Tag: news

Marijuana legalization has gone mainstream. In November, voters in four states approved recreational cannabis, and legislators in Virginia, New Mexico, and New York followed suit in early 2021, sending bills to all three governors’ desks.

But the term legalization obscures vast differences in how states regulate marijuana businesses and consumption. Oklahoma arguably passed the most free market medical marijuana rules among the states. Michigan‘s recreational marijuana regulations largely embrace free and open markets, while Colorado’s have steadily liberalized since legalization. Unfortunately, most other states are choosing highly restrictive market structures that undercut their ability to foster economic growth and quash the black market (we’re looking at you, California!).

Wielding statutes such as possession limits, allowance for home growing, tax levels, licensing regimes, and testing and labeling requirements, states are targeting real political problems or imagined market ones. But such wrangling ensures that legal markets lose out to black markets. Even in polite Canada, only 28 percent of cannabis consumers buy legally, possibly beating out some U.S. states. Here are the four biggest mistakes states make, time after time, when creating legal marijuana markets.

1. Caps on Licenses

Most states where marijuana has been legalized arbitrarily cap how many businesses can be licensed to grow, manufacture, or sell. Advocates justify these caps to limit excess supply from bleeding into black markets, despite every recreational marijuana program’s extensive state-monitored inventory tracking, which uses radio frequency identification on every plant or package and mandatory continuous video surveillance. If each product from every licensed facility is tracked, why cap licenses? 

A more pernicious motivation may lurk under the surface: excluding aspiring competitors. In Nevada, which permits only 120 dispensaries statewide, regulators accepted bribes from applicants, then manipulated the application process in those applicants’ favor. In Illinois, which permits only 30 cultivators in a state with more than 11 million residents, license caps created systemic shortages, raising prices well beyond those found on the black market.

2. High Taxes

Studies show consumers react to even small price changes of legal marijuana, retaining readily available black market substitutes if those prices range too high. Following basic supply and demand, high tax rates end up fostering the black market, shrinking the very tax revenues that government bureaucrats seek. In California, where state and local taxes comprise 30 to 40 percent of legal market prices, illegal sellers were projected to rake in $8.7 billion in 2019 sales while legal sellers reported only $3 billion. No wonder California has fallen vastly short of its forecast revenues, leading legislative analysts to advocate reducing tax rates down to 15 percent.

3. Local Opt-Outs

Legislation that blocks access to legal marijuana within a reasonable distance of residential areas denies voters real access to what they voted to legalize. In California, four out of five local governments prohibit dispensaries within their jurisdictions, with some consumers living over 100 miles from one. Such NIMBY (“not in my backyard”) attitudes ensure there will be rampant black market alternatives. More reasonable efforts, like New Mexico‘s, would allow local governments to set some restrictions on zoning and hours of operation, but don’t outright prohibit sales.

4. Imagined Market Failures

Policy makers preemptively “solve” marijuana market failures without waiting to see if they occur. For example, many states weirdly don’t allow food or drink sales at marijuana dispensaries or stores (because we’ve all seen the horrors that occur at Walgreens where they sell food and drink along with prescription meds).

Government bureaucrats and regulators also seem obsessed with THC levels in legal marijuana products. Florida lawmakers are in their third year of trying to impose a 10 mg THC cap per dose of legal medical marijuana flower, over the objections of doctors, with no scientific or medical basis for picking that nice round number. Oregon limits THC in edibles to no more than a total of 50 mg per package.

Legalization recognizes Americans’ increasingly strong and widely shared opposition to marijuana prohibition. But, unwilling to get out of their own way, states that insist on over-taxing and over-regulating could foolishly reverse all gains.

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4/23/1985: Cleburne v. Cleburne Living Center, Inc. argued.

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Among the victims of the COVID-19 pandemic we can probably count Americans’ faith in government-dominated education. Through months of closures, teachers union obstinacy, and simple failure to deliver value to children, public schools have driven many families to look elsewhere for the care and feeding of young minds. The result has been rising support for school choice and a flurry of state-level measures to help parents and children pick learning models that suit them—measures that will remain long after the virus is gone.

“The Arkansas House on Wednesday narrowly approved a $2 million state income tax credit program to fund private school scholarships for needy students, sending the bill to Gov. Asa Hutchinson,” the Arkansas Democrat Gazette reported on April 22. Hutchinson supports the measure, so its approval is basically guaranteed. The bill creates dollar-for-dollar income tax credits, up to a modest $2 million cap for the whole state, for donors to organizations that provide scholarships to pay for private school tuition. To qualify for those scholarships, students must have a family income equal to or less than 200 percent of the federal poverty level (currently $53,000 a year for a household with four people).

