March 2013

March 20, 2013 4:33PM

School Choice Gains Momentum in Idaho

For the first time in state history, the Idaho House of Representatives passedscholarship tax credit (STC) bill. Like the bill that the Alabama legislature passed last month, Idaho’s STC legislation is a step in the right direction though it has some limitations.

The Idaho bill would grant tax credits to individuals and corporations in return for donations to nonprofit scholarship granting organizations (SGOs). The SGOs would fund low‐ and middle‐​income students attending nonpublic schools. To be eligible to participate, a family’s household income could not exceed 150% of the federal free‐​and‐​reduced lunch program’s income threshold ($63,964 for a family of four). According to the Friedman Foundation for Educational Choice, that would cover about 59% of Idahoans. The program is limited to students who attended a public school in the previous year or are entering kindergarten or first grade.

The program would be capped at $10 million per year. While the cap would adjust for inflation, there is no “escalator” provision to grow the program over time to meet demand, as in Arizona, Florida, and New Hampshire.

The program would also require participating private schools to administer standardized tests. This is an unnecessary provision that’s intended to provide accountability but could exacerbate the “teach to the test” problem. The most effective form of accountability is the chosen schools’ direct relationship with parents who can choose to leave if their kids’ needs are not met. Most STC programs do not require schools to administer standardized tests, yet many schools voluntarily administer them because parents desire it. However, when the state mandates testing to participate in school choice programs, there are fewer choices available to parents who want to avoid the “teach to the test” issue.

Despite the bill’s limitations, the Idaho House of Representatives just took the Gem State one step closer to having an education system that empowers families to choose the education that best meets their kids’ individual needs.

March 20, 2013 4:11PM

Genetically Modified Choice

The New York Times reports today that Whole Foods, Trader Joe’s, and Aldi supermarket chains have decided not to sell a new form of genetically modified fish. The FDA is set to approve the sale of a type of salmon genetically engineered to mature more quickly than its natural ancestors. This will be the first genetically modified animal approved for human consumption. While the FDA has determined that the genetic alteration of the fish has no effect on its meat, “Frankenfish”—as some have called it—still gives many consumers the heebie‐​jeebies. 

I would just like to point out that consumer demand for natural fish has prompted a market response that provides convenient access for GM‐​wary eaters while (most importantly) preserving choice for less‐​cautious consumers. Mandatory labels like those proposed last year in California were not needed to ensure consumers received desired information; retailers have filled that function instead. 

Anti‐​GM campaigners lobby for restrictions on GM foods like out‐​right bans or onerous labeling requirements with the aim of ensuring that everyone has access to non‐​GM options. Whole Foods has offered non‐​GM products for a long time, but this has generally not mollified anti‐​GM campaigners, because Whole Foods is pricier than most grocery stores. Aldi, however, is very much a discount grocery store that targets and appeals to a different demographic than Whole Foods. I won’t hold my breath, but I’m hoping that anti‐​GM activists are now more open to the idea that consumers are empowered by choice, not mandates.

Without government intervention retailers will provide consumers with what consumers want. When government intervenes, retailers are forced to provide consumers with what ideological activists and lobby‐​savvy industries want them to have. Those industry groups are especially active right now as regulators seek to amend mandatory country of origin labels for beef and dolphin‐​safe labels for tuna that have been rightly decried by our trade partners as protectionist discrimination. Trusting consumers to look after themselves could save us a lot of trouble.

March 20, 2013 3:43PM

This Week in “Gun Disgust”: Social Services Visits New Jersey Man’s House Because of a Facebook Picture of His Son Holding a Gun

A picture of Shawn Moore’s 11‐​year‐​old clad in camouflage and holding a scary‐​looking gun prompted New Jersey’s Department of Children and Families to visit his house for an “inspection,” according to Moore. As reported by the Associated Press:

The elder Moore was at a friend’s house when his wife called, saying state child welfare investigators, along with four local police officers, were at the house, asking to inspect the family’s guns.

