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Donald Trump’s newly released position paper on immigration is the precise mix of fantasy and ignorance that one has come to expect from the recently self-described Republican.  Specifically, his position paper reads like an outline of this April op-ed by Senator Jeff Sessions (R-AL).  Trump is still a candidate in the GOP primary supported mainly by older white men who are not particularly conservative.  Although the electorate has never been more supportive of expanding legal immigration, Trump has never been more opposed.

Trump’s position paper attempts to lay the foundation for his immigration policy as president. Below, I review how his ideas measure up. Quotes from his paper are in quotes, my responses follow.

Here are the three core principles of real immigration reform:

  1. A nation without borders is not a nation. There must be a wall across the southern border.
  2. A nation without laws is not a nation. Laws passed in accordance with our Constitutional system of government must be enforced.
  3. A nation that does not serve its own citizens is not a nation. Any immigration plan must improve jobs, wages and security for all Americans.

The first sentence is true by definition, but assumes that for a border to be real, it must have a wall around it. Whether a wall is warranted should depend on the circumstances at the border, which are vastly more safe than Trump claims. 

The last two principles are vague enough that they could support any immigration policy from a total ban on immigration to open borders. The rest of his position paper narrows their focus.

U.S. taxpayers have been asked to pick up hundreds of billions in healthcare costs, housing costs, education costs, welfare costs, etc. Indeed, the annual cost of free tax credits alone paid to illegal immigrants quadrupled to $4.2 billion in 2011.

This analysis factors in only fiscal costs, which will always lead to negative fiscal outcomes. It ignores the fiscal benefits that come from a larger economy.  The fact remains that poor immigrants use less welfare than poor Americans.  They contribute mightily to Social Security, Medicare, and other portions of the U.S budget.  Over time, immigration’s impact on the U.S. taxpayer is about a net-zero.  In other words, immigrants and their descendants pay for themselves. 

Immigration can turn fiscally positive by further restricting welfare access.  Right now illegal immigrants do not have access to means tested welfare programs, but their American born children do.  However, their benefit levels are adjusted downwards to account for the non-eligible members of their households.  Short of lowering welfare benefit levels for everybody, which would be a positive move, the government cannot deny citizens access based on who their parents are.  However, Congress can deny all non-citizens access to welfare.  Cato has published the only guide of how to do that. Removing the Earned Income Tax Credit for unauthorized or other categories of non-citizens would also be easy.

The position paper doesn’t factor in the estimated $400 to $600 billion government cost of removing all unauthorized immigrants as well as the lost tax revenue from the subsequently smaller economy.  Doing so reveals how fiscally damaging this immigration plan would be if it ever became law. 

The effects on jobseekers have also been disastrous …

The influx of foreign workers holds down salaries, keeps unemployment high, and makes it difficult for poor and working class Americans – including immigrants themselves and their children – to earn a middle class wage.

There is a lot of research on whether immigrants displace Americans in the job market – and the general finding is that immigrants displace very few American workers. 

David Card and John DiNardo looked at native responses to immigration in American cities to test the so-called “skating rink” model of native location decisions that assumes each new immigrant knocks an American out of the workforce.  If the skating rink model is correct, natives with skills similar to immigrants should vacate areas where immigrants move to and not move to areas where immigrants are residing.  Instead they found that an increase of the immigrant population in specific skill groups leads to small increases in the population of native-born individuals in the same skill group.  Immigrant-induced changes in the local economy, such as the creation of new businesses and new types of industries, creates enough new jobs to make up for any displacement of native workers. 

Another paper by Card did not find any change in native mobility due to immigration, but he discovered negative wage effects for some skill sets.  However, he also found that inflows “reduced the relative employment rates of natives and earlier immigrants in laborer and low-skilled service occupations by up to 1 percentage point, and by up to 3 percentage points in very high-immigrant cities like Los Angeles or Miami” (emphasis added). 

Card’s findings in his second paper are consistent with the later findings of Gianmarco Ottaviano and Giovanni Peri that newer immigrants compete with the immigrants who preceded them, not with native-born Americans who have similar skills.  The labor market effects of new immigrants appear to fall most heavily on immigrants who preceded them, not Americans, which would seem to cut against the theory that immigrants have a large negative effect on American workers.  In other words, immigrants don’t compete against Americans, they only compete against other immigrants. 

Even then, Card and Ethan Lewis looked at how new Mexican immigrants displaced older Mexican immigrants and found decidedly small effects. Only in Los Angeles and El Paso, TX did new Mexicans push out older Mexicans.  In all of the other cities they examined, new Mexican immigrants complemented the existing Mexican immigrant workforce rather than displaced it.  The U.S. economy is very good at attracting Mexican immigrants, providing incentives for them to settle in areas where they are most demanded, and responding in ways that increase net production and employment.

paper by George Borjas seems to find the greatest effect of immigration on the wages of native-born American workers, a wage elasticity of –0.39.  Borjas’s finding has been criticized by many, including in this recent paper that extended his period of analysis by 10 years but found only a –0.2 wage elasticity as well as other potential problems with his methods.  Another paper by Peri and Chad Sparber also questioned Borjas’s paper, finding that less educated immigrant workers and native born workers specialize in different tasks, thus inducing natives to reallocate their task supply, thereby reducing downward wage pressure.  Foreign-born workers specialized in occupations that required manual labor and physical skills while natives pursued jobs that required more intensive communication and language skills. Immigration induces natives to specialize accordingly, reducing the negative wage effect of immigration by roughly 75 percent.  In other words, natives do not react to immigration by leaving the workforce or moving to different areas, but by changing their skill sets and occupations. 

If immigrants compete most with anybody, they compete with teenagers.  However, a Chicago Fed Letter and research paper authored by Daniel Aaronson, Kyung-Hong Park, and Daniel Sullivan discovered that teens have declining labor force participation rates for reasons other than immigration like an increase in the relative benefits of education versus work, government financial incentives for schooling, merit-based scholarships with minimum grade requirements, and education grants.  In other words, teens allocated their scarce time to education and away from work to increase their investment in acquiring human capital and, hence, a higher future income.  Low-skilled immigration and stiffer labor market competition was not a compelling explanation for their decline in labor force participation.  

Another report by the U.S. Bureau of Labor Statistics in 2002 echoed the findings of Aaronson, Park, and Sullivan when it concluded that teen Labor Force Participate Rates dropped because they were more likely to be enrolled in school. Competition with immigrants didn’t push them out of the labor market.

Patricia Cortes does find some displacement effects across cities.  These effects are not large enough to equalize wages across the country, and thus not large enough to induce the displacement of one American worker for each immigrant worker.  Cortes found that three natives move out of a city for every 10 immigrants who move in. 

Over the last 20 years, immigrants occupy about as many jobs in the economy as their percentage of the working age population would predict.

These academic papers do not produce a compelling reason to believe that immigrants displace native-born workers in large numbers nor that they lower American wages.  There is likely some job displacement or wage effects caused by immigration, but the effect is small compared to the benefits they provide.

The impact in terms of crime has been tragic. In recent weeks, the headlines have been covered with cases of criminals who crossed our border illegally only to go on to commit horrific crimes against Americans. Most recently, an illegal immigrant from Mexico, with a long arrest record, is charged with breaking into a 64 year-old women’s home, crushing her skull and eye sockets with a hammer, raping her, and murdering her. The Police Chief in Santa Maria says the “blood trail” leads straight to Washington.

Some immigrants do commit heinous crimes.  Our immigration enforcement system should be almost entirely focused on removing actual security and criminal threats rather than being concerned with regulating the labor market.  However, immigrants are less likely than natives to commit crimes or be incarcerated for them.  Please read this detailed literature review for more information. 

The cost of building a permanent border wall pales mightily in comparison to what American taxpayers spend every single year on dealing with the fallout of illegal immigration on their communities, schools and unemployment offices.

Building a border wall won’t solve any of the problems that Trump describes.  First, border apprehensions are near their post-1970 historical low point.  Second about 42 percent of unauthorized immigrants entered legally and overstayed their visas.  A border wall won’t prevent them from entering.  Third, better border enforcement could actually increase the illegal immigrant population by locking them in the United States.  Illegal immigration was largely a circular phenomenon until the late 1980s when the United States increased border security.  Migrants would enter the country, work, and return home secure with the knowledge that they could return in the future again.  When border security was beefed up in the late 1980s, the costs of crossing the border increased so these migrants decided to stay instead of returning home.  When the migrants can’t go back and forth, their families come north.

Mexico must pay for the wall … 

No matter who writes the checks, we all pay for a border wall.  The decrease in economic activity caused by more regulation of labor markets required by this plan will make the United States, Mexico, and other countries poorer as a result. 

The purpose of building a wall would be to decrease illegal immigration, but a functional legal immigration system would be far more effective.  As I detail here, guest worker visas are the most effective way of halting unauthorized immigration because they provides a lawful pathway for low-skilled immigrants to enter instead of overstaying a visa, running across a desert, or being smuggled in.  A guest worker visa system will funnel peaceful migrant workers into the legal system leaving immigration enforcement to deal with a much smaller pool of unlawful immigrants. 

Congress did open up guest workers a bit in the 1950s, which ended up cutting unauthorized immigration by over 90 percent by creating a low-skilled guest worker visa called the Bracero Program.  That program later ended due to union pressure and controversies over poor treatment of some of the workers, causing unauthorized immigration to immediately skyrocket. The program was shut down after domestic unions, especially Cesar Chavez’s United Farm Workers, mounted a national campaign against it.

According to Stuart Anderson of the National Foundation for American Policy, a February 1958 Border Patrol document from the El Centro, California district states, “Should Public Law 78 [Bracero Program) be repealed or a restriction placed on the number of braceros allowed to enter the United States, we can look forward to a large increase in the number of illegal alien entrants into the United States.”  That is exactly what happened.

The government cannot regulate immigration if much of it is illegal.  Legalizing the flow of workers into the United States is a simple and cost-effective way to control the border and limit unlawful immigration.  The border was controlled in the past with many fewer government employees, it can happen again.      

Nationwide e-verify. This simple measure will protect jobs for unemployed Americans.

E-Verify is a failure.  Since 2008 Arizona, Mississippi, South Carolina, and Alabama have mandated it for all new hires in order to turn off the “jobs magnet” that attracts illegal immigrants.  However, the wages for illegal immigrants barely budged in those states (they would have to drop to weaken the jobs magnet). 