Even as Arkansas lawmakers passed the tuition tax credit plan, their counterparts in Florida approved a proposal to consolidate scholarship programs and expand eligibility to include more families.

“The Florida House voted to expand the state’s school voucher programs Wednesday, opening up scholarships created to help children living in poverty to youngsters from families earning nearly $100,000 a year,” according to the Orlando Sentinel.

North Carolina’s House voted to expand the state’s voucher program earlier this month; the measure is now in the Senate. Elected officials in Kentucky and West Virginia beat them to the punch, approving plans to let education dollars follow children to their chosen education options, rather than just funneling them to government institutions. To further illustrate where the momentum lies, West Virginia also expanded authorization for charter schools, while Kentucky lawmakers overrode Gov. Andy Beshear’s veto to implement their plan. And those states are far from the full story of school choice progress.

The reason isn’t difficult to discern. Public schools completely dropped the ball during the pandemic, leaving kids languishing and parents frustrated and angry.

“The pandemic has been a revelation for many Americans about union control of public schools that refuse to reopen,” The Wall Street Journal‘s editorial board pointed out last month, before the most recent developments. “Nearly 50 school-choice bills have been introduced this year in 30 states. It’s a testament to how school shutdowns have made the advantage of education choice more evident, and its need more urgent.”

That’s a massive turnaround from the success teachers unions enjoyed just a few years ago with their national #RedForEd strikes. They briefly had officials on the ropes with their demands for money and political power. Then they squandered their position and lots of good will by fighting to keep schools closed during the pandemic and lashing out at parents who disagree. They damaged not just their own standing, but that of the quasi-monopoly government schools that they control.

Polling supports that point. While school choice has gained ground over the years, it really picked up steam through the months of shuttered schools and idled children.

“71% of voters back school choice,” the American Federation for Children announced earlier this month about the results of a recent survey. “This is the highest level of support ever recorded from major AFC national polling with a sample size above 800 voters.”

“65% support parents having access to a portion of per-pupil funding to use for home, virtual, or private education if public schools don’t reopen full-time for in-person classes,” the organization added, noting support for exactly the sort of programs gaining ground in states including Arkansas, Florida, Kentucky, North Carolina, and West Virginia.

Even in the absence of portable education funding, families are matching their sentiments with their actions. In October, NPR found enrollment in public schools unexpectedly dropping across 20 states.

“Large and small, rich and poor, urban and rural — in most of these districts the decline is a departure from recent trends,” NPR’s Anya Kamenetz noted.

By contrast, enrollment in private schools, which offer options that cater to varying family preferences, held steady or increased during months of shutdowns. That flew in the face of researchers’ expectations that the economic stress of the last year would have driven away families challenged to pay tuition bills.

“In our sample, 70 percent of independent schools experienced increases in enrollment or level enrollments during the pandemic recession,” according to a study from Georgia’s Kennesaw State University.

Publicly funded but privately managed charter schools have also largely fared well with flexible policies that suit different families.

“We understood that charter schools didn’t have to follow the public schools’ calendar, or its rules and regulations, and we had heard public schools may not even open,” one parent told PBS’s Frontline.

Government data reveals that the ranks of homeschoolers more than tripled from 3.3 percent of students before the pandemic to 11.1 percent as of the most recent information. 

“[T]he global COVID-19 pandemic has sparked new interest in homeschooling and the appeal of alternative school arrangements has suddenly exploded,” observed Census Bureau researchers Casey Eggleston and Jason Fields.

Parents and children, it seems, have decided in large numbers that they want out of unresponsive government schools and eased access to education that suits their needs. Many have already made the move, and others are poised to do the same if they can extract their money from institutions they’re ready to abandon. With a new flurry of school choice programs, lawmakers across the country are catching up with their constituents.

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Together Together is a romcom without the rom. It’s an offbeat inquiry into the possibility of platonic love between a man and a woman. Ed Helms and Patti Harrison are just about perfect as Matt, a lonely, 45-year-old app designer, and Anna, a 26-year-old barista whom Matt has hired as a surrogate mother for the baby he wants to ground his life with.

“When I hang out with my settled friends,” Matt says, “I feel sad for what I want and don’t have. And when I hang out with my single friends, I feel sorry for what I have and don’t want.”

Anna plans to use the money Matt is paying for the use of her uterus to finally get a college degree. She’s a little puzzled about Matt’s motivation for seeking single parenthood. “Why are you doing this alone?” she asks. “Because I am alone,” he says. (His last romance lasted eight years, “but it just didn’t work out.”)

