Policy Institutes

During the Republican primary season, most candidates railed against the Iranian nuclear deal promising to rip it up. Indeed, Donald Trump, our new President-elect, described the Joint Comprehensive Plan of Action (the JCPoA) as “one of the worst deals I’ve ever seen.” With Trump’s unexpected success in yesterday’s election, the future of the Iran deal—one of the major diplomatic successes of Barack Obama’s presidency—has become murky.

Over the last year, Trump’s campaign was impressively inconsistent on the question of the Iran deal. Various Trump surrogates—including Rudy Giuliani in his speech at the Republican National Convention—suggested that Trump would “rip up” the deal on day one in office. Trump himself strongly criticized the deal, promising in a speech to AIPAC in March that dismantling the deal would be his number one priority. Yet later statements focused instead on the idea that he would “fix” the deal, by going back to the negotiating table with Tehran, a line later adopted by many of his campaign advisors.

Unfortunately, though this might indicate that Trump’s stance was more rhetoric than reality, he is likely to face strong pressure from the GOP-dominated congress to upend the deal. The pressure is liable to come from inside his administration too: not only did Mike Pence, Trump’s VP pick, take a hard line on the Iran deal in debates, but several of Trump’s potential advisors have similarly argued that the deal should be destroyed. It’s hard to imagine an administration featuring Bob Corker, John Bolton or Michael Flynn taking a conciliatory approach to Iran on any issue.

So can Trump actually end the Iran deal? Perhaps more effectively than many have assumed, though it would be politically and diplomatically costly. In order to end the deal, the United States would have to assert to the UN Security Council that Iran is violating the agreement. Though such a violation would technically be confirmed by an external party like the IAEA, the fact is that the “snapback” provision of sanctions relief found in the JCPoA allows the United States to exercise its veto power, forcing the reintroduction of UN sanctions.

The United States cannot force the European Union to reintroduce all its sanctions, which include some of the harshest measures on Iran’s oil and banking sectors. Nor can it apply sanctions retroactively; any deals made by companies during the last six months—like the Total oil and gas deal—are grandfathered in. But if he wanted to, President Trump could issue executive orders reinstating or creating new sanctions on Iranian individuals or companies. He could also direct the Treasury to apply those sanctions extraterritorially, preventing European or Asian companies which do business with Tehran from accessing the U.S. financial system.

Yet the choice to end the Iranian nuclear deal would be extremely costly for the United States. It would alienate key allies in Europe and elsewhere, discouraging them from participation in future U.S. diplomatic endeavors. A better deal is pretty much impossible to achieve, thus we would substantially increase the likelihood that Iran will return to nuclear development, bringing them closer to the bomb, and the United States closer to military conflict. And it would be a black eye for the United States, implying that we cannot be trusted to abide by international agreements which we negotiate.

It’s certainly possible for President-elect Trump to dismantle the JCPoA. But as with all questions about Trump’s foreign policy, it remains unclear whether he will choose to do so or not. If he does, the repercussions for U.S. foreign policy would be unpleasant. Tearing up the Iran deal may look good to the Republican base, but it’s the diplomatic equivalent of shooting ourselves in the foot: it achieves no foreign policy goals, runs the risk of destabilizing the Middle East still further, and does grave harm to America’s diplomatic reputation.

Even if one had the stomach for more prognostication after last night, when it comes to Trump foreign policy looking ahead seems like a fool’s errand (see my last op-ed if you don’t believe me). As Max Fisher notes in the New York Times today, Donald Trump has been so inconsistent on foreign policy specifics that no one feels confident in making bold predictions. Uncertainty, at home and abroad, rules the day.

However, even though the election can’t tell us much about what might happen in the future, Trump’s victory does reveal a great deal about how Americans think about politics in general and foreign policy in particular.

One thing we have learned is that the divide in Americans’ foreign policy views now mirrors the broader political fault lines in the nation. As I wrote after the final presidential debate, in the absence of a compelling external threat, Americans have become more polarized as the “national interest” has devolved into an array of competing interests. The foreign policy debate is no longer about how to keep America safe; it’s a clash over competing conceptions of America and its role in the world.

In one corner are the previous champions, the liberal internationalists, who enjoyed a long, bipartisan run after the end of the Cold War. The liberal internationalists have seen globalization as a boon for the U.S. and the world. In this vein they have pursued free trade, an expansive network of alliances, and meddled a great deal in the affairs of other nations for a wide range of often dubious but usually well-intentioned reasons. In the other corner we have Trump’s surging nativists and nationalists—much more pessimistic about the benefits of globalization, much less supportive of free trade, far less interested in engaging the world, and far more concerned about what immigration might do to the United States.

