Policy Institutes

In 2007, Judge Richard Posner found it “untenable” that attaching a tracking device to a car is a seizure. But the Supreme Court struck down warrantless attachment of a GPS device to a car on that basis in 2012. Putting a tracking device on a car makes use of it without the owner’s permission, and it deprives the owner of the right to exclude others from the car.

The weird world of data requires us to recognize seizures when government agents take any of our property rights, including the right to use and the right to exclude others. There’s more to property than the right to possession.

In an amicus brief filed with the U.S. Court of Appeals for the D.C. Circuit last week, we argued for Fourth Amendment protection of property rights in data. Recognition of such rights is essential if the protections of the Fourth Amendment are going to make it into the Information Age.

The case arises because the government seized data about the movements of a criminal suspect from his cell phone provider. The government argues that it can do so under the Stored Communications Act, which requires the government to provide “specific and articulable facts showing that there are reasonable grounds to believe that [data] are relevant and material to an ongoing criminal investigation.” That’s a lower standard than the probable cause standard of the Fourth Amendment.

As we all do, the defendant had a contract with his cell phone provider that required it to share data with others only based on “lawful” or “valid” legal processes. The better reading of that industry-standard contract language is that it gives telecom customers their full right to exclude others from data about them. If you want to take data about us that telecom companies hold for us under contract, you have to get a warrant.

Under the “reasonable expectation of privacy” test, a person doesn’t have privacy or a Fourth Amendment interest in information they share with others. But, as we pointed out to the appeals court, the Supreme Court has been moving away from the “reasonable expectation of privacy” test and its step-child, the “third-party doctrine.”

The Court of Appeals should put aside doctrine and administer the Fourth Amendment like a law. If there was a seizure—an invasion of a property right, including the right to exclude others from data—that should be reviewed for reasonableness. And the hallmark of reasonableness is getting a warrant.

Speaking of administering the Fourth Amendment, the weird world of data is going to require a deeper understanding of what it means to “search,” too. A new law enforcement technique uses advanced data collection and storage techniques to search entire communities before the government knows what it’s looking for.

Since January, Baltimore police have been recording all activity in the city from above, using a special, camera-equipped plane. The data collected makes any visible activity available for police to review later. I’m calling it “pre-search,” and I’ve written about it on the Reason blog.

In an ordinary search, you have in mind what you are looking for and you go look for it. If your dog has gone missing in the woods, for example, you take your mental snapshot of the dog and you go into the woods comparing that snapshot to what you see and hear.

Pre-search reverses the process. It takes a snapshot of everything in the woods so that any searcher can quickly and easily find what they later decide to look for.

In this case, it’s not the woods. It’s every home in Baltimore, and every Baltimorean. Even though the order may be backward, their interests in security from unreasonable search is the same. When this technique gathers information about people’s movements and activities in and around homes, the government’s collection and use of data should be subject to the Fourth Amendment’s constraints.

Pre-search is in use at departments of motor vehicles around the country today. Many are using facial recognition to scan the faces of all applicants and drivers’ license holders—and they’re doing it without suspicion. Scanning the faces of every driver license holder is a pre-search that sets up innocent people for later digital searching.

The weird world of data gives us a lot to grapple with if we’re going to protect our privacy.

Libertarian presidential candidate Gary Johnson, the former-governor of New Mexico, wrote a remarkable op-ed for CNN yesterday detailing his views on immigration reform. The piece included the following:

Our politicians, both right and left, have created a system for legal immigration that simply doesn’t work. We have artificial quotas. We have “caps” on certain categories of workers that have no real relationship to the realities of the free market. It’s no coincidence that recent history shows the only successful way to reduce illegal immigration is to have a recession. Over the past 10 years, both illegal entries and the number of undocumented immigrants in the country have declined. That’s not because the government did anything right. ….

Try this, instead: No caps. No categories. No quotas. Just a straightforward background check, the proper paperwork to obtain a real Social Security number and work legally or prove legitimate family ties, and a reliable system to know who is coming and who is going.

Gov. Johnson is correct to reject government-mandated immigration quotas. As I argued in a recent blog post, quotas are the definition of an unreasonable immigration policy—they literally have no reason behind them. They are no different than Soviet manufacturing quotas, and they have the exact same effect: discord in the free market—surpluses where workers are unneeded, shortages where they are needed, and black markets that inevitably results when government makes movement illegal.

Not to quibble, but Gov. Johnson shouldn’t give the poor economy all of the credit for declining illegal immigration in recent years. In fact, a significant portion of the credit can be attributed to doing what he says—granting more work visas. As the figure below shows, the number of work visas is inversely correlated to the number of illegal entries. During the 1950s and 1960s, illegal immigration almost disappeared during the Bracero guest worker program. Then, in recent years, less strict visa rules have resulted in more legal immigration and less illegal immigration.

Figure: Apprehensions of Illegal Immigrants at the Border and Lesser-Skilled Guest Workers Admitted

Sources: INS, DHS, and CBP

If the presidential candidate’s plan was implemented, the days of illegal immigration would be behind us for good.

While some people will call Gary Johnson’s proposal “open borders” without limits, this is not the case and not just because there would be background checks. There would be limits, but the limits would be those imposed not by bureaucrats, but by Americans as individuals. Rather than a single “immigration plan” for the country, Gov. Johnson is proposing giving Americans back their liberty to associate with foreigners as they see fit—plans of the many, not of the few. As the economist Friedrich Hayek once said:

This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals. Planning in the specific sense in which the term is used in contemporary controversy necessarily means central planning—direction of the whole economic system according to one unified plan. Competition, on the other hand, means decentralized planning by many separate persons.

That is also the heart of the disagreement between those who favor an “immigration plan” along the lines of those outlined by the major party candidates and those who favor free markets in movement and employment. 

Responding to the worldwide refugee crisis—which the United Nations has called “the biggest humanitarian emergency of our era”—President Obama vowed last September that the United States would accept 10,000 Syrian refugees and 85,000 refugees total over the following 12 months. With much fanfare, the State Department hit its Syrian refugee quota this week. But with just one month left, it is still 15,000 short of its overall target, and if it continues at its current pace, it will come up 3,000 short.

But here are seven reasons why hitting the target would be a major accomplishment.

1) A slow start: The biggest reason that the State Department is cutting it close is that it suffered one of its slowest starts in recent years.  In the prior three fiscal years (FYs), the refugee target was 70,000, and yet even with a higher goal this year, the United States had accepted fewer refugees at the midpoint of this year than at the same time in any of those years (the purple bolded line in the chart below). While the United States has usually ramped up slightly during the second half of prior years, it has taken an historic effort to catch up this year.

Figure: Monthly Refugee Admissions to the United States (FY 2013-FY 2016)

 

Source: State Department

2) Most refugees in a month ever: If the United States is to reach its goal this year, it will need to accept nearly 15,000 refugees in September. This is more than any month that the State Department has made available since 2001 and possibly the most ever. Although month-by-month statistics are unavailable for the record year of FY 1992 when the United States admitted 132,000 refugees, the average monthly intake was only 11,000, making it possible that this September will be the most ambitious month in history.

3) Late planning: A major reason for the slow start is that the agencies had planned throughout FY 2015 to accept only 75,000 in FY 2016. It was not until two weeks before the start of the year that Secretary of State John Kerry changed course and decided to increase the number by 10,000. The agencies scrambled to adjust, but it took time to ramp up. “As an operational person and for planning purposes, I had anticipated an increase from 70,000 to 75,000,” Barbara Strack, Refugee Affairs Division Chief of U.S. Citizenship and Immigration Services (USCIS), told Congress on October 1st last year. In order to meet the goal, the agency needed to “surge” hundreds of refugee officers into Jordan from February to April to conduct enough interviews to meet the goal.

4) No new money: The agencies are already on pace to admit 12,000 more refugees this year than last year, despite receiving no new funding to do so. The agencies actually did not ask for new money. The State Department’s representative Larry Bartlett told Congress in October that the department was “looking for efficiencies across its programs.” Ms. Strack told Congress that USCIS believed that there was “sufficient funding… to cover the 85,000 anticipated admissions in FY ‘16 by reprioritizing between programs.” But again, reprioritizations and efficiencies take time, and the lack of new money likely delayed their ability to ramp up, making the accomplishment all the more impressive.

5) Humanitarian emergencies everywhere: On top of these 85,000 refugees, the Office of Refugee Resettlement will also have to deal with the most Cuban arrivals since 1980, the most asylum-seekers at the border claiming a credible fear of persecution in their home countries ever, and a massive influx of unaccompanied immigrant children. The administration warned Congress as early as December that it may fall short of the money needed to handle the number of unaccompanied children, and that has in the past resulted in money being taken from the refugee program.

6) The most difficult cases: Assuming that it takes in as many as it did last month, the United States is on pace to accept roughly 13,000 Syrian refugees this year, which is more than 5 times the amount it admitted last year. These cases require the highest level of security review. USCIS’s Fraud Detection and National Security Directorate conducts enhanced reviews of Syrian refugee cases that require more manpower than the typical refugee case. They employ surveillance to check any factually verifiable claim that the refugee makes during the process. This leads to higher rejection rates, which also makes these cases much more difficult to process.

7) Hostile political climate: Maybe this goes without saying, but it has taken political determination to effectuate a 21 percent increase in the number of refugees in the face of congressional opposition and, at times, even public opposition. In 1980, Congress entrusted the president with the responsibility, after hearings with Congress, to raise the refugee goal precisely in order to insulate the decision-making from such political whims. The fact that the president has exercised the authority deserves credit.

