Archive | January, 2014

The Economics of Credit Card Security

The WSJ has an interesting article today on the Target credit card security breach. As the article notes, the US card system is less secure than elsewhere in the world, most notably Europe, which has a “chip and PIN” system, which has a computer chip embedded in the card and requires the purchaser to insert a PIN as well to make a transaction. The Target security breach has led many to wonder–and implicitly the WSJ–why the US has lagged on adopting this more secure technology.

Well it turns out that the economics of credit card security is more complicated than it appears at first glance. But first, an important thing to keep in mind: historically the United States has been a high-trust, low-fraud country when it comes to payment card usage. For example, the conventional practice of handing over your credit card (or debit card) to a waiter in a restaurant and having him disappear into a back room with it is something that must strike people in other countries as somewhat bizarre. Nevertheless, we do it all the time and rarely does anything go wrong in this process. So, this makes a difference–in a high-trust, low-fraud country it generally is not necessary to invest in as elaborate security protections as elsewhere. As an analogy, consider that in the U.S. very few restaurants, stores, or hotels routinely post visible armed guards at their front door, whereas this precaution is not uncommon in other countries.

With that background in mind, the WSJ article contains some interesting numbers relative to the optimal level of credit card security.

First, consider the size of the potential dollar size:

But if the chip cards were used in the U.S., fraud losses could be halved, Aite Group estimates. U.S. merchants and banks had 2012 losses of

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Brief Review of Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy

This book, by journalist Charlie Savage was published six years ago, but I just finished it. It’s a well-written, well-researched critique of the George W. Bush’s Administration’s abuse of executive power based on often extremely dubious constitutional theories. If you’re interested in the subject matter, it’s well worth reading, despite its age. Of particular interest to many VC readers is that he traces the intellectual origins of the Bush Administration’s broad assertions of executive power back to (mostly) young conservative lawyers who worked in the Reagan Administration.

I have a few qualms about the book. Most important, for a book that’s all about executive power, you’d hope the author would master what the theory of the unitary executive means, and wouldn’t, as so many Bush Administration critics did, confuse that theory with other issues. Savage, unfortunately, fails that test repeatedly.

Savage also sometimes overstates his case, especially later in the book. For example, Savage notes that Bush issued signing statements indicating that the Administration would decline, for constitutional reasons, to enforce affirmative action preferences in government employment dictated by statute. Savage claims that Bush did so despite the Supreme Court’s holding in Grutter that affirmative actions preferences are constitutionally permissible. Savage indicts the administration for ignoring Grutter in favor of its own interpretation of the Constitution. In fact, Grutter only held that preferences in higher education are permissible. While some scholars think that Grutter’s logic can be applied to employment (I’m not one of them), Grutter didn’t purport to overrule cases unfavorable to preferences, in particular the Adarand case, banning preferences in government contracting. In this instance, I think Bush had the better of the constitutional argument based on Supreme Court precedent, but at the very least Savage significantly overstated the case that Bush was acting lawlessly.

And some […]

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Canadian Prime Minister Harper on Israel

I think President Obama has been better to Israel than his critics acknowledge, and has been very pro-Israel by any standard except perhaps that of the prior two presidents, who were the most pro-Israel of any American presidents. But it’s hard to imagine him giving a speech like this:

“It is a Canadian tradition to stand for what is principled and just, regardless of whether it is convenient or popular,” he said to the Israeli parliament.

But “support today for the Jewish state of Israel is more than a moral imperative. It is also of strategic importance, also a matter of our own long-term interests,” he elaborated, praising Israel’s record on human rights and economic freedom. “Israel is the only country in the Middle East which has long anchored itself in the ideals of freedom, democracy and the rule of law. These are not mere notions. They are the things that, over time and against all odds, have proven to be the only ground in which human rights, political stability, and economic prosperity, may flourish. These values are not proprietary; they do not belong to one nation or one people. Nor are they a finite resource; on the contrary, the wider they are spread, the stronger they grow.”

