Hacking attacks are estimated to cost the global economy a whopping $400 billion each year. With recent attacks on Sony and U.S. Central Command, it seems like nothing online is completely safe. The United States is scrambling to improve cybersecurity and prevent attacks that could otherwise have major impacts on national security, the economy, and personal safety. Here’s what you need to know about cybersecurity policy, government efforts, and what to expect in the future.

What is cybersecurity?

In the increasingly digital world with an ever-growing e-commerce sector, cybersecurity is of vital importance. Cybersecurity is a broad concept that resists a precise definition; it involves protecting computers, networks, programs, and data from cyber threats. Cybersecurity can help protect privacy and prevent unauthorized surveillance and use of electronic data. Examples of cyberattacks include worms, viruses, Trojan horses, phishing, stealing confidential information, and control system attacks. Because of it loose definition, it is hard for the government to regulate how businesses should protect their systems and information. A number of different measures are used to ensure at least a basic level of cybersecurity.

How does cybersecurity work?

Cybersecurity helps to prevent against the risks associated with any cyber attack, which depend on three factors:

1. Removing the threat source. Determining who is attacking can indicate what kind of information or advantage they are seeking to gain. Cyberattacks may be carried out by criminals, spies, hackers, or terrorists, all of whom may do it for different reasons.
2. Addressing vulnerabilities through improving software and employee training. How people are attacking is important in trying to set up the best cybersecurity possible. This can be likened to an arms race between the attackers and defenders. Both try to outsmart the other as the attackers probe for weaknesses in their target. Examples of vulnerabilities include intentional malicious acts by company insiders or supply chain vulnerabilities that can insert malicious software. Previously unknown, “zero day” vulnerabilities are particularly worrisome because they are unknown to the victim. Since they have no known fix and are exploited before the vendor even becomes aware of the problem, they can be very difficult to defend against.
3. Mitigating the damage of an attack. A successful attack may compromise confidentiality, integrity, and even the availability of a system. Cybertheft and cyberespionage might result in the loss of financial or personal information. Often the victims will not even be aware the attack has happened or that  their information has been compromised. Denial-of-service attacks can prevent legitimate users from accessing a server or network resource by interrupting the services. Other attacks such as those on industrial control systems can result in destruction of the equipment they control, such as pumps or generators.

Examples of common cybersecurity features include:

• Firewall: a network security system to control incoming and outgoing network traffic. It acts as a wall or barrier between trusted networks and other untrusted networks.
• Anti-virus software: used to detect and prevent computer threats from malicious software.
• Intrusion Prevention System: examines network traffic flows to prevent vulnerability exploits. It sits behind the firewall to provide a complementary layer of analysis.
• Encryption: involves coding information in such a way that only authorized viewers can read it. This involves encrypting a message using a somewhat random algorithm to generate text that can only be read if decrypted. Encryption is still seen as the best defense to protect data. Specifically, multi-factor authentication involving a two-step verification, used by Gmail and other services, is most secure. These measures (at least for the time being) are near impossible to crack, even for the NSA.

Watch the video for a basic overview of cybersecurity.

What is the role of the federal government in cybersecurity?

Most agree the federal role should include protecting federal cyber systems and assisting in protecting non-federal systems. Most civilians want to know online shopping and banking is secure, and the government has tried to help create a secure cyber environment. According to the Congressional Research Service, federal agencies on average spend more than 10 percent of their annual IT budget on cybersecurity measures.

There are more than 50 statutes that address various issues of cybersecurity. While much legislation has been debated in recent years, no bills have been enacted. The most recent and significant cybersecurity legislation came in 2002 with the passage of the Federal Information Security Management Act (FISMA), which requires each federal agency to implement and report on cybersecurity policies.

Over the past several years, experts and policymakers have shown increasing concern over protecting systems from cyberattacks, which are expected to increase in both severity and frequency in the coming years. Most proposed legislation and executive branch action with regard to cybersecurity focus on immediate needs, such as preventing espionage and reducing the impact of successful attacks. Historically there has been an imbalance between the development of offensive versus defensive capabilities. Coupled with slow adoption of encryption technologies, many programs were vulnerable to attack. While the cybersecurity landscape has improved, needs still exist with regard to long-term challenges relating to design, incentives, and the environment. Overcoming these obstacles in cybersecurity remains a challenge.

Design

Developers of software or networks are typically more focused on features than the security of their product. Focusing primarily on the product’s features makes sense from an economic standpoint; however, shifting the focus away from security makes these products more vulnerable to cyberattacks.

Incentives

The distorted incentives of cybercrime make it hard to prevent. Cybercrime is typically cheap, profitable, and relatively safe for criminals. In contrast, cybersecurity is expensive, often imperfect, and companies can never be certain of the returns on the investments they make in cybersecurity.

Environment

Cybersecurity is a fast-growing technology. Constantly-emerging properties and new threats complicate the cybersecurity environment. It is very difficult for the government or private companies to keep up with the pace of changing technology used in cyberattacks. What laws and policies do exist are almost always out of date given the rapid pace of change in cybersecurity.

Watch the video below for an overview of the difficulties of cybersecurity policy.

Has President Obama taken any action on cybersecurity?

With recent attacks and data breaches at Sony, Target, Home Depot, and the Pentagon’s Central Command, the need for toughened cybersecurity laws has been highlighted. Cybersecurity is an issue where both sides of the political aisle see the need to work together. It is clear that a comprehensive policy playbook is needed to guide the government’s response to such serious cyberattacks.

On January 13, 2015, President Obama announced a new cybersecurity legislative proposal, which consists of three parts:

1. Enabling cybersecurity information sharing: The proposal enhances collaboration and cybersecurity information within the private sector and between the private sector and the government. The proposal calls for the private sector to share cyber threat information with the Department of Homeland Security’s National Cybersecurity and Communications Integration Center (NCCIC). Sharing information about cyber threats with the NCCIC would shield companies from liability. The bill would require the Department of Homeland Security to share threat information as quickly as possible with other agencies like the FBI or NSA. The proposal would also require private entities to comply with privacy restrictions like removing unnecessary personal information and taking measures to protect any personal information that must be shared.
2. Modernizing law enforcement authorities to fight cybercrime: This ensures that law enforcement has the proper tools to investigate and prosecute cybercrime. These provisions would criminalize the sale of stolen U.S. financial data, expand authority to deter selling of spyware, and shutdown programs engaged in denial-of-service attacks. Other components criminalize various cybercrimes.
3. National data breach reporting: Many state laws require businesses that have suffered from breaches of consumer information to notify consumers. The proposed legislation would simplify and standardize these existing state laws. The proposal would also put in place a timely notice requirement to ensure companies notify their customers about security breaches.

Watch the following video for an outline of President Obama’s plan.

On January 16, 2015, President Obama and British Prime Minister David Cameron promised to cooperate with regard to cybersecurity. Cameron expressed concerns about encryption technologies that might make it easier for would-be terrorists to avoid detection. Cameron hopes to outlaw certain forms of encryption. President Obama did not as easily dismiss privacy concerns, but did state that he believes the government can do a better job of balancing both privacy and security.

Why is it hard to implement effective cybersecurity policy?

Congress has tried for years to pass legislation encouraging companies to share information from cyberattacks with the government and with each other; however, liability issues and privacy concerns stopped such laws from passing. Many privacy advocates are speaking out against President Obama’s proposed legislation for the same reasons. They fear that such information-sharing legislation could further the government’s surveillance powers. Some groups caution that substantial National Security Agency reform should come before considering any information-sharing bill. Privacy concerns such as these have made it difficult to pass cybersecurity packages in Congress in the past; however, the recent Sony attack may prove to be a game changer in passing new cybersecurity bills.

Even if President Obama and Congress can implement the above changes, it will still be difficult for the government to enact more effective policy changes. Technology can easily mask the identity or location of those organizing cyberattacks. This can make identifying and prosecuting those responsible near impossible. Justifying an appropriate response to attacks is even harder.

Legislatures and citizens also tend to be kept in the dark due to extreme security regarding a country’s cyber capabilities. Edward Snowden’s revelations about the NSA sparked public interest in cybersecurity and in the extent of the government’s capabilities. But still, information regarding the U.S.’ cyber policies remains classified and not open to general discussion. Without transparency, it is hard to exercise oversight or explain to the public the government’s cybersecurity activities.

Critics also contend that President Obama’s proposal leaves large gaps in cybersecurity policy. The policy fails to establish ground rules for responding to cyber attacks once they have occurred and it remains unclear how the United States might respond to cyberattacks against government networks or even private sector entities like Sony. While attacks may be criminalized, prosecuting these cases with limited evidence is difficult.

A recently uncovered 2009 U.S. cybersecurity report warned that the government was being left vulnerable to online attacks because encryption technologies were not being implemented fast enough. While the country has come a long way since 2009 there is still much room for improvement. A 2015 review of the Department of Homeland Security stated that:

DHS spends more than $700 million annually to lead the federal government’s efforts on cybersecurity, but struggles to protect itself and cannot protect federal and civilian networks from the most serious cyber attacks.

Conclusion

More needs to be done in the realm of cybersecurity to prevent against cyberattacks. While less legislation may have worked in the past, the scale of recent cyberattacks shows the vast potential for damage to the government, companies, and individuals. President Obama’s recent proposal may be a good start, but more long-term policies are needed to protect citizens from serious cyberattacks. No cybersecurity solution is permanent, so public policy must constantly evolve to suit the needs of its citizens in the cyber realm.

Resources

Primary

Department of Homeland Security: Federal Information Security Management Act

White House: Securing Our Cyberspace: President Obama’s New Steps

Homeland Security and Governmental Affairs Committee: A Review of Missions and Performance

Additional

Congressional Research Service: Cybersecurity Issues and Challenges

National Journal: Obama’s New Cybersecurity Proposal Facing Skepticism

UMUC: Cybersecurity Primer

Forbes: Why a Global Security Playbook is Critical Post-Sony

Guardian: Secret U.S. Cybersecurity Report

Reuters: Obama Seeks Enhanced Cybersecurity Laws to Fight Hackers

NPR: Obama, Cameron Promise to Cooperate on Cybersecurity

Yahoo: Obama Says Hacks Show Need for Cybersecurity Law

Huffington Post: What’s Wrong with America’s Cybersecurity Policy?

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Cybersecurity: Will We Ever Be Safe? appeared first on Law Street.

For many people, Guantanamo Bay conjures horrific thoughts of terrorists, torture, and inhumane treatment. Many are surprised to hear that this dark stain in American history still exists and holds more than 100 detainees. While President Obama pledged to close Guantanamo Bay during his first campaign for the presidency, the process has been far from easy. Where can the United States send detainees to be released, and who will accept those deemed simply too dangerous to be set free?

What is Guantanamo Bay?

Guantanamo Bay detention camp is a U.S. military prison located at Guantanamo Bay Naval Base in Southeastern Cuba. Since 1903, the United States has been leasing the 45 square miles the base sits on from Cuba in an arrangement that can only be terminated by mutual agreement. After the attacks on September 11, 2001, existing detention facilities at the base were temporarily repurposed in order to hold detainees and prosecute them for war crimes in the “War on Terror.”

Since 2001, Guantanamo Bay has housed nearly 800 detainees. As of the beginning of 2015, there are 127 detainees at Guantanamo Bay. During President George W. Bush’s administration, the United States claimed that since the detainees were not on American soil they were thus not protected by the U.S. constitution. Their status as “enemy combatants” meant they could be denied U.S. legal protections and even protections from the Geneva Conventions. Many detainees endured cruel, inhumane treatment and various forms of torture while being held indefinitely without charges. The Supreme Court later ruled in various cases that procedures at Guantanamo Bay violated military law and the Geneva Conventions.

President Obama signed an executive order following his 2009 inauguration ordering the detention facilities at Guantanamo Bay to be closed within a year. Despite this order, various obstacles have required that the facilities remain open.

Why haven’t the detention facilities closed?

The difficulty in closing the facilities at Guantanamo Bay comes in finding an appropriate place for the detainees to go. Many countries do not wish to take in detainees, and Congress objects to holding trials in the United States for any of the detainees who may have to serve longer sentences.

On December 19, 2014, President Obama signed the annual defense policy bill, titled the National Defense Authorization Act, into law. The Act prohibits him from closing Guantanamo Bay or transferring the detainees to U.S. soil. Negotiators even rejected a change that would have allowed detainees to come to the United States for emergency medical care rather than fly doctors and equipment to them. Despite signing, the frustrated President Obama hinted that he may claim constitutional powers to transfer some detainees against Congress’ wishes. According to the Washington Times, President Obama stated that since the law “violates constitutional separation of powers principles, (the) administration will implement them in a manner that avoids the constitutional conflict.” Watch the video below for more of President Obama’s sentiments.

At this point, the best way to whittle down the number of detainees at Guantanamo Bay is to transfer them elsewhere. Fifty-nine detainees have been approved for transfer but still remain at the facility. President Obama is allowed to transfer detainees to other countries willing to take them; however, the transfers can only take place after the Secretary of Defense certifies that they are not likely to join terrorist organizations. Frustrations linger between President Obama’s National Security staff and outgoing Secretary of Defense Chuck Hagel. While the staff has approved transfers, sign-off delays from Hagel and the Pentagon slow the process.

Has progress been made?

After a virtual halt in transfers between 2011 and 2013, a quickened pace for detainee releases was seen in 2014. Last year the Obama administration was able to transfer 28 detainees. Most recently they have been accepted by Kazakhstan, Uruguay, and Afghanistan, and they are not likely to face further detainment.

Transfers

Another 59 detainees have been approved for transfer but remain at Guantanamo Bay; 51 of those approved are from Yemen. The United States is not willing to send the detainees back to Yemen due to instability and prevalent militant activity. Concerns that the government there cannot ensure that the men will not join a terrorist organization rule out any chance they would be sent back to the country. The United States is instead looking to countries in Europe, Latin America, and the Middle East to take some of the detainees. Countries must assure the United States the detainees will not return to the battlefield and will be treated humanely.

Detainees in Limbo

If the United States can find places to send all of the 59 detainees approved for transfer, officials can begin the more difficult task of deciding what to do with the remaining prisoners. An additional 58 detainees are expected to remain in limbo. They are considered too difficult to try in court due to insufficient evidence, but they are still too dangerous to release. Ten detainees, including five alleged to have helped plot the 9/11 attacks, are in the military trial stage and have been for months. Administration officials say that the detention center cannot be closed without sending at least some of the remaining inmates to the United States to be held for longer sentences.

Cost Issue

The hope is to decrease the population down to the low 120s within the next month, making it half of what is was when President Obama took office in 2009; however, this still leaves President Obama far from his goal of closing the prison. The White House has continually argued that Guantanamo is a propaganda symbol used by terrorists to fuel anger at the United States and so it should be eliminated; however, the Obama administration has increasingly made the argument for Guantanamo Bay closure from a financial standpoint. According to the Wall Street Journal, the cost to operate the prison is between $400 and $500 million annually. The annual cost per inmate at Guantanamo Bay is well above $2 million, while officials say the cost to hold an inmate at a U.S. supermax prison would be only around $78,000. As more inmates are transferred from Guantanamo Bay, the cost per inmate continues to rise. The hope is to reduce political opposition to the ban on transferring detainees to the United States by shrinking the number held at Guantanamo until maintaining the separate facility seems far too expensive.

Watch the video below for more information on the difficulty of closing Guantanamo Bay.

Does releasing detainees pose security risks?

It depends on who you ask. A 2013 report from the Director of National Intelligence (DNI) stated that 17 percent of the more than 600 Guantanamo detainees released or transferred since 2002 returned to militant activity. An additional 12 percent were suspected of doing so. In order to cut down on this recidivism the DNI recommended avoiding transfers to countries enduring conflict, instability, or active recruitment by terrorist organizations. President Obama noted, however, that over 90 percent of Guantanamo Bay detainees transferred during his administration are not confirmed or suspected of having reengaged in terrorist activity. Still, many critics contend that the increased pace of prison transfers raises national security concerns.

The risk of future terrorism  is not limited to released Guantanamo Bay detainees. For instance, Abu Bakr al-Baghdadi, head of the Islamic State, was once a prisoner at a U.S. detention center in Iraq before being released. Others note that recidivism in the U.S. legal system is higher than 60 percent, which is much worse than recidivism rates from Guantanamo Bay. While there are risks in releasing detainees, there are similar risks in releasing any prisoner.

With the goal of shutting down Guantanamo Bay, there are few other options than releasing detainees to other countries. Americans remain fearful of detainees being held on U.S. soil. A Gallup poll released in June 2014 said 29 percent of Americans support closing the detention center at Guantanamo Bay and transferring detainees to U.S. prisons. Sixty-six percent oppose the idea. While Americans may agree in theory that the prison should close, they do not want the detainees to ever be held on U.S. soil.

Watch the video below for more of the potential risks of moving prisoners to the United States.

Conclusion

Guantanamo Bay will not be closing anytime in the immediate future. Ultimately President Obama may have to threaten executive action if he cannot overcome congressional opposition to moving the detainees more quickly and shutting down the facility. With no place to put many of the remaining prisoners who are stuck in limbo, it is likely some would have to be sent to the United States for the prison to close anytime soon. At this time, that seems unlikely to happen; however, given fewer detainees and extremely high costs of running the facility, the American public may eventually warm to the idea of housing certain prisoners in the United States.

Resources

Primary

White House: Executive Order: Closure of Guantanamo Bay

Director of National Intelligence: Summary of Reengagement of Detainees

Additional

Washington Post: U.S. Prepare to Accelerate Detainee Transfers

CNN: Guantanamo Bay Naval Station Fast Facts

Politifact: Obama: ‘We’re Spending Millions for Each Individual’

The New York Times: Four Afghans Released From Guantanamo Bay

Washington Times: Obama Signs Defense Bill That Keeps Gitmo Open

CNN: U.S. Hopes to Transfer Dozens From Gitmo

CNN: What Happens When Detainees Get Out?

USA Today: Obama Faces Challenges in Closing Gitmo

Fox News: U.S. Releases Fives More Guantanamo Bay Prisoners

Wall Street Journal: Obama Weighs Options to Close Guantanamo

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post What Will it Take to Finally Close Guantanamo Bay? appeared first on Law Street.

In an ideal world elections would be determined by a competition of ideas. But in today’s world, politics in the United States is determined by fundraising, wealth, and access. Regulations stipulating how campaigns can be financed determine who can donate how much in elections and what the money can be used for. Some argue campaign donations should be protected as a form a free speech while others see these donations as giving the wealthy undue political influence. Read on for the history, controversy, and future for campaign finance reforms.

What is campaign finance?

Campaign finance refers to all money raised to support political candidates, organizations, parties, or initiatives in elections. Any successful political campaign typically costs a significant amount of money. Money is needed to cover travel expenses, pay for political consulting, and to communicate with voters. Advertising costs are by far the most significant expense in heated political campaigns.

This fundraising takes a new turn with corporations and wealthy individuals interested in spending as much as possible to support their candidate. At the federal level, campaign finance is regulated by the Federal Election Commission (FEC). At lower levels, it is governed by state and local law. Most campaign spending comes from private groups, but qualifying presidential candidates can opt to use public money.  Regulation typically takes the form of disclosure, contribution limits, and the limits that come with public financing. The strange array of political terms surrounding campaign finance often makes it hard for people to follow the actual debate.

• Political Action Committees (PACs) – the private groups that fundraise from individual contributors to spend money for political purposes. PACs are necessary since corporations and unions cannot directly donate money to a candidate or national party committee.
• Super PACs – emerged more recently due to Supreme Court decisions. These organizations have no legal limit on the amount they can spend so long as they are politically independent of the actual campaign.
• Hard money – includes donations regulated by the FEC that are made directly to political candidates by individuals and corporations. The names of those who contribute and how much they contribute are publicly available.
• Soft money – known as an indirect donation, it is often given to a political party rather than a candidate and thus can avoid certain legal limitations.
• 527 organizations – refers to advocacy groups like traditional PACs and political parties, named after their IRS code and tax-exempt status.

Watch below for more on how campaign finance works:

What is the history of campaign finance?

Numerous laws and Supreme Court cases have attempted to regulate campaign finance. Typically it is not until a political scandal that there is a push for more stringent regulation in financing.

Tillman Act

In 1907 the Tillman Act became the first ever campaign finance law after Theodore Roosevelt faced questions about which corporations funded his campaign in 1904. The Act banned corporate contributions to national campaigns; however, the law lacked any real method of enforcement.

Federal Election Commission Act (FECA)

In 1971 modern campaign finance rules were born. FECA instituted disclosure requirements for federal candidates. The Act was rewritten in 1974 after it surfaced that Richard Nixon used corrupt funds in his re-election campaign. These amendments established a system of regulation and enforcement through the Federal Election Commission. FECA also created new public financing for presidential elections to limit the influence of money. The new law put limits on individual contributions to candidates, contributions to PACs, total campaign expenditures, and spending by individuals or groups to a specific candidate.

The constitutionality of FECA was challenged in the case of Buckley v. Valeo. The Supreme Court upheld the limits on individual donations and disclosure requirements, citing the compelling state interest to prevent corruption. However, the Court stated that the limits on what campaigns and individuals could spend was a violation of the First Amendment. Further, disclosure could only apply to communications expressly advocating for a candidate. There are three key takeaways from the case:

1. Free speech allows individuals to spend unlimited political money.
2. TV or radio ads that expressly advocate for or against a specific candidate, by using words like “elect” or “defeat,” must be financed with regulated money.
3. Corporations, unions, and individuals can contribute unlimited “soft money” to political parties in an effort to influence campaigns. This encouraged many companies to set up PACs to donate.

Bipartisan Campaign Reform Act

In 2002 the Bipartisan Campaign Reform Act, or McCain-Feingold Act, was passed after it came out that wealthy Democratic donors were given special privileges and the Party had illegally accepted foreign money. The Act prohibited corporations and unions from donating directly to candidates. However, it did not regulate 527 organizations. Because of this many soft money activities previously funded by parties were now done by 527 groups.

Watch a musical overview of the history of campaign finance below:

How is campaign finance regulated today?

Rules regarding campaign finance continue to change, making many things fair game that were once illegal.

Citizens United v. Federal Election Commission

In a January 2010 5-4 decision, the Supreme Court ruled that the government cannot prohibit corporations and unions from spending money for political purposes. Essentially this allows corporations and unions to spend as much as they want on campaigns.

In the March 2010 case of Speechnow.org v. Federal Election Commission, the Federal Court of Appeals for the D.C. Circuit unanimously ruled there should be no contribution limit to groups that only make independent, uncoordinated expenditures to a campaign.

These rulings led to the rise of super PACs. Super PACs are known formally as “independent-expenditure only committees” because they cannot make contributions directly to candidates but instead spend on political advocacy independently of campaigns. Unlike regular PACs, these super PACs have no legal limit to the funds they can raise from various groups, provided they are operated correctly.

Watch the story of Citizens United v. FEC below:

McCutcheon v. Federal Election Commission

In April 2014, a 5-4 decision by the Supreme Court struck down caps on what individuals can contribute to federal candidates in any two-year election cycle because they restrict the democratic process and violate the First Amendment.

Public Funding

At the federal level, public funding is available for presidential campaigns. If a candidate agrees to limit his spending according to a formula, the candidate will receive a matching payment for the first $250 of each individual contribution in the primary campaign. Additionally, the candidate receives financing for the national nominating convention and general election campaign. Candidates have to qualify for funding by privately raising $5,000 in at least 20 states. If a candidate refuses matching funds, she is free to spend as much money as she raises privately. In the 2012 election no major candidate opted to take public funds since candidates can typically raise and spend more on their own. The price of a winning election today has made public funding near obsolete.

What are the arguments surrounding campaign finance reform?

Many of the Supreme Court justices who ruled on recent campaign finance cases decided that spending money for political purposes is equivalent to free speech and should be protected by the First Amendment. The same reasoning extends to corporations, in citing that corporations are made up of individuals and should enjoy the same political rights as individuals. Those who argue for fewer donation restrictions cite their rights guaranteed by the First Amendment.

