Liberty Watch Episode 19: Sports Gambling Legalized

The following is the outline text version of my YouTube video which can be viewed by clicking here:  https://youtu.be/UubIS1N8Xl8

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Sports Gambling Legalized?

The libertarian perspective on issue

Does not violate the non-aggression principle

No one takes your stuff without your consent

No one beats you up

Who gets to choose if you gamble on sports?

You

Someone else

The supreme court’s view

Justice Alito writes majority 6-3 opinion

PASPA ruled unconstitutional for wrong reason

The Professional and Amateur Sports Protection Act

 

The Professional and Amateur Sports Protection Act (PASPA) makes it

unlawful for a State or its subdivisions “to sponsor, operate, advertise,

promote, license, or authorize by law or compact . . . a lottery,

sweepstakes, or other betting, gambling, or wagering scheme based

. . . on” competitive sporting events, 28 U. S. C. §3702(1), and for “a

person to sponsor, operate, advertise, or promote” those same gambling

schemes if done “pursuant to the law or compact of a governmental

entity,”

 

And the Constitution indirectly restricts the

States by granting certain legislative powers to Congress,

see Art. I, §8, while providing in the

 

Supremacy Clause

that federal law is the “supreme Law of the Land . . . any

Thing in the Constitution or Laws of any State to the

Contrary notwithstanding,” Art. VI, cl. 2. This means that

when federal and state law conflict, federal law prevails

and state law is preempted.

[Actual text of the article VI clause 2 supremacy clause:

This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.]

[Laws passed that are unconstitutional are not the “supreme law of the land.”  Reductio ad absurdum.  Congress passes law that says you must kill your firstborn child.]

 

The legislative powers granted to Congress are sizable[see Madison contradicting statement],

but they are not unlimited. The Constitution confers[should be delegates] on

Congress not plenary legislative power but only certain

enumerated powers. Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms.  And conspicuously absent from the list of powers given to Congress is the power to issue direct orders to the governments of the States.[How about the power to prohibit gambling not in article 1 section 8?]

 

…The PASPA provision at issue here—prohibiting state

authorization of sports gambling—violates the anticommandeering

rule.

…It is as if federal officers were installed in state legislative

chambers and were armed with the authority to stop

legislators from voting on any offending proposals. A more

direct affront to state sovereignty is not easy to imagine.

…Congress can regulate sports gambling directly but if it elects not to do so each state is free to act on its own.[Again, no authority in article 1 section 8 to regulate sports gambling]

Article 1 Section 8 of the U.S. Constitution

Does not authorize much of what Congress has done

Social security

Providing health insurance

Involvement in education

Prohibition of alcohol and drugs

18th amendment established alcohol prohibition
21st amendment repealed the eighteenth amendment

Prohibition of gambling

The text

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

 

To borrow money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

 

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

 

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

 

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

 

To establish Post Offices and Post Roads;

 

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

 

To constitute Tribunals inferior to the supreme Court;

 

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

 

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

 

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

 

To provide and maintain a Navy;

 

To make Rules for the Government and Regulation of the land and naval Forces;

 

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

 

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Comments by the Founding Fathers

Federalist 45- James Madison

“The powers delegated by the proposed constitution to the federal government are few and defined,” not “sizable” as Justice Alito writes in this opinion.

Federalist 39- James Madison

“The local or municipal authorities form distinct and independent portions of supremacy, no more subject in their respective spheres to the general authority than the general authority is subject to them within their own sphere.  In this relation then the proposed government cannot be deemed a national one because its jurisdiction pertains to enumerated objects only and leaves to the states a residuary and inviolable sovereignty over all other objects.”

Federalist 83- Alexander Hamilton

“An affirmative grant of special powers would be absurd as well as useless if a general authority was intended.”

Madison in 1792 on the House floor regarding the Constitution’s commerce clause

“I venture to declare it as my opinion, that, were the power of Congress to be established in the latitude contended for, it would subvert the very foundations, and transmute the very nature of the limited government established by the people of America.”

