Featuring Reason's Nick Gillespie and Michael C. Moynihan, with guests Sallie James and Sam MacDonald
Why the Supreme Court endorsed unreasonable searches and seizures
The Bill of Suggestions
Why the Supreme Court endorsed unreasonable searches and seizures
Steve ChapmanOne reality of 21st-century religion is that many people treat the Ten Commandments as the Ten Suggestions, to be modified or ignored without penalty. That same spirit has infected the Supreme Court, which last week contemplated an abuse of the Bill of Rights, rolled its eyes and said: Oh, what's the big deal?
Bennie Dean Herring had gone to a sheriff's impoundment lot in Coffee County, Ala., to get some things out of his truck. A suspicious investigator checked with officials of a neighboring county to see if the ex-convict had any outstanding arrest warrants and was told he did. The investigator arrested Herring and found him in illegal possession of drugs and a gun.
But it turned out there was a problem with the arrest warrant. It had been canceled months before but was never deleted from the database. So when Herring was indicted on drug and weapon charges, his lawyer asked for the evidence to be thrown out because it came from an arrest that the sheriff had no right to make.
When presented with these facts, the Supreme Court reached two conclusions. The first was that everyone agreed the cops had violated Herring's rights. The second was that it was his tough luck. Never mind the Fourth Amendment, which forbids unreasonable searches and seizures—he's guilty and he's going to jail.
This decision creates a new exception to the exclusionary rule, which bars evidence police obtain through an illegal search. The prohibition was meant to foster respect for constitutional requirements by giving law enforcement agents a disincentive to violate them. But Chief Justice John Roberts and four of his colleagues are happy to excuse some violations.
The exclusionary rule, said the court, "serves to deter deliberate, reckless or grossly negligent conduct, or in some circumstances recurring or systemic negligence. The error in this case does not rise to that level." On the contrary, wrote Roberts, it was but a trifle, "the result of isolated negligence."
Of course the error did rise to a fairly significant level—since it deprived Herring of a freedom considered vital enough to be enshrined by the nation's founders. The Constitution doesn't say the government may not violate these rights except through isolated negligence. It says the government may not violate them, period.
Rights need constitutional protection because governments have a tendency to ignore them. But it takes more than a parchment dictate to force the authorities to do what they are supposed to do. It takes penalties that make violations painful to the violator.
That's where the exclusionary rule comes in. Police face constant temptations to break the rules to nab villains and put them in jail. But this rule goes far to discourage them. Violate a criminal's rights, and he may go unpunished.
That wasn't always the case. In the old days, cops paid little attention to the Fourth Amendment because they had nothing to gain by respecting it. Only when they had to pay a price for overstepping did they develop a sudden interest in staying on the right side of the constitutional line—to the benefit of the innocent as well as the guilty. Wonder of wonders, police departments actually began training officers in how to comply with the Fourth Amendment.
After the Supreme Court imposed the rule on states and cities in 1961, New York's deputy police commissioner acknowledged as much. "Before this, nobody bothered to take out search warrants," he said. "[T]he feeling was, why bother?"
Anyone in charge of maintaining databases of arrest warrants may now be asking the same question. In fact, the court's decision creates an incentive for poor record-keeping. If Herring's warrant had been purged promptly, after all, he could not have been searched, and he would have gotten away with his offenses.
That may seem too high a price to pay. But the real objection is not to the exclusionary rule—it's to the Fourth Amendment, since if his rights had not been violated, he would have gone free. The tradeoff between catching criminals and protecting privacy is not a daffy invention of activist liberal judges. It was the framers' whole point.
But the Supreme Court says it's fine for the government to profit when it deprives citizens of their constitutional rights through incompetence or sloth. That's like telling teenagers it's OK to get pregnant, as long as it's not on purpose.
Getting back on track
The inauguration
Getting back on track
Barack Obama is poised to become president, bolstered by enormous public goodwill
THE Bush era, with all its calamities and blunders, is over. Barack Obama has ridden his train to Washington, DC, and is ready to swear the oath of office on Abraham Lincoln's own bible at noon on Tuesday January 20th. Then Americans will start to see what kind of a president they have chosen as the 44th occupant of the office.