This achievement, however, should be seen in context: 85,000 refugees is 0.13 percent of the total number of forcibly displaced persons around the world this year who have fled their homes to escape violence and persecution. The president’s current goal for FY 2017 is 100,000, which is still lower than the share of refugees worldwide that the country has taken historically. I have argued that this number could be increased through exempting refugees from the normal immigration quotas and admitting refugees with private sponsors, neither of which would require more money from Congress.

East Asia is a rough neighborhood. Chinese activities in the East and South China Seas stoke tensions and raise questions about Beijing’s plans for regional or global dominance. North Korea’s latest contribution to regional instability came in the form of a submarine-launched ballistic missile test on August 24, during a large annual U.S.-South Korean military exercise. Initial analysis suggests that the missile could have a range of 1,000 km or more, which would give Pyongyang the ability to place all U.S. military bases in South Korea and the main Japanese islands at risk.

America’s allies and partners in East Asia have not stood idly by while Beijing and Pyongyang acted aggressively. Rather, they have taken relatively small but still meaningful measures to improve their defenses and, thus, their ability to resist coercion.

Tokyo announced that it would develop new anti-ship missiles and deploy them to islands near the disputed Senkaku/Diaoyu Islands in the East China Sea after multiple Chinese Coast Guard and fishing vessels began operating in the area in early August. During the annual Han Kuang military exercises, Taiwan’s president Tsai Ing-wen announced that the Ministry of National Defense will devise a new strategy by January 2017. U.S. allies and partners also worked with one another. For example, on August 18, Japan delivered the first of ten coast guard vessels to the Philippines.

In the near term, the United States will likely retain its status as the ultimate guarantor of security for its East Asian allies and partners, but these efforts to take on a greater burden for self-defense should be praised. Eventually these states may take up the mantle of security guarantor, but such a transformation will take time. Additionally, the next president of the United States should encourage further burden sharing. Allies that are capable of deterring coercion or responding to security threats on their own enable a more restrained U.S. grand strategy by reducing the range of incidents or crises that require U.S. intervention. 

Our statist friends like high taxes for many reasons. They want to finance bigger government, and they also seem to resent successful people, so high tax rates are a win-win policy from their perspective.

They also like high tax rates to micromanage people’s behavior. They urge higher taxes on tobacco because they don’t like smoking. They want higher taxes on sugary products because they don’t like overweight people. They impose higher taxes on “adult entertainment” because…umm…let’s simply say they don’t like capitalist acts between consenting adults. And they impose higher taxes on tanning beds because…well, I’m not sure. Maybe they don’t like artificial sun.

Give their compulsion to control other people’s behavior, these leftists are very happy about what’s happened in Berkeley, California. According to a study published in the American Journal of Public Health, a new tax on sugary beverages has led to a significant reduction in consumption.

Here are some excerpts from a release issued by the press shop at the University of California Berkeley.

…a new UC Berkeley study shows a 21 percent drop in the drinking of soda and other sugary beverages in Berkeley’s low-income neighborhoods after the city levied a penny-per-ounce tax on sugar-sweetened beverages. …The “Berkeley vs. Big Soda” campaign, also known as Measure D, won in 2014 by a landslide 76 percent, and was implemented in March 2015. …The excise tax is paid by distributors of sugary beverages and is reflected in shelf prices, as a previous UC Berkeley study showed, which can influence consumers’ decisions. …Berkeley’s 21 percent decrease in sugary beverage consumption compares favorably to that of Mexico, which saw a 17 percent decline among low-income households after the first year of its one-peso-per-liter soda tax that its congress passed in 2013.

I’m a wee bit suspicious that we’re only getting data on consumption by poor people.

Why aren’t we seeing data on overall soda purchases?

And isn’t it a bit odd that leftists are happy that poor people are bearing a heavy burden?

I’m also amused by the following passage. The politicians want to discourage people from consuming sugary beverages. But if they are too successful, then they won’t collect all the money they want to finance bigger government.

In Berkeley, the tax is intended to support municipal health and nutrition programs. To that end, the city has created a panel of experts in child nutrition, health care and education to make recommendations to the City Council about funding programs that improve children’s health across Berkeley.

In other words, one of the lessons of the Berkeley sugar tax and the 21-percent drop in consumption is that the Laffer Curve applies to so-called sin taxes just like it applies to income taxes.

But the biggest lesson to learn from this episode is that it confirms the essential insight of supply-side economics. Simply stated, when you tax something, you get less of it.

Which is something that statists seem to understand when they urge higher “sin taxes,” but they deny when the debate shifts to taxes on work, saving, entrepreneurship, and investment.

I’m not joking. I debate leftists all the time and they will unabashedly argue that it’s okay to have higher tax rates on labor income and more double taxation on capital income because taxpayers supposedly don’t care about taxes.

Oh, and the same statists who say that high tax burdens don’t matter because people don’t change their behavior get all upset about “tax havens” and “tax competition” because…well, because people will change their behavior by shifting their economic activity where tax rates are lower.

It must be nice not to be burdened by a need for intellectual consistency.

Speaking of which, Mark Perry used the Berkeley soda tax as an excuse to add to his great collection of Venn Diagrams.

P.S. On the issue of sin taxes, a brothel in Austria came up with an amusing form of tax avoidance. The folks in Nevada, by contrast, believe in sin loopholes. And the Germans have displayed Teutonic ingenuity and efficiency.

Back-to-school season is also education survey time—Jason Bedrick and I examined the Education Next poll last week—and today we get the latest Phi Delta Kappa poll. For decades the PDK survey was done in conjunction with Gallup but is not this year. It also dropped questions specifically about such hot-button topics as vouchers and the Common Core. Maybe avoiding specific mention of the latter explains an interesting finding: the public’s response to curriculum standards is quite, well, blah.

The pollsters asked several questions about standards—especially an un-specified “new set of educational standards”—and inquired what parents thought of their effects.

First, when members of the public were asked if they thought the standards in their local public schools addressed “the things students need to succeed in their adult lives,” 27 percent answered that they addressed them “extremely” or “very” well, and 30 percent said “not so” or “not at all” well. 40 percent gave the middling “somewhat” answer. Ho-hum.

How about those “new” standards? 53 percent of parents thought the standards had changed what their oldest child was being taught, versus 33 percent saying “no change.” The direction of the change? 49 percent who perceived a change thought it had been for “the better,” 47 percent for “the worse” – essentially a tie.

Note that the data breakout I found did not differentiate between public and private school parents. In the poll’s executive summary, however, public school parents were isolated, and it appears that 45 percent thought the changes were for the better, 51 percent for the worse.

Where there may be some good news for standards fans is that 43 percent of parents who thought the new standards had changed what was being taught in their child’s school saw the changes increasing what their child was learning. Still, 31 percent thought the standards had decreased learning, and 25 percent perceived no change. So a plurality detected an increase, but a majority saw a decrease or no change. Similarly, 51 percent thought there was an increase in the degree of challenge for their kids, but 48 percent saw a decrease or no change. And remember, this was only among the 53 percent of parents who saw standards changing what their schools were teaching.

Have we been feuding over the Common Core, and standards generally, for no good reason? Do standards not really make a clear difference?

Surveys, of course, only tell us what respondents perceive, and we need more information than that to really know what effect standards have. But parents have an incentive to track their kids, and what these results seem consistent with is the conclusion that standards do not make much difference. Many Common Core opponents have long argued that, and I found it when examining the empirical evidence on national standards. But that is, in fact, a major reason that it was so troubling when Core advocates used federal power to coerce adoption of national standards; they sought to ramp up federal power without even having meaningful evidence that what they wanted would help.

At least for now, the public has spoken: there’s no consensus whether standards have helped or hurt. That should come as no surprise.

In my last post, I noted promising support for marijuana legalization initiatives this fall. Still, outside libertarian circles, there​​ unfortunately isn’t the political will to support a broader repeal of our federal and state drug laws.

Before you say it: No, drug legalization will not solve our mass incarceration problem. Not all by itself, ​anyway​; ​the numbers just don’t add up. You can see that for yourself at the Urban Institute’s web-based prison population forecaster. As the Urban Institute notes,

While dramatically reducing the national prison population requires addressing the hard stuff—like long prison sentences and time served for violent offenses—reforms to drug laws and revocation policies will still go a long way in many states.

For example, nonviolent offenses are a major driver of the prison population in Alabama, Kentucky, Missouri, Oklahoma, and Texas, so sending fewer people to prison for drug and property crimes would have a big impact on incarceration rates. Halving drug admissions would cut the prison population by nearly 10 percent in each of those states by the end of 2021. And a 50 percent reduction in admissions for all nonviolent crimes would cut at least a quarter off their populations (nearly a third in Kentucky).

​For good or ill, the Urban Institute doesn’t ​consider libertarians’ first-best solution, which ​is​ of course the full legalization of all drugs​. Libertarians support this policy not just because ​it would help empty the prisons, but because it’s your body, and it’s your right to choose what goes into it.​

These propositions are obvious to us; if only they were more obvious to others. But as the success of marijuana legalization becomes increasingly apparent, I hope that a fuller legalization, also once laughed at, will come to be taken more seriously.

Nonetheless ​it’s easy to see that even full legalization won’t get us to an OECD-reasonable incarceration rate. Mandatory minimum sentencing also needs to be reconsidered, as do longer sentences in general, and we​ will​ likely need to do something about plea bargaining as well, which​, when coupled with longer sentencing​,​ tends to result in many more people behind bars, including innocents. We should finally recall that we are only a couple of decades out from a historic peak in the violent crime rate. Many people incarcerated during that time are still in prison and arguably still belong there.

