Tag: hit&run

Federal Hospital Regulations Are a Competition-Killing Mess. A New Bill Promises To Fix That.

In some parts of America, it can take up to 34 minutes to drive to the nearest hospital. With more than 100 rural hospitals having shuttered since 2010, that problem is only getting worse.

Fewer hospitals mean a lack of competition and, as a result, higher prices for patients. There’s not a single cause for the decreasing level of competition among hospitals—particularly in rural areas—but experts point to a combination of factors, including a rise in hospital mergers and government regulations that protect large hospitals from competition.   

The rise of regional hospital monopolies is “the most important driver of higher prices for hospital care,” writes Avik Roy, conservative health care scholar and founder of the Foundation for Research on Equal Opportunity. Those monopolies have allowed hospitals to “persuade the government to give them financial and regulatory advantages over competitors and taxpayers,” Roy writes.

Some of those advantages include Certificate of Need (CON) laws, which require potential new providers to prove that there is a “need” for a new provider in an area that already has a hospital. In practice, these regulations, fervently supported by established hospitals, help protect the monopoly power (and high profits) of large hospitals, and raise prices for patients. Another regulation that has helped exacerbate hospital market consolidation is the Affordable Care Act’s ban on new physician-owned hospitals, smaller competitors of large hospitals.

What’s to be done about all this? Rep. Jim Banks (R–Ind.) has a few ideas.

Banks’ Hospital Competition Act seeks to bring down the cost of health care by improving competition in the world of health care providers. Banks’ bill would incentivize states to repeal CON laws—as 15 states already have—and repeal the ban on new physician-owned hospitals. The bill also includes other provisions to lower costs through competition, such as requiring hospitals to share the costs of their 100 most frequently performed procedures and quadrupling Federal Trade Commission staff on hospital consolidation issues.

In a video posted to Facebook, Banks described the bill as “an ambitious first step towards expanding competition in the hospital sector, which has protected for too long by special interests.”

The bill would also make hospitals in highly concentrated health care markets accept Medicare reimbursement rates, which are lower than private insurance rates, from commercial payers.

Still, some lawmakers and hospital industry groups argue that CON laws help prevent duplicative, unnecessary, and costly health care facilities, which is why the federal government once incentivized states to enact CON laws, but the laws have instead raised costs and reduced access, particularly in rural areas. There’s also evidence that hospital mergers do lower administrative costs, but those cost reductions are seldom passed on to patients in the form of lower prices.

The New York Times found that, in metropolitan areas that experienced a major hospital merger, the cost of the average hospital stay rose between 11 and 54 percent more than costs in the rest of the state from 2010 to 2013. Other studies, from a Health Affairs paper on California’s hospital services to a study from the progressive Center for American Progress, support the conclusion that hospital consolidation spurs rising patient costs, while failing to provide better quality care.

On the whole, the bill takes a much more coherent view of antitrust policy than many wannabe trust-busters in Congress have. The bill focuses on clear consumer harms created by market concentration—namely higher prices—which are the traditional justification for intervening in the case of monopoly, as opposed to an amorphous concept of “bigness.” And given that mergers do often reduce administrative costs, monopolistic hospitals should be able to absorb lower reimbursement rates.

The Hospital Competition Act is by no means a comprehensive solution to America’s sky-high health care costs. However, the bill would allow for more competition in health care, bringing the U.S. closer to an affordable market system that could serve people of all income levels a little better.

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Masterpiece Cakeshop Faces Yet Another Legal Fight over Cakes

June is LGBT Pride Month, meaning that every single brand you love is covered in rainbows and glitter and declaring their support for all people gay, bisexual, transgender, and otherwise nonconforming in some fashion. Some of it is pure pandering, while some of it is tied to useful fundraising for valuable charitable causes. All of it is an awesome reflection of a positive cultural shift toward public inclusion of a class of people who were once treated like predators and sex fiends.

But a transgender Denver attorney named Autumn Scardina is spending this month using the courts in Colorado to go after a bakery that has become famous for its unwillingness to play along. Jack Phillips and Masterpiece Cakeshop are being sued, yet again, for refusing to bake somebody a cake.

Phillips and Masterpiece Cakeshop were central to a Supreme Court decision focusing on whether a baker could be required, under a state’s anti-discrimination public accommodation laws, to bake a wedding cake for a gay couple. Ultimately, the court ruled 7-2 in Phillips’ favor, but under a narrow analysis that determined the state’s civil rights agency had shown bias against Phillips’ religion when making its decision. The ruling left the underlying legal question unanswered of whether a baker who doesn’t support same-sex marriage could be forced to make a wedding cake or whether doing so was compelling speech.

At the same time as that case was winding its way up to the Supreme Court, Phillips was contacted by Scardina for the purpose of making some sort of transgender celebratory cake—pink on the inside but with blue frosting. Masterpiece Cakeshop declined to make her cake, and Phillips indicated he held religious objections to “celebrating” a gender transition, just as he objected to same-sex marriage.

Scardina complained to Colorado’s Civil Rights Commission, which went after him yet again under the state’s anti-discrimination laws. Phillips fought back and countersued, arguing that the state was targeting him for punishment due to his religious beliefs.

