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Texas Is Attempting to Sue Georgia, Michigan, Pennsylvania, and Wisconsin Over the 2020 Election

Texas Attorney General Ken Paxton is asking the Supreme Court to intervene in the 2020 Presidential election. Yet rather than seek SCOTUS involvement in pre-existing election cases, such as those filed by Pennsylvania legislators, the Trump campaign, or others, AG Paxton is initiating a suit of his own attempting to invoke the Supreme Court’s original jurisdiction. This suit is, without question, among the most audacious legal filings of the 2020 Presidential election, and it is quite unlikely the Supreme Court will respond favorably to Texas’s plea.

In this case, Texas AG Paxton has filed suit against four states–Georgia, Michigan, Pennsylvania and Wisconsin–alleging that various changes to election rules and procedures in those states, combined with alleged fraud–”tainted” the election results in those states. Because this case is styled as a suit filed by one state directly against other states, the suit invokes the Supreme Court’s original jurisdiction (as opposed to the Court’s appellate jurisdiction). Accordingly, AG Paxton filed a motion for leave to file a Bill of Complaint, which is the way that a state asks the Supreme Court to hear a case brought directly against another state under its original jurisdiction, bypassing the need to first bring the case in a lower court.

The full filing, which also includes a Bill of Complaint, a Brief in support of the Motion to Leave, a Motion for Expedited Consideration, and a Motion for a Preliminary Injunction and Temporary Restraining Order, raises the full panoply of constitutional and other claims that we have seen in 2020 Presidential election litigation thus far, and seeks to turn alleged election irregularities and statistical anomalies into constitutional violations. Only three attorneys are listed on the filings: AG Paxton, recently appointed First Assistant AG Brent Webster, and D.C. attorney Lawrence J. Joseph, who is listed as “Special Counsel” to the AG. [As noted here, there has been a great deal of turmoil in the Texas AG’s office, leading to substantial turnover within the office.] Texas Solicitor General Kyle Hawkins is conspicuously absent. (Perhaps Senator Ted Cruz will volunteer to argue in the unlikely event the Supreme Court takes the case, as he has in other election litigation.)

Texas alleges that the four defendant states violated their own laws in making changes to their election procedures and violated the constitution by authorizing or allowing differential treatment of different sets of voters within their states. Because these claims would not be enough, by themselves, to overturn the Electoral College results, the complaint seeks to shoehorn election fraud claims into the argument by alleging “voting irregularities . . . that would be consistent with the unconstitutional relaxation of ballot-integrity protections in those States’ election laws,” and repeats a number of unfounded or unsubstantiated charges relating to missing USB drives and statistical disparities in election results. Failing to prevent such irregularities, Texas claims, contributed to the constitutional violations alleged. Specifically, Texas claims that by “taking—or allowing—non-legislative actions to change the election rules that would govern the appointment of presidential electors,” the defendant states have violated the Electors Clause, the Equal Protection Clause, and the Due Process Clause. The filings further ask the Supreme Court to prevent the defendant states from appointing electors based upon certified election returns and require the defendant state legislatures to appoint electors directly.

Article III of the Constitution provides the Supreme Court with jurisdiction to hear cases in which one state sues another in its original jurisdiction, but it does not always do so. Under current practice, states ask the Court for permission to file such suits—hence the Motion for Leave—and the Court does not always oblige. So, for instance, when Nebraska and Oklahoma sought to sue Colorado over the latter’s decision to legalize marijuana, the Supreme Court refused to hear the case.

Here, Texas is not only asking the Supreme Court to hear the case, it is also asking for expedited consideration and extraordinary emergency relief, in the form of injunctions barring the defendant states from relying upon the election results to appoint electors and authorizing “pursuant to the Court’s remedial authority, the Defendant States to conduct a special election to appoint presidential electors.” In effect, the suit is asking the U.S. Supreme Court to supervise the Presidential election in the four defendant states.

Setting aside the merits of the case for a moment, the Texas filing raises a range or jurisdictional questions. Among other things Texas has to overcome a range of obstacles, including standing and the political question doctrine, to press this suit. Texas claims it will be harmed if the allegedly unconstitutional actions within the defendant states determine the presidential election. Yet the Constitution provides that Congress is the ultimate judge of the Electoral College results. This is yet another reason why it is hard to see the Supreme Court accepting Texas’s plea. Further, the standards for the sort of emergency relief Texas seeks are quite high–among other things, the party seeking such relief is supposed to show a likelihood of success on the merits–so it seems likely the Court will deny the various motions, hopefully without too much delay.

 

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Universal Student Debt Forgiveness Is Regressive, Say Economists

polspphotos661265

Wiping out student loan debt for American college graduates would benefit the wealthy much more than it benefits less privileged students, according to a new working paper from the National Bureau of Economic Research. “Blacks and Hispanics would also benefit substantially less than balances suggest,” the authors say.

In the paper, titled “The Distributional Effects of Student Loan Forgiveness,” economists Sylvain Catherine and Constantine Yannelis conclude that universal student loan “forgiveness would benefit the top decile as much as the bottom three deciles combined.”

Not all student-loan-forgiveness schemes would have the same effects, they note:

There are a number of ways in which debt can be discharged, with important distributional implications. For example, forgiveness can be universal, capped or targeted to specific borrowers. These debt cancellation policies can benefit different socioeconomic and ethnic groups. This paper explores their distributional impacts. We find that the benefits of universal debt forgiveness policies largely accrue to high-income borrowers, while forgiveness through expanding income-contingent loan plans instead favors middle-income borrowers.