“Likewise, when they are threatened anywhere, they are threatened everywhere,” Harper continued. And “what today threatens the societies that embrace such values and the progress they nurture? Those who scorn modernity, who loathe the liberty of others, and who hold the differences of peoples and cultures in contempt. Those who often begin by hating the Jews, but, history shows us, end up hating anyone who is not them. Those forces which have threatened the State of Israel every single day of its existence, and which, today, as 9-11 graphically showed us,

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Some Upcoming Speaking Engagements

Here are some speaking engagements I will be doing in the next two weeks:

Thursday, January 22: I will be delivering the annual Brennan Lecture at Oklahoma City University. My topic (picked because it interested the organizers) is “NFIB v. Sebelius and the Constitutional Debate Over Federalism.” Perhaps Justice William Brennan would turn over in his grave if he knew that I was giving this lecture. There are important areas of agreement between us, but probably not on this issue. On the other hand, he might already have turned over when co-blogger Randy Barnett delivered a previous lecture in the series in 2004 (the list of past speakers also includes many people closer to Brennan’s views).

Jan. 27, noon: University of Chicago Law School Federalist Society: I will be doing a talk on my book Democracy and Political Ignorance: Why Smaller Government is Smarter (with commentary by a U of Chicago professor, name TBA).

Jan. 28, noon: University of Illinois College of Law Federalist Society, Champaign, IL: “Democracy and Political Ignorance,” (with commentary by Illinois Prof. Jason Mazzone).

January 31, 2-3:30 PM: University of Texas School of Law, Austin Texas, Conference on “Is Democracy Desirable?” (with commentary by Yale Law School Professor Heather Gerken and University of Texas Professor Sanford Levinson). […]

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Immigration and Political Freedom

I recently wrote a guest post for the Open Borders blog on migration and political freedom. The connection between the two is often ignored in debates over immigration policy. Here’s an excerpt:

There is widespread agreement that political freedom is a fundamental human right – that everyone is entitled to substantial freedom of choice in deciding what type of government policies they will live under. This is one of the main justifications for democracy. Voting enables the people to exercise political choice. But the principle of political freedom also has implications for international migration. The same logic that justifies giving people a right vote at the ballot box also implies that they should have a right to vote with their feet. This is particularly true of people living under authoritarian governments, where foot voting is often the only feasible way of exercising any political choice at all. But even for those fortunate enough to live under a democracy, the right to migrate elsewhere is an important aspect of political freedom. In both cases, obviously, the right to emigrate is of little value unless there is also a right to immigrate to some other nation….

Although the democracy has spread rapidly in recent decades, the majority of the world’s population still live in undemocratic states….

Residents of many authoritarian nations can exercise political freedom only through international migration or not at all. If developed democracies refuse admission to migrants from such countries, they effectively deprive them of their political freedom. They therefore become complicit in violating a fundamental human right. One can object that Westerners are not responsible for the lack of democracy in many Third World nations. But as philosopher Michael Huemer explains, immigration restrictions don’t merely leave in place poor conditions created by others. They involve the active use

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Was a Scientific Journal Canned for Disagreeing with the IPCC?

Copernicus Publications, “the innovative open access publisher,” recently announced it was terminating one of its journals, Pattern Recognition in Physics due to concerns about the journal’s editorial practices.  PRP was not even one year old.  It seems the problems began when the journal’s editors agreed to a special issue on “Pattern in solar variability, their planetary origin and terrestrial impacts,” in which the issue’s editors had the temerity to “doubt the continued, even accelerated, warming as claimed by the IPCC project.”[*]According to the original explanation offered by Martin Rasmussen of Copernicus Publications, as reported by JoNova, the expression of this conclusion was a motivating factor for the “drastic decision” to terminate a journal. A letter to one of the editors also expressed “alarm” that a paper in PRP would question the IPCC.

If Copernicus indeed shuttered a journal because of disagreement with the conclusions expressed in a published paper, it would be quite shameful.  But is that what happened? In a revised statement, Rasmussen notes “the editors selected the referees on a nepotistic basis, which we regard as malpractice in scientific publishing and not in accordance with our publication ethics we expect to be followed by the editors.” Whatever the merits of the papers at issue (and even some climate skeptics were unimpressed), it appears that PRP did violate accepted peer review norms in producing the special issue — as Anthony Watts details here — and concerns were raised about the journal last year.  So it appears Copernicus did have sufficient grounds to reconsider its production of PRP.  Given the wording of Rasmussen’s initial statement, however, questions remain about what prompted the publisher’s decision.

[* The IPCC is the Intergovernmental Panel on Climate Change, a UN-sponsored, intergovernmental entity that produces periodic reports on climate change.]

