Month: June 2018

Just because a law is impossible to follow is not enough of a reason for a court to throw it out. So California’s Supreme Court ruled on Thursday.

On the face the ruling sounds utterly absurd, but there’s a deeper explanation that makes it a little less silly and much more deeply concerning about the deference granted to lawmakers.

Some context: California passed a law a decade ago that demanded gun manufacturers implement microstamping technology that would imprint identifying information on bullets as they were shot from semi-automatic weapons. Gun manufacturers say the technology hasn’t advanced enough to comply with the law. Smith & Wesson announced in 2014 that they would be pulling some guns from the market in California rather than complying with the law (a cynic might theorize that this is the law’s actual intent).

The National Shooting Sports Foundation sued to block the law. California’s Civil Code contains a section that simply reads, “The law never requires impossibilities.” So the question the state’s Supreme Court was addressing was whether the courts can invalidate this law because it is impossible for people to comply with it.

Not only did the California Supreme Court rule that it cannot invalidate the law, but it ruled so unanimously. To be clear: The court does not suggest that people can face punishment for being unable to comply with impossible laws. Instead, the court says, “impossibility can occasionally excuse noncompliance with a statute, but in such circumstances, the excusal constitutes an interpretation of the statute in accordance with the Legislature’s intent, not an invalidation of the law.” Essentially, it’s not unconstitutional to pass impossible laws, but the courts can exempt people from the consequences of those laws without overturning the laws themselves.

Strip away the absurdity, and it’s essentially a very technical ruling. The court acknowledges its role in making sure that people are not punished for being unable to comply with a law because it’s impossible—that would be an unconstitutional violation of a person’s rights. It just can’t use that basis for invalidating the law itself.

This is all of interest because California lawmakers regularly pass terrible laws that interfere with markets and individuals’ choices for the expressed purpose of controlling how the state develops. Often the laws are impractical in the current environment and are designed to push technological development in certain directions that appeal to certain political (and politically connected) constituencies.

The most obvious example is California setting extremely high renewable energy goals by law in order to control how the market develops. It may be currently impossible for the state to get all its energy from renewable sources, but because these laws exist, it necessarily means that the state’s public and private development is going to be deliberately focused in such a way that compliance eventually becomes possible, and then mandatory.

Indeed, Attorney General Xavier Becerra made it clear in his statement praising the ruling that this is entirely the point. Lawmakers pass laws that have currently “impossible” technological standards for the purpose of controlling what the private sector develops and how the private sector is regulated.

“Today’s ruling confirms that California can create incentives for the gun industry to make products that serve the public’s needs,” Becerra said in a prepared response. “Innovation and technology will continue to drive California to be a leader. We will not go backwards. The California Department of Justice is committed to reducing gun violence and improving the ability of law enforcement to fight crime and hold accountable those who commit firearm murders and assaults.”

California is far from alone in the attitude that technological development should be directed to serve political constituencies. The result is that various interests lobby the government to control how these goals are set so that they are likely able to meet them and cash in—and perhaps their competitors are not.

There are costs borne by the public due to these impossible laws. For example, California passed a law in 2006 calling for the state to reduce greenhouse gas emissions significantly by 2020. No, this isn’t an “impossible” law on its face, but the result was a whole host of regulatory and policy changes implemented to make what was impossible in 2006 much more possible in the future. That goal was one of the ways the terrible high-speed rail boondoggle was sold to Californians. The state claimed it would reduce greenhouse gases. Those claims are very dubious, but Californians are still, at the moment, stuck with an expensive, unneeded train proposal that will cost more than $100 billion and won’t be finished for decades. The state’s citizens are getting bilked due to the costs of meeting this arbitrary goal.

And what if some companies are able to innovate to reach these “impossible” goals and others are not? That’s what we’re seeing in the European Union as it implements a vast, confusing data-privacy law that may well end up being impossible for some businesses to comply with. Big names like Google and Facebook—with all their money and lawyers—are able to comply. Smaller businesses are not, or at least it is much more difficult for them to do so. When the government sets impossible goals in order to force businesses to make the government’s future agenda possible, some firms are going to be left behind. It’s another way for the government to choose winners and losers.

Laws that are “impossible” to comply with do, in subtle ways, threaten the livelihoods of citizens as they struggle to adjust to these demands. They do challenge our freedom as citizens by attempting to force markets and innovators to dance to the government’s tune—or the tune of the people with powerful government connections. There’s a saying: “Nothing’s impossible for the person who doesn’t have to do it.” Some of those people have the power to enshrine the impossible as law and leave the rest of us figuring out how to adapt.

A Pennsylvania police officer tased a sitting suspect in the back, and video of the incident is going viral.

