Policy Institutes

What some doctors say about regulating the treatment of sepsis has much broader application. Sepsis, an often lethal reaction to infection sometimes called blood poisoning, is the leading cause of death in hospitals, Richard Harris reports for NPR. Understandably, then, some doctors and regulators have a typical reaction: “A 4-year-old regulation in New York state compels doctors and hospitals to follow a certain protocol, involving a big dose of antibiotics and intravenous fluids.”

Other doctors aren’t so sure about the rush to regulation. 

Dr. Jeremy Kahn at the University of Pittsburgh believes that regulations can prod doctors to follow the latest protocol. But “The downside is that a regulatory approach lacks flexibility. It essentially is saying we can take a one-size-fits-all approach to treating a complex disease like sepsis.” Harris continues:

That’s problematic, because doctors haven’t found the best way to treat this condition. The scientific evidence is evolving rapidly, Kahn says. “Almost every day another study is released that shows what we thought to be best practice might not be best practice.”

Kahn wrote a commentary about the rapid changes earlier this month for the New England Journal of Medicine.

For a while, medical practice guidelines distributed to doctors called on them to use one particular drug to treat sepsis. It turned out that drug did more harm than good. Another heavily promoted strategy, called goal-directed therapy, also turned out to be ineffective.

These are concerns that economists often raise about regulation: that government mandates may be rigid, inflexible, and frozen in time. They don’t change easily in response to new information. They may require a specific protocol that may turn out not to be the best practice:

And a study presented last week at the American Thoracic Society and published electronically in the New England Journal of Medicine finds that one of the steps required in New York may not be beneficial, either.

The regulations call for a rapid and substantial infusion of intravenous fluids, but that didn’t improve survival in New York state hospitals….

In fact, some doctors believe that most patients are better off without this aggressive fluid treatment. There’s a study getting underway to answer that question. Dr. Nathan Shapiro at Harvard’s Beth Israel Deaconess Medical Center hopes to enlist more than 2,000 patients at about 50 hospitals to answer this life-or-death question.

But that study will take years, and in the meantime doctors have to make a judgment call.

“It is possible that at present they are requiring hospitals to adopt protocols for fluid resuscitation that might not be entirely appropriate,” Kahn says.

Somehow this reminds me of the phenomenon noted in the 1980s when Canada banned cyclamates and the United States banned saccharin. Presumably one country had banned the less dangerous sugar substitute.

Economists Gerald P. O’Driscoll Jr. and Lee Hoskins wrote about the problems with regulatory mandates in 2006:

Coercion may bring uniformity of product or conduct, but only at the expense of innovation and flexibility. Merchant law suffered when the hand of the state took it over: “Many of the desirable characteristics of the Law Merchant in England had been lost by the nineteenth century, including its universal character, its flexibility and dynamic ability to grow, its informality and speed, and its reliance on commercial custom and practice” (Benson 1989: 178).

Markets excel in adapting to changing circumstances, while legislation and government regulation are notoriously rigid. That is perhaps the strongest case for market self-regulation over government-mandated regulation.

Regulation seems to substitute the judgment of a small group of fallible politicians or bureaucrats for the results of a market process that coordinates the needs and preferences of millions of people. It sets up static, backward-looking rules that can never deal with changing circumstances as well as voluntary decisions by people on the ground, whether entrepreneurs, customers, scientists, or doctors.

Greater reliance on user fees, federal loans rather than grants, and corporatization are three keys to the Trump administration’s infrastructure initiative released as a part of its 2018 budget. The plan will “seek long-term reforms on how infrastructure projects are regulated, funded, delivered, and maintained,” says the six-page document. More federal funding “is not the solution,” the document says; instead, it is to “fix underlying incentives, procedures, and policies.”

In building the Interstate Highway System, the fact sheet observes, “the Federal Government played a key role” in collecting and distributing monies to “fund a project with a Federal purpose.” Since then, however, those user fees, mainly gas tax receipts, have been “inefficiently invested” in “non-federal infrastructure.”

As a result, the federal government today “acts as a complicated, costly middleman between the collection of revenue and the expenditure of those funds by States and localities.” To fix this, the administration will “explore” whether transferring “responsibilities to the States is appropriate.”

The document contains a number of specific proposals:

  • Allow states to toll interstate and other federally funded highways;
  • Encourage states to fix congestion using “congestion pricing, enhanced transit services, increased telecommuting and flex scheduling, and deployment of advanced technology”;
  • Corporatize air traffic control, as many other developed countries have done;
  • Streamline the environmental review process by having a one-stop federal permit process and “curtailing needless litigation”;
  • Expand the TIFIA loan program and lift the existing cap on private activity bonds, both of which will make more money available for infrastructure without increasing federal deficits.

The paper also includes proposals for reforming inland waterways, the Power Marketing Administration, and water infrastructure finance. Like the transportation proposals, these call for increased reliance on user fees, corporatization, privatization, or loans rather than grants.

“Corporatization” means creating a non-profit or for-profit corporation that may be government owned but doesn’t necessarily rely on taxpayer subsidies. Comsat is a classic example, but Canada and other countries’ air traffic control systems work in this way.

Except for air traffic control reform, Trump’s plan isn’t fleshed out in detail. But these ideas have all been tossed around enough that everyone pretty much knows what they mean. Most importantly, they mean a significant change in the way Washington deals with infrastructure.

Because it doesn’t contain a list of projects that members of Congress could take credit for, the plan has received relatively little notice in the media. Democrats, of course, are unhappy with it, but they would be unhappy no matter what Trump proposed.

One of the more controversial proposals is to allow the states to toll interstate highways. “I don’t like paying for a road twice,” Representative Sam Graves (R-MO), who chairs the Highways and Transit Subcommittee of the House Transportation and Infrastructure Committee, told The Hill. But, given that Congress has had to inject tens of billions of dollars of general funds into the highway trust fund in recent years, what makes Graves thinks existing user fees are paying for the roads now? All roads need maintenance and occasional rehabilitation, so the fact that user fees paid for construction 50 years ago doesn’t mean that costs stop.

The most important point is that Trump wants user fees to pay a greater share of infrastructure costs. Naturally, the transit lobby, which represents the most heavily subsidized form of transportation, per unit of output, is upset about this. But Trump’s agenda sounds good to anyone who wants an efficient, user-fee-driven infrastructure program.

Politicians seem increasingly likely to (falsely) assert that “hate speech is not protected by the First Amendment.” The mayor of Portland, Oregon, just did so following anti-Muslim violence in his community. Former governor and Democratic Party official Howard Dean said the same last month.

The Washington Post does a good job of showing why the claim is false. Courts have not recognized a “hate speech” exception to the First Amendment. To allow us such a prohibition would allow the government to discriminate among viewpoints, a power precluded by the First Amendment. As the FIRE Guide to Free Speech on Campus says, “Laws that ban only certain viewpoints are not only clearly unconstitutional, but are also completely incompatible with the needs, spirit, and nature of a democracy founded upon individual rights.”

Part of the problem here is the term “hate speech” itself. People generally do not like expressions of hatred of individuals or groups. The term “hate speech” in and of itself makes censorship more likely especially when compared to the more neutral term “extreme speech” often used by legal scholars.

Indeed extreme speech can be odious. But we also should recall the general libertarian principle that allowing liberty to do or say something does not constitute endorsing what is done or said. You can criticize extreme speech and argue against prohibiting it. In other words, we need to defend the rights of a speaker but not what he or she says. That difference is likely to be lost in the extreme events that sometimes evoke extreme speech. Indeed that appears to have happened in Portland.

A communications group at Yale University has put out a video that seems to be a rebuttal to a Dilbert cartoon by Scott Adams poking fun at climate scientists and their misplaced confidence in models. The video is full of impressive-looking scientists talking about charts and data and whatnot. It probably cost a lot to make and certainly involved a lot of time and effort. The most amazing thing, however, is that it actually proves the points being made in the Dilbert cartoon. Rather than debunking the cartoon, the scientists acted it out in slow motion.

The Dilbert cartoon begins with a climate scientist saying “human activity is warming the earth and will lead to a global catastrophe.” When challenged to explain how he knows that, he says they start with basic physical principles plus observations about the climate, which they then feed into models, pick and choose some of the outputs, then feed those into economic models, and voila. When asked, what if I don’t trust the economic models, the scientist retreats to an accusation of denialism.

The Yale video ends in exactly the same way. After a few minutes of what I will, for the moment, call “scientific information,” we see climatologist Andrew Dessler appear at the 4:28 mark to say “It’s inarguable, although some people still argue it – heh, heh.” As in, ah those science deniers.

What exactly is “inarguable”? By selective editing we are led to believe that everything said in the video is based on multiple independent lines of evidence carrying such overwhelming force that no rational observer could dispute it. Fine, let’s go to the 2:38 mark and watch someone named Sarah Myhre tell us what this inarguable science says.

“It’s irrefutable evidence that there are major consequences that come with climate warming, and that we take these Earth systems to be very stable, we take them for granted, and they’re not stable, they’re deeply unstable when you perturb the carbon system in the atmosphere.”

How does she know this? From models of course. These claims are not rooted in observations but in examining the entrails of model projections. But she has to pick and choose her models because they don’t all say what she claims they say. Some models show very little sensitivity to greenhouse gases.  If we put the low-sensitivity results into economic models the results show that the economic impacts of warming are very low and possible even negative (i.e. a net benefit). And the section of the IPCC report that talks about the consequences of warming says:

For most economic sectors, the impact of climate change will be small relative to the impacts of other drivers (medium evidence, high agreement). Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change.

It goes on to show (Figure 10-1) that at low levels of warming the net economic effects are zero or positive. As to the climate being “deeply unstable” there’s hardly any point trying to debate that since these are not well-defined scientific words, but simple reflection on human experience will tell you that the climate system is pretty stable, at least on decadal and century time scales. The main thing to note is that she is claiming that changes to atmospheric CO2 levels have big warming effects on the climate and will cause a global catastrophe. And the only way she knows this is from looking at the outputs of models and ignoring the ones that look wrong to her. Granted she isn’t bald and doesn’t have a little beard, but otherwise she is almost verbatim the scientist in the cartoon.

Much of what she says in the video is unsubstantiated and sloppy. For instance she talks (2:14) about paleoclimatic indicators like tree rings, ice cores and sediment cores as if they are handy records of past climate conditions without acknowledging any of the known problems extracting climate information from such noisy sources.

