Archive for the “Government & Policy” Category


Justice Holmes awakens

“On Jan. 21, poor Justice Holmes must have turned in his grave.”

So writes Mimi Marziani in the National Law Journal, lamenting the Supreme Court’s decision in Citizens United v. FEC, issued on Jan. 21, 2010. That’s the controversial case holding that corporations have a right to speak out on political issues without being censored.

What’s the connection with Justice Oliver Wendell Holmes, Jr., who died back in 1935? Well, Holmes spent much of his long career arguing against the idea that the U.S. Constitution is a bulwark of liberty, a barrier to governmental infringements on individual rights. So Marziani is right that Holmes, if he were alive today, would have dissented in the Citizens United case—just as he dissented more than a century ago in the case forever associated with his name, Lochner v. New York. (In that 1905 case, the Court struck down a maximum-hours law for bakers.)

 

In fact, Marziani says, there’s a direct parallel between the two famous cases. Citizens United, she asserts, is “Lochner’s 21st century equivalent.” Why? Because both cases were driven by a conviction that the Constitution should be interpreted where possible to protect people against the awesome power of government to violate their rights. Along with Holmes, Marziani believes that the Constitution is agnostic on the relationship between individuals and the state. Read the rest of this entry »


Hit the brakes on government health care

Nicholas Kristof gives us his best case for passing ObamaCare:

Critics doubt that the Senate and House bills would succeed in containing health care costs very much, and they may be right. It’s hard to know. But the existing system is a runaway roller coaster. Isn’t it prudent to try brake pedals even if we’re not sure how well they’ll work?

You’ve got to love likening a sprawling new government program to further bureaucratize, politicize and intervene in American health care to putting on the brakes.

No, Kristof, I don’t think it’s particularly prudent to expand government’s control over health care based on nothing but the blind hope it will work; I don’t think it’s prudent to approach any problem without understanding the nature of that problem. Read the rest of this entry »


Are corporations creatures of the state?

In Citizens United v. FEC, the recent campaign finance case I discussed here and here, the Supreme Court noted that one of the arguments for restricting corporate speech is that “[s]tate law grants corporations certain advantages–such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.” According to this line of argument, corporations are “creatures of the state” and they give up any claim to First Amendment rights in exchange for special state-granted favors.

In answer to this argument, the Court quoted a dissent by Scalia from a previous decision: “It is rudimentary that the State cannot exact as the price of those special advantages the forfeiture of First Amendment rights.”

The Court, which admirably upheld the free speech rights of corporations, took it for granted that corporations wouldn’t exist save for special favors from the state. It’s a common view of corporations. But it’s one that must be questioned.

There’s reason to think that all of a corporation’s essential features–”corporate personhood,” perpetual life, and limited liability–could arise by voluntary agreement among individuals on a free market, without a single government favor. Consider what many regard as one of the most controversial features of a corporation, limited liability. Read the rest of this entry »


Shut up, we want to regulate you

Jeff Scialabba and I have already addressed most of the substantive arguments Ralph Nader and Robert Weissman raise in their Wall Street Journal op-ed “The Case Against Corporate Speech” (see here, here, and here). But this is revealing:

Corporations know that money makes a big difference when it comes to blocking protections for workers, consumers and the environment. Wall Street, health insurance and drug companies, fossil fuel and nuclear power companies, and defense corporations have been hard at work defeating common-sense reforms that would make them more accountable.

Do we want more elected officials to believe that to challenge corporate agendas is to risk their career?

This means: “We should restrict corporate speech because it interferes with us passing our anti-corporate agenda.” As my colleague Onkar Ghate has pointed out, the same argument could have been made by segregationalists during the sixties: “We should restrict speech by blacks because it interferes with our anti-black agenda.”

Image: flickr


The real root of political corruption

The recent Supreme Court decision in Citizens United v. Federal Election Committee knocked down long-standing restrictions on corporate and union contributions to political campaigns and was a definitive move toward the restoration of free speech in America. Yet many Americans are up in arms over the ruling, viewing the decision as an invitation for rampant corruption in Washington. While people are right to be concerned about political corruption, there’s a serious misunderstanding here about what gives rise to it and how it can be eliminated.

