Government Forces Rock Solid Church Into a Hard Place

The Fifth Amendment prohibits the taking of private property for public use without just compensation. Still, Congress, regulatory agencies, and even the Supreme Court have each played their part in making receipt of just compensation practically impossible in certain scenarios.

Ministerio Roca Solida, a Nevada church, is one victim of this injustice. It owns a 40-acre parcel in Nevada’s Amargosa Valley entirely surrounded by a federally managed wildlife refuge. It uses this parcel for religious purposes; until an illegal intervention by the U.S. Fish and Wildlife Department, it performed baptisms in a spring-fed stream on the land.

In 2010, the government rerouted the stream to a higher elevation entirely outside of Roca Solida’s property; later that year, rainfall caused the stream to overflow its channel, flooding Roca Solida’s property and causing damage to its facilities. After making a statutorily mandated claim with the Department of the Interior and receiving no response, Roca Solida filed a lawsuit, seeking various kinds of relief for constitutional violations, the negligent waterway rerouting/flooding, and the taking of its stream.

Courtesy of Congress, Roca Solida was forced to split its claims between two different courts: district courts have exclusive jurisdiction over tort claims against the government, while the Court of Federal Claims has exclusive jurisdiction over monetary claims in excess of $10,000. The Supreme Court addressed the constitutional implications of this jurisdictional arrangement most recently in United States v. Tohono O’Odham Nation (2011), holding that a Civil War-era statute (28 U.S.C. § 1500) bars plaintiffs from pursuing monetary claims in the CFC while any other claims with “substantial overlap in operative facts” are pending in district court. Relying on Tohono, the CFC dismissed Roca Solida’s takings claim. The U.S. Court of Appeals for the Federal Circuit affirmed—though in concurrence, Judge Taranto noted that Tohono’s “application of § 1500 may soon present a substantial constitutional question about whether federal statutes have deprived Roca Solida of a judicial forum to secure just compensation for a taking.”

Gay Marriage Is Here - Now What?

That’s the title of a symposium that the Federalist published after the Obergefell ruling. It included mini-opeds from a range of people on both sides of the debate, including Newt Gingrich and Mike Lee. Here was my contribution:

Just because today’s opinion was expected by nearly everyone doesn’t make it any less momentous. In sometimes-soaring rhetoric Kennedy explains that the Fourteenth Amendment’s guarantee of both substantive liberty and equality means there is no further valid reason to deny this particular institution, the benefit of these particular laws, to gay and lesbian couples. Okay, fair enough: there’s a constitutional right for gay and lesbian couples to get marriage licenses—at least so long as everyone else gets them. (We’ll set aside the question of why the government is involved in marriage in the first place for a later time.)

But where do we go from here? What about people who disagree, in good faith, with no ill intent towards gay people? Will ministers, to the extent they play a dual role in ratifying marriage licenses, have to officiate big gay weddings? Will bakers and photographers have to work them? What about employment-discrimination protections based on sexual orientation—most states lack them, but are they now required? And what about tax-exempt status for religious schools, the issue that came up during oral argument?

It’s unclear to be honest—much depends on whether Anthony Kennedy remains on the court to answer these thorny questions in his own hand-waving way—but all of these examples, including marriage licensing itself, show the folly inherent in government insinuation into the sea of liberty upon which we’re supposed to sail our ship of life. (Justice Kennedy, you can use that one next time; no need even to cite me.)

If government didn’t get involved in regulating private relationships between consenting adults—whether sexual, economic, political, athletic, educational, or anything else—we wouldn’t be in that second-best world of adjudicating competing rights claims. If we maintained that broad public non-governmental sphere, as distinct from both the private home and state action, then we could let a thousand flowers bloom and each person would be free to choose a little platoon with which to associate.

But the extent to which we live in that world is decreasing at a horrendous pace, and so we’re forced to fight for carve-outs of liberty amidst the sea of mandates, regulations, and other authoritarian “nudges.”

In any event, good for the court today—and I echo Justice Kennedy’s hope that both sides will now respect each other’s liberties and the rule of law. But I stand ready to defend anybody’s right to offend or otherwise live his or her life (or run his or her business) in ways I might not approve.

You can read the other entries here, and also see Jason Kuznicki’s longer post on the future of “marriage policy” and Roger Pilon’s prescient piece from a few months ago.

Overtime Regulation

President Obama plans to raise the salary threshold at which employers must pay time-and-half for overtime hours (normally defined as those above 40 hours per week). Currently these rules apply to workers with annual salaries up to $23,660; the President’s proposal raises this threshold to $50,400.  The new rules will affect about 5 milllion workers according to administration estimates.

What impact will this expanded regulation have on the labor market?

In the very short run, employers affected by this expansion may have little choice but to pay their employees higher total compensation; in the very short run, employers have few ways to avoid this added cost.

But in the medium term, employers will invoke a host of methods to offset these costs: re-arranging employee work schedules so that fewer hit 40 hours; laying off employees who work more than 40 hours; or pushing such employees to work overtime hours off the books.

