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Several recent news stories report information that was hardly surprising to anyone who has studied economics or read Cato at Liberty. We talk a lot about unintended or unanticipated consequences around here, but in these cases the consequences were anticipated and even predicted by a lot of people.

First, consider this front-page story from the Washington Post on Monday:

The [fast-food] industry could be ready for another jolt as a ballot initiative to raise the minimum wage to $15 an hour nears in the District and as other campaigns to boost wages gain traction around the country. About 30 percent of the restaurant industry’s costs come from salaries, so burger-flipping robots — or at least super-fast ovens that expedite the process — become that much more cost-competitive if the current federal minimum wage of $7.25 an hour is doubled….

Many chains are already at work looking for ingenious ways to take humans out of the picture, threatening workers in an industry that employs 2.4 million wait staffers, nearly 3 million cooks and food preparers and many of the nation’s 3.3 million cashiers….

The labor-saving technology that has so far been rolled out most extensively — kiosk and ­tablet-based ordering — could be used to replace cashiers and the part of the wait staff’s job that involves taking orders and bringing checks. 

Who could have predicted that? Well, Cato vice president Jim Dorn in his 2014 testimony to the Maryland legislature. Or Bill Gates around the same time.

Then there’s this all-too-typical AP story out of California:

California lawmakers from both parties are calling for more stringent oversight of a clean jobs initiative after an Associated Press report found that a fraction of the promised jobs have been created. 

The report also found that the state has no comprehensive list to show much work has been done or energy saved, three years after voters approved a ballot measure to raise taxes on corporations and generate clean-energy jobs….

The AP reported that three years after voters passed Proposition 39, money is trickling in at a slower-than-anticipated rate, and more than half of the $297 million given to schools so far has gone to consultants and energy auditors. 

Well, you might have seen that coming if you’d read Cato’s 2011 book The False Promise of Green EnergyOr Thomas Hemphill and Mark Perry in 2012. Or Dan Mitchell in 2008 on government job creation. Or indeed Henry Hazlitt in 1946.

And finally this recent study from the Federal Reserve finding, as reported by Bloomberg:

The surging cost of U.S. college tuition has an unlikely culprit: the generosity of the government’s student-aid program, a report by the Federal Reserve Bank of New York said.

Increases in federal loans, meant to help students cope with rising costs, are quickly eaten up by schools in higher prices, wrote David O. Lucca, Karen Shen and Taylor Nadauld.

Private colleges raise their tuition 65 cents for every dollar increase in federal subsidized loans and 55 cents for Pell grants given to low-income students, according to the report. College tuition has outstripped U.S. inflation for decades.

Who would have guessed? Certainly not Hillary Clinton. But Gary Wolfram, author of this 2005 Cato study, understood what was going on. So did Neal McCluskey in 2009 and Jason Bedrick in 2012 and Steven Pearlstein in 2004. Clinton and other political leaders may not read the Cato website diligently. But you’d think they’d have seen Pearlstein’s article in the, um, widely read Washington Post.

Understanding basic economics can make it fairly easy to predict the results of price floors, price ceilings, subsidies, job creation schemes, and other efforts in economic discoordination. It’s too bad that the widespread availability of economic knowledge doesn’t seem to do much to improve public policy.

A Michigan-based supermarket trying to expand into Wisconsin has come up against an absurd law against selling products at “unfairly low” prices.  As reported by MLive, the Meijer grocery store chain is facing complaints that its grand opening sales violated Wisconsin law for offering products at prices below cost. Why is that bad?

The official rationale behind Wisconsin’s Unfair Sales Act of 1939 is revealing:

The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce. Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression.

Some of these are simply a consequence of any market competition, a process that inevitably results in some companies failing.  But the idea that there is something uniquely harmful called “unfair competition” that occurs once a product is sold below cost is just false.  There are many reasons companies sell certain products at certain times for less than the cost of production.  For example, grand opening sales and seasonal sales are ordinary forms of competition.  It’s common in many retail sectors to use a low-priced “loss leader” product to draw customers into your store hoping they will buy other high-priced items as well.  

In short, the existence of regular below-cost sales is in fact a sign of a healthy, competitive market that serves consumers and suppliers. 

It’s tempting to see Wisconsin’s law as a relic of the New Deal era’s now widely discredited interventionist economics.  But this sort of rhetoric is still quite common among people who want the government to prevent their competitors from being too competitive. 

The head of the Wisconsin Grocer’s Association warns that without the law, competition would (paradoxically) lead to monopoly.

“You would have massive, massive disruption in the marketplace… . You would have competitors trying to meet those prices and you would have others who simply could not do it.”

While state laws like Wisconsin’s Unfair Sales Act are relatively rare, the federal government relies on the same bad economics to justify the U.S. antidumping law, which imposes punitive tariffs on imports sold below “fair value.”  And just like the Wisconsin Grocer’s Association, the beneficiaries of antidumping tariffs claim such protections are needed to ensure a competitive market.

The entire institution of antidumping is based on bad economies and crony politics.  It keeps prices high for consumers and businesses while frustrating U.S. foreign relations.  I urge you to take a look at some of the extensive work Cato scholars have done and continue to do to address the myths that keep the protectionist U.S. antidumping law alive.

I don’t think anyone likes the idea of responding to all of the various statements that Donald Trump makes, but when he says something vaguely – emphasis on vaguely – substantive on an issue, a short response might be of value. In a recent interview with Chris Cuomo, Trump talked about trade policy, and had this to say (starting around the 7:00 mark) about Ford doing some of its manufacturing in Mexico:

Trump: … Ford is building a $2.5 billion … manufacturing plant for cars, trucks, and parts in Mexico.

Cuomo: How do you keep them?

Trump: Uh you keep them by…

Cuomo: … ‘cause the labor’s cheap that’s why they go.

Trump: For one thing, you keep them by talking to them. But I would say you keep them … if they go there, you know… they’ll make cars, and they’ll sell them to the United States no tax, no nothing. Just come right across the border. …

Cuomo: …and they say the labor’s cheaper over there.

Trump: And you know what, then we’ll say that’s fine. If the labor’s cheaper over there that’s good, but you know what, you’re gonna have to pay a tax to get those cars back in. You’re gonna have to pay a penalty. And if you put a… a penalty on, a tariff or whatever you call it … 

My sense is that Trump’s conception of Ford as a company is rooted in the 1950s, or maybe even the 1920s. In his mind, Ford is owned by Americans, produces in America, and sells to Americans. In reality, though, Ford has long been a global company. Here’s something I wrote about Ford a while back in the context of a paper on international investment:

Total U.S. employment for Ford in the manufacturing sector is about 43,000, but Ford employs 123,000 people worldwide in 51 different production facilities. Ford has factories in North America, Africa, South America, Australia, Europe, and Asia. In South America (26,000 employees), production is centered in Brazil and Argentina. Within Europe (38,000 employees), production is concentrated in Belgium, Germany, Romania, and Spain. And in Asia (45,000 employees), Ford plants are located in China, India, Thailand, and Turkey.

Thus, the truth is, Ford makes (and sells) cars all around the world. And it’s not just Ford, it’s most of the major car companies. Here’s what I said about Toyota:

While there are 16 Japanese production facilities and about 70,000 Japanese employees, Toyota has overseas employment of about 166,000. It has factories in North America, Latin America, Europe, Africa, Asia, Australia, and the Middle East. Within the United States, manufacturing employment is concentrated in Kentucky, Indiana, and Texas. In Europe, manufacturing employment is in the Czech Republic, France, Turkey, and the United Kingdom. And in Asia, manufacturing is concentrated in China, Taiwan, India, Indonesia, and Thailand. 

That’s how much of large-scale manufacturing works these days, and it’s good that it does, because it improves quality and lowers costs. Globalized production is more efficient in many ways, and actually helps companies like Ford stay competitive.

