March 9, 2007 11:04AM

Landmark Second Amendment Ruling Today

Today, a federal appeals court ruled that the District of Columbia’s draconian gun control law is unconstitutional. This is a very big deal. The Supreme Court is very likely to review this case, which means we’re about a year away from a definitive ruling from the high court on the meaning of the Second Amendment–is it just about militias or does the Constitution guarantee an individual right to keep and bear arms? 

I doubt there will be much of an immediate practical impact on the ordinary lives of people. Attorneys for the government, for example, will probably get a “stay” of this ruling pending its appeal to the Supreme Court. The significance is that a debate that has been raging in academic and, to some extent, in legislative arenas, is now moving to our highest courts. The impact on the lives of ordinary folks will likely follow slowly over the next few years–first in the District of Columbia and then in other jurisdictions.

Prior coverage of this controversy here. For related Cato work, go here.

Update: Read the Cato Institute press release on the decision

March 9, 2007 10:07AM

U.S. Economic Misery — or Delusion?

Opponents of trade liberalization are painting themselves into a corner. They repeat endlessly that rising imports and trade deficits are bad for the U.S. economy and American workers. Imports and the trade deficits they fuel supposedly reduce U.S. employment and wages and impoverish American households as we borrow more and more and sell off the family jewels to support consumption. And since imports and trade deficits keep expanding, our economy must be getting worse, right?

Wrong. This morning the Labor Department reported that the U.S. unemployment rate fell again last month, to 4.5 percent, which must be full employment by anybody’s definition. Almost 100,000 net jobs were added in February, despite cold weather that crimped construction. Those job gains come on top of a revised net gain of 372,000 jobs in December and January, bringing net employment growth in the past four years to 6.5 million. Today’s report also confirms that real wages continue to rise for American workers.

Adding to the favorable picture, the Federal Reserve Board reported yesterday that the net household wealth of American families in the last quarter of 2006 reached a record $55.6 trillion. And that is net wealth: what we own after subtracting mortgage, consumer and other debts. Our net wealth is up 43 percent in the past four years, driven by increases not only in home values but also stock prices.

Granted, our infinitely complex, $13.5 trillion economy will have its ups and downs, but the current reality simply does not square with the politically tainted picture of economic misery and hopelessness being portrayed by certain critics of trade.

March 9, 2007 9:37AM

C’mon, the Invisible Hand Isn’t That Hard to See

Methinks Matthew Holt and one of his readers entirely missed my point regarding David Leonhardt and Adam Smith. 

Some states have mandated that hospitals publicly report certain quality indicators. Leonhardt wrote:

The funny thing is that while patients remain largely ignorant of the information that is already available, it has still inspired hospitals to make big changes. But maybe that shouldn’t be too surprising. Doctors and nurses, like most everyone else, apparently care what their peers think of them. As Dr. Wachter says, “I think people underestimate the role of pride.”

I wrote, “Leonhardt documents well how the Invisible Hand works even in health care.” My point was that, once the quality information exists, patients don’t even have to know about it. Other forces move doctors and hospitals in the right direction. Some of those forces originate inside the hospitals, some originate without.

Critics of free health care markets often argue that patients can’t be expected to make their own health care decisions because, darn it, health care is just too complicated. But Leonhardt showed that patients don’t need to possess information to benefit from it. The market protects the ignorant.

I did not claim that the Invisible Hand was responsible for the quality reporting. That would have been silly. Obviously, the “visible hand” of the states drove that. I did write that I am not convinced that a mandate is necessary to produce that information. There is a strong argument that price‐​sensitive patients would demand similar (or even more) quality reporting.

That’ll teach me to be subtle. (Opaque?)

March 9, 2007 9:28AM

Education Tax Credits Keep Going and Going and

Yes folks, education tax credits keep rolling right through all of the court challenges that the anti‐​educational choice crowd can come up with.