To an astonishing degree they seem willing to give him the benefit of any possible doubt. Mr Obama's polling numbers have reached stratospheric levels. According to a Washington Post-ABC News survey, 80% of people now have a favourable impression of Mr Obama, a figure that has been steadily increasing since his election in November. It is the highest figure recorded for an incoming president for 30 years, according to another poll. It compares well even with George Bush's 90% patriotism-fuelled rating in the wake of the September 11th attacks, although Jimmy Carter racked up high numbers when he came to office in 1977 backed by a wave of hope that a previously-unknown president could clean up the mess left behind by disgraced Republicans.
Mr Obama's numbers seem the more remarkable given the large proportion of people who say that they do not expect to see quick results. Fully two thirds of them, according to a New York Times/CBS poll, do not expect to see much progress in the economy in the next two years, and more than half doubt there will be much progress on health-care reform, or an end to the war in Iraq, in that time. Yet these were Mr Obama's three main campaign promises. On the other hand, 61% of them expect the country to be in better shape in five years' time. This ought to imply a fairly long honeymoon period, if only because the economic disaster now befalling America is so strongly felt to have been caused by Republican high-end tax-cutting, free trading and indulgent regulation of Wall Street.
So Mr Obama takes office with a high degree of trust. His transition has been impressive, despite a number of missteps. The latter include the embarrassing withdrawal of a poorly-vetted Governor Bill Richardson from his attempt to become commerce secretary, a kerfuffle over the appointment of the new CIA head (who has no experience of intelligence work) and the latest glitch, surrounding the tax affairs of treasury secretary-designate Tim Geithner. Having served in the Senate as one of its most liberal members, Mr Obama has neatly repositioned himself as a centrist by appointing a team that even a majority of John McCain's voters appear quite comfortable with.
But the fact remains that voters have short memories, that honeymoons have to end, and that Mr Obama has made some very specific promises. He talks of “creating or saving” no fewer than 4m jobs and of completing a withdrawal from Iraq within 16 months of taking office: the clock is about to start ticking.
If the recession continues to get much worse, and shows no signs of recovery after say a year, or if his plans for health reform get too obviously bogged down in Congress (as Bill Clinton's did: and he had solid Congressional majorities of similar dimensions to Mr Obama's), the public may well turn out to be quite a bit less forgiving then they now tell pollsters.
Mr Obama has skilfully worked with the new Congress, even before his inauguration, to get the second $350 billion tranche of the TARP released, and plans are progressing with the $800 billion two-year stimulus package he is after. But what if even this trillion-dollar effort doesn't work? There must surely be a limit to how much even a Democratic president can ask from a Democratic Congress. The midterms, after all, are less than two years away.
And much though he may hope to concentrate all his energies on domestic policy (as did Mr Clinton and Mr Bush both when they were inaugurated: remember “it's the economy stupid” and “compassionate conservatism”?) foreign affairs will intrude. A truce has been declared in Israel's war in Gaza, but the smouldering conflict is not over and the legacy of the latest fighting will be bitter. Atomic scientists are predicting that Iran will have acquired enough fissile material for its own bomb by the end of this year. Russia is again turning grumpy. Mr Obama's inauguration will be a high moment of hope; and the dozens of inaugural balls taking place on Monday and Tuesday night will be fun for everyone, if exhausting for the new president. On Wednesday, the hard work begins.
The year of living dissidently
Dissent in China
The year of living dissidently
For the government and its critics, a calendar mined with sensitive anniversaries
THE months ahead will be busy for Chinese dissidents. A string of sensitive anniversaries will evoke numerous petitions calling for political change. In December more than 300 of the country’s most prominent activists issued a wide-ranging appeal for democratic reform. On January 12th a group of them were at it again, no less quixotically, with a demand for a boycott of national state-owned television.
As China’s economic growth falters and unemployment rises, political activists—marginalised during the past few years of prosperity—will become a bigger worry to the government. The 20th anniversary on June 4th of the quashing of the Tiananmen Square protests will be the highlight of the dissident calendar. For Tibetans it will be the 50th anniversary on March 10th of an uprising that led to the Dalai Lama’s flight into exile in India. Followers of Falun Gong, a quasi-Buddhist sect, will want to mark the tenth anniversary on July 22nd of its banning. Ever fearful of instability, the government will be especially anxious to quell dissent in the build-up to celebrations on October 1st of 60 years of Communist Party rule.
Dissidents can take some pride in their first salvo of the season. Their petition, known as Charter 08, which they issued online in early December to mark the 60th anniversary of the UN’s Universal Declaration of Human Rights, was initially signed by 303 intellectuals. They included a wide range of lawyers, journalists, academics and activists. Organisers say that thousands more have added their names (by sending their details to an e-mail address), although the identities of many of them are difficult to verify.