Trump’s election last night might have been a shock, but the growing divide on foreign policy has been clear for some time. A great deal of polling data from the past several years has revealed that the public has lost much of its appetite for the liberal internationalist cause. Recent polling has discovered that record numbers of Americans think the United States should “mind its own business” internationally and fully 70% of Americans want the next president to focus on domestic policy.  When you add to that the widespread concerns about Obama’s trade deals and U.S. policies in the Middle East, it becomes clear that much of the nation is ready to rethink the Beltway Consensus on foreign policy.

The implications of this emerging foreign policy tribalism are profound. Without existential national security concerns to ground the debate, foreign policy has become just another arena for cultural and identity politics. Trump’s foreign policy, whatever it turns out to be, will not be constrained by broad-based public and elite support for a single strategic vision. Instead, Trump is free to pursue foreign policies that please his base.

Though I won’t dare to make predictions about which issues Trump will take up in earnest next year, a quick comparison of his supporters to Democrats on key issues is potentially revealing. 80% of Trump’s supporters see immigrants and refugees as a critical threat, for example, compared to just 27% of Democrats. 92% of Trump’s supporters support his proposal for a wall on the Mexican border while just 29% of Democrats do. Whereas 68% of Democrats believe international trade is good for the U.S. economy, just 42% of Trump supporters do.

I will boldly end with one prediction: Regardless of which way Trump goes on foreign policy, the divisions revealed during this campaign will not go away any time soon.

It happened.

Don’t worry, our country is strong enough to deal with what might be coming. Unfortunately, however, our Constitution has some holes in it, many of which were created by the last two administrations, that allow presidents to assert shockingly broad powers. We will gladly welcome back to the fold our left-wing friends who have spent eight years cheering for executive power. They resisted executive power during the Bush administration, and it should be like riding a bike. We hope we will be joined by principled people on the right who understand the need for constitutional limits. Maybe, in the process, we can create a new consensus around limiting executive power.

Constitutionally limited government exists to protect the freedom of the citizens from the vicissitudes of democratic rule. The Framers of the Constitution knew that a person of George Washington’s caliber would not always be chosen president. They knew about demagoguery and populism. James Madison, in particular, was terrified of how voters in states could be swept up in waves of populist fury and, in the process, enact policies damaging to the long-term prosperity and freedom of the people.

Unfortunately, after a century or more of erosion, our Constitution doesn’t limit our government the way it once did. In particular, the president is incredibly powerful, and able to make significant decisions without proper checks and balances. Democrats wanted this power when President Obama was in office, but the powers of the executive, especially after President Obama, are now truly concerning when held by someone as unpredictable as Donald J. Trump.

Here’s a basic principle of good government: Don’t endorse a government power that you wouldn’t want wielded by your worst political enemy. Democrats will soon be learning that painful lesson.

Obama’s most concerning legacy was to use congressional inaction as a justification for sweeping executive orders. In the DACA and DAPA immigration cases, the president decided that, if Congress didn’t do something about immigration, then he would. This is a shocking argument for asserting unilateral power in a constitutional system that depends on checks and balances, and it should not matter whether you agree with the policy outcome. Nevertheless, Democrats, by and large, endorsed Obama’s action.

Obama also used congressional inaction as a justification for claiming the power to decide whether the Senate was in session. After his nominees to the NLRB and CFPB were blocked by the Senate, President Obama used his recess appointment power—which gives the president the ability to appoint executive officers during Senate recesses—to push his nominees through. In so doing, he essentially declared that the Senate’s pro forma sessions, which were sham sessions first used by Harry Reid to block President George W. Bush’s nominees, were not “real” sessions of the Senate. It was a bold, reckless, unprecedented, and dangerous move that was struck down unanimously by the Supreme Court. On many types of executive overreaches, however, the Court will not be able to similarly intervene. If Obama had the temerity to push through those appointments, imagine how far Trump might go on other matters.  

Finally, the Congress hasn’t declared a war since World War II. Korea, Vietnam, First Iraq, Second Iraq, and Afghanistan were all fought without obtaining the constitutionally required declaration of war from Congress. We currently have the Authorization of the Use of Military Force, signed a week after the September 11th attacks and subsequently used by two presidents to fight “terrorists” wherever they wanted. President Trump will have that power too, which should concern anyone.

