Archives: 02/2012

Welcome to Our War-torn World, Health Care

Cato adjunct scholar John H. Cochrane has a terrific piece in the Wall Street Journal today on the Obamacare vs. religious freedom brouhaha. In particular, though it’s not Cochrane’s main point, I thought this was spot-on:

Our nation is divided on social issues. The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don’t have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society.

For those of you who don’t follow education very closely this might seem like a fairly novel point. Unfortunately, this also probably seems novel for many who do follow education, even many who do so professionally. But it shouldn’t, because unlike in health care, government has been the dominant provider of education for well over a century, and social conflict and division have been its constant companions.

Welcome to our war-torn world, health care. Better bring a helmet.


Indian Gaming: The Lobbyists Always Win

One of the issues discussed in my new essay on the Bureau of Indian Affairs (BIA) is the lobbying by groups of American Indians seeking official tribal status. The BIA has the power to confer tribal status, and it does so in a non-transparent manner. With official status comes tribal access to a wide range of federal subsidy programs plus the ability to earn monopoly profits with a casino. The gaining of official status for tribes was one of Jack Abramoff’s specialty services.

The most recent BIA decision to confer tribal status is a classic case. The 221-member Tejon tribe in California received a thumbs up from the BIA in January 2012. The group’s reservation and its tribal status had been dissolved decades ago, but it hired some powerful Washington lobbyists to work their magic. An article in the Bakersfield Californian notes, “In their quest to gain recognition, the Tejons had the help of an unnamed ‘financial backer’ who had paid $300,000-plus to the tribe’s attorneys.” This financial backer was “banking on a casino.”

A Mountain Enterprise story says that once the Tejon tribe’s status was official, “speculation began almost immediately about the tribe’s plans to affiliate with Tejon Ranch Corporation and Las Vegas investors to establish a casino facility.” Famous D.C. lobby shop Patton Boggs earned $120,000 in fees on the deal.

For the Tejons, the lobbyists produced results. There are hundreds of Indian groups who have petitioned the BIA for tribal status, and the BIA only confers status to a few tribes a year. Yet somehow the Tejons managed to jump to the front of the queue. This list (and this one) appear to show that the tribe ranked low on the recognition waiting list at #230 (but I admit I’m not an expert on how the system works).

The tribes who hire lobbyists don’t always win. Here’s a story about the 450-member Muwekma Ohlone of California:

Financed by their own casino sugar daddy, Florida real estate tycoon Alan Ginsburg and his associates, as well as with proceeds from the tribe’s own archaeological consulting firm, the otherwise humble Muwekma have spent millions of dollars on the effort. Much of that money has gone toward procuring the aid of a high-powered Washington, D.C., law firm…. [R]ecognition would open the door for the tribe… to place land in federal trust as a ‘reservation’ on which it could open a casino. Indeed, should they attain recognition, the Muwekma almost assuredly will become the envy of non-gaming tribes from outlying regions of the state who’ve tried and thus far not succeeded at ‘reservation shopping’ — that is, attempting to set up casino operations in urban areas far from their aboriginal homeland.

The Muwekma Ohlone tribe lost an important court ruling last year, which has set back their search for official recognition. In this case, the only winners were the lawyers and lobbyists, who apparently pocketed huge fees from the tribe. This data source shows that lawyers and lobbyists gain about $20 million a year in fees on Indian gaming-related issues. Jack Abramoff alone raised $80 million from half a dozen tribal clients in the early 2000s for lobbying on a wide range of tribal issues.

Indian gaming and other complex regulatory schemes usually generate “rent” or monopoly privileges that groups vie for a manner that is unproductive to society as a whole. When the government confers special benefits through regulation, wealth is channeled to lawyers and lobbyists but the overall economy shrinks due to the misallocation of resources.

The best policy for gaming would be to repeal all government restrictions and to treat gaming like any other industry. That would eliminate rents and the related lobbying, and it would create an equal and competitive playing field for Indians and non-Indians alike.

The good thing about Indian gaming is that it has shown that Indians are every bit as entrepreneurial as other Americans. But gaming is not likely to be a stable platform for long-term Indian economic development. That’s because as tribal and nontribal gaming continues to expand, profit levels in tribal gaming are likely to decline.

