Did anyone think the U.S. Department of Justice was really up for a flood of “pool closes for fear of ADA liability” stories over Memorial Day weekend? So instead they’ve announced another delay in their rules, this time carrying them until safely after the election, specifically Jan. 31. The Department is murmuring about being “flexible” when it eventually gets around to enforcing the mandatory permanent-lift regulations, which have raised a storm of criticism (more here and here) as unreasonably burdensome to pool operators. The House has passed a rider cutting off funds for the enforcement of the regulation, over objections from Rep. Steny Hoyer (D‑MD) and others, but the fate of the rider in the Senate is considered less promising.

University of Texas law professor Sanford Levinson has an op-ed in today’s New York Times on the thesis of his new book, Framed. He makes the observation that too many Americans “have seemingly lost their capacity for thinking seriously about the extent to which the Constitution serves us well. Instead, the Constitution is enveloped in near religious veneration.” That’s a fair point. I have no doubt that if, say, podcast interviews were around in the 1790s, Patrick Henry, George Mason, James Madison, and the other leaders of that time would tell us very frankly what they disliked about the Constitution and what improvements they thought would be beneficial. Such discussions are pretty rare nowadays and that is lamentable. A few weeks ago, Professor Levinson stopped by Cato for an informal luncheon to discuss his book and reform proposals.

Professor Levinson and Cato scholars tend to disagree about his view of political “gridlock” and whether it is responsible for the electorate’s low opinion of the Congress and of the federal government more generally. Speaking only for myself, I agree with Professor Levinson that the Article V amendment procedure has proven to be a defect and I explain why here (pdf).

Related material here and here.

C.J. Chivers’s excellent post for the New York Times’s “At War” blog dispels the widely-reported contention that the Libyan weapons stockpiles looted amidst last year’s fighting included shoulder-launched SA-24 air-defense missile systems. The post explains that while Libya did acquire SA-24s, they were not the shoulder-launched or MANPADS (man-portable air-defense systems) variety. Because vehicle-launched SA-24s like Libya’s are harder than MANPADS to surreptitiously transport and operate, they are a smaller proliferation risk, especially where terrorists are concerned.

Libya did have SA‑7 MANPADS, some of which appear to have been looted from weapons stockpiles. These are less reliable than SA-24s due to age, and far less capable even when young. Last spring, U.S. officials began to say that Libya had acquired 20,000 SA‑7 missiles. I complained about that estimate here. No U.S. official has ever said where that figure comes from, and it vastly exceeds prior published estimates.

As Chivers explains on his own blog, if Libya had 20,000 missiles, it likely acquired far fewer reusable components and had far fewer complete systems. It’s like how you buy fewer cannons than cannon balls. But as the 20,000 claim has been widely repeated, reporters have often replaced the “missiles” part with “MANPADS,” which means the whole system. A quick Google search gives countless examples. Even Andrew Shapiro, the State Department’s Assistant Secretary, Bureau of Political-Military Affairs, said 20,000 lost Libya MANPADS in prepared remarks in February.

What all this amounts to is underreported good news. At least, the news is far better than even careful newspaper readers have realized. Rather than 20,000 MANPADS, including some high-end types, floating around Libya and who knows where else, the number is almost certainly far lower and consists of less capable or even unusable components.

That good news makes the already dubious case for paying to protect commercial aircraft against MANPADS even worse. Someone tell Senator Barbara Boxer (D‑CA).

Few security reporters have C.J. Chivers’s experience with weapons and military organizations. But there is nothing preventing them from having stronger BS detectors and approaching scary official claims with more skepticism.

Cross-posted from the Skeptics at the National Interest.

It is not surprising that the recent losses at JP Morgan have resulted in calls by current and would-be politicians to remove bankers from the boards of the regional Federal Reserve banks, as JP Morgan CEO Jamie Dimon currently sits on the board of the New York Federal Reserve. There’s even a petition for the “public” to demand Dimon’s resignation. Setting aside the irony of having senators call for keeping bankers off the regional Fed boards just days after they voted to place a former investment banker on the Federal Reserve board, the real question we should be debating is: Should the the Federal Reserve even be involved in banking regulation?

As I’ve noted elsewhere, a recent paper by economists Barry Eichengreen and Nergiz Dincer suggests that separating monetary policy from banking supervision would yield superior outcomes, both for banking stability and the economy more generally. While there is a very real conflict-of-interest when bankers sit on the boards of their regulators, there is an even bigger conflict-of-interest when those setting monetary policy are also responsible for bank safety. Rather than let institutions they supervise fail, and face public criticism, there exists a strong incentive for the monetary authority to mask bank insolvency by labeling such a liquidity crisis and then injecting easy and cheap credit. The result is that the rest of us are left paying for the mistakes of both the bank and regulator. A far better alignment of incentives would be to separate the conduct of monetary policy from bank supervision.