Charter 08’s name was intended to recall that of Charter 77, a human-rights manifesto circulated by dissidents in Czechoslovakia in 1977. The Chinese version called for everything from private ownership of land to multiparty democracy. It said social tensions were building up and the number of protests was rapidly increasing, “indicating a tendency towards a disastrous loss of control”. Democratisation, it said, could “no longer be delayed”.
The authorities disagree. They quickly detained the chief organiser, Liu Xiaobo, a veteran Beijing activist, and threatened or questioned dozens of other signatories. Chinese internet-service providers removed postings about the document. A blog-hosting service, Bullog, home to several personal sites supportive of the charter, was shut down. A search in Chinese for the words Charter 08 on Google’s Chinese search engine now produces only a standard warning that “according to local laws, regulations and policies, some results have not been displayed”. Dai Qing, a prominent author and signatory, says the charter is unlikely to galvanise the public now that many cannot find it online to read.
The call for a boycott of the state broadcaster CCTV suggests some dissidents have not been deterred. Among the 22 people who signed the petition are seven, including its drafter, Ling Cangzhou, from Charter 08’s first group of signatories. The petition accuses CCTV of playing down reports about protests and other negative news. It mentions a CCTV report broadcast in September last year praising the quality controls on milk-powder production by Sanlu, a leading dairy company. Sanlu was revealed just a few days later to have been selling tainted baby formula that caused thousands of infants to fall sick.
The contaminated milk scandal, in which many other Chinese milk producers were also implicated, heightened public suspicion of officialdom just as concerns were beginning to grow about the impact on China of the global financial crisis. With a total of nearly 300,000 children affected by the milk, the government feared unrest. On January 1st police in Beijing detained five parents of sickened children for several hours, apparently to stop them holding a press conference to complain about compensation arrangements.
Officials allowed the press little access to the trial on December 31st of Sanlu’s boss, Tian Wenhua, and three other executives. Press reports say Ms Tian might be sentenced this week. Several officials have lost their jobs in connection with the scandal but none has been taken to court. Xu Zhiyong, a Beijing lawyer, says courts have ignored collective lawsuits he has filed on behalf of affected families. He is now planning to bring their cases to the Supreme Court. One of Mr Xu’s aides speculates that the government, anxious to put the tainted-milk affair behind it, wants families to accept out-of-court settlements.
Even the official media have given warning that 2009 could be troubled, as the economy wobbles. Liaowang, a weekly magazine, quoted a senior journalist as saying that China was entering a “peak period for mass incidents” (the usual official euphemism for protests and riots). The authorities, he said, could be tested by “even more conflicts and clashes”.
But few—even among dissidents—envisage upheaval on the scale of the pro-democracy protests in 1989. Hu Xingdou of the Beijing Institute of Technology says the public appetite for rapid political change still seems low. This month China’s police chief, Meng Jianzhu, said that as long as Beijing was stable, the whole country would be stable. To mark the anniversary festivities of the founding of the People’s Republic, the authorities will pull out every stop to ensure a trouble-free capital.
document.write(' Should the Government Bail Out Newspapers?
Should the Government Bail Out Newspapers?
What started last year as something of a joke from the "tongue & check" department at Business Week, and a supposedly outlandish column by Michelle Malkin, has now become a reality: the state of Connecticut is seriously considering a rescue package for The Bristol Press. Can the nation's premier junk-bond newspaper, The New York Times, or The Chicago Tribune—already in bankruptcy court—be far behind?
With a private property-based economy, each person is ultimately the judge of the truth. Particular newspapers and other information services, particular schools and universities, and even particular artists and entertainers are supported or not supported depending on their ability to secure an audience. To be sure, one's "audience" need not constitute a majority and might only be a few. As John Stuart Mill taught, consideration of alternative ideas should neither be limited by the tyranny of the government nor by the tyranny of an overly orthodox social majority.
The intellectual elite have always hated the marketplace of ideas and have desired government support for the arts, entertainment, and news media. Because they are dissatisfied with the size of the audience that their chosen media gain in the marketplace, they have sought the official sanction of the government, its imprimatur. With the silly notion that the expression "freedom of the press" refers only to newspapers and not to other media, they have gradually chipped away at the separation of information and state through such organizations as the NEA, NEH, PBS, and NPR.
