Category: reason

Not that Europe is lacking for economic basket cases, but Spain
has been an especially fascinating train wreck to watch, with the
unemployment rate hitting
27 percent last year. Official statistics are so dismal that
they could be expected to produce riots in the streets; that they
haven’t is evidence that, somehow, Spaniards are finding ways to
eat and pay the bills. If some sort of invisible economic activity
were not under way,
pointed out Victor Mallet and Guy Dinmore in a 2011 article in
the Financial Times, “Spain would not be as peaceful as,
barring a few demonstrations, it has so far been.” Now comes
confirmation from the country’s government that the people of Spain
have, in fact, retained their ability to work and create jobs and
wealth—by staying as far under the state’s radar as possible.

A new
report from Spain’s Finance Ministry reveals that the shadow
economy—underground activity that would be legal, if subject to the
usual tax and regulatory regime—has grown steadily every year from
2008 through 2012, the most recent year measured. In that time, the
shadow economy increased from 17.8 percent of official GDP to 24.6
percent.

Perhaps unsurprisingly for a country troubled by state meddling
with the economy, the shadow economy is smallest in Madrid, the
seat of government, at 17.3 percent, and sharply larger in every
other region, hitting 31.1 percent in Extremadura.

And Spain’s economy is somewhat hobbled by government
interference. On the 2014 Index of Economic Freedom, Spain ranks at
49, and 22nd out of 43 countries in Europe. “Its score is 0.8
point lower than last year due to declines in the management of
government spending, business freedom, and labor freedom that
outweigh small improvements in trade freedom and freedom from
corruption.”

For Spaniards looking to climb out of the country’s economic
doldrums, not only are taxes high, but “Incorporating a business
takes 10 procedures and about three weeks, but completing licensing
requirements takes over seven months and costs more than the level
of average annual income. Labor regulations remain largely
inflexible hindering job growth in the private sector.”

The country has actually improved its overall economic freedom
ranking a bit over the past 20 years, but unevenly and with decline
in recent years, even as the Euro crisis made life difficult.

As they grapple with the growth of the shadow economy, Spanish
officials, like officials everywhere, will have to deal with the
fact that underground activity can develop its own inertia as
people get accustomed to living that way.

Writes
economist Friedrich Schneider (PDF):

But even major tax reforms with major tax rate deductions will
not lead to a substantial decrease of the shadow economy. Such
reforms will only be able to stabilize the size of the shadow
economy and avoid a further increase. Social networks and personal
relationships, the high profit from irregular activities and
associated investments in real and human capital are strong ties
which prevent people from transferring to the official economy.

Having given people ample reason to hide their activities and
experience in doing just that, Spain’s government may have a tough
time getting those underground entrepreneurs back into the official
economy.

Not that Europe is lacking for economic basket cases, but Spain
has been an especially fascinating train wreck to watch, with the
unemployment rate hitting
27 percent last year. Official statistics are so dismal that
they could be expected to produce riots in the streets; that they
haven’t is evidence that, somehow, Spaniards are finding ways to
eat and pay the bills. If some sort of invisible economic activity
were not under way,
pointed out Victor Mallet and Guy Dinmore in a 2011 article in
the Financial Times, “Spain would not be as peaceful as,
barring a few demonstrations, it has so far been.” Now comes
confirmation from the country’s government that the people of Spain
have, in fact, retained their ability to work and create jobs and
wealth—by staying as far under the state’s radar as possible.

A new
report from Spain’s Finance Ministry reveals that the shadow
economy—underground activity that would be legal, if subject to the
usual tax and regulatory regime—has grown steadily every year from
2008 through 2012, the most recent year measured. In that time, the
shadow economy increased from 17.8 percent of official GDP to 24.6
percent.

Perhaps unsurprisingly for a country troubled by state meddling
with the economy, the shadow economy is smallest in Madrid, the
seat of government, at 17.3 percent, and sharply larger in every
other region, hitting 31.1 percent in Extremadura.

