Hope for Free Market Reform in Uruguay

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Although the global media barely covered last year’s elections in Uruguay, President Luis Lacalle Pou’s victory was significant for ending 15 years of governance by the leftist Broad Front.

The president from that party from 2010 to 2015 was José “Pepe” Mujica, a former member of the violent Tupamaros guerrilla group who achieved international notoriety as a plainspoken man of the people who donated 90 percent of his salary to charity. Mujica’s private austerity distracted from his reckless approach to public finances: According to Uruguayan writer Hana Fischer, his government oversaw “the largest increase in government spending since democracy was restored in Uruguay in 1985.” In a power grab overruled by the country’s highest court, Mujica sought to impose double taxation on large landholdings. He passed a “media law” that the influential newspaper El País called a threat to free speech. And although he legalized marijuana, Mujica included “a state-enforced oligopoly, production and consumption quotas, price-fixing, [and] coerced registrations,” as one commentator explained.

The new president’s style certainly contrasts with that of his Broad Front predecessors, class warrior Mujica and Tabaré Vázquez, a socialist doctor who served two terms in office in 2005–2010 and 2015–2020. The son of former president Luis Alberto Lacalle, Lacalle Pou is a 46-year-old lawyer and a skilled surfer who enjoys hunting wild boar. In 2019, he narrowly beat his Broad Front rival with a platform of decentralization, increased transparency, and promises to cut red tape. He even admitted to recreational drug use in his youth.

Lacalle Pou started his term by refusing to invite the socialist dictators of Cuba, Venezuela, and Nicaragua to his inauguration. When the COVID-19 pandemic hit a few months later, Lacalle Pou rejected the strong statist measures suggested by his closest advisers. In a speech with nearly 2 million Twitter views as of mid-July (Uruguay has a population of only 3.5 million) Lacalle Pou explained that his government faced strong pressure to create new taxes on wealth and businesses, suggestions that he “emphatically rejected.” Entrepreneurs, he stated, “are the ones who will push the country forward. But in the pandemic, if we punish those who create businesses and jobs, those who produce, innovate, and trade, they will be left by the wayside,” leaving everyone worse off as a result.

Instead of taxing wealth creators, Lacalle Pou decided to place an additional 20 percent tax on any state official—himself included—who earned over 1,900 U.S. dollars per month. “We wanted to signal that the state has to make an extra effort, not private individuals,” he said. “Because, once this is over, the state won’t provide for the population…it’s the individual who will rev up the engines and move the country onwards.”

Lacalle Pou’s defense of free market capitalism—extremely rare in Latin America—is no coronavirus fluke. Before the pandemic, he planned to ease the restrictions for setting up tax residency in Uruguay to attract foreign investors, a measure that is now law.

That’s not to say Lacalle Pou has ignored the public health component of the current crisis. Uruguay is the only country in the region that has executed a successful test-and-trace policy. As Bloomberg News notes, this allowed it to control the spread of the virus mostly “without a lockdown, harsh quarantines, or heavy-handed policing,” despite having the largest percentage of elderly citizens in Latin America. Although schools and restaurants closed their doors, most businesses were able to remain open, bolstering Lacalle Pou’s initiative to allow an unshackled private sector to lead the economy out of crisis.

Uruguayan libertarians are aware of their good fortune. Journalist Pris Guinovart says Lacalle Pou “is firmly convinced of the importance, value, and need of more freedom in Uruguay and in the rest of the world.”

For Fischer, Lacalle Pou’s sound policies as president have come as a welcome surprise. His previous career as a congressman, she explains, left her thinking he had few ideas of his own and that he had advanced in politics mostly by riding on his father’s coattails. “We now know that he does have his own ideas and that he is an ardent lover of liberty,” she says, “as he has proven with the way he handled the pandemic, without a mandatory lockdown and [by] appealing to individual responsibility.”

 

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Hope for Free Market Reform in Uruguay

topicsworld

Although the global media barely covered last year’s elections in Uruguay, President Luis Lacalle Pou’s victory was significant for ending 15 years of governance by the leftist Broad Front.