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The Pot Bowl

It is perhaps worth mentioning that the two teams that made it to the Super Bowl on Sunday represent Colorado and Washington – the two states that recently legalized marijuana. If this somehow helps accelerate the recent decline in public support for the War on Drugs, it will almost be enough to offset my disappointment over the Patriots and Tom Brady losing to longtime rival Peyton Manning. […]

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Thanks for Help with Obsidian Finance v. Cox

I just wanted to thank the many people who helped me with Obsidian Finance v. Cox:

  • Benjamin Souede of Angeli Ungar Law Group LLC, our pro bono local counsel for the motion for new trial in district court and for the motion to block plaintiff’s zany attempt to seize the appeal rights.
  • Mayer Brown LLP, with which I’m a part-part-part-time Academic Affiliate, and which paid the litigation costs through its pro bono program.
  • Helene Siegel of Mayer Brown, for her work with cite-checking and production.
  • My colleagues David Babbe, Sam Bray, and Dan Bussel, Loyola (L.A.) professors Karl Manheim, Jay Dougherty, John Nockleby, and Justin Levitt, and recent graduate Dafna Gozani for their help with moot courts for my argument.
  • Bruce Brown, Gregg P. Leslie, and Jack S. Komperda, representing the Reporters Committee for Freedom of the Press, and Tom Goldstein, representing SCOTUSblog, for their amicus briefs that supported our position, and Matthew J. Zimmerman and Richard D. Mc Leod, representing the Electronic Frontier Foundation, which filed an amicus brief supporting our motion for new trial.

I very much appreciate all that all these people have done to bring us to Friday’s win. […]

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Two Toddlers Killed in Exorcisms in Maryland

So reports the Washington Post (thanks to Prof. Howard (Friedman) Religion Clause for the pointer):

A Germantown mother and another woman accused of killing two toddlers and trying to kill two other children believed that they were releasing demonic spirits that had possessed the siblings, Montgomery County police said Saturday.

The two dead children — a boy, Norell Harris, 1, and a girl, Zyana Harris, 2 — were found Friday morning on their mother’s bed in a Germantown townhouse. Both had been stabbed repeatedly, police said. A sister, Taniya Harris, 5, and a brother, Martello Harris, 8, were seriously injured but are expected to survive.

Police said the women thought that they were performing an exorcism, although it did not appear they had followed any ritual….

Police identified the women as Zakieya L. Avery, 28, the mother, and Monifa Sanford, 21, who lived with the family. Each has been charged with two counts of first-degree murder and two counts of attempted first-degree murder….

Avery, who has received mental health counseling, moved twice in recent years — from Western Maryland to Ohio and then to Montgomery, according to a minister whose church she attended. A relative said she had separated from her husband. Writings on her Facebook page suggest that she believes in God and fears Satan….

In the townhouse community where Avery lived … at least one neighbor saw signs of possible trouble Thursday night. He spotted a child alone in a parked car and called 911, police said. As officers were on the way, two women came out of Avery’s townhouse, told the neighbor to mind his own business, took the child and went back into the home, police said.

When officers arrived, they knocked on Avery’s door but got no response. They didn’t hear or see anything suspicious

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Prison for Blasphemy

The Guardian (UK) reports:

A man who created a Facebook page poking fun at a revered Greek Orthodox monk has been sentenced to 10 months in prison in Greece after being found guilty of blasphemy…. Filippos Loizos, 28, … used a play on words to portray Father Paisios as a traditional pasta-based dish [pastitsio -EV] ….

Father Paisios, who was revered for his spiritual teachings and was said by some believers to have powers of prophecy, died in 1994.

Loizos had appealed against the ruling and would not be jailed before his case was heard by a higher court, Kleftodimos said.

Here’s what seems to be a copy of the Facebook page:

A reminder that blasphemy prosecutions are, unfortunately, not entirely a thing of the past in Europe. Thanks to Bill Poser for the pointer. […]

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Thanks And Farewell For Now

My thanks again to the VC for lending me the podium this week to talk about The Conscience of The Constitution. I hope you’ll join me—in person or online—on January 30, when I speak about the book at the Cato Institute’s book forum. Then I’ll be participating in February’s Cato Unbound to discuss the debate over “judicial activism” (which takes up chapter 5 of my book).

If you enjoy The Conscience of The Constitution, you might also be interested in my other books, The Right to Earn A Living: Economic Freedom And The Law, and Cornerstone of Liberty: Property Rights in 21st Century America (on sale now for only $7 at the Cato store).