Her most telling comment was the Freudian slip at 1:06 when she says “There is incredible agreement about the drivers of climate science.” What she meant (and quickly corrected herself to say) was “climate change.” But her comment is revealing as regards the incredible agreement—i.e. groupthink –that drives climate science, and the individuals who do the driving.  Myhre’s Freudian slip comes right after a clip in which Michael Mann emphatically declares that there are dozens of lines of evidence that all come together, “telling us the same thing,” adding “that’s how science works.” Really? The lines of evidence regarding climate do not all lead to one uniform point of view, nor is that how science works. If that’s how science worked there would be no need for research. But that’s how activists see it, and that’s the view they impose to drive climate science along in service of the activist agenda. As Dr. Myhre herself wrote in a recent op-ed:

Our job is not to objectively document the decline of Earth’s biodiversity and humanity, so what does scientific leadership look like in this hot, dangerous world? We don’t need to all agree with each other – dissent is a healthy component of the scientific community. But, we do need to summon our voices and start shouting from rooftops: “We have options”, “We don’t have to settle for cataclysm”.

Got that? The job of scientists is not objectively to gather and present evidence, but to impose an alarmist view and yell it from the rooftops. At least according to Sarah Myhre, Ph.D..

The video opens with a straw man argument: climate science is all just made up in computer models about the future, and it’s all just based on simulations. This is then refuted, rather easily, with clips of scientists listing some of the many observational data sets that exist. Whoopee. That wasn’t even the point of the Dilbert cartoon, it was just a straw man made up by the interviewer. Then, in the process of presenting responses, the video flits back and forth between lists of observational evidence and statements that are based on the outputs of models, as if the former prove the latter. For instance, when Myhre says (2:45—2:55) that the climate systems is “deeply unstable” to perturbations in the carbon “system” (I assume she meant cycle) the video then cuts to Andrew Dessler (2:55) talking about satellite measurements, back to Myhre on paleo indicators, then to Carl Mears and Dessler (3:11) talking about sea ice trends. None of those citations support Myhre’s claims about instability, but the selective editing creates the impression that they do.

Another example is a sequence starting at 1:14 and going to about 2:06, in which various speakers lists different data sets, glossing over different spatial and time scales, measurement systems, etc. Then an assertion is slipped in at 2:07 by Ben Santer to the effect that the observed warming can’t be explained by natural causes. Then back to Myhre listing paleoclimate indicators and Mann describing boreholes. The impression created is that all these data types prove the attribution claim made by Santer. But they do no such thing. The data sets only record changes: claims about the mechanism behind them are based on modeling work, namely when climate models can’t simulate 20th century warming without incorporating greenhouse gas forcing.

So in a sense, the video doesn’t even refute the straw man it set up. It’s not that climate science consists only of models: obviously there are observations too. But all the attribution claims about the climatic effects of greenhouse gases are based on models. If the scientists being interviewed had any evidence otherwise, they didn’t present any.

Now suppose that they are correct in their assertion that all the lines of evidence agree. All the data sets, in Mann’s words, are telling us the same thing. In that case, looking at one is as good as looking at any of the others.

Ignore for a moment the selective focus on declining Arctic sea ice data while ignoring the expansion of Antarctic sea ice. And ignore the strange quotation from Henry Pollock (3:23—3:41) about how ice doesn’t ask any questions or read the newspaper: it just melts. Overlaid on his words is a satellite video showing the summer 2016 Arctic sea ice melt. Needless to say, had the filmmaker kept the video running a few seconds more, into the fall, we’d have seen it re-freeze. Presumably the ice doesn’t read or ask questions in the fall either, it just freezes. This proves what exactly?

Anyway, back to our assumption that all the data sets agree and say the same thing. And what is it they tell us? Many key data sets indicate that climate models are wrong, and in particular that they overstate the rate of warming, (see here, here, here, here, here, here, here, here, etc.). So according to the uniformity principle so strongly enunciated in the video, all the evidence points in the same direction: the models aren’t very good. And by implication, statements made based on the models aren’t very reliable.

There’s another irony in the video’s assertions of uniformity in climate science. At the 3:55 mark Michael Mann announces that there’s a consensus because independent teams of scientists all come at the problem from different angles and come up with the same answers. He’s clearly referring to the model-based inferences about the drivers of climate change. And the models are, indeed, converging to become more and more similar. The problem is that in the process they are becoming less like the actual climate. Oops.

So how did the video do refuting Scott Adams’ cartoon? He joked that scientists warning of catastrophe invoke the authority of observational data when they are really making claims based on models. Check. He joked that they ignore on a post hoc basis the models that don’t look right to them. Check. He joked that their views presuppose the validity of models that reasonable people could doubt. Check. And he joked that to question any of this will lead to derision and the accusation of being a science denier. Check. In other words, the Yale video sought to rebut Adams’ cartoon and ended up being a documentary version of it. 

We will never achieve a good tax reform by trusting bad revenue estimates.

According to Wall Street Journal reporter Richard Rubin, “Each percentage-point reduction in the 35% corporate tax rate cuts federal revenue by about $100 billion over a decade, and independent analyses show economic growth can’t cover all the costs of rate cuts.”

Economic growth does not have to “cover all the cost” to make that $100 billion-per-point rule of thumb almost all wrong.  If extra growth covered only 70% the cost of a lower rate, the static estimates would be 70% wrong.  Yet the other 30% would be wrong too, because it ignores reduced tax avoidance.  Mr. Rubin’s bookkeepers’’ rule-of-thumb implicitly assumes zero “elasticity” of reported taxable profits. Corporations supposedly make no more effort to avoid a 35% tax than to avoid a 25% tax.

Acceptance of this simplistic thumb rule – which imagines a 35% corporate rate could raise $1 trillion more over a decade than a 25% rate – explains why Ways and Means Committee Chairman Kevin Brady still insists a big new import tax is needed to “pay for” a lower corporate tax rate. 

In this view, a border adjustment tax (BAT) is depicted as a tax increase for some companies to offset a tax cut for others.  No wonder the idea has been ruinously divisive – with major exporters lobbying hard for a BAT and major retailers, refiners and automakers vehemently opposed.  Mr. Rubin declares the BAT “dead or on political life support,” while nevertheless accepting that it would and should raise an extra $1 trillion over a decade – assuming no harm to the economy and no effect on trade deficits.

Like Mr. Rubin, Reuters claims “Trump could have trouble getting the rate much below 30 percent without border adjustability.”  That is false even on its own terms because the Ryan-Brady plan would eliminate deductibility of interest expense, which is enough to “pay for” cutting the rate to 25% on a static basis.  Adding a BAT appears to cut the rate further to 20%, but the effective Ryan-Brady rate is really closer to 25% because the import tax and lost interest deduction are not a free lunch.

In any case, the entire premise is wrong. There is no need to “pay for” cutting a 35% corporate “much below 30 percent” because nearly every major country has already done that and ended up with far more corporate tax revenue than the U.S. collects with its 35% tax.  

The average OECD corporate tax rate has been near 25% since 2008, and revenue from that tax averaged 2.9% of GDP.  The U.S. federal tax rate is 35% and revenue averaged just 1.9% of GDP.  Ireland’s 12.5% corporate rate, by contrast, brought in 2.4% of GDP from 2008 to 2015.

Sweden cut the corporate tax rate from 28% to 22% since 2013 and corporate tax revenues rose from 2.6% of GDP in 2012 to 3% in 2015 according to the OECD. Britain’s new 20% corporate tax in 2015 brought in 2.5% of GDP according the same source, unchanged from 2013 when the rate was 23%. 

Many countries have deeply reduced corporate tax rates including Germany, Russia, Israel, Indonesia, Taiwan, Thailand, Mauritius, Vietnam and more.  And they didn’t raise VAT or other taxes to “pay for” lower corporate rates, because corporate revenues didn’t fall. Canada cut the corporate rate from 36.5% to 26.5% since 2006 while also cutting VAT from 7% to 5%.  

AEI Economist Alex Brill surveyed several studies that used experience of other countries to estimate what U.S. corporate tax rate would bring in the most revenue over time.  Among recent studies, the revenue-maximizing tax rate was found to range from 23.2% to 29.1%.  Contrary to The Wall Street Journal, each percentage point cut in the 35% rate raises revenue up to a point.   To cut the rate below 25%, simply cap interest deductions.  Expensing ends up raising more revenue after 20 years, so Congress could extend the window if they want expensing.

So, the first way to pay for a tax rate below 30% is to lower the rate. And that has nothing to do with whether or not a lower corporate tax rate raises economic growth, thought it would.  

The “Laffer Curve” revenue gains from cutting a 35% corporate tax rate are not due to faster economic growth, but reduced tax avoidance. Revenue gains from cutting the 35% rate to about 25% (23-29%) are not about macroeconomics but microeconomics.

The Joint Tax Committee makes this distinction: “A conventional [‘static’] JCT estimate incorporates behavioral responses in projecting tax revenues, but assumes that these tax and behavioral changes do not change the size of the US economy.”  

Less-conventional “dynamic” estimates from The Tax Foundation do allow behavioral changes to change the size of the US economy, but do not usually incorporate “microeconomic” behavioral responses that the JCT includes.  By combining the macroeconomic responses of the Tax Foundation with the microeconomic details of the JCT we could get closer to the truth.  

When the tax rate goes up, corporations find ways to report less taxable income. They do that by moving profitable activities other countries, by booking expenses in the U.S. and revenues abroad, by diverting profitable activities to pass-through entities, and by taking-on more tax-deductible debt and maximizing other deductible expenses such as travel and entertainment.

Economists have begun to estimate the “elasticity of taxable income” (ETI) for corporate marginal tax rates, as they have for individual tax rates on salaries and capital gains.  A joint paper by the Congressional Budget Office and Joint Committee on Taxation, for example, found the elasticity of realized capital gains to be arguably high enough for a lower tax rate to generate more revenue.  That is not because a lower capital gains rate raises GDP growth (though it does), but because it tax raises the volume and frequency of asset sales.

Similarly, a lower tax rate on corporate income can increase the amount of reported taxable income by reducing accounting gimmicks, corporate relocation, partial or complete conversion to unincorporated status, and superfluous deductions (e.g., interest expense on Apple’s needless borrowing).

