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In July, my Cato colleague Ari Blask and I wrote a study critiquing the National Flood Insurance Program.

We made what—to us—seem like obvious critiques of a broken program: it doesn’t charge an actuarially fair price for many homeowners who live in flood plains, and those who get the best deal seem to be the wealthy. It also fails to use updated maps that detail the current geography and risks to homeowners, and generally doesn’t charge enough to cover the costs of major catastrophes. The result of this is that we have too much development in the flood-prone areas of the country.

After the report came out I appeared on a few radio and TV shows and received a few emails about our research, and the main complaint I received—in fact, virtually the only feedback I got—was from people who said they were in a 100 year floodplain but had never seen any flood. They were angry that their bank made them buy this insurance to get a mortgage, and didn’t think it was fair.

On Thursday, I was a guest on another radio show to talk about the aftereffects of Hurricane Harvey, and the second caller complained about… having been forced to purchase flood insurance despite his belief that his house couldn’t flood. The next caller chimed in with the same complaint.

Apparently not too many people see Harvey as being a precautionary tale. But that’s only natural: human beings aren’t great at perceiving risk. Surveys show that people worry much more about dying from a terrorist attack or a plane crash when slipping in the shower or getting hit by lightning are far more deadly, for instance.

However, insurance companies tend to be pretty good at discerning risk—they go bankrupt if they’re bad at it. Life insurers hire teams of people to try to understand longevity risk, for instance, and property and casualty insurers do the same to understand the risk to homes.

They use this information in pricing the cost of life insurance and homeowners insurance, and they have every incentive to get it right—if they charge too high a price they won’t get much business, and too low and they will lose money.

The federal government—which administers the National Flood Insurance Program—does not have such a keen incentive to get prices right. In fact, in many regions of the country they use flood insurance maps that are decades out of date because it would anger homeowners—who are also voters—to force them to pay more than they think is fair.

I am not sure this is going to change. One thing that Harvey will do is bring more pressure on the federal government to provide “affordable” flood insurance to more people.

However, not all places merit cheap flood insurance—certainly not people who live along the gulf coast or along the North Carolina beaches, where flooding is not uncommon. These people tend to be well off already—many of these are vacation homes.

Harvey is unusual in that it created a monumental flood in a place where most of the homes were not in a flood zone. Some meteorologists described it as a “1,000 year flood.” It is not at all clear how the government will react to this disaster—hopefully it decides that it should be a priority to accurately measure flood risk, for starters. While the government is clearly not beyond subsidizing rich people (that’s what the mortgage interest deduction is all about, after all) perhaps we shouldn’t use this disaster to expand the National Flood Insurance Program and its inherent subsidies, as I fear people will begin to suggest.

Most people agree that we want a federal government to assist the public when we have unforeseen natural disasters, such as what has occurred with Hurricane Harvey.

However, the government’s role in the flood insurance market has exacerbated the damage done by catastrophic floods. By not charging the proper premiums for flood insurance, homeowners don’t make all cost-effective mitigation efforts and we see more development in flood prone areas than would otherwise be the case.

As Congress begins to deliberate the re-authorization of the National Flood Insurance Program, it is worth asking why the federal government feels obligated to provide flood insurance in place of the private market, and whether concentrating its efforts in disaster mitigation and relief, rather than poorly administering an insurance program, might be a more appropriate way.

Having such a debate in the aftermath of a tragedy like Hurricane Harvey may lead the government to simply throw money at the problem. But the reality is that extricating itself from the flood insurance market would be the best thing it could do in the long run if it wants to mitigate the damage caused by future floods as well as the federal government’s obligations during such disasters.

Public schooling monopolists such as the President of the American Federation of Teachers, Randi Weingarten, argue that private school choice programs undermine our democratic society. One of the frequently made fundamental arguments is that, if given the opportunity to do so, self-interested individual families would choose a “less-than-socially optimal” level of schooling since education may be a merit good.

In other words, if my children receive an education, the rest of society benefits from the transaction without having to pay for it directly. After all, other members of society will benefit if my children grow up to be well-informed voters and law-abiding citizens. The conclusion made by some economists is that the government ought to be able to force the rest of society – the free-riders – to subsidize schooling so that the collective could reach some “socially optimal” level of education.

However, such a conclusion assumes that having a more educated populace is the only externality associated with traditional schooling. In order to better understand the overall effect, I have created a list of possible positive and negative externalities associated with government schooling.

Positive Externalities:

  • A more educated citizenry – the rest of society benefits when they have educated people to interact with. Also, democracy might function more effectively with highly educated and informed voters.
  • Obedience – public schools were originally designed to create more obedient citizens. If a person is more obedient to the state, they may be less likely to break the law. As a result, third parties benefit from not having their property damaged or stolen.

Negative Externalities:

  • A less educated citizenry – third parties are harmed if the compulsory levels of schooling do not maximize children’s education levels. After all, schooling is but one channel to achieve an education, and government schools do not have an incentive to provide children with optimal educational experiences.
  • Obedience – if citizens are trained to be obedient, they may be less likely to invent technologies that benefit the rest of society. In addition, obedient employees may be less productive if their job requires them to think on their feet.
  • Legitimized coercion through voting – the voting booth allows advantaged groups to exercise coercion over less fortunate members of society. Politically powerful groups can mobilize and extract resources from third parties, producing, at best, a zero-sum game.
  • Opportunity costs of the political process – citizens must use excessive amounts of time and effort in order to become politically knowledgeable about various educational policies. These scarce resources could be more efficiently allocated towards generating an income or spending time strengthening bonds within the family.
  • Inefficiency – government schools do not have an incentive to spend taxpayer resources efficiently. Consequently, we have observed public school spending increase substantially without discernible effects on observed student outcomes.

These expected externalities are demonstrated in table 1 below:

 

So is government schooling a merit good?

It certainly doesn’t seem like it if we consider all relevant externalities. Indeed, if I had to guess the sign of the net externality, I would argue that it is more likely to be negative overall. Nonetheless, since all of these positive and negative externalities are uncertain and likely to be very large in magnitude, I do not believe it is even possible to accurately calculate the sign of the net externality.

Rather than attempt to reach some imaginary socially optimal level of schooling, we ought to acknowledge that externalities exist in education, but that government intervention likely leads to more negative effects than it eradicates. Instead, we can improve overall social welfare by eliminating much of the negative externalities produced by government involvement in the education system.

Earlier this year my colleague Logan Albright and I estimated the economic and fiscal costs that a full and immediate repeal of DACA would impose on the federal government and the economy as a whole. DACA stands for the Deferred Action for Childhood Arrivals, an Executive Order issued by President Obama that allowed the foreign-born children of illegal immigrants who migrated with their family to remain in the U.S. if they remain in school and subsequently obtain gainful employment.

We found that the aggregate economic cost would be over $200 billion and the cost to the government would be $60 billion, numbers we suggest are conservative. Most of this high cost is driven by the fact that the “dreamers” tend to do well in school and as a result do well in the job market after they complete their education.

To shed some further light on this issue we recently updated our analysis to break down these costs by the individual states.

We began our original analysis by comparing DACA recipients to those immigrants who hold H-1B visas. These are high-skilled, well-educated immigrants who are demographically analogous to DACA students, all of whom must necessarily enroll in higher education programs in order to be eligible.

The average DACA recipient is 22 years old, employed, and a student. 17 percent of them are on track to complete an advanced degree. The college attrition rate of DACA recipients is miniscule compared to domestic students, an indication of the exceptional caliber of the DACA students and their degree of motivation, no doubt partly driven by the fact that dropping out of school for them can result in deportation.

H-1B holders are generally between 25 and 34, have an employment rate of nearly 100%, and have usually completed a college education. We posit that they are akin to what DACA recipients will look like in a few years’ time.

We used a study from the Hoover Institute that estimated the economic impact of expanding the H-1B visa program as our baseline for estimating the cost of DACA repeal.[1] The two differences between this study and what we would like to do is that Hoover was considering an increase in numbers and we contemplate a (dramatic) decrease–an irrelevant difference for our purposes–and the two populations differ somewhat in size and salary, which does matter but is something that we can easily adjust for. 

If DACA recipients were completely analogous to H-1B holders, their removal would constitute a budgetary loss of $127 billion and a GDP loss of $512 billion.

DACA recipients, being younger and not completely finished with their education, earn on average roughly 43 percent of what H-1B holders earn. Also, the population of DACA recipients is about 750,000, compared to the 660,000 H-1B holders the Hoover study examined. Accordingly, we adjust our numbers by the lower wage and the higher population.

From this, we determined that, over a ten-year window, a repeal of DACA would cost the federal government $60 billion in lost revenue, and the impact on economy would total $215 billion in lost GDP.[2]

Our results were consistent with other work on the impact of DACA on the economy. For instance, a 2016 study published by the National Research Council[3] estimated the average long-term fiscal impact for immigrants who remain in the country for an extended period of time to be $59.3 billion, or within one percent of our own estimate.

To provide a bit more relevant data for policymakers, we have supplemented our original work by breaking down the fiscal and economic costs at the state level. Using data from a 2015 survey completed by the Center for American Progress,[4] we estimated the total cost of repealing DACA for each state based on the proportion of DACA recipients in each state.[5] Table One contains the breakdown of these state-level costs.

Of the 50 states, California will bear the highest cost, with over 30 percent of DACA recipients. Factoring in budgetary and economic effects, California’s total cost over a ten year window would be $84.2 billion.

It is important to note that these estimates are conservative, as DACA recipients will likely end up being more productive than their current salaries indicate, as they complete their degrees and gain experience in the workplace. Nor does this analysis factor in the enforcement cost of physically deporting recipients should the program be eliminated, which we believe would be significant.

