Policy Institutes

It’s quite rare that a counsel denies Cato (or anyone) consent to file an amicus brief. That just forces us to file a perfunctory motion, thereby drawing more court attention to our brief than it otherwise would’ve received. Experienced lawyers know that there’s really no point objecting to these briefs; the court will itself reject any bizarre or disrespectful ones, and judges are free to disregard (or not even read) amicus briefs anyway.

In the case of Harte v. Board of Commissioners, however, counsel representing some (but not all) of the defendants in a civil suit made just such an objection. As you’ll recallHarte is the case where police officers are accused of using excessive force and pursing an unreasonable search for their military-style raid of a private home in Johnson County, Kansas. The evidence that led to the raid was that the Hartes had visited a gardening store and thrown out wet tea leaves that were misidentified as marijuana.

Cato thus moved for permission to file before the U.S. Court of Appeals for the Tenth Circuit, arguing simply that the case implicates the constitutional safeguards that exist to preserve person and property from unnecessary harms. Our brief advances unique and helpful arguments about Fourth Amendment common law and the systemic use of military-style raids by police. Had law enforcement in this case done routine police work, an armed raid need not to have taken place.

Counsel for Johnson County, perhaps seeing an opportunity to bill his clients for more (taxpayer-funded) hours, disagreed. To Lawrence L. Ferree III, our brief is “simply a lame attempt to morph this case into Cato’s libertarian mantra” on a case of “narrow issues.” Credit is due to Mr. Ferree for his rhetorical flare, but his arguments fall flat. 

Ferree tried to argue that our brief would not be helpful to the court because the search of the Harte’s residence wasn’t a “raid,” our brief is “boilerplate,” and that the case does not implicate Fourth Amendment common law. Well, it takes a certain degree of mental gymnastics to argue that a seven-person team armed with AR-15s, trained dogs, and a battering ram isn’t a raid team. It’s also curious that Ferree’s legal argument against our filing contained some of the exact same language he used to oppose the Marijuana Policy Project’s brief – “boilerplate” arguments, indeed.

Cato’s arguments have never been made in this court before, let alone in the same case. It takes chutzpah to accuse another counsel for using boilerplate language – as if we file briefs by cutting and pasting tired tropes from previous briefs – by using boilerplate language.

The most unique part of Mr. Ferree’s arguments was that they actually boiled down to a reason for the court to grant Cato’s motion. He spends most of his time responding to Cato’s substantive Fourth Amendment arguments. Ferree is certainly free to tell the court why Cato is wrong – that would be good lawyering – but such arguments have no bearing on whether Cato’s arguments are helpful or useful or non-duplicative, the applicable legal standard that justifies amicus filings.

And that’s why a Tenth Circuit motions panel earlier this week granted Cato’s motion, subject to reconsideration by the panel that will hear the case (a formality). So that’s a win on the sort of nuts-and-bolts litigation that we rarely get to pursue.

We can only hope that the court sees our arguments on the merits in a similarly favorable light.

The Philadelphia school district is in a near-constant state of financial crisis. There are many factors contributing to this sorry state–particularly its governance structure–but it is compounded by fiscal mismanagement. One particularly egregious example is paying six-figure salaries to the tune of $1.5 million a year to “ghost teachers” that do not teach. Pennsylvania Watchdog explains:

As part of the contract with the School District of Philadelphia, the local teachers union is permitted to take up to 63 teachers out of the classroom to work full-time for the Philadelphia Federation of Teachers. The practice, known as “release time” or “official time,” allows public school teachers to leave the classroom and continue to earn a public salary, benefits, pension and seniority.

These so-called ghost teachers perform a variety of jobs for the PFT, serving as either information officers for other teachers or carrying out the union’s political agenda.

“Teachers should be paid to teach,” attorney Kara Sweigart, who is arguing ghost teacher lawsuits for the Fairness Center, a free legal service for employees who feel they’ve been wronged by their unions, told Watchdog.

“At a time when school districts are hurting financially, districts should be devoting every tax dollar to support students,” she said, “not to pay the salaries of employees of a private political organization.”

According to public salary data available through Philadelphia city agencies, the school district is paying 16 ghost teachers $1.5 million this year. All of them are making at least $81,000.

PFT Vice President Arlene Kempin, who has been on release time since 1983, is among the highest paid at $108,062. Union head Jerry Jordan, who has also been on release time for more than 30 years, is earning $81,245, according to district payroll logs. The 16 ghost teachers on the books this year are making an average salary of almost $98,000.

The “ghost teacher” phenomenon is far from unique to Philly or even the education sector. Such “release time” subsidies for ghost teachers, policemen, firefighters, and bureaucrats of all stripes are common features of public-sector union contracts nationwide. Last month, a Yankee Institute report found that Connecticut provided unions with $4.1 million to subsidize 121,000 hours union-related activities, “the equivalent of more than a year’s worth of work for 50 full-time employees.” Meanwhile, the Goldwater Institute in Arizona is in the midst of a lawsuit against the city of Phoenix for unconstitutionally providing millions of dollars in release-time subsidies.

According to the most recent report from the federal Office of Personnel Management, the federal government paid more than $157 million in 2012 for federal employees to work for their unions for a total of 3,439,449 hours. And those are just the direct costs.

In his book, Understanding the Teacher Union Contract: A Citizen’s Handbook, former teacher union negotiator Myron Lieberman explained how difficult it is to account for the full amount of subsidies that taxpayers provide to the unions:

Most school board members are not aware of the magnitude of these subsidies. In school district budgets, the subsidies are never grouped together under the heading “Subsidies to the Union.” Instead, the subsidies are included in school district budgets under a variety of headings that may or may not refer to the union… School districts pay for these subsidies from a variety of line items in the district budget: payments to substitute teachers, teacher salaries, and pension contributions, among others. In most situations, the union subsidy is lumped together with other expenses paid for under the same line item; for example, the costs of hiring substitutes for teachers who are on released time for union business may be included in a budget line for substitutes that also covers substitutes for other reasons, such as replacing teachers on sick leave, personal leave, maternity/paternity leave, and so on.

Taxpayer dollars allocated for education should be spent on items and activities that assist student learning, not to promote the interests of private organizations (especially when their interests often collide with the interests of students). Union work should be paid out of funds the unions collect through dues and donations, not funds expropriated from unwilling and unwitting taxpayers. 

Although there’s no such thing as a straightforward measure of the quantity of money in an economy, monetary policy is nonetheless about managing that quantity.  How ought it to be managed?  The (misleadingly) simple-sounding answer is: so that it neither falls short of nor exceeds the quantity of money demanded by the public.

So much for a summary of Part 1.  Now for the hard part: dealing with the many questions this summary raises.  How can a central bank manage a quantity without being certain just how to define, let alone measure, that quantity?  How is it possible for the quantity of money supplied to differ from the quantity demanded?  When those things do differ, how can one tell?  Finally, just what does “the demand for money” mean?

The Demand for Money Isn’t Unlimited

The suggestion that there’s such a things as a “demand for money,” comparable to the demand for, say, heating oil, is one that many people find hard to accept.  But in truth the demand for money is a lot more like the demand for heating oil than many suppose.  Just as anyone with an oil furnace needs to keep some heating oil on hand in case the temperature drops, allowing the furnace to consume it gradually, while counting on regular deliveries to replenish the supply, people who can afford to keep some money — currency and bank deposits and checkable money funds and the like — on hand, drawing down the inventory to pay for other things, and replenishing it now and then out of their earnings, or perhaps by selling some non-monetary assets.  Notice that it’s by holding  on to money rather than by spending it that people evince a demand for the stuff.

