201611

November 4, 2016 11:06AM

European Criticism of American Internet Platforms

The Guardian reports on calls by German chancellor Angela Merkel for internet platforms to "divulge the secrets of their algorithms":

Angela Merkel has called on major internet platforms to divulge the secrets of their algorithms, arguing that their lack of transparency endangers debating culture.

The German chancellor said internet users had a right to know how and on what basis the information they received via search engines was channelled to them.

Speaking to a media conference in Munich, Merkel said: “I’m of the opinion that algorithms must be made more transparent, so that one can inform oneself as an interested citizen about questions like ‘what influences my behaviour on the internet and that of others?’.

“Algorithms, when they are not transparent, can lead to a distortion of our perception, they can shrink our expanse of information.”

An algorithm is the formula used by a search engine to steer a request for information. They are different for every search engine, highly secret and determine the significance or ranking of a web page.

Merkel has joined a growing number of critics who have highlighted the dangers of receiving information that confirms an existing opinion or is recommended by people with similar ideas.

“This is a development that we need to pay careful attention to,” she told the conference, adding that a healthy democracy was dependent on people being confronted by opposing ideas.

“The big internet platforms, through their algorithms, have become an eye of a needle which diverse media must pass through [to access their users],” she said.

My sense is that some Europeans are frustrated at how American companies dominate many aspects of the Internet. However, instead of trying to compete with the American companies in the marketplace (which would be a welcome development, as more competition is good), they have decided that regulating these companies (e.g., through antitrust scrutiny) is their best strategy for reducing American dominance.

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November 4, 2016 9:43AM

Seattle: County Mines “Courtesy Card” Data To Identify Dog Owners

They'll be watching you: King County (Seattle) uses grocery loyalty card data to figure out who owns pets, according to a new report from local station KOMO. It then sends them letters warning of a $250 fine if they do not license the animals. The "county said they pay the company who pays stores such as Safeway ...for access to customer data contained in every one of those reward card swipes." And "the mailers work. Just last year they brought in more than $100,000 in new pet licenses."

But remember, government needs access to Big Data to fight terrorism.

November 3, 2016 5:14PM

School Choice Is Just Peachy

In 2008, Georgia’s General Assembly enacted the Qualified Educational Tax Credit Program in an effort to expand educational opportunities for schoolchildren and provide alternatives for parents concerned about underperforming public schools. Under the program, individual and corporate donors can receive a credit against their state income tax liability in exchange for contributions to qualified, nonprofit Student Scholarship Organizations that aid Georgia families in paying tuition at qualified private schools of their choice.

Unfortunately, opponents of school choice are once again trying to restrict parents’ ability to select the best education for their children. Because many of the scholarship students use them to attend religiously affiliated schools, the plaintiffs in this case argue that the tax-credit program entangles government in religion. Specifically, they claim that the program violates the Georgia constitution’s No-Aid Clause—one of the historically anti-Catholic Blaine Amendments—which forbids the taking of money “from the public treasury, directly or indirectly, in aid of any church, sect, cult, or religious denomination or of any sectarian institution.” They also allege a violation of the Gratuities Clause, which says that “the General Assembly shall not have the power to grant any donation or gratuity or to forgive any debt or obligation owing to the public.” Several families who have benefitted from the program, represented by the Institute for Justice, have intervened to defend the law.

The trial court held that plaintiffs lacked standing to challenge the tax-credit program. It further ruled that, even if they had standing, plaintiffs’ constitutional arguments failed because tax credits are not government funds. Violations of the No-Aid Clause require that public funds be spent in aid of a sectarian institution, and the Gratuities Clause could not have been violated because “the General Assembly cannot donate or give what it does not own.” Plaintiffs appealed and Cato has now filed an amicus brief, in collaboration with Neal McCluskey and Jason Bedrick of our Center for Educational Freedom, before the Georgia Supreme Court.

We urge the court to affirm the determination that the tax-credit program does not violate the state constitution, focusing on the fact that it does not involve spending public funds for any sectarian purpose. Because the program makes no expenditures from the public fisc, it cannot violate the No-Aid Clause. Taxpayers choose to donate voluntarily using their own private funds and receive a tax credit for the amount of the donation; no money ever enters or leaves the treasury.

The challengers attempt to get around this fact by claiming that the credits constitute an indirect public expenditure, but this argument relies on a budgetary theory known as “tax expenditure analysis” that finds no support as a legitimate means of constitutional interpretation under Georgia (or federal, or any other state) law. Indeed, the U.S. Supreme Court rejected this type of reasoning in Arizona Christian School Tuition Organization v. Winn (2011).