Issues arise, of course. Matt is a naturally warm kind of guy, but Anna wants to maintain boundaries. When he asks if she’d like to move into a spare room in his house, she says, “I think you’ve watched too many Woody Allen movies.” He also says things like, “Let’s get some houseplants.” But it soon becomes clear that he’s not hitting on her. Their relationship is fundamentally bittersweet. Although they’ll soon be parents, Anna is unable to share in any of the traditional prenatal glow. (When she convinces Matt to have a baby shower and agrees to attend it herself, she finds herself awkwardly surrounded by his friends and family, and introduced around as “the surrogate.”) The script, by director Nicole Beckwith, probes Matt and Anna’s relationship more deeply than you might expect going in.

Ed Helms is a master at projecting warmth and concern, and Patti Harrison, who steps up into stardom here, creates an irresistible portrayal of a slightly sour young woman who’s already logged some serious pain in life, but isn’t ready to give up. In the end, she tells Matt that she actually does love him—”but not in a gross way.”

Sisters with Transistors

Computer music was once dismissed as cold and inhuman, but Suzanne Ciani, a veteran of the electronics avant-garde, has argued against that notion from the outset of her career. In Lisa Rovner’s Sisters with Transistors—a revelatory repositioning of several pioneers of electronic music who happened to be women—we see Ciani at a 1974 art gallery performance. She is standing in front of an iconic Buchla synthesizer, a welter of knobs and dials and patch cords, controlled by a small keyboard. Addressing her audience, all sitting in the traditional position of cross-legged meditation on the floor, she is refuting the cold-and-inhuman canard.

“I think they’re sensual,” Ciani says, looking back at her own introduction to music synthesizers. “The machine was alive, it was warm, it communicated. You could move something just the littlest bit and a whole new expression would open up.”

“Women are naturally drawn to electronic music,” says Laurie Anderson, the perfect narrator for a documentary about this subject. “You didn’t have to be accepted by any of the male-dominated resources: the radio stations, the record companies, the concert-hall venues. You can make music with electronics and you can present it directly to an audience. And that gives you tremendous freedom.”

So we see. Among the musicians assembled here is Clara Rockmore, a Lithuanian violinist who came to America, met the Russian physicist Leon Theremin, another immigrant, and helped him refine his misterioso electronic invention, the theremin, which was controlled by two antennas (the player never had to touch the instrument) and is often thought to have been used in the score of the 1956 movie Forbidden Planet.

That’s not so, though. Forbidden Planet, did have the first all-electronic movie score, but it was actually the work of the New York team of Bebe and Louis Barron, who created some of the film’s otherworldly sounds by overloading electronic circuit boards. “The dying of Morbius,” Bebe says in the film, “was the actual dying of the circuits.” Somewhat outrageously, the American Federation of Musicians refused to allow the Forbidden Planet soundtrack to be marketed as “music.”

“We were barely acknowledged as composers,” says Bebe, still pissed after all these years.

Also royally screwed over was Delia Derbyshire, an English composer and mathematician who was employed by the BBC Radiophonic Workshop in the 1960s. Derbyshire attained a kind of sci-fi immortality in 1963, when she created the soundtrack theme for a new BBC show called Doctor Who. The theme had been written by another composer, Ron Grainer, but Derbyshire’s electronic ministrations utterly transformed it. Naturally, the BBC decided that since she was a mere staffer, she couldn’t be credited for her work, which was featured on Doctor Who for the next 17 years.

Let us not dwell on injustices, however. Another electro-composer examined here is Maryanne Amacher, a woman who is frankly all about the noise. (“I didn’t want to push around dead white men’s notes,” she says.) Amacher gives off a strong mad scientist vibe, and we see her rattling the walls of her bomb site home while cranking up the volume for two visitors—Sonic Youth’s Kim Gordon and Thurston Moore (whose forefingers are pressed tightly into each of his ears throughout).

One of the most captivating musicians interviewed here is Laurie Spiegel, a 1970s denizen of the fabled (and now defunct) Bell Labs synth music research center in Murray Hill, New Jersey. Unusually, Spiegel is both a folkie and a ukulele player (and writes her own software, too). Spiegel sees the synthesized music of today as only a beginning. “We want to put music back in touch with itself,” she says. “We’ve only begun the scratch the surface of what’s possible.”