 

… “If Congress can employ money indefinitely to the general welfare and are the sole and supreme judges  of the general welfare they may take care of religion into their own hands; they may appoint teachers in every state, county and parish; they may pay them out of the public treasury; they may take into their own hands the education of children establishing in like manner schools throughout the Union; they may assume provision for the poor; they may undertake the regulation of all roads other than post roads.  In short, everything from the highest object of state legislation down to the most minute object of police would be thrown under the power of Congress, for every object I have mentioned would admit the obvious application of money that might be called provisions for the general welfare.”

 

LMV:  In other words, the general welfare, necessary and proper, and commerce clauses were not powers of their own but descriptions of the purposes of those limited and enumerated powers already mentioned in the Constitution.

Libertarian Humor

This graphic shows some people crawling under a barbed wire fence.  The caption reads “Look at me crawling under barbed wire to escape free market capitalism.  Said no one ever.”

Reminiscent of the wall separating East Berlin from West Berlin

Reagan “tear down this wall” clip

LMV:  That’s the show.  See you next time.

Liberty Watch Episode 11: Hurricanes and Wein-Stains

The following is the text version of my YouTube video which can be viewed by clicking here:  https://www.youtube.com/watch?v=YEp6Au3E7lE

You can subscribe to my YouTube channel by clicking here: https://www.youtube.com/channel/UCIb4k41f3A1lftMXivcvj5g.

LMV:  Wow!  Did you like my show intro?  I thought it was pretty cool but then I remembered this intro.

Audio clip:  Intro to Rolling Stones song Brown Sugar.

LMV:  And then I remembered this intro.

Audio clip:  Intro to Rolling Stones song Gimme Shelter.

LMV:  So I must confess my intro is not as cool as the Stones’.  Nevertheless, welcome to another edition of Liberty Watch.  I am your host Liberty Man Van.  The hurricane season of 2017 has been a particularly active one.  Coincidentally, the Miami Hurricanes are off to a great start at 7-0.  It seems that every ten years or so we have a bunch of hurricanes in one season and the years in between are relatively inactive.  No matter how many inactive seasons we have someone is sure to attribute the active one to global warming, rather, to climate change.  They used to call it global warming but after several years of cooling recently they have renamed it climate change- that is sure to encompass whatever happens.

Hurricane Harvey, the worse storm of the year hit Texas hard, including staying stationary for a while and dumping megatons of water on the Houston area; massive flooding was the result.  Here is a little of the news coverage from that storm.

Video clips of Hurricane Harvey in Houston.

LMV:  And whenever nature moves to damage an area and citizens, the price gougers are soon to follow.

Video:  Price gouging report.

LMV:  Should these natural disaster entrepreneurs be arrested or fined?  The emotional response is to say “hell yes!”, but a more careful look reveals a more nuanced answer.  Consider the following article from FEE.org entitled “Anti-Price Gouging Laws Make About As Much Sense As Anti-High Temperature Laws.”  The article begins with the typical defense of anti-price gouging laws:

“Many residents in Texas and Louisiana have suffered from the devastating effects of Hurricane Harvey in recent days, and some of those residents are now being unfairly subjected to further suffering from the unconscionable actions of businesses and individuals who are engaged in illegal price gouging for essential goods like gasoline, water, and food.

To prevent residents from being victimized by ruthless and greedy price gougers, Texas law prohibits businesses from charging “exorbitant prices” for gasoline, food, water, clothing, and lodging following natural disasters like Hurricane Harvey.

Despite those price gouging laws, one large Texas retailer was allegedly charging $42 for a case of water and a gas station in the affected area was reported to be charging $99 for a case of water according to the Texas attorney general. Those retailers are now subject to legal prosecution and fines for charging “excessively high” prices in violation of price gouging laws in Texas.”

