Archives: 06/2017

More Solid Judges

Whatever’s happening with James Comey’s testimony, Donald Trump’s Twitter account, or congressional inaction on Obamacare repeal, tax reform, or much of anything else, from where I stand all that is #fakenews designed to distract your eyes from the prize: we have more judicial nominees! In an echo of how the 21 contenders for the Supreme Court vacancy were announced during the campaign, on top of last month’s stellar list of 10 lower-court nominees come 11 more, including three circuit court judicial candidates: Justice Allison Eid of the Colorado Supreme Court to fill Neil Gorsuch’s vacant Tenth Circuit seat; North Dakota District Judge Ralph Erickson for the Eighth Circuit; and Professor Stephanos Bibas of the University of Pennsylvania Law School for the Third Circuit. 

Of those 11, I know three. Eid, a former clerk for Justice Clarence Thomas, is a thoughtful and intellectual jurist much in the mold of her former boss. Bibas is one of the top criminal-law scholars in the country with whom I’ve worked professionally and had a drink personally; he’ll be outstanding but leaves a gaping hole as faculty adviser for Penn’s Federalist Society chapter. And then there’s Stephen Schwartz, an old friend who was a few years behind me at the University of Chicago Law School and who’s been nominated to the U.S. Court of Federal Claims. He’ll be terrific.

If the other eight are of the same caliber as these three (and the previous 10) – and we have no reason to think otherwise given that the administration’s nominations staff and advisers are the same – then this is the sort of #winning of which I won’t ever tire.

The only curiosity is that again there’s no mention of Justice Don Willett of the Texas Supreme Court – and indeed no nominees to the Fifth Circuit at all. As Hugh Hewitt has pointed out, of the 11 original SCOTUS short-listers, five were state judges. Three of them have now been nominated to the federal appellate courts. The two remaining are Tom Lee of Utah (which has no current vacancies) and Willett (and Texas has two vacancies). Moreover, Willett was apparently one of the five or six finalists for the seat that Gorsuch filled, and is close to Texas Senator Ted Cruz. So you’d think he’d be a shoo-in.

Now, I’ve speculated about the possibility of some grand bargain whereby two other worthies get the Fifth Circuit slots but Willett goes to the high court whenever Justice Anthony Kennedy decides to retire. But that’s pie-in-the-sky because so many other stakeholders are involved at that point. Of course, if this deal – the best deal! – is ratified by the president himself, that would be bigly indeed.

In the meantime, the White House counsel’s office should just keep these black-robe orders coming.

Federal Gas Tax: LaHood Makes No Sense

Former U.S. transportation secretary Ray LaHood lobbied for a federal gas tax increase in a Washington Post letter the other day. The letter captures the illogic and misrepresentation that influences the highway funding debate.

Hugh Hewitt was right on target in his May 31 op-ed, “Trump should raise this tax,” about boosting the federal gas tax to address our nation’s crumbling roads and bridges. The federal gas tax of 18.4 cents a gallon has not been increased in 24 years. Imagine living today on the same salary you made in 1993. That’s the dire situation facing our infrastructure: We’re supporting our roads and bridges using outdated budgets that fail to meet the demands of 2017.

On this important issue, Congress must look to the 22 states that have raised their gas taxes since 2013. States leading the way are “red” states such as Wyoming, Georgia and Idaho and “blue” states such as California, Maryland and Vermont. The list also includes New Jersey, with a Republican governor and Democratic-controlled legislature. Infrastructure is a bipartisan issue. It’s time our federal government takes the action for which Republicans and Democrats have been tirelessly advocating.

Over the years, gridlock and finger-pointing have prevented real action on addressing our infrastructure challenges. All the while, traffic congestion has worsened, potholes have multiplied, and our roads and bridges have further deteriorated.

Here are some problems with LaHood’s position:

First Problem. As former transportation chief, LaHood must know that his own department publishes data showing that the condition of the nation’s bridges has steadily improved for two decades, while the condition of highways has been stable in recent years and improved in some cases since the 1990s. (Highway data summarized here and here. Bridge data here). Why does he say “… bridges have further deteriorated” when he surely knows that is not correct?

