Policy Institutes

Rep. Ted Yoho (R-FL) and 11 co-sponsors recently introduced House Concurrent Resolution 40. It expresses the perfectly laudable “sense of Congress that all direct and indirect subsidies that benefit the production or export of sugar by all major sugar producing and consuming countries should be eliminated.” Things go downhill from there.

The resolution conveniently lists the trade-distorting sugar policies of Brazil, India, Thailand, the European Union, and Mexico, while neglecting to mention U.S. tariff-rate quotas (TRQs) and domestic price supports. The president is encouraged to “seek elimination of all direct and indirect subsidies benefiting the production or export of sugar” in foreign countries. Once the president has accomplished this objective and submits a report to Congress detailing how other countries have eliminated their trade-distorting measures, then he “should propose to Congress legislation to implement United States sugar policy reforms.” 

In essence this means, “Once other countries have given up all policies that favor their sugar growers, let us know and we’ll think about whether we should change ours.” Not exactly demonstrating robust U.S. leadership on trade, is it? 

The American Sugar Alliance (ASA), which represents domestic sugar growers and processors, is a strong supporter of the policy status quo. It serves their interests reasonably well. Or, at least it accomplishes the transfer of a lot of money from U.S. consumers to U.S. sugar producers. Not surprisingly, ASA likes Rep. Yoho’s approach to “reform.” ASA can express full support for this version of zero-for-zero knowing full well that it will never happen. 

An ASA statement praising the resolution laments that “Sugar producers … are also struggling with U.S. sugar prices that are currently as low as they were in the 1980s.” That statement may be technically correct because in the early 1980s sugar prices peaked much higher than today’s levels. What it doesn’t say, though, is that U.S. sugar prices have been in a long-term uptrend since 2013 and now are in the neighborhood of 30 cents per pound for raw cane sugar – well above the U.S. loan rate (support price) of 18.75 cents. 

The statement goes on to say, “Jack Pettus, ASA’s chairman, said new technology and strong business practices have made U.S. producers among the world’s most efficient. They are ready to compete on a level international playing field that is subsidy free.” If Pettus had stopped before adding the words, “that is subsidy free,” he and I would be in complete agreement. As I wrote two years ago in the paper, “Toward Free Trade in Sugar,” the U.S. industry is among the world’s most efficient. Based on an analysis published in the May 15, 2014, edition (pages 17-33) of the USDA/ERS publication, Sugar and Sweeteners Outlook, U.S. sugar producers could compete effectively even without the current system of import restrictions and domestic price supports. 

The Sugar and Sweeteners Outlook article addresses relative costs of production across the world’s major sugar-producing regions. If that study doesn’t by itself persuade that the U.S. industry no longer needs protection from imports, consider this additional evidence: Canadian farmers grow sugar beets solely on the basis of earnings from the marketplace. The Canadian government provides no import restrictions or other forms of income assistance. If Canada can produce sugar without subsidies, why can’t the United States?

Instead of pussyfooting around and giving lip service to sugar policy liberalization, the United States should show genuine leadership. The best way to do so would be to end U.S. import restrictions and domestic supports unilaterally. That would not only create quite a constructive stir in the global sugar community, it also would give the United States a great deal of moral authority to request similar actions by other countries. 

Unilateral reform would serve the best interests of the United States. The economic welfare of a country always rises when trade restrictions are reduced or eliminated–gains to consumers exceed any losses to producers. The sugar program’s rigid market-control mechanisms prevent free movement of sugar prices in response to supply and demand. That rigidity causes resources to be used inefficiently and inflicts large deadweight losses on the U.S. economy.

After cleaning up its own policy mess, the United States would be in a strong position to encourage reform overseas. There’s nothing like walking the walk to build negotiating credibility. 

Instead of offering zero policy reforms and getting zero back, it’s time for the United States to demonstrate leadership by ending its sugar market distortions unilaterally. That’s the best way to encourage other countries to do the same.  

During his campaign, President Trump said that he wanted drones to patrol the border 24/7. Customs and Border Protection (CBP), a Department of Homeland Security (DHS) agency, has used drones originally designed for foreign battlefields in order to conduct border surveillance, although these efforts have hardly been efficient. Federal solicitation documents reveal that DHS is looking to smaller drones with facial recognition capabilities. This ought to concern Americans who value civil liberties.

Before unpacking why plans for CBP facial recognition drones are disquieting, it’s worth outlining what kind of capabilities DHS is looking for.

The solicitation notice states the following:

This OTS [Other Transaction Solicitation] call seeks novel sUAS [small unmanned aerial system] capabilities and technologies to augment CBP and USBP [U.S. Border Patrol] mission capabilities. In particular, DHS is interested in technologies and solutions that support USBP agent activities, including enhanced overall situational awareness or support during distinct events, such as detection, tracking, interdiction, and apprehension, and search and rescue (SAR) operations. USBP agents operate day and night in diverse and extreme environments across thousands of miles of the nation’s international land borders and coastal waters. Agents must patrol remote areas, often with significantly limited mobility, visibility and communications. Additionally, agents are often required to traverse rough terrain on foot while carrying large amounts of equipment and, with limited intelligence and support, resolve encounters with unknown and potentially hostile actors. DHS seeks sUAS solutions that can augment USBP capabilities in such conditions.

Because of the “very positive/robust response” to this solicitation, DHS is closing the OTS call early, with an April 27th deadline now in place.

The solicitation lists required sensor capabilities for the drones, including, “Provides a surveillance range of 3 miles (objective),” “Able to track multiple targets persistently,” and “Identification of humans via facial recognition or other biometric at range.”

Later on, the same document notes:

the sensor technology would have facial recognition capabilities that allow it cross-reference any persons identified with relevant law enforcement databases. The data gathered via the sensors would provide information to USBP agents including the presence and extent of potential threats and support the ability of the agent to determine an appropriate response.

If you’re an American adult reading this there is a good chance that your facial image is in one of these “relevant law enforcement databases.” A 2016 report published by Georgetown Law’s Center on Privacy and Technology revealed: “One in two American adults is in a law enforcement face recognition network.” A Government Accountability Office report from last year found that the Federal Bureau of Investigation’s facial recognition system has access to more than 411 million facial images, including the driver’s license photos from sixteen states.

