Archived columns
The Phyllis Schlafly Report
Small Business Needed for Economic Growth
by John and Andy Schlafly
November 28, 2017
While large corporations dominate the news and the lobbying in D.C., economists have long known that small business is the real engine to drive economic growth. Headlines about big business are more likely to mention “massive layoffs” than any hiring plans.
Small business and innovation by small inventors are essential to our economy, as some of them will become the big employers of tomorrow. Kodak and Xerox were just two of the successful businesses founded on an idea of a small inventor, and a patent that secured for him the fruits of his labor.
Yet today 80% of challenged patents are invalidated in some way by the Patent and Trademark Office, without the patent owner ever getting his day in court. Imagine the outrage if homes or other property were taken away by an administrative agency without a court hearing.
On Monday, in Oil States v. Greene’s Energy, the Supreme Court held lively oral argument in a challenge supported by small inventors to how the federal government is taking away their property in deprivation of their Seventh Amendment right to a jury trial. Several Justices expressed dismay at how our patent system, once the envy of the world, has denigrated into a victim of the administrative state.
Due to a federal law enacted in 2011, the America Invents Act, the Patent Office changes its mind and tosses out most of the patents that it previously issued, if someone asks it to. Anyone – a competitor, a disgruntled employee, or even a stranger – can ask the Patent Office to strike down a previously issued patent, without the right of the patent-holder to have a trial in court.
During the one-hour hearing before the Supreme Court, Justice Breyer expressed alarm at how a patent can be in existence for 10 years, with $40 billion invested in developing it, and “then suddenly somebody comes in and says: Oh, oh, we want it reexamined, not in court but by the Patent Office.” Phyllis Schlafly opposed this bad law at the time, but corporate lobbyists pushed it through.
Our economy depends heavily on new inventions to grow, because cheaper labor will always be available in other countries. Our competitors, such as China, recognize how important innovation is, and they force American companies to share the secrets of our inventions with them.
The result has been devastating to the real elements of economic growth: jobs and wages. Neither has improved in years.
Only 63% of potential workers are actually working in the United States. This labor participation rate is near its 38-year record low, set during the Obama Administration.
Likewise, real wages actually decreased in October, and over the past year wages have barely kept up with inflation. This is in sharp contrast with nearly two decades ago, when hourly pay was increasing at a much healthier rate of 4%.
When the Governor of Virginia issues a press release to brag about a company in his State creating merely 15 new jobs, as Democratic Governor McAuliffe did on Monday, it underscores how scarce good jobs are. Pandering to lobbyists of big corporations, as Congress does, will not help.
The American economy grew fastest when the incentives of our unique patent system existed for small inventors. Buoyed by the inventions of Thomas Edison and Alexander Graham Bell, our economy boomed in the late 1800s.
Thomas Edison obtained more than a thousand American patents, which enabled him to attract large investments. With such funding Edison was able to light up New York City in September of 1882, using his new electricity-generating power plant.
Raymond P. Niro explained how important the rights of small inventors are to a prosperous future, in an article available on the helpful website IPWatchdog.com. He listed nearly three-dozen inventions that have changed the world, all by “individual inventors who ultimately formed companies to exploit their ideas, but who initially manufactured nothing.”
Justice Sotomayor asked rhetorically during oral argument on Monday, “If I own something, … how can a government agency take that right away without due process of law at all? Isn’t that the whole idea of Article III, that only a court can adjudicate that issue?”
Indeed, and it is ironic that while Congress talks about boosting our economy with a tax bill, it is actually the Supreme Court that may do more for job and wage growth if it rules in favor of small inventors in the Oil States case. Congress seems uninterested in helping small investors and small business, but the Court might.
THE PHYLLIS SCHLAFLY REPORT
No Thanksgiving at the Border
by John and Andy Schlafly
November 21, 2017
On the first day of Thanksgiving week, U.S. Border Patrol agent Rogelio Martinez died and an unidentified second agent was seriously injured as they patrolled a lonely stretch of Interstate 10 in west Texas, near the Mexican border. The agents’ injuries were apparently caused by grapefruit-sized rocks thrown by men who had illegally crossed the border in an area where, as the New York Times reports, “drug and human trafficking are common.”
