More Foreign Competition in Software and Internet Services?

We’ve gotten used to American dominance in the internet/software industries.  That may not last forever:

Over the weekend, China announced that it was planning to launch a homegrown operating system to replace Windows and Android for running the nation’s desktop and mobile devices. The first iteration of this “Made in China” OS could roll out as early as October

There is some good and bad with this.  The good is that more competition in these industries would be great.  While there is already a fair amount of disruption and innovation here, there are also some key products/services where a couple firms are pretty dominant.  Consumers would benefit tremendously from more competition.

Washington Should Stop Praising Military Tyranny in Egypt

CAIRO—Egypt’s capital is crowded, busy, confused, and messy.  Security isn’t obvious, until you get close to a sensitive site, such as the Interior Ministry. 

The military has taken firm control, elevating its leader, Abdel Fata al-Sisi, to the presidency.  The army permitted dictator Hosni al-Mubarak’s ouster by street protests in 2011 because he planned to turn military rule into a family dynasty.

If ousted president Mohamed al-Morsi and the Muslim Brotherhood been defeated in a future election, they would have been discredited peacefully.  However, the coup turned the movement’s members into angry victims.  In Cairo they took over Rab’a al-Adawiya and al-Nahda Squares, just as the anti-Mubarak and anti-Morsi crowds had done in Tahir Square. 

The military government responded with a campaign of premeditated murder.

In a new report Human Rights Watch detailed the junta’s crimes.  From the beginning the military used deadly force with no concern for casualties.  In fact, the army began using live ammunition against protestors just two days after the coup. 

The most horrific episode occurred when the regime deployed soldiers, APCs, bulldozers, police, and snipers to destroy a vast tent village in Rab’a Square.  Explained HRW:  “security forces used lethal force indiscriminately, with snipers and gunmen inside and alongside APCs firing their weaponry on large crowds of protestors.  Dozens of witnesses also said they saw snipers fire from helicopters over Rab’a Square.” 

In roughly 12 hours HRW figured that at least 817 and likely more than 1000 people were slaughtered.  Since then, said HRW:  “Security forces have continued to use excessive lethal force against demonstrators.” 

Moreover, the regime moved against liberals and other critics, including youthful leaders of the revolution against Mubarak.  Bahey al-Din Hassan, head of the Cairo Institute for Human Rights Studies, argued that military control “is more horrible than the old regime.” 

In fact, by its own count the government has arrested 22,000 people, many of whom have been tortured.  When meeting a visiting delegation organized by the International Coalition for Freedoms and Rights of which I was part, Ayaalaa Hosni, spokeswoman for a women’s anti-coup group, complained that you can’t demonstrate without a warrant but if you “go to ask for a warrant you get arrested.”

Outside assessments are uniformly negative.  David Kramer, president of the group Freedom House, declared in June:  “the human rights situation has worsened compared to what it was at any point under Hosni Mubarak.”   His organization reported that Egypt had gone from “Partly Free” to “Not Free” after the coup, with significant deterioration across the board. 

In a separate study Freedom House rated Egypt’s media “not free.”  An organizer for press freedom told our delegation that ten journalists had been killed.  Scores had been shot and injured, more than 100 had been assaulted, and scores more had been arrested.  Another reporter said simply:  “Journalism has become a crime.”

Yet repression is unlikely to deliver stability.  Terrorism may be seen by more than jihadists as the only way to challenge a regime which bars peaceful dissent.  Mubarak’s jails helped turn Brotherhood member Ayman al-Zawahiri into al-Qaeda’s leader. 

There isn’t much the U.S. can do to change Cairo.  But the Obama administration could stop intervening constantly and maladroitly.  In fact, Washington’s influence is extremely limited.

As I wrote in Forbes online:  “The U.S. should work with Cairo on issues of shared interest but otherwise maintain substantial distance.  In particular, the administration should stop using foreign aid to bribe Egypt’s generals.  They don’t have to be paid to keep the peace and shouldn’t be paid for anything else.”

Egypt appears likely to end up without liberty or stability.  Instead of pretending to be in control, Washington should step back from a crisis which it cannot resolve.

Ensuring Safe Food in a Free Market: A Lesson from China

Many Americans view the dissemination and enforcement of food safety standards as a basic function of government, and it’s difficult for them to imagine a world where food is both safe and unregulated. Libertarians can point out that the safety of a product is, just like quality and price, something that consumers directly care about and as such will be most effectively preserved in a competitive free market.  But it’s one thing to make abstract economic arguments and quite another to have real life examples.

Well, here’s an interesting story from China, as reported by Reuters last week:

A Chinese retailer is offering insurance to customers who buy infant milk powder, highlighting the lengths to which companies are going to address concerns about food safety in China.

Suning Commerce Group Ltd, which owns the Redbaby chain of stores, told Reuters it had launched the policy this week, backed by China’s second largest insurer, Ping An Insurance Group.