Like nearly every president, President Obama defined a new baseline of executive power. Now that power will be handed over to Donald Trump, and left-wing groups like our friends at the Constitutional Accountability Center will probably be on our side when Cato inevitably files briefs opposing Trump’s forthcoming executive overreaches. I’ll try to restrain myself from saying, “I told you so.”

If you work in education policy, you maybe should have seen Donald Trump’s monumental upset coming. I didn’t, and I would guess most other wonks didn’t either. But we all saw populist frustration boil over with the federally coerced Common Core national curriculum standards. Average Americans rejected the Core over the paternalistic, “you just don’t realize this is good for you” objections of establishment types on both the left and right, just as seemed to happen with Trump’s campaign that defied establishment predictions—and disbelief—almost from day one.

Of course, popular rejection of the Core does not capture nearly all that seems to have driven Trump’s support—immigration, dwindling manufacturing jobs, plain old fear—but it does capture a seeming disdain for elites.

What is this likely to translate into in education policy, especially with a Republican controlled Congress?

Let’s start with the Core. Candidate Trump, without specifics, indicated on the campaign trail that he would get rid of it, seeing it as an unacceptable federal intrusion. And it was federally coerced. The problem is that the main levers of coercion—the Race to the Top contest and waivers out of the No Child Left Behind Act—are gone. Race to the Top is over, and No Child has been replaced by the Every Student Succeeds Act (ESSA). Unless Trump tries to coerce states to dump the Core—make receipt of funds or regulatory relief dependent on ditching it—he can’t end the Core.

What he can do—and I think, along with a GOP Congress, will do—is ensure that regulations to implement the ESSA do not coerce the use of the Core or any other specific standards or tests. This has been a real concern. While the spirit and rhetoric surrounding the ESSA is about breaking down federal strictures, the Obama education department has been drafting regulations that threaten federal control over funding formulas and accountability systems. And the statute includes language vague enough that it could allow federal control by education secretary veto. A Trump administration would likely avoid that.

Trump has also promised to spend $20 billion on school choice. The inclination is right—the way to make education work for kids is to give parents control of the dollars—but “encouraging” with federal carrots or sticks is wrong. For one thing, the Constitution gives Washington no authority to meddle in education outside of the District of Columbia itself, federal installations, and prohibiting state and local discrimination in their provision of education. Perhaps more important, we do not want private schools becoming dependent on federal money because, inevitably, with federal money would come federal rules, which would, over time, render school choice much less of a real choice, with all schools—public or private, from California to Georgia—increasingly identical.

What about higher education, in which federal subsidies have fueled skyrocketing prices and massive waste for decades? The good news is that Trump is unlikely to propose a Clinton/Sanders style “free” college plan. The bad news is that, so far, Trump hasn’t signaled an intent to significantly curb self-defeating subsidies like federal student loans and grants. Rather, he’s proposed an income-based repayment plan for loans and threatened the tax breaks and subsidies of schools that aren’t deemed to be making “a good faith effort” to control student costs. Part of that would include going after schools with big endowments, something likely to make little difference because only a few schools have endowments that are typically considered big.

What will almost certainly come to an end will be the war on for-profit colleges prosecuted by the Obama administration and its allies in Congress. (Programing note: Big event on for-profit schools next week!) That’s good, because for-profit colleges—though they produce some pretty bad outcomes—are not the problem in higher education. Every sector produces bad outcomes. The root problem is the mammoth subsidies, which incentivize bad decision-making by students and price hikes by schools. They are what need to be attacked.

For the youngest children, Trump has not proposed a wide expansion of preschool such as Head Start, which is good. The top-quality research does not support its effectiveness, despite what politicians and advocates pronounce. But he has proposed federal incentives to expand childcare, and that could include an education component. We’ll have to wait and see.

Overall, Trump has inveighed against federal intrusion in education, including talking about eliminating the U.S. Department of Education. The semi-concrete proposals he has put out there, however, seem somewhat at odds with that. One thing, however, seems certain: wonks and pundits would be wise not to dismiss his proposals as political pie-in-the-sky. Trump may well have a better sense for what is politically viable than they do, and his supporters don’t seem inclined to do what Beltway types tell them.

