August 2012

August 31, 2012 5:10PM

Clint Eastwood, Lawyers, and the ADA

It wasn’t everyone’s idea of what a political speech should be, but this morning it was the speech everyone wanted to talk about: Addressing an empty chair representing President Obama, movie great Clint Eastwood took a swipe at the legal profession (“I never thought it was a good idea for attorneys to be president, anyway”) and made a case against the Democrats without actually showing all that much enthusiasm for the Republican Party. And those of us who’ve followed Eastwood’s comments on government and liberty over the years weren’t quite as surprised as many in the press seemed to be.

Did you know, for example, that Eastwood testified before Congress in 2000 on an issue that symbolizes the dysfunctional collision of law, legislation, and politics—that is to say, opportunistic ADA lawsuits? As I wrote at Overlawyered at the time:

The Hollywood actor and filmmaker got interested in the phenomenon of lawsuit mills that exploit the Americans with Disabilities Act … when he was hit with a complaint that some doors and bathrooms at his historic, 32‐​room Mission Ranch Hotel and restaurant in Carmel, Calif. weren’t accessible enough; there followed demands from the opposing side’s lawyer that he hand over more than just a fistful of dollars—$577,000, the total came to—in fees for legal work allegedly performed on the case. “It’s a racket”, opines Eastwood. “The typical thing is to get someone who is disabled in collusion with sleazebag lawyers, and they file suits.” … Eastwood told the WSJ he isn’t quarreling with the ADA itself, and the proposed legislation would affect only future cases and not the one against him; but “I just think for the benefit of everybody, they should cut out this racket because these are morally corrupt people who are doing this.”

Congress heard Eastwood’s and similar testimony and then did … nothing at all, not wanting to offend the more uncompromising lawyers in the disabled‐​rights movement. (More here, etc.)

There’s nothing like exposure to ADA filing mills to give one a jaundiced view of the legal profession. Although Democrats quickly pointed out that Romney and several other leading Republicans have law degrees, that doesn’t really blunt Eastwood’s point: by heading for legal academia, Obama signaled that the training “took” in a way that the business types like Romney didn’t.

There’s also nothing like exposure to ADA filing mills to give one a feeling that while the Democratic Party is more problematic overall, the Republicans aren’t necessarily a bargain either. While conservative GOPers are typically the ones who lead the charge to curtail ADA shakedown suits, much of the party is unwilling to cross the disabled‐​rights community on the issue — and this too is a long‐​running theme, with Presidents Bush both pere et fils having made a huge to‐​do about their unconditional support for a broadly applied ADA.

For many good reasons, not least diplomacy toward many Republicans in the audience, it could be predicted that Eastwood would say not a word about the ADA issue last night. But when he talked of the economic damage caused by feckless governance, I wonder whether he drew on his own experience as a small businessperson—and his awareness that when bad law closes down a restaurant, as has happened repeatedly in his own northern California, one can wind up with not just a single vacant chair but a whole roomful of them.

August 31, 2012 4:59PM

Section 337: A Second Bite at the Samsung

Last Friday, a court determined that Samsung phones did not copy the iPhone’s design and found Apple liable for infringing Samsung’s patents on mobile technology.  Wait, is that right?  Yes---in Korea.  The same day that a California jury found that Samsung owed Apple $1 billion for infringing design and utility patents, a court in Korea came to a very different conclusion.

In fact, courts all over the world have weighed in on the dispute and the results have not been at all consistent.  Just today, Apple lost in Japan, but it has had better results in Germany and Australia.  So far, the most entertaining decision has come from the United Kingdom, where a judge decided that Samsung’s products were not “cool” enough to be confused with the iPad or iPhone and then ordered Apple to issue a public apology to Samsung in paid newspaper ads.

The bizarre drama that is the smartphone patent wars is the byproduct of an international patent system in which products are global but patents are national.  Each country issues its own patents under its own rules, and any infringement determination must be made at the national level.  Samsung and Apple have sued each other in at least half a dozen countries.   In the United States, they are doing it twice.

