When the Internet rose to popularity in the mid-1990s, the legal system had a difficult time dealing with it.

That shouldn’t really come as a surprise to anyone, since the legal system is still having a difficult time with the Internet almost two decades later.

But back in its infancy, the Internet was far less regulated and monitored than it is now,  to the extent that there was very little or no guidance on how existing laws applied to activities on the Internet.

Thus, it was incredibly easy for someone to anonymously voice an opinion behind the safety of a computer screen that they would otherwise refrain from expressing.

While this led to an explosion of regular people expressing their views online, it also led to an upsurge in hate speech.

The problem was that authorities weren’t sure that they could prosecute such speech under current laws.

After Richard Machado was convicted of committing a hate crime 14 years ago today on February 10, 1998, authorities were a little less gun shy.

Machado’s conviction was the first involving a hate crime in cyberspace, and it demonstrated to law enforcement that speech conducted online was not insulated simply because it happened online.

The speech in question occurred on September 20, 1996.

The 19 year old Machado sent a threatening hate message to 59 specific Asian students at University of California Irvine (UCI) via email.

The message blamed the presence of Asian students on UCI’s campus as the reason why the school wasn’t more popular and claimed that they were responsible for all of the crimes on campus.

So far, the speech is indeed hateful, but is still protected by the First Amendment.

And if he would have left the message at that, he wouldn’t have been convicted.

Unfortunately, he repeatedly threatened to “hunt down” and “kill” the Asian students if they did not leave the school.

When he didn’t receive any responses within a few minutes, he resent the same email.

Machado, naturally, used a fake email account to send the message, and used one of the computers in the school’s computer lab, all so he could preserve his anonymity.

Shortly after receiving the message, several of the recipients complained to school officials, who were able to track the computer from which the emails were sent, and, using surveillance cameras, identified Machado as the sender.

The FBI got involved after Machado fled to Mexico in a car stolen from his roommate (he was apprehended upon his return to the U.S.).

In light of the absence of any laws relating directly to online speech such as this, the federal government had to get creative.

It used 18 U.S.C. § 245(b)(2)(A), a 1960s Civil Rights law that criminalizes race-based threats of violence against students at a public college.

As testament to the uphill battle the government faced in stepping into uncharted territory, the trial ended in a hung jury, and a retrial was held.

Before the second trial, the indictment count was reduced from ten to two (on a procedural challenge), and, although Machado was convicted on one count, the jury was deadlocked on the other.

That single conviction was all the government needed, though, and it didn’t seek a retrial on the other count.

Machado was sentenced to a one year prison term, but he was credited for time served, and wasn’t recommitted.

For the federal government, the conviction signaled the applicability of existing laws to online activities, and it proceeded to prosecute several other instances of online hate speech across the country.

As online activity has become increasingly prevalent among the general populace, it has become apparent that activities conducted online are not and should not be insulated from real-world laws.

Nevertheless, since the Internet today is still largely unregulated, the push to extend legal control over it remains.

However, there’s an important distinction to be made.

The regulation of, and exertion of legal control over, the Internet does not need to be imposed to enforce real-world legal consequences on virtual actions.

The case of Richard Machado demonstrates that.

Despite being touted as one of the world’s oldest democracies, the United States doesn’t have a great voting record.

That is, with regards to voting rights, the U.S. has been less than fully inclusive.

At the time of the country’s founding, with rare exception, only white male property holders (i.e. the rich) were allowed to vote.

The struggle for more expansive voting rights wasn’t an easy one, either.

In fact, it was almost 100 years after the nation’s founding until it was illegal to deny a citizen’s right to vote based on race or color.

Moreover, such a reform was only possible due to the suppression of most of the opposition after the U.S. Civil War.

That expansion of voting rights came in the form of the Fifteenth Amendment to the U.S. Constitution, and it was ratified 142 years ago today, when Iowa became the 28^th state to ratify the Amendment on February 3, 1870.

The text of the Fifteenth Amendment is short and simple:

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

The second section states that “Congress shall have power to enforce this article by appropriate legislation.”

Perhaps tarnishing this accomplishment in voting rights is the fact that the Amendment is a watered down version of versions originally finalized in the House and Senate.

For example, the original Senate version protected against discrimination not only of “race, color, or previous condition of servitude,” but also of any “previous condition,” either of the citizen himself or his ancestors.

Likewise, the original House version expanded protections prohibited discrimination based on “nativity, property, or creed.”