Elena Patel and Matt Smith from the Treasury Department’s Office of Tax Analysis wrote a 2014 study about the Elasticity of Corporate Income. They include only taxable domestic income and focus on 2 million smaller C-corporations (83% of the total).  This study’s “baseline estimate of the corporate elasticity is 0.5, suggesting the corporate income tax distorts behavior and may cause substantial deadweight loss.”  

Such high elasticity of reported corporate earnings is quite consistent with Brill’s estimates of a revenue-maximizing tax rate.

If we also take account of faster growth of investment and GDP, of course, the case for lower tax rates becomes even stronger.

Phil Gramm and Michael Solon noted that even if lower marginal tax rates on labor and capital “closed only half the gap between the current [CBO projection of a ]1.8% GDP growth rate and the 3.4% GDP growth rate that the economy averaged for the previous 64 years, that alone would deliver $2.3 trillion in new revenues due to higher growth over the next 10 years.”  That sum is twice as large as those doubtful back-of-the-envelope estimates of a 10-year $1 trillion revenue windfall from a BAT, which blithely assume nothing bad happens – such as mass layoffs among afflicted retailers, automakers and refiners.  

The New York Times has once again published a report claiming that transit hubs are a “growing lure for developers.” The Times published a similar story eight years ago, and I quickly showed that subsidies from tax-increment financing (TIF) and other government support, not transit, was what stimulated those developments.

So has anything changed since then? Nope. The first development described in the recent story by Times reporter Joe Gose is Assembly Row, in the Boston suburb of Somerville. Is it subsidized? Yes, with at least $25 million in TIF along with other state funds. Far from being “free money” as its advocates claim, TIF steals from school districts and other agencies that rely on property taxes to subsidize developers.

Then Gose mentions Chicago’s Fulton Market, downtown Kansas City, Austin, and Denver’s RiNo neighborhood. Fulton Market just happened to receive at least $42 million in support from the city of Chicago, much of which comes from TIF

Supposedly a new streetcar sparked a revitalization of downtown Kansas City. But could it be that revitalization was due more to Kansas City’s twenty-four downtown TIF districts?

Gose doesn’t specify a particular neighborhood or development in Austin, Texas. Of course, Austin is one of the fastest growing cities in America, so anything that’s open for development is going to be developed. But not satisfied to let the market work, Austin has heavily bought into the use of TIF districts. Transit is an afterthought in Austin, carrying less than 1 percent of the passenger travel; the city’s sole rail line was a huge flop that cost way more than expected and now carries fewer than 1,500 round-trips per weekday.

Denver’s RiNo neighborhood–RiNo being short for River North–is growing thanks to at least $44 million on infrastructure improvements in that neighborhood, plus additional TIF funds for special projects.

In Washington, DC, Gose mentions a $3 million project “in Washington’s fast-growing Capital Riverfront neighborhood.” That’s the same neighborhood that received at least $198 million in TIF subsidies.

Gose also refers to Tysons Corner, which has seen new development since the opening of the Silver Line. What he doesn’t mention is that the developers were perfectly happy to do that development without the Silver Line, but planners wouldn’t let them do it until the Silver Line was built, saying that transportation to the area couldn’t support increased density. The Silver Line didn’t stimulate the development, but it did give Fairfax County an excuse to rezone the area to allow for more development.

Transit serves most neighborhoods in most cities while only a few areas are in tax-increment districts. Is it just a coincidence that all of the examples in the Times article are in TIF districts? Which is more likely: that development is being stimulated by transit lines that carry, in most of these cities, less than 3 percent of travelers? Or that it is stimulated by the TIF and other subsidies? And why doesn’t the Times even hint that government subsidies, not rail transit, just might be the reason why these areas are getting redeveloped?

To answer these questions, Mr. Gose should have looked at transit corridors that aren’t getting huge amounts of redevelopment subsidies, such as Denver’s West light-rail line; Portland’s streetcar line after it leaves the Pearl District (where, according to page 15 of the Portland Development Commission’s latest budget, developers have so far received $344 million in TIF subsidies); or Green Belt, Maryland. None of these areas have seen a lot of redevelopment.

Then Mr. Goes should have looked at redevelopment districts that aren’t on major transit corridors. There are a lot of TIF districts in Columbus, Indianapolis, Omaha, Wichita, and other cities that haven’t spent much on transit but still got redevelopment. What he would have found is that transit hubs without subsidies see minimal new development, while redevelopment districts with subsidies see lots of new development even if they have minimal transit service.

Of course, TIF doesn’t cause an urban area to grow any faster–and it may even cause it to grow slower. All it really does is influence the location of new development that would have taken place somewhere in the area anyway, which is nothing to cheer about unless you are one of the lucky property owners or developers to get the subsidies.

The Times’ 2009 article had been inspired by the 2009 annual conference of the Congress for the New Urbanism (CNU), which has an almost religious love of transit. The most recent CNU conference took place just a few weeks ago, and Joe Gose has cited CNU in his articles before, so I have to wonder if he attended that conference. If so, then maybe he’ll learn that next time he attends a political rally he should try to get a different point of view before reporting the claims made at the rally as facts.

Before it even hit the fiber-optics, defenders of public schooling were agitated that PBS stations would be airing Andrew Coulson’s documentary School Inc., which takes viewers on a ride through time and around the world to learn how innovation happens, and why it happens too rarely in education. Last Friday a new critique was published, this time on the website of Phi Delta Kappa, a professional association of educators. In the piece, Loyola University Chicago professor Amy Shuffelton asks, “Why did PBS and its local New York affiliate, WNET, agree to broadcast and distribute such an unbalanced, journalistically questionable series on such a controversial and complicated topic as education?”

Perhaps the answer is that PBS officials thought the series had high-quality content, and discerning viewers could determine for themselves whether they accepted its premise. Writes Shuffelton: “According to WNET’s Specter [Shuffelton does not provide a first name], the second part of the series title, ‘A Personal Journey’ is key to understanding the project. ‘When you read that subtitle, you know that you’re going to get a point of view, and we’re not opposed to presenting different points of view.’”

The documentary certainly is clear that you are getting one person’s perspective. And while I don’t watch a lot of television, PBS or otherwise, it seems unlikely that PBS programs such as Bill Moyer’s Journal or Democracy Now! have been committed to strict, equal time for opposing views. As with public schooling, there is good reason to oppose publicly funded television because it is impossible to represent the views of every taxpayer equally. But PBS exists, and points of view seem to be articulated without having to be balanced out.

Of course, the best way to judge the quality and merits of School Inc. is to view it yourself, which you can do here, or by watching this space for future airings in your market. And you should of course read opposing views like Shuffelton’s, though don’t expect objectivity there, either. For instance, Shuffelton says that Coulson quotes Horace Mann and Thomas Jefferson out of context, but does not say how. Worse, she suggests that Coulson believes discrimination in government funding is a solution to religious conflicts in education:

Coulson does consider the possibility of civic discord in the last ten minutes of the series, but his answers are not convincing. School Inc. turns to Supreme Court Justice Steven Breyer’s dissent in the case Zelman v Simmons-Harris, which upheld an Ohio voucher program. Breyer worried that publicly financed voucher programs, which funnel federal funds to religious schools, raise the possibility of religiously based social conflict.

Coulson’s response should raise concern for anyone worried about First Amendment rights. To show that social conflict is unlikely to follow, he uses the example of a voucher program proposed in New Orleans. One of the schools eager to participate was a Muslim school. When Louisianans got wind of this, controversy followed. So the Muslim school dropped out. In Coulson’s eyes, the problem was thereby solved.

Wait, I found myself thinking as I watched, that’s discrimination, not a defense of First Amendment rights. I expected Coulson to explain why it was not, but the series moved on to clips of jazz performances, which, according to Coulson, demonstrate Americans’ ability to get along.

This is just incorrect. For one thing, Coulson devotes nearly half of the final episode to social conflict, choice, and equality. And far from condoning exclusion of the Muslim school, he explains that a fundamental problem with vouchers is that while they create more freedom and equality than majority-rules public schools, they can still unjustly compel people to furnish funds for teachings they oppose, opening choice up for government discrimination.

The solution, Coulson suggests, are tax credits for people who choose to donate to groups that award scholarships. Want to give to a group providing scholarships for Montessori students? Go ahead! Catholic schools? Sure! Muslim institutions? Absolutely! This maximizes freedom for both families and funders, and minimizes incentives to legally exclude groups.

I think there is a huge amount of value to be found in School Inc., but others can certainly disagree. What they should not try to do is squelch the documentary, or misrepresent what it says. Oh, and if they want to learn even more about Andrew and debate his ideas, they can check out this new book. After all, the more open discussion we have, the better!

Since the end of the Cold War Europe has been obsessed with the idea of eradicating hate as a shortcut to eternal peace. In short, a world relieved from human conflict. This is an utopia and we know from earlier attempts to turn utopias into reality that one of the first victims of these fantasies is freedom. In this case freedom of expression will be endangered.

Germany has for several years been at the forefront of this endeavor so it shouldn’t come as a surprise that the German government now wants to enable its authorities to fine social media companies up to 50 million euros for not deleting online ”hate speech” and defamatory ”fake news” within 24 hours after being notified.

In Germany criminalization of hate speech and fake news is seen as a legitimate way to protect democracy and the historical truth against onslaught. That’s why a mainstream German politician and member of the European Parliament a couple of years ago countered my criticism of legislation against Holocaust denial by insisting that ”European citizens have a constitutional right to the truth.” The frightening implications of this statement didn’t bother him at all. He didn’t realize that it would be welcomed by any dictator wanting a monopoly on state-sanctioned ”facts” and ”truth”.

In Germany and other European democracies the right to free speech is just one among many rights that has to be balanced against other rights, values and considerations, be it public order, dignity, democracy, religious sensibilities, security, equality and so on and so forth.

In the U.S. the First Amendment’s protection of speech cannot be balanced against other rights. That principle has served the US well.

When Heiko Maas, Germany’s minister of justice, earlier this year announced that the government was planning new legislation to criminalize fake news he said:

Defamation and malicious gossip are not covered under freedom of speech. (…) Justice authorities must prosecute that, even on the internet. Anyone who tries to manipulate the political discussion with lies needs to be aware (of the consequences).

This phrasing sounds disturbingly familiar to brave individuals and groups who during the Cold War were fighting oppression behind the Iron Curtain. The Soviet Union made it a serious crime to distribute false and slanderous information defaming the Soviet social and political system. Such criminal laws were widely used by the Kremlin to silence dissidents, human rights activists, religious movements, and groups in the Soviet republics fighting for national independence.

