't really matter, because their response is always the same: Let's keep doing what we're doing. If drug use goes down, it means we're succeeding, so we should get more money. If drug use goes up, we need to redouble our efforts, so we should get more money.
In any case, it's not clear why a decline in drug use per se should count as a victory without evidence that the harm associated with drug use has declined commensurately. If a dramatic reduction in reported drug use were achieved by eliminating every occasional pot smoker, for example, the benefit in terms of health, productivity, and improved social functioning would be negligible. Furthermore, Walters completely fails to consider the other side of the ledger: the enormous costs of the war on drugs (which Ethan Nadelmann of the Drug Policy Alliance discusses in a companion article). Even a committed paternalist, if he is honest, has to ask whether the damage prevented by drug prohibition outweighs the damage it inflicts.
"The good news in drug policy," Walters writes, "is that we know what works, and that is moral seriousness." Moral seriousness on this subject would require taking into account half a million nonviolent drug offenders behind bars, the victims of black market violence, avoidable deaths caused by the unreliable quality and unsanitary practices that prohibition fosters, the risk-premium subsidy to thugs and terrorists, the corruption of law enforcement officials, and the loss of civil liberties resulting from the drug war's perversion of the Constitution. Walters' claim to moral seriousness is therefore hard to take seriously. I'd settle for a little bit of intellectual seriousness from whomever Barack Obama chooses to succeed Walters, but it seems to be incompatible with the job.
Students for Liberty
Here's something for all of you liberty-loving undergraduates:
Registration is open for the Second Annual Students for Liberty Conference, which will be held at George Washington University in Washington, DC from February 20-22, 2009. It looks like a really great program, capped off with a keynote address from Venezuelan student activist Yon Goicoechea, the recipient of the Cato Institute's 2008 Milton Friedman Prize for Advancing Liberty. For details and registration, check out SFL's website.
L.A. Political Hack as Trade Rep?
President-elect Barack Obama has apparently offered the U.S. trade representative job to Xavier Becerra, a truly mediocre machine-politics hack from Southern California. My former colleagues at the L.A. Times editorial board say it well:
He's a terrible choice, and not just because of a history of unsavory behavior -- such as his successful efforts to win a pardon from President Clinton for convicted cocaine kingpin Carlos Vignali, or the screamingly unethical robo-calls his campaign engineered during his run for Los Angeles mayor in 2001. Becerra is a leader of the Democratic Party's protectionist wing, which opposes NAFTA, the Dominican Republic-Central American Free Trade Agreement and most other trade deals.
Free trade irks many liberals because it can shift American jobs to other countries, but it almost invariably does more good than harm, lowering prices for goods and creating new jobs to make up for those it displaces. What's more, history shows that the last thing the country should do during an economic downturn is become more protectionist.
Obama railed against trade agreements every day on the campaign trail, so this pick, and the new president's potentially disastrous approach toward trade, should really come as no surprise.
David Weigel wrote about the death of free-trade Democrats back in the May issue, and Tim Cavanaugh lamented the passing of the New Democrats during the party's national convention this summer.
Milwaukee Bucks
The residents of Cream City are pondering their own currency:
It's not a new concept—experts estimate there are at least 2,000 local currencies all over the world—but it is a practice that tends to burgeon during economic downturns. During the Great Depression, scores of communities relied on their own currencies.
And it's completely legal.
As long as communities don't create coins, or print bills that resemble federal dollars, organizations are free to produce their own greenbacks—and they'd don't even have to be green.
Well, it's not entirely legal—not all of the time, anyway. Just ask the folks who used to make and distribute Liberty Dollars.
The Milwaukee effort seems to be more about encouraging local business than taking a stand against the injustice of the federal monopoly on currency. But the opportunities for punning are excellent, given that the city's NBA team is the Bucks:
"Here's your latte, sir. That'll be three Milwaukee Bucks, please."
"OK, how about Luc Mbah a Moute, Dan Gadzuric, and Charlie Villanueva?"
Read reason on alternative currencies in Argentina, too.
UPDATE: Because it's Friday.
New at Reason: Radley Balko on the Collateral Damage from SWAT Team Raids
In a Citing from our January issue, Senior Editor Radley Balko reports on the death of 26-year-old Tarika Wilson, who was killed during a drug raid at her boyfriend's Lima, Ohio home.
CSI: Nebraska
In 2006, rural Nebraska couple Wayne and Sharmon Stock were killed with shotgun blasts to the head. Early on, the police honed in on Matt Livers and Nick Sampson, cousins of the slain couple. During a heated interrogation, Cass County Sheriff's Investigator Earl Schenk told the mentally-handicapped Livers that unless he confessed, Schenk would do everything in his power to be sure Livers was executed, threatening to "do my level best to hang your ass from the highest tree."
Livers eventually confessed, implicating himself and Sampson in a crime they didn't commit. According to a lawsuit since filed by Livers, investigators then spoon-fed him details about the crime scene, eliciting from him a narrative that fit the one police had in mind.
Cass County investigators then called in David Kofoed, commander of the Crime Scene Investigation unit for Nebraska's Douglas County. According to the Omaha World-Herald, Kofoed is an active self-promoter, making his CSI unit available to other police agencies in Nebraska around the clock. His unit has contracts with 45 police agencies in Nebraska and Iowa.
The problem is, an initial search of the alleged getaway car conducted by Kofoed's staff turned up no incriminating biological evidence against Livers or Sampson. Some time later, on his own initiative, Kafoed went back to the alleged getaway car and conducted a second search. His report at the time says he did the second search alone. He has since insisted that he made a mistake in the report, and that one of his subordinates was with him. Miraculously, on this second search, Kofoed found a tiny speck of victim Wayne Stock's blood on the car's steering column.
That and Matt Livers' confession could well have resulted in a death sentence for Livers and Sampson. Except that days after Kofoed found the incriminating speck of blood, two Wisconsin teenagers were arrested for the Stocks' murders. They had no tie to Livers and Sampson. And their car was crawling with the Stocks' DNA.
An internal investigation cleared Kofoed and his unit of any wrongdoing. But the FBI is now conducting its own investigation, and according to Kofoed himself, they're more skeptical. Kofoed told the World-Herald that FBI agents told him his explanations for how one victim's blood ended up in the ultimately vindicated suspects' car "didn't pass the smell test."
Kofoed and his unit are back on the job, and will continue to work new cases while the FBI continues its investigation.
Whether Kofoed is corrupt or he or Cass County police are merely incompetent, the case is a good lesson in skepticism. A confession that include details about the crime scene coupled with the victim's blood in the suspects' car sounds like a pretty solid case. That is, until you start to understand how police can coerce false confessions and then, even unintentionally, impart to suspects details about the crime—as well as how easily crime scenes can be either accidentally contaminated, or manipulated by people on the inside eager to secure a conviction.
But for the good fortune of police finding the Wisconsin teens, Sampson and Livers would likely have been convicted, and probably sentenced to death.
(Hat tip to David Tarrell and Mark Draughn.)
Booty and the Bailout
Columnist Ron Hart writes about Somali pirates and the Dems and Reps on the bailout:
Republicans seem poised to not vote on a bailout for the poorly managed automobile industry. They find it much easier to adhere to their principles when they are not actually in power. Letting a non-viable business fail, so that it can be replaced by a more efficient one, is simple economic Darwinism. To sum up, Republicans do not want Darwin's theory of survival of the fittest taught to our kids in school, but they do like it applied to business.
Democrats are torn on the bailout for the American automakers. On one hand, they want to feather the beds of the unions, who count on them making their jobs just costly enough that the company they work for can stay solvent long enough for elder union members to retire. On the other hand, they need someone to pay their $18 million a year Viagra bills well into their golden years. In return, Democrats want Detroit to make smaller cars so their limousines can get around them in Washington, D.C., traffic on their way to a private jet that will whisk them off to a global warming summit.
Mary Gets Quite Contrary
Mary Beth Buchanan, who makes a strong case for the title of worst U.S. attorney in the country, says she won’t abide by the customary practice of all U.S. attorneys submitting their resignations with the swearing in of a new administration.
“It doesn’t serve justice for all the U.S. attorneys to submit their resignations all at one time,” she said yesterday.
U.S. attorneys serve at the discretion of the president and may be hired and fired at will, although their appointments must be confirmed by the Senate. When a new president is elected, U.S. attorneys of both parties generally tender their resignations.
Instead, the Republican said she plans to continue her work in the Western District of Pennsylvania. More than that, she said she would consider working in the Obama administration. She would not discuss what her future might hold beyond the U.S. attorney’s office.
“I am open to considering further service to the United States,” Ms. Buchanan said.
It was Buchanan, you might remember, who prosecuted Tommy Chong for selling glass-blown bongs over the Internet. Soon after then-Attorney General John Ashcroft announced that fighting porn would be a priority during his tenure, Buchanan brought the first federal obscenity case in 20 years, against porn producer Extreme Associates. She also prosecuted Karen Fletcher, believed to be the first person convicted on federal obscenity charges for distributing written material. Despite an embarassing defeat in court, Buchanan is also still pursuing charges against Pennsylvania medical examiner Dr. Cyril Wecht, a case so reeking in political opportunism that former Bush 41 Attorney General Dick Thornburgh agreed to represent Wecht, and has since publicly accused Buchanan of using her office for baseless, partisan prosecutions of Democrats.
I’ve written pretty extensively of what I think is one of Buchanan’s most outrageous cases. It’s her prosecution of Dr. Bernard Rottschaefer, a Pennsylvania physician Buchanan put in prison for allegedly writing Oxy prescriptions in exchange for sex. Since Rottschaeffer’s conviction, Buchanan’s case has fallen to pieces, as each of the five witnesses who testified to getting illegal prescriptions from Rottschaeffer have since been shown to have lied. Buchanan refuses to reopen the case. She also refuses to pursue perjury charges against her star witness, Jennifer Riggle, who explicitly conceded in letters to her boyfriend that she lied on the witness stand.
Buchanan has made no secret of her ambition for elected office. During her tenure as a federal prosecutor she has actively sought out high-profile, often dubious cases to win favor with her superiors in the Bush administration. It’s mostly worked. She’s been promoted twice. But it also makes it extremely unlikely she’d have a place in an Obama administration.
