Archives: 08/2012

The Historical Strangeness of the ‘Targeting Argument’ for NSA Wiretapping

I’ve lately been immersed in what we might call the pre-history of the Fourth Amendment in colonial and British common-law and political thought, primarily by way of William Cuddihy’s magisterial treatise The Fourth Amendment: Origins and Original Meaning 602-1791, as well as the exceptionally erudite work of Thomas Y. Davies. One thing that this review of Founding Era thought has driven home to me is how strange the main argument made by supporters of the FISA Amendments Act sounds in light of the Founders’ core concern with prohibiting “general warrants” and “writs of assistance,” which authorized broad and discretionary searches that were not confined to “particularly named” places or things.

At the very heart of the Fourth Amendment is the demand that government agents must not be authorized, by courts or legislatures, to conduct discretionary searches of the homes and papers of Americans, on a “fishing expedition” unmoored from specific evidence. A valid arrest warrant, for example, could not authorize police to emulate the king’s messengers in the infamous  Wilkes Affair—who were empowered to enter any private home at their whim on the hunt for the authors and publishers of the radical weekly The North Briton.   Unsurprisingly, given the historical abuse of search authorities to hound “seditious” writers, a consistent theme in Founding Era condemnations of the general warrant—that “worst instrument of arbitrary power, the most destructive of English liberty and the fundamental principles of law”—is a special horror at the prospect of agents reading through a citizen’s private papers and correspondence. This helps to explain why they are specifically (and perhaps somewhat redundantly) included in the phrase “persons, houses, papers, and effects” even though one would expect “papers”  to be encompassed within the scope of “effects.” In the 21st century, our most sensitive “papers” are often made of bytes rather than wood pulp, but courts have generally understood them to be entitled to the same stringent protection.

Perversely, modern defenders of the FISA Amendments Act argue that sweeping NSA surveillance of our digital “papers” is constitutionally unproblematic precisely because it does not “target” the Americans whose papers are searched: The groups or individuals who are the “targets” of programmatic NSA communications interception must be foreign.  One wonders what the Founders would have made of this strange “defense”: When the king’s messengers burst into printer Dryden Leach’s home in the dead of night to ransack his personal papers—acting on a secondhand report that John Wilkes had recently been seen in his shop—the fact that Wilkes and not Leach was the ultimate “target” of the search hardly excused it in the eyes of liberty-minded observers on either side of the Atlantic. What was so egregious was precisely that the messengers enjoyed “a discretionary power… to search wherever their suspicions may chance to fall,” and not merely a power limited to the person and property of their specific “target.”

Similarly,  it’s not clear why the fact that the “target” of NSA’s information vacuum cleaner must be located overseas should comfort the thousands (if not tens or hundreds of thousands) of Americans whose private digital “papers” will be confiscated in the process. As the legislative history of FISA makes clear, the “target” in the context of that statute is simply “the individual or entity about whom or from whom information is sought. In most cases, this would be the person or entity at whom the surveillance is physically directed… but this is not necessarily so.” [Emphasis added.]  In other words, surveillance that “targets” Al Qaeda is potentially surveillance of anyone talking about Al Qaeda, not necessarily to Al Qaeda.

Thus the law authorizes—one might even, ahem, say it provides general warrant for—the interception and storage of your confidential e-mails, provided that NSA is looking for information about some foreign group or person, and provided they don’t know your e-mail is entirely domestic at the time they intercept it. Of course, given how the Internet operates, there’s a decent chance you don’t know which of your own digital communications are entirely domestic either, unless you make a habit of running traceroute every time you send an e-mail, visit a Web site, or chat over Skype or IM.

Perhaps because ordinary people aren’t clear on the precise meaning of “target” in the FISA statute—and because even those of us who pay close attention have to make educated guesses about just how NSA interception works—we’ve allowed legislators to get away with suggesting that the rights of Americans are adequately protected as long as Americans aren’t “targets.” Yet the governmental power our Founders regarded as most outrageous and tyrannical—the very paradigm of abuse that the Fourth Amendment was designed to protect us against—was just this kind of discretionary authority to inspect the private papers of citizens who were not specifically “targets” of a legitimate investigation. That’s why the Fourth Amendment protects us against unreasonable searches—not against unreasonable “targeting.”

Paul Ryan and the U.S. Conference of Catholic Bishops

Economist Antony Davies and Catholic theologian Kristina Antolin argue in the Wall Street Journal that the U.S. Conference of Catholic Bishops’ criticism of Paul Ryan’s budget policies is wrongheaded:

All people have the moral obligation to care for those who are less fortunate. But replacing morality with legality is the first step in replacing church, religion and conscience with government, politics and majority vote. Coercing people to feed the poor simply substitutes moral poverty for material poverty.

