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The Lighthouse is the weekly email newsletter of the Independent Institute.
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Volume 6, Issue 28: July 12, 2004

  1. Bush "Weak" on Exercising Veto Power
  2. Class Action Jackpots
  3. Drug War Boosts Crime, Experts Say

1) Bush "Weak" on Exercising Veto Power

In a matter of months, President Bush could become the first full-term president since John Quincy Adams to not exercise his veto authority -- quite an unusual feat for someone who vetoed 97 bills as governor of the Lone Star state. Bush's failure to veto is also unusual given the frequency with which recent presidents have done so: Clinton vetoed 37 bills in his two terms of office; Bush the father vetoed 44 bills; and Reagan vetoed 78 bills.

So why has George W. Bush been unwilling to use his veto power?

Several factors seem to have contributed to Bush's no-veto strategy, as Nicolas Heidorn, a public policy intern at the Independent Institute, explains in a new op-ed. A Republican-controlled Congress has passed fewer bills that Bush might veto, and Bush has been reluctant to risk alienating interest groups who support legislative pork. Further, judging by history, there's nothing inherently "presidential" about using the veto: the frequency of its use roughly resembles a bell curve, with the number of vetoes between Washington and Lincoln averaging 3.6 per president and peaking with Franklin Roosevelt at 635 vetoes.

But Bush's no-veto strategy comes at a high price. Since Bush took office, total federal spending has increased 28.8 percent increase, including a 35.7 percent increase in non-defense discretionary spending.

According to figures from the Office of Management and Budget, Bush has threatened to veto 40 different bills. He has also threatened to veto an upcoming transportation bill if its cost exceeds $256 billion. But whether he will do so is up in the air.

"While a veto might help demonstrate fiscal responsibility to his supporters, it could also highlight his inability to control the Congress’ profligacy at a crucial time in the presidential campaign," writes Heidorn. "Bush’s choice -- to veto or not to veto -- could impact not only his chances of re-election, but also whether he makes the history books as a member of a small exclusive club: the veto-free presidents."

See "The Veto-less Bush Will Make History," by Nicolas Heidorn (7/12/04)

Also see, "Under Bush, Federal Spending Increases at Fastest Rate in 30 Years" (The Independent Institute, 6/24/04)

For an analysis of how political incentives and constraints lead to government failure, see BEYOND POLITICS: Markets, Welfare, and the Failure of Bureaucracy, by William Mitchell and Randy Simmons

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2) Class Action Jackpots

Wal-Mart is known for doing things in a big way, but the retail giant may achieve a superlative it didn't want: it's the defendant in the largest class action lawsuit ever brought against a private company. If successful, the more than one and a half million women who have worked at Wal-Mart since 1998 could be awarded more than $1 billion for being unfairly passed up for promotion on the basis of their sex.

Large class action lawsuits have been famous for years, but the phenomenon is not yet four decades old, explains Wendy McElroy, research fellow at the Independent Institute and editor of LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century.

In 1966, McElroy explains, laws were changed so that plaintiffs in a class action lawsuit no longer had to sign on to a lawsuit; they were assumed to be parties to the suit unless they explicitly opted out. This encouraged plaintiff lawyers to seek out very large class action lawsuits -- no matter the merits of the case -- in order to collect excessive contingency fees.

"But much more than monetary profit is involved in the growth of class action suits," McElroy writes. "The lawsuits have become a vehicle for social reform. Those who advocate class action suits often present them as part of a larger crusade for grassroots justice in the face of corrupt corporations and the wealthy.

"The merits of the Wal-Mart case are blurred by association with a broader political cause. The case is as much or more a piece of social reform than it is restitution for injured individuals. This is one of the main criticisms aimed at class action lawsuits and reform-minded judges. Namely, that unelected courts -- including lawyers and juries -- are going far beyond their jurisdiction of providing remedies to specific individuals. They are usurping the function of lawmakers."

Concludes McElroy: "No one knows how to definitively resolve the abuses and dangers of class action suits without denying the underdog access to the courts. A good first step, however, would be to require participants to 'opt in,' to limit contingency fees for lawyers, and reduce the jurisdiction of judges."