Opponents argue the lack of restrictions gives the wealthiest unfair influence over the government. Senator John McCain (R-AZ) told Retro Report, “If money is free speech, then the wealthiest people in America are those that get to speak the most freely.”

For example, a study by the Sunlight Foundation found that just one percent of the top one percent of the United States population accounted for 28 percent of all disclosed contributions in the 2012 elections. In a statement Senator Mark Udall (D-CO) echoed these findings: “The American people are angry that a billionaire can dole out $3.6 million to influence an election — meanwhile, it would take a full-time minimum wage worker 239 years to make that much money.”

Most take issue with the rapid expansion of dark money to organizations under a 501(c)(4) designation by the IRS. 501(c)(4)s are defined as social welfare organizations and are tax-exempt. However, these organizations are allowed to participate in political campaigns so long as their primary purpose is promoting social welfare. Examples of these organizations include the Sierra Club, NAACP, and National Rifle Association.

These organizations do not have to disclose spending on political activity nor the names of donors unless they donate expressly for political advocacy. The use of these organizations for political advocacy has contributed to a sharp rise in outside spending without disclosure. A 2011 report by the Center for Responsive Politics found that since the 2006 midterms, spending from groups that do not disclose donors rose from one percent to 47 percent. Many cite large donations by these groups as a form of legal bribery, with the expectation of political favors following each donation.

Are there new developments in campaign finance?

Many Democrats in Congress have called for an amendment to undo the Citizens United ruling, but that seems very unlikely to happen. Senator Tom Udall (D-NM) proposed an amendment to undo the Citizens United case and instead allow Congress to regulate political money. Numerous Senate Democrats signed on. Harry Reid vowed to bring the measure to the floor, but most agree it has little chance of passing.

Democrats introduced a DISCLOSE Act in 2010, 2012, and again in 2014, which would require organizations that spend $10,000 or more in an election cycle to disclose their expenditures and major donors. Republicans have opposed such bills from the standpoint that they give an unfair advantage to their Democratic opponents. Learn more about the DISCLOSE Act below:

The amount of money spent in elections continues to grow at an alarming rate. The Center for Responsive Politics predicts almost $4 billion will be spent in the 2014 midterm elections, making it the most expensive midterm ever. While the 2010 midterm cost $3.6 billion, 2014 will run an estimated $333 million beyond that. Candidates and parties will spend roughly $2.7 billion, but the explosion of outside money continues to significantly influence the races. Outside groups like super PACs and 527s are expected to spend $900 million on their own. Overall, conservative candidates and groups are projected to outspend liberal candidates and groups by $1.92 billion to $1.76 billion. Expect even more money, especially from outside groups, to come flowing in to the 2016 presidential election.

While there may not be action at the national level, 16 states and more than 500 municipalities have called for a constitutional amendment on campaign finance reform. Yet both sides agree getting rid of dark money and enacting reform will not happen any time soon. Little change will happen without a large, Watergate-esque scandal to bring true reform to campaign finance.

Resources

Primary

FEC: Campaign Finance Reports and Data

SCOTUS: Buckley v Valeo

SCOTUS: McCutcheon v. Federal Election Commission

FEC: Public Funding of Presidential Elections

Additional

The New York Times: The Cost of Campaigns

Politico: Waiting for the Next Watergate

NCSL: Campaign Finance Reform: An Overview

NPR: A Century of U.S. Campaign Finance Law

Washington Post: Campaign Finance: Special Report

Atlantic: Making Sense of McCain-Feingold and Campaign Finance Reform

Washington Times: No Major Takers for Federal Campaign Funds

Open Secrets: Super PACs

Sunlight Foundation: The Political 1% of the 1% in 2012

The New York Times: Milking the Money Machine

Open Secrets: Citizens United Decision Profoundly Affects Political Landscape

Mass Live: Senate Democrats Pushing Campaign Finance Transparency

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Campaign Finance: Free Speech or Unfair Influence? appeared first on Law Street.

Chinese e-commerce giant Alibaba recently made major headlines when it decided to go public. The company’s initial public offering (IPO) went on to become the largest in history. IPOs can be complicated business, and most companies carefully deliberate before putting effort into an IPO. Read on to learn what exactly an IPO is, why companies want to go public, and what different ways there are to go about it.

What is an IPO?

An initial public offering allows a private company to become a public company. Essentially an IPO is a stock market launch where the company’s stock can be bought by the general public. Private shares of a company are sold to big investors who then sell to the general public.

A private company may have only a few shareholders. Since it is private, it is not subject to the regulations of the Securities and Exchange Commission (SEC). A public company is publicly traded and thus is subject to SEC regulation. An IPO is traditionally issued to smaller, younger companies hoping to gain capital to expand their business.

Why do companies decide to have an IPO?

IPOs are a great way for companies to quickly raise large amounts of capital to gain liquidity. This money can then be used to improve the company by reinvesting in its infrastructure or expanding the business. The major benefit to companies is that in selling shares they are never forced to repay investors the money they gain. Watch a video on some of the benefits of an IPO below:

Monetize the Investment

Many early investors or founders of a new company may be interested in cashing out their initial investment. An IPO easily allows them to do just that. The IPO provides an easy exit for angel investors or venture capitalists since they can cash out their investment by selling their shares of the company to the general public.

Increased Exposure

Going public means a company gains prestige and a better public image. Being listed in major stock exchanges such as NASDAQ or NYSE makes the public think more highly of the company and helps to garner media attention.

Benefit of Stock

Being able to offer stock gives the company options and flexibility. Employee stock ownership plans can help recruit top talent to the company. Further, the increased scrutiny that comes from SEC filings means the company can get better rates when it issues debt. Issuing debt allows the company to create other financing opportunities in the future.

What are the disadvantages of an IPO?

The immense legal, accounting, and marketing costs associated with the IPO process can be difficult for a smaller company to afford. The required time, attention, and effort of senior management take a significant toll and can hamper the company’s operations. The issuing of stock can also mean a loss of control for management, since shareholders may be given some say in the future direction of the company.

The requirement to disclose certain information in SEC filings is also a drawback for many companies. A publicly-traded company must have a board of directors and must report its financial information every quarter. This information could prove valuable to the company’s competitors.

IPOs can be risky for investors. It is tough to predict what the stock will do at the beginning of trading since there is no track record of the company to analyze. Since most IPOs are issued by companies going through rapid growth, there is a great deal of uncertainty in predicting how well the company will be doing in the future. Caution should be used when deciding whether to invest. Most experts say that small investors should wait a month or more to buy shares of an IPO so the price of the stock has time to settle down.

How does the IPO process work?

Given the concerns of going public, companies think long and hard before making the decision. The process is lengthy and very costly.

1. Once a company decides to go public, it will typically seek the assistance of an investment banking firm, such as Goldman Sachs or Morgan Stanley. The investment banking firm acts as the underwriter. Banks submit bids to companies going public with statements of how much money the company would make and what share the bank would make. This competition can be fierce, especially if banks think there is a lot of money to be made on the deal.
2. When an investment bank is hired, the company and the bank discuss how much money they will raise from the IPO, the type of securities to be issued, the price, when to bring the IPO  to market, and other details of the underwriting agreement. It is the underwriters’ job to make a large purchase of the firm and then facilitate the orderly sale of this initial stock. Underwriters make money through the fees charged to the company and by the stock they sell. The underwriter takes the risk that it will be able to sell the stock it bought from the firm for more than it initially paid.
3. The bank then puts together a registration statement called an S-1 to be filed with the SEC. This statement offers information about the company such as its past financial statements and any past legal issues. The SEC will investigate to ensure the information it receives is correct and to make sure all information has been disclosed. During this time the company will pick which stock exchange it wants its shares listed on.
4. The company will typically go on some sort of “roadshow.” It may travel to meetings across the country or online as a way to drum up investor interest in the IPO. Through attracting large investors in the roadshow, the company can then sell its stock in large blocks to institutional investors.
5. As the date of the IPO nears, the company and underwriter will agree on a price. They try to find a price low enough to generate interest yet high enough to raise money for the company. A certain percentage of shares, typically around 20 percent, are agreed to be sold. Institutional investors are often offered the first shares.
6. The underwriters sell their shares of stock to a large number of investors on the public market. The banks make their profit on the difference in price between what they paid before the IPO and what the shares sell for when officially offered to the public. Very rarely will small investors get some kind of IPO allocation. Typically they have to wait until the stock is listed on the exchange in a secondary offering. In a secondary offering, investors may sell a large block of their initial sales directly to the public.

Watch a basic overview of the IPO process below.

What are some alternative IPO methods?

There are numerous different ways of making a public offering. While most involve the basic process described above, the different methods alter specific elements of the IPO.

Venture Capital-Backed IPO

A venture capital-backed IPO is one in which management sells its shares to a group of private investors in exchange for funding and advice. This allows venture capitalists to effectively exit after creating a financially-stable company.

Reverse-Leverage Buyout

With a reverse-leverage buyout, the money made from an IPO is used to pay off debt accumulated while the company was private. By privatizing a publicly-traded firm that is undervalued on the market, the owners are able to make money once the public becomes aware of the high intrinsic value of the firm.

Dutch Auction

The idea of a Dutch auction was explored in the Google IPO. In a Dutch auction, the company reveals the amount of shares to be sold and a potential price. Investors state the number of shares they want and what price they want to pay. A minimum clearing price is determined, then investors who bid at or above that price are awarded shares. If there are more bids than available shares, the company awards a percent of shares based on the percent that was bid for. Investment banks do not typically like this arrangement since it offers equal access to shares to groups other than the underwriter. Further, if there is not strong initial demand for the shares, the auction could mean the company will not raise a lot of money through the IPO.

What are some recent examples of IPOs?

Prior to 2009, the United States was the leading issuer of IPOs in terms of total value. China has since taken the lead and become the new major IPO market. The number of IPOs is usually indicative of the health of the stock market and the economy. Most major IPOs in recent years were for technology companies.

On September 19, Chinese e-commerce giant Alibaba made its IPO debut. Trading went off without a hitch as Alibaba’s became the largest IPO ever at a whopping $25 billion. The IPO price was set at $68 a share, but shares opened more than 35 percent above the initial set price.

Facebook’s IPO in May 2012 made only $16 billion. Many cite Facebook’s mistake to be dramatically raising the price of shares and size of the IPO just before the date of the IPO. This led to rough trading and to the stock falling 50 percent in the first four months of public trading.

The recent success of Alibaba as well as other strong IPOs are seen as signals of stock market strength. Do not expect the increase in IPOs to slow down anytime soon.

Resources

Primary

CNBC: Initial Public Offering: CNBC Explains

Additional

Business Insider: The NYSE Explains How IPOs Work

The Share Centre: IPOs Explained: 10 Things You Need to Know

Business Insider: This Handy Infographic Explains How an IPO Actually Works

Wealth Lift: Initial Public Offerings Explained

Investopedia: IPO Basics: What is an IPO?

Seeking Alpha: Facebook IPO and Types of IPOs and After-Market Support

Investopedia: 5 Things to Know About the Alibaba IPO

CNBC: Alibaba IPO Biggest Ever; Shares Decline

Reference for Business: Initial Public Offerings

Mergers & Inquisitions: The Initial Public Offering Process: Got Facebook Shares?

USA Today: Why Alibaba IPO Fared Much Better than Facebook’s IPO

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The Alibaba IPO: What Does Going Public Mean? appeared first on Law Street.

The recent Ebola outbreak is plaguing thousands across West Africa with illness and even death. In the modern age of science, it seems incomprehensible that there is not yet a vaccine for Ebola. Though the virus is an urgent health concern, pharmaceutical companies have few incentives to develop drugs to combat the disease. Read on to learn what happens when economic incentives do not align with public health needs, and what better solutions may exist for drug development.

What is the status of the Ebola outbreak and vaccine?

Ebola virus disease is characterized by fever, intense weakness, and muscle pain, leading to more severe symptoms. Ebola was initially transmitted by animals and is now spreading between humans through contact with bodily fluids. The outbreak was first detected in Guinea, by which time it had already spread to Liberia, Sierra Leone, Senegal, and Nigeria. A separate outbreak occurred in the Democratic Republic of Congo, which is believed to be unrelated to the outbreak in West Africa. The virus has primarily infected villages where there is extreme poverty and insufficient medical care to combat the spread of the virus.

Statistics

Mortality rates for the Ebola virus are well over 50 percent. Since March, Ebola has killed more than 1,500 people, making it the deadliest outbreak of the virus in human history. The World Health Organization estimates that the Ebola outbreak could affect 20,000 within the next nine months, and that roughly half a billion dollars is needed to stop the spread. Watch the video below for more information on the outbreak:

Vaccines

Ebola first appeared in 1976, yet nearly 40 years later no approved vaccination exists. In part this is due to the nature of the virus. Since incidents of Ebola are rare and occur in remote villages, it is difficult for scientists to effectively obtain samples and study the disease. Scientists cannot predict when an Ebola outbreak will occur, and even during a typical outbreak there are rarely enough people for a vaccine trial.

Since the outbreak, scientists are furiously working on an Ebola vaccine, and requests for approval are being fast-tracked. In the United States, the National Institutes of Health partnered with GlaxoSmithKline to develop a vaccine. The potential vaccine tested very well on primates, but the trial on humans only began on September 1. Initial data from the trial will not be available until late 2014. A number of other prototype vaccines are being worked on across the world.

Other Treatments

ZMapp was the experimental drug given to two Americans who contracted Ebola this year. While vaccines are designed to prevent future infections, ZMapp was designed to treat an existing Ebola infection. Both Americans who took the drug recovered, but the company that manufactured ZMapp has exhausted its supply.

What is the drug development process like?

Developing a new drug or vaccine is an extremely long process due to stringent regulation. Candidates for a new drug to treat a disease range anywhere from 5,000 to 10,000 chemical compounds. Of these compounds, roughly 250 will show promise enough to warrant further tests on mice or other animals. On average, ten of these will then qualify for tests on humans. Since certain outbreaks, such as Ebola, do not lend themselves to have vaccines ethically tested on humans, the United States does provide a way for the drugs to be approved on animal tests alone.

Pre-clinical and clinical development for a new drug takes between 12 to 15 years, though the Ebola vaccine should come much sooner. Pre-clinical development includes testing the various chemical entities and meeting all regulations for use. Three sets of clinical trials are then conducted on humans. Clinical phases include trials on healthy humans to test for the safety of the drug. Testing then moves to those who are ill to see if the treatment is successful. If successful, the drug is submitted for further approval by the Food and Drug Administration. Other countries have similar regulatory bodies to the FDA. Internationally, the World Health Organization oversees which drugs can be used to combat a crisis like Ebola. Learn more details about the development process by watching the video below:

The problem is not that scientists lack the capability to create an Ebola vaccine, but rather that the economics of drug development do not entice companies to develop such a vaccine. Pharmaceutical companies estimate the cost of the entire process of developing a new drug to range from hundreds of millions to billions of dollars. Many times the drugs are not successful, in which case the companies have spent a huge amount of money and have no profit-making product. A Forbes analysis estimates that 95 percent of experimental drugs tested ultimately fail. Only one in five that reach the clinical trial phase are approved.

Given the low rate of success for potential drugs and the huge amounts of money that can be spent on research and development of drugs, cost plays a huge factor. In the United States, basic discovery research is funded primarily by government and philanthropic organizations. Development in later stages is funded mostly by pharmaceutical companies or venture capitalists.

Why do some see funding as a problem?

Funding for areas that support public health is a tricky issue. Since pharmaceutical companies are looking to make a profit, they have an incentive to make drugs that a large number of people will take and be on for a long time. Most research and development for these companies target diseases that affect wealthy people in primarily Western countries.

Targeting wealthier clients leads to a severe underinvestment in certain kinds of drugs. Diseases of poverty cannot compete for investment from financial companies looking for big return. Ebola infects relatively few and primarily affects the poor. Ebola is similar to diseases like malaria and tuberculosis, which kill two million people each year but still receive little attention from pharmaceutical companies. Watch the video below for more on the economics of drug development:

Neglected Tropical Diseases, a set of 17 diseases including Dengue Fever and Chagas Disease, affect more than one billion people each year and kill half a million. Most of these diseases could be completely eradicated, but the drugs are not widely available. One study found that of the more than 1,500 drugs that came to market between 1975 and 2004, only ten were aimed at these diseases.

Even though developing countries may experience an outbreak of a disease, the demand for new drugs is limited. In rural villages in Africa, many reject clinical drugs for diseases such as Malaria and Tuberculosis. Instead, they favor spiritual healers and herbal remedies.

What is being done to promote drug research of neglected diseases?

The Office of Orphan Products Development (OOPD) in the FDA was designed to advance development of products that could be used to diagnose or treat rare diseases affecting fewer than 200,000 people. Orphan diseases do not traditionally receive much attention from pharmaceutical companies. The program provides a tax credit of up to 50 percent for research and development of drugs for rare diseases. When these drugs do become available, however, there is still no guarantee that patients will be able to afford them.

Since 1983 the OOPD program successfully enabled the development and marketing of more than 400 drugs and products. In the ten years prior, only ten of these products came to the market. Learn more about the OOPD with the video below:

Additionally, in 2007 the FDA created a voucher program to encourage research for neglected diseases. If a company receives approval for a drug for neglected diseases, it will receive a priority review voucher to speed up the review time for another application. Only four of these vouchers have been awarded so far.

Are there better ways to fund drug research?

Some argue that researching very rare diseases is not worth the time, and that instead research should be focused on more prevalent diseases. Companies will naturally invest in research for the most pressing concerns that offer the greatest opportunity for profit. Drug development for rare diseases should not be encouraged since the diseases occur so infrequently. Others argue research for rare diseases is essential to public health. The case of Ebola shows that even rare diseases can have a disastrous world impact.

Bioterrorism

Beyond public health, knowledge about the workings of any serious virus or disease is important to combat threats of bioterrorism. Concerns of bioterrorism are what led to Ebola research in the past. Serious threats of bioterrorism force the government to partner with research institutions to learn more about rare diseases. In March, the University of Texas and three other organizations received $26 million from the National Institutes of Health to find a cure for Ebola and the Marburg virus in case they were ever used for a bioterrorist attack. Other groups partnered with the Department of Defense to find an injectable drug treatment for Ebola.

Prizes

Prizes and grants are seen as ways to incentivize companies to develop drugs for diseases they might otherwise ignore. Financial incentives would encourage speedy development for an Ebola vaccine. The World Health Organization has looked into building a prize fund, where a centralized fund would reward drug manufacturers for reaching certain research goals. These tactics are more cost effective for the government, since they only have to pay if the product actually works. By creating grants for specific drugs, the government can pull research into neglected areas. Most prizes and grants, however, are not offered until a severe outbreak occurs, by which time many people are already in need of drugs.

Partnerships

Others point to room for greater partnerships between various entities for drug development. The greatest area for partnerships is between development groups and pharmaceutical companies. For instance, if a company pays to research and develop a product, the government could pay the company for the right to the product and could then promote the product itself without worrying about profit. In another case, GlaxoSmithKline and Save the Children arranged for someone from the charity to be on GSK’s research and development board, so the groups can share expertise and resources.

The Ebola outbreak indicates areas in which our current drug development model is lacking. People are dying because no Ebola vaccine exists. When pharmaceutical companies search only for profits, drugs for rare diseases go neglected. By expanding partnerships and offering greater prizes and financial incentives, the government can encourage drug research for these otherwise neglected diseases.

Resources

Primary

WHO: Ebola Virus Disease

FDA: Developing Products for Rare Diseases

CDC: Experimental Treatments and Vaccines for Ebola

Additional 

CNN: Ebola Outbreak: Is it Time to Test Experimental Vaccines?

Vector: De-risking Drug Development

Guardian: Funding Drug Development for Diseases of Poverty

Reuters: Scant Funds, Rare Outbreaks Leave Ebola Drug Pipeline Slim

Explorable: Research Grant Funding

Vox: We Have the Science to Build an Ebola Vaccine

American Society for Microbiology: Ebola Virus Pathogenesis

NBC: No Market: Scientists Struggle to Make Ebola Vaccines

Wall Street Journal: Two Start-Ups Aim to Change Economics of Vaccine Production

NPR: Would a Prize Help Speed Up Development of Ebola Treatments?

Harvard Global Health Review: Funding Orphan Drugs

LA Times: U.S. Speeds Up Human Clinical Trials

Washington Post: Why the Drug Industry Hasn’t Come Up with an Ebola Cure

New Yorker: Ebolanomics

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Incentives for Drug Development: The Case of Ebola appeared first on Law Street.

Millennials seem to be constantly in the news, and when it comes to money matters that trend holds true. With high unemployment and underemployment, unprecedented levels of student debt, and the burden of supporting an aging population, Millennials face a unique set of financial challenges. Recent studies indicate that Millennials think about money differently than older generations. Are Millennials actually less financially savvy, or are they just a product of the Great Recession? Here’s what you need to know about Millennials, their approach to personal finance, and what it means for their future.

Who are the Millennials?

There is no official start and end date to the Millennial generation, but the general definition includes anyone reaching young adulthood around the year 2000. Popular studies define a Millennial as anyone born between 1978 and 1994. There are more than 80 million Millennials, which makes them the largest generational cohort in history. They comprise nearly a third of the population, and their habits are simply too influential to ignore.

Various claims about Millennials only culminate in one agreeable truth: this generation is full of contradictions. Millennials are less politically engaged, but they are interested in helping their communities and making a difference. They are more diverse and tolerant of others, but aren’t naturally trusting. They love technology, multitasking, and personal branding. Critics describe Millennials as over-confident to the point of entitlement. Millennials and their financial situation are incredibly important since they are expected to make up roughly 75 percent of the workforce by 2025. As they search for jobs following the Great Recession, Millennials are best characterized as financially risk-averse.

What is the financial situation of Millennials like?

According to Pew Research Center, the median net worth of a household of a person younger than 35 in 1984 was $12,132 in today’s dollars. Today it’s only $6,815. With less money, Millennials need to be frugal. They are keeping more cash and investing less.

Cash

According to data from Bankrate.com’s latest Financial Security Index, 39 percent of 18 to 29 year-olds choose to hold money they will not touch for at least 10 years as cash in their accounts. This is not too surprising, given that young people are historically more prone to keep money rather than invest. Millennials without jobs or 401(k) plans need to keep more money on hand for short-term needs, like paying bills. This is not just a Millennial phenomenon either. The Great Recession led people of all ages to hold more money in cash rather than make risky investments. However, some scold Millennials for their lack of interest in investment, and even describe them as the most financially conservative generation since the Great Depression.

Banking

Millennials are less likely to rely on traditional banking for their money needs. Most Millennials instead turn to newer forms of payment, such as prepaid debit cards and mobile devices. Millennials shun checks and hate paying monthly fees for things like credit cards. After growing up with one-click companies like Amazon and Apple, Millennials believe in convenience. They look for free shipping, free services, and online accessibility. According to a 2014 TD Bank Financial Education Survey, ninety percent of Millennials use online or mobile devices for everyday banking.

Following the Great Recession, Millennials are hesitant to trust big banks. Many Millennials feel that those on Wall Street do not share their values. After seeing their parents’ accounts depleted in the recent recession, Millennials continue to distrust the stock market. Wells Fargo reported that 40 percent of Millennials disagree that financial advisors have their best interests in mind.

Saving

The good news is that Millennials, if they have the capability, do try to save. On average, Millennials begin saving at age 22, in comparison to age 35 for baby boomers. The issue is that Millennials save three times as much in cash or bonds as they do in equities. Because of this, they get little return on their money. While three in five Millennials describe themselves as savers, 45 percent have not started saving for retirement. Most Millennials are more concerned about saving to weather the next financial storm than saving for their far-off retirements. According to BankRate.com, Americans age 18 to 30 are the group most likely to set aside five months’ worth of expenses in a rainy day fund.

Homeownership

Millennials are more likely than other generations to wait to buy a home. They are also more likely to live with their parents while trying to gain stable financial footing. An October 2013 Pew Research Poll showed that for the second consecutive year a record number of Millennials lived in their parents’ houses. Over 30 percent of 18 to 31 year-olds lived with their parents in 2012 and 2013. Many recent graduates return home as a way to save money and pay off student loans.

