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Published: Thu, 20 Oct 2016 00:00:00 -0400

Last Build Date: Thu, 20 Oct 2016 17:59:42 -0400


Criticism Has Delayed a Kratom Ban but Probably Won't Prevent It

Thu, 13 Oct 2016 08:30:00 -0400

The Drug Enforcement Administration's decision to withdraw its ban on kratom, a pain-relieving leaf from Southeast Asia, underlines the arbitrariness of the federal government's pharmacological taboos, which are based on undefined terms subjectively interpreted by bureaucrats with broad discretion to decide which substances Americans may ingest. The DEA's backtracking was prompted by complaints from kratom consumers, the companies that serve them, researchers who study the drug, and members of Congress. But despite the agency's newfound interest in public input on the question of kratom's legal status, it seems likely that we will end up with the same prohibitory result after a somewhat more elaborate process of post hoc rationalization. When the DEA announced at the end of August that it was temporarily placing kratom's main active ingredients in Schedule I, the most restrictive category under the Controlled Substances Act (CSA), it declared that a ban was "necessary to avoid an imminent hazard to the public safety." When the ban did not take effect on September 30 as expected, DEA spokesman Russell Baer assured Washington Post drug policy blogger Christopher Ingraham that "it's not a matter of if—it's simply a matter of when, in terms of DEA publishing the final order to temporarily schedule kratom." Since Acting DEA Administrator Chuck Rosenberg "has determined that kratom represents an imminent hazard to public safety," Baer said, "I have a sense that publishing our final order will be sooner as opposed to later." Rosenberg's determination was based on an unpersuasive, weakly supported analysis that dismissed kratom's benefits and exaggerated its hazards. Critics pointed out that the DEA's emergency scheduling authority, which Congress approved in 1984 at the agency's behest, was aimed at dangerous new synthetic drugs that might cause many injuries and deaths during the time required by the standard scheduling process. Here is how then-DEA Administrator Francis Mullen explained his understanding of "imminent hazard to the public safety" in a letter to legislators: The "imminent hazard" implies a need for immediate response to a drug trafficking and abuse situation that has occurred with such rapidity and with insufficient warning that normal control mechanisms would result in a large number of deaths and injuries or the continuance of an uncontrolled trafficking situation....The burden would be on the Government to prove that such an urgency exists and that the public safety would be jeopardized during the period that a drug would remain uncontrolled during routine scheduling action. As examples of substances that would be covered by the new provision, Mullen cited "newly synthesized drugs or uncontrolled analogs of existing drugs such as PCP and fentanyl," which "can cause widespread deaths and injuries in a very short period of time following their synthesis." Kratom, a "minimally toxic" natural substance that humans have used for centuries with little evidence of serious harm except in exreme cases, hardly fits that description. "The use of this emergency authority for a natural substance is unprecedented," noted Sen. Orrin Hatch (R-Utah) in a September 29 letter to Rosenberg. Whatever legislators may have had in mind when they created this prohibition shortcut, they did not define "imminent hazard to the public safety." The CSA says only that the attorney general (who has delegated his scheduling authority to the DEA) should consider a substance's "history and current pattern of abuse," "the scope, duration, and significance of abuse," and "what, if any, risk there is to the public health." That formulation leaves bureaucrats like Rosenberg free to describe any uncontrolled psychoactive substance, no matter how favorable its risk-to-benefit ratio, as "an imminent hazard to the public safety." The unscientific nature of that determination is clear from the fact that the DEA has reconsidered it in response to political pressure, as opposed to new evidence. Suddenly Rosenberg's contrived kratom crisis no longer [...]

What You Do Know Can Also Hurt You

Thu, 13 Oct 2016 00:01:00 -0400

We live in the information age, which is called that for the same reason the ice age got its name: an overwhelming proliferation of the stuff. We automatically assume that more information is better than less. But as the dinosaurs learned about ice, even something useful can be dangerous in excess. The lesson is, so far, lost on most lawmakers and regulators. In July, President Barack Obama signed a bill requiring foods containing genetically modified organisms to be labeled as such. It's an outwardly innocuous requirement that is supposed to leave consumers better informed but will actually cause many to be misled. The implication of the mandate is that there is some important difference between foods that contain GMOs and foods that don't. But there isn't. A recent report from the National Academy of Sciences confirmed that genetically engineered food is safe for humans, animals, and the environment. This scientific reality is at odds with public opinion. A June poll by ABC News showed that only one-third of Americans think genetically modified foods are safe to eat. Federally required labels will encourage them to persist in that delusion. What's the harm in telling people a simple fact? "A government-mandated label operates as a de facto warning to consumers," writes Case Western Reserve University law professor Jonathan H. Adler in the fall issue of Regulation magazine. "A mandatory label for organic produce that says 'Produced with animal feces' could be literally true, but would also stigmatize the products at issue." The government says tomato sauce may contain trace amounts of maggots. But it would not make sense to make companies publicize that ingredient, because the disclosure would raise false fears. There are other ways in which labeling requirements can be harmful. Starting next year, the Food and Drug Administration will require chain restaurants to publish the calorie count of each beer on their menus. But there's scant evidence this sort of information makes much difference. Julie Downs, a scholar at Carnegie Mellon University, says that "putting calorie labels on menus really has little or no effect on people's ordering behaviors at all." This rule, however, may have an unintended effect on ordering behaviors—by taking some beers off the table. The tests needed to provide accurate information entail costs that are trivial to mass-market manufacturers, which can spread across huge volumes, but not to small breweries, which can't. The expense is even greater, notes Berry College economist E. Frank Stephenson, for breweries "that rotate beers frequently, produce seasonal specialties or occasionally tweak their recipes." Not surprisingly, the big beer-makers are in favor of the rule. The Brewers Association, a trade group for smaller ones, is not so keen on it. The added cost imposed by the new rule is not likely to yield commensurate benefits. Drinkers who prefer low-calorie beers already know what to order, while craft beer aficionados generally put a priority on flavor over everything else. The consumers who get the least benefit will bear the costs of the mandate, in higher prices or fewer options. (Full disclosure: My stepson works for a craft brewery.) Beer and food are not the only realms where more data works to the detriment of consumers. Most states issue report cards for hospitals. This may sound like a foolproof way of protecting patients from incompetent providers. The truth is more complicated. University of Chicago law professor Omri Ben-Shahar tells me that "healthier and wealthier people are disproportionately likely to use the report card." Hospitals that get high marks will attract more of these patients—and they have an incentive to cater to them, because treating healthier patients leads to higher scores. But the higher-rated hospitals don't have unlimited capacity. So less educated and sicker patients, who are less likely to pay attention to the report cards, will find them less accessible, diverting them to hospitals that get worse scores. "The most vu[...]