Income-contingent payment plans and loan forgiveness schemes already exist in the U.S.  Increasing enrollment in such plans “or increasing these plans’ generosity is another option for targeted debt forgiveness,” and one that would actually benefit middle-income debtors more than their wealth counterparts, the authors suggest.

But full or partial loan forgiveness regardless of income and loan size would be “highly regressive, with the vast majority of benefits accruing to high-income individuals,” they conclude.

Reason‘s Mike Riggs offers some better ideas for student loan reform here.

FREE MINDS

“It is possible for a person—or at least their views—to be both loud and silenced,” suggests Tom Chivers at UnHerd:

FREE MARKETS

Uber is abandoning self-driving cars. Uber “has sold its self-driving car division to Aurora Innovation and has taken a stake in the startup as it looks to pivot away from creating its own autonomous vehicles and focus on profitability following a year of being decimated by the pandemic,” reports The Street.

QUICK HITS

  • Why Thomas Massie is wrong about the federal marijuana legalization bill.
  • On free speech and Section 230, outgoing FCC chairman Ajit Pai says he is “pessimistic about where this goes in the future.”
  • L.A.’s new district attorney is making some much-needed changes:

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Universal Student Debt Forgiveness Is Regressive, Say Economists

polspphotos661265

Wiping out student loan debt for American college graduates would benefit the wealthy much more than it benefits less privileged students, according to a new working paper from the National Bureau of Economic Research. “Blacks and Hispanics would also benefit substantially less than balances suggest,” the authors say.

In the paper, titled “The Distributional Effects of Student Loan Forgiveness,” economists Sylvain Catherine and Constantine Yannelis conclude that universal student loan “forgiveness would benefit the top decile as much as the bottom three deciles combined.”

Not all student-loan-forgiveness schemes would have the same effects, they note:

There are a number of ways in which debt can be discharged, with important distributional implications. For example, forgiveness can be universal, capped or targeted to specific borrowers. These debt cancellation policies can benefit different socioeconomic and ethnic groups. This paper explores their distributional impacts. We find that the benefits of universal debt forgiveness policies largely accrue to high-income borrowers, while forgiveness through expanding income-contingent loan plans instead favors middle-income borrowers.

Income-contingent payment plans and loan forgiveness schemes already exist in the U.S.  Increasing enrollment in such plans “or increasing these plans’ generosity is another option for targeted debt forgiveness,” and one that would actually benefit middle-income debtors more than their wealth counterparts, the authors suggest.

But full or partial loan forgiveness regardless of income and loan size would be “highly regressive, with the vast majority of benefits accruing to high-income individuals,” they conclude.

Reason‘s Mike Riggs offers some better ideas for student loan reform here.

FREE MINDS

“It is possible for a person—or at least their views—to be both loud and silenced,” suggests Tom Chivers at UnHerd:

FREE MARKETS

Uber is abandoning self-driving cars. Uber “has sold its self-driving car division to Aurora Innovation and has taken a stake in the startup as it looks to pivot away from creating its own autonomous vehicles and focus on profitability following a year of being decimated by the pandemic,” reports The Street.

QUICK HITS

  • Why Thomas Massie is wrong about the federal marijuana legalization bill.
  • On free speech and Section 230, outgoing FCC chairman Ajit Pai says he is “pessimistic about where this goes in the future.”
  • L.A.’s new district attorney is making some much-needed changes:

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A Point System for the Vaccine Line

The priority order for scarce Covid-19 vaccines has received considerable debate. Should the elderly be ahead of essential workers? Where do teachers stand in line? What doesn’t seem to receive much attention is the basic model for a priority system. The assumption is that there will be a line. First will be the group with the highest-priority characteristic, then those with the next-highest priority characteristic, and so on.

An oddity of this approach is that a member of two high-priority groups receives the vaccine no earlier than a member of the higher priority of these groups. The current priority list has health care workers at the front, then nursing homes, then first responders, then those with health risks, then elderly, then essential workers, then teachers, and so on. But what about a teacher who is elderly and faces serious health risks? There might be an argument that this person should be ahead of first responders—or at the very least, at the front of the line among the many who have health risks. But the proposed system treats each person based on the single characteristic that moves the person as close to the front of the line as possible.

It is a univariate system for a multivariate world. Forget about interaction effects. But couldn’t we even consider a points system?

Each characteristic in such a system would correspond to some specified number of points, and the points would then be summed to produce a total score, which in turn would determine someone’s place in line. Our elderly teacher with health risks would be closer to the front of the line than someone with just one or two of these three characteristics. A points system also could allow for more distinctions within each category. Instead of treating all elderly as an undifferentiated group, the system could assign different points values for different ages. A 64-year-old would not be treated exactly the same as a 30-year-old, and a person who is extremely obese might be treated differently from one who is just marginally obese. People with some health conditions are more vulnerable than others, and that should be reflected in their place in line.

