Join Jim and Greg as they discuss the FBI searching Biden’s Delaware beach house for classified documents today and reports that the Democrats on the Senate Intelligence Committee are getting increasingly frustrated at the lack of information coming from the Justice Department. They also shake their heads as the HHS inspector general concludes the National Institutes of Health failed to keep close tabs on the gain of function research done in Wuhan and elsewhere that was paid for with taxpayer-funded grants. And they sigh as former Maryland Governor Larry Hogan strongly hints that he will run for president in 2024, even though there’s very little chance he will make any ripples in the campaign at all.

‘Home Equity Theft’ by the Tax Collector

 

Recently, the United States Supreme Court decided to hear the case of Tyler v. Hennepin County, whose factual history reads like a Greek legal tragedy. The story, as recounted in Reason magazine (where I first learned of the case), involves Geraldine Tyler, a 94-year-old woman who suffered from the all-too-common frailty of falling behind on her property taxes. At first, she owed only $2,300 in back taxes. As is common in most states, steep interest charges began to accrue the moment the debt was not paid. For Ms. Tyler, that meant her property debt plus hefty interest and fees mushroomed to $15,000 in a few years. Had the government been a private lender in the consumer market, government agencies including the Consumer Financial Protection Bureau would have explored ways to limit these exactions, for longstanding law governing mortgages holds that lenders may not just keep all the proceeds of foreclosure sales. Instead, private lenders may at most collect principal, interest, and fees, and they must return any sums in excess of that amount (the surplus or equity in the property) to the borrower.

In this context, however, Minnesota’s Hennepin County rejected that principle; it did not stop with the collection of the total debt. Instead, when the obligation had not been repaid, the county seized the property, sold it for $40,000, satisfied the $15,000 debt Ms. Tyler owed, and then pocketed the rest of the money. Ms. Tyler received nothing. No wonder Reason used the evocative term “home equity theft” to describe the transaction. Indeed, what happened to Ms. Tyler could happen to property owners in eleven other states—Oregon, Arizona, Colorado, Nebraska, South Dakota, Illinois, Alabama, New Jersey, New York, Massachusetts, and Maine. Fortunately, most states have recognized the punitive nature of these claims and have reverted to the rule applied to private mortgages, which returns the surplus to the borrower.

So the question then arises: just how was it that the Eighth Circuit sustained the practice that wiped out Ms. Tyler? The most dramatic sentence in its opinion reads: “Where state law recognizes no property interest in surplus proceeds from a tax-foreclosure sale conducted after adequate notice to the owner, there is no unconstitutional taking.” At this point in the analysis, it sounds as if the state may keep the surplus simply by announcing its intention to do so, at which point the taxpayer’s property interest vanishes. Put in this broad form, the constitutional protection afforded to private property becomes a complete sham, because it is always possible for a rapacious government to claim property by the declaration that it owns it.

Join Jim and Greg as they anticipate a U.S. Senate run from GOP West Virginia Gov. Jim Justice and whether that will change Sen. Joe Manchin’s plans for 2024. They also react to former Indiana Gov. Mitch Daniels announcing he will not run for U.S. Senate next year. Then, they fume as water-starved California lets 95 percent of the recent deluge of rain flush out into the Pacific Ocean in order to save the delta smelt in a key part of the state. Finally, they shake their heads as Democrats go from declaring Georgia Jim Crow 2.0 to a leading candidate to host next year’s Democratic National Convention.

Memphis SCORPION Unit Was Corrupt

 

This is a follow up to my “Tyre Nichols, Crucified’ post.  First let’s start with the claims of the police concerning Tyre.  They claimed that Nichols was stopped for “reckless driving.”  From Independent News through Yahoo:

The Memphis Police Department initially said that Nichols was pulled over around 8.30pm local time for “reckless driving.”… Police leadership later walked back those claims.

Jim and Greg give credit to CNN’s Dana Bash for asking tough questions of the three House Democrats House Speaker Kevin McCarthy wants booted from their sensitive committees – and their answers were rather unconvincing. They also react to the latest “Twitter Files,” exposing the powerful left-wing group Hamilton 68, which declared many Twitter accounts to be Russian bots or peddling Russian disinformation, when the vast majority were real people who just disagreed with the left’s narrative on various issues. Finally, they react to President Trump’s bizarre accusation that Florida Gov. Ron DeSantis locked down his state far too long during the COVID pandemic, when the evidence is strongly to the contrary, and discuss why Trump is pursuing this line of attack.

Member Post

 

I know this story has had some prominence even before they released the videos this evening.  I had not paid attention.  I try to avoid sensational news, and another policing story is just another in a string.  You never really know who to believe because it’s not always that clear. But then I watched the […]

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After having fun with the Associated Press war on “the,” Jim & Greg applaud Florida Gov. Ron DeSantis for a 50-year low on crime and aggressive proposals to crack down on child predators and and fentanyl pushers. Jim also walks us through the major water dilemma facing western states and why government intervention is not inspiring a lot of confidence. And they shake their heads as a Biden judicial nominee can’t explain the subject of Article V or Article II of the Constitution.

