From Darwin’s Fool:
The U.S. District Court for the Eastern District of Oklahoma handed the Obama administration another – and a much harsher — defeat in one of four lawsuits challenging the IRS’s attempt to implement ObamaCare’s major taxing and spending provisions where the law does not authorize them. The Patient Protection and Affordable Care Act provides that its subsidies for private health insurance, its employer mandate, and to a large extent its individual mandate only take effect within a state if the state establishes a health insurance “Exchange.” Two‐thirds (36) of the states declined to establish Exchanges, which should have freed more than 50 million Americans from those taxes. Instead, the Obama administration decided to implement those taxes and expenditures in those 36 states anyway. Today’s ruling was in Pruitt v. Burwell, a case brought by Oklahoma attorney general Scott Pruitt.
These cases saw two appellate‐court rulings on the same day, July 22. In Halbig v. Burwell, a three‐judge panel of the U.S. Court of Appeals for the D.C. Circuit ordered the administration to stop. (The full D.C. Circuit has agreed to review the case en banc on December 17, a move that automatically vacates the panel ruling.) In King v. Burwell, the Fourth Circuit implausibly gave the IRS the thumbs‐up. (The plaintiffs have appealed that ruling to the Supreme Court.) A fourth case, Indiana v. IRS, brought by Indiana attorney general Greg Zoeller, goes to oral arguments in federal district court on October 9.
Today, federal judge Ronald A. White issued a ruling in Pruitt that sided with Halbig against King, and eviscerated the arguments made by the (more senior) judges who sided with the government in those cases…
We keep reporting in this space about how federal courts have slapped down the long-shot lawsuits and activist legal positions advanced by the Obama administration's Equal Employment Opportunity Commission (EEOC). In the Freeman case last year, a Maryland federal judge used such unflattering terms as “laughable,” “unreliable,” and “mind-boggling” to refer to Commission positions, while in the more recent Kaplan case, in which Cato filed a brief, a Sixth Circuit panel was only slightly more polite about the systematic shortcomings in the commission's case. Both of those cases arose from the commission's controversial crusade against the use of criminal and credit background checks in hiring.
Since our report in April, the commission has extended its epic, cellar-dwelling record of federal court losses with at least three more defeats.
* Yesterday a Second Circuit panel ruled on a case in which the EEOC had claimed that female and male lawyers at the Port Authority of New York and New Jersey had not received equal pay for substantially equal work. The problems with the commission's case were many, including a seemingly "random" choice of comparison employees that tried to dodge the significance of substantial differences between them based on how long they had been practicing law and had been at the Port Authority. Above all, the EEOC chose to rest its case on the notion that "an attorney is an attorney is an attorney," which meant it was entitled simply to assume that Port Authority lawyers "in practice areas ranging from Contracts to Maritime and Aviation, and from Labor Relations to Workers’ Compensation" were all doing the "same" work meriting the same pay. The panel of appeals judges barely concealed its impatience with this unrealistic assumption -- judges are if nothing else experienced lawyers themselves -- and upheld the dismissal.
Hundreds of thousands of protesters are marching in Hong Kong under the banner of “Occupy Central for Love and Peace.” Have I got a book for them!
Cato Senior Fellow Tom G. Palmer has just edited Peace, Love, & Liberty, a collection of writings on peace. This is the fifth book edited by Palmer and published in collaboration with the Atlas Network, where he is executive vice president for international programs, and Students for Liberty, which plans to distribute some 300,000 copies on college campuses.
But don’t write this book off as a student handout. There’s really impressive material in here. Palmer wrote three long original essays: “Peace Is a Choice,” “The Political Economy of Empire and War,” and “The Philosophy of Peace or the Philosophy of Conflict.” These are important and substantial articles.
But his aren’t the only impressive articles. The book also includes:
- Steven Pinker on why we’ve seen a decline in war
- Eric Gartzke on how free trade leads to peace
- Rob McDonald on early Americans’ wariness of war
- Justin Logan on the declining usefulness of war
- Radley Balko on the militarization of police
- Emmanuel Martin on how we all benefit if other countries prosper
- Chris Rufer on a businessman’s view of peace
- Sarah Skwire on war in literature
- Cathy Reisenwitz on what individuals can do to advance peace
Plus classic pieces of literature including Mark Twain’s “War Prayer” and Wilfred Owen’s “Dulce et Decorum Est.”
And all this for only $9.95 at Amazon! Or even less from Amazon’s affiliates. If you want to buy them in bulk — and really, you should, especially for your peace‐loving friends who aren’t yet libertarians — contact Students for Liberty.
This is a really bad policy idea: the U.S. Postal Service wants to get into the grocery delivery business. Economists will sometimes support government interventions in industries where there are serious market failures. But with grocery delivery, private businesses are already performing the service, and no market failure is evident.
The USPS grocery idea is a desperate attempt to save the agency’s hide, rather than to solve any problems in the marketplace. The Washington Post frames it correctly: “After nearly six years of multibillion‐dollar losses, the U.S. Postal Service has developed a new plan to help turn its finances around: Daily grocery deliveries.”
The problem is that government expansion into an activity squeezes out private providers and deters entrepreneurs from getting in. As the government expands, the private sector shrinks. Such “crowding out” occurs in many areas. An op‐ed in the Wall Street Journal [$] today on retirement savings in different countries notes, “OECD data show a strong negative relationship between the generosity of public pensions and the income that retirees collect from work and private saving.”