However, this lack of homeownership is not necessarily due to shaky finances–there are a couple other explanations. First, Millennials live a more transient lifestyle and are more likely to rent in big cities before settling down. Secondly, Millennials are waiting until later in life to get married and have kids. This means they are also waiting longer to buy homes equipped for family life.

What has caused Millennials’ financial distress?

Student Loans

The increasing need to take student loans to get through college cripples young adults. The burden of paying off student loans leaves Millennials pushing other goals, including investing, to the future. According to the Federal Reserve Bank of New York, the average student loan debt in 2003 was $11,000. The average class of 2014 graduate with student loans owes $33,000. After paying off loan bills, Millennials have little extra money to invest.

The debt takes a toll on Millennials’ sense of financial security. Forty-two percent of Millennials say debt is their biggest financial concern. Forty percent say their debt is “overwhelming,” compared to only 23 percent of baby boomers. Fifty-six percent of Millennials say they are living “paycheck to paycheck.” Fifty-nine percent worry they will never pay off their college loans. Click here to read an in-depth analysis of the American student loan crisis, and watch this clip for more information on student loan debt below:

NerdWallet conducted a study of Millennials’ predicted ability to retire. They found the median debt for a student at graduation to be $23,300. The standard repayment plan of 10 years would cost that student $2,858 per year. This projected debt load would then end up costing that person $115,096 by retirement, since they would miss out on their most important decade of retirement savings with the highest compounded returns.

Unemployment

The difficulties of paying back student loans are exacerbated by the fact that many Millennials spend some period of time unemployed or underemployed in the slowly-recovering job market. Young adults face a rate of unemployment twice the national average. According to a Gallup poll in 2013, only 43 percent of Americans aged 18 to 29 had full-time employment. Some of these young adults could still be in school and therefore not looking for work. However, of those with a college degree, only 65 percent had a full-time job. While the country’s unemployment rate is falling, Millennials still make up 40 percent of those who are unemployed and searching for work. Bureau of Labor Statistics data from June 2014 show the unemployment rate for those ages 18 to 29 is over 15 percent.

So, why is the Millennial financial situation so concerning?

Those in the financial industry worry about Millennials’ lack of investments. Early investment is necessary to meet retirement goals. However, many Millennials are saving in cash to build a “rainy day fund” rather than to fund their retirement still decades away. Most Millennials are aware they cannot safely count on Social Security for their retirement. However, Millennials are not saving enough to get by in retirement without Social Security.

Holding cash in a savings account currently yields negative real interest. By holding cash rather than investing it, Millennials are essentially losing money. The burdens on Millennials in terms of debt and student loans may be preventing them from investing, but financial planners worry this generation is missing out on their prime years of investment. The issue is all the more troubling because Millennials have time to take on the risks of investment since they are still decades from retirement.

Consider the following investing example involving two twin sisters posed by USA Today: one twin sister starts investing $5,000 a year in a Roth IRA at age 22, then stops at age 30 and doesn’t save any more money. The other sister also starts investing $5,000 a year, but begins at age 31 and continues every year until she is 67. With a 10 percent annual return, they both will have just under $1 million. But the sister who started early and stopped at 30 will have slightly more. With consistent returns, the first nine years end up being worth more than the next 36. Getting an early start is more important now than ever, because set pensions are nearly non-existent. Most people have to make 401(k) contributions on their own, where an employer may match a certain amount. Watch for more about retirement savings below:

There are greater concerns than Millennials’ lack of investment and retirement savings. For example, the fact that Millennials are waiting until later in life to buy homes has drawn some ire. Critics contend that Millennials are holding back the recovery in real estate because they are content to live at home rather than become homeowners. Spending on homes and greater investment would have a positive ripple effect on the economy.

Are Millennials just being ignorant?

Maybe. According to Kiplinger, nearly half of Millennials have used costly forms of non-bank borrowing, such as payday loans and pawn shops. These young people may not be aware that less expensive options are available. This lack of knowledge permeates their attitudes toward personal finance. Less than a quarter of young adults in a Kiplinger survey could answer four or five questions correctly on a basic financial literacy quiz. Specifically, Millennials struggle with the concept of mortgages, likely because many have not bought a house. Millennials also struggle with the concept of inflation, probably because they have only lived in an era when inflation has been under control. In a financial literacy assessment created by the U.S Treasury Department and Department of Education, Millennials scored only 69 percent on average. In another quiz, created by the Jumpstart Coalition for Personal Finance Literacy, the average score was just 48 percent. Watch college students answer some financial questions below:

Through both schools and their employers, Millennials are offered more financial education than other generations ever received. However, their participation rate is among the lowest of all generations. Most Millennials are simply content being frugal and trying to save what they can.

Regardless, most Millennials know they need to save for the future. The problem is their current financial situation leaves them little money to invest. They may think holding cash is the safe bet now, but any hope for a safe retirement will require greater levels of investment. The Millennial financial situation isn’t great–but hopefully they will be willing to learn.

Resources

Primary

Financial Industry Regulatory Authority: The Financial Capability of Young Adults–A Generational View

Brookings: How Millennials Could Upend Wall Street and Corporate America

Additional

TIME: Millennials are Hoarding Cash

Fortune: The Collapse of Millennial Homeownership Could be a Mirage

Vox: Why is it so Difficult to Teach People to Manage Money?

Investopedia: Money Habits of the Millennials

U.S. News & World Report: Why Aren’t Millennials Investing? Fear Isn’t the Only Factor

Kiplinger: Millennials Face Financial Hurdles

USA Today: Slow Start, Shaky Future for Millennials

U.S. Chamber of Commerce Foundation: The Millennial Generation Research Review

Nerd Wallet: 73 Will be the Retirement Norm for Millennials

Philadelphia Business Journal: Millennials are Very Conservative Investors–and Why That’s a Problem

New York Post: Frugal Millennials Save for Rainy Days: Study

Federal Reserve Bank of New York: Are Recent College Graduates Finding Good Jobs?

Gallup: In U.S., Fewer Young Adults Holding Full-Time Jobs

Wall Street Journal: Congratulations to Class of 2014, Most Indebted Ever

Editor’s Note: This post has been updated to credit select information to USA Today. 

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Millennials and Personal Finance: A Lost Generation? appeared first on Law Street.

For a few months now, retail giant Amazon.com, and book publisher Hachette have been feuding. The most recent development in their fight came on July 30, 2014, when Amazon pushed for Hachette to allow the sale of e-books at a cheaper price of $9.99. The math behind Amazon’s reasoning is laid out clearly on their website. For every book priced at $14.99, Amazon would sell 1.74 more copies if the book was priced at $9.99.  As the saga stretches onward, Hachette’s bargaining power continues to erode, and it’s looking like this will turn into a clear win for Amazon.

The Background

The battle began earlier this year when readers logged on to Amazon only to discover the pre-order button for certain Hachette books, like J.K. Rowling’s “The Silkworm,” had disappeared. Amazon began understocking Hachette books. Customers reported the books they ordered took extra time to arrive. The website recommended users buy a non-Hachette book instead.

Some observers cite these tactics as instances of bullying by the retail giant. Many saw it as a new low, since the company was actively damaging the customer experience. More than 900 prominent authors have staked their positions against Amazon. Stephen Colbert, carried by Hachette, is not just mad, but “mad prime.”

E-book pricing disputes are nothing new. Book publishers have long pushed for an “agency” model of pricing, where the publishers dictate pricing. Amazon instead advocates a “wholesale” model, where retailers set the retail price and can offer discounts. Publishers aren’t fans of these hefty discounts which can give one retailer–like Amazon–a huge advantage.

The “big five” publishers–Hachette, HarperCollins, MacMillan, Penguin Random House, and Simon and Schuster–thought they found a way out of the issue when they signed contracts with Apple in 2010 to ensure an agency pricing model for e-books. Amazon was not happy. The Department of Justice’s Antitrust Division rushed to Amazon’s aid and brought a suit against these companies for price fixing. The publishers all settled out of court, but Apple was found guilty of price-fixing–a decision it is still appealing. Since the settlement, Amazon has been allowed to discount e-books up to 30 percent. But any discount by Amazon comes from their own pocket, which obviously isn’t preferable for the company.

A Lawsuit in the Works?

With the 2012 settlement set to expire this year, it is likely the recent dispute is Amazon’s attempt to open a new window for pricing negotiations. Amazon wants to buffer its own earnings rather than taking a hit from out-pricing competitors. Publishers are fearful Amazon will dominate the market even further, demand lower wholesale prices, and squeeze profit margins to zero.

Despite Amazon’s questionable tactics, it is difficult to see how Hachette could win in an antitrust suit against Amazon. First, Amazon is not a classic monopoly. If anything, Amazon would be a monopsony. While a monopoly occurs when a dominant seller can raise prices of what it sells, a monopsony occurs when the buyer of goods can unlawfully lower the price of what is buys. Both can distort the market, and both can violate antitrust laws.

Amazon controls more than 60 percent of the e-book market and more than 40 percent of new book sales. But simply dominating the market is not an antitrust violation. The precedent for pushing a monopsony case against Amazon does not look promising. There has never been a case in U.S. competition law where a single company was declared a monopsonist. Most scholars today agree the Amazon and Hachette dispute is just that–a typical business dispute–rather than an antitrust violation.

“Dominant Power”

Section Two of the Sherman Antitrust Act, the 1890 Act which regulates anti-competitive business practices, outlaws monopolistic power in the relevant market acquired or maintained through exclusionary or anti-competitive behavior.

By bringing a lawsuit, Hachette would first have to prove Amazon is the dominant buyer in the “relevant market.” It is unclear if the market would be defined as the market for e-books, for Hachette books in general, or for Hachette books online. For Amazon to be the dominant power in the market, Hachette must have no other viable options to sell their e-books. Since publishers do have the freedom to sell e-books through other websites, many argue Amazon cannot be considered a monopsony.

“Anticompetitive Practices”

Secondly, Amazon must have engaged in “exclusionary or anticompetitive practices,” such as refusal to deal or predatory pricing. “Refusal to deal” involves restricting the supply of goods or the methods of buying or selling goods. By partially cutting off Hachette from the market in recent months, the argument could be made that Amazon is refusing to deal. However, courts narrowly interpret “refusal to deal” and are unlikely to see Amazon’s acts as an antitrust violation.

A lawsuit could be brought on the grounds that Amazon is engaged in predatory pricing practices by setting low prices to drive out all other competition. However, the bar to prove predatory pricing is very high. It would be hard to prove Amazon is not simply engaged in legitimate price competition. Since antitrust suits aim to help consumers, low prices are not typically seen as a problem.

Proving predatory pricing usually means proving that suppliers are forced to sell books at such a loss that there is decrease in the overall supply of books for consumers. So far this has not been the case. There has been no reduction in the variety of new books, nor has Amazon driven out all competitors to later jack up prices themselves.

The Upshot

Book publishers realize how little power they have against Amazon, so the recent trend in the industry has been to merge for greater bargaining power. Penguin recently merged with Random House, and HarperCollins bought Harlequin. Bigger publishers mean greater power plays and a better chance for even pricing negotiations with Amazon.

Ultimately it isn’t likely that Hachette has a case against Amazon on its own. If anything, the legal battle may be whether Amazon engaged in deceptive sales practices by saying certain Hachette titles were unavailable. For now, Amazon’s market power itself isn’t hurting consumers’ wallets, and Hachette can still sell e-books through other vendors. The pricing wars will continue, but don’t expect Hachette to win an antitrust suit anytime soon.

—

Alexandra Stembaugh is a senior at the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

Featured image courtesy of [Karin Lizana via Flickr]

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Hachette v. Amazon: The Feud That’s Going Nowhere appeared first on Law Street.

President Obama stirred up an old debate recently by becoming the first sitting president to endorse statehood for the District of Columbia. Obama expressed his full support: “I’m in DC, so I’m for it…Folks in DC pay taxes like everybody else. They contribute to the overall well being of the country like everybody else. There has been a long movement to get DC statehood, and I’ve been for it for quite some time.”

Here’s what you need to know about Washington DC’s contentious battle for statehood, what it would mean for District residents, and what impact it would have on the country.

Why was the District of Columbia created?

To understand the arguments for statehood, you have to understand the history of Washington, DC. The District of Columbia was specifically created to house the federal government. The authors of the Constitution wanted to house the federal government in its own jurisdiction after witnessing the problems of having the nation’s temporary capital in Philadelphia. The decision was made in 1787 following an incident in which the governor of Pennsylvania refused to disperse rioters threatening Congress in Philadelphia. The framers did not want the federal government to be subject to any decisions of a specific state or governor. So, the delegates wrote Article 1, Section 8 of the U.S. Constitution to outline Congress’ control over the district:

“[The Congress shall have Power] To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cession of particular states, and the acceptance of Congress, become the seat of the government of the United States.”

Congress moved to a new federal capital in 1800, and the District still stands today on land ceded by Maryland. Residents of the District face a number of unique circumstances because it is not a state.

Originally, DC residents were barred from voting for president. It was not until 1961 that the passage of the 23rd Amendment finally secured three electoral votes for the District. DC residents also elect one non-voting member to the House of Representatives.

The District of Columbia has operated under a system of Home Rule since 1973 as a way to better govern local affairs. Home rule means that DC is allowed a local government, including a directly elected mayor and city council. Still, Congress has the ultimate authority and the power to overturn any laws passed by the local government.

Why do people push for DC statehood?

Right to Vote

Residents of DC express outrage that they pay federal and local taxes, are subject to the same laws as everyone else, fight in wars, and serve on juries, yet they lack the same Congressional representation. The argument is also made that this disenfranchisement comes from a legacy of racism aimed at the District’s majority African-American population. Those in favor of statehood want the full rights of being an American citizen, which includes full representation in Congress as well as full control over local affairs. In addition to lacking voting power, DC’s representative in Congress is denied a federal salary and an office. License plates in DC decry residents’ lack of status with the slogan “Taxation without Representation.” Watch President Obama’s remarks on DC statehood below:

Local Control

Many citizens are fed up with the limitations of DC’s Home Rule. Since Congress can overturn any law, it has exerted its power on a number of issues passed by DC residents. Congress has intervened to restrict abortions, to prevent restrictions on firearm ownership, and even to control marijuana issues. Congress has also barred DC from using local tax dollars on specific things, such as statehood advocacy and needle exchange programs.

Taxes

Citizens claim they do not have enough financial resources to pay for high-quality public services. Although DC is not a state, it has all the financial burdens of one. It provides local services, like public schools and a police force, but it also provides services typically dealt with at the state level, like mental health and Medicaid. DC has limited taxing powers. The District cannot tax income earned within its borders by non-residents, even though all other states have that power. Two-thirds of income in the District is made by people who do not live in the District, yet they pay no income tax.  Additionally, the federal government, embassies, and non-profits that occupy most of DC pay no property, sales, or income taxes. The small size of the city and disproportionate number of low-income workers with higher needs for public services strain the District financially. Still, DC residents pay the highest federal taxes per capita.

Growing Population

Washington DC’s fast-growing population of approximately 650,000 — larger than Wyoming or Vermont — is large enough to make it a state. According to the Washington Peace Center, DC as a state could bring in more than $2 billion a year in additional revenue. This would allow the local government to cut taxes and better fund schools and services. Freeing itself from Congressional oversight would also make the district more efficient. Watch more about the DC statehood movement below.

Shutdowns

The 16-day federal government shutdown during Fall 2013 illustrated issues with DC dependency on federal funds and approval. DC Mayor Grey did not shut down local services but suspended some payments so the city could remain operational. Mayor Grey warned that vital city services were dangerously close to ending as the city’s emergency funds were depleted. Allowing DC the autonomy of statehood would prevent these issues in the event of a federal government shutdown.

Legally, how would statehood be achieved?

Despite President Obama’s supportive statement, making DC a state is unfortunately not within his power. There are a couple of avenues that the District of Columbia could take to obtain statehood.

Constitutional Amendment

There is some debate as to whether an amendment could make DC an official state, but it could definitely give DC’s residents much greater rights and further define the area of the federal district. Two-thirds of Congress would have to approve a matching constitutional amendment. Alternately, two-thirds of state legislatures could call a Constitutional Convention. The amendment would then be sent to the states for ratification by three-fourths. Naturally this process would be very difficult. A proposed amendment in 1985 to give DC more voting power was only ratified by 16 states in the allotted seven-year span. Further, critics point out that any constitutional amendment could later be repealed.

Law

Article 4, Section 3 of the Constitution outlines the creation of new states.

“New States may be admitted by the Congress into this Union; but no new States shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.”

Under this section, an act of Congress could make DC its own state with a simple majority vote and signature from the President. This was the same process followed by Hawaii and Alaska as recently as 1959. There is some question as to whether Maryland would need to approve statehood, since DC was formed on land from Maryland. Still, bills are introduced to Congress nearly every year, but none has been brought to a vote since 1993. Most Congressional leaders like the idea of admitting states as pairs, so there is a good chance any vote to make DC a state would also include a bid of statehood for Puerto Rico.

Proposals for giving DC Congressional representation are much more common than bills for complete statehood. These bills have not been met with success. Some contend that giving District residents the right to vote may not even be within Congress’ power.

What are the current proposals?

Previous campaigns for statehood have referred to the new state as “New Columbia,” and the name is still associated with the movement today. The New Columbia Admissions Act was introduced in 2013 before failing to make it out of committee. The Act closely follows the proposed constitution ratified by DC voters in 1982. The plan would create a new state while still keeping a much smaller area of DC a federal district. The area of the federal district would shrink substantially, but would include all important federal buildings like the Capitol, White House, and Supreme Court. The Constitution sets an upper limit on the size of the District at 10 square miles, but no lower limit is set. All of the other residential land currently in DC would then become the 51st state. New Columbia would be granted the same rights as any other state in the Union.

To advance its agenda, the District of Columbia still selects members to a shadow congressional delegation that lobbies Congress to grant statehood and voting rights. The positions were authorized by a “state” constitution in 1982 authorized by voters, but this delegation is still not recognized by Congress. Numerous groups in DC continue to lobby for statehood. Watch DC Congresswoman Eleanor Holmes Norton speak on statehood below.

What are the arguments against statehood?

In Federalist No. 43, James Madison argued that the District of Columbia needed to be independent for maintenance and safety concerns. Madison wrote,

“A dependence of the members of the general government on the State comprehending the seat of the government, for protection in the exercise of their duty, might bring on the national councils an imputation of awe or influence, equally dishonorable to the government and dissatisfactory to the other members of the Confederacy.”

Arguments against statehood today follow similar lines. Americans are concerned that the federal government would be dependent on a single state to cover its security and general operations. With such great power, a state could restrict the federal government in ways that would not be beneficial to the rest of the nation. However, the plan to keep important governmental buildings as a federal district largely mitigates these concerns.

The uniqueness of the DC area makes statehood very difficult politically. Some of the arguments opponents have:

• Similar to all states with relatively small populations, DC’s small size and population would give it an unfair influence in politics.
• The liberal area would be a stronghold for Democrats, and DC would always send Democrats to Congress.
• The interests of the District would be dominated by the federal government, since it would be the state’s largest employer by far.
• The state would be the only one without rural residents. This means the representatives would share none of the interests held by non-urban areas.
• A state could enact a commuter tax on non-residents who come to the state to work. Such a tax is currently banned under Home Rule.
• The constitutional question of whether the state of Maryland would have to consent to the new state, since the district was formed on land granted by Maryland.
• Some people flat out do not want to witness a strange-looking flag with 51 stars. But not to worry, numerous 51-star flags have already been designed, and they don’t look too bad.

Courtesy of jacobolus via Wikipedia

Are there any other alternatives to statehood?

Most citizens in favor of DC statehood oppose settling for anything less. Some propose bills to grant voting representation to members of DC, such as simply allowing DC’s representative in the House of Representatives the power to vote. Others worry these laws could be undone by the next Congress — and Congress may not even have the authority to make such a law.

Others propose some sort of tie with Maryland. This could mean parts of DC being given back to Maryland. However, neither Maryland nor DC really want to merge. A less drastic solution is Congress restoring the voting rights of District residents by allowing them to vote as a part of Maryland while maintaining the integrity of the District. Still, residents want voting as well as increased autonomy over local affairs.

Issues over DC statehood will not soon be resolved unless residents can be better provided some method of true representation. Most recently in the never-ending saga of DC residents, issues arose with DC driver’s licenses not being considered a valid form of ID by uninformed TSA agents. The good news is DC statehood would likely make the lives of TSA agents much easier.

Resources

Primary

Senate: New Columbia Admission Act

The District of Columbia: Statehood

Additional

Week: Obama Endorses Statehood for Washington, DC

Daily Caller: Obama Endorses DC Statehood

Huffington Post: Let’s Settle This Once and for All: DC Statehood is Constitutional

New Columbia: Vision

Brookings: If the District of Columbia Becomes a State: Fiscal Implications

Neighbors United for DC Statehood: FAQs

Mother Jones: DC: The 51st State?

Washington Post: Budget Deal Reminds DC That Congress is Still in Charge

Washington Peace Center: DC Statehood: A Primer

Brookings: A Sound Fiscal Footing for the Nation’s Capital

Hill: Denying DC Statehood Continues Federal Overreach

Smithsonian Magazine: Designing a 51-State Flag

Hill: DC Delegate to Meet with TSA

Leadership Coalition: Why DC Voting Rights Matter

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The 51st State: What DC Statehood Would Mean for the Country appeared first on Law Street.

Trying to get by without a reliable place to stay is difficult. But it becomes nearly impossible when trying to live in a city where it is illegal to sleep in parks, to store belongings, or to stand outside buildings. This is exactly what homeless people are up against in many cities across America. Cities are increasingly turning to laws that criminalize homeless populations by outlawing fundamental human behaviors. With laws banning sleeping and camping in public, where should the homeless turn?

What are the statistics on homelessness?

Homelessness has been a problem for decades, but the root causes of the issue are complex. Homelessness is incredibly difficult to measure, especially since many people are forced into homelessness for only a temporary period of time. According to a one-night head count by the U.S. Department of Housing and Urban Development, more than 610,000 Americans were homeless in January 2013. Sixty-five percent of the nation’s homeless were staying in shelters that night. This means more than one-third were living in unsheltered locations — under bridges, in cars, parks, or abandoned buildings. Nearly a quarter of the homeless were children under the age of 18.

What have cities been doing?

Cities are increasingly passing laws that essentially make it illegal to be homeless. Most of these laws are designed for safety reasons rather than to put more homeless people in jail, but the effects can still be harmful. Numerous U.S. cities have public designs hostile to the homeless, such as benches with a mysterious third bar in the middle to prevent lying down and sleeping. Most cities have unevenly enforced loitering laws as well as laws prohibiting begging.

The National Law Center on Homelessness and Poverty released a report on July 16, 2014, tracking the laws of 187 American. Some of its findings:

• 57 percent of cities prohibit camping in particular public places — “camping” encompasses a wide array of living arrangements
• 27 percent of cities prohibit sleeping in particular public places and 18 percent of cities impose a city-wide ban on sleeping in public
• 76 percent of cities prohibit begging in particular public places
• 65 percent of cities prohibit loitering in specific public places
• 9 percent of cities prohibit sharing food with homeless people
• 74 percent of homeless people do not know a place where it is safe and legal for them to sleep

The problem is that these laws have increased in recent years. Since 2011,

• Citywide bans on camping in public have increased by 60 percent.
• Citywide bans on loitering, loafing, and vagrancy have increased by 35 percent.
• Citywide bans on sitting or lying down in particular public places have increased by 43 percent.
• Bans on sleeping in vehicles have increased by 119 percent.

Watch the video below for more information on the measures taken against the homeless in Clearwater, Florida:

Are these laws constitutional?