A Facebook video shows a man since identified as Sean Williams, 27, on a sidewalk as a Lancaster police officer, identified as Philip Bernot, gives him instructions to sit on the curb.

Bernot can be seen pointing his Electronic Control Device (ECD) towards Williams while he speaks. Bernot tells Williams to put his legs “straight out,” which he does. Bernot then tells Williams to cross his ankles. As Williams begins to pull his legs back, Bernot, who is standing behind the seated man, shoots his ECD into Williams’ back.

“Oh come on, bruh. You’re really going to tase him? He was sitting down,” shouts the bystander who captured the incident on camera. “That’s crazy. That’s why I record everything.”

Lancaster Mayor Danene responded to the incident after the video circulated. Sorace said in her own Facebook video that she was “upset” by the initial video. She went on to say that the use of force was taken “very seriously” and announced an investigation was underway. Sorace also mentioned communication with civil rights groups and confirmed her support for a body camera initiative.

A report from the Lancaster police offers one explanation for the events leading up to the tasing. An Officer Mazzante responded to an initial call in the area about a disturbance. The caller accused Williams of going after them on the street. Mazzante came across a group fitting the caller’s description and told Williams to sit down after he repeatedly told one of the females in the group that he wanted his Social Security card.

Mazzante repeated her instructions “several times” before Bernot took over. The subsequent events were captured on video and posted online.

Emergency medical services followed protocol by performing a check on Williams. Officers took him into custody after finding an outstanding warrant, which charges were listed as “Possession of a Controlled Substance (PCP) and Public Drunkeness.” He was later released on a $5,000 bail.

California Gov. Jerry Brown signed a bill into law Thursday that prevents cities and counties in the state from levying sales taxes on groceries, including soda and other sugary beverages, through 2030.

Sounds great, right? On the surface, yes, but Brown and other Democratic lawmakers in the state weren’t motivated by a desire to protect citizens from excess taxation. Rather, Brown signed Assembly Bill 1838 in an effort to ensure that California localities can keep on increasing other types of taxes.

The bill, which passed with overwhelming support in both houses of California’s legislature, is the result of a compromise between lawmakers and the beverage industry, which was supporting a statewide ballot measure that would have made it difficult for cities and counties to raise all local taxes. Had the ballot measure passed, local tax increases would have needed the approval of two-thirds of voters rather than just a simple majority.

In a signing statement addressed to the California State Legislature, Brown assured lawmakers he understands that soda taxes “combat the dangerous and ill effects in the diets of children,” but indicated he had no choice in the matter. Just four cities in the state are currently passing soda taxes, he wrote, while indicating that the tax initiative had the potential to affect all 482 cities in California.

He also noted that the ballot measure would have restricted “the normal regulatory capacity of the state by imposing a two-thirds legislative vote on what is now solely within the competency of state agencies.” Such a restriction, Brown believes, “would be an abomination.”

The ballot initiative, which was formally withdrawn within minutes of Brown signing AB-138 into law, would have had a significant impact on local tax increases. According to California’s nonpartisan Legislative Analyst’s Office (LAO), about half of local tax measures approved by voters since 2012 did not receive two-thirds support. Those measures have raised hundreds of millions of dollars in tax revenue each year, the LAO said.

The initiative did have some support in the state legislature, particularly among several Republicans who weren’t happy it was withdrawn and didn’t think AB-1838 was a particularly good compromise.

“This bill tells one million people that signed this petition to make it harder to raise their taxes that their voices don’t matter,” said state Sen. Jeff Stone (R–Temecula), according to the Los Angeles Times.

Assemblyman Matthew Harper (R–Huntington Beach), blasted Democrats who voted in favor of AB-1838 even though they support soda taxes. “Don’t cry your crocodile tears at me,” Harper said.

Indeed, there were many Democrats who said publicly they didn’t like AB-1838 but ultimately voted yes on the measure.

“I think this is a terrible decision that we’re making,” said Assemblyman Kevin McCarty (D–Sacramento), who still supported the bill.

“What on Earth has happened here?” said Assemblyman Richard Bloom (D–Santa Monica), who also voted yes.

State Sen. Scott Wiener (D–San Francisco), couldn’t bring himself to support AB-1838, but said he understood many of his colleagues felt like they had to do so. He claimed the beverage “industry is aiming basically a nuclear weapon at governing in California and saying if you don’t do what we want, we’re going to pull the trigger and you are not going to be able to fund basic government services.”

“This is a pick-your-poison kind of situation, a Sophie’s choice. What the legislature is doing is perfectly reasonable,” Wiener added, according to The Sacramento Bee.

In essence, Brown and other lawmakers supported AB-1838 because they didn’t want to give taxpayers a bigger say in government. The result is passage of a bill that no one seems to actually like.