The repeal or rollback of the DACA program would have a significant and negative fiscal and economic impact on the country, and disproportionately affect the various states in which DACA recipients are most prevalent.

Table 1: Cost of DACA Repeal By State[6] 

Table 1: Cost of DACA Repeal By State 2018-2028

State Budget Cost (Millions $) Economic Cost (Millions $) Total Cost (Millions $) AL 258 924.5 1182.5 AZ 2826 10126.5 12952.5 CA 18372 65833 84205 CO 768 2752 3520 CT 642 2300.5 2942.5 DC 900 3225 4125 DE 258 924.5 1182.5 FL 5910 21177.5 27087.5 GA 1158 4149.5 5307.5 HI 126 451.5 577.5 IA 258 924.5 1182.5 IL 1926 6901.5 8827.5 IN 642 2300.5 2942.5 KS 384 1376 1760 MA 258 924.5 1182.5 MD 642 2300.5 2942.5 MI 768 2752 3520 MN 126 451.5 577.5 MO 126 451.5 577.5 NE 126 451.5 577.5 NJ 384 1376 1760 NM 258 924.5 1182.5 NV 126 451.5 577.5 NY 10794 38678.5 49472.5 NC 2184 7826 10010 OH 126 451.5 577.5 OK 126 451.5 577.5 OR 384 1376 1760 PA 258 924.5 1182.5 SC 258 924.5 1182.5 TN 258 924.5 1182.5 TX 5142 18425.5 23567.5 UT 384 1376 1760 VA 1026 3676.5 4702.5 WA 1800 6450 8250

 

Logan Albright, Director of Research at Free the People, co-authored this report.


[1]http://www.hoover.org/sites/default/files/uploads/aafs/2013/05/Estimating-the-Economic-and-Budgetary-Effects-of-H-1B-Reform-In-S.744.pdf

[2] To conform to Congressional budget procedures we compiled a ten year aggregate cost.

[3] The Economic and Fiscal Consequences of Immigration; National Academies Press, 2016.

[4]“Results of a Tom K Wong, National Immigrant Law Center, and CAP Survey” Center for American Progress Memo, June 2015. 

[5] The CAP survey found that nearly the entire DACA population were in 35 states.

[6] Several states have the same estimates because they happen to have the same number of survey respondents in their states.

President Trump’s executive order attempted to temporarily ban all refugees and all travelers or immigrants from six African and Middle Eastern countries due to a concern over widespread vetting failures. The purpose of the temporary ban was to give the administration time to “improve the screening and vetting protocols and procedures.” The order grounded this concern in one fact:

Recent history shows that some of those who have entered the United States through our immigration system have proved to be threats to our national security. Since 2001, hundreds of persons born abroad have been convicted of terrorism-related crimes in the United States.

These statements contain four clear implications: 1) that these “hundreds of persons born abroad” committed acts of terrorism in the United States; 2) that they came to the United States “through our immigration system,” 3) that they entered since 2001, 4) that better “screening and vetting protocols” could have prevented their entry, and 5) these offenders pose a significant threat to Americans. Each one of these implications is false. Here are the facts:

1)      Not “hundreds of persons” committing terrorism in the United States: Only 55 percent of people convicted of “terrorism-related” offenses according to the federal government are, in fact, convicted of involvement in terrorism.

2)      Not “hundreds” through our immigration system: Less than 200 foreigners convicted of or killed during terrorism offenses since 9/11 entered “through our immigration system.”

3)      Not “hundreds” entering since 9/11: Only 34 foreigners convicted of or killed during terrorism offenses since 9/11 entered “through our immigration system” since 2001.

4)      Not “hundreds” slipping through “screening” since 9/11: Only 18 likely radicalized prior to entry—just six refugees and only four from six banned countries.

5)      Not a significant threat: No refugee nor any national of the banned countries has successfully carried out a deadly terrorist attack in over four decades. 

In the aftermath of the world’s worst terrorist attack on September 11, 2001, the U.S. government rapidly responded with much stricter vetting for foreign visitors, immigrants, and refugees. It created new terrorist watch lists, required biometric verification of identities, instituted mandatory visa interviews, hired thousands of new consular officers, improved inter-agency intelligence sharing, and much else. America’s pre-9/11 visa vetting system has almost nothing in common with today’s system. For this reason, it is appropriate to begin the analysis of immigration vetting failures with 9/11.

The government’s terrorism-“related” definition inflates the number of terrorism convictions

The executive order does not reveal the source for the claim that “hundreds of persons born abroad have been convicted of terrorism-related crimes,” but the National Security Division (NSD) of the Department of Justice (DOJ) has published a list of 627 unsealed “terrorism-related convictions” from October 2001 to December 2015. Of this list, however, nearly half—45 percent—were not convicted of a terrorism offense. NSD includes them because the prosecution began with terrorism investigation, even if it did not end with a terrorism conviction. Non-terrorism convictions include mainly false statements to investigators, ID fraud, immigration violations, and drug offenses. Other “terrorism-related” offenses include child pornography, social security fraud, and stealing truckloads of cereal. 

Because the NSD list is both overbroad, incomplete, and not fully up-to-date, I also reviewed all terrorism offenders whose convictions were publicized on the DOJ website since 2015 as well as those included in George Washington University’s Program on Extremism (GW) or in New America Foundation’s International Security Program (NAF). NAF includes offenders who lived in the United States for a period before being killed both in the United States and abroad. I created a combined list of NSD, DOJ, GW, and NAF that includes only those convicted of or killed during terrorism offenses. I used court filings and news reports to identify the dates and places of birth and the years of entry for each of them. In two cases, I was unable to nail down exact entry years, but the fact that these individuals naturalized or were in the process of naturalization allows us to know that they had to have been in the country with legal permanent residency for at least five years.

Many foreign-born terrorism offenders did not go “through the immigration system”

Of the actual terrorism offenders, nearly 60 percent were either born in the United States or brought into the country by U.S. law enforcement for prosecution or arrest, leaving 195 other foreign-born terrorism offenders who entered “through the immigration system” at some point, not the “hundreds” claimed in the executive order. Of these, however, only 34 entered through the system after 9/11 (another one entered illegally), again far fewer than hundreds.

Finally, these 34 were not all vetting failures, either. To begin with, 14 entered as juveniles, including nine who entered at 15-years-old or younger (Abdul Artan’s exact age is uncertain, so I included him as an adult). Six of the juveniles converted from Christianity to extremist Islam. Focusing solely on the adults, we find that the government determined that radicalization occurred prior to entry in just 11 cases. In another nine cases, no determination was made, but in two of these cases, it is apparent from their biographical details and their post-entry behavior that they most likely did not radicalize until after their entry to the United States (both entered as teenagers and lived for eight years before their offense). Thus, if we assume all seven of the other uncertain ones radicalized prior to entry, there were 18 vetting failures since 9/11—not hundreds.

Very few terrorism vetting failures were from banned countries

The 34 terrorism offenders came from 22 different countries. Notably, it includes eight individuals from non-majority Muslim countries. Of the banned countries—Iran, Libya, Syria, Somalia, Sudan, and Yemen—only three are represented on the list. The 18 vetting failures came from 13 countries. No single country had more than three vetting failures. Four of the six banned countries had no likely vetting failures since 9/11, which means that nine countries for whom there were vetting failures are not on the list—representing 78 percent of all vetting failures.

Terrorism offenders have entered or received status in the United States through several avenues. President Trump’s executive order specifically targets the refugee program, which accounts for 26 percent of post-9/11 terrorism offenders and a third of all vetting failures. Other avenues account for 67 percent of the vetting failures. In absolute terms, this was just six refugees. Six deviants simply cannot justify shutting down a program that has admitted nearly a million new U.S. residents since 9/11.

Terrorism vetting failures from banned countries caused zero deaths since 9/11

Vetting failures from refugees or the six banned countries represent a tiny portion of the terrorism offenders since 9/11—to be price, less than 2 percent. More importantly, these offenders caused no deaths. Refugees and nationals of these countries simply have not successfully killed anyone in the United States in the last four decades. In fact, 14 of the 34 terrorism offenders were not involved in a plot to kill anyone in the United States—they were mainly either going overseas to join a terrorist organization or sending money to them. Among the 18 vetting failures, fully half were not attempting to kill anyone in the U.S. Only one did: Tashfeen Malik, a Pakistani woman who immigrated using a family-based nonimmigrant visa (fiancé K visa).

These facts contract the claims of the administration that vetting failures are widespread, and that a total rewrite of the system is necessary. My colleague has previously noted that the risk of foreign-born terrorism is miniscule: just a 1 in 3.6 million chance of dying in a terrorist attack on U.S. soil per year. The risk from a post-9/11 vetting failure is more than a hundred times less.