City bans targeting the homeless population raise a number of legal questions. While the laws are often ruled unconstitutional, they still thrive in most U.S. cities. Most people take issue with the fact that these laws are discriminatory in targeting the homeless population. Some argue that an activity like begging should be protected as free speech. A similar argument is made that the homeless should be afforded freedom from cruel and unusual punishment and should have the right to due process of law. The U.N. Human Rights Committee found criminalization of homelessness violated the International Covenant on Civil and Political Rights. Other significant rulings:

• In April 2006, the Ninth Circuit Court of Appeals ruled that criminalizing behaviors and acts integral to being homeless was a violation of the 8th and 14th Amendments; however, the opinion was vacated when the two parties settled out of court.
• In August 2012, a federal judge in Philadelphia ruled that laws that prohibited serving food outside to the homeless were unconstitutional.
• On June 19, 2014, a federal appeals court cited issues of discrimination in striking down a Los Angeles law that banned people from living out of their cars.

What are the effects of these laws?

Typically the homeless are encouraged to stay in shelters until they can find affordable housing of their own, but oftentimes it is not that easy. Consider a city like Santa Cruz, California, where 83 percent of homeless people are without housing and shelter options, yet the homeless cannot lie down in public or sleep in vehicles. Or consider El Cajon, California, where 52 percent of homeless people have no access to a shelter, but sleeping in public, camping in public, and begging are criminalized.

Watch the video below to learn more about a law banning homelessness in Columbia, North Carolina:

Incarceration

Violators of these rules face fines or incarceration. As many homeless people cannot afford fines, they end up spending time in jail. With no permanent address, no regular transportation access, no place to store personal records, and few to no financial resources, the homeless targeted for criminal behavior have difficulty paying fines. If they can’t pay fines they often cannot get probation. This means they are incarcerated more often and for longer periods of time. For the homeless, getting into shelters and finding affordable housing is already difficult. But doing so after a previous arrest becomes nearly impossible.

Suspended Benefits

The homeless are typically eligible for a variety of beneficial federal programs, such as Supplemental Security Income (SSI), Social Security Disability Insurance (SSD), and SNAP (food stamps). Many homeless people are unaware of these programs. Since most of the homeless lack an address and application documentation, they have difficulty applying. SNAP has special procedures that give greater assistance to the homeless, such as providing the, with a representative and mailing benefits to homeless shelters. Most cities recognize the obstacles the homeless face in applying for federal benefits and employ outreach teams to connect homeless people to benefits and services. For example, Denver’s “Road Home” plan began in 2005 with the goal of helping homeless people with disabilities. Denver organized all the existing outreach programs in the city and added 20 more outreach workers as well as a program coordinator. In the first 3 years, the program helped 2,000 people in Denver access public benefits and services. Another program in Portland set up training to teach all homeless case workers what major benefit programs are available and how the homeless can apply.

One big problem is that having a criminal record makes people ineligible for certain benefits, such as federal housing subsidies. When disabled individuals are incarcerated, their SSI is suspended. If they are incarcerated for more than a year, SSI benefits are terminated and the person must then submit a new application. The process could take months or even years, meaning an increased chance for homelessness in the meantime.

High Cost

Recent studies show that laws targeting the homeless are not always cost-effective. The Utah Housing and Community Development Division reported that the annual cost of emergency room visits and jail stays for the average homeless person was $16,670. Providing someone an apartment and social worker would only cost $11,000.

A 2013 analysis by the University of New Mexico’s Institute for Social Research examined the costs of providing immediate, permanent, supportive housing to the homeless rather than the more typical transitional housing. Albuquerque’s “Heading Home” Initiative made extensive use of community partnerships to coordinate housing and services. Overall, the study found that housing the homeless is 31 percent cheaper than keeping them homeless, mainly because housed individuals use emergency services less frequently. Their research showed that simply by providing permanent housing, Albuquerque reduced spending on homeless-related jail costs by 64 percent. The costs of emergency room visits also declined 13 percent, while spending on mental health visits increased 34 percent.

Do these laws help protect the homeless?

Very rarely are cities explicitly aiming to make the lives of the homeless even harder by instituting these laws. Many cities see these laws as a way to ensure public safety as well as the safety of the homeless. For instance, laws prohibiting sharing food with the homeless are aimed at protecting the homeless from bad food. Food given illegally could be made with questionable food safety practices or could come from someone with more nefarious intent like poisoning the food. Other cities worry about the effects of public feedings. For instance, a church group may set up in a park next to a school, which would leave many parents upset over the safety of their children. Watch for rationale behind feeding laws below:

Laws outlawing public camping are often a way for the city to push the homeless to stay in safer shelters, especially in dangerously cold weather. Staying in a shelter generally keeps the homeless safe from people who may otherwise harm them on the streets. Shelters can also help cities connect the homeless to other beneficial social service programs. Officials also say these laws help to encourage better pubic hygiene and safety. Other laws target panhandling. Police object to panhandling since it is often done in high-volume, potentially dangerous areas, such as a highway median.

So why can’t the homeless find a place to stay?

More than 12.8 percent of the nation’s supply of low income housing has been permanently lost since 2001. This is largely due to a steady decrease in funding for federal subsidies for standardized housing since the 1970s. There are fewer emergency shelter beds than there are homeless people. The number of shelters in the United States rises each year, but the increased supply of beds does not always correspond to the areas of highest demand. In certain areas where there is a lack of affordable housing, the shelters still do not provide enough beds. Further, waiting lists for subsidized housing in most areas are incredibly long. The city of Los Angeles has only 11,933 shelter beds for a homeless population of 53,798. If cities cannot provide adequate shelter beds, there is no place for the homeless to go but the streets.

Typically shelters are run by non-profit organizations associated with church groups or the federal or state government. Numerous national organizations, such as Salvation Army, United Way, and the National Alliance to End Homelessness, aid in the upkeep of homeless shelters. Most shelters require residents to exit in the morning and go somewhere else for the day before returning at night for a meal and to sleep. Shelters try to offer a variety of services, including job training and rehabilitation programs, but some are criticized for being nothing more than holding facilities. One shelter in Washington, D.C. in particular has dealt with corrupt workers preying on the homeless residents as well as a decaying building, contagious infections, and hazardous bug infestations.

Another significant obstacle is how to find housing for vulnerable populations like the previously incarcerated, the recently hospitalized, and veterans. Once released from jail or prison, many have no place to turn and no money to pay for housing. Those released from hospitals are also more likely to suffer from homelessness and even mental illness.

Housing First models have grown in popularity in recent years as part of the movement to find new ways to help the homeless. One of the first Housing First models was launched in Los Angeles in 1998 by the non-profit PATH Beyond Shelter. The success of the policy led to its spread to a number of U.S. cities. Rather than moving the homeless through different levels of housing, Housing First models move the homeless immediately from the streets or a shelter into their own apartment. The idea is that once housing is obtained, other issues like mental health or addiction can more effectively be addressed. By using a Housing First model, Phoenix became the first city to successfully house all of its chronically homeless veterans.

Watch the video below for more information on the Housing First program:

Libraries and the Homeless

With the homeless finding it increasingly difficult to find someplace to sit outside, libraries are a prime spot to spend their days. As social safety nets shrink, libraries have become more vital than ever to homeless populations. Libraries are free, centrally located, provide numerous books and computers, and allow the homeless to escape from snow or scorching temperatures. Increasingly, libraries have added homeless outreach to their array of programs.

Being a de facto gathering place for homeless populations can often deter use by other patrons. Striking the balance between making the homeless feel welcome and making other visitors feel comfortable is tricky. Naturally libraries deal with complaints regarding homeless people being loud, unclean, mentally ill, monopolizing computer time, and bathing in restrooms. Some libraries institute their own rules to mitigate these problems. For example, rules in Washington, D.C. prohibit alcohol, bare feet, carrying more than two bags, sleeping, or an odor that can be detected six feet away.

Watch the video below to see how a library in Burlington, Vermont, deals with the homeless:

Libraries have not turned a blind eye to the needs of the homeless. In response to problems with the homeless population, the city of San Francisco hired a social worker for its main library. The social worker is aided by five peer counselors, all of whom are formerly homeless. The library even implemented a 12-week “vocational rehabilitation” program. Graduates of the program are then hired to work in the system. Other libraries in Washington, D.C. and Philadelphia have since followed suit to hire social workers.

In Greensboro, North Carolina, libraries offer meals, haircuts, blood pressure screening, and job counseling. Libraries in San Jose, California bring library programs, such as computer classes, to homeless shelters. The central library in Philadelphia even features a cafe staffed by the homeless, who then use the job skills gained to secure other employment. The American Library Association calls for even more programming targeting the homeless, recognizing that libraries should provide training to staff and coordinate programs and activities to benefit that population.

Cities need more affordable housing to help the homeless. Ideally they should seek to confront problems of homelessness and provide solutions rather than criminalize homeless behavior. Naturally many communities do not want to have to deal with the homeless in public areas, but criminalization of homeless behavior is costly, unconstitutional, and hinders a person’s future ability to secure a permanent place to stay.

Resources

Primary

HUD: 2013 Annual Homelessness Assessment Report to Congress

 Additional

No Safe Place: The Criminalization of Homelessness in U.S. Cities

Reuters: U.S. Libraries Become Front Line in Fight Against Homelessness

Huffington Post: More Cities are Basically Making it Illegal to be Homeless

The New York Times: Shunting the Homeless from Sight

USA Today: More Cities Pass Laws that Hurt the Homeless

Wall Street Journal: A Crowdfunding App for the Homeless

Blaze: Top 10 Anti-Homeless Measures Used in the United States

American Library Association: Reducing Homelessness Through Library Engagement

NPR: Urban Libraries Become De Facto Homeless Shelters

MSN: Court Overturns Los Angeles Ban on Living in Cars

ALA Library: Services for the Poor

Arizona Central: Success in Housing for Homeless Veterans in Phoenix

Harvard Civil Rights/Civil Liberties Law Review: Jones v. City of Los Angeles: A Moral Response

NPR: With A Series of Small Bans, Cities Turn Homelessness into a Crime

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The Costs of Criminalizing Homelessness appeared first on Law Street.

“You may not know them, but data brokers know you,” Federal Trade Commission (FTC) chairwoman Edith Ramirez said at the release of an FTC report about the data broker industry. Data brokers know where you live, what you buy, what medical conditions you have, your background, interests, and even the names of your kids. It sounds like something out of a sci-fi movie, so it is no wonder most Americans have no idea the thriving market for their personal information even exists. Here’s everything you need to know about how data brokers collect your information, what it is used for, and what protection you have.

What are data brokers?

Data brokers are companies that compile and resell or share the personal data of consumers. The FTC released a report on May 27, 2014 examining nine companies in the industry: Acxiom, CoreLogic, Datalogix, eBureau, ID Analytics, Intelius, PeekYou, Rapleaf and Recorded Future. These companies derive a whopping $426 million in annual revenue from their products.

The information set held by these companies is massive. Acxiom estimates it holds roughly 1,500 pieces of data per consumer. Another broker dwarfs Acxiom with 3,000 data points for nearly every U.S. consumer. One broker is said to maintain about 700 billion aggregated data elements and adds more than 3 billion pieces of data each month. Another database has information on 1.4 billion consumer transactions alone, such as credit card purchases. Watch an in-depth look at data brokers by 60 Minutes below.

Where do data brokers find their information?

Contentions with the data broker industry arise from the fact that information gleaned does not come directly from consumers. Data brokers garner a lot of information from publicly available sites. A site relaying U.S. Census data can provide information regarding local demographics and real estate value. These firms get additional information from voter records, tax records, court records, mortgages and property information, driving records, and numerous other avenues. Companies can scour social media sites, such as LinkedIn, for any publicly-available information. Data brokers also gain a lot of information from card loyalty programs, credit cards, and advertising agencies that may follow a user’s online activities. If you recently bought a subscription to Forbes Magazine or purchased a new dress from a catalog sent to your home, these data brokers will know. By compiling all this information, brokers begin to paint a profile of you, including your age, race, income, social security number, religion, political affiliation, criminal history, movie preferences, gun-ownership, gym membership, and hobbies.

What is this data used for?

Individual data points are compiled to form a profile of potential consumers who can then be targeted for specific products. The information allows companies to more accurately target consumers for advertising campaigns and gain information about consumer preferences. The FTC report shows that data brokers usually package data into two forms:

1. Data elements: Age, family, and interests.
2. Data segments: Compilation of interests used to to create a list of people with similar characteristics. Here are some examples of these list segments: “African-American Professional;” “Allergy Sufferer;” “Bible Lifestyle;” “Biker/Hell’s Angels;” “Plus-Size Apparel;” “Twitter User with 250+ friends.” Other categories include people with high cholesterol or those interested in novelty Elvis items.

Data brokers then use this information to create various products in three different categories:

1. Marketing: This includes mail, email, telemarketing, mobile, and TV campaigns. To target consumers, marketers use a process called “onboarding.” Onboarding allows marketers to load offline information, such as magazine subscriptions or store loyalty cards, into cookies that digital advertisers use to target consumers. Cookies are stored in a computer’s browser and allow advertisers to promote their products on numerous Internet services.
2. Risk Mitigation: This includes identity verification. These products use analytics to help banks comply with “know your customer” identity verification requirements under the USA Patriot Act. Products also include fraud detection to track patterns of attempted fraud. For instance, these products can track how long an email address has been used or whether a delivery address matches a listed consumer.
3. People Search: This includes products generally intended for use by individuals. Products can search for someone’s criminal record, ancestry, phone number, telephone history, or social media information. Most come in the form of fee-based search products.

Does the data make our lives easier?

Many people would agree that products that help to verify one’s identity are a good thing. Companies that can link consumer purchases to personal information like an address, phone number, and email drastically reduce chances of fraud. Some also see personalized advertising as a good thing. Say you are a senior citizen. Rather than scrolling through the Internet and seeing ads for baby strollers or discounted student loans, you might see ads for healthcare services. Targeted advertising means you receive information and discounts for things you actually use instead of products with no relevance to your life. Ideally the more information data brokers have about you, the more they can target your individual tastes. While each individual piece of data has little benefit, the aggregation of this data by data brokers is immensely beneficial to companies doing market research to improve and tailor their products.

How are data brokers changing political campaigns?

The use of personal data is not limited to what you buy. In the 2012 elections, campaigns contracted with political data brokers to match voting records with cookies on computers. Voter registration lists have long been used to target voters. Combined with more information, these lists now take a powerful form in the digital arena. Political microtargeting allows campaigns to utilize information from data brokers to deliver a specific message to a target demographic. Data can help campaigns decide which voters are most likely to respond to a specific ad or which groups need to be targeted with a specific message. Candidates can target registered Democrat or Republican voters with online ads and can even target based on how much the individual has donated to campaigns before.

President Obama’s 2012 re-election campaign was among the first to use big data to its advantage. The 2012 team assembled an analytics department five times the size of that in its 2008 campaign. Some insights into the use of data in Obama’s 2012 campaign:

• As TIME describes, the team discovered that East Coast women between 40 and 50 were not donating as much as hoped. This demographic was the most likely to hand over cash for the chance to dine with a gravitational celebrity. The campaign’s solution? A fundraising drive with the prize being a dinner with Sarah Jessica Parker.
• The campaign used data to predict how much money they would get from each fundraising email. They also used demographics to determine which groups would be most responsive to an email signed by either Barack Obama, Michelle Obama, or Joe Biden.
• The campaign bought data from brokers regarding the television-viewing habits of Ohioans. The campaign was able to combine lists of voters with lists of cable subscribers and then coordinate the information of watching habits. Using this information, they targeted campaign ads to specific demographics at the exact time these niche voters were watching TV. This led to the campaign buying airtime in shows like Sons of Anarchy and the Walking Dead rather than traditional news programming. Watch for more on the use of big data during Obama’s reelection campaign below.

Little information is disclosed on just how much data campaigns can access. Inevitably the collection and effective use of data will play a huge role in the 2016 presidential election, but not all consumers are happy with that. The regulation of the use of data for political purposes raises questions of free speech and privacy. Others claim microtargeting actually offers more privacy, since the data does not include names or physical mailing addresses. It may be hard, however, for consumers to opt out of political advertising. Even lists like the National Do Not Call registry have exceptions for political campaign calls. According to a study by the University of Pennsylvania, 86 percent of Americans said they did not want political advertising tailored to their interests.

What are the problems with data brokers?

There is a certain “creepiness” factor to data collection without consumer consent. Target tried to market products to new parents by identifying them even before the baby was born. Data showed that pregnant women purchased products like cocoa butter and calcium tablets. Target began sending targeted mail to these women. But instead of finding it helpful, the women found the fact that Target knew they were pregnant to be unnerving.

Others worry about the effects of outdated data. Consumers have little access to immediately change what information that brokers have on them, such as an address change or marriage. This means people could potentially be prevented from making a purchase solely based on outdated information. Outdated information becomes more offensive when the deceased remain on data broker lists and continue to receive offers in the mail. Some women revealed stories of experiencing a miscarriage yet continuing to receive insensitive mailings from Gerber and American Baby Magazine.

Companies that have such specific information about segments of consumers may take advantage from the data. An example from the FTC looks at the case of a consumer labeled to be a biker enthusiast. This person might get more coupons for motorcycles and gear, but they could also see higher insurance rates if companies use this information to conclude this individual engages in risky behavior. Watch a Congressional hearing on the industry’s issues below.

An Acxiom presentation to the Consumer Marketing Organization in 2013 indicates further issues with potential discrimination. Acxiom placed customers into “customer value segments.” Data showed that while the top 30 percent of customers add 500 percent of value, the bottom 20 percent actually cost 400 percent of value. The bottom 20 percent call customer service numerous times and cost the company in returns. The company would be better off ignoring these customers altogether, and data brokers can help companies to identify these costly customers. These high-cost customers could then face higher prices or poor service without even being aware they are discriminated against.

Do people have any protection?

The problem most people have with the collection of data is that they have no say in it. They are not aware when information is being collected, nor are they in control of what it is used for or if it is correct. The resale and illegal use of the data is prohibited. Data brokers also suppress protected lists such as phone numbers on the Do Not Call Registry.

Some data brokers do try to protect consumers. Some voluntarily remove information regarding children and teens from their data. Others provide ways to edit and review what data the broker has on you. Acxiom uses aboutthedata.com for this very purpose. Epsilon allows consumers to review information, but reviewing the information costs $5 and requests can only be made by postal mail. Trying to review information collected by every broker is extremely time consuming. Watch for more on how to protect yourself below.

No laws require brokers to maintain the privacy of consumer data unless it is used for prohibited purposes. Federal law protects the confidentiality of medical records. The Fair Credit Reporting Act (FCRA) restricts the search of information when determining eligibility for employment, credit, or housing; however, most data does not fall under the scope of FCRA.

What is the FTC pushing for?

The FTC report recognizes the immense value of data brokers to both companies and consumers; however, the FTC has offered the following recommendations to improve the industry and bolster consumer protection:

• Create a central database where consumers can see what information about them was collected. The database should also allow consumers to opt out from the data collection.
• Require brokers to list their data sources.
• Increase industry visibility and consumer awareness.
• Comprehensive legislation to prevent the discriminatory use of data. For instance, some categories infer sensitive statistics. “Metro Parents” are single parents primarily high school-educated handling the stresses of urban life on a small budget. “Timeless Traditions” are immigrants who speak some English but generally prefer Spanish.
• Adopt a series of best practices, including better protection for minors, improving data security, preventing unlawful discrimination, and restricting collection to only needed data.

The Direct Marketing Association (DMA) and other groups attacked the FTC report. In an interview with the Washington Post, Stuart Ingis of the DMA said, “You’d think if there was a real problem, they’d be able to talk about something other than potential” abuses.

The data broker lobby is very powerful. Senators John D. Rockefeller (D-WV) and Edward Markey (D-MA) led the regulatory push by proposing the DATA bill on February 12, 2014, requiring data brokers to be transparent about the information they collect. But considering the fact that political campaigns benefit from data broker information when targeting voters, it is unlikely there will be new legislation on data brokers in the near future. In the meantime, expect data brokers to know much more about you than you know about them.

Resources

Primary

FTC: Data Brokers: A Call for Transparency and Accountability

Ed Markey: Markey, Rockefeller Introduce Data Broker Bill

White House: Big Data: Seizing Opportunities, Preserving Values

Senate: A Review of the Data Broker Industry

Additional

Yahoo: FTC Wants More Transparency for Data Brokers

Data Privacy Minitor: FTC Report Seeks Congressional Review

Privacy and Security Law Blog: “Getting to Know You, Getting to Know All About You”

Washington Post: Brokers Use Billions of Data Points to Profile Americans

ProPublica: Everything We Know About What Data Brokers Know About You

Slate: What Do Data Brokers Know About Me?

CNN: Why Big Companies Buy, Sell Your Data

New York Books: How Your Data are Being Deeply Mined

Pulitzer Center: Consumer Data Privacy in Politics

Time: Inside the Secret World of the Data Crunchers Who Helped Obama Win

ProPublica: Everything We Know So Far About Obama’s Big Data Operation

AdWeek: Confessions of a Data Broker

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The Big Business of Big Data appeared first on Law Street.

Stories of vicious dog attacks capture the imagination of concerned citizens and instill fear in communities. While dog-bite attacks are relatively rare, the viciousness of some attacks is enough to cause anyone concern. Localities turn to Breed-Specific Legislation (BSL) as a way to regulate aggressive dogs and prevent attacks. Here’s what you need to know about BSL, why groups increasingly oppose it, and what other alternatives exist to be proactive about dog attacks.

What Are Breed-Specific Laws?

Breed-Specific Legislation is a blanket term that refers to any type of law designed to regulate certain breeds with the goal of reducing dog attacks. These laws are typically instituted by city and municipal governments. In its most drastic form, BSL includes a complete ban on a specific type of dog. The laws typically target “pitbull” types and other dog breed that are considered aggressive. Pit bulls aren’t a specific breed, but are a set of dogs that can include American Pit Bull Terriers, American Staffordshire Terriers, and other breed mixes. Bans in cities may also include bulldogs, rottweilers, and wolf-hybrids.

Other BSL has lesser requirements, such as mandatory spaying or neutering, muzzling, confinement, a minimum insurance, or preventing the chaining of dogs. Most BSL requires owners of dangerous breeds to carry liability insurance with coverage up to $500,000. If an attack does occur, victims can then receive medical payment. This also acts as a type of ban, since owners unable to afford such exorbitant insurance would not be allowed to own targeted breeds.

What is the reason for BSL?

The basis for these laws can be traced to numerous studies concluding pit bulls were implicated in a disproportionate number of attacks. A 20-year study (1978-1998) by the American Veterinary Medical Association (AVMA) showed that pit bulls and rottweilers were involved in 67 percent of dog-bite related fatalities during that time period. Numerous studies reveal similar conclusions. Some of the grizzly statistics can be seen below:

BSL advocates point to features specific to certain dogs that make them prone to harmful attacks. Pit bulls derive their genes from “the Butcher’s Dog,” which was originally bred for bull-baiting before being used for dogfighting. The dogs were bred to be muscular, aggressive, and agile. Reports claim these dogs are unique since they give no warning signs before attacking and will not retreat from an attack even when considerable pain is inflicted. These dogs will attack deep muscles and then hold on with their teeth and shake, causing tissues to rip.

Attacks by aggressive dogs can pose a large threat to communities and are too expensive of an issue to ignore. The AVMA estimates hospital expenses for dog-bite related emergency visits to be $102.4 million. A 2010 Agency for Healthcare Research and Quality study showed that the number of Americans hospitalized for dog bites almost doubled over a 15-year period. The study also concluded the average cost of a dog-bite related hospital stay was $18,200, approximately 50 percent higher than the average injury-related hospital stay. In 2012, more than 27,000 people underwent reconstructive surgery as a result of being bitten by dogs.

What arguments are made against BSL?

Numerous organizations, including the American Bar Association, American Humane Association, and Centers for Disease Control and Prevention (CDC) publicly oppose BSL. Many opponents refer to the laws as “Breed Discriminatory Laws.”  In 2013 President Obama even issued an official response to the controversial laws:

“We don’t support breed-specific legislation — research shows that bans on certain types of dogs are largely ineffective and often a waste of public resources.”

