Feds: Your Magnet Sets Are Lawful, Melt Them Down Anyway

In 2012 the U.S. Consumer Product Safety Commission (CPSC) launched a barrage of legal and enforcement actions seeking to ban sales of tiny rare-earth magnet sets, popular under various names as a desk amusement with artistic and scientific applications. While the sets do not cause injury when used as intended by adults, they can cause serious harm to children when swallowed, so a key question was whether they may be sold for adult use with appropriate warnings against letting them into kids’ hands.  As we noted at the time, the leading maker of the sets, which sold them under the name Buckyballs, launched an unusual public campaign criticizing the logic of the ban being sought, even though “it’s rare for a regulated company to mount open and disrespectful resistance to a federal regulatory agency,” let alone in sarcastic Internet memes. The CPSC responded directly and some would say vindictively with an unprecedented recall action naming Buckyballs co-founder personally as well as his company. After expensive ventures in legal defense, Zucker agreed to exit the business, leaving only one leading maker to bid defiance to the commission, Zen Magnets. 

While the CPSC pursued recalls and jawboned retailers to drop the product, the centerpiece of its campaign was to enact a ban on the product itself. Last year, however, the Tenth Circuit struck down the ban, ruling that the commission had improperly stacked its cost-benefit analysis. (Then-Tenth Circuit Judge Neil Gorsuch concurred in throwing out the ban.) The commission has gone back to the drawing board, and perhaps at some future date it will justify a ban to courts’ satisfaction, but for now the products are lawful to sell, and in fact are being sold

None of which, however, has undone the effects of the various allied enforcement actions the CPSC took in its campaign. In one of those actions, a federal judge agreed with the commission that Zen Magnets had improperly ignored a CPSC recall order and ordered it to destroy the remainder of its relevant stock – even though that stock was indistinguishable from other magnets that are sold lawfully. 

The company recently held a “funeral” for the sets it was forced to destroy, $40,000 worth, with a slightly pointed “eulogy” read aloud by company operations director Eric Sigurdson. You can watch it here: 

More at the Denver Post and, on newer developments on the magnet issue at the CPSC, from former commissioner Nancy Nord.   

Do You Have a Constitutional Right to Follow the President on Twitter?

Several Twitter users blocked by President Trump have threatened to file suit, alleging that his Twitter account constitutes a public forum, rendering their exclusion an unconstitutional content-based restriction of speech. They are represented by Jameel Jaffer, director of the Knight First Amendment Institute at Columbia University, who, in a letter to the White House Counsel, contends that Trump’s decision to block critics “suppresses speech in a number of ways.” Blocked users cannot search for or easily view the president’s tweets without logging out, and are “limited in their ability to participate in comment threads associated with [Trump’s] tweets.”

The question turns upon our understanding of the purpose and character of Trump’s twitter presence. Is @realDonaldTrump simply the private Twitter account of a man who happens to be president, or does it constitute a designated public forum, as asserted by Jaffer? A designated public forum is a government-controlled space set aside for expressive activities. While the government may establish time, place, and manner constraints on speech within a designated public forum, it may not impose content-based restrictions on expression therein.

Public forums are usually imagined as physical spaces in which citizens may express themselves, but this need not be the case. In Rosenberger v. University of Virginia, the Supreme Court determined that, by establishing a policy of funding student newspapers, the University of Virginia had created a public forum from which it could not exclude qualifying publications simply because they expressed religious, rather than secular, opinions.

However, the fact that designated public forums may be non-physical, coupled with Trump’s status as President of the United States, is probably not a sufficient basis to deem his Twitter account a designated public forum. The courts have generally determined that designated public forums must be owned by the government in an official capacity, or used for official government communication.

It is unlikely that Trump’s Twitter account represents a government-controlled property. Twitter is a private company; while Southeastern Promotions, Ltd. v. Conrad established that a privately owned theater leased by the government may be considered a public forum, even as President, Trump is simply a Twitter user, bound by the same terms of service as everyone else. Twitter allows its users to block accounts they’d like to avoid, and one block-happy user happens to be president. In effect, Trump’s becoming president does not nationalize the private Twitter account that he used before ascending to the nation’s highest office, and will likely continue to use when his tenure in the White House ends. A determination that Trump’s account represents a designated public forum would greatly undermine Twitter’s ability to establish rules for the digital pseudo-commons it maintains.

Finally, it is difficult to understand Trump’s tweets as official government communications of the sort that might push his account into designated public forum territory. While Trump often announces decisions via Twitter, these releases are accompanied or followed by official statements from the White House. Furthermore, Trump does not restrict his twitter presence to the conveyance of official policy, often using it to fire back at detractors or criticize members of his own administration. Can we really regard “Who can figure out the true meaning of ‘covfefe’ ??? Enjoy!” as an official government communication?