A point system would yield a more granular ranking. A priority system that may place many millions of people at the same point in line leaves unanswered the question of how health care providers should prioritize within each group. Telling ten million people who want the vaccine that it’s their turn when there is only enough vaccine for half of them will predictably result in an avalanche of phone calls, attempts at influence, and anger. There will inevitably be some uncertainty about just when it’s anyone’s turn, given the lack of clarity about how many people exist in each category and how many will want to be vaccinated, but a points system would at least give local vaccine providers a metric that orders patients.

So far as I have found, no one has recommended a points system. Why?

Twenty-dollar bill. Maybe this is the proverbial $20 bill on the sidewalk, and I am the first to invent the idea of a points system for vaccine priority. Much as I would like to pat myself on the back, I don’t think so. There are many rankings that do rely on points systems of one kind or another. (Consider, for example, U.S. News and World Report rankings.) The officials creating the priority system might not have discussed a points system, maybe even didn’t consciously think about it, but that just invites the next question of why they implicitly rejected it.

Complexity for patients. The most obvious answer is that a points system would be too complex for people. But it’s not hard to add up a few numbers. Online calculators could make this easy, and health-care providers could tell people without online access their scores. This isn’t nearly as complicated as filing taxes.

Complexity for committees. The priority list is the result of a complex negotiation involving the CDC, the Advisory Committee on Immunization Practices, and the Administration, and no doubt others. It may be easier to develop a simple framework than a more complex one. The last thing we’d want is for the vaccine to be delayed because we can’t agree on how to allocate points. And so the decision-makers assign themselves a simpler task. This seems more plausible, but it’s not entirely satisfying. Legislative bodies, after all, often produce rules far more complex than a simple points system. Moreover, a points system creates the possibility of compromise. One reason that juries hang on a criminal sentence or damages much less often than on guilt or liability is that compromises are easier.

Complexity for vaccine providers. Vaccine providers may need to perform at least some minimal verification of patients’ entitlement to receive a vaccine at a particular time. For example, they might ask for a paystub to prove that a patient is an essential worker. With just one group at a time, there is only one piece of information that they will need to verify. With a multivariate points system, they may need to verify a patient’s ranking in each category. But this is not an elaborate system of adjudication. Much of the verification is likely to be cursory anyway, and some variables (weight and age) are easily (if occasionally imperfectly) verified.

Legitimacy. A points system cries out for some underlying methodology. That requires a theory of the relative importance of different goals, such as vaccinating those who have the greatest risk of dying if they contract Covid, vaccinating those who are most likely to spread Covid, encouraging economic activity, and compensating for social disparities. Any priority system reflects some weighting of these goals, but less transparently. It’s easier to say “we’re letting the elderly go ahead of essential workers” than to say that someone’s status as elderly counts 1.3 times as much as someone’s status as essential. Why that number? But pseudoscientific precision might lend more apparent legitimacy to the project rather than less. Moreover, a simple line is also arbitrary. It may not feature arbitrary numbers, but it will include somewhat arbitrary decisions about which group is first.

Irrelevance. It’s not just that we don’t have a good political methodology for weighting different goals. We have no shared comprehensive economic or moral theory that even in principle would allow us to make the relevant trade-offs. The moral dilemmas are legion. Is an elderly life worth less than a younger life, either because the elderly have fewer years remaining or because they are less likely to be working? Should groups that have acted relatively irresponsibly (say, young adults) receive the benefit of the vaccine early to protect others? What is the appropriate trade-off between economic activity and life? Add to these a myriad of scientific and economic questions, and serious doubts about our ability to get the priorities right arise. That doesn’t mean we should give up altogether, the theory goes, but there’s no point in worrying about second-order issues when we are probably wrong on some of the biggest questions. But here the second-order issues are easier than the first-order issues. We are pretty sure that age is relevant and so is being an essential worker. Given these very mild assumptions, shouldn’t an elderly essential worker be ahead of someone in just one of those two categories? Surely, that will produce at least some benefit in health or wealth.

Federalism. The federal priority list is just a recommendation to state officials. Presumably, state officials may change priorities or develop subpriorities, and these will be akin to a points system. But if so, the recommendations really ought to be at a higher level of generality, indicating the characteristics that should generally move people up in line and perhaps their relative importance. A points system is not an elaboration of but a change from the recommendations being developed. If the ultimate goal is for the states to create or consider points systems, the recommendations should say so. Many states are likely to follow the federal guidance because it allows them to avoid making hard choices that are sure to anger some constituents. Thus, the federal guidance either should make clear that states have more decisions should make or should provide good default rules.

Most people, I suspect, will prefer the existing approach to a points system. They value simplicity and fear technocracy. In my judgment, if the government is going to make value choices, it ought not make them crudely. 64-year-olds and 30-year-olds should not be at the same place in line. One might reasonably question whether the government should be setting priorities at all, and perhaps the crudeness of the government’s approach is all the more support for private ordering. But vaccines have positive externalities, so there is a case for at least some government involvement. And if the government is going to set priorities, it ought to do it right.

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A Point System for the Vaccine Line

The priority order for scarce Covid-19 vaccines has received considerable debate. Should the elderly be ahead of essential workers? Where do teachers stand in line? What doesn’t seem to receive much attention is the basic model for a priority system. The assumption is that there will be a line. First will be the group with the highest-priority characteristic, then those with the next-highest priority characteristic, and so on.