Still,​ a full drug legalization ​would likely have positive direct effects on both the incarceration rate and the crime rate, and it will also likely make many other reforms easier.

​T​he Urban Institute’s prison population forecaster​ ​treats drug policy as ​​exogenous​​ to the remainder of the U.S. crime rate. ​That is, it doesn’t consider the possibility that legalizing drugs will reduce the incidence of many criminal schemes and enterprises​ that are not detectably drug-related​. ​But w​hen people can resort to the police and the courts to settle their disputes, they are less likely to turn to violence. And ​lawful businesses​, who​ ​must compete on price, quality, and other ​product-regarding ​factors​, will not resort to turf wars.

There are good methodological reasons to resist making ​forecasts that rest on this type of connection,​ and there are good reasons to resist building those forecasts into a web tool whose real purpose is to teach ​the public the true scope of a given, present-day problem. The connection between the war on drugs and secondary crime may be real—and I think to a significant it is—but quantifying it involves making some difficult ​additional predictions about how much the two phenomena are linked and how quickly a change in the one will produce a change in the other. ​These are predictions I’d rather not make.

​But as I’ve noted previously, drugs are almost certainly not exogenous to​ other forms of​ crime: We would appear to suffer much of our violent and property crime owing only to our drug war. Exactly how much is hard to say; few defendants are likely to admit to any more crimes than are necessary, or to admit drug-related motivations that would lead to additional charges. ​Still it’s surely noteworthy that few countries in the world suffer more than 5 firearm homicides per 100,000 without either suffering a civil war… or being ​major drug suppliers or conduits.

Drugs also aren’t exogenous to plea bargaining. Although low-level drug offenses aren’t ​so ​​much ​to blame for our overcrowded prison system, ​low-level ​drug offenses are to blame for our overcrowded court system. Court overcrowding ​encourages plea bargaining, which means more people pleading guilty​ to offenses that lead to prison​, rather than litigating and potentially avoiding it.

Drug offenses are the ​single ​most common type of federal case. State-level data is harder to find, but in Texas, drug offenses made up 31% of all felony cases ​filed ​in 2015​. They were​ the largest single type of felony case, and possession ​charges ​made up 80% of ​that share. Drug offenses were also the largest single type of misdemeanor in ​Texas in ​the same time period.​ This is obviously a significant burden on the court system.​

Now, ​one might say that these considerations are beside the point: If it is categorically wrong to use or possess drugs, then all punishment of drug crime is effort well spent​; in that case, the proper response to an overcrowded court or prison system is to build it out still further.​ As Sen. Tom Cotton remarked, we may have an under-incarceration problem. (But if we do, what do we make of our close cultural relations, countries like the UK and Australia, whose incarceration rates are vastly lower?)
​​
​Meanwhile, if we have anything like a natural individual right use or possess drugs, then complaining about the inefficiency introduced to the court system is silly. We ought rather to complain about the rights violation, and never mind the inefficiency.

​The latter is my actual view. But I recognize that not everyone ​agrees. I suspect that most people believe that drug use ought to be stigmatized to some extent, but that it is not necessarily categorically wrong​, for example​ in the way​ ​that murder is. To this way of thinking, trade-offs ​regarding levels of stigma and the price we pay to inflict it may be worth considering, particularly if the things we do to ​stigmatize drug use end up indirectly causing worse social problems elsewhere.

That’s likely where the rest of the country is regarding drugs harder than marijuana. If so, then a politically viable way forward is clear. It consists of significantly shorter prison sentences, decriminalization where possible, and the consistent referral of low-level possessors and users to the medical rather than the legal system.

Legalizing drugs, or even just significantly decriminalizing them, ​will not solve our mass incarceration problem all by itself. But these measures will directly help out some, and they may indirectly help out quite a lot, particularly if drug legalization is accompanied by reforms in sentencing and criminal procedure. These ought to be goals that everyone can support.

Members of what was surely the Venezuelan regime’s secret police yesterday kidnapped opposition leader and 2008 Milton Friedman Prize winner Yon Goicoechea from his car after he left his home. Diosdado Cabello, the second most powerful person in the regime, publicly announced that the government had arrested Yon on the bogus claim that he was carrying explosives. In the video broadcast on national television, Cabello referred to the $500,000 Friedman Prize award that Yon received as evidence that Yon was some sort of foreign-employed agent bent on terrorism. “That man was trained by the U.S. empire for years,” he said, “It looks like his money ran out and he wants to come here to seek blood. They gave him the order there in the United States.”

This is an old trick of the Chavista regime—distract attention from the severe political, economic and social crisis that it has inflicted on the country. Venezuela’s so-called Socialism of the 21st Century has produced shortages of everything from food and water, to medicine and electricity. Hunger is becoming widespread, the rate of violence is among the worst in the world, and the regime has become extremely unpopular. (We have commented on this downward spiral here, here, here, and here).

Yon won the Friedman Prize in 2008 for having led the student movement that played the central role in defeating the constitutional reform that would have given Hugo Chavez what at that time would have been an unprecedented concentration of political and economic power. One of Yon’s and the student movement’s central tenets is their advocacy of non-violence in the promotion of basic freedoms and democracy. Yon also offers an optimistic vision about the future and potential of his country (see his Friedman Prize acceptance speech here). That approach contrasts with the regime’s constant reliance on repression and force and helps explain its appeal to most Venezuelans. For the same reason, the government’s claim of terrorism on Yon’s part lacks any credibility. The idea that the Friedman Prize is awarded so that the recipient carry out specific tasks is also risible. The prize is given “to an individual who has made a significant contribution to advance human freedom,” and has no conditions attached to it whatsoever. It has been awarded to numerous freedom champions from around the world including prominent reformers and human rights and freedom of speech advocates.

Yon’s detention comes just prior to massive popular protests against the government that are planned for this Thursday. Sticking to the pattern it has followed over the past few years as the crisis has deepened, the regime is doubling down on repression rather than adjusting to political or economic reality. His kidnapping shows just how insecure the regime has become and the importance of speaking truth to power.

In the months and days prior to Yon’s detention, the regime has arrested other opposition leaders and activists. Nobody is sure exactly where Yon is being held or under what conditions (though we believe he is in a cell at the headquarters of the secret police in Caracas). The Venezuelan government stopped being democratic and respecting the rule of law years ago, but we nevertheless call on it to release Yon immediately and treat him with the basic rights to due process that should be afforded to any Venezuelan citizen.

Between writing his well-known revolutionary liberal tracts Common Sense (1776) and The Rights of Man (1791), Thomas Paine contributed knowledgeably to a 1785-6 debate over money and banking in Pennsylvania. Paine defended the Bank of North America’s charter and it operations in a number of lengthy letters to Philadelphia newspapers during 1786, followed by a December monograph that summarized his case, Dissertations on Government; The Affairs of the Bank; and Paper Money.[1]

Paine argued that to repeal the bank’s charter violated both the rule of law and the maxims of sound economic policy. His writings show that he well understood the benefits of banking. Although proponents of the repeal accused Paine, publicly known to be in dire financial shape, of being paid by the BNA’s proprietors for defending it (one called him “an unprincipled author, who lets his pen out for hire”), Paine vociferously denied the charge, and historians (such as Philip S. Foner, who edited an anthology of Paine’s works), have found no evidence to support the accusation. Prima facie evidence for Paine’s sincerity is found in his marshalling of serious arguments that were consistent with the classical liberal principles of his earlier writings.

Here’s the backstory: The Continental Congress chartered the Bank of North America, headquartered in Philadelphia and headed by Robert Morris and Thomas Willing in 1781. Considering a Commonwealth of Pennsylvania charter to be a sounder authorization, in 1782 the bank sought and received a charter from the Pennsylvania legislature. After the Revolutionary War’s end in 1783, as historian Janet Wilson noted, farmers in western Pennsylvania with large debts and tax arrears “set up a cry for paper money” to be issued by the Commonwealth.[2] These state-issued notes would not be presently redeemable, but would be receivable for future tax payments.

The inflationists understandably saw the BNA as a barrier to their plan. If the bank valued the state paper below its par value, while BNA banknotes and checks traded at par in terms of the silver dollars for which they could be immediately redeemed, real demand for the state paper currency would be low. Better for the sake of state paper to eliminate the superior alternative. Hence, with the legislature voting to authorize an issue of state notes in mid-1785, the inflationists demanded repeal of the bank’s charter. They were further motivated by the bank proprietors’ public opposition to state paper. The legislature debated and then repealed the charter in September 1785. The BNA continued to do business, on a smaller scale, under its 1781 charter from the Continental Congress. (The 1st US Congress would not meet until March 1789.) Eighteen months after repeal, in March 1787, following a pitched public discussion and the election of pro-bank legislators in fall 1786, the charter was restored.