Summary

To bring greater attention to the issue of human trafficking, Jessica Vaughan, the Center’s Director of Policy Studies, joins our podcast this week to highlight border-related human trafficking. Current immigration policies are responsible for an out-of-control southern border and for lax guest worker programs, both of which are major contributors to the human trafficking industry in the United States. How do we end this criminal exploitation of the vulnerable?

Vaughan clarifies the important distinction between human trafficking and human smuggling, and describes how smuggling operations can develop into trafficking, which is on the rise. Forced labor trafficking is the most common form of trafficking at our Southern border, and Biden’s border policies create incentives for both smuggling and trafficking.

Member Post

 

Met Stephen Murphy over 20 years ago. Very successful San Francisco lawyer doing mostly plaintiff employment law like I was. Never worked on a case together but had similar contacts and kept in touch.  Got appointed as a San Francisco Superior Court judge. Even though he was smarter than 90% of the civil trial judges […]

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Jim and Greg discuss House Speaker Kevin McCarthy rejecting Reps. Adam Schiff and Eric Swalwell for the House Intelligence Committee, with Jim explaining why the move is good politics and good policy. They also groan as Rep. George Santos criticizes comedians and other politicians for making fun of his serial mendacity. And as former Vice President Mike Pence admits having classified documents, they wonder just how many of our top officials are careless with sensitive materials.

The Wealth Tax Is a Poor Idea

 

Now that the Republicans have taken control of the House of Representatives, it has become crystal clear that there will be no federal wealth tax on high-net-worth individuals for at least the next two years. Unfortunately, as with so many bad policy proposals, the push for a wealth tax has instead generated renewed interest in blue states. California, Connecticut, Hawaii, Illinois, Maryland, New York, and Washington are considering introducing their own wealth taxes. Through joint effort, they hope to make it more difficult for wealthy individuals to flee high-tax states for more favorable jurisdictions. This strategy represents wishful thinking at its finest. If this quixotic endeavor should become law, it will only hasten the exodus of wealthy individuals from blue California and New York to red Florida and Texas.

Today’s aggressive progressives hope to stall that movement by imposing an exit tax on these would-be exiles. These efforts should evoke oppressive regimes like East Germany, which erected the Berlin Wall to keep malcontents at home. It will surely face a fierce constitutional attack, as our Constitution has long been understood to have created a nationwide free-trade zone. In the United States, goods, services—and individuals—can move easily across state lines to promote economic development and growth. An exit tax imposes an explicit barrier on that project and is likely to be struck down as an impermissible burden on interstate commerce, as it is a direct descendant of the taxes and regulations that Chief Justice John Marshall struck down in such notable cases as Gibbons v. Ogden (1824) and Brown v. Maryland (1827).

Ironically, the rosy revenue projections that wealth-tax supporters such as Emmanuel Saez and Gabriel Zucman made in 2021 for its revenue potential—starting in 2023—are now hopelessly out of date. Two years ago, at the height of the pandemic, billionaires accumulated capital at near-record rates. Now, potential gains from a wealth tax have fallen because of the enormous declines in wealth (toward greater income equality!) experienced by virtually all newly minted tech moguls. Elon Musk leads the pack, with capital losses of $115 billion in 2022 alone. He has good company in Jeff Bezos ($80 billion); Mark Zuckerberg ($78 billion); and Larry Page ($40 billion). In sum, the American billionaires lost $660 billion this past year, about one-third of the $2 trillion in losses worldwide. Nothing guarantees that they will recover those losses any time soon, if ever. Considering a hypothetical 3 percent wealth tax rate, close to $20 billion in domestic wealth-tax revenue disappeared in 2022; this number would be far higher if the wealth tax also reached foreigners.

Couldn’t Find the SCOTUS Leaker

 

Big surprise here: the Supreme Court investigation couldn’t find the leaker of the Dobbs opinion. They made 82 employees (but no justices) sign affidavits under threat of perjury that they hadn’t disclosed the opinion. Since they didn’t put the screws on the justices, that means that the leaker has to be a justice. I imagine the leaker-justice got a stern warning from Roberts. Will it be enough to deter future leaks?

Who else thinks the leaker’s name rhymes with Monia Motomayor?

Join Jim and Greg as they cheer the impending resignation of New Zealand Prime Minister Jacinda Ardern, whose years in power were most notably marked by draconian COVID policies and unilaterally outlawing the right to own many different weapons. They also shake their heads as some House Republicans propose a national 30 percent sales tax to replace all other federal taxes. They appreciate the effort to simplify the code and hope discussions continue but fear this plan will only be used by Democrats to hammer Republicans. Finally, they respond to former Vice President Al Gore bellowing about boiling oceans and a billion climate refugees.

Brianna Brown Keen (Photo: Eugene Powers/Shutterstock)

This week Dennis talks to Thomas Julin – a top litigator for the First Amendment – about the #TwitterFiles and exactly what Section 230 means in practice.

A Needed Check on Union Violence

 

Recently, American unions have pushed hard to increase their power in the employment market. Unions may strike and thereby shut down a reluctant firm to extract a favorable deal, and will often do so even though that strike action imposes economic losses on union members. But just how hard will unions press to get a strongly pro-union labor contract? Last week in Glacier Northwest v. International Brotherhood of Teamsters, the US Supreme Court heard oral argument on a case that will help answer that question.