Recently in Foreign Affairs, Heidi Tworek, a fellow at the German Marshall Fund’s Transatlantic Academy and an assistant professor of International History, frames the German government’s targeting of U.S. tech giants like Facebook, Twitter, Google and Microsoft as ”a fight about how much free speech a democracy can take.” She adds that ”social media companies have brought this law upon themselves by failing to understand the historical reasons why the German definition is different than the American one.”

Germany’s push for enforcing its limits on free speech on the European level has been going on since the end of the Cold War. A European Union decision from 2008 aimed at fighting racism and xenophobia called for tougher hate speech legislation and for every EU member state to pass laws criminalizing Holocaust denial. These laws are now on the books in 13 EU-countries.

They were all passed after the fall of the Berlin Wall, not during the first decades following the genocide of European Jews during World War II. The legislation has triggered a wave of memory laws across Europe that challenges academic freedom and freedom of speech. In several former Communist states in Central and Eastern Europe it’s now a criminal offense to deny or minimize the crimes of Communism. Russia has passed a law banning criticism of the actions of the Soviet Union during World War II and Ukraine’s parliament has adopted a law criminalizing insults on to the country’s fighters for national independence in the 20th century. Among them were groups implicated in mass killings of Jews and Poles in Western Ukraine and Poland. Latvia has adopted a law criminalizing speech that denies the fact that Latvia was occupied by both Nazi Germany and the Soviet Union.  

In the aftermath of the refugee crisis in the summer of 2015 the EU-commissioner for judicial affairs, Vera Jourova, said it was disgraceful that Holocaust denial is a criminal offense in only 13 EU-member states. She called for additional measures to combat hate speech. In 2016 the US tech giants signed a Code of Conduct with the EU that obliged them to remove illegal hate speech or disable access to such content with 24 hours of notification. And now we have the German government passing a law that threatens media companies that do not delete ”false information” and ”hate speech”.  

There is no agreement on a clear definition of hate speech, which means that it can be applied to criminalize almost any speech. European countries have different understandings of what constitutes illegal hate speech. In Sweden, an artist was convicted to six months in prison for ”racist and offensive” posters exhibited in a private art gallery; the same posters were freely exhibited in Denmark. A Swedish pastor was given a one-month suspended prison sentence for saying homosexuality is a tumour on society. That wouldn’t necessarily be the case in other European countries. Hizb-ut-Tahrir, an Islamist organization committed to the non-violent establishment of a global caliphate, is banned in Germany but not in Denmark. One man’s hate speech is another man’s poetry, to paraphrase Supreme Court Justice John Marshall Harlan II. What is an unacceptable hateful expression to some may sound like a perfectly legitimate opinion to somebody else.

All human-beings are biased at some level or another. We all know the emotion of hate or serious dislike of something or somebody. If a society really wants to criminalize any expression of hate it would have to ban a lot of speech. That’s not the case. Europe is very selective in its approach to hate speech. Some expressions of bias are treated as criminal offenses, others are not. This indicates there iis acceptable and unacceptable hate speech. It’s okay to mock Christians but not to ridicule Islam. There is no equality before the law when it comes to hate speech.

Hate speech laws seem to be a tool to enforce social norms as Robert Post, a US expert on the First Amendment, has observed. This is problematic in a culturally and socially diverse society where individuals and groups subscribe to different norms. One would assume that the more diverse a society is the more diverse ways people will find to express themselves, i.e. a multicultural society needs more freedom of speech than a monocultural one.  

Historically hate speech laws and laws criminalizing dissemination of false information are being used in unfree societies to silence political opponents and persecute minorities. But even in Italy, a European democracy, the country’s antitrust chief Giovanni Pitruzella wants to criminalize fake news in order to weaken his political opponents on the left and right.

Said Pitruzella to Financial Times: ”Post-truth in politics is one of the drivers of populism, and it is one of the threats to our democracies.”.

As Brendan O’Neill, editor of Spiked puts it:

By its very definition free speech must include hate speech. Speech must always be free, for two reasons: everyone must be free to express what they feel, and everyone else must have the right to decide for themselves whether those expressions are good or bad. When the EU, social-media corporations and others seek to make that decision for us, and squash ideas they think we find shocking, they reduce us to the level of children. That is censorship’s greatest crime: it infantilises us. Let us now reassert our adulthood, our autonomy, and tell them: Do not presume to censor anything on our behalf. We can think for ourselves.

Indeed. Unfortunately, Europe is moving in a different direction with an increasingly powerful Germany imposing its standards of militant democracy on all of Europe.

Journalists are now reporting regularly on the crisis in Venezuela, with shortages of everything from toilet paper to food and now daily street protests. What the news reports too often miss is, Why? Why is a formerly middle-class, oil-rich country now so desperately poor?

The Weekly Standard notes a New York Times article, “How Venezuela Stumbled to the Brink of Collapse,” that spends 1800 words on the country’s “collapse into authoritarianism.” The Standard summarizes:

The strongman Hugo Chávez “ran for president in 1998. His populist message of returning power to the people won him victory.” Chávez polarized because “populism describes a world divided between the righteous people and the corrupt elite.” Now, under the late Chávez’s successor, Nicolás Maduro, “The political system, after years of erosion, has become a hybrid of democratic and authoritarian features.”

But never does the article identify what economic system could cause such disaster. It does mention specific policies: subsidies, welfare programs, money printing, inflation, and price controls. But nationalization is never mentioned. And in particular, the Standard points out, the article does not use the word “socialism” (or “socialist”). It does not mention that Hugo Chavez and Nicolas Maduro have headed the United Socialist Party of Venezuela. Socialism is the cause that must not be named.

So it’s refreshing to see a rather more forthright article in the Washington Post this weekend by Mariana Zuniga and Nick Miroff:

With cash running low and debts piling up, Venezuela’s socialist government has cut back sharply on food imports….

Venezuela’s disaster is man-made, economists point out — the result of farm nationalizations, currency distortions and a government takeover of food distribution. While millions of Venezuelans can’t get enough to eat, officials have refused to allow international aid groups to deliver food, accustomed to viewing their oil-rich country as the benefactor of poorer nations, not a charity case.  

“It’s not only the nationalization of land,” said Carlos Machado, an expert on Venezuelan agriculture. “The government has made the decision to be the producer, processor and distributor, so the entire chain of food production suffers from an inefficient agricultural bureaucracy.”

My colleague Marian Tupy notes that according to the Economic Freedom of the World Index, economic freedom in Venezuela fell from just above 7 out of 10 in 1970 to barely above 3 in this decade. Meanwhile, its GDP per capita has fallen over 40 years, while Chile’s has tripled.

Venezuela doesn’t have to be poor. But to restore its standard of living, it will have to reverse recent changes in property rights, judicial independence, free trade, and corruption.

Last week’s travel-ban ruling by the U.S. Court of Appeals for the Fourth Circuit is a travesty. Not because the underlying policy is anything to write home about. As I wrote when the second executive order came out in March, “[r]efugees generally aren’t a security threat, for example, and it’s unclear whether vetting or visa-issuing procedures in the six remaining targeted countries represent the biggest weakness in our border defenses or ability to prevent terrorism on American soil.” But the judiciary simply can’t substitute its own policy judgment for that of our elected representatives, no matter how well-informed judges may be or how misguided they think our political leaders may be.

Indeed, what’s going on here isn’t a sober legal analysis – incredibly, the majority opinion contains no discussion of the relevant statutory text, or of the scope of executive power in light of congressional policy (the so-called Youngstown Steel analysis) – but a wholesale rejection of Donald Trump. Essentially, the court ruled that anything the current president does, at least in the areas of immigration and national security, is de facto (and therefore de jure) illegitimate. The judiciary has joined the #resistance.

Of course, even a court engaged in civil disobedience has to clothe its willfulness in legal trappings. Here’s how that fig leaf looks here:

  1. Find “snowflake standing” to bring the lawsuit for individuals who haven’t personally been harmed but are experiencing “feelings of disparagement and exclusion.”
  2. As other courts have done, bypass the more technical analysis regarding statutory authorizations and restrictions on the executive power over immigration in order to pontificate on sexier constitutional claims (the opposite of the standard “constitutional avoidance” that courts practice).
  3. Privilege various statements made by Donald Trump on the election trail, as well as media interviews by the president and his surrogates, over official determinations by the Departments of Justice and Homeland Security and the text of the revised executive order itself. Ignore the admissions of plaintiffs’ counsel that another president, one not burdened by the “forever taint” of Trump’s supposed bad faith, could lawfully execute the same order.
  4. Indeed, ignore the revisions to the executive order, even though they fix the problems that the first order’s hasty rollout created by, for example, providing exemptions not just to those with green cards and other valid visas, but also people with significant contacts to United States, students, children, urgent medical cases, and other special circumstances – as well as detailing reasons for the remaining restrictions.
  5. Find that the order violates the Establishment Clause by cherry-picking irrelevant precedents even though our immigration laws routinely classify would-be refugees and immigrants on religious grounds and the order only affects six of the 50 Muslim-majority countries, which contain but 13 percent of Muslims worldwide.

With no due respect, that’s not law. It’s another dog’s breakfast of a legal ruling which I won’t dignify with a full fisking. (Josh Blackman is a better man than I because he’s in the midst of a multi-part series that does unpack the opinions, and I also recommend the work of Peter Margulies, a progressive immigration and national-security expert who actually believes in the rule of law.) 

Perhaps the worst thing about this ruling, and the identical one from the Ninth Circuit that we should get any day now, is that it makes me spend time supporting, as a matter of law, government actions that I don’t think are helpful to either immigration or national-security policy. It’s really the inverse of what I was doing in the late Obama years. As brother Josh says,

writing these (many) posts about the travel bans is not a particularly enjoyable or rewarding task, because I write in defense of policies I profoundly oppose. In many respects, my work on these cases is a mirror image to my previous work on the constitutionality [of] President Obama’s deferred action policies. While I supported DACA and DAPA as a matter of policy, I concluded they were unlawful. In contrast, while I oppose the travel bans as a matter of policy, I concluded they were lawful.

Thus, my commitment to the travel ban litigation is dual-faceted. First, I aim to fill the void, as there is a shortage of clear-eyed analyses of the travel bans due to Trump’s toxicity. Second, recognizing that the judicial resistance may ultimately defeat the Trump presidency, my sincere hope is that courts do so with as little collateral damage as possible to other areas of law.