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The U.S. Attorney’s Office in Philadelphia recently brought a criminal indictment against the former Dean of Temple University’s business school, Moshe Porat, for submitting false numbers to U.S. News to help the school’s ranking.  I posted a long thread over at Twitter when the indictment was announced about legal challenges I see raised by the prosecution.   My friend Michael Levy, who is the former First Assistant U.S. Attorney and Interim U.S. Attorney in that office, and is now retired, also wrote in with some thoughts.

I thought Mr. Levy’s views were worth a post of their own, and I am posting them with his permission.  His analysis follows:

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The indictment of Moshe Porat, the former dean of the Temple University business school (the Fox School of Business), by the U.S. Attorney’s Office in Philadelphia raises several interesting issues about mail and wire fraud. Some of these depend upon the facts, while others are purely questions of law.

The indictment charges that Porat conducted a scheme to defraud Fox applicants, students, and donors of money and property. He allegedly did this by providing false information about the school’s applicants and students to U.S. News and World Report to boost the school’s ranking in the publication’s school ratings. The indictment states that as the school’s ranking rose, so did the size of its class.

This raises factual questions about whether the victims were defrauded. Even if the students opted to go to Fox because of the fraudulently obtained rating, they got what they paid for – a Fox business school education and MBA. The indictment even alleges that in one program the price of tuition decreased during the scheme, while in the other, it remained about the same. The false increase in the school’s standing did not prompt the school to charge more for its product. The indictment does not suggest that the donor’s money did not go to the coffers of the business school and it does not allege that Porat siphoned any money for his personal use.

The indictment implies that the students would not have applied to or matriculated at the school and that the donors would not have contributed, were it not for the false rating. However, it never states so. That will have to await testimony at trial. It does raise the question, whether this conduct is covered by the wire fraud statute. If a person is tricked into entering a transaction but gets what s/he pays for, has s/he been defrauded?

Cases such as United States v. Takhalov, 827 F.3d 1307, 1314 (11th Cir.), as revised (Oct. 3, 2016), opinion modified on denial of reh’g, 838 F.3d 1168 (11th Cir. 2016), would suggest that the answer is no. In Takhalov, a bar hired attractive women to hang out in the bar, acting as if they were patrons, to induce male patrons to buy them drinks. The government argued that the male patrons were defrauded because they were not aware that the women were in fact employees. The fraud was giving the men the impression that a drink might lead to a more romantic encounter. The court held that this was not a fraud and presented the following two hypotheticals to illustrate why.

Consider the following two scenarios. In the first, a man wants to exchange a dollar into four quarters without going to the bank. He calls his neighbor on his cell phone and says that his child is very ill. His neighbor runs over, and when she arrives he asks her to make change for him. She agrees; the quarters pass to the man; the dollar passes to the woman; and they part ways. She later learns that the child was just fine all along. The second scenario is identical to the first, except that instead of giving the woman a true dollar, he gives her a counterfeit one.

The first scenario is not wire fraud; the second one is. Although the transaction would not have occurred but-for the lie in the first scenario – the woman would have remained home except for the phony sickness – the man nevertheless did not intend to deprive the woman of something of value by trick, deceit, and so on.  But in the second scenario he did intend to do so.

Id, at 1313.

I expect that problem will be an issue in the Porat trial. If the students paid for a Fox education and degree, then they got it.

A second, legal issue is whether the object of the scheme was to obtain money and property, or if it was merely to obtain higher ratings and increased student enrollment (with its increase in tuition payments) was an incidental benefit. After the Bridgegate case (Kelly v. United States, 140 S.Ct. 1565 (2020)), it should be clear that obtaining property has to be the object of the scheme, and not just an incidental result of the scheme. Higher ratings could have resulted in an increase in the quality of the students without any increase in enrollment. Again, those students would have gotten what they paid for.

A third issue is what the courts have called the convergence problem – does the person deceived have to be the person defrauded? If A lies to B and as a result C loses money to A, is this conduct covered by the wire fraud statute. For example, a person lies to a regulatory agency and, as a result, the agency allows her to continue her occupation. Are the fees she obtains from her clients because of the continuing authorization, covered by the mail and wire fraud statutes? E.g., United States v. Lew, 875 F.2d 219, 221 (9th Cir. 1989). The courts are split on this issue and the Third Circuit has noted the split but never chosen sides. United States v. Bryant, 655 F.3d 232, 249-50 (3d Cir. 2011).

In this case, the lie to U.S. News and World Report was translated into a rating and passed on to the victims. If that is the government’s theory, then there may be no convergence problem; the magazine was the unwitting transmitter of the false statements to the victims and the people deceived and the people defrauded were the same.

All of this will have to await the filing of motions, the development of a record, and even a trial.

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