Policy Institutes

Last week, Senator Ron Johnson (R-WI) introduced the State Sponsored Visa Pilot Program Act of 2017. Senator John McCain (R-AZ) is an official co-sponsor. If enacted, this bill would create a flexible state-sponsored visa system for economic migrants whereby states would regulate the type of visas and the federal government would handle admissions and issue the actual visas. Representative Ken Buck (R-CO) plans to introduce a companion version in the House in the near future. 

This is an innovative bill but we have encountered one persistent question from conservatives, libertarians, and others who are sympathetic to the idea of immigration federalism: Is a state-sponsored visa constitutional? 

The state-sponsored visa is perfectly consistent with the current migration system. The Johnson-Buck bill does not actually end federal control of migration but it merely creates a visa category whereby the states select the migrants through whatever processes they establish. The federal government is in full control of visa issuance and admission at ports of entry. Thus, states would be acting as sponsors on behalf of migrants whom they represent in their states in the same way that they currently sponsor foreign-born students at state universities and other workers in their capacity as employers.

In 2014, Brandon Fuller and Sean Rust authored a policy analysis for Cato that explored how a state-sponsored visa program could operate in the United States. They wrote a section addressing the constitutionality of such a program:

Historically, the Supreme Court has interpreted Congress to have “plenary power” over immigration, generally giving deference to the political branches of the federal government as an extension of the Naturalization Clause under Article 1, section 8, clause 4, which gives Congress the power “To establish an uniform Rule of Naturalization.”[1] Under current interpretations, this gives Congress the sole power to establish naturalization guidelines. However, Congress can also allow states to be involved in immigration policy in areas besides naturalization, such as managing a state-based visa within federal guidelines. Some immigration policies, with the exception of naturalization, can be partly devolved to the states within a range of powers permitted by the federal government.

The recent case of Arizona v. the United States, which decided the constitutionality of Arizona’s strict immigration laws, reiterates the point that states are allowed to participate in immigration policy and enforcement, but only within the scope permitted by the federal government.[2] In debating the case of Arizona v. United States, Peter Spiro, an immigration law scholar at Temple University’s Beasley School of Law, wrote, “[I]n Arizona, the Supreme Court constricted the possibilities for unilateral state innovation on immigration, both good and bad. That does not stop the federal government from affirming state discretion.” A state-based visa program does just that—allowing states to participate in the selection of immigrants under guidelines permitted by the federal government which is consistent with current interpretations of the Supremacy Clause and the plenary power of the federal government in the matter of immigration.

It is also important to note that U.S. law defines a nonimmigrant visa holder as “an alien who seeks temporary entry to the United States for a specific purpose,” and the federal government may set conditions in accordance with this purpose. For example, in the current immigration system a foreign entrant may be required to be attached to a singular petitioning employer under a number of employer-based non-immigrant visas, such as the H-1B. Like holders of employment-based visas, state-based visa holders would be nonimmigrants with a temporary right to live and work in the United States and an option to pursue permanent residency. As such, the state-based system is simply a variation on the condition being attached to the foreign entrant.

The Johnson-Buck bill is a federally created visa that allows states to sponsor migrants that would operate by the guidelines established under the Supreme Court cases argued over the Arizona immigration enforcement laws. The same precedents that established that states can increase immigration enforcement beyond what the federal government intended, within the confines of a federal program, also allow states to choose whether to have more legal migrants under a federally managed system. 

Naturalization is a solely federal power that the state-sponsored bill does not interfere with. If a worker on a state-sponsored visa finds an employer or a family member to sponsor him for lawful permanent residency then he will have full mobility, employment, and residence rights just like any green card holder.

The federal government currently runs the visa system in the United States and the Supreme Court has interpreted the Constitution to give Congress that power. There is nothing unconstitutional with Congress asking the states to play a role in the process of selecting migrants for visas.

[1] INS v. Chadha, 462 U.S. 919 (1983).

[2] Chamber of Commerce v. Whiting, 563 U.S. (2011); Arizona v. United States, 567 U.S. (2012).

A decade ago an errant pass in a basketball game hit my thumb hard along the nail. After a couple days of intense pain, the thumbnail fell off and then grew back misshapen. It turned out that the injury killed a portion of the nail bed. As afflictions go it is pretty minor, but it is a tad grotesque and makes a few tasks a bit more difficult.

An orthopedic surgeon suggested I either opt for surgery—which may not have worked or been covered by insurance—or else have the entire nail permanently removed for aesthetic reasons. I oped to leave it alone and began getting a regular manicure to keep the thumbnail under control.

A couple months ago, the owner of the salon I frequent asked if a new employee could do my manicure. The issue was that he spoke no English and had no license, but they assured me he had been doing manicures for years in Vietnam and was quite talented. I agreed.

The owner explained my thumbnail issue to him, and he spent several minutes on the digit. A few days later, to my surprise, the dead nail bed began growing again. The nail now looks almost normal.

The story of my healing nail asks a question: to what extent should states license manicurists, or professions that by and large have nothing to do with health and safety? Wisconsin—and many other states—requires graduation from an accredited institution that teaches the trade as well as hundreds of hours of experience. It does not automatically recognize licenses issued by another state or country either. In other words, there would be no clear path for this manicurist to legally practice his profession in the state.

The typical state licenses hundreds of professions. Some of those are unobjectionable—most people want doctors and anesthetists to undergo a licensing regime before assuming their professions, for instance. But other licenses are problematic. For instance, many states require interior designers and florists to be licensed. Do we really need to be protected from a rogue designer who might do damage to the color scheme of our homes? The same question can also be asked of manicurists, barbers, aestheticians, and other professions that have little to do with health or safety.

The harm in excessive licensing is twofold. First, people with an aptitude for a profession but without the means to take the classes to obtain the license are effectively shut out of a way to earn a decent living. A license for an interior designer, for instance, requires six years of training, including at least two years of school.

Second, the higher wages from excessive licensing translates to higher costs for these services as well. A manicure in Oshkosh—a former home of mine—costs more than in Washington DC, where I currently reside. While not everyone might need or want such services, the disparity in prices between my high-cost current home and my former low-cost residence suggests that someone’s getting a bad deal.

A study I wrote with my colleague Logan Albright, published last month by the Wisconsin Policy Research Center, examines the inexorable expansion of licensing in the state—driven both by the expansion of the service sector as well as the increase in the number of occupations in the state requiring a license. We suggest that in an economy where states have been ratcheting up their efforts to attract jobs and boost economic growth, it is time for Wisconsin to examine the current licensing regime and think cogently about which tasks merit licensing and which can do without. Many other states have begun to do precisely this—and are concluding that their current licensing regime has gone too far.

Such an exercise should be a bipartisan affair. Unnecessary licensing hurts the entire state, but those who come from low-income households or lack the means to obtain the training to get such jobs suffer the most.

Governor Walker and the state legislature have both announced they will look at this issue. There’s a lot to look at, we submit.

Ike Brannon is president of the consulting firm Capital Policy Analytics.

 

At a Cato Institute Capitol Hill Briefing today, Senate Homeland Security Committee Chairman Ron Johnson (R-WI) and Congressman Ken Buck (R-CO) announced their intention to introduce new immigration legislation that would allow states to sponsor workers, entrepreneurs, and investors. Sen. Johnson introduced his version this afternoon. In 2014, Cato wrote a policy analysis about this idea. My colleague Alex Nowrasteh and I have published blog posts and op-eds about it, and Cato’s Handbook for Policymakers urged Congress to implement such a policy.

State-sponsored visas would build much-needed flexibility and adaptability into the federal immigration system. We are pleased that members of Congress are finally taking up this innovative and important idea.

The federal government’s monopoly over legal immigration fails to address the diversity of economic needs among the states. A more decentralized visa program could head off local problems before they build into a national crisis, building flexibility into the system that exists in every other area of the market. Giving states greater control would also increase political support for immigration programs and allow Congress to reform the system without needing to agree on every issue.

The federal government determines the number of foreign workers, the type of work that they can perform, and the terms under which they must live. The question today is whether any of these functions could be better handled at the state level.