Victory Over Taxi Monopolists in 7th Circuit Court of Appeals

Fri, 07 Oct 2016 17:45:00 -0400

Taxi monopolists fighting against a more consumer-friendly, tech-enabled world of more competition hired rides were slapped down today by 7th Circuit Appeals Court Judge Richard Posner, in a pair of cases in which cabbies tried to claim that past quasi-monopolies they'd been granted established property rights that could not be constitutionally taken away. Posner does not agree. In Joe Sanfelippo Cabs, Inc., et al. v. City Of Milwaukee, Posner summed up the legal issue: whether the Fifth Amendment's prohibition against the taking of private property for public use without just compensation forbids Milwaukee, in this case, and Chicago, in the parallel case, to allow competition with established taxi services in the city, whether from new taxi companies (in Milwaukee) or from companies that provide close though not identical substitutes for conven‐ tional taxi services, such as Uber Technologies, Inc. (better known just as "Uber") (in Chicago). Posner goes on to explain how since 1992 Milwaukee city regulations ensured a constantly shrinking number of legal taxicabs and concomitant huge rise in the expense of the medallions that gave you the legal right to operate a cab. Milwaukee in 2014 began issuing more permits in response to a legal challenge against their monopoly practices fought by the Institute for Justice, and the cab company plaintiffs in this case contend, Posner writes, "that the increased number of permits has taken property away from the plaintiffs without compensation, in violation of the constitutional protection of property." What does Posner think of this contention? It borders on the absurd. Property can take a variety of forms, some of them intangible, such as patents. But a taxi permit confers only a right to operate a taxicab (a right which, in Milwaukee, may be sold). It does not create a right to be an oligopolist, and thus confers no right to exclude others from operating taxis. Posner hat tips to: An excellent amicus curiae brief filed by Reason Foundation [the foundation that owns this website] [that] offers the hypothetical example of a city government that "issued a license to the first grocery store or gas station in a growing town. Years later, after the population had grown, other individuals applied for licenses to create competing grocery stores and gas stations to better serve the needs of the expanding market. … Ultimately, the pressure for additional services might drive the City to issue additional licenses," thus breaking the monopoly of the initial, single licensee. "It would be absurd for the incumbent owners of the sole grocery store and gas station to assert a property right in the monopoly value of their businesses and claim a 'taking' for any reduction in secondary market value due to the newly‐issued licenses, just as it would be absurd to claim a taking for reduced profits resulting from increased competition." Posner points out the city always made it clear the ordinance freezing taxi permits could be repealed at any time. "The ordinance gave them no property right, and its repeal therefore invaded no right conferred on them by the Constitution," he concludes. Thus, the taxi companies are out of luck. The second case decided similarly today by Judge Posner was Illinois Transportation Trade Association, et al. v. City of Chicago, et al.. This case was not about merely expanding the legal ability to operate a cab, but the supposed threat that Uber and similar e-hailing services, sometimes known as transportation network providers (TNP), pose to taxis. The case is rooted in a complaint against the regulations Chicago applies to Uber and similar companies and how they differ from those imposed on taxis, asserting that Chicago is "denying the equal protection of the laws by allowing the TNPs to compete with taxi and livery services without being subject to all the regulations governing those services." There were seven distinct claims at issue, and Posner find them all "weak." Allowing TNPs into the market is not[...]