Some thoughts, with thanks to Josh Blackman for getting the ball rolling:

  • The Garland nomination is dead. Does this mean that Trump will indeed pick someone from his list of 21 potential nominees? That list was perhaps most notable for including 9 state jurists; will we get one of those on the Supreme Court for the first time since Sandra Day O’Connor was picked in 1981?
  • Senate Republicans’ strategy of not even considering D.C. Circuit Judge Merrick Garland, of letting the American people decide who gets to fill Scalia’s seat, worked. Not only that, but it didn’t at all hurt vulnerable senators running for reelection.
  • Anthony Kennedy will almost certainly continue to be the “swing justice” on most controversial issues; he may have been the biggest winner last night.
  • I feel sorry for Garland, a respected jurist and honorable man who’s been in limbo for nearly eight months. That said, this wasn’t about him and I would’ve advised voting against him.
  • An open question is what happens when Trump realizes that the sorts of judges he’s been advised to appoint would rule against him on various matters.
  • If you live by executive action, you die by executive action—which means that many high-profile cases looming on the Supreme Court docket will simply go away. DAPA (executive action on immigration) and the Clean Power Plan will be rescinded, religious nonprofits will be exempt from Obamacare, Trump’s HHS won’t make the illegal payments that have led to House v. Burwell, and more. That may include the transgender-bathroom guidance, which if rescinded would remove the biggest controversy from the Court’s current term.
  • With the election of (my friend and University of Missouri law professor) Josh Hawley as Missouri’s new attorney general, the not-yet-scheduled Trinity Lutheran case will likely be settled.
  • The New York Times editorial board better include “It turns out that Ilya Shapiro was right” in its editorial urging senators to reject Trump’s judicial nominees. Also, I can’t wait for the Paul Krugman column making that point.

Trump’s victory in the Presidential election is a tremendous political upset. The biggest issue raised by Trump was immigration—and he didn’t waiver from his restrictionist position. Although the polling data doesn’t show support for Trump’s position and the election was not a blowout, depending on whether he wins the popular vote (unclear at this time) he and other restrictionist Republicans will take this as a mandate to follow through on his immigration promises. 

Trump’s stump speeches were superficial but his immigration position paper was detailed and specific. Simply, it calls for a 20 percent to 60 percent cut in green cards and a huge increase in immigration enforcement. Here are the details from his immigration position paper fleshed out:

  1. Border wall. The completion of a border wall or at least 1000 miles of it (there are about 700 miles of walls and barriers currently). This wall could be virtual but he sold it as a physical barrier. His border wall is meant to address illegal border crossings that began subsiding a decade ago and are now near their post-1970 historical low point. There is a perception of chaos on the border that doesn’t reflect reality, but perception is all that matters in politics. The best way to further reduce unlawful immigration would be to create a low-skilled guest worker visa program or expand the existing ones, but Trump’s position paper precludes such a policy option.
  2. Nationwide E-Verify. Mandated nationwide E-Verify for all new hires in the United States as a means to exclude illegal immigrants from employment. E-Verify is an electronic eligibility for employment verification that checks a new hire’s identity information against government databases to approve or deny them employment. My colleague Jim Harper and I published a policy paper last year detailing all of the problems this system poses from economic, privacy, civil liberties, and effectiveness standpoints. E-Verify will add to the more than 13.48 man-hours spent by employers annually dealing with the I-9 form, unintentionally deny and delay many American workers legal employment due to inaccuracies, boost the black market in identity documents, and cost billions in taxpayer and economic costs to implement. E-Verfiy is also unenforced and ineffective at dimming the wage magnet in states where it is already mandated. E-Verify will fail to live up to its expectations and will be followed by calls for a national biometric identity card to seal gaps in the system.    
  3. End birthright citizenship. This would most likely require a constitutional amendment although Judge Richard Posner, noted legal scholar, thinks it can be changed by statute. Birthright citizenship is a lot older than the Fourteenth Amendment and has aided in the assimilation of generations of immigrantsin contrast to the experiences of assimilation in European nations without birthright citizenship. If implemented, jus sanguinis (citizenship through blood relations) would replace jus soli as the most important citizenship law of the land—an embrace of Carthaginian over Roman values.
  4. End DACA. President Obama’s executive action for unlawful immigrants brought here as children gave temporary work permits and relief from potential deportation (not a path to citizenship) to about 665,000 people. The continuation of this program depends on the actions of the President. Although this is not spelled out in his immigration position paper, it’s likely that Trump will decline to continue the program by stopping the periodic renewals required by law, thus opening up this population to deportation. Trump’s administration will also now have access to the identities of all the beneficiaries of DACA who had to submit their personal information to benefit, a source of information that could be used to more efficiently deport them. This has the potential to be a heart-wrenching humanitarian disaster for the DACA beneficiaries, their families, and those of us who count some of them as friends.  
  5. Mandatory detention. Detain all illegal immigrants apprehended while entering the United States. This policy is already partially implemented but could be greatly expanded. It would require new detention facilities similar to those used to detain Unauthorized Alien Children from Central America at serious economic and humanitarian cost
  6. Immigration moderation. Trump’s paper calls for a “pause” on the issuance of new green cards to workers abroad so that “employers will have to hire from the domestic pool of unemployed immigrant and native workers.” There were 151,596 employment-based green cards issued in 2014. 86 percent of them went to workers already in the United States on other visas. The other 14 percent went to workers abroad. The government also issued 645,560 family-based green cards in 2014, all of which allow recipients to work in the United States. 61 percent of these family-based green cards went to immigrants who were not in the country on another visa.  Depending on how you dice it, this provision could cut between about 140,000 and 540,000 green cards annually.
  7. Increase prevailing wage for H-1Bs. This policy proposal will reduce the number of legal skilled temporary migrant workers. Just over 124,000 H-1Bs were approved in 2014 for initial employment in the United States, with 85,000 of them for employment in firms and the rest in non-profit research institutions. These workers have an average salary of $75,000 so they do not compete with low-skilled America workers. If the minimum salary for H-1B visas was bumped up to $100,000 then the number of H-1Bs hired by private firms would decrease while they’d also shrink for research institutions. The 75th percentile for wage compensation for H-1B workers is $81,000. Even including all of the petitions for high wage workers that are rejected each year, this reform would significantly shrink the number of H-1B visas issued at an enormous economic cost. The H-1B system is also the feeder to the employment-based green card so any change here could disrupt future flows there even if no other changes are made. 
  8. Requirement to hire American workers first. This policy would increase the regulatory cost for American firms hiring skilled foreign workers in specialty occupations. Congress considered this policy for the H-1B visa in 1990 and rejected it because the regulatory costs would be so high. If Trump is the anti-regulation candidate he claims to be then he’ll reject this provision.
  9. Refugee program for American children. This policy would raise the standards for refugees and asylum seekers to cut down on supposed abuse and fraud. Assuming the worst case scenario, Trump’s policy proposal would decrease humanitarian immigration by 70 percent if trumped up fraud statistics are to be believed. That policy, if in place in 2016, would have cut the number of refugees by about 60,000 under the worst case scenario. 