That’s a general point. There is also a more specific point related to how production in Mexico and the United States operate together: “A full 40% of the content in U.S. imports from Mexico is actually produced in the United States … . This means that forty cents of every dollar spent on imports from Mexico comes back to the U.S. …”  So, if you are taxing “Mexican” imports, you are also taxing the substantial value added by Americans earlier in the production process. Integrated value chains such as this make life difficult for economic nationalists, but that’s the world we live in, and they are going to need to adjust.

Trump is right that we need companies to invest in America. But the answer is not to threaten trade wars when companies act in ways that are both profit maximizing and make consumers better off. Rather, the way to attract investment is, as my colleague Dan Ikenson has written, to adopt good domestic policies that investors find attractive.

U.S. leaders routinely emphasize that America’s foreign policy is based on support for the expansion of freedom around the world.  But as I point out in a recent article in the National Interest Online, Washington’s behavior frequently does not match the idealistic rhetoric.  Too often, U.S. policymakers seem to favor even brutal and corrupt authoritarian allies over boisterous, unpredictable democratic regimes.

During the Cold War, U.S. administrations enthusiastically embraced “friendly” autocratic governments in such places as South Korea and the Philippines—even when there were viable democratic alternatives.  Because it was uncertain whether democratic governments would be as cooperative with U.S. foreign policy aims, officials preferred dealing with more compliant autocrats.  Worse, U.S. leaders repeatedly misrepresented such allies to the American people as noble members of the “free world.”

The tendency was especially pronounced in the Middle East, and that cynical policy has persisted longer there than in other regions.  It began early, as the U.S. Central Intelligence Agency helped overthrow Iran’s elected prime minister, Mohammed Mossadegh, in 1953 and restore the Shah to power as an unconstrained monarch.  The Shah became America’s chosen Persian Gulf gendarme for the next quarter century, despite the regime’s appalling human rights record and pervasive corruption.  Elsewhere in the region, Washington developed a cozy relationship with Egyptian leader Hosni Mubarak that lasted three decades, even as he and his military cronies looted and brutalized that unhappy country. 

Unfortunately, the Obama administration seems just as hypocritical as its predecessors when it comes to relations with Egypt and other Middle East countries.  U.S. leaders were reluctant to cut Mubarak loose even as pro-democracy demonstrations surged throughout Egypt in 2011.   In a PBS interview, Vice President Joe Biden even objected to describing Mubarak as a dictator and rejected calls for him to step down.

Similar sentiments were evident after General Abdel Fattah el-Sisi led a coup against Egypt’s first elected president, Mohammed Morsi.  Obama administration officials steadfastly refused even to describe the action as a coup. Not only has Washington continued to lavish weaponry on Egypt’s military, it has ignored mounting evidence of egregious human rights abuses by the Sisi regime.  And as with respect to Mubarak, U.S. officials pretend that Sisi is not a dictator, even though he became “president” through a blatantly rigged election that gave him more than 96 percent of the vote.  American leaders used to scorn the results of such phony elections in communist countries, but they chose to view the farce in Egypt as progress toward a mature democratic system.

Hatred of hypocrisy is an emotion that tends to occur throughout very different cultures.   U.S. leaders do not help America’s reputation when they profess a commitment to freedom and democracy while they fawn over such allies as thuggish Egyptian dictators and the odious Saudi royal family.  Victims of oppression were unlikely to take Washington’s alleged dedication to liberty seriously when they saw President George W. Bush strolling through the fields of his Texas ranch hand in hand with Saudi Crown Prince Abdullah as though they were intimate friends.  

Washington needs to walk the walk as well as talk the talk when it comes to supporting freedom as a key component of its foreign policy.  It should at least stop undermining balky democratic regimes and embracing thuggish autocracies.

The Spin Cycle is a reoccurring feature based upon just how much the latest weather or climate story, policy pronouncement, or simply poo-bah blather spins the truth. Statements are given a rating between 1-5 spin cycles, with less cycles meaning less spin. For a more in-depth description, visit the inaugural edition.

Well, well, well. The EPA has finally gone and done it. They have actually calculated the climate change impacts projected to result of one of their climate change regulations—in this case, the proposed rules for the efficiency standards for medium and heavy duty vehicles.

What they found was hardly surprising—the climate impacts from the proposed regulations will be vanishingly small.

The EPA calculates that the amount of global temperature rise averted by the end of the 21st century from the proposed regulations to be… wait, this is too good to paraphrase. From the EPA:

The results of the analysis demonstrate that relative to the reference case, by 2100 projected atmospheric CO2 concentrations are estimated to be reduced by 1.1 to 1.2 part per million by volume (ppmv), global mean temperature is estimated to be reduced by 0.0026 to 0.0065 °C, and sea-level rise is projected to be reduced by approximately 0.023 to 0.057 cm.

Did you catch that? According to the EPA’s own calculations, their regulation mandating the fuel economy of medium and light duty trucks avoids somewhere between twenty-six thousandths and sixty-five thousandths of a degree of future global warming. In other words, it is a useless measure when it comes to influencing the future course of global temperature. If the EPA wants to regulate the fuel efficiency of trucks, it needs to justify it for reasons that don’t relate to climate change.

Of course, if you’ve followed anything that we’ve ever had to say on EPA efforts seeking to mitigate future climate change by limiting carbon dioxide emissions, you know that we have been stressing this for years (basically, since EPA started issuing such regulations). Over and over again, and for each newly-proposed action, we show that the resulting temperature savings will be measured in hundredths to thousandths of a degree.  It is nice to finally see that the EPA completely agrees with us (we’ve known they have all along, but they are just very reluctant to admit it).

When describing the impact of these minuscule changes, we use terms like  “trifling,” “impressively tiny,” “meaningless,” “scientifically undetectable,” and “environmentally inconsequential.”

Here’s how the EPA describes them:

“EPA determines that the projected reductions in atmospheric CO2, global mean temperature, sea level rise, and ocean pH are meaningful in the context of this action.”

“Although these effects are small, they occur on a global scale and are long lasting; therefore, they can make an important contribution to reducing the risks associated with climate change.”

Not only do they talk in glowing terms about the climate significance of the regulations (“an important contribution to reducing risks associated with climate change”), but they simply love the economic ones as well.

Through the magic of the social cost of carbon, the EPA transforms 0.003°C of avoided global warming into $100 billion of economic benefit, and raves:

“[We] estimate net economic benefits exceeding $100billion making this a highly beneficial rule.”

We’ve got to hand it to government bureaucrats, they can be extremely imaginative when it comes to justifying their existence.

But sadly, imagination doesn’t trump reality.

So, while we commend the EPA for actually calculating the climate impacts of their regulation (or should we say, making the results of their calculations publically available), for their overly optimistic view of the import of the (virtually non-existent) impacts, we rate the EPA’s level of spin as “Heavy Duty” and award them four Spin Cycles.


Heavy Duty. Government regulations or treaties claiming to save the planet from certain destruction, but which actually accomplish nothing. Can also apply to important UN climate confabs, such as Copenhagen 2009 (or, quite likely, the upcoming 2015 Paris Summit), that are predicted to result in a massive, sweeping, and world-saving new treaty, followed by self-congratulatory back-patting. Four spin cycles.

I’ve got a new piece in City Journal analyzing the record of New York’s powerful, very left-wing Attorney General Eric Schneiderman. It ranges over topics that include his close ties to labor unions, his campaigns against AirBnB, Craigslist sellers, and herbal-supplement retailers, his role in overturning already-negotiated mortgage and banking settlements, and much more, including the unique role of state AGs in American politics. Very few businesses can resist the pressure a New York attorney general can bring to bear on them, with the sorts of troublesome results I explain in a sidebar

When New York attorney general Eric Schneiderman filed charges of unlawful redlining against two banks in the Rochester and Buffalo areas — they had concentrated their lending in the suburbs — he drew an unusual rebuke from Frank H. Hamlin III, CEO of another small upstate bank, Canandaigua National Bank and Trust, which had not been charged. In a letter to shareholders, Hamlin reassured them that his own bank’s relations with its regulators “are healthy. I am, however, extremely suspicious of the arbitrary and capricious manner in which various agencies (prosecutors) are abusing the legal system in order to further their own political and economic interests.” And he noted a foundational problem: “The regulations are vague in explaining what conduct is actually prohibited.” That gives enforcers plenty of discretion as to when to file complaints and against whom.

