Policy Institutes

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

We’ve got a lot cover this week, so let’s get right to it.

On the science front, we want to highlight two new papers that both suggest that attributing heavy precipitation events in the United States to human-caused climate change is a fool’s errand (not that there aren’t plenty of fools running around out there). This is a timely topic to explore with the big rains in Louisiana over the weekend leading the news coverage.

One paper by a research team from the University of Iowa found that “the stronger storms are not getting stronger” and that there has not been any change in the seasonality of heavy rainfall events by examining trends in the magnitude, frequency, and seasonality of heavy rainfall events in the United States. They did report that the frequency of heavy rain events was increasing across much of the United States, with the exception of the Northwest. As to the reason behind the observed patterns, the authors write “[o]ur findings indicate that the climate variability of both the Atlantic and Pacific Oceans can exert a large control on the precipitation frequency and magnitude over the contiguous USA.”

The other paper, from a research team led by NOAA/GFDL’s Karin van der Wiel, examined climate model projections and observed trends in heavy precipitation events across the United States and concludes:

Finally, the observed record and historical model experiments were used to investigate changes in the recent past. In part because of large intrinsic variability, no evidence was found for changes in extreme precipitation attributable to climate change in the available observed record.

Pretty emphatic and straightforward summary.

So, the next time you read that such and such extreme precipitation event was made worse by global warming, you’ll know that there is precious little actual science to back that up.

We’ll note that the more astute science writers are actually familiar with findings like these but rather than fess-up about them, they prefer to further the climate change narrative through the use of weasel words like “is consistent with” expectations from climate change. This particularly useful phrase encompasses virtually all possibilities and allows every weather event to be linked to the nefarious burning of fossil fuels. And we do mean every—bad or good. But in practice, it is reserved by the media to be applied only to bad events or trends. For good-seeming goings-on, “dumb luck” is the preferred descriptor, despite plenty of science that could be used to show that good things, too, “are consistent with climate change expectations.” Go figure.

This unseemly situation is well-summed up in a recently uploaded video by PragerU featuring Bjorn Lomberg titled “Climate Change: What’s So Alarming?” The video is short, roughly 5 minutes, but Lomborg hits on many alarmist talking points and why they are unhelpful in the discussion of how to best approach the climate change issue. 

And if you liked that video from PragerU, the next video in the series (that autoplays in some browsers) is by our Alex Epstein looking into that whole “97% of Scientists Agree” thing.  It too is worth a watch.  

And if you still haven’t gotten your fill of the role of natural viability in the climate system, check out the just-dropped report from the National Academy of Sciences (NAS) on its role in decadal scale climate change.  Judith Curry has her thoughts about the report here, including:

It is certainly gratifying to see this topic being addressed by the NAS, since decadal variability is too often dismissed by the ‘establishment’ as climate ‘noise.’ The questions asked in the report, and the knowledge gaps, raise the important unresolved issues….

What is missing from the report is the longer term context of multidecadal to millennial variability, and the importance of paleoclimate observations. Without this context, we are not going to make much progress on understanding and predicting the decadal variability in the Atlantic, Pacific, Indian Oceans….

Until these issues and knowledge gaps are sorted out, we don’t have the basis for making the above statements with high confidence.

Here’s to hoping that the climate community is ready to take more seriously the natural climate variability on time scales from decades to millennia.

And we found this quote in the report from Geophysical Fluid Dynamics Laboratory’s Dr. Tom Knutson on the global warming slowdown (a.k.a. hiatus) and the interplay between natural variability and climate sensitivity in producing it (and determining how long it will last) particularly interesting:

With a lower [transient climate sensitivity], models can produce slowdown periods that match observations to date and can extend to about 2030.

It seems that the global temperature evolution over the next few years may produce some pretty important insights for coming near-term (this century) greenhouse-gas-induced temperature change and a test of climate model utility and formulation.

We’ll be watching!

You can check out whole NRC report “Frontiers in Decadal Climate Variability: Proceedings of a Workshop (2016),” here.

 

References:

Mallakpour, I., and G. Villarini, 2016. Analysis of changes in the magnitude, frequency, and seasonality of heavy precipitation over the contiguous USA. Theoretical and Applied Climatology, doi 10.1007/s00704-016-1881-z.

van der Wiel, et al., 2016. The resolution dependence of contiguous US precipitation extremes in response to CO forcing. Journal of Climate, doi:10.1175/JCLI-D-16-0307.1, in press.

A common narrative we hear from the news media this election cycle is that Donald Trump has become popular by tapping into anti-trade sentiment among blue collar workers “on the losing side of trade globalization.”  The basic premises of this narrative are that (1) trade has harmed a large segment of the U.S. population and (2) those people are voting for Trump.  But neither one of those premises is true.

The narrative has been fueled by a paper released earlier this year by economist David Autor, David Dorn, and Gordon Hanson titled “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade.”  The paper has gotten a lot of attention from people on all sides of the trade policy debate.

The key finding of the paper is best summarized by this sentence from the abstract: “At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize.”  The idea is that trade with China has been so disruptive that many people who lost their jobs due to increased imports from China have not been able to find new work. 

Last week, the Wall Street Journal posted a long article tying the picture painted by the Autor, et al. paper to “disillusionment with globalization” and ultimately support for Donald Trump. 

What happened with Chinese imports is an example of how much of the conventional wisdom about economics that held sway in the late 1990s, including the role of trade, technology and central banking, has since slowly unraveled.

The aftershocks are sowing deep-seated political discontent this election year. Disillusionment with globalization has fed one of the most unconventional political seasons in modern history, with Bernie Sanders and especially Donald Trump tapping into potent anti-free-trade sentiment.

It’s understandable that journalists would be attracted to the idea that Trump’s rise fits into broader storylines about economic change and inequality.  But there are a number of reasons why the narrative just doesn’t make sense. 

For one thing, trade isn’t actually the main driver behind the decrease in manufacturing employment, which began in 1979, long before China became a major U.S. trading partner.  Part of the decline is due to trade but the vast majority is due to technological improvements that have enabled greater efficiency and automation.  That’s why even as manufacturing employment has decreased, manufacturing output has continued to rise and is now at an all-time high. 

Also, many of the places where a decrease in manufacturing employment can be tied to competition from Chinese imports are actually doing quite well economically.  If some places affected by trade are doing well and some are doing poorly, that should give us a hint that trade (or other drivers of creative destruction and growth) is not itself responsible for a community’s inability to absorb economic shock. 

My colleague Scott Lincicome has done an excellent job of explaining how the “China shock” is really a story about the lack of labor dynamism in the U.S. economy.  Government policies, many of which differ from state to state, can significantly impact the likelihood that people will find new work after their job becomes obsolete.  Policies that reduce dynamism in the labor market—minimum wage laws, protectionist occupational licensing, various taxes and regulations—make it more difficult for businesses and workers to match up after economic disruption.

So, the first premise of the narrative—that trade is responsible for economic decline in many American communities—is false.   

But maybe people are supporting Trump because they falsely blame trade for their troubles.  A new study using extensive survey data from Gallup blows that theory away.  As the Washington Post reports:

Economic distress and anxiety across working-class white America have become a widely discussed explanation for the success of Donald Trump. It seems to make sense. Trump’s most fervent supporters tend to be white men without college degrees. This same group has suffered economically in our increasingly globalized world, as machines have replaced workers in factories and labor has shifted overseas. Trump has promised to curtail trade and other perceived threats to American workers, including immigrants.

Yet a major new analysis from Gallup, based on 87,000 interviews the polling company conducted over the past year, suggests this narrative is not complete. According to this new analysis, those who view Trump favorably have not been disproportionately affected by foreign trade or immigration, compared to people with unfavorable views of the Republican presidential nominee. The results suggest that his supporters, on average, do not have lower incomes than other Americans, nor are they more likely to be unemployed.

The study found that although Trump supporters may live in the sorts of places people consider to be harmed by trade, those supporters personally enjoy above-average economic performance.  So the second premise of the narrative—that people’s economic troubles are leading them to support Trump—also appears to be false. 

Let’s recap:

America’s manufacturing sector is thriving.  Manufacturing employment has continued to decrease, because America has a modern, developed economy where we make more things than ever before using less labor and people have better employment options than working on a factory floor.  However, as manufacturing jobs disappear (due mostly to increased automation) some people have struggled to find new work (due to various economic and policy realities unrelated to trade).

The Gallup analysis shows that this group of people is, in any event, not the demographic most represented among Trump supporters.  

