Archive | Paternalism

NY appellate court rules 5-0 against Bloomberg soda ban

The First Department of the Appellate Division of the New York Supreme Court has ruled 5-0 against NYC Mayor Michael Bloomberg’s soda ban, in the case of  In re New York Statewide Coalition of Hispanic Chambers of Commerce, et al. v. The New York City Department of Health and Mental Hygiene, et al. (The Hispanic Chambers opinion begins on page 22, following two other opinions released the same day.)

In New York State, the trial courts of general jurisdiction are the Supreme Court. The intermediate courts of appeal are the Appellate Division, which are divided into four geographic Departments, similar to the U.S. Circuit Courts of Appeal. The highest court is the Court of Appeals. Thus, Mayor Bloomberg has the option of trying to bring the case to the Court of Appeals.

The Appellate Division’s decision is quite straightforward: “[T]he Board [of Health] did not bring any scientific or health expertise to bear in creating the Portion Cap Rule. Indeed, the rule was drafted, written and proposed by the Office of the Mayor and submitted to the Board, which enacted it without substantive changes.” If the Board’s ban on the sale of sodas larger than 16 ounces were actually a health rule (similar, for example, to a ban on the sale of infected meat), there would not be so many exemptions for certain types of vendors.

The Appellate Division applied the four-part separation of powers test from Boreali v Axelrod, 71 NY2d 1 (1989). The Appellate Division summarized the four Boreali factors:

First, Boreali found the PHC [Public Health Council] had engaged in the balancing of competing concerns of public health and economic costs, “acting solely on [its] own ideas of sound public policy”. Second, the PHC did not engage in the “interstitial” rule making typical of administrative

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New York Judge Nixes Super-Size Soda Ban

A state court judge has voided New York City’s much discussed (and much derided) ban on the sale of large sugary drinks, the New York Post reports.   The ban was slated to take effect tomorrow.  Due to the judge’s ruling, however, NY health inspectors won’t have to run around testing drink sizes and coffee sellers will still be able to add sugar to large drinks.  (Lattes and the like were exempted, however, due to their milk content — further evidence of the law’s udder irrationality.)  Here is the opinion, and more coverage from the WSJReason, and Reuters.

UPDATE: NYU’s Rick Hills comments:

Justice Milton Tingling of the New York supreme court (that’s a trial judge for you non-New Yorkers) struck down Mayor Bloomberg’s soda portion cap this afternoon, citing the state non-delegation doctrine and the state’s administrative law constraint on arbitrary and capricious rule-making. The essence of the opinion is that defining soda portion size is above the Department’s pay grade, because it is “legislative” in character, a major policy requiring the imprimatur of City Council. . . .

In favor of Justice Tingling’s anti-paternalism canon is that the doctrine simply forces Mayor Bloomberg to apply to the City Council to make controversial policy decisions. As I have elsewhere noted with respect to taxis, the Mayor has been excessively prone to bypass Council, either applying to Albany for direct state legislative authority or simply ruling by executive decree (or by the decree of mayoral sock puppets like the Department of Health).

But one might complain that judicial glosses on statutes, derived from nothing more than the judge’s libertarian suspicion that an agency’s intervention into the market is too novel or meddling, over-extend judicial power even as they constrain agencies’ power. The

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Does any government have the legitimate power to ban medical marijuana?

Ernst Freund was one of the Founding Fathers of progressive constitutionalism. His 1904 book The Police Power: Public Policy and Constitutional Rights argued for a vastly expanded understanding of the police power. (The police power, broadly defined, is a government’s power to regulate health, safety, welfare and morals. It is distinct from other government powers, such as the tax power, or the military power. In the U.S. system, the federal government does not have a police power, except as to federal territories, but the States do have a police power.)

Freund’s expansive view of the police power aimed to overthrow the then-prevailing (at least in theory) view, articulated by Christopher Tiedeman in his 1886  A Treatise on the Limitations of the Police Power in the United States, that the police power could only be used to prevent people from harming others or violating their rights. In the long run, Freund’s view became the mainstream.

