The decision to hold the Olympics in Rio may be bad news for Chicago, but it may be great news for the country!

For more about Mr. Obama’s wrongheaded policies, go here and here (pdf).

• Bush-era surveillance powers are set to expire at the end of this year. Julian Sanchez explores the efforts to revise the PATRIOT Act.

• More on the medical professionals who aided in acts of torture.

• Doug Bandow: Ireland is holding a second referendum on the Lisbon Treaty on Friday. If the Irish say yes, the European Union will be stronger. But will anyone notice?

• How urban planners caused the housing bubble.

• The aftermath of “Cash for Clunkers” hits automakers. Looks like it just might have been the “dumbest program ever” after all.

• Podcast: “Three Felonies a Day”

Despite the economic stimulus and various financial bailouts, our economy continues to shed jobs. One of the reasons for continued job losses is the decline in new hires, especially the lack of new hiring by small business.

As bank analyst Meredith Whitney discusses in the Wall Street Journal [$], all the major credit programs created by Congress and the Federal Reserve have been targeted at big corporations and Wall Street firms. However, small companies, especially start-ups and partnerships, do not issue bonds in the debt markets, nor do they borrow from Goldman Sachs. So these firms have been left out in the cold, as federal credit inventions have favored corporate America.

Adding insult to injury is that not only has Washington subsidized credit to large firms, it has taken actions that restrict the credit available to small firms and start-ups. The prime example of this is the Credit Card Reform Act signed by President Obama in May.

As Whitney reports, “Credit cards are the most common source of liquidity to small businesses, used by 82 percent as a vital portion of their overall funding.” In restricting the usage of credit cards and reducing the ability to risk-base price, Washington has eliminated the most important source of credit to small business.

Of course, being unable to project their future health care costs, or tax burdens (yes, they are going up, but by how much), many small businesses have either been forced to or chosen to sit on the sidelines of our economy. Washington needs to recognize that Wall Street and corporate American are not the sum of our economy, if we hope to turn the employment situation around.

On Wednesday the House Judiciary Committee’s Subcommittee on Crime, Terrorism, and Homeland Security held a hearing on the proposed cyberbullying legislation I mentioned in this post. Cato adjunct scholar Harvey Silverglate testified at the hearing, and his written testimony is available here.

Silverglate highlighted the pernicious potential of this law, which sits at the nexus of his two books. The Shadow University highlights how speech codes have impaired free expression on college campuses nationwide. Three Felonies a Day shows how federal criminal law has expanded to define various innocuous activities as federal felonies. Put the two together and a federal cyberbullying law is what you get. Silverglate’s recent podcast is available here, and he recently appeared at a Cato book forum.

The proposed cyberbullying law would impose a federal felony (two-year maximum sentence) upon anyone who uses electronic means to communicate a message intended to “coerce, intimidate, harass, or cause substantial emotional distress to a person.” Under this law, rude emails, texts, or blog posts can all subject someone to hard time as long as a receiving party alleges “substantial emotional distress.”

The Committee expressed constitutional concerns over this proposal. Chairman Bobby Scott (D‑VA) pointed out the potential chilling effect that this could have on lawful but provocative speech. Ranking Member Louie Gohmert (R‑TX) highlighted the unintended consequences that this bill could have — though intended to protect teens from online bullying, Gohmert said it could prompt prosecution of political opponents who had posted offensive things about him on a blog. There is no limiting language in the statute to prevent such a result. Gohmert said that while this would be satisfying, it would also be unconstitutional and among the reasons not to endorse the legislation.

Other problems plague the proposed statute. A Congressional Research Service report highlights some of the constitutional issues, but the discussion at the hearing brought others to the fore. States that have passed their own cyberbullying sanctions have overwhelmingly done so with misdemeanor, not felony, charges. The felony problem is compounded by the fact that this is a statute intended to apply largely to the conduct of teenagers. A felony charge is both excessive and complicated by the fact that there are no long-term federal juvenile detention facilities — they are referred to state facilities instead.

University of Virginia law professor (and former university president) Robert O’Neil said, in spite of all those concerns, that the proposed law could be tweaked to avoid the feared demerits. In his written testimony, O’Neil notes the difference between offensive political speech and “true threats,” the latter not receiving constitutional protection. He proposes using Intentional Infliction of Emotional Distress (IIED), a traditional state tort claim, as the legal basis for justifying the proposed law. This is an odd foundation for a federal criminal law — no state defines IIED as a crime, and many states require a showing of physical harm for a plaintiff to recover. When Rep. Gohmert pressed him on this, O’Neil said that in spite of the lack of legal foundation for a federal crime based on IIED, it was “worth a try.”

No thanks. Let’s not try. Let’s keep our liberties intact and not do further damage to the law.

My colleague Chris Edwards called the government’s “Cash for Clunkers” program the “Dumbest Program Ever.” Given that Chris is familiar with more than a few dumb government programs, that’s quite a statement.

Today, the Washington Post provides more evidence that he might be right:

After the shopping binge inspired by the government’s “Cash for Clunkers” incentive program ended, U.S. auto sales plunged in September and the industry sunk back to the depths from which it started, figures released Thursday showed… The results raised doubts from some economists about the effectiveness of the $3 billion federal program as a stimulus.

Alan Blinder, a Princeton professor who was among the first to push an auto sales incentive program in the United States, doubted it provided much stimulus, in large part because it was in effect for only a month. “Most of the idea of any stimulus is to pull spending up from the future, but it doesn’t make any sense to design a program that only pulls up spending by one month,” said Blinder, a member of the Council of Economic Advisers during the Clinton administration. “Why in the world would you make it a one-month program? The Germans didn’t do that. The British do that. When I designed a mock version of this I was thinking of it as a one-year or two-year program.”