Unlike every other country in the world, the United States allows patent holders to seek relief from allegedly infringing competitors in both a court of law and an administrative agency.  The U.S. International Trade Commission (ITC) has the power to exclude imported products from the U.S. market if it determines (based on its own separate investigation) that a respondent company has infringed the complainant’s patent and imported the offending product from abroad.

ITC investigations are authorized by Section 337 of the Tariff Act of 1930, a law designed to protect domestic manufacturers who could show that their foreign competitors engaged in “unfair methods of competition or unfair acts.”  Patent infringement has long been the most common allegation made under Section 337.  Although in many ways indistinguishable from a court trial, ITC investigations are generally faster than court cases, have only one remedy available (an import ban), and can only be used against alleged infringers who manufacture their products outside the United States.

In an upcoming Cato Policy Analysis, I explain why the existence of Section 337 is so problematic and argue for its repeal:

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August 31, 2012 12:47PM

Paul Krugman, Won’t You Help Me Be a Better Person?

I find myself on the wrong side of the facts. Again. So says Paul Krugman:

Still, wouldn’t private insurers reduce costs through the magic of the marketplace? No. All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.

I know this flies in the face of free-market dogma, but it’s just a fact.

And Krugman should know. As the following clip shows, this is a guy who always has the facts on his side:

Yes, that was me at the beginning of the clip. Krugman was selflessly trying to instill in me his respect for evidence and his command of the facts. For some reason, I have yet to absorb either.

The proof is in this paper I wrote (and still stand by, for some reason):

Is Government More Efficient?

Supporters of a new government program note that private insurers spend resources on a wide range of administrative costs that government programs do not. These include marketing, underwriting, reviewing claims for legitimacy, and profits. The fact that government avoids these expenditures, however, does not necessarily make it more efficient. Many of the administrative activities that private insurers undertake serve to increase the insurers’ efficiency. Avoiding those activities would therefore make a health plan less efficient. Existing government health programs also incur administrative costs that are purely wasteful. In the final analysis, private insurance is more efficient than government insurance.

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August 31, 2012 11:29AM

The GOP’s Insipid American Exceptionalism

I’ve had it with “American exceptionalism.” Enough already.

The phrase has garnered a considerable amount of attention lately, namely because Republicans are saying it over and over again. The Atlantic points out that the term itself was coined by Joseph Stalin, lamenting America’s inability to go communist (cf. Louis Hartz). Of course, the concept that America was different than Europe goes back at least to Tocqueville, but is it too much to ask that we recall Tocqueville was writing nearly 200 years ago? Might we not pause, at least momentarily, to reconsider the argument from authority and subject it to a bit of scrutiny?

I complained about the pervasive theme at the Republican convention in my podcast yesterday, and Alex Massie holds forth against the exceptionally exceptionalistic speechifying at Foreign Policy today. Republicans—and the rest of us—ought to just shut up about exceptionalism already. As it stands now, a few word substitutions could make Herder or Fichte feel right at home at a GOP convention. We ought not to like this.

Encouraging citizens to reify, then flutter with excitement at the uniqueness of their own “imagined community” lubricates both the administrative capacity of and enthusiasm for the Great American Welfare/Warfare State that is presently bankrupting our unborn children. Those of us who would like a bit more federalism, veering toward sectionalism even, do so realizing that this would create downward pressure on the centralization of our lives in the body of the national government. (“Who is this fellow 2,000 miles away from me and why should I subsidize his career and pay his flood insurance and pension?”) That the disgrace of slavery accompanied the last era of sectionalism in this country is no reason to throw out the concept itself.

Bizarrely, the GOP married this nationalistic theme with an ostensible concern for how America is viewed across the world. Might we not consider that the world finds this constant self-congratulation unseemly and perhaps even dangerous? Imagine your coworker, or neighbor, or spouse, constantly parading about, preening and pronouncing that he is the greatest person ever to have been made and marveling at how lucky are those subject to his ministrations. Any impartial observer would forgive you for nudging him off a pier, and all the more so if he were, in fact, great.

