From the Archives: Policy analyst James Gattuso discusses problems with Net Neutrality – Part II

Policy analyst James Gattuso discusses problems with Net Neutrality – Part II
January 24, 2011 12:15 AM MST

In a January 11 interview with the Charlottesville Libertarian Examiner, James Gattuso – who is a senior research fellow in regulatory studies at the Heritage Foundation in Washington, where he focuses on communication policy – spoke about the Federal Communications Commission’s recent ruling on so-called “Net Neutrality.”

Gattuso argued that the new rules were at odds with efficient economic operation of the Internet and also that they were based on “flawed” claims of legal authority by the FCC.

He also predicted that Congress will take action to reverse the FCC's ruling.


Congressional Review Act
One avenue will be the Congressional Review Act, which was passed in 1996 and allows Congress to overrule executive branch regulations.

Another possibility, Gattuso said, is “standalone legislation to reverse the FCC’s decision and strip them of authority to act in the future.”

This could face a hurdle, however, because Net Neutrality rules have “been a priority item for president Obama and he can veto any such standalone bill.”

He suggested that a “much more potentially winning strategy is going to be the funding approach, where they will put on an appropriations rider prohibiting the FCC from using any funds to enforce this rule.”


Threat to the First Amendment

James Gattuso (c) 2011 Rick Sincere

Finally, Gattuso expressed his concerns that the FCC’s new rules could have negative implications for freedom of expression now protected by the First Amendment.

“The rules as written by the FCC ban ‘unreasonable discrimination,’” he said. “They use the word ‘reasonable’ quite a bit in the rules, which ultimately means the FCC will have discretion to decide how content can be treated on the web, what can be given priority, and what must be given priority.”

This means, he added, that “whenever a company has a plan for treating one group of content different from another or even treating it the same as another, the FCC can say ‘yes’ or ‘no.’”

That will put the FCC “inevitably into the business of deciding what speech is valuable, what speech is important, and which speech is favored.”

That, Gattuso concluded ominously, is “a dangerous path.”

Publisher's note: This article was originally published on Examiner.com on January 24, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Policy analyst James Gattuso discusses the problems with Net Neutrality – Part I

Policy analyst James Gattuso discusses the problems with Net Neutrality – Part I
January 24, 2011 12:03 AM MST

When the Federal Communications Commission issued rules regarding Net Neutrality in December 2010, it set off a debate about the value and legitimacy of those regulations.

Earlier this month, the Charlottesville Libertarian Examiner had an opportunity to interview James Gattuso, senior research fellow in regulatory policy at the Heritage Foundation in Washington. Gattuso had addressed a group of Virginia political activists in Richmond about the FCC’s new rules.

Gattuso summarized his remarks by saying that “the FCC last month adopted rules to regulate the Internet. They’re vague rules but, I think, very detrimental rules to society and the economy.”


‘Vague notion of fairness’

The argument for these rules, he said, “is essentially a vague notion of fairness,” which posits that “ISPs -- companies like Verizon and Comcast, which provide Internet service to individuals and businesses -- should treat all traffic the same, with no differentiation between how the speed or quality with which they’re delivered.”

This, he went on, is a “tempting idea but ultimately flawed.”

It is flawed “because for practical purposes there’s always been and needs to always be differentiation” in services regardless of what kind of business is under discussion.

Moreover, Gattuso said, “the idea of premium services and discount services is inherent to a marketplace. I can’t think of a single industry that does not use premiums and discounts. It’s an economic tool that’s beneficial to consumers.”

Premiums and discounts, he continued, are “necessary to the success of the Internet itself.”

No legal authority

Gattuso also argued that the FCC lacks the legal authority to issue Net Neutrality regulations.

James Gattuso (c) 2011 Rick Sincere

The FCC gets its authority from the Communications Act of 1934 and many subsequent amendments, he said. This law “gives the FCC authority over broadcasting. It gives the FCC authority over the telephone system, but it does not give authority anywhere in the text [for] regulating the Internet.”

To get around this lack of legal authority, Gattuso noted, “the FCC has argued in the past that it has what is known as ‘ancillary jurisdiction,’ which means if they regulate something that is similar to the Internet, they can regulate the Internet itself.”

The problem with this position, however is that the claim “was thrown out in a case in federal court last April, without much ceremony. It was not taken seriously by the court, nor should it have been,” said Gattuso.

However, he added, “with this December decision, the FCC is coming back again with a very similar argument, this time based upon a particular section [of the code] that was meant to be deregulatory.”

In that section, “Congress instructed the FCC to act to encourage development of advanced Internet services. This was a provision that was meant to instruct the FCC to deregulate, to reduce barriers, to advance Internet services if they are not being deployed.”

What the FCC is claiming now is that this deregulatory provision of communications law is “in fact a new grant of authority that they did not otherwise have, mandating them to regulate.”

This, Gattuso concluded, is “a complete reversal of what Congress intended and, ultimately, also legally flawed.”

In Part II of this interview, James Gattuso talks about what the congressional response might be, and whether Net Neutrality is a threat to freedom of expression.