The clamor for irredeemable paper money, wrote Paine in 1786, derived from “delusion and bubble.”[3] Yes, the irredeemable paper currency issued during the war as a matter of necessity had provided revenue “while it lasted,” but not as a free lunch, but rather by taxing individual money-holders through price inflation and currency depreciation. Since its demise, “gold and silver are become the currency of the country.”[4] Those thinking that state paper will relieve a “shortage” of specie have it backwards: it is precisely the issue of irredeemable paper that drives out gold and silver. On this point Paine argued with impeccable Humean logic:

The pretense for paper money has been, that there was not a sufficiency of gold and silver. This, so far from being a reason for paper emissions, is a reason against them. As gold and silver are not the productions of North America, they are, therefore, articles of importation; and if we set up a paper manufactory of money it amounts, as far as it is able, to prevent the importation of hard money, or to send it out again as fast it comes in; and by following this practice we shall continually banish the specie, till we have none left, and be continually complaining of the grievance instead of remedying the cause. Considering gold and silver as articles of importation, there will in time, unless we prevent it by paper emissions, be as much in the country as the occasions of it require, for the same reasons there are as much of other imported articles.[5]

Paine understood that any stimulus from injecting money was only temporary, because issuing more paper money does not create any more wealth. He even offered the binge drinking / hangover analogy that has, in modern times, become commonplace:

Paper money is like dramdrinking, it relieves for a moment by deceitful sensation, but gradually diminishes the natural heat, and leaves the body worse than it found it. Were not this the case, and could money be made of paper at pleasure, every sovereign in Europe would be as rich as he pleased. But the truth is, that it is a bubble and the attempt vanity.[6]

State paper money became not just imprudent but unjust when it was combined with a legal tender law compelling the acceptance of depreciated paper dollars where a contract called for payment in silver or gold dollars:

As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power. … [A]ll tender laws are tyrannical and unjust, and calculated to support fraud and oppression.[7]

For a legislator even to propose such a tyranny should be a capital crime [!]:

The laws of a country ought to be the standard of equity, and calculated to impress on the minds of the people the moral as well as the legal obligations of reciprocal justice. But tender laws, of any kind, operate to destroy morality, and to dissolve, by the pretense of law, what ought to be the principle of law to support, reciprocal justice between man and man: and the punishment of a member who should move for such a law ought to be death.[8]

Responding to an anti-BNA petition, which claimed that “the said bank has a direct tendency to banish a great part of the specie from the country, so as to produce a scarcity of money, and to collect into the hands of the stockholders of the said bank, almost the whole of the money which remains amongst us,” [387-8 n] Paine argued that the issue of immediately gold-redeemable banknotes gives a commercial bank like the BNA a strong reason to retain sufficient gold reserves:

Specie may be called the stock in trade of the bank, it is therefore its interest to prevent it from wandering out of the country, and to keep a constant standing supply to be ready for all domestic occasions and demands. … While the bank is the general depository of cash, no great sums can be obtained without getting it from thence, and as it is evidently prejudicial to its interest to advance money to be sent abroad, because in this case the money cannot by circulation return again, the bank, therefore, is interested in preventing what the committee would have it suspected of promoting. It is to prevent the exportation of cash, and to retain it in the country, that the bank has, on several occasions, stopped the discounting notes till the danger had been passed.[9]

Here Paine failed to add that the public’s voluntary substitution of banknotes for specie, although it does not banish any specie that is still wanted, does allow the payment system to conduct a given volume of payments more economically, with less specie. The ability to export the share of specie thus rendered redundant, in exchange for productive machines and material inputs, was a growth-enhancing benefit of banking that Adam Smith had emphasized in The Wealth of Nations published ten years earlier.

In response to the claim that the bank “will collect into the hands of the stockholders” the specie remaining in the country, Paine explained that a bank’s specie reserves are not the net worth owned by its shareholders. Rather the reserves are held to redeem its liabilities, and thus are “the property of every man who holds a bank note, or deposits cash there,” or otherwise has a claim on the bank.

The Bank of North America at the time held the first and as yet only bank charter granted by the legislature of Pennsylvania. Critics damned the BNA as a privileged monopoly. Legislator John Smiley asserted that the charter repeal “secured the natural rights of the people from invasion by monopolies.” This view – later echoed by the Jeffersonians and Jacksonians in their opposition to the First and Second Bank of the United States – is of course paradoxical. The cure for monopoly power created by exclusive charter (incorporation) is to grant charters freely, to go from one to a multiplicity of charters. It is not to go from one to zero charters. If more banks were free to enter but simply hadn’t yet, then the BNA was a monopolist only in the benign sense that the entrepreneur who creates a new market (thus expanding and not restricting trade) is the single seller until others arrive. Eventually additional chartered banks did enter the Pennsylvania market: the (First) Bank of the United States (chartered by the US Congress) in 1791, and the Bank of Pennsylvania (state-chartered) in 1793.

In a later work criticizing the Bank of England (which did have an exclusive charter to issue banknotes as a corporation), Paine unfortunately seemed to blur the distinction between banknotes and irredeemable paper money. He made the valid point that banknotes held, unlike gold held, are not net national wealth (because they are liabilities of the issuer). Then he declared:

the rage that overran America, for paper money or paper currency, has reached to England under another name. There it was called continental money, and here it is called bank notes. But it signifies not what name it bears, if the capital is not equal to the redemption. … The natural effect of increasing and continuing to increase paper currencies is that of banishing the real money. The shadow takes place of the substance till the country is left with only shadows in its hands.[10]

To reconcile this passage with his previous writings, we must suppose that Paine is not criticizing banknotes in general, but the Bank of England in particular for holding inadequate reserves relative to its growing note-issue.

But this raises the question: Why would the BOE want to hold inadequate reserves when the BNA (as he had argued) did not? Paine might have explained this (but unfortunately did not) by Parliament’s implicit guarantee that it would not penalize the BOE for a suspension of payments, giving the Bank a moral-hazard incentive to skimp on reserves. When the Bank of England did suspend payments in 1797, forced by a run on the bank prompted by the threat of an invasion by Napoleon’s troops, Parliament did in fact immunize the Bank against note-holder lawsuits. Paine ten years ahead warned that the BOE might suspend in 1796, which was only one year off if we consider it a prediction:

A stoppage of payment at the bank is not a new thing. Smith in his “Wealth of Nations,” book ii. chap. 2, says, that in the year 1696, exchequer bills fell forty, fifty and sixty per cent; bank notes twenty per cent; and the bank stopped payment. That which happened in 1696 may happen again in 1796.[11]

To be clear, Paine anticipated trouble from the growing British public debt, not from threat of invasion. But the two were not unrelated.

____________

[1] Most of the quotations from Paine below come from this monograph as reprinted in Philip S. Foner, ed., The Collected Works of Thomas Paine, vol. 2, which is available online here.

[2] Janet Wilson, “The Bank of North America and Pennsylvania Politics: 1781-1787,” The Pennsylvania Magazine of History and Biography 66 (Jan., 1942), pp. 3- 28; available here.

[3] Letter to the Pennsylvania Packet, April 4, 1786; in Collected Works II, p. 419.

[4] Letter to the Abbe Raynal (1782) in Collected Works II, pp. 229, 230.

[5] Dissertations on Government (1786), in Collected Works II, p. 407.

[6] Ibid.

[7] Ibid., pp. 407, 409.

[8] Ibid., p. 408.

[9] Ibid., pp. 391-2.

[10] Paine, “Prospects on the Rubicon” (1787), Collected Works II, pp. 636-7.

[11] Ibid., pp. 663-4.

[Cross-posted from Alt-M.org]

The 2016 G20 summit in Hangzhou is fast approaching and, similar to the pre-summit meetings hosted by China throughout the year, the focus will be the state of the global economy. Still contending with sluggish global economic growth, the summit’s theme of “Towards an Innovative, Invigorated, Interconnected and Inclusive World Economy” is especially timely. Under the umbrella of global economic growth, cultivating opportunities for trade and investment will become a major priority for G20 states, and three global powers—the United States, China, and Russia—are each developing their own multinational trade route projects. These major trade projects could serve as opportunities for cross-country cooperation and growth, but they could also become sources for future conflict.

China’s management of domestic markets, currency, and commitment to structural reforms was a cause for global concern at the first meeting of G20 Finance and Central Bank Governors in February. At next week’s summit, China’s President Xi Jinping will undoubtedly point out China’s efforts towards realizing supply-side structural reforms in the face of China’s “new normal” of slower economic growth. As part of these reforms aimed at rebalancing China’s economy, Beijing plans to cut industrial overcapacity, tackle overhanging debt, reform state-owned enterprises, and seek out new consumer markets. On the last point, Beijing is championing its New Silk Road Initiative (also known as “One Belt, One Road”), a major state project focused on opening up new markets. To accomplish this, Beijing is building vast trade networks spanning several countries and continents, by land and by sea. However, many countries are wary. The project, billed as purely an economic one, may evolve to include a political and/or military dimension as well.

Similarly, Russia is looking to build new economic opportunities and trade links in the face of continued western economic sanctions and an ongoing bearish global hydrocarbons market. Its project, the Eurasian Economic Union (EEU), is based on its precursor organization, the Eurasian Customs Union. Since coming into force on January 1, 2015, the EEU has managed to increase trade amongst its members, which at present include Russia, Kazakhstan, Belarus, Armenia, and Kyrgyzstan. However, this intra-regional economic union has been slow to deliver significant economic advantages for its member states and, in fact, may be having the reverse effect on their economies: due to their close economic links to Russia, they too have inadvertently been suffering fallout from Russia’s economic troubles. Anders Åslund of the Atlantic Council argues that the EEU is actually isolating the economies of its member states and blocking out more beneficial economic relationships, particularly with the EU. Even the initial proponent of the EEU, Kazakhstan’s President Nursultan Nazarbayev, has himself appealed to EEU state leaders for closer integration with both the EU and China’s New Silk Road project.

Finally, the relatively unknown U.S. New Silk Road Initiative is seeking to bring about economic integration and growth by encouraging trade links between South Asian and Central Asian states, and especially with Afghanistan. As the United States aims to drawdown its military presence in Afghanistan, the New Silk Road project could portend a shift to economic concerns. By helping Afghanistan to establish an economic foothold through regional trade, the United States hopes to foster greater stability. On the other hand, getting Afghanistan to stand on its own feet economically could prove difficult in a country rife with internal issues. Also, opening up trade links with Afghanistan as part of the U.S. New Silk Road Initiative could mean that Afghanistan’s various domestic and drug trade problems may spill across borders, having the reverse effect of what was intended, by increasing regional instability instead of calming it. 

