Policy Institutes

After spending some years in both legislative and regulatory policy roles, I’ve come to even more strongly believe that almost everything you really need to understand regulation can be found in Peltzman’s classic 1976 extension of Stigler’s original economic model of regulation. Almost everything. What I find lacking is recognition of the importance of both outright ignorance of the “correct” policy solution, along with cognitive biases on the part of policymakers. While I reach slightly different conclusions for the structure of policy implementation, I follow Rachlinski and Farina(2002) in framing the inquiry around two models of government error: Public Choice and Cognitive Failure.

While still largely ignored within mainstream academia, the central framework of Public Choice theory, that actors in the political realm pursue rational self-interest, appears to have been largely embraced by popular political commentators from Senator Elizabeth Warren to Presidential Candidate Donald Trump. The notion that “the system is rigged” clearly resonates with the public. For some the obvious solution has been to further insulate regulators from the political process: witness the structure of the Consumer Financial Protection Bureau (CFPB) created by the Dodd-Frank Act.

The “protecting” of regulators from the political process is, however, based upon the belief that the “correct” policy is obvious and is simply being blocked because regulators are “captured” by those they regulate. Insulate the regulators, and like magic, you get the right policy.

A challenge to this argument is the performance of the Federal Reserve, arguably the most independent of regulators. Yet its performance before and during the crisis has been widely criticized. The creation of the CFPB was in part a reaction to the perceived failures of the Fed in the area of consumer protection (for a counter argument, see Bernanke’s recent book). Capture at the Fed is often invoked as resulting from having bankers on the regional bank boards, but the consumer protection rules were not written by the regionals but by the Washington-based Fed board.

If not direct capture, then invoked is the notion of “cognitive capture” in explaining the Fed’s (in)action. In this instance the Fed comes to identify with the values and world view of Wall Street and/or economists. There is much merit in this view, and I certainly see it as a fact that “regulatory capture has resulted in an excess sensitivity of the Fed to financial market and financial sector concerns and fears and in an overestimation of the strength of the link between financial market turmoil and financial sector deleveraging and capital losses on the one hand, and the stability and prosperity of the wider economy on the other hand (Buiter 2008).”

But this type of capture does not seem to come from a “revolving door” or Congressional pressure or any of the standard avenues. It appears to come from the transmission of information.

Regulators rely on external parties, often industry, to gather information about the health of the economy and about the impact of regulation on the economy, as well as on specific industries. The problem of representativeness bias, however, arises in determining whether the information is indeed reflective of the overall economy. The NY Fed, for instance, heavily interacts with a small number of banks that are “primary dealers.” Such is a function of how monetary policy is currently conducted. If a primary dealer is experiencing problems and asking the Fed for assistance, the Fed may well conclude many other banks also need assistance. I would suggest this was indeed the case in 2008.

Bankers and economists are not the only parties subject to cognitive capture, nor the only parties able to project it. As there appears to be little evidence that America is suffering from a mandated arbitration crisis, one has to wonder why the CFPB has spent so much effort trying to eliminate it. Perhaps we shouldn’t be surprised that an agency staffed by lawyers is subject to cognitive capture by the general legal profession. The point is not that lawyers are any better (or worse) than economists, the point is that all of us are subject to potential cognitive capture. No one is immune.

Given that everyone is subject to capture, cognitive and otherwise, what structures can reduce this? One solution is, as Stephan Bainbridge has suggested, a board structure. Such could help bring diverse voices to bear on a problem, forcing policymakers to consider alternative viewpoints and recognize their own biases. In this sense, we should follow Cass Sunstein’s call for encouraging more dissent.

Recently Schnakenberg and Turner (2016) have formalized a model where attempts to eliminate capture by limiting influence (the CFPB model) results in less informed policymaking. Are our only choices biased, ignorant policymaking versus captured policymaking? Again here is where checks-and-balances can improve regulatory outcomes. For instance, the President’s Council of Economics Advisors has often stood as an independent voice within the executive branch against agency proposals favoring the constituents of said agency (for example see Hargrove and Morley 1984).  The Office of Management and Budget has often served a similar role.  External review of agency decision-making, whether by the Courts or independent bodies such as the GAO, offer some potential for reducing cognitive capture (See Seidenfeld 2002).

Attempts to require greater agency accountability have often been opposed as favoring special interests. Yet the notice and comment process under the Administrative Procedures Act (APA) has greatly leveled the playing field in terms of influencing agencies. Prior to the APA, agency rule-makings often looked like the machinations of an industry cartel. While the APA has undoubtedly increased the length of the rule-making process, it has also improved it, without inhibiting government’s ability to act. Ultimately expediency in government is the friend of special interests, not the public.

I’ve argued above that the most fruitful avenue for reducing regulatory capture is to impose more checks-and-balances on our agencies, reversing recent trends toward expediency. Of course in many cases, Fred McChesney had it right when he wrote, “the one unambiguous solution for reducing rent extraction is reducing the size of the state itself and its power to threaten, expropriate, and transfer.”

[This article originally appeared on Pro-Market, the blog of the Stigler Center at the University of Chicago Booth School of Business.]

Megaupload.com was once the 13th most popular website on the internet, with more than 82 million unique visitors and a billion total page views during its seven-year operation. The site allowed people to store files on the cloud for later use—and some users inevitably stored copyrighted TV shows, films, songs, and software. In 2012, the U.S. government charged the site’s owner, Kim Dotcom, and its operators with conspiracy to commit copyright infringement. The defendants are currently resisting extradition to the United States (Dotcom lives in New Zealand), as is their right under extradition treaties.

In 2014, the seemingly frustrated government moved to seize the defendants’ considerable assets in a civil-forfeiture action, claiming that the assets are probably connected to the alleged criminal activity. The government had a major problem, however, as the assets that they were seeking to seize were not located in the United States, but in Hong Kong and New Zealand. Under traditional rules of in rem jurisdiction—a legal theory that allows courts to gain jurisdiction over property—the court must have “control” over the property to entertain the claims, which the district court did not have in this case.

The district court, however, ignored fundamental principles of statutory construction, and agreed with the government’s argument that a federal statute—conferring only venue to the district courts in cases where property was located outside of the United States—also expanded the court’s jurisdiction and fundamentally altered the traditional requirement that courts have control over the property to assert jurisdiction over it.

This misreading of the statute also created a serious constitutional issue under Article III. It is a fundamental constitutional rule that federal courts can’t issue mere “advisory” opinions. When a court lacks control over property located in a foreign country, it necessarily relies on another sovereign to enforce that order, making it advisory as to how the other sovereign should enforce the judgement.

To make matters worse, the court here also “disentitled” the defendants from presenting evidence that their property was not subject to seizure. Under civil-forfeiture laws, the government can take property without an underlying criminal conviction based only on the allegation of a crime. Those whose property has been seized can get it back by proving that their property is “innocent.” The government, however, is preventing the defendants from even making that argument. Using the “fugitive disentitlement” doctrine, the government is blocking the defendants from challenging the forfeiture.

Fugitive disentitlement has historically been applied only to criminals who escaped custody while appealing a conviction, the idea being that a court could decide to dismiss the appeal because any judgment would be unenforceable against an absent defendant. Here, the government has decided that, because the Megaupload defendants aren’t coming to the United States to defend their property, they are “fugitives” who have lost the ability to defend against that seizure—and the district court agreed. The U.S. Court of Appeals for the Fourth Circuit then wrongly upheld the district court’s holding, so Cato, along with the Institute for Justice, have filed an amicus brief asking the court to hear the case en banc (all the judges on the court).