Table 1: Foreign Terrorism Offenders Killed or Convicted Who Entered Through the Immigration System After 9/11

  Country of Birth All Post-9/11 Entries Likely Vetting Failures

1

Albania

1

2.9%

1

5.6%

2

Bangladesh

1

2.9%

1

5.6%

3

Cuba

1

2.9%

0

0.0%

4

Ethiopia

1

2.9%

0

0.0%

5

India

1

2.9%

0

0.0%

6

Iran

1

2.9%

0

0.0%

7

Iraq

3

8.8%

2

11.1%

8

Jordan

1

2.9%

1

5.6%

9

Kenya

1

2.9%

0

0.0%

10

Kuwait

1

2.9%

1

5.6%

11

Kyrgyzstan

2

5.9%

0

0.0%

12

Lebanon

1

2.9%

1

5.6%

13

Libya

0

0.0%

0

0.0%

14

Mexico

2

5.9%

0

0.0%

15

Nicaragua

1

2.9%

0

0.0%

16

Nigeria

1

2.9%

1

5.6%

17

Pakistan

3

8.8%

2

11.1%

18

Philippines

1

2.9%

0

0.0%

19

Saudi Arabia

1

2.9%

1

5.6%

20

Somalia

4

11.8%

3

16.7%

21

Sudan

2

5.9%

1

5.6%

22

Syria

0

0.0%

0

0.0%

23

United Kingdom

1

2.9%

1

5.6%

24

Uzbekistan

3

8.8%

2

11.1%

25

Yemen

0

0.0%

0

0.0%

  Total*

34

100%

18

100%

Bold italics = banned country. *One who entered illegally and is not represented came from Kazakhstan Sources: Department of Justice, National Security Division, George Washington University, New America Foundation

Table 2: Foreign Terrorism Offenders Killed or Convicted Who Entered Through the Immigration System or Illegally After 9/11

Status All Terrorism Offenders Likely Vetting Failures Resident

14

40.0%

5

27.8%

Refugee

9

25.7%

6

33.3%

Student

4

11.4%

3

16.7%

Asylum & Other Humanitarian

3

8.6%

0

0.0%

Tourist

2

5.7%

2

11.1%

Family-Based Temporary

1

2.9%

1

5.6%

Visa Waiver

1

2.9%

1

5.6%

Employment Temporary

0

0.0%

0

0.0%

Cultural Exchange

0

0.0%

0

0.0%

Diplomatic

0

0.0%

0

0.0%

Illegal

1

2.9%

0

0.0%

Sources: See Table 1

Table 3: Foreign Terrorism Offenders Killed or Convicted After 9/11 Who Entered Through the Immigration System As Adults

  Name Offense Born in Charge Year Entry year Entry Age Years in U.S. Status Deaths

Vet. Fail

1

Reid, Richard US Plot Britain

2001

2001

28

0

VWP

0

YES

2

Mohammed, Gufran Abroad India

2013

2003

20

10

Resident

0

NO

3

Mohamud, Ahmed Nasir Abroad Somalia

2011

2004

28

7

Resident

0

NO

4

Ahmad, Jubair Abroad Pakistan

2011

2007

19

4

Resident

0

YES

5

Mohamed, Ahmed Abroad Kuwait

2007

2007

25

0

Student

0

YES

6

Alwan, Waad Abroad Iraq

2011

2007

28

4

Refugee

0

YES

7

Aldawsari, Khalid US Plot Saudi Arabia

2011

2008

18

3

Student

0

YES

8

Hassoun, Sami Samir US Plot Lebanon

2010

2008

20

2

Resident

0

?

9

Hasbajrami, Agron Abroad Albania

2011

2008

24

3

Resident

0

?

10

Ibrahim, Abdinasir Abroad Somalia

2014

2008

32

6

Refugee

0

YES

11

Hammadi, Mohanad Abroad Iraq

2011

2009

20

2

Refugee

0

YES

12

Kodirov, Ulugbek US Plot Uzbekistan

2011

2009

20

2

Student

0

NO

13

Abdulmatallab, Umar US Plot Nigeria

2010

2009

23

1

Tourist

0

YES

14

Kurbanov, Fazliddin US Plot Uzbekistan

2013

2009

27

4

Refugee

0

?

15

Fazeli, Adnan Abroad Iran

2016

2009

31

7

Refugee

0

NO

16

Esse, Amina Abroad Somalia

2014

2009

35

5

Refugee

0

?

17

Juraboev, Abdurasul Abroad Uzbekistan

2015

2011

21

4

Resident

0

?

18

Nafis, Quazi US Plot Bangladesh

2012

2012

21

0

Student

0

YES

19

Elhassan, Mahmoud Abroad Sudan

2016

2012

22

4

Resident

0

YES

20

Malik, Tashfeen US Plot Pakistan

2015

2014

28

1

Fiancé

14*

YES

21

Artan, Abdul Razak US Plot Somalia

2016

2014

~16

2

Refugee

0

?

Italics = Banned Country or Refugee
*She carried out the attack with her husband, but all of their victims are represented here.
Sources: See Table 1

Table 4: Foreign Terrorism Offenders Killed or Convicted After 9/11 Who Entered Through the Immigration System As Juveniles

  Name Offense Born in Charge Year Entry year Entry Age Years in U.S. Status Deaths Vet. Fail

22

Tsarnaev, Dzhokhar US Plot Kyrgyzstan

2013

2002

9

11

Asylum

3

NO

23

Suarez, Harlem* US Plot Cuba

2015

2002

11

13

Asylum

0

NO

24

Daud, Abdirahman Abroad Kenya

2015

2003

9

12

Refugee

0

NO

25

Deleon, Ralph* Abroad Philippines

2012

2003

14

9

Resident

0

NO

26

Tsarnaev, Tamerlan US Plot Kyrgyzstan

2013

2003

16

10

Asylum

3

NO

27

Martinez, Antonio* US Plot Nicaragua

2010

2004

15

6

Resident

0

NO

28

Melaku, Yonathan* Other Ethiopia

2011

2005

16

6

Resident

0

NO

29

Santana, Miguel* Abroad Mexico

2012

2007

<16

>5

Resident

0

NO

30

Smadi, Hosam US Plot Jordan

2009

2007

16

2

Tourist

0

?

31

Badawi, Muhanad Abroad Sudan

2015

2007

16

8

Resident

0

NO

32

Khalid, Mohammad Abroad Pakistan

2011

2008

~9**

8

Resident

0

NO

33

Al Hardan, Omar Abroad Iraq

2016

2008

17

8

Refugee

0

Likely No

34

Garcia, Sixto Ramiro* Abroad Mexico

2015

2010

<15

>5

Resident

0

NO

35

Saidakhmetov, Akhror Abroad Kazakhstan

2015

2011

15

4

Illegal Entry

0

NO

*converted to Islam, **verified through personal correspondence with attorney
Sources: See Table 1

Net primary production (NPP) represents the net carbon that is fixed (sequestered) by a given plant community or ecosystem. It is the combined product of climatic, geochemical, ecological, and human effects. In recent years, many have expressed concerns that global terrestrial NPP should be falling due to the many real (and imagined) assaults on Earth’s vegetation that have occurred over the past several decades—including wildfires, disease, pest outbreaks, and deforestation, as well as overly-hyped changes in temperature and precipitation.

The second “National Assessment” of the effects of climate change on the United States warns that rising temperatures will necessarily result in the reduced productivity of major crops, such as corn and soybeans, and that crops and livestock will be “increasingly challenged.” Looking to the future, the National Assessment suggests that the situation will only get worse, unless drastic steps are taken to reduce the ongoing rise in the air’s CO2 content (e.g., scaling back on the use of fossil fuels that, when burned, produce water and CO2).

But is this really the case? If growing crops are increasingly affected, damage should also be showing up in the global ecosystem. Is the productivity of the biosphere in decline?

In a word, no! Observational data indicate that just the opposite is occurring (see, for example, the many studies reviewed previously on this topic here). Rather than withering away, biospheric productivity is increasing, thanks in large measure to the growth-enhancing, water-saving, and stress-ameliorating benefits of atmospheric CO2 enrichment.

The latest study to confirm as much comes from the research team of Li et al. (2017). Working with a total of 2,196 globally-distributed databases containing observations of NPP, as well as the five environmental variables thought to most impact NPP trends (precipitation, air temperature, leaf area index, fraction of photosynthetically active radiation, and atmospheric CO2 concentration), Li et al. analyzed the spatiotemporal patterns of global NPP over the past half century (1961–2010).

Results of their analysis are depicted in the figure below, which shows that global NPP increased significantly from 54.95 Pg C yr-1 in 1961 to 66.75 Pg C yr-1 in 2010 (Figure 1a). That represents a linear increase of 21.5 percent in the last half-century. In quantifying the relative contribution of each of the five variables impacting NPP trends (Figure 1b), Li et al. report that “atmospheric CO2 concentration was found to be the dominant factor that controlled the interannual variability and to be the major contribution (45.3%) of global NPP.” Leaf area index, which is also enhanced by increasing atmospheric carbon dioxide, was the second most important factor, contributing an additional 21.8 percent, followed by climate change (precipitation and air temperature together) and the fraction of photosynthetically active radiation, which accounted for the remaining 18.3 and 14.6 percent increase in NPP, respectively. Li et al. also report that the vast majority of the observed rise in NPP occurred in the middle and high latitude regions, with 61.1 percent of the increase occurring between 30 and 60 degrees of latitude and 26.4 percent between 60 and 90 degrees of latitude of both hemispheres (see Figure 1c).

Figure 1. (A) Annual variations in global NPP between 1961 and 2010. (B) Changes in NPP in recent decades that resulted from multiple environmental factors including climate, leaf area index (LAI), fraction of photosynthetically active radiation (fPAR), and CO2, and the relative contribution rate (%) of each factor during the study period. (C) Spatial distribution of the trend in NPP during the period 1961–2010. Source: Li et al. (2017).