In March, the state of Colorado and Phillips both agreed to drop their respective lawsuits. But while the state declined to keep pursuing this fight, this didn’t stop Scardina from acting on her own in civil court. Scardina is herself an attorney who represents plaintiffs in LGBT discrimination cases, but here she’s turning to lawyers with the Denver-based firms Reilly Pozner and King & Greisen to represent her in the city’s District Court.

So this third lawsuit is fundamentally a repeat of the second lawsuit. Scardina is accusing the bakery of violating her civil rights as well as engaging in false advertising.

During this whole legal fight, Phillips has maintained that he was not discriminating against LGBT customers, but rather refusing to compromise his religious beliefs to create cakes that contained a message that he disagreed with. He would sell gay people birthday cakes and other baked goods, but he wouldn’t make them a wedding cake. He would sell Scardina a cake, but he wouldn’t make a cake for her that celebrated her transgender transition.

But in Scardina’s lawsuit, her attempt to buy a cake from Phillips is described differently from how Phillips has told the story. In her lawsuit, she claims that she initially requested simply a birthday cake that had a pink interior with blue frosting. She says the shop seemed fine with that. Then she volunteered to them that the colors of the cake were meaningful to her because they signified her transition. It was only after they found out what the cake meant to her, she claims, that they objected and refused to bake the cake.

Her story seems to vary from what Phillips previously claimed, which is that she approached them for the purpose of making a cake specifically to celebrate her transgender identity. I don’t know which version of the story (if either) is true, but if what Scardina is claiming is accurate, that means the shop didn’t even see the cake itself as expressing a “message” until Scardina revealed it. If she had said nothing, she wants us to believe that the shop would have simply made the cake. Her argument, then, is that despite what Phillips claims, he is indeed rejecting her as a customer for being transgender.

Alliance Defending Freedom, which represented Phillips before the Supreme Court, says that this new lawsuit is simply a “rehash” of the previous one. Senior counsel Jim Campbell put out a statement noting, “It stumbles over the one detail that matters most: Jack serves everyone; he just cannot express all messages through his custom cakes.”

Scardina’s lawsuit, though, is claiming this isn’t actually the case. The cake wasn’t expressing a message. Which story behind the cake is the truth may end up helping determine the outcome of the lawsuit.

That the “reason” Phillips rejected her is so important makes this entire fight all the more culturally exhausting. Because this lawsuit was filed during Pride month, we can see the extensive effort nearly every other vendor outside of Masterpiece Cakeshop has been making to appeal to LGBT customers. If anything, the timing of Scardina’s lawsuit highlights how much an outlier this bakery actually is, and that there are easy and simple marketplace solutions to the problem that perhaps do not require court interventions at all.

Read the lawsuit yourself here.

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Neil Gorsuch and Stephen Breyer Butt Heads Over Judicial Deference to Federal Agencies

What is the proper role of a federal judge when it comes to reviewing the actions of a federal regulatory agency? Should the judge defer to the ostensible expertise of that agency and its staff, and therefore generally respect the agency’s preferred interpretation of its own regulations? Or should the judge play a more active role, stepping in to prevent the agency from defining the scope of its own regulatory authority?

These are not academic questions. They are at the heart of a major case currently pending before the U.S. Supreme Court.

The case is Kisor v. Wilkie. James L. Kisor is a former Marine and a combat veteran of the Vietnam War. In 1982 he applied to the Department of Veterans Affairs (VA) seeking compensation for service-related post-traumatic stress disorder. His claim was denied. In 2006 he asked the VA to reconsider his claim, this time taking his combat history record and other related documents into account, citing a VA regulation which says that cases such as his may be reconsidered “if VA receives or associates with the claims file relevant official service department records that existed and had not been associated with the claims file when VA first decided the claim.”

This time the VA granted his claim, authorizing the payment of compensation starting that year. But Kisor objected to that timetable, arguing that his compensation should apply retroactively, beginning when his original claim was wrongly denied back in 1982. The VA objected to that, arguing that the new records it took into consideration did not meet the agency’s definition of “relevant” and therefore did not support retroactive payment.

It was around this point that the federal courts entered the picture. Kisor filed suit and, in 2017, the U.S. Court of Appeals for the Federal Circuit ruled against him, citing a pair of Supreme Court precedents which together tip the scales in favor of an agency’s interpretation of that agency’s rules. “At the heart of this appeal is Mr. Kisor’s challenge to the VA’s interpretation of the term ‘relevant,'” the Federal Circuit observed. Unfortunately for Kisor, the Supreme Court has instructed that, “as a general rule, we defer to an agency’s interpretation of its own regulation.”

The SCOTUS precedents in question are Bowles v. Seminole Rock & Sand Co. (1945), which said that “the ultimate criterion is the administrative interpretation, which becomes controlling weight unless it is plainly erroneous or inconsistent with the regulation,” and Auer v. Robbins (1997), which, drawing on Seminole Rock, held that an agency’s interpretation of its own regulations is “controlling unless plainly erroneous or inconsistent with the regulations being interpreted.”

Kisor and his lawyers then appealed to the Supreme Court, asking for both Seminole Rock and Auer to be overruled.