An oddity of this approach is that a member of two high-priority groups receives the vaccine no earlier than a member of the higher priority of these groups. The current priority list has health care workers at the front, then nursing homes, then first responders, then those with health risks, then elderly, then essential workers, then teachers, and so on. But what about a teacher who is elderly and faces serious health risks? There might be an argument that this person should be ahead of first responders—or at the very least, at the front of the line among the many who have health risks. But the proposed system treats each person based on the single characteristic that moves the person as close to the front of the line as possible.

It is a univariate system for a multivariate world. Forget about interaction effects. But couldn’t we even consider a points system?

Each characteristic in such a system would correspond to some specified number of points, and the points would then be summed to produce a total score, which in turn would determine someone’s place in line. Our elderly teacher with health risks would be closer to the front of the line than someone with just one or two of these three characteristics. A points system also could allow for more distinctions within each category. Instead of treating all elderly as an undifferentiated group, the system could assign different points values for different ages. A 64-year-old would not be treated exactly the same as a 30-year-old, and a person who is extremely obese might be treated differently from one who is just marginally obese. People with some health conditions are more vulnerable than others, and that should be reflected in their place in line.

A point system would yield a more granular ranking. A priority system that may place many millions of people at the same point in line leaves unanswered the question of how health care providers should prioritize within each group. Telling ten million people who want the vaccine that it’s their turn when there is only enough vaccine for half of them will predictably result in an avalanche of phone calls, attempts at influence, and anger. There will inevitably be some uncertainty about just when it’s anyone’s turn, given the lack of clarity about how many people exist in each category and how many will want to be vaccinated, but a points system would at least give local vaccine providers a metric that orders patients.

So far as I have found, no one has recommended a points system. Why?

Twenty-dollar bill. Maybe this is the proverbial $20 bill on the sidewalk, and I am the first to invent the idea of a points system for vaccine priority. Much as I would like to pat myself on the back, I don’t think so. There are many rankings that do rely on points systems of one kind or another. (Consider, for example, U.S. News and World Report rankings.) The officials creating the priority system might not have discussed a points system, maybe even didn’t consciously think about it, but that just invites the next question of why they implicitly rejected it.

Complexity for patients. The most obvious answer is that a points system would be too complex for people. But it’s not hard to add up a few numbers. Online calculators could make this easy, and health-care providers could tell people without online access their scores. This isn’t nearly as complicated as filing taxes.

Complexity for committees. The priority list is the result of a complex negotiation involving the CDC, the Advisory Committee on Immunization Practices, and the Administration, and no doubt others. It may be easier to develop a simple framework than a more complex one. The last thing we’d want is for the vaccine to be delayed because we can’t agree on how to allocate points. And so the decision-makers assign themselves a simpler task. This seems more plausible, but it’s not entirely satisfying. Legislative bodies, after all, often produce rules far more complex than a simple points system. Moreover, a points system creates the possibility of compromise. One reason that juries hang on a criminal sentence or damages much less often than on guilt or liability is that compromises are easier.

Complexity for vaccine providers. Vaccine providers may need to perform at least some minimal verification of patients’ entitlement to receive a vaccine at a particular time. For example, they might ask for a paystub to prove that a patient is an essential worker. With just one group at a time, there is only one piece of information that they will need to verify. With a multivariate points system, they may need to verify a patient’s ranking in each category. But this is not an elaborate system of adjudication. Much of the verification is likely to be cursory anyway, and some variables (weight and age) are easily (if occasionally imperfectly) verified.

Legitimacy. A points system cries out for some underlying methodology. That requires a theory of the relative importance of different goals, such as vaccinating those who have the greatest risk of dying if they contract Covid, vaccinating those who are most likely to spread Covid, encouraging economic activity, and compensating for social disparities. Any priority system reflects some weighting of these goals, but less transparently. It’s easier to say “we’re letting the elderly go ahead of essential workers” than to say that someone’s status as elderly counts 1.3 times as much as someone’s status as essential. Why that number? But pseudoscientific precision might lend more apparent legitimacy to the project rather than less. Moreover, a simple line is also arbitrary. It may not feature arbitrary numbers, but it will include somewhat arbitrary decisions about which group is first.

Irrelevance. It’s not just that we don’t have a good political methodology for weighting different goals. We have no shared comprehensive economic or moral theory that even in principle would allow us to make the relevant trade-offs. The moral dilemmas are legion. Is an elderly life worth less than a younger life, either because the elderly have fewer years remaining or because they are less likely to be working? Should groups that have acted relatively irresponsibly (say, young adults) receive the benefit of the vaccine early to protect others? What is the appropriate trade-off between economic activity and life? Add to these a myriad of scientific and economic questions, and serious doubts about our ability to get the priorities right arise. That doesn’t mean we should give up altogether, the theory goes, but there’s no point in worrying about second-order issues when we are probably wrong on some of the biggest questions. But here the second-order issues are easier than the first-order issues. We are pretty sure that age is relevant and so is being an essential worker. Given these very mild assumptions, shouldn’t an elderly essential worker be ahead of someone in just one of those two categories? Surely, that will produce at least some benefit in health or wealth.

Federalism. The federal priority list is just a recommendation to state officials. Presumably, state officials may change priorities or develop subpriorities, and these will be akin to a points system. But if so, the recommendations really ought to be at a higher level of generality, indicating the characteristics that should generally move people up in line and perhaps their relative importance. A points system is not an elaboration of but a change from the recommendations being developed. If the ultimate goal is for the states to create or consider points systems, the recommendations should say so. Many states are likely to follow the federal guidance because it allows them to avoid making hard choices that are sure to anger some constituents. Thus, the federal guidance either should make clear that states have more decisions should make or should provide good default rules.