The argument that the program constitutes an unconstitutional gratuity is likewise incorrect because the tax credits are not public funds, and the government cannot give away that which it does not own. Even if Georgia were giving up something of value, it would not be a “gratuity” because the state receives a substantial benefit in return: increased educational attainment, plus the secondary effects that increased competition and a more educated citizenry create.

The Georgia Supreme Court should affirm the lower court’s decision and uphold the state’s Qualified Educational Tax Credit Program—ensuring educational choice for Georgia families, regardless of how much money they make.

November 3, 2016 2:59PM

Communications and Data Meet the Fourth Amendment

This week and last, the Cato Institute filed amicus briefs urging the Supreme Court to take up two cases dealing with the constitutional status of "cell site location information," or "CSLI." This data, collected of necessity by cellular communications providers, creates detailed records of their customers' movements. The briefs invite the Court to accept these cases so it can revise Fourth Amendment practice to eschew doctrine and more closely adhere to the language of the Fourth Amendment.

The Fourth Amendment states that "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated." Presumably, when called upon to determine whether a Fourth Amendment violation has occurred, courts would analyze the elements of this language as follows: Was there a search? Was there a seizure? Was any such search or seizure of "their persons, houses, papers, [or] effects"? Was any such search or seizure reasonable?

And in cases involving familiar physical objects, courts usually do a sound textual analysis, at least implicitly. But in harder cases dealing with unfamiliar items such as communications and data, courts retreat to "reasonable expectation of privacy" doctrine that emerged from Katz v. United States in 1967, and offshoots of it like the "third-party doctrine." The "reasonable expectation of privacy" test asks whether defendants' feelings about things government agents accessed were reasonable. The corollary "third-party doctrine" cancels Fourth Amendment interests in information and things that are shared on the theory that expectations of privacy evaporate in that context.

The "reasonable expectation of privacy" test is the product of one non-essential concurrence in Katz, and the third-party doctrine was wrong when the Supreme Court created it in 1976 to ratify a law that deputized banks into financial surveillance. That doctrine grows further out of synch with each step forward our society takes in modern, connected living. Today, third-party service providers collect incredibly deep reservoirs of information about us: Cellular telephone networks, Internet service providers, search engines, and payment systems have data that can throw open windows onto our relationships, feelings, health conditions, business dealings, sexuality, emotions, and more.

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November 3, 2016 2:23PM

Most House GOP Candidates in Close Races Reject Trump’s Deportation Plan

A large number of Republican candidates are openly opposing Donald Trump’s immigration position. As I’ve noted before, 10 of the 11 GOP Senate candidates have campaigned on pro-immigration platforms. In the closest 40 House races according to Cook Political Report’s ratings, a majority of Republicans have already expressed openness to a pathway to legalization for unauthorized immigrants.

The large number of supporters of a compassionate immigration policy could be seen as surprising not only because the Republican presidential nominee has strongly opposed this approach, but also because only 6 of the districts are currently held by Democrats who back a legalization measure. However, it is important to note that these members are not out of step with their Republican constituents who, polls show nationally and on a state by state basis, support allowing unauthorized immigrants to stay.

Because some members were not directly asked about their views on legalization, support could be even greater, but here are the 21 members in tight races who have taken humane, pro-immigration positions:

1. Don Young (AK): “We want our country's 11 million undocumented individuals to be welcomed and to have a place to belong – free of fear.... Immigrants have always recharged our country and have been reliable sources of economic growth, cultural diversity and innovation.... like our colleagues drafting the bill, we believe this legislation should... provide a clear and responsible path to citizenship for those already here.”

2. Scott Jones (CA-7): "For those folks who are here illegally, I would advocate, as I have always advocated, a pathway to legal status for each and every one of them if they can pass a background check.”

3. Jeff Denham (CA-10): “I believe our immigration system is broken and in need of real and effective reform. I support providing an earned path to citizenship for those who want it…. Reform will ensure that all undocumented immigrants are added to the tax rolls, ensuring that everyone pays their fair share.”

4. David Valadao (CA-21): "Immigration reform is something I'm still very supportive of and continue to work on behind the scenes…. Every bill that I've been a part of is about allowing immigrants who are here to go through a process to become legal. … For the people who are working hard in the fields, in the restaurant industry, in the service industry, I mean we've got to come up with a system that addresses the 11 million who are here. You have to have a process that makes sure that you have guest worker programs that work, visa programs that work.”

5. Darrell Issa (CA-49): “Beyond border security, any reform package must make an immediate determination of who stays and who goes, based on our national interests. Those who demonstrate the ability to contribute to our society in a meaningful way should have a path forward to guide them, be placed at the end of the legal-immigration line, meet the strict standards established and face a rigorous but fair application process. Those who are migrant workers should be put into a temporary guest-worker program.”