Buchanan isn’t delusional. She’s calculating. My guess is that this is a stunt to force Obama to fire her, at which point she’ll make a public stink, play the martyr, then attempt to parlay the resulting controversy into a run for the Senate, or perhaps for governor of Pennsylvania.
New at Reason: Friday Funnies
In the latest edition of Friday Funnies, Henry Payne looks at how Obama's administration is taking shape.
You Are In the Minority
Don't get cocky, Internet news readers. You may be the wave of the future, but today we remain an oppressed minority—only 5 percent of Americans get their news from the web only, and a mere 29 percent supplement other sources with online reading:
On any given day, more Americans turn to TV for their news (57%) than any other source of media, a rate that has remained largely stable over the past 10 years (59% in 1998).
The Internet may not have crushed TV yet, but newspapers are screwed, so that's something:
In contrast, the percentage of Americans reading a newspaper on any given day has fallen to 34%, down from 40% just two years ago and down from 48% (a 14-point drop) a decade ago.
European Court Rules that British DNA Databases Violate Privacy
The European Court of Human Rights has ruled that British police effort to collect and retain DNA information from people not convicted of any crime violates their privacy rights as guaranteed by the European Convention on Human Rights.
As the Associated Press reports:
Europe's top human rights court Thursday struck down a British law that allows the government to store DNA and fingerprints from people with no criminal record — a landmark decision that could force Britain to destroy nearly 1 million samples on its database.
Rights groups say the ruling could have even wider implications for the storage of other sensitive and personal data.
The case originated when British police refused to destroy DNA samples of two Britons whose criminal cases were dropped.
The European Court of Human Rights' ruled unanimously that keeping DNA samples and fingerprints was in violation of people's right to a private life — a protection under the Human Rights Convention to which the United Kingdom is a signatory. It also criticized Britain's use of "blanket and indiscriminate" storage.
Britain cannot appeal the ruling. It has until March to submit plans for destroying samples or to make a case for why some should be kept. Many European countries allow for temporary storage of DNA in sex crimes or other offenses but samples are usually destroyed after the cases are closed...
Britain has one of the world's largest DNA databases with more than 4.5 million samples, usually collected with a cheek swab.
In England and Wales, more than 850,000 DNA samples from people with no criminal record are stored on a national database. Samples have come from anyone who has been arrested, regardless whether they were charged, convicted or acquitted. Even the DNA of crime victims has been stored on occasion.
Privacy International said the ruling provides a benchmark for collecting data from innocent people — a ruling that could challenge Britain's plans for a database containing DNA samples of children, for a national identity register and for storing sensitive personal information such as financial or health details.
"The entire legal underpinning of Britain's surveillance state has now collapsed," said Simon Davies with Privacy International.
DNA databases are also expanding in the United States, with many states collecting and retaining DNA information from all arrestees. reason reporting on DNA databases and privacy here and here.
BBC: Six Shot at New Delhi Airport
According to a BBC report, six gunmen were shot and killed at New Delhi's "main international airport" today. The BBC report is here, with few details thus far, though the AP is on the story too.
Update: The BBC has amended their original story, now calling the incident in India a "shooting scare."
The police force in charge of security at Delhi's main airport has denied reports that people have been shot and injured there.
Police are investigating "two sharp sounds that were heard at the airport", the force told the BBC's Delhi bureau.
Earlier, airport officials said shots had been fired, and that several gunmen had been killed or injured.
Security has been strengthened at Indian airports after warnings of possible attacks.
The Reason.tv Talk Show with Michael C. Moynihan, Nick Gillespie, Matt Welch, and Cato's David Boaz
Reason.tv's Nick Gillespie and Michael C. Moynihan sit down Reason magazine Editor in Chief Matt Welch and Cato Institute Vice President David Boaz to talk about 40 years of Free Minds and Free Markets, whether we are freer now than we used to be, and the future of libertarian politics, culture, and ideas.
Go here for the podcast version.
Bernanke's "Market Failure"
Federal Reserve Chair Ben Bernanke gave a big speech on the financial crisis today, in which he identified the roots of the problem as carefree home lending by bubble-fattened financial institutions to owners who couldn't really afford their own houses:
[T]he current housing crisis is the culmination of a large boom and bust in house prices and residential construction that began earlier in this decade. Home sales and single-family housing starts held unusually steady through the 2001 recession and then rose dramatically over the subsequent four years. National indexes of home prices accelerated significantly over that period, with prices in some metropolitan areas more than doubling over the first half of the decade. One unfortunate consequence of the rapid increases in house prices was that providers of mortgage credit came to view their loans as well-secured by the rising values of their collateral and thus paid less attention to borrowers' ability to repay.However, no real or financial asset can provide an above-normal market return indefinitely, and houses are no exception. When home-price appreciation began to slow in many areas, the consequences of weak underwriting, such as little or no documentation and low required down payments, became apparent. Delinquency rates for subprime mortgages--especially those with adjustable interest rates--began to climb steeply around the middle of 2006. When house prices were rising, higher-risk borrowers who were struggling to make their payments could refinance into more-affordable mortgages. But refinancing became increasingly difficult as many of these households found that they had accumulated little, if any, housing equity. Moreover, lenders tightened standards on higher-risk mortgages as secondary markets for those loans ceased to function.
So, how to deal with this mess? Provide more home lending by bubble-chastened financial institutions to owners who really can't afford their own houses!
At the macro level, the Federal Reserve has taken a number of steps, beginning with the easing of monetary policy. To the extent that more accommodative monetary policies make credit conditions easier and incomes higher than they otherwise would have been, they support the housing market. [...]
The Federal Reserve supported the actions by the Federal Housing Finance Agency (FHFA) and the Treasury to put the housing-related government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, into conservatorship, thereby stabilizing a critical source of mortgage credit. The Federal Reserve has also recently announced that it will purchase up to $100 billion of the debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks and up to $500 billion in mortgage-backed securities issued by the GSEs. [...]
Yet another promising proposal for foreclosure prevention would have the government purchase delinquent or at-risk mortgages in bulk and then refinance them into the H4H or another FHA program.
Bernanke's logic is that housing prices just affect the economy too damned much, and so need to be artificially propped up for the economy to rebound. I don't agree with that, partly because I think the long-term consquences will create new destructive bubbles, but I did find Bernanke's description of "market failure" more interesting than most:
[A]necdotal evidence suggests that some foreclosures are continuing to occur even in cases in which the narrow economic interests of the lender would appear to be better served through modification of the mortgage. This apparent market failure owes in part to the widespread practice of securitizing mortgages, which typically results in their being put into the hands of third-party servicers rather than those of a single owner or lender. The rules under which servicers operate do not always provide them with clear guidance or the appropriate incentives to undertake economically sensible modifications. The problem is exacerbated because some modifications may benefit some tranches of the securities more than others, raising the risk of investor lawsuits. More generally, the sheer volume of delinquent loans has overwhelmed the capacity of many servicers, including portfolio lenders, to undertake effective modifications.
Whole Bernanke speech here. Tim Cavanaugh on Henry Paulson's definition of "market failure" here.
Ralph Nader for a Carbon Tax in the Wall Street Journal
Nader is properly worried about the spread of environmental protectionism if a global cap-and-trade climate deal is struck in the next couple of years. As Nader and his co-author Toby Heaps write:
Good intentions to limit big polluters in some countries but not others will turn any meaningful cap into Swiss cheese. It can be avoided by relocating existing and new production of various kinds of CO2-emitting industries to jurisdictions with no or virtually no limits. This is known as carbon leakage, and it leads to trade anarchy.
How? The most advanced piece of climate legislation at the moment, the Lieberman-Warner Climate Security Act, contains provisions for retaliatory action to be taken against imports from carbon free-riding nations. Married with the current economic malaise, the temptation to slide into a righteous but runaway environmental protectionism -- which Washington's K Street lobbyists would be only too happy to grease -- would almost certainly lead to a collapse of the multilateral trading system...
True, trade anarchy might reduce emissions via a massive global depression. But there would be a lot of collateral damage. Because of the sheer scale of the challenge and the state of the hyperglobalized economy, we will need the same price on carbon everywhere, or it won't work anywhere.
Whole Wall Street Journal op/ed here. Some of my thoughts on the rent-seeking disaster that cap-and-trade would be here and here. One further thought: After advocating a carbon tax as the least bad alternative, I have been persuaded that it's politically impossible. People are not going to vote for a politician who promises to significantly boost what they pay at the pump and pay for power.
New at Reason: Damon Root on the Trouble with Thomas Jefferson
From our January issue, Associate Editor Damon W. Root examines Thomas Jefferson's deeply tangled relationship with his slave Sally Hemings and her family.
Free Plaxico
Second Amendment scholar Dave Kopel in the Wall Street Journal:
New York Giants star receiver Plaxico Burress is facing a mandatory 3½ years in prison and the end of his football career. His crime? Not having a license, which New York City never would have issued him, for the exercise of his constitutional right to bear arms.
To be sure, Mr. Burress got caught because of what appears to have been stupid and irresponsible behavior connected with the handgun. But he does not face prison for shooting himself. His impending mandatory sentence highlights the unfairness and unconstitutionality of New York City's draconian gun laws.
Mr. Burress had previously had a handgun carry permit issued by Florida, for which he was required to pass a fingerprint-based background check. As a player for the Giants, he moved to Totowa, N.J., where he kept a Glock pistol. And last Friday night, he reportedly went to the Latin Quarter nightclub in midtown Manhattan carrying the loaded gun in his sweatpants. Because New York state permits to possess or carry handguns are not issued to nonresidents, Mr. Burress could not apply for a New York City permit.
This seems about right. Burress was stupid with his careless handling of the gun. But he's being charged and facing mandatory prison time for merely carrying the gun, not mishandling it. Kopel concludes:
The Second Amendment might not require New Jersey or New York City to issue as liberally as Connecticut does. But with a population of several million and only a few thousand (consisting mainly of politicians, retired police and celebrities) able to get permits, New York City's licensing process is almost certainly unconstitutional on a number of grounds, including sheer arbitrariness.
Some commentators contend that Plaxico Burress should have hired bodyguards, instead of carrying a gun himself. Mr. Burress might now agree. But people who aren't as wealthy as he is also deserve to be safe, and they don't have the money for bodyguards. New York City needs to regularize its carry permit system so that law-abiding people can protect themselves, especially if their circumstances (such as being a witness to a gang crime) place them at heightened risk.