We argue that the district court’s reading of the federal statute was not in line with fundamental statutory construction principles and that it’s unconstitutional for the government to use fugitive disentitlement in civil forfeiture proceedings against non-fugitives. The Fifth Amendment’s Due Process Clause requires an opportunity to be heard and an opportunity to defend against government-initiated actions against your property—even if you’re a dotcom millionaire living abroad.

The Fourth Circuit will decide whether to rehear United States v. Batato later this fall. If it declines to do so, the Supreme Court will have an opportunity to take the case – possibly before the end of the new term that just started today.

Millions have watched cellphone videos of police violating Americans’ rights. United States Customs and Border Protection (“CBP”) is trying to make sure the same doesn’t happen to them by banning video and photography—not in secure spaces or regarding special operations, but out in the open in the ordinary court of business.

In a case out of California, two citizens were taking pictures of border crossings from public sidewalks of what they believed were environmental problems and unlawful searches. CBP agents saw them, arrested them, seized their cameras, and deleted their pictures. The district court acknowledged that the recordings were protected by the First Amendment but found the government’s reasons for suppressing them to be so compelling that individual constitutional rights could be ignored in the name of national security.

Now before the U.S. Court of Appeals for the Ninth Circuit, Cato has filed an amicus brief supporting the photographers’ ability to record government officials in public. Americans have a First Amendment right to record law enforcement agents because it’s a way of accurately depicting government operations. The ability to describe government operations allows citizens to criticize those actions and petition for redress of grievances—a core purpose of the First Amendment. Even a Homeland Security report on “Photographing the Exterior of Federal Facilities” recognizes “that the public has a right to photograph the exterior of federal facilities from publically accessible spaces such as streets, sidewalks, parks and plazas.

In 1971, the government tried to stop the New York Times from publishing the Pentagon Papers—which the Times later described as evidence that the executive branch had “systematically lied, not only to the public but also to Congress” about the war in Vietnam. The Supreme Court refused to block the publication. Two justices would have never blocked speech on the basis of national security, but the middle ground position required at least a showing that the publication would “surely result in direct, immediate, and irreparable damage to our Nation or its people.” N.Y. Times v. United States (1971). Such a showing was not even attempted in this case—nor could it have been made given that the information is already known to everyone who crosses or is in eyesight of the border.

We also raised the issue of fair judicial process. A restriction on the First Amendment right on a public sidewalk must be narrowly tailored to a compelling government interest. The government doesn’t even claim that its policy was narrowly tailored, instead asserting that it “need not constitute the least restrictive alternative available.” Instead, the district court decided on its own that the policy was narrowly tailored. The Supreme Court has held that the Due Process Clause requires “notice and a meaningful opportunity to be heard before a claim is decided.” Lachance v. Erickson (1998). The photographers here should have been given the opportunity to rebut any argument of narrow tailoring—which isn’t credible in the first place.

The Ninth Circuit will hear Askins v. U.S. Dep’t of Homeland Security later this fall.

Last week we hosted a book forum for Professor James Duane’s new title, You Have the Right to Remain Innocent.  In addition to teaching you something about constitutional and criminal law, this lecture offers valuable practical advice that can help you and your friends to avoid prosecution and imprisonment and save thousands of dollars in legal fees.  As Duane notes, the key thing to remember is that there is a fundamental discrepancy between what the police say to us and what they say to their own children regarding police investigations.

Here’s an excerpt from his book:

There are many ignorant sentimentalists who believe that our government is deserving of our loyal cooperation and support, and that every good patriot with an innocent conscience should be glad to answer any questions from government agents.  That is hogwash….You cannot write tens of thousands of criminal statutes, including many touching upon conduct that is neither immoral or dangerous, write those laws as broadly as you can imagine, scatter them throughout the thousands of pages of United States Code–and then expect decent, law-abiding, unsuspecting citizens to cooperate with an investigation into whether they may have violated some law they have never even heard about.  The next time some police officer or government agent asks you whether you would be willing to answer a few questions about where you have been and what you have been doing, you must respectfully but very firmly decline.

The slim book is just 120 pages.  Read the whole thing so you’ll have the confidence to assert your rights under pressure.

Here is the lecture:

“You Have the Right to Remain Innocent” (James Duane)

Don’t keep this valuable information to yourself.  Blast it out to friends and family members on social media.

Related Cato work here and here.  The full book forum, with comments from Georgetown Law Professor Randy Barnett, here.


Today, The Oklahoman published an editorial that serves as a good example of how not to think about drone policy. According to The Oklahoman editorial board, a proposed drone weaponization ban was a solution in search of a problem, and concerns regarding privacy are based on unjustifiable fears. This attitude ignores the state of drone technology and disregards the fact that drones should prompt us to re-think privacy protections.

Weaponized drones are often thought of as tools of foreign policy, but technological advances mean that Americans should be keeping an eye out for armed drones on the home front. Yet, in the pages of The Oklahoman readers will find the following:

we know of no instance where Oklahoma law enforcement officers have used drones to shoot someone without justification. To ban the police from using weaponized drones appears a solution in search of a problem.

I’m not aware of police in Oklahoma using drones to shoot someone with justification, but that’s beside my main point. Oklahoman lawmakers shouldn’t have to wait for a citizen to be shot by a weaponized drone before considering regulations. It would be premature for legislators to consider teleport regulations or artificial intelligence citizenship bills. But weaponized drones are no longer reserved to the imagination of science fiction writers. They’re here.

Some states have taken steps to address weaponized police drones. Virginia and Oregon both ban weaponized police drones. Florida law defines police drones as an aerial vehicle that “Can carry a lethal or nonlethal payload.” North Dakota law allows police drones to be outfitted with Tasers. Whatever members of the Oklahoman editorial board think about these laws, they should at least consider the fact that lawmakers in Virginia, Oregon, Florida, and North Dakota didn’t wait for a police drone to shoot someone before pondering legislation.

In fact, one can make a convincing argument that weaponized drone legislation is especially worth considering given what happened in Dallas earlier this year. In July, Dallas police used a robot to kill a mass shooting suspect. It was the first such killing in the history of American policing. The Dallas police use of a robot to lethal effect ought to prompt lawmakers to get out in front of the issues associated with police using remote-controlled tools to kill citizens.

Fortunately, there has not been a significant push for police to have weaponized drones. Speaking before the Senate’s Judiciary Committee in 2013, Benjamin Miller, the Unmanned Aircraft Program Manager with the Mesa County, Colorado Sheriff’s Office, rejected police using lethal and non-lethal weapons on drones. Miller said that it would “absolutely not” be appropriate for police drones to be armed with lethal weapons. When it came to non-lethal weapons Miller noted, “in our experience, considering the risks of unmanned aircraft and then also the risks of use of less-than-lethal munitions, you know, such that they are, a bean bag round out of a shotgun, combining those two risks together is probably not the most responsible thing to do.”

As technology improves weaponized drones will become cheaper and more attractive to police departments. Police drones are comparatively rare at the moment, but this is mostly because of fiscal and technological constraints. We shouldn’t be in any doubt that police drones will be ubiquitous as soon as they become affordable and useful to most police departments.