The bishops dance with the devil when they invite government to use its coercive power on their behalf, and there’s no clearer example than the Affordable Care Act. They happily joined their moral authority to the government’s legal authority by supporting mandatory health insurance. They should not have been surprised when the government used its reinforced power to require Catholic institutions to pay for insurance plans that cover abortions and birth control.

I made similar points back in April after the USCCB issued a series of letters criticizing cuts to domestic spending programs proposed by House Republicans:

The USCCB’s criticism comes at a time when it’s appropriately fighting the Obama administration’s mandate that Church-affiliated employers must provide health insurance that covers birth control. As a Catholic, it pains me that the bishops apparently do not recognize that a central government that is big and powerful enough to spend billions of other people’s dollars on housing, food, and health care programs, which the bishops support, is inevitably going to shove its tentacles into areas where they’re not wanted. In other words, if you play with fire, there’s a good chance you’re going to get burnt…

The Catholic Church could do a lot more for the poor if its parishioners were able to put more into the collection plate instead of rendering it unto Caesar. Thus, it’s pretty sad that the bishops see this as a “time when the need for assistance from HUD programs is growing” rather than a time for the Church to reassert its traditional role in taking care of those in need—a role that is hindered by the welfare state that the bishops embrace.

That Ryan wants to tinker with the federal welfare state in order to preserve it makes the bishops’ criticism even more absurd.

Section 5 of the Voting Rights Act Has Got to Go

This blogpost (and the brief described herein) was co-authored by Cato legal associate Matt Gilliam.

Today Cato filed an amicus brief supporting the petitions for Supreme Court review in two cases involving similar challenges to the Voting Rights Act of 1965. Specifically, the cases challenge the requirement under Section 5 that certain jurisdictions (as determined by a 35-year-old formula in Section 4(b)) receive approval (“preclearance”) from the Department of Justice or a special federal court in Washington before implementing any change to election regulations, no matter how modest.

In Nix v. Holder, the Department of Justice rejected the decision by voters in Kinston, North Carolina, to make local elections nonpartisan – as is the case in most of the state – on the basis that “the elimination of party affiliation on the ballot will likely reduce the ability of blacks to elect candidates of choice.” In Shelby County v. Holder, an Alabama county sued to attain preemptive resolution of the “serious constitutional questions” noted by the Supreme Court in the last significant VRA challenge in 2009. Both lawsuits hinge on the modern validity of Section 5, and both were turned back by the U.S. Court of Appeals for the D.C. Circuit (Shelby County over a heated dissent by Judge Stephen Williams). Both now seek Supreme Court review, and Cato’s amicus brief urges the Court to hear either case, or both.

The Fifteenth Amendment gives Congress the power to craft “appropriate” enforcement legislation to secure the rights of all citizens to vote, regardless of race or color. Congress’s initial attempts to enforce those rights, however, were frustrated by tactics designed to evade federal authority. Congress thus enacted Section 5, meant to apply to jurisdictions with a history of disenfranchising black voters. The Supreme Court, in upholding Section 5 against constitutional challenge in the 1960s, recognized that the measure is extraordinary, exacting perverse and substantial costs on federalism and equal protection principles – but as long as Congress’s electoral concerns were substantiated, Section 5 remained constitutionally justified. Enforcement of the VRA went on to successfully defeat the systemic discrimination that had once justified Section 5.

In 2006, however, Congress reauthorized the VRA for another 25 years, without explaining why certain jurisdictions had to be subject to such an intrusive process on the basis of an obsolete formula, particularly when all of the evidence showed that the goal of minority representation and access to voting in the South was achieved (and indeed that black registration and voting rates were higher in covered jurisdictions than elsewhere in the country). Indeed, the 2006 revisions made matters worse, authorizing the federal government to reject any electoral changes in a covered jurisdiction, no matter how small or insignificant, whenever they are believed to evince “any discriminatory purpose” or “diminish[] the ability of minority citizens … to elect their preferred candidate of choice.” Beyond the harm to federalism, the modern Section 5 thus creates a serious equal protection dilemma, mandating that covered jurisdictions factor race into their election laws even as the Fourteenth and Fifteenth Amendment’s non-discrimination principles forbid it.

