The Scandal in Wisconsin

Over at National Review, David French has a chilling article about politicized ‘John Doe’ investigations and police raids directed against persons and organizations who are suspected of challenging union power and/or supporting Scott Walker.

Here is an excerpt:

[After the early morning police raid came] the warnings. Don’t call your lawyer. Don’t talk to anyone about this. Don’t tell your friends. The kids watched — alarmed — as the school bus drove by, with the students inside watching the spectacle of uniformed police surrounding the house, carrying out the family’s belongings. Yet they were told they couldn’t tell anyone at school. They, too, had to remain silent. The mom watched as her entire life was laid open before the police. Her professional files, her personal files, everything. She knew this was all politics. She knew a rogue prosecutor was targeting her for her political beliefs. And she realized, “Every aspect of my life is in their hands. And they hate me.”

For dozens of conservatives, the years since Scott Walker’s first election as governor of Wisconsin transformed the state — known for pro-football championships, good cheese, and a population with a reputation for being unfailingly polite — into a place where conservatives have faced early-morning raids, multi-year secretive criminal investigations, slanderous and selective leaks to sympathetic media, and intrusive electronic snooping.

Yes, Wisconsin, the cradle of the progressive movement and home of the “Wisconsin idea” — the marriage of state governments and state universities to govern through technocratic reform — was giving birth to a new progressive idea, the use of law enforcement as a political instrument, as a weapon to attempt to undo election results, shame opponents, and ruin lives.

Read the whole thing.

Eric O’Keefe related his experience in this matter at a Cato event a few months ago.  And Cato has filed an amicus brief is support of O’Keefe’s petition to the Supreme Court to hear his case and to rein in Wisconsin’s politicized “investigations.”

Martin O’Malley’s Tax Increases

As scandals continue to swirl around Hillary Clinton, former Maryland Governor Martin O’Malley is positioning himself for a run for the Democratic nomination. He is relatively young, telegenic, and well-spoken. However, O’Malley has a record that includes tax hikes so large that they turned off even Democratic-dominated Maryland.  

As I discuss in the Daily Caller today, O’Malley:

  • Raised the top personal income tax rate from 4.75 to 5.75 percent. With local taxes on top, Maryland’s top rate is 8.95 percent.
  • Raised the corporate tax rate from 7.0 to 8.25 percent.
  • Raised the sales tax rate from 5 to 6 percent and expanded the sales tax base.
  • Raised the sales tax rate on beer, wine, and spirits by 50 percent.
  • Raised the gas tax by 20 cents over four years, almost doubling the rate from 23.5 cents.
  • Doubled the cigarette tax from $1 to $2 per pack.
  • Imposed higher taxes on vehicle registration.
  • Imposed a stormwater mitigation fee on property owners, or a “rain tax.”

O’Malley raised taxes on everybody, and by 2014 Marylanders had finally had enough. In the gubernatorial election, Republican Larry Hogan pulled off a stunning upset over Democrat Anthony Brown based on his promise to roll back some of O’Malley’s tax increases.

The choice then for Democrats is whether unpopular tax increases are the type of “hope and change” they want to run on in 2016.

Wisconsin’s Criminalization of Political Speech

Just when you thought the long-running “John Doe” prosecution/persecutions in Wisconsin couldn’t get any worse—SWAT teams conducting pre-dawn raids on family homes, gag orders on the victims, and the prosecutor’s recusal motion directed against no fewer than four state supreme court justices, all over politically driven campaign finance allegations—Milwaukee County District Attorney John Chisholm suggested over the weekend that Gov. Scott Walker could be criminally charged for lying. Walker’s “crime”? In Iowa on Saturday, he questioned whether the prosecution’s tactics were constitutional.

As so often happens in litigation over often inscrutable campaign finance law, this case is a tangle of legal complexities, many of which are outlined in Cato’s amicus brief, urging the U.S. Supreme Court to hear the appeal of the “John Does,” their lives on hold as they suffer in silence. At its conference last Friday, the Court considered their cert petition, but it was not included in the Court’s list of denials this morning, indicating a “hold” and hence an increased likelihood that the Court will hear the appeal.

Only two weeks ago, in her first campaign stop in Iowa, Hillary Clinton took a shot at the Roberts Court, calling for a constitutional amendment to overturn the Court’s Citizens United decision. That would amount to nothing less than an assault on the First Amendment’s protection of political speech. With that speech so threatened, no better illustrated than in the appalling Wisconsin prosecutions, it’s time for the Court to bring an end to this tyranny.

For Ronald Reagan Peace through Strength Did Not Mean War at Any Price

Alzheimer’s robbed Ronald Reagan of his memory. Now Republican neocons are trying to steal his foreign policy legacy. Reagan likely would have been appalled by the aggressive posturing of most of the Republicans currently seeking the White House.

Ronald Reagan’s mantra was “peace through strength.” Peace was the end, strength the means. He focused on the Soviet Union and its advanced outposts, especially in the Western Hemisphere.

Restraining the hegemonic threat posed by an aggressive, ideological Soviet Union led to Reagan’s tough policy. Still, Reagan avoided military confrontation with Moscow. Indeed, he routinely employed what neocons today deride as “appeasement.”

For instance, Reagan dropped the Carter grain embargo against Moscow. Reagan said he desired to encourage “meaningful and constructive dialogue.”

