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OpenMarket: August 2012

  • Regulation Of The Day 226: Hot Dog Carts

    August 10, 2012 2:14 PM

    Nathan Duszynski is 13 years old and lives in Holland, Michigan. His stepfather has multiple sclerosis. His mother has epilepsy. Neither is able to work.

    To help out with his family's expenses, Nathan started mowing lawns and soon saved up the $1,200 or so that he needed to buy a hot dog cart. That way he could make even more money.

    The owner of a local sporting goods store was even kind enough to allow Nathan to set up shop in his store's parking lot. But regulators shut Nathan down ten minutes after opening up shop for the first time. He had yet to sell his first hot dog. Turns out that food carts are illegal in Holland unless they're connected to a brick-and-mortar restaurant.

    Seeing as many cities across the country have unaffiliated food carts and no evidence of consumer harm, there can only be one explanation for Holland's hot dog cart ban: rent-seeking. Restaurants don't want to deal with the competition, so they convinced the government to do their dirty work for them.

    Because of this rent-seeking, Nathan and his family are now homeless.

    Our friends at the Mackinac Center have spoken with the family:

    "Nate and I are now in a shelter," Lynette Johnson said. "Doug can't stay with us because he takes prescription narcotics to deal with his pain and the shelter does not allow him with those kinds of drugs."

    She said the situation has been stressful on the family. Lynette is afraid to be away from her husband in case she has a seizure.

  • The Myth Of The Phoenix: Losses Resulting From Purity Tests Don't Plant The Seeds Of Future Success

    August 10, 2012 2:02 PM

    "Purifying" a political party by getting rid of moderates does not appeal to voters in the short run. Nor does it allow a party to become stronger in the long run, by allowing it to be reborn and rise from the ashes like a phoenix. But ardent liberals, conservatives, and libertarians often buy into such wishful thinking. In reality, such a strategy works neither in the short run, nor the long run.

    It fails in the long run. It's often said -- falsely -- by right-wingers and left-wingers that conservative Republican Barry Goldwater's 1964 presidential nomination planted the seeds of Republican Ronald Reagan's 1980 victory by giving the GOP a distinctive conservative stamp that eventually attracted white southern voters, even though in the short run, the Goldwater strategy clearly failed, since the conservative Goldwater was drubbed in the general election by incumbent Democratic President Lyndon Johnson, who beat Goldwater by a whopping 25-percent margin, far more than he would have beaten a moderate Republican by. Right-wingers say this to rationalize venerating the politically inept Goldwater (who was a very nice, honest man but not good at PR), and to justify nominating conservatives even when they alienate some moderate voters in the short run.

    Liberals falsely tie the GOP's later victories to Goldwater to make it look like the GOP is built on a supposed "southern strategy" that appeals to white racism. Goldwater carried the Deep South, and no state outside it except for Arizona, carrying the Deep South only because he opposed the 1964 Civil Rights Act (which he opposed on constitutional federalism grounds). White southerners at the time opposed the Civil Rights Act for totally different reasons than Goldwater, who had long criticized segregation, and had been described by Life magazine as "instrumental in pushing the Pentagon to support desegregation of the armed services." Many southerners opposed it out of pure racism, not out of legitimate federalist principles like Goldwater's.

  • Capitalism In Space

    August 10, 2012 1:48 PM

    Over at National Review Online today, I have a piece on the current state of play in U.S. human spaceflight. It's worth noting that, even as Congress continues to keep us dependent on Russian for access to the International Space Station by underfunding the commercial crew program, the Russians just had another launch failure (their fourth in the past couple years), and their program is in disarray. If we lose a crew in the next couple years on a dodgy Russian rocket, we'll know whom to blame, but people like Kay Bailey Hutchison will be retired.

    What a mess.

  • The Case For A Repeal Amendment

    August 10, 2012 1:47 PM

    If you want different results, you need different rules. Allowing two-thirds majorities of the states to repeal federal laws and regulations is one rule change that could deliver great results.

  • Today's Links: August 10, 2012

    August 10, 2012 10:00 AM


    ORANGE COUNTY REGISTER EDITORIAL: "Is California Getting Too Much CARB?"
    "Californians recently have been learning about $54 million that was unspent by the Department of Parks and Recreation, and about $37 billion in 'special funds' throughout state government that is spent without oversight. But perhaps the biggest state bureaucracy that goes unaccountable is the California Air Resources Board, headed by Chairwoman Mary Nichols. Its yearly operating budget is $860 million. But even that figure pales in comparison with the immense powers it is assuming on Jan. 1, when it begins implementing a 'cap and trade' scheme in which greenhouse-gas emissions supposedly will be controlled by capping the total amount allowed in the state, but allowing high-pollution companies to buy extra capacity, in the form of 'permits,' from lower-polluting companies."