Second Problem. The 18.4 cent-per-gallon federal gas tax has not been raised since 1993, and its real value has eroded since then. However, the gas tax rate was more than quadrupled between 1983 and 1993 from 4 cents to 18.4 cents. The 1983 rate would be 9.8 cents in today’s dollars, so the real gas tax rate has risen substantially since then. Even if “potholes have multiplied,” the blame would go to the increasing diversion of plentiful gas tax funds to non-highway uses such as urban rail.

Third Problem. The final issue is the internal inconsistency of LaHood’s position. His first paragraph complains that federal gas taxes are not high enough. But his second paragraph says that 22 states have raised their own gas taxes in just the past four years, which logically negates the need for a federal gas tax increase. The states that have the highest demands for new highway funds are apparently already taking action. Great, problem solved.

In my new Cato study on infrastructure, I note that 98 percent of U.S. streets and highways are owned by state and local governments. The states are entirely capable of funding such infrastructure they own without federal aid. States can tax, borrow, collect user charges, and attract private investment to fund their highways, bridges, airports, and seaports.

Are there any advantages to raising federal gas taxes over raising state gas taxes? How is federal funding of state-owned infrastructure superior to state funding? LaHood and other advocates don’t tell us. Instead, they wave their arms, prattle about crumbling roads and multiplying potholes, and always demand more centralized spending and control.

Trump’s No Good Very Bad Arms Deal

Tomorrow Congress will vote on resolutions of disapproval in response to Trump’s recent arms deal with Saudi Arabia. If passed, Senate Resolution 42 and House Resolution 102 would effectively block the sale of precision guided munitions kits, which the Saudis want in order to upgrade their “dumb bombs” to “smart bombs.” A similar effort was defeated last year in the Senate. How should we feel about this vote?
 
Before the ink was dry President Trump was busy bragging about his arms deal with Saudi Arabia, a deal that he claimed would reach $350 billion and would create “hundreds of thousands of jobs.” The sale bore all the hallmarks of Trump’s operating style. It was huge. It was a family deal—brokered by his son-in-law, Jared Kushner. It was signed with pomp and circumstance during the president’s first international trip. But most importantly, as with so many of his deals, the deal was all sizzle and no Trump Steak.™
 
Trump’s arms deal with the Saudis is in fact a terrible deal for the United States. It might generate or sustain some jobs in the U.S. It will certainly help the bottom line of a handful of defense companies. But from a foreign policy and national security perspective, the case against selling weapons to Saudi Arabia is a powerful one for many reasons.

Freeze That Slush: DoJ Cuts Off Flow of Settlement Cash To Private Groups

In a memo dated June 5, Attorney General Jeff Sessions has ended the practice by which the Department of Justice earmarks legal settlement funds for non-governmental third-party groups that were neither victims nor parties to the lawsuit. This is terrific news and a major step forward in respecting both the constitutional separation of powers and the private rights that litigation is meant to vindicate.

The use of surplus or unclaimed settlement money for causes allegedly similar to those served by the litigation (“cy près,” in the legal jargon) is not itself new. In recent years, however, law enforcers at both state and federal levels have developed it as a way to direct funds to a wide variety of causes, from private charities and advocacy groups to legal aid programs, law schools, and an assortment of other causes that legislatures and their appropriations committees have shown no interest in funding.

Not surprisingly, officials tend to designate as beneficiaries recipients they find ideologically congenial. “With control over big money flows,” as I noted in a piece two years ago, “smart AGs can populate a political landscape with grateful allies.” The Obama administration came under justified criticism for using the mortgage settlement to funnel tens of millions of dollars to “housing counseling” often carried on by left-leaning community-organizing groups.