So, the question remains: “Why has Trump been able to gain support by falsely blaming trade with China for an economic decline his supporters have not experienced?”

The Gallup analysis has an interesting theory based on their data:

The evidence is in favor of contact theory is quite clear. Racial isolation and lack of exposure to Hispanic immigrants raise the likelihood of Trump support. Meanwhile, Trump support falls as exposure to trade and immigration increases, which is the opposite of the predicted relationship.

The idea is that Trump supporters are opposed to trade and immigration, not because they have had bad experiences with them, but because they have had very little experience with them.

It’s worth remembering that, although Donald Trump has been particularly vociferous in his condemnation of trade, there’s nothing especially new about the public’s willingness to buy into anti-trade rhetoric during an election or for politicians to take advantage of that.

Politicians are excellent at deflecting the blame for their own failed policies onto people or institutions that voters already mistrust.  That may be foreigners (especially foreign governments) or corporations (especially multinational corporations).  The success of Trump’s anti-trade message is most likely due to his willingness to take advantage of some people’s distrust of things that are foreign. He will have the most success among people for whom trade and immigration are most foreign.  Much the same can be said of the popularity of Sen. Bernie Sanders’s brand of populist trade-bashing among the anti-corporate Left.

Trying to tie support for trade to economic factors is going to lead you to bad results, because all Americans benefit immensely from open trade.  Trade has made Donald Trump’s supporters wealthier, and taxing imports for the sake of economic nationalism won’t help them, even if they used to work in a factory.

Billionaire investor Wilbur Ross, a supporter of Donald Trump, made the following comment in a letter to the Wall Street Journal (Aug 15): “It’s Econ 101 that GDP equals the sum of domestic economic activity plus “net exports,” i.e., exports minus imports.  Therefore, when we run massive and chronic trade deficits, it weakens our economy.”

In reality, the last sentence –beginning with “Therefore”– does not follow from the first.

Mr. Ross is alluding to the demand side of National Income Accounts, wherein Y=C+I+G+ (N-X). That is, National Income (Y) equals spending on Consumption (C) plus Investment (I) plus Government (G) plus Net Exports (Imports N minus Exports X).  

Taking such accounting too literally, a reduction in imports may appear to be mathematically equal to an increase in overall real GDP.  But that is dangerously incorrect, as the 1930s should have taught us.

The accounting is true by definition (a tautology). But economics is about behavior, not accounting identities.

If trade deficits “weaken our economy,” as Mr. Ross asserts, then we should expect to see real GDP slow down when trade deficits get larger and see real GDP speed up when trade deficits get smaller or become surpluses.  What the data show is much different – the exact opposite in fact.  

The graph compares net exports (N-X) as a percentage of GDP with the annual growth of real GDP.  What it clearly shows is that trade deficits fall in recessions and grow larger in periods of strong economic growth. Trade was in surplus during the recession of 1970 and 1975, and the trade deficit shrank to trivial size in the recessions of 1980-82 and 1990-91. Trade deficits were largest in 1983-89 and 1997-2000 when real GDP was growing by 4.4 percent a year. Trade deficits also expanded in 2003-2006, when real GDP was growing by 3.2 percent a year. As real GDP growth slowed to 2 percent from 2011 to 2015, the trade deficit stabilized near 2.9 percent of GDP.

The main reason trade deficits are inversely related economic growth, contrary to elementary accounting, is that U.S. industry needs more imported parts and raw materials when the economy expands, and consumers can afford more imported luxuries when their incomes and investments are rising. A secondary reason is that whenever the United States is growing faster than the economies of major trading partners (such as Japan, EU, Canada), their demand for U.S. exports is likely to lag our demand for their exports.

Does Y=C+I+G+(N-X) imply that raising tariffs to increase the cost of imports to U.S. families and firms will somehow make their real incomes grow faster?  Of course not. Paying more for less would make Americans poorer, not richer.  If the price of widgets went up by 35 percent because of a tariff, fewer widgets would be sold and fewer Americans would be employed making them.

Writers across the political spectrum claim that immigrants are naturalizing at a higher rate to vote against Donald Trump in the 2016 presidential election.  No doubt some lawful permanent residents (LPR) are naturalizing in order to vote against Trump, who has made his anti-immigration position a major component of his campaign, but the annualized number of petitions filed in the first two quarters of FY 2016 don’t show a big increase over 2015 (Figure 1).

Figure 1

Naturalization Petitions Filed Annually

 

Source:  DHS & USCIS.

The Migration Policy Institute notes that the number of FY2016 naturalization petitions filed through March is up 21 percent over the same time in FY2015.  If that holds until the end of the year, then there will be about 164,000 additional naturalizations compared to 2015.  The annual standard deviation for naturalization petitions filed from 2008-2015 was about 121,000. So, although FY2016 petitions are likely to exceed those of FY2015 by more than a standard deviation, it pales in comparison to increases in previous years.    

A better measurement is the annual number of petitions filed as a percent of all eligible LPRs. Department of Homeland Security reports provided most of the numbers while I had to make some estimates for the years 2014-2016 based on trends. According to this rough measurement, the annualized number of FY2016 petitions is only slightly above those of 2015 and below that of 2012 (Figure 2).

Figure 2

Naturalization Petitions Filed as a Percent of All Eligible LPRs

 

Sources: DHS & Author’s Estimates for 2014-2016.

The 2007 spike was caused by people filing their petitions before an 80 percent increase in naturalization fees went into effect. 

Surges in naturalization petitions have occurred in the past, particularly as a result of the enforcement propositions in California in the mid-1990s and after the Reagan amnesty. Although 2016 naturalization petitions are up, reports of a massive surge are exaggerated.         

Taiwan long has been one of the globe’s most dangerous tripwires. Other than a brief period after World War II, the island has not been ruled by the mainland for more than a century. The 23 million people living on what was once called Formosa have made a nation.

However, the People’s Republic of China views Taiwan–also known as the Republic of China (ROC)–as part of the PRC. As China has grown wealthier, it has created a military increasingly capable of defeating Taiwan.

At the same time, economic ties between the two nations have grown, yet the Taiwanese population has steadily identified more with Taiwan than the PRC. The election of Tsai Ing-wen of the traditional pro-independence Democratic Progress Party as president in January greatly discomfited Beijing.

As Chinese patience wanes, American policy based on ambiguity grows riskier. Washington’s commitment to Taiwan developed out of the World War II alliance with the ROC.

However, Washington loosened its commitment to Taipei with President Richard Nixon’s opening to China. President Jimmy Carter furthered the process when the United States shifted official recognition to the PRC.

The American military commitment has become steadily less certain. Would the United States really risk Los Angeles for Taipei, as one Chinese general famously asked?

Washington officials hope never to have to answer that question, but the recent Taiwanese missile misfire offers a dramatic reminder of the danger of guaranteeing other nations’ security. A Taiwanese vessel mistakenly shot an anti-ship missile toward China, destroying a Taiwanese fishing boat, killing the captain and injuring several other crewmen.

While nothing today suggests that the PRC is planning war, at some point Beijing might find a casus belli to be convenient. And then America would be in the middle.

Of course, American officials want to believe that the mere mention of America would be enough to thwart Chinese ambitions. However, history is full of cases when deterrence fails.

Moreover, security guarantees tend to make their recipients more irresponsible. President Chen Shui-bian, the first DPP president, lost few opportunities to poke the great dragon across the strait, feeling secure with the United States seemingly on his side.

Worse, security guarantees effectively transfer the power to choose war to other states. Indeed, alliances often act as transmission belts of war.

Americans must decide just how committed they are to Taiwan’s independence, and do so now, rather than in the midst of a crisis. Such a crisis could emerge after an errant Taiwanese missile sinks a Chinese ship, followed by an ultimatum from Beijing to Taipei to begin reunification talks.

Taiwan is a good friend and the Taiwanese people are entitled to decide their own future. Unfortunately, however, the island abides in a bad neighborhood.

It is hard to imagine a greater catastrophe than war between the United States and the PRC. It would be virtually impossible to justify Washington not only threatening but actually following through on its military threats against China if the latter moved against Taiwan.

The United States needs to have a serious conversation with Taipei now, well in advance of the moment when the latter expects the American cavalry to arrive in a crisis. Moreover, Washington should consider a plan to back away militarily in seeking a Chinese commitment to an unhurried peaceful resolution to the issue. Doing so might encourage an economically embattled PRC to trim a military build-up that would be less necessary without the challenge of facing Taiwan backed by America.