Hamlin went on to explain that one of the two banks that Schneiderman targeted “has chosen to merely fold while the other has chosen to fight. I can understand the decision to fold. The potential sanctions are severe on both corporate and personal fronts. One must decide whether to put the livelihood of their employees and potentially their own personal liberty on the line or merely cry ‘uncle’ and give the ‘people’ its pound of flesh and go on with life.

“Those who choose to fight are forced to depend upon a legal system that has mutated its focus from time-honored legal principle and justice to efficiency and political expediency,” he wrote. “I can assure you, there is no such thing as ‘efficient justice.’ ”

Finally, Hamlin warned against assuming that any decision to fold was an indicator of ultimate guilt. “The reason that 98 percent of prosecutions are settled instead of taken to trial is not the result of defendants saying, ‘Aw shucks, you caught me.’ It has to do with a fundamental and reasonable lack of faith that our legal system is working properly.”

When the letter began to attract press notice, the bank declined further comment, saying that the letter spoke for itself. Speaking out is all well and good, but in New York, it’s important not to rile up the authorities by doing so too loudly.

Read the whole thing here.

Lord help me if I have to write about anything else Donald Trump says, but I do have a few thoughts on the birthright citizenship debate he’s launched. I’ll set aside the policy aspects, which have been covered in previous years in the Cato Journal, at a Cato Hill briefing, on this blog, by my colleague Alex Nowrasteh in a pithy oped, and I’m sure many other places on our website. (Alex also posted this week an extended analysis of Trump’s new position paper on immigration.) My main take-away on the policy side is that we don’t want to create a permanent state-less underclass like what exists in many countries.

Now, on the law – on the question of whether you would need a constitutional amendment to end birthright citizenship or could just do it by amending the relevant immigration statutes – the picture is actually less clear. The first thing that the Fourteenth Amendment says, before we get to privileges or immunities, due process, and equal protection, is the following: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.” It’s that italicized “subject to the jurisdiction thereof” that’s at the heart of the debate.

Here’s the basic history: The common law at the time of the Founding gave birthright citizenship to all except slaves and Indians. The Supreme Court’s infamous ruling in Dred Scott (1857) confirmed the denial of citizenship to slaves, even if they were freed. The Fourteenth Amendment overturned Dred Scott with respect to blacks (and other non-white races), though Indians were still denied citizenship because they owed allegiance to their tribes, not to the United States. (Native Americans were granted citizenship by statute in 1924, though that allegiance/dual-loyalty paradox still clouds much of Indian law.) 

The proponents of the Fourteenth Amendment added “subject to the jurisdiction” to the Fourteenth Amendment in order to exclude from citizenship two groups beside Indians: the children of (1) foreign diplomats and (2) enemy forces engaged in hostile occupation. That understanding was affirmed by the Supreme Court in United States v. Wong Kim Ark (1898), when it recognized the U.S. citizenship of a man who was born in San Francisco to Chinese parents. Wong’s parents weren’t citizens, although they were legal residents. 

But what about illegal immigrants? Illegal aliens and their children are subject to our laws and can be prosecuted and convicted of violations – unlike diplomats, who enjoy certain immunities, and unlike foreign invaders, who are generally subject to the laws of war rather than domestic civil law. The illegal immigrants’ countries of origin can hardly make a “jurisidictional” claim on kids born in America (at least while they’re here). Thus, a natural reading of “subject to the jurisdiction” suggests that the children of illegals are citizens if born here.

On the other hand, the Fourteenth Amendment’s enactors probably didn’t intend birthright citizenship for illegal immigrants. At ratification in 1868, there were no illegal immigrants and no law had ever restricted immigration. “Subject to the jurisdiction” probably meant primary allegiance to the United States as a sovereign.

My sense of the constitutional question – again setting aside my policy view that more liberal immigration laws (accompanied by vigorous border control to prevent crime, terrorism, and public-health issues) would resolve much of the illegal-alien problem – is as follows.  

When the original public meaning of a legal text is unambiguous, you have to adopt that meaning unless it leads to absurd consequences. Here, the consequences may well be irrational and self-defeating: We have a legal rule that criminalizes unauthorized entry while offering an inducement to unauthorized entry, giving citizenship to the children of those who violate the law. So if Congress were to deny citizenship to children of illegal aliens, the Supreme Court might not declare that law unconstitutional. It’s a close call (read the strong arguments pro and con constitutional birthright citizenship by my friends Jim Ho and John Eastman, respectively).

Would the Court consider the consequences of a textual meaning that gives birthright citizenship to illegal immigrants to be absurd?  If so, the intent or purpose of the Fourteenth Amendment’s enactors might trump the text. On the other hand, and being realistic, if Chief Justice John Roberts can find that a mandate is a tax and that a federal exchange was established by a state, there’s no way that the current Supreme Court would eliminate birthright citizenship for anyone.

So really, let’s debate some serious policy issues. It’s just not classy or luxurious to keep pressing this birthright-citizenship stuff.

Some influential developers of the software that runs Bitcoin have proposed an important amendment to the functioning of the leading cryptocurrency. It’s a development as important to Bitcoin as a constitutional amendment aimed at the Fed would be to the dollar.

The debate has been characterized in some headlines as “existential,” and one write-up called it a “constitutional crisis.” Both are probably overstating the situation. But it’s worthwhile to dig in and see what we should make of the debate. Doing so can tell us how things might go for lots of things in the world of cryptocurrency, including potential future proposals to alter Bitcoin’s embedded monetary policy.

I’ll begin with some basics about the protocol that are essential for understanding what this amendment does, then I’ll discuss the nature and tenor of the debate, which is important for at least the debaters to have in mind.

Much like email is a system for sending “mail” around the globe digitally via the Internet, the Bitcoin protocol is a system for maintaining a global public record book, or ledger. The ledger is optimized for recording transfers of value in the form of digital units called bitcoins.

When one person seeks to send bitcoins to another, he or she broadcasts a message to the Internet, where it is shared among a global web of Bitcoin “nodes.” The nodes confirm the validity of each new transaction by checking the authority of the sender to transfer bitcoins from a given address.

Another group of actors called “miners” gather validated transactions from the nodes and, about every ten minutes, add a new page to the ledger by broadcasting new ledger pages back to the nodes. (They’re rewarded for the service with a pre-set payout of new bitcoins, which is what causes the total stock of bitcoins to increase over time.) If the nodes validate the new page, they add it to the consensus ledger and continue validating the latest transactions, while miners begin work on the next page.

This brief description passes over much in the process. And in Bitcon jargon, ledger pages are known as “blocks”; the ledger is called the “blockchain.”

One of the potential challenges for the Bitcoin protocol, and thus for Bitcoin, is its capacity to handle the kind of transaction volumes one would expect of a global, digital currency. The current maximum size of a ledger page, or block, is 1 megabyte, which equates to about seven transactions per second. The Visa network, by comparison, has a capacity of about 22,000 transactions per second.

It is not a given that Bitcoin should be able to handle every payment around the world, of course. It would still be a happy result for Bitcoin if a significant subset of the world’s bazillion daily payments occurred through “off chain” services using bitcoins, with the blockchain serving as a global settlement network.

But the group of Bitcoin developers advocating for the software change believe that the network will begin to bump up against the 1 megabyte block limit next year. Significant numbers of transactions could be dropped, resulting in badly delayed validations and re-sent transactions that clog and degrade the network. They have been arguing for an increase in the blocksize, and last weekend they introduced a new version of Bitcoin software called Bitcoin XT.