At a time when the widespread use of police drones is in the near future it’s surprising that the Oklahoman editorial board is so seemingly dismissive about the privacy concerns, writing:

Kiesel [executive director, ACLU of Oklahoma] also suggested state law should limit law enforcement agencies’ ability to use drones in situations where residents normally have an expectation of privacy, saying warrants should typically be required in those situations.

On the surface, that doesn’t sound objectionable. Yet it would again be better if advocates of regulation could cite specific examples of abuse. The police can’t fly a drone into someone’s house, and there’s no reasonable expectation of privacy when a person is in a public space. So where are the areas where police can realistically fly a drone that are also areas where people have a reasonable expectation of privacy?

Here I think the editorial board is suffering from a lack of imagination. It’s true that under current Fourth Amendment doctrine police drones won’t usually be filming citizens where they have a reasonable expectation of privacy. But amid the proliferation of drones, it’s worth lawmakers considering how adequate the “reasonable expectation of privacy” standard is.

After all, in California v. Ciraolo (1986) and Florida v. Riley (1989), the Supreme Court held that you don’t have a reasonable expectation of privacy in the contents of your backyard observed from the air. It might be the case that some people won’t mind if police drones hover above their street recording their pool party, barbecue, or yard sale without a warrant, but I suspect that many not would be so happy.

Some lawmakers have recognized the worrying privacy implications of police drones. A handful of states including Florida, Idaho, Wisconsin, Indiana, Iowa, and Virginia have passed police drone warrant requirements. Proposed legislation in New Hampshire and Florida law extends the expectation of privacy for drone surveillance to private property where an individual is not observable from public space at ground level, “regardless of whether he or she is observable from the air.”

Drone technology is understandably attractive to law enforcement. When it comes to inspecting dangerous situations or searching for a suspect, drones can be valuable tools. Yet we should be wary of the privacy and safety concerns associated with police regularly using armed drones. Lawmakers who recognize these concerns should be praised for their foresight.

Yesterday, the Department of Justice Inspector General (DoJ IG) issued a long overdue Congressionally-mandated report on FBI compliance with the PATRIOT Act’s Section 215 “business records” provision between 2012 and 2014. It is the first such report issued that covers the initial period of Edward Snowden’s revelations about widespread domestic mass surveillance by the federal government. Since his indictment for leaking the information to the press, Snowden’s lawyers have argued that he should not be prosecuted under the WW I-era Espionage Act because his revelations served the public interest. The DoJ IG report provides the clearest evidence yet that Snowden’s lawyers are correct (p. 6):

In June 2013, information about the NSA’s bulk telephony metadata program was publicly disclosed by Edward Snowden. These disclosures revealed, among other things, that the FISA Court had approved Section 215 orders authorizing the bulk collection of call detail records. The telephony metadata collected by the NSA included information from local and long-distance telephone calls, such as the originating and terminating telephone number and the date, time, and duration of each call. The disclosures prompted widespread public discussion about the bulk telephony metadata program and the proper scope of government surveillance, and ultimately led Congress to end bulk collection by the government in the USA Freedom Act.

Public discussion of the controversy. Very public action by Congress to change the law, addressing at least one major abuse brought to light by Snowden. And there was more (p. 33):

An [National Security Division] Deputy Unit Chief noted that the number of business records orders reached its peak in 2012 and has declined annually since then, and that the number of [Electronic Communication Transation] requests has declined more than other types of requests. The Deputy Unit Chief said that the Snowden revelations have played a role in this decline, both in terms of the stigma attached to use of Section 215 and increased resistance from providers. The Deputy Unit Chief stated, “I think that it’s possible that folks … have decided it’s not worth pursuing [business records orders], you know, obviously things haven’t been great with providers since Snowden either.” 

Translation: Snowden’s actions forced companies like Verizon, Yahoo and others to grow a spine and start defending the Fourth Amendment rights of their customers. 

Earlier this month, a group of non-governmental organizations and individuals launched a campaign to get President Obama to pardon Snowden before he leaves office. We now have the department seeking Snowden’s prosecution offering unambigous evidence that his whistleblowing actions served the public interest. Obama should direct DoJ to drop the case or he should pardon Snowden. Either approach would be in the public interest, just as Snowden’s actions were.

On Sunday, Colombians will vote in a referendum on a historic peace deal signed this week between the Colombian government and the FARC (Revolutionary Armed Forces of Colombia) rebels who have been at war for more than 50 years. The next paragraph gives a taste of what’s in the 297 pages of the peace agreement. I recommend you skip over it since you will almost certainly not understand it, and it will not be pleasant to read.

 “During the term of the Agreement on CFHBD and DA, the Police Forces and the FARC-EP must comply with the rules governing the CFHBD and DA, as well as other chapters and protocols that make up the Agreement on CFHBD and DA. The MM&V has unrestricted access to the ZVTN included in Annex X of this Agreement and to the units of the Police Forces, committed to the devices specified in Annex Y of this Agreement.”

Surely only a small percentage of Colombians will read the entire text of the agreement. The Colombian government probably counts on that as it and its allies push the notion that those who criticize the peace plan support war. But many Colombians who read the document are finding serious reasons to oppose the plan and agree with independent observers, such as Human Rights Watch, who strongly criticize it. Indeed, José Miguel Vivanco, director of Human Rights Watch’s Americas division, calls the agreement a “façade of justice in the name of peace” and points out that it guarantees impunity.

The Colombian peace deal represents a setback in international practice. Since the aftermath of Apartheid in South Africa in the 1990s, war crimes or crimes against humanity have been prosecuted in international or ad hoc courts where justice is administered as part of peace settlements. Not so in the case of Colombia which “punishes” such criminals with requirements to engage in community service and with no deprivation of liberty.

Moreover, confessed criminals would be entitled, contrary to the Colombian constitution, to participate in politics even while serving their alleged sentences. The agreement guarantees the FARC 10 congressional seats and 16 more in special areas to be created, and in which existing political parties in Congress “may not register candidates.”

In the not too distant future, Colombia may very well see the legitimized political influence of a Senator Timochenko, leader of the FARC guerrillas. It is as if in the 1990s in Peru, which had been ravaged by the unpopular Maoist Shining Path guerillas, the country had chosen to negotiate with the rebels on the verge of their collapse, rather than what it actually did –defeat the group, and capture, try and jail its members who had been found to have committed serious crimes. (The FARC was also decimated on the eve of the Colombian government’s announcement that it would pursue peace negotiations.) Had Peru followed the alternative Colombia is pursuing, it would most assuredly have Abimael Guzmán, the Shining Path’s bloodthirsty leader, and his party in Congress today.

All this comes with the generous support of the state. The agreement ensures that the government will finance the political party of the FARC and the dissemination of its ideas. In addition, the state will pay for a “center for thought and political education” of the FARC, a TV channel and 31 radio stations. According to Rafael Nieto Loaiza, former vice minister of Justice, the FARC’s new party “will receive an annual contribution proportionately higher than that of the other parties.”