So what would Freund, that great advocate for loosening the restraints on big government, have to say about laws which prohibit the medical use of marijuana? Here’s what he wrote about liquor prohibition:

All prohibitory laws make an exception in favor of sales for medical purposes. This is not a legislative indulgence but a constitutional necessity, since the state could not validly prohibit the use of valuable curative agencies on account of remote possibility of abuse. “[T]he power of the legislature to prohibit the prescription and sale of liquor to be used as medicine does not exist, and its exercise would be as purely arbitrary as the prohibition of its sale for religious purposes….” The right to an adequate supply of medicines cannot be cut off by the legislature, and when legal provisions would have such effect they must that extent be inoperative.

Freund, at [...]

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“Failure: Why We Need It”

That was the provocative title of a seminar earlier this month organized by the Istituto Bruno Leoni, Italy’s free market think tank. The event was the IBL’s 9th annual Mises Seminar. As is common at multinational seminars in Europe, the event and the papers were in English, which is today’s lingua franca among well-educated Europeans.

My favorite paper was presented by Kaetana Leontjeva, who is a Senior Policy Analyst at the Lithuanian Free Market Institute. Her paper, Old-age state social insurance: may its failure be averted?, examines the history of old-age pension systems throughout Europe, with a special focus on the USSR, Lithuania and Georgia. She shows how these programs, initially of modest size, grew to an unustainable  level that is financed by borrowing. She argues that there are only two realistic alternatives:

1. Continuing the present systems, with only “technical” reforms. This will eventually lead to complete failure of the old-age pension system, as occurred in the USSR. ” This would lead to a sudden and dramatic change in conditions of the elderly, bringing about poverty and chronic insecurity.” OR

2. “managed failure.” This means starting to shrinking the existing pension systems, by requiring that they operate on a balanced budget. Young people should not be told to depend on the current system, but should be encouraged to start making plans for their own retirement, by setting aside some of their current income to provide for their retirement. “For the ‘managed failure’ approach to work, one generation has to concede and make a sacrifice by paying for the pensions of the current retirees and for their own. In the absence of such a consent and solidarity, the generation to make the sacrifice would emerge spontaneously, and the process of an unexpected old-age social insurance [...]

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Wright and Ginsburg on Behavioral Law & Economics

GMU law professor (and FTC commissioner nominee) Joshua Wright and Judge Douglas H. Ginsburg have a new paper in the Northwestern Law Review, “Behavioral Law and Economics: Its Origins, Fatal Flaws, and Implications for Liberty.” Here’s the abstract from SSRN:

Behavioral economics combines economics and psychology to produce a body of evidence that individual choice behavior departs from that predicted by neoclassical economics in a number of decision-making situations. Emerging close on the heels of behavioral economics over the past thirty years has been the “behavioral law and economics” movement and its philosophical foundation — so-called “libertarian paternalism.” Even the least paternalistic version of behavioral law and economics makes two central claims about government regulation of seemingly irrational behavior: (1) the behavioral regulatory approach, by manipulating the way in which choices are framed for consumers, will increase welfare as measured by each individual’s own preferences and (2) a central planner can and will implement the behavioral law and economics policy program in a manner that respects liberty and does not limit the choices available to individuals. This Article draws attention to the second and less scrutinized of the behaviorists’ claims, viz., that behavioral law and economics poses no significant threat to liberty and individual autonomy. The behaviorists’ libertarian claims fail on their own terms. So long as behavioral law and economics continues to ignore the value to economic welfare and individual liberty of leaving individuals the freedom to choose and hence to err in making important decisions, “libertarian paternalism” will not only fail to fulfill its promise of increasing welfare while doing no harm to liberty, it will pose a significant risk of reducing both.

Definitely worth a read. [...]