They told me that if Trump won the presidency, the rule of law would suffer. They were right.

Earlier this week I attended a very thoughtful and stimulating debate on the modernization of U.S. nuclear missiles hosted by the Project on Nuclear Issues (PONI) at CSIS. The debate addressed the merits and downsides of two planned U.S. nuclear delivery system recapitalization efforts: the Ground Based Strategic Deterrent intended to replace the Minuteman III ballistic missile system, and the Long-Range Stand-Off (LRSO) cruise missile that is supposed to replace the AGM-86 air-launched cruise missile (ALCM). The ALCM is a dual-capable missile, meaning it can carry either a nuclear or conventional payload. While the LRSO is planned to be only used for nuclear missions, in a conflict scenario it would be hard to discern between it and a conventionally-armed cruise missile until the moment of impact.

One topic raised during the debate was the effect of the LRSO on strategic stability, an important and hotly debated issue. The advocates of the LRSO downplayed the destabilizing potential of the system by pointing out that the United States has used dual-capable cruise missiles in past conflicts. Concerns about strategic stability should be kept in mind, they argued, but the United States has a track record of using dual-capable cruise missiles while safely navigating such concerns.

This argument may be technically true, but it ignores a critical fact: all past uses of dual-capable cruise missiles were in conflicts with countries that did not have nuclear weapons—not between two nuclear-armed countries. Policymakers should be wary of arguments that use historical evidence to dismiss or downplay the negative effects of LRSO on strategic stability because there are no adequate past cases to test such arguments against.

Such an oversight is especially damning when one considers the likely targets of the LRSO. The missile, and the B-21 bombers supposed to carry them into combat, are designed to penetrate the dense and increasingly complex air defense networks of “near-peer” adversaries like China and Russia. This enhances the ability of the U.S. Air Force to hold high-value targets, such as command and control facilities, military bases, and enemy nuclear forces, at risk. However, the same bombers could also be armed with conventional cruise missiles.

The ambiguity about whether a cruise missile is nuclear or conventional poses a dilemma for nuclear-armed opponents in a conflict or crisis situation. If the United States starts destroying high-value targets necessary for the effective use of nuclear weapons, will adversaries feel pressure to either escalate the conflict in the hope of getting the strikes to stop or use nuclear weapons while they still have some ability to do so? Will the adversary be able to quickly determine what kind of cruise missile was used against it if communications links are damaged and they suspect more missiles are incoming? The decision to develop and field the LRSO greatly affects these questions. If the United States only possessed conventional cruise missiles, then the target would be more confident that they were not under nuclear attack.  

Countries that the United States has already used dual-capable cruise missiles against did not possess nuclear weapons. Therefore, the United States and the targeted countries did not have to grapple with the dilemma. Firing Tomahawk missiles at a Syrian air base or using ALCMs to punish Saddam Hussein for attacking a Kurdish safe haven does not carry the same escalation risks as using conventional cruise missiles to tear down Russian or Chinese air defense networks.

It is misleading and irresponsible to point to past uses of dual-capable cruise missiles to downplay concerns about the LRSO. Historical evidence cannot settle this debate because there are no cases of the United States using a dual-capable cruise missile against a nuclear-armed adversary. There should be a lively discussion of the LRSO’s impact on strategic stability, but that discussion needs to have sound arguments. 

Hudson Institute historian and political scientist John Fonte has written that immigrants are not patriotically assimilating.  Fonte blames this supposed development on many factors but frequently credits changes in public school curricula away from the nation building Americanization Movement of the Progressive Era toward a multicultural ethos today.  In previous posts, I have challenged Fonte’s claims about a lack of patriotic assimilation amongst today’s immigrants and have shown that his claims about the success of the Americanization Movement are based on anecdotes and that there as many that show it actually slowed assimilation.  

A more subtle reading of Fonte’s work is that he is worried about immigrants and their descendants weakening American political institutions by not supporting them as much as Americans whose ancestors have been here for many generations.  The General Social Survey (GSS) asks many questions of immigrants and their descendants that can help lessen Fonte’s worries. 

The following are responses to the question from the pooled years 2004-2014:

I am going to name some institutions in this country. As far as the people running these institutions are concerned, would you say you have a great deal of confidence, only some confidence, or hardly any confidence at all in them? [Insert Institution]

Figure 1 shows confidence in the executive branch of government by generation.  Immigrants are more likely than any other generation to have “a great deal” or “only some” confidence in the Presidency and they are the least likely to have “hardly any.”  The third generation appears to have the least confidence.  Over the generations, confidence diminishes and then rebounds slightly for Americans whose grandparents were all born here (fourth generation and greater Americans).  Immigrant confidence in the executive branch could weaken during the Presidency of Donald Trump due to his positions on immigration, relative to those of George W. Bush and Barack Obama, but we will have to wait until additional GSS surveys are released in the coming years.

Figure 1

Confidence in Executive Branch of Government

 

Source: General Social Survey. 

Immigrant confidence in the Supreme Court is also relatively high (Figure 2).  Almost 38 percent of them have “a great deal” of confidence, more than any other generation, and 49.9 percent have “only some” confidence.  Immigrants are the least likely to say they have “hardly any” confidence in the Supreme Court.  Again, third-generation Americans are the most likely to have “hardly any” confidence in the institution. 

Figure 2

Confidence in Supreme Court

 

Source: General Social Survey. 

Congress is extremely unpopular and this is reflected in the confidence results for every group (Figure 3).  Immigrants are the most likely to have “a great deal” of confidence and “only some” in Congress.  They are also the least likely to have “hardly any” confidence in Congress.  Once again, third-generation Americans are the most likely to have “hardly any” confidence in Congress with 54.5 percent agreeing with that sentiment.  Confidence in Congress rebounds slightly in the fourth generation. 

Figure 3

Confidence in Congress

 

Source: General Social Survey. 

Confidence in the U.S. military shows a slightly different trend (Figure 4).  Immigrants have a relatively large amount of confidence in the Executive, the Supreme Court, and Congress that then diminishes in subsequent generations.  Immigrants have the lowest degree of “a great deal” of confidence in the military, the highest degree of “only some” confidence, and the second most likely to have “hardly any.”  Later generations tend to have more confidence but the differences are small if you look at responses for “hardly any.”

Figure 4

Confidence in U.S. Military

 

Source: General Social Survey. 

Immigrant confidence in the Presidency, Congress, and the Supreme Court is actually higher than it is for subsequent generations while confidence in the military is a bit lower initially but climbs in every successive generation.  Rather than having lower confidence in the institutions of American government, immigrants tend to have more confidence which is not what you would expect from reading Fonte’s research.  A component of assimilation seems to be diminished confidence in American governmental institutions over the generations.  Fonte does write that immigrant civic knowledge lags behind that of native-born Americans – perhaps knowledge or familiarity with our government’s institutions breeds dislike? 

Another potential explanation for high immigrant confidence in American government institutions is that immigrants generally come from countries with worse political institutions than the United States.  Their experiences with and observation of American political institutions leads to more positive opinions based on their relative experience in their home countries.  Americans whose ancestors have been here longer do not know how good they have it relative to today’s immigrants who have personal experience with worse governments.  As a personal anecdote, as a young adult, I remember complaining about the U.S. government and being told by my immigrant relatives that it is so much better here than in Iran.  I have not forgotten that and it has made me more optimistic than most despite all of the obvious problems with our government’s institutions.

Yesterday, in IRAP v. Trump, the Federal Court of Appeals for the Fourth Circuit—which handles appeals from district courts in Maryland, Virginia, West Virginia, North Carolina, and South Carolina—upheld a preliminary injunction against portions of President Trump’s Executive Order banning entry of individuals from six African and Middle Eastern countries. On critical points, the court’s opinion and the concurring opinions cite or rely upon Cato’s work about the order.

Ten of the 13 judges found that the plaintiffs were likely to succeed in showing that the order violates the Establishment Clause of the Constitution. The court’s opinion cites Cato’s amicus brief to resolve a preliminary matter: whether the executive order—it calls it “EO-2”—“injured” any of the individual plaintiffs. The plaintiffs argued that one man in particular would be separated from his wife due to the order’s ban on visas. The government admitted that this would constitute an injury, but argued that the injury would not be “imminent” because he has offered no reason to believe that the ban on entry “will delay the issuance of [his wife’s] visa.” To this, the court responded (p. 35):

But this ignores that Section 2(c) appears to operate by design to delay the issuance of visas to foreign nationals. Section 2(c)’s “short pause” on entry effectively halts the issuance of visas for ninety days—as the Government acknowledges, it “would be pointless to issue a visa to an alien who the consular officer already knows is barred from entering the country.” Appellants’ Br. 32; see also Brief for Cato Institute as Amicus Curiae Supporting Appellees 25–28, ECF No. 185 (arguing that Section 2(c) operates as a ban on visa issuance).

Indeed, that is exactly what we argued: The executive order was designed to discriminate in the issuance of immigrant visas based on nationality, and it would at the very least delay their ability to travel to the country.

We also argued that the court should not take seriously the position that the purpose of the executive order was national security. Relying on my colleague Alex Nowrasteh’s policy analysis and subsequent blog post, we wrote, “not a single person from these countries has killed anyone in a terrorist attack in the United States in over four decades.” A separate amicus brief by nearly 30 former national security advisers, from both major political parties, cited Nowrasteh’s work and used similar language to amicus, which the court cited (p. 61):

The Government’s argument that EO-2’s primary purpose is related to national security, Appellants’ Br. 43–44, is belied by evidence in the record… According to former National Security Officials, Section 2(c) serves “no legitimate national security purpose,” given that “not a single American has died in a terrorist attack on U.S. soil at the hands of citizens of these six nations in the last forty years” and that there is no evidence of any new security risks emanating from these countries. Corrected Brief for Former National Security Officials as Amici Curiae Supporting Appellees 5–8.

The Executive Order itself cited two specific examples of terrorist attacks that the president believed would be prevented by it. In our brief, we noted that the one case refers to two Iraqi nationals not subject to the new order and the other refers to a Somali national who came as a child. The court cited this evidence as well without citing Cato, but Judge Thacker in her concurring opinion (pp. 129-147) does cite us on this point (p. 136):

One example is from Iraq, but, as Iraq is not part of EO- 2, it does not support this ban at all. The other example involves a child brought to the United States as a two-year-old. As this two-year-old was ultimately radicalized in the United States and not abroad, this case is unrelated to better screening and vetting – the purported purpose of EO-2. See Br. for Cato Institute as Amicus Curiae Supporting Appellees at 12–13.