The DEA's Contrived Kratom Crisis

Wed, 05 Oct 2016 00:01:00 -0400

After the Drug Enforcement Administration (DEA) announced an "emergency" ban on kratom at the end of August, a spokesman for the agency said "our goal is to make sure this is available." The spokesman, Melvin Patterson, also told The Washington Post kratom does not belong in Schedule I of the Controlled Substances Act, the law's most restrictive category, even though that is where the DEA had just put it. Patterson added that kratom, which the DEA says has "no currently accepted medical use," is "at a point where it needs to be recognized as medicine." Confused? You're not alone. The DEA's ban on kratom, a pain-relieving leaf from Southeast Asia, shows how blithely and arbitrarily the government interferes with our freedom to control our own brains and bloodstreams. Kratom, which acts as a stimulant or a sedative, depending on the dose, has been used for centuries in countries such as Thailand, Malaysia, and Indonesia to ease pain, boost work performance, and wean people from opiate addiction. In recent years the drug has gained a following in the United States, sold by online merchants and head shops as an herbal medicine, dietary supplement, or legal high. That situation offended the DEA, which noted in the explanation of its ban that kratom had never been approved by the government for any use. If a psychoactive substance is not explicitly permitted, the DEA figures, it should be prohibited. The agency apparently was surprised by the backlash against its kratom ban, which included angry phone calls to Capitol Hill, a demonstration near the White House, and letters from members of Congress. The DEA still intends to finalize the ban, although it did not take effect last Friday as expected. Patterson, the DEA spokesman, said the reaction to the ban "was eye-opening for me personally." He added that "I want the kratom community to know that the DEA does hear them." That attitude is quite a contrast to the deaf arrogance the DEA displayed when it announced that it was temporarily placing kratom in Schedule I, a classification that lasts at least two years and could become permanent. Declaring that a ban was necessary "to avoid an imminent hazard to public safety," the DEA summarily dismissed kratom's benefits while exaggerating its dangers. The DEA describes all kratom use as "abuse." It was therefore easy for the agency to conclude that the plant has "a high potential for abuse," one of the criteria for Schedule I. Since the DEA assumed there was no rational, morally acceptable reason to use kratom, it did not need to muster much evidence that the drug is intolerably dangerous. It claimed there have been "numerous deaths associated with kratom," by which it meant 30. In the whole world. Ever. According to the U.S. Centers for Disease Control and Prevention, alcohol causes about 88,000 deaths a year in this country, while 28,000 deaths were attributed to heroin and opioid painkillers in 2014. Kratom looks pretty benign by comparison. Another point to keep in mind: "Deaths associated with kratom" are not necessarily caused by kratom. "Kratom is considered minimally toxic," noted a 2015 literature review in the International Journal of Legal Medicine. "Although death has been attributed to kratom use, there is no solid evidence that kratom was the sole contributor to an individual's death." As further proof of kratom's dangers, the DEA noted that "U.S. poison centers received 660 calls related to kratom exposure" from 2010 through 2015, an average of 110 a year. By comparison, exposures involving analgesics accounted for nearly 300,000 calls in 2014, while antidepressants and antihistamines each accounted for more than 100,000. As the DEA's contrived kratom crisis shows, there is little rhyme or reason to the government's pharmacological taboos, which are driven by unreasoning prejudice rather than science. The one overriding theme is that people cannot be trusted to weigh the risks and benefits of drugs for themselves. © Copyright 2016 by Cre[...]

Hey, Regulators. Hands Off Child Care!

Tue, 04 Oct 2016 00:01:00 -0400

When my son was very young, my wife and I paid a neighboring family to watch him during the day. They fed him, along with other kids, ran 'em loose among the pigs and chickens on their land, and taught him to say "horsie" while he was balanced on the back of one. We neither knew nor cared about any applicable regulations, since we trusted the family. In retrospect, some days the care was perfectly legal and others it wasn't, depending on whether they were tending to more or fewer than four children—the magic cutoff in Arizona below which all is well, and above which a doom-laden critical mass of yard apes is achieved. Not that I care any more now than I did then. The arrangement satisfied everybody involved and that's all that matters. The arrangement would have been clearly illegal the entire time if we lived in Connecticut, where I attended high school, since "caring for even one unrelated child on a regular basis for more than three hours a day requires a license from the Office of Early Childhood," according to the Hartford Courant. There, a "shadowy underworld of illegal child care" has journalists all aflutter over the dangers children face watching cartoons and munching peanut butter sandwiches in other people's living rooms. Oh no! Why would anybody entrust their children to an illegal shadowy underworld (as cool as that sounds)? Well, it turns out that "most of the unregulated providers are known to the parents—a neighbor or a friend—and the convenience is attractive. Parents of infants are also sometimes hesitant to leave their babies with people they have only just met, the specialists said." In addition, unregulated day care is cheaper, "undercutting licensed home providers by as much as $150 per week." So… entrust your beloved children to expensive strangers, or inexpensive friends and neighbors. It's so hard to decide. Theoretically, all of those friends and neighbors could get legal by submitting to the costs and bureaucratic requirements of licensing. But that puts them on the radar for inspections. And there are so many rules by which to abide that all 20 Connecticut home day care providers scrutinized in a 2013 audit "did not comply with one or more state licensing requirements." That's every single one examined. How niggling can rules be? In New York City, officials decreed that day care inmates are allowed only four ounces of juice per day, subject to a drinking age of two years old. The kiddies are only allowed 30 minutes of "sedentary" time per day, and 30 minutes of screen time per week. If only the unwashed masses appreciated regulators' efforts on their behalf. "TV can be educational, and not all juices are bad," objected one mom, Victoria Clark, to the New York Daily News. "They want to control everything," added Eric Diaz, a dad. "Every kid has their own level of intake." But even that city's mayor, Bill de Blasio, objected to state efforts to further tighten the regulatory screws and "create more bureaucracy" that would further hike costs, target unlicensed providers, and put day care beyond the reach of many lower-income residents. Despite regulators' claims that unregulated child care is dangerous, and anecdotal tales of crib deaths and kids left in vans by day cares unanointed by red tape, many parents continue use unlicensed and often underground care-providers. Researchers say that "at least 20 percent of children whose parents receive federal child care subsidies are enrolled in license-exempt child care" around the U.S. The number is higher among families paying out of pocket and able to choose providers according to their own standards and budgets—50 or 60 percent is commonly cited. It's likely the regulations themselves that drive parents to use child care that falls below the regulatory threshold or that operates in defiance of the law. Blame both their intrusiveness and the costs they impose on providers that are then passed along to families. When it comes to chil[...]