As a legal matter, this is a question that Congress may answer. Most recently, in the Arizona v. U.S. decision, the Supreme Court held that the states are limited in this area only to the extent that Congress chooses to limit them.

From an economic perspective, the static federal monopoly makes little sense. In a market economy, you want systems that adjust quickly to changes at the local level. The federal system doesn’t change until local problems build into a national one, while a decentralized system could head off issues before a crisis develops. Despite widespread agreement that there has been a crisis for more than a decade, no changes have occurred.

The federal-only system also makes little sense politically. Giving states greater control would increase political support for immigration programs. The fights in Congress that have killed reform efforts in the past could be effectively transferred to state Capitols. Congress could fix the system without finding total agreement.

From an enforcement perspective, guest worker programs have historically reduced illegal immigration, creating an incentive for people to come to the United States legally. And limiting workers to a single state is actually less of a challenge than limiting them to a single employer, as the current federal guest worker programs do. More importantly, according to the Government Accountability Office, about 90 percent of overstays are tourists, not guest workers, because the workers want to be invited back to work legally. This incentive has kept their overstay rate well below 3%.

As is detailed in the Cato policy analysis, this idea has been implemented successfully in two other geographically diverse, former British colonies—Canada and Australia. Both countries use regional visa programs to distribute immigration more fairly and allow rural areas to obtain labor for difficult jobs.

The popularity of these programs can be seen in their rapid growth over the last two decades. They are now the second largest source of economic immigration to these countries.

The United States has a long history of federalism and federal-state partnerships, yet it has so far not applied this tradition to immigration. But some states have already passed bills advocating state-based visas. All states already directly sponsor visa applicants as students through their public universities or workers in their capacity as employers. These protocols could be expanded to allow states to sponsor workers on behalf of their industries.

Hopefully, the fact that it is two conservative members of Congress who are pushing this proposal will change the game politically.

In 2015, following the lead of many other states, Virginia passed a “law that says women have a right to breast-feed anywhere they have a legal right to be,” as the Washington Post reports. The law provides “no exemption for religious institutions,” as well as no quarter, it would seem, for owners’ ordinary rights to set terms and conditions when they invite visits from the general public. Now a mother and her attorney say Summit Church in Springfield, in the D.C. suburbs, had no right to ask her to use a private room after she began feeding her baby without a cover during a sermon.

Should Annie Peguero, of Dumfries, Va., press a claim in court, she might have to contend with Virginia’s version of the Religious Freedom Restoration Act, which provides in relevant part (h/t Ann Althouse): “No government entity shall substantially burden a person’s free exercise of religion even if the burden results from a rule of general applicability unless it demonstrates that application of the burden to the person is (i) essential to further a compelling governmental interest and (ii) the least restrictive means of furthering that compelling governmental interest.” But since not all states have a version of RFRA—and particularly since, if the Post’s readers are typical, a large sector of polite opinion is taking Ms. Peguero’s side and appears to see nothing wrong with applying such laws to churches in Summit’s position—it seems likely that this will not the last such claim. 

Personally, I’m fine with public breast-feeding no longer being classed as an automatically shocking thing. But why is government dictation of how a church may arrange its worship services no longer classed as an automatically shocking thing?

[cross-posted and adapted from Overlawyered]

Results of last week’s DC voucher study, showing some significant negative effects on standardized math tests, has school choice opponents in overdrive writing voucher obituaries. But at least some commentators, like the New York Times’ David Leonhardt, concede that choice works, but only if it is shackled to regulations they like. That choice works if carefully managed is perhaps an inevitable concession with the broad notion of school choice clearly in ascendance. However, the idea that regulated choice produces better outcomes flies in the face of basic economic theory and choice research.

Negative Impacts of Regulation

State requirements often come in the form of standardized test scores or restrictions on the types of teachers that may be employed. These regulations force schools to focus narrowly on state tests, which do not appear to matter in the long-run, and limit the supply of teachers, lowering educational quality while increasing costs.

As I illustrate below, programs with less restrictive voucher laws lead to more impressive experimental evaluations of student math achievement, perhaps because the costs of regulation ward off high quality private institutions:

Vouchers > Charters

In “free” public charter schools, bureaucrats decide how much education ought to cost per child, and each charter school is limited to accepting that amount, even if it is a high performing institution.  The lack of price differentiation in charter schools is detrimental since it does not give institutions the incentive, nor the information, necessary to innovate or excel.

Unsurprisingly, the empirical evidence supports economic theory.  While the DC Opportunity Scholarship has mixed results on test scores, the effects are clear for long-term outcomes: a massive 21-percentage point increase in graduation rates.  Perhaps more importantly, private school choice programs in the United States have significantly improved communities overall through decreased criminal activity, reduced state expenses, and racial integration.

It should not astonish us that families are selecting schools that do not specialize in producing obedient test-taking machines. Naturally, it is likely that parents care less about standardized tests than the overall development of their children. In that sense, the recent evidence only reinforces the fact that markets behave as expected, even in the realm of education. If we really want to ensure that children have access to high quality schools, we ought to use the most powerful form of regulation that we have: parental choice.

Police shootings are back in the news. Michael Slager has pleaded guilty to federal charges involving the killing of Walter Scott. Federal officials have declined to bring charges against the officers involved in the shooting death of Alton Sterling. Meanwhile Texas officer Roy Oliver has been fired in the wake of the shooting death of 15 year old Jordan Edwards.

Each shooting incident has to be considered separately to take account of all the surrounding circumstances. There are a range of possibilities—from self-defense on the part of the officer, to tragic accident or mistake, to manslaughter or even first degree homicide. To ensure just outcomes, one of the most important things is to have independent, impartial investigations whenever there is a questionable shooting, especially where someone is killed or injured. Preferably, this will be done by a completely separate police department or the state attorneys general office, rather than the federal government. Another best practice for police shootings involves transparency. Police departments should identify the shooter and disclose his or her record, such as previous involvement in shootings or previous lawsuits alleging wrongdoing. Authorities should also make videos available. Mayor Rahm Emanuel tried to make the Lacquan McDonald case go away with a quiet legal settlement. It was only when a reporter went to court to seek the release of the video that the scandal was exposed and real movement for police reform could begin. 

For related Cato work, go to our police misconduct web site. Still more here, here, and here.

At the contentious interface of climate science and policy, there’s one thing that people of all flavors agree upon: if Greenland were to shed all its ice in a century that would be an unmitigated catastrophe, raising sea levels an average of 22 feet simply from the sheer volume of water contained thereon.

It therefore stands to reason that a melting Greenland makes for good copy, and The Economist’s witty scribes have just published two alarming articles (here and here). Alarming, that is, because they left out a few pertinent facts.

“The most worrying changes are happening in Greenland, which lost an average of 375bn tonnes of ice per year between 2011 and 2014.”

This is a finely selected cherry that The Economist plucked. 2012 was an exceedingly warm year averaged of the island-continent. Had they included all the recent data, they would have shown that accumulation of ice on Greenland recently reached a record high compared to the previous three decades:

Source:  Danish Meteorological Institute

“This is equivalent of over 400 massive icebergs measuring 1km on each side disappearing each year.”

At the turn of this century, the U.S. Geological Survey reported the volume of Greenland’s ice at 2,600,000km3. The maximum melt of 400km3 is a grand total of 1/5000th of its ice.

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) projects that melting of Greenland’s ice will raise sea level a bit under one-tenth of a meter, or three inches by 2100. 

“Even if current emissions remain stable, the consensus is that global sea levels will rise 74cm [29 in] by the end of the century.”

Nope. The same IPCC science summary projects around 38cm [15in] for this scenario.

With regard to the much-feared sudden loss of Greenland’s ice, we read that “little is known about how Greenland’s vast ice sheet will react to future warming.”

Well, when it comes to the big one, no, not really. A 2013 ice core got all the way back to the beginning of the previous interglacial, when there was a 6,000 year period of very warm summer temperatures. Prior to this work by Dorthe Dahl-Jensen and her colleagues, it was thought summer temperatures in this period, called the Eemian, were about 2⁰C warmer than the 20th century average over northwest Greenland, where the core was drilled. 