Neither of these broader versions was used because legislators (accurately) believed they wouldn’t be ratified by the required three-fourths of the states.

Why?

Frankly, because, although states outside of the South were fine with blacks having the right to vote, many states still wanted to discriminate against other groups.

States in the North, such as Connecticut, Massachussetts, and New York, wished to continue discrimination against Irish immigrants, and would never have ratified a constitutional amendment that banned discrimination based on “nativity.”

Similarly, many Western states wanted to continue to discriminate against Chinese immigrants.

For instance, although Nevada was the first state to ratify the Amendment, it was only after assurances from U.S. Senator William Morris Stewart that it didn’t apply to Chinese immigrants, whom the state could continue to discriminate against.

However, the possibility of Chinese suffrage under the Amendment, no matter how slight, was enough for California and Oregon to soundly reject it (Oregon eventually ratified it in 1959, as did California in 1962).

And, even though the watered down version of the Fifteenth Amendment was eventually ratified, several former Confederacy states (Virginia, Mississippi, Texas and Georgia) were required to ratify the Amendment as a precondition to their having congressional representation.

Even after its ratification, most Southern states still found ways to effectively stop blacks from voting, including using literacy tests and grandfather clauses.

It wasn’t until the passage of the Voting Rights Act in 1965 – almost 100 years later – that such practices were barred entirely.

Section 5 of the VRA remains contentious even today (see this post for more), and if the recent outbreak of voter ID laws is any indication, deciding who can vote is an ongoing struggle in America.

But, as the passage and ratification of the Fifteenth Amendment has demonstrated, any expansion of voting rights in the U.S. doesn’t come easily.

This Wednesday, Republican presidential hopeful Newt Gingrich declared a pretty ambitious goal.

If he were to be elected president, “By the end of my second term,” Gingrich said, “we will have the first permanent base on the moon and it will be American.”

Perhaps he was simply being fanciful to garner political favor from the crowd – after all, he was speaking to a crowd in Florida’s Space Coast near Kennedy Space Center.

If he was serious, though, that’s a promise he may not be able to keep.

I can’t really speak for any scientific or economic limitations, but I do know of at least one legal obstacle that may prevent Mr. Gingrich’s lofty dream.

That obstacle is the Outer Space Treaty of 1967 (also known by its full name, the “Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies”).

The United States became a signatory to the treaty on January 27, 1967, forty-five years ago today.

Most people probably associate the treaty with its provisions on nuclear weapons – specifically, that nuclear weapons or other weapons of mass destruction shall not be placed in outer space or on any celestial bodies (including the moon).

That provision is indeed part of the treaty, and it was further one of the primary motivations for the U.S.’s signing and ratifying it (the U.S.S.R.’s space-faring capabilities combined with its nuclear ones during the Cold War made more than a few Americans a bit nervous).

However, that provision is just one article out of a total of seventeen, so there’s actually quite a bit more to the treaty than nuclear prohibitions.

As it relates to Gingrich’s promise, at least two of the treaty’s articles stand out.

The first is Article II, which reads, “Outer space, including the moon and other celestial bodies, is not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means.”

The provision contains many political loaded terms, but it basically means that no country may lay claims of sovereignty to the moon (or any other celestial body) or any portion thereof.

Although this doesn’t destroy Gingrich’s dream outright, it does make it much more difficult for the proposed moon base to be exclusively American.

Still, since Article VIII states that a nation retains control and jurisdiction of the objects that it launches into space, Gingrich’s imagined moon base may be analogous to an RV parked at a campsite:  the U.S would own the base itself, but not the ground it is sitting on.

Thanks to yet another provision though (Article XII), that analogy isn’t quite accurate.

Article XII asserts that “[a]ll stations, installations, equipment and space vehicles on the moon…shall be open to representatives of other States Parties to the Treaty on a basis of reciprocity.”

Thanks to this provision, foreign astronauts could come and go from the moon base as they please.

True, the U.S. could easily deny other countries access, but then it would probably also lose access to space installations and vehicles of other countries (the U.S. currently relies on Russia for transportation to the International Space Station).

But such denial of access may have implications back on Earth – namely, it would foster strong suspicions that the U.S. was hiding something in its moon base that it didn’t want anyone else to see.

Nevertheless, it still may be very possible to establish a base on the moon that is technically U.S.-owned under the treaty.