Listen to a discussion from the American Kennel Club below:

State bans

Seventeen states ban legislation against specific types of dogs, and other states are considering similar legislation. An interesting case was made in Denver after Colorado approved legislation banning BSL. Denver passed its pit bull ban in 1989, repealed the ban in 2004 to comply with state law, but then reinstated the ban in 2005. The city’s challenge to the state’s BSL prohibition was ultimately ruled in Denver’s favor as a home-rule exception. The court ruled a state ban on BSL could not infringe on Denver’s right to enforce ordinances on matters of local concern. Most court cases have upheld the laws because localities enjoy widespread police powers. As long as cities can prove a BSL is related to improving public safety, it will be upheld. Even following Denver’s BSL, the county has dog bite rates many times higher than other Colorado counties without similar laws.

Profiling

Many take issue with BSL because it is difficult to predict a dog’s breed or behavior based on outward appearance. According to the American Pet Products Association, 31 million of 73 million pet dogs are classified by their owners as “mutts,” which makes them hard to classify as a specific breed. Laws banning “pit bulls” target a loosely-defined class of dogs or dogs with a similar appearance. In many localities, the decision of whether a dog is one of the prohibited breeds is left to a city manager or police who lack sufficient expertise in the matter. Other times animal control or a veterinarian will make the decision. The only certain way to tell a dog’s breed is by way of DNA tests, which can be very expensive. This means BSL is often difficult to effectively enforce.

Expense

The laws are typically enforced by animal control agencies on tight budgets. Counties rack up costs from enforcement, kenneling, euthanasia, and litigation. In 2008, Omaha proposed a BSL that would cost half a million dollars to enforce. A Baltimore auditor estimated it would cost $750,000 to enforce a breed-specific ban.

Nature v. Nurture

Owners of these “dangerous” breeds contend any dog can become vicious if it is not treated properly. Dog owners who do not appropriately care for their dog, abuse it, or treat it as a guard dog rather than a pet make the dog more prone to attacks. In contrast, a loving family training a pit bull would raise a well-behaved dog with no aggression problems.

Unintended effects

Others believe BSL has more dangerous effects. Owners intent on keeping the outlawed breeds may keep their dogs in hiding, meaning the dogs do not get proper socialization or visits to the veterinarian. Opponents also claim these laws encourage ownership by the most irresponsible people, who own pit bulls as a status symbol to show disregard for the law. If there is a ban on pit bulls or rottweilers, owners can still have other unregulated aggressive breeds. One dog owner created a video against BSL below:

Have these laws been effective?

One highly cited case study comes from Prince George’s County in Maryland, as it was one of the few places to examine BSL effectiveness. The county of more than 900,000 people banned pit bulls in 1996. Any pit bulls found in the county after the ban were either put down or sent to live with families in other areas. A 2003 task force found the 15-year pit bull ban cost the county more than $250,000 each year, with no measurable effect on safety. The cost to the county to confiscate and euthanize a single pit-bull is roughly $68,000. In fiscal year 2001-2002, the county spent more than half a million dollars enforcing the ban. Due to ineffectiveness, the task force recommended repealing the ban and found that other, non-breed-specific laws already were in place to cover vicious animals, leash laws, and other public health and safety concerns.

In 2000, the CDC looked at 20 years of data regarding dog bites and fatalities in the United States. The CDC concluded that fatal attacks represent only a very small proportion of total dog bite injuries, and that it’s impossible to calculate the bite rates of specific breeds. No evidence supports the idea that a specific type of dog is more prone to attacks. Furthermore, breed specific laws have not succeeded in reducing overall bite-related injuries in any area where they were implemented.

The U.S. Military also has contentious BSL. The Marine Corps, Army, and Air Force all ban large dogs with a predisposition for aggressive behavior. Dogs such as pit bulls and rottweilers are not allowed to live at base housing, and families wishing to have these dogs may be moved off base. Many feel this treatment is unfair to those who are fighting for their country.

Are there other alternatives to BSL?

Organizations who oppose BSL advocate a number of solutions they feel are more effective. The CDC proposes a community-based approach. This approach includes:

• Public dialogue identifying community issues
• Developing an advisory council
• Monitoring bite response
• Data reporting
• Public education campaign
• Businesses addressing prevention techniques
• Effectively conveying information through local media

The CDC reports that aggression in dogs is tied to a number of factors beyond breed. These factors include sex, socialization, heredity, and treatment. More than 70 percent of all dog bite cases involve unneutered male dogs. An unneutered male dog is 2.6 times more likely to bite than is a neutered dog. Eighty-four percent of bite cases involved dogs who were maintained by reckless owners — the dogs were abused or neglected, not humanely controlled or allowed to interact with children unsupervised. Seventy-eight percent of the dogs in bite cases were not kept as pets but as guard, breeding, or yard dogs.

The statistics show that rather than outlawing specific breeds, campaigns to prevent dog-biting should focus on creating caring owners and encouraging the spaying and neutering of dogs. Further, children must be educated to understand how to play with dogs and when to leave them alone. Dogs themselves may not be dangerous, but a bad situation can make any dog more prone to aggressive behavior. While pit bulls and other “aggressive” breeds can pose threats to a community, outlawing these dogs through BSL is not a surefire solution.

Resources

Primary

ASPCA: Breed Specific Legislation

DogsBite.org: Military Breed-Specific Policies

DogsBite.org: BSL by State

Additional

TIME: Obama Blasts Legislation Targeting Specific Dog Breeds

StopBSL.org: Expense of BSL

Animal Legal Defense Fund: Challenging Denver’s Pit Bull Ban

American Veterinary Medical Association: Community Approach to Dog Bite Prevention

Animal Legal Defense Fund: Pit Bull Bans: The State of Breed-Specific Legislation

National Canine Research Council: Denver’s Breed-Specific Legislation: Brutal, Costly, and Ineffective

Animal Law Coalition: Denver’s Holocaust: Call For an End to the Pit Bull Ban

United Kennel Club: Punish the Deeds, Not the Breeds

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Bullying Pit Bulls: Do Breed-Specific Laws Work? appeared first on Law Street.

Washington and Colorado approved voter referendums in November 2012 to become the first states in the nation to allow recreational marijuana sales; however, the states have taken different regulatory paths. Colorado started selling recreational marijuana on January 1, 2014, while Washington’s first legal stores opened on July 8, 2014. Regulators in Washington have frequently been in contact with those in Colorado to smooth the implementation process. The infographic below shows a quick breakdown of the two states’ policies, and if you’d like to learn more about what’s going on with these rules read on to the in-depth analysis below.

Who is allowed to buy marijuana?

Colorado and Washington both regulate marijuana similarly to alcohol. Only those aged 21 and older can buy recreational weed. Walk into a store, show your ID, and you can make a purchase. Customers are limited to buying or possessing only one ounce of marijuana at a time. Rarely would anyone buy a full ounce — more commonly marijuana is sold as an eighth of an ounce. Should you need more than an ounce, however, you would not be prohibited from making multiple trips to the store in the same day.

In Colorado, buyers from out of state are limited to buying only one-quarter of an ounce at one time, while there is no restriction on purchases by out-of-state visitors in Washington. Marijuana bought in the state must then be consumed in the state. In Colorado, you can share marijuana with others as long as you don’t receive any cash. In Washington, any purchase of marijuana must be for personal consumption. In both states marijuana transactions often have to be made in cash, since credit cards cannot be used due to federal banking regulations; however, state banks in Colorado moved to set up more local credit unions and issue debit cards that can be used for marijuana purchases.

How much does marijuana cost?

In Colorado, shops opened January 1, 2014 and were met with high demand. Initially 136 shops acquired licenses from Colorado’s Marijuana Enforcement Division, but the state has set no official cap on the number of licenses it will issue. The city of Denver, however, has a two-year moratorium on new marijuana businesses. Many other cities, such as Colorado Springs, banned recreational marijuana shops altogether. In the first days of sale, prices for high-quality marijuana rose to more than $300 per ounce. NPR reports that over the weekend of July 4, 2014, prices at a large chain hovered around $85 an ounce. Other estimates show the price per gram in Colorado typically averages $16 to $20.

In Washington, initial sales are likely to lead to product shortages and higher prices. Marijuana can only be purchased in retail shops licensed by the state; however, only 24 shops were licensed for the first day of sales, so owners may initially be inclined to ration. The state set a cap of 334 licenses to be distributed in accordance with population. The Washington State Liquor Control Board still has thousands of applications to sift through. Like Colorado, many municipalities in Washington banned recreational sales of marijuana. In Seattle, with a population of 652,000 and likely the hottest market, only one shop will be open on the first day of sales. Vancouver has two shops and Spokane has three. Growers of marijuana only received their licenses in March, meaning that there has not been enough time to grow a substantial amount of marijuana. Store owners indicate they want to sell for roughly $12 per gram, but the cost per gram could rise to as much as $25. Medical marijuana dispensaries in the state average between $10 and $15 per gram. Watch for more information on the marijuana shortage below:

How much is the state making off sales?

In both states, recreational marijuana is heavily taxed. Colorado buyers face a 15 percent excise tax, 10 percent special sales tax, and a 2.9 percent standard sales tax. Various localities then add additional taxes. Colorado’s amendment dictates that the first $40 million in taxes raised annually by marijuana sales must go toward the state’s public schools. According to USA Today, Colorado collected more than $24 million in marijuana fees and taxes through April 2014. In the fiscal year beginning July 2014, the state expects to make $98 million from marijuana. Tourism also increased, likely in part due to the marijuana law — 2013-2014 was the state’s best ski season to date. Watch an overview of Colorado’s marijuana industry below:

In Washington, an excise tax of 25 percent is levied at three different points in the sale process: from grower to processor, processor to retailer, and retailer to customer. According to USA Today, Washington is expected to collect $190 million from fees and taxes over the next four years.

What restrictions do marijuana shops face?

The two states regulate shops a little differently. Both only allow sales between 8:00am and midnight, and any marijuana sold in the state must be grown in the state. Initially in Colorado, any business wanting to sell recreational marijuana already had to be an existing medical marijuana dispensary. Vendors must be residents of Colorado and undergo a background check. They must apply through the Colorado Department of Revenue’s Marijuana Enforcement Division and typically have to apply for a local license as well. Beginning October 1, 2014, new recreational facilities will be able to apply for licenses. Medical marijuana dispensaries pay a $500 application fee to get a recreational license, while new businesses face a $5,000 application fee. Annual licensing fees can range from $3,750 to $14,000. Colorado also allows companies to vertically integrate by growing, processing, and selling as a single company. Additionally, individuals are allowed to grow up to six plants for personal use.

In contrast, Washington gave medical marijuana dispensaries no edge in the application process over new businesses. The medical marijuana industry was unregulated, so the state created regulations from scratch, including protocol-testing, child-resistant packaging, and shop security systems. Vendors must be residents of the state and are subject to a background check. The law separates producers, growers, and retailers. Businesses face a $250 application fee for a license and a $1,000 annual renewal fee. The state also limits overall marijuana growing to 200 million square feet. Washington does not allow individuals to grow plants themselves.

Are edibles available?

One of the most high-profile issues Colorado faces is how to regulate marijuana edibles, which are often seen as a hassle-free way to consume marijuana. Yet several severe cases illustrated potential dangers of edibles. On March 11, 2014, a college student from Wyoming jumped from a balcony to his death after eating a potent marijuana cookie. In another case, Richard Kirk suffered severe hallucinations after allegedly taking painkillers and eating marijuana-infused candy. The hallucinations led him to shoot and kill his wife. New York Times columnist Maureen Dowd recently chronicled her experience with marijuana edibles to further heighten awareness of the issue. Colorado is aiming to make buyers aware of portion size and THC content, but is still experiencing difficulty regulating edibles and keeping them from the hands of unsuspecting children. The video below explores Colorado’s problems with edibles:

So far Washington has not approved any edible products. Edibles must first be tested and approved, so there will be a bit of a wait before they hit the Washington market.

Are there other regulations?

Smoking Areas

Both states ban smoking in public places, including in marijuana shops. The bans are enforced similar to open-container laws. In Washington, consuming in public means a fairly light $27 fine. Things can get trickier for tourists trying to find a place to consume. Only 25 percent of hotel rooms in Washington are designated as smoking, and it is unclear if hotels will permit smoking marijuana.

Driving

Driving under the influence of marijuana is illegal in both states. Anyone driving with more than five nanograms of THC per milliliter can be issued a DUI. Tests for THC are not as easy as a breathalyzer, especially since THC can linger in the body long after an initial high. If a driver was suspected of being high, an officer would likely have to drive the individual to the hospital for a blood test to get conclusive results. In Colorado, marijuana was involved in 12.5 percent of DUIs occurring in the first five months of 2014, a statistic that the state has only just begun tracking. Watch a video about DUIs below:

Other Issues

Despite the legality of recreational marijuana in these states, questions linger. Employers can still fire employees for showing up high or for testing positive, even though marijuana is legal. An in-depth look at the issue can be found here. States are also wary of consumers who may go to a number of stores to buy a small amount of marijuana at each and then sell it on the black market. The Justice Department is continuing to work on legal guidance for banks on how to deal with local retail marijuana sales. Despite these issues, the sale of marijuana has been a large success in Colorado, with voters now favoring the law by a 22-point margin after witnessing relatively smooth implementation. Should kinks in these laws be worked out, more states will look to Colorado and Washington when implementing marijuana laws of their own. Colorado has increased its regulation of marijuana since the law was first implemented and has not experienced serious consequences. More regulation of edibles in the future will likely lead other states to follow marijuana policies similar to those of Colorado and Washington.

Resources

Primary

Washington Liquor Control Board:  Fact Sheet

Additional

Time: Everything You Need to Know About Buying Legal Weed

Time: Colorado Kids are Accidentally Ingesting Pot

NPR: Washington State to Start Recreational Pot Sales

The New York Times: Still-Divided Washington Prepares for Start of Recreational Marijuana

Mercury News: Marijuana Legalization in Colorado

USA Today: With Legal Marijuana, Washington Joins Exclusive Club

CNN: 10 Things to Know About Nation’s First Recreational Shops

Denver Post: Colorado Voters Approve New Taxes on Recreational Marijuana

USA Today: Colorado, Washington Differ in Legalizing Marijuana

Brookings: Legal Marijuana: Comparing Washington and Colorado

The New York Times: Don’t Harsh Our Mellow, Dude

New York Magazine: Washington Starts Selling Legal Weed: What You Need to Know

The New York Times: Sales of Recreational Marijuana Begin in Washington State

Denver Post: A Colorado Marijuana Guide: 64 Answers to Commonly Asked Questions

Denver Post: Colorado Recreational Marijuana Industry Begins

—

Alexandra Stembaugh is a senior at the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Legal Marijuana Laws: Colorado v. Washington appeared first on Law Street.

Western countries agree that they do not condone the aggressive actions taken by Russia in Ukraine. Their response? Sanction Russia. Rather than resort to military action, countries now use sanctions as the foreign policy tool of choice. The United States and European Union are united in the belief that the best way to encourage Russia to behave in the international arena is to increase pressure on the country by way of this penalty. So what exactly are sanctions, how do they work, and will they be effective in the case of Russia?

What has been happening in Ukraine?

The conflict began at the end of 2013 when former Ukrainian president Viktor Yanukovych rejected an association agreement with the European Union (EU) and instead accepted a deal with Russia. Thousands of protesters took to the streets to voice their disapproval of the deal and perceived government corruption. In response to the protests, Ukrainian forces took aggressive action. Tensions escalated and eventually in February 2014, protesters overtook the capital and sent the president scrambling for Russian protection. Russia quickly moved to secure its interests by invading and annexing the Ukrainian province of Crimea. Russia still has troops stationed along the border in Eastern Ukraine and is accused of sending weapons to aid pro-Russian forces. The issue is complicated by the fact that many people in Ukraine, especially in Crimea, are ethnically Russian and would like to become a part of that country. Watch the video below for further explanation of the conflict:

Western countries declared Russia’s actions to be a clear violation of Ukrainian sovereignty and territorial integrity, which is a breach of international law. The White House called Russian intervention in Ukraine “illegal and illegitimate.” The United States sees the actions as a violation of the United Nations Charter regarding the prohibition of force and of Russia’s 1997 military basing agreement with Ukraine. Russian leader Vladimir Putin, however, continues to disregard the demands of the United States and European Union. With the collapse of a recent ceasefire, the future of the conflict remains unclear.

Western countries hope sanctions will deter Russia from future aggression in Eastern Ukraine and force the country to abide by its international obligations.

What are sanctions?

Sanctions are a foreign policy instrument applied to a country to pressure it into changing its actions. Sanctions institute deliberate government withdrawal or threat of withdrawal from trade or financial relations. Typically sanctions are used to force a country to cooperate with international law, or to contain a threat to the peace of other countries. Ideally sanctions send a strong message of condemnation and entice countries to comply with international rules in order to avoid further harm. Sanctions can be issued by individual countries or by an entire group, such as the European Union, United Nations, or the North Atlantic Treaty Organization. There are several different types of sanctions:

• Diplomatic sanctions sever diplomatic ties, such as by removing embassies from the offending country.
• Economic sanctions can include a number of trade and financial punishments, including a ban of trade, imposing tariffs or embargoes, freezing assets, banning cash transfers, and restricting travel.
• Military sanctions include military intervention, targeted strikes, or supplying arms and aid to military.

A long-term study by the Peterson Institute found that economic sanctions are partially successful only one-third of the time. The study showed sanctions are most successful when they are used to reach a limited, modest goal. Using sanctions to influence a more ambitious policy change drops the rate of success to just 30 percent. For example, the Cuban embargo, in place since the 1960s, is largely seen as a failure; however, the more recent blockades and financial sanctions in Iran were extremely successful in forcing the Iranians to negotiate with the United States. The success in Iran may have emboldened the United States to now apply economic sanctions to Russia for its role in the Ukraine conflict.

What kind of sanctions have been used?

So far, sanctions have been limited to specific targets to impose a cost aimed at those responsible for the situation in Ukraine and Crimea. The economic sanctions have been described by Forbes as a “new breed of financial warfare,” which the treasury has been honing as a way to lock terrorists out of the global financial system.

Specific Targets

On March 6, 2014, President Obama signed Executive Order 13660 to authorize sanctions on individuals and entities responsible for violating the sovereignty and territorial integrity of Ukraine. More sanctions followed. Currently the list of those sanctioned by the U.S. government includes 23 government officials and 18 companies. The individuals are members of the Russian elite and have significant control over the Russian economy, including its banks, railroads, and media. The E.U. and other European countries also released lists of those sanctioned, which includes many of those targeted by the United States. Watch President Obama’s declaration of sanctions below:

Consequences

The sanctions of the United States and European Union currently only impose asset freezes and travel bans. Essentially those targeted are blacklisted. For those listed in the U.S. sanctions, all assets held in the United States are frozen. Furthermore, Americans are prevented from doing business with the listed individuals or entities and are prevented from making any funds available to them. The individuals listed will also be denied visas to enter the United States. The United States will cut off exports of American products to those companies and prevent exports of high-tech items that would contribute to Russia’s military capabilities.

Potential Problems

One of the problems with sanctions is that many feel they unfairly harm a country’s innocent civilians for a government’s actions. The idea is that sanctions may harm the people, but these people will then pressure their government to change its actions. In the meantime, the effects are felt most by ordinary citizens rather than the intended government officials. The current targeted sanctions , however, were enacted to apply pressure only on the elite rather than on the entire economy. Until more major banks are targeted, ordinary citizens may not feel the impact.

Have they had the intended effect in Russia?

It is difficult to judge the exact impact that the limited sanctions have had. Outwardly Putin still seems unfazed, yet in recent weeks he has tempered Russian aggression. The Russian economy was struggling before the sanctions, so these penalties have only furthered the decline. The Russian central bank predicts growth will slow to just 0.4 percent this year. A report by the International Monetary Fund (IMF) says that Western sanctions have had a “chilling effect” on investment. The IMF claims that the future strength of the Russian economy lies in greater global integration, which is currently hindered by the sanctions.

Effect on the Elite

Vladimir Yakunin, Putin’s close friend and head of Russian Railways who is on the saction list told the Financial Times, “I did not intend to travel to the U.S.  I have no assets.  So it does not bother me at all.”

These sanctions have much broader implications, however, even if they do not directly affect Yakunin. All financial institutions are discouraged from interacting with him in any way. The U.S. financial system is extremely pervasive, and the U.S. dollar is the world’s numéraire. Every financial institution needs a relationship with a U.S. bank to do business. Since Bank Rossiya appeared on the U.S. sanction list, it can no longer do business with any bank that deals in dollars either. Major credit card companies Visa and Mastercard even severed their business with the bank.

Effect on Public Confidence

Thus far the major impact of the sanctions has been psychological, impacting consumer and business confidence. No one knows who will show up on the sanction list next, so others are hesitant to do business. The entire Russian economy is effectively isolated. The sanctions lead to capital flight, inflation, and limit future investment in the country. Goldman Sachs reports that $45 to $50 billion was taken out of Russia in the first three months of 2014 as compared with only $63 billion in all of 2013.

Effect on the Future

Experts say the sanctions are likely to push Russia toward increased self-reliance. The economy ministry is already pushing to use state funds to aid lagging economic growth. Major effects of the sanctions have already been seen through cancelled IPOs and two cancelled government bond auctions. Standard & Poor’s recently downgraded Russia’s credit to one level above junk status.

Russia has responded by imposing like-for-like sanctions and threatens greater future sanctions. Russia banned nine prominent American politicians from the country, including Senate Majority Leader Harry Reid (D-NC), Senator John McCain (R-AZ), and Speaker John Boehner (R-OH). McCain responded in a March 20 tweet:

I guess this means my spring break in Siberia is off, Gazprom stock is lost & secret bank account in Moscow is frozen http://t.co/TgwZneD4HY

— John McCain (@SenJohnMcCain) March 20, 2014

Do sanctions hurt the U.S. economy?

The typical argument against economic sanctions is that they can harm the U.S. economy, especially for the companies that do business with the targeted country. The U.S. economy will not be significantly affected simply due to the fact that the United States and Russia do not do much business with one another. Trade between the United States and Russia amounted to $40 billion last year — only one percent of total U.S. trade. By comparison, EU trade with Russia is 11 times that of the United States. Even tougher sanctions, like those applied to Iran, would only have a limited effect on the American economy due to limited ties between the nations. Watch the video below for the debate over who will be harmed by the sanctions:

Concerns are growing, however, that Western jobs are at risk if sanctions increase. For example, Boeing uses Russian titanium, General Electric leases aircraft to Russian airlines, and Exxon, Coke, and Pepsi all do significant business in Russia. If Russia sanctions in return, these companies could see a loss in profits. The U.S. Chamber of Commerce and National Association of Manufacturers are preparing an ad regarding the harmful potential impacts of the sanctions. The groups are particularly concerned if the United States were to impose unilateral sanctions that would single-out American business and put them at a disadvantage. However, recent data shows that the United States exported more goods and services to Russia in May, after the sanctions, than for any other month in 2014 so far.

What’s next?

The idea is to gradually increase the pressure on Russia through sanctions. Many expect more sweeping measures to come in the near future, as both the United States and European Union indicated a stronger response will come soon. President Obama recently agreed on a phone call with British Prime Minister David Cameron that if Russia does not take steps to de-escalate the situation in Ukraine, the United States and European Union would roll out further sanctions. It is likely that targeted bans on key sectors of the Russian economy, such as gas and banking, are next. The options are nearly limitless. The United States could revoke Russia’s favorable tariff rates, which would increase taxes Russian firms have to pay to sell goods in the United States. Other alternatives include quotas, a trade embargo on certain goods, or further limiting Russian access to U.S. financial markets. Secretary of State John Kerry discusses what could be next below:

Unilateral sanctions are rarely effective, and the limited business ties between the United States and Russia means the European Union and United States must impose coordinated sanctions; however, Russia is the largest energy supplier in Europe and among the top three oil-producing countries in the world. Russia supplies roughly one third of the oil and gas in the European Union. This dependency complicates sanction efforts. Europe is hesitant to sanction because it could prohibit E.U countries from purchasing Russian oil, which would then lead to higher prices and potential shortages. Experts agree that ultimately any effective sanctions on Russia in the future must be coordinated and far-reaching.