The observed increase in global NPP over the past five decades is quite an accomplishment for the terrestrial biosphere, especially when one considers all the negative stories—nary a day goes by without notice of some environmental disaster (human- or naturally-caused) occurring somewhere in the world and wreaking havoc on nature. Since 1980, the Earth has experienced three of the warmest decades in the modern instrumental temperature record, has weathered a handful of intense and persistent El Niño events, and suffered large-scale deforestation, “unprecedented” forest fires, disease and pest outbreaks, and episodes of persistent, widespread, and severe droughts and floods. Yet, despite each of these factors, and every other possible negative influence that has occurred over the past half century, terrestrial net primary productivity has increased by 21.5 percent! And it has done so largely because of the ongoing rise in atmospheric CO2. How ironic it is, therefore, that the supposed chief culprit behind the many real (and imagined) assaults on Earth’s vegetation—rising atmospheric CO2—has been found to be the primary cause of an ever-greener planet.

Reference

Li, P., Peng, C., Wang, M., Li, W., Zhao, P., Wang, K., Yang, Y. and Zhu, Q. (2017) “Quantification of the response of global terrestrial net primary production to multifactor global change.” Ecological Indicators 76: 245–255.

Imagine you are an employee and you suspect another employee, or your employer, has violated federal securities laws. You might want to report these violations to your employer (internal reporting), or you might want to tell the federal government (external reporting). But if you report the violation, you run the risk of being retaliated against by your employer.

When Congress passed the Dodd-Frank Act in 2010, it included an “anti-retaliation” provision to protect those employees who externally report securities violations to the Securities and Exchange Commission (SEC). Indeed, the statutory text clearly defines a reporting employee—a “whistleblower”—as an “individual who provides … information relating to a violation of the securities laws to the Securities and Exchange Commission.” The statute is unambiguous: if a person reports a violation of the covered laws to the SEC, Dodd-Frank provides them a remedy to protect themselves from retaliating employers.

In 2014, Paul Somers sued his former employer Digital Realty in the United States District Court for the Northern District of California. Somers claimed that he was fired for complaining to senior management that his supervisor had violated the Sarbanes-Oxley Act of 2002 (one of the securities laws covered by Dodd-Frank). It is undisputed that Somers did not report any violation of the securities laws to the SEC, but he nevertheless asserted in his complaint that Digital Realty retaliated against him in violation of Dodd-Frank’s anti-retaliation provision. Digital Realty moved to dismiss the case because, as noted, it’s clear that Dodd-Frank only protects people who report violations to the SEC. The district court disagreed, however, holding that the definition of “whistleblower” was ambiguous and that Chevron deference was owed to a 2011 SEC rulemaking which had redefined the term “whistleblower” to include not only those who report violations to the SEC, but also those that internally report violations to their employer. Digital Realty appealed to the U.S. Circuit Court of Appeals for the Ninth Circuit, but lost there as well. The Ninth Circuit not only agreed with the district court that the statute was ambiguous, and that Chevron deference should apply to the SEC’s rulemaking, but also—incredibly—upheld Somers claim on the grounds that a better reading of the statute’s text protected internal reporting. Digital Realty petitioned the Supreme Court to hear the case and the Court granted their request.

Cato has filed a brief supporting Digital Realty. We agree with Digital Realty that the statutory language of Dodd-Frank clearly only protects those who report externally to the SEC. If any ambiguity exists, however, the SEC’s 2011 rulemaking should not be granted Chevron deference. The Administrative Procedure Act (APA) requires final rules be the “logical outgrowth” of proposed rules when agencies conduct notice-and-comment rulemaking. In other words, the SEC cannot include things in its final rule that were not in the proposed rule, because it does not give the public “fair notice” and an opportunity to comment on how the SEC intends to interpret the law. When the SEC promulgated its notice of proposed rulemaking, it defined “whistleblower” in line with the statutory definition that Dodd-Frank only applies to those that report externally to the SEC. It did not mention in its proposed rule that it was thinking about changing the definition and did not ask the public for comments on whether it should do so. But when the SEC promulgated its final rule, it expanded the definition of “whistleblower” to cover not only people who report externally, but also to those who report a violation internally to their employers. Thus, the SEC did not give the public an opportunity to comment on that change and did not give them fair notice. This violated the APA. Just two terms ago, the Supreme Court in Encino Motors Cars v. Navarro (2016) reinforced that that agency rules that violate the APA do not receive Chevron deference, and thus the SEC regulation here should not either. Chevron deference is a powerful tool for agencies, and should not be applied when they run afoul of the procedural protections Congress has put in place for the regulated public.  

In The New York Times Magazine, Nicholas Confessore writes about the new lobbying stars in Washington. A new president always creates opportunities for new players. When that president is a non-politician without an established Washington entourage, there’s a lot of uncertainty. Who knows the new president? Who knows the people who know the president?

Confessore tells great stories about newly famous Trumpists such as one-time campaign manager Corey Lewandowski and about “Washington backbenchers, B-listers and understudies” who suddenly realized they knew somebody who had been part of the Trump campaign.

USA Today has reported on people close to Vice President Pence who have opened or expanded lobbying businesses this year.

It’s a sordid story of how fixers and their handsome fees survive even in an administration that came in promising to “drain the swamp.” But how much has really changed? As Confessore reviews:

There are about 10,000 registered lobbyists in Washington — roughly 20 for every member of Congress — and thousands more unregistered ones: consultants and ‘‘strategic advisers’’ who are paid to help shape government policy but do not disclose their clients. By whatever name, they are the people companies and countries hire to help roll back regulations, unstick bids, tweak legislation or get meetings. Lobbying is at once Washington’s most maligned, enduring and essential industry. Underpaid young politicos and retiring lawmakers depend on Beltway lobby shops — known as ‘‘K Street’’ after the city boulevard that once housed many of them — for the high-six-figure salaries that will loft them into Washington’s petite aristocracy… .  But the private sector needs lobbyists the most. The modern federal government is so sprawling and complex that it practically demands a specialized class of middlemen and -women.

Over the decades, lobbying has evolved from a niche trade of fixers and gatekeepers to a sleek, vertically integrated, $3-billion-a-year industry.

Total reported spending on lobbying peaked in 2009 and 2010, the first two years of President Barack Obama’s administration, when trillions of dollars were being handed out or moved around by the stimulus package, the omnibus spending bill, the Dodd-Frank financial regulation bill, the Affordable Care Act, and an ultimately unsuccessful 1200-page energy bill stuffed with taxes, regulations, loopholes, and subsidies. The Washington Post found that “more than 90 organizations hired lobbyists to specifically influence provisions of the massive stimulus bill.” Well-connected Democratic lobbyists like former House majority leader Richard Gephardt and Tony Podesta, the brother of Obama transition director John Podesta, did especially well.

And of course it didn’t start with Obama. As federal spending soared under President George W. Bush, the number of registered lobbying firms climbed. In six years the number of companies with Washington lobbyists rose 58 percent. After the Republicans took control of Congress in 1994, party leaders created the “K Street Project” to pressure lobbying firms to replace Democrats with Republicans. They made it clear that lobbyists needed to shift their political contributions toward Republican candidates, or lose their access to Republican policymakers. By 2003, the Washington Post reported, the GOP had in fact placed Republicans in a significant number of the most influential positions at trade associations and corporate government affairs offices—and were getting their contributions. 

Every new administration threatens to shake up some policies, and that creates a demand for lobbyists to get a piece of the new action. It also means opportunities for people who are well connected among the new White House and agency staffs. But the biggest reason that lobbying grows is that federal spending and regulation grow.

As Craig Holman of the Ralph Nader-founded Public Citizen told Marketplace Radio after a report on rising lobbying expenditures during the financial crisis, “the amount spent on lobbying … is related entirely to how much the federal government intervenes in the private economy.”

Marketplace’s Ronni Radbill noted then, “In other words, the more active the government, the more the private sector will spend to have its say… . With the White House injecting billions of dollars into the economy [in early 2009], lobbyists say interest groups are paying a lot more attention to Washington than they have in a very long time.”

Big government means big lobbying. When you lay out a picnic, you get ants. And today’s federal budget is the biggest picnic in history.

The Nobel laureate F. A. Hayek explained the process 70 years ago in his prophetic book The Road to Serfdom: “As the coercive power of the state will alone decide who is to have what, the only power worth having will be a share in the exercise of this directing power.”

That’s the worst aspect of the growth of lobbying: it indicates that decisions in the marketplace are being crowded out by decisions made by lobbyists and politicians, which means a more powerful government, less freedom, and less economic growth. 

When Oil States Energy Services, LLC filed its patent-infringement suit against Greene’s Energy Group, LLC in federal court back in 2012, the far-reaching negative consequences of the new America Invents Act (AIA) were not yet readily apparent. As the private dispute between these parties has wound its way through the AIA’s legal labyrinth in the subsequent half-decade, however, the structural problems inherent in this new administrative scheme have become increasingly obvious. 

The passage of the AIA has resulted in a substantial transfer of power from the judiciary to the executive branch through the creation of the Patent Trial and Appeal Board (PTAB), an administrative-law body housed within the Patent and Trade Office (PTO) and vested with the extraordinary power to cancel already-issued patents. Although Congress has constitutional authority to determine the kinds of inventions that merit patents, patents themselves (whatever their legislatively determined scope and strength) are and have always been a form of private property. Patents cannot properly be characterized as public rights, as they neither involve the government setting conditions under which it waives its own sovereign immunity nor implicate a statutorily created cause of action that was unknown at common law. Patents are thus necessarily subject to the same protections as a piece of privately held land—and disputes over patents must be handled in the same manner as disputes over other kinds of property, with full judicial review rather than some lesser administrative process. 