On the other hand, Gingrich’s comment that the base “will be American” invites imagery of an installation with operations and goals that are primarily national, rather than international, in character.

Under the current international law framework established by the treaty signed forty-five years ago, that dream may never get off the ground.

Any family law practitioner could tell a horror story or two about a case he or she has done.

Few would come close to the nightmare of having the Federal Government involved in the proceedings while it was under intense scrutiny by the national media.

The custody battle over Elián González involved those elements and more.

12 years ago today, Elián’s two grandmothers from Cuba – Mariela Quintana and Raquel Rodríguez – were issued U.S. visas , and were the first family members to travel to the U.S. to advocate for the boy’s return to Cuba.

The saga started when Elián had left Cuba with his mother, her boyfriend, and eleven others on November 20, 1999.

Two days later, Elián’s father in Cuba, Juan Miguel González Quintana, phoned his paternal great-uncle Lázaro in Miami, and informed him that Elián and his mother had left Cuba without Juan Miguel’s knowledge, and to watch for them in Miami.

However, Elián’s mother, along with ten other passengers, didn’t survive the journey.

On November 25, 1999, Elián was found by two U.S. fishermen clinging to an inner tube several miles off the Florida coast.

After being treated at the hospital, U.S. Immigration and Naturalization Service (INS) temporarily paroled him to the custody of Lázaro.

Lázaro wished for the boy to remain in the U.S., and with his filing of an application for asylum with the INS on December 10, the legal battle for Elián began.

The grandmothers, who were granted visas on January 20, arrived in the U.S. the next day.

They were allowed to meet with Elián once, and spent the next nine days (rest of their time in the U.S.) in Washington, D.C. speaking with congresspeople and Attorney General Janet Reno.

The legal proceedings continued, and, as we now know, they were eventually concluded in favor of Elián’s father, and Elián returned to Cuba, where he lives today.

Despite some public outrage over the decision, immigration law and family law scholars, in analyzing the law behind the decision, found that law and precedent were applied correctly.

Under the immigration lens, a third-party may apply for asylum on behalf of a minor against the express wishes of the parent only if the child has the capacity to understand what he is applying for and has assented to or submitted the application himself.

Considering Elián’s age of six at the time of the asylum application, it’s possible, but not particularly likely that he had the capacity to understand what he was applying for.

Moreover, there was simply no evidence to support grounds stated for asylum – a fear of persecution should Elián return to Cuba.

Lastly, there is no right to asylum, even if those criteria are met; the granting of asylum is at the Attorney General’s discretion.

Interestingly, it was the Clinton Administration’s stance on the issue (allowing Elián to be reunited with his father in Cuba) that many attribute as causing Al Gore’s 2000 election loss in Florida (and the loss of the U.S. Presidency).

Through a family law lens, though, with the political and international implications stripped away, this would have been a pretty easy case.

A mother moves away with her son against the father’s wishes (that’s called parental kidnapping).

Since the mother died, and since there was no evidence of the father being an unfit parent, custody of the minor child should return to the father.

Of course, external factors are often present to complicate family law cases.

Family law practitioners will always hope, though, that the complications in their own cases never reach the same level as those in the case of Elián González.

Do students have First Amendment rights to free speech in school?

According to two landmark Supreme Court decisions, 1943’s West Virginia State Board of Education v. Barnette and 1969’s Tinker v. Des Moines Independent Community School District, they do.

Since Tinker, though, Supreme Court decisions on the topic have tended towards limiting, rather than expanding, student speech rights.

24 years ago today, the Supreme Court decided one of the most significant of such rulings on school speech – Hazelwood School District v. Kuhlmeier.

Hazelwood involved a school principal deleting two articles from a school paper.

One article described school students’ experiences with pregnancy and another article discussed the impact of divorce on students at the school.

Before publication, page proofs were submitted to the principal, who objected to the content of the articles.

Believing that there was not enough time to make changes before publication, the principal ordered the articles to be deleted.

Several high school students sued, claiming a First Amendment violation.

The district court disagreed, but it was overturned on appeal.

The Supreme Court then reversed the appeals court, finding that the school district had not violated the students’ free speech rights.

In making this decision, the majority first found that the school paper did not qualify as a “public forum,” which is the platform of speech that previous Court decisions have ruled warrants the highest level of speech protection.

The Court distinguished Hazelwood from Tinker on this issue by emphasizing the difference between a student speaking on school premises (Tinker) and a school maintaining “authority over school-sponsored publications.”