Of course, the real assault on freedom of thought — and its counter parts freedom of speech and freedom of the press — began with public schools and state universities. Initially, it was thought that local control would be a sufficient safeguard against the use of public schools for political indoctrination, and that "academic freedom" would likewise undergird state universities. But, with the increasing centralization of education, we are seeing those protections erode.
The assault on freedom of thought is seen in environmental politics. Those who oppose the enactment of the "command and control" of the economy in order to save the earth are described as "deniers," even though there is no consensus within the emerging field of climatology that human activity contributes to harmful global warming. The equivalent retort would be to describe the advocates of carbon-regulation as "alarmists;" yet, it is antithetical to freedom of thought to describe either side in such pejorative terms.
This assault is also seen in redistributionist politics, where, e.g., opposition to national health insurance is viewed as immoral, and we are told that we who are productive "owe" this, among other things, to others. It is seen in interest-group politics, where, e.g., you are called a racist, anti-Muslim, a sexist and/or a homophobe unless you follow the left-wing agenda on whatever issue is at hand.
Government support of newspapers — even more so than government support of industries — undermines political freedom because it means that there is little independent information available to people with which to form opinions. Without freedom of the press, along with the panoply of other civil liberties, democratic government loses its legitimacy.
It is almost inevitable that once the government starts picking out which industries to support, it will start picking which newspapers to support. One thing follows the other: Hayek called this the road to serfdom. Promising ethanol subsidies in Iowa and bailing-out the heavily unionized automobile industry of Michigan, almost every Congressman and Senator is scurrying about to secure pork-barrel spending for their district. Whole cities, and soon entire states will be kept afloat only because of various federal programs. All of these things remove the force of the marketplace to direct human action to the service of others, and replace it with the coercive power of the state. All of these things deny the true desires of people — as revealed in market prices — and substitute the opinions of the elite and politically-powerful for the true desires of people.
The Minimum Wage
The Minimum Wage, Discrimination, and Inequality
One of the things that first attracted me to economics is that its logic leads us sometimes to counterintuitive conclusions. A perfect example of this is the regulated workplace. The minimum wage raises incomes for some workers and lowers incomes for others. Workplace safety regulations advantage those who are very risk averse at the expense of those who are willing to accept higher risks in exchange for higher incomes. Laws against "child labor" benefit the relatively well off at the expense of the needy.
The tragic irony of the regulated workplace is that it most adversely affects those on the margins of society. Beyond their disemployment effects on those whose labor is rendered submarginal by regulations on wages and working conditions, regulations in the workplace also exacerbate and perpetuate inequities that would otherwise be mitigated by the market process.
Racism and sexism have been ugly facts about the human social environment since time immemorial. Commentators and critics hypothesize that members of the dominant cultural and ethnic group have advantages stemming from their membership in the dominant ethnic group or socioeconomic class.
I'll use myself as an example. As much as I would like to pride myself on having worked hard to get where I am, my skin color, cultural/religious background, and relatively stable upbringing made for a much less bumpy road to travel than that traveled by those who are less fortunate than I.
It does not follow from this that well-intentioned government intervention that aims to raise wages by legislative fiat is an appropriate corrective. Tragically, a higher minimum wage and workplace-safety regulations are likely to exacerbate rather than mitigate social inequalities by removing the penalties that discriminatory employers would have to pay in a competitive market and by eliminating an important margin on which disadvantaged groups could compete.
When people aren't allowed to compete on the basis of price, quantity, and quality, firms can discriminate on the basis of something other than productivity.
A racist employer would suffer a penalty (lower profits than his competitors) if he insisted on indulging a "taste for discrimination" in a competitive market. When prices are fixed, and labor conditions are set by law, that same employer can indulge his racist preferences without receiving his capitalist comeuppance.
Further, the higher minimum wage takes away a possible advantage for historically disadvantaged groups, and we can illustrate this with a thought experiment that I use in economics 101. Imagine that two people apply for a job at a fast-food restaurant. The first is Crackhead Carl, a middle-aged African-American male who was just released from jail, where he had spent the last few years after stealing from a former employer. Carl has seen the light, or so he claims. He has gotten off the drugs, has seen the error of his ways, and sincerely wishes to better his position in spite of having made a gigantic mess of things.
The second applicant is Tad Vanderbilt Rockefeller, a flaxen-haired white teenager from an affluent suburb who parks his BMW, breezes through the door in an Armani suit, and flashes a perfect smile as he fills out a job application with his monogrammed fountain pen. His references are impeccable. So who gets the job?