In Glacier, the union and the employer were locked in protracted negotiations over a new contract. The company uses cement mixers to distribute its ready-mix product to its customers. Just as the contract was about to expire, union drivers, as part of a coordinated effort, took their loaded trucks on the road, only to return the trucks, still loaded, to the company headquarters moments after the contract expired. The drivers left the engines running to prevent the immediate hardening of their cargo. However, owing to the large number of nearly simultaneous truck returns, much of that cargo did harden, inflicting immediate property damage on the trucks. The two sides reached agreement on a new contract a week later, but the dispute over these losses lingered on. The parties disagree over whether the actions of these workers came within the protected strike practices under the National Labor Relations Act (NLRA). Employers must bear losses caused by strike practices that the NLRA protects, but employers may sue unions in state court in tort for deliberate physical injuries.

This distinction makes a substantial difference. State courts hear and decide cases far faster than the National Labor Relations Board does. More important, state courts can award substantial monetary damages against unions while the NLRB cannot. Given these institutional differences, the key cat-and-mouse game is whether the case goes first to the state court or to the NLRB. The traditional practice on sequencing the two proceedings was set out in the important 1959 labor case, San Diego Building Trades Council v. Garmon, which held that the plaintiff may bring a tort action right away, to which the defendant might plead that the case was “arguably” subject to the provisions of the NLRB as a defense. Upon the defendant pleading such a defense, the tort suit had to be discontinued. The Supreme Court in Garmon ruled that the NLRA required a state court to dismiss a tort suit alleging that a union wrongfully attempted to win a contract by picketing an employer’s place of business. Indeed, that lawsuit was blocked even though the NLRB declined jurisdiction over the case, and even though the state court wanted only to award damages rather than impose an injunction against the union. The coercive effect of damages could induce abandoning the very behavior that the injunction would have directly prohibited. The question in Glacier was whether this employer was caught by Garmon pre-emption.

Join Jim and Greg as they cringe at reports that December’s illegal border crossings will hit a record high and possibly reach 250,000, and Jim wonders why the numbers keep coming out later and later. They also shake their heads as White House Press Secretary Karine Jean-Pierre keeps dodging questions about the Biden classified documents or referring people to sources she knows won’t say anything. Finally, they marvel as Biden climate envoy John Kerry publicly hails himself and others in a “select group of human beings” who are in position to “save the planet.”

Host Joe Selvaggi talks with Cato Institute research fellow Colin Grabow about the failure of the Jones Act, a law that sought to protect the U.S. shipbuilding and merchant marine capacity, and examine its downstream effects on inflation, supply chain fragility, and energy access that directly affect every American.

Guest:

Join Jim and Greg as they are pleasantly stunned by CNN’s Don Lemon telling Senate Majority Leader Chuck Schumer that he seems more measured in his reaction to Biden possessing classified documents than he did to the Trump case. They also roll their eyes at the organization behind the “study” suggesting gas stoves are bad for respiratory health – and wonder if the 3 Martini Lunch is indirectly responsible for this nonsense. Finally, they go through the latest lies uncovered about Rep. George Santos, whether we know anything about this guy, and whether he can stay in Congress.

New York’s Impossible Housing Dream

 

On January 10, 2023, New York Governor Kathy Hochul delivered her State of the State address against a grim political backdrop. For the past several years, New York has led the nation in net population loss, losing more than 400,000 people over the past two years, with no sign that the exodus will abate in the near future. The question is: what should the Empire State do to stem those losses? Much of the governor’s answer is that the state should somehow construct, over the next ten years, some 800,000 housing units, including many affordable ones. Along with dreaming up these units, Hochul has taken aim at localities throughout the state where the issuing of local building permits lags far behind the rate in nearby states. At the same time, Hochul has been reluctant to extend protections against eviction, which also have strong progressive support within the state.

Will New York actually take steps that will stem the string of population losses? The outlook is cloudy at best. To Hochul’s credit, one of the first parts of her program takes a page out of the classical liberal playbook on land-use law by calling for a removal of obstacles to issuing building permits. As Hochul notes, “Between full-on bans of multi-family homes, and onerous zoning and approvals processes,” these restrictions “make it difficult—even impossible—to build new homes.” It’s easy to see why. Permit denials are rarely related to the prevention of nuisance-like behavior from new construction that could impose physical dangers on existing housing. Quite the opposite. Virtually all of these permit denials and zoning restrictions have a different agenda: they hope to maintain property values for incumbent homeowners by preventing the supply expansion that would lower housing costs. Sitting owners therefore know that if they stay, they will enjoy the added benefits from these artificially high values. But the restrictions in question need not keep them tied to the state. The owners have an alternative: to sell at artificially high prices and then depart to other, more desirable (low tax, low regulation) locations.

At no point is there any guarantee that increasing the rate at which permits are issued will reverse the flow of migration out of New York, as the purchasers of their homes will not necessarily be individuals who reside outside the state.