Shiftless in Seattle: Lawmakers Pass Onerous New Scheduling Ordinance

Thu, 29 Sep 2016 10:30:00 -0400

The Seattle City Council last Monday passed a sweeping "secure scheduling" ordinance by a unanimous vote, making it only the second city in the nation to take a direct role in regulating how businesses set employee schedules. Under the new ordinance—effective July 1, 2017—certain employers will be required to tell their workers two weeks in advance which shifts they will be working. Should an employee be called in for extra hours, say, to replace a sick co-worker, the employer will have to pay him added "predictability pay." Should an employee be sent home early—maybe because business is slow or a delivery is late—the employer must compensate him for half the hours he was scheduled to work. In addition, on-call staff will earn half pay for shifts when they are not called into work, while those employees that have less than 10 hours between two shifts will receive time and a half. Managers will also be required to offer any additional hours to current employees before taking on new hires. The stated purpose of the ordinance—aside from creating more predictable schedules—is to provide employees with "secure incomes" by ensuring them adequate hours. Not getting as much work as they would like is a source of frustration for many Seattle workers. In a recent study commissioned by the city, some 30 percent of workers reported wanting more hours, and 10 percent reported difficulty in paying bills due to a lack of hours. Helping eager employees work more and earn more is a laudable goal for the Seattle City Council. It is also a bizarre one, given how many disincentives it has created to businesses giving employees extra hours. In 2012 Seattle passed a bill requiring businesses to provide one hour of sick leave for every 40 hours an employee works, raising the hourly cost of each worker. Then in 2015, the city passed its notorious $15-an-hour minimum wage law, raising that hourly cost still further. Indeed, a July study put out by the University of Washington (UW) found that the mandated wage increase has led to fewer hours worked per-employee and slightly less overall employment for Seattle's lowest-paid workers, compared to similar earners in other parts of the state. The Affordable Care Act (ACA) also bears some of the blame for the lack of hours, says John Vigdora, the UW economist who authored the July study on the city's new wage floor. Many employees have found their hours cut by employers looking to avoid the employer-provided-insurance mandate in the ACA, which kicks in only when someone works hours over a certain threshold, he explains. Whether the new scheduling regulation will help workers get these hours back remains an open question, and Vigdor speculates that employers that are particularly concerned with their level of customer service may choose to absorb the costs of the new law, maintaining current staffing levels. Businesses in a more precarious financial situation, on the other hand, or less reliant on offering good customer service, are likely to respond by cutting hours. In San Francisco—the only other city to adopt secure scheduling legislation—many businesses have indeed cut back on staff. A study conducted six months after the law went into effect found that "in response to the ordinance, 1 in 5 surveyed businesses had cut back on the number of part-time hires, and a similar number were scheduling fewer employees per shift," according to the San Francisco Chronicle. Reason queried each member of the Seattle City Council on whether they thought Seattle businesses might behave similiarly. Tim Burgess and Mike O'Brian declined to comment; the rest did not respond to multiple requests for comment.[...]

California Passes Law That Could Make Getting Any Autographed Book or Art in the State Very Difficult [UPDATED]