Instead, Dahl-Jensen found that it averaged a whopping 6⁰ warmer. She estimated this was associated with a maximum loss of about 30% of Greenland’s ice. That may be charitable because where she drilled, in the cold northwestern region, the ice core revealed that the thickness of the ice was reduced by about 10%. Another, more recent study also found 6⁰C of warming, this time at Summit, where Greenland’s ice cap reaches maximum elevation. That work did not use the ice itself to estimate the Eemian altitude, but a computer model, which showed around a 70% loss of total Greenland ice.

So this much heat rained down on Greenland during the Eemian: 6⁰C X 6,000 summers, or 36,000 degree-summers. And let’s say, maybe, humans could warm it 5⁰C for 500 summers, or 2,500 degree-summers. That would only knock 2500/36000 of the maximum 30% of the ice off, or two percent. This works out to five inches of sea-level rise from the melting of Greenland in the first study and 13 in the second one. 

Most readers likely will not click through the links and read the journal article behind the headlines, nor have a friendly local climatologist to debunk these sort of stories. No wonder so many are so worried.

Writing in The Wall Street Journal on April 27–making another last-ditch pitch for a 20% border tax on business imports–Martin Feldstein asserts that unless corporate tax rate cuts are “offset” by tax increases on imports or payrolls then larger projected deficits would crash the stock market by raising long-term interest rates. “The markets’ current fragility,” he writes, “reflects overpriced assets–the S&P 500 price/earnings ratio is now 70% above its historical average–after a decade of excessively low long-term interest rates engineered by the Federal Reserve.” 

The odd notion that the Fed could somehow depress bond yields for a decade is an irrelevant ambiguity, since the whole point of Feldstein’s story is to claim budget deficits raise bond yields and higher bond yields threaten “overpriced” stocks.

In a recent blog, I found no evidence to support the dogma that bond yields rise and fall with rising or falling budget deficits (actual or projected). Wall Street Journal columnist Greg Ip opines that “interest rates haven’t responded to deficits lately because private investment has been so lackluster.” But that excuse makes interest rates dependent on private investment, not deficits, and leaves us tangled in circular illogic. If interest rates depend on private investment and deficits “crowd out private investment,” then interest rates could never respond to deficits because private investment would always be lackluster when deficits were large (which would also make deficits the opposite of a “fiscal stimulus”).

Switching from bonds to stocks in this blog, I find no evidence that the S&P 500 stock index is “overpriced” relative to long-term interest rates (which is the only meaning of “overpriced” that relates to Feldstein’s argument about deficits and bond yields).

Feldstein claims stocks are “overpriced” because “the S&P 500 price/earnings ratio is now 70% above its historical average.” But there is no reason to expect the p/e ratio to revert to its long-term average unless bonds yields revert to their long-term average.

The graph illustrates this connection by inverting the trailing S&P 500 price/earnings ratio and expressing it as an earnings/price ratio. This became known as “The Fed Model,” though I prefer to call it “The Reynolds Model,” because I first used it in March 1991 (to suggest bonds, rather than stocks, were overpriced). From 1970 to 2016, the average e/p ratio was 6.52 (equivalent to a p/e ratio of 15.2) while the average yield on 10-year bond yield was almost identical at 6.57%. That connection between stocks and bonds has been quite close over the long haul (though not before August 1971 when the dollar was convertible into gold).

An oversimplified thumb rule from Investopia says, “If the earnings yield is less than the rate of the 10-year Treasury yield, stocks as a whole may be considered overvalued.” In 2016, the earnings yield of 4.17 was about twice as high as the 10-year Treasury yield of 1.84, which suggests the earnings/price ratio was then too high and therefore the price/earnings ratio (or bond yield) was too low

On May 1, 2017, the p/e ratio was 25.26, which is equivalent to an e/p ratio of 3.96 (=1/25.26). Since an earnings yield of 3.96 is obviously much higher than recent bond yields of 2.3%, the market is still “undervalued”–not “fragile.”

If bond yields rose to 3.96% (much less to the historical average of 6.57%), that might indeed pose a risk to stocks–unless there was an offsetting rise in expected earnings. However, Feldstein wouldn’t dare to predict that U.S. bond yields may approach 4-7% in the foreseeable future regardless what happens to budget deficits. And his assumed connection between deficits and bond yields is pure conjecture, without credible empirical support.

Feldstein’s latest argument for adding new import or payroll taxes relies on budget deficits pushing up bond yields and thus threatening “overpriced” stocks. Unfortunately, those claims about deficits, bonds, and stocks all rest on faulty theories and nonexistent evidence. 

Border apprehensions of illegal immigrants are substantially down in the first few months of the Trump administration. In fact, the border apprehension figure for the month of March is only 16,600, the lowest monthly figure since 2000. Apprehensions are an important proxy metric for the inflow of illegal immigrants. Many are giving credit to the Trump administration for this rapid and seemingly historical collapse in illegal immigration.

There was another historical decline in border apprehensions that was even quicker, more dramatic, and far cheaper than the decline in border apprehensions that began in 2006 and has trended downward to the Trump administration. It occurred in the 1950s when the government streamlined the Bracero guest worker visa program and allowed more legal migration. These two periods of time lasted about the same number of years and provide an easy comparison between two means of diminishing illegal immigration: by making it legal or doubling down on enforcement.

The border patrol apprehended virtually the same number of illegal immigrants in 1954, when the deregulated Bracero program began operation, as in the year 2006. The deregulated Bracero program lasted from 1954 to about 1965 and the 2006 decline has lasted until today. Apprehensions fell after both of those but they fell further and much more rapidly in the 1950s (Figure 1). Apprehensions declined by 93 percent from 1954 to 1956 but only by 34 percent from 2006 to 2008. Figure 2 shows the same numbers indexed to 1 in the first year. Clearly, the Bracero Era witnessed a much more rapid and complete decline in illegal immigrant entries than the crackdown from 2006 to today.

Figure 1
Border Patrol Apprehensions

Sources: USCIS, CBP, and INS.

Figure 2
Border Patrol Apprehensions, Indexed

Sources: USCIS, CBP, and INS.

There are more border patrol agents in the 2006-2017 period than during the Bracero Era. The 2006-2017 period began with 11.4 times as many agents as in the Bracero Era and ended with 13.3 times as many while the decline in apprehensions was slower and less complete (Figure 3). From the beginnings of the two periods, the number of border patrol agents climbed by 38 percent in the Bracero Era and by 61 percent in the 2006-2017 period. The indexed number of border patrol agents shows that the agency grew more under the 2006-2017 period (Figure 4).

Figure 3
Border Patrol Officers

Sources: USCIS, CBP, and INS.

Figure 4
Border Patrol Officers, Indexed

Sources: USCIS, CBP, and INS.

These two periods are not perfectly comparable. The decline in border apprehensions since 2006 was aided by the housing market collapse, the Great Recession, the 61 percent increase in the number of border patrol agents, the relative demographic decline in Mexico, numerous state-level laws immigration enforcement laws, Secure Communities, and the increase in interior deportations under Presidents Bush and Obama. The Bracero Era collapse in illegal immigration occurred during an expanding domestic economy, a 38 percent increase in the number of border patrol agents, accelerating Mexican fertility, and a fiercely named but relatively moderate interior immigration enforcement scheme that also legalized many illegal workers. Although imperfectly comparable, many natural, political, and macroeconomic factors conspired to lower illegal immigration since 2006 while most of those factors pushed in the opposite direction during the Bracero Era–providing further evidence that Bracero was more effective than enforcement-only.