Resources

Primary

Treasury Department: Treasury Sanctions Russian Officials

Treasury Department: Announcement of Additional Treasury Sanctions

Additional

Washington Post: The West Can’t Afford to Make Empty Threats on Russia Sanctions

Wall Street Journal: Western Sanctions Likely to Push Russia Toward Increased Self-Reliance

Guardian: Ukraine Crisis: Any EU Sanctions Are Unlikely to Make Impression

BBC: Ukraine Crisis Timeline

Politico: The New Russia Sanctions: Stalled Tax Talks

Forbes: Here’s How Obama’s Russia Sanctions Will Destroy Vladimir Putin

CNBC: Russia Sanctions: Who’s Losing Out So Far

BBC: The Impact of Economic Sanctions on Russia

Investopedia: Sanctions Between Countries Pack a Bigger Punch

USA Today: Business Groups Oppose Any New Sanctions on Russia

New Republic: These Sanctions Against Russia Will Hurt

Forbes: U.S. Exports to Russia Rise Despite Tensions

The New York Times: Western Businesses in Russia, Watchful and Wary

The New York Times: Obama Steps Up Russia Sanctions in Ukraine Crisis

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Russia-Ukraine Crisis: Are Sanctions the Answer? appeared first on Law Street.

Between laptops, cellphones, tablets, and iPads, students have more access to technology than ever before, and this comes with numerous benefits — but it also comes with a lot of responsibility. Apps that allow anonymous users, such as the social networking app Yik Yak, are accused of creating more harm than good. Do these anonymous apps make cyberbullying easier?

What is Yik Yak?

Yik Yak was founded by two Kappa Alpha fraternity brothers, Brooks Buffington and Tyler Droll, at Furman University. The app was first released November 7, 2013. Yik Yak allows users to anonymously post to a community bulletin board, much like an anonymous college Twitter feed. Posts are text only and limited to 200 characters. The catch is that posts can only be read by those within a 1.5-mile radius of the person who posted. Users can reply to posts and then vote — an upvote expresses approval and a downvote conveys the opposite. Eventually posts with enough downvotes will disappear from the feed altogether.

Yik Yak is the first app to allow hyperlocal communication while retaining user privacy. The app claims the only information they will ever require is a user’s location. Yik Yak is used for telling jokes, sharing events, providing commentary, and relaying funny sightings. It initially gained popularity on Southern campuses and has spread by word of mouth to 250 campuses nationwide. According to Business Insider, the app is used by nearly 80 percent of the student body at smaller schools. The founders’ goal is to create a local community that keeps everyone, rather than just a select few, informed. In an interview with the Boston Globe, Droll said:

“We saw on our college campus that only a few people really had a voice. They’re the people with big Twitter accounts, maybe student athletes, who had thousands of followers. My thought was why can’t everyone have this power?”

While founders liken it to a campus bulletin board, critics contend that the app is more like a bathroom stall door where vicious rumors are spread. On June 30, 2014, Yik Yak got a huge boost in the form of a $10 million investment from DCM, Azure Capital Partners, and others. The funding will be used to hire new employees, improve the app on Android and iOS, and increase marketing efforts. Other investors have been wary due to concerns that the app does more harm than good.

So what’s the problem with Yik Yak?

The majority of messages on the site are positive; however, the ones that are hurtful can be horrific. Cruel comments spread quickly, even if the post is eventually removed. While the app was intended for college students, it has naturally spread to younger teens who use it to bully and spread rumors. Yik Yak does not require any potentially identifying information to sign up, including any pseudonym or avatar, and there is no way for users to see a thread of someone’s past yaks. Many users simply think what they post on the app is untraceable. Other similar apps, such as “Whisper” and “Secret” share anonymous posts with other users and have the potential for abuse. However, Yik Yak has more downloads than both of these apps combined and typically hits schools like a hurricane — even after one day of popularity, the app’s damage is done.

Yik Yak posts community guidelines, but the nature of the site makes it difficult to consistently and immediately enforce these rules. Following abuse of the app by younger teens, Yik Yak moved to ensure the app is only used by those 17 years and older. According to Yik Yak, users agree not to:

• “Transmit any pornographic, obscene, offensive, threatening, harassing, libelous, hate-oriented, harmful, defamatory, racist, illegal, or otherwise objectionable material or content;”
• “Transmit or encourage the transmission of unlawful, harassing, libelous, abusive, threatening, harmful, vulgar, obscene, or otherwise objectionable material of any kind or nature”

Ultimately, it is users who are left to police the app. Users can flag negative posts that they deem offensive. If two or more users flag a post, it is removed from the site. Alternately, users can send a picture of an offensive post to Yik Yak, and it will immediately be removed. Posts which contain names or phone numbers are removed. Yik Yak can terminate accounts of those who violate the terms and conditions, but not before the damage is done. Watch some of the controversy surrounding the app below:

How has the app been abused?

Most abuse of the app has come from high school students, but college students are guilty too.

Rumors

New York Magazine chronicled the rapid spread of Yik Yak at Staples High School in Westport, Connecticut. Nasty comments forced many students to leave school in tears. No one was safe from the anonymous racist, homophobic, sexist messages that spread through the school in hours.  A sampling of the tamer posts includes comments like the following: “The fact that O.P has diabetes makes me happy;” “Nobody is taking H. to prom because nobody has a forklift;” “S.D. + 10 years = trailer park;” and “J.N. is a fag.”

Criminal Activity

The disruption at Staples High School was not an isolated incident. Marblehead High School in Massachusetts was twice evacuated due to bomb threats posted on Yik Yak. Students in California and Alabama have already been charged for making terroristic threats via Yik Yak. Users think they are completely anonymous.; however, authorities can track the address of the user and obtain their cell phone number from Yik Yak when necessary. While criminal posts are investigated, the everyday, hurtful posts are not. Watch some of the issues with Yik Yak below:

Offensive Jokes

Most recently, the app has been used by Wall Street interns to bash Goldman Sachs. Some of the posts are funny and innocent, “Goldman interns wear sandals with socks” and “GS interns eat lunchables.” However, other posts are more offensive: “God hates fags and GS interns.”

What is being done to address cyberbullying on Yik Yak?

Bullies once used the playground. Now, cell phones can taunt from afar, and apps are the new breeding ground for bullying. Cyberbullying is defined as harassing or making fun of someone online or while using a cell phone or other electronic device. According to the Cyberbullying Research Center, roughly 25 percent of high school and middle school students report being cyberbullied at some point. Seventy percent of students report frequently seeing bullying online. Bullying can have extreme consequences, including low self-esteem, suicidal thoughts, anger, frustration, withdrawal, and antisocial behavior. And It does not end at high school — almost 20 percent of college students report being cyberbullied in their college careers. The disguise of anonymity on online apps makes it significantly easier for bullies to feel free to say anything they want without repercussions. Listen below to some of the bullying on Yik Yak at Boston College:

Yik Yak’s founders claim they did not expect the app to be so popular with younger users who are more likely to cyberbully. The pair do not believe high schoolers are psychologically ready for the app and have taken measures to limit use by younger teens. Technically, users must be 17 and over, but most teens ignore the restriction. School districts in Chicago faced significant problems with the app, leading Yik Yak to remove it from the Chicago area for a short time. Some Chicago school districts even sent letters home to parents about the growing problem.

Yik Yak now geo-fences high school and middle schools through a third party. The app uses GPS to detect when a user is inside a school building and will prevent anyone from posting from that location. Restricted service is in place at approximately 130,000 schools across the country.  While access may be prevented at school, students can still go home and post on Yik Yak.

What more can be done?

The anonymity of apps like Yik Yak make it extremely difficult for schools or anyone else to crack down on inappropriate use. Schools may be able to monitor social media accounts and discipline harmful behavior, but Yik Yak allows users to remain completely anonymous. When used responsibly, Yik Yak maintains that “anonymity is a beautiful thing.” There are no repercussions for mean posts, but vicious rumors spread faster than they can be taken down.

The App’s Responsibility

At some level, the app must take appropriate measures to ensure it is not being used in a harmful manner. Yik Yak declares it is not responsible for offensive or objectionable content. Further, Yik Yak relies on its users to monitor content. The app could take more responsibility by using a filter and automatically flagging certain offensive words that would require further approval from administrators. The Yik Yak site declares it reserves the right to monitor disputes and disable accounts. Critics contend that Yik Yak should have the obligation rather than right to fulfill those roles. Many also argue for greater repercussions for the app’s rule violators.

Role of Parents

It is also unreasonable to expect an app to constantly monitor user-generated content. Parental involvement is necessary to monitor minors’ access to technology. Parents should strive to set guidelines, implement controls, and be knowledgeable about the technology their children are using. It is nearly impossible to monitor all of a child’s technology and social media activity. Instead, experts argue parents should have honest conversations about expectations and responsible behavior even on anonymous apps. By the time a child is in college, there is little more a parent can do to try to prevent bullying. Watch what parents need to know below:

Conclusion

Ultimately an app like Yik Yak is only part of the problem. Dozens of apps like Whisper, Snapchat, Vine, ask.fm, and JuicyCampus have the potential for abuse and bullying. The elimination of Yik Yak would not stop cyberbullying altogether. Students must be educated about the effects of cyberbullying and make the decision to behave responsibly despite the lure of anonymity.

Resources

Primary

Yik Yak: App

Cyberbullying Research Center: Home

Sage: Cyberbullying in College

Additional

Business Insider: Yik Yak, a 7-Month-Old School Gossip App

Wall Street Journal: Yik Yak Raises $10 Million

New York Magazine: A Gossip App Brought My High School to a Halt

Venture Beat: Anonymous Messaging App Yik Yak Grabs $10M

Fox News: Psychiatrist’s View: Yik Yak is the Most Dangerous App I’ve Ever Seen

Huffington Post: Yik Yak Makers do the Right Thing

The Breeze JMU: Yik Yak is an Invasion of Privacy

Chicago Now: The Real Problems With Yik Yak

NY Daily News: Student Monitoring: Cyberbullying Leads LA-area School District to Spy

Business Insider: Here’s What You Need to Know About Yik Yak

ACLU: Social Networking, Your Privacy Rights Explained

DISTIMO: Anonymous Sharing Apps

Chicago Tribune: Students Urged to Delete Controversial Social App

New York Magazine: NYU Students are Mocking Goldman Sachs Interns on Yik Yak

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Technology and the Bullying Epidemic: The Case of Yik Yak appeared first on Law Street.

It is no secret that the United States has a deep love for sugar. In cereals, donuts, candy bars, and icy Coca-Cola, Americans cannot seem to get enough. When ex-New York City Mayor Michael Bloomberg tried to limit the sizes of soda, many were outraged. Critics of the law got their wish when the New York City limit was officially declared dead on June 26, 2014. Soda limits and sugar taxes are consistently struck down. Would a higher tax on soda be a smart move to treat the American sweet tooth and ever-growing obesity epidemic?

What is America’s problem with excess sugar?

Sugar is not necessarily a bad thing. The problem many Americans have is consumption of sugar in levels of extreme excess. High levels of sugar consumption contribute to obesity and diabetes. Often foods with high amounts of sugar are also high in empty calories and contribute to weight gain. More than two-thirds of American adults and nearly one-third of children and adolescents between ages six and 19 are overweight or obese. According to the San Mateo Health System, a child’s risk for obesity increases 60 percent with each additional daily serving of soda. Data from the New York City Health Board shows that sugary drinks make up 43 percent of added sugar in Americans’ diets. Further, the average American consumes 50 gallons of soda and sweetened beverages each year. The increase in portion sizes plays a role in this increased sugar intake. In 1974, the largest drink offered at McDonald’s was 21 ounces. This was long before the days of the SuperSize menu, which features a 42-ounce beverage. People are encouraged to get larger drink sizes because the per ounce cost of larger drinks is much cheaper than the smaller counterpart. Watch below for a clip from “Parks and Recreation” discussing ridiculous increases in soda size. Although it’s obviously fictional, it’s not far from the truth:

So what happened with soda in New York?

Popularly termed the “soda ban,” Bloomberg’s plan for New York was not actually a ban on soda, but a portion-cap rule. The law was initially passed by the city’s health board on September 13, 2012 to promote health and prevent obesity. The proposed rule banned the sale of sodas larger than 16 ounces in restaurants, delis, movie theaters, stadiums, and street carts. However, on June 26, 2014 the New York Court of Appeals struck down New York City’s cap. The Court stated that the the city’s health department had overstepped its bounds by making policy rather than simply dealing with health regulations. Watch a discussion of the law below:

What were the problems with the soda limit?

Exemptions

Critics claim that the New York City law treated restaurants and small businesses unfairly, especially since grocery and convenience stores would be exempt from the 16-ounce limit. 7-Eleven’s Big Gulp would be completely unaffected by the law. Many local small-restaurant owners felt their businesses would be harmed by selling smaller beverages when consumers could go to convenience stores to get much larger sodas if they so desired.

Debatable Effect

Because many stores would be exempt from the size-limit, some wondered if the limit would have any effect at all. Further, the ban would be easy to circumvent since people could still buy two 16-ounce sodas if they really wanted more soda. However, when faced with the choice, many consumers would simply go for the default option rather than buy two individual sodas. Limiting the size of soda also reverses the typical incentive of buying a larger soda to get more bang for the buck. Without a limit, larger soda is cheaper per ounce. With a size limit in place, buying two sodas to get the same quantity as before becomes more expensive.

Soda Marketing

The American Beverage Association and National Restaurant Association led the fight against the New York City restriction. The lobbying groups spent millions on their campaign and even created the New Yorkers for Beverage Choice coalition to coordinate public relation efforts. The American Beverage Association spent $12.8 million in 2010 alone on lobbying at the New York state level to protect soda from restrictions. The bad publicity for sugar and soda itself has led to a decline in soda sales over the last decade. Soda marketers still spend $500 million each year to reach children and adolescents with messages about sugary products — more than is spent marketing any other product. Given the amount of money spent, soda marketers were obviously unhappy with the proposed ban. Obesity has many contributing factors, so soda companies feel they are constantly unfairly singled out for sugar content.

Individual Liberty

Many take issue with the soda limit simply on a basis of individual liberty and the city acting too paternalistic toward consumers. People should be given the freedom to make decisions on their own. The argument is made that the city should instead be focused on health education to allow consumers to make educated decisions when eating. The desire to have a healthy society should not outweigh individual freedom. Once a city starts to regulate soda quantities for health reasons, some worry regulation will spread to other foods or sectors.

Would more tax of soda be effective?

It is hard to say. Twenty-three states currently tax soda at the normal sales tax rate. Only four states (Arkansas, Tennessee, Virginia, and West Virginia) levy an excise tax on soda at the wholesale level. However, the revenue generated is not used for obesity prevention, and Arkansas and West Virginia still have some of the highest obesity rates in the country. In recent years some states, like Illinois and California, have proposed an excise tax on sodas. For example, Illinois proposed a tax of a penny per ounce on all bottled sugar-sweetened beverages. This would mean consumers pay an additional $2.88 per case of soda. Such proposals have been met with swift defeat by heavy lobbying by the beverage industry.

Tax stigmatizes sugary beverages and increases their expense. The Congressional Budget Office estimates that a 3-cent tax on sugary drinks would generate $24 billion over four years. A 2009 “Perspective” piece in the New England Journal of Medicine says that a one-cent excise tax on soda would reduce consumption by 10 percent. A study by the academic journal Health Affairs showed that a one-cent tax per ounce of soda could prevent 2.4 million cases of diabetes and 8,000 strokes over 10 years. Some European countries have taxes on sugar as part of austerity measures. In January 2012, France instituted a tax on soda of about six Euro cents per liter on sugary drinks, which is expected to raise $156 million a year in government revenue. Listen for discussion of soda tax below:

Another proposal is to ban or tax the use of food stamps to buy soda. Currently a sales tax is not levied on food, including soda, bought with the Supplemental Nutrition Assistance Program (SNAP). A study by Health Affairs showed that a ban on the use of food stamps to buy soda could prevent 130,000 kids from becoming obese and 240,000 adults from developing Type-Two Diabetes. The money generated by these taxes could then be used to fund healthcare initiatives, including childhood nutrition and obesity prevention.

Many economists say that taxing soda, as is done with cigarettes or alcohol, would be more effective than the New York City-style limit. However, the effectiveness of a tax largely depends on consumer behavior and on finding the specific price point at which a tax is effective. When faced with a relatively small tax, consumers may not change their buying patterns at all. Alternately, consumers could shift their behavior to drink other sugary beverages that are not taxed. Or consumers may start drinking diet beverages and then get a sugar fix from other foods. Other studies show that a tax would have little impact on the actual weight of consumers.

What else is being done?

Aside from taxing or limiting the size of sodas sold, few initiatives garner public support. In California, a measure to slap warning labels on sodas regarding the effects of over-consumption of sugar was defeated in committee. Other advocates urge the Food and Drug Administration (FDA) to take action rather than allow states to make their own laws. They say the FDA should place a federal limit on the amount of sugar allowed in drinks on the market. However, it is difficult to push for sugar limits in sodas if similar limits do not exist for other sugar-laden products like cereal or baked goods. Some states banned sodas in public schools in an effort to combat childhood obesity. However, studies show that these students then replaced soda with other sugary drinks and drank them at the same frequency as their peers who were allowed to buy soda. More recently, Coke and Pepsi are trying to bring consumers back by creating smaller drinks. The beverage companies rolled out 7.5-ounce mini-cans in an effort to meet consumer-demand for portion control. While the government seeks to improve public health through limiting sugary drinks, many consumers simply want to be able to make choices on their own.

Resources

Primary

CDC: Obesity Facts

OLR Research Report: Taxes on Soft Drinks or Candy

County of San Mateo: A Soda Tax Could Stop Us from Pouring on the Pounds

Additional 

ABC: Drink Up, NYC: Ban on Big Sodas Canned

New Yorker: Downsizing Supersize

THV 11: Food Stamp Soda Ban

WFMZ: Food Stamp Soda Ban Could Help Prevent Obesity

Time: Goodbye, Big Soda: New York Becomes First City to Ban Large-Sized Soft Drinks

Verdict: The Soda Ban or the Portion Cap Rule?

Time: Soda Wars Bubble Up Across the Country

University of Pennsylvania: Taxing Caloric Sweetened Beverages

Time: Sugary Drinks in California Could Come with Warning Label

Illinois Policy: Does Illinois Need Soda Taxes and Soda Permits?

Illinois Policy: Does Illinois Need Soda Taxes and Soda Permits?

Center for Science in the Public Interest: Soda Industry Ups Political Spending

BNA: Extras on Excise: Debate over Soft Drink Tax

Atlantic: Should Food Stamps Buy Soda?

—

Alexandra Stembaugh is a senior at the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

Featured image courtesy of [Vox Efx via Flickr]

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Why Are Limits on Soda Fizzing Out? appeared first on Law Street.

In recent years, an increasing number of parents decided not to vaccinate their children for a number of diseases. Vaccinations are largely heralded as one of the most effective instruments for public health. Measles, declared eliminated in the United States in 2000, is now back in full force primarily due to lack of vaccination. Here’s what you need to know about the controversy surrounding vaccines, preventable diseases, and what more can be done.

Why are we worried about measles?

It’s true, those pesky measles are back. That contagious respiratory disease characterized by a fever, runny nose, cough, and itchy rash is once more making its way through towns in the United States. Most cases result from foreigners traveling to the United States infecting those who are not vaccinated. In the decade before the measles vaccine was introduced, the Centers for Disease Control and Prevention (CDC) reported an estimated 3 to 4 million people contracted measles each year. The disease caused many cases of chronic disability, hospitalization, and even death. Before the vaccine, the virus affected more than 95 percent of children. Measles kill approximately one in every 1000 cases. About 30 percent of cases develop further complications, including pneumonia, ear infections, or diarrhea. The vaccine for measles, commonly known as the vaccine for Measles Mumps and Rubella (MMR) was introduced in 1967. Following a large measles outbreak from 1989 to 1991, Congress instituted the Vaccines for Children Program to increase vaccination rates. Following, cases of measles rapidly fell. The recent return of measles has largely been blamed on the anti-vaccination movement. Watch below for an overview of the benefits of vaccines:

Why don’t parents want to vaccinate their kids?

Parents are hesitant to trust the government or pharmaceutical companies and have a number of concerns in allowing their children to be vaccinated. The anti-vaccination push began following a 1998 study by researcher Andrew Wakefield in the British journal, The Lancet. The study declared a link between the MMR vaccine and autism. However, the article has since been widely discredited in the scientific community due to conflicts of interest and manipulated evidence. The paper was retracted in 2010 and Wakefield lost his medical license. Despite the following events, many parents are still concerned that the MMR vaccine will cause autism. Watch below for some debate of the study:

Beyond this, the anti-vaccine movement has continued to gain traction for a variety of reasons:

Celebrity Support

Actress, model, and “The View” host Jenny McCarthy has been a vocal opponent of vaccination. McCarthy claims the vaccines have toxins that are generally unsafe, especially as the amount of required vaccines has increased. Scientists point out that vaccines contain a much less amount of toxins than other foods. Other opponents of vaccination include actor Aidan Quinn, who connects his daughter’s autism with the MMR vaccine, and reality star Kristin Cavallari, who opposes the vaccination of her children. Listen to Jenny McCarthy discuss autism and vaccination:

“Vaccine Load”

Some parents are worried about vaccine load, where the child’s immune system may not be able to handle multiple shots at one time. Children now receive up to 28 shots by age 2. Several studies show receiving multiple vaccines on the same day is not associated with increased chances of autism. Further, while the number of vaccines given to children has increased in recent years, the amount of main ingredients in vaccines has decreased. Worries of vaccine load mean many children are not vaccinated in a timely manner. The claim is also made that vaccines cause a permanently depressed immune system. Instead of vaccination, children should be allowed to build up natural immunity over time.

Mercury

Concerned parents cite the mercury-based preservative thimerosal in vaccinations as a cause of potential brain damage. Government officials have deemed thimerosal safe and found no evidence of harm. However, by taking the voluntary precaution to phase the compound out of vaccinations in 1999, the CDC instilled a greater fear of vaccinations.

Religion

Others object to vaccination solely on a religious basis. They claim vaccination interferes with natural law and God’s plan. Others believe the body is sacred and should not receive certain chemicals, blood, and tissue from animals.

Don’t parents have to vaccinate their kids?

In most cases, for a child to attend public school they must have certain vaccinations. However, some states allow exemptions for those with religious or even philosophical opposition to vaccinations. Private schools do not have the same mandate as public schools. Therefore,private schools vaccination rates are as low as 20 percent. The vast majority of parents vaccinate. According to USA Today, vaccination rates for all diseases are about 90 percent, and fewer than one percent  of Americans forgo all vaccinations. However, exemption rates from 2006 to 2011 doubled. Since states have different policies, vaccination rates are not geographically uniform. This leads to outbreaks only in specific areas.

All states allow vaccination exemptions for medical reasons. Nineteen states allow philosophical exemptions for vaccinations. In states with philosophical exemptions like Idaho, Michigan, and Vermont, more than 4.5 percent of kindergarteners last year were unvaccinated for non-medical reasons. These rates are four times the national average and are potential hotspots for outbreaks. Mississippi and West Virginia are the only states to not allow religious exemptions.  So far,  those states have not seen any disease outbreaks. A federal judge recently upheld a New York City policy that unvaccinated students are not allowed to attend school when another student has a vaccine-preventable illness. Ultimately the right to forgo vaccination for religious reasons doesn’t trump the fear that unvaccinated students may contract and spread the disease.

Until 2011, parents in Washington could opt out of vaccinating children simply by signing a form. This system meant up to a quarter of kids in some counties opted out of vaccinations. States that allow non-medical exemptions have seen more parents forgo their children’s vaccines. From 2000 to 2010, non-medical exemptions in California tripled. Watch for a description of a recent measles outbreak:

Has lack of vaccination led to more cases of disease?