Like anything, such a separation would not be without its costs. I am the last to go around claiming a “free lunch” when it comes to banking and monetary policy. The current Boston Fed President made a strong case over a decade ago for keeping the two combined. The Richmond Fed has also offered a useful discussion of the pros and cons of such consolidation, as well as consolidating regulators more generally. These costs aside, I believe having the Fed focus solely on monetary policy would improve both.

Among the many things that were wrong or at least grossly misleading in Stephanie Saul’s hit piece on education tax credits is her claim that credits were invented in the late 1990s as some underhanded work-around for political and constitutional problems with vouchers. Here’s Saul’s creation myth for tax credits:

Vouchers … were unpopular among many voters and legislators, and several state courts had found them unconstitutional. Proponents decided to reposition themselves, and in 1997, Arizona’s Legislature adopted the first tax-credit scholarship program.

Credits are much more popular and legally protected than vouchers, but these characteristics are the result of important differences in function and principles. Moreover, the credit concept goes back more than forty years (more for deductions) and dominated the school choice landscape for over a decade. What changed in the late 1990s was an equity-focused twist on the concept, bringing the benefits of education tax credits to families without significant tax liabilities.

Reporters often mistake this relatively recent policy innovation for the origin of the credit approach and overlook credit advantages in policy principle and function in favor of the practical/​cynical drivers of support for the policy. Sadly, Saul and many other reporters skip serious research in favor of collecting anecdotes that help drive their predetermined narrative.

So, a bit on the origins of education tax credits that Saul and even many school choice proponents miss entirely. (Note: Much of this material comes from my dissertation, which relies heavily on an excellent chapter in The Future of School Choice by Martin West, 2003.)

Despite the pedigree of vouchers as the first school choice proposal and the preferred mechanism of Milton Friedman, and despite the rise of progressive voucher plans in the late sixties and early seventies, education tax credits were arguably the dominant school choice policy from the 1970s through the mid-1980s.

Education tax credits first entered the federal agenda during the Nixon administration, during which he assigned the problem of the struggling private school sector to be studied by a panel within the President’s Commission on School Finance. The attention came in response to growing financial problems among the private school sector—in particular, among Catholic schools pressed by the rapidly declining numbers of priests and nuns who had traditionally provided a quality, low-cost labor pool.

Voucher policies, despite their libertarian lineage, were typically framed in progressive equity terms. Tax credits were typically been framed as a fiscal matter, a way to bring tax relief to the middle class. In taking up a proposal for a federal education tax credit, Nixon explicitly framed the issue as a matter fiscal prudence in support of middle-class families, placing “particular emphasis on the dire fiscal consequences should the nonpublic sector be allowed to collapse” (West 2003, 161). A subsequent panel report released in 1972 included a recommendation for a Federal income tax credit for private school tuition, but legislation would not be introduced until four years later. In 1976, a maximum $1,000 education tax credit for tuition at any school from elementary school to college and vocational school was defeated in the Senate by a surprisingly close 52–37 vote that included support from over a third of the Democrats and half of the Republicans. The fiscal argument for tax credits lacked the power it might hold at the state level, as the overwhelming burden of financing education was shouldered by state and local governments.

Efforts at the state level during this period were sporadic and uncoordinated. The attention of school choice supporters was directed toward federal policy and nothing approaching a school choice “movement” had yet developed. Many of the state-level efforts throughout the 1970s attempted to enact tax credit and voucher policy through ballot initiatives and referenda (Catterall 1984).

The tax credit issue came back at the federal level during the Carter presidency with a bill introduced amidst discussion of a similar proposal for higher education. Although the bill passed narrowly in the House, it was defeated 56–41 in the Senate and faced a veto by Carter in any case. It was during this battle over k‑12 tax credits that opposition from the government education establishment coalesced and began to flex to full extent its considerable power. Literally hundreds of lobbyists descended upon Capitol Hill to argue the interests of the recently formed National Coalition to Save Public Education and the National Education Association (West 2003).

The school choice issue was a relatively stable fixture on the national education agenda during the 1980s, first in the form of tax credits and shifting back to vouchers again in the mid-1980s. The hopes for school choice success at the national level peaked with Reagan’s arrival in the White House. Reagan and the Republican Party gave strong and explicit support for education tax credits throughout the 1980’s—with tax credits, but not vouchers, mentioned specifically in the Republican Party platforms of 1980, 1984, and 1988. Tax credits were the primary focus for the conservative policy world as well. The Heritage Foundation, an influential conservative think-tank, published a book in 1983 assessing the failures and accomplishments of the Reagan administration that had an education chapter proposing tax credits to help the middle-class supplemented by vouchers to help low-income parents (White 1983).

The Supreme Court has waded back into the affirmative action thicket, taking up the issue of the proper role, if any, of race in college admissions, in the case of Fisher v. University of Texas at Austin, which it will be hearing this fall, likely in October.