E-Verify doesn’t work for two main reasons.  The first is that E-Verify only identifies unlawful workers about half of the time.  That means half of unlawful workers get hired lawfully when using E-Verify.  The second is that only about half of employers in states where it is mandated actually use it.  If Arizona, Mississippi, South Carolina, and Alabama cannot make E-Verify an effective immigration enforcement tool in their states then it will fail when mandated nationally.   

E-Verify is a fancy-sounding immigration enforcement tool but it simply does not work.  The only thing worse than a mandated E-Verify program that doesn’t work, as Trump proposes, is one that does work.  We can at least be thankful that E-Verify fails otherwise it will do a lot more harm to the labor market.

End birthright citizenship. This remains the biggest magnet for illegal immigration. By a 2:1 margin, voters say it’s the wrong policy, including Harry Reid who said “no sane country” would give automatic citizenship to the children of illegal immigrants.

Most agree, with the exception of Judge Richard Posner, that a Constitutional amendment would be necessary to overturn birthright citizenship. 

Legalities aside, removing birthright citizenship would severely affect assimilation of immigrants in subsequent generations.  The U.S. rule of birthright citizenship is in stark contrast to policies pursued in Germany and Japan, where the children of immigrants were denied citizenship.  Below I summarize some work from here.

The lack of birthright citizenship created a legal underclass of resentful and displaced youth who were officially discriminated against in the government-run education system and had tenuous allegiance to the nation in which they were born.  After four generations in Japan, ethnic Koreans still self-identify as foreign.  In both countries, these noncitizen youths are more prone to crime and extreme political ideologies like communism or Islamism.

Youths born to noncitizen immigrants in nations without birthright citizenship have little legal stake in the nations they were born in but also have no place to go.  Many might gain citizenship through the ethnicity of their parents in Korea or Turkey, but with no connections to those nations, citizenship there is meaningless.

In the U.S., by contrast, children of immigrants are legally on the same playing field as children born to American citizens.  Both can serve in the military, purchase firearms, serve on juries, and be treated the same by the legal system.  That is one reason why 89 percent of second-generation Hispanics and 96 percent of third-generation Hispanics have described themselves as American only.  “Hispanic-American” or “Mexican-American” is still popular after several generations, just as “Italian-American” still survives, but these Americans do not view themselves as foreigners.  Removing birthright citizenship would end this successful assimilation trend.

Every year, we voluntarily admit another 2 million new immigrants, guest workers, refugees, and dependents, growing our existing all-time historic record population of 42 million immigrants. 

About 13 percent of America’s population is foreign born, below the all time peak of 14.7 percent in 1910.  The average percent of the population that was foreign born between 1860 and 1920 was about 14 percent – higher than it is today.  As a percentage of the U.S.-born population, yearly immigrant flows to the U.S. are half of what they were during the 19th century and early 20th centuries.  As a percentage of the U.S. population, this is not a historical high point. 

Other countries that weathered the Great Recession well like Canada, Australia, and Switzerland all let in far more immigrants as a percentage of their population every year and have far larger immigrant populations than the United States.  Switzerland, for instance, lets in about five times as many immigrants as the U.S. does every year as a percentage of their population.  The percent of the U.S. population that is foreign born is also below the OECD average.  In and of itself, that is not an argument for opening lawful immigration, but it should damper the notion that the U.S. has the most immigrant friendly policies in the world.  The numerical numbers of immigrants who come here yearly is large, about the same annual number as a hundred years ago, the U.S. has the third largest population in the world to absorb them.     

Increase prevailing wage for H-1Bs. We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program’s lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program.

There are 85,000 annual slots available for H-1B workers.  This year they were all taken up in about a week.  New wage regulations would have to be extreme to decrease the number of H-1B visas admitted.  Creating them would slash the well-known economic benefits of skilled immigration.

If Trump is concerned about the small number of cases where H-1B workers have been used to displace Americans, then he should support amending the H-1B program so that the workers are portable and able to change employers easily.  Currently it is very legally difficult for the workers to change their jobs making it possible for unscrupulous employers to exploit them and thus displace American workers.  Such a reform would be welcome regardless of the reasons for doing so.

Immigration moderation … This will help reverse women’s plummeting workplace participation rate, grow wages, and allow record immigration levels to subside to more moderate historical averages.

It’s simply not true that closing the border will increase real wages for Americans.  Immigrants increase the size of the economy, create employment opportunities that in turn increases demand for labor, and make the United States a wealthier country.  Removing millions of people from the United States and preventing others from coming is a path toward slower economic growth, not prosperity. 

The purpose of moderating immigration is to get U.S. economic growth in line with the high growth era in the immediate post-World War II period.  But the United States did not have a shrinking or stagnant workforce from 1948 to 1973, the period of the greatest economic expansion and rising wages.  On the contrary, the U.S. workforce expanded rapidly during economic growth.  Merely decreasing the number of workers today by decreasing immigration will not replicate that period of economic growth. 

Furthermore, immigration was not as closed during that time period as many claim.  The Bracero guest-worker visa program let in nearly five million lower-skilled Mexican workers to temporarily labor in American agriculture.  The workforce grew in other ways too.  From 1948 to 1982, the size of the U.S. workforce practically doubled from 60 million to 111 million.  A baby-boom, women entering the workforce, and other internal migrations increased the number of workers.  The number of working women increased from 16.3 million in 1948 to 43.3 million in 1982 to 73 million in 2012.  The number of male workers shot up to from 43 million in 1948 to 76 million in 2012.  Female labor market gains did not take jobs away from men.  Those increases did not lead to massive unemployment or a drop in wages – which would be the result if increased labor scarcity is a path to prosperity.  There is not a fixed supply of jobs to be divided up amongst Americans: the market constantly creates and destroys new job opportunities and increasing supplies of workers and consumers help that process along.

Trump’s theory that the supply of workers is the prime determinant of wages ignores much.  Worker productivity is also influenced by the type and quantity of capital in the economy, the differences between immigrant workers and native-born workers, and the availability of technology.  In a well-functioning economy, increased supplies of workers increases demand for workers, which don’t lead to more unemployment. 


Donald Trump’s position paper on immigration is full of old anti-immigration arguments that have been repeated and rebutted numerous times.  These arguments were incorrect long before he wrote them here.  Trump’s position paper is a most similar to this op-ed by Senator Jeff Sessions (R-AL).  There is very little in it that is new – either as a policy prescription or as a justification.

It’s fire season again, which means we are once again treated to stories about how the Forest Service is running out of money and about how it all must be due to climate change. Both of these claims overlook fundamental points about fire policy and firefighting.

As of August 16, the BLM had spent $2.2 million controlling the 88,000-acre Cornet Fire on the Vale District in Oregon. The Forest Service has spent two-and-one-half times that much on a fire that was just 515 acres in size. BLM photo.

The Forest Service frets that rapidly rising firefighting costs are hurting the budgets of other Forest Service programs. However, as I’ve pointed out before, Forest Service firefighting costs have risen rapidly mainly because they can: the agency has a virtual blank check to spend on fire. As a result, the agency spends far more fighting fires than Department of the Interior agencies, which have never had a blank check.

For example, as of yesterday, the Bureau of Indian Affairs had spent $1.6 million controlling the 55,000-acre County Line 2 fire on the Warm Springs Indian Reservation in Oregon, while the Bureau of Land Management had spent $2.5 million controlling the 44,000-acre Bendire fire on its Vale District. Meanwhile, the Forest Service had spent $5.5 million on the 515-acre Baldy Fire on the Colville National Forest; $5.9 million on the 4,800-acre National Creek fire on the Rogue River National Forest; and $7.1 million on the 2,600-acre Phillips Creek fire on the Umatilla National Forest. These are selected examples, but on average, the Forest Service spends more than five times as much per acre than the Interior agencies.

We don’t yet have 2015 data, but for the past several years the Forest Service has spent about $4 on fire suppression for every dollar spent by the Department of the Interior even though it had fewer acres burn. As a result, over the past five years, it has spent an average of $914 per acre vs. $171 per acre spent by the Interior department.

To deal with rising fire suppression costs, Congress is continually thinking up schemes to give the Forest Service more money. That’s like trying to control a fire by pouring gasoline on it. The problem is not a shortage of funds, but too much money giving Forest Service firefighters no incentive to control costs. Costs will continue to rise until Congress figures this out and fixes the problem, possibly by turning firefighting over to the states and paying the states the same fixed annual amounts per acre that private forest land owners pay.

A comparison of firefighting costs with acres burned shows that there is little correlation: no matter how many acres burn, firefighting agencies (led by the Forest Service) spend about $1.5 billion to $1.9 billion per year. If this is increasing, it is not due to the severity of the fires but to loose spending by Congress.

The claims that growing wildfires are due to human-caused climate change are equally questionable. They are based on a recent study that compares fire trends since 1979. According to the Union of Concerned Scientists, the number of large fires per year has grown and the fire season has lengthened.

Despite all the concern over the drought, these claims aren’t borne out by the 2015 fire season. It is true that, as of August 14, more acres have burned this year than any year in the previous decade. What those numbers don’t show, however, is that 5.1 million of the 6.8 million acres burned as of yesterday were in Alaska.

One reason Alaska fires are so big is because no one spends much effort trying to control them. For example, the BLM spent a mere $2.8 million on fires that covered more than 400,000 acres near Ruby, Alaska.

Outside of Alaska, fires in the arid West are nowhere near record levels and may even be below average. As of yesterday, 173,000 acres had burned in the Southwest, compared with 2.0 million acres as of the same date in 2011 and 460,000 in 2008. About 350,000 acres in California had burned as of yesterday, compared with 1.2 million in 2008. About 220,000 acres had burned in the Pacific Northwest compared with more than 1.1 million in 2012.

Any fire study that only looks back as far as 1979 ignores huge fires that resulted from major droughts in earlier decades. The 1970s were one of the wettest decades on record, with an average of just 3 million acres a year burned. By comparison, there were 9 million acres of annual fires in the 1950s; 23 million in the 1940s; and 39 million in the 1930s. While there are some problems with data from those early decades, they are valid enough to show that recent changes in droughts and fires are due to cyclical variations in climate, not to human-caused warming.

Any look at fire data since 2000 must also take into account a major change in firefighting tactics. Before 2000, the Forest Service and other agencies put firefighters to work at fire edges to contain fires. Too many firefighters died, so now they start huge backfires thousands of feet, and perhaps miles, away from the wildfire fronts. As a result, fires are larger today, but only because a third or more of the acres burned were actually lit by firefighters.