    ALEXIS MADRIGAL: "Finally, Someone Read the Terms of Service So You Don't Have To"
    "I've yet to find anyone who reads the terms-of-service contracts that we "agree" to on the various websites of the world. But now, a group of technologists, lawyers, and interested parties have created TOS;DR, a project to create peer-reviewed summaries of all those documents you will never actually read. Launched in June, it's a kind of brilliant and already-useful tool for some of the more heavily trafficked sites on the web."

    GABRIEL HORWITZ and DAVID KENDALL: "Tough Love: Democrats Must Cut Entitlements"
    "It’s time for Democrats, as parents of entitlement programs, to put them on a diet. And soon — because time is not on our side. Entitlements are set to go on a decades-long growth spurt starting this year, as baby boomers start retiring. At the same time, the Budget Control Act passed by Congress will further shrink investments. How much? Today, there is a $1 trillion gulf between spending on major entitlement programs and the money we devote to public investments. In 2022, the gap is expected to be $2.6 trillion."

  • CEI Podcast For August 9, 2012: Getting TSA To Follow The Law

    August 9, 2012 2:24 PM

    When the TSA installed full-body scanners in airports across the country, they did so illegally. Land-use and Transportation Policy Analyst Marc Scribner explains how a related lawsuit could force TSA to follow the law, and calls for de-nationalizing airport security.

  • Obama Administration Aggravates The Minority Achievement Gap, Increases Risk Of School Violence

    August 9, 2012 2:03 PM

    If you want to fix the achievement gap between black and white students, you must first fix the behaviors that contribute to it, like the disorder and violence in inner-city classrooms that make it hard to teach or learn in such schools, and disproportionately affect the black students in such schools.

    But the Obama administration is doing just the opposite, discouraging school districts from disciplining violent or disruptive black students if they have already disciplined “too many” black students, as Heather MacDonald notes in the current issue of City Journal. Since more black kids come from high-crime areas, it is only natural that infraction rates are higher among black kids than, say, Asian kids (Asians have much lower infraction rates than whites, who in turn have much lower infraction rates than blacks, notes MacDonald). So it is entirely foreseeable, and not the product of racism by a school, that more black kids than white kids get disciplined for misconduct in many schools. The Obama administration argues that higher minority suspension rates presumptively violate Title VI of the Civil Rights Act by constituting "disparate impact," even though the Supreme Court ruled in Alexander v. Sandoval (2001) that such "disparate impact" doesn't violate Title VI.

    Such discipline is not racism, or something that is harmful to minorities in the long run; instead, discipline is a valuable form of instruction that both teaches students how to interact properly with others (a skill that a kid will need both to maximize his own learning, and to handle a job when he reaches adulthood) and also teaches them essential moral values. Depriving disruptive or violent minority students of such discipline based on their race is itself a form of racial discrimination, since it deprives them of "equal access" to an essential educational "benefit," namely, moral instruction and instruction in how to get along with others. See Davis v. Monroe County Board of Education, 526 U.S. 629, 650 (1999)(civil rights laws forbid denying students access to an educational "benefit" based on their sex or race). Employers require their employees to follow rules and get along with co-workers, and expect them to have "soft people skills," all traits that are instilled through discipline in school and in the home.

    But the Obama administration can't see this, since it is wearing ideological blinders. Contrary to what it seems to think, it does not help a black kid if a school official is prevented from disciplining another kid for beating him up just because the kid who beat him up is also black. (Violence is usually committed against other members of the perpetrator's own race.) Doing so is an example of the "soft bigotry of low expectations" that undermines educational achievement among African-Americans.

  • When Violations Of The Law Have No Remedy: The Case Of Warrantless Wiretapping

    August 8, 2012 3:23 PM

    Yesterday, in Al-Haramain Islamic Foundation, Inc. v. Obama, a panel for the Ninth Circuit Court of Appeals ruled that the federal government did not unequivocally waive its sovereign immunity when it comes to violations of federal wiretapping law, thus leaving violations without a civil remedy. In effect, this leaves the plaintiffs with no ability to hold the government accountable for breaking its own laws. As the opinion itself stated: "This case effectively brings to an end the plaintiffs’ ongoing attempts to hold the Executive Branch responsible for intercepting telephone conversations without judicial authorization."

