Policy Institutes

Libertarians and other advocates of a noninterventionist foreign policy—or its close cousin, a policy of realism and restraint —have grappled with how to respond to the candidacy of Donald Trump.  Some of Trump’s policy positions are refreshing and sensible.  His hostility to wars for regime change and nation building are a gratifying contrast to the enthusiasm for such ventures that both neoconservative Republicans and humanitarian interventionist Democrats have exhibited in recent decades.  Trump’s insistence that America’s longstanding allies in both Europe and East Asia do far more for their own defense also has at least the potential to significantly reduce the republic’s excessive and obsolete security burdens. Finally, his desire to avoid confrontational relationships with major powers such as Russia and China  is a rare voice of prudence among America’s political elite, and it has understandable appeal to noninterventionists.

But there are other Trump positions that are deeply disturbing, if not outright offensive to the kind of noninterventionists (or “cosmopolitan realists”) who have filled the ranks of Cato’s foreign policy program.  Trump’s hostility to free trade is both disappointing and myopic.  But his stance on immigration is even worse.  His proposal to build a wall along the border with Mexico to keep out undocumented Hispanic migrants is not only impractical, it conveys a message of hostility to such populations. Trump’s stance on Muslim immigration, especially his call for a “temporary” ban, conveys such hostility with even greater clarity.

His support for trade protectionism, combined with adamant opposition to liberal (or even reasonably humane) immigration policies, and indeed his overall xenophobic rhetoric understandably alienate more cosmopolitan noninterventionists.  What they may find difficult to admit, though, is that Trump’s type of insular, intolerant nationalism has a long history within the noninterventionist camp.

Some of the same political figures who staunchly opposed U.S. involvement in foreign wars and participation in “entangling alliances” during the first half of the twentieth century also supported extremely restrictive immigration quotas in the 1920s and subsequent decades. Even Sen. Robert A. Taft (R-OH) the leader of the dwindling post-World War II noninterventionist contingent in Congress had a mixed record.  He correctly warned that some of the new security partners Washington was acquiring would both besmirch American values and drag the republic into avoidable conflicts.  He even dared to oppose NATO membership for the United States, warning presciently that the European nations would come to depend far too much and far too long on America for their security. 

But Taft was not especially good on trade and immigration issues.  And other prominent noninterventionists of that same period, such as Sen. William Jenner (R-IN), Sen. Kenneth Wherry (R-NE), and Sen. .John Bricker (R-OH) were even more stridently insular.  Bricker is best known for sponsoring a constitutional amendment insisting that no treaty could supersede or override any provision of the U.S. Constitution.  There was nothing wrong with that position per se, but Bricker and his allies used the campaign to whip up public hostility toward the United Nations and America’s other international obligations—even entirely nonmilitary obligations.

Moreover, one ought to keep in mind that all of the men mentioned above (even the usually sensible Taft) were strong supporters of Senator Joseph McCarthy’s unconstrained and often irresponsible hunt for domestic communists in the 1950s—a witch hunt that shattered careers and lives.  They were willing to sacrifice important civil liberties in the name of national security.  In other words, enthusiasm for authoritarian methods has been part of the makeup of some noninterventionists for a long time.  Donald Trump did not invent that behavior.

Such an admission is very difficult for noninterventionists who have worked hard to chart a different, far more open and generous course for that doctrine.  Cosmopolitan realism seeks to promote maximum, peaceful interaction among diverse populations around the world.  Therefore, it is hardly surprising that such noninterventionists favor free trade and liberal immigration policies, even as they vehemently oppose the use of force except in the direct defense of the independence, security, and liberty of the American people.  The question remains, though, how such committed cosmopolitan realists should respond to potential ideological allies who share some, but definitely not all, of those values.  Trump’s candidacy has now brought those concerns to the forefront.

Much of my work on fiscal policy is focused on educating audiences about the long-run benefits of small government and modest taxation.

But what about the short-run issue of how to deal with a fiscal crisis? I have periodically weighed in on this topic, citing research from places like the European Central Bank and International Monetary Fund to show that spending restraint is the right approach.

And I’ve also highlighted the success of the Baltic nations, all of which responded to the recent crisis with genuine spending cuts (and I very much enjoyed exposing Paul Krugman’s erroneous attack on Estonia).

Today, let’s look at Cyprus. That Mediterranean nation got in trouble because of an unsustainable long-run increase in the burden of government spending. Combined with the fallout caused by an insolvent banking system, Cyprus suffered a deep crisis earlier this decade.

Unlike many other European nations, however, Cyprus decided to deal with its over-spending problem by tightening belts in the public sector rather than the private sector.

This approach has been very successful according to a report from the Associated Press.

…emerging from a three-year, multi-billion euro rescue program, Cyprus boasts one of the highest economic growth rates among the 19 Eurozone countries — an annual rate of 2.7 percent in the first quarter. Finance Minister Harris Georgiades says Cyprus turned its economy around by aggressively slashing costs but also by avoiding piling on new taxes that would weigh ordinary folks down and put a serious damper on growth. “We didn’t raise taxes that would burden an already strained economy,” he told The Associated Press in an interview. “We found spending cuts that weren’t detrimental to economic activity.”

Cutting spending and avoiding tax hike? This is catnip for Dan Mitchell!

But did Cyprus actually cut spending, and by how much?

That’s not an easy question to answer because the two main English-language data sources don’t match.

According to the IMF data, outlays were sliced to €8.1 billion in 2014, down from a peak of €8.5 in 2011. Though the IMF indicates that those numbers are preliminary.

The European Commission database shows a bigger drop, with outlays of €7.0 billion in 2015 compared to €8.3 billion in 2011 (also an outlay spike in 2014, presumably because of a bank bailout).

The bottom line is that, while it’s unclear which numbers are most accurate, Cyprus has experienced a multi-year period of spending restraint.

And having the burden of government grow slower than the private sector always has been and always will be the best gauge of good fiscal policy.

By contrast, there’s no evidence that tax increases are a route to fiscal probity.

Indeed, the endless parade of tax hikes in Greece shows that such an approach greatly impedes economic recovery.

Though not everybody in Cyprus supports prudent policy.

Critics have accused the government of working its fiscal gymnastics on the backs of the poor — essentially chopping salaries for public sector workers. Pambis Kyritsis, head of the left-wing PEO trade union, said the government’s “neo-liberal” policies coupled with the creditors’ harsh terms have widened the chasm between the have and have-nots to huge proportions. …Georgiades turned Kyritsis argument around to reinforce his point that there shouldn’t be any let-up in the government’s reform program and fiscal discipline.

