You are here

OpenMarket: April 2014

  • Congressional Scorecard Update: Minimum Wage Fairness Act of 2014

    April 30, 2014 3:33 PM

    Today, the Minimum Wage Fairness Act of 2014, a bill to raise the federal minimum wage to $10.10 per hour, failed to gain enough support in a procedural vote and has been blocked.

  • Sketchy Super PACs

    April 30, 2014 9:14 AM

    The labor battle in Missouri is becoming supersized because of union super PACs. Unions can support politicians (just Democrats, of course) and policies through super PACs, which would be largely funded by dues money. Unions have plenty of cash to throw toward political interests, but now union leaders have promised to focus on “electing Democratic state legislators” in Republican states.

  • This Minimum Wage Hike Will Kill Jobs

    April 30, 2014 9:10 AM

    The key thing you need to know about a minimum wage hike is that it will kill jobs.

    About 80 percent of economists surveyed recognize this job-killing reality, points out  former chair of the White House Council of Economic Advisers and current Harvard economics department chairman Greg Mankiw in his popular textbook, Principles of Economics.

    Moreover, 85 percent of econometric studies demonstrate this job-killing fact. U.S. News & World Report explains, “Proponents of a higher minimum wage point to a handful of studies that find no jobs effect to make their case. And it’s true, these studies do exist — but they’re in the extreme minority. Two economists from the Federal Reserve Board and the University of California-Irvine took the time to read all of the most credible research on the minimum wage from the past 20 years, and found an overwhelming 85 percent of it pointed to a decline in employment.”

    James Buchanan, 1986 Nobel laureate in economics, famously wrote in The Wall Street Journal on April 25, 1996:

  • Obama Administration Attacks Cross-Examination and Due Process Rights in Campus Guidance

    April 30, 2014 8:44 AM

    Justice Brandeis once observed that “The greatest dangers to liberty lurk in the insidious encroachment by men of zeal, well meaning but without understanding.”

    However well-meaning they may be, the Obama administration’s guidance and task force recommendations yesterday on campus sexual harassment and rape contain an insidious attack on cross-examination (as KC Johnson discussed at Minding the Campus.) As the Task Force Report notes (pg. 19), "this new guidance clarifies that: . . . the parties should not be allowed to personally cross-examine each other." Similarly, the guidance itself says (pg. 31): "OCR strongly discourages a school from allowing the parties to personally question or cross-examine each other during a hearing on alleged sexual violence." These attacks by the administration ignore the fact that the Supreme Court has lauded cross-examination as the “greatest legal engine ever invented for the discovery of truth.” (See Lilly v. Virginia, 527 U.S. 116, 124 (1999).) The new guidance will create serious legal problems for both public and private colleges, as I will explain in future commentaries.

    As I explained over a year ago, the Education Department’s attack on cross-examination has no legal basis, especially since cross-examination is permitted all the time in sexual harassment cases in court, showing that cross-examination is entirely consistent with the civil-rights laws. While there is no independent constitutional right to cross-examine in campus disciplinary proceedings, the right has sometimes been protected by state education codes, collective bargaining agreements, or other contracts or regulations. Title IX does not require that these be disregarded, contrary to the Obama administration's suggestions. Indeed, as the Supreme Court observed in its Davis decision, a school is entitled “to refrain from" disciplinary action that "would expose it to constitutional or statutory claims,” without risking Title IX liability. Moreover, in a few campus disciplinary cases, such as Donohue v. Baker (1997), judges have ruled that cross-examination was constitutionally required on due-process grounds to test the credibility of the accuser.

  • Johnson-Crapo Delayed; CEI-Coordinated Coalition Letter Cited as a Factor

    April 29, 2014 3:43 PM

    Today, in a surprise move, the Senate Banking Committee postponed the vote it had been set to mark up for Johnson-Crapo. Reports vary as to whether this bill is "dead on arrival" or coming up soon with amendments (mostly to bring around liberal Democrats).

    One thing is clear, though. The bill is losing momentum, and the proverbial Congressional clock is ticking.