The president from that party from 2010 to 2015 was José “Pepe” Mujica, a former member of the violent Tupamaros guerrilla group who achieved international notoriety as a plainspoken man of the people who donated 90 percent of his salary to charity. Mujica’s private austerity distracted from his reckless approach to public finances: According to Uruguayan writer Hana Fischer, his government oversaw “the largest increase in government spending since democracy was restored in Uruguay in 1985.” In a power grab overruled by the country’s highest court, Mujica sought to impose double taxation on large landholdings. He passed a “media law” that the influential newspaper El País called a threat to free speech. And although he legalized marijuana, Mujica included “a state-enforced oligopoly, production and consumption quotas, price-fixing, [and] coerced registrations,” as one commentator explained.

The new president’s style certainly contrasts with that of his Broad Front predecessors, class warrior Mujica and Tabaré Vázquez, a socialist doctor who served two terms in office in 2005–2010 and 2015–2020. The son of former president Luis Alberto Lacalle, Lacalle Pou is a 46-year-old lawyer and a skilled surfer who enjoys hunting wild boar. In 2019, he narrowly beat his Broad Front rival with a platform of decentralization, increased transparency, and promises to cut red tape. He even admitted to recreational drug use in his youth.

Lacalle Pou started his term by refusing to invite the socialist dictators of Cuba, Venezuela, and Nicaragua to his inauguration. When the COVID-19 pandemic hit a few months later, Lacalle Pou rejected the strong statist measures suggested by his closest advisers. In a speech with nearly 2 million Twitter views as of mid-July (Uruguay has a population of only 3.5 million) Lacalle Pou explained that his government faced strong pressure to create new taxes on wealth and businesses, suggestions that he “emphatically rejected.” Entrepreneurs, he stated, “are the ones who will push the country forward. But in the pandemic, if we punish those who create businesses and jobs, those who produce, innovate, and trade, they will be left by the wayside,” leaving everyone worse off as a result.

Instead of taxing wealth creators, Lacalle Pou decided to place an additional 20 percent tax on any state official—himself included—who earned over 1,900 U.S. dollars per month. “We wanted to signal that the state has to make an extra effort, not private individuals,” he said. “Because, once this is over, the state won’t provide for the population…it’s the individual who will rev up the engines and move the country onwards.”

Lacalle Pou’s defense of free market capitalism—extremely rare in Latin America—is no coronavirus fluke. Before the pandemic, he planned to ease the restrictions for setting up tax residency in Uruguay to attract foreign investors, a measure that is now law.

That’s not to say Lacalle Pou has ignored the public health component of the current crisis. Uruguay is the only country in the region that has executed a successful test-and-trace policy. As Bloomberg News notes, this allowed it to control the spread of the virus mostly “without a lockdown, harsh quarantines, or heavy-handed policing,” despite having the largest percentage of elderly citizens in Latin America. Although schools and restaurants closed their doors, most businesses were able to remain open, bolstering Lacalle Pou’s initiative to allow an unshackled private sector to lead the economy out of crisis.

Uruguayan libertarians are aware of their good fortune. Journalist Pris Guinovart says Lacalle Pou “is firmly convinced of the importance, value, and need of more freedom in Uruguay and in the rest of the world.”

For Fischer, Lacalle Pou’s sound policies as president have come as a welcome surprise. His previous career as a congressman, she explains, left her thinking he had few ideas of his own and that he had advanced in politics mostly by riding on his father’s coattails. “We now know that he does have his own ideas and that he is an ardent lover of liberty,” she says, “as he has proven with the way he handled the pandemic, without a mandatory lockdown and [by] appealing to individual responsibility.”

 

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Brickbat: Courting Cruelty

fingers_1161x653

Iran has sentenced four teens to each have four fingers amputated from their right hands after they were convicted of theft. The four say they were tortured into confessing to the crimes, and one of them tried to commit suicide in prison after an appellate court upheld his sentence. The fingers will be amputated at the base. Under Iran’s Islamic law, the four could have faced the death penalty.

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Brickbat: Courting Cruelty

fingers_1161x653

Iran has sentenced four teens to each have four fingers amputated from their right hands after they were convicted of theft. The four say they were tortured into confessing to the crimes, and one of them tried to commit suicide in prison after an appellate court upheld his sentence. The fingers will be amputated at the base. Under Iran’s Islamic law, the four could have faced the death penalty.