See "Jackpot Justice -- the Wal-Mart Case," by Wendy McElroy (6/30/04)
SPANISH TRANSLATION

Wendy McElroy is editor of LIBERTY FOR WOMEN: Freedom and Feminism in the Twenty-first Century


For more on lawsuits, see:

"Painting the Town . . . with Lawsuits," by Michael I. Krauss (1/30/01)
SPANISH TRANSLATION

"The Effect of Electoral Institutions on Tort Awards," by Eric Helland and Alexander Tabarrok (Independent Institute Working Paper #1)

"Runaway Judges? Selection Effects and the Jury," by Eric Helland and Alexander Tabarrok (Independent Institute Working Paper #2)

"Litigation versus Legislation: Forum Shopping by Rent-Seekers," by Paul H. Rubin, Christopher Curran, and John F. Curran (Independent Institute Working Paper #8)

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3) Drug War Boosts Crime, Experts Say

Transcript to "Drug War Crimes" Forum Now Available

At a recent Independent Institute Policy Forum, entitled “Drug War Crimes,” three distinguished panelists discussed the negative effects of the Drug War in expanding violent crime, causing law-enforcement corruption, and attacking fundamental American liberties. A transcript of their presentations is now available at http://www.independent.org/tii/forums/040506ipfTrans.html

Boston University Economics Professor Jeffrey Miron, author of the new book, also titled DRUG WAR CRIMES, argued that the War on Drugs has had multiple perilous effects. Far from reducing crime, the Drug War “creates violence, because the participants in a black market cannot resolve their disputes using lawyers, and arbitration systems, and judges. They have to resort to guns, or knives, and other forms of violence, because they don’t have access to the non-violent legal dispute resolution system.”

Drug prohibition also causes a “reduced respect for the law,” said Miron. Although some believe that prohibition makes “a moral statement” against drugs, the Drug War is “far more immoral than legalization and drug use, because it has enormous effects, which negatively impact innocent bystanders.”

Miron concluded the Drug War is an utter failure. Although the “U.S. government spends over $30 billion dollars on the war on drugs, and arrests more than 1.5 million people annually,” demand is only marginally decreased; many people “buy and use drugs every day,” and “drug prices have fallen by a factor of about 80 percent.”

The second panelist, former San Jose and Kansas City Chief of Police Joseph D. McNamara, added another perspective, providing first-hand accounts from his experience on the front lines as to how drug prohibition reinforces a corrupt “police culture” of “gangster cops.” Desensitized by the violence they’re exposed to daily, pressured to make large numbers of arrests, and confronted with the futility of their mission, police lose respect for the rule of law, such that the “Constitution is not seen as a glorious document that established unique Civil Rights in the history of civilization, [but instead] as an obstacle that they have to get around to do their job.”

McNamara declared that “for the first 140 years of this Republic, your right to life, liberty, and the pursuit of happiness included the right to use any substance that you wanted, and to sell it.”

Rounding out the panel, Ethan Nadelmann, Founder and Executive Director of the Drug Policy Alliance, reflected on how he came to his conclusions about the Drug War, and explored various drug policy options. While stopping short of advocating the outright, full legalization that Miron favored, Nadelmann relayed his attempts to find a compromise between a “total free market in drugs” and prohibition, so as to “try to take these two models, and stretch them together, and see if we could get right in the middle and figure out that optimal policy in the end.” This compromise, often called “harm reduction,” would employ such policies as “decriminalization, and needles, and methadone programs, and heroin maintenance,” as well as “additional control . . . to reduce the harms of drugs” in an effort to “gut prohibition on the one hand, but also respect [public health] concerns.”

Nadelmann concluded by asking the audience to “decide that this is going to be a priority issue.”

The transcript of “Drug War Crimes,” featuring Jeffrey Miron, Robert McNamara and Ethan Nadelmann

Order DRUG WAR CRIMES: The Consequences of Prohibition, by Jeffrey Miron

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