The Burress case also shows why mandatory sentences are a bad idea. He was careless but had no malign intent. Legislators and mayors like to appear tough by pushing through such draconian laws. Yet the victims are people like Mr. Burress whose conduct may have been improper, but who do not deserve the same sentences meted out to robbers and burglars.
Chris Sprow wrote about how pro sports leagues are more worried about their image than the safety of their athletes in reason in January of last year.
Your Tax Money, Being Spent on Encouraging Lobbyists to Pressure Lawmakers to Support the Ideas Produced by Your Tax Money, etc.
So, in the Bailout's latest thought balloon, the Treasury Department is preparing to buy up scores of billions of mortgage-backed securities from the government-owned Fannie Mae and Freddie Mac, on the condition that (in the Washington Post's words) "mortgage lenders would have to set exceptionally low interest rates, for instance, no more than 4.5 percent for traditional, 30-year fixed-rate loans." Treasury might pay for this credit-loosening exercise by selling a big new batch of 30-year bonds. While you try to wrap your head around that particular Mobius strip, here's a passage I found interesting:
A source said Treasury officials suggested at the meeting that the Realtors start a grass-roots campaign to press the mortgage rate plan with lawmakers.
Treasury officials described the situation as fluid and said the plan was still being finalized, according to people in contact with the department. The officials expressed concerns yesterday that premature disclosure of the plan could prompt Americans to put off buying homes and hold out for a better rate, sources added.
Lots to chew on just in that passage, let alone the whole article and the idea behind it.
Mike Flynn's anatomy of the financial breakdown here, and for those non-subscribers out there, you really ought to pick up the January issue of reason for a big package on the bailout, the role of regulation (both the "de" and "re" varieties), and suggestions for better government policies to address the the recession.
Return of the Blacks
Remember Don and Derek Black, the father and son white supremacist duo who donated and cuddled up to Ron Paul in a photo that gave him weeks of grief?
The Blacks are back. In August, Derek won a seat on the Palm Beach, Florida Republican state committee, which led to fulsome praise from David Duke.
Derek, being the son of Stormfront's own Don Black shows what so many of us should be doing. If he can do it with the notoriety of his father and the notoriety of another rather notorious relation in his life, me, in a place of the demographics of West Palm Beach, it should show to all of you that there is no reason why there shouldn't be thousands of us elected to office.
I think this is some of the greatest news in a long, long time.
The local Republicans groped around for a loophole and found one in Black's failure to sign a GOP loyalty oath. On Wednesday he showed up to take his slot on the committee (wearing the stupid hat he wore in the Ron Paul photo and refusing to take it off) and was shut out. Black whined to the Palm Beach Post about how he won in the first place:
"I talked about immigration," he said. "I talked about the presidential campaign. That was the biggest issue. This was back in August, July. Most of them weren't happy with (Sen. John) McCain turning out to be their candidate. It did come up a few times that I didn't like McCain."
The support of white supremacists for Ron Paul was a frustrating sideshow in 2007 and early 2008. It seemed unfair to slam Paul, as some blogs did, for merely being photographed with the Blacks. I met hundreds of Paul supporters, not all of them white, almost none of them racist. But I did see Stormfront's Jamie Kelso in the Ron Paul tent at the Ames, Iowa Straw Poll last summer, blogging excitedly about the rEVOLution, so it was't a surprise that racists tried to co-opt the Paul message. The Palm Beach Republicans have the right idea about how to handle these people: keep them as far away from real politics and other people as possible.
New at Reason: Steve Chapman on False Cures for the Recession
In his latest column, Steve Chapman explains why the bailout won't work.
When Paternalists Fall in Love With Greedy Lawyers
Last week marked the 10th anniversary of the Master Settlement Agreement (MSA) that resolved state lawsuits against the leading tobacco manufacturers. The occasion prompted attempts by the agreement's supporters to portray it as a great "public health" victory, as opposed to a government-backed conspiracy in restraint of trade that enriched trial lawyers, protected Big Tobacco from competition, and brought state treasuries more than $200 billion in found money, all at the expense of smokers, usually portrayed as victims of the companies that benefited from the deal. A good example of MSA boosterism was provided by syndicated columnist Marie Cocco, who opined that the public-spirited lawyers behind the deal have helped "save millions of lives and billions in health costs." Let's ignore the fact that discouraging people from smoking does not prevent deaths so much as delay them, and that increasing the ranks of longer-lived nonsmokers actually raises total spending on health care instead of reducing it. Is Cocco right to argue that the MSA "may well be the most significant advance in the campaign to curtail tobacco use since the 1964 surgeon general's report"?
Cocco notes that per capita cigarette consumption has fallen by about 28 percent since the MSA was signed in 1998. That compares to a decline of about 22 percent in the previous decade. Cocco attributes the acceleration of the downward trend to the MSA's restrictions on cigarette advertising and promotion, which included bans on billboards and on merchandise embossed with cigarette logos. I am skeptical that advertising has such a powerful effect on total consumption of cigarettes (as opposed to brand share), and Cocco offers no evidence to back up her thesis.
Tellingly, Cocco fails to mention that during this same period state and local cigarette taxes were raised over and over again. The one aspect of the MSA than can most plausibly be credited with discouraging consumption, a price increase of about 45 cents a pack that the tobacco companies used to cover their payments to the states, pales in comparison with the increase in the average state cigarette tax, which rose from about 35 cents in 1998 to $1.19 this year. Meanwhile, smoking bans have proliferated throughout the country and become increasingly strict. Cocco notes this development, which had nothing to do with the MSA, but still clings to the notion that getting rid of Marlboro billboards and Joe Camel T-shirts deserves the lion's share of the credit for reducing cigarette consumption.
Predictably, Cocco wraps up her ode to the MSA by endorsing the notion that when legislatures fail to approve the policies she likes, the courts should do so instead:
There was no get-rich-quick scheme concocted by greedy lawyers that prompted the states to pursue Big Tobacco in court. The impetus was a failure of democracy, and the outcome has been both democratic and healthy.
I'm not sure why Cocco thinks replacing legislation debated and passed by elected representatives with back-room deals hammered out by self-interested trial lawyers enhances democracy. Isn't the usual lawmaking process bad enough?
Columbia University's Sleazy Eminent Domain Abuse
Jonathan V. Last has a great piece in The Weekly Standard detailing Columbia University's shady efforts to use eminent domain to expand its campus:
[Nick] Sprayregen is one of Columbia's neighbors. He owns Tuck-It-Away Storage, a thriving self-storage business, which has five buildings in Manhattanville. He leases out the ground floors of some of his properties, but recently has had a hard time getting businesses to fill the space. As his leasing agent explains, "We have had literally hundreds of offers, most from reputable, well-financed concerns willing to lease on a long-term basis.... At some point along the line, with all of these concerns, the knowledge that Columbia University can or will invoke eminent domain has caused them to seek out alternative space arrangements." Even when the university isn't taking direct action, its very presence drives away businesses.
Each of Sprayregen's buildings is kept in pristine condition. But Columbia wants his land. So the university has been working with the state of New York to have the neighborhood declared "blighted." If that designation is made, the government will be able to take Sprayregen's well-kept property and hand it over to the university, which owns the run-down buildings. And only then, when they have their neighborh's land, does Columbia promise to clean up its act and make Manhattanville nice again.
Back in September, Sprayregen wrote a very good op-ed for The Wall Street Journal describing some of the university's more despicable tactics:
Under New York state law, in order to condemn property the state first has to undertake a "neighborhood conditions study" and declare the area in question "blighted." Earlier this summer the state released its study, which concluded that Manhattanville is indeed "blighted." This gives the state the legal green light to condemn my four buildings and hand them over to the university.
The study's conclusion was unsurprising. Since the commencement of acquisitions in Manhattanville by Columbia, the school has made a solid effort to create the appearance of "blight." Once active buildings became vacant as Columbia either refused to renew leases, pressured small businesses to vacate, or made unreasonable demands that resulted in the businesses moving elsewhere. Columbia also let their holdings decay and left code violations unaddressed.
[...]
There is also a conflict of interest in the condemnation process. The firm the state hired to perform the "impartial" blight study--the planning, engineering and environmental consultant Allee King Rosen & Fleming, Inc. (AKRF)--had been retained by Columbia two years earlier to advocate for governmental approval of the university's expansion, including the possible use of eminent domain.
As Last notes in the Standard, Sprayregen faces the challenge of distinguishing Columbia's development plan from the "comprehensive" one that the Supreme Court endorsed in its notorious Kelo decision, which he may succeed in doing since "Columbia's redevelopment plan is, by their own admission, not comprehensive because 'it is impossible to know today all the new areas of learning and discovery that might arise decades into the future' when the redevelopment is completed."
For more on eminent domain abuse, private property, and the courts, don't miss Tim Cavanaugh's interview with Kelo attorney Scott Bullock, Matt Welch on why The New York Times loves eminent domain, Ilya Somin on the limits of anti-Kelo legislation, and Daniel McGraw on eminent domain, publicly funded stadiums, and sports welfare.
Prop. 8: The Musical
In which the power of capitalism, rendered in song by Neil Patrick Harris, brings the social conservatives and the gays together.
The $102 Trillion Bailout
With a bailout bill that totals $8.5 trillion so far and a "stimulus package" yet to come, the federal debt, currently about $6.3 trillion, can be expected to grow substantially in the next few years. But as a new report from the National Center for Policy Analysis notes, the official number is limited to debt held by the public; it does not include entitlement obligations. The report's authors, economists Andrew Rettenmaier and Thomas Saving, estimate that paying Social Security and Medicare benefits to current workers will cost $52 trillion. If these programs were funded by investments, they say, the government would have to set aside $102 trillion ("about 7 times the size of the U.S. economy") to keep the programs solvent. Assuming the government continues to use current tax revenue to pay for Social Security and Medicare, the two programs will consume one-tenth of the federal budget by 2012, almost half by 2030, and 80 percent by 2070.