On Wednesday, the Maricopa County Superior Court in Arizona dismissed another frivolous lawsuit against an Arizona tax credit programArizona’s individual tax credit was upheld by the state supreme court in 1999 with a wide‐​ranging decision, and the new corporate tax credit is different in no substantive way.

This is the latest in a long line of education tax credit victories, and opponents of educational freedom are running out of options – even frivolous options – for attacking them.

Although voucher laws have been overturned in two states, tax credits have survived every challenge to date (the Florida Supreme Court handed down an absurd and transparently political decision, and Colorado’s law went down over a “local control” provision).

Certainly, out‐​of‐​control judges can make law at will. But education tax credits have serious legal advantages that should prompt more consideration from school choice supporters. The fundamental difference is that vouchers are considered government funds and tax credits are not.

In many states with unsympathetic courts and strict “Blaine” or “compelled support” language prohibiting government funds from being use at sectarian institutions, vouchers are a moot point for legislators. Who wants to stick their neck out on a controversial issue only to have the law tossed out?

Even when a voucher law does survive a challenge — which many have — the legal obstacles are typically higher and more difficult to clear. For instance, the challenge to Arizona’s business tax credit was dismissed in short order (decision appealed of course) while the voucher case still awaits judgment.

The education industrial complex makes getting school choice hard enough … we should go with the more legally viable education tax credits when we can.

March 9, 2007 9:26AM

Idaho Joins the REAL ID Rebellion

Yesterday, the Idaho Senate passed Joint Memorial 3, earlier approved unanimously by the House, to refuse implementation of the REAL ID Act. More info here

I testified on the bill in the Idaho House’s Transportation and Defense Committee, and participated in a panel discussion at the Idaho statehouse, where some common sense was heard.

March 9, 2007 9:24AM

Should Michigan be Re‐​Named Western France?

There is ample competition for the dubious honor of being the state heading in the wrong direction at the fastest rate. California, New Jersey, Connecticut, and New York all can stake a claim to this prize. But Michigan politicians certainly are striving for recognition in this contest, and the Governor is leading the charge. As explained by the Wall Street Journal, she has been on a destructive tax‐​and‐​spending spree:

Re‐​elected last year, Ms. Granholm recently rewarded the voters by announcing some $1 billion in new fees and tax increases. …She would tax trucking, shopping, smoking, hunting, fishing, drinking beer and liquor, using a cell phone and, yes, even dying. …the levies are part of what has become a vicious cycle for Michigan: Poor growth causes lower revenues, so raise taxes, which leads to even poorer growth, so raise taxes again. The state has lost some 362,000 jobs since 2000 and the jobless rate in December was 7.1%, second highest in the country… The national rate is 4.6%. …per capita income in the state fell to its lowest level in 75 years in 2005, relative to the national average. …her budget would…pay off the teachers unions that support her with a new $178 per pupil spending increase, most of which would be absorbed by the bureaucracy and never see a classroom. This continues the state’s lack of spending restraint; between 1995 and 2007 Michigan spent an aggregate $14 billion above the rate of inflation and state population growth, according to a Mackinac study. …according to the Governor’s own Financial Advisory Panel, the state has amassed a $35 billion unfunded liability in its public‐​school health and retirement benefits. The state spends a whopping $1,200 per student per year on teacher and administrator benefits.

March 8, 2007 3:54PM

Let the Sun Shine In

Everyone believes that government would be better if there was more transparency — though people’s ideas of “better” can range quite widely. As I’ve noted before, the Internet and other new technologies have a lot to do with making government information more available.

Apropos of this phenomenon — and the impending advent of spring — next week turns out to be “Sunshine Week,” which includes a wide variety of open government activities. Among other things, the Sunlight Foundation, sponsor of the Sunlight Network, is having a panel discussion called “Sunshine in the First Branch: How Transparent is Congress?

Oh sure, this kind of thing is a little kumbaya, but I’ve been known to hum a few bars of that tune and, again, the benefits of transparency are a matter of (near) pan‐​ideological agreement. Secrecy is also bad. Let the sun shine in.