Publisher's note: This article was originally published on Examiner.com on January 24, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Higher gas prices won’t change American car culture, says transportation expert

Editor's note: One of the repercussions of Hurricane Harvey (and, to a lesser extent, Hurricane Irma) has been a spike in gasoline prices, by about 50 cents per gallon across the country (30 to 45 cents higher in the Charlottesville area). This seems like a good time to revisit the topic of fuel's price elasticity. This article from 2011 sheds light on the issue.

Higher gas prices won’t change American car culture, says transportation expert
May 25, 2011 4:42 PM MST

Higher gasoline prices will not fundamentally affect the travel habits of Americans, asserts transportation expert Alan E. Pisarski, author of the “Commuting in America” series for the National Academy of Sciences.

Pisarski spoke to the Charlottesville Libertarian Examiner immediately after giving a presentation on livability and transportation issues at the Heritage Foundation in Washington on May 20.

$4 a gallon ‘sounds scary’

While four dollars a gallon “sounds scary,” Pisarski explained, that “is actually about the same as we were paying in 1980 -- even less if you take into [account] things like wealth and fuel efficiency.”

Even if gas prices move higher than that, “the benefits that people gain from the automobile are not really going to change,” he said. People will make minor accommodations to account for the higher prices, “but the fundamental change in the society will be trivial.”

As an example, Pisarski pointed out that the “last time we almost doubled the price of gasoline, in 2009, we had a three-and-a-half percent decline in travel.”

Virginia commutes

In his presentation, Pisarski had noted that Virginians commute to work outside of their home counties at a rate double that of the national average – about 52.1 percent travel outside their counties, compared to 27.4 percent nationwide. What accounts for that?

“One of the things that really matters,” he said, “is the fact that because of government, there’s a tremendous integration of activity, so people traverse long distances from their homes to their work sites. You see much more interaction between counties, in an economic sense, than you do in most other areas of the country.”

Arlington County, for instance, "exports" 80,000 workers each day and "imports" 130,000. In other words, only 33 percent of its workers stay in the county even though Arlington has 1.4 jobs per worker. In Fairfax County, to give another example, 50 percent of workers stay in the county for their jobs while 50 percent leave.

While it may seem like Northern Virginia – the suburbs around Washington, D.C. – skew the rate upward, the phenomenon is statewide. There are only two or three counties in the whole state, Pisarski explained, “that don’t send the majority of their people to another county to work.”

In fact, he added, “it’s more extensive in the rural counties” and exurban counties that are “two and three counties out from the metropolitan area,” and from those places, Virginians commute to metropolitan Richmond or metropolitan Washington.

Pisarski noted that the state that comes in second in this category is Maryland, which is also affected by the government jobs and economic activity generated by Washington, followed closely by Pennsylvania.


Livability and local budgets

Alan Pisarski

The theme of Pisarski’s presentation at the Heritage Foundation was the new emphasis on “livability” in the housing and transportation policies of the Obama administration. He said that “livability” is a “nonce word,” which has different meanings – and sometimes no meaning at all – depending upon who is using it and in what context.

“Those words come in and out of favor,” he explained, but the emphasis on livability comes from “the pressure on local governments to come up with money. This is another way for them to argue for what they see is their share, whether its of state money or federal money” to supplement their budgets to pay for community concerns, whether to solve traffic problems, improve neighborhoods, or build bike paths.

“These things” that local governments desire, Pisarski said, “are not unattractive or undesirable or even inappropriate.”

The problem, he explained, is that they do not “belong in discussions at the federal level,” because they are local concerns that should be dealt with on the local or state level.


Publisher's note: This article was originally published on Examiner.com on May 25, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Heritage Foundation's Ronald Utt discusses commercialization of highway rest areas

Publisher's note: This article was originally published on Examiner.com on April 11, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Heritage Foundation's Ronald Utt discusses commercialization of highway rest areas
April 11, 2010 3:01 PM MST

In 2009, the Virginia Department of Transportation (VDOT) closed down about half of the rest areas along interstate highways as a cost-cutting measure. The decision was controversial, and as a candidate for governor, Bob McDonnell made reopening the rest areas one of his most emphatic promises. As governor, McDonnell followed through and the rest areas began to be opened again last month.

One of the issues raised last summer was a federal prohibition on commercial activity at interstate rest stops, which is not universal but nearly so and includes Virginia. On July 17 – just days before the rest areas were scheduled to close on July 21 -- Representative Frank Wolf (R-VA10) introduced an amendment to the transportation appropriations bill, which was killed in the Transportation and Infrastructure Committee on a vote of 26(Yea)-32(Nay).

After he spoke at a Cato Institute briefing on transportation issues on Capitol Hill on April 9, Dr. Ronald Utt answered a few questions about the history of this prohibition and the reasons that highway rest areas are closed to business activity.

Early History

The prohibition “literally goes back to the creation of the interstate highway system,” said Utt, a senior research fellow at the Heritage Foundation, “where you already had existing interstate routes, like Route 1 on the East Coast, that had a lot of commercial development around it that was dependent on the traffic.” There was a perception that “the creation of an alternative highway system right nearby would have threatened the business of those people if there were new commercial establishments started.”

In response, supporters of the interstate system tried to “neutralize opposition … from the existing commercial people” by deciding “that there would be no commercial activity on any of the rest stops. Nothing would be sold -- no gasoline, no food, no motels .... And that essentially bought them off.”

