Category: reason

New York Gov. Andrew Cuomo today signed a bill that adds the country’s fourth most populous state to the list of jurisdictions that allow recreational use of marijuana. Counting New York, 16 states have approved general legalization, although South Dakota’s ballot measure is tied up in legal wrangling. New York’s law, which emerged from years of negotiations between Cuomo and legislators, is surprisingly permissive in some respects but includes high taxes and other provisions that compromise the interests of consumers.

Residents 21 or older will be allowed to possess up to three ounces of marijuana and up to 24 grams of cannabis concentrates in public. They also can legally transfer those amounts to other adults “without compensation.” New York’s limits are more generous than the rules in many other states that have legalized marijuana, where public possession typically is limited to one or two ounces. New Yorkers also will be allowed to possess up to five pounds at home.

Marijuana use will be permitted anywhere that tobacco smoking is allowed, plus in specially licensed “consumption sites,” which can operate in conjunction with dispensaries. Local governments will have the authority to prohibit consumption sites within their jurisdictions. Cannabis consumption in places where it is not permitted will be punishable by a $25 fine.

Cities also will be allowed to ban marijuana retailers, provided they act by the end of the year. But they will not be allowed to stop residents from ordering marijuana online and having it delivered by licensed companies.

The legislature wisely eschewed defining marijuana-impaired driving based on THC blood levels, which are not a reliable indicator of intoxication. As under current law, police instead would have to present evidence that a driver is “under the influence,” which can include blood test results, the smell of marijuana, erratic driving, and performance on sobriety tests.

New Yorkers will be allowed to grow up to six plants, half of them mature at any given time, for personal consumption, with a limit of 12 plants per household. But homegrown marijuana won’t be permitted until up to 18 months after the first recreational retailer opens, which may not happen until late next year. That means consumers will have to continue relying on the black market for a year or two and may not be able to legally grow marijuana until late 2023 or early 2024.

The long delay in allowing homegrown marijuana presumably is aimed at helping newly licensed retailers establish themselves and displace the black market. But when it comes to taxes, New York legislators do not seem very keen on helping the industry or consumers.

New York plans to impose an excise tax based on THC content. It also plans to tax concentrates and edibles at higher rates than flowers, which seems redundant and is inconsistent with the goal of taxing doses equally.

The rate per milligram of THC is half a cent for flowers, eight-tenths of a cent for concentrates, and 3 cents for edibles—six times the flower rate. In other words, the excise tax on a 10-milligram dose will be 5 cents for flowers, 8 cents for concentrates, and 30 cents for edibles. These taxes seem to be aimed at encouraging consumers to smoke marijuana rather than eating or vaping it, which does not make much sense if legislators are concerned about the health hazards associated with cannabis consumption.

The excise tax for flowers is 50 cents per gram at a THC concentration of 10 percent and a dollar per gram at a THC concentration of 20 percent. Assuming a retail price of $10 per gram, that amounts to a tax of 5 percent to 10 percent.

The THC content of concentrates such as wax and shatter can be as high as 80 percent. At that concentration, New York’s tax would be $64 per gram, which amounts to a tax of more than 100 percent, assuming a retail price of $40 to $60 per gram.

The excise tax on a chocolate bar that contains 100 milligrams of THC, which Medicine Man in Denver is currently selling for $10, would be $3. Assuming similar costs in New York, that amounts to a 30 percent tax.

But the THC tax is just the beginning. New York also is imposing a 9 percent tax on retail sales of cannabis products, plus an additional 4 percent tax earmarked for local governments. That combined 13 percent levy is on top of the general state and local sales taxes, which run as high as 8.9 percent. In New York City, the total sales tax would be nearly 22 percent, in addition to excise taxes ranging from 5 percent to more than 100 percent, depending on the type of product and its THC content.

New York’s marijuana-specific taxes—the THC tax plus the special sales tax—are much higher than the levies collected by several other states. Alaska, for example, imposes a wholesale excise tax of $50 per ounce of flowers; it has no statewide marijuana sales tax (or general sales tax), although some cities tax cannabis sales at rates ranging from 3 percent to 5 percent.