When considering CBP’s activities we shouldn’t only be thinking about America’s land borders. Current law allows CBP officials to stop and search vehicles within 100 miles of America’s external boundary in order to prevent illegal immigration. Roughly two-thirds of Americans live in this so-called “Constitution-free” zone. Although DHS’ solicitation mentions facial recognition drones being used as part of border patrol we should be prepared for them to make appearances at interior checkpoints as well as at ports of entry.

CBP and other federal law enforcement agencies using facial recognition tools should only be able to access facial images related to wanted persons and those with a history of violent crime. Allowing police to identify law-abiding citizens going about their day or participating in a First Amendment-protected activity, such as a protest, could have a disturbing chilling effect on members of the public (as Georgetown researchers noted). Because the Supreme Court has yet to rule on whether law enforcement officials using facial recognition technology are conducting Fourth Amendment searches it’s up to federal agencies to implement such policies of their own accord.

Drones are not the only devices that can be outfitted with facial recognition tools. As I wrote late last year, facial recognition tools can be used with police body cameras. As police drones and body cameras become more popular we should be wary of the fact that these tools can serve as platforms for surveillance technology more intrusive than ordinary cameras.

As a candidate, Donald Trump held a relatively moderate line on drug prohibition, often arguing that issues like marijuana legalization should be left to state governments. His selection of Jeff Sessions as Attorney General, however, sent an entirely different message. Sessions is a long-time champion of the federal drug war, and since taking over the Justice Department he has continued to make statements that hint at a return to a much harsher federal approach to drug prohibition.

The Washington Post ran a story this weekend detailing some of the shifts taking place at the Department of Justice, including a green light for federal prosecutors to step up prosecutions for low-level offenses and to rely on heavy mandatory minimums to leverage plea deals. 

Sessions is also expected to take a harder line on the punishment for using and distributing marijuana, a drug he has long abhorred. His crime task force will review existing marijuana policy, according to a memo he wrote prosecutors last week.

The Post story also highlights the central role of Steven H. Cook, a former police officer and federal prosecutor, within the Sessions Department of Justice. Cook has been traveling with Sessions as the Attorney General makes the case for a return to the “tough-on-crime” posture of the 80s and 90s, arguing that efforts to treat even low-level drug offenses as anything less than violent crimes are misguided and “soft.”

Kevin Ring, president of Families Against Mandatory Minimums, expressed his alarm to the Post:

“If there was a flickering candle of hope that remained for sentencing reform, Cook’s appointment was a fire hose. There simply aren’t enough backhoes to build all the prisons it would take to realize Steve Cook’s vision for America.”

Cook, like Sessions, believes that the drug market is inherently violent and therefore the only response is to crack down:

“Drug trafficking is inherently violent. Drug traffickers are dealing in a heavy cash business. They can’t resolve disputes in court. They resolve the disputes on the street, and they resolve them through violence.”

It’s true that the black market for drugs relies on cash transactions and violence, but Cook and Sessions ignore the obvious implication. The drug market has to rely on cash transfers and violence because drugs are illegal. Drug market violence is a function of the market’s illegality, not of the drugs themselves. The same was true of alcohol distributors under prohibition. In 2017 if two alcohol distributors have a dispute, they settle it in court. If two alcohol distributors in 1929 had a dispute, they settled it on the street corner with Tommy guns and Molotov cocktails.  

Drug trafficking isn’t inherently violent; drug prohibition is.

The Trump Administration has yet to announce much in the way of concrete policy changes, but the personnel choices and the drug warrior rhetoric coming from the new administration are causes for concern looking forward.  

For more on drug policy recommendations, the Director of Cato’s Project on Criminal Justice Tim Lynch recently produced a chapter on the federal drug war for Cato’s Handbook for Policymakers. The chapter calls for the repeal of the federal Controlled Substances Act and the abolition of the Drug Enforcement Administration.

Those with an interest in the mass incarceration problem in America may also be interested in an upcoming book forum featuring Fordham law professor John Pfaff, whose new book argues that local prosecutors are a primary and underappreciated force behind mass incarceration. The forum will take place at the Cato Institute on April 26.

A new Reuters/Ipsos poll examines how Donald Trump impacts Democrats’ and Republicans’ conventional public policy opinions. The survey asked Americans to evaluate a series of questions related to statements Donald Trump has made on public policy. However, the poll only told half of the respondents that Trump had made the statement, the other half were simply asked if they agreed or disagreed with the position. Sure enough, the “Trump effect” turned Democrats’ away from single-payer health care and got Republicans somewhat less convinced of their opposition.

The survey asked respondents how much they agreed or disagreed with the following statement made by Donald Trump: “When it comes to health care, the government should take care of everybody and the government should pay for it.” However, only half the sample were told Trump made the statement, the other half were simply asked if they agreed or disagreed that government should pay for everyone’s healthcare.

At first, 68% of Democrats agreed that government should pay for everybody’s healthcare. However, this share drops 21 points to 47% among Democrats who were told Trump thought government should pay for everyone’s healthcare. Republicans’ support increased, but by 6 points, from 33% to 39%, among those who were told Trump made the statement. Initially, 61% of Republicans disagreed with the idea of single-payer, but opposition declined to 50% among those who learned Trump favored it.

The survey also found that Trump could make Democrats more supportive of the idea of American exceptionalism and turn Republicans against it. At first, a majority (53%) of Democrats agreed that “American exceptionalism—the idea that the USA holds a unique place in history—is insulting to people from other countries.” However, results flip among Democrats who were told that Trump made this statement. Instead, a majority (54%) come to disagree with the statement that American exceptionalism is insulting to people from other countries.  

Republicans operated in reverse. A majority (53%) of Republicans at first disagreed that the idea of American exceptionalism is insulting to people from other countries. However, a plurality (46%) came to agree with the statement when they heard that Trump believes American exceptionalism is insulting abroad.

The survey found several more instances of the “Trump effect” among partisans. Notably, majorities of both Democrats (69%) and Republicans (56%) agreed that “government officials should be forbidden from financially benefitting from their position.” However, when Trump was explicitly identified, only 23% of Republicans believed that “Donald Trump should be forbidden from financially benefiting from his position”—a shift of 33 points.