Utt pointed out that today, “most of those businesses that were protected have gone out of business a long time ago. Fast food restaurants didn’t exist back then but they tend to be the largest and most active opponents of commercialization of federal rest stops because they’re the ones who now own the land and the businesses at existing interchanges.”

Local Ownership

Asked whether local businesses could be given “dibs” on taking over the rest stops, Utt replied:

“Exactly. The right of first refusal could go to [anybody who] has something within, let’s say, 100 yards of an existing interchange. Whether it’s a gas station, a coffee shop, or a restaurant, the first round of bidding could be limited to them.”

Naming Rights

What about granting naming rights, where businesses could “sponsor” a rest stop?

Utt chuckled and said, “That’s a good question. I don’t know, given the state of the economy, how much people would pay for that. That’s obviously an idea.”

Then he continued with an illustration from a neighboring state.

“I’ve noticed at some of the North Carolina rest stops along I-95 that there is a certain amount of promotion by the people who provide free services or cut-rate services for those rest stops,” Utt said. “For example, in North Carolina I saw a brass plaque that’s displayed prominently that says ‘Landscape care and lawn care by such-and-such a company.’ So I’m assuming that they were either doing this for free for the exposure, or at a discount for the exposure.”

From the Archives: Former U.S. Transportation Sec’y Mary Peters: ‘not convinced’ on high-speed rail

Publisher's note: This article was originally published on Examiner.com on March 4, 2011. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Former U.S. Transportation Sec’y Mary Peters: ‘not convinced’ on high-speed rail

On the morning of Friday, March 4, the Florida Supreme Court ruled that Governor Rick Scott (R) has the authority to cancel a high-speed rail project between Tampa and Orlando and return.

The seven Florida justices unanimously rejected a lawsuit filed by state legislators challenging Scott’s decision to return approximately $2.4 billion to the federal government that had earlier been earmarked by the Obama administration for the Tampa-Orlando rail line.

No more ‘business as usual’

Hours after the Florida announcement, the Charlottesville Libertarian Examiner met with former U.S. Secretary of Transportation Mary Peters and asked her about high-speed rail and what U.S. transportation priorities should be.

The government cannot “continue business as usual,” said Peters, who served as Transportation Secretary from 2006 to 2009, and previously was head of the Federal Highway Administration. “We need to look at a new paradigm of how we fund, how we operate, how we make project decisions. In the future, that has to be based on cost effectiveness.”

The government has to spend the taxpayers’ money, she said, in a way “that gives them the best possible return. We simply have not been doing that.”


Is high-speed rail cost-effective?

When asked specifically about high-speed rail – a prestige priority of President Obama and current Transportation Secretary Ray LaHood – Peters repeated her emphasis on cost-effectiveness.

“I need to be given the proof that it is indeed cost effective,” she declared.

“We have finite resources right now,” Peters explained, “not just in transportation but in the U.S. budget overall. So every dime we spend, we have to consider, is there a higher, better use of this funding that will give Americans a better return?” Can it, for instance, “reduce the deficit [or] reduce our debt?” she asked.

“I am not convinced that high speed rail is cost effective,” she said.

Leveraging federal dollars

Peters’ top priority for federal transportation policy is to “fully fund TIFIA” – the Transportation Infrastructure Finance and Innovation Act, which, she explained, “can make loans to projects that can attract private investment and help leverage the federal dollar.”

That idea, she added, “segues into the second” priority: Federal transportation policy, she argued, “should give precedence, if you will, to those projects that can take a dollar of federal money and leverage it, perhaps with a dollar of state money and two dollars of private money, to give us more transportation solutions for the same investment.”

Finally, she made the case for consolidation of federal grantmaking programs in the transportation field.

“I would get rid of all these categories,” Peters said. “We have 108 different categories of funding right now” and they should be replaced with block grants to the states, which could make their own decisions on what to spend on transportation projects based on local conditions and circumstances.

The block grants, she said, would not give the states carte blanche, but rather would be aimed at letting them “meet the highest priorities” and would come attached with “measurements” requiring the states to “take care of their Interstate systems at this level” and “maintain their transit systems to a certain level, as well.

In her view, Peters concluded, “I would just block-grant the programs to the states [as] a step toward devolution.”

From the Archives: Former U.S. Secretary of Transportation James Burnley sees U.S. at 'crisis point for infrastructure'

Publisher's note: This article was originally published on Examiner.com on June 25, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Former U.S. Secretary of Transportation James Burnley sees U.S. at 'crisis point for infrastructure'

Currently a partner at the law firm Venable LLP, James H. Burnley IV was not yet 40 years old when he became President Ronald Reagan’s Secretary of Transportation in 1987, having previously served as deputy secretary in that department as well as in the U.S. Department of Justice as an associate deputy attorney general.

In an interview with the Charlottesville Libertarian Examiner at the Heritage Foundation in Washington on June 25, Burnley did not mince words in his assessment of the current state of transportation in the United States.

Time to Rethink Roles

"We’re at a crisis point on infrastructure for transportation in this country and we need to start over, rethinking the roles” of the state, federal, and local governments in devising and implementing transportation policy, he said.

Noting that the economic situation today is quite different than it was in the late 1980s, Burnley pointed out that “we had deficits” under President Reagan “but nothing on the scale we have today.”