Illinois taxes wholesale transfers at 7 percent and collects a 10 percent marijuana sales tax on products with THC concentrations of no more than 35 percent. Michigan imposes the same statewide tax on retail sales. Massachusetts has a 10.75 percent state tax on retail marijuana sales, and cities can add their own taxes of up to 3 percent. Maine collects $335 per pound of flowers from growers and a 10 percent tax on retail sales.

These states seem to recognize that heavy taxes make it harder for licensed retailers to compete with black-market dealers. New York, not so much.

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In a famous 2005 commencement speech, Apple’s Steve Jobs counseled graduates to “stay hungry, stay foolish.” He was quoting Stewart Brand, a man who has been called “the intellectual Johnny Appleseed of the counterculture” and is the subject of the new documentary We Are As Gods, co-directed by David Alvarado and Jason Sussberg.

Born in 1938, Brand was a Merry Prankster who helped conduct Ken Kesey’s legendary acid tests in the 1960s. His guerilla campaign of selling buttons that asked “Why haven’t we seen a photograph of the whole earth yet?” pushed NASA to release the first image of the planet from space and helped inspire the first Earth Day celebrations. From 1968 to 1971, he published the Whole Earth Catalog, which quickly became a bible to hippies on communes and city-dwelling techno-geeks such as Jobs, whose commencement-day quote comes from the final issue of the magazine. The title of the new documentary comes from the first issue, which boldly announced, “We are as gods and might as well get good at it.”

Brand helped shape early techno-culture and cyberspace by reporting on the personal computer revolution and interacting with many of its key figures in the early 1970s. His ideas were instrumental in the creation of the Well, one of the earliest online communities, and he helped found The Long Now Foundation, which seeks to lengthen and deepen the way we all think about the past and the future.

Now in his 80s, Brand’s current passion is Revive & Restore, an organization that is leading the “de-extinction movement” by using biotechnology to bring back plants and animals including the American Chestnut tree, the passenger pigeon, and the woolly mammoth. Unlike so many in the environmentalist movement he helped create, Brand has always viewed technology in positive, optimistic terms.

“Humans actually have been getting better at a lot of things for a long time in terms of heading off various diseases, heading off poverty and heading off a lot of things,” Brand tells Reason while explaining his support for nuclear energy, the de-extinction movement, and other controversial technologies. “You can’t count on the past ways of making it better to fix whatever the current problems are. You have to keep discovering new ones.” He also updates “stay hungry, stay foolish” for a world facing a global pandemic and environmental concerns: “Try everything,” he says. “Take nothing off the table.”

Produced and edited by Meredith Bragg; Illustration: Lex Villena; Source Image: Mark Mahaney

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From the majority opnion in Fabick v. Evers, decided today by a 4-3 vote of the Wisconsin Supreme Court:

Wisconsin Stat. § 323.10 specifies that no state of emergency may last longer than 60 days unless it “is extended by joint resolution of the legislature,” and that the legislature may cut short a state of emergency by joint resolution. The statute contemplates that the power to end and to refuse to extend a state of emergency resides with the legislature even when the underlying occurrence creating the emergency remains a threat. Pursuant to this straightforward statutory language, the governor may not deploy his emergency powers by issuing new states of emergency for the same statutory occurrence….

Read according to its plain language, in context, along with surrounding statutes, and consistent with its purpose, the best reading of Wis. Stat. § 323.10 is that it provides the governor the authority to declare a state of emergency related to public health when the conditions for a public health emergency are satisfied. But when later relying
on the same enabling condition, the governor is subject to the time limits explicitly prescribed by statute.

And from the dissent:

[T]he majority errs by purporting to engage in a straightforward statutory analysis. Yet, it omits any analysis of an essential word in Wis. Stat. § 323.02(16) that is outcome determinative. Left unanalyzed is the statutory term “occurrence,” which when included in the analysis, proves to undermine the majority’s conclusion and mandates a contrary result….

Applying our established definition of “occurrence” to Orders #82 and #90, it is apparent that each is based on a new set of on-the-ground facts, with each new set of facts posing a high probability of either “[a] large number of deaths or serious or long-term disabilities among humans” or “[a] high probability of widespread exposure to a biological … agent that creates a significant risk of substantial future harm to a large number of people.” Thus, the orders were issued in response to separate occurrences and are permissible under the plain language of §§ 323.02(16) and 323.10.