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Congress Continues to Spend Delusional Amounts of Money

reason-debt2

America’s national debt now stands at close to $27 trillion. According to a new report by the Congressional Budget Office, by the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP—and in the following year, this burden will grow to 104 percent of GDP. But its growth doesn’t stop there. Even in the unlikely scenario that spending doesn’t increase, the CBO projects that national debt will weigh in at 107 percent of GDP in 2023. That’ll be the highest level in our nation’s history—higher than during the Great Depression and even higher than its peak during World War II.

Yet nobody in Washington seems to care about this disease of chronic profligacy, and COVID-19 has only made things worse. As economist John Cochrane of Stanford University’s Hoover Institution rightly notes, the pandemic response “resembles a sequence of million-dollar bets by non-socially distanced drunks at a secretly reopened bar: I’ll spend a trillion dollars! No, I’ll spend two trillion dollars! That anyone has to pay for this is un-mentioned.”

A recent CNBC forum confirms Cochrane’s intuition. Former Labor Secretary Robert Reich asserts, “When you have this much unemployment, when you have this much-underutilized capacity; this is the time when the government has got to be the spender of last resort.”

While a few interviewees worry about the long-term impact of the debt, many find comfort in the fact that, with interest rates so low, as long as Uncle Sam does not add more debt to the ocean of red ink we already have, a growing economy should shrink the debt-to-GDP ratio. Also, Keynesian claims about the potency of government spending to spur growth seem easier to make during a recession, when demand is inadequate and wages and prices have a hard time adjusting to the new normal.

As Cochrane notes when writing about those who don’t worry about debt, “Who is to blame them, really? Markets offer 1 percent long-term interest rates. Blowout spending financed by the Fed printing money—which is no different from debt—has resulted in no inflation so far. Faced with the deep concerns of current voters, worry that our children and grandchildren might have to pay off debt is not particularly salient.”

But no one can promise that these conditions will last. For one thing, Congress never reduces spending, even when times are calm and prosperous. Instead, it inexorably hikes spending by more than the taxes that are supposed to pay for it. Ever-larger budget deficits accumulate year after year.

It’s legitimate to wonder if investors will still be willing to lend at 1 percent when the debt is 195 percent of GDP—a level the CBO claims we may be at in just a few decades. Dreamers say that investors will still give us money almost for free, yet nobody can plausibly make such a promise. As we learned during the Greek debt crisis of 2008, today’s low-interest rates don’t prevent tomorrow’s rates from rising fast. The move from low to high rates can happen overnight.

Even if we unrealistically assume that interest rates won’t ever rise again, the scenario remains grim. Additional debt, even at low rates, must be repaid. And more debt means more repayment. Servicing government debt crowds out private spending in addition to the other government spending that people value.

And, of course, even if the debt doesn’t rise, the burden of servicing the current debt will increase if interest rates go up. If both the debt and interest rates rise, the situation could quickly get out of hand.

Even those economists who aren’t worried about our debt today recognize that there will be a point when we should start worrying. But they can’t say exactly when that point will be reached. My question is this: If it’s just a matter of “when” as opposed to “if,” shouldn’t everyone start worrying now, before it’s too late?

Cochrane seems to agree, writing: “We cannot tell when the conflagration will come. But we can remove the kindling and gasoline lying around. Reform long-term spending promises in line with long-run revenues. Reform the tax code to raise money with less damage to the economy. And today, spend only as if someone has to pay it back. Because someone will have to pay it back.”

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Congress Continues to Spend Delusional Amounts of Money

reason-debt2

America’s national debt now stands at close to $27 trillion. According to a new report by the Congressional Budget Office, by the end of 2020, federal debt held by the public is projected to equal 98 percent of GDP—and in the following year, this burden will grow to 104 percent of GDP. But its growth doesn’t stop there. Even in the unlikely scenario that spending doesn’t increase, the CBO projects that national debt will weigh in at 107 percent of GDP in 2023. That’ll be the highest level in our nation’s history—higher than during the Great Depression and even higher than its peak during World War II.

Yet nobody in Washington seems to care about this disease of chronic profligacy, and COVID-19 has only made things worse. As economist John Cochrane of Stanford University’s Hoover Institution rightly notes, the pandemic response “resembles a sequence of million-dollar bets by non-socially distanced drunks at a secretly reopened bar: I’ll spend a trillion dollars! No, I’ll spend two trillion dollars! That anyone has to pay for this is un-mentioned.”