This is perhaps the saddest part of the whole garish spectacle. The United States is a great country. Take a look around you. Saying it over and over again doesn’t make it any more so; in fact it makes it less. All the bleating about our exceptionalism from our leaders is enough to make you think that they don’t really believe it. The party doth protest too much, methinks.

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August 31, 2012 11:00AM

The Contrast Is Fairly Clear

Today POLITICO Arena asks:

Was Romney able to deliver his best possible introduction to the American people?

My response:

In stark contrast to Obama, Romney’s plainly not comfortable tooting his own horn. He’ll stand out in Washington. Thus it fell to others last night to bring out his many good qualities, and they did it well.

But put the Romney and Ryan speeches together, as the Wall Street Journal does admirably this morning, then contrast that with what you hear from the Obama camp, and you get an equally stark picture of the differences between the two parties. As the Journal says, Obama’s single greatest flaw is that “he thinks economic growth can be ordered up by central planners. Tax more here, spend more there, regulate this or subsidize that, and prosperity will follow.”

Romney and Ryan know better. Prosperity comes from the bottom up—from free people pursuing their dreams, not from government planners. Our stagnant economy is no accident. Obama’s done all the wrong things. As the chant went last night, “He just doesn’t get it.”

The big question is whether enough Americans get it. These are not easy ideas to communicate through the fog of campaign rhetoric. But these last few days were a good start.

August 31, 2012 10:56AM

Waiting for Bernanke

Cato senior fellow Gerald P. O’Driscoll Jr. has some advice for the Fed in today’s Wall Street Journal:

Quantitative easing is the Fed’s version of “stimulus,” the complement to fiscal stimulus. The trouble with all forms of temporary spending is that they have no permanent effects. They delay needed adjustments in the economy.

Today’s state and local governments are a case in point. Municipal and state spending was propped up by federal transfers of many billions of dollars in the president’s 2009 stimulus package. But as this federal money has dried up, public payrolls are declining, ironically enough for this administration, close to the presidential election. President Obama received bad advice when he was told that government spending would prime the pump of the economy. Instead it had the effect of temporarily transferring resources from the productive private sector to a bloated public sector.

The Fed’s version of temporary stimulus will likely involve purchasing government bonds. If past is prologue, this will act as a sugar rush to financial markets. There will be equity‐ and bond‐​market rallies. Wall Street will rejoice, but none of this will translate into “substantial and sustainable” economic growth, the FOMC’s stated goal.…

What would stir the spirits of investors and employers would be some policy certainty, reining‐​in of out‐​of‐​control government spending, stopping ill‐​advised regulations, and clearing the air of antibusiness rhetoric. No repeat of a one‐​off round of bond buying by the Fed substitutes for the fundamental and permanent changes needed.

Read it all. And while you’re there, don’t miss Seth Lipsky on “The Gold Standard Goes Mainstream.”

August 31, 2012 8:29AM

After the Welfare State

Cato senior fellow Tom G. Palmer, who is lecturing about freedom in Slovenia and Tbilisi this week, asked me to post this announcement of his new book, After the Welfare State, published through the efforts of Students for Liberty and the Atlas Economic Research Foundation. Check out this 57‐​second video introduction:

The book is directed at young people, and Students for Liberty is distributing 125,000 copies on college campuses. Tom’s introduction begins:

Young people today are being robbed. Of their rights. Of their freedom. Of their dignity. Of their futures. The culprits? My generation and our predecessors, who either created or failed to stop the world‐​straddling engine of theft, degradation, manipulation, and social control we call the welfare state.

Contributors to the volume include experts from Great Britain, Sweden, Italy, and Greece, as well as Cato’s own Palmer and Michael Tanner.

Learn more about After the Welfare State—and download a free PDF immediately–here.