In addition to these problems, Section 5 cannot coexist with Section 2 (a provision aimed at discrete instances of discrimination in voting). The Supreme Court should excise Section 5, leaving Section 2 private rights of action as the proper remedy for voter disenfranchisement. Because Section 5’s burdens are no longer justified by “current needs,” they fail to satisfy the Court’s requirements for “appropriate” enforcement legislation. In other words, Section 5’s early success quickly obviated its legitimacy. Accepting that point is not an admission of defeat, but a declaration that the VRA has achieved its promise.

The Court will decide this fall whether to hear Nix v. Holder and/or Shelby County v. Holder.

The Cost of Government

In today’s Washington Post Lawrence Summers demonstrates with mathematics that you can’t shrink the federal government – as long as (he doesn’t say) you don’t change the tasks you assign to it. True enough, if the government is still going to engage in “sustained deployments” of our military across the globe, and provide retirement income and health care to tens of millions of people, then the size of government isn’t going to shrink. But surely those are the issues we should be debating.

Michael Cannon below notes another key point in Summers’s argument:

[I]ncreases in the price of what the federal government buys relative to what the private sector buys will inevitably raise the cost of state involvement in the economy. Since the early 1980s the price of hospital care and higher education has risen fivefold relative to the price of cars and clothing, and more than a hundredfold relative to the price of televisions.

I would elaborate on Michael’s response. The fact that “the price of hospital care and higher education” has risen much faster than the cost of other goods is not an exogenous variable. Why do those costs rise so much faster? Because the government purchases them, reducing or eliminating the normal effects of supply, demand, and competition. I wrote about this in a 1994 article reprinted in my book The Politics of Freedom responding to an argument made by the economist William Baumol and the scholar-statesman Daniel Patrick Moynihan:

Moynihan identifies a number of services afflicted with Baumol’s disease: “The services in question, which I call The Stagnant Services, included, most notably, health care, education, legal services, welfare programs for the poor, postal service, police protection, sanitation services, repair services … and others.” He points out that many of those are provided by government and posits that “activities with cost disease migrate to the public sector.”

But maybe he has it backwards. Maybe activities that migrate to the public sector become afflicted with cost disease. The conservative magazine National Review, which, surprisingly, seems to accept Moynihan’s thesis, has inadvertently supplied us with some evidence on this point.

Ed Rubinstein, National Review’s economic analyst, writes, “For more than three decades health-care spending has grown faster than national income… . The trend in health-care costs is no different from that of other services.” He cites education and auto repair as examples. However, the numbers Rubinstein provides don’t support his–or Moynihan’s–point. Look at the accompanying figure.

The cost of auto repair, a service provided almost entirely in the private sector, has barely outpaced inflation. The cost of medical care increased twice as fast as inflation. Government’s share of medical spending increased from 33 percent in 1960, when the chart begins, to 53 percent in 1990. Meanwhile, the cost of education, almost entirely provided by government, increased three times as fast as inflation–despite the constant complaints about underfunded schools.

The lesson is clear: Services provided by government are afflicted with Baumol’s disease in spades. Services provided in the private sector, where people spend their own money, are much less likely to soar in cost.

Medical care is a good area in which to test this theory because over the past 30 years it has been paid for in three different ways: out-of-pocket spending by consumers; insurance payments, mostly provided by employers; and government payments. As out-of-pocket spending declines in importance, medical inflation heats up. And private-sector spending on medical care rose only 1.3 percent a year between 1960 and 1990, while government spending rose more than three times as fast–4.3 percent a year.

When services are provided privately, and consumers can decide whether to purchase them, or choose another provider, or do without, there’s a powerful incentive to improve productivity and keep costs down. Stagnant productivity in government-run services reflects not so much Baumol’s disease as what we might call Clinton’s disease, the notion—even now, in 1994—that government can provide services more efficiently and cost-effectively than can the marketplace.

Now, I think Larry Summers knows this. He knows that when consumers don’t face full costs for services, they tend to consume more of them without worrying about the cost. So he knows that these costs could come down, if only we moved these services into the market, or at least found ways to get consumers directly concerned with costs. He should rethink his claims about the inevitability of more expensive government. These realities are in fact choices, decisions that voters and taxpayers can change.

Obama Must Not Read Our Stuff

The topic of this weekend’s weekly presidential radio address was education. The message? You guessed it: The federal government needs to “invest” more in education – as do other levels of government – but instead they are making cuts.

At this point I don’t know what more can be said to show how nonexistent is the connection between federal spending and actual education. As we at Cato’s Center for Educational Freedom have pointed out on countless occasions, federal and overall spending on public schooling has skyrocketed for decades as test scores have laid motionless; staffing has ballooned at the same time; Head Start has almost no lasting benefits; and federal higher ed spending largely enables massive price inflation and encourages people to enter college but not finish.