The new software switches to 8 megabyte blocks after January 2016 if 75% or more of mined blocks indicate that they were produced by miners who support the change. If the switch occurs, the maximum block size limit would then double every two years. (You can follow along, seeing XT and non-XT nodes and blocks here.)

Seventy-five percent is an interesting choice. Proposals to amend the U.S. Constitution are validated and become part of the Constitution if they are ratified by legislatures or conventions in 75% of U.S. states. I don’t know if the authors of Bitcoin XT were thinking of that cherished U.S. document when they set their 75% threshold, but they are doing something very much like a Bitcoin constitutional amendment.

(Full disclosure: I know Gavin Andresen and Mike Hearn better than I know most other developers, and I’ve had very brief communications with each about this debate. I’m doing my best to write this post down the middle, and I’m open to correcting it if others think I’m skewing things — and of course if I’ve gotten technical details flat wrong.)

At its essence, the choice whether to run Bitcoin XT is a simple plebiscite. Miners will “vote” with their feet. If they adopt it, the amendment passes. If they don’t, it doesn’t, and nothing changes.

If the 75% threshold is reached, it is a near certainty that the remaining miners will switch to Bitcoin XT, as well. The coins they would produce using the old software would be incompatible with the majority’s coins, and there is far less value to cryptocurrency that is incompatible with the majority currency. There is no permanent Bitcoin schism in the offing.

But that doesn’t mean that all is sweetness and light. As in debates about constitutional amendments, things are starting to run a little hot. A technical change like this reallocates power and profitability to some degree. Larger blocks propagate slightly less quickly, which may disadvantage miners with weaker Internet connectivity. Higher transaction volumes will consume more storage, raising the cost of operating nodes and potentially reducing their numbers, which threatens Bitcoin’s decentralization and resistance to control. A software change like this always risks producing unforeseen security flaws, which is not pattycake on a network that currently stores about US$3.5 billion-worth of value. So the debate is, and will be, intense.

Cato Institute alumnus and friend Timothy B. Lee wrote a helpful Vox piece on the controversy earlier this week. It was entitled, “Bitcoin is on the Verge of a Constitutional Crisis.” I don’t think “crisis” is quite right, though, for a number of reasons.

For one, the paths forward are clear. There are only two of them: adoption or non-adoption of the amendment. A “constitutional crisis” implies unpredictable behavior of contested legality. That can’t happen here, as control of the use of the software is firmly in the hands of its users, the nodes and miners — not developers.

There is an argument that the software’s users are collectively being duped, but it doesn’t seem strong. This debate is occuring in an environment that is susceptible to testing and rigor. Valid theses about how nodes and miners will be affected have been discussed and modeled — a thing that can’t be done with legal rules. Miners in particular are keenly focused on their interests, and the effects of the amendment on those interests seem pretty well understood.

Given the visibility of behavior in the Bitcoin ecosystem and the threat of exit (which I discuss below), mistaken amendments are more likely to be reversed than a “bad” amendment to a legal-world constitution. The dynamics that lock in bad laws and regulations are not in play — or at least they’re much weaker — with the Bitcoin protocol. Someone seeking economic rents through manipulation of the software’s functioning is very likely to end up drinking their own blood, and pretty much everyone knows that. We are in an environment of virtuous incentives.

The key difference between the Bitcoin protocol and a paper constitution, though, is jurisdiction. The rules that govern Bitcoin are not as important as the rules that govern a country.

Bitcoin is but the most popular of numerous cryptocurrencies, and — putting aside some poorly worded regulatory proposals — anyone with the technical skills can create a new one. Different cryptocurrencies can function differently in ways that optimize them for different uses and needs. And it is very easy to switch among cryptocurrencies.

If the Bitcoin XT proposal is adopted, if its demerits prove greater than its merits, and if switching back doesn’t or can’t occur, developers and users have a relatively easy exit to another cryptocurrency. It is not costless, but some lost Bitcoin wealth and a move to a new cryptocurrency is not as hard as uprooting oneself from a physical place and moving to a different location on Planet Earth. Bitcoin is important, exciting, and precious, but the stakes in the Bitcoin XT debate are somewhat lower than in a true constitutional debate.

Without testable propositions to hold them to account, legal-world politicians spin the most favorable evidence for their positions nearly from whole cloth. They often portray their opponents as animated by venal, fully hidden motives. The stakes are very high because everyone has to live under one rule, so they permit themselves to seek victory at all costs. Government politicians play to the hilt for a largely uninformed audience of voters who happen to respond better to ad hominem attacks than the merits. (Then they adjourn together to the bar — ah, the ruling class….)

This kind of debate is not like that kind of debate. As hot as the debate feels in the Bitcoin developer community — and it does: you can see some developers speaking carelessly to and about each other — it is relatively genteel. And it should stay that way.

The reason why developers should stay moderate with their arguments and language is because perceptions of instability in the Bitcoin ecosystem are bad for adoption, and everyone needs adoption. Were it possible to “win” the Bitcoin XT debate with bombast and exaggeration, such a victory would be Pyrrhic.

As I write this post, the Bitcoin price has seen a sharp drop (and recovery) against the dollar. Coincidental or not, and lasting or not, it’s the kind of thing that reporters who don’t pay much attention to Bitcoin — or who actively dislike it — will join to the Bitcoin XT debate. They’ll use the simple tale of developer angst and price volatility to sow doubts about cryptocurrency among the public at large.

Rancor in the Bitcoin developer community gives succor to the opponents of monetary alternatives. The debate about amending the Bitcoin software should be fascinating to watch, and it should be kept on a high plane.

[Cross-posted from]

Media outlets ranging from Newsweek and Time, to National Geographic and even the Weather Channel, all recently ran articles on the so-called “Overshoot Day,” which is defined by its official website as the day of the year

when humanity’s annual demand for the goods and services that our land and seas can provide—fruits and vegetables, meat, fish, wood, cotton for clothing, andcarbon dioxide absorption—exceeds what Earth’s ecosystems can renew in a year.

This year, the world allegedly reached the Overshoot Day on August 13th. Overshoot Day’s proponents claim that, having used up our ecological “budget” for the year and entered into “deficit spending,” all consumption after August 13th is unsustainable. Let’s look at the data concerning resources that, according to Overshoot Day’s definition, we are consuming unsustainably. (We’ll leave aside carbon dioxide absorption—as that issue is more complex—and focus on all the other resources).

Fruits and vegetables

Since millions of people rose from extreme poverty and starvation over the past few decades, the world is consuming more fruits and vegetables than before. We are also producing more fruits and vegetables per person than before. That is, partly, because of increasing yields, which allow us to extract more food from less land. Consider vegetable yields:

Meat and fish

As people in developing countries grow richer, they consume more protein (i.e., meat). The supply of meat and fish per person is rising to meet the increased demand, just as with fruits and vegetables. Overall dietary supply adequacy is, therefore, increasing.


It is true that the world is losing forest area, but there is cause for optimism. The United States has more forest area today than it did in 1990. As Ronald Bailey says in his new book The End of Doom, “In fact, except in the cases of India and Brazil, globally the forests of the world have increased by about 2 percent since 1990.” As the people of India and Brazil grow wealthier and as new forest-sparing technologies spread, those countries will likely follow suit. To quote Jesse H. Ausubel, Director of the Program for the Human Environment at The Rockefeller University and Advisory Board member:

Fortunately, the twentieth century witnessed the start of a “Great Restoration” of the world’s forests. Efficient farmers and foresters are learning to spare forestland by growing more food and fiber in ever-smaller areas. Meanwhile, increased use of metals, plastics, and electricity has eased the need for timber. And recycling has cut the amount of virgin wood pulped into paper. Although the size and wealth of the human population has shot up, the area of farm and forestland that must be dedicated to feed, heat, and house this population is shrinking. Slowly, trees can return to the liberated land.


