Archives: 03/2012

EPA and the ‘Necessary Bankrupting’ of Coal

In its proposed rulemaking on emissions from coal-fired power plants, the Environmental Protection Agency has fulfilled President Obama’s campaign statement that his administration would “essentially bankrupt” anyone who had the audacity to hope to build a new generation facility. By essentially prohibiting the production of new plants, the administration is again picking winners and losers in our energy economy, something which is best done by the market.

Supporters of this policy will claim that it is cheaper to generate electricity from natural gas, and that is true for now.  But major producers using hydraulic fracturing and new horizontal drilling techniques in shale formations have recently stopped drilling new wells because the price is so low.

If it ultimately costs more to produce electricity from gas than it does from coal, the administration will have slapped yet another energy price hike on us—in addition to what we already pay to subsidize solar power, windmills, and Chevrolet Volts while taxpayers absorb the debt from the multiple bankruptcies of other politically correct energy concerns like Solyndra, Range Fuels, and a host of others.

The Myths and Realities of ‘Stand Your Ground’ Laws

In recent days a great deal of ill-informed commentary has appeared about the “stand your ground” self-defense law enacted in Florida and many other states since 2005 (earlier) and how if at all it applies to the February 26 confrontation between George Zimmerman and Trayvon Martin. The Orlando Sentinel invited me to sort things out for readers and the resulting op-ed is here.

Much of the piece is devoted to clearing away myths:

Let’s start with one of the most common misreadings of the law, namely that (in the words of Washington Post columnist E.J. Dionne) it sets out a rule of “Feel threatened, just shoot.” Florida law justifies lethal self-defense in a public place only under reasonable belief that force is necessary to prevent imminent death or great bodily harm.

Belief that’s not reasonable is of no account. No wonder, according to Sentinel reporting, Central Florida police regularly arrest people who try to claim self-defense after committing violent acts, and courts regularly convict them. That’s consistent with the “stand your ground” law.

The best-known provision of “stand your ground” rejects the so-called “duty to retreat.” Under that rule, prosecutors could sometimes overcome an otherwise valid claim of self-defense by arguing that you could have safely fled your attacker.

But — to clear up another misconception — the old duty of retreat would not have put Zimmerman at fault for following Trayvon around the neighborhood. Instead it came into play only when a confrontation had boiled up to a point of imminent violence.

Evidence remains inconclusive on some crucial points, in particular what happened immediately before the two men got into a scuffle in which Martin inflicted injuries on Zimmerman, who then shot him. (Jacob Sullum has a good summary of the current state of reporting, which is changing rapidly.) Under most likely scenarios, however, Zimmerman’s guilt or innocence as a substantive matter is the same under Stand Your Ground as under Florida’s pre-2005 law, because the prosecutors’ case probably would not hinge on the “duty to retreat.” The 2005 law does afford him some procedural advantages, however; and it also has a number of other provisions (applying to immunity in defense of property and of third parties’ safety, for example) that may well be worth a second look but are not relevant to the Martin/Zimmerman case.

On the key legal issue of “provocation” as it applies to violent fights, by the way, Michael Mannheimer has a very useful post at PrawfsBlawg. You can read my new Orlando Sentinel piece here.

The ‘Dodd Rule’ on Nominations

Obama’s recent nomination of Jeremy Stein and Jerome Powell to the Board of Governors of the Federal Reserve System raises an important question: How should the Senate treat nominations whose terms are likely to run beyond the term of the current president? If confirmed, Stein could serve until 2018 and Powell until 2014. Of course this pales in comparison to current governor Janet Yellen, whose term runs until 2024.  With or without Stein and Powell, Obama nominations will have control of the Federal Reserve for years to come.

The long terms of Federal Reserve governors are meant to insulate them from political pressure. But that’s after they’ve been confirmed.  This structure tells us little about how to handle such appointments during their nomination phase.