Moore said he called his lawyer Evan Nappen, who specializes in Second Amendment cases, and had him on speaker phone as he arrived at his house in Carneys Point, just across the Delaware River from Wilmington, Del.

“They said they wanted to see into my safe and see if my guns were registered,” Moore said. “I said no; in New Jersey, your guns don’t have to be registered with the state; it’s voluntary. I knew once I opened that safe, there was no going back.”

The Department of Children and Families has not confirmed that the Facebook picture was the reason for the surprise “inspection,” but a spokeswoman did comment that it is “important to note the way an investigation begins is through the child abuse hotline. Someone has to call to let us know there is a concern.” 

Yesterday, I argued on FoxNews​.com that the gun debate is really a culture debate. Two cultures are emerging in America. One culture respects guns as important tools in the hands of responsible citizens. The other culture is disgusted by guns. It is becoming increasingly difficult to bridge the gap between those cultures in order to devise reasonable and effective gun laws that respect citizens’ Second Amendment rights. 

Clearly, Mr. Moore is in the former camp and has taught his son how to responsibly use firearms. Appearing on “Fox and Friends” this morning, Moore’s son Josh said he’d been shooting guns since he was five, that he likes to hunt, and is a “pretty good shooter.” 

Yet many who are animated by “gun disgust” believe keeping firearms in the home is tantamount to child abuse. But the actual number of accidental firearm deaths of children are usually grossly overstated. In 2010, the CDC reported 62 deaths by accidental firearm discharge for children between 0–14 years old. (You can check the numbers yourself here.)

While each and every one of these deaths is undeniably tragic, the number is far less than deaths due to accidental drownings (726) or bicycles (approximately 100 in 2006). Yet I’m sure social services would not have visited Mr. Moore’s house if he had put up a picture of Josh on a new ten‐​speed. In fact, for an instrument with such potential for lethality, the number of accidental gun deaths for children is remarkably low. Even seemingly innocuous things, such as adult beds, can kill dozens of children per year. Between 1999–2001, 41 children under five died after being caught between a mattress and a wall or headboard. Nevertheless, during the Clinton administration the Department of Justice ran a series of ads designed to frighten parents about the dangers of unlocked guns, claiming that “an unlocked gun could be the death of your family.”

Those numbers are unlikely to change the minds of the gun‐​disgusted. As in many areas of public policy, facts often matter less than we’d like to believe. 

March 19, 2013 3:28PM

Standard Fire: SCOTUS Foils an Artful Class Action Dodge

With Justice Breyer writing, a unanimous Supreme Court in Standard Fire Insurance Co. v. Knowles (opinion PDF, background SCOTUSBlog) has struck down as invalid a dodge used by some plaintiff’s lawyers to evade the provisions of the Class Action Fairness Act of 2005 (CAFA). As we wrote in October when Cato filed its amicus brief: 

In relevant part, CAFA provides defendants with the right to move class actions to federal court where the claim for damages against them exceeds $5 million. But can clever lawyers keep these cases out of federal court by simply “stipulating” that potential damages are less than $5 million — and before the named plaintiff is even authorized to represent the alleged class? In this case, Greg Knowles is the named plaintiff in a putative insurance‐​recovery class action against Standard Fire Insurance in Arkansas state court. Before the court certified the class, Knowles tried to avoid that removal to federal court by stipulating that his class would not seek more than $5 million in damages at trial. Notably, the stipulation is worded in such a way that it will not apply if the class definition is later altered. … CAFA was enacted specifically to discourage attorneys from “forum shopping” (seeking friendlier courts) and attempting to keep cases out of federal court. Lawyers who game the system by agreeing to cap damages in an effort to keep cases in more favorable state courts violate the federal due process rights of absent would‐​be class members, thereby flouting CAFA. 