In the European context, “liberal” or “neo-liberal” means pro-market and small government (akin to “classical liberal” or “libertarian” in the United States).

Semantics aside, it will be interesting to see whether Finance Minister Georgiades is correct about maintaining spending discipline as the economy rebounds.

As the above table indicates, there are several examples of nations getting good results by limiting the growth of government spending. But there are very few examples of long-run success since very few nations have politicians with the fortitude to control outlays if the economy is growing and generating an uptick in tax revenue (which is why states like California periodically get in trouble).

This is why the best long-run answer is some sort of constitutional spending cap, similar to what exists in Switzerland or Hong Kong.

The bottom line if that spending restraint is good short-run policy and good long-run policy. Though I doubt Hillary Clinton will learn the right lesson.

P.S. Cyprus also is a reasonably good role model for how to deal with a banking crisis.

Of the Equal Employment Opportunity Commission’s record in court, I wrote last summer that 

…it’s not easy to think of an agency to whose views federal courts nowadays give less deference than the EEOC. As I’ve noted in a series of posts, judges appointed by Presidents of both political parties have lately made a habit of smacking down the commission’s positions, often in cases where it has tried to get away with a stretchy interpretation of existing law. See, for example, the Fourth Circuit’s rebuke of “pervasive errors and utterly unreliable analysis“ in EEOC expert testimony, Justice Stephen Breyer’s scathing majority opinion in Young v. U.P.S. on the shortcomings of the EEOC’s legal stance (in a case the plaintiff won), or these stinging defeats dealt out to the commission in three other cases. 

Occasionally, as in the Abercrombie & Fitch case, the commission manages to prevail anyway. But in last week’s Supreme Court decision in CRST Van Expedited, Inc. v. EEOC, it was back to the dunking booth for the much-disrespected commission. The ruling, written by Justice Anthony Kennedy, was unanimous. It laid out in detail a long tale of shoddy EEOC litigation waged against the Iowa-based trucking company CRST, in which the commission took a female driver’s complaint of sexual harassment during training and attempted to expand it into a giant “pattern and practice” lawsuit that might have been settled for millions. Rather than settling, the trucking company decided to fight. The ensuing litigation did not, to understate things, show the EEOC at its best.

It eventually became clear that the federal anti-bias agency had failed to investigate or otherwise adequately advance more than 150 of the claims it had tried to add, which were accordingly dismissed, leaving only two intact. A federal judge granted CRST attorneys’ fees on the prevailing Supreme Court standard of Christiansburg Garment, which permits defendants to recover fees when an employment discrimination claim is “frivolous, unreasonable, or groundless.”  The EEOC, however, resisted the fee order on the grounds that, under a quirky Eighth Circuit interpretation, even a frivolous claim does not generate a fee entitlement unless decided “on the merits.” And the 150 claims it had bungled had not been dismissed “on the merits” – they hadn’t gotten even that far.

In a brief concurrence, Justice Clarence Thomas notes that while the Kennedy opinion is correct and welcome, the Court really ought to be reconsidering the Christiansburg standard itself, under which a prevailing plaintiff “ordinarily is to be awarded attorney’s fees in all but special circumstances,” while a prevailing defendant may get fees only “upon a finding that the plaintiff’s action was frivolous, unreasonable, or without foundation.” Not only does that create a baldly asymmetrical and inequitable fee regime, but it departs from a natural reading of the language of Title VII itself.

In the mean time, my colleague Ilya Shapiro has one more case to add to his long list of the Obama administration’s “unanimous losses, where President Obama doesn’t even get the votes of the two justices he appointed.” 

Rep. Darrell Issa proposes Cato-style aviation reforms in a CNN op-ed today. The congressman does an excellent job laying out problems with the Transportation Security Administration (TSA) and arguing that privatized screening would increase both efficiency and security.

Here are some excerpts:

These firestorms online and in the media [regarding security lines] have brought new attention to our broken airport security system, a problem that has been slowly growing for years. But if we really “hate the wait” and want to fix it, the solution couldn’t be any simpler: let’s get the TSA out of the airport screening business altogether.

The idea of privatizing airport security isn’t a new one. Look no further than Canada and almost every single European country, which all use private airport screeners.

Last year, an internal investigation revealed that undercover agents were able to sneak mock explosives or banned weapons through the agency’s security checkpoints a whopping 95% of the time.

A number of case studies show that private screeners are not only more efficient at their jobs, allowing them to screen more passengers in less time, but are also better at detecting threats.

Under the TSA’s “Screening Partnership Program,” 22 airports have been allowed to contract with private companies to administer airport screening operations. Numerous studies of those programs … offer ample evidence that private security screeners are much better able to detect dangerous objects, including explosives and weapons, than their government-employed counterparts.

Private screeners are also shown to process passengers more efficiently, too, meaning faster-moving lines and more taxpayer savings.

For more on privatizing the TSA, see here and here.

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

Making headlines today (like the one above) is a new paper by Zoë Doubleday and colleagues documenting an increase the population of cephalopods (octopuses, cuttlefish, and squid) over the past 61 years.  The authors, after assembling a data set of historical catch rates, note that this population increase, rather than being limited to a few localized areas, seems to be occurring globally.

End of analysis.

From then on its speculation.

And the authors speculate that human-caused climate change may be behind the robust cephalopod increase. After all, the authors reason, what else has had a consistent large-scale impact over the past six decades? No analysis relating temperature trends (spatially or temporally) to cephalopod trends, no examination of other patterns of climate change and cephalopod change, just speculation.  And a new global warming meme is born—“Swarms of octopus are taking over the oceans.”

There is an overwhelming tendency to relate global warming to all manner of bad things and a great hesitation to suggest a potential link when the outcome is seemingly beneficial. We refer to this as the global-warming-is-bad-for-good-and-good-for-bad phenomenon. It holds a great majority of the time.

In the case of octopuses, squids, and cuttlefish, the authors are a bit guarded as to their speculation of impact of the increase in cephalopod numbers—will they decimate their prey populations or will they themselves provide more prey to their predators? Apparently we’ll have to wait and see.

No doubt, the outcome will be a complex one as is the case behind the observed population increases. Depletion of fish stocks, a release of competitive pressure, and good old-fashioned natural environmental variability are also suggested as potential factors in the long-term population expansion. But complex situations don’t make for great scare stories. Global-warming-fueled bands of marauding octopuses and giant squid certainly do. 