Please also bookmark the Pacific Legal Foundation’s Liberty Blog to follow our litigation in defense of economic liberty and other constitutional rights across the country—including our ongoing challenges to Obamacare, subject of the cover article in this issue of Regulation. And my personal blog is Freespace, where I write on various subjects of interest. You can also follow me on Twitter @TimothySandefur. […]

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Ninth Circuit to Hear Challenge to Obamacare’s “Platonic Guardians” January 28

I mentioned in a previous post that Progressivism has a curious definition of “democracy” that largely takes the form of unaccountable administrative agencies wielding enormous power to regulate people’s behavior. Perhaps the most extreme example of administrative power—the Independent Payment Advisory Board, or IPAB—is the subject of the latest constitutional challenge to Obamacare to be heard by a federal court of appeals. The Ninth Circuit will hear the case in a special session in Las Vegas on January 28.

IPAB is an agency created by Obamacare to regulate Medicare reimbursement rates. This group of bureaucrats is required by the statute to promulgate “recommendations” as to how to reduce Medicare costs—except that those “recommendations” go into effect automatically, without Congressional or Presidential approval. On the contrary, the law specifically forbids Congress or the President from altering these “recommendations” (except in one limited sense: Congress can replace those “recommendations” with new ones, so long as they achieve the same reductions as the originals.) And Obamacare even attempts to make IPAB immune to repeal. It allows Congress to abolish the agency only by passing a joint resolution during a narrow one-month window in 2017—and that resolution must receive the most extreme supermajority ever required in American law. Courts are prohibited from reviewing IPAB’s actions, also. In short, IPAB is an autonomous lawmaking body that operates without Presidential, Congressional, or Judicial checks or balances.*

Given its extreme degree of independence from popular control, it’s not surprising that opponents of the law labeled IPAB a “death panel.” The law’s defenders called that an exaggeration because the law expressly forbids IPAB from “rationing care.” But the law also doesn’t define what “rationing care” means—and since IPAB’s actions are immune from judicial review, it’s hard to see how courts could stop it from doing so. […]

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Upcoming Talks

I have a few upcoming talks that are open to the public and may be of interest to VC readers.

  • On January 21, at noon, I will be speaking at the National Constitution Center’s “Affordable Care Act Town Hall” with Simon Lazarus of the Constitutional Accountability Center.  Jeff Rosen will moderate our discussion of continuing legal controversies surrounding the ACA and its implementation.  This podcast offers a bit of a preview. Registration details here.
  • On January 30, at noon, I will be speaking on ACA implementation before the Cleveland Lawyers Chapter of the Federalist Society. Details to follow.
  • On January 31, at noon, I will be speaking on “The Conspiracy Against Obamacare: How Academic Bloggers Influenced the Legal Battle Over the Individual Mandate” at the Public Affairs Discussion Group, sponsored by the Center for Policy Studies at CWRU.
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Lawyers for Victims of WWII Internment of Japanese-Americans Urge Overruling of Korematsu

At SCOTUSblog, Lyle Denniston has an interesting post on an effort by lawyers who represented Fred Korematsu and other victims of the internment of Japanese-Americans during World War II to persuade the Obama administration to advocate the overruling of Korematsu v. United States, the notorious 1944 Supreme Court decision that upheld the forcible internment of over 100,000 Japanese-Americans during World War II [HT: GMU law student Rebecca Bucchieri]:

Lawyers who worked for years — ultimately successfully — to clear the names of U.S. citizens of Japanese ancestry who were convicted of violating government detention policy during World War II are trying to persuade the Obama administration to join in wiping off the books the Supreme Court rulings of that time, upholding those detentions. The most famous of those rulings – often reviled – was the 1944 decision in Korematsu v. United States.

The lawyers did so in a letter last week to U.S. Solicitor General Donald B. Verrilli, Jr., attempting to shape the government’s response to a new Supreme Court appeal that attacks the Korematsu decision. They want the government to formally repudiate that precedent, and tell the Court that it is no part of the justification today for detention of U.S. citizens during the war on terrorism.

The new case is Hedges v. Obama (docket 13-758), an attempt to revive a constitutional challenge to Congress’s recent support of presidential power to detain suspected terrorists….

While Congress was debating that measure, a controversy arose over how far it would go, if at all, to permit the detention without trial of U.S. citizens captured inside the U.S. In a compromise effort to resolve that dispute, Congress included a statement that now seems ambiguous about what was intended. In the Hedges case, the claim is that the statement can be

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