Toyota Stumbles Into a Dark Legal Alley…

…and the U.S. Department of Justice emerges whistling with $1.2 billion. I explain how it happened in a Wall Street Journal opinion piece today (more: Overlawyered). Toyota’s cars are very safe indeed, and “sudden acceleration” was a concoction of media-fueled panic, as the government’s own safety engineers have confirmed. But now the company is being punished not just for alleged data-reporting and compliance infractions unlikely to have caused any genuine material risk to the public, but also for defending itself and its products at Congressional hearings and in the arena of public opinion. DoJ’s demagogic press release cites, among the instances of supposed fraud for which Toyota is now being punished by the gigantic forfeiture, such standard exercises in bland crisis communication as, “The safety of our owners and the public is our utmost concern and Toyota has and will continue to thoroughly investigate and take appropriate measures to address any defect trends that are identified.” 

A couple of other points I didn’t have room for in the WSJ piece: Toyota is settling the government’s trumped-up single charge of mail fraud by way of a so-called Deferred Prosecution Agreement, or DPA, and its terms really must be seen to be believed. “Toyota understands and agrees that the exercise of the Office’s discretion under this Agreement is unreviewable by any court,” appears on clause 14 on page 6, with “Office” referring to the office of the U.S. Attorney for the Southern District of New York, currently Preet Bharara. And if you are expecting even the tiniest squeak from anyone at Toyota in contradiction to the government line, even around the coffee machine at the local dealership, consider clause 13, which states: that Toyota “agrees that it shall not, through its attorneys, agents, or employees, make any statement, in litigation or otherwise, contradicting the Statement of Facts or its representations in this Agreement.” If DoJ catches wind of any such statement it can revoke the agreement not to prosecute, without of course having to give back the billion dollars. “The decision as to whether any such contradictory statement shall be imputed to Toyota for the purpose of determining whether Toyota has violated this agreement shall be within the sole discretion of the Office.” 

When people talk about federal prosecutors having become a law unto themselves, this is the sort of thing they mean.

Why Don’t Public Schools Give Parents What They Want?

The Washington Post reports today that it’s “harder to describe” the mission of one of the magnet schools in Arlington County, Virginia: Arlington Traditional School. Not that hard, if you just read the quotes from the principal and parents:

“Our emphasis is on basic education,” Principal Holly Hawthorne said….

“The word ‘traditional’ implies a cachet to us,” said Craig Montesano, a lobbyist for the shipping industry who visited Arlington Traditional with his wife. To him, the word conjures ancient Rome and Greece and the promise that his daughter will be “grounded in the learning that has come down through the ages in Western civilization.”

Some parents say the selective nature and more disciplined culture remind them of private school. 

And it seems to work:

The federal government has twice named Arlington Traditional a National Blue Ribbon School for its academic performance. And its students routinely outscore district averages on the Standards of Learning tests.

And parents like it:

Last spring, 298 families applied for 72 slots.

So why doesn’t the Arlington County School Board expand it, or build more such schools around the county to accommodate all the parents who want their children to get this exotic thing called “traditional” or “back to basics” education? Maybe they just didn’t realize until today – or last spring – how popular it is? Well, as it happens, I live in Arlington, and I recall that the Washington Post has been reporting on the popularity of Arlington Traditional School since the late 1970s. Parents used to camp out overnight to get their children into the school until they created a lottery system. Through the Nexis service, I found some of the stories I recalled. Most of these articles are not online. 

Here’s what the Post reported in September 1982 when the school, then called Page Traditional School, was three years old: 

For Arlington school board member Margaret A. Bocek and her husband, the first day of school this year began late Monday night when they and 40 other parents camped out on the lawn of the county’s Page Traditional School to ensure that their 3-year-old children could attend there on opening day, 1984…. 

In the last three years, such parent stakeouts have become commonplace at Page, a public alternative school that stresses a traditional format of self-contained classrooms, regular homework and strict standards for behavior and appearance. Page parents have been lobbying recently for expanding the program to the eighth grade and for expansion of the school’s program to other schools.

And here’s a report from September 1985:

This year, the line began to form at 10 a.m. on Labor Day, 23 hours before Page Traditional School in Arlington would begin accepting applications for the kindergarten class of 1987.

By the time Principal Frank Miller arrived at 9 a.m. the next day, about 80 parents were waiting on the lawn – more than triple the 25 slots that would be available in the school’s one kindergarten class.

Seven years after its much-heralded establishment as a back-to-basics, structured alternative to the open-classroom schools popular in the mid-1970s, Page is a cause of both enthusiasm and consternation in Arlington.

Each September, eager parents camp out on the lawn at 1501 N. Lincoln St. to put the names of their 3-year-olds on the kindergarten waiting list.

December 1991:

In an effort to stop overnight campouts by parents eager to register their children at Arlington’s three popular alternative schools, county school officials have proposed dropping the first-come, first-served admissions policy in favor of a random drawing.

