Retirement and Fuel Prices: A Match Made In Heaven?

Get ready for Washington D.C.’s Mall to be filled with seniors in the not-too-distant future.

About 25 percent of seniors depend entirely on Social Security for their consumption. And for two-thirds of them, Social Security makes up the majority of their monthly income. With soaring fuel and food prices, they are beginning to complain about being unable to make ends meet — as in, having to cut down on leisure and travel activities.

The rise in gas, food, and commodity prices is unlikely to be a bubble and won’t ”burst” anytime soon. Furthermore, the Fed’s recent interest rate–cutting binge has promoted a weaker dollar and risks higher future inflation and inflation expectations. That means our itinerant seniors will soon demand a larger inflation adjustment on their monthly checks than allowed by Social Security’s post-retirement benefit formula.

No prizes for guessing whether Congress will capitulate!

AZ Court Kills School Vouchers for Disabled, Foster Kids

An Arizona appellate court struck down two school voucher programs yesterday, finding that they violate a state constitutional prohibition against using public money to aid private or religious schools. The programs, serving disabled children and those in foster care, were unanimously ruled unconstitutional by a three-judge panel of Arizona’s Division Two Court of Appeals.

The ruling and the motivations behind the suit have been attacked by school choice groups, with the Alliance for School Choice calling it “shameful.” Praising the court’s decision, but doing little to allay concerns about the quality of public school instruction, John Wright, president of the Arizona Education Association, tautologically declared that “Arizonans understand that public schools are our pathway to great public schools.…”

What are the legal merits of this decision, and what does it mean for the affected kids and the school choice movement as a whole?

The ruling hinged on whether the vouchers in question can be considered aid to private and religious schools, because Article IX, paragraph 10 of the Arizona Constitution forbids the use of public money for that purpose. Choice advocates argued that the aid is being given to families and that the schools only benefit indirectly. The court found that while families are indeed aided, so too are the schools. However much I want all children to have access to a choice of independent schools competing to serve them, I find it hard to disagree with the court’s conclusion.

That doesn’t mean that the appellate court’s word is final. Choice advocates will no doubt appeal to the Arizona Supreme Court, which could agree with the narrower interpretation of the aid’s beneficiaries.

Even if it does not, yesterday’s ruling leaves open two paths for recreating the stricken programs in constitutionally acceptable fashion. The justices pointed explicitly to one obvious, if difficult, approach: seek an amendment to the state’s constitution that would strike or revise the “Aid Clause” ( Article IX, paragraph 10).

More helpfully, they also note that Arizona’s Supreme Court has already upheld the state’s education tax credit program in the face of an “Aid Clause” challenge (the Kotterman v. Killian ruling of 1999). As the appellate justices wrote yesterday:

Although Jordan and Kotterman… considered constitutional challenges based on this clause that to some extent foreshadowed the arguments presented here, the conclusions in both of those cases turned on facts clearly distinguishable from the facts of this case. In Kotterman, the court disposed of the Aid Clause challenge in a single paragraph, finding the tax credit there was neither an appropriation of public money nor the laying of a tax.

This is one of the reasons that Cato Institute scholars favor tax credit programs over voucher programs, as outlined in our Public Education Tax Credit model legislation and policy analysis. Reviving the two stricken voucher programs could thus be as simple as incorporating them into Arizona’s existing education tax credit program or reconstituting them as separate tax credit programs.

There will, however, be a temporary hitch to even that solution. The U.S. 9th Circuit Court of Appeals will soon be handing down a ruling that will likely strike down Arizona’s tax credit program under a clever, inventive, but thoroughly misguided interpretation of case law. This ruling, which could come down in the next several months, will almost certainly be overturned by the U.S. Supreme Court on appeal, as are so many of the 9th Circuit’s rulings.

Arizona’s disabled and foster children will ultimately enjoy meaningful educational freedom and choice, but they will sadly have to wait another year or two for a few remaining legal clouds to part. In the end, the sun will shine once more.

The Onion Couldn’t Have Topped This: Arlen Specter’s Spying Scandal

Wired’s Threat Level blog has a great post about Arlen Specter’s effort to get to the bottom of a recent spying scandal. Not, mind you, the Bush administration’s various warantless wiretapping programs, but rather spying among football coaches in the NFL:

Apparently real-world warrantless spying isn’t as egregious as snooping on opposing NFL coaches.

Specter and other lawmakers initially talked tough when The New York Times disclosed Bush’s spying program in 2005. “There is no doubt that this is inappropriate,” Specter said at the time.

But Congress, including Specter, eventually passed the Protect America Act, which allowed government officials to eavesdrop in the United States on telephone conversations and e-mails without warrants, if the target of the surveillance is “reasonably believed” to be overseas.

And now, with the warrantless wiretapping issue still simmering, Specter believes that the most pressing spying issue in the country involves coaches taping each others’ hand signals.

Reining In Abstract Patents

Over at Ars Technica, I’ve got an in-depth discussion of In Re Bilski, an important case that was argued before the U.S. Court of Appeals for the Federal Circuit last week. The Federal Circuit has jurisdiction over most patent appeals and, until recently, their decisions were rarely reviewed by the Supreme Court, making them effectively the final authority on patent issues. And unfortunately, they’ve made quite a mess of things, departing dramatically from Supreme Court patents and allowing patents on broad, abstract concepts (including software, which I wrote about last year). The result has been an explosion of low-quality patents and frivolous litigation:

Amazon’s much-derided one-click patent was approved the year after the decision. Patent litigation in the software industry has exploded with firms facing lawsuits over patents covering extremely broad software concepts such as wireless e-mail, web embedding, and converting IP addresses to phone numbers. Technically, these patents cover general purpose computers executing the algorithms described in the patent rather than the algorithms themselves. But because no one executes such algorithms with pen and paper, the net result has been to give the patent holders effective monopolies on the algorithms themselves.

