The Washington Post reports that “Conservative activists are looking to build momentum for a long-shot amendment to the Constitution, introduced Wednesday in the U.S. House, that would allow states to repeal pieces of federal legislation they find onerous.”

The Post is referring to the “Repeal Amendment” drafted by Randy Barnett.  This proposed amendment provides as follows:

“Any provision of law or regulation of the United States may be repealed by the several states, and such repeal shall be effective when the legislatures of two-thirds of the several states approve resolutions for this purpose that particularly describe the same provision or provisions of law or regulation to be repealed.”

Barnett’s full argument for the Repeal Amendment can be found here. 

Because the Constitution lodges the amending power with Congress, or a constitutional convention, Barnett’s amendment would give the states a say in amendments.  This would be a big improvement over the current procedure.  The states could, for example, repeal the health care law without congressional assistance.  It will be interesting to see if Barnett’s idea gets any traction.

In my Econ 100 class, we discussed Milton Friedman and monetarism on Thursday. Some of my students mentioned Naomi Klein’s The Shock Doctrine, and I emailed everyone links to Robert Lawson’s and my paper “Human Rights and Economic Liberalization” and my review essay on Klein’s book. After I distributed the published version of my paper with Robert Lawson, I got the following email from Arnold Harberger. He has graciously allowed me to share it as he considers it to be in the public domain.

Dear Art:

Thanks for sending me your recent paper, which I found very interesting. It really consists of two quite distinct parts—one focused on Chile during the Pinochet period, the other reporting a series of regressions demonstrating a negative causal relation going from human rights violations to free-market policies. I found the latter quite interesting, though not surprising, but this note deals with the former, on which I can give personal testimony.

In the first place I know of no instance in which any of the so-called Chicago boys were implicated in any violations of human rights. In fact, several of them, including Rolf Luders and Ricardo Marin, were jailed for periods of several months (though they were never tried and convicted), in the wake of the 1982-3 debt and financial crisis.

Secondly, the Chicago faculty took pains to keep a good distance between themselves and the Chilean military regime. I went to Chile mainly under the auspices of private foundations, of USAID, and of the Banco Concepcion, whose top executives were mostly linked to the Christian Democratic Party, which was in opposition to the military regime after its first year or so. I happened to be friends with Chile’s former President, Eduardo Frei Montalva, who was also in opposition after the first year or so, and I visited him maybe eight or ten times during that period. I had no personal relations with any of the Chilean military. I made it a point to refuse requests to be a consultant to the Chilean government for something like five years after the coup. During this period I checked regularly with the American Ambassador and with the officials in the embassy who kept tabs on disappearances and other human rights violations. I only relaxed my “boycott” after, sometime around l978, the embassy reported zero disappearances. In the subsequent years. My consulting consisted of three days of advising at the Central Bank in the turmoil of the financial crisis, plus organizing a conference on public finance issues for the Planning Ministry, which was headed by my former student Alvaro Donoso, plus giving seminars on electricity economics in both of Chile’s public sector electricity companies—Endesa and Chilectra. All in all, probably two weeks of work, at a maximum three weeks, over the dozen years from 1978 to the end of the military government. In adopting this rather minimal relaxation of my boycott, I was mindful of the human rights situations in countries like Korea, Pakistan, Guatemala, El Salvador, the Philippines and others, where many well-known economists had worked for extended periods to help improve the economic situation.

Finally, looking back at the evolution of the Chilean economy and polity, I have often said that there were two miracles. The first was the economic miracle of bringing a relatively free-market revolution to Chile. This was done by the Chicago boys in two waves—one from 1975-81 and the other from l984-89. People should realize that not all the top leaders of this transformation were former University of Chicago students. Notable among the others were Hernan Buchi and Jorge Cauas (both from Columbia University) and José Piñera (Harvard). The reforms made by these people under the military government were subsequently widely imitated in many other countries with democratically-elected governments. Most significant was the way in which Chile’s economic teams pursued the same general “model” of economic policy, during the democratically-elected presidencies of Aylwin, Frei, Lagos and Bachillet. Many of us who watched that evolution closely have attributed it to the “triumph of good economics”. In recent Chilean elections, the economic platforms of the various parties differed in the degree of emphasis given to different aspects, but not on the broad philosophy governing economic policy in general. In my opinion, the degree of economic understanding shown by the various parties in these elections, and by the various administrations once they took power, is a marvel to behold, certainly in comparison with most developing countries, and also compared to many in the industrialized world. In telling the story of Chile, people should pay more attention both to.its successful transition form authoritarian rule to democracy, and to the virtually seamless continuity and continuing evolution of its economic policies in the process.

Sorry for the length of this note. These are matters on which I only rarely perceive the “right” opportunity to express my views.

Best wishes, Al Harberger

Even President Obama, the architect of our $1.4 trillion deficit, sees that it is a problem.  One indication is his call for a two-year pay freeze for federal workers.  (This seems like a tactical error, in that it will have hardly any actual effect on the deficit, and will antagonize federal workers, who would normally be part of his constituency.)  Another indication is the president’s formation of the Deficit Reduction Commission, which will be voting on its final recommendations soon.