The problems with this practice begin at the level of constitutional structure. It is the legislative branch, not some combination of executive and judiciary in connivance, that is supposed to wield exclusive power to appropriate public moneys, and moneys extracted by government enforcement and not otherwise owned (as by parties or victims) are a species of public moneys. In the recent D.C. Circuit decision of Keepseagle v. Perdue, arising from the settlement of a lawsuit by Indians shortchanged by agriculture programs, Judge Janice Rogers Brown wrote a slashing and readable separation-of-powers critique of the practice in her dissent (the panel majority dismissed the issue as having been raised too late.)

There are other constitutional issues at stake as well. Cato has argued as amicus, in cases involving settlements by Facebook and Duracell, that the use of cy près endangers the constitutional rights of individual members in class litigation, both as to due process rights protected by the Fifth Amendment and to First Amendment rights of expression (since the practice uses members’ money to advance causes with which they may strongly disagree). Courts including the Eighth Circuit have voiced misgivings as well, and Chief Justice John Roberts has flagged the constitutional status of cy près as an issue that could soon be ripe for Supreme Court consideration. Members of Congress led by Rep. Robert Goodlatte (R-Va.) have proposed the Stop Settlement Slush Funds Act (H.R. 732), and as I note in a chapter of the new Cato Handbook for Policymakers, state lawmakers in places like New Mexico have pursued similar ideas.

A follow-up question is whether the Department of Justice will follow the same logic by moving against the diversion of funds from entered judgments (as distinct from future settlements) to outside groups, as in the Keepseagle case. Logically, there is good reason for it to pursue this further step.

In the mean time, we should applaud Attorney General Jeff Sessions for one of the big wins for constitutional principle so far in the new administration.

Two Kinds of Diversity

Diversity is and has been at the center of many of our debates about higher education and related issues, including freedom of speech. I see two different meanings of diversity, one compatible with free speech and one perhaps incompatible.

The ordinary meaning of diversity can be found in a dictionary, for example the online Oxford Living Dictionaries (is there an Oxford Originalist Dictionary?). There we find that diversity means “the state of being diverse” and diverse in turn means “showing a great deal of variety; very different.” This definition comports with freedom of speech. The First Amendment prevents public officials from imposing a single view on the governed, thereby protecting advocacy of diverse views. Diversity in this sense and free speech go together.

But diversity has another meaning which I think of as “diversity-as-recognition.” Imagine you see  the world divided into two groups: oppressors and the oppressed. The speech of the oppressor dominates the society and the beliefs of its members; speech in this society is both unequal and unitary, not diverse. What should be done? Government officials (or for that matter, university administrators) should seek “true diversity” by promoting recognition of the equality of the oppressed. If this task were accomplished, all groups would speak from an equal place, and diversity of speech would truly exist.

But achieving this change might require censorship. The oppressor tends to utter speech that asserts the inequality of the oppressed. Such speech is incompatible with achieving equality and true diversity. Put otherwise, to just allow “a great deal of variety” in speech is not equal to the task of achieving “diversity-as-recognition.” Public officials or university administrators thus are required to censor extreme speech to achieve diversity-as-recognition. To allow the speech of the oppressor is to endorse oppression. Diversity-as-recognition thus seems to imply the return of “repressive tolerance.”

Some questions follow for me. Should all speech contrary to “diversity-as-recognition” be censored? Or should only extreme and unargued words be suppressed? In other words, should the advocate of diversity-as-recognition seek to suppress both Charles Murray and racial epithets or just the latter? And if the latter only, why?

Contrary to those questions, a second thought. Might diversity-as-recognition be interpreted in a way compatible with freedom of speech?

HT: Donald Downs for prompting thinking about the compatibility of diversity and free speech. 

Governments Shouldn’t Even Fund Schools

Education reporters frequently make the claim that government ought to fund and operate educational institutions because schooling is a public good. However, since schooling fails both conditions required for a public good to exist, schools should not be publicly operated.

Schooling is Not a Public Good

According to the economic definition, a public good is non-rival in consumption and non-excludable. The first condition means that one individual’s consumption of the good does not hinder others’ abilities to use the product. Schooling fails this condition since students take up seats when receiving an education. The second condition means that the producer of the good is unable to exclude non-payers. Schooling fails this part of the definition since school leaders can prevent students from attending their institutions, if necessary.