The evidence, frankly, is overwhelming that federal education “investment” is really just flushing precious money down the toilet. Which makes me think that maybe President Obama doesn’t read our stuff. Or maybe he just doesn’t care.

Free Trade and Tobacco

Down in Australia, a law requiring “plain packaging” of cigarettes is causing a lot of controversy.  In a nutshell, under the law, cigarette packaging must be drab in color, with no branding of any sort, in order to reduce the attractiveness of tobacco products.

Whether this law will discourage smoking is certainly open to question.  Does Joe Camel cause kids (or anyone) to smoke?  I’ve always had my doubts.

But regardless of the law’s effectiveness, there are some interesting trade and investment disputes that have arisen because of the law, and these disputes help illustrate how, in recent years, trade agreements have gone beyond traditional notions of fighting protectionism, and now can be said to act as a limited form of global governance.

Before we get into the trade and investment disputes, though, let me mention briefly a related case under Australia’s “takings” law.   Some tobacco companies challenged the plain packaging law in Australian court, arguing, in essence, that their trademarks had been acquired without just compensation.  Last week, the Australian High Court rejected this argument.  Now that the domestic challenge is over, attention has turned to the international disputes.

At the international level, there are two categories of complaints.  First, an Australian subsidiary of Philip Morris International has brought a complaint against Australia under the Hong Kong-Australia Bilateral Investment Treaty (investors can sue governments directly under these treaties).  And second, several countries (presumably with legal advice from the tobacco companies themselves) have filed complaints against Australia at the World Trade Organization.

Two of the main arguments against the plain packaging law are: (1) the tobacco companies’ intellectual property rights are being infringed by the law because their trademarks cannot be used on the packaging, and (2) the value of the tobacco companies’ investment in Australia has been undermined by the law (kind of like a ”takings” case).  (The issues are more complex than this, but I don’t want to get bogged down too much in legal arguments, so I’ll leave it at that).

With regard to intellectual property, one of the key issues is whether trademark holders have a right to use their trademarks, or, instead, whether they simply have a right to prevent others from using them.  Here, the Australian law clearly prevents the tobacco companies from using their trademarks, but is that enough to violate the relevant international agreements?  IP experts (and I’m not one) seem divided on the issue.

As for investment, the international legal obligations at issue are extremely vague, and different arbitrators have taken different approaches to the issue.  There’s a lot of uncertainty as to what the scope should be for international “takings” law.

At this point, you may be wondering, what does all this have to do with free trade?  That’s a good question.  The answer is in two parts.  First, trade agreements have expanded considerably over the years.  They are not just about protectionism anymore.  For better or worse, trade agreements have detailed obligations on intellectual property, and the investment rules mentioned above are now included in many of these agreements.

Second, the WTO complaints do include more traditional “trade” claims.  The complainants argue that the law discriminates against foreign products and is too trade restrictive.  It’s not clear to me at this stage what the basis for these claims is.  On its face, the law seems to treat products from all countries the same.  Perhaps the lawyers have something up their sleeve, although they may just be trying to make this issue seem like a more typical trade dispute.

As you can see, there is a lot going on with these cases.  They raise general trade policy questions, like “what is free trade” and “what issues should trade agreements cover.”  They get into the proper scope of trademark protection.  And they address the international counterpart to “regulatory takings” rules.

And if that’s not complicated enough, this is just one of several “free trade and tobacco” issues going on right now, which I discuss in a new Free Trade Bulletin.  In this piece, I argue that protectionism is no better in the tobacco industry than in any other industry, so we shouldn’t carve tobacco out of trade agremeents, as some have suggested.  At the same time, the extent to which trade agreements are becoming a source of “global governance” is a legitimate source of concern, and cases such as the plain packaging one may be useful to help highlight the importance of sorting out what policies trade agreements should pursue.

Larry Summers: Uncle Sam Is No Bill Shatner

In today’s Washington Post, Larry Summers writes:

[I]ncreases in the price of what the federal government buys relative to what the private sector buys will inevitably raise the cost of state involvement in the economy. Since the early 1980s the price of hospital care and higher education has risen fivefold relative to the price of cars and clothing, and more than a hundredfold relative to the price of televisions.

Perhaps the lesson to be drawn is that government should buy less stuff? Maybe then prices in the health and education sectors would behave like the prices for cars, clothing, and televisions.