Reference:

Doubleday, Z. A., et al., 2016. Global proliferation of cephalopods. Current Biology, 26, R387–R407.

Polls recently have found that millennials have a more favorable view of socialism than older Americans do. Of course, Emily Ekins suggests that those attitudes are likely to fade as they start paying taxes. But I was interested to read this in the Washington Post today:

another Pew poll found that 95 percent of Vietnamese felt that people were better off in a free-market economy.

Wow, 95 percent. Rand Paul should run for president there. Today’s Vietnamese, of course, grew up in a Stalinist political and economic system. Since 1986 the Communist party government has pursued “market economy with socialist direction.” That’s not a Western-style free(ish) market, but it’s a lot better than Stalinist socialism, and the economy has prospered. Sounds like the Vietnamese people want more market, less socialist direction.

U.S. millennials grew up in a market economy, and after the fall of the Soviet Union they didn’t even hear much criticism of socialist economies, so they can support some imaginary vision of “socialism.” Even there, though, Ekins notes that 

millennials tend to reject the actual definition of socialism — government ownership of the means of production, or government running businesses. Only 32 percent of millennials favor “an economy managed by the government,” while, similar to older generations, 64 percent prefer a free-market economy. 

Yesterday, Sue Desmond-Hellmann, CEO of the Bill and Melinda Gates Foundation, made an important admission in an open letter about the Common Core:

Deep and deliberate engagement is essential to success. Rigorous standards and high expectations are meaningless if teachers aren’t equipped to help students meet them.

Unfortunately, our foundation underestimated the level of resources and support required for our public education systems to be well-equipped to implement the standards. We missed an early opportunity to sufficiently engage educators – particularly teachers – but also parents and communities so that the benefits of the standards could take flight from the beginning.

This has been a challenging lesson for us to absorb, but we take it to heart. The mission of improving education in America is both vast and complicated, and the Gates Foundation doesn’t have all the answers.

Think about this. One of numerous objections to the Core has been that the Obama administration, at the behest of Core advocates including Gates, attempted to impose the standards on the entire country without the Core ever having been tested. Avoiding the sort of implementation obstacles that Desmond-Hellmann laments is exactly why testing – in a federalist system, typically done by a state or two voluntarily trying something – is so important. It is how you learn what works and what doesn’t, how to improve it, and it is how you keep the whole country from suffering when something fails. But no, Gates and other Core supporters could not wait for that – they had to impose the Core on everyone because, well, they just knew what America needed.

Or maybe they didn’t.

No one – not the Gates Foundation, not the Obama administration, no one – is omniscient, which is one reason it is so dangerous to impose one “solution” on everyone. There is a very good chance that the solution, even if it seems foolproof, will have lots of major, unanticipated problems.

The question now is, will Gates and other Core advocates learn from the ill effects of their hubris, and cease their efforts to impose a single solution on all people?

We can only hope.

President Obama’s trip to Asia is off to a running start with the announcement that the United States will lift a decades-long American arms embargo on Vietnam. Initial commentary on the announcement has been generally positive, portraying the end of the embargo as the most recent in a string of events signaling improved relations with America’s former adversary in an increasingly dangerous region. So, what comes next in the U.S.-Vietnam defense relationship?

1. How will China react?

China’s Ministry of Foreign Affairs had a relatively quiet response to the announcement thus far. However, increased American military support for Vietnam fits into the narrative of a U.S.-led effort to contain China. It would not be surprising if more aggressive rhetoric comes to the fore in Chinese media over the coming days. China has also shown a willingness to respond to U.S. shows of force or resolve with military displays of its own. Vietnam’s capacity to resist Chinese coercion should increase once arms sales begin, but if China responds to such sales with assertive counter-moves then the security dilemma in the South China Sea (SCS) could become worse.

2. What equipment will Vietnam buy?

Given the challenges it faces in the SCS, Vietnam will likely place a premium on military hardware that improves maritime domain awareness and the ability to quickly respond to infringement on its claimed territories. For example, in 2015 the United States pledged $18 million to help Vietnam purchase U.S.-made Metal Shark patrol boats for its coast guard. Sales of more advanced or lethal systems may be more difficult given the challenges of integrating such systems into an arsenal already dominated by Russian weapons and the high price tag of U.S. hardware. Additionally, Vietnam has overlapping territorial claims with the Philippines, a U.S. treaty ally. Vietnam-Philippine squabbling is not the primary threat in the SCS right now, but Washington policymakers have an incentive not to approve sales of equipment that could give Vietnam a significant advantage over the Philippines.

3. How does lifting the arms embargo advance U.S. goals in the SCS?

In a press conference announcing the end of the embargo, President Obama stated “the decision to lift the ban was not based on China,” but was part of a broader process of normalization with Vietnam. This statement is only partly true. On the one hand, U.S.-Vietnam relations have greatly improved over the years and this is the next logical step in normalization. On the other hand, assertive Chinese activity in the SCS is the most pressing security concern in the region and lifting the arms embargo should improve Vietnam’s ability to deal with it. Improving the military capacity of U.S. allies and partners is a low-risk way to increase the costs of Chinese actions, which seems to be the current U.S. objective in the SCS. Unfortunately, “imposing costs” isn’t an end state.

Lifting the arms embargo on Vietnam is an important step toward the best course of action for the United States in the SCS: using weapons sales and economic support to bolster the self-defense capabilities of friendly states. It will be virtually impossible for America’s partners to achieve military parity with China on their own, but with the right mix of weapons systems and strategy they could present serious challenges to Chinese military action. More capable allies and partners should enable the United States to be a balancer of last resort in the SCS, instead of the first line of defense. 

For November, voters turned off by Trump and Clinton may be interested in the likely Libertarian Party ticket of Gary Johnson and William Weld. Johnson is a former governor of New Mexico (1995-2003), and Weld is a former governor of Massachusetts (1991-1997).

David Boaz gives an overview of their records, noting that both governors scored well on Cato’s fiscal report cards. Since 1992, the report cards have examined the tax and spending records of the nation’s governors every two years.  

Cato report cards are here. The best governors get an “A” and the worst get an “F.” The reports covering Johnson and Weld were written by Steve Moore and various coauthors.