Government workers tasked with taking prohibited e-scooters off Nashville’s streets have been caught riding them instead.

Nashville’s NBC affiliate WSMV aired surveillance footage yesterday of employees from the city and county’s shared Metro Public Works department having a grand old time riding confiscated e-scooters in a Metro-owned parking lot while on duty.

Now, it’s certainly hard to fault anyone for enjoying themselves on these e-scooters, which are owned by scooter company Bird. They’re a breeze to ride. But Metro employees doing so is a bit awkward given the agency’s aggressive crackdown on these same vehicles.

In May, Bird launched in Nashville, dropping hundreds of their dockless e-scooters in and around the city’s downtown. One day later the company was hit with a cease and desist letter from Metro attorney Theresa Costonis demanding that the scooters be taken off public sidewalks until a permitting and regulatory framework could be put in place.

Costonis expressed shock and dismay at the idea that Bird hadn’t asked for permission before they littered their scooters all over town, telling the Tennessean, “This is completely new and we didn’t know this was coming. We don’t have anything in place that would allow them to have started operating right off the bat.”

What followed was a sweep of Nashville’s streets that saw Metro impound over 400 of Bird’s scooters on the grounds that they were unlawfully obstructing public rights-of-way.

Bird’s own legal counsel Sam Jackson said Metro was “grossly exceeding” its authority with these sweeps, arguing that the city’s code governing right-of-way obscurations only deals with fixed objects like signs, trees, and banners. Seizing the company’s property without a court order was “unconstitutional” said Jackson. In early June the company agreed to suspend its operations while the city drafts regulations for dockless e-scooters. Currently there are no Bird scooters on the streets of Nashville.

Metro has stressed that its employees’ joyriding was an isolated incident that would not be repeated.

“These were unanticipated and unique circumstances,” the agency said in a statement adding that “we have spoken with the employees and they have assured us that nothing like this will happen again.”

The stern warning is nice. What would be better still is if the agency would stop its crackdown and allow Nashville residents—government workers and private citizens alike—the same freedom to ride clearly irresistible e-scooters.

Back in November of 2016, President-elect Donald Trump’s nominee for Treasury Secretary, Steven Mnuchin, announced that the privatization of Fannie Mae and Freddie Mac would be a “top 10 priority” for the new administration.

Eighteen months later, the Trump administration has finally outlined a plan to reshape the two government-backed mortgage firms. But, like other aspects of the administration’s recent proposal to overhaul the federal government, the suggested reshaping of Fannie and Freddie doesn’t go nearly far enough.

“It’s not removing government from the housing sector; it may shift government subsidies from Fannie and Freddie to other entities, but that’s it,” says John Berlau, senior fellow at the Competitive Enterprise Institute.

While the Trump administration’s plan does advocate terminating the conservatorship of Fannie and Freddie, the proposal would also permit new firms to apply for the same type of charter, creating an environment where many more of these corporations might proliferate, bankrolled by the government. More importantly, the proposal does little to ameliorate the “affordable housing goals” that lend themselves to dangerous lending policies.

“They’re saying they will make the implicit support for the GSEs explicit,” says Berlau. “It’s going to be something the government commits to and taxpayers are going to be on the hook for.”

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs)—that is, corporations created by an act of Congress—that purchase mortgage loans on the secondary market from banks, which they generally sell to investors in the form of mortgage-backed securities. While these GSEs don’t engage in the business of loaning themselves, they put money back into the hands of the bank to engage in more lending, often more than would be permitted under general market conditions.

They can do that because their securities are considered low-risk, like government bonds. They hold a multi-billion dollar line of credit with the U.S. Treasury, essentially guaranteeing taxpayer bailouts to these corporations in the event of another economic downturn.

By artificially boosting mortgage lending, Fannie and Freddie inflate home prices, and—largely thanks to the political pressures—encourage banks to lend to borrowers more likely to default. Those factors played a role in the mortgage crisis that triggered the 2008 financial collapse.

In the wake of that economic catastrophe, the federal government took Fannie and Freddie into conservatorship. It now backs even more mortgages than it did before the financial crisis. If another mortgage crisis hits, Fannie and Freddie might need $100 billion in new bailout money, according to a stress test conducted by the Federal Housing Finance Agency.

The solution to problems created by Fannie Mae and Freddie Mac isn’t simply restructuring government programs, but instead completely eliminating them. In a recent piece for Forbes, Heritage Foundation Research Fellow Norbert Michel described the dangers of the GSEs: “The legacy of the GSEs, as it would be with any such private-public partnership, is crony capitalism, higher mortgage debt, higher home prices, taxpayer bailouts, and no appreciable expansion of homeownership.” Trump has a historic opportunity to affect real change in a sector that’s been devoid of sensible reform for a long time.