Cotton yields are also increasing—as is the case with so many other crops. Not only does this mean that we will not “run out” of cotton (as the Overshoot Day proponents might have you believe), but it also means consumers can buy cheaper clothing. Please consider the graph below, showing U.S. cotton yields rising and cotton prices falling.

While it is true that humankind is consuming more, innovations such as GMOs and synthetic fertilizers are also allowing us to produce more. Predictions of natural resource depletion are not new. Consider the famous bet between the environmentalist Paul Ehrlich and economist Julian Simon: Ehrlich bet that the prices of five essential metals would rise as the metals became scarcer, exhausted by the needs of a growing population. Simon bet that human ingenuity would rise to the challenge of growing demand, and that the metals would decrease in price over time. Simon and human ingenuity won in the end. (Later, the prices of many metals and minerals did increase, as rapidly developing countries drove up demand, but those prices are starting to come back down again). To date, humankind has never exhausted a single natural resource. To learn more about why predictions of doom are often exaggerated, consider watching Cato’s recent book forum, The End of Doom.

The short answer is: Yes, Donald Trump likely has greater appeal among less educated Americans.

While we should keep in mind that the margins of error are wider for subsets of national polls—Trump consistently performs better among Americans who have not graduated from college than among college graduates.

For instance, Rasmussen finds that among Republicans who have not finished college, 25 percent support Trump for president compared to 11 percent among Republican college grads.

No other Republican candidate comes within 16 points of Trump among GOP non-college grads. However, among Republicans with college degrees, Trump is just one of many favored candidates: Scott Walker (13 percent), and Carly Fiorina (12 percent) score slightly better, and Marco Rubio (11 percent) ties Trump. All of these are within the margin of error.

Similarly, an August CNN/ORC poll finds that in a hypothetical match-up, Hillary Clinton leads Trump by 15 points among college graduates nationally, but only leads by two points among non-college graduates. Moreover, another CNN/ORC poll found that among all Americans, Trump’s favorables were underwater: -32 points among college grads but only by -8 points among non-college grads.

These August polls line up with July polls finding Trump performing better among less educated voters, as I detail in this piece at Federalist.

Does this mean that Trump’s appeal is any less genuine or meaningful? Definitely not. But his candidacy has the capacity to divide the more educated from the less educated.

For more public opinion analysis sign up here for weekly digest of Cato Public Opinion Insights.

Alaska Gov. Bill Walker (I) initially asked the legislature to approve the state’s participation in ObamaCare’s Medicaid expansion. The legislature has thus far declined. Now, Walker is trying to implement it anyway, and the legislature appears to be taking him to court. According to Alaska Dispatch News:

The Alaska Legislature on Tuesday said it will sue Gov. Bill Walker to block his move last month to expand the public Medicaid health care program without lawmakers’ approval.

Following a private discussion Tuesday morning, a Republican-controlled House-Senate committee voted 10-1 to spend up to $450,000 on two law firms to represent the Legislature in a suit against the governor.

One, Bancroft PLLC, is based in Washington, D.C., and represented more than two dozen states in their U.S. Supreme Court challenge to the Affordable Care Act, or “Obamacare.” The second, Holmes, Weddle & Barcott, is based in Anchorage.

In a news conference after the committee vote, Republican leaders framed their decision to challenge the governor as a constitutional one. They’re seeking an injunction to stop Medicaid expansion from going into effect Sept. 1.

“This is not a policy issue — we’re not discussing whether we should or shouldn’t expand Medicaid,” said Senate President Kevin Meyer, R-Anchorage. “This is a question of authority and process and our constitution.”


The Legislature is challenging Walker’s move based on a provision in Alaska statute that requires legislative approval before Medicaid coverage can be offered to people whose care is not required under federal law.

The version of “Obamacare” passed by Congress required states to expand Medicaid to cover low-income Americans, who can otherwise face steep health care costs without the subsidies that the legislation offers to individuals with higher incomes.

As written, the law would have revoked all federal Medicaid funding for states that didn’t go through with the expansion. But the U.S. Supreme Court said in 2012 that the threat of revoking the money was unconstitutional and coercive.

The ruling created ambiguity for Alaskan policymakers and legal experts: If Medicaid expansion is technically required under the ACA, but the Supreme Court has ruled the federal government can’t enforce the requirement by revoking money from states that don’t comply, does that make the newly eligible people under Walker’s proposed expansion an optional group that requires legislative approval?

Walker, citing a memorandum from Attorney General Craig Richards, says no. The Republican lawmakers that support the lawsuit say yes and argue the governor is circumventing their authority.

An initial filing in the Legislature’s lawsuit is expected next week.

Read the whole thing here. For more, see these posts from the Foundation for Government Accountability.

Landon Thomas, Jr. of The New York Times reports that the International Monetary Fund (IMF) might not pony up any cash for the third Greek bailout. To calculate the odds on whether the IMF will, or will not, contribute bailout funds requires knowledge of the IMF’s little Greek secret.

By late 2009, Greece was clearly in big trouble. The European Commission (EC) and the European Central Bank (ECB) did not trust the Greek government. So, the IMF was called in to negotiate loan conditions for new Greek financing. Dominique Strauss-Kahn (DSK) was the IMF’s managing director and was preparing to run for the French presidency as the Socialist candidate. DSK was more than willing to give his socialist brothers in Athens a helping hand. As a result, in 2010, Greece received a massive bailout.

Just how massive? Normally, the IMF is limited to lending up to six times a country’s IMF quota subscription to that country. However, if the IMF judges a country’s debt to be sustainable, then that country can qualify for “exceptional access,” and the IMF credit extended to such a country can exceed the 600% limit. Thanks to DSK and the IMF experts, the debt sustainability reports were rosy, until recently. The IMF extended credit to Greece, and did so generously.

The following table tells the tale. Greece holds the record for the highest IMF credit level relative to a country’s quota.

What about the little secret? Well, the IMF has been caught out. It’s massively overextended to Greece. And that explains the cat and mouse game over whether the IMF will, or will not, deliver a present at the third Greek bailout party.

Interstate 35 between San Antonio and Austin is congested, so obviously (to some people, at least) the solution is to run passenger trains between the two cities. Existing tracks are crowded with freight trains, so the Lone Star Rail District proposes to build a brand-new line for the freight trains and run passenger trains on the existing tracks. The total capital cost would be about $3 billion, up from just $0.6 billion in 2004 (which probably didn’t include the freight re-route).

Click image to download a PDF version of this map.

By coincidence, that was the projected capital cost for the proposed high-speed rail line between Tampa and Orlando (cancelled by Florida Governor Rick Scott), which are about the same 80-miles apart as Austin and San Antonio. But, despite the cost, Lone Star wouldn’t be a high-speed rail line. According to a 2004 feasibility study, trains would take about 90 minutes between the two cities, with two stops in between. While express trains with no stops would be a bit faster, cars driving at Texas speeds could still be faster.

Lone Star is asking the San Antonio city council for $500,000 to help pay for an environmental impact statement and other studies. Austin has supposedly already agreed to fund its share, though it isn’t in the city’s budget.

Lone Star is promising 32 trains (16 each way) carrying 20,000 riders (10,000 round trips) per day at fares of up to $12. That’s more than 600 riders per train; though some may not go the entire distance, it still seems high. Megabus currently operates three buses a day that take 85 minutes between the two cities at fares of $1.50 to $7.50. It seems likely that if there were 20,000 people per day wanting to pay $12 to take the trip at the same speed, Megabus would find them.

If the goal is to relieve congestion on I-35, two new lanes would probably cost less than a billion dollars and would be capable of moving far more vehicles per day than Lone Star would take off the road. Of course, the highway is probably not congested over the entire route, so two new lanes for the full length probably aren’t necessary. Besides, self-driving cars will probably go on sale and eliminate any need for passenger trains before the first Lone Star train would turn a wheel.