In his opinion for the unanimous Court, Justice Breyer found that the named class representative lacked a right to limit absent class members’ claims in such a way. Individual litigants remain free to avoid federal jurisdiction through the use of damage stipulations, but that is a decision they are entitled to make only for themselves. That’s very much consistent with the principles Cato urged, and with the importance of individual rights as the fundamental basis for legal action, rather than as mere ingredients to be aggregated by lawyers seeking settlement advantage. Thanks again to the ever‐​brilliant David B. Rivkin, Jr., Andrew M. Grossman and colleagues at Baker & Hostetler for their work on the Cato brief.

March 19, 2013 10:18AM

It’s All About the Authors

In anticipation of a hearing in the House Judiciary Committee Wednesday afternoon, Sandra Aistars, executive director of the Copyright Alliance, writes in the Hill about the principles that should guide copyright reform, calling for debate “based in reality rather than rhetoric.”

Chief among these principles is that protecting authors is in the public interest. Ensuring that all creators retain the freedom of choice in determining how their creative work is used, disseminated and monetized is vital to protecting freedom of expression.

Arguing for authors in terms of freedom of choice and expression is good rhetoric, but it’s quite unlike what I expect you’ll hear during our noon Wednesday forum on copyright and the book Laws of Creation: Property Rights in the World of Ideas.

Authors Ron Cass and Keith Hylton methodically go through each intellectual property doctrine and explore its economic function, giving few words to authors’ “choice” or their “freedom of expression.” They certainly don’t denigrate authors or their role, but Cass and Hylton don’t vaunt them the way Aistars does either.

Recent events in the copyright area are providing much grist for the discussion. You can still register for the book forum, treating it as a warm‐​up for Wednesday afternoon’s hearing, if your freedom of choice and expression so dictate.

March 18, 2013 5:04PM

Cyprus: Follow the Money

While the Cypriot Parliament may be dragging its feet on a proposed rescue plan for Cyprus' banks, the country ultimately faces a choice between Brussels' bitter pill...and bankruptcy. Cyprus' newly-elected President, Nicos Anastasiades, has quite accurately summed up the situation:

"A disorderly bankruptcy would have forced us to leave the euro and forced a devaluation."

 Yes, Brussels and the IMF have finally decided to come to the aid of the tiny island, which accounts for just 0.2% of European output -- to the tune of roughly $13 Billion. But, this bailout is different. Indeed, the term "bail-in" has emerged, a reference to the fact that EU-IMF aid is conditional upon Cyprus imposing a hefty tax on its depositors. Not surprisingly, the Cypriots, among others, are less than pleased about this so-called "haircut".

Still, the question lingers: Why now? The sorry state of Cyprus' banking system is certainly no secret. What's more, the IMF has supported a "bail-in" solution for some time. So, why has the EU only recently decided to pull the trigger on a Cyprus rescue plan?

One reason can be found by taking a look at the composition of Cyprus' bank deposits (see the accompanying chart).


There are two main take-aways from this chart:

  1. European depositors' money began to flow out of Cyprus' banks back in 2010. Indeed, most European depositors have already found the exit door.
  2. Over that same period, non-Europeans (read: Russians) have increased their Cypriot exposure. If the proposed haircut goes through, Russian depositors could lose up to $3 billion. No wonder Valdimir Putin is up in arms about the bail-in.

Perhaps a different "red telephone" from Moscow will be ringing in Brussels soon.

March 18, 2013 3:31PM

Zimbabwe’s Decline

Zimbabwe, a country with one of the world’s least free economies led for decades by the authoritarian Robert Mugabe, has been growing rapidly in recent years. It has outperformed the group of six African countries dubbed the “Lion Kings” because of their high growth. In a Cato paper released today, Craig Richardson explains the factors behind Zimbabwe’s growth, including high commodity prices, and why its performance is unsustainable. 

On Saturday, Zimbabwe voted on a referendum on a proposed constitution. The results should be known later this week, but as Richardson wrote Friday in a Wall Street Journal Europe op‐​ed, if the constitution is approved as expected, it will enshrine “government land grabs as perfectly legal.” Recall that the country began a period of severe economic and political turmoil precisely when the government began seizing large commercial farms at the beginning of the last decade. Unfortunately, most signs point to further decline for Zimbabwe.