LMV:  What is the libertarian way to view this question?  In short, the government should butt out and allow the free market to sort out prices.  This approach allows the maximum amount of freedom for people and businesses to sort it out.  In addition, it just happens to be the most humane approach because it allows precious resources to be allocated to those that need them the most.  The FEE.org article continues:

“The artificially low, government-mandated prices will cause distortions and inefficiencies in Texas and Louisiana because the artificial prices won’t accurately and truthfully reflect the economic reality that supplies of critical goods are extremely low at the same time demand for those goods is extremely high.

Price gouging laws create a government-mandated fantasy world with prices that create a complete disconnect between the true measure of a scare good’s value and a fantasy measure of that good’s value.”

“When it comes to maximizing the efficient allocation of resources following a natural disaster like Hurricane Harvey, what we want are accurate, truthful and precise measures of market conditions (supply and demand), and we can only get those measures from market prices, not from artificial, government-mandated price gouging laws.”

LMV:  When I see anti-price gouging laws and sentiment I am reminded of President Nixon’s response to the Arab oil embargo of the early 70’s.  I can remember watching the evening news and seeing the video footage of the long lines at the gas stations.  Nixon’s response was to impose price controls and rationing.  The price controls prevented price gouging and the result was scarcity and prolongation of the crisis.

Whether rising prices are due to an oil embargo or to a natural distaster, if we allow prices to develop naturally rather try to put artificial caps on prices, we are more likely to ensure that people get the scarce resources they need.  Prices convey a vital piece of information.  They tell us where goods are needed the most so that market actors can make accurate decisions and move goods with the maximum of efficiency.   In other words, anti-price gouging laws are counter-productive because they are likely to prolong the scarcity of goods.  Those who are “too greedy” will end up with goods they cannot sell and will be undercut by competitors.  Allowing the free market to determine prices will be more compassionate, more efficient, and allow maximum freedom.

LMV:  That brings us to our next article from the mises.org website entitled “The Broken-Window Fallacy is Alive and Well.”  The broken-window fallacy was passed down to us from nineteenth century French economist Frederic Bastiat.  It goes something like this.  A shopkeeper has a window at his business broken by a careless son and pay a glazier six francs to replace it.  This stimulates the economy because it has put the glazier to work.  Right?  Wrong!  The happy glazier is what is seen.  What is not seen is that the shopkeeper had planned to spend that six francs on a good pair of shoes.  So, not only is the shopkeeper out of six francs but so is the cobbler.  That is a net loss of six francs; that is what is not seen.

Fast forward to 21st century Houston in the wake of Hurricane Harvey.  The mises.org article states:

“As Hurricane Harvey, now tropical storm Harvey, makes its way across the southern US, estimates have already come in as to the cost of the storm. According to AccuWeather, Harvey is expected to cost upwards of $190 billion in damages, one percent of the national GDP. This makes Harvey the costliest storm ever to hit the United States, more than Katrina ($100 billion) and Sandy ($60 billion) combined.

Here Come The Clowns

As in the wake of every disaster, pundits and politically biased economists — including Larry Summers who declared Japan’s 2011 Tsunami would boost economic growth —  will wax elegantly on how Harvey will end up being a boon for “the economy.” CNBC, for example, reports that Hurricane Harvey may ultimately “raise wages.”  It will spawn government spending and insurance payouts to flood victims, we’re told. These victims will spend that money in the economy which will put people back to work, employ the factors of production and so on and so on.

LMV:  This fallacy seems to surface every time we have a disaster but common sense tells us that if you have to spend money to replace something that you already had, you have not created any new wealth.  In fact, you have lost wealth.

You have heard similar logic from historians discussing how World War ll helped end the Great Depression.  After all, didn’t the GDP explode upward during the war?  Yes it did but we must keep in mind that government spending is counted in the GDP numbers.  And does it follow that spending on tanks, battleships, and bombs really adds to wealth?  Surely not.  If a family spends funds on guns and ammunition to protect the home, it means you have less to spend on bicycles or televisions.  In a word, resources used to recover from a natural disaster do not spur economic growth.