How can we afford deficits of this magnitude?  One answer is that in the short run the Federal Reserve is enabling them.  The Fed’s recently-announced “Quantitative Easing” will buy $600 billion in Treasury securities, which is almost half the deficit, and by buying longer-term securities it will keep interest rates low, making the rapidly expanding national debt easier to afford in the short run, although more painful in the long run.  If Mr. Bernanke agrees with the president that we need to reduce the deficit, he’s not showing any tough love by facilitating all that government borrowing.

If the Fed weren’t engaged in this easy money policy, the Treasury would find it much more difficult to sell its debt, and the high cost of deficit finance would be more apparent.

For an absolutely hilarious explanation of the Fed’s quantitative easing policy, you really need to see this video.  I don’t know whether the video is as funny to plumbers as it is to economists, but all my economist friends love it.  (You’ve probably already seen it, as YouTube says it has been viewed more than 3 million times already.)  I don’t know who wrote the script (tell me if you do), but whoever the author is has a biting sense of humor, and deep knowledge of the facts.  If you are at all interested in these issues, this video is a must see!

A Fox News report broadcast on November 28 supplies means of stanching the unprecedented effusion of budgetary red ink overseen by presidents George W. Bush and Barack Obama.

In that report, talking-head Chris Wallace interviewed Jeffrey Post, curator of the gem and mineral collection at the Smithsonian Institution’s Museum of Natural History. The story focused on the very rare and stunningly blue Hope Diamond, which after a long and fascinating history of intrigue, including a legendary (or maybe not) “curse” falling on its possessor, was donated to the Smithsonian by Henry Winston in 1958.

Near the end of the video, after Mr. Post had waxed lyrical about the gem’s unparalleled size, color and clarity (and having allowed his interviewer actually to hold it in his hands), Wallace’s natural question was, “And if you wanted to sell it?”

Post responded that, “If there’s anything in the world that one could point to and say, ‘it’s priceless’, you know, take the U.S. Treasury – or, even bigger, the U.S. debt – and try to take that money and go out and buy another diamond like this one, you literally could not to it. There’s not one out there anywhere.”

To an economist, of course, nothing – not even human life, which recent studies based on the compensation necessary for the average worker to be willing to expose him or herself to greater risks of injury or death on the job generate estimates of about $7 million – is “priceless.”

The market value of the Hope Diamond, while undoubtedly sizeable, is far from infinite. Selling it to a willing buyer or consortium of buyers, which may be Hugo Chavez or a country in the Middle East, would generate enough cash to at least make a major dent in the federal budget deficit and, perhaps, the accumulated national debt.

There is no public interest in “owning” the Hope Diamond or many other assets, such as millions of acres of federal land, thousands of government buildings, drilling rights on the outer continental shelf, and so on. Even if Mr. Winston imposed conditions on his donation to the Smithsonian, many precedents exist allowing the beneficiaries of gifts to abrogate donors’ intent, although such actions sadly are inconsistent with the law of contract.

Ever since the Smithsonian Institution acquired the Hope Diamond in 1958, the federal government rarely has run a budget surplus. Perhaps that is the modern version of the gem’s romantic curse. If so, we can transfer the curse to its new owner and, at the same time, raise funds to pay off some of the debt without saddling taxpayers with the out-of-control credit-card tab now being run by Washington’s politicians.

The furor over WikiLeaks provides another good acid test to determine how well a given journalist, commentator, or politician understands the issues of liberty and the role of government in a constitutional system. On Judge Napolitano’s Freedom Watch this Monday, Scott Horton discussed the importance of the latest WikLeaks “dump,” what it tells us about the warfare state and State Department, and why Americans have a right to such information.

But many Americans want to shut up WikiLeaks. They oppose the truth getting out. They support the suppression of information regarding U.S. government criminality. Everyone from Eric Holder of the Justice Department and Hillary Clinton of the State Department to most conservative talk radio hosts and likely Republican candidate Sarah Palin support the persecution of WikiLeaks’s Julian Assange. Palin even believes Assange should be summarily executed by the U.S. government, targeted like the Taliban.

These are totalitarian proposals. Given that so much of the political spectrum favors the cracking down on free speech and free information, and the ability of officials to get away with imperial arrogance, lying propaganda and aggressive war without any accountability, the short-term prospects for liberty are dim indeed.

The political culture of the general public shows some encouraging trends, with its vague distrust of bailouts, stimulus, perpetual foreign intervention, socialized medicine, and overtly invasive security procedures at the airports. But when so many voices taken seriously call for the killing of the head of WikiLeaks, we see how far there is to go if American society is to meaningfully embrace the fundamental values of liberty and individual rights.

Today marks the 55th anniversary of Rosa Parks’s refusal to move to the back of the bus. As she explained in her book, Quiet Strength:

Our mistreatment was just not right, and I was tired of it.

Institutionalized by racist laws and upheld by racist governments, especially across the American South, such humiliations were daily visited as part of riding public transit.

Rosa Parks’s dramatic refusal sparked the Montgomery Bus Boycott and eventually led to governments having to back down across the board, from public buses, to public schools, to rescinding black codes and Jim Crow laws that constrained private commerce and voluntary relations among races.