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Researchers Whose Work Was Cited to Justify Bloomberg’s Large Soda Ban Explain Why it Won’t Work

In trying to justify his proposed regulation banning large-size sodas, New York Mayor Michael Bloomberg cited the work of economists Brian Wansink and David Just. In this recent Atlantic article, Wansink and Just explain that he got their work wrong:

New York City’s mayor proposed a restaurant ban for any soft drink over 16-ounces. The hope is that by banning big drinks people will drink less and weigh less. He and others cited our research as the science behind the policy. Indeed, a dozen of our studies show when you randomly give people large sizes of food like popcorn and French fries, they overeat….

There’s a critical difference between the lab and Lexington Avenue that the mayor’s office didn’t account for: when Joe the Plumber and Bob the Banker buy soft drinks, they buy the size they want. They aren’t randomly forced to take a 44-ouncer when they really wanted a 12-ouncer. Moreover, their Coke or Pepsi doesn’t magically refill itself. If that happened, they’d overdrink. Instead, most restaurants give us a choice of a small or large drink — just as nearly every fast food outlet gives us a choice of small, medium, or large fries, and every movie theatre gives us a choice of small, medium, or large popcorn. People who want a little buy a little, and people who want a lot figure a way to get it.

Yes, we have found that when people are given larger portions, they do drink or eat substantially more. But to claim that these results imply that the ban will be effective is to ignore our larger body of work. In our experiments, subjects were given larger or smaller portions of food in a dining or party setting, where they were unlikely to notice portion size. It is exactly

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Do Government Subsidies for Health Care Justify Paternalistic Soda Pop Regulations?

NYU law professor Rick Hills argues that New York Mayor Michael Bloomberg’s ban on large soda pop servings is justified by the existence of government subsidies for health care:

I am inclined to think that denouncing Bloomberg’s proposal as Orwellian is like ridiculing the Food, Drug, & Cosmetic Act as a Stalinist plot or attacking “no smoking” signs in public buildings as a Maoist re-education campaign. Such hyper-ventilated rhetoric against ordinary regulation is making us Republicans look absurd. So long as government subsidizes healthcare costs, regulations to discourage obesity are society’s self-protection, not nosy paternalism. Principled conservative will argue that these subsidies should be reduced so that insurance premiums will reflect the risk of the insured’s behavior. Fair enough…

But no one believes that such subsidies will be eliminated entirely….

Discouraging obesity either through insurance premiums or taxes on sodas (and forcing the purchase of two 16 oz. cups is essentially just a soft-drink tax) is not creating a nanny state: It is avoiding moral hazard by forcing those who undertake risky behavior to pay part of the price of their risk-taking. Despite empty libertarian rhetoric about letting people pay for all of the consequences of their actions, we know that…, the healthcare-subsidized we will always have with us. We will inevitably end up paying for at least some substantial part of at least some folks’ healthcare. So long as such subsidies exist, doing nothing about the effects of soda consumption on obesity is just letting soda drinkers slurp dollars out of their fellow citizens’ wallets.

The problem of externalities created by government subsidies for risky behavior is a real one. But I think that Rick too easily dismisses the far preferable option of dealing with the problem by ending the subsidy. Even if people who are obese [...]

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Funniest Comment on the New York Times online

News item:

Bloomberg Backs Plan to Limit Arrests for Marijuana

ALBANY — Mayor Michael R. Bloomberg said on Monday that he would support a proposal by Gov. Andrew M. Cuomo to significantly curb the number of people who could be arrested for marijuana possession as a result of police stops.

Best reader comment:

Just don’t get caught with the weed AND A 24 OUNCE COKE!

(Hat tip: Eric White) [...]

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The FDA’s Unhealthy Salt Obsession

Is too much salt bad for you?  That used to be the conventional wisdom, but more recent scientific research has suggested the emphasis on salt is misplaced.  No matter.  As Walter Olson notes, the Food and Drug Administration appears to be moving ahead with plans to force gradual reductions in the salt content of processed foods.  Among other things, the FDA is concerning the adoption of federal targets for gradual salt content reductions to wean consumers from their taste for salt.  But reducing salt content will do more than alter food’s flavor.  It can affect texture and perishability as well.  Surely the FDA has better things to do than obsess over the salt content of processed foods.  But if the FDA persists, I suppose it just means these (no relation) will get more use. [...]