The Federal Circuit has been catching a lot of flack for its patent jurisprudence in recent years, and they’ve showed an increased interest in revisiting past precedents. As I discussed in a Cato podcast last week, In Re Bilski concerns a patent that was rejected by the USPTO for being too abstract. In its call for amicus briefs in the case, the Federal Circuit explicitly asked for opinions on whether it should revisit its key rulings on abstract patents from the 1990s.

Unfortunately, the oral arguments suggest that the Federal Circuit is unlikely to abandon its dubious experiment with allowing patents on software and other abstract concepts. At best, I think we can expect the court to tinker at the edges, restricting the most egregiously abstract patents.

I’m more optimistic about the Supreme Court, which has shown a renewed interest in patent law in recent years and has shown no compunctions about overturning the Federal Circuit’s patent decisions. At least three Supreme Court justices (Scalia, Breyer, and Stevens) have raised questions about the patentability of software, suggesting that there may be some skepticism from the Supremes on this issue. If the case gets appealed to the Supreme Court, it will be another opportunity to correct a Federal Circuit that has not done a good job of respecting Supreme Court patent precedents.

SCOCA Overturns Gay Banns Ban

As many expected, the California Supreme Court has overturned that state’s ban on gay marriage. So many expected it, in fact, that opponents have already submitted more than a million signatures through California’s initiative process to put an anti-gay-marriage amendment on the ballot this fall.

I wonder if opponents of gay marriage in California will rely on the same arguments as did the Washington Supreme Court

Educational Freedom Advances in South-East

Having so recently blogged about the expansion of Florida’s k-12 scholarship tax credit program, I’m delighted to be able to add that Georgia governor Sonny Perdue yesterday signed a similar program into law in his own state. Meanwhile, in Louisiana, a modest New Orleans voucher program was passed out of the House yesterday by a nearly 3 to 2 majority (a corresponding bill has already passed out of Senate committee and awaits a floor vote).

While none of these programs is yet big enough to create significant market forces, the growth of the Florida program and the bi-partisan support that it and the New Orleans program are enjoying are promising signs.

When Would McCain Intervene?

Matt Bai has a writeup in this Sunday’s NYTimes Magazine of McCain’s vision on foreign policy. Buckle up:

McCain considers national values, and not strategic interests, to be the guiding force in foreign policy. America exists, in McCain’s view, not simply to safeguard the prosperity and safety of those who live in it but also to spread democratic values and human rights to other parts of the planet….

[…]

[A]s we talked, I tried to draw out of him some template for knowing when military intervention made sense — an answer, essentially, to the question that has plagued policy makers confronting international crises for the last 20 years. McCain has said that the invasion of Iraq was justified, even absent the weapons of mass destruction he believed were there, because of Hussein’s affront to basic human values. Why then, I asked McCain, shouldn’t we go into Zimbabwe, where, according to that morning’s paper, allies of the despotic president, Robert Mugabe, were rounding up his political opponents and preparing to subvert the results of the country’s recent national election? How about sending soldiers into Myanmar, formerly Burma, where Aung San Suu Kyi remained under house arrest by a military junta?

“I think in the case of Zimbabwe, it’s because of our history in Africa,” McCain said thoughtfully. “Not so much the United States but the Europeans, the colonialist history in Africa. The government of South Africa has obviously not been effective, to say the least, in trying to affect the situation in Zimbabwe, and one reason is that they don’t want to be tarred with the brush of modern colonialism. So that’s a problem I think we will continue to have on the continent of Africa. If you send in Western military forces, then you risk the backlash from the people, from the legacy that was left in Africa because of the era of colonialism.”

The United States faced a similar obstacle in Myanmar, McCain went on, shaking his head sadly. “First of all, you’d have to gauge the opinion of the people over time, whether you’d be greeted as liberators or as occupiers,” McCain said. “I would be concerned about the possibility that if it were mishandled, we might see an insurgent movement.” He talked a bit about Aung San Suu Kyi, whom he called “one of the great figures of the 20th century,” but then wondered aloud if the American public would support a military intervention.

“It goes back to the Vietnam thing,” McCain told me. “I’m just not sure the American people would support a military engagement in Burma, no matter how justified the cause. And I can’t tell you exactly when it would be over. And I can’t tell you exactly what the reaction of the people there would be.”

Most American politicians, of course, would immediately dismiss the idea of sending the military into Zimbabwe or Myanmar as tangential to American interests and therefore impossible to justify. McCain didn’t make this argument. He seemed to start from a default position that moral reasons alone could justify the use of American force, and from there he considered the reasons it might not be feasible to do so. In other words, to paraphrase Robert Kennedy, while most politicians looked at injustice in a foreign land and asked, “Why intervene?” McCain seemed to look at that same injustice and ask himself, “Why not?”

Thankfully, though, the Washington Post is reporting that McCain apparently has a secret plan to win the war in Iraq by 2013.