When the Court heard oral arguments in March, the justice who seemed most hostile to Kisor’s position was Stephen Breyer, who said that it “sounds like the greatest judicial power grab since Marbury v. Madison.” Why, Breyer demanded, should unelected federal judges get to substitute their views for those of the bureaucrats and experts who staff federal agencies?

“Agencies aren’t very democratic,” Breyer conceded, “but there is some responsibility.” For example, the heads of those agencies are appointed by the president. However, there is “one group of people who are still less democratic, and they’re called judges.” And if “you believe that the best solution—where there’s real ambiguity, and you just don’t know, the best solution is, in our country, a democratic solution,” Breyer said, “well, maybe the agency is the institution that’s closer to it.”

A short while later, Justice Neil Gorsuch offered a different perspective on the connection between democracy and judicial deference. One benefit of the courts imposing limits on agency discretion, Gorsuch argued, such as making an agency complete a public notice and comment process before it adopts a new rule, is that “people will know prospectively what rules govern them and not be sideswiped later by a bureaucracy.”

“I’m not sure how” judicial deference to an agency’s interpretation of its own rules “serves democratic processes or the separation of powers, as opposed to having an independent judge,” Gorsuch observed. In fact, he argued, knowing that “you’re going to have an independent judge decide what the law is in your case … seems to me a significant promise, especially to the least and most vulnerable among us, like the immigrant, like the veteran, who may not be the most popular or able to capture an agency the way many regulated entities can today.”

In other words, is the public better served when the courts allow federal agencies broad leeway to maneuver, as Breyer maintained, or is the public better served when the courts strictly supervise the actions of those agencies, as Gorsuch maintained?

With a decision in Kisor v. Wilkie expected by the end of June, we should get the Supreme Court’s answer soon enough.

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You Can Get a Year in Jail for Feeding Garbage to a Pig

You can get five years in federal prison for selling llama poop, according to Title Seven of the United States Code, Section 8313(a)(1)(B).

Title 21, Part 139 of the Code of Federal Regulations prohibits the sale of spaghetti noodles that are improperly shaped.

The Swine Health Protection Act forbids feeding a pig garbage that hasn’t been cooked by a garbage cooker (by someone with a garbage-cooking permit, naturally).

Criminal defense attorney Mike Chase, the man behind the popular @CrimeADay Twitter feed, has a new book titled How to Become a Federal Criminal: An Illustrated Handbook for the Aspiring Offender. It chronicles government power at its most arbitrary and absurd.

Reason‘s Todd Krainin sat down with Chase to learn the roots of his obsession with laws against improperly shaped cheese, whistling on a CB radio, and making unreasonable gestures to a passing horse.

Music: “Law and Order,” by Lloyd Rodgers under a Public Domain Mark 1.0 License.

Produced, written, and hosted by Todd Krainin.

Subscribe to our podcast at Apple Podcasts.

 

 

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Justin Amash Isn’t Just Rebelling Against Trump. He’s Fighting the Two-Party System.

Last night, Rep. Justin Amash (R–Mich.) reportedly stepped down from the board of the House Freedom Caucus, which he helped found in 2015. 

The move follows a series of headline-making tweetstorms from Amash taking aim at both President Trump and his backers in Congress, in which Amash, relying on the findings in the Mueller report, argues that the president’s conduct is impeachable, and that most Republicans are defending him out of little more than pure partisanship.

Amash’s fellow Republicans, even those he is ostensibly close with, have generally not taken kindly to his stance, with the Freedom Caucus recently voting to condemn him for criticizing the president. Trump, meanwhile—never one to skip out on belittling a critic—has in recent weeks trashed Amash as “a total lightweight” and a “loser.”

In general, the GOP’s attitude toward Amash, the only congressional Republican who has affirmatively connected Trump’s conduct with the notion of impeachment, has been dismissive and defensive. Republicans have tended to take Amash’s arguments personally, as signs of pointed disloyalty. The job of a Republican, the GOP’s responses have suggested, is to support other Republicans, which these days mostly means supporting Donald Trump and whatever it is he does. Amash was attacking Trump, and therefore had to be cut off.

You can certainly read Rep. Justin Amash’s recent criticisms of President Trump and the vast majority of elected Republicans who back him as attacks against a president that Amash believes has failed the nation and the office—or on the GOP for its willingness to go along with the same—and you wouldn’t be wrong to do so.

But it would be a mistake to assume that’s all Amash is doing, or even that is it necessarily the most important aspect of his critique. Amash isn’t just a NeverTrump pundit with a congressional office; his target is larger than Trump and the party stalwarts who back him. Rather, he is taking aim at the binary choices offered by the Republican/Democrat duopoly, the unthinking partisanship it seems to require, and the ways that partisanship has made Congress less willing to exercise its constitutional duties as a co-equal branch of government. Amash isn’t just taking on Trump; he’s making a systemic critique of the two-party system. 

Arguably the most important part of Amash’s original Twitter thread came not from his initial conclusion that Trump’s conduct was impeachable, but at the end, where he decried the general unwillingness of members of Congress to perform their constitutional duties when doing so would violate their partisan interests.

