“BitLicense” Foolishness

When New York’s Superintendent of Financial Services first encountered Bitcoin, he evidently thought it was a way to build his reputation as a hangin’ superintendent of financial services. (Doesn’t quite roll off the tongue like “hangin’ judge,” does it…) He sent subpoenas to everyone in the Bitcoin world and went on TV talking about “narcoterrorists.” That was foolishness.

Unfortunately, he also hatched the idea of creating a thing called a “BitLicense” for firms wanting to provide Bitcoin-based financial services in New York. That program is now hanging like an albatross around his neck.

I know nothing of the details, but a couple of decades in public policy make the probable outlines of what happened pretty clear. The press seized on the “BitLicense” idea. Lobbyists and business people came around to fawn over the “BitLicense” idea with Superintendent Lawsky, each hoping not to get cut too deeply by its inartful sharp edges. And Lawsky, having come around to favoring Bitcoin (it’s fairly evident from his speeches) found himself committed to coming up with this “BitLicense” thing.

When the first draft came out in July of last year, it was pretty universally panned. The Bitcoin community savaged it. Bitcoin businesses said they would not do business in New York. The idea of a second round of proposal and comment was quickly on offer.

But the second draft isn’t that much better. When comments close at the end of this week (how to comment), the “BitLicense” will again have received strong criticism. There’s always that contingent whose stock in trade is always—always—to play ball. And to others the “BitLicense” saga has gotten boring…

But the outcome is very probably set. In order to avoid backtracking, which would look foolish, the Department of Financial Services will probably continue forward on the errant path of creating a peculiar special license for Bitcoin-based financial services providers in New York.

Chicago Police Department Needs Reform

It’s been a rough month for the Chicago Police Department (CPD). 

First came the revelations from Spencer Ackerman and The Guardian about a CPD warehouse at Homan Square that was, according to detainees, defense attorneys, and civil rights advocates, operating as a “black site” where detainees were held for hours and aggressively interrogated without ever being officially entered into the system or given access to their attorneys. While the police and others dispute this characterization, one complaint seems to be that the abuses at Homan Square could be found at any police facility in Chicago.  Not exactly a resounding defense of CPD practices.  Last week the commander of the Homan Square facility, Nicholas Roti, resigned.

This week, the ACLU of Illinois released a troubling report about the use of Stop-and-Frisk in Chicago.  Stop-and-Frisk is the controversial practice, made infamous by the NYPD which has been ordered to halt it, of stopping large numbers of (especially African American and Hispanic) men on the street without probable cause and frisking them for contraband.  The ACLU report concludes that the CPD’s use of this practice is even broader and more Constitutionally-suspect than the NYPD program.

Learning the History of Liberty from the Encyclopedia of Libertarianism

In an interesting discussion of social change and especially the best ways to spread classical liberal ideas at Liberty Fund’s Online Library of Liberty, historian David M. Hart has high praise for the Encyclopedia of Libertarianism (published by Sage in conjunction with the Cato Institute):

The Encyclopedia of Libertarianism provides an excellent survey of the key movements, individuals, and events in the evolution of the classical liberal movement….

One should begin with Steve Davies’ “General Introduction,” pp. xxv-xxxvii, which is an excellent survey of the ideas, movements, and key events in the development of liberty, then read some of the articles on specific historical periods, movements, schools of thought, and individuals.

Kudos to the New Mexico Legislature for Abolishing Civil Asset Forfeiture

Good news from out west.  A New Mexico bill, HB 560, to restrict civil asset forfeiture has cleared the legislature - receiving unanimous support in the State House and State Senate - and awaits the signature of Governor Susana Martinez to become law.

Among other things, the New Mexico bill requires a criminal conviction for forfeiture actions, bolsters the “innocent owner” defense by requiring that the owner know that his/her property was being used illegally, requires that all forfeiture proceeds be deposited into the general fund rather than into the seizing agencies, and limits the ability of state and local law enforcement agencies to circumvent state law by utilizing the federal equitable sharing program.

As noted numerous times by Cato and other civil liberties advocates like the Institute for Justice and the ACLU, civil asset forfeiture is a conceptually unjust practice that has no place in a society that cherishes due process and private property.  

That many state legislatures across the country are now undertaking efforts to rein in this government abuse is something worth cheering about.

Yes, Ted Cruz Is Eligible to Be President

As Ted Cruz announces his White House candidacy, let me forestall a new round of birtherism prompted by the discovery that the Texas senator was actually born in a different oil patch: Calgary, Alberta, Canada. I looked at the whole “natural-born citizen” requirement a couple of years ago and concluded that Cruz’s eligibility for the presidency is an easy legal call. Here’s the heart of the matter:

So the one remaining question is whether Ted Cruz was a citizen at birth. That’s an easy one. The Nationality Act of 1940 outlines which children become “nationals and citizens of the United States at birth.” In addition to those who are born in the United States or born outside the country to parents who were both citizens … citizenship goes to babies born to one American parent who has spent a certain number of years here.

