Liberty Law Blog

Lawrence Walsh and the Abuse of Power

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Former Iran Contra Independent Counsel Lawrence Walsh recently passed away at the age of 102. While I know it is not the nicest thing to speak ill of those who have just died, I cannot let this occasion pass. I highly doubt that any of Walsh’s loved ones will read this and Walsh committed a genuinely heinous act for which he has borne very little negative publicity.

While I was not a big fan of the Independent Counsel statute, the problem with Walsh was how he behaved as independent counsel. Walsh may have committed one of the most consequential misdeeds in the history of criminal prosecutors, and the amazing thing is so few people remember or know about this. Walsh may very well have changed the result of the 1992 Presidential election between George Bush, Bill Clinton, and Ross Perot.

Walsh was investigating the Iran Contra scandal and he had spent six years with little to show for it. After this period, he was seeking to indict former Secretary of Defense Caspar Weinberger. Walsh initially indicted Weinberger in June of 1992, but the indictment was thrown out on technical grounds. (I base the following description on a book by Lanny Davis, a political associate of Bill Clinton.) Continue Reading →

The Dead Letter of the Law

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A recent report from the Wall Street Journal flatly stated that with “so many unilateral executive waivers and delays . . . ObamaCare must be unrecognizable to its drafters, to the extent they ever knew what the law contained.” As Richard Epstein memorably put it, this amounts to “Government by Waiver.” In the case of Obamacare, the waivers and exemptions go to the heart of the bill itself. Healthcare coverage mandates for companies have been waived until 2015, and now word comes that the individual mandate has been quietly waived indefinitely for those individuals whose plans were cancelled and who cannot find affordable insurance on the exchanges. Continue Reading →

If the Obamacare “tax” exceeds the cost of insurance, it becomes a unconstitutional “penalty”

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In NFIB v. Sebelius, the Chief Justice applied a saving construction to the Affordable Care Act’s penalty, and treated it as a tax, to uphold its constitutionality. (Thom Lambert has a great piece in Regulation Magazine on this topic). But, the Chief Justice placed limitations on the application of the saving construction. The first such limitation stated that because the cost of the “tax” is less than the cost of insurance, a person has a legitimate choice, and there is no coercion:

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More on Tesla and Government Privileges for Auto Dealers

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Last week I wrote about the efforts of New Jersey and other states to prevent Tesla from selling cars directly to the public without using dealers as an intermediary.  Now, Alex Tabarrok has great post on the dealers laws and their effects on competition and consumer welfare.  It is not a happy story.  Here is an excerpt:

So there you have it, [according to the New York Times] limits on direct sales ensure competition and protect car dealers from being undercut by the automakers. Sorry, but you can’t have it both ways.

Franchising arose early on in the history of the auto industry because, as in other industries, franchising can take advantage of local knowledge and at the same time control agency costs. Franchising rules evolved in Coasean fashion so that manufacturers could not expropriate dealers and dealers could not expropriate manufacturers.

Politics, however, began to intrude into this Coasean world in the 1940s and 1950s [to the benefit of dealers who had more political power].

The result of dealer rent seeking has been higher auto prices for consumers, about 6% higher according to one (older) study by the FTC.

The franchise laws have also resulted in a highly inefficient distribution of dealers as populations have moved but dealers have been frozen into place. The inability to close, move or consolidate dealers has impacted the big-3 American firms especially because they have older networks. As a result, a typical GM dealer sells 377 cars a year while a typical Honda dealer sells 1,062 and a Toyota dealer 1,488.

This last point illustrates how government interventions create problems which call for additional government interventions.  The dealer laws have hurt the big 3 American auto firms, who have sought government interventions in the form of import restrictions and more recently government bailouts.

Elane Photography is a Bad Vehicle For Religious Liberty Case (Post Updated)

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Update 3/23/14: I mistakenly assumed that petitioners appealed the Free Speech and Free Exercise clause. I now see that they only appealed the compelled speech issue. Here is the only question presented:

Whether applying a state public-accommodations statute to require a photographer to create expressive images and picture-books conveying messages that conflict with her religious beliefs violates the First Amendment’s ban on compelled speech.

