• “Sadly, in Egypt’s case, a freely elected civilian government may prove powerless in the face of the deeply entrenched and well-organized military.”
• “Washington politicians from both parties, and bureaucrats, have for decades successfully decreased our freedom and liberties as they have regulated more and more of our lives, including our retirement.”
• “The Ryan proposal correctly focuses on achieving debt reduction through spending cuts, but this very gradual debt reduction schedule is a weakness that could lead to its downfall.”
• “Nearly two years ago Sen. McCain, along with Senators Graham and Lieberman, was supping with Qaddafi in Tripoli, discussing the possibility of Washington providing military aid.”
• Cato media fellow Radley Balko joined FOX Business Network’s Stossel recently to discuss your right to make video recordings of police, and why exercising that right frequently is vital to liberty:

Melissa Yu is the winner of first prize in the middle school category of C‑SPAN’s StudentCam 2011 competition. Her video, “Net Neutrality: The Federal Government’s Role in Our Online Community,” is an eight-minute look at the push for regulation of Internet service with an emphasis appropriate for students on how the three branches of government have each been involved in the story up to now.

If you haven’t been following along, or if you want a refresher on net neutrality regulation, here’s a better video than I could have produced in eighth grade. Or now. Congratulations, Melissa Yu!

Last month, I wrote about a major eminent domain struggle in National City, California. City officials had decided to declare almost seven hundred properties blighted even before conducting any sort of blight study, which eventually turned out to be riddled with errors. 

At the center of the fight is a private, nonprofit boxing gym that has helped keep hundreds of at-risk kids in school and off the streets. The city wanted to bulldoze the center so a wealthy developer can build luxury condos and stores. 

In 2007, the Institute for Justice teamed up with the gym and filed suit to stop the city from taking the property, and here’s video about their legal fight:

Four years later, IJ scored a knockout blow against eminent domain abuse: Last Thursday, the Superior Court of California struck National City’s entire 692-property eminent domain zone and found that National City lacked a legal basis for its blight declaration. 

This is a major victory for California property owners, and the first case to apply the property reforms that the state enacted to counter the 2005 Kelo decision. Learn more about the victory here.

I previously wrote about eminent domain shenanigans here and you can read more from Cato on property rights here.

There hasn’t been much good economic news in recent years, but one bright spot for the economy is that the United States is a haven for foreign investors and this has helped attract more than $10 trillion to American capital markets according to Commerce Department data.

These funds are hugely important for the health of the U.S. financial sector and are a critical source of funds for new job creation and other forms of investment.

This is a credit to the competitiveness of American banks and other financial institutions, but we also should give credit to politicians. For more than 90 years, Congress has approved and maintained laws to attract investment from overseas. As a general rule, foreigners are not taxed on interest they earn in America. Moreover, by not requiring it to be reported to the IRS, lawmakers on Capitol Hill have effectively blocked foreign governments from taxing this U.S.-source income.

This is why it is so disappointing and frustrating that the Internal Revenue Service is creating grave risks for the American economy by pushing a regulation that would drive a significant slice of this foreign capital to other nations. More specifically, the IRS wants banks to report how much interest they pay foreign depositors so that this information can be forwarded to overseas tax authorities.

Yes, you read correctly. The IRS is seeking to abuse its regulatory power to overturn existing law.

Not surprisingly, many members of Congress are rather upset by this rogue behavior.

Senator Rubio, for instance, just sent a letter to President Obama, slamming the IRS and urging the withdrawal of the regulation.

At a time when unemployment remains high and economic growth is lagging, forcing banks to report interest paid to nonresident aliens would encourage the flight of capital overseas to jurisdictions without onerous reporting requirements, place unnecessary burdens on the American economy, put our financial system at a fundamental competitive disadvantage, and would restrict access to capital when our economy can least afford it. …I respectfully ask that Regulation 146097–09 be permanently withdrawn from consideration. This regulation would have a highly detrimental effect on our economy at a time when pro-growth measures are sorely needed.

And here’s what the entire Florida House delegation (including all Democrats) had to say in a separate letter organized by Congressman Posey.