Money’s role as a generally-accepted means of payment means that the real demand for it (that is, the average sum of monetary purchasing power people like to have on hand) tends to increase along with the amount of real purchasing to be done.  But just as the demand for heating oil in a city can increase independently of the total volume of inhabited interior space in that city (owing, say, to a decline in average temperature), so too can the demand for money vary independently of the total volume of an economy’s output, becoming more intense, for example, when interest rates on non-monetary assets are relatively low, and during times of greater economic uncertainty.

One difference between money and heating oil that tends to obscure the fact that people demand one no less than they do the other is that people actually purchase heating oil, whereas they seldom purchase money except when trading one sort of cash (say, dollars) for another (say, Euros).  The reason for this is simple: because an economy’s generally accepted means of payment is also what most people earn in exchange for their labor, or for goods they sell, no one has to “shop” for money.  Instead, they get paid in money, and then trade whatever they don’t wish to keep on hand for other things.  In other words, people contribute to the overall demand for goods and services, or “aggregate demand,” whenever they trade money for other stuff, whereas they contribute to the overall demand for money to the extent that they refrain from trading money for other things.

Receiving Money Isn’t the Same as Demanding It

The fact that the public’s demand for money consists of its willingness to hold on to monetary assets instead of spending them is important for several reasons.  First, it allows us to distinguish the demand for money from mere willingness to receive money in payments.  The fact that money is a generally accepted means of payment means that no one is likely to refuse to accept it in payments, let alone as a gift.  But this doesn’t mean that there’s no meaningful sense in which the public’s demand for money can be said to be limited or finite.  People may accept all the money they can get their hands on; but they “demand” money only to the extent that they refrain from spending it, and only for precisely as long as they refrain from spending it.

The insight also allows us to distinguish between the demand for money and the demand for credit, that is, the demand for various sorts of loans.  Here again, money’s role as a generally accepted means of payment can be confusing, because it means that a loan is likely to consist of a loan of money.  Yet most borrowers borrow, not to add to their money holdings, but to acquire other things, like cars and real estate, or (if they are business borrowers) to pay for labor, raw materials, or other inputs.  The fact that the demand for credit is distinct from the demand for money, and that the two things can change independently, means, among other things, that interest rates, which adjust to “clear” markets for various kinds of credit, cannot also be counted on to “clear” the market for money balances.  No matter what all too many textbooks say, interest can’t be the “price” of money, since it is busy being the price of credit, which is something else again; and perhaps no belief in the history of monetary economics has done more damage than the belief that monetary expansion is a reliable means for reducing interest rates.  In fact the relation between monetary changes on one hand and interest rate movements on the other is, as I’ll explain in a later segment, far more complicated than that.

Look, Ma: No Monetary Aggregates!

Finally, the fact that an increased demand for money manifests itself in peoples’ refraining from spending the stuff, while a decline in the demand for money translates into increased spending, means that one can get a handle on whether an economy has too much, too little, or just enough money without having to decide just what “money” consists of.  One need only keep track of overall spending or aggregate demand.  Whenever overall spending goes up, that’s a sign that the supply of money is growing faster than the demand for it.  When it shrinks, it’s a sign that demand for money is growing relative to the available supply.  In short, there’s no need to keep track of any particular monetary measure, or to estimate the public’s demand for the stuff that makes up that measure.  The behavior of spending supplies most of the information central bankers need to manage their nations’ money supplies responsibly.

We are still a long way, though, from being able to say anything — or anything compelling — about the proper conduct of monetary policy.  That changes in spending tend to imply that the demand for money is increasing or declining relative to some given supply doesn’t necessarily mean that a stable level of spending is ideal, much less that monetary policy should be conducted  with the aim of keeping spending stable. That’s so for two reasons.  First, a person’s demand for money is, strictly speaking, not a demand for any particular number of money units, such as dollars, but a demand for a certain amount of purchasing power.  If, at some given level of prices, I consider an average money balance of $1000 adequate for my needs, then, if prices fall to half that original level, $500 will serve me just as well as a $1000 did before.

It follows — and this is the second point — that there are, in principle, two different ways in which any shortage or surplus of dollars can be corrected.  One is to eliminate the shortage or surplus by means of an appropriate change in the available number of dollars of different sorts; the other is to eliminate it by means of an appropriate change in the general level of prices, and hence in every dollar’s purchasing power.  Other things equal, the higher the price level, the greater the quantity of money people will wish to hold; and the lower the price level, the smaller the quantity of money needed.  In principle, then, instead of attempting to prevent changes to the supply of or demand for money balances from leading to changes in the flow of spending, monetary authorities might be inclined to allow total spending to either rise or decline, perhaps at a rapid rate, or even to fluctuate willy-nilly, while relying on changes in the price level to keep the demand for money from veering for long, if ever, from the supply.  If they could get away with that, there would be no need to manage the supply of money after all.

There’s no doubting that, when monetary authorities allow spending in their economies to rise or decline substantially, and even dramatically, the changes in spending eventually promote such price level adjustments as are required to return to a state of monetary equilibrium.  It’s also true that, were prices all “perfectly flexible,” so that they responded both immediately and adequately to any change in the overall flow of spending, there could be no such thing as shortages or surpluses of money.  In such a world, a money supply that responded to changes in the demand for money wouldn’t be much of an improvement, assuming that it would improve at all, upon a money stock that was absolutely constant, or one that varied arbitrarily.[1]

Then again, in a world of perfectly flexible prices, an accommodative monetary arrangement could hardly be worse than any other.  And our price system is not, in fact, one that can be expected to instantly accommodate every sort of change to the supply of or demand for money.  Why that is so, and why some monetary policies are in fact a lot better than others, will be the subjects of the next installment.

Next:  The Price Level.

____________________________
1. In fact even perfectly flexible prices wouldn’t necessarily suffice to avoid troubles connected to changes in the flow of spending so long as those changes are not fully anticipated and contracts are not fully “indexed” so as to mimic contracts that would have been written in a world of perfect foresight.  Consider the case in which an unanticipated halving of the money stock results in an immediate halving of all prices. The halving of prices would suffice to keep the nominal quantity of money supplied equal to the quantity demanded.  But it could hardly serve to make up for losses connected to any fixed nominal contracts outstanding at the time of the monetary collapse.

The federal government funds hundreds of subsidy programs for state, local, and private activities, such as programs for housing and economic development. State and local governments, businesses, charities, and individuals could fund such local activities by themselves without federal aid. But America is increasingly kicking local activities up to the federal government, and so Uncle Sam the Middleman keeps growing.

How much does Uncle Sam the Middleman cost? As a rough estimate, the federal bureaucracy represents about 10 percent of the costs of the projects it gets involved in.

I described how U.S. Department of Agriculture (USDA) rural programs fund such activities as local broadband, clam fishing, energy projects, apartment construction, and street paving. USDA rural programs will cost federal taxpayers $6.5 billion in 2016. Most of the money will go to the people and businesses that are subsidized, but a portion will end up in the hands of federal bureaucrats.

The federal budget appendix shows that there are 5,000 workers in the USDA’s Rural Housing Service, Rural Utilities Services, and Rural Business Cooperative Service. Based on data in the appendix, they earn an average annual salary of about $73,000 and receive benefits of $25,000. They earn less than other federal workers, but still far more, on average, than private sector workers. Fun fact: these 50 rural program administrators earn an average annual salary of about $135,000.