A more durable strategy for Indian prosperity is to make institutional reforms on reservations to encourage broad-based investment in a range of industries, as discussed here.

RTD: ‘Insurance Exchange: Just Say No’

Regarding legislation to create an ObamaCare “Exchange” in Virginia, the Richmond Times-Dispatch explains:

Republicans at the General Assembly are falling prey to the fallacy of the false alternative…

[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)…

Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.

Waiving Goodbye to the Constitution

Today the Obama administration will announce, according to early press reports, that ten states (of eleven that applied) will be receiving waivers from key provisions of the No Child Left Behind Act. That’s right, the 2002 education law passed by Congress and signed by President Bush that absurdly insisted that all children will be proficient in mathematics and reading by 2014. Now President Obama, unilaterally, is telling states that they can forget all that as long as they adopt – or at least have “plans” to adopt – reforms to his liking, such as national curriculum standards and teacher evaluations based on student standardized testing progress.

At this point, it is almost impossible to keep track of the federal savaging of the Constitution in supposed service of education. First there was the federal expenditure of money, allowed by none of the enumerated powers, largely starting in the 1960s. Then there was the growing attachment of controls to that money – again, with no Constitutional authority – culminating in NCLB. Now there is the blatant disregard for the separation of  powers by a President who just decided he didn’t like waiting for Congress to reauthorize the law, and a Congress that exhibits no spine whatsoever when it comes to this power grab because, well, no one seems to like NCLB.

Within this fiasco is all the evidence anyone should need to see why the Feds must be extracted from education. While Washington can drop humongous sacks of taxpayer dough on states and districts, and impose lots of bureaucratic rules and regulations, it can’t actually make education much better. Indeed, the whole point of NCLB was to end decades of Washington spending billions for no return. And what happened? Exactly what state, district, and school-level bureaucrats and unions expected: “accountability” swerved off the road before the 2014 deadline. It took longer than expected – it was a slightly more nerve-wracking game of political chicken than usual – but in the end the entrenched interests won because they’re the most motivated to bring the political pain. After all, their very livelihoods are at stake.

Aside from desegregation – which it has Constitutional authority to compel – the federal government has done no meaningful good in education. Why? Because the special interest-driven reality of politics ensures it can’t do any good. Yet we not only let it continue to trample the Constitution by meddling in education, we are allowing it to shred the Constitution into ever-smaller bits in order to “fix” the destruction it has wrought. And for this, all who turn a blind eye to the Constitution in the name of “the children” are to blame.

ObamaCare’s Coercive Essence

Today POLITICO Arena asks:

Will the GOP win the birth-control fight?

My response:

The GOP will win the current contraceptive-abortifacient battle going away, because the average American understands the essence of religious freedom: government cannot force people to do things that violate their religious beliefs. The administration may try to frame this as a defense of women’s rights, but that’s pure sophistry. As I wrote yesterday, if the administration’s decision is reversed, women will still be perfectly free to use contraceptives, to seek abortions, and to do whatever else their beliefs permit. They just won’t be able to force others who object to such practices to pay for them.

There’s a bigger issue here, however. This is just the latest example of the perils of ObamaCare. When health care is thus “collectivized,” when we’re “all in this together,” we’re forced to fight for every “carve-out” of liberty. Those progressive Catholics who supported ObamaCare, who are now appalled by this move, should have thought of that before they worked to throw us all in the common pot. This incident is simply an early example of the many battles to come if ObamaCare survives the litigation and the elections ahead.

The Wise Crowds Say Individual Mandate Is Unconstitutional, a project of the Constitution-educating Harlan Institute (on whose non-profit board I sit), has been tracking its 12,000+ members’ predictions in the Obamacare case before the Supreme Court.  You can read more in-depth about the current state of the prediction market – with fancy graphs! – but here’s a summary:

The FantasySCOTUS managers caution that these predictions are still preliminary, particularly because most members don’t offer predictions until after oral arguments.  To learn more about FantasySCOTUS and its crowdsourcing techniques (“wisdom of the crowds”), see this recent article from the Northwestern Journal of Technology and Intellectual Property.