6. Mike Coffman (CO-6): "Immigration reform... has to be compassionate about keeping families together…  I cosponsored legislation this summer that would give [immigrant children of unauthorized immigrants] a legal status and then a path to citizenship… For the adults who knowingly broke the law who are here today, I think they ought to have the opportunity to come out of the shadows and have a legal status.”

7. David Jolly (FL-13): "I support... comprehensive immigration reform that has remediation and penalties and so forth…. I don’t support a pathway to citizenship for people who came here illegally. But I do support a pathway to legal status and residency.”

8. Brian Mast (FL-18): "I do not support a pathway to citizenship... But I am open to a conversation of a pathway to legal work status for people who are here in the United States.”

9. Carlos Curbelo (FL-26): "I have been for comprehensive immigration reform... We need to have a guest worker program... We need to create a path to citizenship for those families who are undocumented but are contributing to our economy. A lot of people talk about the undocumented but they don't realize that these are some of the hardest workers.”

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November 3, 2016 12:54PM

The Rise and Fall (and Rise) of Sweden

I'm in Sweden today, where I just spoke before Timbro (a prominent classical liberal think tank) about the US elections and the implications for public policy.

My main message was pessimism since neither Donald Trump nor Hillary Clinton support genuine entitlement reform.

But I've addressed that topic many times before. Today, motivated by my trip, I want to augment my analysis about Sweden from 10 days ago.

Media Name: Sweden-Comparative-GDP1.png

In that column, I highlighted some research from Professor Olle Kranz showing that Sweden became a rich nation during a free-market era when government was relatively small. And as you can see from his chart (I added the parts in red), this is also when per-capita economic output in Sweden caught up with - and eventually surpassed - per-capita GDP in other advanced countries.

Then Sweden began to lose ground. Some of this was understandable and inevitable. Sweden didn't participate in World War II, so its comparative prosperity during the war and immediately afterwards was a one-time blip.

But the main focus of my column from last week was to show that Swedish prosperity began a sustained drop during the 1960s, and I argued that the nation lost ground precisely because statist policies were adopted.

In other words, Sweden enjoyed above-average growth when it relied on policies I like and then suffered below-average growth when it imposed the policies (high tax rates, massive redistribution, etc) that get Bernie Sanders excited.

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November 3, 2016 11:19AM

Serious Problems with E‑Verify

A recent piece by Mark Krikorian, executive director of the Center for Immigration Studies (CIS), argued for mandatory E-Verify as “an important enforcement tool” and metaphorical “wall” that would prevent the hiring of illegal immigrants.  Krikorian did not mention many of the problems with E-Verify so I will do that here after a brief description of the system.

The 1986 Immigration Reform and Control Act (IRCA) created the rudimentary employment verification known as the I-9 form that every new employee must fill out.  An E-Verify mandate would add another lay on top of the I-9 whereby employers, after collecting I-9 those forms, would enter the information on the form into a government website.  The system compares these data with information held in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases.  The employee is work authorized if the databases decide that the data are valid.  A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged.  If the employee and employer cannot sort out the errors then the employer must terminate the new employee through a “final non-confirmation.” 

First, Krikorian erroneously labels E-Verify as a “free online system.”  E-Verify is not a gift from heaven, it was created by the federal government and funded by taxpayers.  E-Verify is also not free because of the opportunity cost of the using the system.  The current I-9 form costs employers an estimated 13.48 million man-hours each year.  A national E-Verify mandate would add to that – perhaps substantially.  Those are a lot of hours that employers could otherwise spend on growing their businesses but instead must waste complying with government rules. 

Most E-Verify checks do not take much time but 46.5 percent of contested cases in 2012 took DHS eight work days or more to resolve.  During that time, employers are justifiably reluctant to train new employees who might not be work authorized.  Employers will likely avoid that cost by pre-screening job applicants and rejecting those who come back as tentative non-confirmations.  Workers could thus get rejected from every job they apply for but not know a simple and correctable error in the E-Verify database is the reason.  Although pre-screening employees would be illegal under a national E-Verify mandate, we shouldn’t expect it to work because the entire point of the system is to stop illegal behavior by employers in the first place.

Second, E-Verify is ineffective at detecting illegal immigrant workers. On top of that, E-Verify’s accuracy rates are notoriously difficult to judge.  An audit of the system by the firm Westat found that an estimated 54 percent of unauthorized workers were incorrectly found to be work authorized by E-Verify because of rampant document fraud.  E-Verify relies upon the documents presented by the workers themselves to their employer.  Frequently, identity information comes from deceased Americans – a loophole the government seems incapable of closing.  For instance, SSNs for roughly 6.5 million Americans who are 112 years old or older do not have a death date attached which means they can easily be used by illegal workers and nobody would complain.  An illegal worker using the SSN of a deceased American would likely end up work authorized.

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