This means that the PTAB is fundamentally incompatible with the purposes of Article III of the Constitution, in at least two important ways. First, the PTAB denies patent litigants their right to a fair and impartial adjudication, as the administrative patent judges who comprise the PTAB are fully under the control of the PTO director (a political appointee), and serve at his pleasure. Second, Article III was designed to protect the independence of the judiciary itself, but the creation of the PTAB draws power away from the judicial branch in favor of the executive. The inordinate powers exercised by the PTAB reach far beyond anything previously accepted by the Supreme Court, which concentration of power is further exacerbated by the lack of meaningful judicial review. Such a distortion of the separation of powers creates a sort of unevenness and instability akin to a three-legged stool after one leg has been cut short and then attached to the end of another. 

This tenuous arrangement cannot stand, and so the Cato Institute, joined by the American Conservative Union Foundation, has filed an amicus brief seeking to restore both the proper role of federal courts in patent disputes and the property rights of patent-holders. The Supreme Court will hear Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, this fall.

The Professional and Amateur Sports Protection Act (PASPA), which Congress passed in 1992, forbids states from “authorizing” sports betting “by law.” As every middle-schooler learns, however, our Constitution establishes dual sovereignty between the states and the federal government. And as the Supreme Court most recently held in New York v. United States (1992) and Printz v. United States (1997), the Constitution forbids Congress from “commandeering” state officials to serve federal ends, whether by forcing states to enforce federal laws or to pass new state laws (or to refrain from repealing old ones), which is exactly what PASPA does.

In 2011, New Jerseyans voted overwhelmingly—two to one—to legalize sports betting in a 2011 referendum. The next year, the state legislature responded to the will of the people by enacting a law allowing sports wagering at casinos and racetracks. The four major professional sports leagues, plus the National Collegiate Athletic Association (NCAA), sued under PASPA to prevent the state from moving forward and legalizing sports betting. In 2016, the U.S. Court of Appeals for the Third Circuit ruled for the NCAA, reasoning that if the state were to repeal its pre-PASPA sports gambling laws, they would be “authorizing” the activity “by law,” which was forbidden by PASPA. Unwilling to be forced to continue enforcement of a law overwhelmingly rejected by its populace, New Jersey appealed to the Supreme Court.

Cato has now joined the Pacific Legal Foundation and Competitive Enterprise Institute on a brief (written by former Cato intern Jonathan Wood) in support of the Garden State. We argue that PASPA unconstitutionally commandeers state officials and undermines the core concepts of federalism.

If the federal government wants to enforce its chosen policy, it must find a way to do so that doesn’t involve having New Jersey do its dirty work. There are several options: Congress could regulate sports betting itself (at least across state lines) or it could use its spending power to provide incentives to states to adopt more restrictive schemes. Instead, PASPA forces states to enforce and maintain policies which have become outdated and unpopular, against popular and state sovereignty.

PASPA and other overweening federal laws pose a serious problem for accountability because they tie the hands of state officials, forcing them to enforce policies they do not want. The people of the state then blame state officials for bad outcomes, not knowing that their hands are tied by Congress. Moreover, the same issue comes up again and again, in areas ranging from immigration to guns, from health care to marijuana. The federal government should not be forcing one-size-fits-all solutions on a large and diverse country—and indeed the Constitution was designed to prevent such abuse.

The Supreme Court will hear Chris Christie v. NCAA this fall.”

I fully expected Larry White’s recent post challenging the state theory of money, and particularly that theory’s understanding of the origins of metallic coinage, to generate some critical feedback. In particular, I expected it to raise the hackles of “Lord Keynes” (henceforth LK), the otherwise anonymous author of the blog, Social Democracy for the 21st Century, who has discussed the same topic on several occasions (e.g. herehere, and here), and who is inclined to favor the alternative, “cartalist” (or “chartalist”) perspective.

Nor was I disappointed. Indeed, within moments of tweeting a link to Larry’s post I found myself in a twitter debate with LK regarding the origins of Lydia’s electrum coins, which are generally considered the world’s earliest. In response to my tweet, LK tweeted in return that “The consensus of modern ancient historians is that coined money in Anatolia and Greece was invented by the state.”

LK has since published a post specifically countering White’s claims, including the claim that, although sovereigns eventually monopolized ancient coinage,

as far as we know coins were already in use among merchants before that happened. Very early coins from ancient Lydia, in what is now Turkey, were not inscribed with human faces but rather animal figures. The Ancient History Encyclopedia states: “It appears that many early Lydian coins were minted by merchants as tokens to be used in trade transactions. The Lydian state also minted coins.” Regarding Lydian coins inscribed with the names Walwel and Kalil, the British Museum comments: “It is unclear whether these are names of kings or just rich men who produced the earliest coins.” Regarding a nearly contemporary ancient Greek coin bearing the legend “I am the badge of Phanes,” the Museum comments: “We cannot be certain who this Phanes was, but it seems that he was placing his badge on coins as a guarantee of their quality.”

According to LK, White here is “clearly asserting that coined money was invented by the private sector in ancient Lydia and Greece.” That seems to me a problematic interpretation, since White’s qualifier, “As far as we know,” makes his statement tentative: to say that X is true “as far as we know” is not to say that X is definitely true. It is merely to observe that we have no good reason for believing that X is not true. Consequently the fact that the positive evidence for the private beginnings of coinage is, as LK goes on to declare, “feeble at best,” doesn’t itself refute White’s claim, for the the positive evidence for kings having been the first coiners could be even more “feeble.”

But is it?

That Supposed Consensus

The one thing we know for sure is that a fair portion of all known electrum coins — one inventory places the share at about 25 percent — bear markings that point to official origins. As for the rest, although expert opinion is divided concerning their sources, most authorities continue to allow that they may bear private markings. “We do not know,” Koray Konuk observes (in his contribution, on coinage in Asia Minor, to the Oxford Handbook on Greek and Roman Coinage), “whether there was a state  monopoly of issuing coinage or whether some wealthy private individuals  such as bankers or merchants were also allowed to  strike coins of their own.” The British Museum’s ancient coin curators, with whom I once had a lengthy discussion of the subject, are of the same opinion. Another relatively recent source, finally, sums matters up by observing how “the enormous bibliography on the origins of coinage partly serves to highlight the continued absence of definitive answers to the fundamental questions of ‘who, what, when, why, where?’”

Naturally this lack of definitive answers hasn’t prevented authorities from taking sides in the debate. But despite LK’s remarks, their doing so can hardly be said to have resulted in a “consensus of modern ancient historians” favoring the view that coinage was a state invention. Although some authorities (notably Robert Wallace) clearly favor that view, others, no less recent or authoritative, lean the other way. According to David Schaps, the author of the superb monograph,The Invention of Ancient Coinage and the Monetization of Ancient Greece (2004), “the prevailing opinion,” far from holding “that the first coins were official private issues,”

is that the types of the coins (there are some twenty, many more than the two or three kings who reigned from the time coins were invented until the end of the Lydian empire) identify not the king under whom they were struck, but the producer of the coin — perhaps a royal functionary, more likely an independent gold merchant (“The Invention of Coinage in Lydia, in India, and in China,” 2006, emphasis added).

John Kroll, another highly-regarded, contemporary expert on ancient coins, also maintains that the “profusion of type symbols” found on early electrum coins suggests

that in addition to the coins that were minted by Lydian monarchs and Greek city states, much early electrum may have been struck by local dynasts, large landholders, and other petty rulers in Lydia and neighboring regions — anyone, in short, with wealth in electrum and a need to spend it.

A recent paper by Peter Van Alfen, the American Numismatic Society’s curator of Greek coins, directly challenges one of the main arguments offered in support of the “state invention” hypothesis, namely the claim that only state authorities could command the “trust” needed to make coins circulate. Although he recognizes that kings were probably not the only source of early electrum coins, John Kroll also supplies a typical instance of this view, in his contribution to the Oxford Handbook on Greek and Roman Coins:

The key factor, which made coinage possible and distinguished it from all earlier forms of money, was the involvement of the state. Unlike anonymously supplied bullion, coins were supplied by the state and were guaranteed by its authority. As small, preweighed and hence prevalued ingots of precious metal that were stamped with the certifying badge of the issuing government, they were instantly acceptable in payment on trust.

Had he reflected on such names as Browne & Brind, Johnson Matthey, and Englehard, Kroll might not have been so quick to claim that bullion must either be supplied by the state or “anonymously.” His perspective is, nonetheless, all too common. To his credit, Van Alfen will have none it. “The generation of trust and guarantees,” he observes,

does not always require state intervention or backing. Indeed, in some cases, state intervention is decidedly to be avoided. While states can serve to mitigate transactional chaos through their various formal institutions, like market regulators and courts, there are numerous non-state institutional responses to the same the problems, including reputation and trust networks, that can be just as effective, particularly when the geographical scope and population size in question is comparatively small.

Moreover, he adds,

there is no necessary relationship between states and monetary instruments, like coinage; there often is a functional relationship between the two, but the state is not a necessary component for generating trust, even for fiduciary instruments….In cases where we have contextual evidence, problems of trust were overcome primarily through private guarantee mechanisms.

As an alternative to the view that coinage began as a state innovation, Van Alfen proposes and defends the hypothesis that originally “the so-called right of coinage was not limited to the state alone, but was rather a (property) right held universally.”

Within the larger context of archaic state formation and the more specific dynamic of Asia Minor monarchies, we should not then expect to find a single established set of relationships between the individual polities and coinage ab initio, but rather a process working out what that set of relationships might become. Coinage, with its potential to enhance social, political and economic might, was no doubt one of many sites where the extension and centralization of power was being negotiated between monarchs and their competitors, and monarchs and the ruled.

In Lydia, Van Alfen speculates, “as state capacity increased, so too did political stability along with general elite consent to Mermnad rule.” Eventually — by Croesus’ time —  the Mermnad’s political influence was such that they had “achieved monopolization over coin production, not so much by decree, but by default.”