Rettenmaier and Saving concede that their preferred solution—reforming Social Security and Medicare "so that each worker saves and invests funds for his own post-retirement pension and health care benefits"—would impose a "substantial" burden on current workers, who would have to "sav[e] for their own benefits while at the same time paying taxes to fund the benefits of current retirees." But the alternatives—a crushing tax burden and/or dramatic benefit cuts—are even less appealing. Except if you're a politician whose main concern is getting re-elected in two, four, or six years. Too bad there's no other kind.
The full NCPA report is here (PDF).
New at Reason: Radley Balko on the Lessons of Prohibition
There's no question that drug prohibition has been every bit the failure that alcohol prohibition was, writes Senior Editor Radley Balko. The main difference is that the Eighteenth Amendment was repealed while the drug war's failures have resulted in the government claiming more power than ever.
Welcome, Taxpayers!
In the early 1990s, Congress got the idea that America needed an underground facility where tourists could escape D.C.'s August heat and February chill while waiting out the long lines to tour the Capitol building and meet their smiling congressman. Estimated cost: about $70 million.
In the 15 years since, the project morphed into a sprawling, $621 million, three-story, ostentatious shrine to "the legislative process." In other words, Congress built a tribute to itself. So it's probably only fitting that members of Congress also took every opportunity throw lard at the project, just as if they were greasing up an appropriations bill.
From Citizens Against Government Waste:
Like the federal budget itself, Congress used the CVC as a warehouse for tens of millions of dollars in extravagant bells and whistles for itself. Even more reprehensible, members of Congress seeking to add special features for themselves used security concerns surrounding the September 11 attacks to justify their extravagant add-ons and constant change orders.”
Original plans called for more than half of the CVC space to be left as unfinished “shell space”, available to be outfitted for future needs. Instead, in 2001 Congress began implementing its wish list for the unfinished spaces. The House side got a two-story hearing room and the Senate grafted on a collection of small hearing rooms and a television and radio studio with adjoining makeup facilities so that senators could cut spots for their constituents back home. Those two efforts alone added $85 million to the cost of the CVC. The CVC will also have a 450-seat dining area, two orientation theaters (one for each chamber), a large auditorium, and an exhibition hall.
The building finally opened this week, three years past deadline and more than $300 million over an already bloated budget. Yesterday's grand opening featured grand speechifying by congressional leaders and VIPs. One thing it didn't feature: tourists and taxpayers. It was closed to the public. And with good reason. Majority Leader Harry Reid (D-Nev.) wasn't content with merely bilking taxpayers for Congress' half-billion-plus vanity project, he felt compelled to insult them, too:
"My staff tells me not to say this, but I'm going to say it anyway," said Reid in his remarks. "In the summer because of the heat and high humidity, you could literally smell the tourists coming into the Capitol. It may be descriptive but it's true."
But it's no longer going to be true, noted Reid, thanks to the air conditioned, indoor space.
And that's not all. "We have many bathrooms here, as you can see," Reid continued. "Souvenirs are available."
But at least Sen. Jim DeMint (R-S.C.) is livid about the project. Alas, it's not because the Center is vain and wasteful. DeMint is angry that the Center "ignored his request to include the phrase 'In God We Trust' and the Pledge of Allegiance." If only they had included a chapel, too!
Overly grandiose, self-important, self-congratulatory, larded with wasteful add-ons demanded by individual politicians, contemptuous of taxpayers—come to think of it, this whole sorry episode might actually be the perfect tribute to Congress.
I wrote about Congress' inability to stop the cluttering of the National Mall two years ago in reason.
Center for Science in the Public Interest Invites You to Join Their Lawsuit Fishing Expedition
The Center for Science in the Public Interest (the self-described "food police") have elevated puritanism--defined by H.L. Mencken as "The haunting fear that someone, somewhere, may be happy” -- to their central public policy principle.
For example, this missive from CSPI just landed in my inbox:
Share Negative Experiences With Mixing Red Bull and Alcohol
Greetings,
Earlier this year CSPI threatened to sue MillerCoors and Anheuser-Busch for the marketing of their respective alcoholic “energy” drinks. These drinks are dangerous, because the caffeine masks the effects of the alcohol—drinkers may not feel impaired, but they are.
We were pleased that Anheuser-Busch agreed to pull its products from the market. But MillerCoors, the biggest producer of these drinks, refused to pull its product “Sparks.” As a result, CSPI sued MillerCoors--that suit is proceeding.
In its research of alcoholic energy drinks, CSPI learned of dangerous experiences that consumers had when they mixed alcohol with the energy drink Red Bull. We’d like to hear from you if you or someone you know had a bad experience after consuming Red Bull mixed with alcohol.
CSPI wants to stamp out Bull Breezes, Bullgaritas, Invisibulls, and Red Bull Blasters. Next up will be the CSPI lawsuit against offering dinner party guests a cup of coffee at the end of an evening.
See my colleague Jacob Sullum's take down of CSPI, "The Anti-Pleasure Principle," here.
Calculating the Price of Everything
On Monday, I appeared at a Cato Institute book forum hosted by David Boaz and featuring George Mason University economist Russell Roberts, whose new novel is the entertaining and edifying The Price of Everything. We ended up talking a lot about bailouts, markets, and how to engage non-libertarians with ideas about freedom.
You can watch video of the conversation or listen to a podcast by going here.
Wiki Your Government
All the content on change.gov, Barack Obama's transition website, is governed by a Creative Commons license, which allows anyone to copy, reuse, reproduce or otherwise rip off everything on the website, as long as they say where it comes from. This is a great step, especially in a world where the actual legal codes of some states are covered by far more restrictive copyright rules.
But in the wake of some unannounced content switcheroo on the policy agenda portion of the site, Internet guru Tim O'Reilly wants more transparency.
There's a primitive form of revision control in word processing products like Microsoft Word, but we need more than that, especially for documents that bring together the work of multiple independent authors. For change.gov, the wikipedia model might work: logging of every change, with only authorized participants allowed to make changes, but everyone (the public) able to review and comment on associated discussion pages.
The real holy grail, of course, would be to provide revision control on all government regulations, and eventually, on legislation.
One benefit of this approach for the administration: No more gotcha stories like this one.
Via Julian Sanchez
When Is 'Not an Option' Not an Option?
Regarding the Big Three automakers, House Speaker Nancy Pelosi says:
I believe an intervention will happen, either legislatively or from the administration. I think it's pretty clear that bankruptcy is not an option.
Where have we heard this sort of talk before? Where haven't we?
"In these challenging times, when we are facing both rising deficits and a sinking economy," President-elect Obama said last week, "budget reform is not an option." He added, "It's a necessity," but the statement probably would have been more accurate if he hadn't.
The next day, USA Today editorialized that Obama's stimulus package "must be bold because timidity is not an option in these dire times." So much for budget reform.
Also last week, A.P. explained that Citibank's failure "is not an option," while Alistair Darling, Britain's chancellor of the exchequer, said taxes must go up because "doing nothing is not an option."
In his November 18 speech on global warming, Obama insisted that "delay is no longer an option."
Back in September, when Treasury Secretary Henry Paulson was drumming up support for his $700 billion plan to encourage lending by purchasing "troubled assets" from financial institutions, Sen. Robert Bennett (R-Utah) announced that "we have to do something," because "inaction is not an option." A few days later, Republican presidential candidate John McCain, possibly after reading David Broder's column on the subject, concurred. A month and a half later, after getting the $700 billion he had demanded, Paulson officially abandoned the plan whose nonimplementation he had declared a nonoption.
Attn, DC Reasonoids: Happy Hour to Celebrate 40 Years of Reason on Thursday, December 4 at 6PM
On Thursday, December 4th, starting at 6:00 p.m., please join Reason's DC staff and Reason Foundation President David Nott for a happy hour to celebrate 40 years of Reason magazine!
Arrive early for Reason swag, including copies of the collector's edition 40th Anniversary issue and the hot-off-the-presses January 2009 ish, Reason.tv's Drew Carey Project DVDs, stickers, and more.
The event will take place at the upstairs bar at The Big Hunt, 1345 Connecticut Avenue, NW, one block south of Dupont Circle.
Drink and food specials will be available throughout the night, and the patio will be open for smokers. The fun begins at 6:00pm and ends when you say it does.
Hope you can make it!
If you would like to be added to Reason's DC event list, please send an email to events@reason.com.
D.C.'s Evolving Gun Laws
The D.C. City Council continues its herky-jerky reactions to the Supreme Court's Heller decision overturning its ban on usable guns in the home. Back in September, it finally gave in and obeyed the spirit of the Supreme Court decision and finally allowed even semiautomatic handguns to be registered, and even loaded.
Yesterday, as the Washington Post reports, the D.C. Council gave
preliminary approval to legislation that would require gun owners to renew their registrations every three years and to notify police annually whether they still own guns.
These sort of niggling restrictions on the right to have weapons in the home strike Alan Gura, the lawyer who successfully argued Heller before the Court, as similarly open to legal challenge. He
said requiring repeated registration will bring the city more legal problems. "None of this is going to reduce crime, but it is going to increase litigation," said Gura, the lead counsel for the plaintiffs in the Supreme Court case. "While I have not studied the bill, requiring people to register and re-register every year is harassment."
Andrew Arulanandam, a spokesman for the National Rifle Association, said he had not seen the legislation. Still, he said, "if the mayor and the city counsel continue to defy the United States Supreme Court, the National Rifle Association will seek a remedy either by legal or legislative means."
"What they are trying to do is to make it difficult as possible for law-abiding people to own a firearm."
To what extent complicated or demanding registration processes impinge on the Second Amendmend right declared in Heller will doubtless be a topic in many future lawsuits--and already is in ongoing suits against Chicago, which requires yearly re-registration, and makes a given weapon eternally unregisterable if you miss a re-reg deadline.
My book on the Heller case and gun control, Gun Control on Trial, is in my hands and should be shipping from Amazon and in stores any ol' day now. For the impatient, an excerpt from it is in the December reason.
"What Price is Life?"
Ten years ago, the British government created the National Institute for Clinical Excellence (NICE) to evaluate the cost/benefit ratio of new medical treatments, especially the costs versus the benefits of pharmaceuticals. Thus government bureaucrats decide whether or not patients should have access to new drugs. This is explicit government rationing. And why not? After all, why should taxpayers be on the hook for costly treatments that may boost a patient's life expectancy by only a few months?