It’s important to keep in mind that Democratic and Republican partisans may have differently interpreted the statements mentioning Trump. For instance, perhaps Republicans assume Trump benefiting financially from his position means his brand may benefit, while Democrats may think it means that he would use his power to offer special preferences to his businesses. Similarly, Trump may not have dissuaded Democrats from supporting a single-payer health care system. Instead, Democrats may wish government to manage the health care system unless Trump is at the helm of the federal government. Thus, the “Trump effect” might be due to different interpretations of the statement’s meaning.

In either case, Trump remains a polarizing force in American politics. He may sour Democrats on ideas they have historically favored and warm Republicans to ideas they’ve long opposed. As Howard House, a Democrat from Jacksonville, Florida, put it: “I’m basically in disagreement with everything [Trump] says. I’ve almost closed my mind to the guy.” Conversely, Susie Steward from Fort Worth Texas explained, “[Trump] is a very intelligent man, He’s proved himself to be one hell of a manager. A builder. I think he has the business sense to do what’s best for the country.” 

This suggests that voters like Howard and Susie tend not to evaluate policy ideas based the policy’s merits, but rather on the association they make between the policy and Donald Trump. Policies like health care and tax reform that become associated with Trump may become forever tainted in the minds of some Democrats. Conversely, some Republicans may come to accept policies out of line with GOP orthodoxy dependent on their level of confidence in Donald Trump. 

There was near consensus in Washington, D.C. last week in support of the U.S. strike on Syria. Voices from the left supporting Trump’s action include Hillary Clinton, most of America’s European allies, Tom Friedman, and a large number of former Obama officials. On the right, the usual suspects like Senators John McCain and Lindsey Graham supported the attack, as did most Republican members of Congress, including some like Majority Leader Senator Mitch McConnell who opposed exactly such an action when President Obama was considering in back in 2013. Even the mainstream media appear to have decided it was time to strike Assad, at least to judge from much of the breathless “journalism” we’ve seen so far.

On first blush one might imagine that this consensus is a good thing, coming as it does during what has otherwise been an incredibly polarized first few months of Trump’s presidency. Finally, you might say, we agree on something. And all this agreement among the people we elect and pay to run U.S. foreign policy might also give you confidence that Trump did the right thing.

That confidence, sadly, would be misplaced. The truth is that the elite consensus on Syria, like Trump’s missile strike, is premature and ultimately dangerous to American national security.

The fundamental danger of elite consensus is that it undermines the marketplace of ideas. A democracy’s primary strength in foreign policy making is the ability to weigh competing policy proposals in the news media. Debate and deliberation reveal the evidence and logic behind competing claims and helps the public and political leaders assess the implications of different courses of action. This process, in theory, helps the United States avoid poor decisions.

Consensus, however, undermines this process by substituting doctrine for debate. Almost by definition, consensus requires little, if any, debate or deliberation. When was the last time elite consensus resulted from a free-flowing and vigorous debate in the United States? The natural outcome of debate is division and disagreement. Consensus emerges only when people already agree so completely on the key assumptions and value judgments involved that the conclusions are preordained and debate is unnecessary.

In the case of Syria, Republican and Democratic elites supported Trump’s missile strike not because they had an extended debate over its wisdom–in fact, there was zero debate before the surprise attack was announced–but because they all relied on the same basic doctrine that strongly endorses the value of military intervention, what Obama recently called the “Washington playbook.” Reliance on doctrine may be sufficient when the topic is how to handle routine issues, but it is clearly not the right approach when it comes to complex policy problems, about which both citizens and political leaders have incomplete information. Though beliefs are useful as general guidelines, they must be married to a careful consideration of the facts of the case at hand in order to produce sound policies. And the best way to assess the connection between beliefs and actions is to debate policy options in the marketplace of ideas.

Elite consensus can also lead to poor policy through overconfidence and precipitous action. Policies forged through debate are shaped by compromise and tempered by exposure to wide-ranging ideas and information. Consensus policies, on the other hand, require neither self-reflection nor compromise. Buoyed by widespread agreement in Washington, political leaders may feel freer to take action without subjecting their strategies to serious cross-examination. Unburdened by challenges to their views from the opposing party and confident that they are taking the consensus approach, political leaders are likely to move more quickly to take action than they would otherwise. Consider how quickly, for example, Trump acted in the wake of the chemical attack. Further, the lack of pushback from opposing elites makes it very possible that Trump’s next move will be more aggressive than it would have been if there had been more vigorous debate.

In the longer run elite consensus is dangerously self-perpetuating and can prevent course correction. Elite consensus creates powerful social forces that tend to strangle debate and stifle criticism. As research has shown, journalists for mainstream news outlets closely index their coverage to the debate in Washington. When elites are in consensus, journalists rarely seek out alternative views, thereby presenting the public with a uniform message and making it difficult to identify weaknesses in existing policies. This, in turn, props up public support for that policy and makes it riskier for political leaders to criticize the policy or the president. In the long run, these dynamics can make it more difficult for U.S. leaders to engage in serious self-appraisal when circumstances warrant. Those who doubt how difficult course correction can be need only look at the quagmires of Afghanistan and Iraq for evidence.

Now that the initial adrenaline rush of the crisis has passed the nation needs a more robust debate on Syria. Despite near unanimous support for the missile strike among Republican and Democratic elites, public support for the strikes is decidedly mixed. Just 51% of the public supports the strikes, only a third believe the strikes will be even somewhat likely to deter Assad from using chemical weapons, and just 20% support further military action. Elites calling on Trump to take more aggressive steps need to do more than wave horrible images and invoke the need for America to provide leadership. Indeed, given the dangers of consensus and complexities of the situation in Syria, now would be a good time for President Trump to reconsider the wisdom of the Washington playbook.

The recipe for growth and prosperity isn’t very complicated.

Adam Smith provided a very simple formula back in the 1700s.

For folks who prefer a more quantitative approach, Economic Freedom of the World uses dozens of variables to rank nations based on key indices such as rule of law, size of government, regulatory burden, trade openness, and stable money.

One of the heartening lessons from this research is that countries don’t need perfect policy. So long as there is simply “breathing room” for the private sector, growth is possible. Just look at China, for instance, where hundreds of millions of people have been lifted from destitution thanks to a modest bit of economic liberalization.

Indeed, it’s remarkable how good policy (if sustained over several decades) can generate very positive results.

That’s the main message in this new video from the Center for Freedom and Prosperity.