San Antonio Mayor Ivy Taylor, who famously cancelled the city’s even more backwards streetcar project, says that Lone Star isn’t one of her priorities. “There will be benefits from this alternative transit option, but we have to be good fiscal stewards,” she added. Local taxpayers should hope that she and the San Antonio city council can resist the starry-eyed Lone Star plan.

On Monday, Education Next released the results of its 2015 survey on education policy. Neal McCluskey already summarized the key findings, but I want to highlight one finding in particular: scholarship tax credits (STCs) are the most popular form of private educational choice. 

STCs received the support of 55 percent of respondents compared to somewhere between 47 percent and 51 percent for charter schools (depending on whether the survey first explained what charter schools are), 27 percent to 46 percent for universal school vouchers (again, depending on the wording of the question), and 34 percent to 41 percent for low-income vouchers. Unfortunately, the survey did not ask about education savings accounts.

Support for STCs was even higher among parents (57 percent), African-Americans (60 percent), and Hispanics (62 percent). This is not surprising since minorities are more likely to be low-income and therefore choice deprived. Those voicing support for STCs more than doubled those opposed in the general public (26 percent) and more than tripled the opposition among African-Americans (16 percent) and Hispanics (18 percent).

Previous Education Next surveys–as well as the Friedman Foundation’s survey last year–also found the most support for STCs among school choice policies. 

Support for STCs dipped slightly from a high of 60 percent last year, but it is still higher than any other year since Education Next first started asking the question in 2009. (They did not ask about STCs in 2013.) However, the poll also revealed the second highest level of opposition since 2009.

In the Friedman Foundation’s 2015 survey, released in July, scholarship tax credits, school vouchers, and education savings accounts all received high levels of support that were within the margin of error of each other when the question was prefaced with an explanation of how the policy worked:

  • Scholarship tax credits: 60 percent support, 29 percent opposition;
  • Education savings accounts: 62 percent support, 28 percent opposition;
  • School vouchers: 61 percent support, 33 percent opposition.

However, when not preceded by a prompt, only 39 percent of respondents supported school vouchers while 26 percent were opposed. (The other questions were only asked with an explanatory prompt because few Americans are familiar with STCs or ESAs.) Charter schools were the least popular with 53 percent in support and 27 percent opposed.

Encouragingly, support for STCs and ESAs in the Friedman poll was highest among Americans aged 18-34 with 72 percent and 75 percent support respectively. These results may well indicate a coming school choice tidal wave.

I’d have figured that the category of “Trump supporters who are aware of the Atlantic Monthly” would be an empty set, but it turns out there are at least 30 of them. Last week, in an open letter to Trump fans, the Atlantic’s Conor Friedersdorf asked  “why him?”, and yesterday, he published the results: “What Do Donald Trump Voters Actually Want?”

The funniest responses tend toward the nihilistic: “I really am at the point of letting the whole thing burn down and explode…. Like the joker from The Dark Knight, I just want to see the world burn”; or, “I just want to watch the chaos unfold …. I’m a young guy who is immature, a bit antisocial, and with no plans for kids or a wife ever. At some level, I don’t really care how things go with America as long as it’s fun to watch.” (Say what you want about the tenets of Trumpism: at least it’s not an ethos!)

But if watching things burn down and blow up is what you want out of politics, the other candidates may have a lot more to offer you—or so I argue in a column for the Federalist this week, “Trump’s Biggest Lie: ‘I’m The Most Militaristic Person’ In This Race.” That’s what Trump said upon his return to Fox News last week, and, even for the Donald, it’s a boast too far. The fact is, “in the 2016 election cycle, the ‘serious and responsible’ candidates for the presidency are so bellicose they make Trump look Cindy Sheehan.”

To take just a couple of examples from the piece, there’s:

Wisconsin governor Scott Walker, who in June, refused a reporter’s invitation to rule out “a full-blown re-invasion of Iraq,” and in July, announced that he’d “very possibly” need to start bombing Iran on his first day in office.

And there’s Florida senator Marco Rubio, who

stands out among his competitors as the sole Republican to argue that Obama’s real mistake in Libya was that he didn’t start bombing even sooner. Rubio wants to double down on the profligate interventionism of the George W. Bush era so badly that he’s built his campaign on B-movie slogans and neocon buzzwords. A Liam-Neeson-style “we will find you; and we will kill you” [is his] message to ISIS… and his website promises “A New American Century,” – a pledge that ought to give pause to anybody old enough to remember how that worked out in the last decade.

Even candidates with residual sympathy toward an earlier tradition of Republican realism have begun to toe the party line. Rand Paul has begun to sound distinctly hawkish lately, and Jeb Bush has decided it just “wouldn’t be prudent” to hire a foreign policy director who’s skeptical about bombing Iran.

Trump, on the other hand, seems determined to demonstrate his unseriousness by denouncing the Iraq War, saying he wouldn’t “rip up” the Iran deal, and complaining that America has become “the policeman of the world.”

Meanwhile, no one in this crowd can out-hawk Hillary Clinton, whose long, ghoulish career can be summed up in her own words, “I urged him to bomb.” “We came, we saw, he died,” is how HRC greeted the news that Colonel Qaddafi had been killed by a rebel mob. The best the Donald could do was brag about how this one time, he really “screwed” Qaddafi in a real estate deal. Wimp!

Look, don’t get me wrong: Trump is a boorish self-promoter—and worse, a literal “robber baron,”—the sort of guy who’d invoke eminent domain to try steal a retired widow’s house so he can use it for a limousine waiting area. The GOP should be embarrassed to have him leading the pack. But, “most militaristic”? Not by a long shot. As I argued in the Federalist, “on this issue, in this field, he’s not quite the embarrassment he should be.” Read the whole thing there.

The annual Education Next poll on school reform is out, and as always it’s boiling over with hot, tasty results. I won’t hit nearly everything in it, and even the topics I do cover can be dissected much further, but I have a few parts I want to highlight.

Common Core

Questions about the Common Core national curriculum standards have been my main focus in past EdNext polls, and they remain so this time around. The news isn’t good for the Core. Among respondents asked whether they support the Core, defined as standards states chose to adopt that “will be used to hold public schools accountable” – a description heavily biased with the promise of wonderful-sounding accountability – support has dropped from 65 percent in 2013 to 49 percent in 2015. Among teachers, the Core has donned its barrel and plunged from 76 percent support to 40 percent, with 50 percent now opposing it. Finally, getting rid of the accountability promise in the description resulted in just 39 percent of the public supporting the Core and 37 percent opposing, essentially a tie when margin of error is considered.

Federal Role

Questions about the federal role in education reveal what appear to be some serious inconsistencies. Unfortunately, 41 percent of the public thinks Washington should be in charge of “setting educational standards for what children should know,” while 43 percent think the states should be and 15 percent local governments. That means roughly 4 out of 10 people are ignoring the Constitution, as well as the federal government’s very poor track record. More encouraging, lower percentages of parents and teachers would have the feds lead on standards, and only about 1 in 5 members of the public think Washington should decide if “a school is failing” or “how to fix failing schools.” But get this: The poll also finds that 67 percent of the public thinks DC should require that all students “in grades 3-8 and once in high school” take math and reading tests. Oh, and allowing parents to opt their kids out of such tests? Only 26 percent of the public, and 32 percent of parents, support that. If there is a unifying theme here it may be that the public likes the abstract idea of national benchmarks but not centralized ramifications for performance, which we likely see reflected in the Common Core debate and No Child Left Behind reauthorization.


For the first time, the poll asked respondents to what degree various subjects were emphasized in their schools and how much they thought they should be emphasized. What that revealed is the public wants all subjects emphasized more except for athletics, which saw slight sentiment for de-emphasis. So more reading, math, arts, history, science, character education, creativity, bullying prevention and – yikes! – global warming? Yes please!