The taxpayer cost of enforcing America’s immigration laws to the point where all illegal immigrants are removed and future flows stopped would be $419 to $619 billion over 20 years, according to estimates by the American Action Forum. These estimates do not include negative economic effects and lost tax revenue from a subsequently smaller economy. The Bipartisan Policy Center estimates that an attrition through enforcement policy would increase projected deficits by about $800 billion over the next 20 years. Those estimates don’t include the cost to the economy and government finances of slashing legal immigration.    

As I write, the presidential race has just been called by the media: barring fantastical litigation, Donald Trump will be moving into the White House. But even if he had fallen just short, it’s no understatement to say that Trump shocked the nation and the world—or at least the elites (conservative, progressive, libertarian, and every other kind). Pollsters are eating crow, as are political campaign professionals. I’m not either of those, but here’s my first stab at sketching an explanation for what we just witnessed.

Here are five reasons behind the Trump phenomenon, in no particular order and using purely qualitative analysis:

  1. Hillbilly Elegy – J.D. Vance’s book touched a nerve in the political culture by capturing the zeitgeist regarding the plight of the white working class, particularly in Appalachia. This phenomenon will be a source of many sociology dissertations in coming years.
  2. Shy Trump Voters – Just like the “shy Tories” who reelected David Cameron and the “shy Brexiteers” who voted the U.K. out of the E.U., many people didn’t want to tell pollsters that they planned to vote Trump, or simply declined to be polled.
  3. Hollywood and General Progressive Smugness – People don’t like being condescended to. I missed my chance to write an op-ed citing schadenfreude as the best reason to vote Trump, but maybe now I’ll get to do it as a silver-linings piece.
  4. Celebrity – Down-ballot GOP primary challengers tried to use Trump’s schtick and they failed. A majority/plurality of Republicans reject much of what specific policies Trump has offered. Yet The Donald has such name recognition, such a brand, that he pulled it off. We can expect many more celebrities entering the political arena in future.
  5. An Opponent Who Is a Truly Horrible Candidate – Hillary Clinton was no Democrat’s dream candidate (even the ultra-feminists would’ve preferred someone who hadn’t already been first lady) and she ran a campaign devoid of meaning—apart from the very identity politics that proved to be her undoing. She’s like Martha Coakley, the former Massachusetts attorney general who somehow managed to lose “Ted Kennedy’s” Senate seat.