Although it is eight years old, my policy analysis on wildfire is still valid today. The problem is not climate change and the solution is not to give firefighters more money. Instead, the problem is too much money and the solution is to treat the land near homes and other structures to make them defensible and then focus fire suppression efforts on nearby public lands mainly on making sure those fires don’t cross over onto private land.

In the “Agriculture” chapter of Cato’s 2012 Addendum to the federal government’s “Second National Assessment” of the effects of climate change on the United States, I wrote the following:

At a fundamental level, carbon dioxide is the basis of nearly all life on Earth, as it is the primary raw material or “food” that is utilized by plants to produce the organic matter out of which they construct their tissues…

Typically, a doubling of the air’s CO2 content above present-day concentrations raises the productivity of most herbaceous plants by about one-third; this positive response occurs in plants that utilize all three of the major biochemical pathways of photosynthesis.

There is no doubt elevated concentrations of atmospheric CO2 lead to enhanced plant photosynthesis and growth. This well-known fact has been confirmed over and over again in literally thousands of laboratory and field studies conducted by scientists over the past several decades. In recent years, however, the growth-enhancing benefits of atmospheric CO2 have been increasingly studied and observed in the real world of nature using Earth-orbiting satellites. Such instruments have the capability to remotely sense plant growth and vigor at altitudes miles above the Earth’s surface; and they have generated a spatial and temporal record of vegetative change that now spans more than three decades. And what has that record revealed?

The take-home message of the satellite data is two-fold. First, at the global level, all recent studies show there has been a significant greening of the planet over the past few decades despite the occurrence of a number of real (and imagined) assaults on Earth’s vegetation, including wildfires, disease, pest outbreaks, deforestation, and climatic changes in temperature and precipitation. Greening has more than compensated for any of the negative effects these phenomena may have had on the global biosphere during that time (Nemani et al., 2003; Young and Harris, 2005; Liu et al., 2010; De Jong et al., 2012; Eastman et al., 2013; Mao et al., 2013; Wu et al., 2014 ). Second, there is compelling evidence that the atmosphere’s rising CO2 content—which is considered by many to be the chief threat  to the future of the biosphere via climate change—is most likely the primary cause of the observed greening trends (Piao et al., 2006; De Jong et al., 2012; Andela et al., 2013; Donohue et al., 2013; Mao et al., 2013).

The observed CO2-induced greening of the Earth portends several obvious benefits for both society and nature. The increasing density and aerial coverage of vegetation, for example, helps to reduce the negative effects of soil erosion caused by the ravages of wind and rain. It also provides an increased source of food for both humanity and wild nature. Plant and animal biodiversity is also similarly stimulated, as vegetative productivity is highly correlated with biodiversity in natural habitats. And thanks to the recent work of Sedda et al. (2015), we now have another reason to celebrate CO2-induced greening—it is helping to reduce poverty in developing nations.

Noting that reducing rural and urban poverty in developing countries was a “key target” of the United Nations Millennium Development Goals of 1990-2015, Sedda et al. set out to conduct a study to determine if satellite-derived Normalized Difference Vegetation Index (NDVI) data could be used to evaluate the degree to which this specific goal may or may not have been achieved. Based on NDVI data they obtained for a large area of West Africa, the team of researchers found that “the intensity of poverty (and hence child mortality and nutrition) varies inversely with NDVI,” which findings, in their words, “highlight the utility of satellite-based metrics for poverty models including health and ecological components.”

Because of the very positive connection that exists between landscape greening and atmospheric CO2 enrichment, as discussed earlier, it is quite plausible—if not certain—that the historic and ongoing increase in the air’s CO2 concentration has played a significant role in the contemporaneous reduction in the portion of Earth’s human population that has lived under poverty conditions, which currently stands at 21%, and which Sedda et al. say is “a reduction from 33% in 2000 and 43% in 1990,” citing Ravallion (2012).

In light of these several observations, Sedda et al. conclude that since “the relative location of people in poverty and child mortality is dependent on the values of NDVI,” a simple “accounting for NDVI can reduce the number of indicators required to measure the intensity of poverty,” as well as to “improve the geographic targeting of pro-poor interventions,” as a part of “the upcoming United Nations Sustainable Development Goals framework.” Why on God’s getting-greener earth would the United Nations simultaneously work to reduce the anthropogenic CO2 emissions that are demonstrably raising standard of living for so many of the world’s poor?


Andela, N., Liu, Y.Y., van Dijk, A.I.J.M., de Jeu, R.A.M. and McVicar, T.R. 2013. Global changes in dryland vegetation dynamics (1988-2008) assessed by satellite remote sensing: comparing a new passive microwave vegetation density record with reflective greenness data. Biogeosciences 10: 6657-6676.

De Jong, R., Verbesselt, J., Schaepman, M.E. and De Bruin, S. 2012. Trend changes in global greening and browning: contribution of short-term trends to longer-term change. Global Change Biology 18: 642-655.

Donohue, R.J., Roderick, M.L., McVicar, T.R. and Farquhar, G.D. 2013. Impact of CO2 fertilization on maximum foliage cover across the globe’s warm, arid environments. Geophysical Research Letters 40: 3031-3035.

Eastman, J.R., Sangermano, F., Machado, E.A., Rogan, J. and Anyamba, A. 2013. Global trends in seasonality of Normalized Difference Vegetation Index (NDVI), 1982-2011. Remote Sensing 5: 4799-4818.

Liu, S., Liu, R. and Liu, Y. 2010. Spatial and temporal variation of global LAI during 1981-20006. Journal of Geographical Sciences 20: 323-332.

I’ve been warning for years of the dangers of the federal Racketeering Influenced and Corrupt Organizations law and how it gives prosecutors and enterprising private lawyers leverage to target above-board businesses in search of punishment or profit. Since the law’s passage in 1970, RICO has seldom been used against violent organized crime. Instead, it has been aimed at a wide array of white-collar defendants, as William Anderson noted in Regulation six years ago, and especially at unpopular industries like gun and cigarette makers, as Cato’s Bob Levy noted in 2000. The latest fillip is Sen. Sheldon Whitehouse’s proposal to aim racketeering charges against groups that promote wrongful thinking on climate change. The civil side of the statute (“civil RICO”), which can be used in private litigation, is especially susceptible to tactical use by private lawyers who know that the vagueness of the law, the high cost of response, the triple-damages provisions, and the racketeering stigma especially are useful in forcing adversaries to the bargaining table. The more those adversaries value respectability, the more powerful the leverage. 

Now comes word that a Washington, D.C.-based tough-on-crime group calling itself the Safe Streets Alliance has filed suit seeking, in its words, “to hold those involved with Colorado’s recreational marijuana industry liable under federal racketeering statute and to have Colorado marijuana business licenses held invalid.” Its press release is at least honest enough to acknowledge that the targets include “the citizens of Colorado” for what it believes was their faulty decision to enact Amendment 64 in 2012. In one case SSA, representing a local Holiday Inn franchisee that didn’t care to have a medical marijuana shop near its business, succeeded in forcing owner Jerry Olson (no relation) out of business. A key tactic in the suit – one quite familiar to those of us who follow hardball civil litigation in general – was to name as racketeering co-defendants a variety of risk-averse, often respectable businesses that had in some way done business with the main target. Thus AP reports

…just last week, a bonding company in Des Moines, Iowa, paid $50,000 to get out of the lawsuit.

“We are out of the business of bonding marijuana businesses in Colorado and elsewhere until this is settled politically,” said Therese Wielage, spokeswoman for Merchants Bonding Company Mutual.

Thus does the litigation accomplish its goal whether or not it ultimately prevails before a judge:

“This lawsuit is meant more to have a chilling effect on others than it is to benefit the plaintiffs,” said Adam Wolf, Olson’s lawyer.

SSA lawyer Brian Barnes of Cooper & Kirk doesn’t seem to contradict that: 

“We’re putting a bounty on the heads of anyone doing business with the marijuana industry,” Barnes said.

I’m occasionally asked why I bother to worry about the legal woes of unpopular industries whose goods I don’t even care to consume. A different way to look at the question is that almost anyone’s line of business – whether it be soft drinks or accounting or putting up visitors in one’s home or charitable non-profit work or electioneering or employing entry-level workers at minimum wage – is one public-vilification campaign, or one round of lawsuits, away from becoming an unpopular industry. 

The course of an economy is determined by the course of that economy’s money supply (broadly determined). The relationship between money growth and nominal GDP growth is presented in the accompanying chart. It is persuasive. Indeed, money, not fiscal policy, dominates.

As I listen to all the ad hoc conjectures about the state of China’s economy and its near-term prospects, I am astounded to never hear anything said about the most important determinant of nominal economic growth: the money supply. The second chart tells the tale. The picture is not a pretty one. China’s money supply growth rate has been slowing down since early 2012. It now is growing at an annual rate of about 10%, which is well below the trend rate of money growth: 17.06%. China is in trouble. Slower money supply growth means that slower nominal GDP growth is already baked in the cake.

Does three make a trend? I can’t recall hearing much discussion of legalizing prostitution in the recent past, and suddenly this week I’ve seen three significant reports in the media. Are they straws in the wind? Could the legalization of prostitution be the next social reform to come to the fore?

First, last Thursday the Telegraph reported on a new study from the venerable free-market think tank in London, the Institute for Economic Affairs:

The sex trade should be fully decriminalised because feminism has left modern men starved of sex, one of Baroness Thatcher’s favourirte think-tanks claims.

A controversial new paper published by the Institute of Economic Affairs (IEA) calls for Britain’s prostitution laws to be scrapped, insisting it is “inevitable” that men will resort to paying for sex as women become more empowered through participation in the workplace.

As IEA notes, the paper got plenty of publicity in the British media.

Then on Tuesday Amnesty International voted, as the New York Times put it, “to support a policy that calls for decriminalization of the sex trade, including prostitution, payment for sex and brothel ownership.” The full policy, which still requires final approval from the board, can be found here. The new policy

is based on the human rights principle that consensual sexual conduct between adults—which excludes acts that involve coercion, deception, threats, or violence—is entitled to protection from state interference (bearing in mind that legitimate restrictions may be imposed on sex work, as noted below).