Wed, 28 Sep 2016 21:45:00 -0400

California Gov. Jerry Brown signed into law this month Assembly Bill 1570, masquerading as some light consumer protection, expanding an existing law that applied just to sports memorabilia to all autographed items. It could if fully enforced squash, among other things, the practice of author book events in the state. The bill, in its own language, demands that "all autographed items" in the state sold by a dealer (defined as "a person who is in the business of selling or offering for sale collectibles in or from this state, or a person who by his or her occupation holds himself or herself out as having knowledge or skill peculiar to collectibles") for more than $5 (that's five) come with a signed, dated, in at least 10-point boldfaced type "certificate of authenticity to the consumer at the time of sale." That certificate cannot be generic pre-printed boilerplate paperwork, but must: 1) Describe the collectible and specify the name of the personality who autographed it; (2) Either specify the purchase price and date of sale or be accompanied by a separate invoice setting forth that information. (3) Contain an express warranty, which shall be conclusively presumed to be part of the bargain, of the authenticity of the collectible....(4) Specify whether the collectible is offered as one of a limited edition and, if so, specify (A) how the collectible and edition are numbered and (B) the size of the edition and the size of any prior or anticipated future edition, if known..." Wait, there's more. This certificate, which the dealer must now by law keep a stored copy of for at least seven years from sale, must also: (5) Indicate whether the dealer is surety bonded or is otherwise insured to protect the consumer against errors and omissions of the dealer and, if bonded or insured, provide proof thereof; (6) Indicate the last four digits of the dealer's resale certificate number from the State Board of Equalization; (7) Indicate whether the item was autographed in the presence of the dealer and specify the date and location of, and the name of a witness to, the autograph signing; (8) Indicate whether the item was obtained or purchased from a third party. If so, indicate the name and address of this third party; (9) Include an identifying serial number that corresponds to an identifying number printed on the collectible item, if any. The serial number shall also be printed on the sales receipt. If the sales receipt is printed electronically, the dealer may manually write the serial number on the receipt." Such sellers of autographed items must also: at the location where the collectible is offered for sale and in close proximity to the collectible merchandise, [display] a conspicuous sign that reads as follows: "SALE OF AUTOGRAPHED MEMORABILIA: AS REQUIRED BY LAW, A DEALER WHO SELLS TO A CONSUMER ANY MEMORABILIA DESCRIBED AS BEING AUTOGRAPHED MUST PROVIDE A WRITTEN CERTIFICATE OF AUTHENTICITY AT THE TIME OF SALE. THIS DEALER MAY BE SURETY BONDED OR OTHERWISE INSURED TO ENSURE THE AUTHENTICITY OF ANY COLLECTIBLE SOLD BY THIS DEALER." Exempted are pawnbrokers, online sales sites (though not the dealers using the sites), and the actual human doing the autographing if he's also the person selling the item. Various state booksellers are pretty steamed about this, for the onerous paperwork requirements it places on the totally innocent and popular practice of selling signed books, and of hosting events in which autographed books are made and sold, either then or later. Brian Hibbs of the store Comix Experience in San Francisco noted in an open letter to Assemblyman David Chu that "I assume that the intention of the bill was to help combat fraudulent 'autograph mills' for collectibles, but because it is written so broadly, the actual real world consequences of this bill will likely be devastating for thousands of legitimate California-based Book and Comic Book stores." [...]

Why Obamacare Exchanges Are Collapsing: Richard Epstein Talks with Nick Gillespie

Tue, 27 Sep 2016 17:08:00 -0400

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The architects of Obamacare could have foreseen today's crisis, says NYU Law Professor Richard Epstein, except they were intellectual "super jocks" with a "superior Ivy-League sneer," who knew so much better than anyone else "how to run this Rube Goldberg contraption" designed to "defeat the law of gravity."

Epstein speaks as an insider to elite circles. A graduate of Columbia, Oxford, and Yale Law School, he's the Laurence A. Tisch Professor of Law at New York University, a senior fellow at the Hoover Institute, and a professor emeritus at the University of Chicago. A towering figure in his field, Epstein has had a profound impact on libertarian legal theory, especially with his 1985 book, Takings: Private Property and the Power of Eminent Domain.

Throughout his career, Epstein says, he's been surrounded by "people cleverer than myself putting up schemes that are dumber than you can imagine."

Reason's Nick Gillespie sat down with Epstein for an extended discussion about the collapse of the Obamacare exchanges (0:43); why cigarette companies don't owe smokers a dime (15:49); the recent legal campaign against Exxon Mobile related to global warming (27:00); Obama's dismal record (35:23); where the U.S. went wrong in Iraq (45:00); why he thinks Gary Johnson is a weak candidate (57:00); Hillary Clinton's criminal offenses (58:26); whether he favors Hillary or Trump (1:04:51); and why he's planning to sit out this election (1:05:34).

For a transcript and video version of the conversation, go here.

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Richard Epstein: Why Obamacare Is Collapsing and He's Not Voting for Trump, Hillary, *or* Johnson

Fri, 23 Sep 2016 14:20:00 -0400

The architects of Obamacare could have foreseen today's crisis, says NYU Law Professor Richard Epstein, except they were intellectual "super jocks" with a "superior Ivy-League sneer," who knew so much better than anyone else "how to run this Rube Goldberg contraption" designed to "defeat the law of gravity." Epstein speaks as an insider to elite circles. A graduate of Columbia, Oxford, and Yale Law School, he's the Laurence A. Tisch Professor of Law at New York University, a senior fellow at the Hoover Institute, and a professor emeritus at the University of Chicago. A towering figure in his field, Epstein has had a profound impact on libertarian legal theory, especially with his 1985 book, Takings: Private Property and the Power of Eminent Domain. Throughout his career, Epstein says, he's been surrounded by "people cleverer than myself putting up schemes that are dumber than you can imagine." Reason's Nick Gillespie sat down with Epstein for an extended discussion about the collapse of the Obamacare exchanges (0:43); why cigarette companies don't owe smokers a dime (15:49); the recent legal campaign against Exxon Mobile related to global warming (27:00); Obama's dismal record (35:23); where the U.S. went wrong in Iraq (45:00); why he thinks Gary Johnson is a weak candidate (57:00); Hillary Clinton's criminal offenses (58:26); whether he favors Hillary or Trump (1:04:51); and why he's planning to sit out this election (1:05:34). A transcript of the conversation is below. Camera by Jim Epstein and Kevin Alexander; edited by Epstein. Subscribe to our YouTube channel. Like us on Facebook. Follow us on Twitter. Subscribe to our podcast at iTunes. This is a rush transcript that has not been checked for accuracy and punctuation. Check any quotes against the video. Nick Gillespie: You were among the people who predicted that Obamacare would fail not simply because it was a bad idea but the implementation would be virtually impossible to do. In the Obamacare exchanges, now we are seeing basically some sort of death spiral or some kind of predictable outcome. Talk a little about that and what is happening and why didn't more people see it come Richard Epstein: Well, I think we start the second question first. Why didn't more people see it coming? I think the explanation really is that these were all the kinds of Ivy League super jocks. And what they always believe is that they can defeat the law of gravity by the ingenious schemes that they could put into place in order to keep things under control. So when this thing was actively debated in 2008 and 2009 there were two approaches to the problem. People like myself said look you know health care insurance is not really special. What you have to understand about all insurance schemes is the greatest chance of conniving is typically with the insured and not with the insurer. And I said the way in which we kind of know this is you go back to the history of marine insurance and you start to see that the insurance companies were always given the options to pull out because they understood that the concealment of information by the insured would have very adverse effects on what they did and it was also clear that the people who would come for insurance were those who had private information which made it more likely than average that they would be the ones who would need the stuff Nick Gillespie: You know you are at NYU and Chicago, not at an Ivy League school. We fixed that because you have to buy insurance. Richard Epstein: Well we didn't fix it because of that. First of all what we do is we say you have to buy it but the mandates were extremely unpopular and the idea that you were going to run a social program with very popular acceptance which says you have to pay if you don't take something that you don't want to buy really sticks in the craw of just about everybod[...]