As we all ponder the election, I welcome suggestions for refinement of and additions to these theories.

One clear message from yesterday’s election is that many voters—and many others who stayed home from the polls—were underwhelmed by the major-party candidates for president. Several factors conspired to deliver the Democratic and Republican nominations to Hillary Clinton and Donald Trump. One of those factors that sorely needs to be reformed before the next election cycle is the lousy format used for candidate debates.

Typically, candidates are given scarcely a minute or two to answer moderators’ questions about complex policy issues, and even less time to rebut an opponent or offer a response. Candidates aren’t given the debate questions ahead of time, and though they have some idea of what they might be asked, they can’t prepare and deliver careful, detailed responses. The candidates aren’t permitted notes or electronic devices, so they can’t quickly reaffirm facts or double-check complex arguments. And they can’t use visual aids to help explain their ideas or provide full references.

These limitations punish candidates who are thoughtful, have nuanced policy knowledge, offer innovative ideas, and who want to communicate with and persuade a broad, diverse audience. The limitations favor candidates with little knowledge or concern for facts, who spout standard ideologies, who play to partisan bases, and who are dishonest and incivil.

If the coordinators of the 2020 debates truly want to provide a public service, they will dispense with the current format and instead provide candidates an opportunity to show if they are informed, pensive, respectful leaders who can talk to Americans about sophisticated public policy. If, on the other hand, these coordinators continue using the same debate formats as 2016, we will likely have party nominees similar to 2016’s.

No matter who wins this year’s presidential election, believers in monetary freedom will have their work cut out for them.

A newly-elected president Trump will quickly turn from making the Fed a scapegoat for his own campaigns’ tribulations to blaming it for his economic policy failures — starting with the equities market nose dive that’s likely to follow his surprise victory. But instead of continuing to rail against the Fed’s supposedly easy policy stance, you can bet that president-elect Trump would soon be blaming it for keeping money too tight.

In any event, a newly-elected Trump administration, through its unveiled hostility toward the Fed, could not fail to make that already “political” institution even more so, for the Fed knows very well that, if it wants to preserve its vaunted independence, it had better heed the administrations’ wishes. That’s what former Fed Chairman William McChesney Martin, who understood the true nature of the Fed’s independence better than anyone, meant when he explained that the Fed was independent, not “from,” but “within,” the government.

And if it doesn’t? Then at the very least we can expect President Trump to make life very unpleasant for Chair Yellen, in the hope of making her resign before the end of her term in January 2018. And even if she resists, we can expect to have a Trump-appointed Fed chair in place for at least half of his term. If you think that might be an improvement, then presumably you believe that Trump is a better judge of monetary policy experts than he is of economic policy experts generally.

In any event, it is another Clinton presidency that champions of monetary freedom are most likely to have to contend with. And what will that mean? Although the Fed would be bound to accommodate her own administration’s wishes to some extent, Clinton’s championing of Fed independence during her campaign would at least make it necessary for her administration to proceed relatively gingerly in trying to sway its conduct. But while the Clinton administration is unlikely to influence Fed policy directly, it can be expected to do so indirectly, in the name of “diversity.”

In fact, as our own Mark Calabria has written, however much the Fed may suffer from a lack of optical diversity, and especially diversity of gender and race, it suffers more from a lack of diversity of ideas, that is, from an excess of group-think. And it suffers from group-think not because its leaders are mainly white, or mainly male, or even mainly bankers, but because the most influential ones are mainly PhD economists from the same handful of mainly Ivy-League universities. It’s easy for such economists to dominate discussions of policy matters rendered increasingly arcane by their own past efforts, leaving little for others to do but hope that they know what they’re talking about.

Diversity reform of the sort that Clinton seems likely to push is unlikely to overcome such group-think. But that doesn’t mean that it can’t serve as a cloak packing the Fed with persons subservient to the administration — I mean, even more subservient than ordinary bureaucratic survival instincts require. And such abuse of any diversity mandate is something fans of sound monetary policy will have to be prepared to combat. For starters, they would be wise to start thinking of potential, diversity-enhancing persons who actually have a good grasp of what it takes to have a sound monetary system.

Then there’s Glass-Steagall. So far Clinton has refused to yield to popular and misplaced pressure to restore parts of the Depression-era banking law that were repealed by Clinton 42 in the 1999 Gramm-Leach-Bliley Act — and which had nothing to do with the crisis (as Bill Clinton correctly pointed out in supporting his wife’s position). But thanks to Wikileaks we know that candidate Clinton came very close to yielding to Elizabeth Warren and other progressive Democrats to restore the old Glass-Steagall provisions; consequently there is some risk that she’ll be persuaded to reconsider her position once in office.