In any case, do not expect debate regarding extension of the public forum doctrine to Internet properties to subside any time soon. As human communication increasingly moves online, and voters continue to demand authenticity from their representatives in government, the line between official and private digital communications will remain somewhat blurry. Nevertheless, for libertarians, the current legal paradigm suggests a satisfactory balance between the property rights of social media firms and users, and the First Amendment rights of both government officials and their critics. Ultimately, social media users benefit when firms are allowed to manage their digital commons as they see fit, freely experimenting with new features and means of interaction. The nationalization of politicians’ personal social media accounts would stymie this process, needlessly dividing platforms into venues governed by an evolving understanding of what makes for an enjoyable user experience, and state fora held back by crudely applied terrestrial standards.   

Experts and the Gold Standard

Many mainstream economists, perhaps a majority of those who have an opinion, are opposed to tying a central bank’s hands with any explicit monetary rule. A clear majority oppose the gold standard, at least according to an often-cited survey. Why is that?

First some preliminaries. By a “gold standard” I mean a monetary system in which gold is the basic money. So many grains of gold define the unit of account (e.g. the dollar) and gold coins or bullion serve as the medium of redemption for paper currency and deposits. By an “automatic” or “classical” gold standard I mean one in which there is no significant central-bank interference with the functioning of the market production and arbitrage mechanisms that equilibrate the stock of monetary gold with the demand to hold monetary gold. The United States was part of an international classical gold standard between 1879 (the year that the dollar’s redeemability in gold finally resumed following its suspension during the Civil War) and 1914 (the First World War).

Why isn’t the gold standard more popular with current-day economists? Milton Friedman once hypothesized that monetary economists are loath to criticize central banks because central banks are by far their largest employer. Providing some evidence for the hypothesis, I have elsewhere suggested that career incentives give monetary economists a status-quo bias. Most understandably focus their expertise on serving the current regime and disregard alternative regimes that would dispense with their services. They face negative payoffs to considering whether the current regime is the best monetary regime.

Here I want to propose an alternative hypothesis, which complements rather than replaces the employment-incentive hypothesis. I propose that many mainstream economists today instinctively oppose the idea of the self-regulating gold standard because they have been trained as social engineers. They consider the aim of scientific economics, as of engineering, to be prediction and control of phenomena (not just explanation). They are experts, and an automatically self-governing gold standard does not make use of their expertise. They prefer a regime that values them. They avert their eyes from the possibility that they are trying to optimize a Ptolemaic system, and so prefer not to study its alternatives.

Placating the Gulf States Distorts Middle East Policy

A lengthy New York Times article over the weekend touches on a contradiction in the U.S. strategy against the Islamic State in Iraq and Syria (ISIS). Even as the United States cooperates in a de facto tactical alliance with Iran against ISIS, we’re engaged in a longer-term strategy against Iranian influence in the Middle East. U.S. and Iranian-backed forces have even clashed in battlefield skirmishes in recent weeks.

Picking a fight with an implicit ally is problematic for many reasons. Perhaps most worryingly, such clashes risk sucking U.S. forces deeper into Syria’s civil war.

The article quotes Lebanese scholar Kamel Wazne’s argument that the Trump administration, with encouragement from Saudi Arabia and other Gulf States, is “turning up the heat against Iran,” and eager to prevent it from establishing “’Shiite crescent’ of influence from Iran to Lebanon” when the Islamic State is defeated. This stance, we’re told, “puts the United States at loggerheads with the pro-government alliance in Syria.”

The stated concern is that Shiite-controlled territory provides a land route for supplying Iranian allies and proxies. But, according to Ilan Goldenberg and Nicholas Heras, writing in The Atlantic, “moving large amounts of weaponry across a 1,000-mile stretch of difficult territory in Iraq and Syria isn’t exactly an ideal logistics plan. Plus, Iran already has the ability to fly supplies into Damascus, and, from there, move them to Hezbollah in Lebanon.”

One suspects what is really driving the U.S. approach here is fealty to existing alliances. Some of this boils down to a kind of compulsive status quo bias. The Sunni Arab Gulf states have been U.S. partners for many years, despite evidence that they act in ways that undermine U.S. interests. With oil sales, lobbying largesse, flattery, and avoidance of direct challenges to top U.S. priorities, they dissuade policymakers from reevaluating that posture.

But there is a more practical rationale. The Sunni Arab Gulf states host U.S. military bases and enable American power projection in the Middle East. If relationships sour, we could lose that access. In the minds of U.S. policymakers, that would damage American leadership and influence. Washington therefore tends to side with the Gulf states.

The problem with having huge overseas military bases, however, is that we tend to use them. Permanently maintaining tens of thousands of U.S. troops throughout the Gulf region can enhance the temptation for policymakers to intervene for bad reasons. As should be clear from the past 25 years of habitual interventionism in the Middle East, “power projection” can be more a liability than an asset.

50 Years of Loving

Fifty years ago today the Supreme Court struck down Virginia’s ban on interracial marriage.