The agreement creates all kinds of bureaucracy for the administration of peace and the transition, and relies on new welfare and spending programs. The government will oversee a rural reform reminiscent of the unsuccessful state-centered models of the 1960s. It will create a land fund, and will distribute three million hectares for free. The government will also provide subsidized credits and insurance, and direct subsidies. The largesse will be focused on rural areas, where the amount of land each family can own is limited by law, as is the transfer or sale of land without government authorization. Public spending on housing, irrigation and other infrastructure will increase and be directed to the places affected by the conflict, but not necessarily take into account the economic viability of such spending. In this way, the government seeks to invigorate the rural economy and give peasants independence, but like so many examples of government planning, it is a model that is bound to fail.

It is reasonable to seek peace and to make concessions along the way if the exchange is worth it. To many of those who read this agreement, however, it will be difficult to conclude that that has been achieved.  

I must be perversely masochistic because I have the strange habit of reading reports issued by international bureaucracies such as the International Monetary Fund, World Bank, United Nations, and Organization for Economic Cooperation and Development.

But one tiny silver lining to this dark cloud is that it’s given me an opportunity to notice how these groups have settled on a common strategy of urging higher taxes for the ostensible purpose of promoting growth and development.

Seriously, this is their argument, though they always rely on euphemisms when asserting that politicians should get more money to spend.

  • The OECD, for instance, has written that “Increased domestic resource mobilisation is widely accepted as crucial for countries to successfully meet the challenges of development and achieve higher living standards for their people.”
  • The Paris-based bureaucrats of the OECD also asserted that “now is the time to consider reforms that generate long-term, stable resources for governments to finance development.”
  • The IMF is banging on this drum as well, with news reports quoting the organization’s top bureaucrat stating that “…economies need to strengthen their fiscal frameworks…by boosting…sources of revenues.” while also reporting that “The IMF chief said taxation allows governments to mobilize their revenues.”
  • And the UN, which has “…called for a tax on billionaires to help raise more than $400 billion a year” routinely categorizes such money grabs as “financing for development.”

As you can see, these bureaucracies are singing from the same hymnal, but it’s a new version.

In the past, the left agitated for higher taxes simply in hopes for having more redistribution.

And they’ve urged higher taxes because of spite and hostility against those with high incomes.

Some folks on the left also have supported higher taxes on the theory that the economy’s performance is boosted when deficits are smaller.

But now, they are advocating higher taxes (oops, excuse me, I mean they are urging “resource mobilization” to generate “stable resources” so there can be “financing for development” in order to “strengthen fiscal frameworks”) on the theory that bigger government is the way to get more growth.

You probably won’t be surprised to learn, however, that these reports from international bureaucracies never provide any evidence for this novel hypothesis. None. Zero. Zilch. Nada. The null set.

They simply assert that governments will be able to make presumably wonderful growth-generating “investments” if politicians can squeeze more money from the private sector.

And I strongly suspect that this absence of evidence is deliberate. Simply stated, international bureaucracies are willing to produce shoddy research (just look at what the IMF and OECD wrote about the relationship between growth and inequality), but there’s a limit to how far data can be tortured and manipulated.

Especially when there’s so much evidence from real scholars that economic performance is weakened when government gets bigger.

Not to mention that most sentient beings can look around the world and look at the moribund economies of nations with large governments (such as France, Italy, and Greece) and compare them with the better performance of places with smaller government (such as Hong Kong, Switzerland, and Singapore).

But if you read the aforementioned reports from the international bureaucracies, you’ll notice that some of them focus on getting more growth in poor nations.

Perhaps, some statists might argue, government is big enough in Europe, but not big enough in poorer regions such as sub-Saharan Africa.

So let’s look at the numbers. Is it true that governments in the developing world don’t have enough money to provide core public goods?

The answer is no.

But before sharing those numbers, let’s look at some historical data. A few years ago, I shared some research demonstrating that countries in North America and Western Europe became rich in the 1800s and early 1900s when the burden of government spending was very modest.

One would logically conclude from this data that today’s poor nations should copy that approach.

Yet here’s the data from the International Monetary Fund on government expenditures in various poor regions of the world. As you can see, the burden of government spending in these areas is two or three times larger than it was in America and other nations that when they made the move from agricultural poverty to middle class prosperity.

The bottom line is that small government and free markets is the recipe for growth and prosperity in all nations.

Just don’t expect international bureaucracies to share that recipe since one of the obvious conclusions is that we therefore don’t need parasitical bodies like the IMF, OECD, World Bank, and UN.

P.S. Unsurprisingly, Hillary Clinton also has adopted the mantra of higher-taxes → bigger government → more growth.

Earlier this week, the Trump campaign released a white paper written by senior policy adviser Peter Navarro to elaborate and quantify the candidate’s economic plan.  The goal of the paper is to explain how Donald Trump’s promises to renegotiate trade agreements and raise tariffs will promote economic growth and raise revenue for the government. 

The plan betrays embarrassing ignorance of how trade negotiations work and a farcically simplistic and erroneous understanding of economics.  In essence, the plan justifies Trump’s policies by reimagining how the world works. 

Trump’s entire view of trade and its impact on the U.S. economy is wrong.  He believes that trade is good for the United States only if we export more than we import and that trade relations are a contest between countries, which we are losing because they sell more stuff to us than we sell to them.  He claims to be the tough-guy who will the save the American economy from shrewd foreign cheaters and the inept government officials who let them beat us. 

Since that’s not how things work in the real world, he has to rely on falsehoods and bad economics to justify disastrous policies.  This new white paper is just a continuation of that tactic.

But you don’t have to take my word for it.  If you think I’m being too harsh or would like to learn more about the “Trump Trade Doctrine” and what’s wrong with it, I recommend you read lengthier condemnations from experts who have called the plan’s analysis “truly disappointing,” “not only wrong, but foolish,” “magical thinking,” “a complete mess,” and the sort of thing “that would get you flunked out of an AP economics class.”

In a landmark decision, the Supreme Court of Nevada today upheld the constitutionality of the nation’s most expansive educational choice law. However, the court ruled that the funding mechanism the legislature adopted is unconstitutional. If the legislature creates a new funding mechanism–as it could and should in a special session–then the ESA program could be implemented right away.

Enacted in 2015, Nevada’s education savings account (ESA) policy was originally scheduled to launch at the beginning of this year, but it immediately drew two separate legal challenges from the government schooling establishment and the ACLU and its allies. Nevada’s ESA provides students with $5,100 per year (plus an additional $600 for low-income students or students with special needs) to use for a wide variety of approved educational expenditures, including private school tuition, tutoring, text books, online courses, homeschool curricula, and more. Families can also roll over unspent funds from year to year. As the Heritage Foundation’s Lindsey Burke and I have explained, the ability to customize a child’s education and save funds for later are significant improvements over school vouchers:

ESAs offer several key advantages over traditional school-choice programs. Because families can spend ESA funds at multiple providers and can save unspent funds for later, ESAs incentivize families to economize and maximize the value of each dollar spent, in a manner similar to the way they would spend their own money. ESAs also create incentives for education providers to unbundle services and products to better meet students’ individual learning needs. 

Of the five existing ESA programs, Nevada’s is the most expansive. Florida, Mississippi, and Tennessee restrict their ESAs to students with special needs. Arizona originally restricted ESA eligibility to students with special needs, but has since included foster children, children of active-duty military personnel, students assigned to district schools rated D or F, and children living in Native American reservations. In Nevada, all students who attended a public school for at least 100 days in the previous academic year are eligible. 