Here are Johnson’s grades, with a few notes from the reports:

  • 1996, “B.” Johnson is “aggressively trying to make the state more taxpayer friendly. To control spending, Johnson has vetoed 200 bills passed by a liberal legislature.”
  • 1998, “B.” Johnson is “a true citizen-lawmaker who calls himself a libertarian … In a big-government state like New Mexico … Johnson’s staunch fiscal conservatism has been much needed, but also much resisted.” Johnson “reduced the number of state employees by nearly 10 percent, and he has set a state record for legislative vetoes.”
  • 2000, “B.” Johnson “has gained a well deserved reputation as a maverick governor. More so than just about any prominent politician in America today, Johnson has a libertarian attitude when it comes to government.” In “battling the legislators at every turn, Johnson has succeeded in cutting the state income tax, the gasoline tax, the state capital gains tax, and the unemployment tax. In 1999 he vetoed a 12-cent-a pack cigarette tax hike—not because he likes smoking, he says, but because he opposes all tax hikes.”
  • 2002, “B.” Johnson “has done much to create private-sector jobs and to erode the culture of dependence on government in New Mexico.”

Why didn’t Johnson get some “A” grades from Cato? In most of the reports, he scored rather middling on spending. Also, the 2002 report suggests that the legislature blocked many of his reforms.

Here are Weld’s grades:

  • 1992, “A.” Weld cut the budget and pushed to reduce income and capital gains taxes.
  • 1994, “B.” Weld cut spending, balanced the budget, improved the state’s bond rating, and cut numerous taxes. Even with a Democratic legislature, “Weld has a stunningly successful fiscal record.”
  • 1996, “B.” Weld “began to engage in a whirlwind of government downsizing. In his first two years in office, the state budget actually declined in nominal terms—an astonishing achievement given the pro-spending inclinations of the legislature. Weld privatized state services, slashed the public payroll, and cut general welfare assistance for employable adults. Weld has also been a supply-side tax cutter.”

Look for a new Cato fiscal report card in October.

The Washington Post discusses an effort by a Maine philanthropist to donate 88,000 acres of land to the National Park Service (NPS). Showing good sense, Mainers are pushing back against the idea:

“How many times do we have to say, ‘No, it’s not what we want for the area?’ ” Millinocket resident Lorri Haskell said, noting that residents in towns near the proposed park voted against its creation, that the governor and legislature are opposed and that Maine’s congressional delegation refuses to introduce the measure necessary to create a national park.

That leaves only the prospect of President Obama using his authority under the Antiquities Act of 1906 to declare the land a national monument — something he has done nearly two dozen times while in office.

“It has nothing to do with us anymore,” Haskell said as she sat at her kitchen table. “It has to do with whether President Obama is going to betray us. Is this how democracy works?”

The land was assembled by Roxanne Quimby, co-founder of Burt’s Bees. She and her son have lobbied for a decade to give it to the NPS. But their effort “has bitterly divided this corner of New England… where distrust of the federal government runs as deep as the rivers and streams.”

Why would Quimby want to give her land to the mismanaged, gridlocked, and polarized federal government? Why not preserve it within a private, nonprofit environmental organization? Why not give it to the state government?

Skeptical Mainers fear that once the Feds have the land, they will curtail access to it and move decisionmaking to faraway Washington. As discussed on DownsizingGovernment.org, centralizing control over assets and activities does not solve problems, it creates them. Whether it is land, water, education, housing, or transportation, federal control creates more bureaucracy, more regulation, less certain funding, and less democracy.

Quimby must have a romantic and unrealistic vision of the NPS, because the actual agency is likely to mismanage her land and run it down over time. The NPS operates more than 400 parks, monuments, and historic sites. The total acreage of NPS holdings has quadrupled from 20 million in 1940 to 85 million today. That is far too large an inventory to manage efficiently, and many NPS sites suffer from deterioration. About 60 percent of 27,000 NPS historic structures need repairs. The NPS and other Department of Interior agencies have accumulated more than $14 billion in deferred maintenance.

America does not need more national parks. The NPS can’t maintain what it already has. Human bureaucracies are not like efficient bee colonies. Mainers would be better off keeping control of their land within Maine.

For more on NPS, see here.

Jim Harper provides an excellent response to the too-smart-by-half libertarians who pride themselves on not voting (and mock those who do). I’ll add another benefit of voting Harper does not mention explicitly.

The usual anti-voting spiel goes like this. Your vote has zero chance of being the deciding vote. So what’s the point? You’re totally wasting your time. Not voting is smart. You should be smart. Like me. Harper responds by noting that the non-deciding vote also has value:

Votes are a dazzling roman candle of information supplied to elected officials, their staffs, political parties, journalists, opinion leaders, and future candidates, to name a few. All these witnesses to elections incorporate vote information—not just outcome, but win/loss margins—into their actions and assessments well beyond election and inauguration day.

Margins of victory matter: to candidates, donors, other officials, etc.

Yet voting has value apart from its direct effect on vote totals for various candidates or referenda. This is principally because many people see voting as an act of caring. If you vote, they think you care about your community/state/country. If you don’t, they think you don’t care and – listen up, libertarians – they will be less open to your ideas. Libertarians who want to influence other people might want to drag themselves to the polls if only so that they can later pass this test.

One might object that it makes no sense to use voting as a signal for caring. Perhaps, but it makes no less sense than using non-voting as a signal for smartness. We don’t get to choose how others interpret voting. Sometimes, if you want to get anywhere with people, you obey the local customs, even if they seem silly. 

I am not recommending that everyone always vote. There may be principled reasons not to vote. Many people who vote maybe shouldn’t. But we should put to rest the “deciding vote” objection.

Your vote matters. Not as much as it would under instant-runoff voting, but it still matters.

A fair number of libertarians pride themselves on not voting. Among their reasons: One person’s vote is so unlikely to influence the outcome of an election that almost any alternative action is a better use of time. That reasoning has appealing simplicity. For consistency’s sake, our hyper-rational non-voting friends should refrain from applauding at performances or cheering at games. People who want to see liberty advance, and not just bask in the superiority of libertarian ideas, should probably vote—and vote loudly.

News that former Massachusetts governer William Weld desires to join Gary Johnson on the Libertarian Party ticket makes the question of libertarians’ voting practices particularly salient in 2016. The major parties’ candidates are the least popular ever.

Here’s a reason why non-provision of the pivotal vote is not a reason not to vote: Voting does more than elect candidates.

Votes are a dazzling roman candle of information supplied to elected officials, their staffs, political parties, journalists, opinion leaders, and future candidates, to name a few. All these witnesses to elections incorporate vote information—not just outcome, but win/loss margins—into their actions and assessments well beyond election and inauguration day.

