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Saturday

26

July 2014

0

COMMENTS

Sen. Paul Moves to Breathe Life Back Into Fifth Amendment

Written by , Posted in Big Government, The Courts, Criminal Justice & Tort

Right now, it is possible and quite common for the government to seize personal assets without trial or any other form of due process. Under what’s known as civil asset forfeiture, police can take property they claim may be part of a crime, though they need not prove so, and put that money in their department’s pocket. This gives police departments incentive to steal. To make matters worse, it is then up to the victim to prove their innocence, often at significant cost, if they want any hope of getting their property back.

Rand Paul has introduced a bill that would end this despicable practice:

Sen. Rand Paul yesterday introduced S. 2644, the FAIR (Fifth Amendment Integrity Restoration) Act, which would protect the rights of citizens and restore the Fifth Amendment’s role in seizing property without due process of law. Under current law, law enforcement agencies may take property suspected of involvement in crime without ever charging, let alone convicting, the property owner. In addition, state agencies routinely use federal asset forfeiture laws; ignoring state regulations to confiscate and receive financial proceeds from forfeited property.

The FAIR Act would change federal law and protect the rights of property owners by requiring that the government prove its case with clear and convincing evidence before forfeiting seized property. State law enforcement agencies will have to abide by state law when forfeiting seized property. Finally, the legislation would remove the profit incentive for forfeiture by redirecting forfeitures assets from the Attorney General’s Asset Forfeiture Fund to the Treasury’s General Fund.

Radley Balko has more on how the law will also stop state and local officials from skirting state law by conspiring, for a kickback, with the feds.

The bill would also require states “to abide by state law when forfeiting seized property.” This is important. Currently, a number of state legislatures across the country have passed reform bills to rein in forfeiture abuses. The problem is that the federal government has a program known as “adoption” or “equitable sharing.” Under the program, a local police agency need only call up the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives or similar federal agency. That agency then “federalizes” the investigation, making it subject to federal law. The federal agency then initiates forfeiture proceedings under the laxer federal guidelines for forfeiture. The feds take a cut and then return the rest — as much as 80 percent — back to the local agency. This trick thwarts the intent of state legislature that have attempted to make civil forfeiture more fair when it comes to burden of proof, protections for innocent property owners and eliminating the perverse incentive of allowing forfeiture proceeds to go to the same police agency that made the seizure.

Which brings us to a final important provision in the bill: It would “would remove the profit incentive for forfeiture by redirecting forfeitures assets from the Attorney General’s Asset Forfeiture Fund to the Treasury’s General Fund.

To put it simply, agencies of the federal government have engaged in a criminal conspiracy with state police departments to loot and rob the American people. It’s about time that someone take the obvious position of ending their abuses.

Friday

18

July 2014

0

COMMENTS

Government Moves to Shake Down FedEx Because They Don’t Spy on Packages

Written by , Posted in Big Government, The Courts, Criminal Justice & Tort

You would think that enforcement of terrible US drug laws would be the responsibility of the myriad government agencies lavishly funded to harass American citizens based solely on what they put in their own bodies. But according to the government, enforcement is apparently actually the responsibility of FedEx.

FedEx Corp. was indicted for delivering prescription pain pills, sedatives, anti-anxiety drugs and other controlled substances for illegal Internet pharmacies.

The operator of the world’s largest cargo airline was charged by the U.S. with 15 counts of conspiracy to distribute controlled substances and misbranded drugs and drug trafficking that carry a potential fine of twice the gains from the conduct, alleged to be at least $820 million for it and co-conspirators. The company, while denying the allegations, said today in a regulatory filing that conviction could be “material.”

…The criminal case is an unprecedented escalation of a federal crackdown on organizations and individuals to combat prescription drug abuse, said Larry Cote, an attorney and ex-associate chief counsel at the U.S. Drug Enforcement Administration.

“Targeting a company that’s two, three steps removed from the actual doctor-patient, pharmacy-patient relationship is unprecedented,” said Cote, who advises companies in the drug supply chain on compliance matters.