Though the potential for cooperation exists, and conflict is not inevitable, how these three major projects espoused by three global powers will interlock will be debated well beyond the conclusion of the upcoming G20 summit and into the future. All three of these trade and investment projects overlap in Central Asia. Moscow’s reaction to these two powers’ further involvement in Central Asia—its traditional region of dominance—will likely not be favorable. Moscow, though, has been in talks with Beijing to include it in the EEU through a Eurasian Partnership Agreement, but how the dynamics of such a partnership would actually play out is yet to be ascertained. For its part, experts in China have expressed that there is room for the United States to cooperate in China’s New Silk Road project. The United States itself is keen to find projects on which to cooperate with Beijing, as part of its own U.S. New Silk Road Initiative. At the same time, however, China feels that the United States, and the west in general, are trying to encircle and exclude a rising China, pointing to the Trans-Pacific Partnership agreement (TPP), the row over the South China Sea, western governments questioning Chinese investments in infrastructure projects, and the U.S.’s planned THAAD anti-missile defense system in South Korea. Therefore, as global leaders gather and discuss how to achieve sustainable growth as part of an “interconnected and inclusive world economy”, the realities on the ground point to several possible areas of contention.

Last week’s 20th anniversary of welfare reform event put income-based poverty measures on trial and drew skeptics from many circles. Michael Tanner stated that you would be hard-pressed to find “anyone on the left or right to defend the current [income-based] measure,” Robert Rector compared the current poverty measure to wearing glasses with cracked lenses, and Scott Winship presented research indicating income-based measurements distort U.S. poverty estimates.

Criticisms of the poverty metric during the event were only a microcosm of objections that have been occurring for some time.

Specifically, academics have taken issue with the failure of income-based poverty measures to accurately capture the realities of poverty. Measuring poverty incorrectly can have deleterious results, because it leads to misunderstanding the problem itself and, by extension, the solution.

So, what’s wrong with using income to measure poverty?

It turns out a lot, because income does not provide an accurate picture of economic well-being. It does not, for instance, provide information about an individual’s access to welfare benefits or access to formal or informal insurance. Income also can’t say anything about an individual’s accumulation of wealth or access to credit. Practically speaking, the income measurement often ignores dollars earned under-the-table on the so-called “gray market.” Importantly, for poor individuals, the resources that income overlooks are often substantially larger than income itself.

For a more concrete illustration of the issue, just imagine your average graduate student. This student likely has very low income. If he is lucky, perhaps he works part-time for a modest wage as a course assistant. As an older student, he may even have a wife who stays at home with a couple of young kids. Though he has substantial academic and personal financial obligations, his financial outlook is not as bleak as income alone indicates: he likely has considerable access to informal insurance (a phone-call to parents or in-laws will help in a pinch), access to credit (sizable student loans), and even a bit of savings remaining from a former professional life. Perhaps he qualifies for an academic scholarship or living stipend.

Even after considering this individual’s meager income and weighty family obligations, we would likely agree that he and his family have a bright future ahead. His day-to-day living situation suggests he knows that he does: he never worries about going hungry, there is no eminent danger of eviction, and his family generally lives life with many of the trimmings of a middle-class lifestyle.

Now consider your average high-school dropout, bereft of credentials or a resume replete with stable professional experience. She works part-time stocking inventory at an agricultural processing plant, but this work is seasonal and variable. At night she has part-time work cleaning office buildings across town. When she’s away from home she leaves her two young kids with a boyfriend who is out of work, but she constantly worries about losing her apartment and paying for groceries. 

For all of their differences, these two individuals have the same income levels, yet they have wildly disparate prospects and financial security. They even have the same size household, which means that they are subject to an identical federal poverty line – $24,300 for a family of four. As such, either may qualify for various income-tested welfare benefits.

Individuals in these two very different categories are treated exactly the same way by current poverty measures.

This example highlights just one of several issues associated with using income to measure poverty. Income has been used to measure poverty for decades because it is simple. However, in an increasingly complex world, it has become an increasingly meaningless measure. As we look to a future of more effective welfare policy, it is essential we improve on it. 

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

It looks like a new investigation into the use of ethanol as a substitute for gasoline found pretty much what most people have known all along—it’s just a bad idea.

Car mechanics know it. Drivers know it. Food analysts know it. Land conservationists know it. The last bastion of holdouts (aside from Midwestern corn farmers and their Congressional representatives) were the climate change do-gooders, claiming that all of the above sacrifices were small prices to pay for the benefit to the climate that ethanol was producing.  After all, they argued, burning ethanol produces fewer carbon dioxide emissions on net than burning “fossil” fuels because the carbon liberated in the process (for more on liberated carbon check out Andy Revkin’s contribution) was being recycled at a quicker rate than the geologic times scales necessary to produce oil.

While this may be technically true, it turns out that the rate of ethanol carbon recycling was being oversold by its supporters. At least this is the conclusion of a new paper authored by John DeCicco of the University of Michigan Energy Institute and colleagues. According to the paper’s press release:

A new study from University of Michigan researchers challenges the widely held assumption that biofuels such as ethanol and biodiesel are inherently carbon neutral.

Contrary to popular belief, the heat-trapping carbon dioxide gas emitted when biofuels are burned is not fully balanced by the CO2 uptake that occurs as the plants grow, according to a study by research professor John DeCicco and co-authors at the U-M Energy Institute.

The study, based on U.S. Department of Agriculture crop-production data, shows that during the period when U.S. biofuel production rapidly ramped up, the increased carbon dioxide uptake by the crops was only enough to offset 37 percent of the CO2 emissions due to biofuel combustion.

The researchers conclude that rising biofuel use has been associated with a net increase—rather than a net decrease, as many have claimed—in the carbon dioxide emissions that cause global warming. The findings were published online Aug. 25 in the journal Climatic Change.

Interestingly, the U.S. Environmental Protection Agency has recently been called to task for not investigating the supposed climate impact of the Congressionally mandated ethanol standards—a report that the EPA was required to produce by law. The EPA’s response: “we ran out of money and Congress didn’t pay attention to us last time we tried to issue a report.” But, they said they’d get right on it—and have a report ready by 2024.

We have a better idea: skip the report and just drop the standards.

Next up is one of the few really good pieces on the Louisiana floods (aside from those generated by our last YOTHAL, e.g., at the Daily Caller and Washington Times).

Louisiana State University’s Craig Colton explains how “suburban sprawl” and poor preparation played a large role in worsening the damage of the recent flooding disaster in the state. He notes that the region has a long history of flooding (pointing to historical accounts back to the 18th century) and provides several examples of very high rainfall amounts there in recent decades (and we’ll add that there are many more examples going back decades further such as a tropical depression in 1962 that put down 23 inches in the vicinity and 1979’s Tropical Strom Claudette which dropped more than 42 inches in nearby eastern Texas). 

Coastal Louisiana is perhaps the most climatologically primed (non-mountainous) spot for heavy rainfall events in the lower 48. As such, urban/suburban development there should proceed accordingly—which apparently isn’t what is happening, according to Colton. While some steps to develop flood plans and reduce risk were drawn up after flooding in 1983, Colton reports that:

However, these efforts have not been sustained. Suburban sprawl has spilled onto floodplains and placed residents at risk.

For example, the relatively new incorporated community of Central in East Baton Rouge Parish reports that 75 percent of its territory is in the 100-year floodplain. According to initial news reports, up to 90 percent of the town’s houses sustained damage in this month’s floods.

Check out Colton’s entire informative article to find out more about why the region’s flooding disaster is rooted in (poor) local decisionmaking and why you don’t need to invoke climate change to understand that this was a disaster in the making. It’s not that a warming climate shouldn’t be expected to generally increase rainfall totals, but laying the blame for the specific heavy rains and the resultant flooding in Louisiana (or anywhere else for that matter) on human-caused climate change is neither instructive nor scientifically defensible.

And finally, we’d be remiss if we didn’t have a little fun with the flip-flop Libertarian presidential candidate Gary Johnson pulled last week on his support of a carbon tax.

Last Sunday (August 21), in an interview with the Juneau Empire, Johnson indicated that he was in favor of a carbon “fee” to address climate change. And on Monday, followed that up with what seemed to be support for a full-blown carbon tax, telling CNBC’s John Harwood:

“I do think that climate change is occurring, that it is man-caused. One of the proposals that I think is a very libertarian proposal, and I’m just open to this, is taxing carbon emission that may have the result of being self-regulating.”

We immediately suggested to Gov. Johnson (via Twitter), that even in theory, a carbon tax wasn’t such a good idea, and pointed to our Cato Working Paper (soon to be Policy Analysis) on the topic:

By last Thursday, Johnson had apparently reconsidered, telling a campaign rally in Concord, New Hampshire (as reported over at Reason.com):

If any of you heard me say I support a carbon tax…Look, I haven’t raised a penny of taxes in my politicial career and neither has Bill [Weld]. We were looking at—I was looking at—what I heard was a carbon fee which from a free-market standpoint would actually address the issue and cost less. I have determined that, you know what, it’s a great theory but I don’t think it can work, and I’ve worked my way through that.

We’re glad that Gov. Johnson has seen the data on the ground and come to see the light—let’s hope he sticks to it.