Most people, I suspect, will prefer the existing approach to a points system. They value simplicity and fear technocracy. In my judgment, if the government is going to make value choices, it ought not make them crudely. 64-year-olds and 30-year-olds should not be at the same place in line. One might reasonably question whether the government should be setting priorities at all, and perhaps the crudeness of the government’s approach is all the more support for private ordering. But vaccines have positive externalities, so there is a case for at least some government involvement. And if the government is going to set priorities, it ought to do it right.

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You Already Support Reason With Your Eyeballs. Will You Donate Too?

reasonpeeps

Today is the final day of our Webathon, and we’ve been so lucky this year. We know 2020 absolutely sucked for many of you in so many ways, but more than 1,200 of you still managed to find some loose change in the cushions of that couch you haven’t left for months. For that, we are very grateful.

We are doubly (ha!) grateful to the folks who offered and participated in our challenge grants. We still have a little time left today on our final $100,000 grant, so take this moment to give a tax-deductible donation and double your money while also legally evading the taxman.

Besides our magic powers to turn your dollars into doppelgangers, why should you give to Reason? I already told you the story of Elias Zarate, the barber whose troubles inspired a crew of people to take action to fix bad licensing laws. But I want to tell you a couple more stories of how solid reporting can lead to reform—and how long that process can take. Tennessee finally passed drug-free school zone reforms while explicitly citing work done years ago by Reason Reporter C.J. Ciaramella and co-author Lauren Krisai. Chicago reformed its vehicle impound program at long last, too. Both stories were broken wide open by Reason. Two of the people Reason profiled in our 2017 Florida opioid investigation were released early from prison this year as well. This year, Ciaramella reported on the detrimental presence of police officers in schools as well as flagrant abuses within Alabama women’s prisons; both stories we hope will bear fruit in eventual reform.

There is still much more work to be done. Freedom of Information Act requests take time. Data scraping and crunching takes time. We’re lucky to have talented people who have the lightly obsessive personality required to see those inquiries through to the end, and we’re lucky to have your help in supporting their work.

At the end of the Webathon, we like to share testimonials from donors. This one caught my eye this year. Libertarians, at least some of them, are born, not made. For decades,  Reason has been helping people—including Drew Carey and John Stossel—figure out where they fit. This week we got a donation from someone who wrote:

I’d like to thank you for your work this year. I’m one of many people that found themselves politically homeless after all that’s gone on over the past few years, with 2020 accelerating those feelings. I’d always thought of myself as sort of a standard, left-of-center type, but I now realize that I’m much more libertarian than liberal. Much of that is due to what’s happened this year. It started with questioning lockdowns and business closures from a civil liberties perspective. I came here for perspective I didn’t see represented in “mainstream” media. But as I read pieces on other topics, I found the new perspective on them refreshing. In short, I’m a convert. Now, if asked my political affiliation, I’d answer “small-l libertarian.” Thank you.

Nope! Thank YOU. Reason is made possible through the support of people who donate their hard-earned cash. But you’re also supporting Reason every single time you read, watch, or listen to something we publish. Our mission is to get libertarian ideas out there; hash them out; make them stronger through original reporting, research, and debate; and introduce more people to them—because you never know who might be in a position to effect lasting change. Just tweeting something from Reason or chatting about one of our podcasts with someone at dinner is a major contribution to Reason. Liking a video on YouTube or sharing a post on Facebook helps us meet our goals and support our mission of making the world safe for free minds and free markets. So even if you don’t have a ton of cash to donate, we appreciate your willingness to share a little space in your brain and in your day with us. Seriously, thank you.

Of course, we wouldn’t say no to cash money either.

from Latest – Reason.com https://ift.tt/33Uvob1
via IFTTT

You Already Support Reason With Your Eyeballs. Will You Donate Too?

reasonpeeps

Today is the final day of our Webathon, and we’ve been so lucky this year. We know 2020 absolutely sucked for many of you in so many ways, but more than 1,200 of you still managed to find some loose change in the cushions of that couch you haven’t left for months. For that, we are very grateful.

We are doubly (ha!) grateful to the folks who offered and participated in our challenge grants. We still have a little time left today on our final $100,000 grant, so take this moment to give a tax-deductible donation and double your money while also legally evading the taxman.

Besides our magic powers to turn your dollars into doppelgangers, why should you give to Reason? I already told you the story of Elias Zarate, the barber whose troubles inspired a crew of people to take action to fix bad licensing laws. But I want to tell you a couple more stories of how solid reporting can lead to reform—and how long that process can take. Tennessee finally passed drug-free school zone reforms while explicitly citing work done years ago by Reason Reporter C.J. Ciaramella and co-author Lauren Krisai. Chicago reformed its vehicle impound program at long last, too. Both stories were broken wide open by Reason. Two of the people Reason profiled in our 2017 Florida opioid investigation were released early from prison this year as well. This year, Ciaramella reported on the detrimental presence of police officers in schools as well as flagrant abuses within Alabama women’s prisons; both stories we hope will bear fruit in eventual reform.