Here’s one use of vote information that I’m familiar with as a former Hill staffer: Folks in Congress assess each other’s strength and weakness according to electoral margin of victory. When a one- or two-term member of Congress is re-elected by a wide margin, it’s a signal that he or she is there to stay. That member is going to have a vote for a long time and will acquire more power with increasing seniority. The stock of that person and his or her staff rises, and they immediately have more capacity to move their agenda.

The process is the same in reverse. When a longer-serving member suffers a narrow win, that signals blood in the water. That member is likely to draw more serious, better funded challenger in the next election, and defeat becomes much more likely. The stock of that politician drops, and the ability of that person’s office to advance an agenda falls with it.

Winning is essential, but margins of victory affect margins of power.

In the coming presidential election, margin of victory will have similar dynamics among other groups—and they could be quite substantial. The larger the “protest vote” going to Libertarian Party candidates or others, the more news stories there will be that expose people for the first time to the existence and relative popularity of libertarian ideas, as well as others. While driving up the stock of liberty, a showing for libertarian candidates could drive down the stock of the Republican and Democratic offerings, putting blood in the water around the establishment parties.

Though hard to measure, the social and political consequences of voting are quite real, regardless of a U.S. election’s (binary) outcome. This does not mean that any libertarian should feel obligated to vote. But libertarians who shave and wear clean clothes, to say nothing of those who write or Tweet about liberty, should probably consider engaging in voting as a similar social signaling tool without respect to whether it elects a candidate.

On May 20th, the Financial Times reported the surprising contraction recorded in Nigeria’s economy. The first negative year-over-year quarter for GDP in six years. This will be the start of more negative news from Nigeria.

Without a major currency reform (read: the installation of a currency board), the weakness of Nigeria’s naira will not end anytime soon. This is bad news for inflation, which, according to my Cato Troubled Currencies Project estimate, has exploded to an annual rate of 58.6 percent. This is a long way from the official estimate (see the chart below).

 

This large discrepancy between the most recent official annual inflation rate of 12.77 percent and my implied inflation rate of 58.6 percent calls again for the use of a lie coefficient. The formula for utilizing this lie coefficient is as follows: (official data) × (lie coefficient) = real estimate. At present, the Central Bank of Nigeria’s lie coefficient is 4.6.

Earlier this week Ruth Marcus of the Washington Post published a column titled (in the print edition) “Stonewaller, shape-shifter, liar.” I won’t keep you in suspense: it was about Donald Trump. But apparently I wasn’t the only reader to have the reaction, Wouldn’t that title apply to more than one candidate this year? And some of the readers made their view known to Marcus. So today she tries valiantly to explain why Hillary Clinton isn’t – really, quite, so much – guilty of the same offenses.

Sure, she stonewalls and keeps secrets. But in many cases, she eventually comes clean. Like, you know, with her private-server emails and her Benghazi correspondence.

And yes, she’s flipped 100 percent from her previously firm positions on same-sex marriage (against, then for) and the Pacific region free-trade agreement (for, then against). Yet, Marcus writes, “voters, agree or disagree, can have reasonable confidence about Clinton’s basic worldview and where she stands on issues.” Really? Just where does she stand on trade? For TPP or against it? For a trade agreement with Europe or against it? Unless Marcus is psychic, she’d surely have to admit that Clinton stands firmly with her finger to the wind. (Admittedly, that might be better than Trump’s adamant support for protectionism.)

And then there’s, well, the lying. Marcus cites two fact-checkers who conclude that there isn’t sufficient evidence to prove that Clinton like about the Benghazi attack. Not beyond a reasonable doubt, anyway. Marcus even praises Clinton’s wildly inaccurate and repeated statements about coming under sniper fire:

Clinton’s handling of another “lie” is instructive. At several points during the 2008 campaign, Clinton described “landing under sniper fire” in Bosnia in 1996; video debunked that account. But confronted with conflicting evidence, Clinton acknowledged that she “misspoke.” Has Trump ever backed down from his bevy of demonstrably false statements?

Sorry, counselor, this is not “misspeaking.” It would be misspeaking if she said she came under fire in 1998, when it was really 1996. We might even credit her with misspeaking if she said it happened in Bosnia when it really happened in Kabul; she’s traveled a lot. But in this case, she made a claim about her own experience, and repeated it many times over several years with great detail (as a video with 7 million views illustrates), that was completely at odds with the facts. It’s not a stumble. It’s more like the false claim of Joe Biden that he came from a long line of coal miners, or the false claim of Sen. Richard Blumenthal throughout his political career that served in Vietnam, or indeed the false claim of historian Joseph Ellis that he too served in Vietnam. In every case these claims served to make the teller seem more experienced and even heroic than he or she actually was – helpful in building a political persona, but absolutely false.

And that doesn’t even get us to statements at odds with known facts on such points as whether she was “dead broke” upon leaving the White House, why she was named Hillary, whether her grandparents were immigrants, and whether she tried to enroll in the Marines or how and why she voted for the war in Iraq.

My low regard for Donald Trump is pretty well known. But I don’t see how any honest assessment can dismiss the low levels of honesty that Hillary (and Bill) Clinton have displayed for 25 years now. Which might explain why exactly 64 percent of voters consider both Clinton and Trump not to be “honest and trustworthy.” And given the high levels of unpopularity of both major-party nominees, you have to wonder if voters are going to be looking around for plausible alternative candidates.

The Peace of Westphalia in the mid-17th Century established the idea of state sovereignty. Under Westphalian principles, each state has exclusive authority over its territory and domestic affairs.  That’s been pretty good for kings, ruling elites, and the lucky few who live in top-class democracies or benevolent dictatorships.

But Westphalia is on the way out. Individual sovereignty is coming in.

Territorial state sovereignty is just one way to organize human affairs. It was probably an improvement on constant tribal war, but it’s not the last step in political evolution. It’s exciting to see how the boundaries of Westphalia can be surpassed in favor of individual empowerment. People are increasingly able to conduct their intellectual affairs—speaking, transacting, and so on—without reference to nation-states.

I’m reminded of this far-sighted (or far-out) notion by a relatively practical observation from identity expert and former Utah CIO Phil Windley. In “Self-Sovereign Identity and Legal Identity” Phil says:

We’ve finally gotten to a place where self-sovereign identities are technically possible. This is a huge milestone. The next hurdle is getting organizations, including governments to allow the use of self-sovereign identities as the basis for their administrative identities.