As I point out for China-US Focus, “U.S. officials tend to assume that Washington’s commitments will never be challenged. But the Taiwanese mishap reminds us of the inevitable unexpected in international relations, and the terrible costs which often result.”

Is America really prepared to risk Los Angeles for Taipei? If not, Washington must decide what price it is willing to pay to assist Taiwan and then configure its foreign and military policies accordingly.

As school choice wins in the court of public opinion, opponents have resorted to fighting it in the courts of law. Here are a few brief updates regarding pending lawsuits against school choice programs around the country.

Colorado: Douglas County’s School Choice Grant Program

Last summer, the Colorado Supreme Court struck down Douglas County’s school voucher program with a plurality ruling that the law violates the state’s historically anti-Catholic Blaine Amendment, which forbids public money from being used at religious schools. District officials responded to the ruling by creating a new voucher program that excludes religious schools, which drew lawsuits from both opponents and supporters of school choice.

The Institute for Justice, which had previously defended the school voucher program, sued the county for unconstitutionally discriminating against religious groups. According to IJ, the “exclusion of religious options from the program violates the Free Exercise, Establishment, Equal Protection, and Free Speech Clauses of the United States Constitution, as well as the Due Process Clause, which guarantees the fundamental right of parents to control and direct the education and upbringing of their children.” IJ contends–correctly, in my view–that the First Amendment requires the government to be neutral both among religions and between religion and non-religion, but it may not actively favor nor discriminate against either religious or non-religious groups or institutions. This case is still pending.

In a separate lawsuit, opponents of school choice contended that the new voucher program was not materially different than the old one. Earlier this month, a district court agreed, striking down the program yet again. Although by excluding religious schools, the new program appears to be in compliance with the Colorado Supreme Court’s ruling, the district court explained that the state supreme court did not rule on the merits of several other alleged violations of state constitutional provisions under which the district court had previously invalidated the program. This case is likely going to return to the state supreme court for resolution.

Florida: Tax-Credit Scholarships

There are currently two lawsuits pending against Florida’s tax-credit scholarship program. As RedefinED reports, a judge recently denied an attempt to fast-track one of the two suits, which primarily concerns the adequacy of the state’s funding of district schools. A judge dismissed the portion of the suit related to the tax-credit program but plaintiffs filed an appeal and asked for the case to skip the appellate court and go straight to the state supreme court. That request has been denied, so the case will go before the appellate court first. That means the program is likely to serve more than 100,000 students by the time it comes before the state supreme court.

Nevada: Education Savings Account

As I noted a few weeks ago, the Nevada Supreme Court held oral arguments in two lawsuits against the state’s education savings account (ESA) program. RedefinED provides a nice summary of the arguments from each side.

Meanwhile, a new poll finds that nearly half of Nevada voters (48 percent) support the ESA program compared to 37 percent who oppose it. Some are making hay of the fact that wealthier families are more likely to support the program, but the law’s legislative sponsor explains that the poor are likely to benefit the most in the long run:

Support rose to 69 percent for voters with an income above $200,000, compared to just 40 percent for those earning less than $30,000.

“That might be true right now,” [state senator Scott] Hammond said. “But like anything else, when new technologies and innovations come down, it does seem like the rich take advantage of those.”

He compared the favorability of ESAs to the adoption of smartphones and other electronics: Wealthy individuals can afford to pay for the cost of research and development for a new product before the price drops for everyone else.

If the Supreme Court rules in favor of ESAs, Hammond predicted the cost of private school tuition and other services will fall and build support for the program.

“The price point will decrease. The knowledge also will increase among groups of people who may not even know what an ESA is,” he said. “And then you’ll start to see more participation.”

Exactly so. As I noted last year, the iPhone was initially something that only wealthier folks could afford, but now Walmart carries a smartphone that has better specs than the original iPhone that costs just $10. Likewise, a market for education will require the participation of higher income families to bring needed capital, but over time the greatest benefit will redound to the poor. As we’ve seen in Arizona, it is the lowest-income families who were the least satisfied with their district schools and who were the most satisfied with the ESA.

New Hampshire: Croydon’s Town Tuitioning Program

The village of Croydon, New Hampshire (population 651) is too small to run its own K-12 school system, so it has long contracted with a neighboring town to educate its students. However, a few years ago, village officials decided to cover the tuition costs of students attending any school their parents chose, up to the amount they had been paying in their previous agreements. Unfortunately, state officials didn’t like the town bucking the government education monopoly:

Croydon had been spending about $12,000 per pupil to place them in Newport’s district school. The town would cover tuition at a family’s chosen school up to the amount Newport charged, and the parents would make up any difference. On the other hand, if a school charged less than that, then the town would reap the savings. This year, Croydon paid for four students to attend Newport Montessori School, a private school where tuition is $8,200 a year.

Although the taxpayers save money and, most importantly, the students’ parents believe that school is the best fit for their children, the New Hampshire Department of Education ordered Croydon to immediately cease paying for students attending private schools.

The DOE argues that Croydon does not have the statutory authority to pay for students to attend private schools. The Croydon School Board’s attorney, former New Hampshire Supreme Court Justice Charles Douglas III, disagrees, pointing to a statute authorizing districts to contract with other public or non-public educational institutions, which, in fact, some other districts already do.

Sadly, a district court recently ruled against Croydon, which is now considering an appeal. Because the town is so small, raising the funds necessary to mount a successful legal appeal is challenging, so some village officials have created a GoFundMe page for a legal defense fund. (Yes, my libertarian friends, they do take Bitcoin!) For more information on the case, see the School Choice for New Hampshire blog.

[Originally posted at Jay P. Greene’s blog.]

The City of Calhoun, Georgia, adopted a scheme by which bail was set to a pre-determined amount, resulting in Maurice Walker being held in jail for nearly 2 weeks on misdemeanor pubic drunkenness charges. Walker challenged detention on behalf of himself and those similarly situated, including person held on traffic offenses.

The federal district court got it right and enjoined the city from enforcing its scheme: when setting bail for criminal defendants, basic due-process principles require a judge to take into account the defendant’s income and set an individually payable amount. That rule exists to ensure against a manifest injustice, converting pre-trial liberty from a right into a privilege of the wealthy. But Calhoun is pursuing an appeal. As Cato points out in ouramicus brief supporting Walker, the due-process rule that the city violated is quite literally as old as the common law.

That right to individualized bail has existed at law for nearly a millennium. Following the Norman Conquest of England in 1066, England developed a robust bail system which ensured the right to pre-trial liberty. The 1215 Magna Carta enshrined that right: “No free man shall be arrested or imprisoned … or victimized in any other way … except by the lawful judgment of his peers or by the law of the land.” When the Stuart Kings of England attempted to impose further absolute monarchy, they chose to attack the right to pretrial liberty and aggrandize royal detention powers. In 1627, Charles I arrested of five knights for unnamed offenses. Counsel for the knights challenged their detention on the ground of the Magna Carta’s liberty guarantee. The royalist King’s Bench denied that defense—contravening 400 years of law—but the House of Commons overruled the case in 1628 by passing the Petition of Right: “no freeman in any such manner as is before mentioned, be imprisoned or detained.”

Charles I was eventually beheaded in 1649 by rebel forces under parliamentary command for his constant usurpation of English constitutional rights. When his son Charles II was restored to the throne, he also attempted to impose absolutist policies, particular regarding the power to detain. His abuse of jurisdictional loopholes led to the 1679 Habeas Corpus Act. Charles II was also (in)famous for setting very high bails, an issue Parliament addressed in 1689.

The same right to individualized bail is protected in the U.S. Constitution’s due process clauses—the Supreme Court has said as much in United States v. Salerno (1987) and Stack v. Boyle (1951)—as well as the Eighth Amendment’s prohibition on excessive bail. Constitutional history could not be clearer about bail and pretrial liberty: it must be available and affordable to all but the most dangerous defendants.

The City of Calhoun now stands with the Stuart Kings among the tyrants of history who usurp ancient rights—and on appeal is trying to defend that title. The city’s best course would be to abandon its defense and comply with basic due-process requirements that preserve the freedom of the poor. That would save its taxpayers some legal fees to boot.

But barring such a change of course, the U.S. Court of Appeals for the Eleventh Circuit will hear Walker v. City of Calhoun this fall.

Hillary Clinton declares on the campaign trail, “Donald Trump simply doesn’t have the temperament to be president and commander in chief of the United States.” Thankfully, he isn’t going to be – not because of his standing in the polls, but because there is no such position as “commander in chief of the United States.”