All and all, workers in the three rural agencies impose an annual cost on taxpayers of about $490 million. But these folks need office space, telephones, travel expenses, and supplies to do their paperwork. Based on data in the appendix, that cost is roughly $38,000 per worker for the rural programs, or $190 million a year.

Thus, of the $6.5 billion taxpayer cost of the rural programs, roughly $680 million does not get to the broadband companies, the clam fisherman, and street paving contractors—it goes into the pockets of the federal middlemen.

Why is this important? Because politicians and federal program supporters often talk as if federal funding of local activities is a free boost to the economy. But it is not free for a lot of reasons. Most directly, federal programs are not free because Uncle Sam the Middleman carves off for itself about 10 percent of the money flowing through it.

The USDA rural programs spent $651,000 on an arts center in Bozeman. But about $65,000 would not have gotten to the arts center; it would have been consumed by the federal bureaucracy. Rather than raising the money locally, Bozeman citizens essentially filled in their 1040s, sent their income tax money to Washington, and then had to lobby federal officials to get some of it back for their arts center. Such roundabout financing of local projects makes no sense.

For more on the problems of America’s roundabout financing system, see here.

America’s political silly season will rush toward a close with the November presidential election. Both party conventions are likely to be lively.

But these spectacles will fall short of the pageantry expected at next month’s communist party congress in the Democratic People’s Republic of Korea. For the first time in 36 years, before current leader Kim Jong-un was born, the Korean Workers Party is gathering.

We still don’t know the exact date that delegates will convene. But North Koreans only just finished a 70-day campaign to prepare for the grand event. In the DPRK appearances are everything.

The masses reportedly are marching as one behind the “Young Marshall.” The regime says the campaign is to “defend the leadership authority” of the KWP and resist the “U.S. imperialists.” At least Kim Jong-un has emphasized economic development; his father, “Dear Leader” Kim Jong-il, pushed a “military-first” policy.

The question for the U.S. is why the congress? It is only the seventh in the DPRK’s 68-year-history.

At the last one “Great Leader” Kim Il-sung inaugurated a system of monarchical communism when he announced that his son would succeed him. The more than 3000 delegates also affirmed Kim’s philosophy of “Juche,” or self-reliance.

In succeeding years the party seemed to lose relevance. Kim instituted the rule of one. After Kim Jong-il took over he shifted power toward the military and away from the KWP. A party congress would have been almost superfluous.

No longer, however. Since Kim Jong-un took over after his father’s death in December 2011, Kim fils has been reshaping Pyongyang’s power structure. He turfed out most of the top officials appointed by and loyal to his father and ruthlessly eliminated any challenge to his power. Moreover, Kim moved decision-making back to the KWP.

The party congress will emphatically reestablish the authority of the party, with Kim at the helm. The gathering also will solidify the rise of Kim’s new generation of officials.

Although he looks secure from challenge, his promiscuous resort to execution suggests he feels otherwise. Indeed, this month his regime suffered embarrassment from a raft of defections.

Kim may use the congress to ratify his more reformist economic policies. The younger Kim appears committed to economic development, whether to improve the lot of his people or strengthen the nation which he rules.

The changes are dramatic enough—a proliferation of markets—as to require a more formal framework. Ruediger Frank of the University of Vienna observed: “all major reforms of state socialism—be it in China under Deng Xiaoping, the Soviet Union under Gorbachev or Vietnam under the slogan of doi moi—have been announced at such regular party congresses or related events.”

A more robust and systematic program of economic reform is the best hope for the North to escape from immiserating poverty. Economic reform also creates the possibility of political liberalization.

China has demonstrated that moving toward markets does not automatically deliver democracy. But the PRC today is far freer in every way than during the rule of Mao Zedong. This may be why Kim’s father, Kim Jong-il, resisted Chinese-style economic reforms.

Since nothing else yet has worked, Washington should greet the congress by expressing a willingness to talk to Pyongyang, and not only about nuclear weapons, which almost certainly is a dead-end with the Kim dynasty. With war the worst of all possibilities and sanctions able to hurt but not transform, the U.S. needs to explore other options.

America’s political conventions will be consequential since they will determine who takes over the helm in Washington. But the DPRK’s political meet-up will offer the ultimate in political choreography.

It also could ratify a change of direction in Pyongyang. As I pointed out in Forbes: “The U.S. should encourage such a possibility. While the chance of success might be small, that would be better than continuing today’s dead-end approach.”

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

Long before “green” came to be associated with moral superiority with regard to climate change, it was a color. The color of vegetation. Healthy, vibrant, prosperous vegetation was green, while unhealthy, senescent, or dormant vegetation was brown. In this context, to say the world is “greening” is to mean that its vegetation—upon which virtually all life depends—is flourishing and expanding. This is a much preferable situation to say its “greening” in the former sense—an amalgam of smoke and mirrors with no demonstrable real-world implication, impact, or most importantly, benefit.

We’re happy to report here that a new scientific paper reports that the world is greening—in the best sense of the word.

Published this week in the scientific journal Nature Climate Change is a paper titled “Greening of the Earth and its drivers” by a collection of 32 authors representing a combination of research programs from around the world. The authors compiled a large collection satellite observations of parameters associated with vegetative health collected since 1982, sorted through it, analyzed it, and then reported:

We show a persistent and widespread increase of growing season integrated LAI (greening) over 25% to 50% of the global vegetated area, whereas less than 4% of the globe shows decreasing LAI (browning).

Figure 1 shows the spatial distribution and magnitude of the greening trends. This is about as good of a large-scale environmental result as one could ever hope for.

Figure 1. Observed trends in leaf area index (LAI)—a measure of the quantity, density and health of vegetation during the growing season from 1982-2009. Positive trends indicate “greening,” negative trends indicate “browning.” The world is bathed in shades of green and blue. Source: Zhu et al., 2016.

What is the driver of this overwhelmingly positive outcome? Again from the authors:

Factorial simulations with multiple global ecosystem models suggest that CO2 fertilization effects explain 70% of the observed greening trend, followed by nitrogen deposition (9%), climate change (8%) and land cover change (LCC) (4%).

“CO2 fertilization” is a result of increasing atmospheric concentrations of carbon dioxide—an important plant fertilizer—primarily caused by carbon dioxide released from the chemical processes associated with the burning of fossil fuels to produce energy. And to think that some folks want to try to dial back this benefit!

While it may be hard to monetize a healthier and productive earth, there have been some attempts to place a value on some aspects of a greener world—primarily those which result from our increasingly productive agricultural systems. After all, the crops we eat are largely the seeds and fruits of plants, and they do better when carbon dioxide levels are higher.

Our Dr. Craig Idso calculated that rising atmospheric levels of carbon dioxide have added about $3.2trillion to the global economy since 1961 as a result of crop production increases and goes on to project nearly $10 trillion more by 2050. That’s a huge positive externality from carbon dioxide emissions.

It is interesting to note that most of the “integrated assessment models” (IAMs) that have been developed and designed to try to determine the “social cost of carbon”—that is, the monetary impact of the emission of each additional ton of carbon dioxide summed over the next 300 years—do not incorporate the positive effects of carbon dioxide fertilization. The primary exception to this situation is the FUND model developed by Dr. Richard Tol. Unsurprisingly, Tol’s model produces a much lower social cost of carbon than the other IAMs. Given that carbon dioxide fertilization and the positive impacts it has of the planet’s plant life is a firmly established scientific reality (as further evidenced by the new findings reported here) you’d think that any IAM that didn’t include it would be summarily rejected. Instead, such models are embraced by the Obama Administration and used to justify all manner of federal regulations.