If Van Alfen’s account is indeed correct, the notion that coinage was a “state” invention makes little sense, for at the birth of coinage the distinction between “the state” on one hand and relatively important individuals (“elites”) on the other was itself murky. All that can be said is that the consolidation of power in certain rulers tended to coincide with the monopolization of coinage — a claim no one has ever contested.

Counter-Counterarguments

So much for the “consensus” that supposedly contradicts White’s stand. Now let’s consider the particular “counterarguments” LK offers against it.  The first concerns the sources of electrum itself.  According to LK, “Lydian king’s either controlled the mines in their kingdom directly and/or levied taxes on mining or extraction of metals.” Therefore, he says, “it is most probable the kings also minted the first electrum coinage.” But the conclusion is a plain non-sequitur: no less than mining and jewelry-making (concerning which more anon), mining and coining are each distinct, specialized activities, which have historically been undertaken by separate outfits; and this has been no less true when mines themselves have been nationalized than when they have been privately owned and operated.

Moreover the premise that kings alone had access to sources of electrum and other precious metals is itself contentious. In his previously-cited paper Van Alfen observes that “While state control of mining by the end of the archaic period seems to have been fairly widespread…there are as well indications that archaic elites individually could gain access to mines far away from the oversight of their home state, and might have had unfettered access to mines within their home territory as well.”

LK’s second counterargument, that the presence of coins not bearing the images or names of kings is no proof that those coins weren’t minted by kings, because “people knew perfectly well that [these coins] had been minted by the state,” begs the question. Since marking coins took some effort, why, in that case, should kings have bothered to mark any of their coins?

LK’s third counterargument, that the names not belonging to any known king’s on some of Lydia’s coins may either be those of mints or those of persons who minted coins on behalf of some Lydian king or kings, is almost equally question-begging. Why identify a coin with a mint, or a coiner, when it was the king’s status that supposedly lent value to the coin? And, if kings did indeed allow private agents to coin for them, does that not itself suggest that those agents, rather than the kings who employed their skills, may have “invented” the first coins?

According to LK, electrum coins were unlikely to have been manufactured by or on behalf of merchants, because most of them were made in denominations too large to be used in ordinary commercial transactions: a Lydian trite, or one-third of a stater, he notes, is supposed to have been capable of buying 10 sheep.

In fact, a trite may actually have been worth considerably less: if some experts have said that one could buy 10 sheep, others say it could only buy one sheep, or three jars of wine.  More importantly, as reported in a very recent paper by Ute Wartenberg, the AMS’s Executive Director, the denominations of even the earliest known electrum coins are now understood to have ranged “from a stater to a 1/192 stater.”[1] It might, in other words, have taken about 21 of the smallest coins, each containing just .06 grams of electrum, to buy a single jar of wine.[2] Furthermore, as François Velde points out in his paper “On the Origin of Specie,” extant electrum coins of various denominations display a weight loss pattern suggesting that the coins did in fact “circulate like modern coinages.”

Precious Tokens?

The last of LK’s counterarguments starts from the premise that, instead of being “full-bodied” coins, Lydia’s electrum globules were actually fiduciary or “token” coins, commanding considerably more than their metallic value in payments, including payments to the state, and goes on to insist that they could not possibly have commanded such value had they not been official products.

In accepting this premise, LK appears to completely ignore (he certainly does not address) White’s observation that it

fails to explain…why governments chose bits of gold or silver as the material for these tokens, rather than something cheaper, say bits of iron or copper or paper impressed with sovereign emblems. In the market-evolutionary account, preciousness is advantageous in a medium of exchange by lowering the costs of transporting any given value. In a Cartalist pay-token account, preciousness is disadvantageous — it raises the costs of the fiscal operation — and therefore baffling. Issuing tokens made of something cheaper would accomplish the same end at lower cost to the sovereign.

Recent research casts further doubt on the claim that electrum coins must have been tokens. That claim rests on the once widely-held belief that electrum coins, though representing uniform weights, did not represent a consistent alloy of gold and silver. Instead, the blend, and hence then commodity value of coins of any given weight, was understood to vary considerably. It would therefore have been quite inconvenient for the coins circulate by weight, that is, at their true metallic worth, rather than by tale, that is, at nominal values independent of that worth.

This once-common view has recently been challenged.  As Wartenberg reports in her aforementioned paper,

Current investigations by a number of scientists and scholars shed critical new light on the question of how the earliest coins were minted, how their production was organized, and how alloys were produced. By using a variety of new analytical methods and techniques, some of these processes are beginning to be better understood.

Among other things, the new methods and techniques to which Wartenberg refers reveals that Lydia’s electrum coins were made, not from naturally-occurring and variable alloy, but from “an alloy deliberately created for coinage.” Using a technique called “Synchrotron X-ray photoelectron spectroscopy,” Wartenberg discovered that Lydia’s electrum coins were in fact “more consistent in their metal composition than previously thought”:

What these different results all show is a fully organized system, in which a specific composition of electrum for a coin series was created. All this was clearly done deliberately, and the desired gold:silver ratio was achieved by combining pure gold and silver, which was previously refined. The discovery that it was not naturally found electrum, which was used, illustrates a highly sophisticated process, but not only of metallurgical technology in the 7th and 6th century BC, but also an understanding of monetary systems.

Although these findings alone don’t suffice to establish that Lydia’s electrum coins, instead of being mere (if costly) tokens, were valued at their metallic worth, or at that worth plus a premium reflecting coinage costs, and perhaps some seigniorage, they certainly make this view appear more plausible than before. Taking the trouble to regulate the blend of gold and silver contained in what were in fact mere tokens would have been yet another pointless expense, on top of that involved in making tokens from any blend of precious metal instead of from less costly materials.

A Misplaced Burden

I’d like to conclude with some remarks concerning, not LK’s particular arguments, but the presumption, implicit in most versions of the “state invention” hypothesis, that sovereigns are at least as capable as other persons, and perhaps more capable, of coming up with monetary innovations. Such a belief flies in the face of all experience. The story of money’s evolution — or that part of it concerning which we have certain knowledge — is, essentially, one of recurring private inventions followed, in many instances, by public appropriation of those inventions. It was not kings or governments but private-sector innovators who came up with manual screw presses, as alternatives to hammers, for striking coins, and with their later steam-driven and electrical counterparts. It was private goldsmiths, and not public bankers, who, in the west, issued the first banknotes. Private innovators also gave us the first lines of credit, the first clearinghouses, the first electronic payments (consisting of telegraphic wire transfers), the first credit and debit cards, the first ATMs, and, most recently, the first blockchain-based means of payment. Governments, in contrast, pioneered little, if anything. Instead, they observed what private markets did, and then stuck their mitts in, sometimes regulating, sometimes prohibiting, and sometimes nationalizing, private-sector innovations.

Consider again, in light of these observations, those tiny electrum coins. According to Wartenberg their existence “begs the question how such blank metal flans were produced to such precision.” In answer, Wartenberg notes that

The technique of granulation was well-known for Lydian and Achaemenid jewelry, and it is likely that a similar method was used for these coins, which were also struck with obverse and reverse dies. … The dies used for many of these objects have simple emblems, which are stylistically close to archaic gems.

Wartenberg’s remarks suggest a link between early coins and jewelry that appears to be just another instance of the even more ancient connection between ornament and money, as described in detail in chapter two of William Carlile’s Evolution of Modern MoneyBut to recognize that linkage is to raise what ought to be an obvious question: if anyone was likely to be the true “inventor” of the first electrum coins, why not a Lydian manufacturer of jewelry, who would have possessed the skill and instruments, as well as access to the metal, required for the purpose?

Allowing, as John Kroll (and most other authorities) do, that “electrum in the form of nuggets, weighed ingots, and bags of electrum ‘dust’ must have been put to use in all sorts of payments for goods and services” well before coins were first made from it, and that “because it was a mixed metal whose gold-silver proportions varied in nature and could be artificially manipulated by adding refined silver to dilute the gold content, it was poorly suited as a dependable means of exchange,” would it not have been perfectly natural for some jeweler to have employed familiar techniques, including the augmentation of natural electrum with silver, not in order to deceive, but to make coins of standardized alloy to supply to merchants for use in exchange?[3] Why suppose instead that some Lydian king came up with the idea?

In short, to treat coinage as an exception to the general rule that private parties are the source of technical monetary innovations, on the grounds that we lack affirmative evidence to the contrary, is, in my humble opinion, to place the burden of proof in this controversy precisely where it doesn’t belong.

_____________________

[1]It had previously been supposed that the smallest coins were those of 1/96 stater.

[2]For further criticism of the argument that early coins were unsuited for commercial use see this article by Alain Bresson.

[3]Making coins conform, at least roughly, to a particular standard was a simple matter of employing a touchstone — a device in common use in ancient Greece long before the birth of coinage, and so closely associated with the Lydians that it is also known even today as a “Lydian” stone.

[Cross-posted from Alt-M.org]

In these days when liberalism is again under attack from some of its old enemies in new guises, one way to counter authoritarian threats is to educate ourselves on the fundamental ideas of liberalism. The Encyclopedia of Libertarianism, now available online, offers a wealth of information on the ideas, people, and history of liberalism and libertarianism. Historian David M. Hart, director of the Online Library of Liberty, says that the Encyclopedia “provides an excellent survey of the key movements, individuals, and events in the evolution of the classical liberal movement.” And on his own website he outlines a course of study in classical liberalism that includes a curated list of articles in the Encyclopedia for someone who wants to learn about the ideas, movements, and people of liberalism.