“Our system of checks and balances relies on each branch’s jealously guarding its powers and upholding its duties under our Constitution,” he wrote. “When loyalty to a political party or to an individual trumps loyalty to the Constitution, the Rule of Law—the foundation of liberty—crumbles.” America’s system “of checks and balances relies on each branch’s jealously guarding its powers and upholding its duties under our Constitution. When loyalty to a political party or to an individual trumps loyalty to the Constitution, the Rule of Law—the foundation of liberty—crumbles.”

Members of Congress on both sides of the aisle made up their minds about Trump’s actions without having read the Mueller report, Amash said, resting their conclusions solely on the basis of partisanship. As if on cue, a Republican primary challenger appeared in Amash’s district who supported Trump, but amusingly admitted he hadn’t read the report.

This wasn’t just a narrow criticism of a president or the party that blindly supports him; it was a critique of reflexive partisanship and a system that works from the expectations that party affiliation is the most important (and, in many cases, the only) factor that matters in high-stakes political decisions. It was an institutional critique of a legislature that has lost its willingness to pay a co-equal role in the federal government, and, in the process, has failed both itself and the public it serves. 

That critique is one that can be extended beyond the bounds of impeachment, from the broken federal budget process to the reluctance that GOP lawmakers have displayed to check Trump’s worst instincts on trade—even when Republican lawmakers are known to be opposed to his actions. What’s at stake in these debates isn’t just bad policy outcomes, but a kind of institutional degradation in which constitutional order breaks down. By choosing to prioritize partisanship, Amash was saying, Congress had chosen to be weak.

Implicit in this idea and in much of Amash’s politics is a sense that the two-party system is failing to provide the range of choices that are now de rigueur in nearly every other area of life. Modern economies have become fragmented and personalized, offering people a vast array of choices about everything from diet to entertainment to sexual identity. But politics has largely been static, offering two basic choices—a default liberal and conservative option—that don’t capture the variegated reality of individual political predispositions and outlooks. 

And there are signs, even beyond Amash, that the voting public, in the U.S. and elsewhere, yearns for more: Look at the recent elections in Europe, where Green won big in Germany, and Labour and Conservatives lost in the U.K. The biggest loser was centrist politics as usual. Or look at Bernie Sanders, who is carving out a kind of sub-party within the Democrats, and pulling the party his way in the process. Or look, even, at Donald Trump, who ran on the GOP ticket, and shares some tendencies with the Republican base, but isn’t exactly a Washington Republican in the classic sense, and whose campaign and election, at least, were a result of frustration with the GOP in its most conventional form.

Complaints about the limited choices offered by the two-party system are as old as the two-party system. And it’s generally true that first-past-the-post voting systems tend to result in two-party dynamics, meaning that third parties are inherently disadvantaged in the U.S. electoral system. But there’s an alternative to the third (or fourth, or fifth) party dream, as attractive as it may be—and that’s the politics of individuals and ad hoc, issue-based coalitions, a politics of principle rather than partisan loyalty above all. Amash is modeling that sort of politics.

That sort of politics doesn’t typically sit well with the Red Team/Blue Team mentality that drives today’s politics. It has been telling to see that the most consistent criticisms of Amash have amounted to arguments that he is aiding Democrats and seeking attention for his own political ambitions—as if the point of politics is not to advance the ideas you believe in or form useful coalitions to achieve those goals. (And if attention-grabbing tweets are now off-limits, Republicans may need to reconsider their feelings about Trump.)

But this form of idiosyncratic outsider politics, while not always successful, can nonetheless produce real results, reshaping a party from within, or forcing change upon it from the outside. While Amash may be making little impact on the Republican party itself, which is reflexively pro-Trump and likely to remain that way for the near future, he may be having an effect on those who see themselves as unrepresented by the two-party system as it is currently constituted. Over the last few weeks, voters who self-identify as independent have broken towards impeachment. The shift has pulled the entire nation towards impeachment, and it occurred at almost exactly the same time as Amash took his stand.

Amash closed his original tweetstorm with the idea that “America’s institutions depend on officials to uphold both the rules and spirit of our constitutional system even when to do so is personally inconvenient or yields a politically unfavorable outcome. Our Constitution is brilliant and awesome; it deserves a government to match it.” It was a call to place individual commitments over party power and to uphold a system of government that can offer more than two bad choices, but rarely does. Almost alone among Republicans, Amash seems up to this task.

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Congress Wants to Help Broker a Better Tech Deal for Big Media

Congress wants to help broker better tech deal for Big Media. Today, members of the U.S. House of Representatives will “be hearing multiple pitches for a bill called the Journalism and Preservation Act,” pushed by “lobbyists for the newspaper industry,” CNN Business reports.

Politicians may have a historically rocky relationship with traditional press, but at least they can control it somewhat, especially through soft means like bullying reporters over bad takes or promising access in exchange for “fair” coverage. Online platforms are a whole different beast, and one that leaves neither establishment journalists nor political authorities with room to hide from the masses, nor protection from anyone with a phone reporting on their antics. It’s no wonder that—the president’s bluster about Fake News aside—we’re seeing a growing alliance between Washington and the news industry when it comes to technology policy and punishment.