As the New York Times explains:
When Bruce Hardy's kidney cancer spread to his lung, his doctor recommended an expensive new pill from Pfizer. But Mr. Hardy is British, and the British health authorities refused to buy the medicine. His wife has been distraught.
"Everybody should be allowed to have as much life as they can," Joy Hardy said in the couple's modest home outside London.
If the Hardys lived in the United States or just about any European country other than Britain, Mr. Hardy would most likely get the drug, although he might have to pay part of the cost. A clinical trial showed that the pill, called Sutent, delays cancer progression for six months at an estimated treatment cost of $54,000.
But at that price, Mr. Hardy's life is not worth prolonging, according to a British government agency, the National Institute for Health and Clinical Excellence. The institute, known as NICE, has decided that Britain, except in rare cases, can afford only £15,000, or about $22,750, to save six months of a citizen's life...
...the decisions that get the most attention are those involving new drugs. Any drug that provides an extra six months of good-quality life for £10,000 - about $15,150 - or less is automatically approved, while those that give six months for $22,750 or less might get approved. More expensive medicines have been approved only rarely. The spending limits represent the health institute's best guess for how much the nation can afford....
"It's hard to know that there is something out there that could help but they're saying you can't have it because of cost," said Ms. Hardy, who now speaks for her husband of 45 years. "What price is life?"
Some will object that the U.S. already engages in rationing. After all, private health insurance companies limit access to certain drugs or limit the amount they will pay for treatments. In fact, as health care costs escalate, our dysfunctional employment-based health insurance system encourages employers to find the cheapest one-size-fit-all policies for their employees.
A better system would allow people to purchase health insurance policies that reflect their own evaluation of how much an extra bit of life should cost. Some may choose gold-plated policies that pay for nearly any new treatment. Others may decide that it is more important to save money to give to their heirs than to try to purchase a few extra months of life that an expensive policy might provide. In other words, the "rationing" decision would made by individuals rather than by bureaucratic boards eager to protect the pocket books of taxpayers.
However, with the creation of the Medicare prescription drug program, such bureaucratic rationing is probably inevitable in the U.S.
New at Reason: Mike Flynn on the Government's Role in the Financial Meltdown
From our January issue, Mike Flynn explains how concerted government policy helped trigger the financial crisis—and will almost certainly extend it.
Gay Marriage: The Victory After the Defeat
Spinning off of Jacob Sullum's column today on gay marriage and gay rights, a couple of recent analyses of the meaning of gay marriage's electoral defeats last month point out, accurately I think, that gay marriage is seeing its last wave of defeats presaging likely complete victory.
From Michael Brendan Dougherty in the November 17 American Conservative:
Superficially, 2008 seems like a....success for social conservatives. Following the passage of marriage amendments in Arizona and Florida, as well as California, Maggie Gallagher wrote at National Review Online, “when it comes to marriage, there is no such thing as a blue state or a red state. Americans support marriage as the union of husband and wife.” But a closer look at the election results and the legal developments in the past year suggests that 2008 is in fact the year the marriage debate tipped in favor of same-sex marriage.
Only Arizona passed its traditional marriage initiative by 2004-like margins. While only 38 percent voted against the Florida initiative, the measure passed the required 60-percent threshold by just 2 points. In California, Proposition 8 passed by a bare 52 percent of the vote, and exit polls seem to attribute its success to an abnormally high turnout of socially conservative black voters. In Connecticut, voters had the chance to resist their state’s pro-gay-marriage Supreme Court decision, Kerrigan v. Public Health, by voting for a constitutional convention. That initiative failed by 20 points.
.........
Exit polls reveal that without the overwhelming support of voters over 65, neither the Florida nor California marriage initiatives would have passed. Younger voters turned out overwhelmingly against them. Absent an incredible shift in attitudes, same-sex marriage will soon command majority support. Shrinking majorities voting in favor of traditional marriage will encourage similar rulings to the Connecticut court’s. And the legal precedents used in Kerrigan will be used to challenge the 29 state laws restricting marriage to a union of one man and one woman.
The minor victories for marriage traditionalists this year point to defeats in the near future. Unless social conservatives find a way to appeal to voters under 40, [San Francisco Mayor Gavin] Newsom’s prediction, “It’s inevitable,” is unassailable.
Dougherty isn't thrilled by this conclusion; he just thinks it's accurate. And in Rolling Stone, in an article that excoriates the opponents of Prop. 8 for a feckless and slow campaign (which points out that merely saying that the No on 8 forces raised more money than the Yes forces is misleading, since the Yes campaign got moving and raising big bucks much faster), the conclusion is similarly optimistic:
Since 2000, the margin of voters in the state who oppose gay marriage has plunged from 23 points to only four.
"The speed at which this issue is moving is unprecedented in my personal political experience," says Bill Carrick, a prominent Democratic consultant who worked on the presidential campaigns of Bill Clinton and Ted Kennedy. "Support for gay marriage has moved so far, in such a short period of time, that I think we're going to look back at Prop 8 as an aberration. History is headed in a very pro-gay-marriage direction, and it probably is going to happen in a much shorter time than anybody imagines."
It does help pro-gay marriage forces to be of good cheer and remember that we have seen remarkably quick shifts in public perception on this issue; it has gone from the kind of fear of a nightmare future a Falwell would use in a fundraising letter 20 years ago to something supported by many courts and near-majorities of state voters. What's happening now is not a wickedly powerful and on-the-grow religious right taking away some fundamental right we've always known, but a matter of the last fading shows of force from a mentality battered and on the ropes, not one vital and getting stronger, electoral victories notwithstanding.
New at Reason: Jacob Sullum on Gay Rights and Equal Protection
To the average social conservative, gay marriage represents a battle to force "the gay agenda" on people who are morally opposed to homosexuality. To the average gay rights activist, it represents a just struggle for equal treatment under the law. As Senior Editor Jacob Sullum writes, the key to reconciling these perspectives lies in recognizing the crucial distinction between public and private discrimination.
Happy Security!
Cute security cameras. Making the surveillance state easier to love! From Crunchgear:
Surveillance cameras can sometimes give you a creepy feeling (especially the ones you can’t directly see) but the nation of cute- and friendliness, Japan, now offers two solutions for that problem.
One example of a “friendly” CCTV camera is the Daruma surveillance doll. Daruma is a wish doll in Nippon so that many Japanese people see the little guy in a positive light by nature (even though it says “security camera” on the doll in the video above).
For more on the upsides of zero privacy, read me and reason contributor Declan McCullagh.
Obama Apparently Drops Windfall Profits Tax Proposal
During the campaign, President-elect Barack Obama promised to stick it to Big Oil with a windfall profits tax. At the time, reason explained why such a tax was a bad idea:
Sen. Barack Obama (D-Ill.) is also calling for a windfall profits tax on oil companies. But will it work?
The last time the United States imposed a windfall profits tax on oil companies was in 1980 and it lasted until 1988. The result, according to a 1990 Congressional Research Service analysis, was that the tax on oil company profits decreased domestic production by 3 percent to 6 percent and increased dependence on foreign oil by 8 percent to 16 percent. Keep in mind that the big private oil companies actually control only about 6 percent of the world's known oil reserves—the rest are owned by gigantic foreign national oil companies. And just where do private oil companies get the billions they invest in projects to increase supplies? That's right; their profits.
Obama has now quietly dropped the idea:
President-elect Barack Obama has removed any reference of his promise to implement a windfall profits tax on the oil and gas industry from the Obama-Biden Transition Team website, www.change.gov.
Activists are dismayed:
With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan. The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League (ASBL) questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration.
Hooray for economic sanity.
Sick Chickens and Blue Buzzards
Economist Steven Horwitz has a great post at Liberty & Power telling the remarkable story of the Schechter brothers, the Kosher butchers who fought FDR's New Deal all the way to the Supreme Court and won:
As part of its legislation, the [National Recovery Administration] had all kinds of detailed codes for individual industries, describing to the letter how firms must do their business. The Schechters fell under the "Code of Fair Competition for the Live Poultry Industry of the Metropolitan Area in and About the City of New York" (and you thought Atlas Shrugged was fiction....). Among the things the code prohibited was "straight killing" which meant that customers could buy a whole or half coop of chickens, but did not have the right to make any selection of particular birds (such individual selecction was "straight killing").
This last rule was in direct conflict with Kashrut laws, which also served as an informal health code in the Jewish community. As [Amity] Shlaes points out, the phrase "glatt kosher" referred to the fact that the lungs of the animal were smooth (which is what "glatt" means) and therefore free of tuberculosis. Inspecting the lungs was part of the official process of conferring Kosher status on a butcher shop. Removing unhealthy animals from the stock was one of the core principles of keeping Kosher, and the rabbinical inspectors were fanatic about doing this. But so were customers. As Shlaes points out, individual customers, both retailers and their customers, had the right to refuse individual animals. This minimized the risk of an unhealthy animal getting through when both seller and buyer did such inspections. And it ensured that the kosher laws served as a health code, or perhaps something more like the Underwriters Laboratory or Good Housekeeping seal.
The Schechters, as you may have guessed, were targeted by the NRA enforcement crew. They were inspected repeatedly during the summer of 1934, which forced them to violate their own Kashrut practices, telling customers that they could not reject individual birds as keeping Kosher allowed. Not surprisingly, their deeply religious customer base began to dwindle. The constant inspection turned up a variety of violations, including allegations that they had, in fact, sold sick chickens (not surprising, if true, given that part of their own internal inspection process was negated by the NRA code itself!). They were also accused of “competing too hard” and keeping prices “too low."
Thankfully, the Supreme Court saw things differently, holding in Schechter Poultry Corp. v. United States (1935), that, "It is not the province of the Court to consider the economic advantages or disadvantage of such a centralized system. It is sufficient to say that the Federal Constitution does not provide for it."
For more on why the New Deal wasn't so great after all, see here, here, and here.
Resisting the Neatness Police
Kenneth City, Fla. council members want their fellow residents to cut their grass, paint their houses, and allow officials to inspect homes to make sure that everyone is meeting acceptable standards of neatness.
But a motley crowd of voters showed up to object to the new ordinance. According to the St. Petersburg Times:
Council members caved in to demands from an angry crowd and delayed approving a neatness ordinance until officials explain every word of the 26-page document to Kenneth City residents.