Today, pundits from the left to neocon right argue that airline passengers give up their rights when they “choose” to travel by plane. They would no doubt have argued that Ms. Parks similarly gave up her rights when she “chose” to ride the public bus.

Ms. Parks in her simple eloquence knew such thinking was just plain wrong. Whether an individual is ordered out of her seat by a public bus driver or made to either “assume the position” or be subjected to unwanted intimate contact by command of a government agent, she is no longer sovereign; she is a subject.

Ms. Parks knew when it was time to say enough. Do we?

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For more on the State’s role in upholding and institutionalizing racism and injustice, see our book Race and Liberty in America

Yesterday, Judge Norman K. Moon in Liberty University v. Geithner, upheld Obamacare’s controversial provision requiring Americans to purchase health insurance.  This provision is based on Congress’s power to regulate interstate commerce

Judge Moon held that “there is a rational basis for Congress to conclude that individuals’ decisions about how and when to pay for health care are activities that in the aggregate substantially affect the interstate health care market.” 

If this is the case, then what activity cannot be regulated by Congress under the Commerce Clause?  So long as an activity or inactivity could affect a interstate market, Government can compel citizens to take Government-directed actions.  The possibilities are endless.  

For a critique of Government by Commerce Clause, see this recent Independent Institute article posted at the The Daily Caller.

Yesterday, Judge Vicki Miles-LaGrange issued a preliminary injunction stopping the Oklahoma State Board of Elections from certifying the election results for State Question 755, which prohibits the state courts from “look[ing] to the legal precepts of other nations and cultures” when deciding a case.  Question 755 specifically states that courts “shall not consider international law or Sharia Law.”   The relevant case filings can be found here.

The Plaintiff, a Muslim, claims injury because upon certification “Plaintiff is certain that having he knowledge that Oklahoma condemns his faith will cause offense and injury.  He anticipates that such official disapproval of his faith will result in a stigma attaching to his person.”

While there will be much debate about whether the First Amendment’s Establishment Clause prohibits Question 755, the State characterizes this as simply a choice of law measure that applies to a variety of foreign laws. 

Before we get geared up about the First Amendment debate, my bet is that the case will be decided on procedural grounds.  Whether one approves or disapproves of Question 755, the Plaintiff must show an actual or imminent injury to have standing to bring the legal action.  Courts typically hold that abstract or stigmatic injury does not get a plaintiff across the standing hurdle.   Judge Miles-LaGrange’s finding of standing is “aggressive” to say the least.  I doubt a court of appeals will ever reach the merits of this case given the standing infirmity.

Today, the U.S. Supreme Court will hear arguments on this issue.  The case arises out of California where on average 2 inmates must occupy the space constructed for just one.  A three-judge panel issued an order capping the total prison population at 137.5 percent of design capacity.  This result must be achieved within two years.  The order might result in approximately 40,000 inmates being set free.    The panel found that crowded prisons directly lead to the denial of medical and mental health services to which the inmates are constitutionally entitled under the 8th Amendment to the U.S. Constitution.

Counsel for the inmates describes the situation as follows:

Medical care in California’s prisons is in crisis despite eight years of judicial oversight. Prisoners are dying unnecessarily at the alarming rate of one every eight days because they do not receive basic medical care from the State. Prisoners are not properly screened for communicable and other serious diseases because there is no space in the overcrowded prisons to do so. If they are properly diagnosed they often do not receive timely medicine because the medication distribution system is so overburdened by the vast number of prisoners in a system designed for half as many. . .

Under the federal Prison Litigation Reform Act (PLRA) three-judge panels can order the release of state prisoners as a last resort. Such a panel may not be convened to consider such relief unless the remedial orders entered by a single-judge district court have been given a “reasonable amount of time” to remedy the alleged violations. Crowded prisons must also be found to be the primary cause of the problems complained about.

California is challenging (1) the court’s authority to issue the order, (2) findings that overcrowding caused violations of inmate rights, and (3)  whether the release order goes beyond the Prison Litigation Reform Act inasmuch as it threatens public safety.   

This will be an interesting case to watch.  On the one hand, it exposes how government’s policy of simply locking up drug users and petty criminals leads to terrible conditions in our jails.  No doubt, much of the overcrowding comes from the failed War on Drugs.  There is no rehabilitation–we simply warehouse human beings for a set period of time.  On the other hand, one must question whether unelected federal judges are the proper parties to run a state’s prison system.  Aren’t issues like the construction of new prisons and use of prison space decisions for elected representatives?

Stay tuned for updates as this case progresses.

Today the Ninth Circuit Court of Appeals disclosed the panel that will hear the appeal of Judge Vaughn Walker’s decision striking down Proposition 8 as unconstitutional. The panel will be: Judge Stephen R. Reinhardt—perhaps the most left-leaning judge on the federal bench; Judge Michael Hawkins—a very liberal judge; and Judge N. Randy Smith—a moderate compared to the other two.

With this panel, opponents of Proposition 8 should be feel pretty secure.

For a review of Judge Walker’s decision and the issues at hand, see William Watkins’ “Nationalizing Marriage”.