And before we leave this new greening paper, we want to point out the comparison made by the authors of the patterns of observed trends with those projected to have occurred from a leading climate/vegetation model (Figure 2). We draw your attention to the western half of the United States. Here, the climate/vegetation model produced large (in area and magnitude) browning trends, driven by a general drying trend over the period of record. The observations on the other hand, show little, if any, trends towards browning, and instead show a general, mild, greening over the region.

Figure 2. Modeled (left) and observed (right) changes in leaf area index (LAI) for North America, 1982-2009. Source: Zhu et al., 2016.

The authors explain:

Such pronounced negative trends were not captured by any of the three satellite products. Our analysis indicated that models may be over-sensitive to trends in precipitation as soil water holding capacities maybe under-estimated in models, and deep rooting, ecosystem composition changes (e.g. shrubification) are not modeled, which is consistent with previous studies.

In other words, the models don’t have their, er, stuff, together. And as a consequence, they project negative outcomes that don’t materialize. 

Reference:

Zhu, Z., t al., 2016. Greening of the Earth and its drivers. Nature Climate Change, published on-line April 25, 2016, doi:10.1038/nclimate3004

 

What do you do after you brought your party’s control of government to a dramatic end? You become an international scold, blaming the world’s problems on everyone else.

Former British Prime Minister Gordon Brown is the UN Special Envoy for Global Education. He recently declared that we all are responsible for the depredations of Nigeria’s murderous Boko Haram. “The World Should Be Ashamed of the Failure to #BringBackOurGirls,” he titled his article.

It’s been two years since the group kidnapped 276 girls from the town of Chibok. The militants kill moderate Muslims but typically target Christians, as in Chibok. Despite promises from the Nigerian government, proffers of Western assistance, and a twitter campaign led by First Lady Michelle Obama, none of the girls have been rescued.

Two years on Brown offered his opinion: “we have all done far too little to secure their release.” Indeed, those enslaved “are now a symbol of our apparent weakness to protect young lives.”

I didn’t realize that I should have spent the last two years attempting to “secure” the girls’ release.

It’s an awful tragedy committed by moral monsters, but “we” should not gloss over the ugly realities of Boko Haram’s activities. The mass kidnapping was a conscious attack by armed insurgents/terrorists. It succeeded because the security forces that should have been guarding the school and students failed to fulfill their responsibility.

Brown offered the sort of answer one would expect from a “UN special envoy” with little connection to the real world. He insisted that “emergency aid funding” for education should be increased, which would have done nothing to help the Chibok girls.

Moreover, he opined that “the United Nations Security Council could intervene and encourage the Nigerians—with the support of the Americans, the French, the Chinese and the British—to undertake enhanced air surveillance and potential action on the ground to secure the release of the girls.” Actually, the U.S. government, among others, encouraged Abouja to do more to confront Boko Haram.

Certainly the Nigerian people desire more effective action—which is one reason they ousted incumbent Goodluck Jonathan in favor of former dictator Muhammadu Buhari in last year’s election. Unfortunately, the Nigerian government is part of the problem.

Brown then asserted: “we could and should do far more to protect children from attacks and abductions when in school.” Who is “we”? Should I pick up an AK-47 at the local flea market in northern Virginia, hop on a plane for Chibok and head to a local school to take up picket duty? Moreover, how do “we” prevent “attacks and abductions” at, presumably, not just Nigerian schools, but schools in every nation around the world?

Brown also suggested: “To show the kidnappers will be punished, the Security Council should adopt a resolution that holds the perpetrators of future child abductions accountable so that the full weight of international pressure is brought to bear.” Who will enforce this resolution if the Nigerian government is incapable of governing fairly and applying effective military force?

Finally, said Brown, “All governments should now support a ‘Safe Schools Declaration,’ stating that attacks on schools, colleges and universities are crimes against humanity. And the international community should ensure the funds for guards, for cameras and simple gates to protect schools in conflict zones.”

Does Brown really believe that Boko Haram would have stopped if confronted by cameras, gates, and guards, let alone an international declaration? The group has prospered by defeating Nigeria’s security forces in combat.

What’s going on in Nigeria and in so many other war-ravaged states is tragic. Instead of blaming the rest of us for problems well beyond anyone’s control, however, Brown and others like him should bring their ambitions back to earth.

As I pointed out on Forbes: “millions of kids around the world currently denied the chance to prepare for a better future need practical help in their local communities, not UN resolutions, international declarations, and pompous proclamations from special envoys.”

The New York Times reports that yogurt giant Dannon plans to change its milk supply structure to accommodate new consumer demands for sustainable agriculture and GMO-free food. In the United States, most milk used for yogurt is produced by rural dairy cooperatives that aggregate milk from many sources and ship it to central processing centers where it then goes through the production process. Milk buyers typically have little say in the standards dairy farmers use for feed, animal treatment, and other aspects of raising cows. The company, responding to consumer demand, is looking to change this production process so it has more say on such issues.

Calls for regulation of the agricultural production process to make similar changes are common. Activists have successfully persuaded many Americans to care about the way animals are treated on the farm. Some have proposed regulations to force farmers to change their practices. The question is whether regulation is the proper method of enacting the changes activists seek.

The private sector has shown it can successfully respond to consumer demands for products produced without socially undesirable processes or ingredients. Last year, I  noted here how chicken giant Perdue shifted to antibiotic-free products. Dannon is responding to similar incentives and is undertaking a similarly costly change.  

All of this comes without the need for government regulation to force the company to comply with a particular set of standards. Dannon’s shake-up of its milk supply chain is yet another example of how private companies react to consumer demands for changes in the way food is produced.

Research assistant Nick Zaiac contributed to this piece

The House Judiciary Committee recently held a hearing to discuss potential reforms to Section 337 of the Tariff Act of 1930—a law that is used by U.S. patent holders to ban the importation of infringing products. It was very encouraging to hear from many members of Congress who were concerned that Section 337 was redundant in a world where global companies can easily sue each other in U.S. federal court.

Under Section 337, the U.S. International Trade Commission (ITC) has the power to exclude products from entering the U.S. market in order to prevent “unfair methods of competition and unfair acts in the importation of articles.”  The potential scope of that authority is staggeringly broad, but the vast majority of cases are about patent infringement.  In practice, Section 337 has been used to turn the ITC into a specialized patent court for imports.

I wrote a Cato Policy Analysis in 2012 pointing to the numerous problems caused by having a dual-track patent litigation system that singles out imports.  Section 337’s broad language attracts abuse by enterprising lawyers (examples here and here) and that the law violates U.S. trade obligations.

But Section 337 also impedes the proper functioning of the U.S. patent system.  In today’s globalized economy, lots of high-tech products are imported.  Plaintiffs, therefore, often have a choice whether to bring their patent case in district court or at the ITC, and they choose the ITC when Section 337 offers advantages over traditional litigation.  This is true regardless of the nationality of the plaintiff or the defendant.  For example, because iPhones are assembled in China, Korea-based Samsung was able to take California-based Apple to the ITC.  Both companies were also suing each other in federal district court.

What makes the ITC such an attractive litigation venue is that Section 337 provides only one sort of remedy—exclusion of the infringing product from the U.S. market.  In district court, successful plaintiffs are likely to be awarded only money damages unless the can show special cause to justify an injunction.  In the ITC, every successful plaintiff wins an injunction. 