Thus, school officials were free to impose “reasonable restrictions” on student speech in the paper.

Exactly what “reasonable” means, though, was determined by the Court with no precedential support.

Instead, the majority examined the facts in more detail.

The Court found it reasonable that the principal cut the pregnancy story because the pregnant students, although not named, might be identified from the text (testimony from a teacher revealed that she would have been able to identify at least one, if not all three pregnant students).

Further, the principal believed that the article’s references to sexual activity and birth control were inappropriate for 14-year-old freshmen.

Given its historic (and current, for that matter) propensity to deal with sexual speech as obscenity, it is unsurprising that the Court found this restriction “reasonable.”

Lastly, the principal objected to the divorce article because the page proofs he was furnished identified by name a student who complained of her father as an inattentive parent (as one who chose “playing cards with the guys” over family).

The majority found the principal’s rationale – that the father was entitled to an opportunity to defend himself as a matter of journalistic fairness – reasonable and upheld the restriction (the final draft, which the principal supposedly hadn’t seen, removed the student’s name).

Thus, the school ruled that no First Amendment violation had occurred.

In so doing, the Court cemented Hazelwood as one of the most significant decisions in school speech jurisprudence.

Recently, the Supreme Court relied heavily on Hazelwood in deciding Morse v. Frederick – the “BONG HiTS 4 JESUS” case.

The Court ruled in Morse the same way it ruled in Hazelwood – no First Amendment violations occurred.

Considering recent Supreme Court jurisprudence on free speech (excluding campaign finance laws, of course), it is likely that this tightening of restrictions on student speech will continue.

Luckily, high school only lasts four years, so students can look forward to full First Amendment speech rights after they graduate.

76 years ago today, the U.S. Supreme Court decided U.S. v. Butler, striking down the Agricultural Adjustment Act of 1933 as unconstitutional.

It was a significant decision at the time it was made, and, despite its age, the case continues to be significant today.

Its importance in 1936 stems from the context in which the Supreme Court made the decision.

The Agricultural Adjustment Act (AAA) was part of President Franklin Roosevelt’s New Deal, and it was intended to artificially increase crop prices, which had plummeted in the early 1930s.

It did this by paying farmers subsidies for essentially agreeing to grow fewer crops.

The problem, at least according to the Supreme Court, was that the subsidies were exclusively funded by taxes levied against agricultural processors (i.e. the ones purchasing the crops from the farmers).

The Court held that Congress, through this program, was using constitutional means – taxing and spending – for an unconstitutional purpose – regulating agricultural production.

Regulation of agricultural production was viewed as unconstitutional in Butler because the Supreme Court reasoned that it was a power delegated exclusively to the states, and thus it was in violation of the Tenth Amendment.

Obviously, this isn’t the case today, since farm bills such as AAA are commonplace today (they just don’t provide funding in the exact same way as the 1933 Act).

Still, Butler has never been explicitly overturned.

However, it was one of the last Supreme Court cases to strike down one of FDR’s New Deal programs.

In fact, it was one of the last decisions to limit Congress’s regulatory power at all until 1995’s U.S. v. Lopez.

Even Lopez, though, only limited Congress’s power under the Commerce Clause, not the Taxing and Spending Clause, as Butler did.

Indeed, the Supreme Court has yet to again limit Congress’s power under the latter clause.

That, combined with more recent decisions such as 1987’s South Dakota v. Dole arguably granting even broader regulatory Taxing and Spending Clause powers to Congress than those at issue in Butler, has led to the widespread belief that Congress has almost unlimited powers under that clause.

That is relevant today because of 2010’s Patient Protection and Affordable Care Act (PPACA or ACA).

As many know, that law has been met with numerous legal challenges since it was first signed into law.

The two primary grounds for the challenge rest on the infamous “individual mandate,” which levies a tax penalty against those who do not carry health insurance, and the Medicaid expansion, which significantly expands Medicaid eligibility, and forces states to follow suit.

The Medicaid expansion question easily falls within the purview of the Spending Clause, and it’s because of this that no court opinion reviewing the issue has yet to strike it down as unconstitutional (I go into more detail about it and my prediction on the Supreme Court’s ruling here).

The dispute over the individual mandate is a little more complicated.

Despite the fact that the penalty levied is a tax and collected by the IRS, challengers have gone to great lengths to argue that it is, in fact, not an exercise of Congress’s Spending Clause power, but rather of its Commerce Clause power.