The Bracero Era’s immigration enforcement policy was called “Operation Wetback,” a nasty immigration enforcement operation begun in 1954 that removed almost two million illegal Mexican migrants. While brutal and unnecessary, many of the migrants rounded up under Operation Wetback were legalized on the spot, a process derogatorily referred to as “drying out” illegal migrant workers, and given a Bracero work visa. The number of migrants “dried out” is not well recorded but 96,239 were processed thusly in 1950. The Department of Labor actually preferred legalized illegal migrants over newly-admitted Braceros. Other apprehended illegal immigrants were made to “walk around the statute”–basically taking a single step into Mexico and then returning under the watchful eye of a border patrol agent who then handed him a work visa and drove him back to his farm. The government did not tolerate illegal immigration but they made it simple for migrants to get a guest worker visa and used the border patrol to funnel the migrants into the legal system. Many border patrol agents and other officials testified to what a success Bracero was in reducing illegal immigration.

The main goal of modern immigration policy is to end illegal immigration. The government should choose the cheapest way to accomplish that task–which is by expanding guest worker visas. Border patrol agents and walls are expensive, they decrease economic growth, and have never completely stopped illegal immigration. Guest worker visas are cheap, they increase economic growth, and they reduced illegal immigration far more rapidly and effectively than the modern enforcement-only method. If it was easier for would-be illegal immigrants to instead earn a legal work visa similar to Bracero then almost all future and current illegal immigrants could be funneled into the legal market without increased enforcement. This was the policy followed in the Bracero Era and it worked quicker, more efficiently, more completely, and more cheaply than the modern enforcement-only approach.

If the Trump administration really wants to end illegal immigration then they should copy Eisenhower’s policy of enforcement and liberalization toward guest worker visas rather than Obama’s enforcement-only approach.

Private school choice programs have been proposed in state legislatures all across the nation, and public interest in the term “school choice” reached an all-time high earlier this year. Since school choice programs create accountability to parents and children, education scholars have discussed whether state-driven accountability is on the wane. While robust accountability to the state is essential in traditional public schooling institutions, it is inferior to accountability to every single family.

Necessary in Involuntary Settings

Accountability to the public is necessary in schools with compulsory attendance based on age and zip codes. What would happen if state officials did not set minimum standards? Public schools could serve children inadequately and even harm them to a certain degree before parents were forced to decide whether to pay out of pocket for a private institution or move. In many cases, parents would not be able to afford to opt out of the free school due to income constraints.

Suppose you were required to send your child to a residentially assigned public restaurant until they were eighteen years old, because, after all, nutrition may be the most basic right of them all. If your child becomes sick from food poisoning, you may still decide to keep them there based on income restrictions and perceived differences in quality. Of course, the state would need to intervene in order to keep the compulsory public restaurants accountable to minimum safety and, perhaps, taste standards.

Political Process Problems

While state accountability is necessary in the public sphere, we should recognize the shortcomings. First, who is deciding what the standards ought to look like, and how do we keep those people accountable? The commonly cited answer is that state officials are held accountable to the public through the political process. The main problem with that argument is that it assumes that the political process is efficient in holding bureaucrats accountable. 

Inefficiency runs rampant in the political sphere because voters do not have an incentive to become politically knowledgeable. If I am voting in a presidential election, for example, I have around a 1 in 60,000,000 chance of determining the outcome. On the other hand, it is extremely costly to gain information on every policy that a given politician talks about and influences. The counterintuitive result is that voters actually make a rational decision to be politically irrational.

Even if all voters were completely rational, we would still face the problems associated with majority rule. Policies around educational standards result from the most politically powerful groups in society. The consequence is that children from disadvantaged groups are harmed by the uniform set of standards decided by the elites. 

Similarly, suppose we went into the grocery store and voted on the cart that we received. Even if we were in the majority and got the cart that we preferred, we would still end up with some of the things we wanted, and much of what we did not care to have. 

Consequences of Central Planning

I have sat in many rooms filled with intelligent people attempting to determine what educational accountability systems ought to look like. What measures should we focus on? What weights should we assign to each measure? What do we do to schools that do not meet goals? Each individual truly tries their best to improve the educational experiences of all children. However, it is sadly an impossible problem to solve, especially given the constraints of the traditional system of schooling.

Perhaps most importantly, something as small as altering the weight of a certain accountability measure is likely to change the life trajectory of many children. Should character skills assessments count as 11% or 10%? If we arbitrarily decide on 10%, rather than 11%, we may very well harm children at the margin that desperately needed behavioral development. The result? Moving the needle in the wrong direction could mean that one more child, at the margin, ends up in prison for the rest of their life.

We should not force children to suffer the consequences of the political process. Instead, we should allow all families to get what they want through voluntary educational choices, regardless of income level or political power.

There was–perhaps still is–a Cuban aphorism that “Sugar is made with blood.” Few other people were better situated to actually comment on what went into producing sugar (consumed all the way from England to India) than those whose labor created it. None knew more intimately than the slave just how much human misery was squeezed into every cup. Sugar and tobacco were the New World’s primary cash crops because their stimulating and addictive chemistries gave European aristocrats incredible amounts of wealth and power. Factory workers dumped sugar into their tea to up calorie counts and make it through the day while corporatists and slave masters reaped a harvest of stimulated profits. The slave’s blood fed the production of cane, and cane fed the new generations of drudge workers. Sugar, in many regards, was made with blood, and history is much the same. But to find out just how sanguine our cup is, we have to be willing to ask disturbing questions. To enjoy tales about the good times and the pleasant things, the heroes and victories, we have to be direct and honest about our past.

Libertarianism.org’s newest podcast, Liberty Chronicles, will present listeners with a humane history of Liberty and Power, neither romanticizing the present nor failing to bluntly analyze the past. The saga of human history is incredibly painful and, often, not terribly inspirational. In many ways, it is a long train of cautionary tales each of which has failed to adequately instruct successive generations. Despite the constant stream of evidence that prosperity requires peaceful cooperation, we consistently fail to improve ourselves. We ignore our true histories–the painful catalog of who exercised violence against whom–to tell myths that temporarily bandage any serious wounds.

To understand more fully who did what to whom and why, we have to be willing to jettison our preconceived notions about the world we know and love. We have to stop trying to justify history and begin really listening to its record. We have to break from the nationalistic, hopeful narratives of an ever-improving synthesis and recognize that the past offers us no nice, neat little lessons or predetermined end-points. Having done these ideological exercises, we can commit ourselves to exploring the past from the perspectives of those actual human beings who created and lived it. With a bit of practice, we can start training ourselves to practice empathy and sympathy by straining to understand people so radically different from ourselves.

Liberty Chronicles combines libertarian methodology with a variety of historical theories and perspectives. We will help listeners eschew academic gatekeepers and propagandizers, taking up Carl Becker’s famous invitation that “Everyman” become “His Own Historian.” We begin today with a discussion of H.L. Mencken’s history of the bathtub and over the next several weeks we will broaden our ideological toolkit to prepare for investigations of our own. Having covered history from above, history from below, Marxism vs. Classical Liberalism, methodological individualism, and conspiracy theory, we will move to the Early Modern period and the development of Liberty and Power in colonial America. From there and then, the battle between those seeking liberty and those seeking power has remained an open contest. Subscribe on your favorite podcatcher, add us on Facebook and Twitter, send us your questions, share the news far and wide all across the land! The history of libertarianism and its war on power is more relevant and necessary now than perhaps ever before.

I heard a report this morning on BBC Newshour on the shortage of dentists in Ivory Coast (Cote d’Ivoire). I can’t find the report at the Newshour website, but here’s something similar from CNBCAfrica, coauthored by a Unilever representative. It’s a sad story of disease, pain, and school absenteeism.

But stories like this miss the point. Why does Ivory Coast have so few dentists? Why does the Gates Foundation need to buy mosquito nets for African countries? It’s not because there’s something special about dentists and mosquito nets. It’s because African countries are poor. And they’re poor because they lack freedom, property rights, markets, and the rule of law.

Take Cote d’Ivoire. In the 2016 Economic Freedom of the World Report, Cote d’Ivoire ranks 133rd in the world for economic freedom. On page 66 of this pdf version, we see that it rates particularly badly on “Legal System and Property Rights.” You can’t generate much economic growth if you don’t have secure property rights and the rule of law. It also rates badly on regulatory barriers to trade and capital controls. 