And then today I see this in the Washington Post:

D.C. Council member David Grosso said he is considering introducing legislation this fall that would decriminalize prostitution in the city and provide sex workers with resources to be safe and get out of the business if they want to.

Grosso’s announcement comes on the heels of Amnesty International’s controversial recommendation Tuesday calling for “full decriminalization of all aspects of consensual sex work.”

“It is something that my staff and I have been working on and thinking about for a few months now,” Grosso (I-At Large) said Wednesday. “Once the Amnesty report came out, it validated a lot of the concerns that I have of how we handle this in the District.”

I’ve heard journalists say that three examples make a trend. So maybe we’ve just spotted one.

In my long years of interviews and speeches on libertarianism, I’ve often encountered people who think that libertarians’ main interests are legalizing drugs and prostitution. Indeed, libertarians – including the Cato Institute – have been talking about the harmful effects of the drug war for a long time. But I’ve actually seen very little libertarian scholarship or activism around the issue of prostitution. There’s been some, but it’s been nothing like a major topic of discussion. The only analysis I can find on the Cato website is this Cato Unbound symposium.

Whether libertarians have led the way or not, I am intrigued to see these three straws in the wind in such close proximity. Who’s next?

The myth that there’s no evidence that school choice works has more lives than Dracula. Worse, it’s often repeated by people who should know better, like the education wonks at Third Way or the ranking Democrat on the U.S. Senate education committee. In a particularly egregious recent example, a professor of educational leadership and the dean of the University of Wisconsin-Madison School of Education wrote an op-ed repeating the “no evidence” canard, among others:

The committee also expands the statewide voucher program. There is no evidence privatization [sic] results in better outcomes for kids. The result will be to pay the tuition for students who currently attend private school and who will continue to attend private school—their tuition will become the taxpayers’ bill rather than a private one. Additionally, the funds for the expansion would siphon an estimated $48 million away from public schools, decreasing the amount of money available for each and every school district in the state.

It is astounding that a professor and a dean at a school of education in Wisconsin would be unfamiliar with the research on the Milwaukee voucher program, never mind the numerous gold standard studies on school choice programs elsewhere. Fortunately, Professor James Shuls of the University of Missouri-St. Louis and Martin Lueken of the Wisconsin Institute for Law & Liberty set the record straight:

…the Wisconsin Legislature commissioned a comprehensive five-year study by researchers at the University of Arkansas. The research team matched and compared children at private schools in the choice program to similar students at Milwaukee Public Schools. The study concluded that children in Milwaukee who used vouchers were more likely to graduate from high school, enroll in four-year colleges and persist in college.

These findings are very similar to those of “gold-standard” studies done nationwide. Among 13 peer-reviewed studies on voucher programs that use research methods based on random assignment, all but one study concluded that vouchers benefit students (the other was unable to detect an impact). In addition, recent work by a Harvard economist demonstrates that giving low-income families better educational options can help improve social mobility for children.

Just a year and a half ago–in response to yet another school choice denier who should know better–the coauthors of the Milwaukee study clarified that their research found school choice produced “a modest but clearly positive effect on student outcomes.”

First, students participating in the Milwaukee Parental Choice (“voucher”) Program graduated from high school and both enrolled and persisted in four-year colleges at rates that were four to seven percentage points higher than a carefully matched set of students in Milwaukee Public Schools. Using the most conservative 4% voucher advantage from our study, that means that the 801 students in ninth grade in the voucher program in 2006 included 32 extra graduates who wouldn’t have completed high school and gone to college if they had instead been required to attend MPS.

Second, the addition of a high-stakes accountability testing requirement to the voucher program in 2010 resulted in a solid increase in voucher student test scores, leaving the voucher students with significantly higher achievement gains in reading than their matched MPS peers.

Moreover, as Shuls and Lueken note, “private schools in the choice program obtain these results when the government funding for a voucher is 60 percent less than what public schools receive.”

The final two claims by the UW-Madison faculty–that the voucher program benefits students who would attend private school anyway and siphons money from the district school system–also fail to withstand scrutiny. A conservative analysis of the Milwaukee voucher program by Prof. Robert Costrell of the University of Arkansas found that “about 10 percent of low-income voucher users would have attended private school anyway.” The 2009 study also found that the voucher program produced significant savings to the state taxpayers, as shown in the figure below:

Chart by Robert M. Costrell.

A Friedman Foundation study released last year found that the Milwaukee voucher program saved the state more than $238 million since its inception in 1990. Moreover, as the Wisconsin Institute for Law & Liberty notes in a recent report, Wisconsin gives a “school choice bonus” to district schools that lose students to the voucher program. Although a district’s total revenue decreases when a student leaves (along with the variable costs associated with that student), the “school districts will actually have more revenue per pupil because the district can continue to count students it no longer educates for equalization aid and revenue limit purposes.”

Sadly, opponents of school choice are likely to continue resurrecting the “no evidence” canard. But when they do, Van Helsings like Shuls and Lueken will be there to put a stake in its heart.

How much Australian sugar should be allowed to enter the U.S. market?  That’s a key question the U.S. government must answer prior to concluding the Trans-Pacific Partnership (TPP) negotiations.  The United States is the largest sugar market in the TPP, consuming about 11 million metric tons (MMT) per year.  It also is the largest producer (7-8 MMT) and importer (3 MMT) in the group.  Australia generally is believed to be the most cost-competitive sugar producer among the12 TPP nations.  It also is the largest exporter, annually shipping 3-4 MMT to other countries. 

To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities.  Australian sugar producers understandably want to redress that omission.  Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.

The U.S. sugar program includes a price-support level for raw cane sugar of 22.25 cents per pound ($490/MT), with refined sugar supported at 26 cents.  Those levels effectively have been raised more than 10 percent to around 24.7 cents ($545/MT) and 30-32 cents, respectively, under the trade-restricting terms of the recent settlement agreement in the antidumping/countervailing-duty (AD/CVD) dispute involving imports from Mexico. (For more on U.S.-Mexico sugar issues, see here and here.)  Mexico is the largest supplier of U.S. sugar imports, generally providing between 1.0-1.5 MMT per year.  Suffice it to say that the agreement between the U.S. and Mexican governments will limit the amount of sugar Mexican producers can export to the United States, and also force that sugar to be sold at higher prices. 

With global raw sugar prices currently at relatively low levels of around 12 cents, Australian cane growers find the possibility of selling more sugar to the United States at high prices to be quite intriguing.  However, those sales currently are limited to the amount allocated to Australia under the U.S. tariff-rate quota (TRQ) regime – a modest quantity of only 87,000 MT.  Australia is asking that the TRQ be boosted by 750,000 MT, an increase of more than nine times.  The United States apparently has offered an additional 65,000 MT (official figure not disclosed), which would not even double Australia’s current access. 

Frankly, the Australians have the better side of this argument.  For the United States to insist on only a small increase in sugar access would be tantamount to accepting a very low level of ambition for agricultural market access in the TPP. 

But, you ask, aren’t the Aussies being too greedy?  Wouldn’t an additional 750,000 MT of imports cause the U.S. sugar program to collapse?  Close analysis reveals that the request actually is quite reasonable and that such an increase in sugar imports – handled appropriately – would not cause the program to collapse. 

Even U.S. sugar growers would acknowledge that a lot more Australian sugar imports could be accommodated, but they would want imports from Mexico to be reduced to make room in the marketplace.  (An increase in imports from Australia would equal a decrease from Mexico.)  Since Mexico is an active participant in the TPP negotiations, it probably isn’t feasible to reach agreement on a pact that simply robs Peter to pay Paul.  Plus, Mexico’s open access to the U.S. sugar market was negotiated over 20 years ago as part of the balance of concessions that went into NAFTA.  Mexican negotiators likely would not be amused at an attempt in the TPP to reduce the value of that access. 

The proper approach would be to reduce the quantity of sugar that U.S. growers are allowed to sell in the U.S. market by 750,000 MT.  This actually is a lot simpler to do than one might think.  Several years ago the U.S. sugar industry gave up the right to market as much as they could grow in order to maintain attractive price support levels.  They made a conscious decision that they would be better off selling somewhat less sugar than they would prefer, but at artificially high prices.  As if it was regulating a public utility, the U.S. Department of Agriculture (USDA) each year sets the overall allotment quantity (OAQ) that sugar growers are allowed to market domestically, roughly 10 MMT.  If the law was changed under the TPP implementing legislation to reduce the OAQ by 750,000 MT, U.S. growers would be able to sell about 9.25 MMT. 

There’s little doubt that the U.S. sugar industry would oppose such a change.  However, their protests should not be heeded.  Recall the earlier comment that the agreement settling the Mexican AD/CVD case had the effect of boosting U.S. price support levels by more than 10 percent?  That price increase would more than offset the smaller quantity growers would be allowed to sell.  Let’s do the math, using the conservative assumption that all sugar is valued at the effective support level for raw cane:

Income prior to the Mexican agreement: 

10 MMT x $490/MT = $4.9 billion

Income following the Mexican agreement, and incorporating a 750,000 MT reduction in the OAQ:

9.25 MMT x $545/MT = $5.04 billion

In other words, the increase in price that will accrue to U.S. sugar growers in response to the agreement with Mexico is more than large enough to offset revenues they would lose from a 750,000 MT reduction in the OAQ.  Since overall U.S. sugar policy would lead to a slight increase in the incomes of sugar growers, they have no legitimate basis for complaining about giving Australia the market access it is seeking.  The regulated sugar industry would remain comfortably cossetted.

What about commitments U.S. officials have made to the sugar industry regarding the TPP?  It’s important to understand what USTR Michael Froman has said.  When speaking about sugar on July 1 he stated, “Whatever we do in that area won’t undermine the sugar program.”  Frankly, granting Australia increased access of 750,000 MT while reducing the OAQ by a like amount would not undermine the sugar program.  Growers would earn more money than before, courtesy of the AD/CVD settlement agreement.  The structure of the U.S. sugar program would remain the same – a high price for sugar, coupled with limitations on how much domestic and imported sugar can be marketed.  There would be no fundamental reform of the sugar program to make it more market oriented.

It would be nice to think that the Obama administration might have sought a reduction in the U.S. sugar support price as part of the TPP process.  Meaningful liberalization of sugar policy would require reforms that strengthen competition, improve economic efficiency, and reduce costs for consumers.  (A paper on sugar policy reform can be found here.).  Such an outcome seems beyond reach at this point in the TPP negotiations, and would clearly be incompatible with Amb. Froman’s commitment not to undermine the sugar program. 

