Archives: 12/2009

Likely Supreme Court Tie Would Be a Loss to Property Owners

Today, the Supreme Court heard argument in Stop the Beach Renourishment v. Florida Department of Environmental Protection, which is a Fifth Amendment Takings Clause challenge involving beachfront property (that I previously discussed here).

Essentially, Florida’s ”beach renourishment” program created more beach but deprived property owners of the rights they previously had – exclusive access to the water, unobstructed view, full ownership of land up to the “mean high water mark,” etc. That is, the court turned beachfront property into “beachview” property.  After the property owners successfully challenged this action, the Florida Supreme Court – “SCOFLA” for those who remember the Bush v. Gore imbroglio – reversed the lower court (and overturned 100 years of common property law), ruling that the state did not owe any compensation, or even a proper eminent domain hearing.

As Cato adjunct scholar and Pacific Legal Foundation senior staff attorney Timothy Sandefur noted in his excellent op-ed on the case in the National Law Journal, “[T]he U.S. Constitution also guarantees every American’s right to due process of law and to protection of private property. If state judges can arbitrarily rewrite a state’s property laws, those guarantees would be meaningless.”

I sat in on the arguments today and predict that the property owners will suffer a narrow 4-4 defeat.  That is, Justice Stevens recused himself – he owns beachfront property in a different part of Florida that is subject to the same renourishment program – and the other eight justices are likely to split evenly.  And a tie is a defeat in this case because it means the Court will summarily affirm the decision below without issuing an opinion or setting any precedent.

By my reckoning, Justice Scalia’s questioning lent support to the property owners’ position, as did Chief Justice Roberts’ (though he could rule in favor of the “judicial takings” doctrine in principle but perhaps rule for the government on a procedural technicality here).  Justice Alito was fairly quiet but is probably in the same category as the Chief Justice.  Justice Thomas was typically silent but can be counted on to support property rights.  With Justices Ginsburg, Breyer, and Sotomayor expressing pro-government positions, that leaves Justice Kennedy, unsurprisingly, as the swing vote.  Kennedy referred to the case as turning on a close question of state property law, which indicates his likely deference to SCOFLA.

For more analysis of the argument, see SCOTUSblog.  Cato filed an amicus brief supporting the land owners here, and earlier this week I recorded a Cato Podcast to that effect. Cato also recently filed a brief urging the Court to hear another case of eminent domain abuse in Florida, 480.00 Acres of Land v. United States.

A Free Press Only Counts if It’s on Dead Trees

newspapersThe Associated Press reports:

The federal government is wading into deliberations over the future of journalism as printed newspapers, television stations and other traditional media outlets suffer from Americans’ growing reliance on the Internet.

With the media business in a state of economic distress as audiences and advertisers migrate online, the Federal Trade Commission began a two-day workshop Tuesday to examine the profound challenges facing media companies and explore ways the government can help them survive.

Media executives taking part are looking for a new business model for an industry that is watching traditional advertising revenue dry up, without online revenue growing quickly enough to replace it. Government officials want to protect a critical pillar of democracy—a free press.

“News is a public good,” FTC Chairman Jon Leibowitz said. “We should be willing to take action if necessary to preserve the news that is vital to democracy.”

Language mavens, observe the lede: The federal government is “wading into deliberations.” I infer that in Newspeak, this may mean something like “trying to spend more money.” Perhaps I should look forward to the federal government wading into deliberations over my salary? (On second thought, maybe not.)

Some of the proposals aimed at saving traditional journalism are relatively innocuous, like letting newspapers become tax-exempt nonprofits. At least this wouldn’t do too much harm, and, given recent performance in the industry, it approaches being fiscally neutral.

Other ideas, like forcing search engines to pay royalties to copyright holders, would have far more serious consequences. It’s hard to see whom this proposal would hurt worse, the search engines, socked with massive fees, or the copyright holders themselves – if search engines don’t index you, you don’t exist anymore.

The surest loser, though, would be the rest of us. Restricting the flow of news for the financial benefit of Rupert Murdoch seems a far cry from our Constitution, which allows Congress “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Burdening search engines seems only to inhibit the progress of science and the useful arts, while enriching a small number of people. It might pass the letter of the law, but I doubt that this is what the founders had in mind.