Lech Walesa and the Solidarity movement were a global inspiration but the Polish military, fearing Soviet intervention, imposed martial law in 1981. No American bombers flew, no invasion threatened, no soldiers marched. Reagan waited for the Evil Empire to further deteriorate from within.

However, Reagan wanted to negotiate—from a position of strength, but he still wanted to negotiate.

Throw out Massachusetts’s Sedition Act

John Adams left his state a conflicted legacy. As a young man in 1765, Adams took to the Boston Gazette to protest censorship, reminding his readers that “liberty cannot be preserved without a general knowledge among the people,” and for that reason “none of the means of information are more sacred, or have been cherished with more tenderness and care by the settlers of America, than the press. Care has been taken that the art of printing should be encouraged, and that it should be easy and cheap and safe for any person to communicate his thoughts to the public.” Fifteen years later, Adams was called upon to write a constitution for the Commonwealth of Massachusetts, which provided that as “[t]he liberty of the press is essential to the security of freedom in a State; it ought not, therefore, to be restrained in this commonwealth.”

Wise words from a wise man. But two decades hence later, Adams was no longer a young man, and no longer so wise.

In 1798, Adams was an embattled and unpopular president, under constant fire from the nation’s papers. In response, he pushed through a law that made it a crime to “write, print, utter or publish … any false, scandalous and malicious writing or writings against the government of the United States.”

Reviled as an unconstitutional affront to liberty, the Sedition Act was so unpopular that it cost Adams a second term, and has served for over 200 years as a symbol of tyrannical overreach. Adams also gave his name to the courthouse where the Supreme Judicial Court of Massachusetts meets; that Court will now have to decide which version of Adam’s legacy it will embrace.

For almost 100 years, Massachusetts has had its own version of the Sedition Act, a law making it crime to publish “any false statement in relation to any candidate for nomination or election to public office, which is designed or tends to aid or to injure or defeat such candidate.” Cato has filed a brief pointing out just how absurd and unconstitutional this law is.

No, not that brief, but if the law sounds familiar it should: Ohio had a similar law—until a trip up from the federal district court to the U.S. Supreme Court and back resulted it in being struck down. Statutes in Minnesota and Washington have suffered the same fate. These laws are a direct and indefensible attack on the freedoms protected by the First Amendment, and because John Adams was right when he described censorship as the “jaws of power … always opened to devour, if possible, to destroy the freedom of thinking, speaking, and writing,” it’s time for Massachusetts to follow suit.

As a more modern president from the Commonwealth once said, the government cannot be “afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people.”

The Massachusetts Supreme Judicial Court hears argument in Commonwealth v. Lucas on May 7.

Was Monetary Policy Loose During the Housing Boom?

Did the Fed’s set its policy interest rate below the market-clearing or ‘natural’ interest rate level in the early-to-mid 2000s? Or did it simply lower its policy interest rate down to a depressed natural interest rate level during this time? The answers to these questions determine whether U.S. monetary policy was loose during the housing boom.

John Taylor believes the Fed pushed interest rates below their natural interest rate level. He views this departure from a neutral stance as a key contributor to the housing boom. Ben Bernanke and Larry Summers believe otherwise. They see the Fed simply doing its job back then by adjusting its policy rate down to a low natural interest rate level. Bernanke believes the natural interest rate level was low because of a saving glut while Summers holds that its was depressed because of secular stagnation. Either way, both individuals do not blame the Fed for any role the low interest rates played in fostering the housing boom. The Fed’s lowering of interest rates was simply an endogenous response.

George Selgin, Berrak Bahadir, and I recently published an article that lends support to John Taylor’s view of Fed policy during this time. It received some pushback from Scott Sumner who is sympathetic to both the saving glut and secular stagnation views. At the same time, Tony Yates provided a critique of John Taylor’s argument on the financial crisis that was heartily endorsed by Paul Krugman. So the debate over the Fed policy during this period continues.

What I want to do here is to step back from this debate and review what I see as the key economic developments that affected U.S. interest rates at this time. Then, given these considerations, I will jump back into the debate and ask whether Fed policy pushed interest rates in the same direction as that implied by these developments.

The key developments as I see them are threefold: a falling term premiums, a spate of large positive supply shocks, and the emergence of a monetary superpower. Let us consider each one in turn.

You Ought to Have a Look: Earth Day Round-Up

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  ere we post a few of the best in recent days, along with our color commentary.

Since the Earth Day coverage this year seemed rather meager—a sign, perhaps, that everyone is growing tired of the pessimistic drone that defines the current environmental movement—it is possible that you may have overlooked a few stories out there that shine a more positive light on the human condition and the way forward.

You ought to take a few minutes and take Alex Epstein’s short course from Prager University. It is presented in the form of a 5-minute video titled “Why You Should Love Fossil Fuel.” Here’s course description:

Every year on Earth Day we learn how bad humanity’s economic development is for the health of the planet. But maybe this is the wrong message. Maybe we should instead reflect on how human progress, even use of fossil fuels, has made our environment cleaner and healthier. Alex Epstein of the Center for Industrial Progress explains.

We hope you like this, because you’ll undoubtedly be hearing much more from Alex in the future as we are happy that he has joined us at the Center for Study of Science as one of Cato’s newest adjunct scholars.

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