On the broader Human Freedom Index, we see on page 63 that Cote d’Ivoire also rates low for freedom of domestic movement, political pressure on the media, and procedural, criminal, and civil justice.

African countries have severe tariff and nontariff barriers to free trade, reducing the benefits they can gain from specialization and the division of labor, even among sub-Saharan countries themselves.

The long-term way to get more dentists and mosquito nets in Africa is not Western aid or charity, it’s freedom and growth. Those who want Africa and Africans to have better lives need to encourage African countries to move toward the rule of law, free trade, property rights, and open markets. 

The American Public Transit Association (APTA) has a new report on the economic impact of President Trump’s proposal to stop wasting federal dollars on digging holes and filling them up. Actually, the report is about Trump’s proposal to stop wasting federal dollars building streetcars, light rail and other local rail transit projects, but the two have almost exactly the same effect.

The APTA report says that digging holes and filling them up would provide about 500,000 jobs (though it really means job-years, that is, 500,000 jobs for one year). Since APTA says it would take ten years to dig and fill the holes that Trump wants to stop funding, that’s 50,000 jobs a year.

However, nobody wants a job digging holes and filling them up. What they want is income. Since there is no market for refilled holes, the only source of income for digging and filling holes is tax dollars. So what APTA really wants Congress to do is take money away from workers and then give it back to them and call it jobs. That’s not very productive.

The APTA report also says that refilled holes create economic development that will generate another 300,000 more jobs (which again really means job-years). Supposedly, people like living, shopping, and working next to refilled holes and so they will clamor to have homes, stores, and offices built next to those holes.

I don’t believe that’s true, but let’s say it is. If we don’t dig and refill the holes, people will still need to live, shop, and work somewhere. So the homes, stores, and offices will still be built, though (if you believe in the hole-location theory) they might be built in some part of the city other than next to the undug holes. Thus, digging holes creates zero net secondary jobs.

In fact, digging and refilling holes probably creates negative secondary jobs for the cities digging them because someone has to pay for those holes. The federal capital grants program only pays half the cost of digging and refilling the holes, and the locals have to pay for the rest. After the holes are dug, local taxpayers have to pay most of the cost of maintaining the refilled holes as settling is likely to occur. The local construction and maintenance costs put a huge burden on the local tax base, and some businesses are likely to locate in a city that isn’t obligated to pay for such holes.

In comparing streetcars, light rail, and other forms of rail transit to holes, some people might think I am unfair to holes. After all, holes don’t require annual operating costs like rail transit, and their maintenance costs are also a lot lower. For example, Washington DC used federal dollars to dig some holes and put trains in them, and now it faces a $25 billion maintenance backlog. If they had just left the holes empty, or filled them with dirt–or better yet not dug them at all–they wouldn’t have to worry about who is going to pay for that backlog.

As Will Rogers once said, “If you find yourself in a hole, stop digging.” The rail transit construction of the past 50 years has dug a huge hole that has cost taxpayers hundreds of billions of dollars and coincided with (and arguably contributed to) a decline in per capita transit ridership.

Whether we are talking about holes or building rail transit, the effect is the same. APTA wants Congress to take money from taxpayers so it can give it back to them and claim it is giving them jobs. APTA also wants local governments to take money from taxpayers so they can claim they are making cities more productive. But neither holes nor rail transit produce the income needed to sustain jobs nor do they make urban areas more economically productive. All they do is enrich a few contractors while adding to the overall tax burden. That’s why I think Trump’s policy of ending federal support to holes and other strictly local projects is a good idea.

The northern end of the Antarctic Peninsula is Warming Fast
BBC, August 23, 2012

No, it’s not. When BBC reported this, the Northern Peninsula hadn’t on average warmed a lick in thirty years.

In the 1990s and early part of this century, news reports about the dramatic warming of the northernmost Antarctic Peninsula—the tip of the 800-mile dagger pointed at the heart of Tierra del Fuego—were a common staple. And, while scientists wouldn’t write this in the literature, they were happy to blame it on dreaded carbon dioxide on television, as paleoclimatologist Robert Mulvaney did in the 2012 BBC feature.

The story has become increasingly curious. Marc Oliva of the University of Lisbon recently examined the high quality weather stations over the northern peninsula and the nearby South Shetland Islands. There is a decent warming trend, averaging around 1.5⁰C, from the beginning of the data in 1957 (the year when Antarctica was instrumented as a part of the International Geophysical Year) to the early 1980s, or about a quarter-century. That’s a warming, if it continued (and surely it would!), of 6⁰C per century. The warming that gets huge attention is actually only from a single station, Faraday (now renamed Vernadsky), which warmed roughly 2.5⁰C during the same period. If that continued (and surely it would!), that’s 10⁰C/century!

Oliva et al. wrote that the “Faraday/Vernadsky warming trend is an extreme case, circa twice those of the long-term records from other parts of the AP.” The variability in the Faraday/Vernadsky record is also huge—around three times as much as other stations in the area, probably because it is often at the edge of the sea-ice.

Satellite data show that sea-ice around Antarctica grew from when satellite data began in 1978 through early 2016, especially after 2000. Last April, the satellite’s sensor started sending back bizarre data. The University of Illinois people who archive this at Cryosphere Today have been using backup sensors that are giving completely strange stuff, such as a huge crash in Antarctic sea ice—larger and faster than anything in the record—followed by an even larger gain. That seems impossible, so recent sea ice data are just plain suspect.

The data shown below are from Olivia et al. What is obvious is since the early 1980s—over three decades ago—there’s no net change of which to speak. And if you want to be picky about it, there a net decline in temperature that begins in the late 1990s, the same time the infamous “hiatus” in global warming started.

Last year, John Turner published a paper in Nature providing evidence that the lack of recent warming is consistent with natural variability as well as the previous warming. To wit:

Therefore all of these [nearby ice-core] studies suggest that the rapid warming on the AP [Antarctic Peninsula] since the 1950s and the subsequent cooling are both within the bounds of the natural decadal-scale variability of the region.  

 

But that’s not what the public hears.

References:

Oliva, M, et al.,  2017.  Recent regional climate cooling on the Antarctic Peninsula and associated impacts on the cryosphere.  Sci. Total Environment  580 210-223.

Turner, J. et al., 2016.  Absence of 21st century warming on Antarctic Peninsula consistent with natural variability.  Nature  535 411-415.

Mulvaney, R., et al., 2012. Recent Antarctic Peninsula warming relative to Holocene climate and ice-shelf history. Nature  489, 141-144.

In a column in today’s  New York Times, Steven Rattner attacks Trump’s tax plan for being unrealistic. Since I also think the proposal isn’t very plausible, I’m not overly bothered by that message. However, Rattner tries to bolster his case by making very inaccurate and/or misleading claims about the Reagan tax cuts.

Given my admiration for the Gipper, those assertions cry out for correction. Starting with his straw man claim that the tax cuts were supposed to pay for themselves.

…four decades ago…the rollout of what proved to be among our country’s greatest economic follies — the alchemistic belief that huge tax cuts can pay for themselves by unleashing faster economic growth.

Neither Reagan nor his administration claimed that the tax cuts would be self-financing.

Instead, they simply pointed out that the economy would grow faster and that this would generate some level of revenue feedback.

Which is exactly what happened. Heck, even leftists agree that there’s a Laffer Curve. The only disagreement is the point where tax receipts are maximized (and I don’t care which side is right on that issue since I don’t want to enable bigger government).

Anyhow, Rattner also wants us to believe the tax cuts hurt the economy.

…the plan immediately made a bad economy worse.

This is remarkable blindness and/or bias. The double dip recession of 1980-1982 was the result of economic distortions caused by bad monetary policy (by the way, Reagan deserves immense credit for having the moral courage to wean the country from easy-money policy).

But even if one wants to ignore the impact of monetary policy, how can you blame the second dip of the recession, which began in July 1981, on a tax cut that was signed into law in August 1981?!?

Moreover, while Reagan’s tax cut was adopted in 1981, it was phased in over several years. And because of previously legislated tax increases, as well as inflation-driven bracket creep (prior to 1985, households were pushed into higher tax brackets by inflation even though their real income did not rise), the economy did not enjoy a tax cut until 1983. Not coincidentally, that’s when the economy began to boom.