The overwhelming majority of current measles infections occur in unvaccinated people. From the beginning of 2014 to June 20, 2014, the CDC declared 514 cases of measles and approximately 16 outbreaks, the most since 1996. Half of these casesare adults age 20 and over. Following a widespread measles outbreak in San Diego in 2008, roughly one in five children were not vaccinated against the disease. Even last year in California, USA Today reported 14,921 children were not vaccinated for philosophical reasons. In Colorado four percent of kindergarteners did not have shots for non-medical reasons. Watch below for information on the recent measles outbreak:

Another vaccine-preventable disease, pertussis, or whooping cough, increased considerably in recent years. In 2012, a fifty-year high of almost 50,000 cases of whooping cough were reported, a stark contrast from the 1980s and early 1990s when rates hovered around 5,000. Through June 16, 2014, almost 10,000 cases of whooping cough were reported, which is a 24 percent increase when compared with the same period in 2013. This is attributed to the anti-vaccination movement as well as weakened antibodies which wane as a person ages.

Should I be worried?

If you are vaccinated and your shots are up to date, probably not. The most vulnerable are infants who are too young to be vaccinated and the elderly who may not have proper boosters. The effects of vaccination deteriorate over time, so adults who have not gotten booster shots can still contract the disease from an unvaccinated person. Unvaccinated people may not even know if they are carrying a disease like measles, but they can still contagious before any symptoms arrive. A recent case study of an individual dubbed “Measles Mary” has even shown it is possible for a vaccinated person to contract measles and then unwittingly pass the disease on to others.

A recent study by the CDC showed routine childhood vaccinations given between 1994 and 2013 will save 732,000 lives while preventing 322 million cases of illness and 21 million hospitalizations over the course of the children’s lifetimes. According to the Washington Post, every $1 spent on vaccines provides $10 benefit to society.

Medical experts agree proper vaccination is extremely important. Having more people vaccinated makes it less likely that anyone in the community will get a disease, a phenomenon known as “herd immunity.” Aiming for vaccination rates higher than 90 percent can help protect the most vulnerable, especially infants who are too young to be vaccinated. Most officials think the best strategy to increase vaccination is a tireless public education campaign to dispel rumors regarding the danger of vaccines. Watch a video below aimed at educating parents:

 Resources

Primary

CDC: Measles Cases and Outbreaks

CDC: Pertussis Outbreak Trends

CDC: Benefits from Immunization During the VCP Era

CDC: Highest Number of U.S. Measles Cases Since 2000

CDC: Measles Vaccination

FDA: Thimerosal in Vaccines

Additional

USA Today: Anti-Vaccine Movement is Giving Diseases a 2nd Life

Newsweek: Anti-Vaccination Movement Strikes Out in Bible Belt States

Washington Post: How the Anti-Vaccine Movement is Endangering Lives

Time: Parents not Vaccinating Kids Contributed to Whooping Cough

Week: The Worrying Rise of the Anti-Vaccination Movement

National Vaccine Information Center: State Law and Vaccine Requirements

Washington Post: Measles Cases are Spreading, Despite High Vaccination Rates

Science: Measles Outbreak Traced to Fully Vaccinated Patient for the First Time

NCSL: Immunization Policy Issues Overview

The New York Times: Judge Upholds Policy Barring Unvaccinated Students

History of Vaccines: Cultural Perspectives on Vaccination

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The Anti-Vaccination Movement: Eradicated Diseases Making a Comeback appeared first on Law Street.

Immigration has long been a pressing issue in the United States. The debate has taken a new turn following a drastic increase in unaccompanied children from Central America trying to cross the border illegally. Current facilities for children are not equipped to handle this surge, and immigration courts are already backlogged. Why are children flocking to the United States in the first place, and what is the appropriate action for dealing with the crisis?

Who are illegal child migrants?

“Unaccompanied alien children,” who are generally defined as any unmarried person under 18 years of age illegally coming to the United States without an adult. The recent surge of child migrants from Guatemala, Honduras, and El Salvador has sparked major concern. Most of the children apprehended range from ages 14 to 17, but more recently the children are even younger. Kids coming to United States by themselves are a particular cause for concern since they are more vulnerable and susceptible to harm. Oftentimes, these children are trying to find family members that currently reside in the United States. Honduras’ President Juan Orlando Hernández described the children fleeing to the United States as war refugees, and the Obama administration has recently termed the escalating situation to be an “urgent humanitarian crisis.”

Where are the child migrants coming from?

Children from Guatemala, Honduras, and El Salvador account for more than 90 percent of those now in government shelters. Children from Mexico continue to illegally enter the United States, but apprehended children from Mexico are immediately returned to Mexico rather than housed in shelters. The problem now is how to shelter all the children coming from Central America. The graph below shows the scope of the growing problem in the past few years:

According to Border Patrol statistics and a UNHCR Report, the United States saw a 92 percent increase in child migrants ages 18 and under from a year ago, and a fivefold increase since 2011. In the 2011 fiscal year , roughly 4,059 kids from Guatemala, Honduras, and El Salvador entered the United States unaccompanied. By 2013 fiscal year, that number rose to 21,537 kids. This year, 52,000 children were apprehended at the southwest border from October 1, 2013 to June 15, 2014. The Obama administration anticipates that number to rise to 90,000 before the end of the fiscal year in September. Next year’s estimates show the number of children illegally entering the United States from Central America could soar to as much as 130,000. Last year, fewer than 2,000 of these children were returned to their home countries.

Why are they coming?

A variety of factors contribute to children seeking to enter the United States, and debate surrounds exactly what has driven the children to cross the border.

Violence

Many say civil unrest and gang activity; drug-fueled violence in Central America has led to an influx of children coming to the United States. Parents may feel that the children are not safe at home, more likely to join gangs, or  be subjected to violence. Others have family already in the United States that they are trying to reach. When interviewed, many children cited violence as reasons for leaving their country rather than any knowledge of U.S. immigration policy.

Lax Immigration Policy

Others, including Congressman Bob Goodlatte and House Speaker John Boehner, say that children are coming with the belief that the United States will not push deportation. Some interview-based studies cite that many women who entered the country with children believed the law would allow them to secure a “permiso”, or pass to stay in the county indefinitely. Conservatives blame the 2012 Deferred Action on Childhood Arrivals Policy (DACA), which exempts many undocumented immigrants brought to the country as children from deportation for two-year renewable periods. Recently the White House is trying to make clear that children who have recently crossed the border illegally are not eligible for legal status under the DACA program, since it only applies to immigrants who arrived in 2007 or earlier. Immigrants would not even qualify for the Senate’s recent immigration plan, where the eligibility cutoff was the end of 2011. On June 20, 2014, Vice-President Joe Biden traveled to Guatemala to meet with Central American governmental leaders in an effort to secure their support in dispelling rumors that those who cross the U.S. border illegally would not be deported. Whether or not immigrants are influenced by DACA remains contested, but there is little dispute that those in Central America believe unaccompanied children are more likely to be allowed to stay in the United States.

What does the United States do with the children?

Border officials are overwhelmed since the United States lacks appropriate facilities for the surge of children being apprehended. Children crossing the border are treated differently than adults and are not placed in immigration detention, but in shelters. The laws for processing unaccompanied, illegal children differ from those of adults due to the 2002 Homeland Security Act and the 2008 Trafficking Victims Protection Reauthorization Act. The Act was designed to protect children and address concerns involving human trafficking for vulnerable, unaccompanied children. All unaccompanied child migrants not from Mexico have to be screened, housed, and then transferred to the care of the Office of Refugee Resettlement (ORR) under the Department of Health and Human Services (HHS).

Border facilities have been struggling to supply enough food, beds, and sanitary facilities for the incoming children. Watch the strain on these facilities below:

By law, children can only be held at border facilities for 72 hours before they are transferred to the care of ORR. Due to the recent surge, many children have been held for longer than 72 hours. Border officials are caring for the children rather than spending time apprehending those crossing the border. Many agree the situation is far from ideal. Various reports of abuse in the system have surfaced, and children complain of being denied medical care or being kept in ice-cold holding cells.

ORR is tasked with administering long-term shelters and finding relatives of the children in the United States. Roughly 100 permanent shelters exist and all are currently filled to capacity. Authorities have been forced to open three temporary shelters at military bases in Texas, Oklahoma, and California (CNN). According to Vox, for some 90 percent of children, a relative can be found. Others remain in long-term care or foster homes until their case works its way through the immigration courts. It is possible some of the children could qualify for asylum or some sort of humanitarian protection. However, the minors lack legal representation which would help them obtain such protection, since unaccompanied children are not granted counsel in court proceedings. Many of the released children fail to even show up for their court date. The Department of Homeland Security released a helpful infographic to convey the entire process.

What has the United States done to deal with the problem?

The United States now faces two major issues:

1. What to do with the thousands of children who are need to be sheltered?
2. What to do to stem the future tide of unaccompanied child migrants from Central America?

Solution to the Current Problem

Aside from creating more temporary shelters, President Obama has called for a response through a new Unified Coordination Group. The Group was created to leverage federal resources to provide humanitarian relief using branches of the Department of Human Services and the Federal Emergency Management Agency (FEMA). The President announced a “surge” of immigration officials at the border and sent more immigration judges to Texas to help with backlogged cases.

Preventing future problems

The more difficult issue is how to prevent an influx of children going forward. Biden’s meeting in Guatemala was aimed at preventing false rumors about U.S. immigration policy to make clear that children crossing the border illegally will be deported. Watch for more on Biden’s visit below:

The United States also plans to aid Central American countries to prevent drugs, gangs, and violence while improving security. So far, the United States has announced over $80 million in aid to Guatemala, Honduras, and El Salvador. Legislation providing $2.28 billion in funds to handle the food, housing, and transportation of illegal children has advanced in Congress – an increase of $1.4 billion from the Obama administration’s original funding request.

Are there any other solutions?

If billions of dollars are provided to federal agencies and more immigration judges are sent to the Southwest, it is likely to reduce the strain of the current crisis. Some still call for stronger legislation regarding child immigration, but it would be difficult to pass a law specifically hard on children. Others in Central America shift the blame to the United States for lax drug policy which fuels the drug trade and generates violence. Some, such as Department of Homeland Security Secretary Jeh Johnson, suggest the United States should launch a campaign in Central America to warn of the dangers of illegal immigration. The problem, as with any refugee situation, is that such campaigns have little effect if the dangers children are trying to evade are much greater than any posed by the United States. Providing aid to Central American countries to assist with safety, security, and aid for at-risk youth all provide a good starting place. However, the United States must first resolve what to do with all of the children already in the country.

Resources

Primary

State Department: Trafficking Victims Protection Reauthorization Act of 2008

White House: Unaccompanied Children from Central America

US Customs and Border Protections: Southwest Border Unaccompanied Alien Children

Additional

The New York Times: As Child Migrants Flood to Border, U.S. Presses Latin America to Act

Vox: Thousands of Children are Fleeing Central America to Texas – Alone

UNHCR: Children on the Run: UNHCR Report

Mother Jones: Why are More and More Children Walking Across the Border?

US News: Obama Calls Spike in Unaccompanied Children Crossing the Border

LA Times: Enforcement Alone Can’t Stop Surge in Child Migrants

CBS: Thousands of Illegal Immigrant Children Will be able to Attend Public Schools

KIND: A Treacherous Journey: Child Migrants Navigating the U.S. Immigration System

CNN: Daniel’s Journey: How Thousands of Children are Creating a Crisis in America

Huffington Post: These are the Real Reasons Behind our Humanitarian Crisis

AP: Obama: Child Migrants ‘Urgent Humanitarian Issue’

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The New Immigration Crisis: Children Crossing the Border appeared first on Law Street.

On March 26, 2014, Peter Sung Ohr, a regional director for the National Labor Relations Board (NLRB), issued a landmark ruling that football players at Northwestern University are allowed to form a union. The college sports world erupted. Naturally, Northwestern immediately challenged the ruling. In the meantime, the case leaves players and universities with more questions than answers. Some athletes want unions, universities and the National Collegiate Athletic Association (NCAA) are fighting back, and fans are wondering if this will impact their BCS Bowl viewing parties. What exactly does this all mean, and are we slowly inching toward paying college athletes?

What is the case for unions?

Ohr’s ruling cites several important factors as reasons football players at Northwestern should be treated as university employees and therefore, allowed to unionize:

1. The football players are not primarily students. Players typically spend 40 to 50 hours per week playing football, which is more time than most people spend at a full-time job. This is also more time than the players spend on academics. Some players make the argument that the intense football schedule means practices interfere with schoolwork and limits their ability to take certain courses.
2. Northwestern has significant control over its players similar to the control employers exert over their workers. Scholarship recipients sign a tender which outlines the conditions of their scholarship. The agreement stipulates players’ behavior, requires housing leases be approved by a coach, and even states a player must accept a coach’s friend request on social media. Additionally, players must sign away rights to their image and likeness.
3. The University recruits players chiefly on the basis of football ability. When scouting a player, academic skills are secondary to football, showing that the primary duty of a scholarship recipient is not to study, but to play football.

Listen to a more in-depth explanation of the ruling below:

What do the players actually want?

The College Athletes Players Union (CAPA) is the formal entity created to represent Northwestern’s players in a union. CAPA was formed by former college athletes, including former Northwestern quarterback Kain Colter, as an offshoot of the National College Players Association (NCPA), an advocacy group. Rather than fighting for pay, the union is about giving college athletes a seat at the negotiating table. The NCPA outlines 11 goals which are shared by CAPA and Northwestern’s players in their “Blueprint for Change”:

1. Minimize athletes’ risk to brain trauma by reducing contact practices, providing concussion experts, and funding research.
2. Raise the scholarship amount so a “full scholarship” will cover the actual cost of attendance, including incidentals and travel home.
3. Ensure players do not pay sports-related medical expenses out of pocket.
4. Increase graduation rates by reducing games that take place during the week and investing more in education.
5. Give students a non-athletic scholarship to continue their education if their athletic scholarship is eliminated.
6. Prevent universities from eliminating the scholarship of an athlete who suffered a permanent injury from the sport.
7. Enforce uniform safety guidelines to prevent injuries.
8. Eliminate restrictions on legitimate employment for student-athletes. Right now, athletes are not allowed to make any money for any reason.
9. Prohibit punishment of athletes who have not committed a violation. Currently, NCAA sanctions can punish entire programs for years.
10. Guarantee an athletic release from universities if athletes want to transfer schools.
11. Allow all college athletes to transfer schools once without punishment.

What is not included (yet) — any desire for a pay-for-play program.

 What would a union look like for players?

On April 25, 2014, football players at Northwestern made history by becoming the first collegiate athletes to vote on forming a union. However, the votes are impounded until Northwestern’s appeal to the NLRB is decided, which could take months or even years. The votes cast by Northwestern’s players will only be opened if the board sides with the players. Smart money says the 5-member, labor-friendly board will uphold Ohr’s decision that football players are employees. If the board upholds the decision, the mere right to vote on a union is a victory for Northwestern’s football players. It is likely by the time the case is ultimately decided, the players who voted will no longer be at Northwestern. But if the players voted against forming a union, they would still be considered employees even if the union movement at Northwestern would temporarily end. If the players voted for a union, the University would be forced to bargain with CAPA or force further appeals.

More importantly are the implications for the University at the NCAA. At this point, the union is not asking for a pay-for-play, but unions could be the first step down that road. Furthermore, if football players are treated as employees, they could be subject to tax on their scholarships.

What would a union mean for universities?

Most importantly, a union would mean Northwestern would have to negotiate with players and meet more of their demands. Northwestern strongly urged its students to vote against forming a union. Northwestern’s Vice President for University Relations Alan Cubbage issued a statement saying, “Northwestern believes strongly that our student-athletes are not employees, but students. Unionization and collective bargaining are not the appropriate methods to address the concerns raised by student-athletes.” Team officials see a union as transferring the players’ trust to a third party which may not have the players’ best interests in mind. They argue a union would create an “us versus them” mentality and create unnecessary tension for the team.

The NLRB ruling applies solely to private schools, only a handful of which (Stanford, USC, Notre Dame, Vanderbilt, Duke, Miami) have big-name athletic programs. The law currently exempts public schools from NLRB jurisdiction, but public universities should be concerned if state labor boards decide to follow the lead of NLRB. The push from Northwestern’s players alone may make colleges consider greater dialogue with players in regard to health, safety, and full-cost scholarships. Simply by filing, the players have made athletic departments across the country more concerned that their players be treated fairly.

If upheld, the ruling will pose interesting questions to universities. If scholarship football players are considered employees, are other university athletes also considered employees? Would students on a musical or academic scholarship be considered employees? Would this have any Title IX implications for gender equality? Will the presence of athletic unions at private schools make their programs more desirable and destroy the NCAA’s competitive balance?

Why is the NCAA opposed?

The NCAA has long insisted that players are “student-athletes” who are foremost students, which is strongly at odds with the notion that student-athletes are employees. NCAA officials are quick to point out that 99 percent of college athletes will never play professional sports.The NCAA has created a system which has helped millions go to college, and they do not want to see this system thrown away. A primary concern is that allowing unions is a first step toward greater benefits for athletes, including pay. In 2012, the NCAA reported $872 million in revenue. Many players see their lack of receiving any of this compensation as exploitation. Below is a clip from NCAA’s President Mark Emmert discussing the impact of unionization:

Would unions change college sports?

Unions may be a big first step toward long-term change, but allowing unions themselves will not revolutionize the college sports’ world. Athletes will still take the field every Saturday and the NCAA will still make billions. A union will allow players to negotiate benefits on their own behalf. The ruling would make football players employees of the university, not of the NCAA, so there would not be any direct impact on any NCAA rules.

Currently, the NCAA is fighting a slew of lawsuits which pose greater threats to its future. Jeffrey Kessler and Ed O’Bannon have each brought a significant lawsuit:

• Kessler alleges the NCAA and 5 conferences are engaged in price-fixing for capping the compensation of athletes at the value of a scholarship and thus, violating antitrust laws. The intent is to strike-down rules that prevent college athletes from receiving a share of NCAA revenue and greater compensation.
• The O’Bannon case seeks licensing revenue from the NCAA for football and basketball players’ names, image, and likeness. The case could mean paying players for their jersey sales and for their use in video games.
  

  ---

Conclusion

Treating college athletes as employees means a fundamental shift in the negotiation rights provided to athletes. Whether or not the original NLRB ruling is upheld, universities and the NCAA will be forced to alter their own stance to ensure athletes do not feel that they are being exploited. Problems with college athletics will not disappear anytime soon, and major change is coming to the economic model of college sports.

Resources

Primary

College Athletes Players Association: Official website

Washington Law Review Association: The Myth of the Student-Athlete: The College Athlete as Employee

National Labor Relations Board: Decision in Northwestern University Athletes Case

Additional

SB Nation: Northwestern Players’ Union Votes are in: Now What?

CBS: Northwestern Players Start Union Movement in College Athletics

Washington Post: College Athletics Have Many Problems, But a Union is the Wrong Way to Try to Fix Them

Pittsburgh Post-Gazette: College Athletes Union Raises Tax, Discrimination Questions

ESPN: NU Players Cast Historic Vote

NU Game Changers: 10 Point Blueprint for Change

Slate: Northwestern Football Players Just Voted on a Union

NPR: Northwestern Players Cast Union Vote–But Results Will Have to Wait

USA Today: A Simple Guide to the Biggest Thing Happening in College Sports: Northwestern Football Union’s Fight

National College Players’ Assciation: Mission & Goals

Post Game: Deeper Look at Northwestern Football, NCAA Union Issue

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post The Battle in College Sports: Northwestern Football and Unions appeared first on Law Street.

With barbed wire fences, armed-guard towers, extensive searching by guards, and locked rooms, prisons seem to be a place almost completely cut off from the world. Few would think marijuana, cocaine, heroin, and OxyContin are commonplace behind prison walls. The War on Drugs has led to nearly half of federal inmates being sentenced for drug crimes. If illegal drugs can easily be found behind bars in the most controlled of environments, what can be done to prevent substance abuse by inmates?

What are the statistics on drug use inside prisons?

Prisons seem to be the last place one would think to find drugs, yet prevalent gang activity and dependency on drugs has created a thriving black market. Drug use in prisons has become more relevant due to increasing calls for improved substance abuse treatment for inmates. According to CASA Columbia, 65 percent of inmates in 2010 met the criteria for substance abuse or addiction. Those who suffer from addiction and committed crimes relating to drugs or alcohol make up 85 percent of the nation’s prison population. A large segment of the prison population has been affected by drugs and alcohol prior to incarceration, but prison walls have not been a barrier to these substances.

Reliable statistics on drug use in prisons are difficult to attain. The frequency of drug testing is not standardized across facilities and can be random or can be issued with reasonable suspicion to specific inmates. Furthermore, prisoners have no reason to confess to using, and officials in prisons do not want to report unfavorable statistics. Technology has helped those behind bars to coordinate their drug trade while locked up. Cell phones allow inmates to track drugs via satellite and can even allow access to mobile banking. The prevalence of cell phones in prisons indicates the ease of obtaining contraband and the method for obtaining drugs.

The case of California

• Roughly 1,000 seizures of drugs are reported in California prisons each year.
• From 2006-2008, 44 of California’s inmates died from drug overdoses.
• From 2008-2009, California officers seized the highest amount of drugs in decades: 2,832 grams of marijuana and 92 grams of cocaine.
• In June 2013, 23 percent of California’s inmates tested positive for illegal substances and another 30 percent refused to be tested.
• In 2013, California alone confiscated over 12,000 cell phones from their prisons.
• More than 4,000 drug-related incidents were reported in California prisons in 2013.

These are far from the rates of drug usage outside of prison, but they still have strong implications. It is important to note that drug testing is often conducted by urine analysis, which will only detect drug use from the past several days. In contrast, testing hair can detect drug use from the past 90 days. In response to testing, drug use in prison often involves drugs that are harder to detect, such as heroin or prescription drugs.

How are drugs smuggled inside the prison?

From the Outside

Reports from the Washington Times and The Economist showed the limitless creativity exhibited by inmates to get contraband through extensive security. In some cases, drugs are thrown over prison walls in a ball or package. Some prisons do not scan all mail, so drugs can be delivered through mail and even on the backs of stamps. Oftentimes visitors may bring in drugs by “plugging” their body cavities or hiding drugs in a baby’s diaper. The drugs are then given to an inmate by way of a kiss, dropped in a shared can of soda, or food. Some inmates’ work detail, such as receiving deliveries, allow them greater privileges and more opportunities to bring in drugs.

From Staff

By the admission of those who work inside prisons, the most likely smuggling culprits are staff members themselves. Staff are searched before entering the facility but sometimes they are not as thoroughly searched as visitors. Staff have brought in drugs on their person or even hidden in their food. Some staff members do it for money to supplement their modest salary. Others are young and easily manipulated by seemingly friendly inmates. In April 2013, 13 correctional officers in Maryland were indicted for aiding the Black Guerrilla Family, a national prison gang thriving in Baltimore. The guards allegedly smuggled in cell phones, drugs, and other contraband on their person and in food. One indicted guard was reported to have made $3000-$5000 dollars a week for smuggling contraband to one inmate. Once guards are involved, drug use by inmates often goes overlooked.  ­­

The Market

Numerous inmates have verified drugs are as available in prisons as they are on the street, but not in the form of a cash market. Prisoners typically trade by using tobacco or items bought from commissary. Prisoners claim drugs inside a prison sell for more than 4 times the legal price outside prison walls. In an interview with The Fix, one anonymous prisoner claimed, “You can get whatever you want in here. Marijuana, heroin, whatever. They had oxy-80s on the pound for $160 each. It’s way more expensive than on the street, but if you got the money you can buy them… The sad thing about it all is, they lock you up for drugs and they can’t even keep the drugs out of the prison.” The shocking video below, made by inmates in Orleans Parish Prison, shows drugs, alcohol, guns, and gambling – all within prison walls:

What are the consequences of drug smuggling?