That single-parent requirement has been amended several times, but under the law in effect between 1952 and 1986 — Cruz was born in 1970 — someone must have a citizen parent who resided in the United States for at least 10 years, including five after the age of 14, in order to be considered a natural-born citizen. Cruz’s mother, Eleanor Darragh, was born in Delaware, lived most of her life in the United States, and gave birth to little Rafael Edward Cruz in her 30s.

In an amusing footnote, when this mild controversy first arose, Cruz quickly renounced any claim to Canadian citizenship. This prompted my good friend and sometime co-author Josh Blackman to present me with a filled-out renunciation application after I naturalized as a U.S. citizen last June. I have not signed or submitted this document, however, because there’s really no need – and who knows when a second passport might come in handy? (The State Department allows dual citizenship even though the naturalization oath requires a new citizen to “renounce and abjure all allegiance and fidelity to any foreign prince, potentate, state, or sovereignty, of whom or which I have heretofore been a subject or citizen.”) Rest assured that if I’m ever required to give up my Canadian citizenship to get a security clearance or for some other official reason, I will do so, much as I owe to the country where I grew up after my family left the Soviet Union.

The GOP and the Great War Spending Scam

I have an op-ed in The National Interest dealing with the GOP’s intramural squabble over defense spending levels in the House and Senate’s budget resolutions for fiscal year 2016, which have now passed their committees.

I explain there how the Republican chairmen of both committees tried to restrain military spending, but lost out to military hawks in their caucus in a newly pernicious way. The resolutions limit appropriations to the legally mandated cap for non-war “defense” spending. But they stuff $38 billion that the White House wanted for the Pentagon above the cap into the uncapped war (“Overseas Contingency Operations” or OCO) account, taking an established scam to evade caps and making it far larger and more blatant. If these spending levels hold, in 2016 the Pentagon would get a total budget roughly equal to its current one, but a much bigger chunk of it would come via OCO.

Thus far, then, the fight between GOP budget and fiscal hawks has produced a compromise that offers a new sort of militarism amid a pretension of fiscal responsibility. That outcome, I argue, may be worse than giving the administration a deal to raise the cap:

The problem … isn’t just that military spending is too high. It is also that this method of paying creates perverse incentives. If OCO becomes an auxiliary Pentagon fund that exists to escape caps, war becomes the Pentagon’s budgetary salvation. Historically, the elements of the defense establishment benefit from a public sense of insecurity, but not necessarily war. This new set-up could change that.

I say “may” be worse because of a couple uncertainties. One is that hawks upset about this arrangement may have a point. They worry that locating this money in a shrinking war account makes it unlikely to last. I hope not.

Second, the reaction of Democrats is uncertain. Some may work with Republican budget hawks to strip the extra OCO money out on the floor, which has happened before, albeit on a smaller scale. Under current Senate rules, that apparently takes only 50 votes. But those Democrats–like President Obama, Armed Services Committee Ranking Member Jack Reed (D-RI), and various other heavies–who want to boost military spending may agree to do so through OCO. Where the leadership comes down, I can’t say.

You Ought to Have a Look: Intimidation in Science

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

Talk of interference, intimidation, and abridgement of scientific freedom continues to make the news this week—and increasingly is taking the form of pushback against recently announced congressional investigations into sources of scientific research funding.

On Tuesday, the Wall Street Journal ran an editorial offering a “round of applause for those pushing back, providing the bullies a public lesson in the First Amendment.” Highlighted in their coverage were efforts by the Cato Institute, Heartland Institute and Koch Industries condemning attempts to “silence public debate” on climate change. From the WSJ:

Democrats and their allies have failed to persuade Americans that climate change is so serious that it warrants sweeping new political controls on American energy and industry. So liberals are trying to silence those who are winning the argument. We’re glad to see the dissenters aren’t intimidated.

Also unintimidated by attempts abridge academic freedom is Alice Dreger, professor of Medical Education-Medical Humanities and Bioethics at Northwestern University and a historian of science and medicine. Dreger has a new book out titled Galileo’s Middle Finger: Heretics, Activists and the Search for Justice in Science that describes how activists try to intimidate researchers when the activists disagree with the researchers’ work.

Roger Pielke Jr. reviews the book for Nature. From his blog, leading into his review, Roger describes why he empathizes with Dreger: