Tuesday, March 31, 2009

Governor Kaine Rebuffs ACLU, Allows Citizens to Choose Life (License Plates)

In 2003, then-Governor Mark Warner vetoed a bill that would have allowed Virginians to pay an extra $25 voluntarily to add "Choose Life" to their license plates. At the time Warner cited "potential First Amendment issues." Yesterday Governor Tim Kaine announced that he will NOT veto a similar measure, thereby reversing Warner's position and rebuffing the ACLU, Planned Parenthood, and other opponents of the bill who do not agree with the message conveyed by such plates. Virginia now joins 23 other states that allow their citizens to express themselves by purchasing such plates. After 1000 such plates are purchased, $15 from each such purchase will go to fund crisis pregancy centers that encourage alternatives to abortion, including adoption.

As Kaine rightfully pointed out, Virginia already allows citizens to choose from among numerous message they wish to include on their plates, including messages that others might not share. Examples include "Friends of Tibet," "Kids First," "Home Education," "Fraternal Order of Police," the "National Rifle Association," "Fight Terrorism," "Peace," etc. Moreover, a University of Virginia fan certainly does not agree with the message conveyed by a "Virginia Tech" license plate. Indeed, one might even say that the "Choose Life" plate is simply a natural extension Virginia's "Kids First" license plate, shown at the top of this post.

The objection by Planned Parenthood to such plates is strange indeed. After all, hundreds of thousands of Virginia taxpayer subsidize Planned Parenthood involuntarily, since the state legislature has seen fit to appropriate millions of dollars to Planned Parenthood each year, and the taxes that support these appropriations are by no means voluntary. (Try writing to your state legislator and asking for a pro-rata refund of your tax dollars that get funneled to Planned Parenthood!). If the legislature can coerce Virginians into supporting Planned Parenthood, why can't the state allow citizens to express an opposing view at their own expense on a license plate that they pay for.

I wonder if Planned Parenthood plans to seek a license plate expressing its view that abortion is sometimes a laudable choice ? I am not aware of any states that allow such plates. I can imagine some arguing that the Constitution would require the legislature to grant such a request. At the same time, the Supreme Court has repeatedly said that the state need not be morally neutral on the question of abortion, for instance. It may instead speak and encourage others to speak in favor of life. As Chief Justice Rehnquist put it in Rust v. Sullivan:
"To hold that the Government unconstitutionally discriminates on the basis of viewpoint when it chooses to fund a program dedicated to advance certain permissible goals, because the program in advancing those goals necessarily discourages alternative goals, would render numerous Government programs constitutionally suspect. When Congress established a National Endowment for Democracy to encourage other countries to adopt democratic principles, it was not constitutionally required to fund a program to encourage competing lines of political philosophy such as communism and fascism. "
I do not mean to say that the question is a "slam dunk" for a legislature that rejects such a petition. After all, individuals who pay for license plates are not the government. Moreover, some might argue that the state has created a sort of "public forum" by creating a "vehicle" through which private individuals may express themselves. An analogy might be a public university, which by its nature invites the expression of all views, views that the state cannot selectively quash. This "public forum" analogy might fail for two reasons, though. First, a group whose petition for a particular license plate message is denied can simply display bumper stickers, which are far less expensive than such vanity plates, anyway, thus suggesting that any burden on speech is quite small. Second, the "public forum" analogy seems to prove too much; it would seem to require, for instance, a state that allows "Stop Domestic Violence" plates also to allow hateful plates expressing a contrary message. Given the state's (limited) association with the messages in question --- an association that makes a license plate message more attractive than bumper stickers --- one might conclude that the state has more leeway within the confines of its license plates than it does in a traditional public forum.

Thank you, Governor Kaine !

Thursday, March 26, 2009

Peeps Dioramas !

With Easter Approaching, several publications are holding Peeps diorama contests. Contestants arrange peeps and other items in various scenes, including astronaut Peeps exploring the moon in one contest. Here are some links to the entries and winners in some such contests.

1) 2006 St. Paul Pioneer Press contest. Note that this link includes the lunar diorama mentioned above. http://www.flickr.com/photos/moocow/sets/72057594108017526/

Publications currently holding contests include:

1) Chicago Tribune "Peeps on Parade:" http://www.chicagotribune.com/features/peeps/

3) University of Chicago Alumni Magazine: http://magazine.uchicago.edu/0902/every_issue/lite.shtml
Good luck to all entrants !

Tuesday, March 24, 2009

SAAB Sinking/Sweden Rejects American Socialism!

The New York Times has reported that SAAB is suffering huge losses, on the order of $350 million last year. That's about $3500 per car sold worldwide. Moreover, GM, which once owned fifty percent of SAAB, is shedding its interest in the company, leaving Sweden to "hold the bag" so to speak.

Still, the Swedish government is not taking the bait, having rejected SAAB's request for a taxpayer-funded bailout. The Swedish Minister of Enterprise, Maud Olofsson (pictured on THE RIGHT) summed up her government's position as follows:

"We are very disappointed in GM; but we are not prepared to risk taxpayers' money. This is not a game of monopoly." The Times also quotes Minister Olofsson as saying: "The Swedish state is not prepared to own car factories."

Will President Obama (pictured on the LEFT, above) summon the courage to resist further taxpayer subsidies of GM, for instance ? Or will he find himself out-couraged by Maud Olofsson? In reading the Times article, I was surprised to learn that SAAB only sold 93,000 cars worldwide last year, and about 21,000 in the United States. That compares to more than two million for Chrysler, for instance, and over 10 million for GM and Toyota. GM had high hopes for SAAB, having set a goal back in 1996 for over 150,000 in worldwide sales.

Let me end by saying that, subsidy or not, I wish SAAB every success. I sat in a couple of SAABs last week at the Richmond Auto Show, including a 9-3 Sport-Combi. The car had great headroom and was, to put it bluntly, pretty spiffy. Here's a link to the Edmunds.com test drive of the car:

Wednesday, March 18, 2009

Mark Warner Supports Vouchers !

Mark Warner (pictured on the right), Virginia's former Governor and now junior Senator, has bucked his party and voted to revive a voucher program for D.C. School Children that many Democrats in Congress apparently want to kill. The Richmond Times-Dispatch quite rightly praises Senator Warner's vote here.

The "D.C. Opportunity Scholarship Program" provides up to $7,500 for students from families with incomes less than 185 percent of the poverty standard. More than sixty private schools participate in the program, and about 1,800 children currently receive such vouchers.

The Washington Post recently opined that Congressional opponents of vouchers have "step[ed] between 1,800 D.C. Children and a good education." The Post also concludes that these opponents won't "let fairness and the interests of low income, minority children stand in the way of their politics." Translation: politics is trumping the interests of schoolchildren who lack the means to escape a substandard school system.  Here is the Post Editorial.

One commentator has estimated that Washington D.C. spends more than $24,000 per pupil on its K-12 schools.  The same commentator estimates that the average tuition at the private schools in the District to be far less.  Here are the relevant figures for the District's private schools:

Average tuition actually paid: $11,627;

Median tuition actually paid: $10,043;

Estimated average total per pupil spending: $14,534;

Estimated median total per pupil spending: $12,534

Presumably private endowments make up the difference between tuition and actual spending at these schools.

The arguments for vouchers are powerful and, I think, irrefutable. Take food stamps as an analogy. Most Americans believe that taxpayers should feed the hungry. This obviously requires the government to raise revenue and spend the proceeds. When it comes to feeding the hungry, such spending takes the form of a food voucher -- food stamps. The government need not, however, take over the grocery stores that sell the food, the farms that produce it, the factories that package it, or the trucks or trains that transport the final product from factory to the grocery store. Instead, a free society rightly depends upon the private market, based on property and free contract, to produce and distribute such goods, subject of course to valid police power regulation, e.g., state-enforced labeling requirements and health-related inspections. Redistribution to feed the hungry is one thing. Coercive state monopoly is something else entirely. Support for the former in no way justifies the latter.

If food stamps are the right answer when it comes to feeding the hungry, why not apply the same logic to educating individuals who cannot afford to send their children to private schools? This, of course, was the approach taken by the "GI Bill," which provided vouchers to returning GIs who then applied such vouchers at the private or public University of their choice. Ditto for ROTC scholarships, which recipients may spend at any school with an ROTC program, so long as the recipient meets the school's admissions standards. No one, I hope, would have argued that the federal government should have nationalized universities after World War II to ensure that returning GIs would have sufficient educational opportunities.

Perhaps that's why so many Nobel Prize winning economists, including F.A. Hayek (pictured above-left) have supported vouchers.

Friday, March 13, 2009

Indy Racing Less Than One Month Away/Helio On Trial

The start of the IRL Season is just three weeks away. USA Today reported that Will Power, formerly of RV racing, will replace Helio Castroneves for Team Penske during Helio's trial for tax evasion. http://www.usatoday.com/sports/motor/nascar/2009-01-13-castroneves-penske_N.htm Last year Power finished 12th overall in the IRL Series, including a first place finish in the Streets of Long Beach race, a fourth place finish in the Mid-Ohio Sports Car race, and a fifth place finish in the Chicagoland Speedway 300. He was 13th in the Indianapolis 500. Not bad for an IRL rookie ! Power was no stranger to open-wheel racing, however. He had cut his teeth in Australian Formula Formula Ford Championship before moving on to the World Series By Renault and then Champ Car in 2006.

The Boston Herald reports on some of the intricacies of the government's criminal case against Helio Castroneves here: http://www.bostonherald.com/sports/other_sports/auto_racing/view.bg?articleid=1157392&chkEm=1

Apparently Helio's lawyers are arguing that Helio never actually received the income from Team Penske --- $5 million --- on which he supposedly evaded taxes. The money was parked in an offshore account instead. In response, the government is apparently arguing that, even if Helio did not ACTUALLY receive the money, he should be deemed to have received it under a doctrine of "constructive receipt." I know nothing about this area of law and offer no opinion on the merits of the government's case. I will note, however, something that I often tell my students. In law, "constructive" is a synonym for "non," as in "non-notice or "non-receipt." That is, once a court starts talking about "constructive knowledge" or "constructive delivery" or "constructive receipt," it really means that: 1) You had NO knowledge, or no delivery was made or you received nothing BUT 2) the law, for policy reasons, will treat you as though you DID have notice, you did have knowledge, or you did receive the item in question.

The photos of Will Power are from 2007 Champ Car Spring Testing and are courtesy of Terry Blanchard, and posted on Flickr here:
The terms of the license authorizing their display are found here:

Stewart Missing the Point . ..

The Chicago Tribune tells us that John Stewart had strong criticism for Jim Cramer on his show this evening. http://newsblogs.chicagotribune.com/towerticker/2009/03/jon-stewart-vs-jim-cramer-angry-daily-show-takes-on-cnbc-mad-money.html

At least as reported, Stewart's criticism does not respond to the points that have brought Cramer so much publicity lately, namely, his criticism of President Obama's economic policies which, according to Cramer, are causing "the greatest destruction of wealth in our lifetime." See Cramer interviewed by Matt Lauer and Erin Burnett, here. http://www.youtube.com/watch?v=3c4SyrNdE5E

Maybe Stewart can tell us why a $ 1.7 trillion deficit, mostly directed towards enhancing consumption, plus surtaxes on our most productive citizens, is wise public policy in light of the vote of no confidence the markets have given the President's plan.

Friday, March 6, 2009

Here are some updates to prior stories:

1) The AP, via Yahoo Finance, reports that the nation's personal savings rate JUMPED to an annual rate of five percent in January of this year. http://finance.yahoo.com/news/Consumer-spending-rises-in-apf-14509525.html. That compares to even lower rates in recent years (the rate was even negative for part of the summer) and is the highest since 1995. In the early 1980s, the rate was 8 percent, falling to 6.5 percent in the lat 1980s. These figures seem to contradict Robert Reich's claim that we have entered a period of secular stagnation, which would entail HIGHER savings rates as real per capita national income grew, as it has certainly done since 1980.
2) Senator Bayh of Indiana has published a superb Op-Ed in the Wall Street Journal calling on the Senate to reject the $400 Billion-plus Omnibus Spending Bill. According to Bayh: the proposed bill "lacks the slightest hint of austerity from the Federal Government or the recipients of its largersse." Like this Blog, Bayh also notes that China, Japan and other foreign nations holds large amounts of our debt, raising the prospect that they will be able to unduly influence our policy.

3) David Brooks of the New York Times is expressing buyers remorse regarding President Obama. Brooks now apparently thinks President Obama might be a liberal ! More on Brooks' reasoning and the Obama team's response, in a subsequent post.

Tuesday, March 3, 2009

Comet Lulin Cometh

Comet Lulin made its appearance early last week, and is still making its way around the Sun. Astromers tell us that the Comet originated in the so-called "Oort cloud," which apparently begins about one light year from the Sun and may end around three light years, or 18 trillion miles, away. The Oort cloud contains billions of comet nuclei, which scientists say are left over from the initial formation of our solar system. Occasionally, gravitational pertubations from passing stars or gravitational "tides" in the Milky Way itself will dislodge one of these objects and send it hurtling toward the sun. In some cases these comets are "captured" by the inner solar system and remain in short period orbit, as in the case of the famous Halley's comet. One astronomer has estimated that the close approach of the star Alpha Centauri, to a distance of 3.1 light years several thousand years from now will cause 200,000 comets to leave the Oort Cloud and cross earth's orbit 20 million years from now (recall that these comets will begin over a light year away and will not accelerate to high speed until they approach the inner reaches of the solar system). (The author assumes that there are 5 trillion comets in the Oort cloud.) See Robert A.J. Matthews, The Close Approach of Stars in the Solar Neighborhood, 35 Quarterly Journal of the Royal Astronomical Society 1-9 (1994).

The bottom photo above comes from NASA's "photo of the day" series and was taken in Virginia's Shenandoah Valley (hence the trees). The top photo is courtesy of Joseph Brimacombe, who licensed the photo via Creative Commons.

For a map of the comet's whereabouts in the night sky over ther next several nights, see the following entry on Flickr.

Monday, March 2, 2009

More Centralization/President Obama to Hit Non-Profits and Universities?

Michael Barone has amplified a recent report in the Wall Street Journal that the Obama Administration will propose additional tax surcharges on society's most productive members, over and above the higher tax rates he proposed during the campaign. To be precise, the new Obama plan would limit deductions for charitable giving and mortgage interest for individuals in the 33, 35 and 39.6 percent tax brackets. Such individuals could only deduct 28 percent of the value of such payments from their tax liability, instead of 33, 35 or 39.6 percent, as the case may be. As Barone notes in a blog post at U.S. News and World Report, the result of this change would be to divert Billions of dollars from the private charitable sector (including Universities and, I might add, hospitals) to the coffers of the National Government. Barone also explains that this change will tend to undermine one of America's great strengths --- a decentralized system of charitable giving and education, with neither government nor private entities dominating the other.

Barone's argument for decentralization reminds me of a famous judicial opinion that justified so-called "Corporate Social Responsibility," A.P. Smith Manufacturing Company vs. Barlow, 90 A.2d 581 (New Jersey 1953). There several shareholders challenged the corporation's gift of $1,500 to Princeton University. The New Jersey Supreme Court rejected the challenge, holding that, absent countervailing language in the corporate charter, a firm's directors were free to make such gifts. The opinion rested in part on testimony by former executives in other firms, including U.S. Steel, to the effect that corportate support for independent centers of learning helped create the conditions necessary for a thriving free society.
"Mr. Irving S. Olds, former Chairman of the Board of US Steel, opined that . . . . 'Capitalism and free enterprise owe their survival in no small degree to the existence of our private, independent universities' and that if American business does not aid in their maintenance it is not 'properly protecting the long-range interest of its stockholders, its employees and its customers.' Similarly, Dr. Harold W. Dodds, President of Princeton University, suggested that if private institutions of higher learning were replaced by governmental institutions our society would be vastly different and private enterprise in other fields would fade out rather promptly. Further on he stated that 'democratic society will not long endure if it does not nourish within itself strong centers of non-governmental fountains of knowledge, opinions of all sorts not governmentally or politically originated. If the time comes when all these centers are absorbed into government, then freedom as we know it, I submit, is at an end.'"
Let's hope that Congress rejects this proposal, and not simply because our most productive citizens already pay enough in taxes !

Sunday, March 1, 2009

Correction/Will China Bail Us Out ?

An earlier post noted that the President's new budget will if passed create a deficit of $1 trillion. I was wrong. The actual figure will be:

1.75 Trillion Dollars

This raises one obvious question: who will purchase the debt that will finance this single year deficit, not to mention those that follow in the out years ? As reported in an earlier post, China and Japan combined hold between $1.2 and $1.3 Trillion in US Treasury Securities, and Japan's holding have decreased slightly over the past year. The United Kingdom is a distant third, holding $360 Billion.

Of course, Americans could also purchase such debt, out of private savings. Indeed, the Associated Press Reports that America's savings rate rose to 5 percent of income in January. If sustained throughout the year, total savings will be $545 Billion.

Americans will certainly allocate some of their savings to purchases of Federal Debt, with vehicles as varied as savings bonds, on the one hand, to mutual funds that focus on government securities, on the other. Some deposits in banks will themselves find their way to the purchase of Federal Debt. At the same time, some of these savings will find their way to other instruments, e.g., state debt, private debt, initial public offerings of common stock, etc.

One still has to wonder just who will purchase the $1.75 Trillion in debt necessary to finance the President's first budget. China's total foreign currency reserves are less than $2 Trillion, and their rate of growth has slowed recently. Will the Chinese really devote a sizable share of those reserves to propping up our debt ? Or, instead, will they stand on the sidelines and watch the price of our debt fall, raising interest rates, thereby saddling us with long term annual interest costs ? Should we be taking such a risk ?