    Today's delay is great news for ordinary American taxpayers and shareholders who would have been ripped off by Johnson-Crapo and its creation of the Federal Mortgage Insurance Corportation, or Feddie Mic. The Competitive Enterprise Institute (CEI) has for decades warned about the risk to taxpayers and the economy posed by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. In 2000, CEI founder and then-president (now chairman) Fred Smith warned in Congressional testimony that if anything went wrong, Fannie and Freddie could put taxpayers on the hook for $200 billion. Many thought he was exaggerating then, but he turned out to have underestimated it.

    Needless to say, we would support any true reform of the GSEs that reduces the government's role in the housing market. Unfortunately, after examining the Johnson-Crapo legislation, we have concluded it would actually make the situation worse. It replaces Fannie and Freddie with an even bigger government backstop in the form of the Feddie Mic, which could hold the bag for as much as 90 percent of losses from mortgage-backed securities.

  • CEI Podcast for April 29, 2014: Ten Thousand Commandments

    April 29, 2014 2:03 PM

    Wayne Crews talks about the new 2014 edition of Ten Thousand Commandments

  • Kings, Contracts, and the Rule of Law: Republic of Argentina v. NML Capital

    April 29, 2014 1:04 PM

    Co-authored with John Norton Moore and Robert F. Turner

    Last Monday, April 21, the Supreme Court heard argument in a major case involving issues at the core of the rule of law, sovereign immunity, and the right of contract. The case, Republic of Argentina v. NML Capital, involves Argentina’s attempt to avoid liability for its 2001 default on billions of dollars in foreign debt. The specific issue is whether a group of American bondholders, which won court judgments against Argentina over that default, can seek discovery (that is, legally-compelled information) against Argentinian assets outside the U.S. in order to satisfy these judgments. The Second Circuit upheld this discovery. Argentina, supported somewhat surprisingly by the U.S. State Department, is asking the Supreme Court to overturn that ruling.

    If Argentina were a private party that owed money to others, there is no question that such discovery would be available to creditors who had judgments against it. In this case, however, there are three complicating factors: 1) Argentina’s status as a sovereign country; 2) the Foreign Sovereign Immunities Act (FSIA); and 3) Argentina’s express waiver of sovereign immunity when it issued its bonds, agreeing to subject itself to U.S. court jurisdiction.

    Sovereign states have historically been immune from the judgments of foreign courts, but that is no longer the rule when states engage in commercial activities like selling bonds. Congress embraced this restrictive theory of sovereign immunity in 1976 by enacting the FSIA, and this underlying principle is now settled international law. When it comes to nations engaged in commercial activities, there is no reason to continue the old thinking that, legally, “the king can do no wrong.” As Congress affirmed in the FSIA, when foreign nations engage in commercial transactions in this country, they should be subject to the same rule of law as corporations or private litigants.

    That is made doubly clear in this case by Argentina’s express waiver of sovereign immunity in connection with its bonds, since the waiver’s very purpose was to entice American investors to purchase them. When Argentina later defaulted on the bonds, it pressured American investors to accept new bonds valued at less than thirty cents on the dollar. In fact, it went so far as to enact a law prohibiting any payments to creditors, such as the opposing party in this case, who refused to compromise their claims. Since many state pension funds invest in foreign bonds, and are guaranteed against loss by law, if Argentina succeeds in evading its legal debts they may have to be paid by American taxpayers.

    Even more outrageously, Argentina has made clear its intention to defy any monetary judgment of an American court in this matter, even though the bond agreement expressly provided that disputes would be resolved under the laws of New York. Not surprisingly, Argentina lost the case in both federal district court and in the court of appeals.

  • Congressional Scorecard Update: Confirmation of David Weil to Wage and Hour Division

    April 29, 2014 10:25 AM

    On April 28, 2014, the U.S. Senate confirmed another ardent Big Labor supporter, David Weil, to serve as the administrator of the Wage and Hour Division of the Department of Labor.

  • Ten Thousand Commandments 2014

    April 29, 2014 10:05 AM

    The 2014 edition of Wayne Crews’ annual Ten Thousand Commandments report comes out today

  • May 8 debate in Washington DC

    April 29, 2014 9:30 AM

    I'll be debating Professor Brian Fitzpatrick in Washington, DC, the morning of Thursday, May 8. Registration and details at the e21 site.


Subscribe to OpenMarket: April 2014