One matter that is significantly different, he said, is that “the highway user fee trust fund idea has broken down completely. In the last few years $34.5 billion have been transferred from general revenues because we can’t pay for the existing highway programs and the transit programs that are funded, in part, from the highway trust fund.”

That’s why, he said, we have to “go back to a clean sheet of paper and rethink the federal role vis-à-vis the states and cities on transportation.”

Critical of Obama
Burnley was also critical of the Obama administration’s approach to these issues.

“I don’t think that the policies that the Obama administration seems to be intent on implementing are taking us in that direction – unfortunately,” he said. “Rather, their policies, under the so-called ‘livability doctrine’ seem to be designed to have the federal government play a much more intrusive, heavy-handed role in state and local transportation decisions. I’m sorry to see that happening.”

One proposal, pushed heavily by the Obama administration, is to build and expand high-speed rail across the United States. Burnley is skeptical.

This is, he said, “an issue that ultimately will be determined by how much we as a country are willing to spend because it will never pay for itself and it requires enormous capital investments by someone.”

There are questions that have to be asked in the debate over high-speed rail, Burnley said. “Is that money available from any source, and, if so, where does it come from? The federal government? State government? Private capital, which I think is not very likely?”

Funding, he said, is “the ultimate determinative factor, which is where is the money going to come from, and is it an investment as a country that we want to make?”

High-Speed or Low-Speed?
One issue that is emerging is that federal stimulus funds claimed to be for high-speed rail are going to projects far removed from that concept.

“Part of the $8 billion in stimulus money that was set aside last year for high speed rail that’s not going to the two greenfield projects in California and in Florida has been spread out by the federal [Department of Transportation] among the states to be spent on existing railroad lines,” Burnley explained, which, outside of the Northeast Corridor – where the lines are owned by Amtrak – are owned by freight railroads.

“What we think about as the high-speed rail program” besides those greenfield projects and Acela -- “we’re talking about increasing speeds by 2, 3, 4 miles an hour, very modest increases.”

As a result, that stimulus “money is, in fact, going as direct subsidies to the freight railroads because those are the lines upon which the passenger trains run outside the Northeast Corridor,” said Burnley. “You can argue the merits of that but, factually, I think, it’s important to note that that’s what’s happened. That’s where those billions of dollars are going.”

In other words, federal money designated for “high-speed rail” is subsiding “slow rail” instead.

From the Archives: Former Virginia Secretary of Transportation Shirley Ybarra discusses rail, roads, and HOT lanes

Publisher's note: This article was originally published on Examiner.com on June 25, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Former Virginia Secretary of Transportation Shirley Ybarra discusses rail, roads, and HOT lanes

Now a senior transportation analyst at the Reason Foundation, Shirley J. Ybarra served as Secretary of Transportation for the Commonwealth of Virginia during the administration of Governor James Gilmore. She previously served as deputy secretary under Governor George Allen.

Ybarra attended a luncheon seminar at the Heritage Foundation in Washington on June 25, where the topic was high speed rail. After the presentation ended, she spoke briefly with the Charlottesville Libertarian Examiner on transportation issues facing Virginia.

The biggest single issue she identified is “congestion, particularly in Northern Virginia,” adding that in “the Virginia Beach area, same issues. It’s road congestion, quite honestly.”

To address the congestion problem, Ybarra said, “we’re seeing some solutions in Northern Virginia, with the Beltway HOT lanes and,” eventually, “the I-95/395 corridor HOT lanes.” She noted that those high-occupancy toll lanes are “not just for cars; that puts bus rapid transit on those HOT lanes also.”

High-Speed Rail in Virginia?
As to whether there is a role for high-speed rail (HSR) in Virginia, Ybarra said probably not.

“I think it’s going to be difficult to find a role for high speed rail,” she said. “A project that was started when I was Secretary was something called ‘the Third Rail’ between Washington and Richmond.

“That was because they were using the freight railroad tracks and they needed sidings and a new bridge down by Fredericksburg and that would allow the passenger trains not to be delayed by the very long freight trains like the ‘Juice Train’ that goes through right at the time it’s needed for the VRE service,” that is, the Virginia Railway Express commuter line. VRE, which runs from Manassas in the west and Fredericksburg in the south to downtown Washington, pays “freight railroads for the use of the tracks,” Ybarra explained, “because it is their track.”

McDonnell Administration Efforts
Assessing the successes and failures of the administration of Governor Bob McDonnell in transportation so far, Ybarra said “they are certainly trying to continue with public-private transportation acts, or what the rest of the world calls, public-private ventures, to bring some of the capacity and the private sector into road building,” as well as in transit.

One obstacle facing the McDonnell administration is that has substantially smaller budget “available than I did so they need to bring in the private sector and I know [the governor is] pushing that.” She noted that public-private ventures in transportation were part of McDonnell’s campaign platform and that suggestions to refine that promise have come out of a recent study commissioned by the administration.

Moreover, Ybarra added, McDonnell will be “putting in a dedicated group of people” to study transportation issues, “which we were unable to do when I was there. We all just did our regular job plus that job” of looking into future solutions for transportation problems.

“I think the dedicated group of people will help” in policymaking efforts, she concluded.

