The Heritage Insider: Oregon v. free speech, San Francisco v. economic reality, monetary union for Europe was always misguided, and more

July 11, 2015

Latest Studies
34 new items, including a Just Facts Foundation report on tax facts, and a Pacific Research Institute index of small business regulation

Notes on the Week
Oregon v. free speech, San Francisco v. economic reality, monetary union for Europe was always misguided, and more

To Do
Examine the past and future of religious freedom in America

Latest Studies

Budget & Taxation
• The Alabama Deferred Retirement Option Program – Alabama Policy Institute
• Alternative Liability Measures and Contribution/Cost Allocation Procedures for Public Sector Plans – American Enterprise Institute
• Tax Facts – Just Facts Foundation
• Paying Down Unfunded Pension Liabilities Through Asset Sales and Leases – Reason Foundation
• An Analysis of Senator Cardin’s Progressive Consumption Tax – Tax Foundation

Economic Growth
• Whether and How to Adjust Income Trends For Declining Household Size – e21 – Economic Policies for the 21st Century
• Pathways to Upward Mobility – National Affairs

Education
• A Progress Report on Charter Schools – National Affairs
• Vacant School Buildings: An Examination of Kansas City and Saint Louis – Show-Me Institute

Elections, Transparency, & Accountability
• De-Amalgamation in Canada: Breaking Up Is Hard to Do – Fraser Institute

Foreign Policy/International Affairs
• China’s Investment in the World Increasing, Not Soaring – American Enterprise Institute
• Iran’s Strategy Towards the Gulf Cooperation Council – American Enterprise Institute

International Trade/Finance
• The Danger of Trans-Pacific Partnership and Fast-Track Trade Authority – Public Interest Institute

Labor
• Salaried Overtime Requirements: Employers Will Offset Them With Lower Pay – Heritage Foundation
• On Increasing the Minimum Wage in Saint Louis – Show-Me Institute

Monetary Policy/Financial Regulation
• From Free Checking to the Financial Fringe: A Tale of Two Regulations and Low-Income Families – American Action Forum
• Examining the Designation and Regulation of Bank Holding Company SIFIs – American Enterprise Institute
• The Financial Stablity Board, The Financial Stability Oversight Council, and the Federal Reserve – American Enterprise Institute
• Being “House Rich” – Affordable Housing, Foreclosures, and Home Size – Public Interest Institute

National Security
• Pursuing Strategic Advantage: The Utility of Armed Forces in Peace, War, and Everything in Between – American Enterprise Institute
• China’s Newest Defense White Paper Suggests Fundamental Change in Perspective – Heritage Foundation
• Key Questions For General Dunford – Heritage Foundation
• A Renewed Vision for Nuclear Risk Reduction – Hoover Institution
• Cyber-Enabled Economic Warfare: An Evolving Challenge – Hudson Institute

Natural Resources, Energy, Environment, & Science
• Administration’s GHG Regulation Surpass Cap-and-Trade Costs – American Action Forum
• China, the US, and the Geopolitics of Energy – American Enterprise Institute
• The Many Problems of the EPA’s Clean Power Plan and Climate Regulations: A Primer – Heritage Foundation
• Licensing Small Modular Reactors: An Overview of Regulatory and Policy Issues – Hoover Institution
• Step on the Gas! How to Extend America’s Energy Advantage – Manhattan Institute
• Energy Conservation Standards for Residential Furnaces – Mercatus Center
• Doing Better with Less: Lessons for California from Australia’s Water Reforms – Reason Foundation

Regulation & Deregulation
• The 50 State Small Business Regulation Index – Pacific Research Institute

The Constitution/Civil Liberties
• Regulatory Crimes and the Mistake of Law Defense – Heritage Foundation

Transportation/Infrastructure
• Federal Transportation Reform – National Center for Policy Analysis

Notes on the Week

Oregon restricts speech rights of gay marriage dissenters; then Slate reports it didn’t happen. Did the state of Oregon really violate the free speech rights of the bakers who refused to bake a wedding cake for a lesbian couple? Yes.

Last week, Commissioner of the Oregon Bureau of Labor and Industries Brad Avakian issued an order fining Aaron and Melissa Klein $135,000 for refusing to bake a wedding cake for a lesbian couple. As well, the order instructed the Kleins to “to cease and desist from publishing, circulating, issuing or displaying, or causing to be published […] any communication to the effect that any of the accommodations […] will be refused, withheld from or denied to, or that any discrimination be made against, any person on account of their sexual orientation.”