Instead, the administration’s trade policy has focused on “expanding economic opportunity for American workers, farmers, ranchers and businesses” by increasing “made-in-America exports.”  U.S. sugar growers generally do not export. The U.S. sugar price is higher than in most other countries, and the large and affluent U.S. market provides ample opportunities to sell their sugar at home.  The sugar industry simply isn’t in a position to help the administration achieve its goal of increasing exports.

On the other hand, U.S. farmers that raise the vast majority of other crops and livestock are globally competitive.  They easily could expand their exports, if more overseas markets are open to them.  The U.S. government is using the TPP as a forum in which to push Japan and Canada to make truly meaningful policy changes that would expand access for food and agricultural imports into those countries.  Trade negotiations are a poor time for practicing hypocrisy.  If the United States hopes to be successful in its legitimate pursuit of market opening in other countries, it needs to be willing to address its own previously sacrosanct programs.  The admittedly protectionist U.S. sugar program is at the top of the list.  Providing 750,000 MT of additional sugar access to Australia could be the key that would unlock the door to boosting exports of made-in-America grains, oilseeds, meats, and dairy products, along with a wide array of horticultural and specialty items. 

The best hope for a truly trade-expanding conclusion to the TPP is for the United States to provide a very substantial increase in sugar market access to Australia, coupled with equally significant efforts by the Japanese and Canadian governments to open their agricultural markets.  Genuine liberalization of the U.S. sugar market will have to wait for another day. 

If you’re familiar with Cato’s project, then you probably know that according to the available data, people today are wealthier, healthier, better educated, and less exposed to violence than in the past. provides you with the tools to explore how the state of humanity has changed over time. But even if you have visited the website before, you may not be aware of every feature it offers. Did you know that allows you to compare datasets of human wellbeing against one another, allowing you to see if the datasets correlate? Or that you can download a customized chart or map with the click of a mouse? Our new introduction video offers a rundown of all our current features. Check it out:

An Introduction to

I blogged last year about efforts to promote free trade within Canada, through an improved “Agreement on Internal Trade.” Some Canadians are now attempting a new approach to addressing this problem: Invoking the Canadian Constitution.

Here’s what happened to trigger the constitutional litigation, via the Canadian Constitution Foundation:

On October 6, 2012, New Brunswick resident Gerard Comeau decided to go to Quebec on a booze run. As a result of his trip, Mr. Comeau was surprised to find himself charged with violating New Brunswick’s Liquor Control Act.

Here is the strange part: Mr. Comeau’s purchase of beer and liquor in Quebec was entirely legal. His alleged crime was bringing it home to New Brunswick.

Mr. Comeau was stopped in Campbellton, New Brunswick just after crossing the bridge spanning the Quebec-New Brunswick border. He had been followed by the RCMP while he made two stops to buy liquor in Quebec. He was charged with violating the ban on bringing in more than 12 pints of beer or liquor from an out-of-province source (per s. 43 of the Act). As a New Brunswick resident, you can legally buy larger amounts only from a New Brunswick Liquor Corporation store. This crown corporation holds a legally enforced monopoly on liquor sales in the province, and it effectively protects its monopoly across provincial borders through the Liquor Control Act’s prohibitions on importation.

So what does the Canadian Constitution say about all this?  Section 121 of the Constitution Act, 1867 states that: “121. All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”  You might think that would be enough to ensure free trade, but apparently there is a 1921 Supreme Court decision narrowly interpreting the provision so that it only prohibits customs duties imposed at the border.

The Canadian Constitution Foundation is bringing the litigation in this case, and is arguing for a broader view of the provision, which would allow Canadians to bring goods accross provincial borders more generally. They argue that:

If Comeau is successful in restoring the correct, original meaning of s. 121 of the constitution, many forms of internal trade barriers may also be invalidated.  The implications go beyond the liquor and beer industries.  Restrictions on interprovincial trade in eggs, poultry and dairy products—often referred to as supply management—may likewise be considered unconstitutional.

Through NAFTA, Canadians have (mostly) free trade with the United States.  It would be nice if they also had free trade with each other.

The Republican presidential race is heating up and Florida Sen. Marco Rubio is talking foreign policy. Alas, he believes intervention and war to be a first resort and seems willing to sacrifice American lives, wealth, and prosperity for almost any reason.

Rubio shares the common delusion on the Right that the world has grown more dangerous since the end of the Cold War. Actually, the end of the Soviet Union and Warsaw Pact has made it much safer for America.

Rubio claimed that “Turmoil across the world can impact American families almost as much as turmoil across town.” But that is only if the United States allows it. During most of America’s history, Washington avoided involvement in foreign tragedies.

Rubio worried about rising prices from foreign instability. Far more consequential is the expense of military intervention, human and financial.

But Rubio was right when he declared: “foreign policy is domestic policy.” It is difficult to maintain a democratic republic with a limited government committed to individual liberty while pursuing an imperial foreign policy. Americans’ freedom ends up as an afterthought.

In Rubio’s view, America’s ideals “have been replaced by, at best, caution, and at worse, outright willingness to betray those values for the expediency of negotiations with repressive regimes.” That actually sounds like Washington’s persistent support for the dictatorial allies that Rubio cherishes.

He wouldn’t admit any error in invading Iraq “because the president was presented with intelligence that said Iraq had weapons of mass destruction.” Never mind that the supposed evidence variously was manipulated, based on lies, and carefully scrubbed.

But Rubio blamed Barack Obama for the current Iraq imbroglio, criticizing support for Nouri al-Maliki, who became prime minister under George W. Bush. Rubio urged an American return to Iraq: “It’s not nation-building. We are assisting them in building their nation.” That fine distinction might earn a good grade in law school, but it won’t fool the American people.

Rubio also backed the Obama administration’s Libya misadventure. Yet he complained that “Anytime there’s a vacuum created anywhere in the Middle East it becomes a magnet for these sorts of terrorist groups.”

The United States must “reinforce our alliances,” he insisted, particularly in Europe. Never mind that it has more money and people than America yet continues to underfund defense.

Worse, Washington must “reaffirm that the open door policy is still intact and applies to any NATO aspirant, including Ukraine if it so chooses.” But the burden of defending any new member would fall on the United States.

As I point out on Forbes online: “Because Kiev is stuck in conflict America might face an immediate call to fulfill NATO’s Article 5 security commitment—against a nuclear-armed power. Does Rubio want to start World War III?”

Rubio complained that “Most threatening of all, we’ve seen Iran expand its influence.” Actually, Iran is a wreck and poses little danger to the United States. Moreover, the most important impetus for Tehran’s increased clout was Bush’s invasion of Iraq, which Rubio endorsed.

Rubio attempted to add a humanitarian gloss to his disastrous proposals: “Oppressed peoples still turn their eyes toward our shores, wondering if we can hear their cries.” He also argued that “we have a responsibility to support democracy.” Does his heart-warming concern apply to friendly oppressors in Egypt, Bahrain, Saudi Arabia, and Central Asia?

Yet Rubio also would turn the military into an agent of corporate America through his plan for “the protection of the American economy in a globalized world.” The United States is insulated from much tumult overseas. Shouldn’t other nations take the lead when they are directly affected? How many lives is he prepared to sacrifice to sustain corporate jobs and profits?

Of course, with this agenda there must be more military spending. But America already is stronger than every other nation. If more than 40 percent of the world’s military spending isn’t enough, how much is?

Most of the other GOP candidates sound similar to Rubio. Unfortunately, Republican group-think won’t make the United States more secure. The GOP needs to engage in a real debate over foreign and military policy.

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.

President Obama is keen on calling carbon dioxide emitted from our nation’s fossil fuel-powered energy production, “carbon pollution.” For example, last week, when introducing EPA’s Clean Power Plan—new regulations limiting carbon dioxide emissions from the power plants that currently produce 67 percent of the country’s electricity—he used the term “carbon pollution” ten times. For example:

Right now, our power plants are the source of about a third of America’s carbon pollution. That’s more pollution than our cars, our airplanes and our homes generate combined. That pollution contributes to climate change, which degrades the air our kids breathe. But there have never been federal limits on the amount of carbon that power plants can dump into the air. Think about that. We limit the amount of toxic chemicals like mercury and sulfur and arsenic in our air or our water – and we’re better off for it. But existing power plants can still dump unlimited amounts of harmful carbon pollution into the air. [emphasis added]

Clearly, he is trying to paint a picture for the American public whereby carbon dioxide emissions are thought of as dirty, noxious substances that invade the air we breathe and make us sick. Who wouldn’t support regulation to try to limit such a menace?

But, this is scientifically inaccurate and, no doubt, intentionally misleading. It reflects poorly on the president and on his scientific advisors.

First and foremost, carbon dioxide is a colorless, odorless gas that is non-toxic to humans at concentrations below some tens of thousands of parts per million (ppm). The current carbon dioxide concentration in the atmosphere is 400 ppm and even worst case projections by the end of the century only put the concentration at 800-1000ppm. This is still some 5-6 times below the government’s recommended exposure limits. No one breathing open, well-mixed air* has ever been sickened from breathing carbon dioxide—nor ever will be.

Secondly, far from being sickened, the planet’s plant life is invigorated by carbon dioxide—the more the merrier. High concentrations (~1,000ppm) of carbon dioxide are routinely used in commercial greenhouses to produce faster growing and more robust plants. Scientific studies have shown that as carbon dioxide concentrations rise, plants become more resilient to environmental stressors, more efficient in their use of water, and more productive. A recent estimate has pegged the economic contribution of human carbon dioxide emissions to date, acting via increased crop production, at $3.2 trillion over the past 50 years and estimates an additional $10 trillion by mid-century. Pretty good for a “harmful” pollutant.

Thirdly, referring to carbon dioxide as “carbon pollution” is just plain scientifically inaccurate.

A carbon dioxide molecule is made up of two atoms of oxygen and one atom of carbon. Under the president’s apparent logic, wouldn’t it be twice as apt to term carbon dioxide “oxygen pollution”? But, we think, everyone would agree that would be deeply misinformative. So, too, everyone should agree, is applying the term “carbon pollution.”

In fact, carbon pollution already exists—it is more commonly called “soot,” the tiny elemental carbon particles that result from incomplete combustion. Soot is black, dirty, and oily, and not only makes an environmental mess, but is also dangerous to breathe. It is just what you expect a “pollutant” to be. And, it is already highly regulated by the EPA. So Obama’s statement that “existing power plants can still dump unlimited amounts of harmful carbon pollution into the air” is factually incorrect.