And Spain’s economy is somewhat hobbled by government
interference. On the 2014 Index of Economic Freedom, Spain ranks at
49, and 22nd out of 43 countries in Europe. “Its score is 0.8
point lower than last year due to declines in the management of
government spending, business freedom, and labor freedom that
outweigh small improvements in trade freedom and freedom from
corruption.”

For Spaniards looking to climb out of the country’s economic
doldrums, not only are taxes high, but “Incorporating a business
takes 10 procedures and about three weeks, but completing licensing
requirements takes over seven months and costs more than the level
of average annual income. Labor regulations remain largely
inflexible hindering job growth in the private sector.”

The country has actually improved its overall economic freedom
ranking a bit over the past 20 years, but unevenly and with decline
in recent years, even as the Euro crisis made life difficult.

As they grapple with the growth of the shadow economy, Spanish
officials, like officials everywhere, will have to deal with the
fact that underground activity can develop its own inertia as
people get accustomed to living that way.

Writes
economist Friedrich Schneider (PDF):

But even major tax reforms with major tax rate deductions will
not lead to a substantial decrease of the shadow economy. Such
reforms will only be able to stabilize the size of the shadow
economy and avoid a further increase. Social networks and personal
relationships, the high profit from irregular activities and
associated investments in real and human capital are strong ties
which prevent people from transferring to the official economy.

Having given people ample reason to hide their activities and
experience in doing just that, Spain’s government may have a tough
time getting those underground entrepreneurs back into the official
economy.

In an
interview with CNN’s Jake Tapper that aired last night,
President Obama tried to dodge responsibility for eliminating the
contradiction between his
recent comments about marijuana and its classification as a
Schedule I drug under the Controlled Substances Act:

Tapper: You said that smoking pot was a bad
habit but you didn’t think it was any worse for a person than
drinking. Now that contradicts the official Obama administration
policy, both on the website of the Office of National Drug Control
Policy and also the fact that marijuana is considered a Schedule I
narcotic, along with heroin and Ecstasy. Now do you think you were
maybe talking just a little too casually about it with Remnick in
The New Yorker, or are you considering not making
marijuana a Schedule I narcotic?

Obama: Well, first of all, what is and isn’t a
Schedule I narcotic is a job for Congress.

Tapper: I think it’s the DEA that decides
that.

Obama: It’s not something by ourselves that we
start changing. No, there are laws undergirding those
determinations.

Tapper: Would you support that move?

Instead of answering that question, Obama started talking about
a “public health” approach to marijuana (a subject I plan to
address in another post). But notice that Obama at first denied
that the executive branch has the power to reschedule drugs, saying
“what is and isn’t a Schedule I narcotic is a job for Congress.” As
Tapper pointed out, that’s not true. While Congress can amend the

Controlled Substances Act (CSA) to increase or reduce
restrictions on particular drugs, the statute also gives that power
to the attorney general, who has delegated it to the Drug
Enforcement Administration (a division of the Justice Department).
In fact, the DEA has repeatedly
rejected petitions to reschedule marijuana, most recently in
2011. I forget: Who was president then?

Apparently Obama forgot too. Obama often speaks as if he is an
outside observer of his own administration—condemning
excessively long prison sentences while hardly ever using his
clemency power to shorten them, sounding
the alarm about his own abuses of executive power in the
name of fighting terrorism, worrying
about the threat to privacy posed by surveillance programs he
authorized. Now here he is, trying to distance himself from his own
administration’s refusal to reclassify marijuana.

When Tapper challenged that evasive maneuver, Obama tried
another one. “There are laws uindergirding those determinations,”
he said, implying that the language of the CSA somehow dictates
that marijuana remain on Schedule I. These are the statutory
criteria for drugs in that category:

(A) The drug or other substance has a high potential for
abuse.

(B) The drug or other substance has no currently accepted
medical use in treatment in the United States.

(C) There is a lack of accepted safety for use of the drug or
other substance under medical supervision.