Brickbat: Reaping What They Sowed

Thu, 22 Sep 2016 04:00:00 -0400

(image) Metric Giles got tired of looking at the trash-strewn vacant lot next door to the offices of the Community Stabilization Project where he worked in St. Paul, Minnesota. The lot was once the site of a church building that was torn down for code violations. So with permission of that church, which claims to still own the lot, he and some others who work in the neighborhood cleaned it up and planted a garden. But the state claims the lot had been forfeited to it years ago for back taxes and Ramsey County is its legal steward. And county officials have now placed "no trespassing" signs on the lot and ordered Giles to remove the garden.

Feds Want to Support Automated Cars. Oh, Also: They Want Much More Regulatory Authority.

Tue, 20 Sep 2016 12:40:00 -0400

The good news is that the federal government genuinely does want self-driving or automated vehicles to happen. Credit a heavily technocratic Obama administration that loves the idea of replacing the poor choices of feckless citizens with smooth, sleek algorithms. Today, the National Highway Traffic Safety Administration (NHTSA) released a 116-page report detailing how it plans to regulate the introduction of these cars, which they're calling "highly automated vehicles," or HAVs. So we can have a debate over whether it should be legal to allow HAVs to drive in HOV (high-occupancy vehicle) lanes. The administration wants these cars on the road, but on its own terms. President Barack Obama makes it clear in a guest commentary over at the Pittsburgh Post-Gazette, where HAVs are now being tested on the road. He also makes it clear that the federal government will be deciding what is and isn't safe. Obama and the NHTSA are your parents watching you do a wacky chemistry experiment for a science fair project making sure you don't mix the wrong things together: Regulation can go too far. Government sometimes gets it wrong when it comes to rapidly changing technologies. That's why this new policy is flexible and designed to evolve with new advances. There are always those who argue that government should stay out of free enterprise entirely, but I think most Americans would agree we still need rules to keep our air and water clean, and our food and medicine safe. That's the general principle here. What's more, the quickest way to slam the brakes on innovation is for the public to lose confidence in the safety of new technologies. Both government and industry have a responsibility to make sure that doesn't happen. And make no mistake: If a self-driving car isn't safe, we have the authority to pull it off the road. We won't hesitate to protect the American public's safety. To be completely clear, "For [the Department of Transportation], the excitement around highly automated vehicles (HAVs) starts with safety," is a sentence somebody actually wrote with complete sincerity in the executive summary of the report. Much of the report is technical, dry, and about figuring out how HAV regulations fit within existing federal framework. That is very nearly praise, given the much worse potential alternatives. The NHTSA is providing guidance to the states in the report, trying to separate what the federal government wants to control (establishing vehicle safety standards, managing recalls, issuing guidance to manufacturers) and what it wants to leave to the states (licensing drivers, enforcing traffic laws, managing safety inspections and liability rules) Essentially it's similar to the separation of authorities over vehicles right now, but what they're trying to do is prevent individual states (and cities) from creating their own rules about what an HAV must have or do in order to be allowed on the road. It's one thing to have different speed limits from state to state; it's something else entirely if it's illegal for the vehicle you're in to be on the road in some states but not others. That's exactly what has happened in some states when lawmakers passed their own regulations. But despite the emphasis on making way for innovation and experimentation, make no mistake: The NHTSA is also using the development of HAVs to lobby for more regulatory authority. Buried deeper into the report, after outlining the various processes for car manufacturers to get their vehicles approved, are requests for additional authority to control the process. One of those authorities they're asking for is pre-market approval of new vehicle types and technologies. Read this section and suddenly you might hear the sound of screeching tires in your head: NHTSA adoption of a full pre-market appro[...]