Guest Post: 5 Laws That Could Send Santa to Federal Prison

by David Rosenthal

While most people know Jolly Old Saint Nick as a friendly figure, he too is not immune from the perils of administrative overreach and overcriminalization.

To get you in the Christmas spirit, here is a list of some of the potential crimes and violations of federal law Saint Nick as he prepares to take flight for 2016.

1. The Reindeer Act

Many have tried finding Santa’s workshop—without success—but children have long mailed letters to the Santa Claus House located at 101 St. Nicholas Drive in North Pole, Alaska. This office location is the first source of trouble for Father Christmas. Under the Reindeer Act, signed into law by President Franklin D. Roosevelt in 1937, only Alaska Natives are allowed to own reindeer in Alaska.

While Santa has been operating out of the North Pole for many years, only Eskimos, Indians, and Aleuts inhabiting Alaska at the time the United States purchased the land from Russia are considered natives under the act, and Saint Nicholas is from the Greek village Patara in modern-day Turkey. Luckily for Santa, he might be able to avoid the $5,000 fine for violating this provision of the Code of Federal Regulations, but only if he applies for and is granted a special use permit to possess reindeers as a non-native.

2. The Lacey Act
Even if Santa gets around the Reindeer Act, he may face civil and criminal penalties under the Lacey Act if his purchase, sale, possession, or use of reindeer—or any other flora or fauna— violates any state or federal law or the law of any foreign nation, no matter what language or code that foreign law is written in.

Just as some unwitting Americans have been convicted of offenses such as the “importation of Caribbean spiny lobsters from Honduras” in violation of Honduran packaging laws, Santa could be committing a crime each time he crosses borders to deliver flora or fauna.

3. Flying Without a License
Despite Santa’s many years of experience, there is no Mr. Claus listed in the Federal Aviation Administration’s pilot certificates database. If Santa is piloting his sleigh without an airman’s certificate, he is in violation of 49 U.S.C. § 46317.

Any pilot who operates an aircraft without a proper license is guilty of a federal crime punishable by three years in prison (the sleigh would almost certainly be deemed an aircraft under 49 U.S.C. § 40102(a)(6)). And that is only for Santa’s role as a pilot. If his sleigh is not deemed airworthy, Santa will be in violation of 14 C.F.R. § 91.7 and subject to additional civil penalties by the FAA.

If Santa’s sleigh is approved, he then must post “within” the “aircraft” a copy of the registration, airworthiness certificate, and other official documents, to be displayed “at the cabin or cockpit entrance so that it is legible to passengers or crew,” per 14 C.F.R. § 91.203(b); the sleigh’s baggage compartment must be installed subject to Subsection C with a copy of FAA Form 337 authorizing such installation maintained on board the sleigh; and all fuel venting and exhaust emissions must meet additional requirements.

Hopefully Santa has a good compliance team.

4. False Statements
Any white lie that falls within the jurisdiction of the U.S. government could be a federal crime. As Heritage scholars have written elsewhere, there is one general federal statute for false statements that “should be broad enough to reach any fib or whopper that the federal government could have a good reason to prosecute.”

But there are dozens more specific criminal statutes that punish false statements regarding such minutiae as fluid milk products. If Santa parks his sleigh on federal land and encounters a park ranger while coming down the chimney, he’d better not tell a fib about what he’s up to or he could end up in big trouble. (He would also be violating another federal law if he parks his sleigh in a way that inconveniences another person on federal land, but I digress.)

Supreme Court Justice Ruth Bader Ginsburg once observed that, under federal false statement statutes, “the prospect remains that an overzealous prosecutor or investigator—aware that a person has committed some suspicious acts, but unable to make a criminal case—will create a crime by surprising the suspect, asking about those acts, and receiving a false denial.”

Here, once Santa gets off the ground, his real legal trouble is only just beginning. A government agent need only ask Santa if he committed burglary, trespass, or larceny, or ask him, “Are you really Santa Claus?” In that case, Santa really would need a Miracle on 34th Street to stay out of the slammer for lying.

5. IRS Tax Gift
Even if Santa evades capture during his Christmas Eve flight, he then must deal with Uncle Sam upon his return to the North Pole. Under IRS gift tax rules, the giver of gifts above a certain threshold is taxed at a rate up to 40 percent of the value of the gift. While individuals are allowed to make gifts up to $14,000 per recipient without encountering any tax consequences—most toy trucks and dolls would probably fit under this exemption—gifts above the limit must be reported on IRS Form 709.

As such, each time Santa drops off a shiny new BMW for mom or dad, he will be on the hook for an even bigger tax bill on April 15. Willful failure to file a gift tax return can land Santa in prison for up to one year under 26 U.S.C. § 7203. Let no good deed go unpunished.

The List Goes On
While those are just a few examples of how Santa may be held criminally and civilly liable for violating U.S. law, there are several other ways in which he operates in legal gray areas.

For instance, how does Santa compensate all of his elves who are working around the clock to finish making toys before the big day? If they are not receiving proper overtime pay in a safe work environment, Santa will be in violation of numerous provisions of the Fair Labor Standards Act. Finally, given the size of his operation, Santa must be complying with the Affordable Care Act’s employer mandate.

If Santa cannot even stay in line with every single government rule and regulation, how is the average American supposed to keep up? Attorney Harvey Silverglate argues that the average American unwittingly commits three felonies a day due to vague laws and governmental overreach.