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Steven Levitt’s “Daughter Test” for Paternalistic Policies

Famous economist Steven Levitt, coauthor of Freakonomics, recently described his “daughter test” for assessing paternalistic policies:

Most of the time there is broad agreement as to which activities should be made criminal. Almost no one thinks that theft or violence against innocents is socially acceptable. There are, however, a few activities that fall into a gray area, like illicit drugs, prostitution, abortion, or gambling. Reasonable people can disagree as to whether it is appropriate to prohibit such activities… A common feature of these gray-area activities are that they are typically “victimless” in the sense that, unlike a theft or murder, there is no easily discernible victim of the activity…..

I’ve never really understood why I personally come down on one side or the other with respect to a particular gray-area activity….

It wasn’t until the U.S. government’s crackdown on internet poker last week that I came to realize that the primary determinant of where I stand with respect to government interference in activities comes down to the answer to a simple question: How would I feel if my daughter were engaged in that activity?

If the answer is that I wouldn’t want my daughter to do it, then I don’t mind the government passing a law against it. I wouldn’t want my daughter to be a cocaine addict or a prostitute, so in spite of the fact that it would probably be more economically efficient to legalize drugs and prostitution subject to heavy regulation/taxation, I don’t mind those activities being illegal.

It’s easy to poke holes in Levitt’s “daughter test.” If I had a daughter, I wouldn’t want her to not go to college. Does that mean college attendance should be mandatory for anyone with the requisite academic skills? I wouldn’t want my daughter to advocate racism or communism. [...]

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Broccoli, Slippery Slopes, and the Individual Mandate

Opponents of the constitutionality of the individual mandate have emphasized that upholding the mandate would give Congress the power to mandate virtually anything, including forcing people to eat broccoli. Northwestern law professor Andrew Koppelman appears to agree, but argues that this slippery slope is nothing to worry about:

One of the most rhetorically effective arguments that has been made against President Obama’s health insurance mandate is that it places us on a slippery slope to totalitarian government. If the federal government can make us buy insurance, what can’t it do?…

The Broccoli Objection, as I will call it, rests on a simple mistake: treating a slippery slope argument as a logical one, when in fact it is an empirical one.

This basic point was made long ago in Frederick Schauer’s classic article, Slippery Slopes, 99 Harv. L. Rev. 361 (1985). Schauer showed that any slippery slope argument depends on a prediction that the instant case will in fact increase the likelihood of the danger case. If there is in fact no danger, then the fact that there logically could be has no weight. For instance, the federal taxing power theoretically empowers the government to tax incomes at 100%, thereby wrecking the economy. But there’s no slippery slope, because there is no incentive to do this, so it won’t happen.

Similarly with the Broccoli Objection. The fear rests on one real problem: there are lots of private producers, including many in agriculture, who want to use the coercive power of the federal government to transfer funds from your pockets into theirs. But the last thing they want to do is impose duties on individuals, because then the individuals will know that they’ve been burdened. There are too many other ways to get special favors in a less visible way.

Koppelman [...]

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No Soda for You!

The WSJ reports:

Mayor Michael Bloomberg and Gov. David Paterson have asked the federal government to bar New York City food-stamp recipients from using the benefit to buy sugary drinks, an effort to determine if the move would decrease obesity and diabetes problems.

The request, sent late Wednesday to the U.S. Department of Agriculture, could affect an estimated 1.7 million city residents who receive food stamps. As much as $135 million in federal nutrition benefits is used to buy sugar-sweetened drinks, the mayor’s office said. . .

Food-stamp users cannot use benefits to buy alcohol and cigarettes. The request asks that the USDA allow city officials to have two years to assess if sugary-drink purchases drop, as well as problems associated with diabetes and obesity, a mayoral spokeswoman said. The proposal would not affect the total benefits received, she said.

So is this an example of over-weening paternalism? Or is it a responsible limitation on government assistance? [...]

