Topic: Regulatory Studies

PISA School Test Results

New international student test results called PISA have been released. See here and here. Once again, U.S. high-school kids did poorly. American kids ranked 36th in math, 24th in reading, and 28th in science among 65 countries and jurisdictions. The U.S. scores were below the average of other countries in all three subject areas.

A number of Asian countries scored the highest on all three tests. But Canadian kids also did very well, scoring toward the top on all the tests. On math, for example, Canadian kids ranked 13th, compared to U.S. kids at 36th.   

American policymakers often react to such dismal U.S. results by calling for more central planning of education through federal subsidies and mandates. But note that Canada has no federal education department and no federal subsidies for its K-12 schools. Canadian education is entirely controlled at the provincial and local levels.  

The Canadian test score advantage over the United States doesn’t prove that decentralization alone leads to higher scores, but it does prove that the United States does not need any federal involvement in order to become a top-ranked schooling nation. Indeed, Cato scholars have long argued that we would better off abolishing the U.S. Department of Education and ending all federal subsidies

My colleagues have opined on the PISA results here and here.

More on Canada’s decentralized government here and here.

Against Forced Unionization

The Supreme Court has long applied exacting scrutiny to limitations placed on the freedoms of speech and association. Unfortunately, the Court has not extended such protection to those forcibly unionized.

In Abood v. Detroit Board of Education (1977), the Court accepted that promoting “labor peace”—limiting the number of competing workplace interests that bargain over the conditions of employment—was an interest so compelling that a state may mandate its employees’ association with a labor union, forcing them to subsidize that union’s speech and submit to it as their exclusive representative for negotiating with the government regarding their employment. Since that time, more than a dozen states have forcibly unionized independent contractors who are paid through Medicaid.

In 2003, Illinois forced its home healthcare workers to join and pay dues to the Service Employees International Union as their sole representative before the state. Workers subject to this coerced association have challenged the law as a violation of their First Amendment rights and the case is now before the Supreme Court. Cato, joined by the National Federation of Independent Business, has filed an amicus brief in support. We argue that Abood was wrong when it was decided and should now be overturned. Abood simply assumed without analysis that the Supreme Court had already recognized “labor peace” as a “compelling interest.”

But the cases Abood relied on only regarded “labor peace” as justifying Congress’s exercise of its Commerce Clause authority to regulate labor relations, not as a basis to override workers’ First Amendment rights—and a Commerce Clause analysis is logically irrelevant to the First Amendment. Furthermore, Abood turns the logic of the First Amendment on its head: Unions are designated as the exclusive representatives of those employees that are compelled to support them for the sole purpose of suppressing the speech of dissenting employees, but under Abood it is exactly this suppression of speech that validates coerced association under the First Amendment. Such logic can’t be reconciled with the Court’s strict scrutiny of laws in other First Amendment contexts.

Even if the Court chooses to maintain Abood, it should reject the coercive programs at issue here because they’re unsupported by Abood’s rationale and serve no other compelling state interest. The homecare workers subject to the law aren’t employed by the state. Although they’re paid through a Medicaid disbursal, every crucial aspect of the employment relationship, including workplace conditions, hiring, and firing, is determined by the individual cared-for by the worker. The union is thus limited to petitioning the state for greater pay and benefits. Given this limited scope, there can be no serious claim that SEIU’s exclusive representation of some workers has freed Illinois from any great burden due to “conflicting demands” from other workers. Whatever Abood’s long-term vitality, that flawed case doesn’t support the compelled unionization of workers who are in no way managed by the state.

The Supreme Court will hear Harris v. Quinn on January 21.

This blogpost was co-authored by Cato legal associate Lauren Barlow.

The Dangers of a Soda Tax

Discussing the problems with a soda tax is both easy and difficult. It is easy because the main argument is fairly obvious: If taxing soda in the name of public health is a legitimate function of government, then there is no functional limit on what government can do under the guise of public health.

But this argument, though straightforward, is a difficult sell because it is not terribly convincing. This is partially because it is a slippery slope argument (“step 1 will inexorably lead to step 10”), and slippery slope arguments are often straw-man arguments. Arguing against step 10 (“so why don’t we just tax all bad foods?”) is not actually the argument being made at step 1 (“I think we should tax soda.”).

The other reason the argument is difficult is because it is hard to ignore the science. Perhaps it is true that a tax on soda will help public health. In fact, I’ll concede for the sake of argument that taxes on soda will increase public health.

So, as someone who opposes soda taxes, what arguments do I have left if I’ve made these concessions? There are three: 1) The Primitivism of Politics; 2) The Modern Fallacy of “Public Health”; and 3) A Properly Formulated Slippery Slope Argument

The Court Revisits Obamacare

Obamacare’s legal troubles were far from ended when Chief Justice Roberts ruled in 2012 that the law’s “penalty” for failing to buy health insurance was really a “tax,” purportedly rendering the Act constitutional under Congress’s power to tax, even though neither he nor anyone else could say whether the Constitution recognized or allowed so sui generis a tax.