And finally, the carbon dioxide emitted from power plants is part and parcel of the chemistry of combustion. It is not some sort or gas or particle that is produced as a result of impurities in the fuels and can be separated from the process—it IS the process. Adding heat to hydrocarbons, such as fossil fuels (like coal, natural gas, or oil) in the presence of oxygen starts a chemical reaction that releases more heat (in excess of what was original applied) along with carbon dioxide and water (CO2, and H2O)**. Consequently, the power plants that the President refers to as being able to “dump unlimited amounts of harmful carbon pollution into the air” aren’t so much polluting as simply doing their job, the one that we ask of them—to produce the power that drives modern society and our way of life.

By calling carbon dioxide emissions “carbon pollution” President Obama and his EPA seek not to be scientifically accurate, but rather to sway public opinion in support of voluminous regulations aimed to restrict energy choice, not only here, but through his leadership aspirations, abroad (e.g., at the upcoming UN climate conference this December in Paris). For this, we award him 2.5 spin cycles—somewhere between Slightly Soiled and Normal Wash—in other words, the standard modus operandi of the federal government.

*There have been documented, although quite rare, occurrences of sudden carbon dioxide outgassing events associated with volcanic activity that have led to high fatalities in affected areas.

** In fact, it is similar to the process your body uses to power itself (in this case metabolism rather than combustion), breaking apart carbohydrates into carbon dioxide and water and liberating energy. Just as power plants emit H2O and CO2 into the air, so do you. The biggest difference, from a climate standpoint anyway, is that the carbohydrates you ingest were taken out of the air recently by plants (via photosynthesis), while the hydrocarbons ingested by power plants were taken out of the air by plants millions of years ago (and have been geologically converted and stored in the form of fossil fuels). Consequently, the collective breath of humanity does not lead to a build-up of CO2 in the atmosphere, whereas the collective breath of fossil fuel-powered electricity generating facilities does.

SHENYANG, CHINA—North Korea is a major topic of interest in this provincial capital in China’s northeast. The “Hermit Kingdom” is just a couple hours away by car. Again, the North’s harvest does not look good. Observers warn that another famine may be coming.

The first reports of drought appeared earlier this year. The United Nations warned that 70 percent of North Korea’s population faces a food shortage.

Another famine is a grievous embarrassment. Several hundred thousand, and perhaps as many as two million, North Koreans died between 1995 and 1997 from a brutal, extended famine. The North since has been dependent on the generosity of others to feed its people.

The DPRK again has begun to bang its tin cup, seeking aid. The People’s Republic of China remains the North’s most important food supplier. The Chinese government almost certainly will continue to stand by its ally.

Between 1995 and 2005, Seoul provided nearly $1.2 billion in food and fertilizer alone. South Korea largely cut off general support after Pyongyang’s military attacks in 2010.

Still, the South remains willing to restart humanitarian transfers. In June, Unification Minister Hong Yong-pyo said: “If North Korea faces tougher situations, South Korea is willing to provide the necessary support.”

Japan has episodically provided food assistance, but aid generally has reflected the state of relations, which in recent years remains tainted by the controversy over North Korea’s abduction of Japanese citizens. With the Abe government adopting a more assertive foreign policy, it is unlikely to come to the North’s rescue.

Washington has provided aid in the past—roughly $1.1 billion worth, about 60 percent of which was food, between 1995 and 2005. Since then, assistance has been only little and occasional.

Alas, Pyongyang has tended to take the money and, if not run, at least ignore its promises to behave better. In fact, in early 2012, the North almost immediately violated a new agreement negotiated with Washington trading aid for nuclear restraint with a new rocket launch.

So far the administration is saying no. The State Department’s East Asia-Pacific spokeswoman, Katina Adams, explained that “the U.S. has no plans to provide humanitarian assistance to North Korea at this time.”

However, as I point out in National Interest, “having succeeded in engaging the pariah states of both Cuba and Iran, the Obama administration might decide to make another try with Pyongyang. And the threat of famine offers an obvious excuse for another aid effort.”

Of course, no one wants the North Koreans to starve. But famine is a self-inflicted disaster. The North has socialized its agriculture and used food to reward political loyalty. Moreover, Pyongyang has devoted scarce resources to nukes, other weapons, and luxuries for the nomenklatura that otherwise could be used to purchase food.

Tempting though it might be to try again, such an effort would certainly be a bad idea. Pyongyang would treat official aid as support for the regime; any resources transferred inevitably free-up resources for use elsewhere. U.S. support would increase popular hardship over the long-term.

However, Washington should allow truly private aid. Such assistance carries no imprimatur of political support.

Moreover, the North appears to be less vulnerable to disaster than two decades ago because farmers produce more food privately, which increasingly is distributed through private markets.

Indeed, that is how many North Koreans survived during the 1990s famine. Such a process will help distribute even limited food supplies to people today.

Refusing to provide aid does not mean Washington should not talk with the North. The United States just should keep its expectations quite low—and not pay anything for mere promises.

North Korea is a continuing tragedy. There is no easy or simple policy guaranteed to end confrontation on the peninsula.

Almost everything the United States has failed so far, including providing government aid to the DPRK. If famine again does strike, the United States and its allies should tell Pyongyang no.

Scott Walker touts his record as a fiscal conservative. But this morning, reports the Associated Press

Wisconsin Gov. Scott Walker took a break from the presidential campaign trail Wednesday to commit $250 million in taxpayer money to pay for a new arena for the Milwaukee Bucks.

Walker’s come under a lot of criticism from both left and right for his arena funding plan, including an article I wrote at the Huffington Post after he defended his plan on ABC’s “This Week.” Such deals are paid for by average taxpayers to benefit millionaire players and billionaire owners. But millionaires and billionaires have more influence than average taxpayers, and the pictures around stadium deals are great: 

Calling the new NBA stadium a “dynamic attraction for the entire state of Wisconsin,” Walker signed the bill at the Wisconsin State Fair Park surrounded by state lawmakers, local officials and Bucks team president Peter Feigin.

The economics, not so good. Walker has claimed a ”return on investment” of three to one, which he says is “a good deal” for the taxpayers. Economists disagree. As Dennis Coates and Brad Humphreys wrote in a 2004 Cato study criticizing the proposed D.C. stadium subsidy, “The wonder is that anyone finds such figures credible….

Our conclusion, and that of nearly all academic economists studying this issue, is that professional sports generally have little, if any, positive effect on a city’s economy. The net economic impact of professional sports in Washington, D.C., and the 36 other cities that hosted professional sports teams over nearly 30 years, was a reduction in real per capita income over the entire metropolitan area.

Republican voters are looking for fiscal conservatives and straight talkers. We’re hearing a lot of denunciations of corporate welfare and crony capitalism. And here’s a leading conservative candidate for president sitting down in front of cameras to sign a bill handing $250 million in taxpayers’ money (Bloomberg says $400 million with interest) to wealthy owners of a sports team (some of whom, no doubt coincidentally, are large donors to his campaign), in defiance of free-market advocates and virtually all economists. Will the other Republican candidates take him on? Will they denounce this wasteful extravagance?

Or will we have to rely on John Oliver to do the job small-government Republicans ought to be doing?


I never watched That ’70s Show, but according to Wikipedia, the comedy program “addressed social issues of the 1970s.”

Assuming that’s true, they need a sequel that addresses economic issues of the 1970s. And the star of the program could be the Congressional Budget Office, a Capitol Hill bureaucracy that apparently still believes - notwithstanding all the evidence of recent decades - in the primitive Keynesian view that a larger burden of government spending is somehow good for economic growth and job creation.

I’ve previously written about CBO’s fairy-tale views on fiscal policy, but wondered whether a new GOP-appointed director would make a difference. And I thought there were signs of progress in CBO’s recent analysis of the economic impact of Obamacare.

But the bureaucracy just released its estimates of what would happen if the spending caps in the Budget Control Act (BCA) were eviscerated to enable more federal spending. And CBO’s analysis was such a throwback to the 1970s that it should have been released by a guy in a leisure suit driving a Ford Pinto blaring disco music.

Here’s what the bureaucrats said would happen to spending if the BCA spending caps for 2016 and 2017 were eliminated.

According to CBO’s estimates, such an increase would raise total outlays above what is projected under current law by $53 billion in fiscal year 2016, $76 billion in fiscal year 2017, $30 billion in fiscal year 2018, and a cumulative $19 billion in later years.

And here’s CBO’s estimate of the economic impact of more Washington spending.

Over the course of calendar year 2016,…the spending changes would make real (inflation-adjusted) gross domestic product (GDP) 0.4 percent larger than projected under current law. They would also increase full-time-equivalent employment by 0.5 million. …the increase in federal spending would lead to more aggregate demand than under current law. …Over the course of calendar year 2017…CBO estimates that the spending changes would make real GDP 0.2 percent larger than projected under current law. They would also increase full-time-equivalent employment by 0.3 million.


If Keynesian spending is so powerful and effective in theory, then why does it never work in reality? It didn’t work for Hoover and Roosevelt in the 1930s. It didn’t work for Nixon, Ford, and Carter in the 1970s. It didn’t work for Japan in the 1990s. And it hasn’t worked this century for either Bush or Obama. Or Russia and China.

And if Keynesianism is right, then why did the economy do better after the sequester when the Obama Administration said that automatic spending cuts would dampen growth?

To be fair, maybe CBO wasn’t actually embracing Keynesian primitivism. Perhaps the bureaucrats were simply making the point that there might be an adjustment period in the economy as labor and capital get reallocated to more productive uses.

I’m open to this type of analysis, as I wrote back in 2012.

…there are cases where the economy does hit a short-run speed bump when the public sector is pruned. Simply stated, there will be transitional costs when the burden of public spending is reduced. Only in economics textbooks is it possible to seamlessly and immediately reallocate resources.

But CBO doesn’t base its estimates on short-run readjustment costs. The references to “aggregate demand” show the bureaucracy’s work is based on unalloyed Keynesianism.

But only in the short run.

CBO’s anti-empirical faith in the magical powers of Keynesianism in the short run is matched by a knee-jerk belief that government borrowing is the main threat to the economy’s long-run performance.

…the resulting increases in federal deficits would, in the longer term, make the nation’s output and income lower than they would be otherwise.