There is still much more work to be done. Freedom of Information Act requests take time. Data scraping and crunching takes time. We’re lucky to have talented people who have the lightly obsessive personality required to see those inquiries through to the end, and we’re lucky to have your help in supporting their work.

At the end of the Webathon, we like to share testimonials from donors. This one caught my eye this year. Libertarians, at least some of them, are born, not made. For decades,  Reason has been helping people—including Drew Carey and John Stossel—figure out where they fit. This week we got a donation from someone who wrote:

I’d like to thank you for your work this year. I’m one of many people that found themselves politically homeless after all that’s gone on over the past few years, with 2020 accelerating those feelings. I’d always thought of myself as sort of a standard, left-of-center type, but I now realize that I’m much more libertarian than liberal. Much of that is due to what’s happened this year. It started with questioning lockdowns and business closures from a civil liberties perspective. I came here for perspective I didn’t see represented in “mainstream” media. But as I read pieces on other topics, I found the new perspective on them refreshing. In short, I’m a convert. Now, if asked my political affiliation, I’d answer “small-l libertarian.” Thank you.

Nope! Thank YOU. Reason is made possible through the support of people who donate their hard-earned cash. But you’re also supporting Reason every single time you read, watch, or listen to something we publish. Our mission is to get libertarian ideas out there; hash them out; make them stronger through original reporting, research, and debate; and introduce more people to them—because you never know who might be in a position to effect lasting change. Just tweeting something from Reason or chatting about one of our podcasts with someone at dinner is a major contribution to Reason. Liking a video on YouTube or sharing a post on Facebook helps us meet our goals and support our mission of making the world safe for free minds and free markets. So even if you don’t have a ton of cash to donate, we appreciate your willingness to share a little space in your brain and in your day with us. Seriously, thank you.

Of course, we wouldn’t say no to cash money either.

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via IFTTT

Proposed Banking Rule Change Would Upend Oppressive ‘Operation Chokepoint’ Tactics

banking_1161x653

Financial access can make or break anyone in America. Being cut off from our payment systems is a bit like being unpersoned: Large swathes of the economy are suddenly out of reach while financial futures darken. Controlling financial access is a great way to control people, and the government knows this. It has manipulated access to financial channels as a way to manage society beyond the constraints of formal legislation.

The best example is Operation Chokepoint, a Department of Justice (DOJ) effort that put pressure on our banking system to cut off financial access for politically disfavored industries under the guise of cutting down fraud or money laundering. A recent proposed change in banking rules would give these industries better protection from such tactics.

Under the Obama administration, regulators such as the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) issued threatening letters to financial institutions that processed payments for industries such as payday lenders, gun and ammunition firms, and cryptocurrency companies. The message was clear: cut back on business with these industries, or else. Banks got the hint, and affected firms found it harder and harder to find banking partners.

To be clear: the industries themselves were perfectly legal. It is no crime to sell fireworks or gold coins or bullets (with the proper federal and state licensing, of course). After all, if these firms were operating a de facto criminal enterprise, the government would have plenty of legal tools to take them down.

What the DOJ was arguing was that these industries were associated with a higher risk for fraud or money laundering. Rather than trying to go after each firm one by one—and surely some of the individual businesses within those industries were indeed engaged in such hijinks—the DOJ sought to put pressure on all of them at once by “choking” them of finance.

Bullying banks into doing the government’s dirty work was a quick and easy way to get the job done. Even better: it was an extralegal method to get rid of businesses the feds didn’t like too much anyway.

Operation Chokepoint was controversial when it was first revealed by the Wall Street Journal in 2013. Obviously, the affected industries cried foul, but Republicans also bristled at what they viewed as a covert politicization of the financial system. (No wonder, since targeted industries tended to include right-leaning trades such as arms sales and energy production.) The FDIC walked the program back a bit in 2015, but it continued in some form until the Trump administration wound it down in 2017.

This is not to say that banks are no longer a key channel for social control, just that the federal government no longer has a known operation to exploit it. Some states and their private sector counterparts have been all too happy to pick up where Operation Chokepoint left off.

For example, NY Gov. Andrew Cuomo directed his Department of Financial Services to issue Operation Chokepoint-style warning letters to financial institutions which provided services to the National Rifle Association. Climate change activists have turned similar tactics towards banks who process payments for oil and gas companies. Commentators and platforms routinely find trouble securing payment processing services. And it will keep going. Wherever there is a group who wants to shut something down, financial pressure will be a tempting tool of suppression.

Censorship-resistant and privacy-preserving cryptocurrencies such as bitcoin and Monero provide some relief to the problem of financial suppression. However, as Operation Chokepoint demonstrates, even cryptocurrency can succumb to financial controls through the on- and off-ramps that transfer digital currencies from fiat currencies and vice versa. This is no problem for people who can remain crypto-native, and have no need to touch US dollars, but that is a pretty small portion of the population at the moment.

Help may be coming from some unexpected quarters: the OCC, which less than a decade ago had led the charge with Operation Chokepoint. Under the leadership of acting director (and Bitcoin-friendly) Brian Brooks, the OCC has proposed a rule change that would make government-supported financial suppression much harder legally. It’s legally clever, and makes use of an Obama-era law to stave off future Obama-style injustices.