So far is the litigation from over, in fact, that if you’re planning a legal challenge to Obamacare, you’ll have get in line. Two of those in line got good news today: The Supreme Court has agreed to hear their challenges. Both concern Obamacare’s mandate that employer provided health insurance policies cover such things as sterilization, contraceptives, and abortifacients, even in the face of an employer’s religious objections. In Sebelius v. Hobby Lobby Stores, Inc. the U.S. Court of Appeals for the Tenth Circuit ruled for the individual employer. In Conestoga Wood Specialties Corp. v. Sebelius the U.S. Court of Appeals for the Third Circuit ruled against the corporate employer. At issue are both constitutional and statutory claims under the Religious Freedom Restoration Act (RFRA).

Ilya Shapiro has discussed the issues more fully here. And earlier on I had a short post on the subject here. The Court will likely hear oral argument in March. Maybe the website will be running by then.

Peter Lewis, RIP

Progressive Corp. Chairman Peter B. LewisThe Washington Post brings us some sad news today: Peter Lewis has died of a heart attack.

If you watch any television at all, you will see many TV commercials for Progressive Auto insurance, featuring the wise-cracking, Flo, with her 1960s hairdo, but Peter Lewis was the man who took the helm of the company as CEO in 1965 and turned a small company into one of the largest auto insurers in the USA.

After serving as CEO for 35 years, Lewis retired to focus on philanthropy.  He saw the futility and countless injustices of America’s drug war policies and financially supported organizations that worked to end drug prohibition, including the Cato Institute.

In ten years (less?) marijuana will be a legally sold product in much of the United States, and too many people will casually assume that it was somehow inevitable.  Last December, following the successful initiatives to legalize marijuana in Colorado and Washington, I told an adviser to Lewis that when the history of the drug war is written, he will be remembered as one of the heroes.   I am glad Lewis lived to see the turning of the tide on drug policy here in the USA.

Who’s Afraid of Political Speech?

With the dust barely settled following Harry Reid’s bombshell late last week—killing Senate filibusters of appellate court nominees, the obvious purpose of which was to enable the DC Circuit’s eventual rubber-stamping of Obama’s rule by executive order—the Wall Street Journal is now reporting that the Obama administration today “proposed a crackdown on the widespread use of tax-exempt organizations for political campaigning, seeking to reduce the influential role that the secretive groups have played in recent elections.” The timing is exquisite.

It’s hardly news that the administration (and the left generally) is obsessed with limiting political speech—and with the Supreme Court’s 2010 Citizens United decision in particular. Recall the president’s appalling breach of decorum when in his State of the Union Address two weeks later he ridiculed the captive justices sitting before him, to the cheers of the Democrats standing in applause over them. The obsession has continued, manifesting itself most notoriously in the IRS stonewalling of Tea Party applications for 501(c)4 tax-exempt status. Now, we’re told, the new “guidance” issued today “by the Treasury Department and the Internal Revenue Service would curtail a broad array of these tax-exempt entities’ activities, including campaign advertising, voter registration, get-out-the-vote efforts, and distribution of voter guides and campaign materials”—all designed, one Treasury official said, “to simplify the task of policing the groups for the IRS, by drawing brighter lines.”

Thus, under the current standard, the Journal reports,

a tax-exempt entity could run TV ads in the run-up to an election, congratulating a candidate for introducing a bill, and urging the legislature to enact it into law and viewers to support candidates who back that issue, officials said. Under the new standards, the group wouldn’t be able to count that as exempt activity if it is run within the 60-day or 30-day window.

Groups also are able to do voter registration drives and get out the vote efforts now, as long as it isn’t done in support of a particular candidate. But under the new standard, groups couldn’t do voter registration drives as part of their exempt activity, even voter drives that aren’t overtly partisan or political.

I won’t go into the arcane contribution limits or disclosure requirements that are contemplated by this proposal. But I will note that none of this would be necessary if only we could give directly to candidates and their parties far more than our crabbed current law allows. But that would mean that incumbents would face stiffer competition than they now do under current restrictions. And that’s the dirty little secret of our campaign finance law. It parades as corruption prevention, but at bottom it’s incumbent protection.

FDA Moves To Crush 23andMe

23andMe is a service that combines a home-based saliva testing DNA-sample kit combined with a web-based service to explain what the results mean and put you in touch with other users. At $99, it’s a breakthrough hit in affordable personal technology – and now the Food and Drug Administration is determined to snuff it out. I discuss this appalling development in a new post at Overlawyered: 

…Some of us want to seek out distant relatives and clues about national origins, or satisfy curiosity about patterns of disease in our family lines. For adoptive families, home genome testing can be hugely valuable in cases where one knows little about the medical history of an adoptee’s birthfamily. It’s our body, and our right to inform ourselves about it — or so we thought.

The FDA very likely has decent legal grounds to forbear from a crackdown should it choose to. But the key takeaway sentence from Matthew Herper’s piece in Forbes criticizing the company is: “This is not the way to deal with a powerful government regulator.” Disrespectful, anti-authority attitudes from someone an agency intends to regulate? Ask former Buckyballs CEO Craig Zucker where that gets you. …

Science blogger Razib Khan has suggested that information services like 23andme, rather than submit to expensive and cumbersome regulation as “medical devices,” may simply pack up and move offshore. But even if they do, that won’t be the end of our government’s jealous wish to regulate them – or so I predict in my post.

P.S. Is it relevant that governments themselves, through their law enforcement agencies, run elaborate saliva-, blood- and DNA-collection operations that are hedged with few of the protections of voluntariness, privacy and openness that one finds with 23andMe?