Nashville Councilwoman: Deciding Who Sleeps in Your Home is a Privilege Bestowed by Government, Not a Right

Mon, 19 Sep 2016 15:15:00 -0400

Tennessee's state legislature is considering whether to overrule local ordinances restricting how people can use short-term rentals like those available through websites like Airbnb. As part of that process, state lawmakers on Thursday heard from local officials in cities like Nashville, which requires homeowners obtain a permit before renting their homes on Airbnb and similar websites. Nashville's regulations also cap short-term rentals at no more than 3 percent of all homes in a given neighborhood—so if 3 percent of your neighbors are listing their homes through a room-sharing service, you won't be allowed to get a permit even if you meet all the other qualifications the city has set. That provision is already facing a legal challenge for being what it is: an arbitrary restriction on what property owners can do with the property they own. When asked by the special state Senate committee on short term rentals to defend that policy, Nashville Metro Council Member Burkley Allen gave a glimpse into how city officials view the relationship between property owners and their government. "To me it is a privilege to be able to do this, not a right," said Allen, who sponsored the bill that became Nashville's Airbnb ordinance. "The city of Nashville decided to grant that privilege." That drew an immediate rebuke from state Sen. Mark Green, R-Clarksville, who told Allen to "be real careful about saying somebody who owns a piece of property doesn't have a right to use that property how they want to." Allen responded by claiming that the city's zoning authority gives it the power to restrict commercial business activity in residential neighborhoods. "I think everybody agrees that we have a difference between residential and commercial, we do decide that there are rules," she said. Green jumped in to point out that Nashville's regulations "just arbitrarily say the first 3 percent get to it and the other 97 percent don't." Accepting money from someone in exchange for letting them sleep in your home is certainly commercial activity, but only in the broadest sense. Allowing people to rent their homes on Airbnb to make some extra cash doesn't fundamentally change a neighborhood from being a residential place to being a commerical one, at least not in the same way that building a shopping center or a big box store would. Even if it did, it would be hard to see how zoning laws could justify something like Nashville's threshold for how many homeowners can rent their property, as Green said. Burkley had no response to that one. To her credit, she claimed earlier in the hearing that the growth of the sharing economy and Airbnb has been beneficial to Nashville (then why restrict it, one might ask). The full hearing can be viewed here—the exchange between Allen and Green takes place about an hour and 20 minutes into it. A tip of the hat to the Beacon Center of Tennessee, which highlighted the exchange between Allen and Green on its Facebook page. src="" allowfullscreen="allowfullscreen" width="560" height="315" frameborder="0"> The Beacon Center is also involved in the lawsuit challenging Nashville's limitations on short-term rentals. The two plantiffs in the lawsuit are P.J. and Rachel Anderson, Nashville residents who rented their home on Airbnb before the city's ordinance took effect. The Andersons were unable to get a permit from the city before the 3 percent cap on short term rentals in their neighborhood was reached. The same Nashville ordinance also prohibits any form of physical advertising—like a sign or even a sticker on a window—on homes with short-term rental permits and gives police the p[...]

Economic Freedom in the World Is Increasing

Sat, 17 Sep 2016 10:00:00 -0400

(image) Economic freedom has been increasing around the world during the last 30 years according to the Fraser Institute's Economic Freedom of the World 2016 Annual Report. Using data from 2014, the Canadian free-market think tank creates its economic freedom index using a ten-point scale that measures the degree of economic freedom in five broad areas; (1) size of government: expenditures, taxes, and enterprises; (2) legal structure and security of property rights; (3) access to sound money; (4) freedom to trade internationally; and (5) regulation of credit, labor, and business.

The good news, according to the 2016 report is that "economic freedom has increased throughout the world during the past three decades. The average EFW rating of the 20 high-income countries was 0.8 units higher in 2014 than 1985 and that of the 89 developing economies, 1.7 units higher." Between 1985 and 2014, economic freedom among high-income countries rose from 6.9 to 7.7 points; among developing countries economic freedom increased from 5.0 to 6.7 points. To consider how bad things used to be, by 2014 only four developing countries remained below the 5.0 point average of 1985 - Argentina, Congo, Libya, and Venezuela.

The report notes that the top-ten countries are Hong Kong and Singapore, that once again, occupy the top two positions. The other nations in the top 10 are New Zealand, Switzerland, Canada, Georgia, Ireland, Mauritius, the United Arab Emirates, and Australia and the United Kingdom, tied for 10th. The researchers report the rankings of some other major countries: the United States (16th), Germany (30th), Japan (40th), South Korea (42nd), France (57th), Italy (69th), Mexico (88th), Russia (102nd), India (112th), China (113th) and Brazil (124th).

The bottom ten least economically-free (otherwise known as basket-cases) are Iran, Algeria, Chad, Guinea, Angola, the Central African Republic, Argentina, the Republic of the Congo, Libya and, lastly, Venezuela. Glancing at the map below will tell you that the folks a Fraser did not evaluate places like Sudan, South Sudan, Somalia, Afghanistan, Tajikistan, etc. - which suggests there is a level below basket-cases. Let's call that the hellhole level.

Additionally, the report notes that nations that are economically free out-perform non-free nations in indicators of well-being. Nations in the top quartile of economic freedom had an average per-capita GDP of $41,228 in 2014, compared to $5,471 for bottom quartile nations (PPP constant 2011 US$). In addition, life expectancy is 80.4 years in the top quartile compared to 64.0 years in the bottom quartile.