Note that we’re not talking about delivering cocaine for the cartel here, but rather medicines that government artificially restricts and keeps from patients and those who need them. Nevertheless, the government insists not only that selling medicine is a no good, horrible bad thing, but that it furthermore is the responsibility of FedEx to know what is in every package they deliver to ensure that that no one is daring to deliver cheap medicine.

The whole thing is, in other words, typical government thuggery at its ugliest:

As it turns out, the feds say that “as early as 2004, DEA, FDA and members of Congress” told the delivery company that willing buyers and sellers were engaging in transactions that make politicians very, very sad. FedEx apparently established internal systems for tracking online pharmacies, but shipments still got through. This makes the feds even sadder, and they insist FedEx has been “conspiring” to let the packages through.

FedEx says this is all bullshit. The company insists that, in response to the government’s crusade to keep Uncle Bob from buying his little blue pills at a discount, it’s asked the feds for a list of suppliers it shouldn’t service. The feds haven’t gone beyond the bitching phase to offer anything helpful.

…So, what do the feds want FedEx to do? The indictment isn’t specific, but FedEx hints that the government wants the company to paw through everything it ships and block the stuff that officials don’t think people should be allowed to send from place to place.

 

Thursday

3

July 2014

0

COMMENTS

Moore Says Conservatives Losing Their Way on Taxes

Written by , Posted in Economics & the Economy, Taxes

Stephen Moore alleges that conservatives are losing their way on taxes:

A new economic plan is circulating called “Room to Grow,” and one of its premises seems to be that tax rates aren’t important for the middle class. One of its key proposals is to increase tax credits to families with children and even possibly raise tax rates on others to pay for it.

The idea here is that middle-class families with kids are facing a financial squeeze and need relief.

It’s well-meaning, but a classic misdiagnosis of the problem at hand. “This is anti–supply side policy,” fumes Larry Kudlow of CNBC. “It’s just awful growth policy.”

He’s right, and here’s why: Giving every family an extra tax break, as opposed to incentivizing businesses to invest and expand and workers to work, does nothing to grow the economy. This is pure redistribution to families with children. It is better to give a man a fish rather than to teach him to fish, in other words.

This completely misunderstands the source of the economic anxiety facing families today. For most middle-class families, the central problem is not that taxes are too high. It’s that before-tax wages and salaries are not rising — they’re even falling for many income groups — thanks to Obamanomics. On average, the median household has lost about $3,000 of purchasing power since the recession began in 2008. Half of Americans think we are still in recession. The middle class is getting squeezed because the recovery is so feeble and jobs are so scarce, not because of tax increases.

Moore is exactly right. I haven’t looked through all the other policy proposals in YG Network’s “Room to Grow” – though as John Tamny points out in another eloquent take-down of its shortcomings, David Brooks loves it so presumably I will not – but on the question of taxes and economic growth they have failed to diagnose the problem for the reasons Moore mentions. This malady in conservative tax thought can even be traced back to the Bush administration, where Keynesian assumptions were embraced in 2001 with “tax rebates” that failed just as thoroughly to “stimulate” the economy as Obama’s spending. There were, in a second attempt in 2003, better tax cuts under Bush that were more oriented toward supply-side growth, but the point is that conservatives sometimes buy into their own form of erroneous economic populism.

The point is not that taxes are not part of the problem – they certainly are – but rather that the problems caused by the tax code are its numerous disincentives for work, savings and investment. It is suppressing economic growth by punishing productive behavior. Those incentives need to be corrected, and that’s not done through gimmick handouts and a further narrowing of the tax base.

Thursday

26

June 2014

1

COMMENTS

Another Industry In the Obama Administration’s Sites

Written by , Posted in Education, Government Meddling

The private sector is under assault from the Obama administration. We’ve seen it most famously with the war on coal, but as this post from Center for Freedom & Prosperity President Andrew Quinlan demonstrates, we can add for-profit higher education to the list. And once again, it is unelected regulators usurping legislative powers in order to eradicate entire industries:

Now, the Department of Education is targeting private-sector colleges through so-called “Gainful Employment” regulations. The rules not only punish an entire business model for the wrongdoings of a small few schools, but by closing one of the best avenues for working class adults to improve their education and increase employability, they also threaten jobs and the economy.