The Obama administration is debating a declaration of no first use of nuclear weapons. Some Asia specialists fear the resulting impact on North Korea. But dealing with Pyongyang is a reason for Washington to encourage its ally South Korea to go nuclear.

Washington has possessed nuclear weapons for more than 70 years. No one doubts that the United States would use nukes in its own defense.

However, since then, Washington has extended a so-called “nuclear umbrella” over many of its non-nuclear allies. For instance, the United States long has threatened to use nuclear weapons in its NATO allies’ defense, though the precise circumstances under which the United States would act were not clear.

Northeast Asia is the region where nuclear threats seem greatest. Japan and South Korea are thought to be snuggled beneath America’s nuclear umbrella, which has discouraged both from acquiring their own weapons.

The “umbrella” obviously is defensive, that is, to protect American allies against the first use of nukes. However, Washington also could—and, it appears, would, if necessary, whatever that might mean—use nuclear weapons first to stop a conventional attack. Russia and China aren’t likely to attack the Republic of Korea or Japan. More plausible is a North Korean invasion of the ROK.

Extended nuclear deterrence always has been risky for the United States. It means being willing to fight a nuclear war on behalf of others. Americans would risk Washington, D.C. and Los Angeles to, say, defend Berlin and Tokyo.

At least bilateral deterrence among great powers tends to be reasonably stable. Dealing with North Korea is potentially more dangerous. 

Yet the DPRK eventually may gain the ability to strike the U.S. by developing long-range missiles as well as nuclear weapons. The North isn’t likely to attack first, but it still could lay waste to a major American city–which would be a bad deal indeed.

Yet advocates of extended deterrence are criticizing proposals for an American pledge of no first use of nuclear weapons.

The problem is fundamental: It is one thing for Washington to use nuclear weapons, including preemptively, to protect America. It is quite different to do so for allies.

As I point out in National Interest: “Alliances are a means, not an end, that is, a mechanism to help defend the U.S. A North Korean attack on the ROK would be awful, a humanitarian tragedy. But American security would not be directly threatened. Certainly there is no threat warranting the risk of nuclear retaliation on the U.S.”

Of course, those being defended have configured their security policy and force structure in response. But future policy should not be held captive to the past.

Washington’s chief responsibility should be America’s security. Backers of the status quo act like there is no alternative to leaving the ROK (and Japan, which faces a real, though less direct, threat from the DPRK) vulnerable to attack.

However, Seoul is well able to deter and defeat the North. The ROK possesses around 40 times the GDP and twice the population of North Korea, as well as a vast technological lead and an extensive international support network. Japan, which long possessed the world’s second largest economy, also could do far more.

The South is capable of developing nuclear weapons. Indeed, polls show public support for such an option today. Opposition to nuclear weapons is stronger in Japan, but an ROK weapon would put enormous pressure on Tokyo to conform.

Obviously, there are plenty of good reasons to oppose proliferation, even among friends. However, the current system is entangling Washington in the middle of other nations’ potential conflicts. The result is to make America less secure.

Dealing with nuclear weapons is never easy. Washington’s best alternative may be to withdraw from Northeast Asia’s nuclear imbroglio. Then America’s allies could engage in containment and deterrence, just as America did for them for so many years.

When the federal district court in D.C. ordered a seizure of Alonzo Marlow’s cell service location information (CSLI) held by his cell provider, it held that the federal government didn’t need a warrant to obtain CSLI data from a person’s phone provider. The Stored Communications Act of 1986 (SCA) governs the searching of such data, and under § 2703(d) of that act, federal investigators need not demonstrate probable cause in order to search—but merely to show “specific and articulable facts” that there is criminal wrongdoing. Thus, the Fourth Amendment requirement that “no warrants shall issue, but upon probable cause” is effectively removed.

Cato has filed an amicus brief with the U.S. Court of Appeals for the D.C. Circuit, supporting the appeal of Marlow and his co-defendants. For purposes of the Fourth Amendment, cell phone data is a “paper” or “effect” in which there is a right of the people to be secure. The Supreme Court made clear in Riley v. California (2014) that giving police carte blanche to search a phone incident to an arrest would “in effect give police officers unbridled discretion to rummage at will among a person’s private effects.”

Indeed, Marlow specifically protected his cell data from prying eyes through his user agreement; Sprint was contractually obligated to maintain his privacy unless some valid lawful process required production. Because the government took Marlow’s data without his consent, there was a seizure of “effects” under the Fourth Amendment. But the district court did not issue a warrant for this seizure, instead simply acceding to the government’s § 2703(d) request.

The government claims that the SCA created the lawful process that satisfies the contractual exemption, so Marlow is out of luck. But in order for that process to be valid, it needs to comport with the Fourth Amendment.

When there is a property right to exclude others—which in this case was contractually created—the Fourth Amendment requires a probable-cause warrant, a higher standard than “specific and articulable facts.” Thus the SCA court order process itself is constitutionally infirm. The aim of the courts in interpreting the Fourth Amendment is to “assur[e] preservation of that degree of privacy against government that existed when the Fourth Amendment was adopted.” Kyllo v. United States (2001).

Allowing the warrantless search of CSLI violates privacy as much as rummaging through a person’s physical papers did in 1776. To handle the challenges of the digital age, Fourth Amendment jurisprudence requires robust protection of cellular data contents as “effects.”

We urge the D.C. Circuit to reverse the ruling below in United States v. Benbow and make clear that property interests in data privacy are protected under the Fourth Amendment.

In her speech yesterday at the Federal Reserve’s annual conference in Jackson Hole, Wyoming, Fed Chair Janet Yellen stated that “the case for an increase in the federal funds rate has strengthened in recent months.” She based that view on “the continued solid performance in the labor market” and “our outlook for economic output and inflation.”

As documented by Jon Hilsenrath in yesterday’s Wall Street Journal,the Fed has consistently overestimated economic growth since 2004. The Fed’s economic model is wrong and there is no reason to believe it will suddenly produce reliable predictions. The model also does poorly in predicting inflation, though it does not show such a bias one way or another. Continuing to rely on the Fed’s flawed model to determine policy would be foolish.

Characterizing the labor market as “solid” is misleading in the extreme. Much of the decline in the unemployment rate to which Yellen directs our attention has been due to the decline in the civilian labor market participation rate. If people give up on the labor market, they are not counted as unemployed. Far from being a sign of strength, a fall in the unemployment rate for that reason is arguably a sign of weakness in labor markets. Since the unemployment rate is no longer a reliable indicator of labor market conditions, it should be dropped as a policy gauge.

For these and other reasons, I stand by my post of August 9th that the Fed will not be able to raise rates. My only hedge on that prediction is that Yellen is putting the Fed’s credibility on the line with her continued predictions of raising interest rates. Loss of face is a poor justification for raising interest rates, but the human factor cannot be dismissed in policy making.

I have a love-hate relationship with corporations.

On the plus side, I admire corporations that efficiently and effectively compete by producing valuable goods and services for consumers, and I aggressively defend those firms from politicians who want to impose harmful and destructive forms of taxes, regulation, and intervention.

On the minus side, I am disgusted by corporations that get in bed with politicians to push policies that undermine competition and free markets, and I strongly oppose all forms of cronyism and coercion that give big firms unearned and undeserved wealth.

With this in mind, let’s look at two controversies from the field of corporate taxation, both involving the European Commission (the EC is the Brussels-based bureaucracy that is akin to an executive branch for the European Union).

First, there’s a big fight going on between the U.S. Treasury Department and the EC. As reported by Bloomberg, it’s a battle over whether European governments should be able to impose higher tax burdens on American-domiciled multinationals.

The U.S. is stepping up its effort to convince the European Commission to refrain from hitting Apple Inc. and other companies with demands for possibly billions of euros… In a white paper released Wednesday, the Treasury Department in Washington said the Brussels-based commission is taking on the role of a “supra-national tax authority” that has the scope to threaten global tax reform deals. …The commission has initiated investigations into tax rulings that Apple, Starbucks Corp., Amazon.com Inc. and Fiat Chrysler Automobiles NV. received in separate EU nations. U.S. Treasury Secretary Jacob J. Lew has written previously that the investigations appear “to be targeting U.S. companies disproportionately.” The commission’s spokesman said Wednesday that EU law “applies to all companies operating in Europe – there is no bias against U.S. companies.”

As you can imagine, I have a number of thoughts about this spat.

  • First, don’t give the Obama Administration too much credit for being on the right side of the issue. The Treasury Department is motivated in large part by a concern that higher taxes imposed by European governments would mean less ability to collect tax by the U.S. government.
  • Second, complaints by the US about a “supra-national tax authority” are extremely hypocritical since the Obama White House has signed the Protocol to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which effectively would create a nascent World Tax Organization (the pact is thankfully being blocked by Senator Rand Paul).
  • Third, hypocrisy by the US doesn’t change the fact that the European Commission bureaucrats are in the wrong because their argument is based on the upside-down notion that low tax burdens are a form of “state aid.”
  • Fourth, Europeans are in the wrong because the various national governments should simply adjust their “transfer pricing” rules if they think multinational companies are playing games to under-state profits in high-tax nations and over-state profits in low-tax nations.
  • Fifth, the Europeans are in the wrong because low corporate tax rates are the best way to curtail unproductive forms of tax avoidance.
  • Sixth, some European nations are in the wrong if they don’t allow domestic companies to enjoy the low tax rates imposed on multinational firms.

Since we’re on the topic of corporate tax rates and the European Commission, let’s shift from Brussels to Geneva and see an example of good tax policy in action. Here are some excerpts from a Bloomberg report about how a Swiss canton is responding in the right way to an attack by the EC.