In what was estimated to be the largest crowd to ever attend a Kenneth City Council meeting, an outraged group of residents railed at the proposal that would regulate the upkeep of both the exterior and interior of all property in the town.
The proposal basically sets standards for upkeep and appearance and gives town officials the right to enter homes. If the owner refuses to allow the official to enter, the town can go to a judge for an "administrative search warrant" to allow access to the interior of buildings. Violations would cost up to $250 a day.
Angry residents likened the proposal to rules created by Communist or Nazi dictatorships. One person said the result would be to create a network of spies to snitch on neighbors to council members and other town officials. Someone suggested the town should change its name from Kenneth City to "Petty City."
Apparently the ordinance is not all that unusual. As the St. Pete Times reports:
...the ordinance is a virtual copy of others in places like Fort Walton Beach and Belleair Beach.
Nothing like local tyrannies! Whole article here.
Hat tip to D.A. Ridgely.
Murder Chic in Manhattan
If you happened upon a bronze statue of Che Guevara on Fifth Avenue in Manhattan today, its creator, artist Christian Janowski, wants you to know that it is merely a representation of the Argentinean imperialist—it's actually a Barcelona-based street performer playing the revolutionary.
At the New York Times' City Room blog, David Gonzalez tartly explains Guevara's legacy to one clueless, yet curious, tourist snapping photos of the newly installed art work:
"That's Che Guevara, right?" said Sean Kelly, who was visiting from Ames, Iowa. "I'm kind of interested in his beliefs and the kind of stuff he did."
There were the executions when he presided over the prison at La Cabaña. Or his stated willingness to have let the missiles fly had they been under Cuban control, according to a newspaper interview cited by the biographer Jon Lee Anderson. And as several conservative commentators have noted, soon after the 1962 crisis, Che was preparing to export revolution while Cuban diplomats in New York were implicated in a plot to blow up, among other targets, department stores in New York City on the day after Thanksgiving.
When a passing bike messenger explains that Che was about "liberation," about societies where hipsters wouldn't have deliver packages to corporate fat-cats on fix-gear bicycles, but could start their own Williamsburg Social Club on that people's dime, Gonzalez helpfully adds that "For some Cubans, liberation means rolling the dice on a raft trip across the Florida Straits."
And oh, how The Times has changed: reason contributing editor Glenn Garvin on the paper's Castrophilic former Cuba correspondent Herb Matthews here.
New at Reason: Shikha Dalmia on the Big Three Bailout
The former Big Three automakers are back in D.C. to scare up $25 billion more on top of the $25 billion they've already received from Uncle Sam. But as Shikha Dalmia writes, these companies will need divine—not government—intervention to survive. So why use taxpayer money to postpone the inevitable?
I Plumb, Therefore I Am
For some reason The American Spectator asked Samuel Joseph "Joe the Plumber" Wurzelbacher to contribute to its "books for Christmas" recommendations list. Joe recommends three (3) books on plumbing, including Flushed with Pride: The Story of Thomas Crapper, as well as this book:
The Theory of Money and Credit by Ludwig von Mises. The book is a 1912 study of monetary theory. It brought monetary theory into the mainstream of economic analysis. It is important reading for these troubled times.
I never believed that Joe was an "undecided voter." He was clearly an free market conservative who thought Social Security was a "joke."
New at Reason: Ron Bailey on the Latest Round of Climate Change Talks
Delegates from 190 nations are gathering in Poznan, Poland to launch the latest round of global warming negotiations. But as Science Correspondent Ronald Bailey writes, they face three significant obstacles to completing a new international treaty.
Beth Hoffman, R.I.P.
Beth Hoffman, the longtime managing editor of The Freeman, the flagship publication of the Foundation for Economic Education, the first distinctly modern libertarian educational organization, has died at age 58. From FEE's note on her passing (which includes a reprint of a great explanation of inflation she wrote to a 10-year-old in 1981):
Freeman editor Sheldon Richman added, "We've lost a devoted, passionate champion of freedom and the free market, as well as the best steward of the English language that I've known. Her skills and dedication made a lasting impression on many people even if only by telephone, letter, or e-mail. In her low-key way she was a mentor to many, many young people who came through FEE over the years."
There's Safety in a Union
Well that didn't take long. Just a few days after the death of a Wal-Mart employee in Long Island, following a stampede of psychotic "Black Friday" shoppers, a spokesman for the United Food and Commercial Workers International Union, longtime nemesis of the behemoth from Bentonville, was already exploiting the tragedy. CNN has details:
The union is calling for an investigation "by all levels of government" to ensure justice for Damour's family and make sure that such an incident never happens at Wal-Mart again.
"If the safety of their customers and workers was a top priority, then this never would have happened," said Patrick Purcell, a projects director for the local UFCW. "Wal-Mart must step up to the plate and ensure that all those injured, as well as the family of the deceased, be financially compensated for their injuries and their losses. Their words are weak."
The UFCW has long been a harsh critic of Wal-Mart's, arguing that the world's largest retailer offers low wages and poor health care for its workers and pushes competitors and suppliers to do the same or go out of business.
It is true, in its way. Perhaps the UFCW could argue that had
the Long Island Wal-Mart been a union shop, wages would be much
higher, as would be the price of the products on its shelves—thus
potentially preventing the crush of bargain hunters.
In other Wal-Mart stampede news, the New York Times refers
to the death in Long Island as a "shopping Guernica," comparing the
trampling death to a Nazi bombing raid during the Spanish Civil
War. And according to the Times,
it was all rather predictable anyway, because big business like
Wal-Mart are controlling our minds and making us kill for plasma
televisions:
I wrote about the history of anti-big box hysteria here.
Reason Writers Around Town: Matt Welch on Religion, Tolerance, and Cross-Faith Communication
In The Washington Post, Editor in Chief Matt Welch reviews Gustav Neibuhr's Beyond Tolerance, an elegant and engaging look at the search for interfaith understanding in America.
The Long Arm of Liability
Massachusetts' highest court has ruled that a livery service is liable for a drunk driving fatality caused by one of its customers—after he had been dropped off. Seems like a helluva' stretch to get to negligence, here.
The Supreme Judicial Court found that Ultimate Livery Service Inc. of Boston and its driver, Richard Broderick, were negligent in a 2001 accident that killed an off-duty Boston police officer and left several other people with serious injuries.
The court said Broderick should not have dropped off a drunk passenger at a location where he would probably get into a car and drive.
Even here, I'd have a problem with the ruling. But it's actually worse. The service didn't drop the passenger off at a parking lot, or at his car. It dropped him off at another bar.
William Powers, along with five other men, had hired Ultimate to take them to a bachelor party on the night of Aug. 11, 2001. The driver picked them up in a 15-passenger van at a South Boston sports bar, took them to a strip club in Rhode Island, then drove them back to the sports bar. The men drank in both bars and during the ride to and from Rhode Island.
Powers, joined by two of the men, drove away after being dropped off and had a violent intersection collision with another car. The crash killed Sean Waters, an off-duty police officer who was a passenger in the other car, and passengers in both cars were injured.
Lawsuits were filed by Waters's estate and the injured passengers, claiming that Ultimate and its driver were negligent in allowing Powers to leave the van at the Boston bar when they knew, or should have known, that Powers was probably going to drive a car while intoxicated.
Because the driver in this case helped Powers and his friends get drunk (he stopped so they could buy more liquor) the court could have just used this case to extend the state's dram shop liability laws. That would have been bad enough. But the notion that a driving service is somehow supposed to discern the intent of its customers after they leave the vehicle is absurd. It also isn't difficult to see how that level of liability might put a damper on these sorts of services, which would actually make the state's roads more dangerous.
I also wonder what a taxi or limo driver who suspects an intoxicated passenger might drive at some point in the night is supposed to do, particularly if the customer demands to be let out. Drive them around until they're sober? Drive them to a police station? Should they make possibly intoxicated passengers sign a waiver promising not to drive until they're sober?
(Thanks to David Boaz for the tip.)
CORRECTION: The A.P. has posted a correction in the article linked above. The court ruled that this particular case should be heard by a jury, and overruled a lower court's dismissal of the complaint. The ruling basically holds open the possibility that driving services could be found negligent in these sorts of cases. But barring a settlement, the Ultimate Livery Service case will now be tried before a jury.
No Depression?
It's becoming increasingly clear that the battle of ideas over all things related to our newly certified recession and $8.5 trillion (so far) bailout is boiling down to a fascinating revisionist face-off over the Great Depression: its causes, its effects, its solutions. Are we indeed in, or headed toward, the worst economic crisis since the Great Depression, and if so what lessons apply? A Greek-tragedy twist on all this is that Fed Chair Ben Bernanke is an economic historian who specialized in...the Great Depression! As such, his thoughts on the analogy are both fascinating and crucial. Here's what he said yesterday:
"Well, you hear a lot of loose talk, but let me just ... say, as a scholar of the Great Depression -- and I've written books about the Depression and been very interested in this since I was in graduate school, there's no comparison," Bernanke said in a question period after an address in Austin, Texas.
Bernanke cited "an order-of-magnitude difference" in the current situation compared to the 1930s.
"During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war," he said.
"During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent." [...]
Still, the Fed chief said lessons learned from the Depression may still apply today, including the "excessively tight monetary policy" that led to higher interest rates and deflation of about 10 percent a year over the first three years of the 1930s.
"We have learned from that experience that monetary policy has got to be proactive and supportive of the economy in a situation of difficult financial conditions," he said.
"The other part was -- the other error, the big mistake that policymakers made in the early '30s was they essentially allowed the financial system to collapse and they didn't do anything about it. The Federal Reserve did no action as the banks failed by the hundreds and the thousands."
More here, including a section about President Bush that seems to contradict Bernanke's this-ain't-the-'30s view:
President George W. Bush said in an interview released Monday that Bernanke and Treasury Secretary Henry Paulson warned him weeks ago that bold action was needed to avert a new Great Depression.
"I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don't act boldly, Mr. President, we could be in a depression greater than the Great Depression," Bush told ABC News.
What has reason been writing on the Great Depression for the past 40 years?
* In January 2004, Julian Sanchez conducted a brief interview with Jim Powell, author of FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression.