The Dodd-Frank Act was a sweeping financial reform that, among many other things, authorized the OCC to ensure that nationally chartered banks provide “fair access to financial services, and fair treatment of customers.” The intention was that minority customers be evaluated for creditworthiness on her or her own individual merits rather than the attributes of their broader group. In other words, a creditworthy individual shouldn’t be punished because they belong to some group that is considered “high risk” in the aggregate.

The OCC would like to apply this thinking to industries through the proposed “Fair Access to Financial Services” rule. The largest banks in the country—those with more than $100 billion in assets—would be prohibited from red-lining politically disfavored industries just as they are prohibited from red-lining politically oppressed populations. Rather, a gun manufacturer or pornography company or payday lender must be evaluated on the terms of their individual creditworthiness.

The rule does not require that all large banks must do business with all, say, fossil fuel companies, just like banks are not required to extend credit to every single member of a protected class who applies for a loan. Rather, it is a nondiscrimination requirement. Large banks will not be allowed to cut off financial access for disfavored industries just because the government or some other powerful group leans on them to do so.

It’s an interesting rule because it merely extends the logic of Dodd-Frank regulations that Democrats strongly supported. To oppose this rule while supporting Dodd-Frank, lawmakers would have to argue that it is okay to discriminate against some groups and not others. It would cement the situation as explicitly political.

Unsurprisingly, cryptocurrency law commentators have championed the rule as a strong check against the Operation Chokepoint-style suppression that choked the crypto industry in its infancy. The large banks that would be affected are balking a bit, arguing that there’s not really a problem here at all. Public comments on the rule are due by January 4, which gives the Trump-appointed acting OCC director (and current nominee for a five-year term) Brooks plenty of time to finalize the rule before whatever goes down on January 20.

Some libertarians balk at the prospect of the government effectively telling private banks that they are not allowed to cut off financial access to a group for whatever reason. It’s a decent point—after all, conservatives argue that religious groups should not be forced by the government to subsidize activities or provide services that violate their beliefs.

These critics say that ideological financial discrimination may result in innovative alternative financing, perhaps involving cryptocurrency. This is true, although unfortunate. For instance, the Lightning network payment app Strike was developed after founder Jack Mallers saw his family’s marijuana business struggle to secure payment processing.

Yet as it stands, the government already tells private banks that they are not allowed to cut off access to certain groups but leaves others open to financial ruin. The OCC is not about to rescind protections for currently protected classes; this rule change would bring consistency. As attorney Marco Santori pointed out, these large banks are already granted certain government privileges by virtue of their charter status—this change would put guardrails on the negative effects of that government-granted barrier to entry.

Furthermore, as mentioned, cryptocurrency activities themselves have already been cut off from financial access due to government pressure campaigns—could the financial vendors for alternatives like Strike one day be targeted? And large banks would be free to deny financing to truly insolvent or undeserving businesses. Finally, this rule change is ultimately a way of tying the government’s hands as well. Operation Chokepoint-style schemes would be clearly illegal under the proposed rule.

It’s great to see policymakers take the problem of power-driven financial suppression seriously. Policy can be a useful tool, but at the end of the day, there is a cultural problem that must also be addressed. More people need to be aware of the harms endemic to financial surveillance and control. We need to recognize what this kind of roundabout dispossession looks like and criticize it harshly when we see private actors engaging in it. Our financial freedoms will depend on it.

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Proposed Banking Rule Change Would Upend Oppressive ‘Operation Chokepoint’ Tactics

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Financial access can make or break anyone in America. Being cut off from our payment systems is a bit like being unpersoned: Large swathes of the economy are suddenly out of reach while financial futures darken. Controlling financial access is a great way to control people, and the government knows this. It has manipulated access to financial channels as a way to manage society beyond the constraints of formal legislation.

The best example is Operation Chokepoint, a Department of Justice (DOJ) effort that put pressure on our banking system to cut off financial access for politically disfavored industries under the guise of cutting down fraud or money laundering. A recent proposed change in banking rules would give these industries better protection from such tactics.

Under the Obama administration, regulators such as the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) issued threatening letters to financial institutions that processed payments for industries such as payday lenders, gun and ammunition firms, and cryptocurrency companies. The message was clear: cut back on business with these industries, or else. Banks got the hint, and affected firms found it harder and harder to find banking partners.

To be clear: the industries themselves were perfectly legal. It is no crime to sell fireworks or gold coins or bullets (with the proper federal and state licensing, of course). After all, if these firms were operating a de facto criminal enterprise, the government would have plenty of legal tools to take them down.

What the DOJ was arguing was that these industries were associated with a higher risk for fraud or money laundering. Rather than trying to go after each firm one by one—and surely some of the individual businesses within those industries were indeed engaged in such hijinks—the DOJ sought to put pressure on all of them at once by “choking” them of finance.

Bullying banks into doing the government’s dirty work was a quick and easy way to get the job done. Even better: it was an extralegal method to get rid of businesses the feds didn’t like too much anyway.

Operation Chokepoint was controversial when it was first revealed by the Wall Street Journal in 2013. Obviously, the affected industries cried foul, but Republicans also bristled at what they viewed as a covert politicization of the financial system. (No wonder, since targeted industries tended to include right-leaning trades such as arms sales and energy production.) The FDIC walked the program back a bit in 2015, but it continued in some form until the Trump administration wound it down in 2017.

This is not to say that banks are no longer a key channel for social control, just that the federal government no longer has a known operation to exploit it. Some states and their private sector counterparts have been all too happy to pick up where Operation Chokepoint left off.

