Archives: 03/2012

Why Is Massachusetts Trying to Ban Truthful Information About Hedge Funds?

The Massachusetts Uniform Securities Act prohibits general solicitation and advertising by anyone offering unregistered securities, ostensibly for the purpose of furthering state and federal disclosure schemes. Yet this ban on public communications has been applied so broadly that it has undermined those purported disclosure goals.  For instance, the ban has prevented individuals who have no interest in investing in any security – such as journalists, academics, students, and others who are not wealthy or financially sophisticated – from receiving truthful, non-misleading information about hedge funds.

In Bulldog Investors v. Massachusetts, an investment company maintained an interactive website that provided information about its products. Because Bulldog was not registered in Massachusetts, however, the State filed an administrative action against the firm, demanding it take down its online content.

In response, Bulldog joined a group of other firms and individuals – including some who have no interest in investing but wish to read the website information – in a lawsuit claiming that the Massachusetts ban violates their First Amendment rights. The Supreme Judicial Court of Massachusetts upheld the ban, so the plaintiffs have asked the U.S. Supreme Court to take the case.

Cato, along with the Competitive Enterprise Institute and a group of journalists and academics, has now filed an amicus brief supporting that request and arguing that the Massachusetts law is an unconstitutional ban on free speech. We show that the state’s claim that the ban furthers a larger federal regulatory scheme ignores the judgment of many federal officials (from both parties) who have concluded that such bans undermine these goals.

The state’s alleged disclosure interest is just a pretext for coercing companies to register in Massachusetts, and is therefore an unconstitutional attempt at circumventing federal preemption. But even if the ban furthers a legitimate state interest, it is so broad that it is has substantially chilled both truthful, non-misleading commercial speech and noncommercial speech alike.

A law so repugnant to the First Amendment cannot stand.

Girl Likens Public School Failure to Ban on Teaching Slaves to Read

A 13-year-old black girl from Rochester likens the pedagogical malfeasance of her public school to the deliberate prohibition against teaching slaves to read–as recounted by Frederick Douglass in his autobiography. And she is hounded out of the school.

We can do better than this. We need a free marketplace in education with financial assistance to ensure universal access. Scholarship donation and personal use education tax credits can do that.

The ‘War on Women’ — a Rhetorical Distraction

Today POLITICO Arena asks:

Now that Rush Limbaugh has apologized, will voters see the Democrats’ “war on women” language as overkill?

My response:

We’re in the season of rhetorical overkill. Rush Limbaugh’s vile attack last week on Sandra Fluke was reprehensible. So too is the Democratic campaign to paint a Republican “war on women” – not least because it treats women as a monolithic class, ignoring the many women who grasp what’s at issue here – liberty.

ObamaCare is a major step toward socialized health care. You can pretend otherwise – the “war on women” rhetoric aims at that – but the coercive elements inherent in any socialized scheme come to the surface when conflicts like the one before us arise.

And it’s only the beginning. Soon enough, as costs to “the public” mount (the only costs that matter in socialized arrangements), Republicans will be talking about a “war on the elderly,” and they’ll be right. After all, “We’re all in this together.” We have that on high authority. Welcome to the world of all against all.

Endless Spending

Urging Congress to spend more money on infrastucture, Rep. John Sarbanes (Big Government-Maryland) says, “You’ve got to kind of get past this mentality that you can’t spend any money at all.”

Right. Because it’s that kind of attitude that has given us a federal budget of $3.8 trillion, up more than 100 percent in a decade, and spending at permanently higher levels of GDP:

Russia Primed for Strife after Sunday Elections

Sunday’s so-called “presidential election” inRussia will be neither free nor fair. Prospective candidates like Leonid Ivashov or Grigory Yavlinsky were not allowed to participate. Opposition leaders were denied access to mass media with exception of an eight-day-long “thaw” in January. TV channels are overwhelmed with aggressive propaganda for current Prime Minister Vladimir Putin who, through the September 24, 2011, decision to swap seats with Dmitry Medvedev, decided to come back as the president for a third term. During the special “parliamentary election” operation on December 4,  the Central Electoral Commission, infamous for mass falsifications in previous polls, hit another record by stealing between 13 to 17 million votes (out of about 50 million who did in fact appear at the polling stations) in favor of the pro-Putin United Russia party.