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The FDA to Target Salt

From today’s Washington Post:

The Food and Drug Administration is planning an unprecedented effort to gradually reduce the salt consumed each day by Americans, saying that less sodium in everything from soup to nuts would prevent thousands of deaths from hypertension and heart disease. The initiative, to be launched this year, would eventually lead to the first legal limits on the amount of salt allowed in food products.

The government intends to work with the food industry and health experts to reduce sodium gradually over a period of years to adjust the American palate to a less salty diet, according to FDA sources, who spoke on condition of anonymity because the initiative had not been formally announced.

Officials have not determined the salt limits. In a complicated undertaking, the FDA would analyze the salt in spaghetti sauces, breads and thousands of other products that make up the $600 billion food and beverage market, sources said. Working with food manufacturers, the government would set limits for salt in these categories, designed to gradually ratchet down sodium consumption. The changes would be calibrated so that consumers barely notice the modification.

The legal limits would be open to public comment, but administration officials do not think they need additional authority from Congress.

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Does the Supposedly Superior Expertise of Regulators Justify Libertarian Paternalism?

Some of the commenters on my last two posts criticizing libertarian paternalism accuse me of ignoring the possibility that such paternalism is justified by the supposedly superior expertise of government regulators. Actually, I have addressed this point in several previous posts, such as here and here. However, readers can’t be blamed for not taking the time to collect bits and pieces from previous posts scattered over a three year period. Therefore, it may be helpful to collect my thoughts on this point in a single post. To summarize, I think that the regulators’ superior expertise applies at most only to one-half of the relevant equation, that even with respect to that half it has serious drawbacks, and that consumers who need expert advice can usually do better by relying on the private sector.

I. Regulators Lack Expertise on the Subjective Benefits of Risky Activities.

Regulators may have greater knowledge than consumers about the health or safety dangers of risky activities. But they lack comparable knowledge of the benefits that consumers derive from those activities. A public health expert probably knows more than I do about the risks of drinking or smoking. But only I know how much enjoyment I derive from having a beer or puffing on a cigarette. This is especially true when we remember that preferences about such things vary widely. I get zero utility from smoking and (unusually for a Russian) very little from drinking alcohol. Many other people have very different experiences. With respect to the subjective benefits they get from risky activities, consumers actually have vastly greater expertise than regulators do. In a classic 1945 article, F.A. Hayek emphasized the importance of this constraint on expert knowledge:

It may be admitted that, as far as scientific knowledge is concerned, a body of suitably

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Richard Thaler Responds to Critics of Libertarian Paternalism

Economist Richard Thaler, a leading advocate of libertarian paternalism, has briefly responded to some of the points I made in my most recent post on that subject. In that post, I argue that advocates of libertarian paternalism implicitly rely on the assumption that regulators and voters are rational, while consumers and other private sector actors are not:

Ilya Somin gets the discussion off to a unhelpful start by claiming (a) that we consider regulators to be perfectly rational, when again we repeatedly say in the book that regulators are human just like everyone else and (b) that “regulators have no reliable way of estimating the benefits and costs that consumers derive from potentially risky products.” If he means “perfectly reliable” then fine, but that is not a sensible standard. Suppose that a crib is found to strangle babies that sleep in it, as happened to the child of friends of mine. I think it is pretty easy to guess that parents would not want to buy a crib that has strangled a dozen kids. Don’t you?

Thaler’s response, I think, misinterprets my argument. Of course I am well aware that Thaler and other advocates pf libertarian paternalism realize that regulators are “human just like everyone else.” Indeed, in my post I linked some important articles on regulatory irrationality by Thaler’s coauthor Cass Sunstein. The problem is that this recognition of regulators’ “humanity” gets lost in libertarian paternalists’ policy recommendations, where the implicit assumption of regulator rationality plays a crucial role. If the libertarian paternalists built in to their theory the fact that regulators cannot be expected to be more rational than consumers (and, for reasons, I indicated in my post are often likely to be less rational), then it is unlikely that they would continue to advocate government [...]

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