Rattner even wants us to believe the Reagan tax plan caused higher interest rates.

…the Reagan tax cut increased the budget deficit, helping elevate interest rates over 20 percent, which in turn contributed to the double-dip recession that ensued. The stock market fell by more than 20 percent.

The deficit jumped mostly because of the double-dip recession, just as red ink always climbs when there is an economic downturn.

And interest rates were high largely because inflation was so high (lenders don’t like to deliberately lose money).

But the most amazing part of the above excerpt is that Rattner wants us to believe the Reagan tax cuts caused the part of the double-dip recession that occurred in 1980, when Jimmy Carter was still president.

That’s sort of like Paul Krugman trying to imply that Estonia’s 2008 recession was caused by spending cuts that took place in 2009!

You also won’t be surprised to learn that Rattner selectively likes Keynesianism.

Big deficits can sometimes be advisable, as they were in aiding recovery from the 2009 recession.

I guess he wants us the applaud Obama’s so-called stimulus and be impressed by the very anemic recovery that followed.

But we’re supposed to overlook the booming economy of the Reagan years.

Last but not least, it’s noteworthy that Rattner - in spite of his bias - endorses part of the Trump tax plan.

I understand our need to lower the corporate tax rate to compete with other countries and adjust other provisions to keep companies and jobs here. Critics are correct that our business-tax structure encourages companies to ship jobs and even themselves overseas.

And when even folks like Rattner realize that the current corporate tax system is indefensible, that explains why I’m semi-hopeful that we’ll get a lower rate at some point in the near future.

Now let’s look at broader lessons from the Reagan tax cuts.

Lesson #1: Lower Tax Rates Can Boost Growth

We can draw some conclusions by looking at how low-tax economies such as Singapore and Hong Kong outperform the United States. Or we can compare growth in the United States with the economic stagnation in high-tax Europe.

We can also compare growth during the Reagan years with the economic malaise of the 1970s.

Moreover, there’s lots of academic evidence showing that lower tax rates lead to better economic performance

The bottom line is that people respond to incentives. When tax rates climb, there’s more “deadweight loss” in the economy. So when tax rates fall, output increases.

Lesson #2: Some Tax Cuts “Pay for Themselves”

The key insight of the Laffer Curve is not that tax cuts are self-financing. Instead, the lesson is simply that certain tax cuts (i.e., lower marginal rates on productive behavior) lead to more economic activity. Which is another way of saying that certain tax cuts lead to more taxable income.

It’s then an empirical issue to assess the level of revenue feedback.

In the vast majority of the cases, the revenue feedback caused by more taxable income isn’t enough to offset the revenue loss associated with lower tax rates. However, we do have very strong evidence that upper-income taxpayers actually paid more to the IRS because of the Reagan tax cuts.

This is presumably because wealthier taxpayers have much greater ability to control the timing, level, and composition of their income.

Lesson #3:Reagan Put the United States on a Path to Fiscal Balance

I already explained above why it is wrong to blame the Reagan tax cuts for the recession-driven deficits of the early 1980s. Indeed, I suspect most leftists privately agree with that assessment.

But there’s still a widespread belief that Reagan’s tax policy put the United States on an unsustainable fiscal path.

Yet the Congressional Budget Office, as Reagan left office in early 1989, projected that budget deficits, which had been consistently shrinking as a share of GDP, would continue to shrink if Reagan’s policies were left in place.

Moreover, the deficit was falling because government spending was projected to grow slower than the private sector, which is the key to good fiscal policy.

Lesson #4: Lower Tax Rates Are Just One Piece of a Larger Puzzle

Having just disgorged hundreds of words on the importance of lower tax rates, let’s close by noting that fiscal policy is just one of many factors that determines an economy’s performance.

Indeed, tax and budget issues only account for 20 percent of a nation’s economic performance according to Economic Freedom of the World.

So it’s quite possible for a nation to be relatively free even with a bad tax system, and it’s also possible for a country to be economically repressed if it has a good tax system.

And this explains why economic freedom increased in America during the Clinton years, notwithstanding the 1993 tax hike. Simply stated, it’s the overall policy mix that matters.

I’ll conclude by noting that aggregate economic freedom in America increased during the Reagan years.

And the biggest reason for the increase was better fiscal policy.

It’s possible that we may also get more economic freedom during the Trump years. Indeed, I gave him a decent score for his first 100 days.

But it takes a lot of political courage to consistently fight for economic liberty in a town that cheers statism. And even though there’s a strong case to be made that there are political benefits to good policy, I’m not overly optimistic that Trump will be another Reagan.

In a recent article for City Journal titled, “How Trump Can Help the Cops,” Heather MacDonald offers about a dozen recommendations to the White House.  In this post, I want to scrutinize a few of those proposals and some of the arguments behind them.

Let me begin, however, by saying that Heather MacDonald was recently threatened by a crowd of protestors (I use that term very loosely here) while visiting a college campus to deliver a lecture.  That was outrageous and inexcusable.   I have met Ms. MacDonald several times, and while we have some strong disagreements on certain subjects, she has always been friendly and courteous.  She holds strong views and makes forceful arguments, but her claims should be answered with better arguments, not intimidation.  As many others have already noted, it is a sad commentary on the state of our universities that such incidents keep happening.  (Thanks to Harvey Silverglate and his colleagues for what they do at FIRE).

Returning now to MacDonald’s article, she says “Sanctuary cities, counties, and states must be severely penalized. These scofflaw jurisdictions, numbering about 300, refuse to cooperate with Immigration and Customs Enforcement (ICE) efforts to deport convicted illegal-alien criminals.”  She continues, “Over just one week in late January 2017, ICE found 206 criminal aliens who had been released back to the streets in defiance of a detention request.”  Okay, so far this is the standard public safety argument against sanctuary cities.  But here’s the claim that is problematic: “Such disobedience of lawful federal requests undermines the constitutional system.”  This is very misleading.

Last week’s ruling, County of Santa Clara v. Donald J. Trump, summarized the law succinctly:

 

An ICE civil detainer request asks a local law enforcement agency to continue to hold an inmate who is in local jail because of actual or suspected violations of state criminal laws for up to 48 hours after his or her scheduled release so that ICE can determine if it wants to take that individual into custody. See 8 C.F.R. § 287.7; Neusel Decl. ¶9; Marquez Decl., Ex. C at 3 (SC Dkt. No. 29-3). ICE civil detainer requests are voluntary and local governments are not required to honor them. See 8 C.F.R. § 287.7(a); Galarza v. Szalczyk, 745 F.3d 634, 643 (3d Cir. 2014) (“[S]ettled constitutional law clearly establishes that [immigration detainers] must be deemed requests” because any other interpretation would render them unconstitutional under the Tenth Amendment). Several courts have held that it is a violation of the Fourth Amendment for local jurisdictions to hold suspected or actual removable aliens subject to civil detainer requests because civil detainer requests are often not supported by an individualized determination of probable cause that a crime has been committed. See Morales v. Chadbourne, 793 F.3d 208, 215-217 (1st Cir. 2015); Miranda-Olivares v. Clackamas Cnty., No. 3:12-cv-02317-ST, 2014 WL 1414305, at *9-11 (D. Or. Apr. 11, 2014). ICE does not reimburse local jurisdictions for the cost of detaining individuals in response to a civil detainer request and does not indemnify local jurisdictions for potential liability they could face for related Fourth Amendment violations. See 8 C.F.R. § 287.7(e); Marquez Decl. ¶¶ 21-15 & Exs. B-D.