Unlike Order #72, which was premised on preparing Wisconsin for the fight against COVID-19, Order #82 declared a new public health emergency in response to a “new and concerning spike in infections” that without quick intervention “will lead to unnecessary serious illness or death, overwhelm our healthcare system, prevent schools from fully reopening, and unnecessarily undermine economic stability ….” …

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America’s relationship with China can’t be reduced to a single label, Secretary of State Antony Blinken told CNN’s Dana Bash in an interview last week. Beijing is not merely a U.S. “adversary,” Blinken said. “There are clearly and increasingly adversarial aspects to the relationship,” he allowed, and there are “certainly competitive ones. There are also still some cooperative ones.”

That nuanced thinking has been evident in a handful of recent remarks from Blinken about China, and it bodes well for the Biden administration’s policy in this arena, which just a few weeks ago was couched in more extreme language. But Blinken’s comments also evince an unjustified—and pessimistic—determinism grounded in a misguided perspective on China’s military situation. The U.S.-China relationship is indeed multifaceted, and it does not have to become “increasingly adversarial.”

Blinken didn’t speak about Chinese military posturing on CNN, but he did address it in a speech at Brussels one day prior, where he named China first on the list of military threats facing the United States. “Beijing’s military ambitions are growing by the year,” Blinken said. That includes “efforts to threaten freedom of navigation, to militarize the South China Sea, to target countries throughout the Indo-Pacific with increasingly sophisticated military capabilities,” he claimed, and “the challenges that once seemed half a world away are no longer remote.”

It’s true that Beijing’s military might is not to be underestimated. Though its nuclear arsenal is still far smaller than those of the U.S. and Russia, by spending and many measures of conventional strength, China’s military is second only to ours. Blinken is likewise correct that Beijing has expanded its maritime power over the past few decades, especially in the South China Sea, and seeks regional preeminence.

Yet this is not the cross-global threat to U.S. security that Blinken suggests, thanks in significant part to unalterable geographic realities. Consider the differences between U.S. and Chinese geography for defense. The United States spans our continent and borders only two neighbors, both close allies. We are insulated from three quarters of the world’s nations by the Atlantic and Pacific Oceans, the world’s greatest natural “moat.”

China, by contrast, is surrounded. It borders four nuclear states—Russia, North Korea, Pakistan, and India—and must pass through multiple island chains to reach open ocean. Many of China’s regional neighbors have robust militaries of their own, and their military spending rapidly adds up to outmatch Beijing’s, whose own spending is substantially directed toward domestic authoritarianism and defense. Some of these neighbors (e.g. Japan, South Korea, Taiwan, Australia) are longstanding U.S. partners, but they need no direction from Washington to counterbalance Chinese ambitions.

All this means the United States is neither directly threatened by, nor the only obstacle to, the Chinese regional ambitions Blinken described. “China’s is a force hemmed in by geography in a way traditional great naval powers have not been and is also embedded in a region with other powerful states who have their own important maritime capabilities with the wherewithal to further expand them in the years ahead,” as Defense Priorities fellow Mike Sweeney has observed. Indeed, “the extent of effort by China to enhance its maritime capabilities is also striking in what it has not achieved,” Sweeney notes. “It is little closer to controlling the East, South, and Yellow Seas to the exclusion of other naval forces; nor does it possess the means at this time to decisively invade, occupy, and garrison Taiwan.”

Underestimating Chinese power would distort U.S. defense strategy, but overestimating it will produce distortion, too, and that is Washington’s characteristic temptation. Believing a military threat from Beijing to be greater and more imminent than it is produces the deterministic thinking Blinken demonstrated when he spoke of the U.S.-China relationship becoming “increasingly adversarial.” There is no inherent requirement that this antagonistic dynamic expand. The Thucydides Trap thesis, which postulates that rising and extant great powers must come to blows, is not a law of nature.