America’s financial institutions benefit greatly from deposits of foreigners in U.S. banks. These deposits help finance jobs and generate economic growth… For more than 90 years, the United States has recognized the importance of foreign deposits and has refrained from taxing the interest earned by them or requiring their reporting. Unfortunately, a rule proposed by the Internal Revenue Service would overturn this practice and likely result in the flight of hundreds of billions of dollars from U.S. financial institutions. …According to the Commerce Department, foreigners have $10.6 trillion passively invested in the U.S. economy, including nearly “$3.6 trillion reported by U.S. banks and securities brokers.” In addition, a 2004 study from the Mercatus Center at George Mason University estimated that “a scaled back version of the rule would drive $88 billion from American financial institutions,” and this version of the regulation will be far more damaging.

Both Texas Senators also have registered their opposition. Senators Hutchison and Cornyn wrote to the Obama Administration earlier this month.

We are very concerned that this proposed regulation will bring serious harm to the Texas economy, should it go into effect. …Forgoing the taxation of deposit interest paid to certain global investors is a long-standing tax policy that helps attract capital investment to the United States. For generations, these investors have placed their funds in institutions in Texas and across the United States because of the safety of our banks. Another reason that many of these investors deposit funds in American institutions is the instability in their home countries. …With less capital, community banks will be able to extend less credit to working families and small businesses. Ultimately, working families and small businesses will bear the brunt of this ill-advised rule. Given the ongoing fragility of our nation’s economy, we must not pursue policies that will send away job-creating capital.We ask you to withdraw the IRS’s proposed REG-14609–09. The United States should continue to encourage deposits from global investors, as our nation and our economy are best served by this policy.

Their dismay shouldn’t be too surprising since their state would be especially disadvantaged. Here are key passages from a story in the Houston Chronicle.

Texas bankers fear Mexican nationals will yank their deposits if the institutions are required to report to the Internal Revenue Service the interest income non‑U.S. residents earn. …such a requirement would drive billions of dollars in deposits to other countries from banks in Texas and other parts the country, hindering the economic recovery, bankers argue. About a trillion dollars in deposits from foreign nationals are in U.S. bank accounts, according to some estimates. …The issue is of particular concern to some banks in South Texas, where many Mexican nationals have moved deposits because they don’t feel their money is safe in institutions in Mexico. …“This proposal has caused a wave of panic in Mexico,” said Lindsay Martin, an estate-planning lawyer with Oppenheimer Blend Harrison + Tate in San Antonio. He has received in recent weeks more than a dozen calls from Mexican nationals and U.S.-based financial planners with questions on the rule. …Jabier Rodriguez, chief executive of Pharr-based Lone Star National Bank, said not one Mexican national he has spoken to backs the rule. “Several of them have said if it were to happen, then there’s no reason for us to have our money here anymore,” he said. Many Mexican nationals worry that the data could end up in the wrong hands, jeopardizing their safety. If people in Mexico and some South American nations find out they have a million dollars in an FDIC-insured account in the United States, “their families could be kidnapped,” added Alex Sanchez, president of the Florida Bankers Association.

For those who want more information about this critical issue, here’s a video explaining why the IRS’s unlawful regulation is very bad for the American economy.

Lately I seem to have been blogging — and filing briefs — a fair bit on campus First Amendment issues, regarding both students and professors. The threats to free speech and academic freedom stretch far beyond the halls of Widener Universty and concern more than just the rules of political correctness.

This month, UCLA’s James Enstrom (34 years a professor) is fighting his dismissal from UCLA for submitting a paper to a regulatory board that denied that diesel particulates cause 2,000 premature deaths in California per year. The scientific literature published subsequent to his initial findings support his thesis and the conclusions his work refuted turned out to be written by a fraud who received his Ph.D. from a diploma mill. In short, he was fired for telling the truth.

Rea​son​.tv produced an excellent (and infuriating) video detailing the story. The story exposes a corrupt political process, bogus credentials, cronyism, and trumped-up charges against a man guilty only of scientific rigor:

Thankfully, our friends at the Foundation for Individual Rights in Education have taken Professor Enstrom’s case. You can read more about the sorry tale here. I wish the best of luck to FIRE and Prof. Enstrom in their fight.

“Bijan Pakzad, an extravagant fashion designer and boutique owner who happily and unabashedly made wealthy men look rich, feel rich and smell rich,” has died, reports the Washington Post. Mr. Pakzad explained that he catered to customers who “normally aren’t concerned about inflation.”

His slogan — “the costliest men’s wear in the world” — helped his opulent clothing store become known as the West Coast’s one-stop Savile Row.