The DEA argues that marijuana satisfies the first criterion
because people like to consume it for nonmedical purposes, which
according to the government qualifies as abuse. It’s illegal, after
all. According to that definition of abuse, prohibition justifies
itself, which hardly seems fair. A more reasonable view defines
abuse as harmful, excessive, or problematic use. Regardless of
which definition you prefer, it is hard to see in what meaningful
sense marijuana has a higher abuse potential than, say, the
barbiturates and benzodiazepines on Schedule III. According to the
DEA, even dronabinol has a lower abuse potential than marijuana.
What is dronabinol? A synthetic version of THC, the main
psychoactive ingredient in marijuana.

The DEA says marijuana meets the second criterion—no currently
accepted medical use—not because the drug is ineffective at
treating symptoms such as nausea, pain, and muscle spasms (in fact,
the Obama administration
concedes the medical utility of cannabinoids) but because such
uses have not gained wide enough acceptance within the medical
community. Given the subjectivity of that judgment, it amounts to
saying that marijuana has no accepted medical use because the DEA
deems medical use of marijuana unaccceptable. The agency likewise
does not accept that marijuana can be used safely, although it
obviously can, as Obama
conceded when he observed that alcohol is more dangerous.

The DEA clearly is
bending over backward to keep marijuana on Schedule I, and
nothing in the CSA requires it to do that. It could easily apply
the CSA’s criteria in a way that would make marijuana less
restricted, and the decision not to do so is ultimately Obama’s. He
is the one who appointed the current DEA administrator, a hardline
holdover from the Bush administration who is so committed to
prohibitionist orthodoxy that she recoils in horror at the thought
of a hemp flag flying over the Capitol and could not restrain
herself from
openly criticizing Obama, notionally her boss, for his
scientifically uncontroversial statement about the relative hazards
of marijuana and alcohol. He is the one who, despite his avowed
commitment to sound science and his own statements to the contrary,
allows the DEA to insist marijuana is so dangerous that it must be
more tightly restricted than cocaine, morphine, oxycodone, and
methamphetamine.

“It’s very unfortunate that President Obama appears to want to
pass the buck to Congress when it comes to marijuana laws,” says
Tom Angell, chairman of Marijuana Majority. “If the president truly
believes what he says about marijuana, he has a moral imperative to
make the law match up with his views and the views of the majority
of the American people without delay. He should initiate the long
overdue rescheduling of marijuana today.”

“Why No Smart City Would Want the NFL” is the latest video
from Reason TV. Watch above or click on the link below for video,
full text, supporting links, downloadable versions, and more Reason
TV clips.

View this article.

Yesterday, Georgia Institute of Technology law
and ethics professor Peter Swire published an
op-ed in the Washington Post in which he tried to sort
through the “culture war” between spies and techies over how they
view Edward Snowden. My
views are pretty clear. What struck me was Swire’s assertion
that he would think better of Snowden had he chosen to go to jail
for making his revelations about unconstitutional domestic
surveillance by the National Security Agency. Swire writes:

After wrestling with the issue, I think that Snowden could have
been a conscientious objector — but he has thus far failed the
test. A central element of nonviolent dissent is to move society’s
conscience by taking personal responsibility. Mohandas Gandhi and
Martin Luther King Jr. went to jail for their beliefs, but Snowden
ran away.

Going to jail is, of course, a lot to ask of a person. But
Snowden knowingly set himself above the law, claiming a higher
morality. Full clemency, without any jail time, would create a bad
precedent in holding others in the intelligence community
accountable, should they break security rules.

The moral leadership and the sacrifices made by Gandhi and King
deserve our highest respect. Gandhi and King were imprisoned for
the crime of fighting for liberty. However, both men were able to

communicate with and guide their movements from their jail
cells. After being convicted of “sedition” in 1922, Gandhi was
sentenced to six years of imprisonment, of which he served two. The
known charges against Snowden could add up to 30 years in
prison.