The media bill (H.R. 2054) being hashed out today may not be so bad in itself. It “would provide newspapers and online publishers with a four-year antitrust exemption, allowing them to band together in negotiations with online platforms,” writes CNN’s Brian Stelter.

But the people pushing it sound scarily like all they really want is crony corporatist solutions to competition from digital technology and the masses. They want to be able to force all sorts of online intermediaries and web platforms to conduct business on terms that are favorable to certain big publications.

David Chavern, CEO of the News Media Alliance, told CNN that if publishers could come together to negotiate, they could pressure platforms with regard to not just economic arrangements between press and tech companies but also sharing their customer data, their algorithms (or as Chavern calls them, “secret rules that change on a moment’s notice”), and control over which publications they promote. Hmm…

Do we really want both tech platforms and all sorts of media outlets to be able to access our data? Why should The New York Times or CNN get a say in what social media companies promote on their own platforms? Or to peek at the private intellectual property and business practices of these companies? And how in the world does that help anyone but, well, Big Media?

No matter how many news outlets band together, they’re not going to find a way to stop a lot of advertisers from choosing social platforms and search engines (one of the big things harming traditional media right now). Nor are they likely to succeed finding some way to force platforms like Google News to pay publishers for links (why oh why would a platform pay you to promote your product?).

When giving details, these groups show a fundamental misunderstanding or dishonesty about how online monetization works.

In any event, House members are expected to discuss the bill at a hearing today titled “Online Platforms and Market Power, Part 1: The Free and Diverse Press.” It starts at 2 p.m.

In the meantime, check out Nick Gillespie on the question: “Are Google and YouTube evil?” and read Andrea O’Sullivan on what antitrust actions against them would mean.

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Good news:

FREE MARKETS

187 companies sign on to letter against abortion laws. Big companies from H&M to Slack to Ben & Jerry’s ice cream are critiquing abortion bans passed in some states recently. From Business Insider:

Banks, tech firms, media companies, and fashion brands jointly signed a full-page ad in The New York Times, published Monday, that said: “Equality in the workplace is one of the most important business issues of our time.” Signatories on the open letter — titled “Don’t Ban Equality” — included Bloomberg, Ben & Jerry’s, Postmates, H&M, Yelp, Atlantic Records & Warner Media Group, Tinder, and Slack.

“Restricting access to comprehensive reproductive care, including abortion, threatens the health, independence and economic stability of our employees and customers,” the companies said in the letter, adding they employ more than 108,000 workers.

“Simply put, it goes against our values and is bad for business,” they said. “It impairs our ability to build diverse and inclusive workforce pipelines, recruit top talent across the states, and protect the well-being of all the people who keep our businesses thriving day in and out.”

QUICK HITS

  • U.S. Customs and Border Protection’s facial recognition database has already been breached.
  • Are you ready for “fully automated luxury communism“?
  • “What’s happening is that the broader national context is changing, not that the cannabis laws didn’t have this initial protective effect” against opioid overdoses, Johns Hopkins professor Brendan Saloner told the Wall Street Journal.
  • A case involving the Obamacare contraception mandate and Notre Dame University health coverage goes to federal court today.
  • Making grifting simple again? “Trump-era grifting is unique in its shamelessness,” but Mitch “McConnell and his wife harken back to a simpler (and more enduring) time,” quips The Bulwark, reporting on the latest scandal involving Transportation Secretary Elaine Chao.
  • Target is expanding paid leave to all employees, regardless of whether they work full- or part-time.

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Stossel: Don’t Be Scared of Designer Babies

Have you heard of “designer babies?”

Parents who use in vitro fertilization can already select an embryo by gender and screen for diseases. Gene-editing technology will eventually allow them to alter their future offspring’s intelligence, height, eye color, and more.

This scares some people. Eighty-three percent of Americans say editing human genes to improve intelligence goes too far.

“Of course they say that,” says Georgetown University Professor Jason Brennan in an interview with John Stossel. “When you have any kind of intervention into the body that’s new, people think it’s icky. And they take that feeling of ‘ickiness’ and they moralize, and think it’s a moral objection.”

Jenna Bush Hager, who’s the daughter of former President George W. Bush, recently said that “there should be things that we leave up to God.”

“I’m not really sure I’m going to take her word for it,” says Brennan. “If God appears before me and says ‘don’t do this,’ I’ll stop.”

“We already give our kids music lessons, braces, tutoring, karate lessons,” Stossel says. “Any advantage we can—why not also give them the best genes?”

In the future, he notes, humans could be much smarter—perhaps possessing the wisdom enough to avoid wars and travel to other planets.

Sheldon Krimsky, a professor of urban planning and environmental policy at Tufts, argues that it’ll “be a new way to create disparities in wealth.”

“Every bit of technology that we enjoy today follows the same pattern,” says Brennan. “You look in your automobile, and you have a CD player or an MP3 player, and a GPS. All of these things, when they first became available, were incredibly expensive,” he says.

When asked if he was simply opposed to technological progress, Krimsky responded, “I love change…But I think there are some boundaries.”

Will there be social pressure for everyone to have “designer babies”?