Putin has been running his campaign on a clear anti-Western, anti-American and “anti-Orange” platform. A special peculiarity of his campaign is that it is illegal for Putin to even participate in the election, since the Russian Constitution forbids any president fom serving more than two terms. The 1998 decision of the Constitutional Courtand the 2011 decision of the Supreme Court – as well as the commentary of the Chair of the Constitutional Court, Valery Zorkin, in 2009 – unequivocally confirm these constitutional provisions.

More fuel was added to the fire Wednesday, February 29, when Putin hinted that some of the well-known opposition leaders might be killed as “sacred victims.”  At this moment it seems almost certain that Putin will be announced as the winner of this special operation regardless of the actual number of people who appear at the polling stations, or the number of those who would vote for or against him. It is also certain that on March 5 tens if not hundreds of thousands of Russians will go to the streets to protest.

A Soft Surrender to Low Expectations

There is a problem in the school choice community … let’s call it a soft surrender to low expectations.

We are witnessing a race to the bottom on education policy, and the latest case comes from my own state of Virginia. The legislature passed an education tax credit program this week, soon to be signed by the Governor, which means I should be celebrating. Unfortunately, the Virginia tax credit program is a mockery of education reform.

I will lay out my basic list of criticisms, which include some of the program’s  inadequacies along with its grave debilitations. Read more here.

  1. It is a 65% credit, which is terrible policy and will cripple the program (see more on this issue).
  2. It places the program administration and control, including approval of SOs and schools under the state DOE rather than the proper authority for administering a tax credit program, the Dpt. of Revenue.
  3. It exempts the DOE from the Administrative Process Act, which provides for appeal and review of decisions, and explicitly states that all decisions by the DOE and Superintendent are “final and not subject to review or appeal.” In other words, they have been given a blank check of regulatory authority over the program and schools.
  4. The bill will force schools to collect and report detailed student information to the DOE.
  5. The cap is only $25 million, and has no growth provision.
  6. No personal-use credits so that families can use their own money for their own children … they must beg for charity if they are eligible.
  7. No homeschooling or non-traditional education.
  8. And the kicker … the whole thing sunsets in 2018, five years from now (see section 58.1-439.26 A, “beginning on or after January 1, 2013, but before January 1, 2018 …”).

I would celebrate the last provision, a sunset clause, as a chance for Virginia to get it right the second time, if not for the much greater probability that the looming demise of the program will enable choice opponents to make the program even worse in trade for a stay of execution.

If we will accept this, we will accept anything. It will not do what we expect or need in terms of expanding choice and freedom, and the hope that it will be appreciably improved in the next five years is slim at best.

Often, when I insist on higher standards in school choice policy, I am told that we must voice support because it will help some children now. Few seem to consider the hundreds of thousands of children who will not be helped in decades to come, indeed may well be harmed, because of this inadequate policy. Opportunity costs must be considered. All the children yet to be born must play into our utilitarian calculus if that is the measure we use to judge public policy.

And we should not pretend that obviously inadequate programs are bold reforms; it  only serves to encourage yet more inadequate policy. We should push the conversation and educate leaders and citizens about real reform. Instead, the issue of school choice will be set aside for at least four years, as politicians point to their “accomplishment” that will help so few and provide no foundation for future reform. A roadblock to real education reform has just been passed in Virginia, and it is labeled SB 131.

New at

From the ongoing new and interesting stuff appearing at

We also released two new videos this week, featuring Gene Burns on the nature and role of government and Gerald O’Driscoll on order and organization in society.

As always, you can stay up to date with everything going on at by following us on Twitter or Facebook.