This is simply because the challenges would have little or no chance of success if the mandate were attacked as an unconstitutional use of Taxing Clause powers.

The only decision that ruled it unconstitutional under that theory made extensive use of Butler, but quite honestly, the argument wasn’t very convincing and appeared 75 years out of date (and it was overruled on appeal for lack of standing).

So while Butler is the most recent decision limiting congressional Taxing and Spending Clause power, and it has never been explicitly overturned, subsequent legal developments have rendered it irrelevant to current jurisprudence on the topic.

Given the eagerness of the ACA’s challengers to shift the constitutional argument to the Commerce Clause field, Congress’s Taxing and Spending Clause power is unlikely to return to the days of Butler.

Earlier this year, billionaire Warren Buffett sparked controversy by commenting that he paid a lower federal tax rate than his secretary in 2010.

Buffett enjoyed the low effective tax rate not because of any illegal evasion, but because of legitimate mechanisms in the tax code.

This revelation led to calls for tax reform to ensure that the super-rich pay an equal or greater tax rate than the middle class.

If such tax reforms ever materialize, it wouldn’t be the first time that public outrage was caused by disclosures of the rich getting off easy with taxes.

In 1968, it was revealed that 155 individuals with incomes exceeding $200,000 (about $1.3 million today) paid no income taxes the previous year.

Under strong public pressure, Congress passed the Tax Reform Act of 1969, and it was signed into law by President Richard M. Nixon on December 30, 1969.

The main provision designed to remedy this issue was Section 56, which created the “Minimum Tax for Tax Preferences,” or as it has become known today, the Alternative Minimum Tax (AMT).

However, the minimum tax created by the 1969 Act operated a little differently than the AMT we know today.

Most notably, 1969’s minimum tax was not an “alternative tax;” it was an additional tax.

Whereas the current AMT system is an alternative to regular income tax liability (the taxpayer is to pay whichever tax liability is greater), the 1969 minimum tax was imposed in addition to all other taxes under the tax code.

This change occurred in 1982 with the passage of the Tax Equity and Fiscal Responsibility Act, which also modified several other aspects of the 1969’s minimum act.

For instance, originally, the minimum tax was equal to 10% of the sum of “tax preferences” in excess of $30,000.

Tax preferences were defined by the Act as any number of specified different tax deductions that primarily pertained to capital gains (i.e. “excess investment interest,” “stock options” and “investment expenses”).

Although tax preferences are still a part of the calculation of AMT today (they’re now called “tax preference items”), they represent a much smaller part of the equation (it would require too much space to discuss the entire AMT calculation, so you’ll have to just take my word for it).

One piece of the 1969 Act that wasn’t updated in 1982 is arguably one of AMT’s biggest flaws: there are no adjustments for inflation accounted for.

This means that as incomes have steadily increased in the past 42 years, more and more taxpayers find themselves subject to the AMT (and thus are paying more in taxes).

When originally enacted, the minimum tax was only intended to target those 155 individuals (and others like them) who, despite their high incomes, had escaped paying income taxes altogether.

As of 2011, according to the non-partisan Tax Policy Center, 4.2 million taxpayers paid AMT.

It should be noted, though, that this marked increase in recent years is an effect primarily of the 2001 tax cuts (commonly called the “Bush tax cuts”), since they decreased marginal tax rates for all income tax brackets without making similar changes to AMT rates.*

Ironically, this impact was primarily felt by the middle class, away from whom the minimum tax was originally designed to shift the tax burden.

Unfortunately, despite the massive increase AMT’s effect in the future, there will likely be little public push for reform, mainly because AMT has been mostly kept obscure by easy tax preparations offered by TurboTax and H&R Block.

However, the fact that President Obama tried to add an inflation index to the AMT calculations in his fiscal year 2011 budget proposal (which didn’t pass) indicates that the issue isn’t off of all politicians’ minds.

Thus, it is entirely possible that any future tax reform efforts (such as ones prompted by Buffett’s comments) may include an AMT inflation index.

If such becomes reality, the minimum tax may actually resume its originally intended purpose of shifting the tax burden away from the middle class.

There’s a lot of talk today about the “war on Christmas.”

This “war” is supposedly being waged by those who advocate for use of the phrase “Happy Holidays” instead of “Merry Christmas.”