Over the last few centuries, it has become the state’s acknowledgement of one’s identity that provides entree to the accoutrements of human society. Want to go to school? Check out a library book? Open a bank account? Buy a home? Drive a car? Get Internet access? Ride in a plane? Have a beer? You’ll probably need to show or have shown government-issued ID.

The dominance of government identification probably emerged because states have generally had the better administrative capability to fix identities to people. Has it strengthened the power of the state as a byproduct? Oh, yes. Identity is a linchpin.

But the administrative environment has changed. Government systems wil become less and less important. Anyone can create a secure digital identity, and systems will emerge to attach biography and reputations to such identities that are as good or better than what attaches to our government-sanctioned identities in the highly regulated credit reporting system.

That opens up new vistas for people to act without respect to the constraints of governments and government-approved systems—to speak, assemble, interact, transact. We’ve enjoyed felicitious and generally well-enforced rules that protect free speech in the United States (and not that many other places).That’s only one important dimension of freedom. Now not only identity but money and digital goods and services are ripe for a break from government (and corporate) control. Using Bitcoin as its payment rail, for example, the OpenBazaar software system allows people to buy and sell on their own terms.

Territoriality still matters. The Westphalian norm rules in situations where government agents can lay hands on you and your stuff. But in the intellectual realm, as distinguished from the physical, a new sovereignty of individuals is fit to emerge. The clear benefits of Westphalian ordering to political leaders and rulers may soon begin to fall away as individuals conduct their lives without respect to political authority, including politicians’ demands for control or a cut of the action.

Phil’s post is inspired by the ID2020 summit being held today at the UN’s headquarters in New York. The Westphalian system has failed to deliver usable identity to some 20% of the world’s people, it turns out, and that conference aims to get them some. The risk in a top-down identity enterprise, if that’s what results, is that such systems could nail humanity irreversibly onto government machinery rather than fostering freedom in all its facets. I’m heartened to see some participants there who I know from the Bitcoin world to be liberty-minded, among many who are at best indifferent.

“Descartes didn’t say ‘I have a birth certificate, therefore, I am.’” That’s Phil Windley again. Brilliant. I don’t know that he shares the vision unreservedly, but here’s hoping that technology can fulfill the promise that men and women will exist and live more fully on their own terms, and less on terms dictated by the state.

The Obama administration this week announced final regulations doubling the salary threshold (from $23,660 to $47,476) at which most employers must pay time-and-a-half overtime to white-collar workers, and indexing future thresholds to advances in the wage level. Employees 25-34 and those with a bachelor’s degree are expected to be the most heavily affected groups; among sectors expected to be hard hit are not only retail chains, restaurants, and small businesses that hire on-site managers, but also colleges and even food co-ops.

As colleague Jeffrey Miron observed in this space on Wednesday, the notional paycheck benefits to employees reassigned to hourly status are likely to prove temporary, since employers have many ways over the medium term of dodging a permanent upward jump in payroll costs: they can forbid employees to clock more than 40 hours a week, lay off those who regularly do so, cut back on non-cash perks for the salaried, and so forth, not to mention suppressing the level of base pay itself.

The final version slightly softens some of the worst features of last year’s proposal, knocking down the pay threshold a bit, allowing bonuses and commissions to count toward 10 percent of the sum, and dropping a scheme to expand the range of duties forbidden to salaried managers. But overall, it’s still impractical in the extreme - as House Democrats, of all people, discovered when they tried to comply with the spirit of the rules in their own offices. The result, as I noted in this space last month, turned out to be a series of headaches including the prospect of unanswered phones and other gaps in constituent service, layoffs, and even closure of some district offices.

Two years ago, when the administration announced its plans, I pointed out in this space that the proposal, part of President Obama’s “binge” of executive orders and unilateral decrees to bypass Congress, posed very large compliance costs, aside from giant class action payouts by employers unlucky enough to guess wrong about the law’s requirements. It would also “frustrate ambitious individuals who willingly tackle long hours to rise into management ranks.” Perhaps most significant, it would force millions of workers into time-clock or hour-tracking arrangements even if they themselves prefer the freedom and perks of salaried status. The hassles of this system, when stringently enforced by law, are major:

For years, some lawyers have been advising clients not to hand out company-paid cellphones to any workers who lack a lawful overtime exemption, lest a claim later be made that work was done on the phones during evenings and weekends. Where the law is particularly stringent about calculation of lunch breaks, as in California, some lawyers have advised employers to make it a firing offense to do any work during the allotted break.

Many workers will also lose the option of “comp time” arrangements, often valued as family-friendly, by which extra hours worked one week are offset by a paid day off in the next. Much more on the likely constriction of workplace flexibility is to be found in Donald Boudreaux and Liya Palagashvili’s recent Mercatus Center paper, which discusses the menace posed by the rules for the practice of telecommuting (which by its nature makes it hard to track work hours).

I’ve covered the regulations extensively over the past two years at Overlawyered, including the tactics (such as lowballing costs and fast-walking comment periods) by which the intensely ideologized Department of Labor of Thomas Perez has sought to evade scrutiny of the measure’s costs. Along the way,  I also noted that “one big if unstated aim” of the rules is one of ideological transformation of the American workforce itself: “with more people punching clocks at work, there’ll be fewer with the politically unproductive ‘management mentality’ of salaried types.”

While everyone was debating Trump’s judicial-nominations list yesterday, the judge in Brownsville, Texas, who still maintains control of certain technical aspects of the immigration-executive-action case now before the Supreme Court issued an extraordinary order sanctioning the Justice Department for various misrepresentations and other ethical breaches. It turns out that the government had begun implementing DAPA and extended DACA – the program providing temporary eligibility for residence and other benefits to large classes of illegal aliens – before the February 2015 date when those programs were intended to become active.

Judge Andrew Hanen had worked to produce a 123-page opinion enjoining the executive action on the eve of that “go” date, and it turns out that the Justice Department violated its duty of candor by not revealing the extent of its malfeasance – and continuing with the program in certain ways for a few weeks after the order went into effect. That is, regardless whether the government purposely defied the judge or this was a case of the left hand not knowing what the far-left hand was doing, administration lawyers had a duty to disclose everything that was going on, and to make best efforts to stop the Department of Homeland Security from putting its new programs into effect.