Martin Luther King, Jr. was arrested 30
times. In 1960, he was sentenced to four months in prison for
participating in a lunch counter sit-in in Atlanta, Georgia. He was
quickly released after the intervention of then-presidential
candidate John F. Kennedy. Most famously in 1963, King was jailed
for eleven days in Birmingham, Alabama for protesting
government-mandated racial segregation. From his jail cell, King
composed one of the great documents of the civil rights movement,
The
Letter from Birmingham Jail.

Both the British Raj and the segregated South were brutal, but
their functionaries were not able to impose the sort of
totalitarian silencing that our current legal system enables with
regard to cloaking the
illegal activities of the surveillance state. Even now, the NSA
has stamped “top secret” its own “talking
points” outlining its claims against Snowden and refuses to
release them in response to a Freedom of Information Act request.
The liars
at the head of national surveillance state had blocked any way for
whistleblowers like Snowden to alert Congress and the public to
their violations of our constitutional rights.

Interestingly, Swire does not mention the much more relevant
civil disobedience case of Pentagon Papers leaker Daniel Ellsberg
who, like Snowden, was charged under the Espionage Act in 1971 and
could have been sentenced to 115 years in prison.

Ellsberg pointed out in a July, 2013 Washington Post
op-ed Snowden today would be imprisoned and held in
total isolation and incommunicado. His trial, when it would
occur, would be closed to the public on the excuse that an open
trial would harm national security. Ellsberg noted that he when he
was arrested and was immediately released on his personal
recognizance. That would not happen today. Instead, Ellsberg
writes: 

I hope Snowden’s revelations will spark a movement to rescue our
democracy, but he could not be part of that movement had he stayed
here. There is zero chance that he would be allowed out on bail if
he returned now and close to no chance that, had he not left the
country, he would have been granted bail. Instead, he would be in a
prison cell … incommunicado. … He would almost certainly be
confined in total isolation….

Snowden’s contribution to the noble cause of restoring the
First, Fourth and Fifth amendments to the Constitution is in his
documents. It depends in no way on his reputation or estimates of
his character or motives — still less, on his presence in a
courtroom arguing the current charges, or his living the rest of
his life in prison. Nothing worthwhile would be served, in my
opinion, by Snowden voluntarily surrendering to U.S. authorities
given the current state of the law.

I hope that he finds a haven, as safe as possible from
kidnapping or assassination by U.S. Special Operations forces,
preferably where he can speak freely.

What he has given us is our best chance — if we respond to his
information and his challenge — to rescue ourselves from
out-of-control surveillance that shifts all practical power to the
executive branch and its intelligence agencies: a United Stasi of
America.

Swire is wrong. Snowden deserves our admiration and support.

Reason contributor and celebrity memoir collaborator
(Made
in America with Ultimate Figher Matt Hughes and

I Want You to Shut the F#ck Up with comedian D.L.
Hughley, among others) was inspired by his visit to North Korea,
which he wrote
about for us in our Aug./Sept. 2013 issue, to produce an
“unauthorized autobiography” of North Korea’s late Dear Leader Kim
Jong Il, Dear Reader.

That book is out
now.

While a lot of the tyranny of North Korea reads like a dark
humor comic opera to us–and the idea of an “unauthorized
autobiography” is funny–Malice has a serious intent behind the
apparent comedy: to get inside the nearly unspeakable evil of North
Korean government in a way no other method could.

I wrote about Harvey Pekar’s graphic
novel biography of Malice, Ego and Hubris, back in
2006. 

Malice did a
Reddit “ask me anything” yesterday on this book and other
things.

California Gov. Jerry Brown is
gearing up for an infrastructure-building spree, as he hopes to
create the nation’s first high-speed-rail system and bore
giant water-moving tunnels underneath the Delta. Before the state
moves forward with these multibillion-dollar projects, however,
Californians might want to look at how the state has built other
recent projects, says Steven Greenhut. They got a rare opportunity
to do so in recent days and the results are alarming.