The first part of the video, narrated by Abir Doumit, reviews success stories from around the world, including Hong Kong, Singapore, Chile, Estonia, Taiwan, Ireland, South Korea, and Botswana.

Pay particular attention to the charts showing how per-capita economic output has grown over time in these jurisdictions compared to other nations. That’s the real test of what works.

The second part of the video exposes the scandalous actions of international bureaucracies, which are urging higher fiscal burdens in developing nations even though no poor nation has ever become a rich nation with bigger government. Never.

Yet bureaucracies such as the United Nations, the International Monetary Fund, and the Organization for Economic Cooperation and Development are explicitly pushing for higher taxes in poor nations based on the anti-empirical notion that bigger government is a strategy for growth.

I’m not joking.

As Ms. Doumit remarks in the video, these bureaucracies never offer a shred of evidence for this bizarre hypothesis.

And what’s especially frustrating is that the big nations of the western world (i.e., the ones that control the international bureaucracies) all became rich when government was very small.

And while the bureaucracies never provide any data or evidence, the Center for Freedom and Prosperity’s video is chock full of substantive information. Consider, for instance, this chart showing that there was almost no redistribution spending in the western world as late as 1930.

Unfortunately, the burden of government spending in western nations has metastasized starting in the 1930s. Total outlays now consume enormous amounts of economic output and counterproductive redistribution spending is now the biggest part of national budgets.

But at least western nations became rich first and then made the mistake of adopting bad fiscal policy (fortunately offset by improvements in other areas such as trade liberalization).

The international bureaucracies are trying to convince poor nations, which already suffer from bad policy, that they can succeed by imposing additional bad fiscal policy and then magically hope that growth will materialize.

And having just spent last week observing two conferences on tax and development at the United Nations in New York City, I can assure you that this is what they really think.

Immigration has small long-run relative wage impacts on American workers by education (Figure 1). These estimates are the most popular and widely cited in the immigration debate. They were completed by George Borjas and Gianmarco Ottaviano and Giovanni Peri. Their findings are very close but diverge most appreciably for the wages of dropouts, even though the effect is small and positive for all native-born workers lumped together. According to the 2015 American Community Survey, 9.4 percent of native-born Americans over the age of 25 are dropouts. Thus, the wages for over 90 percent of Americans actually increased due to immigration according to more pessimistic findings in Figure 1.

Figure 1

Relative Impact of Immigration on Native Wages by Education

 

Sources: Borjas, p. 120; Ottaviano & Peri, Table 6.

Note: Borjas looks at 1990-2010. Ottaviano and Peri look at 1990-2006.

Borjas and Ottaviano and Peri find that the wages of immigrant workers are most affected by new immigrants (Figure 2). That’s because new immigrants have skills and education levels most similar to previous immigrants, so they compete against each other more than with natives who have very different levels of skill and education. As we point out in Figure 25 of this bulletin, immigrants still support liberalized immigration despite the negative wage effects they experience. There are at least three explanations for this.

Figure 2

Relative Impact of Immigration on Immigrant Wages by Education

 

Sources: Borjas, p. 120; Ottaviano & Peri, Table 6.

Note: Borjas looks at 1990-2010. Ottaviano and Peri look at 1990-2006.

First, most of these immigrants want to bring over their family members, so they support expanded immigration even if they know they will face more wage competition. People are willing to pay a lot to have their families nearby. Second, wage competition does not generally cause anti-immigration opinions. As Jens Hainmueller and Daniel J. Hopkins wrote in their wonderful literature review of the literature on opinions toward immigration: “As an explanation of mass attitudes toward immigration, the labor market competition hypothesis has repeatedly failed to find empirical support, making it something of a zombie theory.” Immigration attitudes show little evidence of being strongly correlated with personal economic circumstances. Instead, people are most concerned with immigration’s nation-wide impact on many issues.

Third, the wage gains from immigrating are so relatively gargantuan that the small single-digit decline is swamped. Research on the wage premium by Michael Clemens, Claudio E. Montenegro, and Lant Pritchett illustrate this point. A 35-year-old Mexican-born male urban worker with nine years of education can expect a monthly wage 2.53 times as large just by immigrating to the United States. In other words, his monthly wage income rises from $580.90 to $1,470.80 by immigrating. Without immigrants during the time period, as measured by Borjas and Ottaviano and Peri, his monthly wage income would have instead been $1,541.40 or $1,548.75, respectively, or 2.65 to 2.67 times as great as in Mexico. That’s a maximum difference of about $78 a month.

The Borjas and Ottaviano and Peri findings are at ends of the academic literature as most findings are even closer to zero. These differences are small for natives and, with the exception of dropouts, all point in the same direction by skill-education. Borjas and Ottaviano and Peri reach slightly different conclusions because they measure the immigrant impact on population differently. Borjas measures the immigrant impact by their fraction of the population by skill-education level while Ottaviano and Peri measure it by looking at the inflow of the share of immigrants in the labor force by skill-education level compared to the previous Census.

Regardless, Borjas and Ottaviano and Peri agree on at least two points. First, immigrants raise relative native-born American wages overall by +0.6 percent. Second, immigrant workers compete with other immigrant workers and lower their wages in every education group reported. Native-born American workers do not face much wage competition with immigrants. 

The Washington Post reports:

Del. David B. Albo … (R-Fairfax) surprised his party by announcing Wednesday that he won’t seek a 12th term [in the Virginia legislature].

Really? After 12 terms in office it’s a surprise when a politician doesn’t run for a 13th term? Or it’s “shocking” when an 80-year-old U.S. senator doesn’t seek to add to her 40 years in Congress?

Maybe it’s time to limit terms. The American Founders believed in rotation in office. They wanted lawmakers to live under the laws they passed—and wanted to draw the Congress from people who have been living under them. And polls show that contemporary Americans agree with them.

Only 15 percent of Americans approve of Congress’s performance. Yet in almost every election more than 90 percent of incumbents are reelected. In fact, the most common reelection rate for House members over the past 30 years is 98 percent. Even when voters are angry, it’s hard to compete with the power of incumbency.

Americans don’t want a permanent ruling class of career politicians. But that’s what the power of incumbency and all the perks that incumbents give themselves are giving us.

We want a citizen legislature and a citizen Congress—a government of, by, and for the people.