The proposed rules would cut off federal loan and financial-aid eligibility for programs that fail to meet certain federal standards, such as graduates with high student-loan debt relative to their earnings in the first few years after graduation. This is a deeply flawed approach for reasons both practical and philosophical.

While there is a strong case to be made for ending or severely reducing government financial support for higher education, allowing government to distort the market by picking winners and losers would be even worse than the current system of heavy subsidies. The “Gainful Employment” regulations amount to a thumb on the scale, which unsurprisingly would benefit government-run institutions at the expense of the private sector.

The so-called “Gainful Employment” rule will limit loans and financial aid on the basis of high student loan debt relative to post-graduate earnings, among other things. Problems with the rule are numerous. First and foremost, if it is truly needed to protect students, why are public and private non-profit universities excluded? For-profit schools only serve about 20% of all higher education students, and yet are the exclusive target of the regulation.

Second, the rule fails to account for the market being served. For-profit schools provide opportunities for a lower economic class of students that is often closed out of the prestige-conscious university system. Any rule that punishes schools whose students have relatively lower post-graduate earnings is going to in effect punish schools that take on students who start with lower earnings potential. The rule is thus a perverse attack on economic opportunity at a time when opportunities are already few and far between.

Like much of the Obama agenda, the effort has already run into legal trouble. A prior version of the rule was thrown out by a federal judge for being “arbitrary,” but that hasn’t stopped anti-market ideologues from coming back for another bite at the apple. Quinlan quotes industry expert Donald Graham’s scathing letter in opposition to the rule, which includes an account of the true objectives of the rule’s chief architect:

Why is Mr. Shireman still relevant? Because it is he who decided there should be a gainful employment regulation in the first place.

…With his speech last week at the Center for American Progress, Mr. Shireman lets the cat out of the bag: he simply does not believe that a business should own a college or serve students. Now this is a perfectly respectable point of view. But one could ask: is a person who holds this point of view a fit regulator of a sector consisting of colleges owned by businesses? The judgment on whether businesses were fit to own colleges was made by the Congress of the United States in 1965. Mr. Shireman and now his successor regulators seek to substitute his judgment for that of Congress.

Obama administration officials substituting their lawless judgment for that of duly elected members of Congress seems par for the course these days.

Sunday

8

June 2014

0

COMMENTS

The Artifacts of Big Government

Written by , Posted in Big Government, Culture & Society, Liberty & Limited Government

Last month, the Washington Post provided an exposé on the proliferation of wasteful government reports. As the headline example, the author cites the 15 employees across at least six different offices that prepare an annual Report to Congress on Dog and Cat Fur Protection. The requirement was created as part of a 2000 law written by legislators no longer in office. It is, in other words, perfectly emblematic of Washington DC dysfunction. The question is: what exactly does this tell us about why and how our government is failing?

The Dog and Cat Fur Protection report is just one of many. The story claims that the current Congress expects 4,291 different reports from 466 federal agencies (aside: there should not even exist anywhere near this many federal agencies, and wouldn’t if the government stuck to its Constitutional duties).

It would be easy for some to blame all this on bad legislators. Certainly it would be possible for Congress to collectively decide to solve the problem by going through and eliminating unnecessary reports, just the same as they could close down duplicative and unneeded agencies. But that’s misleading. If the institutions of government, along with the incentives they create, and the political culture both remain constant, it’s not going to matter who is elected. The results will continue to be the same.

We have now a system that has grown out of control, and a populace enamored with magical thinking. We expect every problem in life to have a political solution, and we demand that someone – the more centralized their role, the better – be answerable for every setback or inconvenience. The result is that government not only must try to involve itself in far too many aspects of daily existence, but that politicians must constantly demonstrate that they are in firm control of the apparatus of government, even as such control becomes increasingly impossible.