View this article.

George Mason University economics professor Bryan Caplan has
written an article for
EconLog titled “I’m Too Busy Fighting Tyranny to Feed My
Family,” which does a good job of highlighting the absurdity of
opponents of increased immigration saying that foreigners in awful
conditions should stay where they are and fix their home country
rather than try to flee to a wealthy country like the U.S.

Caplan begins his article by describing John, an unemployed
political activist who spends much of his time posting and sharing
political news on social media and attending political events. John
is so dedicated to political activism that his kids are “hungry and
ragged.”

Caplan then makes a moral point which I hope is obvious to most
readers:

I think you’ll agree that John is a terrible human being.
 Why?  Because his priorities are demented.
 Political activism is a luxury.  Before you engage in
this luxury, you must satisfy your basic responsibilities to
provide for yourself and your family.  

Caplan goes on to rightly point out that some opponents of
increased immigration are asking those who live in regrettable
situations to do exactly what John is doing:

Why bring this up?  When I point out that would-be
immigrants are trying to save themselves and their families from
hellish Third World conditions, my critics often respond, “They
ought to stay home and try to fix their broken political systems!”
 In other words, my critics are admonishing the global poor to
heed the example of John the feckless activist.

Thus, suppose Jacques the desperate Haitian father has an
opportunity to escape to Miami, where he can shine shoes and send
money home to feed his kids.  Instead, he chooses to let his
kids go hungry so he stays in Port-au-Prince and fights tyranny
with political leaflets and soapbox speeches.  Noble?  No
more than John.  The righteous man knows that meeting his
family responsibilities is more important than playing Don
Quixote.

The article finishes by pointing out that people in poor
countries who try to escape to the developed world while trying to
provide for their families are doing their home country far more of
a service than most political junkies:

What should humble people born into Third World misery do?
 Stay the course.  Do your best to provide for your
family.  Keep trying to escape to the First World and get the
best job you can.  Remember that activism is a luxury if you
know what you’re talking about – and a pestilence if you don’t.
 The people who follow this advice aren’t just fulfilling
their basic responsibilities.  They’re doing far more to
improve their homelands than the vast majority of political junkies
ever will.

I’m glad that Caplan has highlighted the nonsense that is the
“stay home and fix your own country” rhetoric sometimes heard among
those who oppose increased immigration. Men, women, and children
die every year trying to leave their homes. Some
drown, others
die of thirst and
exposure, and some are
tortured and killed by traffickers. It’s immoral and ignorant
to suggest that people who risk such dangerous outcomes while
trying to improve their lives and the lives of their family members
would be better off back in their home countries being political
activists.

Watch Reason Foundation’s Shikha Dalmia outline five reasons why
low-skilled immigrants are good for the economy below:

George Mason University economics professor Bryan Caplan has
written an article for
EconLog titled “I’m Too Busy Fighting Tyranny to Feed My
Family,” which does a good job of highlighting the absurdity of
opponents of increased immigration saying that foreigners in awful
conditions should stay where they are and fix their home country
rather than try to flee to a wealthy country like the U.S.

Caplan begins his article by describing John, an unemployed
political activist who spends much of his time posting and sharing
political news on social media and attending political events. John
is so dedicated to political activism that his kids are “hungry and
ragged.”

Caplan then makes a moral point which I hope is obvious to most
readers:

I think you’ll agree that John is a terrible human being.
 Why?  Because his priorities are demented.
 Political activism is a luxury.  Before you engage in
this luxury, you must satisfy your basic responsibilities to
provide for yourself and your family.  

Caplan goes on to rightly point out that some opponents of
increased immigration are asking those who live in regrettable
situations to do exactly what John is doing:

Why bring this up?  When I point out that would-be
immigrants are trying to save themselves and their families from
hellish Third World conditions, my critics often respond, “They
ought to stay home and try to fix their broken political systems!”
 In other words, my critics are admonishing the global poor to
heed the example of John the feckless activist.