But there are reasons why courts of law don’t always award injunctive relief to every successful plaintiff.  Courts are especially reluctant to grant injunctions in cases involving standard-essential patents or when the plaintiff’s sole interest in the patent is the collection of royalties or (in the case of “patent trolls”) litigation settlements.  The ITC can be a much more attractive venue for plaintiffs in those cases.

At the hearing, Representative Darrell Issa (R-CA) and others were concerned that companies were using Section 337 to bypass the federal courts.  Issa made the case that if two companies could be litigating their dispute in a court of law then they should be.  He bemoaned the increasingly prominent role of administrative agencies in settling private disputes, saying, “It is our responsibility to preserve the constitutional right of an American entity to have their claim, whether plaintiff or defendant, adjudicated within the court.”

It’s encouraging to see members of Congress recognize that Section 337 provides excessively broad patent jurisdiction to a trade agency.  Momentum seems to be building toward real reform that would reduce the harmful influence of trade protectionism in the U.S. patent system.

This morning I read an op-ed by Douglas Holtz-Eakin tackling the chasm between what it takes to enroll in college and how ready for college students actually are. It is a yawning gap, and Holtz-Eakin rightly laments it. But then he pulls the ol’, “Common Core is a high standard,” and suggests that it will bridge the college prep divide. He even writes that the Core has been “shown” to be “effective.”  

Not only has there been no meaningful evidence of the Core’s effectiveness, but right after I read Holtz-Eakins’ piece I saw that the latest National Assessment of Educational Progress scores had come out – indeed, for the very 12th grade students on the verge of college – and they had dropped in both reading and math between 2013 and 2015, and some dropped going back to 2009. This was, of course, as Common Core was being implemented nationwide. And not only did aggregate scores drop, but also scores for numerous racial and ethnic groups.

Do these results prove that Common Core is either impotent, or worse, a negative force? Certainly not. For one thing, as presented we can’t even break the 12th grade scores out by state as we were able to do with the 4th and 8th grade scores released several months ago. And even that was only able to furnish slightly more nuanced evidence than looking at aggregate national scores. But all these scores do undermine any proclamations of proven Core effectiveness.

Of course, lots of things affect test scores – federal policies, state policies, local policies, economics, demographic changes, etc. – and we can’t ignore all those things and just declare whatever policy we happen to dislike the undisputed villain. But one thing is clear, no matter how you feel about Common Core or anything else: NAEP tests continue to produce awful results for the students who are about to finish K-12 education, whether it is stagnant 17-year-olds’ scores on Long-Term Trend NAEP exams, or these scores for 12th graders on the “Main NAEP.” And this, as I tackle in a new, big update to the Downsizing the Federal Government K-12 page, despite huge increases in spending over the decades, as well as heavily centralized control.

Do the latest NAEP results prove that the Common Core, or centralization more broadly, are bad for American education? No. But they sure don’t help the narrative that centralization, including the federally driven Core, has helped it.

It may be “cyber incidents” like the US $81 million hack on the Bank of Bangladesh that has SWIFT, the Society for Worldwide Interbank Financial Telecommunication, investigating “Distributed Ledger Technology.” Asked to comment on SWIFT’s program for a CoinDesk reaction piece, I was most interested by the euphemistic language. It reveals something about the state of the Bitcoin ecosystem.

Yes, the folks at SWIFT capitalize the phrase “Distributed Ledger Technology.” It seems meant to create distance from “blockchain.” Of course, talking about “blockchains” was meant to create distance from “Bitcoin,” assumedly for a financial services community that found Bitcoin too uncouth or disruptive.

But Bitcoin is the lodestar. There are contenders, but most everything else is some denigrated system, lacking network effects, that ultimately fails to unite unrelated parties from across the globe in the project of recording transactions on an immutable public ledger. The question is how long it will take for the financial services industry to adopt Bitcoin or for Bitcoin to surpass the financial services industry. Regulator-friendly blockchains are at best a weigh-station on that road.

Enough with the Bitcoin triumphalism, though. The existence of a genius protocol does not guarantee its adoption. For Bitcoin to thrive, there still needs to be a great deal of social and economic change.

Bitcoin’s social capital needs are manifold. To deliver on its promises of global financial inclusion, user-defined privacy, enhanced liberty, and a stable money supply for all the world’s people, the Bitcoin ecosystem needs: a larger and more sophisticated community of software and protocol developers; greater assurance against mining centralization; and a thriving community of node operators. The embrace of the financial services community would speed things along. Bitcoin needs the reality and perception of low volatility; protocols and practices that assure privacy; flourishing, successful marketplaces; a congenial regulatory environment; and a positive reputation. (This list of social capital needs is drawn from my 2014 study of impediments to Bitcoin’s success.)

I’ve saluted the Open Bitcoin Privacy Project for its work on the privacy piece. A lot of effort in a lot of places is going into other dimensions, but the dominant theme in Bitcoin-land remains the “blocksize debate,” which will determine how Bitcoin will add capacity, as it must. I’ve written about the debate a couple of times, framing it as politics in a ‘non-political’ money system and as governance by competition.

In a podcast last August (which holds up adequately well), I said that everyone is going to settle down before too long. It’s taking longer than I thought. That does nothing to undermine Bitcoin’s essential genius. It just means that community members are burning a lot of energy on one dimension of the Bitcoin ecosystem, energy which is not available for developing Bitcoin’s other dimensions. Bitcoin will fail to achieve both its social potential and its potential value while community members use their energies this way.

The problem is particularly acute, though, when the blocksize debate undercuts progress in other dimensions of the Bitcoin ecosystem. When debaters exhibit personal animosity toward others, make churlish comments, and foment derision for the other side among their supporters, they are signaling to observers of Bitcoin in many important segments of society that Bitcoin is not an attractive thing to be involved in. Pursuing victory for themselves (or vanity, or attention), they undercut Bitcoin acceptance among important observers.

A winnowing process is underway to determine who are the good businesspeople, technologists, pool operators, and other ecosystem participants. The needed social capital will develop. But it’s a slow, human process, and the longer it takes, the slower Bitcoin’s promises of global development, liberty, progress, and profit will take to deliver.

When SWIFT uses the phrase “Distributed Ledger Technology” to distance itself from “blockchain” and “Bitcoin,” it might just be a semantic quirk. But it might tell us something about the Bitcoin ecosystem. Bitcoin has a maturity problem.

Volkswagen did a very bad thing: it installed software in hundreds of thousands of cars sold in the United States designed to defeat pollution tests, and then obfuscated when confronted with the evidence.

Last Thursday a U.S. federal court said that the company would either have to fix or buy back some 500,000 cars. The judge also indicated that Volkswagen would have to make a substantial payment to the car owners, regardless of how the problem is finally resolved, to make them whole.

I am all for applying a severe punishment to the company–fraudulently manipulating its equipment to evade a test result is an outrageous act that the government must punish to ensure companies don’t feel emboldened to emulate them. However, the judge lost me when he asserted that the recipients of this essentially tortious payment should be the injured car owners. From my perspective, I’m not that sure that they are victims here.

The drivers undoubtedly saw the resale value of their cars fall owing to the scandal, but that should be something that the car buybacks can account for without too much trouble. However, the higher emissions from the cars didn’t hurt the owners–it damaged the environment, which means it affected all of us, regardless of whether we own a Volkswagen.