It is still possible to steer U.S. engagement with China away from its more adversarial elements—particularly where military conflict is conceivable, as a U.S.-China war would be unthinkably horrific—and toward the cooperative and economically competitive aspects of the relationship to which Blinken also alluded. On one point, at least, the Biden administration is already on the right track: Instead of attempting to “punish” Beijing for the COVID-19 pandemic, for which there is simply no good option, Blinken said the administration is taking a forward-facing approach to “do everything possible to prevent another pandemic.”

More broadly, moving away from an adversarial stance means more—and more realistic—diplomacy and cooperation for mutual advantage. It should also mean rejecting calls for risky U.S. military buildup in China’s near abroad, as well as Washington’s ineffective yet reckless habit of overusing sanctions. China’s rise to be a regional power is likely inevitable, but the slide toward an adversarial relationship can and should be reversed.

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The Education Department announced on Tuesday that it will freeze collections and return garnished wages and tax refunds to student loan borrowers who have defaulted on their Federal Family Education Loans (FFEL). More than 1 million borrowers will be covered by the new policy, and they will join 40 million other Americans who, since March 2020, have not accrued interest or been required to make payments on student loans already owned by the Education Department. 

Exactly who are the borrowers in this category? Anyone who took out a Stafford or PLUS student loan prior to 2010 borrowed that money from a commercial lender with a federal guarantee under the FFEL program. If your FFEL loan is in good standing, congratulations! Your loan remains with a commercial lender and Tuesday’s action does not apply to you. However, if you defaulted on your FFEL loan and it has been transferred to a federally funded guaranty agency—but has not been in default so long that the guaranty agency has already transferred collections to the Education Department (in which case, it was already frozen)—then you are the intended beneficiary of Tuesday’s announcement. Your loan repayment will be frozen until at least September 2021, any wages or taxes garnished since March 2020 will likely be returned (at some point), your loan will be restored to good standing, your credit score will hopefully be depenalized, and you will have the option to request a refund of any voluntary payments you made on your defaulted loan during the pandemic. 

I qualified many parts of the above because the Education Department does not yet know exactly how many people will benefit from this policy, exactly how much money will be taken from the Treasury in the form of refunded garnishments, how it will return garnishments or refund voluntary payments, or how it will coordinate the various parties needed to make this policy work. For instance, assuming the Education Department can quickly identify every borrower who will be affected by Tuesday’s announcement, it can probably stop the IRS from withholding their 2020 tax refunds, unless, perhaps, those people have already filed. But how quickly can it identify—or get guaranty firms to identify—which employers should stop garnishing defaulted borrower’s wages and communicate that information to them?

If this policy turns out to be a hot mess, it will largely be because the FFEL program was a hot mess. 

Under FFEL, the Education Department paid commercial lenders a fee to lend to students and their parents. When a borrower enters repayment and defaults, the commercial lender files a claim with a guaranty agency; the guaranty agency then uses Education Department funds to buy the loan from the commercial lender for about 97 cents on the dollar; that guaranty agency then charges the Education Department to collect on the loan and contracts collections out to various other firms. If the guaranty agency’s debt collection contractors can’t collect, the Education Department takes over loan service and collections. 

As that chain of responsibility suggests, FFEL was a case study in moral hazard. Not only did lenders and guaranty agencies make money without taking on risk, but annual limits on how much each student could borrow incentivized lending to as many people as possible, regardless of whether they were likely to complete their degree or had enrolled in an institution that was preparing them for gainful employment. 

In the wake of the 2008 mortgage crisis, many private lenders no longer had the capital to issue new FFEL loan disbursements to students who were already enrolled, which left students in the lurch. Asking colleges to charge a fraction of their pre-crisis rates overnight was out of the question, so Congress allowed the Education Department to buy newly issued FFEL loans from the very banks the department had previously paid to issue those loans so that students could continue borrowing. Ultimately, the Education Department purchased roughly $150 billion in FFEL loans issued between 2007 and 2009. 

The Education Department’s FFEL purchase in 2009 is why some FFEL borrowers have already benefited from the loan repayment freeze. Other FFEL borrowers have already benefited from the freeze because they were in default so long that their debt had already been moved from the commercial lender to the guaranty agency to the Education Department. To complicate matters further, some guaranty agencies that are servicing FFEL defaulted loans voluntarily froze repayment at the same time the Education Department did. This makes total sense, in a way, because the Education Department already owns the loans that commercial lenders have transferred to the guaranty agencies, but the Education Department does not know exactly which FFEL borrowers in default whose debt remains in the care of guaranty agencies have had their payments frozen. 