And in the longer term, employers can simply reduce the base wages they pay so that, even with overtime pay, total compensation for an employee working more than 40 hours is no different than before the overtime expansion.  

So, expanded overtime regulation will benefit some employees in the very short term; cost others their jobs or lower their compensation in the medium term; and have no meaningful impact on anything in the long term.

Is that a victory for middle class economics?

Greek Marxists versus the IMF

With the failure of the Greek government to make a scheduled payment to the International Monetary Fund (IMF), we have moved from high drama to low farce. The Marxists who are running the show in Athens have scored a first: Greece is the first so-called advanced economy to miss an IMF payment in the Fund’s 71-year history.

It was all so predictable. The Marxists in Athens did what Marxists do: they ramped up the rhetoric. Yes, the IMF became a “criminal syndicate,” certainly not the type of organization that the current Greek government would dare to pay.

As for the IMF, it drew a line in the sand after realizing that it had been way too lenient and generous with Greece. Under normal conditions, the IMF is supposed to be limited to lending up to 200% of a country’s quota (each country’s capital contribution made to the IMF) in a single year and 600% in cumulative total. However, under the IMF’s “exceptional access” policy there are, in principle, virtually no limits on lending. For example, the loan made to Greece in May 2010 was worth an astounding 3208% of Greece’s quota – by far the highest percentage recorded for a loan made to any member country.

So, the high drama of the past few months had to end in a farce – and it has.

Close the Export-Import Bank to Cut Federal Liabilities and Promote Economic Fairness

The Export-Import Bank’s charter expired on June 30. What is commonly known as “Boeing’s Bank” is headed toward Washington’s trash bin.

When Congress returns, it could revive Ex-Im, which primarily subsidizes big business. But a proper burial for what candidate Barack Obama called “corporate welfare” would save Americans money, reduce economic injustice, and promote economic growth.

ExIm exists to borrow at government rates to provide credit at less than market rates for select exporters, mostly corporate behemoths. The bank claims to be friendly to small business, but cherchez the money: it goes to Big Business.

According to Veronique de Rugy of the Mercatus Center, the bank subsidized $66.7 billion in sales by Boeing between 2007 and 2013. In 2013, the top ten ExIm beneficiaries accounted for two-thirds of the bank’s total activities.

The bank charges fees and interest and claims to make a “profit”—more than $1.6 billion since 2008. But economists Jason Delisle and Christopher Papagianis explained that the bank’s “profits are almost surely an accounting illusion.” Most important, there is no calculation for market risk. CBO figures real losses over the coming decade are likely to exceed $2 billion.

Taxpayers also could get hit with a big default bill. Total outstanding credit is $110 billion, yet the agency’s own inspector general warned that bank practices create the risk of “severe portfolio losses.”

The agency is supposed to create jobs by throwing cheap money at purchasers of American products. However, the bank backs only about two percent of U.S. exports. There is plenty of private money available for such deals.

Oregon Marijuana Policy

Part of Oregon’s Measure 91, passed in November and legally titled Control, Regulation, and Taxation of Marijuana and Industrial Hemp Act, goes into effect today. The new law allows men and women, 21 and older, to grow limited amounts of marijuana on their property and to possess a limited amount for personal, recreational use. Specifically, an Oregonian can possess up to eight ounces of marijuana and grow up to four marijuana plants in their homes. Each adult can possess up to an ounce in public, but one may not use marijuana in public.  §6 of Measure 91 lists all the guidelines that one would need to know about what is now legally permissible personal and household use under the new law.

The personal use and cultivation of marijuana will not be overseen by the Oregon Liquor Control Commission (OLCC). That agency will be tasked with overseeing the commercial use of marijuana, including licensing, taxing, and regulating. The review and acceptance of licenses will begin in January. Actual sale and purchasing of commercially grown marijuana will also begin sometime in 2016.

The fact that recreational use and private in-home ownership will now be legal has sparked some media interest. Particularly, the question has been asked: How can interested Oregonians begin their recreational use or home growing when there is no legal sale?  That’s a good question with respect to the lawful supply.  The underground market is fairly easy to find.

For related Cato work, go here and here.

Not Theirs to Give: Misguided Compassion at Public Expense

What can seem more appealing than a cafeteria worker giving out free lunches? Or an education official writing-off school loans?

Yet, in both cases, those acting as beneficent philanthropists weren’t paying the cost. The taxpayers were. Public officials should learn that the money is not theirs to give.

Della Curry recently was dismissed as kitchen manager from an elementary school in Aurora, Colorado for, she admitted, “giving food to children that did not have money.” Doing so was legally wrong, she said, but “I do not feel bad about it and would do it again in a heartbeat.”

Although posing as a great humanitarian while denouncing this rich nation for failing to “provide lunch for its children,” she didn’t pay for any children’s lunch. Rather, she gave them a full lunch at public expense.

Indeed, contrary to her claim, the school district was no collective Scrooge. Many children were on official school lunch plans and received free or cheap meals. In fact, a family of four could earn $44,000 annually and still receive a federal subsidy.

Any other student without money received free meals three times. After that, cashless children received a cheese sandwich.