The emissions cheating didn’t hurt car performance either–boosting the cars’ performance is why they did this to begin with. In fact, because of the defeat devices the Volkswagen owners got an automobile that performed better than had they bought a comparable vehicle from another company, one that hewed to the emissions standards. They actually benefited from the cheating–at the expense of degrading the environment that we all live in, both VW owners and the rest of us.

Compensating Volkswagen owners illustrates a fundamental chasm between lawyers and economists when it comes to punishing bad behavior. Lawyers tend to argue that tort law serves to provide adequate compensation to a victim, while economists see it as a way to tilt a company’s cost-benefit calculus so that it doesn’t make tradeoffs in risk (or pollution) that society deems unpalatable. The design of the Pinto exposed the gas tank to rupture in a crash because doing so was cheaper than doing a better job of protecting the gas tank. The fines paid by Ford when they were found guilty more than wiped out its cost savings from the engineering choice.

I completely agree with making Volkswagen buy the high-emission cars as well as imposing a fine on the company that goes above and beyond the estimated environmental damage. However, no additional money should not go to the people who bought VW cars, because they’ve not been materially injured, and there’s no societal gain by directing the fine into their pockets.

While simply directing the money to the government’s coffers may be a prescription makes libertarians a bit uncomfortable, in the absence of any real victim there’s no better solution.

Nearly two and a half centuries after Adam Smith vanquished the mercantilists, mercantilism is the beacon of U.S. trade policy.  In descending order of priority, U.S. trade policy is oriented toward three objectives: (1) Accelerating export growth; (2) Limiting import growth; (3) Effectuating a trade enforcement regime that maximally supports the first two objectives. The coexistence of the “exports good, imports bad” philosophy with 41 straight years of trade deficits explains why trade is so often maligned and demagogued (i.e., “We’re getting crushed in trade!”), and why trade liberalization is such a tough slog politically. 

Anyone who reads the press releases from the U.S. Trade Representative’s office, the House Ways and Means Committee, the Senate Finance Committee, or the big business trade associations is familiar with the statistic that 95 percent of the world’s consumers live outside the United States.  That mantra is deployed to promote the importance of exports – to suggest that removing foreign trade barriers is essential to U.S. export growth, which is essential to U.S. economic growth.  But rarely does anyone in official Washington make the valid point that if 95 percent of the world’s potential customers live abroad, so do 95 percent of the world’s suppliers, 95 percent of the world’s supply chain partners, 95 percent of the world’s workers, and 95 percent of the world’s investors.

The fact that the United States accounts for only 5 percent of the world’s population means there are numerous channels through which engagement with the world increases U.S. wealth and living standards, and that U.S. barriers to imports, investment, and immigration are at least as important to surmount as are foreign barriers to U.S. exports. But official Washington considers dismantling foreign market barriers, while fortifying U.S. import barriers, to be its remit.

A brief refresher on business accounting is in order.

Lesson 1:

Profits equal revenues minus costs.

In simple arithmetic terms: P = R – C.

Lesson 2:

With reference to the simple equation above, a business can realize higher profits by increasing R or decreasing C.  To be more precise, higher profits require revenues to increase faster than costs increase or for costs to decrease faster than revenues decrease.

Lesson 3:

For any given firm, revenues equal the value of its domestic sales plus the value of its export sales, and costs equal the materials, labor, and overhead used in production, as well as transportation expenses, selling expenses, taxes, and other expenses incurred in the process of delivering the good or service to the customer.

Lesson 4:

By increasing overall supply and reducing the average price of manufacturing inputs and final end-user products, imports help reduce the cost of production for businesses and the cost of living for American households. For businesses, those lower costs generate greater profits to reinvest or distribute to shareholders or they enable lower prices to help them compete.  For households, those lower costs mean lower prices and more resources to save or spend elsewhere in the economy.

Lesson 5:

The goal of trade policy should not be to maximize business revenues.  The goal of trade policy should be to maximize profits (or put in economic terms: to maximize value-added, i.e. GDP). The equation in Lesson 1, above, shows that reducing costs contributes to profit growth just like increasing revenues contributes to profit growth.

Congress demonstrates occasional, attenuated appreciation of these lessons.  Every few years (8 times since 1982), Congress has passed a Miscellaneous Tariff Bill, which temporarily suspend duties on certain, “noncontroversial” products—usually intermediate goods, such as chemicals, electronic components, and mechanical parts—that are not manufactured domestically but are needed by U.S. producers to generate their own output. Although limited in impact by its temporary nature, by the “no domestic production” requirement, and by the caveat that the suspended duty must not reduce tariff revenues by more than $500,000, the MTB does provide some cost savings to U.S. producers. The last MTB provided an estimated $748 million of import tax relief.

As described in this new paper – released ahead of a House vote tomorrow on legislation to resuscitate the MTB process – Congress should recognize that tariffs are always costs that reduce GDP and act with greater resolve to eliminate all import tariffs permanently.

Bloomberg reports that the Port of Los Angeles is increasing automation with the installation of self-driving cranes and other equipment. The automation is being partly driven by the need to minimize the use of high cost and troublesome unionized labor.

The West Coast longshoremen and their unions have long caused disruptions and slowdowns at the seaports. This is one reason why U.S. seaports have fallen behind the efficiency levels of the best facilities in the world, such as the Port of Rotterdam.

A new incentive for seaport managers to automate is the need to minimize the environmental impact of shipping. The new machines are faster and cleaner than the old human-operated equipment, and so they cut air pollution. For this reason, California’s government is behind the push to automate.

Jon Slangerup, head of the Port of Long Beach, concluded: “Efficiency and the environment go hand in hand … They’re two sides of the same coin.’’

In an upcoming Cato study on privatization, I describe how this theme applies to business activities of the federal government. In government-owned businesses, inefficiencies imposed by Congress and the bureaucracies harm the environment. To cut waste and pollution, we should privatize:

  • A privatized Amtrak would save energy as it ended low-volume and inefficient routes.
  • A privatized U.S. Postal Service would save energy by closing thousands of little-used locations and cutting its fleet of more than 200,000 trucks.
  • A privatized air traffic control system would adopt technologies to reduce flight times and cut fuel use.
  • A privatized Tennessee Valley Authority would likely be a better environmental steward than this mismanaged government utility has been.

While liberals often assume that the environment and profit-hungry businesses are enemies, the opposite is true. Profit-seeking is a friend to the environment because it generates incentives to minimize waste, to recycle, and to discover better ways of producing products with fewer resource inputs.

While private profit-driven recycling is efficient, government recycling tends to be wasteful. And some federal agencies, such as the Department of Energy, have had terrible environmental records. The problem is that governments have incentives to maximize costs, not minimize them.

Politicians talk a good game about saving the environment, but it is markets and private businesses that actually deliver.

Donald Trump is a genius for gaining media attention. Sometimes his opinions also reflect basic common sense.

Consider his complaint that Washington’s prosperous allies in Asia and Europe don’t pay enough in return. Defenders of the status quo contend that it is in America’s interest to subsidize its allies, as if they were defending the United States.

Advocates of the status quo also argue that U.S. allies contribute to U.S. basing costs. That’s true but irrelevant. The fact that countries defended by America help cover Washington’s cost of stationing U.S. troops is notable only because allied free- (or cheap-) riding has been so shameless for so long.

As I pointed out in CNN online: “The most important cost for America is that of creating the forces deployed, wherever they are stationed. Every security commitment requires additional personnel and equipment. America’s oversized military budget reflects America’s many formal and possible security guarantees: 27 NATO members, alliance wannabes Georgia and Ukraine, various East Asian allies and friends, several Middle Eastern and Central Asian nations.”