On Thursday, the Daily Signal described the order as a gag on the Kleins from speaking about their beliefs about marriage—which would be an unconstitutional prior restraint on speech. [Daily Signal, July 2]

On Monday, Slate magazine counter charged that the order is constitutional because it is merely a bar against the Kleins communicating an intent to discriminate, not against speaking their minds on the issue. [Slate, July 6]

The Daily Signal’s Katrina Trinko and Hans von Spakovsky have now debunked Slate’s debunking by cataloging Avakian’s misconstruing of the Klein’s statements. What Avakian claims to be notices of an intent to discriminate are simply statements by the Kleins about marriage and religious freedom. In particular, Trinko and Spakovsky write:

Avakian specifically made note of the Kleins’ statements that “This fight is not over. We will continue to stand strong.” According to Avakian, as outlined on page 27 of his order, the Kleins’ “joint statement that they will ‘continue’ to stand strong relates to their denial of service and is prospective in nature. The statements, therefore, indicate Respondents’ clear intent to discriminate in the future just as they had done with Complainants.”

Therefore, Avakian entered his “cease and desist” language on page 42 and 43 preventing the Kleins from saying or publishing anything even remotely similar to all of the language he summarized in which the Kleins were clearly talking about their beliefs about same-sex marriage and their intent to continue to “stay strong” and fight this unfair, unjustified financial penalty and gag order.

And this is the crux of the point made in the original Daily Signal article: If these personal statements of religious belief and willingness to defend themselves against government persecution can be construed as showing “discrimination,” then pretty much almost everything the Kleins could say about their case could be construed by Oregon as showing “discrimination.”

In other words: The Kleins are, yes, “gagged” legally from saying much more, if anything, about their case. [Daily Signal, July 6]

Walter Olson also argues that Oregon did a poor job of distinguishing between broader political discussions that should be protected and forward-looking statements of an intent to discriminate:

Suppose someone began a sentence with the words “I don’t think I should have to serve [group X] at my shop….” If they follow with the words “but since it’s the law, I’ll comply,” the sentence as a whole would clearly count as protected speech under current law. If they follow with the words “and I won’t, law or no law,” it loses protection. But suppose the speaker were to end the sentence at “…my shop.” Up to that point, the speaker has expressed only an essentially political opinion, not a forward-looking intention to defy the law.

Such speech is all the more of core First Amendment interest when it takes place not in a local, commercial context but as part of broader political discussions between citizens as to whether laws are unjust or government too heavy-handed. You might think the state needs to be at special pains not to chill or suppress this kind of broader political discussion. That might imply giving the benefit of the doubt to speech that conveys less than clear and unmistakable future intent to break the law, or speech that is primarily directed at outside audiences who are listening as citizens rather than as prospective clients (in contrast to the old no-service signs and classified ads, which could be seen as attempting to chase away part of the local customer base).

That’s not how Oregon saw it. […]

The implication is clear enough: if locked in a legal battle with Oregon authorities, you may not have a legal right to rally your supporters with statements like “This fight is not over” and “We will continue to stay strong.” [Ricochet, July 8]

Higher wages means higher prices. How will San Francisco businesses pay the higher wages required by the city’s raising of its minimum wage? From Mark Perry, here is some evidence that “there ain’t no such thing as a free minimum wage hike”:

From an equity research report issued to investors by global investment banking and wealth management firm William Blair on Chipotle Mexican Grill, Inc. (NYSE: CMG) – “Price Increases Have Begun Early in Third Quarter” (received privately):

• In our weekly survey of ten of Chipotle’s markets, we found the company implemented price increases in half of the surveyed markets this week—San Francisco, Denver, Minneapolis, Chicago, and Orlando. In most markets, the price increases have been limited to beef and average about 4% on barbacoa and steak, toward the lower end of management’s expectation for a 4% to 6% price increase on beef.

• San Francisco, however, saw across-the-board price increases averaging over 10%, including 10% increases on chicken, carnitas (pork), sofritas (tofu), and vegetarian entrees along with a 14% increase on steak and barbacoa.We believe the outsized San Francisco price hike was likely because of increased minimum wages (which rose by 14% from $10.74 per hour to $12.25 on May 1) as well as scheduled minimum wage increases in future years (to $13 next year, $14 in 2017, and $15 in 2018). [American Enterprise Institute, July 6]

At higher prices, customers will buy fewer burritos, which means in San Francisco Chipotle will need to employ fewer burrito makers than it previously did.