The answer is, "it depends."
Carl knows that he needs some way to convey his sincerity and fidelity to a prospective employer, and having shredded his credibility through a life of riotous living, people who want to give him the benefit of the doubt nonetheless remain skeptical even though he promises that this time, things will be different. In an unregulated market, Carl could accept lower wages or relatively riskier working conditions in order to compete with Tad.
When wages and working conditions are heavily regulated, however, the law cuts off Carl's ability to compete. In all likelihood, Tad would get the job and Carl would again be shoved out onto society's fringes. One of the unintended consequences of the minimum wage and workplace regulations is that they perpetuate inequality.
One might respond that what Carl needs is education, not a dead-end job mopping floors at McDonald's. This may be true, but many valuable skills that are learned in the workplace cannot be learned in a classroom. It is the development of this tacit knowledge and these valuable skills that Carl misses out on by being regulated out of the workplace.
In this case, the choice was pretty clear. Tad appears to have been a less risky choice than Carl whether the employer is a racist or not. But racism is an entrepreneurial error, and one that should be quickly punished in the marketplace. With restrictions on the way the labor market functions, the entrepreneurial error (and moral abomination) that is racism can go uncorrected.
Milton Friedman openly argued that minimum-wage laws are racist in effect if not intent; in the early 1960s, he pointed out that, as a result of higher minimum wages, black teenage unemployment was much higher than it would otherwise be. Denied the opportunity to earn incomes and to acquire valuable skills, those adversely affected by the minimum wage were not allowed to share in the general prosperity that a market economy produces. Empirical evidence reported by economists David Neumark and William Wascher suggests that among the long-run effects of minimum wages are lower degrees of educational attainment, less on-the-job training, and lower lifetime earnings.
In The Fatal Conceit, F.A. Hayek said that "[t]he curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
In an imperfect world, we suffer from a "fatal conceit" when we imagine that we can make justice roll down like waters and make righteousness like an ever-flowing stream just by passing laws that say "make it so." Indeed, laws like this will more often than not make justice and righteousness roll more slowly by perpetuating the inequalities that have historically worked against disadvantaged groups.
Mugging Bank of America
Mugging Bank of America
No good financial deed goes unpunished.
So much for being a good corporate citizen. Bank of America CEO Ken Lewis earned kudos last year for stepping into the breach when the mortgage market and Wall Street cratered. BofA's purchase of Countrywide Financial and its September agreement to buy Merrill Lynch offered a welcome dose of optimism and private capital amid the panic.
In December, Mr. Lewis realized that he had been too optimistic. And when he considered breaking off the Merrill engagement, Washington arranged a shotgun wedding. After BofA shareholders approved the Merrill purchase on December 5, Mr. Lewis saw Merrill's assets plunge in value and began to explore a way out. At least he wanted a better price given the erosion in Merrill's real estate and corporate portfolio.
Mr. Lewis's effort to protect his common shareholders was vetoed by his most important shareholder, the feds. In October the U.S. Treasury had insisted on investing $15 billion in his bank. Come December, Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke told him that Merrill had to be saved, and that BofA had to be the savior. Mr. Lewis said yesterday that the government was "firmly of the view" that canceling or delaying the Merrill deal might result in "serious systemic harm."
In other words, the feds believe that the way to calm financial markets is to force the nation's largest, and a heretofore healthy, bank to swallow toxic assets it didn't want. In return, yesterday the Treasury agreed to invest $20 billion in BofA, for which the government will receive preferred shares paying 8%. Treasury, the FDIC and the Fed will also partially insure $118 billion in troubled assets -- mostly Merrill's. In return for this downside protection, BofA will have to render unto Caesar another $4 billion of preferred stock plus warrants.
These preferreds will also pay 8%, but private shareholders are not so fortunate. The agreement limits quarterly common stock dividends to a penny a share. The Charlotte bank will also have to accept new executive compensation limits. And the bank will need to submit for government approval a plan to modify troubled mortgages.
Mr. Lewis doesn't seem thrilled that the government has a larger piece of his business. When asked yesterday when the bank might escape federal ownership, he replied, "I wish I knew," and then added, "clearly as soon as possible." Bank of America investors, who've taken a beating since the Journal reported on Merrill's latest troubles and the government "rescue," would surely agree. BofA shares fell 14% yesterday. If the feds really want to attract private capital to the banking system, this isn't the way to do it.
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