The “Merry Christmas” defenders claim that the “war on Christmas” is an attempt to secularize the holiday and take the focus off of it serving as a commemoration of the birth of Jesus Christ.

However, those individuals likely are unaware of the full history of the holiday.

First, to decry as a “war” the use of the phrase “Happy Holidays” or even any actual outright attempts to secularize Christmas is a gross overstatement.

If you want to talk about an actual war on Christmas, look no further than Oliver Cromwell’s reign in England from 1653 to 1658, during which the celebration of Christmas was banned outright.

This wasn’t because Cromwell was advocating for any kind of separation of church and state.

Instead it was his religious convictions that drove him to take such action.

A Puritan, Cromwell believed that Christmas celebrations were frivolous and improper, and that they distracted from prayer and fasting.

Of course, Christmas celebrations until the 19^th century were a bit more raucous than they are now.

Owing to its roots in Pagan Roman celebrations Saturnalia and, to a lesser extent, Dies Natalis Solis Invicti (“the birthday of the unconquered sun”), Christmas was celebrated with eating and drinking in excess.

While this doesn’t sound too much different from today’s traditions, it very much is, since there was a lot more partying in the streets and going into other people’s homes originally.

Specifically, the older customs (also derived from its Pagan Roman roots) involved the poor visiting wealthier communities and begging (or more often demanding) food and drink in return for toasts to their hosts’ health (and refusals to do so could be dangerous).

Given the Puritan outlook on such merriment, it’s easy to understand why Cromwell would want it banned (and why Puritan Massachusetts banned it for 22 years from 1659 to 1681).

Such celebrations of Christmas often turned into riots during times of particularly stark poverty (a Christmas riot in New York in 1828 led to the formation of New York’s first police force).

This trend led to a desire to change the Christmas tradition, with authors such as Washington Irving and Charles Dickens contributing to the change.

Particularly influential in the U.S. was Irving, who wrote about a (fictional) stay in the English countryside during Christmas and described cordial, family Christmas celebrations (Dickens later cited Irving’s writings as an inspiration for A Christmas Carol).

Eventually, Christmas did settle down and celebrations slowly evolved into what we know it as today, with family dinners and the exchanging of gifts.

It was, perhaps, this evolution that led to its recognition by the federal government as a holiday in 1870, since the holiday was abandoned as an “English tradition” after the Revolutionary War.

Given this history, Christmas can be accurately described as an American holiday.

Does that necessarily make it a secular holiday?

Actually, you can celebrate Christmas how you want to.  That’s the great thing about America.

But I have to wonder if the true antagonist in the “war on Christmas” is the phrase “Happy Holidays” or the fact that the holiday is dominated by materialism. 

Ninety-eight years ago today, President Woodrow Wilson signed the Federal Reserve Act into law, creating the Federal Reserve System.

To understand the motivation for the law, it’s first necessary to understand what the Act does.

Broadly speaking, the Act established the U.S.’s central banking system (the Federal Reserve), and also granted the Fed the authority to issue legal tender – Federal Reserve Notes.

Most people today call those Notes “dollar bills,” and prior to the Act’s passing, legal tender was issued by private banks.

The Federal Reserve can also issue additional notes at times of financial crisis to offset the accompanying reduction in market liquidity.

“Reduction in market liquidity” means, essentially, a market freeze; financial transactions such as buying, selling, lending, or paying debts slow or stop altogether.

Liquidity in the banking market mostly refers to banks having enough cash on hand to continue to operate and, in worst-case scenarios, avoid bank runs.

Bank runs are when all of a bank’s customers attempt to withdraw their deposits at the same time for fear that the bank is or will soon become insolvent (think of the scene in It’s a Wonderful Life as an example).

Anyhow, such a financial crisis – the Panic of 1907 – was the primary motivation for the Federal Reserve Act.

Strangely enough, the Act was a product of anti-Wall Street sentiment among the general public, but it took several years to get there.

The initial response by Congress to the 1907 crisis was the Aldrich-Vreeland Act, which was aimed to make the money supply somewhat more elastic during emergency shortages (currency elasticity is a trait that describes a currency’s ability to expand or contract).

The law also established the National Monetary Commission, which was formed to study what changes needed to take place in the U.S. banking system.

Republican Senator Nelson W. Aldrich of Rhode Island, who was largely responsible for the Aldrich-Vreeland Act, also became the Chairman of the Commission.

Aldrich, though, was widely perceived as being closely aligned with big banks and big business.