While drinking champagne presented by white-gloved butlers, customers could shop for $2,500 silk pajamas, $1,500 cologne, a $24,000 mink-lined topcoat, a $19,000 ostrich vest, $55,000 crocodile luggage or even a $120,000 Mongolian chinchilla bedspread lined with silk.

Who could afford such clothes? Warren Buffett and Bill Gates? Yes, but they don’t look like they spend so much money on clothes. The Post names a few customers:

From the moment in 1976 when Mr. Pakzad first opened Bijan, his Rodeo Drive emporium, three words bedecked the entrance: “By appointment only.”

The locked-door policy made clear that Mr. Pakzad exclusively catered to men who had money, power or fame — and usually all three. His clients included President Obama, Frank Sinatra, Cary Grant, Stevie Wonder, Arnold Schwarzenegger and Michael Jordan.

Wait, President Obama? That’s not the same Barack Obama who told college graduates not to “take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy,” is it?

During Tuesday’s oral arguments in American Electric Power v. Connecticut—the global warming lawsuit that Walter Olson recently discussed here and Ilya Shapiro here, and in which Cato filed amicus briefs at both the certiorari stage and the merits stage—the justices concentrated their inquiries on a few technical legal doctrines in order to answer one question: should states even be allowed to sue power companies for the damage that global warming has allegedly done to their lands and citizens?

There are multiple ways this question could be answered, and how it is answered in the final opinion could have important ramifications for future environmental litigation.

Connecticut and five other states, plus New York City and three land trusts, brought the suit against five power companies. Their claim is based on the age-old tort of nuisance, the same ground that lets you sue your neighbor if his contaminated water seeps onto your land. Essentially, the states argued that if courts can solve that kind of dispute, then a dispute over global warming is only slightly different—bigger in scope, certainly, but not different in kind.

But at oral argument, the justices did not seem persuaded. Arguing against the states, Acting Solicitor General Neal Katyal opened by pointing out that “[i]n the 222 years that this Court has been sitting, it has never heard a case with so many potential perpetrators and so many potential victims…[T]he very name of the alleged nuisance, ‘global warming,’ itself tells you much of what you need to know.” Chief Justice John Roberts later asked the states’ attorney, New York solicitor general Barbara Underwood, if she had any rebuttal to Katyal’s claim—if there was “any case where it has been as broad as it is here?” Her answer? “Well, of course it depends on what you call broad.”

Indeed.

But how much broader could it be? Taking the scientists at their word, we’d have to include at least every car owner, every coal power plant, every natural gas power plant, every cement producer, every forester, and the fabled effects of bovine flatulence. And not just every one of these in America, but every one in the world. The scope of this case and the numerous trade-offs involved make it utterly inappropriate for judicial resolution.

The supposed link between the power companies’ emissions and the alleged global warming harms resembles a Rube Goldberg device of conjectures that stretches back millions of years. In our brief we analogized this to the famous “butterfly effect”: a butterfly flaps its wings in Brazil and causes a tornado in Texas.

A few theories were offered as to why the case should not go any further. The most far reaching of these theories, the political question doctrine, is one we advanced in our amicus briefs. The political question doctrine directs courts to stay out of disputes that are better left to the other branches of government. A decision along those lines would go far in the future toward keeping such suits out of courts.

But many environmental lawyers are hoping, and predicting, that the states will “lose well”—that is, the suit will be dismissed because it has been “displaced” by the “regulatory cas­cade” underway at the EPA, not because it is a fundamentally impossible and illegitimate lawsuit. Dismissing the suit on these grounds would leave the door open for large-scale suits to be brought whenever an agency is thought to be shirking its regulatory duties. Such suits are already a problem for administrative agencies, particularly those brought by environmental advocacy groups trying to force agencies to live up to the groups’ idea of sound environmental policy. The NY Times, for example, reported recently on the “barrage [that] has paralyzed the listing process” for the Endangered Species Act.

Not wanting to totally foreclose the possibility of large-scale suits being brought in the future, at least three justices, Kagan, Breyer, and Ginsburg, seemed partial to the displacement theory. One hopes that the other five justices will rule, on either prudential standing or political question grounds, that no amount of regulatory action or inaction can make these suits justiciable. If regulation is called for here — a dubious proposition — it should be undertaken by the political branches, not the courts.