When the European Union pressured Switzerland to scrap tax breaks for foreign companies, Geneva had most to lose. Now, the canton that’s home to almost 1,000 multinationals is set to use tax to burnish its appeal. Geneva will on Aug. 30 propose cutting its corporate tax rate to 13.49 percent from 24.2 percent…the new regime will improve the Swiss city’s competitive position, according to Credit Suisse Group AG. “I could see Geneva going up very high in the ranks,” said Thierry Boitelle, a lawyer at Bonnard Lawson in the city. …A rate of about 13 percent would see Geneva jump 13 places to become the third-most attractive of Switzerland’s 26 cantons.

This puts a big smile on my face.

Geneva is basically doing the same thing Ireland did many years ago when it also was attacked by Brussels for having a very low tax rate on multinational firms while taxing domestic firms at a higher rate.

The Irish responded to the assault by implementing a very low rate for all businesses, regardless of whether they were local firms or global firms. And the Irish economy benefited immensely.

Now it’s happening again, which must be very irritating for the bureaucrats in Brussels since the attack on Geneva (just like the attack on Ireland) was designed to force tax rates higher rather than lower.

As a consequence, in one fell swoop, Geneva will now be one of the most competitive cantons in Switzerland.

Here’s another reason I’m smiling.

The Geneva reform will put even more pressure on the tax-loving French.

France, which borders the canton to the south, east and west, has a tax rate of 33.33 percent… Within Europe, Geneva’s rate would only exceed a number of smaller economies such as Ireland’s 12.5 percent and Montenegro, which has the region’s lowest rate of 9 percent. That will mean Geneva competes with Ireland, the Netherlands and the U.K. as a low-tax jurisdiction.

Though the lower tax rate in Geneva is not a sure thing.

We’ll have to see if local politicians follow through on this announcement. And there also may be a challenge from left-wing voters, something made possible by Switzerland’s model of direct democracy.

Opposition to the new rate from left-leaning political parties will probably trigger a referendum as it would only require 500 signatures.

Though I suspect the “sensible Swiss” of Geneva will vote the right way, at least if the results from an adjoining canton are any indication.

In a March plebiscite in the neighboring canton of Vaud, 87.1 percent of voters backed cutting the corporate tax rate to 13.79 percent from 21.65 percent.

So I fully expect voters in Geneva will make a similarly wise choice, especially since they are smart enough to realize that high tax rates won’t collect much money if the geese with the golden eggs fly away.

Failure to agree on a competitive tax rate in Geneva could result in an exodus of multinationals, cutting cantonal revenues by an even greater margin, said Denis Berdoz, a partner at Baker & McKenzie in Geneva, who specializes in tax and corporate law. “They don’t really have a choice,” said Berdoz. “If the companies leave, the loss could be much higher.”

In other words, the Laffer Curve exists.

Now let’s understand why the development in Geneva is a good thing (and why the EC effort to impose higher taxes on US-based multinational is a bad thing).

Simply stated, high corporate tax burdens are bad for workers and the overall economy.

In a recent column for the Wall Street Journal, Kevin Hassett and Aparna Mathur of the American Enterprise Institute consider the benefits of a less punitive corporate tax system.

They start with the theoretical case.

If the next president has a plan to increase wages that is based on well-documented and widely accepted empirical evidence, he should have little trouble finding bipartisan support. …Fortunately, such a plan exists. …both parties should unite and demand a cut in corporate tax rates. The economic theory behind this proposition is uncontroversial. More productive workers earn higher wages. Workers become more productive when they acquire better skills or have better tools. Lower corporate rates create the right incentives for firms to give workers better tools.

Then they unload a wealth of empirical evidence.

What proof is there that lower corporate rates equal higher wages? Quite a lot. In 2006 we co-wrote the first empirical study on the direct link between corporate taxes and manufacturing wages. …Our empirical analysis, which used data we gathered on international tax rates and manufacturing wages in 72 countries over 22 years, confirmed that the corporate tax is for the most part paid by workers. …There has since been a profusion of research that confirms that workers suffer when corporate tax rates are higher. In a 2007 paper Federal Reserve economist Alison Felix used data from the Luxembourg Income Study, which tracks individual incomes across 30 countries, to show that a 10% increase in corporate tax rates reduces wages by about 7%. In a 2009 paper Ms. Felix found similar patterns across the U.S., where states with higher corporate tax rates have significantly lower wages. …Harvard University economists Mihir Desai, Fritz Foley and Michigan’s James R. Hines have studied data from American multinational firms, finding that their foreign affiliates tend to pay significantly higher wages in countries with lower corporate tax rates. A study by Nadja Dwenger, Pia Rattenhuber and Viktor Steiner found similar patterns across German regions… Canadian economists Kenneth McKenzie and Ergete Ferede. They found that wages in Canadian provinces drop by more than a dollar when corporate tax revenue is increased by a dollar.

So what’s the moral of the story?

It’s very simple.

…higher wages are relatively easy to stimulate for a nation. One need only cut corporate tax rates. Left and right leaning countries have done this over the past two decades, including Japan, Canada and Germany. Yet in the U.S. we continue to undermine wage growth with the highest corporate tax rate in the developed world.

The Tax Foundation echoes this analysis, noting that even the Paris-based OECD has acknowledged that corporate taxes are especially destructive on a per-dollar-raised basis.

In a landmark 2008 study Tax and Economic Growth, economists at the Organization for Economic Cooperation and Development (OECD) determined that the corporate income tax is the most harmful tax for economic growth. …The study also found that statutory corporate tax rates have a negative effect on firms that are in the “process of catching up with the productivity performance of the best practice firms.” This suggests that “lowering statutory corporate tax rates can lead to particularly large productivity gains in firms that are dynamic and profitable, i.e. those that can make the largest contribution to GDP growth.”

Sadly, there’s often a gap between the analysis of the professional economists at the OECD and the work of the left-leaning policy-making divisions of that international bureaucracy.

The OECD has been a long-time advocate of schemes to curtail tax competition and in recent years even has concocted a “base erosion and profit shifting” initiative designed to boost the tax burden on businesses.

In a study for the Institute for Research in Economic and Fiscal Issues (also based, coincidentally, in Paris), Pierre Bessard and Fabio Cappelletti analyze the harmful impact of corporate taxation and the unhelpful role of the OECD.

…the latest years have been marked by an abundance of proposals to reform national tax codes to patch these alleged “loopholes”. Among them, the Base Erosion and Profit Shifting package (BEPS) of the Organization for Economic Cooperation and Development (OECD) is the most alarming one because of its global ambition. …The OECD thereby assumes, without any substantiation, that the corporate income tax is both just and an efficient way for governments to collect revenue.

Pierre and Fabio point out that the OECD’s campaign to impose heavier taxes on business is actually just a back-door way of imposing a higher burden on individuals.

…the whole value created by corporations is sooner or later transferred to various individuals, may it be as dividends (for owners and shareholders), interest payments (for lenders), wages (for employees) and payments for the provided goods and services (for suppliers). Second, corporations as such do not pay taxes. …at the end of the day the burden of any tax levied on them has to be carried by an individual.

This doesn’t necessarily mean there shouldn’t be a corporate tax (in nations that decide to tax income). After all, it is administratively simpler to tax a company than to track down potentially thousands - or even hundreds of thousands - of shareholders.

But it’s rather important to consider the structure of the corporate tax system. Is it a simple system that taxes economic activity only one time based on cash flow? Or does it have various warts, such as double taxation and deprecation, that effectively result in much higher tax rates on productive behavior?

Most nations unfortunately go with the latter approach (with place such as Estonia and Hong Kong being admirable exceptions). And that’s why, as Pierre and Fabio explain, the corporate income tax is especially harmful.

…the general consensus is that the cost per dollar of raising revenue through the corporate income tax is much higher than the cost per dollar of raising revenue through the personal income tax… This is due to the corporate income tax generating additional distortions. … Calls by the OECD and other bodies to standardize corporate tax rules and increase tax revenue in high-tax countries in effect would equate to calls for higher prices for consumers, lower wages for workers and lower returns for pension funds. Corporate taxes also depress available capital for investment and therefore productivity and wage growth, holding back purchasing power. In addition, the deadweight losses arising from corporate income taxation are particularly high. They include lobbying for preferential rates and treatments, diverting attention and resources from production and wealth creation, and distorting decisions in corporate financing and the choice of organizational form.

From my perspective, the key takeaway is that income taxes are always bad for prosperity, but the real question is whether they somewhat harmful or very harmful. So let’s close with some very depressing news about how America’s system ranks in that regard.

The Tax Foundation has just produced a very helpful map showing corporate tax rates around the world. All you need to know about the American system is that dark green is very bad (i.e., a corporate tax rate that is way above the average) and dark blue is very good.

And to make matters worse, America’s high tax rate is just part of the problem. A German think tank produced a study that looked at other major features of business taxation and concluded that the United States ranked #94 out of 100 nations.

It would be bad to have a high rate with a Hong Kong-designed corporate tax structure. But we have something far worse, a high rate with what could be considered a French-design

In the wake of the devastating floods in Louisiana, many people have been stranded in places that are difficult to access, some needing rescue and others running dangerously low on basic supplies. 

The federal response has gotten mixed reviews so far, but some residents in Louisiana saw the real need for help and decided to step up and do what they could for their friends and neighbors.

“All of a sudden before the feds could react, we got thousands of boats in the water, with locals helping each other,” said Kevin Dietz.