The policy stipulates that if a brand of milk powder is recalled, customers who bought cans from any Redbaby store or its e-commerce website would be paid up to 2,000 yuan ($325) per can, with payments capped at 100,000 yuan.

“In recent years, the milk powder market in China has been in a mess,” Suning said in an email.

Why Tax Credits Survive Legal Challenges But Vouchers Often Don’t

Yesterday, on the same day that the New Hampshire Supreme Court rejected a challenge to the state’s scholarship tax credit law, a district court judge struck down Oklahoma’s special-needs voucher law.

Both vouchers and scholarship tax credit laws are constitutional under the U.S. Constitution, but vouchers laws have often run afoul of states’ historically anti-Catholic Blaine Amendments, which prohibit public funds from being expended at religiously affiliated schools. By contrast, scholarship tax credit laws have a perfect record at both the federal and state courts because they rely on voluntary, private donations. Donors to nonprofit scholarship organizations receive tax credits worth 50 percent to 100 percent of their donation, depending on the state. In ACSTO v. Winn, the U.S. Supreme Court held tax credit funds did not constitute public money because they had not “come into the tax collector’s hands.” These credits are constitutionally no different than tax deductions for charitable donations to nonprofits (including religious organizations) or the 100 percent property tax exemption granted to houses of worship. In none of those cases do we say that the nonprofit or religious institution is “publicly funded.” 

Yesterday’s decision is heartbreaking for the hundreds of Okie children with special needs who use the vouchers to attend the schools of their parents’ choice. If Oklahoma policymakers want to help those children, they will follow the legal advice of the Institute for Justice and enact a special-needs scholarship tax credit or expand their existing tax credit law.

For more on the the New Hampshire decision, listen to this Cato Daily Podcast with the Institute for Justice’s Dick Komer, who argued the case before the state Supreme Court.

They’re Not Making Jeff Smiths Like They Used To

Movie poster

For generations of Americans, “Jefferson Smith” was the archetype of the honest, hard-working man of the people who gets into politics to serve the public interest and stands up to powerful interests. Mr. Smith Goes to Washington is the quintessential movie about a corrupt system that can be toppled by a single man of integrity. So maybe it’s no surprise that there seem to be a lot of Jeff Smiths getting into politics. What better name to inspire confidence?

Unfortunately, Sen. Jeff Smith of some unnamed Western state would be mighty embarrassed by some of the Jeff Smiths who have come along in his wake.

Today in Washington, D.C., former city council candidate Jeff Smith was sentenced to 60 days in jail for accepting illegal campaign funds and making false reports to the city’s campaign finance office. Like D.C. mayor Vincent Gray, Smith was essentially accused of benefiting from an illegal shadow campaign run by a major donor who makes his money from city contracts.

Today’s Jeff Smith story reminded me of one from a few years ago. As Jason Zengerle reported in the New Republic, Missouri state senator Jeff Smith “was the brightest young star in the Missouri Democratic Party. Thanks to an award-winning documentary about him, he was also a national political figure—a crusading reformer whose combination of charisma, idealism, and intelligence prompted comparisons to Howard Dean, Paul Wellstone, and even Barack Obama. Although he was only in his first term, no one (least of all of Smith himself) doubted he was destined for greatness.”

Jefferson Smith was the leader of the Boy Rangers. Jeff Smith of Missouri taught political science at Washington University and had equally devoted young supporters. Indeed, that Jeff Smith was so Capra-esque – at least to liberal eyes – that filmmaker Frank Popper made a film about him. Zengerle writes that the film, “Can Mr. Smith Get to Washington Anymore?, is a minor masterpiece of the political documentary genre. After its release in 2006, it broadcast nationally on PBS’s prestigious ‘Independent Lens’ series and earned Popper, a first-time feature director, numerous festival accolades.”

But then it all went wrong. Right from the beginning, actually. In his first campaign, afraid of losing, Smith turned to some sketchy operatives who put together – whattaya know? – an illegal shadow campaign to attack his opponent. Eventually the FEC came calling, and then the FBI. Things spiraled out of control. One of the operatives ratted him out. His campaign manager committed suicide. Smith was sentenced to a year in jail.

I remember hearing back in Kentucky about a woman who refused to vote for a friend for public office because “if a man’s not ruint when he gets in there, he’s ruint when he comes out. And there’s no sense in ruining a good time.” Frank Capra’s fictional Jeff Smith could resist the temptations of power, but it seems that a lot of regular folks named Jeff Smith – or anything else – can’t.

 

 

Another “Winn” for Educational Freedom in New Hampshire

In ACSTO v. Winn (2011), the U.S. Supreme Court upheld Arizona’s scholarship donation tax credit program on the grounds that plaintiffs did not have standing to sue in the first place, because they could not show any specific injury to themselves caused by the voluntary program. Today, the New Hampshire Supreme Court reached the same conclusion in a case involving that state’s new scholarship program. Importantly, this preserves the perfect legal record of modern education tax credit school choice programs.