The American people—and Mr. Claus—deserve better. Heritage scholars have identified a comprehensive strategy to combat the problem of overcriminalization, which threatens liberty by using the criminal law and penalties to attempt to solve every problem in society and compel compliance with regulatory schemes.

Merry Christmas to all, and to all a good night.

Reprinted from The Daily Signal.


David Rosenthal is a visiting legal fellow in the Edwin Meese III Center for Legal and Judicial Studies at The Heritage Foundation.

This work is licensed under a Creative Commons Attribution 4.0 International License.
This article was originally published on FEE.org. Read the original article.

From the Archives: Colin Dueck explains libertarian influences in conservative foreign policy

Publisher's note: This article was originally published on Examiner.com on October 28, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Colin Dueck explains libertarian influences in conservative foreign policy

Colin Dueck teaches at George Mason University in Fairfax, Virginia, where he is associate professor of public and international affairs. He is also the author of a new book, Hard Line: The Republican Party and U.S. Foreign Policy Since World War II.

On October 28, on the eve of an election widely expected to bring in a new Republican majority to the House of Representatives, if not the U.S. Senate as well, Dueck addressed an audience at the Heritage Foundation about his book. In his lecture, he argued that the Republican approach to foreign policy has been remarkably consistent over the past six decades.

Dueck says in his book that “despite apparent oscillations between internationalism and isolationism, there has in fact been one overarching constant in conservative and Republican foreign policies for several decades now, namely, a hawkish and intense American nationalism.”

After his lecture, Dueck spoke briefly with the Charlottesville Libertarian Examiner about his book, about libertarian influences in conservative foreign policy making, and prospects for free trade after the election.


McKinley, Roosevelt, Taft

Dueck said he was motivated to write Hard Line as he “was reflecting on some of the changes that had taken place in U.S. and, specifically, Republican foreign policy after 9/11 -- the arguments for war in Iraq, the Bush doctrine, and so on.”

His original manuscript, he said, was 600 pages long and “started with McKinley," he said. “Then I talked to my editor,” who told him, “’This is totally out of control.’”

The first version of the book had chapters on McKinley, Teddy Roosevelt, and Henry Cabot Lodge, but, Dueck said, he “decided the story would hold together a little better with a start in World War II.”

He explained that the “main storyline is the decline of that anti-interventionist trend represented by Robert Taft. That’s the big story in the Forties and Fifties.”

Anti-interventionist and Libertarian Strains

Taft represented what Dueck calls an “anti-interventionist” strain in foreign policy, with origins in libertarian thought.

Colin Dueck

Libertarian thinking, Dueck explained, “was prominent in the sense that for Taft and, actually, for most conservatives and most Republicans, the belief was that if the U.S. intervened, for example, in World War II, that you would get an expanded national security state -- big government, in a way. So for Taft, the priority was ‘let’s avoid that at all costs.’ Therefore, that’s the argument for staying out of war.”

History, however, intervened. As Dueck put it, “Obviously, Pearl Harbor settled the issue.”

That anti-interventionist tendency, he continued, “still persisted after the war and for somebody like William F. Buckley [it was a] major theme, but what trumped it eventually in the Fifties was a concern over Communism.”

What happened was, said Dueck, “in practical terms a lot of libertarians or libertarian-leaning conservatives [and] Republicans embraced this new consensus over the course of the Fifties, which was a more hawkish, anti-communist, cold war policy.”

Dueck did note that there were “important exceptions” to this trend, such as economist Murray Rothbard, “who was strictly libertarian.”

Rothbard, he said, “stuck to this anti-interventionist position throughout the Cold War and in that way, almost ended up having more in common with the New Left, beginning in the Sixties and Seventies.”

While Rothbard and his circle represented “an interesting strain,” Dueck said, “it was clearly not, politically [or] in practical terms in Congress, a major force in the Republican Party,” either in the Sixties and Seventies or “in the later Cold War period.”

Free Trade Policy

One foreign policy issue that generally divides Republicans and Democrats is free trade.

Asked whether a new Republican majority in Congress will affect the pending trade agreements with Colombia, Panama, and South Korea, Dueck replied:

“Well, that will really be up to President Obama. There’s been no sign that he’s going to make that a priority.”

If Obama wanted to make free trade a priority, Dueck noted, “he might get more support from the next Congress than from the last one.”

The reason, he said, is that “at the end of the day, new Republican Members are going to be friendlier to these trade agreements than most Democrats have been.”

From the Archives: Steve Forbes makes the moral case for free markets and free people

Publisher's note: This article was originally published on Examiner.com on January 9, 2013. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Steve Forbes makes the moral case for free markets and free people

Speaking at the Heritage Foundation on Wednesday, January 9, two-time presidential candidate Steve Forbes made the ethical case for free enterprise in summarizing his most recent book, Freedom Manifesto (coauthored by Elizabeth Ames), which has as its subtitle “Why Free Markets Are Moral and Big Government Isn’t.”

Forbes, chairman and editor in chief of Forbes Media, began by invoking Alexis de Tocqueville’s warning about “soft tyranny” – when, Forbes said, “government takes more and more responsibility away from you and makes you more passive and dependent.”