This is a constitutional republic, and we don’t have a commander in chief. According to Article II of the Constitution, “The President shall be Commander in Chief of the Army and Navy of the United States.”

That’s an important distinction, and it’s disturbing that any candidate for the presidency would miss it. Hillary Clinton may want to be commander in chief of the whole country, of you and me, and to direct us and our economic activities the way the president directs the officers and soldiers of the armed forces. But if so, she needs to propose an amendment to the Constitution – an amendment that would effectively make the rest of the Constitution irrelevant, since it was designed as a Constitution for a limited government of a free people.

Much as they might both wish it, neither Donald Trump nor Hillary Clinton is going to be my commander.

The Supreme Court has eschewed the “reasonable expectation of privacy” test in its most important recent Fourth Amendment cases. It’s not certain that the trend away from the so-called “Katz test,” largely driven by Justice Scalia, will continue, and nobody knows what will replace it. But doctrinal shift is in the air. Courts are searching for new and better ways to administer the Fourth Amendment.

A good example is the Tenth Circuit’s decision last week in U.S. v. Ackerman. That court found that opening an email file was a Fourth Amendment “search,” both as a matter of reasonable expectations doctrine and the “distinct line of authority” that is emerging from the Supreme Court’s 2012 decision in U.S. v. Jones.

Here are the facts: AOL scans outgoing emails for child porn by comparing hashes of files sent through its network to hashes of known child porn. When it becomes aware of child porn, it is required by law to report them to the National Center for Missing and Exploited Children. NCMEC is a governmental entity and agent. (That point takes up the bulk of the decision; Congress has made huge grants of governmental power to the organization.) NCMEC opened the file without a warrant.

Nobody in the case disputed that the email is a “paper” or “effect” for Fourth Amendment purposes. The remaining question was whether the opening of the email was a search. If it was, it required a warrant.

The government persuaded the court below that NCMEC did no more than AOL did. The “private search” doctrine suggests that Ackerman can’t complain of the government learning what AOL told it by looking again.

But the Tenth Circuit overruled the district court because of the difference between observing the similarity between the hashes of two files and looking at the file, the text of the email to which it was attached, and three other attachments. NCMEC’s observation of all the email’s content was a search, which requires a warrant.

But the private search doctrine’s leading case, U.S. v. Jacobsen (1984), allowed the government to chemically test a powdery substance that FedEx had reported after they opened a damaged parcel. Such a test exposes only contraband, in which there cannot be a reasonable expectation of privacy, so such test is not a search under “reasonable expectation of privacy” doctrine. Wouldn’t the analogy allow the government to look at an email that “tested positive” for child porn?

Not really. Looking at the rest of an email after one file has tested positive is an additional search of distinct things that have not tested positive.

But the court continued in a way that has been called puzzling. It bolstered its decision with reasoning that seems to recognize property rights in information.

Jones explained that government conduct can constitute a Fourth Amendment search either when it infringes on a reasonable expectation of privacy or when it involves a physical intrusion (trespass) on a constitutionally protected space or thing (‘persons, houses, papers, and effects’) for the purpose of obtaining information.” Destroying powder to test it would seem to be a “trespass to chattels” that might not survive Jones. Opening an email would be the digital/informational equivalent—also disallowed in light of Jones.

It is a puzzling decision, but that’s because Fourth Amendment doctrine is so convoluted. There are good ways to make sense of it.

An email is a communication analogous to a letter sent in the mail. Rather than writing words on paper, folding the paper, and sealing it so that its contents can’t be seen, the words are typed into a computer and (along with other content) encoded as digital signals. The signals pass invisibly along wires, cables, and radio waves like letters travel by road, rail, and air—unavailable to strangers. Emails are reconstructed into visible material at the receiving end like letters are unsealed by their proper recipients. Emails and their contents are papers and effects.

In general, AOL and other service providers have bound themselves by contract to maintain the confidentiality of such communications, but AOL does not permit transmission of child porn and it monitors for the stuff. When it discovers it, AOL is required by law to turn it over to NCMEC. (That reporting obligation is of doubtful constitutionality to me, but I assume that citizenship/market pressure would cause AOL to report such crimes voluntarily.)

Ackerman doesn’t have a complaint about his information being absconded with by AOL. But he has a complaint when the government uses his email file to recreate the content of his email and peruse it. Distinct from possessing it, the government’s use of Ackerman’s data requires a warrant. The right to use is another of the sticks in the “bundle” that comprise property rights. AOL hadn’t converted the file to human-readable form; NCMEC did. It should have gotten a warrant.

This is how the case squares with Jones, which at its heart is a property case. Just like popping a GPS device onto a car converts it to the government’s purposes without affecting possession, making use of a file takes its “benefits” for the government—a seizure—regardless of possession.

(Courts and commentators routinely equivocate between property and “trespass,” as if the trespass cause of action triggers constitutional analysis. No, the seizure of a property right—any property right—is what should trigger further Fourth Amendment analysis.)

Making Ackerman’s data file into something humans can perceive facilitated the search  that immediately followed. That’s the Kyllo case, which pairs with Jones as the foundation of a juridical method for interpreting the Fourth Amendment. There’s seizure founded in common law property rights, and search founded in common experience with sensing (and here data processing) that has a purpose of finding particular things.

In Kyllo, it wasn’t digitized email content, but analog infrared waves that government agents converted to perceptible form. As a Fourth Amendment scholar better recognized than I said of Kyllo, “the transformation of [a] signal into a form that communicates information to a person … constitutes the search.”

In U.S. v. Ackerman, the government in the person of NCMEC rightly came into possession of a file that probably contained child porn. Making use of that file was a seizure, which, though minor, required a warrant. That seizure faciliated a search, which would have been covered by the same, constitutionally required warrant.

Though it has called the “reasonable expectation of privacy” test and its odd corollaries into question, the Supreme Court has not provided a clear path for lower courts. Judge Gorsuch’s opinion in U.S. v. Ackerman is a game attempt at finding the right path. Here’s hoping the Supreme Court better fleshes out the contours of seizure (Jones) and search (Kyllo) in cases to come.

Once again Donald Trump has shocked the foreign policy establishment. He suggested that maybe the U.S. should no longer defend its prosperous, populous allies in Europe.

The North Atlantic Treaty Organization made sense when created in 1949. War-ravaged Western Europe faced an aggressive Soviet Union. The American defense shield allowed Washington’s allies to recover and rebuild.

Nearly seven decades later the alliance has become a means rather than an end. The world has changed, yet Washington continues to guarantee the security of its 27 (soon to be 28) NATO allies (as well as Japan, South Korea, and others). Yet only four European nations bother to devote even two percent of GDP to the military, barely half America’s level.

Trump sees this as just a free-riding problem. He said he’d like to keep the alliance, but doesn’t know if it’s possible. “Many NATO nations are not making payments, are not making what they’re supposed to make,” he complained.” He “would prefer not to walk,” but if the Europeans don’t “fulfill their obligations to us,” perhaps Washington shouldn’t defend them.

A predictable firestorm erupted about America keeping its word and reassuring allies. The Trump campaign appeared to retreat ever so slightly: aide Sam Clovis downplayed the candidate’s remarks: “We just want people to follow the rules. We’re putting a marker out there.” Trump told the Washington Post: NATO is a “good thing to have” and “I don’t want to pull it out.”

Alas, Trump fundamentally misperceives the real problem. As I argue on Forbes: “The issue is not burden-sharing, getting the Europeans to do more. It is burden-shedding, turning responsibility over to the Europeans. There no longer is any geopolitical justification for America to defend Europe.”

The only potential serious threat facing Europe is Russia, and even that fear is overblown. Vladimir Putin’s behavior is egregious, but he’s shown no interest in dominating or conquering distant territories peopled by non-ethnic Russians.

In any case, Europe enjoys a population advantage approaching three-to-one and economic lead of nearly ten-to-one over Russia. Europe has a larger population and economy than America. Even today Europe spends two to three times as much as Russia on the military.

Why should the U.S. maintain the status quo?” America gets a lot out of the alliance, argue representatives of the countries being defended. Jens Stoltenberg, the former Norwegian prime minister who now serves as alliance secretary general claimed that “we defend one another,” pointing to European contributions in Afghanistan. But these are far less than America’s role in that nation, and far less costly than bearing most of the burden in confronting nuclear-armed Russia.

The U.S. is interested in the continent’s security and stability, it is said. Of course, but the Europeans have an even greater interest. Yet they lack an incentive to act if America promises to take care of their problems.