In the absence of strong policy or theoretical rationales, we often look to precedent. In this case we have at least one. In December of 2007, almost a year before the November 2008 election, then Senate Banking Committee chair Chris Dodd (D-CT) said, in relation to the nomination of Randall Kroszner to the Federal Reserve, “We’re frankly getting down to less than a year away from the election. On nominations of that length, I’m fairly reluctant.” Senator Dodd acted (or rather failed to act) on that reluctance, and blocked the nomination of Professor Kroszner.  His nomination was not an exception, as the nominations of Larry Klane to the Federal Reserve and a couple of nominations to the Securities Investor Protection Corporation were also blocked, for apparently this same reason. Dodd also delayed nominations to the President’s Council of Economic Advisers, although those positions would have ended with the term of President Bush. Also worth noting is that these important economic policy positions were being blocked in the middle of a recession and financial crisis, when one would think you need “all hands on deck.”

Is this “Dodd rule” the correct position? It’s hard to know. I can say I didn’t think it was appropriate at the time. And I am usually not one to believe that “two wrongs make a right.” The correct solution, in my view, would be to have the Senate decide upon the appropriate length of time before a presidential election that it will no longer consider nominations that run beyond the president’s term and incorporate that decision into the Senate rules.  Until then operating under the “Dodd Rule” strikes me as fair enough.

British Student Jailed over a Tweet

I had to read this story twice and I still cannot quite bring myself to believe it. Apparently, a British judge sentenced a 21 year old biology student to 56 days in jail for making fun of a tragic near-death experience of a soccer player. As Fabrice Muamba, a Bolton Wanderers midfielder, collapsed in mid-play due to a heart-attack, Liam Stacey tweeted “LOL (laugh out loud). **** Muamba. He’s dead!!!’”

Disgusting and childish? Yes! But did the tweet warrant a prison sentence and branding of Stacey, who was drunk at the time of his tweeting, as an inciter of “racial hatred” (Muamba is black, while Stacey is white)? What’s next, flogging for making fun of fat people? Thank goodness that the First Amendment of the U.S. Constitution protects free speech—even thoroughly tasteless and deeply offensive speech. Otherwise there is no telling where our political elite would lead us.

There is, of course, a larger point here. Britain, like some other European countries, suffers from deep fissures along racial, religious, national, and class lines. The elite has attempted to fix those problems by increasingly regulating speech and criminalizing behavior at an astonishing rate of one new offense a day between 1997 and 2010. (The new Conservative/Liberal Democratic coalition government has promised to do things differently, but no major repeal of law and regulation has yet taken place.) How can a society address problems that it cannot talk about? How can it remain free if so much is forbidden?

The Other Federal Takeover

Right now the nation is fixated on the Supreme Court and health care, as well it should be. If the Court rules the wrong way and the individual mandate is upheld, seemingly the last limit to federal power—Washington can’t make you buy stuff—will be gone. So yes, please, let’s focus on ObamaCare.

When the arguments end and the health fight abates for a while, however, let’s pay some much needed attention to another federal takeover, one that is constantly being overshadowed by bigger things like wars, ObamaCare, and budget blowouts: looming federal domination of education.

There’s actually an immediate ObamaCare connection to education, though few will likely recall it. To make the CBO cost estimates come out right, Democrats attached the Student Aid and Fiscal Responsibility Act (SAFRA) to the already immense legislation. SAFRA eliminated guaranteed college loans—loans originated through private lenders but completely backed by taxpayer money—and made almost all lending direct from the Treasury. It wasn’t a sudden takeover as many Republicans framed it—the guaranteed program already represented massive federal control—but it did push the private sector even farther to the student-lending fringes.

Much more insidious is what Washington has been doing in K-12 schooling.

The real sea change was No Child Left Behind, when the Feds went from primarily doling out money, to dictating that every state have standards and tests in math, reading, and science, and schools and districts make yearly “proficiency” progress. It was a huge ramping-up of already unconstitutional federal involvement.

At least NCLB, though, was enacted through the proper legislative process: Congress debated the law, voted on it, and the president signed it. These days, that’s just too much of a bother.

The Obama administration started unilaterally making education policy with the “Race to the Top,” a contest in which states competed for $4 billion in “stimulus” money. Among the administration-specified things states essentially had to adopt to win? National curriculum standards, better known as the “Common Core,” which we are told repeatedly are voluntary for states to adopt.