In two separate lawsuits, opponents of educational choice alleged that Nevada’s ESA violated the state constitution’s mandate that the state provide a “uniform system of common schools” (Article 11, Section 2), its prohibition against using public funds for sectarian purposes (Article 11, Section 6), and a clause requiring the state to appropriate funds to operate the district schools before any other appropriation is enacted for the biennium (Article 11, Section 10). The court found that the ESA was constitutional under the first two constitutional provisions, but the way it was funded violated the third.

“Uniform” Does Not Mean “Exclusive” 

The anti-choice plaintiffs alleged that the state constitution’s mandate that the state provide a “uniform system of common schools” means that the state may only fund that system, and not an “alternative” system that includes “non-common, non-uniform private schools and home-based schooling.” Essentially, they argued that “uniform” meant “exclusive.” The court disagreed. The plain language of the term “uniform” refers to uniformity within the system of common schools. Such schools must be free-of-charge, free of sectarian instruction, open at least six months a year, and so on. The ESA program does not change that.

The plaintiffs took great pains to explain away the previous provision of the state constitution, which explicitly authorized the legislature to “encourage” education “by all suitable means.” Although the plaintiffs argued that the term “all suitable means” is somehow limited by the “uniformity” clause, the court ruled that the two clauses operate independently. Furthermore, the court held that the expression “by all suitable means” clearly “reflects the framers’ intent to confer broad discretion on the Legislature in fulfilling its duty” to promote education. The creation of an ESA program falls within this discretion. 

ESA Funds Belong to Parents, Not the State

The plaintiffs further alleged that the ESA violated the state constitution’s Blaine Amendment, which states: “No public funds of any kind of character whatever […] shall be used for sectarian purpose.” Although even the plaintiffs conceded that the ESA has a secular purpose and that parents may expend all of their ESA funds on secular education, they contended that the potential that parents might use ESA funds to pay tuition at a religious school or purchase religious homeschool materials was a violation of the Blaine Amendment. The court disagreed:

Once the public funds are deposited into an education savings account, the funds are no longer “public funds” but are instead the private funds of the individual parent who established the account. The parent decides where to spend that money for the child’s education and may choose from a variety of participating entities, including religious and non-religious schools. Any decision by the parent to use the funds in his or her account to pay tuition at a religious school does not involve the use of “public funds” and thus does not implicate Section 10.

This is consistent with how the courts treat other transfers of public funds to individual citizens. A person using food stamps for a religious feast, hosting regular Bible studies at a subsidized apartment, or spending Medicaid funds at a Catholic hospital with a crucifix in every room and priests on the staff likewise do not violate the U.S. or state constitutions. The mere fact that the state places some restrictions on how those funds may be spent does not, as the plaintiffs alleged, mean that they are still “public funds.” As the court ruled, “That the funds may be used by the parents only for authorized educational expenses does not alter the fact that the funds belong to the parents.”

Finding a New Funding Mechanism

Education savings accounts are constitutional. Nevertheless, the court ruled that the way the legislature funded them is not. In its current form, there is no limit to the number of ESAs that the state might issue because it depends on the number of eligible students who apply for an account. The legislature did not explicitly create a separate appropriation for the ESAs, but rather diverted the funding that the state would otherwise have spent on those students had they enrolled in a district school. This creates a Catch-22. If the court were to find that the ESA funds do constitute a separate appropriation, then it runs afoul of the constitutional mandate that the legislature fund the district school system first because the legislature passed the ESA bill before the district school funding bill. However, if it is not a separate appropriation (as the court eventually held), then the legislature did not actually appropriate funds for the ESA because the district school funding bill makes no mention of them. The state treasury therefore has no authority to use the funds appropriated in the district school funding bill to fund the ESAs.

Although the Nevada Supreme Court issued an injunction against implementing the ESA, this decision gives supporters of educational choice more reason to celebrate than not. If funded properly, ESAs are constitutional in Nevada. Now all the legislature needs to do is hold a special session to make that happen.

A recent randomized controlled trial found that the number of complaints against police fell dramatically after officers were outfitted with body cameras. It is the latest piece of research suggesting that police body cameras have a positive effect on police-citizen interactions. 

The study, headed by the University of Cambridge’s Institute of Criminology, studied complaints against police in seven sites in two countries. The departments involved in the study were in areas such as the English Midlands, Cambridgeshire, California, and Northern Ireland. Researchers examined 4,264 officer shifts over roughly 1.5 million hours. In the 12 months before the trial began there were 1,539 complaints filed against police in the seven sites. After 12 months of taking part in the trial there were 113 complaints, a reduction of 93%.

Officers involved in the study were told to adhere to two policies that are not required by many departments: 1) officers wearing body cameras “had to keep the camera on during their entire shift,” and 2) those same officers had to “inform members of the public, during any encounter, that they were wearing a camera.”

The study’s findings are similar to an often-mentioned trial that took place in Rialto, California, which also found that the outfitting of officers with body cameras was followed by a significant reduction (87.5%) in complaints. 

Speaking about the most recent study, Cambridge University’s Barak Ariel, who oversaw the Rialto trial, said, “I cannot think of any [other] single intervention in the history of policing that dramatically changed the way that officers behave, the way that suspects behave, and the way they interact with each other.” 

Interestingly, the researchers found that complaints fell for officers who weren’t wearing body cameras as well as those who did. According to the researchers this may be because of “contagious accountability”:

We argue that that BWCs affect entire police departments through a process we label contagious accountability. Perhaps naively, we find it difficult to consider alternatives to the treatment effect beyond the panopticonic observer effect when the reduction in complaints is by nearly 100%. Whatever the precise mechanism of the deterrence effect of being watched and, by implication, accountability, all officers in the departments were acutely aware of being observed more closely, with an enhanced transparency apparatus that has never been seen before in day-to-day policing operations. Everyone was affected by it, even when the cameras were not in use, and collectively everyone in the department(s) attracted fewer complaints.

As the researchers note, this “contagious accountability” effect comes with some caveats:

There is, however, a caveat associated with this conclusion, which is important for future experiments on BWCs. It is not the camera device alone that caused the contagious accountability, but rather a two-stage process. First, the treatment effect incorporated the camera as well as a warning at the beginning of every interaction that the encounter was being videotaped. We urge practitioners to acknowledge that the verbal warning, which our protocol dictated should be announced as soon as possible when engaging with members of the public, is a quintessential component of the treatment effect. It primed both parties that a civilized manner was required and served as a nudge to enhance the participants’ awareness of being observed. Without the warning, the effect might easily have been reduced or failed to materialize.

The second element to the process is the need for affirmation that the videotaped footage can be used. People may be aware of CCTV or bystanders filming the encounter but still conduct themselves inappropriately, believing the camera to either not be recording or not monitoring their demeanor. Without the actualization of the warning, transgressors may be quick to assume that the threat of apprehension and risk of sanctioning are not real. Therefore, the fact that the officially collated, recorded footage can be used against the participants moves this intervention from being a “toothless policy” (Ariel, 2012, p. 57) into an effective technological solution. 

Although the recent study and the Rialto study did reveal encouraging findings, not all cities have seen such dramatic falls in complaints following body camera deployment. Nonetheless, the recent latest findings ought to encourage citizens and law enforcement officials alike to support police body cameras. Body cameras can, with the appropriate policies enforced, provide some much-needed increase in transparency and accountability in law enforcement while also helping to exculpate officers falsely accused of wrongdoing. 