By using the term “request,” MacDonald seems to concede that ICE detainers are not lawful orders.  The requests are voluntary.  And yet MacDonald uses the word “disobedience” to describe jurisdictions that choose to decline some requests from ICE.  Again, this is quite misleading.  Let’s say one of my neighbors knocked on my door and said he had changed his mind about hosting a party for his son’s soccer team and wanted to know if I would be willing to host the 30 players and their parents in my home instead.  Let’s say that I resisted the temptation to close the door in his face, but merely declined the peculiar, but lawful request.  Would anyone say that I was disobedient to my neighbor’s lawful request?  No—because disobedient means a refusal to obey a rule or lawful command.  If a homeless person asks you for $10 and you walk on by, would MacDonald say that you were “disobedient” to the homeless person’s lawful request?  I doubt it—and for the same reason it is wrong to say that sanctuary cities and counties are disobedient.  (MacDonald does not explain her additional claim that that by opting to decline an ICE request, cities would be “undermining our constitutional system.”  As the passage above notes, cities might well be violating the Constitution by keeping a person locked up without probable cause.)

Next, MacDonald writes that community members have an obligation to “obey police commands and not resist arrest.”  According to MacDonald, “the vast majority of questionable police shootings over the last several years, as well as the justified police shootings, were triggered by the noncompliance of the victims.”  There are several problems here.  First, noncompliance cannot excuse brutality.  If a shoplifter keeps running after a police officer yells “Halt!” the officer would not be justified in shooting the thief in the back.  When Eric Garner was accused of selling illegal cigarettes on the streets of New York City, he should have put his hands behind his back to be handcuffed, but his noncompliance did not justify the chokehold that led to his tragic death

Second, the police are trained to get people to waive their constitutional rights by blurring the distinction between a command and a request.  So if an officer says, impatiently, “Would you empty the contents of your purse on the hood of the car for me?”  We can’t know whether that is a request or a command.  The Courts say citizens have to assert their rights or they may be deemed waived. To assert our rights against self-incrimination and against consensual searches necessarily entails some degree of “noncompliance” with what the police want.  MacDonald ignores these very serious legal dynamics by telling us to “Comply now, Complain later.”   I hosted a book forum with author James Duane last year in which he lays these issues out in some detail.  Go here for his terrific talk.

MacDonald claims the “vast majority of questionable shootings over the past several years, as well as the justified police shootings, were triggered by the noncompliance of the victims.” This assertion is not supported by data, a reference to another work, or extended argument.  Recall that South Carolina Officer Sean Groubert ordered Levar Jones to produce identification.  When Jones moved to retrieve paperwork from his vehicle to comply, the officer shot him.  Recall also the case from Minnesota involving Philando Castile.  When Officer Jeronimo Yanez pulled over Castile’s girlfriend for a traffic stop, Castile, in the passenger seat, volunteered that he had a concealed firearm and had a lawful permit.  When Castile calmly explained that he wanted to produce his identification and permit, the officer shot at him seven times and killed him. 

Last week, Supreme Court Justice Sotomayor highlighted the case of Ricardo Salazar-Limon, who was pulled over by a Houston police officer for suspected DUI.  Salazar-Limon got out of his car, reluctantly, at the officer’s direction.  When the officer made a move to handcuff him, he started to walk away.  According to Salazar-Limon, within seconds of hearing the officer’s command to “halt,” he was shot.  All agree that police have every right to defend themselves, but we also know that police will be dealing with situations where people do not understand English, where people have hearing problems, where people like Salazar-Limon have had too much to drink.  We can’t have officers using deadly force against people when there is noncompliance with their orders.  As Sotomayor noted, Salazar-Limon’s claim of excessive force was dismissed prior to trial.  The officer may have prevailed at trial with his self-defense claim, but the jury should have been able to hear Salazar-Limon’s side of the story.  Instead a judge dismissed the brutality claim by granting the officer immunity. 

To be clear, I am sure there are shooting cases in which officers shouted instructions, such as “keep your hands where I can see them,” or “get down on the ground,” and the suspect did something else, which might have prompted a reasonable officer to fire in quickly unfolding circumstances.  However, the proposition is whether such scenarios are in fact the “vast majority,” as MacDonald claims.  The point here is that no support is offered for the claim.  We should have more information about police shootings than we do.  Thanks to the Washington Post and the Guardian, we are finally getting a better understanding of these cases.

Last, MacDonald claims that “drug enforcement play no role in disproportionate black incarceration rates.”  Another bold claim, but, again, misleading.  MacDonald draws the attention of readers to incarceration rates, but is that the only place to consider?  When the prisons are filled to capacity, the system starts backing up.  The river of drug cases has to be dealt with somehow.  Officials start scrambling.  Put 4 men in cells designed for 2.  Stack bunk beds in the cafeteria.  Use the county jail, instead of the state system.  Send some cases to drug court. Send more cases to the federal system.  Use supervised probation when necessary. 

The drug trade offers young minority men a chance to make some money.  The police are told to make drug busts.  These dynamics result in constant clashes between police units and young minority men.  Of course, they don’t go to state prison for the first offense of selling or transporting drugs—especially if they’re still in their teens—but the rap sheet starts growing.  After a while, bail will be denied.  If the young men don’t get killed in a turf dispute, they will eventually get a prison sentence.  The Manhattan Institute’s own John McWhorter has put it well: “If the War on Drugs were terminated, the main factor keeping race-based resentment a core element in the American social fabric would no longer exist.  America would be a better place for all.”   MacDonald misses this important insight as to how the drug war harms black Americans.

For related Cato work, go here, here, and here.

This Sunday, French voters will return to the polls to decide the country’s next president. Last month’s first-round vote reduced the field to two unconventional candidates: Emmanuel Macron, formerly a top official of the left-wing Parti Socialiste and now leader of the fledgling En Marche! party; and Marine Le Pen, until recently the leader of the nationalist-right Front National.

Both candidates are unconventional not just because their parties have never held political power, but because the candidates have fashioned themselves as populist/outsider champions of downtrodden workers. Granted, sans-colluttes appeals are standard fare in French politics, but they have renewed force in this election, following a half-decade of French unemployment hovering around 10% and with youth unemployment (under age 25) well above 20%.

French employment and the country’s overall economy have sagged before, of course. U.S. observers often attribute those downturns in part to France’s labor laws, which they say (with irony) protect current workers by discouraging employers from creating new jobs. But French employment and the country’s economy have also surged before; typically France is Europe’s 2nd largest economy, after Germany. The past several decades have heard many predictions that France has reached “the end of the road” (to borrow from Ronald Reagan in 1964) unless it reforms its labor, entitlements, and other domestic policies, but neither economic doom nor dramatic reform has occurred.

Université du Québec en Outaouais economist Pierre Lemieux explored this in last fall’s cover story for Regulation magazine. It’s a great read if you want to learn more about what has led to France’s current conditions and what may lie ahead.

Friday afternoon, US Secretary of Commerce Wilbur Ross announced a new White House Executive Order to study “violations and abuses” of US trade agreements. The EO itself is hardly remarkable – President Trump’s first 100 Days have featured numerous executive demands for studies, investigations and reports on various international trade issues (without any actual anti-trade actions, so far) – but what was remarkable was the substance of Ross’ speech itself, which appeared to be unaware of certain basic facts about US trade agreements. In this regard, Ross’ statements raise questions about not only the White House’s basic research competence, but also what they’ll eventually produce in their final “trade agreement abuses” report.

A full accounting of the errors and omissions in Ross’ press briefing is beyond the scope of this short blog post, but the four most basic are below. (My Cato colleague Simon Lester handles some of Ross’ confusion surrounding basic World Trade Organization rules and procedures in a separate blog post, so be sure to check that out too.)

ROSS: And as far as I can tell there has never been a systematic evaluation of what has been the impact of the WTO agreements on the country as an integrated whole.

Actually, the US government has produced dozens of studies on the impact of US trade agreements, including the WTO Agreements, over the last decade or so.  Indeed, just last year both the US International Trade Commission and Congressional Budget Office produced comprehensive reviews of how our trade agreements have affected the US economy as a whole, each finding that our trade agreements have produced small but significant net benefits for the US economy in terms of GDP, employment, wages and so forth.  Furthermore, the Government Accountability Office has repeatedly examined the specific issue of US trade agreement enforcement – see, for example: here, here and here – finding limited concerns, while the USDA has often examined the benefits of US trade agreements for the American farm sector.  I could go on, but I think you get the idea.