Moreover, there’s an even better case for the Europeans to subsidize America’s defense. After all, the continent is vitally interested in U.S. well-being. Why don’t the well-heeled Europeans subsidize American security?

Washington uses bases in Europe for its misbegotten activities in the Middle East, contend some NATO enthusiasts. But America would be much more secure if it didn’t intervene so promiscuously and disastrously. Anyway, it’s possible to negotiate base access without promising to inaugurate nuclear war on behalf of the host country.

As for Trump’s complaints, increasing Europe’s outlays would not suddenly make it in America’s interest to defend that continent. Nor would any increase be sustainable. Most Europeans perceive little threat, and thus little justification, for additional military outlays.

As I observe in Forbes: “No one should mistake Donald Trump as a great strategic thinker. But when it comes to foreign policy he exhibits more common sense than the usual gaggle of establishment politicians, starting with Hillary Clinton. NATO has outlived its usefulness. The U.S. should turn over defense responsibility for Europe to Europe.”

When Michelle Obama delivered her address at the Democratic National Convention (DNC) in Philadelphia, she created a stir when she cried out that America’s story was “the story that has brought me to this stage tonight, the story of generations of people who felt the lash of bondage, the shame of servitude, the sting of segregation, but who kept on striving and hoping and doing what needed to be done so that today I wake up every morning in a house that was built by slaves.”

That last line, “…I wake up every morning in a house that was built by slaves,” was the focus of much attention, with some conservative critics calling the claim false or misleading. The record was set straight in a New York Times article of July 26th, “Yes, Slaves Did Help Build the White House”.

While it important to address sins of the past, it is always wise to focus on today’s indiscretions too. Yes, a forward-looking perspective is always prudent. The slavery problem that is pressing today is modern slavery, and it’s a shockingly huge problem.

In 2013, the Walk Free Foundation, founded by Australian mining magnate Andrew Forrest, created the Global Slavery Index (GSI) to track and report modern slavery worldwide. The GSI defines modern slavery as “situations of exploitation that a person cannot refuse or leave because of threats, violence, coercion, abuse of power or deception, with treatment akin to a farm animal.” With data on 167 countries, the Global Slavery Index estimates that over 45.8 million people find themselves in some form of modern slavery today.

According to the Global Slavery Index, over 58 percent of slaves today live in just five countries. India’s embrace of slavery is astounding, with over 18 million Indians enslaved today – over 4.5 times more than the U.S. had during its peak decade of the 1860s.1  China, Pakistan, Bangladesh, and Uzbekistan round out the top five offenders. Seventeen countries have at least one percent of their populations living in modern slavery, with North Korea leading the pack, as the accompanying table shows.

 

While it might be politically correct to exclusively spend time gazing into the rearview mirror and speaking only about the history of slavery in the U.S., it would be wise to speak of the 45.8 million who are enslaved today. It’s time to shine a light on today’s slave trade and the countries where slaves reside.

 

 

 

 

 

 

 

 

 

 

Today in the New York Times columnist Nicholas Kristof argues that the failure to intervene in the Syrian civil war represents President Obama’s worst mistake, “casting a shadow over his legacy.” The war has certainly been a monumental tragedy. Almost 500,000 have died and millions now struggle as refugees. The truth, however, is that Obama’s refusal to bow to political pressure stands as a significant accomplishment of his tenure, not a mistake.

Kristof joins a bipartisan choir in accusing Obama of wrongly believing there is nothing the United States can do to make things better in Syria. Among his suggestions: implementing a no-fly zone, creating safe zones for civilians, and grounding the Syrian government’s air force. The immediate goal of such efforts would be to prevent harm to civilians. The longer-term goal is to put pressure on the Assad government to come to the negotiating table and put an end the civil war.

Though Kristof’s heart is in the right place, all of these suggestions – as well as the other, more interventionist recommendations made by many over the past several years – gloss over the obstacles to successful intervention. Obama’s more cautious approach implicitly acknowledges the reality of the situation in Syria as it stands today.

Most fundamentally, the political interests of those engaged in the civil war far outweigh America’s humanitarian interests in Syria. Calling Syria ‘Obama’s mistake’ both misdirects moral responsibility for the conflict and obscures the fact that the combatants are far more motivated than the United States. Both the Assad regime and the rebels have suffered incredible losses; all sides are clearly in it for the long haul.

Against such motivation the United States can certainly bring overwhelming military force. But as we saw in Afghanistan and Iraq, military superiority does not always translate to peace and stability. More American intervention in Syria is thus unlikely to change the calculus of those fighting for the future of their country. In the end, Syrians’ stomachs for taking casualties to control their own future will prove stronger than America’s stomach for taking casualties to prevent Syrians from dying.

Kristof also imagines that military humanitarian intervention on such a scale can be precise and limited. It cannot. The effort to exert control over events in Syria would lead inexorably to ownership of the broader conflict. This would lead to a massive and open-ended American commitment to Syria. It would also lead those currently fighting each other in Syria to find it increasingly necessary and useful to fight the United States – witness the attacks already conducted by the Islamic State and its supporters in Europe and the United States in response to Western engagement in Syria and Iraq.

On a practical level, American intervention would be dangerous on multiple levels. Thanks to Russia’s support for Assad, trying to enforce no-fly zones and humanitarian corridors would increase tensions with Russia and risk confrontation between U.S. and Russian aircraft. Beyond that the United States would need ground troops to manage humanitarian corridors and the safe movement of civilians, raising the likelihood of American casualties.

Of course, Kristof might argue that a lengthy American commitment is worth it if it ensures the peaceful future of Syria. But who, exactly, will comprise a new government in Syria once Assad is gone? It is very difficult to imagine what a new government might look like or how it would have any legitimacy to govern. So far the United States has been unable to identify any group that appears likely to be better for Syria in the long run. Getting rid of Assad in particular would just make life easier for the jihadists, who have been far more resilient and organized than the “moderate” rebels to date.

If the lengthy occupations of Afghanistan and Iraq could not promote peace and stability, there is little reason to believe that an effort in Syria, under far worse conditions, would do so.

Though Obama has stumbled here and there on Syria, overall the administration’s efforts have reflected a clear-headed reading of the situation. The administration has stuck with diplomacy and collaboration rather than making an effort to stop the bloodshed on its own. The hard truth is that the United States cannot resolve every conflict and cannot always make things better by direct intervention. If Obama had not understood this, Syria could well have been his worst mistake. 

As Americans we grow up learning that our criminal justice system is based on the principle that everyone accused of a crime is innocent until proven guilty — and that no one can be punished before getting a fair trial. Unfortunately, the government doesn’t always follow this principle.

In the U.S. Court of Appeals for the Fourth Circuit, a court has the power to restrain a defendant’s property, preventing him or her from selling or otherwise disposing of it, even though the government has yet to secure a conviction or even establish that the property has been criminally tainted in any way. Such is the case with Sergeant First Class William Todd Chamberlain, whose home is now subject to forfeiture even though the government admits that it has no connection to any wrongdoing whatsoever.

A federal district court approved of this restraint, and now Chamberlain has appealed that decision to the Fourth Circuit. Chamberlain, a former Special Forces soldier, is one of five defendants alleged to have embezzled federal funds totaling $200,000 ($40,000 each) while on tour in Afghanistan. The government has decided to recoup all $200,000 from Chamberlain alone — going after his home while leaving the property of the other defendants (who unlike Chamberlain don’t dispute their guilt).

The government relies on a federal law that allows courts to file a pre-trial restraining order on tainted assets so as to preserve their availability for forfeiture upon conviction, as well as another section of that law that allows for the substitution of untainted property during post-conviction forfeiture proceedings in situations where the defendant has caused the property to become unavailable. That problem is that now we have a case of pre-conviction, pre-trial restraint of untainted property.

This is an outrageous attempt to circumvent the clear meaning of a statute in order to unlawfully encumber the private property of an individual, in clear violation of Sergeant Chamberlain’s constitutional rights. The argument in favor of pre-trial restraint of tainted assets — that the defendant never legitimately owned them anyway, and thus really has no rights to be violated — is wholly lacking. This is why the fact that the district court sided with the government, and that current Fourth Circuit precedent is in line with that decision, is absurd — particularly so after the Supreme Court’s ruling in United States v. Luis earlier this year (which rejected the freezing of untainted assets that would allow a defendant to pay for counsel of choice).