Fourteen conservatives who shaped America: Historian Garland Tucker tells the story of America by telling the story of 14 conservative heroes:

Toolkit: Figuring out your digital strategy: What capabilities does your digital team need? What should be its priorities? Structure? Size? The answers depends partly on whether you are a big national organization, a state-level organization, or a local group. Lincoln Labs has developed a blue print to help you sort it out: “Digital Campaign Guide: A Blueprint for a Tech-Driven Organization.”

The paradox of marriage freedom: In Obergefell v. Hodges, Justice Anthony Kennedy said the Constitution provides all a right “to define and express their identity,” and then went on to explain that you can’t define and express your identity unless you are in a marriage recognized by the government. That turns out not be a very liberating world view. David Azerrad elaborates:

Liberalism’s exalted view of man’s limitless possibilities, paradoxically enough, is not accompanied by an equally exalted view of his inner strength and resolve. One might think that liberalism would encourage individuals to trust in themselves and to be scornful of society’s staid bourgeois conventions in defining and expressing their identity.

It doesn’t. For all his purported god-like powers of self-creation, liberal promethean man is actually a weak, insecure, and isolated individual. It is not enough that he define and express his identity. He needs others to recognize it, embrace it, and celebrate it. He needs the state to confer dignity upon it. […]

An earlier generation of liberals would have told the man to go to hell with his marriage certificate. “We don’t need no thought control,” they would have yelled. “All in all you’re just another brick in the wall!” To have the suits recognize your alternative lifestyle would have defeated the whole purpose of embracing it in the first place.

Contemporary liberalism, by contrast, views man as a weak and fragile creature. Adversity doesn’t forge character. It stigmatizes and demeans. Unless others affirm our choices, they are worthless. We have no unshakable inner convictions or faith. We are all insecure.

Promethean man, it turns out, is a pathetic creature. He thinks himself the measure of all things, but must in fact have his solipsistic existence be publicly affirmed and dignified by the state. He is simultaneously everything and nothing. […]

Only marriage can respond “to the universal fear that a lonely person might call out only to find no one there,” writes Kennedy. Not to marry is to “be condemned to live in loneliness.” Lovers, friends, parents, siblings, cousins, aunts, uncles, nephews, nieces, neighbors, coreligionists, brothers-in-arm, colleagues—none of them can be counted on to respond to our lonely cries of anguish. All bachelors are not only unmarried—they’re also unhappy.

All this adds up to a really interesting coincidence. In deliberating on the question of gay marriage, Justice Kennedy proclaims that we are absolutely free to be who we want to be—except when it comes to gayness and marriage. [Public Discourse, July 8]

He’s “Gov” and he’s here to help. What happens when “Gov” tries to run other people’s lives? Find out by watching the Independent Institute’s series of shorts that tell the tale of Scott “Gov” Govinsky and his overbearing ways. Here is episode one:

Catch all the episodes at http://www.independent.org/lovegov.

ObamaCare is reducing competition in both health insurance and hospitals. The problem, writes Scott Gottlieb, starts in the managed care sector where five big insurers may soon shrink to three. Aetna in particular has announced a $37 billion deal to acquire Humana in order to expand “its footprint in Medicare Advantage, a business that has become more financially attractive now that ObamaCare caps profits in the individual and group insurance markets.” Then there are the 23 non-profit “co-op” plans that ObamaCare funded with $2.5 billion in grants, but which may fold because the government-created entities don’t know how to price risk, among other problems.

Finally, writes Gottlieb, ObamaCare gave an advantage to hospital-run health plans (and co-ops) by giving them a higher cap on operating expenses. The idea was that if bigger hospitals were also in the insurance business, then they would do a better job of coordinating care, which would lower costs. Gottlieb explains why it really means less competition and higher prices:

The truth is that the greatest innovations in health-care delivery haven’t come from federally contrived oligopolies or enormous hospital chains. Novel concepts—whether practice-management companies, home health care or the first for-profit HMO—almost always have come from entrepreneurial firms, often backed by venture capital.

