The latest example of liberty-reducing occupational licensing schemes comes to us from Florida, where a law restricts the practice of interior design to people the state has licensed. Those wishing to pursue this occupation must first undergo an onerous process ostensibly in the name of “public safety.”

In reality, the law serves as an anti-competition measure that protects Florida’s current cohort of interior designers. Our friends at the Institute for Justice have pursued a lawsuit against the law but lost their appeal in the Eleventh Circuit.

Cato has now joined the Pacific Legal Foundation on an amicus brief asking the Supreme Court to review that ruling. The lower court got it wrong not just with respect to the right to earn a living, however, but also on First Amendment grounds.

That is, interior design, as a form of artistic expression, is historically protected by the First Amendment. Indeed, interior designers are measured primarily on the value of their aesthetic expression, not for any technical knowledge or expertise. This type of artistry is a matter of taste, and the designer and client usually arrive at the end result through collaboration and according to personal preferences. Thus, the designer-client relationship has little in common with traditionally regulated professions such as medicine, law and finance, where bad advice can have real and far-reaching consequences—but even then, the Supreme Court has emphasized the First Amendment implications of placing “prior restraints” on expression through burdensome licensing schemes.

Instead of following that precedent, however, the circuit court carved out a constitutionally unprotected exception for “direct personalized speech with clients.” Florida’s “public safety” justification is similarly weak, given that the state has presented no evidence of any bona fide concerns that substantiate a burdensome licensing scheme that includes six years of higher education and a painstaking exam—instead relying on cursory allegations that, for example, licensed designers are more adept at ensuring that fixture placements do not violate building codes.

Finally, the Eleventh Circuit’s ruling disregarded the infinite array of auxiliary occupations the Florida law subjects to possible criminal sanctions: wedding planners, branding consultants, sellers of retail display racks, retail business consultants, corporate art consultants, and even theater-set designers could all get swept in. The state has already taken enforcement actions against a wide spectrum of people who are not interior designers, including office furniture dealers, restaurant equipment suppliers, flooring companies, wall covering companies, fabric vendors, builders, real estate developers, remodelers, accessories retailers, antique dealers, drafting services, lighting companies, kitchen designers, workrooms, carpet companies, art dealers, stagers, yacht designers, and even a florist. This dragnet effect also suggests that the law is too broad to survive constitutional scrutiny.

The Court will likely decide by the end of the year (or early 2012) whether to take this case of Locke v. Shore.

I’ve been meaning to post this article from OpenSe​crets​.org that sheds light on the claim that either Obamacare or its twin, Romneycare, somehow “get tough” on insurance companies:

Health Insurance Industry Opens Check Books for Mitt Romney, Barack Obama


Research by the Center for Responsive Politics shows that President Barack Obama and his GOP rival Mitt Romney, the former governor of Massachusetts, are the only two presidential candidates to have raised more than $40,000 from the health insurance industry so far this election cycle…

Both men have favored health care policies that include an individual mandate for people to purchase private insurance plans. Romney did so as governor of Massachusetts, and Obama did so as part of the health care reform package he signed into law last year…

Such mandates are supported by the insurance industry, which stand to benefit from increased customers as well as from government subsidies that help enroll people who could not otherwise afford insurance.

Romney, in fact, has received more than five times as much money from the health insurance industry than any other GOP presidential candidate, according to the Center’s research.

That should weigh on the minds of states that are considering whether to create the health insurance “exchanges” that will implement Obamacare’s individual mandate and subsidies for insurance companies.

A year after Kate Zernike wrote in the New York Times that Tea Partiers were “resurrect[ing] once-obscure texts by dead writers”—such as F. A. Hayek, who won the Nobel Prize in 1974 and died in 1992—the New Yorker’s cover depicts Wall Streeters in top hats and bushy mustaches. That’s an image from, what, the 1930s? Or maybe the 1870s? Who’s “reach[ing] back to dusty bookshelves for long-dormant ideas” now?

At noon Monday, Professors John Mueller and Mark Stewart will be here to discuss their new book: Terror Security and Money: Balancing the Risks, Benefits and Costs of Homeland Security. Register here.

The question in this post’s title is the book’s. It quantifies Mueller’s skepticism about the utility of homeland security spending with cost-benefit analysis, which is Stewart’s specialty. They use this analysis, which is employed by various federal agencies as part of the regulatory review process, to show that little of what the Department of Homeland Security does is a good investment. That is, the bulk of its activities cost more—measured in lives or dollars— than they save. In the conclusion, where you find most of the book’s political science, Mueller and Stewart discuss why DHS avoids this sort of analysis—neither it nor its political advocates have much reason to advertise its wastefulness—and why that should change.

Alan Cohn, Deputy Assistant Secretary for Policy at DHS, has boldly agreed to join the proceeding. DHS rules prohibit him from commenting directly on the book, but he will presumably defend his department and discuss how it considers policies’ cost and benefits, or what it calls risk management.

That all sounds very wonky, I know. Here is why the book and forum should interest those not particularly concerned with homeland security or risk analysis: the book calls a bluff. One of the great myths about U.S. national security is that it aims to maximize safety. Almost everyone speaks about security as if this were so.