Throughout his campaign, Donald Trump has been warning against accepting Syrian refugees. Last year, he said of refugees, “They’re all men. You look at it. There are so few women and there are so few children. And not only are they men, they’re young men.” We showed at the time that this claim was inaccurate, but with the fiscal year closing tomorrow, we have the information necessary to test it as a prediction—and yet no matter how you look at it, it’s unequivocally false.

Figure 1 shows how the State Department groups the ages of the 12,500 Syrians that it has resettled this year. As can be seen, the breakdown skews heavily toward children. In fact, half of all Syrian refugees in the United States are 13 years old or younger. This demonstrates that the flow is overwhelmingly families with small children.

Figure 1: Ages of Syrian Refugees in FY2016


Source: State Department

As Figure 2 shows, nearly three quarters of the Syrian refugee flow is women and young children under the age of 14. Nearly 90 percent of Syrian refugees who came this year were outside of the “young men” demographic—men ages 14 to 30. Donald Trump is simply confused.

Figure 2: Age and Gender Distribution of Syrian Refugees FY 2016


Source: State Department

The United States has a history of accepting refugees from war-torn areas. We shouldn’t allow inaccuracies about the threats posed by refugees to dissuade us from continuing in that tradition.

Ten days ago the New York Times reported that Hillary Clinton’s campaign would soon take aim at the campaign of Libertarian candidate Gary Johnson, who had pulled close to Clinton with younger voters in some polls. Within 24 hours there began a wave of anti-Johnson commentary from left-leaning figures and outlets who had previously had little to say about the former New Mexico governor and his candidacy. The office of former Massachusetts Gov. Bill Weld, Johnson’s running mate, was “inundated” with dozens of phone calls demanding that he drop out and endorse Hillary – in a Boston radio appearance, Weld said he had an idea where that viral outbreak had originated – and Carl Bernstein even put out a story on cable TV that Weld was thinking of pulling out, which the campaign had to spend a day denying.  Nor has the effort flagged: “Democrats target Libertarian ticket,” The Hill reported yesterday, noting that everyone from Sen. Bernie Sanders to billionaire Tom Steyer were now on message against casting a protest vote in the election.

When the Times ran its report on Sept. 16, I dashed off this response, which I’ll publish here since it didn’t make it into the paper’s letters column:

To the editor:

According to your report, advisers to Hillary Clinton are “alarmed by the drift of young voters toward the third-party candidates,” in particular Libertarian Party nominee Gov. Gary Johnson, who was within two points of overtaking Mrs. Clinton for first place among voters 18-34 in the most recent Quinnipiac Poll. They are plotting counter-strategy to appeal to these voters.

If Mrs. Clinton desires to poach voters from Gary Johnson, she could always try to champion individual liberty, honest and efficient administration, and low-hubris leadership that is realistic and humble about what government can do. Yet the article contains few indications that Mrs. Clinton’s advisers grasp these sources of Gov. Johnson’s appeal.

Should Mrs. Clinton wish to make a direct appeal to Gov. Johnson’s voters, she might also offer to debate him.

Yours etc. – Walter Olson

I might have added that Mrs. Clinton could pull a two-fer and poach voters from both Johnson and Green candidate Jill Stein by recognizing the dangers of omnipotent government surveillance and military overreach. I know, crazy talk. But I can dream, can’t I?

A new Housing Policy Toolkit from the White House admits that “local barriers to housing development have intensified,” which “has reduced the ability of many housing markets to respond to growing demand.” The toolkit, however, advocates tearing down only some of the barriers, and not necessarily the ones that will work to make housing more affordable.

“Sunbelt cities with more permeable boundaries have enjoyed outsized growth by allowing sprawl to meet their need for adequate housing supply,” says the toolkit. “Space constrained cities can achieve similar gains, however, by building up with infill.” Yet this ignores the fact that there are no cities in America that are “space constrained” except as a result of government constraints. Even cities in Hawaii and tiny Rhode Island have plenty of space around them–except that government planners and regulators won’t let that space be developed.

Instead of relaxing artificial constraints on horizontal development, the toolkit advocates imposing even tighter constraints on existing development in order to force denser housing. The tools the paper supports include taxing vacant land at high rates in order to force development; “enacting high-density and multifamily zoning,” meaning minimum density zoning; using density bonuses; and allowing accessory dwelling units. All of these things serve to increase the density of existing neighborhoods, which increases congestion and–if new infrastructure must be built to serve the increased density–urban-service costs.

Urban areas with regional growth constraints suffered a housing bubble in the mid-2000s and are seeing housing prices rise again, making housing unaffordable. Source: Federal Housing Finance Agency home price index, all transactions.

Developers learned more than a century ago that people will pay a premium to know that the neighborhood they live in will not get denser. Even before zoning, developers used restrictive covenants to limit density because they knew people would pay higher prices for lots with such covenants. When zoning was introduced to do the same thing, many neighborhoods were built without such covenants, but that doesn’t mean the people in those neighborhoods will be happy to see four- and five-story buildings pop up among their single-family homes.

Urban areas with few regional growth constraints see only moderate changes in housing prices over time and still have plenty of affordable housing.

Planners argue the market has changed and more people want denser development. This is belied by the toolkit, which also supports the use of property tax abatements and value capture incentives (i.e., tax-increment financing) to promote higher densities. If there really were a market for higher densities, such subsidies would not be necessary.

If there really is a market for higher densities, then developers should be allowed to build such densities in areas that are not already established low-density neighborhoods. But developers should also be allowed to build low-density neighborhoods at the urban fringe to meet the demand for that kind of development. Instead, state and local planning rules in California, Florida, Hawaii, Oregon, Washington, and most New England states have essentially made such low-density developments illegal.

Moreover, there is little reason to believe that “building up with infill” will make cities more affordable. Artificial constraints on urban growth make land many times more expensive than in unconstrained areas. Mid-rise and high-rise housing costs more to build per square foot than low-rise housing.

Increasing density generally correlates with decreasing housing affordability. Source: 2010 census.

No matter how often urban planners chant, “grow up, not out,” the fact is that no urban area in the nation has ever made housing more affordable by increasing its density. In fact, as the chart above shows, there is a clear correlation between density and housing unaffordability.

The urban areas that have been increasing their densities through artificial growth constraints are precisely the ones that are having affordability problems. For example, from 1970 to 2010 the density of the San Francisco-Oakland urban area grew by 43 percent while its median home value-to-median family income ratio (a standard measure of housing affordability) grew from 2.2 to 7.1. Portland’s density grew by 14 percent and its value-to-income ratio grew from 1.6 to 3.9. Honolulu’s density grew by 23 percent and its value-to-income ratio grew from 3.2 to 6.6. Growing up has made these regions less affordable, not more.

Ultimately, what is wrong with the White House toolkit is that it is focused on local zoning which it should be focused on regional growth management. If there are no regional growth constraints, local zoning won’t make housing more expensive because developers can always build in unrestricted areas. Dallas has zoning; Houston doesn’t, yet in 2014 both had value-to-income ratios of 2.4. Only regional growth constraints make housing expensive. Every major city in America except Houston has local zoning, yet only those cities that have growth constraints have become unaffordable.

The real danger is that the White House’s policies will be imposed, via the Department of Housing and Urban Development, on areas that have few regional growth constraints today. The increased regulation advocated by the White House will make those areas less affordable, not more, while it won’t do anything at all for areas that already have lots of growth constraints.