After Banning Kratom, DEA Says It Might Be a Useful Medicine

Fri, 16 Sep 2016 07:30:00 -0400

Officials at the Drug Enforcement Administration (DEA) seem to have been surprised by the negative reaction to the agency's "temporary" ban on kratom, which it implausibly claimed was necessary "to avoid an imminent hazard to public safety." That ban, which will last at least two years, can be extended for another year, and during that time the DEA is supposed to go through the motions of justifying the decision it has already made. But according to DEA spokesman Melvin Patterson, the agency may decide not to keep kratom in Schedule I, the most restrictive category under the Controlled Substances Act (CSA). "I don't see it being Schedule II [or higher] because that would be a drug that's highly addictive," Patterson tells Washington Post drug policy blogger Christopher Ingraham. "Kratom's at a point where it needs to be recognized as medicine. I think that we are going to find out that probably it does [qualify as a medicine]." Patterson makes it sound as if the DEA had no idea Americans were using kratom for medical purposes, even though it discusses those uses in its explanation of the ban. The storm of protest from medical users of kratom, which included a demonstration near the White House on Tuesday, "was eye-opening for me personally," Patterson says. "I want the kratom community to know that the DEA does hear them. Our goal is to make sure this is available to all of them." And what better way to do that than banning all kratom products? Patterson's comments are surprising, not least because they contradict conclusions the DEA already has reached about kratom, a pain-relieving leaf from Southeast Asia that recently gained a following in the United States as a home remedy and recreational intoxicant. Explaining why it decided to ban kratom, the DEA says "available information indicates that [mitragynine and 7-hydroxymitragynine, kratom's main active ingredients] have a high potential for abuse, no currently accepted medical use in treatment in the United States, and a lack of accepted safety for use under medical supervision." Those are the criteria for Schedule I, which Patterson now says is not appropriate for kratom. Although the DEA does not have to demonstrate that kratom meets the criteria for Schedule I to put it there temporarily, it goes to great lengths to show that kratom has "a high potential for abuse," mainly by classifying everything people do with it as abuse. Under the CSA, drugs in the top two schedules are all supposed to have a "high potential for abuse," while drugs in lower schedules (III through V) are supposed to have progressively less abuse potential. Patterson suggests a drug cannot have a high potential for abuse unless it is "highly addictive," which kratom is not. Yet neither are many other substances in Schedule I, including marijuana, qat, LSD, psilocybin, mescaline, MDMA, and dimethyltryptamine, assuming addictiveness is measured by the percentage of people who become heavy users after trying a drug. Evidently a drug need not be highly addictive to be placed in Schedule I. Nor does the DEA define abuse potential based on the hazards a drug poses. Chuck Rosenberg, the agency's acting administrator, notes that "Schedule I includes some substances that are exceptionally dangerous and some that are less dangerous (including marijuana, which is less dangerous than some substances in other schedules)." Emphasis mine, because people tend to assume that Schedule I is a list of what the DEA considers to be the world's most dangerous drugs. The DEA does not see it that way. "It is best not to think of drug scheduling as an escalating 'danger' scale," Rosenberg says. If "high potential for abuse" does not refer to addictiveness or to danger, wha[...]

Donald Trump Was Right to 'Float Rolling Back Food Safety Regs'

Thu, 15 Sep 2016 18:04:00 -0400

So here's something on which I agree with Donald Trump: his momentary policy on "rolling back food regulations" (in the get-a-load-of-this phraseology of The Hill). In a fact sheet posted online Thursday, the campaign highlighted a number of "specific regulations to be eliminated" under the GOP nominee's economic plan, including what they called the "FDA Food Police." "The FDA Food Police, which dictate how the federal government expects farmers to produce fruits and vegetables and even dictates the nutritional content of dog food," it read. "The rules govern the soil farmers use, farm and food production hygiene, food packaging, food temperatures and even what animals may roam which fields and when," the statement continued. "It also greatly increased inspections of food 'facilities,' and levies new taxes to pay for this inspection overkill." More here. Sadly, Trump's plan had barely been noticed (and criticized) before he mostly pulled it down. Does anyone really think that FDA inspections or those by city regulators are the only thing protecting the nation's stomachs from mass poisoning by Big Food and mom-and-pop grease trucks alike? As Reason's Ronald Bailey noted in the past, food-borne illnesses have been declining even as reports about salmonella and other contamination outbreaks have been increasing (it bleeds it leads, and if you vomit, the press is on it). Now more than ever, thanks to social media, no business can hide from poisoning its customers. You get rid of "official" food inspectors and you know what will happen? To the extent that customers demand any sort of certification beyond public reputation, private-sector and nonprofit groups will be created to provide this or that level of inspection. We see that already with kosher and halal food prep, of course, not to mention other sorts of watchdog groups (think Fair Trade coffee and the like). Yelp or some other rating system would likely add some sort of Good Housekeeping Seal of Approval-style process as well. Whatever else you can say about a lot of regulatory burdens and inspections processes that were put into operation 100 years or more ago, a lot of them were never necessary, could be provided more efficiently by non-governmental outfits, or have been superseded by technological and social innovations. Public-sector food inspections could be as safely tossed into the garbage heap as, say, state-run taxi commissions. Uber, Lyft, and related outfits aren't perfect (no system is) but they do a far better job of coordinating service and doing right by customers than any municipal hack bureau ever has. As with most things, Chris Elliott's path-breaking early '90s Fox sitcom, Get A Life! got there decades ago, in an episode in which becomes a food inspector and quickly goes on the take: src="" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0"> Hat tip: Ron Siliko.[...]