The “Cajun Navy” as it has been called, consists of dozens of people with boats and coordinators who work together to deliver supplies or rescue people from flooded areas. 

These volunteers are not just some disorganized rag-tag group, many of them might know how to navigate their neighborhoods better than the government officials, and they are utilizing new technologies to share their GPS locations with each other and organize their communications onto dedicated channels.

State Senator Jonathan Perry is now in the middle of a maelstrom after a report came out that he was working on a proposal that could require these would-be rescuers to undergo training or get a permit in order to help.

To be fair to Senator Perry, he contends that he is trying to figure out a way to remove the layers of red tape that prohibit volunteers from helping with the rescue efforts, as under current law it is illegal for them to  cross the barriers set up by law enforcement and many of them are prevented from doing so.

In the current framework these volunteers are being turned away and prevented from doing what they can at the same time that people are stranded and waiting for help.

This dynamic is not unique to situations like the flooding in Louisiana. Dozens of cities have passed bans making it illegal for private citizens and charities to feed the homeless, which leads to situations like this 90-year-old man and two being charged in Florida for violating the ban. Occupational licensing makes it much more difficult for medical professionals to volunteer their medical and dental services at free clinics through organizations like Remote Area Medical.

There is a rich history in America of people coming together to help others: one report from Giving USA claimed 2015 was “America’s most-generous year ever” when it comes to donating money to charities, and almost 63 million Americans volunteered their time in some capacity, although the volunteer rate has declined in recent years. These private efforts have enormous capacity to help solve problems if they are not deterred by burdensome red tape.

As one member of the Cajun Navy put it, “How can you regulate people helping people, that doesn’t make sense to me.”

Unfortunately, it’s all too common for government regulations to erect barriers and layers of red tape that make it harder for people to help.

I’m delighted to join the many people spreading the news today that the University of Chicago, my graduate alma mater, is bucking the trend at colleges and universities across the country by refusing to pander to the delicate but demanding “snowflakes” and “crybullies” who’ve tyrannized American campuses over the past few years. As the Daily Beast reports, Dean of Students John Ellison told the incoming class of 2020 “something they wouldn’t hear on most other liberal-arts campuses: ‘We do not support so called “trigger warnings”… and we do not condone the creation of intellectual “safe spaces.”’” At Chicago, students are expected to live “the life of the mind.”

Just yesterday Nick Rosenkranz posted in this space about the efforts he and colleagues over at Heterodox Academy are taking to encourage greater ideological diversity in academia. On both of these closely connected issues I’ve spoken at some length and in detail—it’s not a pretty picture out there. But this silliness could not go on forever—not at these prices. Let’s hope that these are signs of changes in the offing.

Would you like a break from the presidential campaign and be interested in catching a movie?  The pickings are pretty slim–unless you can’t get enough of the Obamas.  Here’s a tip: Check out the new documentary film, Incarcerating US, which is coming to theaters next month. 

Sneak preview:

Incarcerating US: Teaser

For more information about the film, go here.

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

This is a follow-up to my post yesterday about Muslim American assimilation that focuses on religious differences between Muslims in the United States, between them and their co-religionists in their countries of origin, and their differences with other Americans.    

There are many different sects of Islam and most are represented in the United States.  Sunni Islam is the largest followed by Shia Islam at roughly 89 percent and 11 percent, respectively, which is similar to the global division.  African American membership in the Nation of Islam adds another wrinkle.  There are further sub-sects such as the Sufi, Druze, Ahmadiyya, Alevism, and others that disagree on virtually everything from doctrine to modes of practice.  In addition to those differences, there are five main schools of Islamic jurisprudence (four Sunni and one Shia) that reveal further differences to say nothing of how local cultures have altered practice and doctrine.  Islam is not a monolithic and uniform religion.  It is highly fractured and lacks a central religious authority. 

Based on a 100 point index pooling the responses from religious questions in the World Values Survey, Muslim immigrants in the West had a religiosity of 76 compared to 83 in their countries of origin and 60 in their destination societies.  According to Gallup, 80 percent of Muslim Americans say that religion plays a key role in life, which is more than the 65 percent of the general population but still less than the 85 percent reported by Mormons who agree with that statement.  Those figures are slightly lower for younger Muslim and non-Muslim respondents aged 18 to 29.  Pew also found that religion is about as important to U.S. Muslims as it is to Christians while both valued it more than the general population. 

Gallup and Pew found that compared to Muslims in Islamic countries, U.S. Muslims are the least likely to say religion is important to them.  Gallup found that Muslim weekly attendance at religious services in the United States is only just above that of the general population, 41 percent to 34 percent, and is 22 percentage points below Mormon attendance.  Among Muslims who said that “religion is important,” only 49 percent attend religious services once a week – lower than the U.S. general population and all other religious groups except Judaism.  For respondents aged 18 to 29, 41 percent of Muslims attend mosque at least once a week, the same percentage as Protestants, 27 points behind Mormons, and 14 points ahead of the general population.  Pew found that weekly attendance for Muslims and Christians was about the same and both were higher than the general population. 

According to Doug Massey and Monic Higgins, 68 percent of Muslim immigrants never attend religious services compared to 62 percent of all American Christians who say they attend religious services once or twice a month.  Chapter 7 of a National Academy of Science report on immigration assimilation analyzed New Immigrant Survey data and found a significant drop off in new immigrant Mosque attendance that likely rebounds over time.  

A 2011 poll by Pew found that 35 percent of Americans Muslims think their religion is the only true faith while 37 percent think there is only one true way to practice it.  For American Christians, the percentages are 30 and 28, respectively.  Pew also found that 56 percent of U.S. Muslims believe that many religions can lead to eternal life compared to 65 percent of all Americans and 64 percent of Christians.  Only 47 percent of African American Muslims said that many religions could lead to eternal life, a percentage lower than in any other demographic group.  The median finding in other countries is that only 18 percent of Muslims believe that many religions can lead to heaven.  The same poll found that 63 percent of U.S. Muslims and 64 percent of U.S. Christians do not say there is any tension in being devout and living in a modern society.  The global median for Muslims on this question was 54 percent.   

A 2016 poll by the Institute for Social Policy and Understanding (ISPU) found that 45 percent of Muslim Americans favor a role for their religion in law.  In the same poll, 50 percent of Protestants said their religion should play a role in the law.  ISPU also finds that those Muslims with strong religious identities are also more likely to strongly identify as Americans, a finding similar across the religious groups surveyed.  A 2011 survey found that only 1 percent of American Muslim believed in the extreme Salafi approach to making Islamic decisions, down from 6 percent in 2005.  A majority of Mosque-goers, 55 percent, are also more likely to disagree with the statement that “all the different religions are equally good ways of helping a person find ultimate truth,” compared to 31 percent of attendees at other U.S. congregations. 

Related to religious belief, African American Muslims who are mostly converts or the descendants of recent converts and also disproportionately affiliated with the Nation of Islam, are more than twice as likely to think that America is immoral than immigrant and second-generation Muslims.  According to Gallup, Muslims are also less likely to strongly identify as American compared to other religious groups but they are also less likely to strongly identify with their own religion than Protestants and Mormons.  Only a small minority of Muslim Americans respondents in one study reported any conflict between being Muslim and American.  In another study, women who were more religious were also more involved in civil society and politics but that was also correlated decreased cultural and psychological integration into U.S. society.        

Educated, prosperous, and urbanized Muslim immigrants are less religious.  The concentration of Muslim immigrants among their fellow co-religionists and co-ethnics is positively associated with religious participation across a range of countries.  Endogamy also boosts religious participation.  In this regard, the greater diversity among American Muslims by ethnicity, race, and country of origin works against religious participation by limiting the scope of ethnic concentration and endogamy.  Shia Muslims, who are about 11 percent (page 23) of all U.S. Muslims, are especially fractionalized

How America Has Altered Islam

The lack of a state religion in the United States combined with a lively free-market in faith and high levels of belief have prompted Muslims to adapt.  They have had to create religious institutions from the ground up without U.S. government support, meaning that they end up copying the way that American churches are organized, staffed, funded, and operated. 

The different Western social, religious, and institutional landscape means that religious Muslims have to make a greater effort to actually practice.  Religion and religious institutions have often helped American immigrants assimilate.  That being said, conversion to other religions is uncommon among Muslims in the United States – 65 percent of those who do convert to another faith become unaffiliated while the rest choose another religion.  There is also some evidence that moving to the United States makes immigrants more observant but they tend to practice differently than in their home countries by, for instance, adopting a congregational style of mosque participation that is less ethnically divided.

Religion has also become more important as a source of identity for Muslim Americans in the second generation that often accompanied with a rejection of their parent’s ethnicity.  That’s partly a search for authentic or pure Islam untainted by culture, a notion present among some Muslim immigrants themselves.  A stronger religious identification can also push many marginal believers out of Islam, leading them to identify as non-religious.  This doesn’t appear to be at odds with broader integration.  Sociologists David Voas and Fenella Fleischmann sum up this section of their review by writing that: “[T]here is little evidence that religious socialization, current religiosity, or desire to maintain inherited traditions reduce the interest in adopting the mainstream culture.”

Conclusion

American Muslims have very different religious opinions and practices compared to their fellow co-religionists in Muslim-majority nations.  The difference in Muslim opinion between countries could be explained by the fact that those who choose to emigrate could have different opinions, America might change them, or both.  Interestingly, African-American converts to Islam, whether to the Nation of Islam or not, have the most negative about America and American culture.  That should improve our relative view of Muslim immigrants and their assimilation.  Muslim Americans have religious opinions that tend to differ from those of other Americans but the gulf is not too wide.     

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