Friday

30

May 2014

0

COMMENTS

Reading Rainbow Ditches Government

Written by , Posted in Culture & Society, Free Markets

Reading Rainbow was an iconic children’s show with a long run on PBS that ended in 2006. As one of millions who grew  up watching the show – it aired for the first time just days before I was born – I’m happy to see it returning to encourage new generations to read. LeVar Burton, long time host and a major force behind the show, announced on Kickstarter plans to revive the program as a web-based program and get it into classrooms for free. The campaign quickly blew through its $1 million goal, which was hit in less than 24 hours. The revival is not a return of the TV show, though, but rather an evolution appropriate for reaching new generations.

It is also a testament to the fact that government is not a necessary ingredient for the provision of educational content, especially in the age of Kickstarter and ubiquitous crowdsourcing. Proponents of public television will no doubt argue that the campaign would not have caught fire if it weren’t for the decades of exposure the program already had on government subsidized television. This is a far point. But even accepting this particular project might not have gotten precisely as much support as it did, and as quickly as it did, if not for its previous exposure, does mean that: 1) such exposure could not have come without government or, 2) that it or similar worthy causes could not thrive otherwise.

So for fellow fans of Reading Rainbow, celebrate not just its return, but also that it is doing so through voluntary support instead of government force.

Saturday

26

April 2014

0

COMMENTS

Should We Punish Success as Inequality Fix?

Written by , Posted in Economics & the Economy, Taxes

Thomas Picketty has received a lot of attention for his attack on capitalism. His new book Capital in the Twenty-first Century has breathed new life into old Marxist critiques of capitalism, and been elevated to the status of very important book by the designated smart people™ who make it their business to decide what is important for the rest of us. It has received glowing coverage from the elite press like The New York Times and The Nation, and gushy reviews from prominent statists thanks to his assertion that capital is unfairly allocated, and that inequality poses an existential threat to democracy. In response, he calls for the admittedly utopian and impractical imposition of a global tax on wealth.

I’m not going to offer a rebuttal to Picketty. That work has already  been done. Rather, I’m here to note how his work has emboldened statists to admit their deepest policy desires – policies so radical and destructive that in the past were only whispered about at cocktail parties.

Matthew Yglesias writes at Vox that we need “confiscatory taxation” because “endlessly growing inequality can have a cancerous effect on our democracy.” Others are calling for a “maximum wage.”

There are problems with such proposals. First, inequality is largely misstated and misunderstood. Much of the data to back claims of rapidly growing inequality are being driven by statistical artifacts and cultural trends – creations of changes in the nature of households which make up the basis of inequality comparisons, or of changes in marriage patterns, or of problems with trying to take static snapshots of a dynamic economy.

Yglesias correctly notes that taxes influence behavior. Specifically, if you tax something, you get less of it. This forms the basis for his assertion that we should “apply the same principle of taxation-as-deterrence to very high levels of income.” If you start with the presumption that large incomes are unearned and without economic merit this might make sense. But if you believe that the market by-and-large distributes resources based on productivity, then this plan is quickly revealed as a tax on high levels of productivity. And with the agreed upon understanding that taxing a thing makes it less likely to occur, that means discouraging high levels of productivity. The net results is lower total output.

It is, in other words, the classic leftist plan to more evenly distribute a smaller economic pie. Or, as Margaret Thatcher would say, they would “rather that the poor were poorer, provided that the rich were less rich.”

Thursday

10

April 2014

0

COMMENTS

Statists Getting Heartburn Over Free Internet?

Written by , Posted in Big Government, Free Markets

The latest digital scare to captivate the media is the so-called Heartbleed bug, which constitutes a major vulnerability in OpenSSL, a common encryption program. In light of the find, the Washington Post’s Craig Timberg penned an article less about the bug itself and more about his discomfort at the idea that there are systems which operate outside the heavy hand of government or other centralized control. Wringing his hands over the “chaotic nature of the Internet,” Timberg finds it “terrifying” that the internet is “inherently chaotic,” and that there’s “nobody in charge of it all.” Give me a break.

Keep in mind that the Heartbleed bug was discovered by security experts and the news at this stage is just a proof of concept. No major infiltration has yet been attributed to the vulnerability, though it’s apparent lack of a footprint means they may still have occurred. But even if there were, it would hardly justify concern over the internet’s free nature, nor the prevalence of open source programs, which Timberg spends an inordinate amount of time dissecting. Despite his fretting that “volunteers and nonprofit groups that often create [open source software] lack the time and expertise to continually update their work,” such programs nevertheless are found in many ways to outperform enterprise or closed-source developments, or do just as well across a range of metrics. It’s the power of emergent order on display.