* Four years later, Nick Gillespie interviewed The Forgotten Man author Amity Shlaes.
* In October 2004, Damon Root looked at "How FDR made life worse for African Americans."
* In June of this year, we polled seven market-friendly economic observers, all of whom (unlike me!) pronounced that we were either in or entering recession.
* At the height of bailout panic, we sampled another batch of libertarian economists about what they thought.
* And in a wonderfully prescient November 2006 piece, Brian Doherty discussed among five economic analysts (including Milton Friedman and Ron Paul) whether we can bank on the Federal Reserve, and specifically what they thought of Ben Bernanke's analyses of the Great Depression.
"Unlike bank bailouts and auto loan guarantees, state and local aid does not rely on the business strategies of traumatized corporate executives to be effective"
It's almost cute to watch them compete with one another for our money.
New at Reason: Tim Cavanaugh on the Enduring Appeal of Dystopian Entertainment
From our January issue, Contributing Editor Tim Cavanaugh examines the enduring appeal of nightmare visions that didn't come true, from George Orwell's 1984 to Frank Zappa's rock opera Joe's Garage.
More Death, More Drug Raids Gone Wrong: FBI Edition
The family of Laquisha Turner, a 17-year-old quadriplegic woman who died last week in Richmond, California, is blaming her death on an FBI drug raid of their home.
"When I opened the door I said, 'I have a disabled daughter...you guys are going to scare her, you can come in and search, do whatever you have to do,' but by this time they were coming in the side door shooting things," West said.
West believes the agents used tear gas during the raid on her house.
The agents were serving a for West's son, wanted on felony drug charges. The FBI declined to comment to ABC7, citing an ongoing investigation, but sources close to the raids said the agents used flash-bang gernades, not tear gas but admitted they do leave a cloud of smoke.
Turner was kept inside, breathing the air while waiting for paramedics while the raid went on.
"They kept telling her to get down on the ground and she kept telling them, 'I can't get down,'" West said.
The FBI was apparently looking for Turner's brother, who is wanted on felony drug charges. Oddly, Turner was paralyzed after being shot two years ago in a drive-by targeted at her boyfriend. That shooting led to retaliatory shootings that precipitated the series of FBI raids last month. Prosecutors may now charge her assailants with murder.
It's too early to say if Turner's death was directly attributable to the raid. Her family is awaiting the results of an autopsy. And it's difficult to muster much outrage over the more severe charges for the men who shot her two years ago. But regardless of whether the raid was a factor in her death, she was needlessly put through another horrifying experience. Once again we have police storming a house with guns and flashbangs to apprehend a drug offender. And once again, it looks like they didn't first bother to check to see who might be inside (if they knew Turner was inside and chose the paramilitary tactics anyway, all the worse). In this case, they at best terrified—and at worst may have killed—the very woman whose injury set off the reason for the raids in the first place.
This comes a couple of weeks after a drug raid in Pittsburgh that resulted in the first on-duty death of an FBI agent in more than a decade. Agent Samuel Hicks was shot and killed when Christina Korbe, the wife of suspect Robert Korbe, says she mistook the raiding FBI agents for armed robbers, and fired blindly down the stairs to her home. While Robert Korbe is a repeat drug offender, Christina had no prior record, and claims she was protecting her 10- and 4-year-old children, who were asleep upstairs during the 6 am raid. She called 911 shortly after shooting Hicks. She has been charged with criminal homicide.
It's Official: The Greatest Multi-Trillion Dollar Economic Crisis in the History of Creation Has Led to a Recession
So saith the Business Cycle Dating Committee of the National Bureau of Economic Research. Many (though not all) significant macro measures of economic growth have been on the downhill slide since the last quarter of 2007. The heart of the matter:
The committee determined that the decline in economic activity in 2008 met the standard for a recession..... All evidence other than the ambiguous movements of the quarterly product-side measure of domestic production confirmed that conclusion. Many of these indicators, including monthly data on the largest component of GDP, consumption, have declined sharply in recent months.
And some specifics:
The committee identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession.
Payroll employment, the number of filled jobs in the economy based on the Bureau of Labor Statistics’ large survey of employers, reached a peak in December 2007 and has declined in every month since then. An alternative measure of employment, measured by the BLS’s household survey, reached a peak in November 2007, declined early in 2008, expanded temporarily in April to a level below its November 2007 peak, and has declined in every month since April 2008..............
Our measure of real personal income less transfers peaked in December 2007, displayed a zig-zag pattern from then until June 2008 at levels slightly below the December 2007 peak, and has generally declined since June...........
The last monthly measure of production is the Federal Reserve Board’s index of industrial production. This measure has quite restricted coverage—it includes manufacturing, mining, and utilities but excludes all services and government. Industrial production peaked in January 2008, fell through May 2008, rose slightly in June and July, and then fell substantially from July to September. It rose somewhat in October with the resumption of oil production disturbed by hurricanes in the previous month. The October value of the industrial production index remained
a substantial 4.7 percent below its value in January 2008.
The committee noted that the behavior of the quarterly estimates of aggregate production was not inconsistent with a peak in late 2007. The income-side estimate of output reached its peak in the third quarter of 2007. The product-side estimate reached a temporary peak in the same quarter, but rose to a higher level in the second quarter of 2008.
Link via Marginal Revolution.
A Lesson From Mumbai on The Occasional Futility of Common Terror Countermeasures
Some observations, which seem spot on to me, from security maven Bruce Schneier:
If there's any lesson in these attacks, it's not to focus too much on the specifics of the attacks. Of course, that's not the way we're programmed to think. We respond to stories, not analysis. I don't mean to be unsympathetic; this tendency is human and these deaths are really tragic. But 18 armed people intent on killing lots of innocents will be able to do just that, and last-line-of-defense countermeasures won't be able to stop them.
- If a bunch of men with guns and grenades is all they really need, then why isn't this sort of terrorism more common? Why not in the U.S., where it's easy to get hold of weapons? It's because terrorism is very, very rare.
- Specific countermeasures don't help against these attacks. None of the high-priced countermeasures that defend against specific tactics and specific targets made, or would have made, any difference: photo ID checks, confiscating liquids at airports, fingerprinting foreigners at the border, bag screening on public transportation, anything.....
Another salutary thing we can learn from Mumbai, given that the resources and openings to commit horrible crimes like this are quite common, is that it seems there just aren't that many people inclined to commit acts like this, even if they can't really be prevented from doing so.
Instapundit w/links on gun control, and a lack of inclination on the part of even the legally armed to shoot, in India.
Schneier's name is oft-dropped here at reason.
Link via Unqualified Offerings.
Freedom of Speech (Just Watch What You Say)
Neil Gaiman, the acclaimed author of Sandman, American Gods, and many other superb works of fantastic fiction, has a very long and very good post at his blog on why defending freedom of speech sometimes means "defending the right of people to read, or to write, or to say, what you don't say or like or want said." He's writing in response to the case of Christopher Handley, an Iowa man facing up to 20 years in prison for possessing comic books that allegedly depict minors engaged in sexual activity. These aren't photographs, it's worth repeating, they're illustrations. Here's Gaiman:
When I was writing Sandman, about eighteen years ago, I had thought that the Marquis de Sade would make a fine character for my French Revolution story (I loved the fact that at the time he was a tubby, asthmatic imprisoned for his refusal to sentence people to death) and realised I ought to read his books, rather than commntaries on them, if I was going to put him in my story. I discovered that the works of DeSade were, at that time, considered obscene and not available in the UK, and that UK Customs had declared them un-importable. I bought them in a Borders the next time I was in the US, and brought them through customs looking guilty. (You can now get De Sade in the UK. The arrival of internet porn in the UK meant that the police stopped chasing things like that.)
[...]
Freedom to write, freedom to read, freedom to own material that you believe is worth defending means you're going to have to stand up for stuff you don't believe is worth defending, even stuff you find actively distasteful, because laws are big blunt instruments that do not differentiate between what you like and what you don't, because prosecutors are humans and bear grudges and fight for re-election, because one person's obscenity is another person's art.
Because if you don't stand up for the stuff you don't like, when they come for the stuff you do like, you've already lost.
Whole thing here. reason on the panic over virtual porn here and here.
Spaceballs!
Guys like him gave guys like them wedgies in middle school. But former Washington Redskin Ken Harvey had full attention from an audience of NASA engineers, technicians, and scientists for a reason other than abject fear last month: space football.
"There’s a bonus," [said Harvey], "where you have to pick up a person holding a certain ball and throw them through a hoop as a sort of extra point.”
Wonder who he's thinking of for that move?
Of course, Harvey's idea has a little competition from some characters that I wrote about a couple of years ago: Space Champions: Zero Gravity.
Maybe when they get around to building that stadium on Mars there can be some inter-league mixing.
Play a lame computer simulation here. Upside, no gravity-confusion induced vomiting!
New at Reason: Matt Welch on Barack Obama's Promises of Fiscal Responsibility
From our January issue, Editor in Chief Matt Welch examines the president-elect's promises to make his budget figures "add up."
Attn, DC Reasonoids: Russ Roberts & Nick Gillespie Discuss The Price of Everything on Mon., Dec. 1 at Cato Institute
What: Come to a discussion of the new novel The Price of Everything, featuring the author Russell Roberts, Professor of Economics, George Mason University; with comments by Nick Gillespie, editor in chief of reason.tv and reason online.
Where: The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC 20001
When: Monday, December 1, 12PM (lunch follows immediately)
Why: George Will writes in Newsweek, "Improbable as it might seem, perhaps the most important fact for a voter or politician to know is: No one can make a pencil. That truth is the essence of a novella that is, remarkably, both didactic and romantic. Even more remarkable, its author is an economist. If you read Russell Roberts's The Price of Everything: A Parable of Possibility and Prosperity, you will see the world afresh-unless you already understand Friedrich Hayek's idea of spontaneous order. Roberts sets his story in the Bay Area, where some Stanford students are indignant because a Big Box store doubled its prices after an earthquake. A student leader plans to protest Stanford's acceptance of a large gift from Big Box. The student's economics professor, Ruth, rather than attempting to dissuade him, begins leading him and his classmates to an understanding of prices, markets and the marvel of social cooperation." Roberts will discuss his novel way of teaching economics at a Cato Book Forum, with comments by Nick Gillespie, a literature Ph.D. who is surely the only journalist to have interviewed both Ozzy Osbourne and the 2002 Nobel laureate in economics, Vernon Smith.