Sigh. Red ink isn’t a good thing, but CBO is very misguided about the importance of deficits compared to other variables.

After all, if deficits really drive the economy, that implies we could maximize growth with 100 percent tax rates (or, if the Joint Committee on Taxation has learned from its mistakes, by setting tax rates at the revenue-maximizing level).

This obviously isn’t true. What really matters for long-run prosperity is limiting the size and scope of government. Once the growth-maximizing size of government is determined, then lawmakers should seek to finance that public sector with a tax system that minimizes penalties on work, saving, investment, risk-taking, and entrepreneurship.

Remarkably, even international bureaucracies such as the World Bank and European Central Bank seem to understand that big government stifles prosperity. But I won’t hold my breath waiting for the 1970s-oriented CBO to catch up with 21st-century research.

P.S. Here’s some humor about Keynesian economics.

P.P.S. If you want to be informed and entertained, here’s the famous video showing the Keynes vs. Hayek rap contest, followed by the equally clever sequel, which features a boxing match between Keynes and Hayek. And even though it’s not the right time of year, here’s the satirical commercial for Keynesian Christmas carols.

In this Bloomberg BNA podcast, Supreme Court correspondent Kimberly Robinson and I discuss King v. BurwellSissel v. HHS (the Origination Clause case), and House of Representatives v. Burwell, (the House GOP’s lawsuit against the Obama administration’s efforts to exceed its powers under the Constitution and the Affordable Care Act).

Keep an eye out for my article on King v. Burwell with Jonathan Adler in the upcoming Cato Supreme Court Review.

Adler and I will be speaking about King at the Cato Institute’s 14th annual Constitution Day symposium on September 17, 2015. Register here.

Of course I didn’t expect my recent post, listing “Ten Things Every Economist Should Know about the Gold Standard,” to stop economists from repeating the same old misinformation. So I’m not surprised to find two of them, from the New York Fed, repeating recently some of the very myths that I would have liked to lay to rest.

The subject of James Narron and Don Morgan’s August 7th Liberty Street Economics post is the California gold rush. After describing the discovery at Sutter’s mill and the “stampede” of prospectors anxious to get their hands on part of the “vast quantities of gold” whose existence that discovery had revealed, Narron and Morgan observe that the

large gold discovery functioned like a monetary easing by a central bank, with more gold chasing the same amount of goods and services. The increase in spending ultimately led to higher prices because nothing real had changed except the availability of a shiny yellow metal.

No economist worthy of the name would deny that, other things being equal, under a gold standard more gold means higher prices. But other things evidently weren’t equal in the U.S. in the late 1840s and early 1850s, for if they had been the path taken by the U.S. CPI between 1830 and 1880 would not have looked as it does in the chart shown below, which was also in my above-mentioned post:

*Graphing Various Historical Economic Series,” MeasuringWorth, 2015.

As you can see, the gold rush didn’t even cause a blip in the CPI, which was about as stable from 1840 to 1860 as it has ever been. Indeed, prices fell slightly, making for an annual inflation rate of minus .19 percent. For the shorter period of 1845 to 1860 the inflation rate is, admittedly, much higher: a whopping .63 percent. But even this higher rate is, according to the Fed’s current credo, was dangerously low. Were one to assume that a 2 percent inflation rate was as desirable 167 years ago as Fed officials claim it to be today, one would have to conclude that the gold rush, far from having made the U.S. money stock grow too rapidly, didn’t suffice to make it grow rapidly enough.

Having left their readers with a quite false impression regarding the inflationary effects of the gold rush, the New York Fed economists go on to claim that “the gold standard led to more volatile short-term prices (including bouts of pernicious deflation) and more volatile real economic activity (because a gold standard limits the government’s discretion to offset aggregate demand shock [sic]).”

Here again, a little more attention to both the statistics themselves and the economic forces underlying them, casts doubt upon the Fed experts’ conclusions.

It is, first of all, notorious that early macroeconomic statistics tend to be based on smaller samples, and ones that lean more heavily on relatively volatile components, than modern ones. Christina Romer documented this fact with respect to early real GNP estimates, but the same goes for early price-level measures. Consequently it is more than likely that at least some of the gold standard’s apparent short-run price level volatility is nothing more than a statistical artifact.

Second, and more fundamentally, the authors’ implicit premise — that an ideal monetary standard avoids short-run price level volatility — is false. What’s desirable isn’t that the price level not fluctuate, or that it only fluctuate within narrow limits, but that it should fluctuate only to the extent that is needed to reflect corresponding changes in the general scarcity of final goods. In other words, the price level ought to vary in response to shocks to “aggregate supply,” but not because of shocks to total spending or “aggregate demand,” which an ideal monetary system will prevent.

A sharp rise in prices connected to a drought-induced harvest failure, for example, isn’t the same thing as one caused by a surplus of exchange media. The rise supplies a desirable signal of underlying real economic conditions. Far from making anyone better off, a monetary system that kept prices from rising under the circumstances would have to do so by reducing the flow of spending, which would only mean adding the hardship of tight money to the damage done by the drought itself.

As numerous studies (including several that I, Bill Lastrapes, and Larry White cite in “Has the Fed Been a Failure?”) have shown, harvest failures and other sorts of aggregate supply shocks were a relatively much more important cause of macroeconomic volatility during the gold standard era than they have been in more recent times. It follows that one would expect both the price level and real output to have varied more during the gold standard days than they do now even if, instead of having been governed by a gold standard, the money supply back then had been regulated by a responsible central bank. As a matter of fact, according to a fairly recent study by Gabriel Fagan, James Lothian, and Paul McNelis, had a Taylor Rule been in effect during the gold standard period, it would not have resulted in any welfare gain.

Just as there are good reasons for allowing adverse supply shocks to be reflected in higher prices, so too are there good reasons for allowing the price level to decline in response to positive supply innovations. Those reasons can be found both in my writings defending a “productivity norm” and in arguments by Scott Sumner and others for targeting NGDP.

Consideration of these arguments brings me to Narron and Morgan’s claim that the gold standard was responsible for “bouts of pernicious deflation.” That the gold standard did bring periods of deflation no one would deny. But it doesn’t follow that those deflationary episodes, or most of them, were “pernicious.” In fact, Michael Bordo, whom Narron and Morgan give as the source for their claim, has himself denied that “pernicious” deflation was a frequent occurrence under the classical gold standard. According to the abstract to Bordo’s paper, “Good versus Bad Deflation: Lessons from the Gold Standard Era,” written with John Landon Lane and Angela Redish,

the deflation of the late nineteenth century reflected both positive aggregate supply shocks and negative money supply shocks. However, the negative money supply shocks had little effect on output. This we posit is because the aggregate supply curve was very steep in the short run during this period. This contrasts greatly with the deflation experience during the Great Depression. Thus our empirical evidence suggests that deflation in the nineteenth century was primarily good.

Several other recent studies reach broadly similar conclusions, including at least a brief research note from another Federal Reserve economist.[1]

To say that deflation can be either “good” or “bad,” depending on whether it stems from goods becoming more abundant or from money becoming more scarce, and to observe that, under the gold standard, deflation was mostly good, isn’t to deny that there’s such a thing as bad deflation. But if it’s striking examples of bad deflation that one seeks, one will find them, not by peering back into the days before the Fed’s establishment, but by looking no further back than the Coolidge recession of 1920-21, or the Great Contraction of 1930-33, or the Roosevelt Recession of 1937-8. Heck, instead of even going back that far, one could just consider the subprime deflation of 2008-9. According to the linked sources, in each of these instances, deflation was to some considerable extent an avoidable consequences of the Fed’s deliberately-chosen policies, rather than something beyond the Fed’s control.[2]

Besides exaggerating both the inflationary and the deflationary risks posed by the classical gold standard, Narron and Morgan repeat the myth that a gold standard costs considerably more than a fiat standard:

Apart from their macroeconomic disadvantages, gold standards are also expensive; Milton Friedman estimated the cost of mining the gold to maintain a gold standard for the United States in 1960 at 2.5 percent of GDP ($442 billion in today’s terms).

What Friedman’s calculation actual showed was, not that “gold standards” are quite expensive, but that one very peculiar sort of gold standard is so, namely, a “pure” gold standard arrangement in which gold coins alone serve as exchange media, without the help of any fractionally-backed substitutes! Not a single one of modern history’s actual “gold standards” ever even came close to Friedman’s fictional case. (Even mid-17th century goldsmith-banks are said to have kept specie reserves equal to about a third of their “running cash” liabilities.) If one assumes that banks in 1960 would have required 10 percent gold reserves, one arrives at a gold-standard cost estimate of .25 percent of GDP; if one assumes (still more plausibly) that 2 percent reserves would have sufficed, one arrives at an estimate one-fiftieth as large as Friedman’s! When, oh when!, will economists stop taking Milton Friedman’s absurd 2.5 percent estimate seriously?

Yet correcting Friedman’s estimate is only part of the story. All sorts of other things are wrong with the claim that the gold standard was expensive. Those interested in a quick summary may consult item # 2 of my “Ten Things” post. I will only add here that even Friedman himself came to doubt that fiat money was a bargain.

Narron and Morgan conclude their article thus:

Despite the demonstrable disadvantages of a gold standard, some observers still call for the Unites States to return to a classical gold standard. Should we? Let us know what you think?

What I think is that, if the gold standard really does have “demonstrable disadvantages,” Messrs. Narron and Morgan haven’t managed to put a finger on any of them.


[1]See also Atkeson and Kehoe, Borio et al., and Beckworth.

[2]The U.S. did, of course, experience several less-severe cases of “bad” deflation during the classical gold standard era. But these episodes resulted, not from the ordinary working of the gold standard, but from financial crises that were peculiar consequences of misguided U.S. banking and currency laws.

[Cross-posted from]

The Court of Appeals for the Federal Circuit heard oral arguments today in a case about dental retainers that could threaten the free flow of information over the Internet.  The question is whether the U.S. International Trade Commission has the authority to bar the “importation” of digital transmissions.  The case has serious implication for the future of 3D printing, internet service providers’ liability for copyright piracy, and the internet’s global infrastructure. 