The White House toolkit calls its proposals “smart housing regulation.” Truly smart regulation would rely on policies that work, not policies that only work in the fantasies of urban planners. The policies that do work would better be described as “smart land-use deregulation,” as they involve dramatically reducing constraints in unincorporated areas. Until that happens, housing will continue to become less affordable in constrained areas.

During the first half-hour of Monday’s presidential debate the candidates talked about the role of foreign trade in America’s economy.  Some observers have said that Donald Trump “won” this portion of the debate, because even though everything he said was wrong, he sounded very confident and Hillary Clinton didn’t have good responses. 

Trump took control of the narrative from the beginning when he came out swinging against China and Mexico, who he says are stealing our jobs.  He effectively blamed Clinton for the destruction of American manufacturing by tying her to NAFTA.

Clinton could have responded with any number of rebuttals.  For example, U.S. manufacturing has not been destroyed; NAFTA has been good for our economy; globalization has been a major driver of America’s economic success; gauging American economic health by the size of our trade deficit is foolish; and promising growth through protectionism is a con job.

But Clinton can’t make any of those rebuttals, because her trade policy proposals are nearly identical to Trump’s and rely on the same myths and fallacies.  Clinton has criticized trade and Chinese cheating for harming U.S. manufacturing.  She’s promised to violate WTO rules to impose high tariffs on Chinese goods.  And she has promised many times to renegotiate NAFTA.

American public discourse, and possibly the quality of life of millions of people, would have been better served if someone on that stage had been willing to take on Trump’s belligerent nationalism by pointing to the incredible prosperity promoted by decades of ever-expanding global economic liberalization.  

We are in the midst of “Banned Books Week,” a time dedicated not so much to shining light on books that have actually been banned—that no one may legally read—but that parents object to their children being forced or encouraged to read by the public schools for which they must pay and, de facto, use. Such parents are frequently accused of “banning,” but are often really objecting to a public school—a government school—pushing their children to read material they think violates their religious convictions, is offensive, or is just age-inappropriate. They aren’t trying to ban books, they are trying to escape government-privileged reading they do not think is right for their kids. It is parents doing what school boards, librarians, and teachers do whenever they assign or purchase one book, and reject another.

The more basic violation is not parents objecting to books—a free society lets people freely choose what they read, and parents are the guardians of their children—but government placing some people’s speech above others. Indeed, public schools are supposedly democratically controlled, so in theory every parent is supposed to be able to raise objections to any book, and if they can convince a majority to remove it that is supposed to be just fine. But the country is not supposed to be a democracy. Rather, it is built on individual liberty that is to be defended even against—perhaps especially against—the majority will.

But how do you protect liberty with a public schooling system? How can one elementary school, or district, to which people are assigned based on their home address, tailor instruction and readings to each individual family and child?

The answer is it can’t, and one consequence is wrenching, divisive conflict. You can get a sense for this with Cato’s interactive Public Schooling Battle Map, which contains summaries of more than 220 book battles in public schools. And the map only contains conflicts that have made headlines or been reported to the American Library Association. Likely many others have occurred that did not make the news, and no doubt many parents object to readings but do not feel they can fight.

Worse than conflict is the treatment of families, and often whole communities, as second-class citizens, forced to fund teaching they find inappropriate or just plain wrong. Perhaps this is the most powerful reason that “Banned Books Week” should be changed to “Educational Freedom Week.” (Of course we already have School Choice Week, but the more, the merrier!) The key to treating all speech and people equally is to not make anyone fund decisions that inherently privilege one person’s speech—their ideas and values—over another’s.

This can be done to some extent with vouchers—let families use the money for their children’s education at schools that share their values—but even better with scholarship tax credits or tax credit-funded education savings accounts. The latter vehicles not only give families choice, but funders, too. People would choose whether or not to donate, and in the best plans, to whom.

Such freedom would defuse conflict and promote equality not just concerning reading assignments and school library content, but all of the other things the Battle Map shows people fighting over in public schools, including bathroom access, dress codes, hairstyles, human evolution, Mexican-American history, prayer at graduation, sex education, NRA t-shirts, schools named after Confederate generals, “Bong Hits for Jesus,” International Baccalaureate…and so on.

We have a much more fundamental problem than “banned” books. We have an education system that is inherently unequal and conflictual, and we need to fix it. We need educational freedom for all.  

This morning, the Associated Press published results of their investigation into the unauthorized access of law enforcement databases by police officers. They found egregious abuses including stalking, harassment, and selling of personal information.

Unspecified discipline was imposed in more than 90 instances reviewed by AP. In many other cases, it wasn’t clear from the records if punishment was given at all. The number of violations was surely far higher since records provided were spotty at best, and many cases go unnoticed.

Among those punished: an Ohio officer who pleaded guilty to stalking an ex-girlfriend and who looked up information on her; a Michigan officer who looked up home addresses of women he found attractive; and two Miami-Dade officers who ran checks on a journalist after he aired unflattering stories about the department.

“It’s personal. It’s your address. It’s all your information, it’s your Social Security number, it’s everything about you,” said Alexis Dekany, the Ohio woman whose ex-boyfriend, a former Akron officer, pleaded guilty last year to stalking her. “And when they use it for ill purposes to commit crimes against you — to stalk you, to follow you, to harass you … it just becomes so dangerous.”

Law enforcement discipline and self-monitoring is notoriously opaque and varies jurisdiction to jurisdiction, so it is impossible to know how often these abuses happen. While it would be unfair to say that most police officers violate these laws and rules, it is unfortunately not uncommon either. Police departments should regularly audit the logins and access to sensitive personal data to protect the privacy of individuals and maintain the integrity of their own agencies.

You can read the whole AP story here. You can scroll through many of the cases Cato’s National Police Misconduct Reporting Project found that document the phenomenon on Twitter here. You can follow the project on Twitter at @NPMRP or on the web at PoliceMisconduct.net.

This is a version cross-posted from a piece at PoliceMisconduct.net

One of the insidious dangers to a major power, even a superpower such as the United States, is the possibility that a security client could entangle its patron in an unwanted, unnecessary conflict.  That is what happened in 1914 when Serbia’s zealous pursuit of a parochial nationalist agenda eventually sparked a disastrous war that consumed its protector, Czarist Russia, as well as other traditional European powers.  A prudent great power must always be wary of such potential “loose-cannon” allies.

As I describe in an article over at the National Interest Online, the United States currently needs to worry about two such security clients in East Asia: Taiwan and the Philippines.  The recent conduct of both countries should raise serious questions about the wisdom of maintaining the U.S. security commitment to their defense.

Taipei has taken a number of actions that further complicate the already delicate situation in the South China Sea.  Even as Washington has repeatedly admonished Beijing not to enhance the islands and reefs that it occupies in that body of water, media reports indicate that Taiwan is pursuing an ambitious agenda of its own.  According to United Press International, relying on reports in China Times and other Taiwanese sources, Taiwan is now building anti-aircraft defenses on Taiping (also known as Itu Aba) Island, the largest island in the disputed Spratly chain claimed by China, Taiwan, Vietnam, and the Philippines.  That follows on the heels of the building of an upgraded military airstrip.  To make matters even more ominous, the Taiwanese government apparently asked Google to blur out images of the site to conceal the military construction.  At a minimum, Taipei’s conduct will make Washington’s next lecture to Beijing on maintaining the status quo in the South China Sea considerably more awkward.  At worst, the move substantially increases military tensions in the region and U.S. exposure to those tensions.