When people like himself express fears about “big government,” he said, they are not talking about the kind of government James Madison wrote about in the Federalist. They are not expressing a desire for what the “other side” tries to portray as a desire for “anarchy.” Rather, Forbes said, they are trying to make a cogent case for keeping government limited to a few things that it can do well and properly, leaving to the private sector and to individuals the overwhelming rest of things.

'Deeper sense of humanity'

Forbes defended free markets as being “moral because they meet the needs of other people.” Free markets, he said, promote both opportunity and a “deeper sense of humanity” by stimulating creativity and innovation, in the arts and philanthropy as well as in commerce and industry.

Steve Forbes at Heritage Foundation

Commerce, he said, “is a profoundly creative exercise” that produces “extraordinary circles of cooperation around the world.” He cited Leonard Read’s widely-distributed essay of the 1950s, “I, Pencil,” which explains how thousands of individuals divided by thousands of miles contribute to the making of a single pencil.

Markets, Forbes explained, “are about transactions” – not, as Hollywood stereotypes might portray it, as about “taking” but about “trade.” Commerce, he continued, “breaks down barriers between people. It channels their energies toward constructive ends.”

Because commerce is about people interacting with each other, he scoffed at the notion that economics is “the dismal science.” It isn’t dismal, Forbes said, because “it’s about people, and people are always fascinating.” Contrary to old definitions of economics as being about studying scarce resources, he said, it’s quite the opposite: “It’s about creating resources” and making useful things out of things that were not useful.

Luxuries no more

He gave examples of how products once reserved to the very rich are now commonplace. A century ago, he said, “the automobile was a plaything for the very rich” and it cost about $150,000 in today’s dollars. When Henry Ford and his engineers created the mobile assembly line, that changed, and the automobile became a product nearly anyone could afford.

Similarly, he said, 30 years ago, a cell phone cost about $3,000 and “it was the size of a shoebox.” With innovation and new technology, the cell phone became ubiquitous – even in poor, Third-World countries.

Looking further back, Forbes noted that “200 years ago, famines were common in Europe. People then didn’t even make $1,000 a year in today’s dollars.” Agricultural technology and the division of labor has, since then, eliminated famine in Europe and the rest of the industrialized world, even as the number of farmers has declined to a tiny fraction of the population.

Although free markets have an undeserved reputation of being unstable, Forbes said, they instead allow for the improvements that are built upon failure. Steve Jobs, he pointed out, was fired by the very company he created, only to come back and make it even bigger and better. He quoted Bill Gates as saying that “success is a poor teacher.” Free markets allow failure to teach and serendipity to guide innovation.

Money as 'liberator'

Citing Alexander Hamilton’s view that “money is a liberator” because creating things in a commercial environment is blind to race, class, and ethnic differences, he pointed out as well that “money is just a facilitator” for people making transactions with “each other in a common endeavor” – even people who never meet each other and may not even know about the others’ existence.

Forbes concluded his remarks by reiterating that “free markets are about people creating” – creating products and services that meet the needs and wants of other people. Free markets, he said, look to the future while governments look to the past.

From the Archives: Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation

Publisher's note: This article was originally published on Examiner.com on February 20, 2013. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016. I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation

Speaking at the Heritage Foundation on February 20, author Amity Shlaes reminded her audience, “if you want to know only one thing about Calvin Coolidge,” the subject of her new biography, “it is that when he left office in 1929” – 67 months after he had succeeded Warren Harding -- “the federal government was smaller than when he had become president in 1923.”

That singular achievement is one of the aspects of Coolidge's life that motivated Shlaes, a syndicated columnist for Bloomberg View and director of the Four Percent Growth Project at the George W. Bush Presidential Center, to write the simply-titled Coolidge, which is both follow-up and prequel to her previous best-selling book, The Forgotten Man: A New History of the Great Depression.

“I'm on a mission of reputation-building,” Shlaes said, in light of the fact that Coolidge tends to be ranked low among historians of the presidency. She identified parallels between the time Coolidge took office in post-World War I America and the present day, when crises seemed to emerge day after day, tempting the government to “do something.”

Parallels to today

For instance, federal debt had grown by a factor of 20 since before the First World War. The times were “troubled,” Shlaes said, because thousands of returning veterans had been unable to find work and as many as one-third of them were disabled.

At the end of the Wilson administration, she explained, “the machine of government was broken. They had gridlock,” not unlike the current standoff between Republicans in Congress and the Obama White House.

In 1920, the presidential ticket of Ohio Senator Warren G. Harding and Massachusetts Governor Calvin Coolidge ran on a platform of “no” – as Shlaes put it, “not kinder, gentler, but 'no'” to spending, to taxes, to expanding government.

During Harding's term, Congress passed the Budget and Accounting Act, which established the forerunner of today's Office of Management and Budget (OMB). For the first time, the federal government was able to invoke independent analysis of budget proposals with an overarching view of how programs added up. Previously, appropriations were made on an ad-hoc basis, which made it difficult for presidents, when asked for something, to say “no.”

Cutting tax rates

After Harding died, Coolidge continued and built upon his program of austerity. With Treasury Secretary Andrew Mellon, he cut the top marginal income tax rate to 25 percent, resulting in increased revenues paid to the U.S. Treasury. (No other president has been able to achieve such low marginal rates since then. Ronald Reagan, Shlaes pointed out, was only able to cut the top rate to 28 percent.)