But they didn’t do that, so Judge Hanen issued a truly remarkable sanctions order that not only details DOJ’s “bad faith” but incorporates movie dialogue to illustrate points about the the government’s not being above the law and the importance of truth-telling. As Josh Blackman says in an excellent summary:

This egregious conduct violates the most basic tenets of judicial ethics, which demand an ongoing duty of candor to the courts. What is the government’s defense? The Justice Department rationalized that its lawyers “lost focus on the fact” or that somehow “the fact receded in memory or awareness.” In one of the more light-hearted parts of the otherwise sober opinion, Judge Hanen quoted from the classic movie Miracle on 34th Street. When young Tommy Mara was asked to testify about Kris Kringle’s secret identity, he was asked, “Tommy, you know the difference between telling the truth and telling a lie, don’t you?” The boy answered, “Gosh, everybody knows you shouldn’t tell a lie, especially in court.” The Justice Department lawyers deserved coal in their stockings.

These accusations aren’t even the most audacious aspect of the court’s 28-page order. In a decision that will be studied in legal-ethics classes for decades to come, Judge Hanen placed many of the lawyers at the Justice Department’s headquarters in Washington, D.C. — known as “Main Justice” — under his personal supervision. This relief is reminiscent of federal courts that placed recalcitrant school districts under supervision to ensure compliance with desegregation orders. Or more recently, this relief is akin to judges who placed deficient police departments under federal oversight to ensure they reduce police brutality or other offenses. What is remarkable here is that Main Justice will now be required to report to Judge Hanen’s authority for the next five years to improve its ethics.

Indeed, Hanen’s remedy consists of five component: (1) all the lawyers at DOJ headquarters who litigate in the 26 states that challenged DAPA (most of them) have to go back to school for an annual ethics course taught by an outside expert; (2) DOJ has to certify annually for five years that these lawyers are indeed going to school; (3) the attorney general must report within 60 days “a comprehensive plan to prevent this unethical conduct from ever occurring again,” and “what steps she is taking to ensure that . . . the Justice Department trial lawyers tell the truth — the entire truth.”; (4) the attorney general is also required to report in 60 days “what steps she is taking to ensure that the Office of Professional Responsibility … appropriately disciplines those whose actions fall below the standards that the American people rightfully expect from their Department of Justice.”; and (5) the government must “file a list of each of the individuals in each of the Plaintiff States given benefits” under the enjoined programs, including their names, addresses, and other personally identifying information. These records would remain sealed, but the states would be able to access them on a “showing by a state of actual or imminent damage that could be minimized or prevented by release of the information to one of the Plaintiff States.” (Josh is dubious about the purpose and propriety of this last item, but it would seem to me that it would facilitate, should the plaintiff states ultimately prevail in their legal challenge, the state revocation of driver’s licenses and other benefits from those who wouldn’t have gotten them had not the government acted so egregiously.)

I can’t overstate how unusual such a sanctions order is. Judge Hanen even said that in a normal case, he’d simply strike the guilty party’s pleadings – meaning the government’s entire defense, handing a summary win to the challengers – but he couldn’t do that here because such a move would imperil the Supreme Court’s jurisdiction over a case of national import. He also said that he’d disbar the attorneys responsible if he had that power, but instead simply revoked the out-of-state lawyers’ ability to practice in his court pro hac vice (for this case).

Amazing. I’m sure that much if not all of this will be affirmed on appeal.

Yet again Donald Trump has proved that he was not the most militaristic Republican running for President. While most of Trump’s erstwhile Republican opponents were more likely to propose bombing North Korea, he proposed talking with Pyongyang.

Whether Trump meant a summit, phone conversation, or diplomatic discussion is unclear. But Washington should propose diplomatic talks, whether or not ultimately capped by a presidential conversation.

After all, other approaches are a nonstarter or have failed. Military strikes likely would trigger serious retaliation and possibly full-scale war. Sanctions have inflicted pain but not changed Pyongyang’s policy.

Why engage? First, even paranoids have enemies. Diminishing its sense of threat would at least create a possibility that Pyongyang would respond favorably to American initiatives.

Second, while the DPRK almost certainly would not voluntarily dismantle its existing nuclear arsenal, it might be willing to accept restrictions on future developments and proliferation.

Third, enlisting China’s aid, meaning a willingness to cut energy and food assistance, thereby potentially threatening the survival of the North Korean state, remains a long-shot and requires a significant American initiative to engage the DPRK.

Fourth, America could use a window, however small, into the Hermit Kingdom. Negotiations would offer a peak.

Fifth, the DPRK desires direct talks with America. One reason may be the desire to balance against China, which Washington should encourage.

Of course, any talks should be conducted with realistic expectations. Pyongyang is hardly a model negotiating partner. But that doesn’t preclude a more limited agreement at least moderating Pyongyang’s threats.

No surprise, Trump’s proposal to talk is controversial. However, as I write in the Diplomat, despite a policy agenda highlighted by foolish and unrealistic proposals (starting trade wars and building walls, for instance), on Korea Donald Trump is right. Offering to talk with North Korea’s Kim Jong-un could help break today’s stalemate.

The 2016 election season has put international trade in the spotlight – or, actually, under the heat lamp – like never before.  But just as some of us in the trade policy community started getting big heads over the increasing prominence of our pet issues, the U.S. International Trade Commission released this report yesterday, which concludes that the Trans-Pacific Partnership Agreement, if implemented, would boost real annual GDP by 0.15 percent by the year 2032. In other words, the economic growth from TPP could be wiped out by a single new major EPA regulation.  So much for the importance of trade, I guess.

Of course, some will downplay the magnitude of the issue and turn these modest gains into positive talking points to encourage TPP ratification. In addition to GDP, small gains are estimated for real income, employment, and trade, as well.

Others will suggest that the estimates overstate the benefits, as the ITC studies are wont to do.  But as Dan Pearson explained a few months ago in this paper, the ITC’s assessments are not intended to be interpreted as projections into the future. They are static comparisons. The TPP study compares today’s economy without TPP to today’s economy with TPP.  The results are just estimates of what the various outcome metrics would be ceteris paribus.  Accordingly, the utility of the estimates is limited and the validity of the model cannot be tested by comparing real future outcomes to these estimates because in the real world there is no ceteris paribus. Things change.

For example, the model doesn’t take into account things like: supply shocks (such as another fracking-type boom) or demand shocks (such as mass adoption of hand-held devices); transitions from human labor to robots; changes in institutions; the policy reactions of other countries to the TPP; accessions to the agreement by other countries; the impact on the multilateral trading system, and so on.  All of these factors matter at least as much as the terms of the TPP itself. 