But anyway…. shame on Americans for our “growing reliance on the Internet”! Don’t we realize that, as the article notes, “a free press is a critical pillar of democracy” – and that a free press only counts, apparently, if it’s on dead trees?

I’m all in favor of the good the press can do, but it strikes me as shortsighted to think that this good can only be done in the traditional media. It also seems foolish to me to think that tying the press more closely to the government will make it more critical and independent. Often, the very best journalism comes from complete outsiders. I’m reminded of Radley Balko’s recent (and excellent) takedown of the claim that Internet journalists are basically parasites:

In 20 years, the Gannett-owned Jackson Clarion-Ledger never got around to investigating Steven Hayne, despite the fact that all the problems associated with him and Mississippi’s autopsy system are and have been fairly common knowledge around the state for decades. It wasn’t until the Innocence Project, spurred by my reporting, called for Hayne’s medical license that the paper had no choice but to begin to cover a huge story that had been going on right under its nose for two decades.

… That’s when the paper starting stealing my scoops. Me, a web-based reporter working on a relatively limited budget. Like this story (covered by the paper a week later). And this one (covered by the paper weeks later here). Oh, and that well-funded traditional media giant CNN did the same thing.

Tell me again, who’s the parasite here? And why should taxpayers bail out yet another industry that isn’t delivering what we want?

Not the Change We Hoped For

express-coverBarack Obama first became a credible presidential candidate on the basis of his antiwar credentials and his promise to change the way Washington works. But he has now made both of George Bush’s wars his wars. The Washington Post’s front-page analysis began, “President Obama assumed full ownership of the war in Afghanistan on Tuesday night…” The cover of the tabloid D.C. Express was even more blunt.

Speaking of Iraq in February 2008, he said, “I opposed this war in 2002. I will bring this war to an end in 2009. It is time to bring our troops home.” Responding to Hillary Clinton’s criticisms in March 2008, he said, “I will bring this war to an end in 2009, so don’t be confused.” Now he is promising to end the Iraq war in 2011, and to begin a withdrawal from Afghanistan in that year. Not the change we hoped for.

President Obama promises that after all this vitally necessary and unprecedented federal spending, he will turn his attention to constraining spending at some uncertain date in the future. And now he says that he will first put more troops into Afghanistan, and then withdraw them at some uncertain date in the future (“in July of 2011,” but “taking into account conditions on the ground”). Voters are going to be skeptical of both promises to accelerate and then put on the brakes later.

Of course, John McCain thinks that even a tentative promise to get out of this war after a decade is too much. “Success is the real exit strategy,” he says. And if there’s no success? Then presumably no exit. Antiwar voters may still find a vague promise of getting the troops out of Afghanistan three years after the president’s inauguration preferable to what a President McCain would have promised.

But as Chris Preble wrote yesterday, this increase of 30,000 troops – or 40,000 – is not going to win the war. The U.S. military’s counterinsurgency doctrine says that stabilizing a country the size of Afghanistan would require far more troops than anyone is willing to invest. So why not declare that we have removed the government that harbored the 9/11 attackers, and come home?

The real risk for Obama is becoming not JFK but LBJ – a president with an ambitious, expensive, and ultimately destructive domestic agenda, who ends up bogged down and destroyed by an endless war. Congress should press for a quicker conclusion to both wars.

Wednesday Links

  • Chris Preble on Afghanistan: It’s time to leave. “We don’t need 100,000 soldiers in Afghanistan chasing down 100 al-Qaeda fighters.”

The Cost of Government Guarantees

John Kay’s column in yesterday’s Financial Times criticizes government guarantees to banks because they involve hidden but large costs. According to Kay:

  • Such guarantees distort competition: sheltered banks outperform rivals not because of greater efficiency, but because capital becomes cheaper to obtain.
  • Sheltered banks gain too-big-to-fail status, which creates barriers to entry for smaller, more efficient banks.
  • Relief from business risk leads to more risk taking, AKA moral hazard.
  • Cheaper private risk management incentives are reduced within and outside the bank.