Needless to say, owing to partisan gridlock, a Clinton Presidency threatens those legislative initiatives favoring greater monetary freedom that have been wending their way through Congress recently, including the FORM Act and the Financial CHOICE Act.

But Clinton’s most obvious threat to monetary freedom consists of her resolve, not only to retain, but to reinforce, Dodd-Frank’s encroachments upon that freedom. Evidently candidate Clinton is less interested in what Dodd-Frank has actually accomplished than in what it pretends to accomplish. We can only hope that President Clinton can be persuaded to take reality more seriously. At the very least, one hopes she can be persuaded that so far as small banks are concerned Dodd-Frank’s influence runs entirely counter to her proclaimed desire to “cut red tape to streamline the process of starting a small business” and to “unlock” non-bank small businesses access to capital.

As for Clinton’s call for a reform that would allow the government to break-up banks deemed “too large and risky to be managed effectively,” how should lovers of financial freedom respond? That depends, in part, on the extent to which they regard existing financial behemoths as so many Frankenstein monsters given life by past government guarantees.

The sad reality is that the battle for monetary freedom has for some time now taken the form of a rearguard action, aimed at resisting as much as possible ever-increasing government incursions into the ever-shrinking realms of monetary freedom. The election’s outcome, whatever it may be, won’t change this. Instead, it will make it all the more necessary for those of us who recognize the virtues of monetary and financial freedom to rise to the defense of those pockets of financial liberty that we still hold, even as we renew our struggle to recover ground already lost. Eternal vigilance… .

[Cross-posted from Alt-M.org]

The economic plight of low-skilled workers has received considerable attention during the presidential campaign. The problem is older than the primary season however, as the share of prime-age U.S. workers without a high school degree with jobs has been declining for decades. Yet at the same time, low-skilled immigrant men have been unaffected by this trend. While some commentators have attempted to blame the failure of native-born men to work on immigrants, the evidence points to other causes.

This post will expand on the lessons from Nicholas Eberstadt’s wonderful new book Men Without Work to give five reasons why low-skilled men who have immigrated to the United States tend to work more often than similarly educated men who were born here.

Figure 1 highlights the problem. For as far back as we have data, immigrant men without high school degrees in their prime years (25-54) have held jobs far more often than similar native-born men. Moreover, the gap in employment between the average low-skilled immigrant man and the similar native-born man is growing. In 1995, there was an 18 percentage point difference in the employment rates of the two groups. By 2014, the difference was 31 points.

Source: Census Current Population Survey March Supplement

1. Low-skilled immigrant men look for work. The single most important reason that immigrants perform better than lower-skilled natives is that they actually search for jobs in the labor market. As Figure 2 shows, more than 1 in 3 low-skilled native-born men in their primes are not even looking for jobs, compared to just 1 in 13 immigrant men. The gap is also growing. In 1995, there was a 17 percentage point difference between the share of low-skilled immigrant men and low-skilled native-born men who were out of the workforce entirely. By 2014, the difference had reached 25 points. It’s hard to get a job without first looking.

Source: Census Current Population Survey March Supplement

2. Low-skilled immigrants use less welfare. As a 2013 paper by the Cato Institute demonstrated, poor immigrants use significantly less welfare than poor native-born citizens. Moreover, as I have shown previously, immigrant labor force participation rates grew in response to the welfare reform that Congress passed in 1996. The 1996 law barred all noncitizens from welfare, except for legal permanent residents who had been in the country for more than five years. This incentivized them to seek jobs, and during this time, overall immigrant employment rates surpassed the native-born rates. This surge in employment caused their income to rise so much that their rates of poverty actually declined. Native-born men have faced much less pressure to reenter the labor market.

3. Low-skilled immigrant men commit far fewer crimes. Immigrant men are much less likely to be incarcerated than similar native-born men. Figure 3 provides the incarceration rates for native and foreign-born men ages 18 to 39, and in every Census year since 1980, the foreign-born rate is half or less than half the native-born rate. This is also true for high school dropouts from the top sending countries for unauthorized immigrants. Almost 1 in 9 native-born men ages 18 to 39 without a high school degree was incarcerated in 2010, compared to just 1 in 59 Mexican-born men. Criminal records and unemployment resulting from incarceration provide serious obstacles to the ability of native-born men to find employment.