Since schooling is not a true public good, the basic free-rider problem does not exist. This is important because it means that government does not need to operate schools or force residents to pay for them.

A Merit Good?

When journalists claim that schooling is a public good, I believe they actually mean to say that education is a merit good since it produces positive externalities. When an educational product is purchased, both the consumer and the provider benefit, as in all other voluntary transactions. However, the rest of society may also benefit if schooling actually creates citizens that are more educated. This argument leads many scholars to support government subsidization of schooling.

The Problem

Obviously, schooling is only one channel through which people can achieve an education. Since children can learn in various settings, the current system of schooling may actually harm their overall educational levels. In other words, schooling may impose negative externalities on society through providing a less than optimal level of education to all children.

Similarly, schooling likely creates a more obedient citizenry. This generates positive externalities, through less criminal activity, and negative externalities, through less creativity and technological innovation.

Since there are large positive and negative externalities that result from schooling, in theory, it is impossible to determine the overall sign of the net spillover. Consequently, it is unclear whether we ought to tax or subsidize schooling; and even if we could somehow figure out the overall sign, we would not be able to determine the optimal magnitude of the intervention.

We should recognize the fact that externalities do exist in education. However, as the founder of externalities conceded, we must also realize that attempting to reach the socially optimal level of schooling through government intervention may ironically result in much harm. Instead, we ought to limit this probable detriment by allowing individual families to seek ideal educational experiences for their own children.

#Russiagate Update: Winner Leak Implications

Megyn Kelly is probably kicking herself for not delaying her interview of Vladimir Putin. Had she waited just a few days, she could’ve brought a leaked copy of the latest NSA estimate of the timeline, motivations, and targets of alleged Russian hackers during the 2016 election cycle to her chat with Putin and asked a lot of pointed questions about it. Even though that opportunity never materialized, she and other journalists still have the chance to ask some equally important questions of American officials about this rather interesting document and the young woman responsible for sharing it with the world. What follows are some of my suggested lines of inquiry for our friends in the Fourth Estate.

The Leaker: Reality Leigh Winner

As I read The Intercept’s story, I kept asking myself one question, over and over: did this young woman learn nothing from Ed Snowden? 

This extract from the arrest warrant affidavit contains details that, if accurate, speak to a total lack of awareness of or concern for the kind of “insider threat” detection measures that now exist in most, if not all, Intelligence Community components:

Extract of arrest warrant affidavit in the case of Reality Leigh Winner

Why did Winner not use a truly secure means of contacting The Intercept? Why did she select this particular document? Why did she not contact a whistleblower advocacy organization for legal advice before even contemplating such a rash act?

The Media Outlet: The Intercept

In a statement published a short time ago, The Intercept claimed that

On June 5 The Intercept published a story about a top-secret NSA document that was provided to us completely anonymously. Shortly after the article was posted, the Justice Department announced the arrest of Reality Leigh Winner, a 25-year-old government contractor in Augusta, Georgia, for transmitting defense information under the Espionage Act. Although we have no knowledge of the identity of the person who provided us with the document, the U.S. government has told news organizations that Winner was that individual.

That statement is at odds with the search warrant affidavit quoted above, which claims that Winner was in “email contact” with the “News Outlet” (The Intercept).

Who’s telling the truth here vis a vis Winner’s alleged email contact with The Intercept–the Department of Justice or the paper? Could Winner have emailed the wrong reporter at The Intercept, and the actual story authors were in the dark that she’d contacted the paper? Did Winner’s email bounce? And why did Intercept staff share an exact copy of the purloined document with NSA officials in the first place? Why didn’t they simply read key passages of the document over the phone, or include extracts in an email to NSA officials?

Given the fact that Winner printed the document and thus left investigators a digital trace of her actions, perhaps The Intercept’s decision to share a scanned version of the document wouldn’t have mattered–but maybe it would have, and why endanger a source (annonymous or otherwise) by behaving in such an irresponsible way with the document?