For example, NY Gov. Andrew Cuomo directed his Department of Financial Services to issue Operation Chokepoint-style warning letters to financial institutions which provided services to the National Rifle Association. Climate change activists have turned similar tactics towards banks who process payments for oil and gas companies. Commentators and platforms routinely find trouble securing payment processing services. And it will keep going. Wherever there is a group who wants to shut something down, financial pressure will be a tempting tool of suppression.

Censorship-resistant and privacy-preserving cryptocurrencies such as bitcoin and Monero provide some relief to the problem of financial suppression. However, as Operation Chokepoint demonstrates, even cryptocurrency can succumb to financial controls through the on- and off-ramps that transfer digital currencies from fiat currencies and vice versa. This is no problem for people who can remain crypto-native, and have no need to touch US dollars, but that is a pretty small portion of the population at the moment.

Help may be coming from some unexpected quarters: the OCC, which less than a decade ago had led the charge with Operation Chokepoint. Under the leadership of acting director (and Bitcoin-friendly) Brian Brooks, the OCC has proposed a rule change that would make government-supported financial suppression much harder legally. It’s legally clever, and makes use of an Obama-era law to stave off future Obama-style injustices.

The Dodd-Frank Act was a sweeping financial reform that, among many other things, authorized the OCC to ensure that nationally chartered banks provide “fair access to financial services, and fair treatment of customers.” The intention was that minority customers be evaluated for creditworthiness on her or her own individual merits rather than the attributes of their broader group. In other words, a creditworthy individual shouldn’t be punished because they belong to some group that is considered “high risk” in the aggregate.

The OCC would like to apply this thinking to industries through the proposed “Fair Access to Financial Services” rule. The largest banks in the country—those with more than $100 billion in assets—would be prohibited from red-lining politically disfavored industries just as they are prohibited from red-lining politically oppressed populations. Rather, a gun manufacturer or pornography company or payday lender must be evaluated on the terms of their individual creditworthiness.

The rule does not require that all large banks must do business with all, say, fossil fuel companies, just like banks are not required to extend credit to every single member of a protected class who applies for a loan. Rather, it is a nondiscrimination requirement. Large banks will not be allowed to cut off financial access for disfavored industries just because the government or some other powerful group leans on them to do so.

It’s an interesting rule because it merely extends the logic of Dodd-Frank regulations that Democrats strongly supported. To oppose this rule while supporting Dodd-Frank, lawmakers would have to argue that it is okay to discriminate against some groups and not others. It would cement the situation as explicitly political.

Unsurprisingly, cryptocurrency law commentators have championed the rule as a strong check against the Operation Chokepoint-style suppression that choked the crypto industry in its infancy. The large banks that would be affected are balking a bit, arguing that there’s not really a problem here at all. Public comments on the rule are due by January 4, which gives the Trump-appointed acting OCC director (and current nominee for a five-year term) Brooks plenty of time to finalize the rule before whatever goes down on January 20.

Some libertarians balk at the prospect of the government effectively telling private banks that they are not allowed to cut off financial access to a group for whatever reason. It’s a decent point—after all, conservatives argue that religious groups should not be forced by the government to subsidize activities or provide services that violate their beliefs.

These critics say that ideological financial discrimination may result in innovative alternative financing, perhaps involving cryptocurrency. This is true, although unfortunate. For instance, the Lightning network payment app Strike was developed after founder Jack Mallers saw his family’s marijuana business struggle to secure payment processing.

Yet as it stands, the government already tells private banks that they are not allowed to cut off access to certain groups but leaves others open to financial ruin. The OCC is not about to rescind protections for currently protected classes; this rule change would bring consistency. As attorney Marco Santori pointed out, these large banks are already granted certain government privileges by virtue of their charter status—this change would put guardrails on the negative effects of that government-granted barrier to entry.

Furthermore, as mentioned, cryptocurrency activities themselves have already been cut off from financial access due to government pressure campaigns—could the financial vendors for alternatives like Strike one day be targeted? And large banks would be free to deny financing to truly insolvent or undeserving businesses. Finally, this rule change is ultimately a way of tying the government’s hands as well. Operation Chokepoint-style schemes would be clearly illegal under the proposed rule.

It’s great to see policymakers take the problem of power-driven financial suppression seriously. Policy can be a useful tool, but at the end of the day, there is a cultural problem that must also be addressed. More people need to be aware of the harms endemic to financial surveillance and control. We need to recognize what this kind of roundabout dispossession looks like and criticize it harshly when we see private actors engaging in it. Our financial freedoms will depend on it.

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St. Patfrisk—the Patron Saint of Boston Irish Cops?

I just came across the term “patfrisk,” which seems to be almost exclusively a Massachusettsism, though the “pat frisk” (or “pat-frisk”) version also appears with some frequency in New York and Minnesota.  The first reference to “patfrisk” is in 1995 and to “pat frisk” in 1969, but without any self-consciousness, so it makes me think that it had been in the air before.

Patfrisk appears to be defined as a “carefully limited search of the outer clothing of [a] person[] … to discover weapons” (authorized by the Court in Terry v. Ohio). The term is likely a frisk × patdown portmanteau, but it’s not clear to me how it differs from just a frisk. I crave enlightenment, if there is some subtle distinction.

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