By the way, Jay Greene has some great thoughts on why character education has close to the biggest gulfs between what is desired and what is delivered, and he cites Cato’s Public Schooling Battle Map. Check out his post to see what I would have said (only not as well as he says it). And the same problem Greene discusses for character education likely applies to global warming, about which the pollsters found that Democrats want more emphasis and Republicans less. Maybe if we had school choice, far more people could get what they wanted on controversial topics like character education and climate change. And speaking of choice…

School Choice

Overall, like “that re-form,” people seem to like that school choice…maybe. Much depends on the type of choice, question wording, and whom you ask. When charter schools are described as schools that “are expected to meet promised objectives, but are exempt from state regulations,” 51 percent of the public supports them while 27 percent opposes. Getting rid of the description and just asking people if they “support or oppose the formation of charter schools” garners 47 percent support, 19 percent opposition (and a big increase in “neither support nor oppose”). For scholarship tax credits intended “to help low-income parents send their children to private schools,” 55 percent of the public is supportive, versus 26 percent in opposition. For essentially universal private school vouchers, 46 percent support the idea versus 36 percent opposing. Restrict vouchers to only low-income families, however, and support drops to 41 percent.  And, again, wording is important. When the question dropped a description of the goal of vouchers – to give low-income families “wider choice” – public support dropped to just 34 percent, with 49 percent opposing.  And when the wording was simply for a program “that would use government funds to pay the tuition of all students who choose to attend private schools,” only 27 percent were supportive and 58 percent were opposed. Perhaps the public favors giving people more choice, but doesn’t like giving out taxpayer money for existing choices that people may think are predominantly made by fat cats at very expensive schools.

African Americans and Hispanics support choice far more than whites, which is not surprising given years of previous polling and minorities tending to be in schools that see worse outcomes. 62 percent of Hispanics and 60 percent of African Americans support scholarship tax credits for low-income students, versus 53 percent of whites. For “wider choice” universal vouchers, 65 percent of Hispanics and 58 percent of African Americans are supportive, versus 40 percent of whites. For low-income vouchers with the “wider-choice” description, 59 percent of Hispanics are supportive as are 66 percent of African Americans, but just 33 percent of whites. For low-income vouchers without the “wider-choice” description, 50 percent of Hispanics are supportive, as are 42 percent of African Americans and just 30 percent of whites.  Finally, 45 percent of African Americans, 34 percent of Hispanics, and a mere 22 percent of whites support using “government funds to pay the tuition of all students who choose to attend private schools.” Clearly, minority families are much more likely to support private school choice than are whites.

Much More!

In addition to these topics, the poll furnishes fascinating insights on topics including “disparate impact” discipline, teacher tenure, and public schools funding. So why are you still here? Go read it!

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

We’ll start out with one of the best quotes we’ve come across in recent memory. It’s from the inimitable Matt Ridley in his piece, “The Green Scare Problem” from the Wall Street Journal last week:

Making dire predictions is what environmental groups do for a living, and it’s a competitive market, so they exaggerate.

Ridley goes on to describe a growingly familiar list of now-failed environmental apocalypses that had been, at one point in time, predicted to befall us—pesticides, ozone hole, acid rain, GMOs, etc. Climate change calamity, as is being pushed by President Obama and the EPA to justify their ever-expanding restrictions of our carbon dioxide emissions, is the latest addition to Ridley’s list. Ridley’s main point is that the “we’re doomed if we don’t do what the environmental pressure groups tell us, and saved if we do” push “has frequently turned out to be really bad advice.” Ridley foresees more of the same from Obama’s Clean Power. We’re inclined to agree.

Be sure to check out Matt’s full column in which he backs up his opinions. It well worth the time spent reading.

When it comes to selling the Clean Power Plan, President Obama and his EPA go to such extreme lengths that they run up against (and often exceed) the bounds of sound science. We’ve addressed many of these transgressions. Climate impact of the Plan? Zilch. Health impacts from the Plan. Non-existent. Economic stimulus of the Plan? Negative. Validity of calling “carbon dioxide emissions” “carbon pollution”? None.

To expand a bit upon the latter, we tracked the historical usage of the phrases “carbon dioxide emissions” and “carbon pollution” in press releases issued by the EPA since 1994. “Carbon dioxide emissions” is the scientifically appropriate description of well, carbon dioxide emissions, while “carbon pollution” is grossly inaccurate and, well, deceptive. Our figure tracks how the EPA has moved away from science and towards propaganda in recent years, no doubt, in concert with the President and his push for limits to carbon dioxide emissions under his Climate Action Plan announced in 2013 (and telegraphed years earlier).


Figure 1. Number of press releases each year since 1994 (through August 11, 2015) issued by the U.S. Environmental Protection Agency which contained either the phrase “carbon dioxide emissions” or “carbon pollution.”

When a straight up telling of the situation fails to impress, try dressing it up with something a bit scarier-sounding.

And finally, if the Obama Administration isn’t going to have its hands full dealing with challenges by states and industries who are opposed to the Clean Power Plan for myriad reasons, it’ll also have to defend itself against a lawsuit from a group of youths who think that the Clean Power Plan doesn’t go far enough:

They are asking for a court order to force Obama to immediately implement a national plan to decrease atmospheric concentrations of carbon dioxide to 350 parts per million – a level many scientists agree is the highest safe concentration permissible – by the end of this century. The concentration of carbon dioxide in the atmosphere has already hit 400 parts per million.

“It’s really important that the court step in and do their jobs when there’s such intense violation of constitutional rights happening,” [Julia] Olson [lead council on the case] said.

Nothing like a lawsuit that is suing for the impossible!

Today we’ve released The Human Freedom Index, a new report that presents a broad measure of personal, civil, and economic freedom around the world. It is co-published by the Cato Institute, the Fraser Institute (Canada) and the Liberales Institut (Germany), and is the most comprehensive index on freedom yet created for a globally meaningful set of countries.

My co-author Tanja Porcnik and I look at 76 indicators in 152 countries to capture the degree to which people are free to engage in voluntary exchange and enjoy major liberties such as freedom of speech, religion, and association. We also include measures on freedom of movement, women’s freedoms, safety and security, and rule of law. We use data from 2008 to 2012, the most recent year for which sufficient data is available.

Hong Kong and Switzerland top the rankings, followed in order by Finland, Denmark, New Zealand, and Canada. The United States ranks in 20th place, below the United Kingdom (9) and Chile (18). Other countries rank as follows: Singapore (43), India (75), Russia (111), China (132), Venezuela (144), and Zimbabwe (149).

The United States fell from 17th place in 2008 to 20th place in 2012. The decline reflects a long-term drop in every category of economic freedom and in its rule of law indicators. The U.S. performance is worrisome and shows that the United States can no longer claim to be the leading bastion of liberty in the world. In addition to the expansion of the regulatory state and drop in economic freedom, the war on terror, the war on drugs, and the erosion of property rights due to greater use of eminent domain all likely have contributed to the U.S. decline.

We do not measure democracy in the index, though we consider it important. Indeed, we find a strong relationship between human freedom and democracy, a link that merits further study. As such, Hong Kong is an outlier in our index. Its high ranking is due to its traditionally strong rule of law, and high levels of both personal and economic freedom, something that all advocates of freedom, including democracy advocates, should seek to protect. The danger there is that China’s efforts to limit democracy will lead to increasing interference in the territory’s institutions—including on the independence of its legal system and the freedom of its press—which will reduce its overall freedom.

We believe that freedom is inherently valuable and plays a central role in human progress. As the graph above shows, belonging to the freest countries in the world greatly improves the average person’s income. Read the study here to see our other findings, the data, and other goals of the research.

Jeb Bush has amassed a sizable war chest and positioned himself to be the safe establishment pick after Donald Trump’s expected implosion. Alas, on foreign policy Bush has turned hard right.

“Our security,” he recently claimed, is “in the balance.” Yet the U.S. continues to dominate the globe as no other nation before it.