Source: American Immigration Council 

4. Low-skilled immigrant men are more likely to marry. For both immigrants and natives, married prime-age men are much more likely to work than never-married men (Figure 5). For immigrants, there was an almost 10 percentage point difference in employment rates between these two groups of men. Natives had nearly twice the gap. As Figure 6 shows, low-skilled immigrant men were nearly twice as likely to be married in 2014. The best theory is that married men are more motivated to work because they often need to provide for their families.

Source: Census Current Population Survey March Supplement (2014)

5. Native male workers are more likely to get educated. As I have previously explained, the greater share of natives who fail to graduate high school or obtain employment is explained entirely by the fact that working natives are much more likely to get educated today than in the past. In fact, as Figure 7 shows, the absolute number of native-born high school dropouts without work (purple line) has actually declined slightly since 1995, just not as quickly as the total population of dropouts has declined (red line). As native workers are leaving this population by getting educated, low-skilled immigrants are entering from abroad (blue line) and finding jobs much faster than others are leaving the workforce (green line).

Source: Census Current Population Survey March Supplement

Opponents of immigration note that several studies have found that low-skilled immigration causes small declines in wages for native-born high school dropouts. But all of the studies finding declines for low-skilled native wages have found substantially larger declines for low-skilled immigrant wages. If those small wage declines forced natives out of the workforce in large numbers then we should expect even larger declines in labor force participation rate for low-skilled immigrant workers. That we do not is telling. As Eberstadt notes:

No matter their race or educational status, married men raising a family work more, and never-married men without children or children in their home work less. No matter their ethnicity or race, prime-age men who come to this country work more than those here by birth. Neither a wedding nor a green card confers innate advantage in the competition for jobs. Rather, marriage and migration decisions point to motivations, aspirations, priorities, values, and other intangibles that do so much to explain real-world human achievements.

Government policies—such as reforming welfare programs and the criminal justice system—could help some of these native-born Americans to reenter the labor force. But the main reason that low-skilled immigrant men work more often than other low-skilled men is that these immigrants have made better personal decisions. They seek out work and commit fewer crimes. They start and provide for their families. They make these decisions despite facing stiffer competition for jobs from newer immigrants and lacking the language proficiency of native workers—the most important hurdle to employment in the United States.  

In other words, immigrants don’t just provide important economic benefits by preventing the U.S. labor force from declining—they are also bringing with them many important cultural benefits that the United States desperately needs. Punishing these immigrant workers will not aid struggling native-born workers—it will only hurt them and the economy as a whole.

Don B. Kates, a pioneer in the revival of the Second Amendment, has died at 75. Eugene Volokh writes in the Washington Post that 

Don wrote “Handgun Prohibition and the Original Meaning of the Second Amendment,” 82 Mich. L. Rev. 204 (1983), the first modern article in a major law review arguing for the individual-rights view of the Second Amendment, and since then he wrote or co-wrote over 15 more law review articles, as well as writing, co-writing or editing four books. His work has been heavily cited both by courts and by scholars.

His writing career may have begun with Inquiry magazine, published in the 1970s by the Cato Institute. His article “Handgun Control: Prohibition Revisited” appeared in Inquiry’s second issue, December 5, 1977. For some reason that piece appears to have been excerpted in the Washington Post three years later.

Libertarian movement historian Brian Doherty expands on his seminal influence:

As explained in an excellent 2014 essay on Kates’ contributions to modern Second Amendment thought by California-based gun law scholar C.D. Michel, “Kates was a nearly lone voice in the constitutional law wilderness….Kates’ work, both as a constitutional scholar and criminologist….largely ignited the counter revolution against the American gun control movement” by arguing and demonstrating that the Amendment was certainly intended to protect an individual right to possess weapons.

Kates’ article became an ur-source to later articles by more academically well-connected authors, such as Sanford Levinson’s 1989 Yale Law Review article “The Embarrassing Second Amendment,” that spread the new understanding of that Amendment as guaranteeing an individual right to the more liberal side of legal academia.

As Michel notes, “All the scholarship that Kates indirectly ignited eventually fueled legal briefs filed before the Supreme Court in District of Columbia v. Heller.”

According to Wikipedia, Kates grew up in the San Francisco Bay Area and later attended Reed College and Yale Law School. During the Civil rights movement, he worked in the South for civil rights lawyers including William Kunstler, an experience that informed his understanding of the need for armed self-defense. After three years of teaching constitutional law, criminal law, and criminal procedure at Saint Louis University School of Law, he returned to San Francisco where he practiced law and began writing on criminology and guns. Dave Kopel has more on his background and influence here.

Watch Don Kates talk about gun control in this 1989 speech at Libertarianism.org.

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