Judge Thacker goes on to make a point that we emphasize in our brief. We wrote, “To the extent the Order is based on evidence at all, it is based on evidence regarding countries—more precisely, ‘conditions in six of the previously designated countries’—rather than nationals of those countries, who are the actual subjects of the Ban.”  We pointed out that a person could be a national of a country that he has never actually lived in, concluding that, “Where government action imposes such overinclusive restrictions, “[i]t is not unreasonable to infer, at least when there are no persuasive indications to the contrary, that [such] a law … seeks not to effectuate the stated governmental interests,” but rather to advance impermissible purposes.” Judge Thacker notes the same thing (p. 138):

Moreover, if the conditions in the six countries subject to EO-2 truly motivated the Government’s travel ban, the Government would have based its ban on contact with the listed countries, not nationality. Under EO-2, a person who is a citizen of Syria would not be allowed to enter the United States even if they had never set foot in Syria. However, a person who lived his or her whole life in Syria but never obtained Syrian citizenship, and had even recently lived near terrorist-controlled regions of Syria, would be unaffected and freely allowed to enter the United States. As a result, EO-2 is at once both overinclusive and underinclusive and bears no logical relationship to its stated objective.

Since last year, I have argued that, setting aside the constitutional questions, the order as applied violates the letter of the law. Our brief argued the same. Since 1965, the Immigration and Nationality Act has banned all discrimination in the issuance of immigrant visas—or permanent residency visas—based on national origin or nationality. Some of the plaintiffs in this case were U.S. citizens or legal permanent residents petitioning for their spouses or family members, and the order would purport to deny or at least delay their ability to obtain a visa. That’s a violation of the law.

The district court found that the order did violate the law, but only insofar as it related to visa issuance, not entry. In other words, the government had to issue travel documents to the applicants under the 1965 law (8 U.S.C. 1152(a)), but could deny them entry under its separate authority in 8 U.S.C. 1182(f). As I wrote before, neither party had argued for this strange result, but it was a major win in any case for the plaintiffs. Once a person is inside the United States, the law guarantees their right to apply for asylum. As we saw the night the initial ban was rolled out, courts are willing to intervene to protect them.

The opinion of the majority for the 4th circuit decided to set this issue aside because its decision on the constitutional issue would render the statutory argument superfluous. But two of the three judges who wrote concurring opinions on the issue did agree that the administration is violating the law to a greater or lesser degree than the District Court did. Judge Thacker defends the lower court’s reasoning against the government (p. 143):

The Government also contends it would be a “fruitless exercise” and would “make no sense” to enable issuances of immigrant visas pursuant to § 1152(a)(1)(A), when those aliens receiving the visas would nonetheless be barred from entering the United States once they reach our borders. Appellants’ Br. 31, 35. I fail to see how permitting a national of one of the Designated Countries to continue with her immigrant visa process would be fruitless, unless, of course, the Government intends to use the ban as a gateway to a much more permanent ban, ultimately sweeping in those nationals whose processes were halted by the order. See Section 1(a) (stating that a “Policy and Purpose” of the EO- 2 is to improve the protocols and procedures “associated with the visa-issuance process”). Moreover, being a visa holder, even if one may be temporarily inadmissible, carries with it a certain status with regard to EO-2. See, e.g., EO-2, § 3(c) (suggesting that one receiving a visa from U.S. Customs and Border Protection during the protocol review period could gain entry to the United States).

As importantly, however, both her opinion and that of Judge Wynn would actually go further than the district court’s view and strike down the ban on entry of immigrants as a violation of 8 U.S.C. 1152(a)’s prohibition on nationality-based discrimination. Judge Wynn’s concurrence in particular follows my line of reasoning (p. 120):

Interpreting Section 1182(f) to allow the President to suspend the entry of aliens based solely on their race, nationality, or other immutable characteristics also would conflict with 8 U.S.C. § 1152(a), which provides that “no person shall receive any preference or priority or be discriminated against in the issuance of an immigrant visa because of the person’s race, sex, nationality, place of birth, or place of residence.” Congress passed Section 1152(a) in 1965, more than a decade after it enacted Section 1182(f), as part of a comprehensive revision to the Immigration Act intended to eliminate nationality-based discrimination in the immigration system.

Section 1152(a) deals with issuance of immigrant visas, rather than entry, which is governed by Section 1182. Nonetheless, reading Section 1182(f) as authorizing the President to deny entry based on invidious discrimination would place Section 1182(f) in conflict with Section 1152(a), which prohibits invidious discrimination in the issuance of visas. In particular, the Immigration Act authorizes the executive branch to refuse to issue a visa to any alien who “is ineligible to receive a visa or such other documentation under section 1182.” 8 U.S.C. § 1201(g). As the Government concedes, the President’s exercise of his authority under Section 1182(f) to deny entry to aliens from the six predominantly Muslim countries, were it lawful, also would bar, by virtue of Section 1201(g), such aliens from obtaining visas, including immigrant visas. This would be the very result Congress sought to avoid in ending nationality-based discrimination in the issuance of immigrant visas through its passage of Section 1152(a).

These two paragraphs are virtually identical to my argument. As I have noted before, the law also applies the procedures for “visas” to granting “status,” which is what happens at the border when you are granted entry. This interpretation avoids an absurd result and gives meaning and effect to each provision of law. Judge Thacker’s analysis of how to resolve conflict between two apparent conflicting statutes (pp. 144-146) closely parallels mine as well.

Judge Keenan disagrees, but her reasoning—that the ban on visas is different than a ban on entry—would support the district court’s decision. She fails to acknowledge this or address the points raised by Thacker and Wynn.  None of the dissents deal with this issue at all. We filed a similar brief in the related 9th Circuit case over the executive order, Hawaii v. Trump, that is still pending.

Effective policing requires that crime witnesses and victims contact the police and that citizens trust law enforcement. Without such trust and communication crimes go unsolved, criminals run free, and victims live in fear. Sadly, it looks as if the Trump administration’s immigration rhetoric could have prompted a chilling effect on Latino crime reporting. 

The father of modern policing, the British statesman Sir Robert Peel, understood how important public approval of the police is in order for police officers to effectively do their jobs. Peel founded London’s Metropolitan Police Force in 1829. The force issued new officers with copies of “General Instructions,” which included the “Peelian Principles” of effective policing.* The second Peelian principle urges officers

To recognise always that the power of the police to fulfil their functions and duties is dependent on public approval of their existence, actions and behaviour and on their ability to secure and maintain public respect. 

Although written for officers in London, the Peelian Principles migrated to the states, where now former New York Police Department Commissioner William J. Bratton featured them on his blog and they continue to be favorably cited by law enforcement and public safety officials.

The fact that public approval and trust in the police are necessary conditions for effective policing seems to have been lost on officials in the Trump administration, whose anti-immigrant policy proposals could be having a negative effect on crime reporting.

Below is some of an analysis of this issue from FiveThirtyEight:

Data from [Denver, Philadelphia, and Houston] is consistent with the idea that immigrants have become less likely to report crimes. In both Denver and Philadelphia, crime reports among Latinos — who make up 45 percent of all immigrants nationally and a majority of undocumented immigrants, specifically — fell relative to non-Latinos in the first three months of the year. In Denver, crime reports among non-Latinos increased 3.6 percent in the first three months of 2017 compared with the same period last year; among Latinos, crime reports fell 12 percent. In Philadelphia, crime reports by non-Latinos declined by 1.0 percent, while they fell 4.3 percent among Latinos. Notably, the decline in crime reports from Latinos appeared to cut across several types of crimes, whereas the Houston and Los Angeles police chiefs highlighted declines in sexual assault and, in the case of Los Angeles, domestic violence. Neither Denver nor Philadelphia provided data sufficient to evaluate trends in domestic violence and sexual assault. 

The story is a bit different in Dallas, where data shows no overall decline in crime reports among Latinos relative to non-Latinos. (One possible reason for the difference: Crime data released by the Dallas Police Department excludes “sexually oriented offenses” and incidents of domestic violence, the crimes identified by Houston and Los Angeles as experiencing the biggest declines in Latino reporting.) But crime reports among Latinos — or, more precisely, reports of crimes in which the alleged victims are Latinos — do seem to be falling disproportionately in immigrant-heavy neighborhoods. Specifically, since Trump’s election, there has been a statistically significant correlation between the share of a neighborhood’s residents who are non-citizens and the decline in crime reports among Latinos in early 2017.

From Houston Public Media:

In early April, Houston Police Chief Art Acevedo alerted a room full of reporters of what sounded like a troubling trend: fewer Hispanics reporting crime this year.

“What we’ve noticed is a 42.8 percent decrease in the number of Hispanic victims reporting rape,” he announced.

Acevedo said that decrease is troubling, because there was actually an 8 percent increase in rapes being reported by non-Hispanics.

“There appears to be, for far in recent weeks and months, a chilling effect on Hispanic members of our communities reporting crimes at a lower rate,” the Chief stated. “When you see this type of data, and what looks like the beginnings of people not reporting violent crime, we should all be concerned.”

He speculated that current political rhetoric, and immigration enforcement tactics, may be making some in the Hispanic community afraid to report crime.

Finally, from NPR:

In Los Angeles, Police Chief Charlie Beck says reports of sexual assault this year have dropped 25 percent among the city’s Latino population compared to the same period last year.

A new survey of hundreds of victim’s advocates and legal service providers in 48 states finds that immigrants are afraid to call police, afraid to press charges and afraid to testify at trial because ICE is making arrests at courthouses. 

Fear of local police engaging in immigration enforcement is not limited to immigrants. One survey conducted in 2012 found that 28 percent of U.S.-born Latinos agree with the statement, “I am less likely to contact police officers if I have been a victim of a crime for fear they will ask me or other people I know about our immigration status.” When it comes to reporting known crimes the figures are just as bleak, with 29 percent of U.S. born-Latinos agreeing with the following, “I am less likely to voluntarily offer information about crimes I know have been committed because I am afraid the police officers will ask me or other people I know about our immigration status.” 

It’s not hard to see why you would want unauthorized immigrants to call the police if they witness a crime. If you are attacked from behind and knocked unconscious and the only witness is an unauthorized immigrant wouldn’t you want that person to call the police and describe the assailant?