So the question is: Why even bother performing these studies?  The real outcomes are determined primarily by information that is unknown and difficult to estimate with reasonable accuracy when the models are run. The results are politicized and misused by advocates and proponents of trade agreements alike.

As it stands now, the ITC is required under the terms of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (the Trade Promotion Authority Bill) to conduct an economic impact assessment of a trade agreement within 105 days of the president entering into such an agreement. While there is some useful information to obtain from these assessments, it seems that their greatest utility is to provide political cover to members of Congress.

In the end, I believe, these assessments do more damage to the credibility of trade advocates and provide fodder to trade’s opponents.  Moreover, as I wrote earlier this year:

What the public and policymakers should be considering – what should be under the spotlight – are the rules of the TPP, not the projected outcomes. The outcomes cannot be known with certainty. The rules are objective and concrete. We should be able to draw conclusions about the desirability of the TPP from its language – from the rules it articulates – without guarantees of particular outcomes. The TPP should be judged by the degree of economic freedom it restores, not by a shouting match over highly contestable estimates.  Indeed, some chapters of the TPP are expressly about reducing trade barriers, including tariffs and other obstacles to competition. Those provisions should be universally embraced, as they will help restore our economic freedoms…

Other chapters of the TPP are less about liberalization and more about crafting common rules about how governments treat foreign enterprises and how they enforce labor rights, environmental regulations, intellectual property provisions, and so on.  It is less clear whether and how these “governance” chapters enhance or impair our economic freedom. But each chapter can be assessed exhaustively on a qualitative basis, without need of highly malleable estimates of economic outcomes.

 

Dismissing a challenge from the ACLU, yesterday Las Vegas District Court Judge Eric Johnson ruled that Nevada’s education savings account (ESA) program is constitutional. However, the ESA program is still on hold due to a second lawsuit against the ESA program in which the judge issued an injunction against issuing the accounts. That case is currently pending before the Nevada Supreme Court, and it is possible that the two legal challenges will be merged.

The ACLU challenged the ESA law on two grounds, claiming that the ESA violated the Nevada Constitution’s “uniformity” clause and the state’s historically anti-Catholic Blaine Amendment. Siding with the state of Nevada and the Institute for Justice, the court rejected these claims. 

“Uniform” Does Not Mean “Exclusive”

Nevada’s state constitution requires that the legislature “shall provide for a uniform system of common schools.” These schools must “be established and maintained in each school district at least six months in every year” and it is forbidden for these schools to “allow instruction of a sectarian character therein.” In a separate clause, the state constitution enjoins the legislature to “encourage” education “by all suitable means.”

The ACLU argued the “suitable means” mentioned in Article XI, Section 1 are defined by uniformity clause in Section 2. The ACLU cited the infamous Bush v. Holmes decision in Florida, in which Florida’s state supreme court struck down the state’s voucher program by interpreting the state’s duty to create a “uniform” system of public schools to mean that the state had a duty to provide a system of schooling exclusively according to the means described in the state constitution, despite the state constitution empowering the legislation to create “other public education programs that the needs of the people may require.” (The Florida Education Association is now suing to halt the state’s tax-credit scholarship program on the same grounds.)

However,  the judge rejected this interpretation, holding instead that that in these two clauses, “the framers indicated that they intended to create two duties, a broad one to encourage education by ‘all suitable means,’ and a specific, but separate, one to create a uniform public school system.” The judge noted that the framers’ “use of two different sections to set out the Legislature’s responsibilities without reference in either section to the other plainly suggests the sections are separate and distinct.” By contrast, adopting the ACLU’s clever but strained interpretation would, according to the judge, “make section 1 superfluous, without any meaning or purpose.”

In other words, the Nevada constitution requires the state to establish a non-sectarian system of public schools, but it is also empowered to encourage education by other means that are not limited to non-sectarian schooling. 

Winning the Blaine Game

The ACLU also claimed that the ESA law violated the state constitution’s Blaine Amendment, which states that “[n]p public funds of any kind or character whatever […] shall be used for sectarian purpose.” As the Becket Fund details in their amicus brief, this clause was inserted into the Nevada state constitution out of animus toward Catholics during a time when the so-called “common schools” were actually de facto non-denominational Protestant schools that taught the Bible and held prayer in school. (“Sectarian” was a thinly veiled euphemism for “Catholic.”)

Having already found that the legislature has a general power to create programs like the ESA, a finding that the ESA ran afoul of the Blaine Amendment would only have invalidated its use at religious institutions, similar to the Montana Department of Revenue’s interpretation of its own state constitution with regard to administering its state’s tax-credit scholarship program. (It should be noted that the Institute for Justice is suing the Montana DOR, arguing that excluding religious institutions from participating in a religiously neutral program violates the U.S. Constitution’s Free Exercise clause.) However, the judge held that the ESA did not violate the Blaine Amendment.

Following the U.S. Supreme Court’s First Amendment jurisprudence, the judge held that the Nevada Constitution prohibits aiding one religion, preferring one religion over others, or aiding all religions in a manner that prefers religion over non-religion, citing in particular the state constitution’s declaration that the “free exercise and enjoyment of religious profession and worship without discrimination or preference shall forever be allowed in this State.” The Blaine Amendment had prohibited “sectarian” instruction in the public schools, but did not preclude the legislature from enacting religiously neutral programs that would provide funding to families to educate their children in the manner they preferred, whether at a religious or secular institution. In rejecting the ACLU’s view, the judge cited the Indiana Supreme Court’s 2013 decision Meredith v. Pence, which held that it was “inconceivable” that own state’s Blaine Amendment would prohibit:

any an all government expenditures from which a religious or theological institution derives a benefit–for example, fire and police protection, municipal water and sewage service, sidewalks and streets, and the like. Certainly religious or theological institutions may derive relatively substantial benefits from such municipal services. But the primary beneficiary is the public, both the public affiliated with the religious or theological institution, and the general public.

The Indiana Supreme Court concluded: “Any benefit to religious or theological institutions in the above examples, though potentially substantial, is ancillary and indirect.” Likewise, the Nevada judge held, any benefit to religious schools from the ESA was ancillary and indirect. The Blaine Amendment “was not intended to preclude any expenditure that has an incidental benefit to religion, where such is made for a primary secular purpose,” and the ESA “was enacted for the valid secular purpose of providing financial assistance to parents to take advantage of educational options available to Nevada children.”

Case dismissed.

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