The U.S. Border Patrol has tallied 720 assaults on border officers in the last fiscal year, and 38 agents have been killed in the line of duty since 2003. You’d think the dangerous assaults on federal agents would have given pause to the federal judge in San Francisco who was considering a lawsuit challenging President Trump’s crackdown on sanctuary cities, but no.
Judge William Orrick went right ahead on Monday night with his 28-page order declaring a nationwide permanent injunction against the president’s effort to punish sanctuary cities with the loss of federal funds. Judge Orrick was named to the federal bench in 2013 after he bundled at least $200,000 for Obama and donated another $30,800 to groups supporting him.
As U.S. Attorney General Jeff Sessions said last week in his address to the Federalist Society, “an increasing number of district courts are taking the dramatic step of issuing nationwide injunctions that block the entire U.S. government from enforcing a statute nationwide. In effect, single judges are making themselves super-legislators for the entire United States.”
“The Supreme Court has consistently and repeatedly made clear that courts should limit relief to the parties before them,” General Sessions continued. “So if lower courts continue to ignore that precedent, then the Supreme Court should send that message again.”
Last month California became a sanctuary state when Governor Jerry Brown signed a new law that limits what state and local officials can say to federal immigration officers about people detained by police or awaiting trial. It also prohibits law enforcement from inquiring about a person's immigration status.
The law, known as SB 54, was championed by state senate president pro tem Kevin de Leon, who is running to replace Dianne Feinstein in the U.S. Senate. If elected, he would represent a state that is home to more than 2.3 million illegal aliens – a state where 45 percent of the population told the Census Bureau that a language other than English is spoken at home.
The harm of sanctuary policies is illustrated by the case of Nery Israel Estrada-Margos, who was arrested by Santa Rosa, California police on August 18 after allegedly beating his girlfriend, Veronica Cabrera Ramirez, to death. The illegal alien had been arrested two weeks earlier, on August 2, for domestic violence, but released because he had no prior convictions.
The sheriff of Santa Rosa county, which has its own sanctuary policy, defended the prior release by claiming he gave a heads-up to agents of the federal Immigration and Customs Enforcement (ICE). In fact, local officials gave ICE only 16 minutes to travel over 60 miles, and the man was gone by the time ICE got there.
Similar atrocities have occurred in other sanctuary jurisdictions, which are mostly found in the 20 so-called blue states that voted for Hillary Clinton for president. In Maryland near Washington, D.C., Montgomery County officials ignored a detainer from ICE in order to release Mario Granados-Alvarado, who broke into an unmarked police car and stole an AR-15 and ammunition from the officer’s trunk.
Near the town of Brentwood on New York’s Long Island, three more young bodies were found bearing the marks of ritual killing by the gang called MS-13. They were Angel Soler, 15, from Honduras, who had been hacked to death with a machete; Javier Castillo, 16, from El Salvador; and Kerin Pineda, 19, from Honduras.
In Massachusetts, the popular columnist and talk-show host Howie Carr identified an assortment of violent crimes recently committed by “Third World illegal-alien criminals.” In just the last few weeks a Cambodian, an African, a Salvadoran, a Dominican, a Vietnamese, a Chinese, and a Liberian were charged or convicted of murder, assault, drug trafficking, identity fraud and resisting a federal officer.
The tax reform bill moving through Congress plugs one of the ways in which illegal aliens have been supporting themselves with federal tax credits. The bill requires a valid Social Security number to claim the Additional Child Tax Credit, under which $4.2 billion a year has been paid out to illegal aliens who lack a valid number.
That’s fine as far as it goes, but child tax credits should require a valid ID from both parents, not just one. An even better reform, which is not currently in the bill, would be to prohibit employers from getting a business tax deduction from wages paid to unauthorized alien workers.
According to the Center for Immigration Studies, $165 billion a year in deductible wages is currently being paid to illegal workers, thereby saving their employers about $25.4 billion a year in federal taxes. Plugging that gap would yield $254 billion over 10 years which could support additional tax cuts for law-abiding Americans.