The ITC has the power to ban imports to prevent “unfair competition” and has become a popular venue to enforce U.S. patents.   A Cato Policy Analysis from 2012 details how the ITC’s patent enforcement powers are unnecessary, protectionist, and inconsistent with U.S. trade obligations

The case before the appeals court today involves products that are manufactured inside the United States based on schematics generated by a computer in Pakistan.  The production of those schematics is covered by a patent owned by Align Technology, who successfully petitioned the ITC to issue an order barring its competitor ClearCorrect from transmitting the data from Pakistan to the United States.

An editorial in yesterday’s New York Times explained the dangers of allowing the agency to have power over digital transmissions:

The I.T.C. has long had the power to forbid companies from importing physical goods like electronics, books and mechanical equipment that violate the patents, copyrights and trademarks of American businesses. It does so by ordering customs officials to seize items at the border or by issuing cease and desist orders to importers. The commission’s order to ClearCorrect was the first time it had sought to bar the transfer of digital information. If the appeals court upholds this decision, it could set a precedent that would allow businesses to seek to block all kinds of data transmissions.

Of course businesses should be able to protect their patents and copyrights. But there are far better ways to do so. In this case, for example, Align could sue ClearCorrect and seek damages for patent infringement. Or the company could ask a judge to order ClearCorrect to stop selling products made using the information contained in the files.

It is not even clear that the commission has the authority to restrict international data transfers. Congress has given it authority to block the import of “articles,” which for decades has been understood to mean physical goods. In last year’s ruling, a five-member majority of the commission ruled that the word “article” includes data.

Groups like the Motion Picture Association of America and the Recording Industry Association of America are supporting the commission’s view. They argue that, as trade increasingly becomes digital, the definition of “article” should include data. The Internet Association, which represents companies like Facebook, Google and Twitter, is asking the court to reverse the decision.

We already know from leaked documents that the MPAA plans to use the ITC’s potential jurisdiction over data transmissions  as a way to block Americans from accessing foreign websites that host copyrighted movies.

The purpose of the ITC’s patent enforcement power is to make sure that U.S. companies have a remedy against foreign infringers who are otherwise unreachable by a domestic court.  That’s why the ITC’s remedy is a ban on future imports rather than money damages for past infringement like you would get in federal district court.  But the bulk of the ITC’s caseload, including the Align case, involves disputes between parties that can and do sue each other in U.S. courts. 

In today’s global economy, it’s particularly pointless to have a specialized IP court for imports, digital or otherwise.  The fact that an article is imported from outside the United States or a piece of information travels through a foreign computer server has no bearing on whether that product infringes a U.S. patent or copyright. 

Giving the ITC power to bar cross-border data transmissions invites mischievous litigation without serving any legitimate public policy goal.

The GOP’s Cleveland debate was spirited, but shed little light on foreign policy. There are important differences among the participants, but few were exposed.

For instance, elsewhere Donald Trump opined that Crimea was Europe’s problem and asked why Washington still defended South Korea. These sentiments deserved discussion.

No multi-candidate forum can delve deeply into such complex issues, however. Even those Republicans giving formal foreign policy addresses have come up short. The GOP contenders have been largely captured by a reflexive, even rabid interventionism which ignores consequences and experience.

Leading the hawks is Sen. Lindsey Graham, a member of the Senate’s unabashedly pro-war caucus. In the interventionist middle some candidates demonstrate hints of reluctance, such as Ted Cruz and John Kasich. Sen. Rand Paul brings up the rear, uncomfortably gyrating between his father’s views and the GOP conventional wisdom.

Chris Christie delivered a formal foreign policy address in which he easily staked his claim to being most committed to violating Americans’ civil liberties through surveillance of dubious value. He charged that his critics were “ideologues,” yet opposed any restraints on the new, far-reaching presidential powers that he demanded.

His foreign policy views are even worse. At age 52, Christie declared: “I don’t believe that I have ever lived in a time in my life when the world was a more dangerous and scary place.”

This is nonsense. As I pointed out on Forbes online: “Christie barely missed the Cuban missile crisis. During his life the Cold War raged, the Vietnam War was lost, the Soviets invaded Czechoslovakia and Afghanistan, and China’s Mao Zedong unleashed the bloody Cultural Revolution. People talked about the potential for a ‘nuclear winter’ from a nuclear exchange. Today the U.S. vastly outspends its potential adversaries and is allied with every major industrialized power save China and Russia.”

 “Building stronger alliances” is a “pillar” of Christie’s foreign policy. U.S. foreign policy is based on “partnership with the people and nations who share our values,” he explained. Like the totalitarian Saudis, brutal Egyptian military, and dictatorial Central Asian states?

Moreover, America’s friends can defend themselves. For instance, South Korea has 40 times the GDP of the North; Japan possesses the world’s third largest economy. Europe has a larger GDP and population than America and multiple of those of Russia.

Many so-called allies are security black holes, making America less secure. Why would Washington wish to confront nuclear-armed Moscow over interests the latter considers vital by defending nations such as Georgia and Ukraine, which always have been irrelevant to America’s security?

Christie argued that “We didn’t have to be a global policeman who solved every problem.” But that’s what Washington has done with perpetual social engineering through foreign aid, military intervention, war, and more.

In Christie’s view squandered U.S. credibility is why Russia grabbed Crimea, Syria’s Bashar al-Assad used force against his opponents, and “Iranian-backed militias are rampaging across Yemen.”

In fact, Washington never was going to go to war over Crimea with nuclear-armed Russia. Assad was determined to remain in power and therefore had to fight, irrespective of Washington’s view. Yemen’s Houthis have been in revolt for decades and have never had much connection to Iran, let alone America.

Of course, Christie demanded more military outlays. But it would be easier “to keep our edge” if Washington didn’t constantly squander Americans’ resources defending other nations and rebuilding failed states.

Christie insisted that “What happened on 9/11 must never happen again.” But he failed to understand that promiscuously supporting authoritarian regimes, aiding foreign combatants, dropping drones and, most important, bombing, invading, and occupying other lands creates enemies determined to do America ill.

Rubio and Bush also have given formal speeches, but sound no better than Christie. Most GOP candidates promise brave new interventions and wars.

If Republicans really believe in limited government and individual liberty, they should promote peace. It is time for a real Republican debate over foreign and military policy.

Let’s celebrate some good news.

When politicians can be convinced (or pressured) to exercise even a modest bit of spending restraint, it’s remarkably simple to get positive results.

Here’s some of what I wrote earlier this year.

…one of the few recent victories for fiscal responsibility was the 2011 Budget Control Act (BCA), which only was implemented because of a fight that year over the debt limit. At the time, the establishment was screaming and yelling about risky brinksmanship. But the net result is that the BCA ultimately resulted in the sequester, which was a huge victory that contributed to much better fiscal numbers between 2009-2014.

And “much better fiscal numbers” really are much better.

Here’s a chart I put together showing how the burden of federal spending declined between 2009 and 2014. And this happened for the simple reason that spending was flat and the economy had a bit of growth.

But now let’s look at some bad news.

It won’t surprise anyone to learn that the big spenders in Washington don’t like fiscal discipline.

They don’t like the modest restraint required by the Budget Control Act and they want to repeal or eviscerate the law. And they’ve already enjoyed some success, replacing spending restraint with tax hikes and budget gimmicks back in 2013.

And now there’s pressure for a similar capitulation this year, led by the Committee (gee, what a shocker) that’s in charge of spending money.

An article in Politico captures some of the internal dynamics.

…what should have been a dream job for House Appropriations Chairman Hal Rogers (R-Ky.) has instead become an exercise in frustration. Despite his plum position, Rogers finds himself at odds with GOP leadership… He’s calling for his party to raise strict spending caps he says are choking off necessary funding… But Rogers’ calls for a budget deal have fallen flat.

By the way, it’s not the main point of today’s column, but the article also shows why it was so important to eliminate “earmarks.”

Lawmakers no longer can be bribed to support more spending in exchange for pork-barrel projects.

It’s a reminder of the sway lost by the once powerful appropriations panel, in an age when earmarks are outlawed… The committee, once an aspiration for every lawmaker, is struggling to make its voice heard… appropriator Steve Womack (R-Ark.)…cheered Rogers for “pushing our leaders to the extent that he can” toward a budget accord. “Appropriators are in a tough spot … We just don’t have the grease that we formerly possessed.”

Good. I don’t want big spenders to have “grease” that facilitates a bigger burden of government.

But getting rid of earmarks didn’t win the war. Washington is still filled with lobbyists, bureaucrats, cronies, special interests, and other insiders who want more spending.

They want to bust the spending caps so they can line their pockets at the expense of the American people. Which is why maintaining the BCA caps are a critical test of whether Republicans are sincere about controlling Leviathan.

To understand the importance of the spending caps, here’s a chart from the Center on Budget and Policy Priorities, a left-wing group that supports bigger government. I won’t vouch for their specific numbers since they have an incentive to exaggerate and overstate the amount of fiscal discipline that’s been imposed, but there’s no question that the big spenders have been handcuffed in recent years.

Now that we’ve reviewed why it’s important to have spending caps, let’s talk about the elephant in the room.

There are two reasons why Republicans may sell out. First, as already discussed, some of them are spendaholics. They like bribing voters with other people’s money.

The second reason the GOP may capitulate is that the President and congressional Democrats may force a “government shutdown” fight.

To be more specific, the annual spending (or “appropriations”) bills are supposed to be completed by October 1, which is the start of the new fiscal year.

If President Obama uses his veto pen, which is what most observers expect, there will be a shutdown. And even though previous shutdowns have yielded positive policy changes, Republicans are afraid that they will suffer political blowback.

Given that they won a landslide election in 2014 after the 2013 shutdown (and also prevailed after the 1995 shutdown fight), this skittishness is a bit of a mystery, but the conventional wisdom is that GOPers will capitulate to Obama and agree to a deal that busts the spending caps.

Which would be very unfortunate for the cause of good fiscal policy.

On the issue of big government and spending discipline, I recently appeared on John Stossel’s show, along with Chris Edwards, while participating in FreedomFest. Here’s what we said about the importance of shrinking Washington to promote freedom and prosperity.

Dan Mitchell and Chris Edwards on Big Government vs Growth

P.S. In this video, Chris and I pontificate at greater length on fiscal policy issues.

P.P.S. While I’m critical of the politicians on the Appropriations Committee, I don’t think they’re necessarily any worse than other lawmakers. As I explained last month when analyzing the bad behavior of politicians who are on the committees that deal with transportation, the system creates a perverse incentive structure to expand government.

P.P.P.S. Here’s some government shutdown humor. And some more at the bottom of this post.