ROSS: But there are those problems that I mentioned, then there’s also the structural problem of the [WTO] dispute resolution mechanism.  Takes a very long time, and given the composition of the WTO panels, often we’re defeated when people come and appeal it.  Because if the people on the panel are mostly people who are doing the same thing as what you’re complaining about, it’s a little bit hard to get them to vote for you.

WTO dispute settlement does, indeed, suffer from delays – a problem brought about by high use and a staffing crunch – but it’s beyond a stretch to imply, as Ross does here, that it harbors some sort of institutional bias against the United States.  In fact, the United States is very successful in WTO dispute settlement –more so than most other Members.  As my colleague Dan Ikenson noted recently–

The “WTO” doesn’t file complaints at the WTO. WTO members do. And they do so when they are aggrieved and when they are as close as possible to 100% certain that they will prevail if the matter goes all the way through dispute settlement. As a result, complainants prevail almost all of the time – on 90% of adjudicated issues. When the United States has been a complainant (as it has in 114 of 522 WTO disputes over 22 years – more than any other WTO member) it has prevailed on 91% of adjudicated issues. When the United States is a respondent (as it has been in 129 cases – more than any other WTO member), it has lost on 89% of adjudicated issues.

Just as importantly, the United States’ win/loss records in dispute settlement are also good in comparison to other WTO Members.  According to a recent Bloomberg analysis, the United States actually wins more often than average and loses less often than average and has a far better “loss rate” (i.e., we successfully defend more often) than the EU, Japan and China.  Furthermore, the United States itself has a less-than-stellar record of non-compliance with the WTO Agreements and adverse WTO dispute settlement decisions.  How these hard numbers can possibly reflect, as Ross asserts, a “structural problem” with the WTO is beyond me.

ROSS: And I think that points out one of the issues with our current relationship with the World Trade, namely Mexico and others have had very big external tariffs on many, many goods.  U.S. is the least protectionist country.  Many goods come in totally free, and others have little, tiny tariffs, like 2.5 percent.  Countries like Mexico frequently have 15, 20 percent, even more than 20 percent tariffs.

By no conceivable measure is the United States “the least protectionist country” in the world. As I noted last fall, for example, “according to a recent analysis by Credit Suisse, when you add up all forms of trade barriers imposed between 1990 and 2013, the biggest protectionist in the world isn’t China or Mexico but none other than… the United States.”  This includes the 370+ protective duties – often over 100%! – through our trade remedy (antidumping and countervailing duty) laws and our “Buy American” rules for federal procurement – measures that the Trump administration has expressly targeted for expansion.  Even the United States’ basic tariff rates aren’t the world’s lowest – not even close, actually.  As Ramesh Ponnuru recently noted, “[t]he World Bank reports that we have higher average tariff rates than Canada, Israel, the European Union, Japan, and many other countries. Our average tariff level is just slightly below the developed-world average.”  (Using a different tariff metric, the WTO also finds that the United States is not the best.) We also are about average when it comes to restrictions on trade in services.

ROSS: What are some of the problems under WTO?  Its 160-some-odd countries are participants in the WTO, and the vast majority of those are countries that export to us, and in most cases, export more than they buy from us.

The Trump administration’s obsession with trade deficits and balanced trade is well-known at this point, so I won’t rehash all of that here.  Nevertheless, calling the US trade balance a “problem under the WTO” defies the most basic of economics.  In particular, I highly recommend this recent (very short!) explainer from the San Francisco Federal Reserve on what drives the US trade balance and whether trade deficits are really a “problem” per se.  (Spoiler: it’s not the WTO Agreements and no).

There are plenty of substantive questions surrounding the alleged “violation and abuse” of US trade agreements.  Of the top of my head: Are such violations and abuses really pervasive?  Do they actually harm the economy? Either way, what should we do about them? And, finally, is the United States really so innocent here? As such, an assessment of international trade agreement violations and abuses is, in theory, worthy of undertaking.  If the aforementioned errors are any indication, however, the result of the new US investigation won’t provide many good answers.

Congress passed the Fair Labor Standards Act (FLSA) in 1938 to regulate certain employment practices between employers and employees. In order to put the law into effect, Congress delegated authority to the Department of Labor (DOL) to enforce the statute’s provisions. It’s a fundamental legal principle, however, that an executive-branch agency may only regulate those provisions that Congress has actually put into its authorizing statute. Where Congress has not address a certain practice, the agency has no authority to regulate and the practice is presumptively legal.

Fast forward almost 80 years. E.I. Du Pont De Nemours and Co. (better known as DuPont), following standard industry practice, paid their employees for otherwise noncompensable meal breaks, using that compensation as credit towards the time employees spent performing certain work duties (especially “donning and duffing” special clothing and gear) before and after their shifts. The employees sued DuPont in federal court, arguing that the FLSA forbids this type of crediting and that they must be paid overtime pay for the donning/duffing time.

The district court disagreed, finding that the statute was silent about the practice and so DuPont had done nothing illegal under the FLSA. On appeal, the U.S. Court of Appeals for the Third Circuit invited DOL to file an amicus brief regarding whether DuPont had violated the law—essentially allowing it to regulate. DOL admitted in its brief that the FLSA was silent on the issue, but argue that the statute implicitly forbade the practice. The Third Circuit then adopted that view by granting DOL Skidmore deference (by which judges defer to agency interpretations according to their persuasiveness), and reversed the district court’s ruling.

Cato has now filed an amicus brief supporting DuPont’s petition for Supreme Court review. We argue that Third Circuit ignored the basic administrative-law and constitutional axiom that agencies can only exercise the powers delegated to them. Indeed, under Supreme Court separation-of-powers precedent, Congress must give executive agencies at least some “intelligible principle” to follow. The Third Circuit, however, would give any agency a virtually unlimited power to write any regulations it thinks a statute should cover, without any congressional authority.

Moreover, when the court accorded Skidmore deference to the DOL amicus brief, it violated DuPont’s due process rights for two reasons. First, this was the first time in the FLSA’s long history that DOL had ever interpreted the statute to forbid the practice at issue—and two other circuit courts had already ruled that the practice was legal—so DuPont was denied fair notice. Second, by inviting a nonparty government agency into the litigation and deferring to its view, the court decided the case with bias towards one of the parties before it.

The Supreme Court should take DuPont v. Smiley and explain that the Constitution’s separation of powers does not allow such judicial enabling of executive mischief. Administrative agencies simply cannot take it upon themselves to rewrite duly enacted legislation and then thrust their statutory revisions on private litigants for the first time in litigation.

Following Trump’s electoral success in rustbelt states, the spotlight has been on white, rural, post-industrial poverty. J.D. Vance, author of the now-famous memoir Hillbilly Elegy, discussed some possible explanations for rural poverty yesterday in a podcast. In the interview, he suggests that geographic (im)mobility is partly to blame for the erosion of areas like Appalachia: the poor simply aren’t migrating to jobs. 

Vance is right that Americans have limited interest in relocating, and are relocating less than before. According to calculations[1] using University of Chicago data, the proportion of individuals unwilling to relocate for work is high: 42% of Americans say they will not move within the United States for work, and 68% of Americans will not move outside the country for work. A full quarter (25%) of Americans would not consider traveling further for a job, even if the decision resulted in unemployment. Meanwhile, Census data suggests that relocation—whether inter-state, inter-county, or intra-county—is down (Figure 1). 2016 had the lowest relocation rate in seventy years (Figure 2).

Figure 1. Type of Move, 1948–2016

Figure 2: Number of Movers and Mover Rate, 1948–2016

 

Why are people relocating less than ever? One explanation Vance misses is that government policy gets in the way. For example, research provides evidence that land use regulations put pressure on housing prices in high-opportunity areas, which in turn eliminates the fiscal rewards of relocation for the poor and unskilled. Tragically, this means low-income Americans are trapped in job deserts with little in the way of opportunities, amenities, or hope.

You can listen to more of Vance’s interview regarding the causes of white, rural, post-industrial poverty, here.

[1] Author’s own.

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