“It’s not so clear why that’s a problem,” Brennan says. “If everyone is making their kids healthier and stronger and smarter, and less prone to disease, and you feel social pressure to go along with that, good. Shouldn’t you do that as a parent for your child?”

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

 

 

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Will Antitrust Action Against Big Tech Resolve Anything?

Well, it was bound to happen eventually. After near three years of all-out rhetorical war against tech giants, for politically-shifting sins including bigness, too much censorship, not enough censorship, data hoarding, and being too irresistible, policymakers are ready to move beyond cheap talk and start slapping wrists—or more.

Specifically, regulators and Congress recently announced new antitrust scrutiny against Silicon Valley. The House Judiciary Committee cheerfully launched a “bipartisan investigation into competition into digital markets.” Nothing can bring us all together these days quite like hating the online services we use most. No particular firms have been named, but we can expect the usual suspects are due for a thrashing.

Regulators, on the other hand, are dividing and conquering. The Department of Justice (DOJ) and Federal Trade Commission (FTC) sliced up the pig, with DOJ taking on Google and Apple, and the FTC going after Facebook and Amazon. The Wall Street Journal reports that Google and Facebook are the real targets, for now.

Tech companies knew this was coming. How could they not? Presidential hopefuls compete over who wants to break up tech giants the most. New books like The Curse of Bigness: Antitrust in the New Gilded Age by superstar economist (and father of “net neutrality”) Tim Wu warn that lax antitrust enforcement could spawn a new Nazism (really). In February, the FTC set up an antitrust taskforce for the sole purpose of preparing actions against the big guys. It was always a question of when, not if.

Bigness is badness in the minds of most people. But in terms of U.S. law at least, being big is not a crime.

Rather, as an essay by my Mercatus colleagues Adam Thierer and Jennifer Huddleston points out, American antitrust is only intended to be used when “a firm has the ability to monopolize a sector, or it possesses an ‘essential facility’ that cannot be replicated.”

Laws like the Sherman Antitrust Act and the Clayton Act give agencies substantial powers to clamp down on monopolies. So antitrust enforcers have developed a robust jurisprudence on what is and is not kosher. Some things, like price fixing, are so “inherently harmful” that they are always illegal.

But in general, the U.S. antitrust approach places the consumer at the center of the analysis. We don’t punish businesses because they have been exceptional at meeting consumer demand. Rather, the government steps in if a business engages in anti-competitive activities that harm customers, like obliterating the competition with low prices before jacking them up on consumers that have no other option—classic monopolistic behavior.

Doesn’t that just make sense? Consider the alternative. The government could break up or limit any firm that is simply a great competitor. Consumers are actually served well by this giant. But their competitors of course will grumble for their nemesis to be taken down a few pegs.

In this conception of antitrust, the government essentially protects the bottom lines of competitors who can’t keep up. Before U.S. courts settled on the economics-grounded consumer welfare standard that has guided U.S. antitrust for decades, trust-busting activities were often little more than handouts to interest groups.

Not only would court cases counterintuitively seek to keep prices high, to the detriment of consumers, judges worked a host of non-antitrust hobbyhorses into their decisions. Maybe one judge had a particular fondness for “social equality.” The antitrust decisions he handed down might have aimed for that totally unrelated, arguably impossible outcome.

The European approach to antitrust is more like the muddled U.S. approach before it settled on the consumer welfare standard. Some in the U.S. would like our antitrust posture to be more like Europe’s, but at least for now, it is limited to the scribblings of theorists in the land of the free.

With that crash course in antitrust theory under our belt, we can now ask: What will the U.S. do about Facebook and Google?

Some people would like to see the companies broken up. They propose surgical cuts: Facebook must relinquish WhatsApp and Instagram, while parent company Alphabet could spin off feeder products from advertising-funded search.

On what grounds? We know that bigness per se is no crime. Are these companies “essential facilities” that left fewer, more expensive options for consumers?

The problem is that many of these companies’ products cost us nothing, at least in terms of dollars. It doesn’t look like Facebook or Google have been lowering product quality, either. In general, there’s a lot of competition when it comes to social media platforms and search, even if people choose not to use them very much.

Online platforms like Facebook and Google are tricky when it comes to antitrust because they essentially serve two markets: users and advertisers.

When it comes to users, there are plenty of alternatives. Advertisers, too have plenty of alternatives: they can buy spots on television, the radio, billboards, in newspapers, and even via costumed sign-waver on the side of the road.

But for online ads, there are basically two games in town: Facebook and Google. My colleague Brent Skorup pointed out to me that recent precedent could indicate that the courts will consider “the ad market and the social media market as components of a single relevant market.” If so, Facebook and Google could be looking at serious antitrust enforcement.

But will this brouhaha end up being irrelevant?

Antitrust actions take a long time, and by the time a remedy—good or bad—is chosen, the market may have already moved on. This is particularly the case in a fast-moving space like tech. Consider the drawn-out cases against IBM and Microsoft. On the other side of the decades-long court cases, the issues that so vexed regulators had long ago become moot. What were the costs to consumers and innovation in the process?