Other kinds of government guarantees, such as social insurance, also involve large hidden costs. Social Security and Medicare’s guarantee of a paid holiday with medical care for the rest of retirees’ lives generates the same types of costs:

  • Labor competition is reduced because the programs induce early worker retirements, which leads to higher wage costs, on average, and lower national output.
  • Workers who believe they will receive Social Security and Medicare will engage in lower personal saving, which means less capital formation and lower economic efficiency.
  • Retirement income guarantees induce riskier personal savings portfolios, AKA moral hazard.
  • Guaranteed retirement income means poorer financial knowledge and poorer risk management.

And now, retiree political power is too big to fail as well!

How come when Kay writes about market distortions from government guarantees for banks, he gets published; but when I do the same about government guarantees for people, I get the cold shoulder from editorial page editors?

Food Stamp Use Soars and Stigma Fades

That’s the title of a piece in Saturday’s New York Times. That welfare usage is up in a recession isn’t surprising, but if the stigma is truly fading it’s not a positive development. As a Cato essay on food subsidies states, “The [food stamp] program contributes to long-term dependence on government and produces various social pathologies as side effects.” Disturbingly, the USDA official who oversees the program is pleased:

Although the program is growing at a record rate, the federal official who oversees it would like it to grow even faster. ‘I think the response of the program has been tremendous,’ said Kevin Concannon, an under secretary of agriculture, ‘but we’re mindful that there are another 15, 16 million who could benefit.’

There are certainly people in need of assistance, but the government is the wrong delivery system. Michael Tanner sums up why in his book, The Poverty of Welfare:

In the absence of government welfare, the civil society can be expected to rise to the occasion, as it always has, to address the needs of the poor in a way that is both more compassionate and more effective. No government program can provide the degree of flexibility and diversity of private ones. But perhaps more importantly, voluntary, private charity treats both givers and recipients as individuals, fully respecting their worth and dignity. Unlike the coercive nature of government, private charity understands that true charity starts with the individual and that individual’s choice to give out of individual conscience and virtue.

The Times piece goes on to provide anecdotal cases of food stamp recipients who traditionally harbored negative views of the program. In an example of why federalism needs reviving, we learn that one fellow “gave in” when “an outreach worker appeared at his son’s Head Start program.”

The outreach worker is a telltale sign. Like many states, Ohio has campaigned hard to raise the share of eligible people collecting benefits, which are financed entirely by the federal government and brought the state about $2.2 billion last year. By contrast, in the federal cash welfare program, states until recently bore the entire cost of caseload growth, and nationally the rolls have stayed virtually flat.

If the outreach worker is a state government employee as the article appears to indicate, it means his or her salary is funded by taxpayers. This person’s job is to go to a Head Start program, which is also funded by taxpayers, to encourage people to sign up for additional government benefits to be funded by – drum roll – taxpayers.

We would have a more efficient government welfare system if the state governments that wanted to have welfare programs had to fund them using state tax revenues, without the subsidies and incentives for profligacy from Washington. Even better would be to allow individuals to control funding for charitable causes through private contributions without a bloated government welfare system at all.

SandelTV on Libertarianism

An episode of Harvard philosopher Michael Sandel’s fantastic television series Justice takes up libertarian political philosophy.  Now, up front: this series is a minor miracle and, if this were a classical philosophy thought experiment, I’d trade all my cherished original comic pages to see this show supplant Dancing with the Stars in the Zeitgeist. Sandel gives as reasonably sympathetic a summary of the libertarian view of rights as anyone could expect in the time he’s got.  But you also end up watching long stretches and thinking: Yes, great, an A-list Harvard philosopher can smack around undergraduates with inchoate libertarian instincts; good for him. Even this spectacularly thoughtful forum is not really capable of giving the competing ideas under discussion a suitably thorough airing.  This is not—God forbid—another tedious kvetch about either media or academic bias, as Sandel is clearly trying to give a philosophy with which he’s out of sympathy equal time.  But it does suggest a reason to open-source the conversation.  Anyone want to take up particular points on YouTube?  Ping me on Twitter as @normative; at my obnoxious sole discretion, I’ll circulate the strong ones.