Faced with the fear of police digging into people’s immigration status some police departments have opted for what are sometimes called “sanctuary” policies such as not asking people for immigration status and not honoring Immigration and Customs Enforcement (ICE) detainers. During his presidential campaign Donald Trump railed against sanctuary cities, threatening to withhold federal funding from jurisdictions that don’t cooperate with federal immigration enforcement efforts. What this proposal overlooked is that sanctuary policies are often implemented as tools of effective policing and good public policy, not lawless political correctness.

It shouldn’t come as a surprise if the rhetoric of a president who campaigned against legal and illegal immigration has prompted a chilling effect on Latino crime reporting across the country. For as long as there has been modern policing we’ve known that effective policing requires that the public trust police officers. Ironically, the president’s “Blue Lives Matter” approach coupled with his anti-immigration policies look poised to make many police officers’ jobs much harder.

*The Peelian Principles were probably not actually written by Peel himself but by the first joint commissioners of London’s Metropolitan Police Force, Charles Rowan and Richard Mayne.

For more on this topic please check out my colleague Jonathan Blanks’ work in The Washington Post and Democracy.

As you can tell from our blog volume, there’s been a blizzard of new and significant climate findings being published in the refereed literature, and here’s some things You Ought to Have a Look at concerning the recent “hiatus” in warming and what might happen to our (now) post-El Niño climate.

With President Trump still deciding on U.S. participation in the Paris Climate Agreement, new research suggests the Earth’s global mean surface temperature (GMST) will blow past the so-called 1.5°C Paris target in the next decade. But before making that ominous prediction, Henley and King (2017) provide us with a good history lesson on a taboo topic in climate science circles: the recent global warming “hiatus” or “pause” from 1998-2014. One could be forgiven for thinking the hiatus was “settled science” since it featured prominently in the 2013 IPCC AR5 assessment report. But a concerted effort has been made in recent years to discount the hiatus as an insignificant statistical artifact perhaps based upon bad observational data, or a conspiracy theory to distract the public and climate policymakers. Even acknowledging the existence of the “hiatus” is sufficient to be labeled as a climate change denier.      

Social scientists, psychologists, and theologians of all stripes feared that widespread community acknowledgement of the hiatus would wither support for climate policy at such a pivotal juncture. 

In a 2014 Nature Commentary (Boykoff Media discourse on the climate slowdown) saw the rise of the terms “hiatus and pause” in the media in 2013 as a “wasted opportunity” to highlight the conclusions of the IPCC AR5 report, which in itself ironically struggled with explaining the hiatus/pause (IPCC: Despite hiatus, climate change here to stay. Nature September 27, 2013). Amazingly, in a Nature interview a week prior to AR5’s release, assessment co-chair Thomas Stocker said this:

Comparing short-term observations with long-term model projections is inappropriate. We know that there is a lot of natural fluctuation in the climate system. A 15-year hiatus is not so unusual even though the jury is out as to what exactly may have caused the pause. 

Claims that there might be something fundamentally wrong with climate models are “unjustified unless temperature were to remain constant for the next 20 years,” he said. 

Except there was something fundamentally wrong with the climate models: they missed the pause! The IPCC was caught flat footed and their dodgy explanations were woefully inadequate and fueled continued questions about the credibility of future warming forecasts based exactly on those deficient climate models. What’s going on with this hiatus? A cacophony of explanations has filled the literature and media with several dominant themes: do not believe your lyin’ eyes – the data is wrong – and even if it is not, you are using it wrong. Karl et al. 2015 fixed the SST and buoy data, and (erroneously) claimed to have gotten rid of it. Cherry picking! The heat is sequestered in the depths of the ocean or the aerosols covered up the greenhouse gas signal. It’s enough to make you think climate “science” might not know what it is talking about!  

Only a few years since the last (2013) UN climate report, there is now a strong scientific consensus on the cause of the recent global warming hiatus as well as the previous “big hiatus” from 1950s-1970s: a mode of natural variability called the Interdecadal Pacific Oscillation (IPO) which could be colloquially called El Niño’s uncle. The mode operates on longer time scales than El Niño but it is intimately related as a driver of Pacific Ocean heat exchange with the atmosphere and therefore a dominant modulator of global temperature. In a March 2016 Nature Climate Change commentary (Fyfe et al.), eleven authors including climate scientists Benjamin Santer and Michael Mann persuasively “make sense of the early-2000s warming slowdown.” Their article provides evidence that directly contradicts claims that the hiatus was a conspiracy, or scientifically unfounded fiction. Several important points are made that deserve mentioning:

The recent hiatus occurred during a period of much higher greenhouse gas [GHG] forcing e.g. CO2 almost 100 ppm higher than the previous “big hiatus” slowdown in the 1950s-1970s. The authors rightly raise the question if the climate system is less sensitive to GHG forcing that previously thought or global temperatures will undergo a major warming “surge” once internal natural variability (e.g. IPO) flips sign.

The observed trends in global surface temperature warming were not consistent with climate modeling simulations. Indeed, using a baseline of 1972-2001, climate models failed to reproduce the slowdown during the early twenty-first century even as GHG forcing increased. The hiatus was neither an artifact of faulty data nor statistical cherry-picking – it was a physical change in the climate system that was measured across multiple independent observation types. 

Climate scientists still need to know how variability (natural and anthropogenic) in the climate system works to attempt to model its changes through time regardless of political inconvenience.

Now back to the Henley and King (2017) piece that predicts a flip in the Interdecadal Pacific Oscillation to a positive phase will lead to almost 0.5°C increase in global temperature by 2030. Based upon the RCP8.5 high emission scenarios (which are likely to be too high themselves), those same climate models that did not adequately predict the early 21st century hiatus are used to generate so-called warming trajectories.

Image adapted from Henley and King (2017) 

How plausible is this extreme warming scenario? Regardless of the phase of the IPO, the model projections suggest an acceleration in the warming rates considerably above the hiatus period of the last 15-years. The authors allow for 0.1°C of warming from the recent strong El Niño as the offset for the “new” starting period, but that estimate is probably too low. We calculated the daily temperature anomaly from the JRA-55 reanalysis product—a new and probably more reliable temperature record–and apply a 30-day centered mean to highlight the enormous warming step with the 2015-2016 El Niño. Only an eyeball is necessary to see at least a 0.30°C upward step now into May 2017. Note that this is not carbon dioxide warming, and if we had a strong La Niña (the cold opposite of El Niño), we would expect a step down. 

Is this warming now baked in (double entendre intended) to the climate system or will we descend to a lower level during the next year or two thanks to a La Niña? In other words, will the hiatus return, another one begin, or will the upward trajectory accelerate? Oh, and did we mention that we know of no climate model that warms the earth in jump-steps followed by long “hiatuses” after big El Niños?

The old saying goes, “If you do the crime, you should to do the time.” In reality, however, many ex-offenders find out they’re effectively still being punished after they have served their sentence and have been told they paid their debt to society. These “collateral consequences” of arrest and incarceration include restrictions on potential jobs, housing, and benefits that help people get back on their feet. There are literally tens of thousands of restrictions at the federal, state, and local levels.

One way to alleviate some of these collateral consequences is called expungement. Expungement is a process by which a criminal conviction is effectively erased someone’s record, provided they meet certain criteria. There is already a law that allows first-time, non-violent federal drug possession offenders under the age of 21 to serve one year of probation and have the charges expunged after successful completion.

Today, Rep. Hakeem Jeffries (D-NY) and Rep. Trey Gowdy (R-SC) introduced H.R. 2617, “The Renew Act of 2017,” which expands the same expungement eligibility age from 21 to 25 years old.

Expungement expansion could make a big difference in the lives of young adults who make a mistake. Under current laws and practices, the effects of a criminal conviction can burden someone long after they’ve completed their sentence. As I’ve written before, it is simply unfair to expect ex-offenders to become productive members of society and impede their success at the same time. 

For more details, please check out this post by John Malcolm and John-Michael Seibler of the Heritage Foundation. 

Power Ventures, Inc. offers a service to amalgamate various social-media platforms into one system; each user gives the company his usernames and passwords, including for Facebook. Facebook objected to Power Ventures’ use of Facebook in this manner and sent a cease-and-desist letter. When Power Ventures refused to comply, Facebook sued under the Computer Fraud and Abuse Act (“CFAA”).

The CFAA was designed to prevent hackers from accessing a computer system “without authorization” and has criminal penalties of up to five years in prison. The district court found that Power Ventures had indeed accessed Facebook without authorization and the U.S. Court of Appeals for the Ninth Circuit affirmed that decision. Power Ventures has petitioned the Supreme Court to review the case; Cato has filed an amicus brief supporting that petition.

We explain that there’s a split among the circuit courts as to the legal basis for an entry to be “authorized” under the CFAA. The Fifth and Seventh Circuits use agency law (scope of employer permission), the First and Eleventh Circuits use contract law (established policies), and the Second, Fourth, and Ninth Circuits use property law (the common law of trespass). The ideal resolution would involve an analogy to physical trespass, which various members of Congress involved in drafting the CFAA used to discuss the computer crimes that the law was designed to prevent.

In applying trespass law here, the facts begin to look like a landlord-tenant dispute over a third-party guest. A landlord typically can’t prevent a tenant from inviting guests to access the tenants’ property by using the common areas of the building, without a limitation in the lease. Here, Facebook’s users own the data (information, pictures, etc.) they put on the social network, as Facebook acknowledges, and there’s no guest-access restriction in the terms of service.

Many people share social-network, email, or other passwords without considering such actions to be criminal and the common law is presumed to conform to the customs of the people unless there’s explicit statutory text to the contrary. Otherwise millions of people could unwittingly be made criminals.

This is also the reason why the “rule of lenity” applies in Power Ventures’ favor, because an (at best) ambiguous statute cannot be used to punish someone.

The final reason that the Supreme Court should take the case is its importance to the online economy. Power Ventures is trying to compete with Facebook and Facebook’s ban prevents the market from being able to determine who has the better product. Many other companies, including Google, use a method of automated access similar to that which Power Ventures uses and could be imperiled by the lower court’s ruling. Internet companies need clear legal rules so they know what they can do nationwide without the threat of civil liability or criminal prosecution.

The Supreme Court may decide whether to take Power Ventures v. Facebook before it breaks for its summer recess at the end of June, or it could hold the decision over till the start of the next term in the fall.