To get that, we need term limits. We should limit members to three terms in the House and two terms in the Senate. There must be more than one person in San Francisco capable of making laws. And more than one family in Detroit.

Term limits might result in the election of people who don’t want to make legislation a lifelong career.

Some say that term limits would deprive us of the skills of experienced lawmakers. Really? It’s the experienced legislators who gave us a $20 trillion national debt, and the endless war in Iraq (and Yemen and Syria), and a Veterans Affairs system that got no oversight, and massive government spying with no congressional oversight, and the Wall Street bailout.

Politicians go to Washington and they forget what it’s like to live under the laws they pass. As we’ve seen in some recent elections, they may not even keep a home in the district they represent.

When journalists and political insiders are surprised and shocked by the retirement of legislators who have served for decades, it’s time for new blood.

Political scientists say the evidence on the effect of term limits is mixed. But the evidence on the effects of the permanent congressional class is pretty clear.

For more on term limits, see the Cato Handbook for Congress, Ed Crane’s 1995 congressional testimony, or this very thoughtful article by Mark Petracca, “The Poison of Professional Politics.”

Last week, I highlighted how the DC authorities will be “among [the] first in [the] nation to require child-care workers to get college degrees.” Basic economics tells us this will restrict the supply of potential careers, raise prices, and, I fear, over time lead to a demand for more subsidies to “make child care more affordable.”

There was another possibility I did not explore. Today’s Washington Post suggests that subsidizing supply is on the agenda instead:

Mayor Muriel E. Bowser (D) has offered a $15 million proposal to address the acute shortage of licensed child-care options for the city’s infants and toddlers, an issue that has gained urgency amid a baby boom. Her 2018 budget includes competitive grants to help high-quality providers expand or open centers and would also make space available for child-care facilities in three city-owned or leased buildings.

A basic principle that policymakers should follow is “first do no harm.” DC has a general affordability and availability problem, which is screaming “restricted supply.” But now the DC authorities are having to subsidize supply in part to overcome the reductions in supply caused by their own policies. Watch for calls for more demand-side support next.

The result? More and more government control over this crucial economic, social, and familial aspect of life.

I’ve got a new piece at the Institute for Humane Studies’ Learn Liberty explaining the basics of how politicians rig district lines to reward friends and punish foes, the entrenchment of an established political class that results, and how it might be combated. Snippet:

In a classic single-party gerrymander, the party in power packs opposition voters densely into as few districts as possible, thus enabling its own voters to lead by a comfortable margin in a maximum of districts. When a legislature is under split party control, the theme is often bipartisan connivance: you protect your incumbents and we’ll protect ours. Third-party and independent voters, as is so common in our system, have no one looking out for their interests….

Geographic information systems (GIS) methods now allow members of the public using inexpensive software to analyze the full data set behind a map. In several states, that has meant members of the public could offer maps of their own or make well-informed critiques of legislators’ proposed maps. In one triumph for citizen data use, the Pennsylvania Supreme Court invalidated a map drawn by lawmakers as clearly inferior to a map that had been submitted independently by an Allentown piano teacher.

Separately, I generally agree with what Aaron Blake writes in a new Washington Post piece: with so many other solid reasons to end gerrymandering, there’s no need to over-sell two arguments frequently invoked against it, the polarization thesis and the “GOP-fixed House” thesis.

On the much-noted trend in national politics toward ideological polarization, it seems clear that gerrymandering is but one contributing factor among many. The U.S. Senate, for which districting is not an issue, has followed a path not too far from that of the House, with virtually all Senate Democrats now to the left of virtually all Senate Republicans and stepped-up party-line cohesion on voting. And states with relatively fair districting maps have experienced polarization with the rest. So, yes, reform will probably make a difference at the margins for those who would like there to be more swing or contestable seats, but don’t expect miracles.

And while gerrymandering today on net benefits Republicans (which has not always been the case), it is probable for reasons Blake explains that fair/neutral districting would still have produced a GOP-run House in 2016. An important reason is that Democratic voters are so concentrated in cities.

For some of the many other reasons the cause is worth pursuing no matter which party (if any) you identify with, check out my IHS piece or, for somewhat more detail, my chapter on the subject in the new Eighth Edition of the Cato Handbook for Policymakers. I’ve previously written several pieces about my experience dealing with the problem in my own state of Maryland.

Attorney General Jeff Sessions apparently plans to entrust criminal justice “reform” to Steven H. Cook,

a former street cop [turned] … federal prosecutor … [who] saw nothing wrong with … life sentences for drug charges [or] … the huge growth of the prison population. 

This news is not surprising given Sessions’ views on the drug war (“good people don’t smoke marijuana”). But the Sessions/Cook perspective is still depressing:

Law enforcement officials say that Sessions and Cook are preparing a plan to prosecute more drug and gun cases and pursue mandatory minimum sentences. The two men are eager to bring back the national crime strategy of the 1980s and ’90s from the peak of the drug war, an approach that had fallen out of favor in recent years as minority communities grappled with the effects of mass incarceration.

The “silver” lining is that Sessions’s position–drug users are bad people–makes the issue as stark as possible: do we, as a society, believe in individual liberty or not? Much opposition to the drug war (e.g., campaigns against mandatory minimums) avoids that question.

Mandatory minimums are misguided, but mainly because drug trafficking and possession should not be crimes in the first place.  

The Drug War will end only when opponents focus on the fundamental issue: drug use is an individual decision, and government has no right to interfere.

Speaking to reporters aboard Air Force One yesterday, President Trump strongly condemned the recent nerve gas attack in Northern Syria: “I think what Assad did is terrible…. a disgrace to humanity,” he declared: “something should happen.” Last night, US forces hit a Syrian airfield with 59 Tomahawk missiles launched from destroyers in the Eastern Mediterranean. This was something, and it it happened. For a political outsider, Trump’s picked up “politician’s logic” pretty fast.  

I won’t hazard a guess at what Trump’s exercise in Tomahawk humanitarianism means for our ongoing involvement in the Syrian civil war. His own Secretary of State is less than coherent on the subject, alternately announcing that “steps are underway” to remove Assad and that there’s been “no change” in US “policy or posture relative to our military activities in Syria.” But the airstrikes are clarifying in one respect: they confirm the worst fears about our 45th president’s hairtrigger temperament and disdain for legal limits on his ability to wage war.