LMV:  And now for our final angle regarding this year’s hurricanes.  I have noticed through the years that it seems the same flood prone areas get hit again and again.  And the houses are rebuilt in those same flood prone areas again and again.  Why does this happen?  Why do we never learn from our mistakes?  Why do we continue to engage in this risky behavior?

The short answer is that someone other than the property owners are paying for it.  If the property owners had to pay a market price for flood insurance the cost would be much greater and many of them would be discouraged from rebuilding in the same flood prone areas.

One article that captured the folly appeared in the USA Today and was entitled “Dear Texas, how many times do we have to rebuild the same house?”

From the article:

…Hurricane Harvey offers the clearest lesson why Congress should not perpetuate the federal National Flood Insurance Program (NFIP), which expires at the end of September. The ravages in Houston and elsewhere would be far less if the federal government had not offered massively subsidized flood insurance in high-risk, environmentally perilous locales. But this is the same folly that the feds have perpetuated for almost 50 years.

…NFIP embraced a “flood-rebuild-repeat” model that has spawned an almost $25 billion debt. The National Wildlife Federation estimated in 1998 that 2% of properties covered by federal flood insurance had multiple damage claims accounting for 40% of flood insurance outlays, and that more than 5,000 homes had repeat claims exceeding their property value. A recent Pew Charitable Trust study revealed that 1% of the 5 million properties insured have produced almost a third of the damage claims and half the debt.

…NFIP paid to rebuild one Houston home 16 times in 18 years, spending almost a million dollars to perpetually restore a house worth less than $120,000…The Washington Post recently reported that a house “outside Baton Rouge, valued at $55,921, has flooded 40 times over the years, amassing $428,379 in claims. A $90,000 property near the Mississippi River north of St. Louis has flooded 34 times, racking up claims of more than $608,000.

…FEMA has loitered on updating in part because many members of Congress vehemently oppose accurate estimates of the risks and updated, higher insurance rates for their constituents.

…The financial soundness of federal flood insurance will always depend on politicians’ self-restraint in buying votes. In other words, the program is actuarially doomed. There is no constitutional right to federal bailouts for flooded homes. The sooner the feds exit the flood insurance business, the safer American coasts and paychecks will be.

LMV:  In other words, like all government programs, it is to benefit the politicians and their well connected friends that tax money is spent.  There are precious few politicians in D.C. that are taking up for the taxpayers.  The expense is accrued by the many and the benefits to the few.  The is same old tired story we see again and again with government.  Let me say it as I have said it before.  The government always looks out for its best interests first.  It is not there to protect you or to be your congenial benefactor.  Get those ideas out of your head and you won’t be surprised when these types of bad programs continue to exist decade after decade.

LMV:  Our next story is a about big shot Hollywood film producer Harvey Weinstein.  As you may have heard, he has been accused being a sexual predator over the many years of his Hollywood career.  Here is a snippet from a USA today article:

…Since the New York Times and New Yorker published bombshell reports detailing decades of alleged sexual harassment and assault by producer Harvey Weinstein early this month, dozens of women have come forward with similar claims against the movie mogul.

60 women have accused Weinstein of inappropriate to potentially criminal behavior ranging from requests for massages to intimidating sexual advances to rape.

LMV:  This is not surprising for those of us who are enlightened by our love of rock and roll.  As a matter of fact, the Eagles wrote a song about this activity years ago.

Audio clip:  From the Eagles song King of Hollywood.

LMV:  The fact is, this type of behavior has been well known in Hollywood for decades.  Why is everyone so shocked.  This is old news.

LMV:  And finally, it is time in the show for a little libertarian humor.  Did you ever wonder what the libertarian version of Star Wars would look like?

Video clip:  Libertarian Star Wars.

LMV:  And that’s our show for today.  Thanks for joining us, tell a friend, and join us next time on Liberty Watch where we don’t believe you need some guy with a bullhorn to tell you what to do.