Coolidge made cutting government into an art. He used the political skills he had honed since first being elected to public office at age 26 to veto 50 bills over six years. He also made ample use of the “pocket veto,” which requires no message of explanation and, because Congress is not in session when the president quietly rejects the bill, it cannot be overridden. Coolidge, Shlaes said, “was like an Isaac Stern of the pocket veto.”

Coolidge's use of the veto and pocket veto reflected his view that “it's better to kill bad laws than to pass good ones.” As then-prominent political commentator Walter Lippmann put it, Coolidge used “dullness and boredom as a political device,” in order to prevent bad legislation.

Bothersome Prohibition

In reply to a question posed by the Charlottesville Libertarian Examiner about Coolidge's role in Prohibition, Shlaes said he regarded it “as a bother.” Earlier in his career, she explained, he had seen commerce in alcoholic beverages as beneficial to local farmers and businesses. He also understood that Prohibition was unpopular among recent immigrants, and he was concerned about his party (the Republicans) losing immigrant votes – something, she pointed out, with parallels today.

Coolidge, she explained, “tried to ignore [Prohibition] as best as he could” but felt constrained to uphold it because it was the law of the land. He disfavored Prohibition because “there was too much social legislation when economic legislation is more important.”

Still, before the repeal of the 18th Amendment, Coolidge bought stock in a grocery-supply company that sold a great deal of yeast, a major component of making beer and other fermented beverages. He was betting, Shlaes said, that Prohibition would end sooner rather than later.

As it turned out, of course, Coolidge ended sooner than Prohibition. He died on January 5, 1933; Prohibition was repealed on December 5 that same year, exactly 11 months later.

From the Archives: Index of Economic Freedom shows global progress for 2015, while USA loses ground

Publisher's note: This article was originally published on Examiner.com on February 2, 2015. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site was scheduled to go dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

Index of Economic Freedom shows global progress for 2015, while USA loses ground

For 21 years, the Heritage Foundation and the Wall Street Journal have collaborated to publish the annual Index of Economic Freedom, a list ranking nearly every country in the world on the basis of various criteria like rule of law, regulations, corruption, and openness to investment.

The 2015 Index was released on January 27, and two days later, the Charlottesville Libertarian Examiner spoke by telephone to one of its compilers, Charlotte Florance, who is research associate for economic freedom in Africa and the Middle East at the Heritage Foundation.

In the interview, Florance explained that the Index “scores the metrics in four broad categories for every country in the world,” drawing on statistics gathered by the World Bank and other organizations.

Analytical categories
The four broad categories that the Index uses are, she said, “rule of law, government size, regulatory efficiency, and open markets.”

Those four categories are broken down further into sub-categories.

For instance, Florance explained, rule of law includes “property rights and freedom from corruption. Government size includes fiscal freedom and government spending. Regulatory efficiency includes business freedom, labor freedom, and monetary freedom. And then open markets include trade freedom, investment freedom, and financial freedom.”

This methodology, she continued, “covers a broad spectrum of the economies of countries around the world. Scores in each category are aggregated to create an overall score and then countries are ranked on that score.”

The rankings are then divided up among five additional categories: “free, mostly free, moderately free, mostly unfree, and repressed.”

The “repressed” category, she noted, refers to countries like Venezuela, Cuba, and Zimbabwe, “some of the most closed off economies in the world, with North Korea being the bottom of countries ranked.”

United States is 12
Florance noted that people are surprised to find out that the United States is not in the “free” category, and does not even have one of the ten most free economies in the world.

“The United States is actually twelfth,” she said, “in the mostly free category and it falls behind countries such as Hong Kong, Singapore, New Zealand, Chile, Canada, and even a very small African country, Mauritius.”

That last country, she explained, is “an island but still part of sub-Saharan Africa and it is actually ranked tenth – so a very tiny economy is actually ranked more free than the United States.”

In the past two decades, according to the annual Index of Economic Freedom, the world as a whole has become increasingly free. The United States is something of an exception in that it has become less free.

This year was the first year in seven years, Florance said, in which the United States “was bumped up slightly in its score.” While economic freedom has been declining here in the United States, she said, global economic freedom has been improving.

She cautioned, however, that “there are certain cases around the world where certain authoritarian regimes do certain things that hinder economic freedom.”

Florance noted how it is “a good message that in 21 years of measuring economic freedom, globally it's getting a lot better.”

She pointed to sub-Saharan Africa as “a region where, although you do have the most repressed economies in the world, there has been significant improvement over the past 21 years.”

Africa south of the Sahara, she said, “remains one of the leading regions in overall improvement year after year,” even though, she added, there is “still a lot to be done.”

SUGGESTED LINKS

Heritage Foundation's Matthew Spalding assesses the Calvin Coolidge revival
Amity Shlaes discusses significance of Calvin Coolidge at Heritage Foundation
Transportation policy 'unfocused,' says Heritage Foundation's Ronald Utt
Five reasons to be a libertarian
South African author Greg Mills offers solutions to African poverty

Original URL: http://www.examiner.com/article/index-of-economic-freedom-shows-global-progress-for-2015-while-usa-loses-ground