Thus far, the administration has said nothing about the legal authority for the strikes. There’s not much that can be said: they’re plainly illegal. He had neither statutory nor constitutional authority to order them.

Earlier today, Sen. John McCain insisted that the strikes were covered by the Authorization for the Use of Military Force (AUMF) Congress passed in 2001. True, the 2001 AUMF, targeting the perpetrators of the 9/11 attacks, has proven an impressively stretchable statute: in Syria alone it already supposedly covers Al Qaeda affiliates and the ISIS operatives beheading them. But it’s hard to see how it can be stretched far enough to underwrite military action against Assad, who’s at war with both. The legislators who voted for that AUMF in 2001 thought they were authorizing our 43rd president to fight Al Qaeda and the Taliban; it’s safe to say none of them imagined they were giving our 45th president the power to take all sides in a future Syrian civil war.

Without statutory cover, all that’s left is an appeal to presidential power under Article II of the Constitution. But that document vests the bulk of the military powers it grants in Congress, with the aim of “clogging, rather than facilitating war,” as George Mason put it. In that framework, the president retains the power to “repel sudden attacks” against the US; but he does not have the power to launch them. Candidate Barack Obama had it right in 2007 when he told reporter Charlie Savage that “The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”

As president, Obama violated that pledge repeatedly, but his decision not to attack Syria after its use of chemical weapons in 2013 was one of the few occasions where he honored it. While insisting in public that he had all the authority he needed to wage war without Congress, in private, Obama told aides he agreed with the position he’d outlined to Savage in 2007. Still, Obama aide Ben Rhodes told Savage, “it was still a choice, not a necessity, to go to Congress because ‘it’s not like the lawyers couldn’t have come up with a theory.’”

While we’re waiting to see what legal theory Trump’s lawyers come up with, it’s worth worrying about the practical dangers presented by a system that allows the president to wage war at will. 

The Framers’ allocation of constitutional war powers was informed by their skeptical view of human nature. As Madison put it: “In war, the honours and emoluments of office are to be multiplied; and it is the executive patronage under which they are to be enjoyed. It is in war, finally, that laurels are to be gathered, and it is the executive brow they are to encircle. The strongest passions and most dangerous weaknesses of the human breast; ambition, avarice, vanity, the honourable or venial love of fame, are all in conspiracy against the desire and duty of peace.” 

In the 70-odd days since he became president, Donald Trump has been finding out the hard way that government doesn’t work like a business. Judges can push back; the Freedom Caucus won’t vote for your bill just because you told them to. The buck may stop at the president’s desk when it comes to public expectations, but the threat of “you’re fired” is of limited use when the president’s facing down the permanent bureaucracy or coordinate branches of government. Contemplating the prospect of an Eisenhower presidency, Harry Truman famously remarked: ”He’ll sit here, and he’ll say, ‘Do this! Do that!’ And nothing will happen. Poor Ike—it won’t be a bit like the Army.”

Except, of course, when it comes to ordering the US military into battle: the president’s role as commander-in-chief of US armed forces is one of the few aspects of the job where his power matches his absurdly vast responsibilities. He can say “do this! Do that!”—and something will happen. And that can be tempting, particularly when your approval ratings are about where Nixon’s were as Watergate unfolded.

As my colleague Julian Sanchez warns, “We are at the extremely dangerous stage where Trump is realizing he can automatically command the news cycle by ordering missile strikes.” Worse still, he can also—at least temporarily—get the approval he seems to crave. His drive-by bombing has already earned him strange new respect from neoconservative #NeverTrump-ers, who appear to believe that the mercurial celebreality billionaire is at his least frightening when he’s literally blowing things up. Centrist pundit Fareed Zakaria echoed that grotesque logic on CNN earlier today: “I think Donald Trump became president of the United States last night.”

As much as he disdains the media establishment, Trump revels in this sort of praise. It may not be long before he free-associates about it in interviews: “my airstrikes–which got terrific ratings, by the way….” And when the glow fades, he may be tempted to light it up again.

 

Here’s a joke: a Republican, a Democrat, the director of a left-wing think tank, three AEI scholars, and Ivanka Trump walk into a bar. What do they agree on?

The answer: they want federally mandated paid leave or child care, effective immediately.

You aren’t laughing? Well, you’re in good company – this joke isn’t funny, especially for women. Paid leave and child care policies have been tried in a variety of contexts, and to advocates’ dismay, the consequences are not universally beneficial to women.

As an example, take Chile, which in 2009 mandated employer-provided childcare for working moms. According to recent research, women employed by affected Chilean firms were paid between 9 and 20 percent lower wages than comparable female Chilean workers following policy implementation.

And the impact of women’s labor policies is arguably worse in Spain, which is struggling with the fallout of a 1999 policy that aims to protect women with children against layoffs [1] but in practice harms them: a natural experiment shows that after policy implementation, Spanish employers were less likely to hire childbearing-aged women, less likely to promote child-bearing-aged women, and more likely to lay child-bearing-aged women off.

Although Spain and especially Chile are different in myriad ways that limit extrapolation to a U.S. context, it’s hard to dismiss home-grown evidence. Though the United States doesn’t have a federally-mandated paid leave policy, it did enact a federally mandated unpaid leave policy, Family & Medical Leave Act (FMLA), in 1993. And despite FMLA being an accepted part of the modern legislative fabric, the consequences of the policy are not all stellar. Analysis suggests women hired after the policy are five percent more likely to be employed but eight percent less likely to be promoted.

Though the U.S. hasn’t adopted a paid leave mandate, a few states have. Research on policy outcomes in California show female labor force participation rates rising after implementation of unpaid leave (maybe good?), along with childbearing-aged female unemployment rates and unemployment duration rising (unambiguously bad). This is probably because the mandate made women universally more expensive in employer’s eyes, whether they intend to use it or not.

So why don’t the Ivankas of the world seem to care about these negative repercussions, at least as much as the imagined benefits of women’s policies? The most gracious interpretation is that modern advocates are uninformed. It could also be that it is inconvenient information.

And although advocates would like to paint a rosy picture, the reality is that some women, perhaps many, would be collateral damage under a federally mandated policy. For negatively affected women, that’s a lot more tragic than it is funny.

[1] This protection is granted if the worker had previously asked for a work-week reduction due to family responsibilities.