The Congressional Budget Office’s cost estimate of the American Health Care Act confirms what health-policy scholars have known for months: the AHCA is bad health policy that will come back to haunt its Republican supporters.

Premiums on the individual market have risen an average of 105 percent since ObamaCare took effect. Maryland’s largest insurer has requested rate hikes for 2018 that average 52 percent. Yet the CBO estimates the AHCA would saddle voters with two additional premium increases before the mid-term elections—a further 20 percent increase in 2018, plus another 5 percent just before Election Day. Even worse, the bill’s ham-handed modifications to ObamaCare’s most harmful regulations would accelerate the race to the bottom that ObamaCare has begun. Voters will blame Republicans for their skyrocketing premiums and lousy coverage, deepening what appear to be inevitable GOP losses in 2018.

Free-market reforms would reduce premiums by up to 90 percent, make access to care more secure for people who develop expensive medical conditions, reduce taxes and health care prices, and give states the ability and flexibility to cover preexisting conditions. It might even give the GOP’s base a reason to go to the polls in 2018.

The AHCA is not free-market reform.

It’s not often an appellate court agrees to re-hear a case en banc—that is, reexamine a decided case with all active judges participating—and when it does, usually it’s because the case is of particular importance.  Today the federal appeals court in D.C. heard two such cases, and both address fundamental issues of due process and constitutional integrity.  Heavy and exciting stuff.  Cato filed amicus briefs in both cases, given their potential impact on core principles of liberty and the rule of law.

The first case, Lucia v. SEC, considers the role of the Administrative Law Judge (ALJ).  While the case was nominally about whether ALJs are inferior officers, and therefore subject to certain constitutional appointment and removal proceedings, at its heart is the question: what makes a judge a judge?

Most Americans expect that if the government is going to haul them in for alleged wrongdoing, they’ll at least have their case heard by an impartial judge, with all the usual legal protections.  And this is what Americans should expect.  Unfortunately, some federal agencies operate differently, using their own internal administrative proceedings, with their own ALJs, to determine if someone has broken the rules, and to impose a fine or other punishment.

The vast majority of ALJs work for the Social Security Administration, determining whether individuals are eligible for benefits.  As Lucia’s lawyer pointed out in argument today, there is a big difference between ALJs determining whether someone will receive something from the government, as the Social Security Administration’s ALJs do, and determining whether the government will take something from someone.

ALJs who oversee adversarial proceedings, such as those at the SEC along with a handful of other agencies, exercise a level of discretion and carry out responsibilities almost indistinguishable from those of judges in federal court.  The SEC has argued that the crucial difference is that ALJs’ decisions are not technically final until the Commissioners themselves have signed off on them.  But while the Commissioners review the ALJs’ application of the law, they do not review what is known as “findings of fact” or the admissibility of evidence.  That means that the ALJs are the only people who decide what documents and testimony will be used to prove the case, listen to the witnesses and decide whether they’re telling the truth, and determine what “really” happened.

That is a huge amount of control for a “mere employee” to have over people’s lives.  Finding that ALJs are indeed officers and therefore subject to the constitutional appointment and removal requirements might have consequences that ripple through other agencies that use ALJs to oversee adversarial hearings.  But as Lucia’s counsel said at argument today, “if following the constitution has consequences, then those consequences must be faced.”

The other case considers not just the constitutionality of one position within an agency, but of the agency as a whole.  PHH Mortgage has challenged the constitutionality of the Consumer Financial Protection Bureau (CFPB), the new and highly controversial agency created in the wake of the 2008 financial crisis.  This agency, unlike almost every other financial regulator, has a single director at its head, instead of a bi-partisan commission.  This director can be removed by the president only for cause—and no official has ever actually been removed “for cause” successfully.  Last year, a three-judge panel decided the case in favor of PHH, finding that the CFPB’s structure is unconstitutional because it is insufficiently accountable to the people.

I will not be surprised if both Lucia v. SEC and PHH v. CFPB wind up before the Supreme Court.  But it seemed today that PHH’s counsel was already preparing for the Supreme Court argument.  There are a number of independent agencies in the federal government.  These agencies have principals who can be removed by the president only “for cause.”  While these agencies have existed since the New Deal, they remain constitutionally suspect since there is no provision in the constitution for their creation.  In 1935, President Roosevelt fired an FTC commissioner because he felt the commissioner, William Humphrey, was not sufficiently supporting Roosevelt’s policies.  Humphrey challenged his firing and the Supreme Court ruled in his favor (or rather, in favor of his estate as Humphrey himself died while the case was pending). 

This case, known as Humphrey’s Executor, was the heart of today’s argument.  If the Supreme Court has ruled that the head of an agency can be removable only for cause without imperiling the separation of powers, does that apply to the Director of the CFPB?  If not, how is the CFPB different from the FTC? 

PHH’s counsel presented several arguments for why the CFPB presents constitutional concerns.  However, as the appeals court noted, it is bound by Supreme Court precedent.  Either the CFPB is meaningfully different from the FTC—and therefore this court is free to rule its structure is unconstitutional—or it’s not and therefore this court, whatever its constitutional concerns, must rule in favor of the CFPB since it cannot overrule the Supreme Court.

As I’ve noted previously, this case, in addition to its glitziness as the case deciding the future of the CFPB, is also notable for the fact that the Department of Justice filed a brief in support of PHH.  It is not at all common for one part of the government to file a brief in opposition to another.  An attorney for the Department of Justice argued against the CFPB today as well.  He argued that if it’s fine to make a single director removable only at will by the president, why stop there?  What prevents congress from making every agency head in the federal government removable only for cause, effectively barring the president from having any policy influence at all?

Before argument today, there was a lot of chatter in the legal community about whether the court would wade into the constitutional waters in PHH v. CFPB at all.  But this morning, everyone dove headfirst into that ocean.  The court could simply punt, claim Humphrey’s Executor is controlling and pass the mess to the Supreme Court.  Humphrey’s Executor is itself constitutionally problematic and I would welcome the chance to review it.

Both of these cases consider the scope of the government’s power, and the strength of the safeguards erected to contain it.  I hope the court will hew to constitutional principles and reinforce these strictures.  But no matter what this court decides in either case, I doubt we’ve seen the last of either Lucia or PHH.

The biggest news about the Trump administration’s release yesterday of its $603 billion 2018 defense budget proposal is that there isn’t much. The anticlimax comes partly because most of the details were already out, thanks to the “skinny budget” plan for discretionary spending released in March and a recent leak. Moreover, the most newsworthy aspects of the proposal—its big cuts and chicaneries—came in non-defense areas and through 10-year projections that are little more than symbolic wish lists.

There’s a bigger reasons that Trump’s budget is historically unimportant: Congress is going to ignore it. Even the 2018 plan seems more statement than realistic attempt to guide appropriations. The breadth of the non-defense cuts used to fund the $54 billion defense increase makes it easy for even vulnerable Democrats to oppose it. That, along with Trump’s declining public support, even among conservatives, is why Republican backers won’t stick up for his plan.

Even if the budget were less impolitic overall, its military spending increase would face long odds thanks to the cap on defense spending, which is $54 billion less than Trump wants. Under the Budget Control Act, if an annual defense appropriation exceeds its cap, the Treasury must “sequester” the excess, pulling proportionally from all accounts in that category. Contrary to much reporting, sequestration hasn’t occurred since 2013, when it resulted automatically from the failure of the congressional supercommittee to come up with a deficit reduction plan.

Instead, Congress has cut a series of deals that raised the annual cap. Democrats made sure that the cap on non-defense discretionary spending went up by equal measure. The increases were paid for, in theory, by dubious future savings. Further Pentagon relief comes through abuse of the Overseas Contingency Operations (OCO) budget, which is uncapped out of deference to the pretention that it is “emergency” spending for wars. The OCO budget is annually stuffed with non-war funding—now at least $30 billion of it.

Congress will likely cut a deal of that sort again this year. Because changes to the caps take 60 Senate votes, Republican control of both branches affects bargaining dynamics less than it might seem. The recent passage of the 2017 budget—midway through the fiscal year— is instructive. Senators Mitch McConnell and Chuck Schumer, the majority and minority leaders, essentially negotiated the deal and handed it to the president as a fait accompli. He could sign or veto and shutdown the government. Despite the absence of funds for his promised wall, he grumbled and signed. There’s no obvious reason for that pattern not to repeat itself with a budget deal later this year.

What’s most notable about Trump’s defense budget is what it wouldn’t do, even if it were fully realized, somehow. It wouldn’t deliver anything like the historical buildup Trump promised as a candidate and now brags about. Nor will it serve even the more modest goal of fixing the military’s overhyped readiness problem, which the president refers to as “depletion.” The spending increase for 2018 would go largely to other priorities. Personnel spending would get a 3% increase, versus Obama’s plans, which would cover pay increases and higher end-strength numbers in the ground forces. “Research, development, testing and evaluation,” would get a 10% boost, which would largely benefit future weapons systems. There is a small increase (2.1%) in “operations and maintenance,” which in theory might go to readiness-enhancing things like training, equipment, and spare parts. But in practice that increase would largely go to cover the costs of the force’s minor growth. That means the military would get slightly larger but no more ready. In the longer term, the increases to force structure might generate demands on operational spending that budgets don’t fund, meaning that Trump’s limited buildup would exacerbate readiness problems.

Whatever happens with the budget, the president may decide to declare victory and say he fixed the military, following his habit of declaring victory in contrivance of facts. Or he might blast Democrats for failing to back his buildup and blame any problems on them. Republican hawks in Congress already blame Democrats for the same sin and Trump for not requesting more for the Pentagon. Democrats will say they are for a military increase too, just not without domestic spending increases.

What all this ignores is that even a smaller budget could end the military’s readiness issues with better prioritization. There would be more to spare for readiness if the budget-makers in the White House, Pentagon and Congress didn’t prefer to spend it on procurement and other priorities. That reallocation would be especially feasible under a strategy that asked less of the military, allowing it be smaller and less strained.

The budget does usefully request another base closure round and a cut in foreign military financing, where we basically pay foreign states to buy U.S. weapons. Congress ought to preserve those measures as they toss the rest of the budget. As I recently explained in the Boston Review, the irrelevance of Trump’s budget is a generally good thing. Sticking to the budget caps, or better yet a lower cap including OCO funds, would force useful discipline on the Pentagon, potentially increasing efficiency and maybe even encouraging an overdue move toward restraint.

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