So, Professor Blinder, what happens to auto sales after your one- or two-year program disappears? Regardless of whether the programs lasts one month, three months, one year, or three years, when the “free” money from Uncle Sam goes away, the result is going to be the same.

Milton Friedman said “Nothing is so permanent as a temporary government program.” Let’s hope he’s wrong in the case of Cash for Clunkers.

Nate Anderson at Ars Technica has a good write-up of the New America Foundation’s interesting proposal for labeling of broadband services, something akin to the nutrition labels we have for food.

Labeling and disclosure are better than direct regulation of the terms on which goods and services can be sold, of course. Labeling does not presume to decide unalterably what factors are or will be the most salient to consumers. But it does seek to channel those interests, and it does presume that consumers discover information that is important to them via labels. (I dealt with some of these concepts in my recent post about privacy notices.)

What labeling is really about, I believe, is pushing consumers to focus on the terms that intellectuals believe are most interesting. Smart people’s interests often match up with everyone else’s, but not always. Anderson’s write-up wonders aloud “whether requiring disclosure of the ‘maximum round-trip latency to border router’ will do more than induce eye glaze among most broadband users.”

I want my ISP to give me a live tech-support person that can solve the problem with my wifi router, but that didn’t make it into New America’s labeling plan. Any labeling plan will likely be either overinclusive or underinclusive or both, obscuring and omitting the most relevant information.

Yes, labeling is “market-friendlier” than regulation dictating what broadband providers can and can’t offer. But if we believe that markets discover the dimensions of goods and services that are salient to consumers, we can also believe that markets discover what information consumers want, and how they best learn it.

Many years ago, I spoke to a panel of regulators about a financial privacy “short notice” project that — heck — may still be going on. I passed around a small package from which I had eaten baby carrots the previous day. Along with a nutrition label, it had a picture of a cornucopia spilling forth vegetables and fruits, with the legend “Five a Day!” This, I suggested, communicates more salient information to consumers than nutrition labels: eat more fruits and vegetables. “But I use nutrition labels,” countered a well-meaning regulator, extrapolating from her own experience to that of all Americans.

Commerce is alive with trade names, trademarks, symbols, messages, notices, and signals about the content, quality, and desirability of goods and services. Consumers get much more relevant, actionable information this way, I think, than through mandated labels.

They do not intellectualize about these things, but that’s fine. Time is scarce, and it’s not worth it for people to intellectualize about the details of most purchases. Those who do, and those who talk about it, press the market toward what is good for all. The average consumer can gather just enough information to be relatively confident of being satisfied overall with any purchase. On the whole, consumers and markets will gravitate toward products and services that make all better off.

There may be consumer demand for organized, industry-wide labeling in some areas, of course. It’s a fine thing if there is. 

Anderson takes NAF’s plan to be a call for a government mandate, but the write-up itself is vague, saying that broadband providers “should” do various things and observing the absence of a legal requirement for notice. It takes pains to use the passive voice when ordinary speech would identify what actor should establish a labeling regime. 

If only there were a label about that salient feature of the proposal!

At a recent town hall meeting, [via Ryan Jaroncyk at The Humble Libertarian], U.S. Rep. Tim Johnson (R‑IL) explained why he wants a withdrawal of U.S. troops from Afghanistan:

I’m suggesting to you that there is no end game. I believe that our men and women are there in a mission that is ill-defined… I think we’re losing people by the day, here and over there, with no even indirect relationship to our national security.

Within a couple of weeks, I’m going to be looking at legislation and issuing a definitive statement on my position on Afghanistan, which at this point I would suggest would call for our withdrawal of troops forthwith.

We’ve had a succession from Vietnam to Iraq to Afghanistan, and the net result has been thousands of lives lost, and very little progress made… I’m in favor of doing everything we can to make America secure, to make sure we don’t have another 9/11 or even anything analogous to that, but I’m also convinced that our continued presence in Afghanistan is not serving that role. And we need to seriously re-examine where we’re at.

As I mentioned back in February of this year, “There is immense pressure to infuse greater troops in the region, but there is no objective in mind — and before you deploy the troops, you want to have a strategy.” The Obama administration is still stuck at a crossroads: either send more troops to protect the villages of Afghanistan from the Taliban, or stay at present levels (or decrease U.S. troop commitments) to go after al Qaeda cells in Pakistan.

The American public is against sending more troops, the overwhelming majority of Democrats are against sending more troops, some Republicans in Congress have begun to speak out against sending more troops, and prominent conservative commentators are against sending more troops. I am reminded of a quote from General Fred Weyand, the last U.S. commander in Vietnam, who told Pulitzer prize-winning author and Vietnam correspondent Stanley Karnow, “The American army is really a people’s army in the sense that it belongs to the American people… When the army is committed, the American people are committed; when the American people lose their commitment, it is futile to try to keep the army committed.”

I used to ridicule President Bush for staying the course in Iraq. While President Obama will take a hit to his credibility for deciding to scale down America’s presence — after having already deployed more troops earlier this year — I would commend the President for having the strength of his convictions for deciding not to send more young men and women to fight and die for a cause (and a country) that does not constitute a vital national security interest. Doubling down in Afghanistan is too easy. It’s deciding to pull ourselves out of Afghanistan that will take true leadership.