That venture capital has been drying up since ObamaCare was passed. Instead, the biggest wagers in health-care services are being placed by private equity, which is chasing opportunities to roll up parts of the existing infrastructure. For instance, there were 95 hospital mergers in 2014, 98 in 2013, and 95 in 2012. Compare that with 50 mergers in 2005, and 54 in 2006. Cheap debt and ObamaCare’s regulatory framework almost guarantee more consolidation. That will mean less choice for consumers. [Wall Street Journal, December 5]

A monetary union for Europe was always a bad idea. The problem with a monetary union in Europe, as Milton Friedman pointed out 18 years ago, is that its long term success presumes a political harmony that does not yet exist:

Europe’s common market exemplifies a situation that is unfavourable to a common currency. It is composed of separate nations, whose residents speak different languages, have different customs, and have far greater loyalty and attachment to their own country than to the common market or to the idea of “Europe”. Despite being a free trade area, goods move less freely than in the United States, and so does capital.

The European Commission based in Brussels, indeed, spends a small fraction of the total spent by governments in the member countries. They, not the European Union’s bureaucracies, are the important political entities. Moreover, regulation of industrial and employment practices is more extensive than in the United States, and differs far more from country to country than from American state to American state. As a result, wages and prices in Europe are more rigid, and labour less mobile. In those circumstances, flexible exchange rates provide an extremely useful adjustment mechanism.

If one country is affected by negative shocks that call for, say, lower wages relative to other countries, that can be achieved by a change in one price, the exchange rate, rather than by requiring changes in thousands on thousands of separate wage rates, or the emigration of labour. The hardships imposed on France by its “franc fort” policy illustrate the cost of a politically inspired determination not to use the exchange rate to adjust to the impact of German unification. Britain’s economic growth after it abandoned the European Exchange Rate Mechanism a few years ago to refloat the pound illustrates the effectiveness of the exchange rate as an adjustment mechanism. […]

The drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues. Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity. [First published August 28, 1997, reprinted by Financial Review, July 7]

To Do: Examine the Past and Future of Religious Freedom in America

• Learn how the American tradition of protecting religious liberty should apply to conflicts over gay marriage and public accommodation laws. The Family Research Council will host a talk by Mark David Hall of George Fox University. Noon on July 15. [Family Research Council]

• Figure out the opportunities and threats to a transatlantic renewal. The Transatlantic Think Tank Conference will look at the challenges posed by Russia, the Islamic State, bad fiscal policy, and Asia. 9 a.m. at the International Republican Institute and 2:30 p.m. at the Hudson Institute on July 16. [Hudson Institute]

• Find out how the Right can fight for happiness, unity, and social justice. Arthur Brooks will give a talk on his new book The Conservative Heart: How to Build a Fairer, Happier, and More Prosperous America. 5 p.m. on July 16 at the American Enterprise Institute. [American Enterprise Institute]

• Learn what it’s like to escape from North Korea and adjust to the West. Lee Hyeon-seo will talk about her book The Girl with Seven Names: A North Korean Defector’s Story. 2 p.m. on July 15 at The Heritage Foundation. [The Heritage Foundation]

• Examine the link between discretionary monetary policy and cronyism. The Atlas Network will host a panel discussion on the ways that central banks pick favorites in the economy. 6 p.m on July 13 at the Penn Club of New York. [Atlas Network]

• Explore how people make decisions in groups. Michael Munger will give a talk on his new book Choosing in Groups: Analytical Politics Revisited. 4 p.m. on July 17 at the Cato Institute. [Cato Institute]

• Become a great communicator! Think Freely Media is now accepting submissions for its 2015 Great Communicators Tournament. Twelve finalists will compete during the State Policy Network’s annual meeting in Grand Rapids, Mich., September 29 – October 2. The deadline for submissions is July 24. [Think Freely Media]

Have a tip for InsiderOnline? Send us an e-mail at insider@heritage.org with "For Insider" in the subject line.

Follow us on Twitter: http://twitter.com/InsiderOnline.

Looking for an expert? Visit PolicyExperts.org.

The Heritage Foundation | 214 Massachusetts Ave NE, Washington, DC 20002 | 202.546.4400

You are subscribed to Heritage Foundation e-mails as johnmhames@comcast.net. If you want to change your e-mail preferences, please click here to update your subscription.

Search This Blog

Diogenes-Light