An October 1999 headline:

School’s Excellence Is in Demand

Now you’ll notice that the 1991 story mentions three “popular alternative schools,” and indeed the other two, Drew Elementary and H-B Woodlawn Secondary, offer a very different alternative, a more informal, individualized style of education reflecting the “alternative” ideas of the 1960s and 1970s. The Post referred in 2004 to Woodlawn’s “quirky, counterculture ways.” In November 1991 the Post reported that “Last weekend, dozens of parents camped in front of H-B Woodlawn to register their children for the 70 sixth-grade slots.”

In 2012 the Arlington school board did vote to expand Arlington Traditional School by 12 classrooms. But why did it take so long? And why not open more “back to basics” schools, and also more “counterculture” schools, if that’s what parents want?

I wrote about that years ago in a book I edited, Liberating Schools: Education in the Inner City.   

In the marketplace, competition keeps businesses on their toes.  They get constant feedback from satisfied and dissatisfied customers. Firms that serve customers well prosper and expand. Firms that don’t respond to the message they get from customers go out of business. Like all government institutions, the public schools lack that feedback and those incentives.

No principal or teacher will get a raise for attracting more students to his or her school. A successful manager in a private business gets a raise, or gets hired away for a bigger salary. A successful entrepreneur expands his or her store or opens a branch. Can one imagine a public school choice system allowing a successful principal to open another school across town and run both of them? 

If Virginia were even a little bit tolerant of charter schools, or if Virginia allowed real private school choice, parent groups or entrepreneurs could organize to deliver the kinds of schools – from traditional to counterculture – that families want. But in a bureaucratic monopoly, the local paper can run thirty years of stories about parents desperate to get their children into particular types of schools, and the central planners can ignore them. 

The Federal Spying Budget

The latest revelations regarding the NSA’s bulk data collection illustrate the vastness of the government’s spying apparatus. That vastness costs taxpayers a lot of money.

The cost of the federal spy budget used to be secret, which was a bizarre thing for a government that is supposed to be of the people, by the people, and for the people. But in recent years, policymakers have taken a step toward transparency and released figures on total intelligence spending.

The federal spy budget consists of spending on the National Intelligence Program (NIP) and the Military Intelligence Program (MIP). The Federation of American Scientists has summarized the data. In 2013 the NIP and MIP cost $68 billion. (For 2015, the administration is requesting $46 billion for the NIP and $13 billion for the MIP.)

Even by Washington standards, $68 billion is a lot of money. The chart shows that the spy budget is two-thirds as large as the $96 billion Americans spend on state and local policing activities. And the spy budget is far larger than spending on state and local fire activities ($42 billion), the NASA budget ($17 billion), and the National Park Service budget ($3 billion). (Police and fire data are for 2011; NASA and Park Service data are for 2013.)

What do the NIP and MIP spend so much money on? I assume it’s mainly the wages and benefits of their skilled workers, plus lots of spending on computers, drones, and other technology.

The Silver Lining in the Florida School Choice Expansion Loss

Supporters of the Florida Tax-Credit Scholarship (FTS) program are understandably disappointed that the state senate abandoned legislation to expand the program on Thursday. The FTS assists low-income families that want to enroll their children in private schools by offering tax credits to donors of nonprofit scholarship organizations. This year, the state’s only active scholarship organization, Step Up For Students, was able to aid more than 60,000 students but there were not enough funds to aid the more than 30,000 additional applicants. The proposed expansion would have provided enough funds to aid about 6,000 more students. The bill’s withdrawal therefore leaves 6,000 students without the funds they need to attend the school of their choice.

However, the disappointment should be tempered by a large measure of relief. While the legislation contained several praiseworthy changes and eliminated some red tape (including a requirement that would-be scholarship recipients spend a year in a government-run school first), legislative negotiations threatened to add a poison pill that would have severely affected school autonomy and parental choice.

The FTS currently mandates that all participating schools administer a nationally norm-referenced test. Nevertheless, Florida Senate President Don Gaetz insisted that the FTC expansion bill include a provision requiring that scholarship students take the Florida Comprehensive Assessment Test (FCAT), which is soon to be replaced by a Common Core-aligned assessment.

While the existing mandate is unnecessary because private schools are already directly accountable to parents, it still allows schools and parents some measure of flexibility in deciding how best to measure performance. By contrast, the proposed state testing mandate would have forced all schools into a uniform testing regime. Since tests dictate what is taught, when, and how, this mandate would have induced conformity at the expense of diversity and innovation. As explained in the open letter on choice and accountability that the Cato Institute recently issued along with the Heritage Foundation, Friedman Foundation for Educational Choice, and others, such mandates undermine the central purpose of educational choice:

Educational choice has also been repeatedly shown to produce far higher levels of parental satisfaction than does centrally planned schooling. That’s because choice empowers parents to find the best education for their children, and test scores are not their only consideration. Research shows that many parents care more about safety and discipline, graduation and college acceptance rates, and moral values.