A recent CNBC forum confirms Cochrane’s intuition. Former Labor Secretary Robert Reich asserts, “When you have this much unemployment, when you have this much-underutilized capacity; this is the time when the government has got to be the spender of last resort.”

While a few interviewees worry about the long-term impact of the debt, many find comfort in the fact that, with interest rates so low, as long as Uncle Sam does not add more debt to the ocean of red ink we already have, a growing economy should shrink the debt-to-GDP ratio. Also, Keynesian claims about the potency of government spending to spur growth seem easier to make during a recession, when demand is inadequate and wages and prices have a hard time adjusting to the new normal.

As Cochrane notes when writing about those who don’t worry about debt, “Who is to blame them, really? Markets offer 1 percent long-term interest rates. Blowout spending financed by the Fed printing money—which is no different from debt—has resulted in no inflation so far. Faced with the deep concerns of current voters, worry that our children and grandchildren might have to pay off debt is not particularly salient.”

But no one can promise that these conditions will last. For one thing, Congress never reduces spending, even when times are calm and prosperous. Instead, it inexorably hikes spending by more than the taxes that are supposed to pay for it. Ever-larger budget deficits accumulate year after year.

It’s legitimate to wonder if investors will still be willing to lend at 1 percent when the debt is 195 percent of GDP—a level the CBO claims we may be at in just a few decades. Dreamers say that investors will still give us money almost for free, yet nobody can plausibly make such a promise. As we learned during the Greek debt crisis of 2008, today’s low-interest rates don’t prevent tomorrow’s rates from rising fast. The move from low to high rates can happen overnight.

Even if we unrealistically assume that interest rates won’t ever rise again, the scenario remains grim. Additional debt, even at low rates, must be repaid. And more debt means more repayment. Servicing government debt crowds out private spending in addition to the other government spending that people value.

And, of course, even if the debt doesn’t rise, the burden of servicing the current debt will increase if interest rates go up. If both the debt and interest rates rise, the situation could quickly get out of hand.

Even those economists who aren’t worried about our debt today recognize that there will be a point when we should start worrying. But they can’t say exactly when that point will be reached. My question is this: If it’s just a matter of “when” as opposed to “if,” shouldn’t everyone start worrying now, before it’s too late?

Cochrane seems to agree, writing: “We cannot tell when the conflagration will come. But we can remove the kindling and gasoline lying around. Reform long-term spending promises in line with long-run revenues. Reform the tax code to raise money with less damage to the economy. And today, spend only as if someone has to pay it back. Because someone will have to pay it back.”

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Prisoners Have the Right to Access Court Records in Their Own Cases

The First Amendment generally gives anyone the right to access court records (with rare exceptions when the records can be sealed). But a Louisiana statute limits prisoners’ right to file public records requests, including for court records. That statute has been read (perhaps misread) to limit prisoners’ ability to get the records that reveal how the jury in his case voted. And that’s practically important now that the U.S. Supreme Court has held (in Ramos v. Louisiana) that nonunanimous convictions are generally unconstitutional, and many prisoners will be challenging their convictions on those grounds.

Several months ago, when Ramos was pending, the Louisiana Supreme Court was asked to recognize the prisoners’ right of access in such situations (Logan v. State). And the Marion B. Brechner First Amendment Project, the Pennsylvania Center for the First Amendment, and I filed an amicus brief in support (many thanks to our pro bono counsel, William Brock Most).

Yesterday, the court agreed, and allowed applicant Donald Logan access to the relevant court records. The court’s decision relied on the Louisiana Constitution’s right of access provision (“No person shall be denied the right to observe the deliberations of public bodies and examine public documents, except in cases established by law”) and past Louisiana decisions interpreting the statute, and our brief was based on the First Amendment. (The petition canvassed state law well, and we thought we would focus on the federal question.) Still, we hope that our arguments might have helped push the court in the right direction:

Summary of the Argument

The First Amendment protects the right to access court records. That right belongs to all Americans, including prisoners. While the right can be overcome when necessary to protect prison security or a similar interest, permitting prisoners to access their jury polling information will not undermine security.