Under these programs, individuals or businesses can donate money to a non-profit Scholarship Granting Organization that then uses the money to make private education affordable to lower income families. The donor’s taxes are cut in proportion to the size of the donation they make (100% in AZ, 85% in NH). No one is compelled to make a donation, and those who do not donate have their taxes collected as they always were. Those who choose to make donations can pick the organization that receives their money, just as they would pick any other charitable organization.

To have standing to sue over the constitutionality of a law, it is generally required to show that the law has personally and concretely harmed you in some way. Though this may seem arbitrary, it has a very important purpose, which the NH ruling explains in detail: without the harm requirement, courts would have sweeping power to override the will of voters and their elected representatives. If anyone could sue to overturn any law for any reason, innumerable cases would be filed and courts could simply agree to hear the ones pertaining to whatever laws they happened not to like.

But there is another reason why it is important that both the U.S. and NH Supreme Courts rejected challenges to education tax credits due to lack of standing: freedom of conscience. The plaintiffs lacked standing in these cases because the programs are voluntary. No one has to donate to a scholarship organization. Those who do not donate see their taxes collected as they’d always been. As a result, no one is compelled to pay for religious instruction, which would violate many state constitutions.

In fact, education tax credits offer a meaningful improvement for freedom of conscience over the public schooling status quo. Under the current system, everyone is forced to pay for a single official system of education that cannot possibly reflect the values of such a diverse nation. The result, as my colleague Neal McCluskey has shown, is an endless battle over the content of public schooling. Education tax credits avoid that compulsion, allowing people to choose the organization that receives their education donations. In a mature program like the one in Pennsylvania, there are over a hundred different scholarship organizations to choose from. It is thus possible to ensure funding to a diverse range of educational choices without forcing any taxpayer to support a particular sort of instruction that might violate his or her most deeply held convictions.

As I wrote three years ago, in the wake of the U.S. Supreme Court ruling, education tax credits are A “Winn” for Education and Freedom of Conscience.

Live Free and Learn: NH Supreme Court Upholds School Choice

Low- and middle-income children in New Hampshire will now be able to use tax-credit scholarships at any school they choose, whether secular or religious.

This morning, the New Hampshire Supreme Court (NHSC) followed the precedent of the U.S. Supreme Court in unanimously ruling that the petitioners challenging the “Live Free or Die” state’s scholarship tax credit law lack standing because they could not demonstrate any harm. The law grants tax credits to corporations worth 85 percent of their donations to nonprofit scholarship organizations that help low- and middle-income parents send their children to the schools of their choice. 

When two anti-school choice organizations challenged the law, the Institute for Justice intervened, representing several low-income families who had applied for the scholarships. The Cato Institute filed an amicus brief defending the law’s constitutionality.

The NHSC overturned a lower court’s flawed and unprecedented decision, which had forbidden scholarship recipients from using the funds at religiously-affiliated private schools. The lower court held that the scholarship funds constituted “money raised by taxation” and therefore violated the state’s historically anti-Catholic Blaine Amendment, which states: 

[No] money raised by taxation shall ever be granted or applied for the use of the schools of institutions of any religious sect or denomination. (New Hampshire Constitution, Part II, Article 83)

The NHSC did not address the merits of the lower court’s decision because it held the petitioners were unable to demonstrate that “their personal rights have been impaired or prejudiced.” Similarly, the U.S. Supreme Court, in rejecting the petitioners’ standing in ACSTO v. Winn, held that the tax-credit funds did not constitute public money because they had not “come into the tax collector’s hands.”

This is great news for the tens of thousands of students who qualify for tax-credit scholarships—parents like Melissa Cogan, who used the program to cover homeschooling expenses for her two children, Hope and Hunter.

“Without the scholarship from (the Network for Educational Opportunity), homeschool would not have been an option for us,” Melissa said. “We are a large family with very limited resources for supplies, books, workbooks, and electronic technology. The generosity of the Network for Educational Opportunity has made it possible for us to purchase everything we needed to become a successful homeschooling family.”

Such stories should make it unsurprising then that, last year, nearly 97 percent of scholarship families reported being satisfied with the learning environments they chose for their children.

NH tax-credit scholarship, parental satisfaction.

The decision’s import reaches far beyond New Hampshire’s borders. The NHSC’s ruling today takes some wind out of the sails of the Florida School Boards Association (FSBA), which is inexplicably suingthe Sunshine State over its more-than-decade-old scholarship tax credit law, in a complaint that mirrors the legal reasoning of the NH petitioners.  It is likely that the Florida Supreme Court’s reasoning will mirror that of the New Hampshire Supreme Court and U.S. Supreme Court.

Certainly there are families in Florida, and elsewhere nationwide, similar to the Cogans who are craving an educational environment that works best for them. Today, the New Hampshire Supreme Court handed them a much-needed victory and, thus, the ability to live free and learn.

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