And if you want to get in on the predicting, you can sign up here.

The Senate’s SOPA Counterattack?: Cybersecurity the Undoing of Privacy

The Daily Caller reports that Senator Harry Reid (D-NV) is planning another effort at Internet regulation—right on the heels of the SOPA/PIPA debacle. The article seems calculated to insinuate that a follow-on to SOPA/PIPA might slip into cybersecurity legislation the Senate plans to take up. Whether that’s in the works or not, I’ll detail here the privacy threats in cybersecurity language being circulated on the Hill.

A Senate draft currently making the rounds is called the “Cybersecurity Information Sharing Act of 2012.” It sets up “cybersecurity exchanges” at which government and corporate entities would share threat information and solutions.

Sharing of information does not require federal approval or planning, of course. Information sharing happens all the time according to market processes. But “information sharing” is the solution Congress has seized upon, so federal information sharing programs we will have. Think of all this as a “see something, say something” campaign for corporate computer security people. Or perhaps “e-fusion centers.”

Reading over the draft, I was struck by sweeping language purporting to create “affirmative authority to monitor and defend against cybersecurity threats.” To understand the strangeness of these words, we must start at the beginning:

We live in a free country where all that is not forbidden is allowed. There is no need in such a country for “affirmative” authority to act. So what does this section do as it in purports to permit private and governmental entities to monitor their information systems, operate active defenses, and such? It sweeps aside nearly all other laws controlling them.

“Consistent with the Constitution of the United States and notwithstanding and other provision of law,” it says (emphasis added), entities may act to preserve the security of their systems. This means that the only law controlling their actions would be the Constitution.

It’s nice that the Constitution would apply</sarcasm>, but the obligations in the Privacy Act of 1974 would not. The Electronic Communications Privacy Act would be void. Even the requirements of the E-Government Act of 2002, such as privacy impact assessments, would be swept aside.

The Constitution doesn’t constrain private actors, of course. This language would immunize them from liability under any and all regulation and under state or common law. Private actors would not be subject to suit for breaching contractual promises of confidentiality. They would not be liable for violating the privacy torts. Anything goes so long as one can make a claim to defending “information systems,” a term that refers to anything having to do with computers.

Elsewhere, the bill creates an equally sweeping immunity against law-breaking so long as the law-breaking provides information to a “cybersecurity exchange.” This is a breath-taking exemption from the civil and criminal laws that protect privacy, among other things.

(1) IN GENERAL.—No civil or criminal cause of action shall lie or be maintained in any Federal or State court against any non-Federal governmental or private entity, or any officer, employee, or agent of such an entity, and any such action shall be dismissed promptly, for the disclosure of a cybersecurity threat indicator to—
(A) a cybersecurity exchange under subsection (a)(1); or
(B) a private entity under subsection, (b)(1), provided the cybersecurity threat indicator is promptly shared with a cybersecurity exchange.

In addition to this immunity from suit, the bill creates an equally sweeping “good faith” defense:

Where a civil or criminal cause of action is not barred under paragraph (1), a good faith reliance by any person on a legislative authorization, a statutory authorization, or a good faith determination that this Act permitted the conduct complained of, is a complete defense against any civil or criminal action brought under this Act or any other law.

Good faith is a question of fact, and a corporate security official could argue successfully that she acted in good faith if a government official told her to turn over private data. This language allows the corporate sector to abandon its responsibility to follow the law in favor of following government edicts. We’ve seen attacks on the rule of law like this before.

A House Homeland Security subcommittee marked up a counterpart to this bill last week. It does not have similar language that I could find.

In 2009, I testified in the House Science Committee on cybersecurity, skeptical of the government’s ability to tackle cybersecurity but cognizant that the government must secure its own systems. “Cybersecurity exchanges” are a blind stab at addressing the many challenges in securing computers, networks, and data, and I think they are unnecessary at best. According to current plans, cybersecurity exchanges come at a devastating cost to our online privacy.

Congress seems poised once again to violate the rule from the SOPA/PIPA disaster: “First, do no harm to the Internet.”