The district court’s ruling is based on a 25-year-old interpretation of the law that has since been repudiated by every other circuit that has addressed the issue. Cato has filed an amicus brief in support of Sergeant Chamberlain, joined by the National Association of Criminal Defense Lawyers, urging the Fourth Circuit to end its incorrect and outmoded practice.

Innocent until proven guilty is the bedrock foundation of American criminal law, and it is high time that the Fourth Circuit remembers that fact in the context of asset forfeiture.

Thanks to Cato legal associate David McDonald for his help with this post.

Over the past two weeks, the Obama administration has introduced a significant escalation of U.S. involvement in the ongoing Libyan conflict. On August 1, U.S. forces launched Operation Odyssey Lightning, a campaign of limited airstrikes in support of Libyan militias against Islamic State fighters ensconced along the Libyan coast in Sirte, the birthplace of Muammar Qaddafi. This week, Pentagon officials also acknowledged that U.S. Special Operations Forces are on the ground in Libya, providing direct intelligence support to forces loyal to Libya’s fragile Government of National Accord (GNA). Those actions represent another manifestation of the Obama administration’s “light footprint” approach to military force—the use of standoff strike capabilities in support of allied ground troops—and they highlight the limitations of that approach.

After all, Odyssey Lightning is essentially a response to the negative repercussions of the multinational operation that the United States “led from behind” to overthrow Qaddafi in 2011. Allied airstrikes enabled Libyan rebels to oust Qaddafi in relatively short order. In so doing, however, the Western intervention produced a power vacuum, which resulted in a persistent civil war that enabled the Islamic State to carve out an enclave in Libya. Over the past five years, developments in Libya have thus demonstrated that the light footprint is quite useful for combating relatively well-armed militants (both state and non-state); yet the approach cannot resolve (and may even exacerbate) the socio-political disputes that lie at the heart of the instability and conflict that has swept over the Greater Middle East.

In all likelihood, U.S. airpower will enable the forces loyal to Libya’s GNA to dislodge the Islamic State from Sirte—just as U.S. support is assisting Iraqi security forces and Kurdish militias to roll back the Islamic State in Iraq and Syria. Unfortunately, the political cleavages within Libya, Iraq, and Syria show little sign of abating. There is still no end to the Syrian civil war in sight. The Shiite-dominated government in Baghdad has shown little inclination to accommodate Iraq’s large, disaffected Sunni community. And in Libya, a rival government in Tobruk continues to deny the authority of the GNA. As long as such cleavages persist, the United States will not be able to eradicate the Islamic State—just when we think we’ve won, the organization (or its next iteration) will likely pop up again. The United States thus appears to be stuck playing whack-a-mole.

The hard truth is that the United States cannot defeat transnational terrorism with military force. As Michael Morrell, Sandy Winnefeld, and Samantha Vinograd recently suggested, “unless we—and our allies and partners—also get our arms around the underlying causes of extremism, we will be facing it for generations.” Although we still lack a sophisticated understanding of what the root causes of terrorism are, it seems clear that the sectarian conflict and ungoverned spaces that have emerged within the Greater Middle East over the past two decades have served as incubators. Eradicating terrorism will therefore depend on constructing stable political settlements in countries throughout the region. The United States can and should do everything in its power to support that process. Ultimately, though, the construction of a durable political order is something that each country must accomplish on its own—and it is likely to take decades.

It’s no secret that war has been declared on for-profit colleges. The question is whether the war is justifiable. I don’t think it is—the evidence strongly suggests that all of higher ed is broken—but I also think it is very hard for the public, in any individual case, to know whether a college accused of wrongdoing is really awful, or the target of politicians trying to make names for themselves. But just accusing a school of predatory behavior hurts it, generating lots of bad press, encouraging more suits and investigations, and usually resulting in schools settling with government accusers without admitting guilt, maybe to stop the PR and financial bleeding, maybe because they think they’re guilty and that’s the best they can get. Regardless, there is clearly an imbalance of power between taxpayer-funded accusers and the accused.

New federal regulations look like they’ll make the problem of accusation-equals-sentence worse. The Wall Street Journal has a lengthy piece looking at the broad potential ramifications of the regs, but one part of the US Department of Education regulation summary caught my eye: Schools would have to automatically “put up funds, in the form of letters of credit (LOCs), that total at least 10 percent of the amount of Title IV funds received by the school over the previous year” if “a state or federal government entity such as an attorney general, the CFPB, or the FTC brings a major suit against the school.” In other words, the moment any government entity, including the unchained Consumer Financial Protection Bureau, accuses a school of wrongdoing, the punishment begins.

This punishment could easily trigger a cascade of trouble, with the need for a letter of credit scaring off investors, bad publicity scaring off students, and a school suffering financially as a result. That school could then be targeted by the Department of Education for being even more of a financial risk, and the death spiral would become inescapable. This is not too far off from what seems to have happened to Corinthian College. Corinthian was, importantly, ultimately found guilty of fraud, but that rare guilty verdict was rendered after Corinthian was no more and had no one to defend it in court.

It is, to be sure, hard to feel too sorry for the for-profit sector. It does have poor outcomes, and is heavily dependent on students paying with government dough. That said, there is also a good bit of evidence that it is no worse, controlling for student challenges, than other higher ed sectors. And it is very easy to imagine politicians—human beings likely as self-interested as the average for-profit school owner or employee—going after for-profit schools because it is politically easy.

These proposed regulations look like they will stack the deck even more against for-profit colleges.

I recently wrote in The Hill on Donald Trump’s fiscal plan. The graph below clarifies some of my comments.

Estimates purporting to show the new, evolving Trump/Ryan Tax Reform must “lose trillions” over 10-20 years are usually static – meaning they assume lower marginal tax rates on labor and capital have zero effect on economic growth or tax avoidance.  Yet that is a relatively small part of the problem.

Even if static estimates made any sense, the alleged revenue losses would still be wildly exaggerated because they compare estimated revenues from reform plans with “baseline” revenues projections from the Congressional Budget Office (CBO).  

As the graph shows, CBO projections pretend that revenues from the existing individual income tax will somehow rise as a share of GDP every year –forever– reaching levels never before seen in U.S. history, even in World War II. 

Real wages in the CBO forecast supposedly rise so rapidly that more and more middle-income taxpayers are pushed into higher and higher tax brackets.  Since tax reform eliminates the highest tax brackets, it thwarts these sneaky tax increases and thus appears to “lose money.” But the CBO’s phantom projections are sheer fantasy and no basis for rejecting sensible tax reforms to encourage more business investment and greater labor force participation.

 

My colleague David Bier has a wonderful new blog post where he argues that the government has systematically under-issued employment-based (EB) green cards since 1992.  In essence, his argument is that Congress intended for the small number of EB green cards (140,000 annually) to only be issued to the workers themselves.  In practice, however, the government has issued the majority of them to the family members of the workers.  Bier argues that the practice of issuing EB green cards to family members has no statutory basis and that it runs contrary to Congress’ intent which was to exempt the spouses and minor children from the cap altogether.  This change would more than double the number of EB green cards available for workers.  Importantly, this error in interpretation can be corrected immediately by this or the next administration.  Do read the entire post for more details. 

Altering the way that EB green cards are counted would more than double the number of them issued to workers every year while actually making it easier for the families of skilled workers to follow their breadwinners. 

From 1992 to 2014, only 46 percent of all EB green cards were issued to workers while the rest were used by their family members.  During that time, approximately 1.7 million additional EB green cards for skilled workers could have been issued if the administrations had followed Bier’s correct interpretation and appropriately counted against the cap.  There is also the possibility that the government could “recapture” the EB green cards issued to family members in the past and properly issue them to skilled workers today.  

This is a reform that the administration could act on immediately and Bier has provided the support.           

Okay, I’ll admit the title of this post is an exaggeration. There are lots of things you should know - most bad, though some good - about international bureaucracies.

That being said, regular readers know that I get very frustrated with the statist policy agendas of both the International Monetary Fund and the Organization for Economic Cooperation and Development.

I especially object to the way these international bureaucracies are cheerleaders for bigger government and higher tax burdens. Even though they ostensibly exist to promote greater levels of prosperity!

I’ve written on these issues, ad nauseam, but perhaps dry analysis is only part of what’s needed to get the message across. Maybe some clever image can explain the issue to a broader audience (something I’ve done before with cartoons and images about the rise and fall of the welfare state, the misguided fixation on income distribution, etc).

It took awhile, but I eventually came up with (what I hope is) a clever idea. And when a former Cato intern with artistic skill, Jonathan Babington-Heina, agreed to do me a favor and take the concept in my head and translate it to paper, here are the results.