Argument

[A.] Mr. Logan Has a First Amendment Right of Access to the Jury Polling Information in This Case

“The public has a common-law and First Amendment right to inspect and copy judicial records.” “The right of access extends to all phases and records of criminal proceedings.” “The public’s access to judicial records ‘serves to promote trustworthiness of the judicial process, to curb judicial abuses, and to provide the public with a more complete understanding of the judicial system, including a better perception of its fairness.'” “[C]ourts of appeals have … recognized a First Amendment right of access to documents filed for use in sentencing proceedings.” The right is equally recognized as to documents related to the trial. See, e.g., Phoenix Newspapers v. U.S. Dist. Ct. (9th Cir. 1998) (“transcripts of hearings conducted during jury deliberations in a criminal trial”), cited approvingly by In re Hearst Newspapers, LLC (5th Cir. 2011).

Under this right of access, every member of the public is presumptively entitled to access court records, such as the jury polling information in this case. Nor is the presumption rebutted here. “The presumption of openness may be overcome by an overriding interest based on findings that sealing is essential to preserve higher values and is narrowly tailored to serve that interest.” McCraney, 99 F. Supp. 3d at 654 (citing Press-Enterprise Co. v. Superior Court, 464 U.S. 501, 510 (1984)). But there is no overriding interest in denying inmates, or anyone else, the results of a jury poll. Keeping this information open will not jeopardize, for instance, the security of prisons, jurors, or witnesses.

[B.] Mr. Logan Has Not Lost This Right as a Result of Being Imprisoned

Mr. Logan should be able to access the jury poll results even if this Court concludes that the First Amendment right of access to court records is more constrained for prison inmates, and “that a prison regulation impinging on” this right “‘is valid if it is reasonably related to legitimate penological interests.'” Mr. Logan’s records request was not denied under a prison regulation enacted by “‘prison administrators'” or “‘prison officials'” ; the U.S. Supreme Court’s concerns about deference to “the day-to-day judgments of prison officials” with regard to “anticipate[d] security problems,” id. (citation omitted), therefore do not apply.

Nor does denying Mr. Logan documents related to the jury poll serve a “legitimate penological” purpose. Prisoners cannot use these documents in ways that exacerbate “disciplinary and security concerns.” The denial is not “expressly aimed at protecting prison security.” The prisoner is not seeking a right of access as a basis for physically going to court, which could create a wide range of penological problems.

The denial does not involve “individualized … determinations” made by a “warden” that the documents are “detrimental to the security, good order, or discipline of the institution” and therefore “create an intolerable risk of disorder under the conditions of a particular prison at a particular time.” Indeed, it is extremely unlikely that these documents would have such detrimental effects, and there is certainly no basis for a general presumption that they would have such effects. See Shakur v. Selsky (2d Cir. 2004) (concluding that an “across-the-board” restriction on [prisoner] free speech rights could not be upheld … because it “may be too broad” and involve “needless exclusions”). Likewise, jury poll results cannot “facilitate criminal activity.”

Instead, access to jury poll results merely facilitates prisoners’ First-Amendment-protected [actions]. Access to court proceedings by the media promotes the media’s Free Press Clause rights (and the rights of the public to receive information). Likewise, access to jury poll results by a prisoner promotes his Petition Clause rights to bring claims on appeal and on habeas review.

More broadly, free speech is constitutionally protected because, among other things, “it furthers the search for truth.” “The right of access to court records” likewise “serves vital purposes” including “to safeguard against any attempt to employ our courts as instruments of persecution, to promote the search for truth, and to assure confidence in judicial remedies.”

The courts in these cases were speaking about the search for truth in public debate. But the courtroom is also a place for search for truth; in a possible future habeas claim brought by Mr. Logan, a court may need to determine the truth of whether Mr. Logan was convicted by a nonunanimous verdict. The search for truth in that case would be advanced by the right of access to court records here.

Conclusion

Mr. Logan may or may not end up having a right to have his nonunanimous conviction set aside under the Sixth Amendment. But he has a First Amendment right to access the records of his criminal trial, records that can help him exercise a future First Amendment right to bring the Sixth Amendment challenge. This Court should agree to hear the case, and reverse the district court’s order denying Mr. Logan access to the documents recording the polling of the jury in his case.

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