The problem is that regulators have a static mindset. They see a slice of a market in time, deem one actor too powerful, and seek to artificially create “more competition” to freeze this market in time. But that’s not how markets progress. As venture capitalist Benedict Evans points out, “Tech anti-trust too often wants to insert a competitor to the winning monopolist, when it’s too late. Meanwhile, the monopolist is made irrelevant by something that comes from totally outside the entire conversation and owes nothing to any anti-trust interventions.”

In the meantime, antitrust actions are often wasteful, distracting, and can limit consumer choice. We still don’t how this new round of trust-busting will shake out. But it’s a good chance that by the time we’re on the other side, a new class of unassailable giants will have cropped up without regulators noticing. And then we can start the theatrics all over again.

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Why the Arkansas Law Aimed at Boycotts of Israel Is Generally Constitutional, Part II

Here’s Michael’s post, from Dorf on Law:

In Arkansas Times v. Waldrip, the U.S. Court of Appeals for the Fourth Circuit will decide whether an Arkansas law requiring public entities (including contractors with the state) to certify that they do not boycott Israel or companies that do business with Israel violates the First Amendment. The district court held that it does not. Various champions of free speech have filed briefs arguing that political boycotts are protected free speech. Three scholars who also fashion ourselves champions of free speech—Professors Andrew Koppelman, Eugene Volokh, and I—take the opposite view. You can read our brief here. You can read a summary of our argument in a blog post by Prof Volokh here. His blog post also contains links to the briefs on the other side. Here I’ll add a few words that go beyond what I wrote on this topic back in February and what we say in the brief.

Some substantial portion of the argument is doctrinal. We cite Rumsfeld v. FAIR for the proposition that a boycott—as opposed to speech accompanying a boycott—is not speech. The other side cites NAACP v. Claiborne Hardwarefor the proposition that political boycotts are protected speech even apart from the speech that accompanies them. For the reasons we lay out in our brief and that Prof. Volokh summarizes in his blog post, I think we have the better doctrinal case. That said, I’ll concede for the sake of argument that there is sufficient wiggle room in this and other constitutional doctrines, that one could say that it is an open question whether boycotts themselves—in contrast to speech accompanying boycotts—should be deemed protected speech.

So the question then becomes this: Should boycotts be treated as speech? Answering that question requires both conceptual analysis (more about that below) and some sense of the consequences of treating boycotts as speech. One apparent consequence—as we highlight in our brief—would be the gutting of public accommodations laws. If refusal to buy goods from Israel is speech because one’s motive is opposition to Israeli policy (or Israel’s existence), then ideologically motivated refusal to sell goods to LGBT customers or for same-sex weddings is also speech.

In the briefs for the other side and my discussions with people who come down on the other side, I have encountered two main arguments why one supposedly needn’t worry about anti-discrimination law. First, they say that there is a compelling interest in public accommodations laws forbidding anti-LGBT discrimination but not in laws like the Arkansas anti-boycott-of-Israel law. Second, they distinguish between purchaser boycotts (protected they say) and seller boycotts (unprotected they say). Neither contention is persuasive.

(1) I agree that there is no compelling interest justifying the Arkansas law or others like it. Indeed, I think such laws are unwarranted. I oppose them on policy grounds. I also agree that there is a compelling interest in public accommodations laws. However, one must think strategically about such issues. The question is not what some liberal law professors regard as a compelling interest but what a majority of the Supreme Court will ultimately regard as compelling. I have no confidence that the Court would find a compelling interest in forbidding discrimination on the basis of LGBT status.

Indeed, we have good reason to think the opposite based on Justice Alito’s majority opinion in Hobby Lobby v. Burwell. Here’s what I wrote last month:

“Dissenting in Hobby Lobby, Justice Ginsburg charged that the Court’s aggressive use of [the Religious Freedom Restoration Act (RFRA)] could undercut laws that protect against discrimination based on race and sex, including sexual orientation. Not to worry, responded Justice Alito for the majority: RFRA allows that other federal statutes—such as anti-discrimination laws—can override religious objections where those other federal statutes amount to the least restrictive means of advancing compelling interests. And, he added, ‘[t]he Government has a compelling interest in providing an equal opportunity to participate in the work-force without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.’ Notably, despite the fact that Justice Ginsburg expressly pointed to LGBT discrimination, Justice Alito responded with respect to racial discrimination only, thereby implying that the Court’s now-even-more-conservative majority might think there is no compelling interest in addressing LGBT discrimination.”

As a practical matter, my many friends on the other side of the Arkansas Times case are wrong that their position poses no threat to anti-discrimination law.

(2) What about the claim that purchaser boycotts are different from seller boycotts? The claim is problematic in at least two respects.

(a)  In an economic sense, there is no real difference between a purchase and a sale. When Henry sells Georgia a wedding cake, Henry exchanges the wedding cake for money from Georgia. Henry had a cake and Georgia had some money. They trade. It’s hard to see why one side of the transaction is expressive and the other isn’t. It’s even harder when we think about the function of money.