Begin, he says, with the survey article by Steve Davies, “General Introduction” (pp. xxv-xxxvii in the print version). Then read any of the following articles. Or, for a logical and chronological course of study, read these articles in this order:

Key Ideas in the Classical Liberal Tradition

Basic Principles:

Grounds for Belief:

Processes for Creating a Free Society:

Political and Legal Freedoms:

Economic Freedoms:

Social Freedoms:

  • Equality under the Law - “Equality” (of rights)
  • Toleration of different Ideas and Behaviour (see Freedom of Speech & Religion above)
  • Acts between Consenting Adults - “Presumption of Liberty”
Key Movements and People in the Classical Liberal Tradition

 

I might add that Chapter 2 of The Libertarian Mind, “The Roots of Libertarianism,” is a very short guide to many of these movements and people. And The Libertarian Reader collects and curates many of the key texts of liberalism and libertarianism.

Disasters seem just about the worst possible time to discuss economic concepts. Ask Forbes columnist Tim Worstall, whose column on “price gouging” in the aftermath of Hurricane Harvey has purportedly been removed from their site.

At times of human suffering, a host of people apparently consider it crude to discuss the best response, if that response incorporates the functioning of a market economy. Yet for those of us who worry about outcomes rather than platitudes, it is incumbent to denounce bad ideas, and seek to propose better ones. Natural disasters such as Hurricane Harvey reap enough destruction, emotional and physical, without compounding it with policies that make things worse.

CNBC reported yesterday that Texas Attorney General Ken Paxton has said 500 complaints about so-called “price gouging” have been made following the storm:

That includes reports of up to $99 for a case of water, hotels that are tripling or quadrupling their prices and fuel going for $4 to $10 a gallon.

Such price increases in emergency situations can lead to significant fines under current Texas law. The traditional justification is that raising prices in emergencies reflects greedy profiteering. Indeed, in reaction to natural disasters and terrorist attacks worldwide it is common for companies to be denounced for heartlessness (here’s something I wrote about criticism of Uber after the Manhattan bomb attack).

The real question we should be concerned with though is surely not moralizing, but whether “price gouging” laws improve outcomes and responses or worsen the situation?

Natural disasters such as hurricanes often lead to shortages of certain products, many of which might be considered essential. Fresh water might be the obvious example. If water supplies get cut off, the demand for bottled water will surge, and if there is uncertainty about how long until those supplies will be back online, some consumers may seek to stockpile. The knockout of transportation routes will likely restrict new supply too. At the moment the storm hits supply will therefore be relatively inelastic, meaning that increases in demand feed through almost exclusively into rising prices.

Opponents of price gouging seem to believe that these price increases reflect sellers using their market power to unfairly profit from the disaster. In most cases, however, prices are merely messengers letting us know the relative scarcity of the good.

Laws which, in effect, fix prices below market-clearing levels are therefore akin to hijacking the messenger and forcing him to tell a comforting lie. A maintained low price of water in effect tells users “everything is fine, buy as much as you like.”

This can have perverse consequences. It encourages the over-purchase of water by certain consumers and therefore can lead to water ending up away from those who value it most. Similarly, holding the price down discourages other suppliers from seeking to supply their goods to market. This can be particularly important when, as likely with Houston, those transporting new supplies of water may have to make difficult and expensive journeys, including having to rent or utilize boats to get to certain locations. A rise in the market price would have changed the economic calculation, making it profitable to make such journeys in some cases.

The result of price gouging laws is therefore an exacerbation of the cause of the surge in the first place – a greater gap between the supply and customer demand arising because new suppliers are not incentivized to meet wants and need. Though well-intended, price gouging laws hurt more than they help.

Two economic objections tend to be held up against this operation of market forces.

The first relates to the allocation of the goods. If prices rise too much, then people worry that those on lower incomes will simply not be able to afford them. This is an argument made in an LA Times op-ed by Michael Hiltzik, who explains that in times of crisis, it is understandable that people consider a first-come-first-served approach to be fairer and more reflective of need than a “most-money-best-served advantage.”

For sure there are those desperately in need, and civil society, charities and, in some cases, government, may have a role to play to ensure they are catered for. And civil society does respond – see how sports teams and celebrities have already founded support funds.

But in such extreme cases it is equally likely that those with few resources would not have the means or ability to access the water in the first place (think the vehicles or boats needed, for example). It is not entirely clear why the ability to queue or travel long distances is a more efficient form of rationing than the use of the price mechanism in reflecting real need.

More importantly though, the artificially low price might encourage hoarding (and the development of a black market anyway), whilst discouraging other suppliers from entering the market and ordinary truckers from attempting to make their usual deliveries.

A more sophisticated critique of those who oppose anti-price gouging laws comes from the economist Jeff Ely. He argues that when natural disasters have happened, supply by-and-large cannot respond, so policymakers should simply seek to maximize the “consumer surplus” and not worry about the “producer surplus.” If the disaster has no effect on production decisions, then the benefits to consumers from keeping prices low can exceed the benefits associated with allocating the goods to those who value them most.

But the key assumption here is that supply is fixed. In fact, the mere existence of price gouging laws affects supplier expectations about how they should respond when they know a crisis will hit, making them less likely to prepare some of what Tyler Cowen calls “option ready supply.” (As an example: if an Uber driver knew surge pricing was banned, they would not be as likely to head out to an area where they knew a concert was just about to finish). Walmart, for example, already operates an emergency operations center, which plans and coordinates responses to these disasters, as evidenced in New Orleans after Katrina - clearly supply is not fixed.

A high price is also likely again to change the decision of many small potential suppliers, who might otherwise have just hoarded the product. If I had 10 packages of water stored in a warehouse, a higher price may make more likely to venture to obtain and supply them.

Hurricanes and natural disasters are destructive and lead to no good outcomes overall. But that does not mean we should throw out the price mechanism, which has important benefits in crises in terms of allocating scarce resources to those who value them most, and encouraging others to bring their goods to market.

When Attorney General Jeff Sessions announced yesterday the Trump Administration’s repeal an Obama-era rule limiting the distribution of certain military equipment (such as tracked vehicles, camouflage uniforms, high-powered rifles, bayonets, and grenade launchers), he dismissed concerns about police militarization as “superficial.”  The evidence suggests otherwise: militarization makes police more violent.

Earlier this year, a study conducted by researchers from Harvard, Stanford, Cincinnati, and Gardner-Webb concluded that the Pentagon’s 1033 weapons transfer program made participating departments more likely to engage in deadly violence.  After receiving 1033 gear, departments were more likely to kill civilians as well as dogs.  The researchers included the number of dog killings by police (which, according to the Department of Justice, number around 10,000 a year) in order to control for possible variations in human behavior during the period of the study.

The study found:

1033 receipts are associated with both an increase in the number of observed police killings in a given year as well as the change in the number of police killings from year to year, controlling for a battery of possible confounding variables including county wealth, racial makeup, civilian drug use, and violent crime.

[…]

[D]ue to concerns of endogeneity, we re–estimate our regressions using an alternative dependent variable independent of the process by which LEAs request and receive military goods: the number of dogs killed by LEAs. We find 1033 receipts are associated with an increase in the number of civilian dogs killed by police. Combined, our analyses provide support for the argument that 1033 receipts lead to more LEA violence.

The researchers pointed to four areas of militarization that drive the increase in violence:

[W]e argue that increasing LEA access to military equipment will lead to higher levels of aggregate LEA violence. The effect occurs because the equipment leads to a culture of militarization over four dimensions: material; cultural; organizational; and operational. As militarization seeps into their cultures, LEAs rely more on violence to solve problems.

It turns out that having a hammer really does make everything look more like a nail.

But what if that increased violence is justified by increased police readiness to deal with emergency situations? 

When asked to justify the push for militarization, many law enforcement agencies are quick to point to terrorist attacks and mass murders as a justification for the equipment. Indeed we can imagine situations in which the police might legitimately need grenade launchers or .50 caliber rifles (though the thousands of bayonets local cops have taken from the federal government may be tougher to explain).

But such events are exceedingly rare, while history proves that the police deployment of militarized weapons and tactics will not be. Police routinely cite rare hypothetical emergencies to justify tactics and policies that end up becoming far more routine and abusive.

SWAT teams were originally designed to handle hostage situations and active shooters. Today they often function as hyper-violent warrant servers, as the number of SWAT raids has ballooned from hundreds per year to tens of thousands and responding to hostage situations has given way to serving search and drug warrants.

Police defend civil asset forfeiture with appeals to “taking the profit out” of terrorist organizations and drug cartels, but black market drug profits remains strong as thousands of regular Americans have their property taken without charge or trial.

Law enforcement agencies purchase military-grade surveillance devices such as Stingray cell phone trackers with terrorism grant money, and justify the outrageous secrecy that shrouds them on national security grounds, but they’re virtually never used for terrorism investigations, instead being deployed thousands of times for routine law enforcement investigations as an end-around the warrant requirement.

In other words, military weapons and tactics are inevitably used far more often in everyday policework than in the rare situations that supposedly justify them.

Contrary to Attorney General Sessions’ dismissal, the damage done by these government policies is not “superficial.” It’s not superficial when a SWAT team throws a flash grenade in a baby’s crib and disfigures the infant’s face, or when a family’s life is ruined by militarized police looking for tea leaves, or when protesters find themselves staring down the barrels of sniper rifles and accosted by masked, camo-wearing, rifle-toting police units.

Combined with President Trump’s recent pardon of Sheriff Joe Arpaio (who is no stranger to overly violent militarized raids and was convicted for repeatedly violating people’s rights in defiance of a court order), this move sends a strong message that police restraint and accountability are taking a back seat in this administration. 