Dictating uniform standards and tests threatens those other valued features by redirecting educators’ focus from serving families to catering to bureaucrats. It also contributes to a culture of “teaching to the test” that has already resulted in several large-scale public-school cheating scandals.

Children are not interchangeable widgets that can be beneficially fed through their education on the same conveyor belt. Even within a single family, children often learn different subjects at different speeds. Myriad new options are arising in response to that reality that allow students to learn at their own pace in every subject, helping all to fulfill their individual potential — the very antithesis of uniform government mandates.

Fortunately, the FTS already contains an “escalator” provision that allows it to grow over time, albeit not as quickly as it would have under the expansion bill. Hopefully, Florida legislators will take a second look at some of the important reforms that would have expanded access to the program. Meanwhile, other states that are considering scholarship tax credit legislation should learn from Florida’s experience. Design matters.

Frank Underwood Wants a Subsidy

House of Cards is a Netflix television series about a powerful, manipulative politician who gets what he wants with little regard for the public good. Here’s an example:

“House of Cards” star Kevin Spacey is booked to appear in Annapolis on Friday night as the fate of a tax credit that has benefited the production of his Netflix series hangs in the balance.

Gerard E. Evans, an Annapolis-based lobbyist for the show, has invited the entire Maryland General Assembly to a local wine bar to meet the two-time Academy Award winner who plays the scheming Vice President Frank Underwood in the series. An invitation describes the event as “an evening of Annapolis, D.C. and Hollywood.”…

The visit is scheduled just a few days after the Senate voted to increase the amount the state can spend next year, to $18.5 million, on a tax credit that rewards movie and television production companies that choose to film in Maryland. “House of Cards” has been the biggest beneficiary in recent years.

The House of Delegates has yet to act on the bill, with about two and a half weeks remaining in this year’s 90-day legislative session in Maryland. Evans said he has been encouraged by recent meetings with House Speaker Michael E. Busch (D-Anne Arundel) and other key delegates.

A few weeks before the second season of “House of Cards” debuted online, the show’s production company sent letters to Busch and Gov. Martin O’Malley (D) making clear they could film elsewhere if the debate over the tax credit didn’t end well.

It’s hard to imagine a better example of rent-seeking, crony capitalism, and conspiracy between the rich, the famous, and the powerful against the unorganized taxpayers. A perfect House of Cards story.

The Tax Foundation has been covering film tax credits in general and the House of Cards saga in particular. The Mackinac Center has been campaigning against Michigan’s film tax credits, and Gov. Rick Snyder has tried to rein in the program. But it’s hard to beat Frank Underwood.

 

RIP Tonie Nathan, the First Woman to Receive an Electoral Vote

Tonie NathanTheodora (Tonie) Nathan, the 1972 Libertarian Party vice presidential nominee who became the first woman in American history to receive an electoral vote, died Thursday at 91.

Tonie Nathan was a radio-television producer in Eugene, Ore., when she attended the first presidential nominating convention of the Libertarian Party in 1972. She was selected to run for vice president with presidential candidate and philosophy professor John Hospers. Although the ticket received only 3,671 official votes, Virginia elector Roger L. MacBride chose to vote for Hospers and Nathan rather than Nixon and Agnew, thus making Nathan the first woman in American history to receive an electoral vote. MacBride, an author and former legislator, had been elected on the Republican slate. As I wrote in Liberty magazine when he died in 1995, “MacBride became a ‘faithless elector’—faithless to Nixon and Agnew, anyway, but faithful to the constitutional principles Rose [Wilder] Lane had instilled in him.”

Brian Doherty, author of Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, writes:

It is a shame that her historical status for the advancement of woman’s role in what had been entirely a man’s world has been little noted or long remembered, mostly I suspect because the Libertarian Party is not much respected by institutional feminism (though it should be).

Hospers-Nathan buttonNathan was also the first Jewish person to receive an electoral vote.

After her vice-presidential run, she ran for office as a Libertarian candidate during the 1970s through the 1990s for numerous offices, vigorously though never successfully. In the 1980 U.S. Senate election in Oregon, Nathan participated in three statewide television debates with incumbebt Bob Packwood (R) and then–state senator Ted Kulongoski (D). She served as national vice-chair of the Libertarian Party, and at the 2012 Libertarian National Convention she announced former New Mexico governor Gary Johnson as the presidential nominee. She founded the Association of Libertarian Feminists in 1973 and served as its chair.

Note: Premiering tonight on Showtime is a new documentary about Geraldine Ferraro, the 1984 Democratic vice presidential nominee, whom many people would likely identify as the first woman to receive an electoral vote.