Of course the Justices can also grant the Free Exercise issue, even though it was not mentioned in the Cert petition. I’ll leave the remainder of the post as is.


Currently pending before the Supreme Court is the certiorari petition in Elane Photography v. Willock, which involves a case where a photographer refused to photograph a same-sex civil commitment ceremony.  While much of the attention to this case focuses on religious liberty, Eugene Volokh and Ilya Shapiro have a great Op-Ed arguing that forcing Elane to photograph a same-sex wedding, against her wishes, would not only implicate religious liberty, but free expression. They would be forcing her to speak–or more precisely create art in the form of photographs:

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Classical Liberals have to Avoid the Nirvana Fallacy Too

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Several commenters vigorously disagree with my proposals to limit the influence of bureaucracy on the grounds that these solutions do not attack the roots of the problem and may create more bureaucrats. But many of my proposals would not expand bureaucracy. For instance, the REINS Act forces Congress to approve major rules. It will create no new bureaucrats by itself and would almost surely cut down on the work of agencies as they realize some of their proposals could not pass both houses. Putting independent executive agencies under Presidential control would not create any new bureaucrats either. And it could eliminate some bureaucrats who are responsible for coordinating the work of these independent satrapies.

More importantly, focusing simply on the number of bureaucrats in government is a mistaken way of thinking about the problem of bureaucracy for classical liberalism. Today the greatest cost to liberty from bureaucracy is a more intrusive and more left-wing government than people want. More bureaucrats, correctly placed and incentivized, can reduce these dangers. A case in point is OIRA—the unit within OMB that reviews regulations for their consistency with the President’s program and deploys cost benefit analysis. OIRA has prevented myriad intrusive and unjustified regulations from seeing the light of day. OIRA also has a far less parochial, empire-building culture than most agencies with a single mission. Although having OIRA means having more bureaucrats, OIRA has meant a net gain for liberty. Madison reminded us that the separation of powers can protect liberty, even if it multiplies the branches of government: “Ambition can counteract ambition.” The same can be true of internal checks within the bureaucracy. Continue Reading →

The Irony of American Exceptionalism

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This week brought the stunning news that Russia has deployed technology that records every phone call made in the United States, keeps it for 30 days, and retrieves segments for listening and long-term storage.

Not really. But the United States has done precisely this to telephone users in an unknown target country. Leaked documents indicate “every single” call there was recorded—not merely metadata that tracks numbers called, but the actual content of conversations.

Consider that inversion a political Rorschach test. There is a breed of American elite whose mood, upon reaching the end of the second paragraph, would instantly melt from outrage to relief. That breed lacks the political virtue par excellence—prudence—and it is getting us into trouble. Continue Reading →

Friday Roundup, March 21st

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[Blitz] thinks Plato’s Laws may be a better guide to the manner in which reason and revelation can to good effect interact (at least where revelation takes the form of law) than the various works dedicated to that subject by Hobbes, Spinoza, Locke, and the leading figures of the 18th century Enlightenment.

Solutions to the Problem of Bureaucracy

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Responding to my post on the problem of bureaucracy, some commentators asked how to prevent bureaucrats from creating a bigger and more left-wing government. Here are a few solutions:

1. Delegate less. Conservatives and libertarians should be reluctant to delegate power that is likely to be exercised in a liberal direction. To put it another way, these lawmakers should demand a statute several degrees to the right of where they think it should be if there is a delegation because the bureaucracy will move it several degrees to the left.

2. Pass the REINS Act. The REINS Act would apply to open-ended delegations of power already in place by requiring a Congressional vote under fast track procedures to approve major agency rules before they become law. This act would transfer power currently held by bureaucrats back to legislators. Of course, people on the left realize the constraints imposed by the REINS Act and thus it could not be enacted until the next era of unified Republican government. Continue Reading →