The truth is instead that every security policy, indeed every government policy, is a choice among risks. Most policies aim to mitigate risk in some way and by expending resources expose us to other risks. Our policy preferences and ideologies are largely beliefs about which risks to combat socially and which to leave to individuals, or least how much attention we should pay to competing risks. Our society, it turns out, is willing to pay far more to save lives from terrorism than most other dangers. That is, we value lives lost from it far more highly than those lost in other ways. We trade small gains in protection from terrorists for substantial losses in our ability to combat other troubles.

By asking what U.S. homeland security would look like it if truly aimed to maximize safety against all dangers, Mueller and Stewart’s book makes plain that we have chosen to do otherwise. People that disagree about the merit of that choice should agree at least that it is one we should make openly. Democracies make better choices when they perceive them.

From the General Motors bailout to subsidies for Solyndra, crony capitalism is as serious a threat to liberty, free markets and civil society as ever. Cato Institute Senior Fellow Tom G. Palmer recently discussed The Morality of Capitalism (free pdf), the financial crisis and cronyism at the John Locke Foundation.

The book is quick and rewarding read.

It’s fun to be on the winning side of a fight, even if someone else gets to land the knockout punch. Yesterday the U.S. Court of Appeals for the Federal Circuit dismissed as moot the case of FLFMC, LLC, v. Wham‑O, in which I and Cato’s Center for Constitutional Studies had entered an amicus brief on the side of toymaker defendant Wham‑O. The Western District of Pennsylvania federal court had agreed with our position that the qui tam (bounty-hunter) provision of the false marking statute was unconstitutional; the Federal Circuit heard argument on the issue, but before it could rule the U.S. Congress resolved the controversy by wisely acting, as part of its patent reform bill, to do away with the whole cottage legal industry of bounty-hunting litigation over false patent marking.

For those who came in late, federal law had long provided that anyone could sue a manufacturer that wrongly claims patent protection for its product, and collect a minor award ($500) so as to help defray the cost of bringing the action. In a 2009 case, a federal court shocked the business world by ruling that the $500 bounty should be construed as per mismarked item sold — meaning that a company that had mismarked a million paper cups or mascara applicators might owe hundreds of millions of dollars. Entrepreneurial lawyers rushed to file more than a thousand lawsuits, most of them aimed at companies that had gone on selling products with a marking after a given patent had expired. (More background here, here, and generally here at my Overlawyered site.) The constitutional issue arose because the overall setup, like the unlamented “independent counsel” scheme, delegated to private attorneys too much of the government’s distinctive law enforcement authority, an authority that in this case is essentially criminal rather than civil in nature, given the Powerball penalties to be applied with no showing of harm to either consumers or competitors.

It would have been nice to get the Federal Circuit on record agreeing with this line of reasoning, which had persuaded a number of lower courts. But what happened instead was in its own way equally satisfying. Congress specified in its patent bill last month that wholly uninjured bystanders do not have standing to pursue false marking cases, and that expired markings, without more, are not “false.” It also explicitly applied these principles to pending cases, generally seen as a choice that is within its discretion to make in cases in which, as here, no one is suing over an privately vested property right.

Around the country, many a manufacturer can now heave a sigh of relief at not having to sign its future over to lawyers. And Cato can move on to more fights over classical liberal principle in its very successful amicus program, about which you can learn more here.

P.S. Almost forgot to thank the real heroes of the adventure, the ones who wrote and edited the Wham‑O brief: Paul Wolfson and Pamela Bookman at Wilmer Hale, and Ilya Shapiro and Michael Wilt at Cato.

Former Libyan dictator Moammar Qaddafi is dead. The Transitional National Council can now get on with the challenges ahead, including setting up elections for a future government deemed legitimate by Libyans.

At the heart of Libya’s many problems is the so-called natural resource curse. Libya’s economy is based heavily on oil and gas. Yet the abundance of natural resources like oil or minerals has often slowed growth, over-expanded the state’s role in society and strengthened authoritarianism in places as diverse Russia and Iraq. In developing countries with weak institutions, such resources tend to be channeled, if not monopolized, through government, which then becomes corrupted, less responsive to the desires of citizens, and less interested in advancing policies and institutions that create wealth.

But not all resource-rich countries suffer from the curse. Chile overcame the resource curse while Venezuela has not. A study by the Fraser Institute used measures of economic freedom, including rule of law measures, to find what set successful countries apart from the rest. The difference was the level of economic freedom or institutional quality. On a scale of 0–10, where 10 represents better institutional quality, the paper found a resource curse threshold of about 6.9—the level above which countries broke the so-called curse. More economic freedom turns the curse into a blessing.

The graph below shows selected countries and regions with regard to the resource curse threshold.

For lack of reliable data, the Middle East and North Africa indicator does not include Libya and a number of countries in the region whose scores would surely bring the region’s average down notably. What is clear is that the region is below the point at which countries can take advantage of their riches to also make their people rich. Libya’s new leaders should pay heed to the central role of economic freedom in political and economic progress. After all, as our friends in the region remind us, the Arab spring began when Tunisian street vendor Muhammad Bouazizi set himself on fire after he was prevented from selling his goods, i.e., after being denied his economic freedom.