But wait. Didn’t I used to write that Race to the Top was $4.35 billion? What happened to the other $350 million?

It wasn’t part of the purse states competed for. Instead, the administration is using it to pay for the development of national (read: “federal”) tests to go with the Common Core.

In case all that weren’t enough, the Obama Administration has decided it’s tired of waiting for Congress to rework NCLB and is issuing waivers to states that promise to implement administration-approved reforms. Included in those is adopting “college- and career-ready” standards, a euphemism for the Common Core. In other words, the federal government is on the precipice of dictating the basic curriculum for every public school in America, and doing so without even the semblance of following the constitutional, legislative process. It’s not just a federal takeover, but an executive branch takeover.

Why hasn’t this gotten the sort of attention that’s been showered on health care?

Unfortunately, a large part of the problem is that people are simply accustomed to a government education monopoly. Historically such a monopoly hasn’t been the norm, but in our lifetimes it has, and government schooling advocates would have us believe that it is the cornerstone of our society. Not so with health care: lots of people want others to pay for their care, but the default has never been government assigning you a doctor and hospital based exclusively on your home address.

The other part of the problem is people simply don’t know about the federal edu-coup. This is especially the case with national standards, which advocates have purposely soft pedaled to avoid the fate of open and honest—but disastrous—federal standards efforts in the 1990s. And when the topic has come up in public discussion, classic propaganda techniques have been employed: repeat enough that the effort is completely “state-led and voluntary,” and people will believe you.

Thankfully, it’s not too late to reverse this. There’s no historic Supreme Court showdown on the horizon, but some states have started to resist federal control, and groups like the Pioneer Institute and Pacific Research Institute have undertaken concerted efforts to expose the Common Core. The biggest problem is that the public is largely oblivious to what’s going on. Which is why, after the ObamaCare Supreme Court arguments are over, we need to turn our attention to the other, almost complete, federal takeover: education.

Randy Barnett and the Health Care Overhaul

Cato senior fellow Randy Barnett is featured on the front page of today’s New York Times as the chief academic critic of the constitutionality of the 2010 health care law. He spoke at Cato on that topic last Friday; video here.

The article notes his longstanding interest in the Ninth Amendment, the subject of his book published by Cato and the George Mason University Press in 1989, The Rights Retained by the People: The History and Meaning of the Ninth Amendment.

Professor Barnett also cooperated with Cato on his most recent book, Restoring the Lost Constitution: The Presumption of Liberty.

Wall Street’s Seat at the Federal Reserve?

Tomorrow the Senate Banking Committee will likely hold a vote on President Obama’s recent nominations to the Federal Reserve Board, Harvard professor Jeremy Stein and former investment banker and Treasury official Jerome Powell. I’ve written elsewhere on how these two fail to meet the statutory requirements for board membership, as it relates to geography. But there is another issue that continues to bother me about these nominations.  That is the unwritten assumption that Wall Street gets a seat on the Federal Reserve Board.

As Bloomberg reports Powell “would bring expertise on financial markets to the Fed’s board, filling a void left by Kevin Warsh, a former Morgan Stanley banker.” But this overlooks the fact that the New York Federal Reserve President, currently former Goldman Exec William Dudley, is a permanent member of the Fed’s Federal Open Market Committee (FOMC). As an institutional matter, the Fed already has a line from Wall Street via the New York Fed, where’s the need for another?

The Federal Reserve Act requires the president, when making nominations to the Fed, to give “due regard to a fair representation of the financial, agricultural, industrial, and commercial interests.” As far as I can tell there is zero representation on the Board for “agricultural, industrial and commercial interests” and already one former banker (Duke) on the Board. How is that “fair?”  While this “fairness” requirement is not as black and white as the geography issue, I do believe it is one fundamental to the functioning of the Fed. Is this a Fed that represents all sectors and interests in the economy, or is this a Fed that mainly represents Wall Street (and academia, which is never mentioned in the Federal Reserve Act)?

While I do not personally know Mr. Powell, and I have no reason to suspect he is anything other than an honorable and well-intended man, I think we all have reason to believe that the last thing the Fed needs is another New York investment banker.