Many have started supporting a so-called merit-based immigration system since President Trump mentioned it a few months ago. A merit-based immigration system could mean just about anything but most define it as a system that admits more highly skilled and educated immigrants, as in Canada, and fewer lower-skilled and family-based immigrants as currently enter under America’s immigration system. Despite the lack of any significant legal or regulatory changes, new immigrants are becoming more highly educated immigrants over time even relative to natives.

The share of admitted immigrants who have at least a college education increased from 22 to 39 percent 1993 to 2015 (Figure 1). Over the same period, the share of admitted immigrants who are high school dropouts dropped from 37 percent to 27 percent. Virtually all of that change occurred since 2007 when illegal immigration slowed down and the number of Chinese and Indian immigrants began to grow relative to Mexicans. Although the American system does not select for education, it does not intrinsically favor the uneducated either.  

Figure 1
Share of New Immigrants by Education & Year of Admission

Source: Current Population Survey and author’s calculations

Immigrants in 1993 were less educated than natives in that year when controlling for age (Figure 2). However, new immigrants were more likely than natives to have a college or above education by 2015 (Figure 3).

 Figure 2

Share of New Immigrants and Natives by Education, 1993
Source: Current Population Survey and author’s calculations

Figure 3
Share of New Immigrants and Natives by Education, 2015

Source: Current Population Survey and author’s calculations

The percentage of dropout immigrants is still high in the United States relative to natives and to new immigrants in Australia and Canada. However, if this trend continues without any legal reforms then education of newly admitted immigrants in the United States will look more and more like those of countries with so-called meritocratic immigration systems. Rather than only counting immigrants under the employment-based green card category as meritocratic, the education and skills of all immigrants should be considered.

By a vote of 54-45, the Senate today concluded the long, bruising battle to confirm President Donald Trump’s nomination of Judge Neil Gorsuch to the U.S. Supreme Court. Chief Justice John Roberts is scheduled to swear Judge Gorsuch in at 9:00 a.m. on Monday morning. We can now look forward to the Court’s return to its normal practices, taking and deciding cases without the prospect of 4-4 decisions hanging over it.

Judge Gorsuch has often been likened to Justice Antonin Scalia, whose seat he will assume, and for good reason, for he too is a textualist and an originalist in his approach to constitutional and statutory interpretation. But he comes from a later generation, one immersed in the debates between liberals, conservatives, and classical liberals over the proper interpretation of the Constitution and the role of judges under it. During his confirmation hearings, for example, Judge Gorsuch spoke favorably of the Court’s decisions in cases like Meyer v. Nebraska and Pierce v. Society of Sisters, where the Court upheld parental rights not expressly found in the Constitution. That bodes well for his appreciation for the rich moral, political, and legal theory that stands behind and informs the often broad language of the Constitution, as his own graduate study at Oxford in natural law would suggest.

Speaking of generational change, an interesting historical note was just brought to my attention by a personal friend with whom I served in the Reagan administration, Chicago attorney Joseph A. Morris. As a law clerk for Justice Anthony Kennedy, Justice Gorsuch will be the first U.S. Supreme Court justice ever to serve on the bench alongside the justice for whom he clerked. The play between them will be fun to watch! Congratulations Judge, soon to be Justice, Neil Gorsuch.

Congratulations to Neil Gorsuch, who will be sworn in Monday as the newest Supreme Court justice. Gorsuch’s mentor, Justice Byron White, liked to say that each new justice makes for a new court, and I look forward to the breath of fresh air, intellectual rigor, collegiality, and constitutional seriousness that Justice Gorsuch will bring. I’m also glad that our nation’s political debate can move beyond this toxic episode and that we won’t ever have to discuss nuclear options with regard to judges ever again. 

With his decision to launch missile strikes against an airfield in Syria, President Donald Trump has apparently learned a lesson that eventually dawns on all American presidents, especially in the post-Cold War era: with great power comes great responsibility. I call it the power problem.

The power problem was encapsulated in the exchange between then-U.N. Ambassador Madeleine Albright and Gen. Colin Powell, at the time the Chairman of the Joint Chiefs of Staff:

What’s the point of having this superb military that you’re always talking about if we can’t use it?

Relieved of the burdens to justify U.S. military actions solely on the basis of our own national security interests, U.S. presidents and the foreign policy elites who advise them have gone searching for other reasons to use force. There will never be a shortage of aggrieved parties pleading for help. There is, however, a shortage of countries willing to help.

U.S. military power, and our willingness to use it, have discouraged others from possessing power of their own. They can reasonably claim that they lack the capability to act.

The United States doesn’t have that luxury. From the moment when a president arrives in the Oval Office, he possesses vast power, and few constraints on how it is used.

Using it wisely requires tremendous discipline, and a willingness to endure the criticisms of those who will accuse you of everything from callousness to mendacity – both when you act, and when you refuse to do so.

Trump’s repeated invocation of the doctrine “America First” suggested that he would not be swayed by such criticisms. And, in the past, he has suggested that the United States should not become involved in Syria’s civil war. In September 2013, for example, Donald Trump urged President Obama via Twitter not to attack Syria. 

But now, just 77 days into his presidency, he has created an inevitable rejoinder for every successive foreign policy crisis, anywhere in the world: “Mr. President, you struck Syrian government forces in April 2017. Why are you not striking [insert name of petty tyrant here] in response to equally grievous actions against [petty tyrant’s people]?”

In his statement last night justifying the use of unilateral force against Bashar al-Assad’s forces in Syria, President Trump explained “It is in this (sic) vital, national security interest of the United States to prevent and deter the spread and use of deadly chemical weapons.” 

It is a debatable point, and one that deserves to be debated. A new authorization for the use of military force (AUMF) would be a good place to start. There are risks, including conflict with nuclear-armed Russia. There are reasonable questions about what effect such strikes will have on Assad’s capacity to carry out similarly brutal killing by purely conventional means. And, lastly, having now introduced a very small increment of U.S. military power directly into the Syria conflict, some will wonder whether that signals a willingness to use much more. Those who castigated Barack Obama for refusing to intervene decisively in the Syrian civil war, including Sens. John McCain and Lindsey Graham, hope so. The question is whether President Trump, in the face of all this uncertainty, will be able to resist the temptation to escalate.

If he succumbs, Americans could find themselves sucked into yet another elective military quagmire in the Middle East.