The decline in mail volumes is prompting the USPS to extend its tentacles. GovExec reports, “from banking to passport photos, nearly all postal reform stakeholders agree any legislation must unchain the Postal Service to leverage its unique, in‐every‐community network to create new sources of revenue.” By “stakeholders,” GovExec appears to mean groups—such as the labor unions—that benefit from the subsidized status quo.
The Wall Street Journal reports [$] that the grocery gambit “is the latest in a string of aggressive moves by the Postal Service to compete in the package‐delivery market.” But why would we want the government “aggressively” undermining private businesses, especially in an industry like package delivery that is already efficient and competitive?
If the USPS expands into new areas such banking and groceries, we will end up with a mess of cross‐subsidies between the agency’s different activities. Banks, for example, would complain that subsidized USPS banking was undercutting them, which would be inefficient and unfair. Such disputes would be chronic, and each dispute would descend into a battle over accounting between lobby groups in front of Congress.
For more efficiency and less lobbying, Congress should be encouraging the USPS to shrink, not expand. Does it make sense for a letter carrier to deliver groceries? The best way to find out is to privatize the letter carrier, repeal its legal monopoly, and then let it have a go. Postal privatization works. Britain, Germany, and the Netherlands have shown the way.
School choice programs expand educational opportunity, but at what cost?
Opponents of school choice frequently claim that vouchers and scholarship tax credits “siphon” money from public schools and increase the overall cost of education to the taxpayers. However, these critics generally fail to consider the reduction in expenses associated with students switching out of the district school system, wrongly assuming that all or most school costs are fixed. When students leave, they claim, a school cannot significantly reduce its costs because it cannot cut back on its major expenses, like buildings, utilities, and labor. But if that were true, then schools would require little to no additional funds to teach additional students. A proper fiscal analysis considers both the diverted or decreased revenue as well as the reduction in expenses related to variable costs.
A new study by Jeff Spalding, Director of Fiscal Policy at the Friedman Foundation for Educational Choice, does exactly that. The study examines the fiscal impact of 10 of the 21 school voucher programs nationwide, finding a cumulative savings to states of at least $1.7 billion over two decades. Spalding, the former comptroller/CFO for the city of Indianapolis, is cautious, methodical, and transparent in his analysis. He walks readers through the complex process of determining the fiscal impact of each program, identifying the impact of each variable and explaining equation along the way. He also makes relatively conservative assumptions, such as counting food service and interscholastic athletics as fixed costs even though they are variable with enrollment. Critically, Spalding accounts for those students who would have attended private school anyway, explaining:
One common complicating factor is student eligibility. If a voucher program allows students already enrolled in a private school to qualify, then those students do not directly relieve the public school system of any costs. Thus, there is a new public cost incurred for the vouchers provided to those students, but no corresponding savings for the public school system. Anytime voucher eligibility extends to students not currently enrolled in a public school, the net savings calculation must include that complicating factor.
States save money when the variable cost of each student to the district schools is greater than the cost of the voucher, accounting for the students who would have attended private school anyway. After wading through each state’s byzantine school funding formula, Spalding calculated that the voucher programs reduced expenditures across all 10 programs by $4.5 billion over two decades while costing states $2.8 billion, producing $1.7 billion in savings.
In the last 40 years, government spending on K‑12 education has nearly tripled while results have been flat. Moreover, the Census Bureau projects that the elderly will make up an increasingly larger share of the population in the coming decades, straining state budgets with spending on health care and retirement benefits. Schools will have to compete with hospitals and nursing homes for scarce resources.
In other words, our education system needs to become more effective and financially efficient, fast. Large‐scale school choice programs promise to do both.
Article One, Section One of the Constitution vests “all legislative powers” in Congress. The sovereign power to make laws comes from the people, so their representatives—Congress—should make those laws.
It sounds simple enough, but once the federal government started ballooning in size and regulating everything under the sun, that simple understanding had to go. There was too much governing for Congress to handle on its own, so the courts adjusted, allowing a proliferation of government agencies to exercise lawmaking power, within certain guidelines.&
We've now apparently gotten to the point, however, that there's so much governing to do that it's too much for the government to handle on its own. In a case now before the Supreme Court, Amtrak—the for-profit, quasi-public entity that the federal government has deemed private for these purposes—has been given a part to play in making laws to regulate its competitors in the rail transportation industry.
For the past few years I have charted the trends in American education spending and performance (see below). The goal is to see what the national data suggest about the productivity of our education system over time. Clearly, these data suggest that our educational productivity has collapsed: the inflation‐adjusted cost of sending a student all the way through the K‑12 system has almost tripled while test scores near the end of high‐school remain largely unchanged. Put another way, per‐pupil spending and achievement are not obviously correlated.
Not everyone is happy with these charts, and in this post I’ll respond to the critics, starting with the most recent: Matt DiCarlo of the Albert Shanker Institute, an organization that honors the life and legacy of the late president of the American Federation of Teachers. DiCarlo finds the chart “misleading,” “exasperating,” and seemingly designed to “start a conversation by ending it.” Since we’re actually having a conversation about the chart and what it shows, and since I’ve had countless such conversations over the years, perhaps we can agree that the last of those accusations is more of a rhetorical flourish than a serious argument.