Mildred Jeter, a black woman (though she also had Native American heritage and may have preferred to think of herself as Indian), married Richard Loving, a white man, in the District of Columbia in 1958. When they returned to their home in Caroline County, Virginia, they were arrested under Virginia’s anti-miscegenation statute, which dated to colonial times and had been reaffirmed in the Racial Integrity Act of 1924. The Lovings were indicted and pled guilty. They were sentenced to a year in jail; the state’s law didn’t just ban interracial marriage, it made such marriage a criminal offense. However, the trial judge suspended the sentence on the condition that they leave Virginia and not return together for 25 years. In his opinion, the judge stated:

Almighty God created the races white, black, yellow, malay, and red, and he placed them on separate continents. And but for the interference with his arrangement there would be no cause for such marriages. The fact that he separated the races shows that he did not intend for the races to mix.

Five years later they filed suit to have their conviction overturned. The case eventually reached the Supreme Court, which struck down Virginia’s law unanimously. Chief Justice Earl Warren wrote for the court,

The freedom to marry has long been recognized as one of the vital personal rights essential to the orderly pursuit of happiness by free men. Marriage is one of the “basic civil rights of man,” fundamental to our very existence and survival.

Here’s how ABC News reported the case on June 12, 1967:

Trade-Offs in the Middle East

During the presidential campaign, Donald Trump delighted in waving to packed crowds while the Rolling Stones’ “You can’t always get what you want” played.  At the time, the song seemed like a repudiation of the Republican elites who had failed to support his campaign. Today, as his Middle East policy careens off the rails, it’s a concept the President himself should learn to grasp.

Mere hours after Secretary of State Rex Tillerson announced that tensions between Qatar, Saudi Arabia and other regional states were negatively impacting the fight against ISIS and calling for all sides to defuse tensions, the President contradicted him, publicly castigating Qatar for terrorist financing, and backing the Saudis in their campaign against Doha. In this, as in other things, Trump appears not to understand the trade-offs inherent in his own Middle East policies.

Certainly, the rift between Qatar and other Gulf states predates Donald Trump. Tensions have been high for years, particularly during the Arab Spring, when the Gulf states often backed different sides in the political struggles and wars that convulsed the region. As I described in a Cato Policy Analysis in 2014:

“As early as June 2012, media sources reported that Saudi Arabia, Qatar, and Turkey were arming anti-regime rebels [in Syria] with both light and heavy weapons… The vast quantities of money and arms they have provided during the past three years have driven competition among Syria’s rebel groups. This competition has increased the conflict’s duration and has reduced the likelihood that the rebels will eventually triumph.”

What Do the Subsidy Recipients Think about Cutting Subsidies?

Ever since President Trump and budget director Mick Mulvaney released a proposed federal budget that includes cuts in some programs, the Washington Post has been full of articles and letters about current and former officials and program beneficiaries who don’t want their budgets cut. Not exactly breaking news, you’d think. And not exactly a balanced discussion of pros and cons, costs and benefits. Consider just today’s examples:

[O]ver 100,000 former Fulbright scholars, among them several members of Congress, are being asked to lobby for not only full funding but also a small increase.

As a former Federal Aviation Administration senior executive with more than 30 years of experience in air traffic control, I believe it is a very big mistake to privatize such an important government function. 

On Thursday, all seven former Senate-confirmed heads of the Energy Department’s renewables office — including three former Republican administration officials – told Congress and the Trump administration that the deep budget cut proposed for that office would cripple its ability to function.

This is nothing new. Every time a president proposes to cut anything in the $4 trillion federal budget — up from $1.8 trillion in Bill Clinton’s last budget — reporters race to find “victims.” And of course no one wants to lose his or her job or subsidy, so there are plenty of people ready to defend the value of each and every government check. As I wrote at the Britannica Blog in 2011, when one very small program was being vigorously defended:

Every government program is “well worth the money” to its beneficiaries. And the beneficiaries are typically the ones who lobby to create, expand, and protect it. When a program is threatened with cuts, newspapers go out and ask the people “who will be most affected” by the possible cut. They interview farmers about whether farm programs should be cut, library patrons about library cutbacks, train riders about rail subsidy cuts. And guess what: all the beneficiaries oppose cuts to the programs that benefit them. You could write those stories without going out in the August heat to do the actual interviews.

Economists call this the problem of concentrated benefits and diffuse costs. The benefits of any government program — Medicare, teachers’ pensions, a new highway, a tariff — are concentrated on a relatively small number of people. But the costs are diffused over millions of consumers or taxpayers. So the beneficiaries, who stand to gain a great deal from a new program or lose a great deal from the elimination of a program, have a strong incentive to monitor the news, write their legislator, make political contributions, attend town halls, and otherwise work to protect the program. But each taxpayer, who pays little for each program, has much less incentive to get involved in the political process or even to vote.

A $4 trillion annual budget is about $12,500 for every man, woman, and child in the United States. If the budget could be cut by, say, $1 trillion — taking it back to the 2008 level — how much good could that money do in the hands of families and businesses? How many jobs could be created? How many families could afford a new car, a better school, a down payment on a home? Reporters should ask those questions when they ask subsidy recipients, How do you feel about losing your subsidy?