Cato events, unless otherwise noted, are free of charge. To register for this event, please email events@cato.org, fax (202) 371-0841, or call (202) 789-5229 by noon, Friday, November 28, 2008. Please arrive early. Seating is limited and not guaranteed. News media inquiries only (no registrations), please call (202) 789-5200.
Russ Roberts discusses his novel on reason.tv:
Posse Comitatus Goes Belly Up
The U.S. military expects to have 20,000 uniformed troops inside the United States by 2011 trained to help state and local officials respond to a nuclear terrorist attack or other domestic catastrophe, according to Pentagon officials.
The long-planned shift in the Defense Department's role in homeland security was recently backed with funding and troop commitments after years of prodding by Congress and outside experts, defense analysts said.
There are critics of the change, in the military and among civil liberties groups and libertarians who express concern that the new homeland emphasis threatens to strain the military and possibly undermine the Posse Comitatus Act, a 130-year-old federal law restricting the military's role in domestic law enforcement.
But the Bush administration and some in Congress have pushed for a heightened homeland military role since the middle of this decade, saying the greatest domestic threat is terrorists exploiting the proliferation of weapons of mass destruction.
Before the terrorist attacks of Sept. 11, 2001, dedicating 20,000 troops to domestic response -- a nearly sevenfold increase in five years -- "would have been extraordinary to the point of unbelievable," Paul McHale, assistant defense secretary for homeland defense, said in remarks last month at the Center for Strategic and International Studies. But the realization that civilian authorities may be overwhelmed in a catastrophe prompted "a fundamental change in military culture," he said.
I predict that while now couched in terms of the necessity for a ready response to a cataclysmic terrorist attack, within five years there will be calls to use these forces for less urgent matters, such as crowd control at political conventions, natural disaster response, border control, and, inevitably, some components of the drug war (looking for marijuana in the national parks, for example).
Here's hoping Obama scales this back. Or if he doesn't, that, with a Democrat in the White House, the Republicans rediscover the way they once got the heebie-jeebies over this stuff.
Reason Writers Around Town: Jesse Walker on the Forgotten Antifederalist Luther Martin
In The American Conservative, Managing Editor Jesse Walker reviews Forgotten Founder, Drunken Prophet, Bill Kauffman's engrossing new biography of Luther Martin, the long-winded Baltimore attorney who stood up for states’ rights during the debates over the U.S. Constitution.
LEAP on Repeal Day
The gang at Law Enforcement Against Prohibition—a group of ex-cops, judges, and prosecutors who've come out against the drug war—will commemorate the 75th anniversary of the repeal of alcohol prohibition with an event tomorrow at the National Press Club. From the press release:
On Tuesday, December 2, a group of law enforcers who fought on the front lines of the “war on drugs” and witnessed its failures will commemorate the 75th anniversary of alcohol prohibition’s repeal by calling for drug legalization. The cops, judges and prosecutors will release a report detailing how many billions of dollars can be used to boost the ailing economy when drug prohibition is ended.
“America’s leaders had the good sense to realize that we couldn’t afford to keep enforcing the ineffective prohibition of alcohol during the Great Depression,” said Terry Nelson, a 30-year veteran federal agent and member of Law Enforcement Against Prohibition (LEAP). “Now, cops fighting on the front lines of today’s ‘war on drugs’ are working to make our streets safer and help solve our economic crisis by teaching lawmakers a lesson from history about the failure of prohibition. We can do it again.”
Here's LEAP's compelling promotional video:
"But what about those of us in the nonprofit world? Where's our bailout?"
Nope, not The Onion. Here's the sales pitch:
My child-care agency, supported largely by government contracts -- federal and state dollars partially matched by county funds -- went nine years without an increase in the rate of funding it receives. During those years, the cost of a child-care worker rose from $23,000 a year to $29,000 a year. Multiply that figure by our 100 child-care workers, and we are facing a $600,000 shortfall in just one job category. No industry in the public or private sector could have survived nine years of flat funding.
How will we make up that shortfall? Fundraising? Unlikely, in this economy. And investment losses have had a profoundly negative effect on endowed organizations. We need a bailout.
reason's sock puppet and assorted goodies here.
Balko Speaking on Repeal Day
This Friday, I'll be speaking at a Cato Institute forum commemorating the 75th anniversary of Repeal Day. Here are the details:
Free to Booze: The 75th Anniversary of the Repeal of Prohibition
POLICY FORUM
Friday, December 5, 2008
3:30 PM (Reception To Follow)Featuring Michael Lerner, author of Dry Manhattan: Prohibition in New York City; Glen Whitman, author of Strange Brew: Alcohol and Government Monopoly; Asheesh Agarwal, Former Assistant Director of the Federal Trade Commission's Office of Policy Planning; and Radley Balko, Senior Editor, Reason. Moderated by Brandon Arnold, Cato Institute.
The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC 20001Watch the Event Live in RealVideo
Listen to the Event in RealAudio (Audio Only)On December 5, 1933, the 21st Amendment to the Constitution was ratified, thus ending our nation’s failed experiment with Prohibition. Organized crime flourished during Prohibition, but what were the other effects of the national ban on alcohol? How and why was it repealed? Please join the Cato Institute for a celebration of the 75th anniversary of the repeal of Prohibition and a discussion of its legacy and continuing impact on America. Drinks will be served following the discussion.
Cato events, unless otherwise noted, are free of charge. To register for this event, please fill out the form below and click submit or email events@cato.org, fax (202) 371-0841, or call (202) 789-5229 by 3:30 PM, Thursday, December 4, 2008.
Here's the link to register online.
$8.5 Trillion and Counting
The L.A. Times on Sunday updated the numbers on 2008's historic (and historically awful) round of bailouts, and came out with a shiny new figure: $8.5 trillion. It's a useful piece of journalism, so I almost hate to complain, but the lead-paragraph framing is really annoying:
With its decision last week to pump an additional $1 trillion into the financial crisis, the government eliminated any doubt that the nation is on a wartime footing in the battle to shore up the economy. The strategy now -- and in the coming Obama administration -- is essentially the win-at-any-cost approach previously adopted only to wage a major war.
What a godawful mix of imprecise, played-out metaphors ("wartime footing," "battle," "major war") and couldn't-possibly-be-accurate absolutism ("eliminated any doubt," "win-at-any-cost approach," "only"). As in the inaccurate, propogandistic usage of "rescue" over "bailout," this paragraph conveys the impression that the financial crisis can be likened to a finite, singular goal, one that can be accomplished if only you marshal enough resources. Neither are true. Globalized economies are organisms that evolve constantly, not stationary mountains that can be climbed with enough sherpas. And by definition, not all government interventions into a national economy get you closer to the goal of allaying a capital-C Crisis, particularly when key elements of said Crisis (politicized lending practices, moral hazard caused by federal guarantees, cheap monetary supply, mark-to-market accounting rules) were caused by...government intervention!
Anyway, the rest of the article is actually about that latter conundrum, which is another reason to read it. Here is a section devoted to sanity:
Once the financial crisis eases, higher interest rates and soaring inflation will be risks. If they materialize, they could dramatically increase the government's borrowing costs to meet its annual debt payments. For consumers, borrowing could become more expensive even as the price of everyday items rise, holding back economic growth.
"We could have a super sub-prime crisis associated with the meltdown of the federal government," warned David Walker, president of the Peter G. Peterson Foundation and former head of the Government Accountability Office.
My only quibble there being with the word "if," since we will have bailout-triggered inflation, mes amis.
And here's a quote that scares me:
"You just throw everything you have at the problem to try to fix it as quickly as you can," said David Stowell, a finance professor at Northwestern University's Kellogg School of Management. "We're mortgaging our future to a certain extent, but we're trying to do things that give us a future."
As the economics journalist Amity Shlaes told Nick Gillespie in a January 2008 interview, such kitchen-sink problem solving, and the uncertainty it creates, certainly prolonged the Great Depression. A selection from that interview:
Both the Hoover and Roosevelt administrations (but especially the Roosevelt administration) were so unpredictable. That hurt the economy very much, and when I went back and saw the extent I was astounded. Uncertainty is a factor that I thought needed to be explored. There were lots of people who said, "I will not invest 'til I know what's going to happen."
During the Depression, you heard the phrase "bold, persistent experimentation" all the time. We've been taught that was good. Somebody had to do something, was what we learned. But what I saw was this enormous cost, especially during the second half of the 1930s.
Atlas Fugged: Adventures in Ayn Rand Inspired Dating Services
Blogger extraordinaire and serial novelist Alan Vanneman points, via Andrew Sullivan, to this New York mag bit on The Atlasphere, an Ayn Rand-inspired dating service. Random comments at the virtual Regal Beagle of Galt's Gulch:
waitingfordagny, Chicago, Illinois
I want to meet a serious woman who both challenges me intellectually and inspires me to noble things by her beauty.Michael, Naples, Florida
Long ago a very dear friend, Angie, turned me on to Ayn Rand and Atlas Shrugged.Parenthetically, she also turned me on in other ways. Alas, our relationship remained Platonic.
Contact Me If You ... : are Angie.
dpvabc, Edmonton, Canada
My name is Daniel. I consider myself to be a born-again egoist and I have dedicated the rest of my life to self-improvement. People see me as a socially inept loner because I tend to avoid superficial conversation but actually I love talking to people who like to think (the problem being I don't know very many).mxjohnxm, Greenville, South Carolina
"One can't love man without hating most of the creatures who pretend to bear his name."...lostpainting, Hagerstown, Maryland
Please note: If you're overweight, I won't date you. If you believe in God, I won't date you. If you vote for Democrats, I won't date you.Chinoy, Manila, Philippines
My individualism takes precedence at all costs, if not at all times.
Reason noted the start of the Atlasphere back in 2003.
Reason on the long-lasting impact of Ayn Rand on American popular culture here and here and here.
New at Reason: Steve Chapman on the Case for Gay Adoption
Laws against gay adoption say, in effect, that a child may not be adopted by gays even when the adoption is in the best interest of the child. But as Steve Chapman writes, the real meaning of family values is that the best interest of the child always comes first.
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