As Yaron Brook explained in a 2008 forbes.com op-ed, the problem is not the “allegedly corrupting influence on money on politics,” but rather subjecting “political speech to the corrupting influence of government control.”

It’s true that in a free system, money does give you a greater ability to get your message out; this is precisely one of the reasons it’s desirable to earn wealth. If this is what campaign finance advocates regard as corrupt, which system would they regard as uncorrupt? One in which a person’s ability to promote his viewpoint is unrelated to the financial resources he’s earned (whether personally or through voluntary contributions).

This is why campaign finance advocates have not been appeased by McCain-Feingold, and are calling for complete public financing of political elections. Under such a system, candidates would no longer have to financially earn the platform from which they speak; instead, the government would furnish candidates with your tax dollars. Of course, not every potential candidate could receive public funding under such a system: Only “serious” candidates would.

Who decides which candidate is serious? Those presently holding government power. There is no surer way to create a political aristocracy in America.

But what of the fear of corporations supporting politicians in exchange for favorable legislation? Isn’t that a form of corruption justifying restrictions on their freedom of speech? The real question is: Just who is corrupting whom? Read the rest of this entry »


The freeze fraud

In the name of fiscal responsibility, President Obama is promising a spending freeze–at the record-high spending level he reached in 2009. This is like an alcoholic promising to “freeze” his drinking at 20 beers a night.

Read the rest of this entry »


The coming inferno?

Ben Bernanke won a second four-year term at the head of the Federal Reserve yesterday with a 70-30 vote in the Senate. Alex Epstein pointed out the absurdity of reconfirming Bernanke on foxnews.com. Bernanke is among the individuals most responsible for the financial crisis, and he hasn’t changed his financial philosophy in the least. Yet nearly three-quarters of the Senate—and President Obama—think he saved us from disaster. To use one of Alex’s metaphors, we just elected the arsonist to put out the fire.

Image: Gage Skidmore on Flickr


Obama v. the First Amendment

Last week’s Supreme Court ruling, which struck down restrictions on certain kinds of political speech by corporations, was a profoundly important decision. Not only did it eliminate the most odious parts of McCain-Feingold, but it did so largely for the right reasons. In particular, the Court recognized that a corporation is an association of individuals, who retain their First Amendment right to free speech. I highly recommend reading the decision in its entirety.

The decision couldn’t have been more timely. The purpose of the First Amendment is to protect our ability to communicate our views without interference by the government. Politically, it is, as James Madison called it, “the only effectual guardian of every other right.” By enabling us to freely criticize our leaders, it is the best and last defense against the threat of unlimited government power.

As this blog has argued at length, Obama has been making an alarming grab for power since the day he entered office. He has shown nothing but contempt for economic freedom and limited government–and now he is seeking to silence those, corporations in particular, who challenge him. Read the rest of this entry »


State of the Union in one sentence

We need to rise above fear, hesitation, and partisan politics–to give the government all the power it needs to solve all our problems.

That was the message of President Obama’s State of the Union address, which named dozens of problems in America and not once suggested that individual rights, liberty, or freedom were the solution.

From a quick reading of the speech, some statistics:

  • Number of times President Obama said “I”: 105–mainly pushing for the government programs he seeks to pass.
  • Number of times President Obama said “individual rights”: 0.
  • Number of times President Obama said “liberty”: 0.
  • Number of times President Obama said “freedom”: 1–but it was freedom for Afghanistan.

flickr: Darwin Bell


Barney Frank should quit his day job

For years, Barney Frank has been the most prominent cheerleader of Fannie Mae and Freddie Mac–the colossal failures that have cost taxpayers $110 billion to date. Frank has long denied any problems with the government sponsored entities designed to “promote home ownership” by making or guaranteeing loans the free-market wouldn’t.

“These two entities—Fannie Mae and Freddie Mac,” he famously said, “are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Frank also explicitly endorsed the reckless lending that proved Fannie and Freddie’s downfall: “I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

Last week, Barney Frank changed his mind: “The remedy here is…as I believe this committee will be recommending, abolishing Fannie Mae and Freddie Mac…”

But don’t celebrate just yet. Frank didn’t call for a meaningful abolition–he called for “abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance” (emphasis mine). Read the rest of this entry »