Washington accounts for roughly 40 percent of the globe’s military outlays in order to project power on behalf of other states. Providing a defense shield for war-ravaged nations originally made sense. But that world has passed away.

Washington should stop defending its prosperous, populous allies. They should pay for their own defense and confront future security threats as equals.

 

President Obama’s Council of Economic Advisers (CEA) has just released a new report, “Economic Perspectives on Incarceration and the Criminal Justice System.”  I attended a briefing on the report this morning at the White House led by Jason Furman, who chairs the CEA.  A panel discussion followed and C-SPAN covered the proceeding.

In this post, I want to excerpt some of the most interesting aspects of the report based on my quick perusal and offer some comments.  Instead of asking the Attorney General and the director of the bureau of prisons to examine the criminal system, Obama asked for an economic analysis.  That was an interesting choice.  From the report:

From an economic perspective, the goal of an efficient criminal justice system is to maximize the safety of citizens and minimize criminal activity while also limiting the direct and indirect costs of criminal justice policies to individuals, communities and the economy. Broadly, debates about the criminal justice system can be framed as a comparison of the system’s societal benefits in terms of reduced crime and its societal costs in terms of direct government spending and collateral consequences for individuals, families and communities. Likewise, any reform should offer an improvement to current practice, through increasing safety, rebuilding communities, improving economic opportunity, or reducing expenditures or other social costs.

One of the panelists, Douglas Holtz-Eakin, joked that many in the room may think that economists may be heartless because of their number crunching ways, but he said cost-benefit analyses can be a very useful framework to organize our thinking.

This is “re-entry week,” which means we’re supposed to focus on how prisoners can successfully transition from life behind bars to a life in civil society.  More than 600,000 prisoners are released each year and over 70 percent of those prisoners are re-arrested within 5 years of release.  A businessperson and an economist might say that the system has a failure rate of 70 percent.  If we could find a way to reverse those numbers–so that less than 30 percent of the prisoners would be re-arrested following release–economists would say we have a superior system (if all other variables remained constant).

The re-entry system in many American jurisdictions is either broken or nonexistent.  Imagine a guy that is 32 years old.  He has just completed a 10-year prison sentence.  He dropped out of school after a year in high school and started transporting drugs between cities–until he got busted.  He has no high school diploma, no job skills, no real job experience, and a criminal record.  In some states, when he walks out of the prison gates, he’ll have a bus ticket and $50 in his pocket.  If he does not have a family to support him, he’s going to get desperate fast.  The government seems to be setting him up to fail–and that makes little sense.

Many things can and should be done to improve the re-entry process.  A lady sitting next to me said there should be more emphasis on “no-entry,” by which she meant there are too many people entering the criminal justice system who shouldn’t be there at all.  Precisely.  The drug war has been a public policy disaster.  Locking up a marijuana dealer or someone who unloads a boat of cocaine is expensive and does almost nothing to improve community safety.  That person is immediately replaced by another small fry.  As we await the government to admit its mistakes in the area of drug policy, it can at least reduce its regulatory barriers to employment for the millions of people who now have criminal records.

Another excerpt from the report:

The American Bar Association National Inventory of Collateral Consequences of Conviction documentsover 46,000 State and Federal laws restricting employment, occupational licenses, and business licenses for people with criminal records (American Bar Association 2016). As discussed above, policies that improve access to employment and sufficient wages for individuals with criminal records not only benefit individuals and their families, but also have the potential to decrease recidivism and increase the economic viability of communities.

Our liberal friends always seem to be searching for regulations that can make things better.  As libertarians, we must try to show them that things might get better if the government would start regulating less.  And our conservative friends might consider subjecting criminal justice policies to cost-benefit analyses to determine if our taxpayer dollars are being misspent.

More here.

 

 

The Middle East has long been hostile to Christians and other religious minorities. Among those at risk are Egypt’s Copts.

During the reign of dictator Hosni Mubarak, the U.S. State Department called the status of Egyptian religious liberty “poor” and noted that Christians and Baha’is faced “personal and collective discrimination.” Attacks on Copts were common, and perpetrators rarely were prosecuted.

Mubarak’s overthrow led Copts to hope for a freer and safer Egypt. But under Mubarak’s successor, President Mohamed Morsi, violence against Copts increased. Morsi was not the only culprit. In one infamous case, the military–then headed by Gen. Abdel Fattah al-Sisi–shot down more than a score of Coptic protesters.

Two years ago, al-Sisi overthrew Morsi and eventually became president. Alas, the military used extreme brutality—killing hundreds of demonstrators on the streets of Cairo—to maintain control.

Coptic Pope Tawadros II publicly supported the coup. But the church remained as vulnerable as it was visible, and was targeted by angry Islamists. Dozens of churches were destroyed.

In January, al-Sisi celebrated Christmas at a Coptic service and promised to rebuild churches that had been destroyed. So far, however, the government has delivered more promises than actions.

Mina Thabet of the Egyptian Commission for Rights and Freedoms complained that al-Sisi was no liberal and “doesn’t care about religious freedom.” Certainly he evidenced no interest prior to the coup.

Nor is the only problem attacks on churches (which have diminished). The State Department noted that Egypt’s government did not recognize conversion from Islam and prosecuted people for religious defamation and blasphemy, including many Copts. In February, four teenage Copts were sentenced to five years in prison for a video directed against the Islamic State but treated as an attack on Islam.

The government failed to respond to attacks on Christians. The State Department added that the lack of accountability “fostered a climate of impunity.”

Even if Copts believe they remain safer under al-Sisi, they may have sold their liberty for what turns out to be a mess of security pottage. Copts live in the same unfree society as everyone else.

Coptic film critic Joseph Fahim wrote two years ago: “more than 40,000 arrests have been made since Morsi’s overthrow, journalists have been prosecuted, artists have been censored, opposition voices have been violently silenced, dissented politicians have been witch-hunted, the Mubarak regime has successfully reassembled itself, institutional corruption has grown more rampant, the country has descended into further chaos and fear has become the prevailing sentiment of the day.”

According to the State Department’s 2015 human rights report: “The most significant human rights problems were excessive use of force by security forces, deficiencies in due process, and the suppression of civil liberties. Excessive use of force included unlawful killings and torture. Due process problems included the excessive use of preventative custody and pretrial detention, the use of military courts to try civilians, and trials involving hundreds of defendants in which authorities did not present evidence on an individual basis. Civil liberties problems included societal and governmental restrictions on freedoms of expression and the press, as well as on the freedoms of assembly and association.”

Many people simply disappear. The latest case to embarrass the government involves a 28-year-old Italian graduate student. The government tried to blame his death on a car accident. His mutilated body showed signs of torture.

Cairo currently is shutting down organizations that report on government abuses, including the anti-torture Nadeem Center. Two years ago, I wrote in Forbes, “I was a member of a delegation of lawyers who visited the Nadeem Center. Co-founder Aida Seif al-Dawla told us that torture was more pervasive then than at any point during the Mubarak era.”

Today Egypt is scary for anyone who dissents. Unfortunately, sustained repression has only encouraged radicalization and more terrorist attacks, leaving Coptic Christians even more vulnerable.

Coptic reliance on Egypt’s al-Sisi increasingly looks like a bad deal. Egyptians need a new approach that doesn’t sacrifice national liberty for sectarian security.