Again, if this all sounds ridiculously complicated and poorly designed, that’s because it is. Congress killed the FFEL program in 2010 for all the reasons mentioned above and replaced it with Federal Direct Loans, or FDLs, all of which have been frozen since March 2020. But FFEL’s complexity still haunts us because some 8 million FFEL borrowers are still out there, chipping away (or not!) at their ballooning balances. 

While there are likely some deadbeats among the beneficiaries of Tuesday’s announcement, the median borrower who is struggling to make minimum payments on loans issued prior to 2010—with some active FFEL loans dating back to the 1990s—probably does need some debt relief and isn’t providing much in the way of garnishment regardless. If you believe in means testing, Tuesday’s policy is better than the blanket freeze on all student loans owned by the Department of Education, which benefitted not just households that lost income, but also white-collar workers who didn’t miss a paycheck over the last year. 

However, we should consider whether the Education Department is creating a new moral hazard or other bad incentives. For instance, Tuesday’s announcement says that “any of these [FFEL] loans that went into default since March 13, 2020, will be returned to good standing. The guaranty agencies that hold those loans will assign them to the Department and request that the credit bureaus remove the record of default.” Might some people interpret that to mean they can or should default on FFEL loans that they are currently repaying? What if you defaulted earlier in the pandemic but can now afford repayment—why bother? What message does this send to the 5 million FFEL borrowers whose loans remain with commercial lenders? What message does this send to people who are having their wages garnished for other kinds of debt? What about people who defaulted before COVID-19 tanked the economy, and the people who will default after the economy recovers? 

Lastly, when are policymakers going to acknowledge that federal student loans have played a major role in driving up the cost of education, and that dipping into the public fisc to pay off debts incurred due to cost inflation is a vicious cycle that is bound to repeat itself?

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To eliminate bullying, a school in England has eliminated ball games and jump-roping on the playground, replacing these with poetry recitations, choir, and quizzes. Said Charlotte Whelan, the Hackney New School head teacher (the British equivalent of a principal): “A school without bullying sounds like a utopia, but it is achievable.”

Whether or not reciting Shelley during recess is your idea of utopia, a BBC piece on the school quotes Whelan saying, “It’s long been my belief that we could be doing more for pupils while they are on their breaks,” because “so often you see them aimlessly wandering the playground. We want every second at school to count.”

I’m sure the kids are counting the seconds, too.

Clearly Whelan is of the belief that kids’ brains shut down the moment they are not engaged in something officially academic. That’s what prompted her to start the break-time poetry recitals, “and it evolved from there.”

I doubt it will come as a surprise that another expert quoted in the piece said it is important for schools to create safe spaces, where kids feel “supported and included.”

The issue here is not just the Dolores Umbridge-esque nature of the administration. It’s the inability of that administration to believe that kids could possibly be learning anything when they are allowed to goof around. The teachable moment notion of child development is so thick here that kids are not allowed to “waste” their time even between bites.

This notion is wrong. “When they are free to play in their own ways, children practice the most important skills required to move toward adulthood—how to take initiative, make their own decisions, solve their own problems, negotiate with peers—and, yes, how to deal with others who aren’t always nice,” says Peter Gray, a professor of psychology at Boston College and my co-founder at Let Grow. “When we prevent them from such opportunities by taking continuous control of their lives, we prevent them from growing up.”

Prevent away seems to be the philosophy of those who believe the only way to end bullying is to end any freedom the students enjoyed. Linda James, founder of a nonprofit called “Bullies Out,” notes in the BBC piece: “Unstructured games can sometimes lead to nasty comments, aggressive behavior and children feeling left out.”

She’s right: Some sad feelings—and betrayals and loneliness—are inevitable in both childhood and adulthood. No one wants kids facing constant cruelty, but learning how to deal with some playground frustration is actually a big life skill it behooves them to learn. There’s more to school than sonnets.

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