    The dangers of broad immunity are real in both the public and private contexts. Previously, Ryan Radia of CEI and Berin Szoka of TechFreedom have argued that any cybersecurity bill passed by Congress should not grant broad statutory immunity against common law contract claims because it would prevent a market for privacy from arising. In Al-Haramain, the principle of sovereign immunity was applied, thwarting an attempt to keep government officials accountable.

    The genesis of sovereign immunity should be enough to illustrate its dangers. The concept is a relic of a bygone era, reflecting the medieval idea that "the King can do no wrong." Erwin Chemerinsky, Against Sovereign Immunity, 53 Stan. L. Rev. 1201, 1201 (2001). Along with the confused doctrine of divine right of Kings, there were those who seemingly believed the monarch actually shared many of God's attributes--such as perfect administration of justice. This is in stark contrast with the classical liberal standard, which is that all men should be held accountable for their actions.

    The notion that the government is incapable of error seems contrary to the historical experience of the Founding generation and can be found nowhere in the United States Constitution. Nonetheless, the concept of sovereign immunity has been incorporated into American law by courts who looked to English common law and practice. The theoretical justification of such a move has been unclear even to the courts which have applied it. See, e.g., United States v. Lee, 106 U.S. 196, 207 (1882) ("[T]he principle has never been discussed or the reasons for it given, but it has always been treated as an established doctrine.").

  • Teachers Unions Defend Institutional Incompetence

    August 8, 2012 3:00 PM

    No good deed goes unpunished.

    Take Mayor Michael Bloomberg’s brave decision to lay off 3,600 employees -- including teachers and principals -- of 24 of New York City's worst-performing schools, all with an eye toward rebooting them with new staff, management plans, and curricula. The outgoing staff were told they could reapply, but would have to compete with thousands of new applicants. The goal: Turn around the schools by turning them inside out.

    Naturally, the teachers’ unions pitched a fit, and have done everything they can to thwart the Mayor’s plan.

    The irony is that, as is so often the case, unions brought this pain on themselves. Bloomberg’s original plan was to institute a comprehensive instructor evaluation plan in order to, as The Wall Street Journal editorial board put it, “smoke out the lowest performing educators.” But New York’s powerful United Federation of Teachers (UFT) strongly objected to this effort to locate incompetent instructors, forcing Bloomberg into his plan B -- mass layoffs at the two dozen worst-performing schools.

    To no one’s surprise, this, too, was unacceptable to the UFT, which claimed the city’s actions violated the teacher’s collective bargaining agreement. And so off the case went to arbitration, where the Mayor got his hat handed to him: sole arbitrator Scott Burchheit scrapped the planned reboot of the failing schools because, he found, “a wish to avoid undesirable teachers was the primary, if not exclusive reason” for the closings.

    In other news, mice like cheese.

  • Today's Links: August 8, 2012

    August 8, 2012 9:16 AM


    STEVE FORBES: "To Help Free Market, Bury the Hatchet"
    "We all want America’s economy to improve and realize that crony capitalism — where Washington politicians, not free markets, decide who succeeds — is a barrier to prosperous growth. Yet industries still dispatch lobbyists to Capitol Hill to get a legislative or regulatory 'fix' when there’s a marketplace dispute. Consider the recent settlement between retailers and payment card companies over fees that merchants pay to accept plastic."

    WILL OREMUS: "What Happens When Our Cellphones Can Predict Our Every Move?"
    "Your cellphone knows where you’ve been. And new research shows it can take a pretty good guess at where you’re going next. A team of British researchers has developed an algorithm that uses tracking data on people’s phones to predict where they’ll be in 24 hours. The average error: just 20 meters. That’s far more accurate than past studies that have tried to predict people’s movements."

    INVESTOR'S BUSINESS DAILY: "The True Costs of the GM/UAW Bailout"
    "The administration claims to have saved the U.S. auto industry. What it really saved was the industry's dominant union - and it weakened capitalism in the process. Michigan is one of those light-blue states where Mitt Romney just may have a chance on Nov. 6. Don't be surprised, then, if Barack Obama's re-election campaign carpet-bombs it with ads noting that Romney once said the auto industry should go bankrupt, and that the Obama administration found a better way."


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