Moreover, Bush contended, “if we withdraw from the defense of liberty elsewhere, the battle of eventually comes to us anyway.” Actually, the world long has been filled with horror which Washington has successfully avoided.

Bush followed the Republican stereotype in demanding more military spending. “We are in the seventh year of a significant dismantling of our own military,” he falsely claimed. Real spending continued to increase until 2012.

In Bush’s view two and a half percent of GDP for the Pentagon is too low. But as Ronald Reagan observed, military spending should reflect the threat environment, which is vastly improved. Bush seemed to recognize this reality when he suggested a strategic review since “the world’s changed. I mean, we’re, the Soviets aren’t going to launch a tank attack across Eastern Germany into Germany.”

Very true. He should launch a strategic review first, which would suggest fewer defense responsibilities and thus lower military outlays.

Bush first called his brother’s policy in Iraq “a mistake.” More recently, however, he declared that ousting Saddam Hussein was a “pretty good deal.”

Maybe so, I pointed out in Forbes, “if you don’t count dead Americans, dead allied personnel, dead Iraqis, widespread sectarian violence, mass refugee flows, increased Iranian influence, regional instability, and the rise of the Islamic State.”

Bush misleadingly argued that ISIS “didn’t exist when my brother was president” and that a continued U.S. military presence “would not have allowed” the group to flourish. This is false.

ISIS is an outgrowth of al-Qaeda in Iraq, which developed in response to George W.’s invasion. The group grew in opposition to the U.S. occupation and Shia-majority regime installed by Washington.

Alas, the famed “surge” did not foster sectarian reconciliation, as intended. ISIS exploded when the Sunni Awakening went into reverse in response oppressive sectarian policies begun by the Iraqi government under George W., who also failed to win approval of a status of forces agreement and continued U.S. military presence. Obama only followed the Bush timetable.

Nor would a continuing presence of U.S. troops have achieved much, unless augmented and used in continuing anti-insurgency operations—contrary to the fervent desire of most Americans. And maintaining the military occupation would have provided a target for radicals of every sectarian viewpoint.

Nevertheless, Jeb urged a new war dedicated to “throwing back the barbarians of ISIS, and helping the millions in the region who want to live in peace.” Actually, those millions, rather than Americans, should fight ISIS.

Even scarier, Bush proposed that Washington join Syria’s civil war. He urged “a coordinated, international effort” to strengthen increasingly ineffective moderate forces. Worse, Bush advocated not only a “no-fly zone” but “multiple safe zones,” which would require substantial and sustained U.S. military involvement.

He complained that the administration didn’t deal with Iran’s malignant regional behavior. True, because Washington focused on the far more important issue of preventing Iran from acquiring nuclear weapons.

Bush advocated additional sanctions, which would not have been matched by other nations. He also recommended that Washington support the Iranian opposition, as if the Islamist regime would allow increased international interference promoting its ouster.

Bush contended that America’s “alliances need rebuilding.” Which means increasing subsidies for rich industrialized states, which are capable of defending themselves. Bush also believes in placating authoritarian governments—Egypt, Saudi Arabia, and others. So much for democracy and liberty.
Finally, like other Republican presidential wannabes, Bush is oblivious to the consequences of U.S. policy. Droning, bombing, invading, and occupying other nations create blowback. While Washington’s behavior doesn’t justify terrorism, promiscuous intervention helps explain it.

Americans can’t afford a rerun of Dubya’s disastrous presidency.

The whole point of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes was to put an end to “trial by formula” class actions that stack the deck against defendants. Lower courts, unfortunately, haven’t gotten the message. And that is a serious threat to defendants’ due process rights. Fortunately, the Supreme Court will return to the issue next term in Tyson Foods, Inc. v. Bouaphakeo.

There is a whiff of parody to the case. The plaintiff class consists of about 1,300 workers at Tyson’s Storm Lake, Iowa, pork-processing plant who say that Tyson failed to compensate them for the overtime that they spent putting on and taking off protective gear before and after their shifts. The class was certified as presenting “common” fact questions despite that the  plant has some 420 job classifications, each of which has different protective requirements, not to mention that Tyson provides additional gear that employees may choose to wear—so even workers in the same department or at the same position may wind up wearing different equipment.

Logically, one would expect the plaintiffs to present evidence of the amount of time that they each spent putting on and taking off gear, compare that to the work and pay records kept by Tyson, and then show that they weren’t properly compensated for any time they worked over 40 hours in a given week, which the Fair Labor Standards Act sets as the trigger for overtime. After all, that’s how it would work in an individual suit.

But that’s nothing like what happened here.

Rather than put on evidence of individual employees’ changing times, an expert for the plaintiffs measured several workers, whose changing times ranged from a few seconds to ten minutes—reflecting what even the expert acknowledged was “a lot of variation.” No matter, the expert averaged everything out, added in a few minutes to account for various factors, and arrived at “average” changing times of 18 minutes for “processing” workers and 21.25 for “slaughter” workers. At this point, a second expert added those averages to individual employees’ time records, identified weeks in which workers were due overtime pay, and then calculated damages, arriving at a class-wide figure of over $6 million in unpaid overtime wages. But as the second expert conceded, that figure was very sensitive to changes in the averages; reduce them by just a small amount, and hundreds of workers drop out of the class altogether, because their time drops below 40 hours for every week or they were already adequately compensated for any overtime. Indeed, although the jury ultimately found for the employees, it didn’t buy the average times and reduced the damages award to less than $3 million.

In case that’s not clear: based on the plaintiffs’ formula evidence, the jury necessarily believes that a substantial number of class members suffered no injury at all. Yet as class members, they’ll still receive damages—at the expense of other workers who might actually have been underpaid. So the jury verdict is incoherent, but you can’t really blame the jury: the class itself is the real problem, throwing together workers with so many different kinds of jobs and such different circumstances that there aren’t any truly common fact questions among them. Meanwhile, due to the use of common, formula-based evidence, Tyson was denied any ability to challenge its liability to and the damages of individual class members, only the plaintiffs’ formula. Even with most of its defenses off the table, Tyson’s challenge to the formula was mostly successful. Absent the formula, it’s possible that Tyson might have prevailed on many individual claims or even all of them—there’s no way to know.

That’s not how class actions are supposed to work. Rule 23, which sets the procedure for class actions, is a procedural device and is not supposed to alter the substantive rights of plaintiffs or defendants. In particular, that means that a class action can’t be used as a shortcut by “extrapolating” damages and liability based on a formula. The Court explained in Dukes that this requires that plaintiffs’ claims turn on a common contention “that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” (For example, a common issue in a product-liability class action might be whether a given product was defectively designed.) When that requirement is loosened, the result is trial by formula, as individual issues are decided based on class-wide evidence, whether or not that evidence says anything at all about particular class members’ claims. The quaint notion of having to support legal claims with probative evidence goes out the window. Relieving plaintiffs of the burden of proving their cases is, needless to say, something more than merely “procedural.”

Trial by formula not only violates Rule 23 and its statutory basis, the Rules Enabling Act, but also raises serious due process concerns. “Due process requires that there be an opportunity to present every available defense,” the Supreme Court has explained. It follows that “[a] defendant in a class action has a due process right to raise individual challenges and defenses to claims, and a class action cannot be certified in a way that eviscerates this right or masks individual issues.” When aggregate litigation procedures abridge a defendant’s ability to mount the same defenses that it could bring in individual suits, something is seriously wrong.

The Court needs to make clear that trial by formula is off-limits, whether a case is brought as a class action or as a “collective action” under the Fair Labor Standards Act or a combination of the two. Defendants have a right to defend themselves, and that’s possible only when a class action satisfies Dukes’s “one stroke” rule. That’s as true in FLSA wage and hour cases—which many of the lower courts seem to believe are an exception to due process requirements—as in any other. Skipping past that requirement offends fundamental principles of justice and perverts the substantive law being enforced by extending liability to persons and circumstances that Congress never intended.