At first glance, it might seem that eagles, net-shooting bazookas, and “death rays” don’t have much in common. However, each has been proposed as a possible way to deal with errant drones that stray where they’re not supposed to be, including airports. The issues surrounding drones at airports re-emerged earlier this month when a drone reportedly hit an Airbus A320 approaching London’s Heathrow Airport. While it is not absolutely clear that the object that hit the plane was a drone, the incident does raise questions about how lawmakers and regulators should deal with drones buzzing around near airports. 

Anti-drone “death ray” machines may sound initially like an effective way to deal with drones hampering flights. Yet, such a device would probably not have been useful in the case near Heathrow. According to the Metropolitan Police, the drone hit the plane at 1,700ft (the legal drone limit is 400ft) above Richmond Park, the largest enclosed space in London. For those unfamiliar with London’s geography, below is a map showing where Richmond Park is in relation to Heathrow Airport.  

Richmond Park and Heathrow Airport are at least 6 miles apart as the crow flies. The “death ray” machine recently discussed as a means to deal with drones obstructing flight paths would probably not have been effective at preventing the recent collision because the drone would almost certainly have been outside of the “death ray’s” range.

Reporting on the recent drone strike the London Evening Standard discussed the Anti-UAV Defence System (AUDS), a joint project involving three companies working on disabling drones by blocking signals from the drone’s operator.

According to the London Evening Standard’s reporting, AUDS can block a signal “from up to six miles [about 9.7km] away, before tracing the owner.” Last year, when the AUDS was unveiled, Blighter Surveillance Systems (one of the three companies working on the project) announced that the system can “detect, track, classify, disrupt and neutralise UAVs at ranges of up to 8 km [about 5 miles].”

As the map above shows, it’s unlikely that the incident involving the Heathrow-bound plane earlier this month could have been avoided by the AUDS. In order for the AUDS to have been effective in this particular case the drone and the AUDS would have to have been at the very edge of Richmond Park and Heathrow’s southeastern perimeter respectively. 

Of course, this isn’t a reason for officials at Heathrow to dismiss the possibility of installing “death ray” machines. But it’s worth noting that the devices will not be able to halt all drones that could potentially be a nuisance to planes approaching Heathrow.

It won’t come as a surprise that drone manufacturers want to avoid collisions near airports. DJI, which produces the Phantom photography drones, introduced an update for some of its drones that restricts flights close to airports. The safety feature ensures that drones within 1.5 miles of a big airport like Heathrow will be unable to take off, and that drones between 1.5 miles to 5 miles away from the airport will gradually descend as they fly closer.

It’s in the interest of drone manufacturers to make safety features like the one developed by DJI. They will make it easier for hobbyists to avoid inadvertently running afoul of local airspace regulations.

However, such features will not necessarily prevent those committed to doing harm from using drones to collide with airplanes. For instance, DJI did revise its no-fly zone software in order to allow self-certified pilots to fly drones in restricted areas. In attempts to prevent malicious drone collisions, airport officials and law enforcement will probably consider a range of technology, including tools like the AUDS.

Fortunately, drone collisions with airplanes are very rare, a fact lawmakers pondering drone regulations should remember. As the Mercatus Center’s Eli Dourado pointed out, from January 1990 to July 2015, 200 turtles collided with airplanes in the United States. In the same time period, there were zero drone collisions with aircraft.

 

I am just as distressed as the rest of America at Prince’s passing, and there’s little I can say that would meaningfully add to his deserved tributes and encomiums: it’s not an exaggeration to say that we may not ever again have an entertainer like that who has the ability to produce music that cuts across race and class and age to be appreciated by everyone.

But the fact that he died just as America put the portraits of Mary Cady Stanton, Sojourner Truth and Harriet Tubman on U.S. currency may be serendipitous, in that it gives us a precedent for the government to honor his accomplishments in a meaningful way.

The tradition of our government naming things after retired–or even active–politicians is noxious. I despise the fact that the playground at the zoo my daughter and I compulsively visit each weekend has a plaque next to it in honor of the Appropriations committee member who put a rider on a bill to allocate a few bucks to spruce it up. Everywhere I turn there are post offices, train stations, airports, roads, bridges, tunnels, bike paths and anything else big enough for a plaque and was paid for by our tax dollars named after some politician. And until last week our currency was reserved for politicians too.

It’s a stupid tradition: there’s nothing that makes politicians more deserving of such an honor than a regular citizen, and patting them on the back with an honor in perpetuity for shoveling tax dollars back to us strikes me as the worst possible incentive possible.

So we should follow up on what the Treasury did in honoring three brave private citizens who literally risked life and limb to extend freedom to all Americans and pass a constitutional amendment that bans naming government property after a politician, living or dead. And to help kick off such a movement we should put our heads together and name something after Prince, a consummate entertainer who brought joy and happiness to millions and left us a dozen songs that will be sung long after the likes of us have passed from this earth. 

The problem with the federal government is not just its vast size but its increasing scope. It has expanded into many areas that should be left to state and local governments, businesses, charities, and individuals. The federal expansion is sucking the life out of the private sector and creating a top-down bureaucratic society.

Many people in Washington seem to think that nothing would ever get done without the help of Uncle Sam. They seem to have no idea that businesses invest, towns and cities grow, people help people, and problems are solved every day in billions of ways across our nation without guidance from central government experts.

Take a look at the new “Rural Development Progress Report” from the U.S. Department of Agriculture (USDA). Rural programs are just $6 billion out of the $150 billion USDA budget, which in turn is just a small sliver of the $4 trillion federal budget. Yet this relatively small USDA division has its subsidy tentacles into everything, as the following giveaways from the 2015 Progress Report show:

  • $10 million to Exela Pharma Sciences in North Carolina.
  • $3.4 million for a sewer system in Geraldine, Alabama.
  • $8.5 million for a college expansion in Pocahontas, Arkansas.
  • $7,500 to a guy in Red Bluff, California, to fix his water well.
  • $200,000 to “one of the largest clam producers in Florida.”
  • $7.5 million to fix a dam in Idaho.
  • $1 million to an automotive shop and other businesses in Du Quoin, Illinois.
  • $63,000 to a biofuels company in Maine.
  • $200,000 for a farmers market in Michigan.
  • $651,000 for an arts center in Bozeman, Montana.
  • $373,000 to a paper company in Nevada.
  • $1.5 million to an apartment developer in Monticello, New York.
  • $2 million for a vet clinic in North Dakota.
  • $1.1 million for street improvements in Pittston, Pennsylvania.
  • $113,000 to fix up an old theatre in Rutland, Vermont.
  • $5.2 million for a fire station in Sweetwater County, Wyoming.

The tone of the Progress Report is triumphant and self-congratulatory: “This has been a year of historic accomplishment for the USDA.” The agency’s broadband investments “have been extremely successful, and offer the potential for exponential rural growth in the future.” Exponential—wow!

With that sort of success, is there any local and private project in the nation that the federal government should not get involved in? And, indeed, the far-flung subsidy activities of the USDA are mirrored in numerous other federal departments, such as HUD.

The thinking seems to be that the federal government has a magical source of money, so federal aid is an automatic boost to society. Of course, all federal aid money ultimately comes from taxpayers who live in the 50 states. So activities such as USDA-Rural are a zero-sum game. Actually, they are worse than a zero-sum game because taxpayers have to pay for all the bureaucrat middlemen who run these money recycling schemes.

For more on the problems and pathologies of federal aid, see here.

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