Likewise, there is little reason to be great central control would make vulnerability like Heartbleed less likely to occur. If you want an idea of what the internet would be like with “someone in charge of it all,” just look to any of the number of failed Obamacare exchange launches for guidance.

Bugs and vulnerabilities in code are a fact of life. There is nothing that will ever prevent them entirely. But a robust, innovative system unencumbered by centralized, bureaucratic control is far more likely to possess the nimble responsiveness necessary to react quickly and minimize the damage.

Sunday

30

March 2014

0

COMMENTS

Weiner Reveals Progressivism’s Anti-Progress Economic Agenda

Written by , Posted in Big Government, Government Meddling, The Nanny State & A Regulated Society

I promised myself I wouldn’t give any attention to Anthony Weiner in his new capacity as Business Insider columnist after the increasingly awful outlet’s decision to give the indelibly awful Weiner yet another public forum. But his inaugural column provides so perfect an illustration of the regressive positions of ironically so-called progressives on matters economic that I cannot resist.

Dipping his toe, and gratefully not other parts of his over documented anatomy, into the recent debate over whether Tesla motors has the right to sell their own product without first going through a government enforced middle man, Weiner comes down firmly against the interests of consumers, but not only that, against the very idea of economic progress. He says:

In Tesla’s case, some might consider bans on direct auto sales to be part of a protectionist regime set up by a powerful lobby—neighborhood car dealers—and unchallenged by a lazy industry that didn’t want to antagonize its sales force. Still, dismissing all existing regulations out of hand without recognizing them as the product of reasoning and careful consideration isn’t the answer.

Tesla and these other tech disruptors might want to put more of their energy into finding ways to fit their innovations into existing regulations.

…In situations where that’s not possible, why don’t these founders and tech executives focus on getting wider public support or convincing lawmakers their causes are just? Instead, they seem to show up expecting the world to be wowed by their shiny new companies and losing it when people don’t get out of the way. Gnashing of teeth via press release doesn’t make the case where it counts. If you want to be in the business of selling great cars, there may be more productive ways to spend your time than bitching about the laws that the majority have passed and reaffirmed from the time of the Model T.

If I didn’t know better and naively thought that political words still had meaning, I might be surprised to hear such conservative rhetoric from someone who proudly and loudly claims a progressive label. But modern progressivism is no longer about tearing down the existing order standing in the way of human progressive (well, they never truly were, but that’s another matter) because they are that order, and it is they who are standing in the way of progress. Innovations do not occur through the careful consideration of government bureaucrats and empowered regulators as Weiner fantasizes, but rather at the hands of “tech disruptors” who see the faults in the current order and move decisively to excise them.  Anthony Weiner wants Telsa to properly prostrate itself before the political elites, grease some wheels, and help keep Anthony Weiner and his friends in the social driver’s seat by working within a dysfunctional system for no other reason than that it is run by his compatriots and benefits the same.

Modern progressivism is about power and control, and modern progressives like Anthony Weiner will defend the political power to control your lives in every instance where it is threatened, because what progressives revealed once they finally had the power they long lusted for was that it was never simply sought as a means, but always as an end unto itself.

Wednesday

26

March 2014

1

COMMENTS

Government’s Top Thug Preet Bharara Shakes Down Toyota

Written by , Posted in Big Government, The Courts, Criminal Justice & Tort

Preet Bharara is a rogue U.S. Attorney and government thug. The latest victim of one of his shakedown scams is Toyota:

The original uproar was set off when a Lexus crashed in San Diego on Aug. 28, 2009. In later investigations, both Nhtsa and the San Diego County sheriff’s office concluded that the car had been fitted out with too-long floor mats belonging to another model, trapping a floored accelerator.