His 1911 “Aldrich plan” for addressing the woes of the U.S. banking system probably didn’t help this perception, since it called for a central institution (the National Reserve Association) to be privately controlled by bankers.

These events coincided with the rise of the Progressive Movement, which was extremely distrustful of concentrations of power and wealth.

Naturally, Progressive leaders such as William Jennings Bryan were opposed to Aldrich’s plan.*

Amid this climate, the plan had little public support, and, with Democrats gaining control of Congress in the 1910 elections, little political support.

The next year, hearings were held before the House Banking and Currency Committee on the control on the nation’s banking and financial resources.

The hearings concluded that the majority of America’s finances were concentrated in the hands of a tiny Wall Street group, further incensing the public against Wall Street.

The last ingredient in the creation of the Federal Reserve Act was the 1912 election of Woodrow Wilson, who, running on a Progressive platform, defeated Republican William Howard Taft.

Wilson’s election ultimately led to a central banking system that was controlled by the government, not big banks (admittedly, I’m skimming over quite a few details leading up to the creation of the final Act itself).

The Act received overwhelming support from Congress (voted 298–60 in the House, 43–25 in the Senate), and was signed by President Wilson on December 23, 1913.

Although the Federal Reserve is regarded as controversial by some even today (which I really don’t want to get into two days before Christmas), it is nonetheless a mainstay of the U.S. financial system, and looks to continue to be in the foreseeable future.

*Jennings famously declared that if the Aldrich plan were implemented, the big bankers would, “then be in complete control of everything through the control of our national finances.”

On December 16, 2003, the “Controlling the Assault of Non-Solicited Pornography And Marketing” Act, or CAN-SPAM Act, was signed into law, and took effect just over two weeks later on January 1, 2004.

As suggested by both the law’s full name and acronym, the purported aim of the bill was to stop (or “can”) spam – that is, unsolicited marketing email.

It set out to accomplish this through several means.

First, the law prohibits false or misleading header information – that is, an email’s “From,” “To,” and routing information – including the originating domain name and email address – must be accurate and identify the person who initiated the email.

Next, it prohibits deceptive subject lines (they cannot mislead the recipient about the contents of the message).

The Act also requires that marketing emails give recipients a valid way to opt-out of receiving future emails, and forbids the selling or transferring of email addresses of such users who have chosen to opt-out.

Lastly, it requires that commercial email be identified as an advertisement and include the sender’s valid physical postal address.

The Act enforces these and other prohibitions through a combination of criminal penalties, civil enforcement by the Federal Trade Commission, and private rights of action.

Sounds great, doesn’t it?

On paper, perhaps.

In practice, though, CAN-SPAM seems to have had little effect on the volume of spam being sent.

According to several studies by three different spam-filtering vendors conducted weeks after CAN-SPAM’s enactment, spam rates had actually risen.

In addition, two of the vendors’ studies found that less than one percent of spam sent was compliant with CAN-SPAM, and the third found just over ten percent compliant.

Moreover, according to a 2009 study by the International Journal of Cyber Criminology, the Act has not reduced the volume of spam sent.

Instead, it concludes that the law created a safe-harbor for spam by specifically listing how spam can be compliant with U.S. law.

Furthermore, the way CAN-SPAM is structured, enforcement is somewhat limited.

Specifically, only the worst offenders are targeted by the FTC and criminal law enforcement agencies.

Also, CAN-SPAM limits the right to a private cause of action to an “Internet access service,” which, even under the broader definition given in 2010’s Haselton v. Quicken Loans, Inc., does not include individual consumers.

Given the impetus needed for Congress to pass regulatory legislation, one has to wonder why such an ineffective law as CAN-SPAM was enacted to begin with.

Considering that CAN-SPAM was enacted after California had passed much tougher anti-spam restrictions (to take effect beginning in 2004 as well), and that CAN-SPAM contained a specific provision preempting all state spam regulation, the motivation, perhaps, is clearer.

States, of course, are still able to regulate fraud and deception in emails, but under CAN-SPAM, the act of regulating what spam is allowable and isn’t falls under the exclusive purview of the federal government.

Many email users may have certainly noticed less spam in their inboxes since 2004, but this is actually because of advances in spam filtering technology, not CAN-SPAM.

Does Congress need to update CAN-SPAM, then?

That question seems less central than one that is increasingly pertinent today:

Is Congress even capable of passing effective legislation than does more good than harm?