Abigail Fisher, who is white, was denied admission to the University of Texas at Austin even though her academic credentials exceeded those of many admitted minority applicants. She challenged UT-Austin’s consideration of race in selecting its incoming freshmen but lost before the district court in light of the Supreme Court’s 2003 ruling in Grutter v. Bollinger.

In Grutter, a divided Court held that using race as a factor (but not one tied to a set number of points or quotas) was justified in the name of diversity. But UT-Austin’s admissions program treats race in a different way, and gets different results, than did the admissions program Grutter upheld at the University of Michigan Law School.

The Fifth Circuit panel nevertheless affirmed the district court, but Judge Emilio Garza specially concurred to say that while he was bound by Grutter, that decision seemed to conflict with other precedent and with the Fourteenth Amendment’s Equal Protection Clause. The Fifth Circuit then voted 9–7 against rehearing the case en banc (before all judges on the court), over a sharp dissent from Chief Judge Edith Jones that emphasized how the ruling would allow states to play fast-and-loose with Grutter’s narrow-tailoring requirement.

Now before the Supreme Court, Cato filed an amicus brief supporting Abby Fisher and arguing that the Fifth Circuit showed blind deference to UT’s policy rather than the constitutionally demanded strict scrutiny. The lower court explicitly declined to evaluate the merits of UT’s decision to consider race, instead assuming the institution’s good faith. Under this rule, a public university’s mere assertion of a diversity interest, irrespective of the university’s precise circumstances or actual motivations, trumps an applicant’s right to be treated as an individual rather than a racial specimen.

We also point out that the Fifth Circuit ignored the Supreme Court’s requirement (from the 1989 case of City of Richmond v. J.A. Croson Co.) that the government demonstrate a “strong basis in evidence” for racial classifications in order to smoke out the illegitimate motivations that can underlie such schemes. That is, Grutter upheld Michigan’s racial preferences because the school showed that minority enrollment would have plummeted to almost nothing without them, while UT had already achieved real diversity (beyond even that created by Michigan’s preferences) with a race-neutral law that guarantees admission to anyone graduating in the top 10 percent of a Texas public school.

Finally, we note that even if UT could show that racial preferences were necessary for some legitimate reason, its chosen paradigm for applying such preferences is arbitrary. For example, UT justifies preferences to Hispanics by pointing to the need for a “critical mass” of such students, even as it denies preferences to Asians, who comprise a smaller portion of the student body.

We urge the Supreme Court to reign in UT’s unbridled use of race in admissions decisions and take an important step toward ensuring that young Americans are judged on their qualifications and character rather than their skin color.

In Sunday’s New York Daily News, I deplore the efforts of politicians and regulators to drag successful companies into the parasite economy of Washington, the most recent example being Apple. As the article says,

Heard of “too big to fail”? Well, to Washington, Apple is now too big not to nail.

I was prompted to these reflections by a recent article in Politico. The Wall Street Journal used to call itself “the daily diary of the American dream.” Politico is the daily diary of the rent-seeking class. And that class is very upset with Apple for not hiring many lobbyists, as illustrated by Politico’s front-page cartoon:

The story begins:

Apple is taking a bruising in Washington, and insiders say there’s a reason: It’s the one place in the world where the company hasn’t built its brand.

In the first three months of this year, Google and Microsoft spent a little more than $7 million on lobbying and related federal activities combined. Apple spent $500,000 — even less than it spent the year before.

The nerve of them! How do they expect lobbyists to feed their families? Then comes my favorite part:

The company’s attitude toward D.C. — described by critics as “don’t bother us” — has left it without many inside-the-Beltway friends.

“Don’t bother us”—yes! Don’t tread on me. Laissez nous faire. Leave us alone. Just let us sit out here in Silicon Valley, inventing cool stuff and distributing it to the world. We won’t bother you. Just don’t bother us.

But no pot of money can be left unbothered by the regulators and rent-seekers.

Apple is mostly on its own when the Justice Department goes after it on e‑books, when members of Congress attack it over its overseas tax avoidance or when an alphabet soup of regulators examine its business practices.

And what does the ruling class say to productive people who try to just avoid politics and make stuff? Nice little company ya got there, shame if anything happened to it:

“I never once had a meeting with anybody representing Apple,” said Jeff Miller, who served as a senior aide on the Senate Judiciary Committee’s Antitrust Subcommittee for eight years. “There have been other tech companies who chose not to engage in Washington, and for the most part that strategy did not benefit them.”

As I noted in the Daily News, back in 1998 Microsoft was in the same situation—a successful company on the West Coast, happily ignoring politics, getting too rich for politics to ignore it—and a congressional aide told Fortune’s Jeff Birnbaum, “They don’t want to play the D.C. game, that’s clear, and they’ve gotten away with it so far. The problem is, in the long run they won’t be able to.” All too true.

Watch out, aspiring entrepreneurs. You too could become too big not to nail.