Thus, suppose Jacques the desperate Haitian father has an
opportunity to escape to Miami, where he can shine shoes and send
money home to feed his kids.  Instead, he chooses to let his
kids go hungry so he stays in Port-au-Prince and fights tyranny
with political leaflets and soapbox speeches.  Noble?  No
more than John.  The righteous man knows that meeting his
family responsibilities is more important than playing Don
Quixote.

The article finishes by pointing out that people in poor
countries who try to escape to the developed world while trying to
provide for their families are doing their home country far more of
a service than most political junkies:

What should humble people born into Third World misery do?
 Stay the course.  Do your best to provide for your
family.  Keep trying to escape to the First World and get the
best job you can.  Remember that activism is a luxury if you
know what you’re talking about – and a pestilence if you don’t.
 The people who follow this advice aren’t just fulfilling
their basic responsibilities.  They’re doing far more to
improve their homelands than the vast majority of political junkies
ever will.

I’m glad that Caplan has highlighted the nonsense that is the
“stay home and fix your own country” rhetoric sometimes heard among
those who oppose increased immigration. Men, women, and children
die every year trying to leave their homes. Some
drown, others
die of thirst and
exposure, and some are
tortured and killed by traffickers. It’s immoral and ignorant
to suggest that people who risk such dangerous outcomes while
trying to improve their lives and the lives of their family members
would be better off back in their home countries being political
activists.

Watch Reason Foundation’s Shikha Dalmia outline five reasons why
low-skilled immigrants are good for the economy below:

Secure email provider Lavabit failed to surrender its encryption
keys to the government in 2013. It’s been paying the price. In what
some
call a landmark privacy case, the Virginia-based 5th U.S. Circuit
Court will decide whether or not Lavabit sufficiently
complied with the lower court’s orders last year. Three judges
listened to opposing arguments Tuesday.

The feds presented a search warrant to the company in the summer
2013, in what many believe was a hunt for the emails of NSA whistle
blower Edward Snowden. In response, encrypted email service Lavabit
suspended operations in August 2013.

The company faced a tough decision. If Lavabit had relinquished
its Secure Sockets Layer (SSL) private keys, it would have provided
the government unrestricted access to 400,000 users’
communications, not just the one user the FBI was looking for.
Since users expected privacy—whether from governments or
corporations—making the private key accessible undermines the point
of Lavabit’s privacy service. Rather than comply with court’s
orders, Lavabit founder owner Ladar Levison decided to halt
Lavabit’s operations completely.

Levison told BBC that
if he wins the appeal he filed last August, Lavabit could rise from
the dead. It would also set a precedent for future privacy
communication cases.

Brian Hauss, a legal fellow for the American Civil Liberties
Union (ACLU) told BBC News:

Mr Hauss hopes the case can “establish a principle that
governments can’t use a hammer when it should be using a
scalpel”.

“If the court does not find in Lavabit’s favour, technology
companies will look for new ways to protect user data,” he
added.

But judges seem to disagree about the focal point of the case.

PC World explains:

For the proceedings, the judges actively listened to and
questioned the arguments of both sides, though they seemed wary of
turning the case away from the specifics of why Lavabit did not
comply with court orders to turn over data on one of its users, and
towards the larger issues that Lavabit raised in its
highly publicized defense of what scope the government should
have over those parties who hold SSL (secure socket layer) keys to
encrypted data.

Last year, U.S. government meddling led to the closure of
privacy services like Silent
Circle and
CryptoSeal. Faced with a government hostile toward privacy
services, innovative, secure communication products are opening
outside of the United States.

Reason‘s J.D. Tuccille
argued in August:

Unfortunately, the government’s position seems to be
the same as that of the Mafia: If you’re told to do business with
the mob, you don’t get to decide otherwise.

We’ll see if the government continues down that path. A decision
could take a few weeks.

Read more on Lavabit here.