Horrifying as mat-entrapment accidents may be, they are rare: The feds have identified only one fatal Toyota crash with this pattern other than the one in San Diego. There also is nothing unusual about sudden-acceleration claims—they’ve been lodged against Audi, NSU.XE +0.02% Honda, Ford, Mercedes, GM, GM -0.84% Subaru, basically every auto maker.

Toyota had recognized the mat concern as early as 2007 on a Lexus model, and now, out of caution, it also recalled millions of cars to have gas pedals altered so oversize, stacked, or otherwise errant mats would be less likely to overtake and smother them.

Nevertheless, the Justice Department on March 19 announced a one-count wire fraud indictment of the Japanese company, simultaneously settled by Toyota’s agreement to pay $1.2 billion. Why the huge sum? Supposedly, the company had made that much in extra sales by inappropriately reassuring the public, Congress and regulators that it was adequately handling the (almost entirely bogus) furor.

…Manhattan U.S. Attorney Preet Bharara’s statement of agreed facts fulminates about a second supposed coverup, that of “sticky pedal” syndrome: unwanted friction might make some gas pedals stick on the way back up. Toyota informed Nhtsa about sticky-pedal in October 2009, but the feds complain that the company should have come clean a few weeks earlier than that.

Left out of all this is the conclusion reached in the Nhtsa’s 2011 report: There was no evidence sticky pedals played a role in any of the accidents. The agency also acknowledges that sticky or otherwise, a gas pedal can be overridden by properly functioning brakes.

Providing an addendum to his op-ed at the Cato Institute blog, Walter Olson highlights some of the draconian terms in the “agreement” offer that Toyota no doubt understood it could not refuse:

A couple of other points I didn’t have room for in the WSJ piece: Toyota is settling the government’s trumped-up single charge of mail fraud by way of a so-called Deferred Prosecution Agreement, or DPA, and its terms really must be seen to be believed. “Toyota understands and agrees that the exercise of the Office’s discretion under this Agreement is unreviewable by any court,” appears on clause 14 on page 6, with “Office” referring to the office of the U.S. Attorney for the Southern District of New York, currently Preet Bharara. And if you are expecting even the tiniest squeak from anyone at Toyota in contradiction to the government line, even around the coffee machine at the local dealership, consider clause 13, which states: that Toyota “agrees that it shall not, through its attorneys, agents, or employees, make any statement, in litigation or otherwise, contradicting the Statement of Facts or its representations in this Agreement.” If DoJ catches wind of any such statement it can revoke the agreement not to prosecute, without of course having to give back the billion dollars. “The decision as to whether any such contradictory statement shall be imputed to Toyota for the purpose of determining whether Toyota has violated this agreement shall be within the sole discretion of the Office.”

When people talk about federal prosecutors having become a law unto themselves, this is the sort of thing they mean.

Appalling stuff, but this is really just par for the course for Bharara, whose unquenchable quest for power has turned him into one of the government’s more vile goons. He touched off an international incident last December when he arrested and subjected to a strip search an Indian diplomat over a petty minimum wage issue. He later added fuel to the fire he created with one of America’s strongest Asian allies by going off half-cocked and lashing out at critics with a “defense” of his action that was thoroughly unprofessional in tenor and tone, which further antagonized India and undermined efforts of the State Department to calm the matter. Investigative reporter Gary Weiss correctly observed that, “there is something seriously wrong with [Preet Bharara’s] judgment and temperament.”

He’s not the only one tired of Bharara’s antics. U.S. District Judge Richard Sullivan criticized the “tabloid tone” of Bharara’s typical pretrial grandstanding.

But it’s still business as usual for Manhattan’s U.S. Attorney, whose aggressive tactics are typically celebrated thanks to the heavy dose of economic populism that accompanies his agenda. So long as he targets unpopular segments of society, his overreaches will be tolerated  by the cocktail crowd. In fact, they generally criticize him for doing too little on Wall Street. In that regard, Bharara resembles much more a demagogic politician than an agent and enforcer of the law. The law is simply a tool that he is perfectly comfortable perverting to his nakedly self-interested ends. Given the significant and largely unchecked power he wields, that makes him one of America’s most dangerous thugs.

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About Me

profileI serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.

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