But the Taiwanese government looks like the model of diplomatic caution and decorum compared to the Philippines under the rule of President Rodrigo Duterte.  Among the lowlights of his presidency thus far was his labeling of President Obama a “son of a bitch,” which cost him a summit meeting with the leader of his country’s patron and protector.  People in the United States tended to focus on the crudity of the comment rather than the context, but the context was important.  Duterte was emphasizing that he was answerable only to the Philippine people and that Manila’s foreign policy would not necessarily follow Washington’s wishes.  Duterte has since expanded on that theme, asserting that he wishes to forge alliances with both Russia and China. 

At the same time, though, he expects the United States to fully honor its commitment in the bilateral defense treaty and to back Manila’s foreign policy position on contentious issues. One really must ask what America gains by incurring the risks necessary to defend such a self-serving, duplicitous “ally.”

And then there is Washington’s relationship with its increasingly authoritarian and volatile NATO ally Turkey.  Not only have U.S. policymakers watched as the government of President Recep Tayyip Erdogan jails thousands of journalists, teachers, and judges to the point that “democratic” Turkey is now a thinly disguised dictatorship, but Ankara’s external behavior has frequently run counter to Washington’s wishes and interests. Turkish forces have attacked Kurdish rebel units in Iraq and Syria that were backed by the United States, and Ankara has repeatedly flirted with supporting radical Sunni Islamist forces.

Even more disturbing was an incident in late November 2015 when Turkey shot down a Russian military aircraft that had strayed into Turkish airspace for all of 17 seconds.  Ankara’s reckless belligerence was exceeded only by its hypocrisy.  Turkish planes had violated the airspace of Greece more than 2,000 times the previous year alone, and that was a typical year for such incidents.  Greek officials have long complained that their country must devote a considerable portion of its defense budget to intercept aircraft engaging in such violations.  Fortunately, Athens never emulated Turkey’s standard and blasted offending aircraft out of the sky.

The incident with Russia was extremely worrisome.  Luckily, Vladimir Putin’s government responded with restraint and did not resort to retaliatory measures that could have escalated the confrontation.  Indeed, Moscow worked hard in the succeeding months to repair the overall relationship with Ankara.  But if Russia had retaliated for downing the plane, the United States would have been called upon under Article 5 of the NATO treaty, which considers an attack on one member to be an attack on all, to come to Ankara’s defense.  That is how an irresponsible ally can embroil a superpower in a thoroughly unwanted and unnecessary conflict. 

The United States needs to review, reconsider, and prune its overgrown global network of military alliances.  Our country has far too many security obligations to other governments that are profoundly unworthy of such commitments.

People who know me can vouch for the fact that I don’t defend Hillary Clinton very often. This may be the first time ever. But I feel compelled to defend her a bit on the Trans Pacific Partnership (TPP).

She has gotten a lot of criticism – including in Monday night’s debate – for flip-flopping on her position on the TPP. As Secretary of State, she was for it.  Now, she is against it.

But it’s important to be clear on her role in trade policy as Secretary of State, in two ways.

First, in that position, she worked for President Obama. He was setting the agenda. He decided the TPP would be a useful part of his “pivot to Asia” on foreign policy. I have not heard anything about the internal cabinet debate on the TPP; for all we know, she may have argued against it and lost. But once the decision was made to pursue the TPP, she couldn’t take an opposing position, unless she wanted to resign over it.

Second, the State Department does a lot of things related to foreign policy, including a little bit related to trade. However, trade is far from the main task there. In fact, it is the U.S. Trade Representative’s Office that takes the lead on trade. So it’s not as though Hillary Clinton took the Secretary of State job thinking, “I can’t wait to negotiate trade deals.” Basically, her job was to manage foreign policy in general, one small aspect of which was – in the context of overall foreign policy – talking about trade deals that someone else was negotiating.

In addition, keep in mind that when she was Secretary of State, the TPP was still in the early stages of negotiations. No doubt many people were disappointed with some of the final terms, so it’s not completely disingenuous to see the completed deal and decide you don’t like some particular part of it.

That doesn’t mean Hillary Clinton has been very good on trade in general. She hasn’t. Generally speaking, I get the sense that she treats trade as a practical political problem to manage, rather than a policy she believes in or cares about. At the same time, given her flexibility on this issue, she may find a way to push trade policy forward. She has mentioned specific things she doesn’t like about the TPP.  It is not hard to imagine that, as President, she would look for ways to fix what she sees as flaws in the TPP.  In that sense, she is probably a lot better than the alternative.

The debate over transgender rights has risen in prominence in recent years, with the fight over access to public restrooms and locker rooms receiving particularly heavy public attention. The legal question at the heart of the first such lawsuit to reach the Supreme Court, however, is one not of civil rights law, but of administrative law: Should courts defer to agency interpretations of their own regulations, even when those interpretations constitute major, substantive changes to public policy via informal, non-binding pronouncements?

G.G. is a transgender high school student—minors are identified by letters in sensitive cases—who argues that Gloucester (Va.) High School’s policy disallowing him from using the facilities that correspond with his preferred gender identity violates federal law (Title IX of the Education Amendments) regarding sex discrimination in education. Upon being informed of G.G.’s conflict with the Gloucester County School Board, James A. Ferg-Cadima—a civil servant in the DOE’s Office of Civil Rights (OCR)—decided to get involved. He wrote a letter purporting to interpret the relevant regulation, stating that “[w]hen a school elects to separate or treat students differently on the basis of sex in [situations like this], a school generally must treat transgender students consistent with their gender identity.”

While the district court rejected this interpretation, the U.S. Court of Appeals for the Fourth Circuit deferred to the agency. The Gloucester County School Board now seeks Supreme Court review. Cato, along with three respected law professors (Jonathan Adler, Richard Epstein, and Michael McConnell), has filed an amicus brief supporting that petition.

We do so not because we necessarily oppose OCR’s position as a matter of policy—that’s a question for another day—but because we oppose its unconstitutional method of enacting that policy. OCR seeks to change federal law not through notice-and-comment rulemaking as required by the Administrative Procedure Act, but through an informal, unpublished letter written by a low-level bureaucrat.

Supreme Court precedent under Auer v. Robbins, 519 U.S. 452 (1997), says that courts must give such agency interpretations of their own regulations controlling deference. But deferring in this way incentivizes agencies to write vague regulations because they can be confident that they will then be free to reinterpret them at a later date without having to go through the trouble and expense of the rulemaking process—changing the law with no notice to regulated entities or the general public. Auer deference also allows executive agencies to consolidate both legislative and judicial power by effectively rewriting regulations beyond the scope delegated by Congress and then judging for themselves whether they’ve overstepped that authority.

We call on the Court to take this opportunity to overrule Auer and declare that the judiciary will no longer blindly accept self-serving agency interpretations, but make their own independent determinations based on a searching and reasoned reading of the regulations at issue. Should the Court choose not to overrule Auer, we suggest that—at minimum—it hold that only agency interpretations that have received the public scrutiny of notice-and-comment rulemaking merit judicial deference. 

The justices will consider whether to take the case of Gloucester County School Board v. G.G. later this fall.