Imagine a barter economy in which people meet at the market to exchange goods. Jim is a baker and Sheila is a farmer. Jim trades his baked goods for raw materials he uses to make more baked goods as well as for finished products that his family needs but that he doesn’t produce. Sheila trades the wheat she grows on her farm for items she needs. Now let’s suppose Sheila is trying to decide whether to trade some of her wheat with Jim in exchange for a cake. If, in the money economy of the prior paragraph, Georgia, as the “buyer,” is engaged in speech by refusing to purchase cakes from Henry (perhaps because Henry obtains some of the ingredients for his cakes from Israel), then Sheila is equally engaged in speech when she refuses to hand over a sack of wheat to Jim in exchange for a cake. (Sheila doesn’t want to trade with Jim because Jim trades cakes for sugar with Ophelia, whose beet farm sits on land that Sheila believes rightly belongs to indigenous people.) But if refusing to exchange wheat for a cake is speech, then obviously so is refusing to trade a cake for wheat also speech, assuming some ideological motive, such as opposition to the use of the cake in a same-sex wedding ceremony. And because there is nothing more or less expressive about barter than monetary transactions, it follows that selling is every bit as expressive (or non-expressive) as buying. And that makes sense intuitively.

Economic transactions either are or are not inherently expressive. Thus, if the plaintiff and its amici are right that purchase boycotts are speech, so are seller boycotts. The purchaser/seller distinction does not work as a basis for protecting public accommodations laws against the consequences of treating purchaser boycotts as speech.

(b) Meanwhile and also troublingly, a rule that treats boycotts—even if only purchase boycotts and not seller boycotts—as inherently expressive threatens to Lochnerize the First Amendment. Suppose that before Congress zeroed out the tax due for failure to maintain minimum coverage under the Affordable Care Act, Tea Partiers organized a boycott of mandated health insurance and defended on free speech grounds. Or suppose that right now, with the employer mandate still in force, employers with ideological objections to the ACA refuse to purchase health insurance for their employees or to pay the associated financial penalty. These would not need to be religiously motivated refusals. Rather, if refusal to purchase a good or service based on a political view is inherently expressive, then the individual and employer mandates could only be validly applied if they satisfy strict scrutiny as applied by the increasingly conservative federal judiciary. Even the very creative lawyers who challenged the ACA on multiple grounds lacked the temerity to suggest that it violates free speech. But if the challengers of the Arkansas law prevail, such a claim could be coming next. So could a wide range of other economic-liberty-as-free-speech claims challenging progressive legislation.

* * *

Here’s another issue: The ACLU, which has filed on the other side of this case, describes the Arkansas law as “suppressing one side of a public debate.” After all, Arkansas does not require state contractors to certify that they do not boycott goods from or firms that do business with Palestine or anywhere else. Isn’t that a problem?

No, unless one assumes the conclusion. If boycotts are speech, then sure, a law targeting boycotts targets speech, and a law that targets only some boycotts would be “content-based.” But the very question under discussion is whether to treat a boycott as speech. As I have explained, there are conceptual and practical reasons not to.

To be sure, a law targeting a boycott could implicate free speech under special circumstances. As I observed in my February post and as Profs Koppelman, Volokh, and I acknowledge in our brief, the Arkansas law could implicate the First Amendment if the record contained evidence of censorial motivation on the part of the Arkansas legislature. Suppose that a majority (or a decisive minority) of Arkansas legislators voted for the legislation at issue for the purpose of suppressing the message sent by boycotts of Israel rather than because of what they regarded as the economic impact of boycotts of Israel. That might well violate the First Amendment.

But absent such evidence of illicit subjective motive, the fact that a law treats economic transactions involving one foreign country or territory differently from economic transactions with others is not a First Amendment issue, even if the difference implicates a longstanding conflict. Purchases of certain goods from Iran but not the same goods from Saudi Arabia are forbidden. Tariffs differ by country and region. Etc. Nobody thinks these differences implicate the First Amendment, even if someone wants to make forbidden purchases of goods from North Korea or Venezuela to make a point.

Hold on, you say. Laws governing tariffs and sanctions are enacted at the federal level. What business does the state of Arkansas have in regulating economic transactions with foreign firms and governments? That’s a fair question. Perhaps there could be a challenge to the Arkansas law under some conception of a “dormant foreign commerce clause” doctrine. The Supreme Court avoided ruling on whether there is such a doctrine in Crosby v. National Foreign Trade Councilwith respect to a Massachusetts law that forbade state entities from purchasing goods and services from companies doing business with Burma. But even if there were a dormant foreign commerce clause claim available, that would have nothing to do with free speech.

Even assuming the doctrinal question is open, there are powerful conceptual and pragmatic grounds to conclude that boycotts, absent more, are not expression, and that therefore, absent proof of censorial legislative motive, laws forbidding boycotts do not infringe free speech.

Continue reading “Why the Arkansas Law Aimed at Boycotts of Israel Is Generally Constitutional, Part II”

Puerto Ricans Rebuild Without Government Help After Hurricane Maria

After the monthslong power blackout that followed Hurricane Maria in 2017, Puerto Ricans realized they couldn’t rely on government to meet their basic needs. Enter Biotecture Planet Earth, a New Mexico–based nonprofit that specializes in sustainable building. The organization is constructing an off-grid, hurricane-resistant compound in Aguada, Puerto Rico. Built largely out of garbage such as tires and cans, the buildings include systems that provide electricity, collect water, and grow food. The compound will serve as an education and community center.

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