Amid increasing tensions between Washington and Beijing over economic and security matters, Chinese President Xi Jinping is in Florida today and tomorrow for meetings with President Trump.  Although economic frictions between the world’s two largest economies are nothing new, the safeguards that have helped prevent those frictions from sparking an explosion and plunging the relationship into the protectionist abyss may no longer be reliable.

As I noted in this recent Cato Free Trade Bulletin: 

Never have the U.S. and Chinese economies been more interdependent than they are today. Never has the value of the bilateral trade and investment relationship been greater. Never has the precarious state of the global economy required comity between the United States and China more than it does now. Yet, with Donald J. Trump ascending to power on a platform of nationalism and protectionism, never have the stars been so perfectly aligned for the relationship to descend into a devastating trade war.

What are those safeguards and why might they no longer be reliable?

First, U.S. multinational business interests that used to favor treading lightly with China, and provided a policy counterweight to U.S. import-competing industries advocating protectionism, have grown disillusioned by the persistence of policies that continue to impede their success in Chinese markets. Many think a more aggressive posture from Washington, even if that makes matters worse for them in the short run, is overdue.

Second, the pro-China-trade lobbies in Washington have grown sheepish in their advocacy on account of an economic study that went viral last year, ascribing massive U.S. jobs losses to trade with China, and because many fear political retribution from challenging Trump’s assumptions.  Full-throated support for the relationship has become conditional support.

Third, now more than ever before, U.S. policymakers, media, and the public are less inclined to look at the bilateral economic relationship in isolation from the strategic and geopolitical aspects of the relationship.  Segregating the issues in the past allowed us to focus on the win-win elements of trade, where there was broad enough agreement that mutual benefits could be derived, without being distracted by the issues where the United States and China are less likely to agree.  Today, our economic frictions are viewed through the prism of our geopolitical differences – and that makes trade disputes more difficult to manage.

Fourth, probably more so than at any time since 1989, there is political “appetite” for a trade war. By that I mean that both Trump and Xi could extract some domestic political capital from the initiation of trade hostilities. Trump’s base and plenty of business and other interest groups believe China has it coming and—after all—as Trump suggests, China has much more to lose from a trade war given its $350 billion trade surplus with the United States. Meanwhile, Xi’s difficulties righting the Chinese economy, which has been suffering its slowest growth in 25 years, threaten him and the party with a crisis of legitimacy.  Being able to blame domestic economic woes on protectionist or otherwise aggressive foreign policies would enable Xi to tap into a vast reservoir of Chinese nationalism, and would reduce the burdens of reform that confront him today.  But make no mistake: a trade war between the United States and China would have profoundly adverse consequences in both countries and—depending on its course—could devastate the global economy. So there’s that.

Fifth, there are a number of legitimate gripes about Chinese AND U.S. trade policies that can no longer go unresolved. Beijing and Washington have been tightening the vices on one another’s companies in a number of different ways, and in some cases violating established rules.  The focus of Trump’s criticism of China has been its currency policy, which has been a non-issue for nearly a decade.  As is often the case, the politics lags the economics, but Chinese suppression of the value of its currency is simply irrelevant (as an economic matter).  In fact, over the past two years, China has burned through $1 trillion of foreign reserves, purchasing Chinese renminbi on currency markets to prevent its value from depreciating further.

Among the list of potentially legitimate gripes made about Chinese policies are:

  • Massive subsidization of industries
  • Relatively high tariffs on goods imports and barriers to the provision of services by foreigners
  • Widespread restrictions on foreign investment in a multitude of Chinese industries
  • Forced transfer of technology imposed on foreign companies seeking to establish presence in China
  • Indigenous innovation policies that grant preferences to companies that develop and register intellectual property in China
  • Insufficient enforcement of intellectual property rights
  • Barriers to digital trade, including web filtering and blocking, and restrictions on data flows and cloud computing
  • The continued prominence of state-owned enterprises, which don’t face the same market constraints that private companies face
  • Discriminatory application of China’s Anti-Monopoly law
  • Scope for discriminatory application of China’s new Cybersecurity Law and National Security Law

Among the list of potentially legitimate gripes made about U.S. policies are:

  • Continued discriminatory, non-market economy treatment of Chinese companies in U.S. antidumping cases
  • Discriminatory application of the U.S. countervailing duty law, which punishes Chinese exporter (and U.S. importers) twice for the same alleged infraction
  • Opaque and possibly discriminatory procedures at the U.S. Committee on Foreign Investment in the United States (CFIUS), which reviews and can block proposed acquisitions of U.S. companies by foreigners on grounds of threats to national security
  • Proposed expansion of CFIUS’s remit to include an economic security element, a food security element, and to extend covered transactions beyond acquisitions to include green field investments
  • The unofficial, but commercially consequential blacklisting of acquisitions by and products made by certain Chinese information and communication technology companies

Many of the complaints about Chinese policies could have been addressed through the Trans-Pacific Partnership had President Trump not withdrawn the United States from that agreement. In fact, the TPP offered the clearest path to compelling favorable changes in China’s economic policies because China would have seen most of its major trade partners join the TPP, and would have had no better alternative than to join itself.  That’s where the leverage (in the form of a carrot, not a stick) to compel China to play by the rules resided.  And, for now at least, that leverage is squandered.

So, absent any obvious remaining carrots, some in Washington and around the country are encouraging a more strident tack with China.  In today’s Washington Post, Rob Atkinson from the Information Technology and Innovation Foundation, calls for what looks like some form of international sanctions against China.  It seems a sure path to trade war.

A better idea, as articulated by my colleagues Simon Lester and Huan Zhu in this new paper, would be to launch bilateral trade negotiations to accomplish resolution of some or all of these issues in a very direct manner.  Simon and Huan argue:

If the United States wants to promote the liberalization of Chinese trade and investment policy, it needs to engage with China in a more positive way. To this end, it should sit down with China and negotiate a new economic relationship, one that goes beyond the terms of the WTO. In particular, the United States should initiate formal negotiations on a trade agreement with China. Negotiations of this kind will be a challenge, especially with a president who has been so critical of China. However, negotiations offer the best hope for addressing concerns about China’s economic policies and practices.

Of course, like all trade negotiations, this one would be politically difficult.  But considered against the alternatives, a bilateral trade deal is well worth serious consideration.

 

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