I think this hits the nail on the head.

Excessive government is the main problem plaguing the global economy. But the international bureaucracies, for all intents and purposes, represent governments. The bureaucrats at the IMF and OECD need to please politicians in order to continue enjoying their lavish budgets and exceedingly generous tax-free salaries.

So when there is some sort of problem in the global economy, they are reluctant to advocate for smaller government and lower tax burdens (even if the economists working for these organizations sometimes produce very good research on fiscal issues).

Instead, when it’s time to make recommendations, they push an agenda that is good for the political elite but bad for the private sector. Which is exactly what I’m trying to demonstrate in the cartoon,

But let’s not merely rely on a cartoon to make this point.

In an article for the American Enterprise Institute, Glenn Hubbard and Kevin Hassett discuss the intersection of economic policy and international bureaucracies. They start by explaining that these organizations would promote jurisdictional competition if they were motivated by a desire to boost growth.

…economic theory has a lot to say about how they should function. …they haven’t achieved all of their promise, primarily because those bodies have yet to fully understand the role they need to play in the interconnected world. The key insight harkens back to a dusty economics seminar room in the early 1950s, when University of Michigan graduate student Charles Tiebout…said that governments could be driven to efficient behavior if people can move. …This observation, which Tiebout developed fully in a landmark paper published in 1956, led to an explosion of work by economists, much of it focusing on…many bits of evidence that confirm the important beneficial effects that can emerge when governments compete. …A flatter world should make the competition between national governments increasingly like the competition between smaller communities. Such competition can provide the world’s citizens with an insurance policy against the out-of-control growth of massive and inefficient bureaucracies.

Using the European Union as an example, Hubbard and Hassett point out the grim results when bureaucracies focus on policies designed to boost the power of governments rather than the vitality of the market.

…as Brexit indicates, the EU has not successfully focused solely on the potentially positive role it could play. Indeed, as often as not, one can view the actions of the EU government as being an attempt to form a cartel to harmonize policies across member states, and standing in the way of, rather than advancing, competition. …an EU that acts as a competition-stifling cartel will grow increasingly unpopular, and more countries will leave it.

They close with a very useful suggestion.

If the EU instead focuses on maximizing mobility and enhancing the competition between states, allowing the countries to compete on regulation, taxation, and in other policy areas, then the union will become a populist’s dream and the best economic friend of its citizens.

Unfortunately, I fully expect this sage advice to fall upon deaf ears. The crowd in Brussels knows that their comfortable existence is dependent on pleasing politicians from national governments.

And the same is true for the bureaucrats at the IMF and OECD.

The only practical solution is to have national governments cut off funding so the bureaucracies disappear.

But, to cite just one example, why would Obama allow that when these bureaucracies go through a lot of effort to promote his statist agenda?

Imagine life in isolation, waking every morning before sunrise to make your own clothes, build and repair your meager shelter, hunt and harvest your own food, concoct rudimentary salves for what physically ails you, and attend to the upkeep of your brutish existence engaging in other difficult and tedious tasks. Forget leisure or luxuries; all of your time would be consumed trying to produce basic necessities merely to subsist.

Fortunately, that’s no longer the way most of humanity organizes its economic activities. We don’t attempt to make everything we need or want to consume, but instead specialize in a few, or a couple, or just one value-added endeavor – one profession. This specialization is possible because we accept and embrace the concept of cooperation in the form of exchange. We realize that by specializing, we can focus our efforts on what we do best, and produce more value than would be possible if we had to attend to the production of all of our needs and wants. Because we can exchange our output (monetized in the forms of wages and salaries) for the output of others, we don’t even have to know the first thing about hammering a nail, mixing mortar, making thread, yarn, and cloth, threading a needle, whittling an arrow to kill a deer, or any of the details of the incredibly complex processes and supply chains that generate the products and services we consume daily.  Fortunately (but sadly, too), most of us never give it a second thought.  

If two people focusing their efforts on the tasks they do best and exchanging their daily surpluses enables both to consume more or better quality output, then it should readily follow that four people or eight or eighty or eight million participating in this cooperative economic relationship can lead to much higher volumes of output (wealth) and much greater consumption and savings (higher living standards).  This is the purpose of exchange. It enables us to specialize.  And when there are more participants in the market (more with whom to exchange) there is greater scope for more refined levels of specialization. That means greater opportunities to match individuals’ precise skills and faculties (or to cultivate then match those precise skills and faculties) with increasingly specialized tasks and professions created in response to the increasingly refined demands of societies as they produce even greater wealth and higher living standards. 

We’ve come a long way from exchanging cloth and wine.  No longer are people’s choices restricted to being sober and clothed or naked and drunk. Today, we can almost have it all. Whereas once there were witchdoctors serving as generalist medical practitioners, today (in Washington, DC, I am told) there is burgeoning demand for the services of psychiatrists who specialize in treating the emotional and psychological adjustment costs associated with being an expat spouse of a foreign diplomat from Western Europe.  It’s become that specialized. Imagine hearing: “Sorry, my specialty is in talking spouses of diplomats through their neuroses brought on by resettling in Washington from places like Stockholm, Amsterdam, Paris, or London.  Since you’re from Warsaw, let me recommend a different specialist who focuses on treating Polish ex-pats with similar conditions.”

The purpose of exchange is to enable each of us to focus our productive efforts on what we do best.  By specializing in an occupation — instead of allocating small portions of our time to the impossible task of producing each of the necessities and luxuries we wish to consume — and exchanging the monetized output we produce most efficiently for the goods and services we produce less efficiently, we are able to produce and consume more output than would be the case in the absence of specialization and trade. The larger the size of the market, the greater is the scope for specialization, exchange, and economic growth.

Free trade is the extension of free markets across political borders.  Enlarging markets in this manner – to integrate more buyers, sellers, investors and workers – enables more refined specialization and economies of scales, which lead to greater wealth and higher living standards. When goods, services, capital, and labor flow freely across borders, Americans can take full advantage of the opportunities of the international marketplace.

The purpose of trade is to enable us to specialize; the purpose of specialization is to enable us to produce more; the purpose of producing more is to enable us to consume more.  More and better consumption is the purpose of trade. Thus, the benefits of trade come from imports, which deliver more competition, greater variety, lower prices, better quality, and innovation. The real benefits of trade are measured by the value of imports that can be purchased with a unit of exports — the so-called terms of trade. When we transact at the local supermarket, we seek to maximize the value we obtain by getting the most for our dollars.

But when it comes to trading across borders or when our individual transactions are aggregated at the national level, we seem to forget these basic principles and assume the goal of exchange is to achieve a trade surplus. We forget that trade barriers at home raise the costs and reduce the amount of imports that can be purchased with a unit of exports.  U.S. trade barriers hurt U.S. citizens, as consumers, taxpayers, workers, producers, and investors. Americans would be better off if we simply undertook our own reforms – on tariffs, regulations, and other artificial impediments to commerce – without regard for what other government’s do. Yet we don’t.

Although tariffs and other trade barriers have been reduced considerably since the end of the Second World War, U.S. policy continues to accommodate egregious amounts of protectionism.  We have “Buy American” rules that restrict most government procurement spending to U.S. suppliers, ensuring that taxpayers get the smallest bang for their buck; heavily protected services industries, such as air transportation and shipping, that drive up the cost of everything; apparently interminable farm subsidies; quotas and high tariffs on imported sugar; high tariffs on basic consumer products, such as clothing and footwear; energy export restrictions; the market-distorting cronyism of the Export-Import bank; antidumping duties that strangle downstream industries and tax consumers; regulatory protectionism masquerading as public health and safety precautions; protectionist rules of origin and local content requirements that limit trade’s benefits; restrictions on foreign investment, and so on.

It is sad, but true, that Congress seems to have forgotten why we trade.

For decades, the government has cut the number of immigrants far below what Congress authorized. Since 1990, every administration has misinterpreted the law, counting the spouses and children of legal immigrants against the limits on immigration when the statute lacks the requirement. This has cut the available slots for high-skilled workers in half, creating endless delays as they wait to obtain permanent residency in the United States.

Immigrants qualify for visas to come to the United States by meeting various requirements (college degree, family connections, etc.) and by having an employer or U.S. resident to sponsor them. Those who meet the requirements—the primary applicants—can also bring their spouses and minor children—the derivative applicants. The law limits immigration to no more than 226,000 visas for family members of U.S. citizens, 140,000 for employees of U.S. business, and 55,000 for diversity immigrants from areas that send few immigrants here. The question is: should only primary applicants count against those caps or should their families be counted against them as well?