Consequences of drug smuggling vary. Drug use in prisons can pose security problems, escalate violence, lead to disputes regarding debts owed, and increase health and overdose concerns. Anyone bringing drugs into prison can be prosecuted, and inmates face write-ups and revoked privileges.

New York

In New York, if an inmate is caught with drugs or has tested positive, he is sent to solitary confinement for up to 3 months for his first offense. Prisoners in solitary are prohibited from any treatment programs they may have been in and those on the waiting list for treatment are removed from the list. Between 2005 and 2007, New York sentenced inmates to a collective 2,561 years in solitary from drug-related charges. Time in solitary confinement has negative emotional and physical consequences on inmates, who are potentially more vulnerable to using once they are released in the general population. These inmates are often sentenced to longer prison time with probation revoked or delayed and visiting privileges suspended.

California

Recently the California Department of Corrections and Rehabilitation proposed a plan where those who test positive for drug use will lose 90 days of pay from their work assignments, though inmates make only 8 to 32 cents per hour of work.

What do prisons do to treat drug addiction?

Access to Programs

Some inmates may not want substance abuse treatment. But for those who do, a 2011 report by the Government Accountability Office showed that while 31,803 inmates were enrolled in basic drug education programs, more than 51,000 inmates were on waiting lists for periods up to 3 months. Prison overcrowding, with federal prisons operating at 40 percent above capacity, has meant limited access to these programs. A 2010 CASA Columbia report showed only 11 percent of inmates with substance abuse and addiction disorders receive any treatment during their incarcerations.

Programs

Different facilities offer different programs to treat drug abuse. Federal inmates have access to residential programs, transitional programs, nonresidential programs, and drug education programs. Other treatment programs vary by state. Tight budgets have forced states such as Kansas and Pennsylvania to cut treatment programs inside prisons and instead divert offenders to less expensive treatment programs outside of prison. Some claim that prisons should be focused on punishment rather than rehabilitation. Others argue that prison is the best chance to treat those with substance abuse problems to help prevent future crimes, but oftentimes this opportunity goes unused.

Medical Treatment in Prison

Treating an addiction like heroin or opioids can require Methadone or Buprenorphine to help with withdrawal symptoms. However, a drug like Methadone requires strict regulation and is expensive for correctional facilities in the short run. Allowing Methadone in prisons means it may be  sold on the black market and could even lead to inmates robbing the dispensary. Only half of states provide these treatment drugs even though both are listed by the World Health Organization as drugs that should be available to prisoners at all times.

Cost Effectiveness

Human Rights Watch has reported that for every $1 spent on substance abuse programs, states save $2-$6 dollars in the long run from reduced recidivism rates. One study found that for each inmate who remained sober, employed, and crime-free, the United States would save $91,000 per year. There is a great demand for substance abuse rehabilitation programs which can lead to early release and save government money. Watch this video for more information on the benefit of substance abuse programs in prison:

What else can be done to prevent drug use in prisons?

Many consider the Pennsylvania plan to limit inmate access to illicit drugs among the most successful. The Pennsylvania Department of Corrections instituted a zero-tolerance policy after facing increasing drug usage in its prisons. The plan called for:

• Criminal prosecution of inmates caught with drugs
• Increased surveillance of inmates and visitors
• Increased visits by drug-detecting dogs
• Greater number of cell searches
• Improved technology in detection and scanning systems
• Random monitoring of phone calls
• Drug testing by hair rather than solely by urine analysis
• Revoked visiting privileges for offenders

In 1996, 7.8 percent of Pennsylvania inmates whose hair was tested showed illicit drug usage in the past 90 days. With the addition of the measures above, only 1.4 percent of inmates tested positive two years later. Along with the falling rates of drug use, assaults on inmates decreased 70 percent and assaults on staff decreased 57 percent.

Many states have looked to follow Pennsylvania’s example. However, many of the strategies in prisons are not replicated in more lax county jails. Furthermore, once inmates leave prisons, they enter less strict programs or probation where drugs are easy to obtain. Limiting drug use in prisons makes little sense if inmates do not have treatment and are overwhelmed by the availability of illegal drugs once they are no longer behind bars.

Critics have taken issue with the level of strictness required to eradicate drug use in prisons. Prisons could always be made worse. States could require inmates to spend more time locked in their rooms, have less free time in the yard, and have very closely-monitored visits. The question becomes at what cost should prisons seek to be drug-free. Many facilities simply do not have the staff to better supervise the amount of visits they receive. Accommodative visiting policies are aimed at making family visits easier since contact with family is integral to an inmate’s success after prison.

Balancing what prisons can actually achieve with their limited staff, funding, and how they can best keep contraband outside without completely dehumanizing inmates remains a complicated act. Stronger substance abuse programs may be necessary to prevent drug use, but completely eliminating the supply of drugs could be a game of hide and seek that will never end.

Resources

Primary

US Code 1791: Providing or Possessing Contraband in Prison

US Code 14052: Enhanced Penalties for Illegal Drug Use in Federal Prisons

NCJRS: Reducing Drug Use in Prisons: Pennsylvania’s Approach

Additional

Nation’s Health: Report Finds Most U.S. Inmates Suffer From Substance Abuse

CASA: Behind Bars II: Substance Abuse and America’s Prison Population

Economist: Drugs in Prisons: Supply and Remand

Washington Times: Drugs Inside Prison Walls

Newsweek: The Case for Treating Drug Addicts in Prison

Daily Beast: With Cigarettes Banned in Most Prisons, Gangs Shift

Hills Treatment Center: Drug Rehab Programs in Jail and Prison

Syracuse: Prison and Drugs: State Often Denies Help

USA Today: Prisoners Face Long Wait for Drug-Rehab Services

The Fix: Drug Treatment in Prison

Columbus Dispatch: Drug Use in Ohio’s Prisons Spiked

CBS: California Prisons Find 1 in 4 Inmates Used Drugs

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Why the War on Drugs Takes on a New Form Behind Bars appeared first on Law Street.

The once-thriving Motor City now stands as a collection of vacant lots, unused industrial sites, and abandoned homes–the poster child for the decline of the Rust Belt. Detroit’s population peaked in 1950 at 1.8 million but has since dropped to a mere 700,000. Poverty, crime, and unemployment plague the city. 911 response times hover around 58 minutes. Detroit’s residents blame the woes on corrupt mayors and years of mismanagement. The question is now how to move forward. The city is undergoing the painful bankruptcy process, but what will this mean for the future of Detroit?

How can a city declare bankruptcy?

Declaring bankruptcy is a last resort for any indebted entity. The case of a city going bankrupt is no different from a person: expenditures exceed revenue to a point that is beyond repair. Chapter 9 bankruptcy allows municipalities to declare bankruptcy, and in many ways it is similar to bankruptcy by a person or company. Unlike a company, however,  a city cannot be broken up and sold for its parts. Municipal bankruptcies are rare because 23 states do not allow cities to file for Chapter 9. Further, it is difficult for a city to convince courts it cannot pay debts since cities have the power to tax. When a city cannot repay its debts, it has to find new ways to negotiate and restructure its debt. Watch this video for greater explanation of Chapter 9 bankruptcy:

In 2011, Jefferson County, Ala. became the largest municipality to declare bankruptcy until it was surpassed by the city of Detroit declaring bankruptcy on July 18, 2013. Detroit’s liabilities have been estimated at a whopping $18 billion. Problems with poverty, crime, and blight still plague the city. A recent report claimed there were 84,641 vacant structures and lots in the city, all of which require significant money for the city to fix. Despite increases in recent cases, municipal bankruptcies are nothing new. There have been fewer than 700 cases since the Chapter 9 provision was added in 1937. What is unprecedented is the size of the cities now declaring bankruptcy.

There are four main criteria for Chapter 9 bankruptcy that must be proven in court:

1. The state must approve the city’s motion to file for bankruptcy.
2. The city must be insolvent.
3. The city must desire a plan to adjust its debts.
4. The city must attain an agreement with the majority of creditors or at least attempt to negotiate with creditors.
   

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How does bankruptcy impact the city?

Declaring bankruptcy allows a city to find ways to cut costs and increase revenue that would otherwise be off limits. Before the filing, Detroit’s hands were tied. The city had almost completely lost the ability to borrow due to its bad credit rating and had difficulty increasing tax revenue as its population plummeted. Municipal bankruptcy brings all affected parties to the table to negotiate while allowing a judge to preside. Unlike a person or business declaring bankruptcy, a municipality declaring bankruptcy gives courts a less active role in determining the restructuring plan. A court can only approve a plan set before them. Detroit’s bankruptcy has allowed the city to reduce pensions that would otherwise be protected under the state constitution, which is significant since nearly half of the city’s debt comes from pensions and retiree healthcare costs. Watch for some of the implications of municipal bankruptcy:

Beyond the physical effects on a city, declaring bankruptcy can have a significant psychological effect. People come to see the city as dysfunctional and problem-ridden, even if bankruptcy may prove more beneficial in the long run. This impacts the city’s population, attractiveness, and future ability to borrow.

Frank Shafroth, director of the Center for State and Local Government Leadership at George Mason University, recognizes the necessity of bankruptcy. “Everyone thinks it’s so terrible, but if a violent storm or flood or tornado happens, we understand something outside the control of politicians happened to the city. If you have a financial storm that does the same to a city, you have to find a way to recover to ensure that essential services are provided.”

What is Detroit’s restructuring plan?

On March 14, 2013, Michigan Governor Rick Snyder appointed bankruptcy lawyer Kevyn Orr as emergency manager of Detroit. On December 3, 2013, Detroit was determined legally eligible for bankruptcy. Listen to Orr discuss the process below:

Orr, in conjunction with various other groups, has outlined a plan to slash Detroit’s liabilities and increase future revenue, mainly through deep pension cuts and cuts to bond insurers. Thirty-two thousand people are entitled to a pension from the city, 22,000 of whom are retired. Another major problem addressed includes what to do with massive swaths of uninhabited land. The plan includes:

• A 4.5 percent cut to pensions of general retirees if they accept the plan, and a 27 percent cut if they reject the plan.
• Elimination of cost-of-living adjustments for the pensions of general retirees and a lesser cost-of-living adjustment for police and fire department retirees.
• Up to 20 percent repayment from employees who received excess interest.
• Providing $1.25 billion over ten years to improve safety and remove blight.
• Paying 74 cents on a dollar for unlimited tax bonds.
• $25 million for a Department of Transportation security force.
• $90.6 million to improve outdated software and servers.
• New structure for the General Retirement System and Police and Fire System pension boards.

Until recently, plans involved deeper cuts that would force Detroit to auction works from the Detroit Institute of the Arts (DIA). The recently-appraised city-owned pieces of art were valued at $454-$867 million. Instead, a “grand bargain” was struck where foundations, the State of Michigan, and the DIA will collectively provide $816 million to reduce pension cuts and to allow the art to be transferred to an independent nonprofit. Auto companies General Motors, Ford, and Chrysler have already pledged $26 million for the deal. Michigan’s legislature passed a measure to provide $195 million to Detroit upfront.

A yes vote by July 11, 2014 is needed to secure the $816 million in state aid and private funding to prevent further cuts. Even If pensioners reject the deal, Bankruptcy Judge Steven Rhodes could still decide to force deeper benefit reductions. So far Orr has the bankruptcy process moving with unprecedented speed and bipartisanship in the hope of wrapping up the deal without further appeals before his term ends September 30, 2014.

 Why do people reject Detroit’s plan?

1. Severe cuts outlined in the bankruptcy plan have left many unhappy. Many reject the negotiations on principle, simply refusing to take any cut to pensions that were rightfully earned. Others across Michigan reject the state’s provision of almost $200 million in taxpayer money to provide a “bailout” to Detroit. They instead argue that Detroit should be forced to sell its assets.
2. What should be done with the water and sewage system? The city hopes to privatize the system, which serves more than four million people in Southeast Michigan. The plan has pitted the city of Detroit against its suburbs where residents fear their rates will increase. However, the plan could be a huge boost for the city since the new provider would pay for improvements to the system and provide additional cash flow to Detroit.
3. Other groups take issue with the cuts proposed for bondholders, claiming the plan improperly treats pension holders better than investors. Bond insurers are still searching for what options may be available to protect themselves. The insurers have forced the city to provide millions of pages of documents and in doing so managed to push back the trial to August 14, 2014.

How will this affect Detroit in the future?

With the approval and implementation of a plan, cuts to pensions and bonds can put Detroit on more stable footing in the future. This was the case with Orange County, Calif., which had a triple-A bond rating nine years after its 1994 bankruptcy. However, bankruptcy may lead public employees to rethink their approach to retirement benefits and their decision to work in the public sector. This results in highly educated workers no longer being attracted to public-sector jobs in the city, even in areas like teaching. The scale of the latest municipal bankruptcies has led to greater calls for disclosure and transparency in cities across the country, especially with regard to negotiated contracts.

The severe cuts to bondholders in Detroit will have strong effects on the future of the city and on other cities in the state with regard to the riskiness associated with municipal bonds. The cuts to bondholders makes these usually safe general obligation bonds less attractive to bondholders in the future. As a result, Detroit may have to offer higher interest rates to attract investors when their bonds have lower ratings. This could also negatively impact other cities and investors across Michigan who have seen the insecurity of municipal bonds firsthand.

Will more cities be forced to declare bankruptcy?

The case of Detroit has set legal precedent that through bankruptcy cities can renegotiate pension contracts and even cut bond liabilities. Most bonds had previously been protected in bankruptcy due to their legal classification. If the city does emerge stronger it may be used as a blueprint for other struggling cities. Even the threat of bankruptcies in other cities can be a catalyst for serious financial discussions. Cities have been reviewing their assets and moving to protect them, such as museum art, that they do not want to be forced to sell. If anything, the case of Detroit highlights issues with grossly underfunded pensions that exist across America. Money spent on pensions leaves little for spending on education or infrastructure. Listen to a discussion of bankruptcy and pension cuts in Central Falls, RI below:

Several California cities in the process of filing for bankruptcy haven’t been allowed to cut pensions since they are considered an arm of the state and exempt from the bankruptcy restrictions. The truth is that bankruptcy is not easy. Legal fees are expected to cost Detroit more than $100 million. The city of Vallejo, Calif. escaped $32 million of debt through bankruptcy; however, it cost the city more than $13 million in legal fees, and a potential second bankruptcy looms on the horizon.

Municipal bankruptcies will likely lead to more state involvement in local government. Despite the increasing size of cities now declaring bankruptcy, there is not an epidemic of cities failing to meet financial obligations. Frank Shafroth points out that bankruptcy does not have to be contagious, but cities have to be cautious. States have a proactive role to play in ensuring the success of their largest cities. Shafroth states, “What we are beginning to see in Michigan is an absolutely bipartisan effort of overcoming opposition from conservatives who said ‘Let Detroit burn in hell.’ The future of Michigan will very much depend on Detroit’s recovery.”

The case of Detroit has illustrated what options cities have in declaring bankruptcy, but cities will still use all measures available to avoid the unknown fate of Detroit.

Resources

Primary

U.S. Courts: Chapter 9 Municipal Bankruptcy

U.S. Bankruptcy Court: Detroit Bankruptcy Disclosure Statement

Additional

USA Today: Detroit Becomes Largest U.S. City to Enter Bankruptcy

Economist: Detroit’s Bankruptcy–Revenge of the 99 Percent

Huffington Post: Detroit Bankruptcy Could Set Legal Precedent for Bankrupt Cities With Pension Obligations

Fox News: Detroit Bankruptcy Case, the Largest at $18 Billion, is Moving Quickly Less Than a Year Later

Washington Post: Here’s How Detroit’s Bankruptcy Will Actually Work

Economist: Retirement Benefits–Who Pays the Bill?

Michigan Radio: Will Detroit’s Bankruptcy Affect Your Hometown?

The New York Times: Michigan Senate Passes Plan to Ease Detroit Pension Cuts

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Municipal Bankruptcy: The Steps, Scope, and Consequences appeared first on Law Street.

In recent weeks, the swap of Bowe Bergdahl in exchange for Taliban leaders has sparked much criticism and mixed reactions towards the United States’ policy on dealing with terrorists. Congressional leaders are upset that they did not receive notification prior to the prisoners’ exchange. Others are fearful that the deal makes the United States appear to negotiate with terrorists. So, what does all of this mean–did President Obama make the right call to bring back Bergdahl? Most importantly, what are the future implications for American diplomacy? Here is everything you need to know on the Bergdahl’s exchange.

Who is Bowe Bergdahl?

Bowe Bergdahl is a soldier in the U.S. Army who was held captive by the Taliban-affiliated Haqqani network in Afghanistan from June 2009 to May 31, 2014. Bergdahl was released to the United States in exchange for five senior Taliban members who were held at Guantanamo Bay. The controversy surrounding Bergdahl’s release has made him one of the highest-profile POWs in decades. The exchange itself can be seen in the Taliban video below:

A celebration in Bergdahl’s hometown of Hailey, Idaho was cancelled due to the controversy and Bergdahl’s family has been receiving threats. Bergdahl is currently recovering in Germany, where he is speaking but still has not contacted his family or anyone in the United States. The focus is currently on Bergdahl’s emotional recovery, but officials are hopeful he will soon be able to shed light on his story.

How and why was Bergdahl captured?

The circumstances surrounding Bergdahl’s capture remain disputed. National Security Advisor Susan Rice claimed on ABC that Bergdahl “served the U.S. with distinction and honor.” However, numerous reports claim Bergdahl to be a deserter who grew increasingly disillusioned with the U.S. effort in Afghanistan. According to first-hand accounts, Bergdahl walked off his post and left behind a note along with his body armor and rifle. An unnamed defense official confirmed that Bergdahl walked off the post without authorization. It is reported that Bergdahl’s desertion led to the death of at least six troops in the search for him, though it is unclear if these deaths were directly related to the search for Bergdahl. According to an essay in the Daily Beast by Nathan Bradley Bethea, a former sergeant in Bergdahl’s battalion, “Every intelligence aircraft available in theater had received new instructions: find Bergdahl.” Troops were concerned Bergdahl may be providing the enemy with information. Bergdahl’s former squad leader, Justin Gerleve, goes so far as to tell CNN that following Bergdahl’s disappearance, “The attacks did get more direct, the IEDs did get more pinpoint to our trucks.” Reports dating to 2009 claim Bergdahl had wandered from his assigned areas before. The U.S. Army, currently investigating the claims made by those who served alongside Bergdahl, has yet to confirm any of these accusations.

What led to his release?

A deal involving Bergdahl’s release had been considered for several years but talks had continually broken down. In January 2014, the White House received an emotional video of Bergdahl whose health appeared deteriorated to the point of near death. The Obama administration stated the new health concerns conveyed the need to move quickly to bring Bergdahl home. While Bergdahl is currently listed in good health and reports of his desertion surface, President Obama has defended the decision in claiming the United States cannot qualify the release of a U.S. soldier. Some have praised Obama for his shown commitment to bring back POWs and for refusing to leave a soldier behind as the war ends. Obama defends his actions in the video below:

Relative secrecy of the deal was required as any information leaked from the deal was a clear threat to Bergdahl’s life by the Haqqani. Later, the administration added to its rationale that Bergdahl’s value to his captors was diminishing as negotiations had previously failed and the end of the war in Afghanistan was quickly approaching.

What were the arguments against his release?

The problem many have with the deal is that the President Obama failed to follow the requirement that the Defense Secretary notify appropriate Congressional committees at least 30 days prior to the transfer of any prisoners at Guantanamo Bay. The National Defense Authorization Act stipulates the 30-day notification, but Obama did write a signing statement in December 2013 concerning the potential unconstitutionality of this Act. The statement outlines Obama’s concern that the Act could limit his ability to act quickly in conducting negotiations regarding detainee transfers, such as the fast action required to swap for Bergdahl. Still, members of Congress want answers for why they were not briefed. Defense Secretary Chuck Hagel is to testify in front of the House Armed Services Committee on the release of Bergdahl. The clip below discusses the alleged illegality of the swap:

Other concerns involve what future threats the five detainees involved in the swap may pose to the United States. Negotiations for the deal were made through Qatar, who promised the United States that the former prisoners would stay in Qatar and be prohibited from participation in terrorist activities for one year. The five released were all in their mid-to-late 40s and were the most senior Taliban leaders still in the hands of the United States. Questions surround what will happen when their one year travel ban in Qatar expires and what, if any, other restrictions are in place. Secretary of State John Kerry discusses the release of the Taliban and future U.S. actions below:

Discussion has also arisen regarding Bergdahl’s punishment. If Bergdahl was a deserter, the severe law on wartime desertion could mean Bergdahl would be subject to further punishment even beyond his five years already spent in captivity. Current punishment for military desertion could result in death, though it is highly unlikely Bergdahl would face such an extreme punishment.

Is this a new foreign policy stance?

Throughout the War on Terror and especially following the attacks on September 11,  it has been made clear the United States does not negotiate with terrorists. Some argue the prisoner exchange has made the United States appear to negotiate with terrorists, which has fueled fears that more Americans will be captured to be used as a bargaining chip. However, the United States has negotiated in the past to free American hostages, most notably in the 1979 Iranian hostage crisis, in freeing hostages taken by Hezbollah in Lebanon in the 1980s, and even in trading Iraqi militants for the release of British civilian Peter Moore in 2010. It could be argued the country has entered a different era in foreign policy and in dealing with terrorists, but clearly the United States has traded for hostages in previous decades. Listen below  to the discussion of what message is being sent by the swap:

Will this have any impact in Afghanistan?

While negotiations were made through a third party of Qatar, the negotiation process has illustrated that it may be possible for the United States and Taliban to find some small area of mutually beneficial common ground. The Taliban showed good faith in the talks and a degree of trust was established. With this prisoner swap as a potential first step, greater talks in the future may come as the war continues to wind down. Some argue the deal conveys American weakness, as statistics from the Office of the Director of National Intelligence show more that 16 percent of detainees released from Guantanamo Bay have returned to terrorist activity, while 12 percent are suspected of having returned to terrorism. One of the released, Noorullah Noori, has reportedly already told relatives he hopes to return to Afghanistan to fight Americans. But as the War in Afghanistan is soon set to end, the United States will have to release its prisoners at Guantanamo Bay if the prisoners are classified as POWs under international law. If the prisoners are to be released anyway, it makes sense to use them as a tool for negotiation rather than setting them free and coming away empty-handed. The real question becomes what will happen when detainees are set to be released and the United States no longer gets something in return. Could the swap have energized the opposition so closing Guantanamo Bay will become even harder?

Resources

Primary 

Barack Obama: 876-Statement on Signing the National Defense Authorization Act for Fiscal Year

Additional 

Politico: Rice: ‘Sacred Obligation’ Led to Bergdahl Swap

Weekly Standard: Susan Rice: Bergdahl Served with Honor and Distinction

Washington Post: Obama: No Apologies for Bergdahl Release Deal

USA Today: Bergdahl Trade More About Guantanamo

CNN: Kerry Defends Bergdahl for Taliban Exchange

Daily Beast: We Lost Soldiers in the Hunt for Bergdahl

Blaze: We’ve Got Bigger Problems: The Broader Implications of the Bergdahl Release

Wall Street Journal: Trading With the Taliban

CNN: Bergdahl’s Former Squad Leader: He Did Not Serve with Honor and Distinction

CNN: The Six Soldiers at Center of Bowe Bergdahl Debate

Wall Street Journal: Behind Bowe Bergdahl’s Release, a Secret Deal That Took Three Years

MSNBC: Bowe Bergdahl: Deserter or Hero?

CNN: Was Bergdahl Swap Legal? Depends on Who You Ask

USA Today: Army Says it Will Launch a New Review of Bergdahl Capture

Washington Post: The Timeline You Need to Understand the Bowe Bergdahl Story

Alexandra Stembaugh

Alexandra Stembaugh graduated from the University of Notre Dame studying Economics and English. She plans to go on to law school in the future. Her interests include economic policy, criminal justice, and political dramas. Contact Alexandra at staff@LawStreetMedia.com.

The post Trading POWs: What Does Bergdahl’s Release Mean for American Diplomacy appeared first on Law Street.