In 1990, the Bush administration decided that the spouses and children should count against the cap. This has had a particularly acute effect in the employer-sponsored categories, where a majority of the 140,000 visas are used by spouses and children instead of workers. In 2014, for example, 56 percent of immigrants admitted under the “employer-sponsored” immigration categories were actually family members of the workers. Whenever a spouse or child uses one of the 140,000 visas, they take spots away from workers who applied after them, delaying them from getting their visas. 

Counting spouses and children ignores the plain reading of the law

The problem with what the Bush administration did is that the law contains no requirement to count families against the visa limits. Here, for example, is the relevant part of the statute (subsection (b) of 8 U.S.C. 1153) that designates 40,000 visas for the highest skilled workers:

(1) Priority Workers.—Visas shall first be made available in a number not to exceed 28.6 percent of such worldwide level [40,000]… to qualified immigrants who are aliens described in any of the following subparagraphs (A) through (C):
    (A) Aliens with extraordinary ability…
    (B) Outstanding professors and researchers…
    (C) Certain multinational executives and managers…

The plain reading of the statute is that those 40,000 visas are meant for “aliens with extraordinary ability,” “outstanding professors and researchers,” and “multinational executives and managers”—not for their spouses and children. Congress provided visas for spouses and children in a separate subsection (subsection (d) of 8 U.S.C. 1153). Here that is:

(d) Treatment of Family Members.—A spouse or child… shall, if not otherwise entitled to an immigrant status and the immediate issuance of a visa under subsection (a) [for family members], (b) [for workers] or (c) [for diversity immigrants], be entitled to the same status, and the same order of consideration provided in the respective subsection, if accompanying or following to join, the spouse or parent.

What this provision says is that because spouses and children are not entitled to status as workers, they are entitled to status under this provision as spouses and children of workers. And here’s the critical part: this provision does not apply the worldwide limit onimmigration to these workers. We know that it is not saying that spouses and children should receive status as if they were workers under the subsection that has limits because, although it applies the “order of consideration provided in the respective subsection” to the spouse and children, it doesn’t apply the limits on visas provided in that subsection.  

Moreover, it’s not clear how, if families were subject to the limitation and treated as workers, they could even be guaranteed “the same order of consideration.” If a worker in line received their green card as the 140,000th person in line, then their family could not receive the exact same order of consideration. They would have to wait until next year. This actually does happen under the current system, which flies in the face of the statute’s clear language.

Lastly, in addition to the total number of visas for the world, Congress also created limits for countries. No more than 7 percent of the visas can be taken by immigrants from any particular country. Spouses and children are explicitly included under the per-country limits, but this does not mean that they are subject to the worldwide limits. We know this because the reverse is true. The statute (8 U.S.C. 202) never applies the per-country limits to diversity visa beneficiaries, meaning that it would be incorrect to conflate the two types of limits.  

Another sign that Congress saw the two types of limits differently is that Congress was afraid that the per-country limits, but not the worldwide limits, might separate parents from their children. It created special rules to try to prevent separation from happening under the per-country limit, such that children can borrow the numbers of a different country than the one in which they were born to avoid hitting the limit. (A child born in India to an Indian mother and a Swedish father, for example, could be counted against the Swedish per-country limit instead of the backlogged Indian limit.) Congress could have created a similar scheme—borrowing from future years—to prevent separation due to the worldwide limits, but it knew it didn’t need to: families were guaranteed visas at the same time.

Counting spouses and children was not what Congress intended

The language about spouses and children being “entitled to the same status and same order of consideration” had been in immigration law since 1965, and they were counted against the cap. But in the Immigration Act of 1965, the language was included under the subsection that limited the number of visas:

(a) Aliens who are subject to the numerical limitations specified in section 201(a) shall be allotted visas… as follows:
     (1) Visas shall be first made available, in a number not to exceed [10,000]… to qualified immigrants who are unmarried sons or daughters of citizens of the United States…

It then listed 7 more categories of immigrants in the same way before stating:

    (9) A spouse or child… shall, if not otherwise entitled to an immigrant status and the immediate issuance of a visa or conditional entry under paragraphs (1) through (8) be entitled to the same status and the same order of consideration… if accompanying, or following to join, his spouse or parent.

Thus, a spouse or child are allotted visas as “aliens who are subject to the numerical limitations.” In 1990, Congress removed paragraph (9) from the subsection applying the worldwide limits and made it its own subsection, removing it from the cap on visas.

But here is the smoking gun of congressional intent: Congress set aside 12,000 visas for workers from Hong Kong, 1,000 for displaced Tibetans, and 40,000 for transitional diversity beneficiaries. Each time, it stated that spouses and children were “entitled to the same status and same order of consideration” without including them under the special new visa caps. But in early FY 1992, just after the 1990 act was implemented, Congress amended the law to apply those limits to their families, specifying that the visa numbers were for any alien admitted as, for example, a displaced Tibetan “or as the spouse or child of such an alien.”

Congress understood that the plain reading of that language would have exempted the spouses and children from being counted, and so it amended the law specifically to include them. It did not do so for the other categories of visas—employer, family, or diversity. Again, this strongly implies that Congress wanted spouses and children not to be counted against the caps.

The original House version of the 1990 act made three changes dealing with spouses and children of immigrants. In addition to taking the “entitled to the same status” language out of the numerically limited subsection, it explicitly exempted existing spouses and children of employer-sponsored immigrants initially coming to the United States, while allowing all legal permanent residents (LPRs) already in the country to bring new spouses and children to the United States without any limits.

In combining the House and Senate bills, the conference committee—made up of key members from both the chambers—kept the “entitled to the same status” language, while dropping the language on explicitly exempting families of employer-sponsored immigrants and the broader exemption for new spouses and children. It makes sense to remove the explicit employer-sponsored exemption if the first change—moving the “entitled to the same status” out of the numerical limitation subsection—had already exempted them along with diversity and family-sponsored immigrants. It would have been duplicative, and Congress wanted to treat them all equally.

Removing the broader exemption for all LPRs already in the country is consistent with the view that Congress wanted to keep existing families together—whether they were diversity-, employer-, or family-based immigrants—when they initially entered, but not allow immigrants already in the country to bring new families without a limit.

Statements from the law’s drafters support not counting spouses and children

Former-Congressman Bruce Morrison, the author of the House bill, has argued for this change, but the most telling evidence that Congress intended to exempt spouses and children who initially enter with immigrants comes from opponents of the broader provision exempting spouses and children of immigrants already in the country. When Rep. Lamar Smith (R-TX), ranking member on the House immigration subcommittee, proposed an amendment to strip the broader provision, he made this distinction:

The change… goes beyond the unification of existing families. It rewards less compelling cases of family-connected immigration. That is, an alien who starts a family outside the United States after having emigrated to the United States. In this instance, an alien enters without immediate family, then marries someone from the home country, and petitions for their entry before the principal alien becomes a citizen. I do not find this instance compelling enough to create a whole new immigration entitlement.

Sen. Alan Simpson (R-WY), ranking member on the Senate immigration subcommittee, made the same point in outlining his objection to the House bill. He envisioned a system where “as long as the spouse and children were in existence at the time the alien was issued the visa, they may enter when they wish, without restriction,” where the House bill “creates an entitlement to immediate immigrant visas for aliens who go abroad and start new families after those aliens have been granted permanent residence in the United States.”

So the best interpretation of the conference committee changes is that those who advocated for it—led by Sen. Simpson and Rep. Smith—were okay with allowing the spouses and children of diversity-, family-, and employer-based immigrants to receive unfettered access to the United States when they initially entered, but opposed a provision allowing for immigrants who later married or had children. Both Smith and Simpson said this arrangement was to encourage immigrants who are already here to apply for citizenship, while not separating current families coming here for the first time.

The Bush administration never issued regulations interpreting the statute. The State Department just made rules that quoted the “entitled to the same status” language. When the law came into effect in FY 1992, the administration continued to issue visas the same way as it had before. During the debate over the bills, it issued a statement supporting only “a modest increase in the number of legal immigrants” and favoring the less expansive Senate bill. We know it also opposed the broader exemption for immigrants already in the country, so it’s possible that it decided to adopt a restrictive view for those initially coming as well.

These facts cannot help but lead to the conclusion that four administrations have cut legal immigration to half the level that Congress authorized and that high skilled workers have been cheated for decades. President Obama has four months to correct this mistake. Immigrants shouldn’t die waiting for visas that they already have every legal right to.

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