Last night I was reading AEI president Arthur Brooks’ excellent Wall Street Journal op-ed on the lottery, that seemingly ubiquitous government revenue scheme targeted at the poor, and it brought to mind Horace Mann, the “father of the common schools.” Did Mann pop into my brain because he was also the father of the “Diamond Dollars” scratcher, or “Pick 6 XTRA”? In a way, yes.  

Mann actually hated the unproductive, greed-fueled lottery, which he wrote “cankers the morals of entire classes of the people.” As was the case for seemingly every social ill perceived by Mann, he had a cure for the canker: universal public schooling. Lotteries, he wrote, “await the dawning of that general enlightenment which common schools could so rapidly give, to be banished from the country forever.”

Fast forward to the present day, and what do we have? Roughly 90 percent of school-aged Americans attending public schools—and all children with access to them—while slickly advertised state lotteries pull in $70 billion annually, according to Brooks, with a disproportionate amount coming from low-income Americans who have little chance of breaking even, much less striking it rich.

Contra Mann’s promise, common schooling did not doom the lottery. Far, far from it. Today, perhaps the primary justification for the lottery is that it provides money for the public schools!

Frankly, Mann, who pronounced with assumed authority on everything from proper chewing to the number of “bodies” in the solar system, should have seen that coming. He certainly identified the supposed beneficiaries of lottery proceeds in his day: “the erection of public works,–to build a bridge, a canal, or a church [italics in original].” Mann was especially incensed by the latter, decrying, “When a church is built by a lottery, can there be any doubt which has the best side of the bargain, the Evil Spirit or the Good?”

Today, the “churches” conceived by Mann—the public schools—are themselves enriched by lotteries. Maybe that’s because they could never spread the universal enlightenment that Mann confidently promised. Maybe it is also because, like most of us, those employed by the public schools want as much money as they can reasonably get, and government schemes like the lottery enable them to bring in more.

As the NAFTA renegotiation enters its second round this week-end, President Trump is bringing back talk of a possible NAFTA “termination.” He tweeted this on Sunday: “We are in the NAFTA (worst trade deal ever made) renegotiation process with Mexico & Canada. Both being very difficult, may have to terminate?”  And at a press conference yesterday, he said the following: “I’ve talked about NAFTA, you’ve heard me many times – and I’ve said that we will either terminate it or renegotiate it.”

Recall that a few months ago, the White House seemed to be considering a withdrawal from NAFTA, but later backed off. Is the current termination threat anything new and different from what took place before? Is it just a pretty transparent attempt to gain negotiating leverage? As Trump himself said, “I believe that you will probably have to at least start the termination process before a fair deal could be arrived at because it’s been a one-sided deal.” 

In theory, you can gain leverage in any negotiation by threatening to walk out. It’s not clear how much credibility Trump’s threat has, though. Two law professors have argued recently that the President does not have the legal authority to terminate NAFTA on his own, without a Congressional say (to be clear, there is a lot of uncertainty on this legal point). Aside from the law, such an action by President Trump would create a political battle between the White House and Congress that could upset the rest of Trump’s agenda, so it may be unlikely.

At this stage, I’m not taking these termination threats by Trump very seriously. Most likely, it is a negotiating tactic, and I suspect the Canadian and Mexican governments have been following U.S. political events closely enough to realize this. If Trump eventually does push for terminating NAFTA, either to gain leverage or to try to unwind the deal, we can all start pushing back. But for now, it’s better to focus on getting a positive outcome in the negotiations.

In 1993, a Pennsylvania jury found Willie Tyler not guilty of murder but guilty of conspiracy to intimidate a witness. He was sentenced to “two-to-four years” and paroled in 1994. Two years later, a federal grand jury issued a four-count indictment against Tyler after Justice Department officials deemed he could be subject to a “retrial” on federal charges. He was convicted on all four counts and sentenced to a life term.

Following an appeal, second trial, and conviction, the case was remanded for reconsideration and a third trial was ordered. In the subsequent appeal of this third trial, Tyler challenged his second prosecution as a violation of the Fifth Amendment, which guarantees that no person shall “be twice put in jeopardy of life or limb” for the same offense. But under a strange exception to the Double Jeopardy Clause created by the Supreme Court 60 years ago, the state and federal governments are allowed to both prosecute someone for the same act.

Cato has joined the Constitutional Accountability Center in filing a brief urging the Supreme Court to review Tyler’s case and overturn this misguided “dual sovereignty” exception—as we did last December in Walker v. Texas, which presented the same issue. We make three principal arguments. First, none of the Framers would have contemplated such a large exception to Double Jeopardy protection. Even before the Founding, English jurist and legal theorist William Blackstone wrote that it was considered a “universal maxim of the common law of England, that no man is to be brought into jeopardy of his life, more than once, for the same offence.” And in congressional debates before the enactment of the Fifth Amendment, Rep. Roger Sherman observed that “the courts of justice would never think of trying and punishing twice for the same offence.”

Second, the practical magnitude of the dual-sovereignty exception is much greater today than it was 60 years ago. For most of our nation’s history, the federal government left most criminal matters to be handled by the states; there were relatively few offenses punishable by both authorities. But in recent decades, there has been “a stunning expansion of federal criminal jurisdiction into a field traditionally policed by state and local laws,” as Justice Clarence Thomas wrote in dissent in Evans v. United States (1992). Now that nearly every state crime has a federal analog, the dual-sovereignty exception risks entirely swallowing the Double Jeopardy rule.

Finally, the Supreme Court created the dual-sovereignty exception a decade before it held that the Double Jeopardy Clause fully applies to the states. Now that we know that it does, there’s no reason why a state prosecution shouldn’t “count” when a defendant objects to having been prosecuted twice.

As Justice Hugo Black once put it, also in dissent, “If double punishment is what is feared, it hurts no less for two ‘Sovereigns’ to inflict it than for one.” Bartkus v. Illinois (1959). The Court, when it considers whether to take up Tyler v. United States this fall, should listen to that common-sense advice and put an end to the misguided dual-sovereignty exception, at least as it works in practice in modern times.

The Trump administration has quietly made immigration more difficult for people seeking to immigrate to the United States. It has increased the length of immigration applications significantly. Since January, it has increased the length of 15 immigration forms, yet at the same time, it claims that most of these forms will take no more time to complete. The table below presents a list of all of the forms that the new administration has increased since January and how long each administration estimated the forms would take to complete.

Collectively, immigration forms have doubled in length, but key forms like the I-485 to adjust to permanent residency were tripled. The I-130 to sponsor a relative increased sixfold. U.S. citizens will need to fill out nine times as many pages to sponsor a spouse as they did last year. It’s a monsoon of bureaucracy. 

Table: Immigration Form Lengths by Presidency

 

Form

President Trump

President Obama

    Form Pages Instruction Pages Minutes to Finish Form Pages Instruction Pages  Minutes to Finish

1

I-130 | Petition for Alien Relative

12

12

120

2

7

90

2

I-130 | Petition for Alien Spouse Supplement

18

12

170

2

7

90

3

I-526 | Immigrant Petition by Alien Entrepreneur

13

13

110

3

4

110

4

I-485 | Application to Register Permanent Residence or Adjust Status

18

42

390

6

8*

390

5

I-290B | Notice of Appeal or Motion

5

9

90

2

8

90

6

I-129F | Petition for Alien Fiancé(e)

13

15

195

6

9

95

7

I-485 Supplement A | Supplement A to Form I-485, Adjustment of Status Under Section 245(i)

4

11

13

2

4

75

8

I-730 | Refugee/Asylee Relative Petition

8

7

40

4

6

40

9

I-765 | Application for Employment Authorization

2

18

205

1

12

205

10

N-600 | Application for Certificate of Citizenship

15

13

95

9

9

95

11

N-600K | Application for Citizenship and Issuance of Certificate Under Section 322

13

16

125

8

9

125

12

I-693 | Report of Medical Examination and Vaccination Record

13

12

150

9

11

150

13

I-918 | Petition for U Nonimmigrant Status

11

17

300

8

9

300

14

I-914 | Application for T Nonimmigrant Status

10

14

135

9

9

135

15

I-363 | Request to Enforce Affidavit of Financial Support and Intent to Petition for Legal Custody for Public Law 97-359 Amerasian

7

4

N/A

1

2

N/A

 

Total

162

215

2,138

72

114

1,990

*Note the form goes onto the ninth page, but USCIS doesn’t include those sections as part of the form instruction length.
Source: U.S. Citizenship and Immigration Services; Old Forms Obtained through Web Archive

 

Several weeks ago the Defense Department revealed it is seriously considering drone strikes against Islamist terrorists in the Philippines, which would make it the eighth country the United States has bombed in the war on terror. Certainly the terrorists—who have operated in various forms there for over a hundred years—are a threat to Filipinos. They are not, however, a threat to the United States. Why, then, would the United States start bombing?

The answer may lie in the misguided theory driving American thinking about terrorism.

During the Cold War, America’s political leaders subscribed to the domino theory. The theory, whose name comes from a 1954 speech by President Eisenhower, held that if one country fell to communism, then its neighbors would fall next, toppling like dominoes. This fear encouraged U.S. officials to worry about the emergence of communism even in places of little strategic importance.

History reveals that the domino theory was a poor guide to international relations, but its power during the Cold War was real. The United States intervened repeatedly in the Third World, toppling governments and fueling civil conflicts, in order to prevent the spread of communism. Most importantly, the domino theory provided the primary justification for the Vietnam War, which cost the United States almost 60,000 lives and also strained the fabric of American society. Tragically, the irrelevance of the loss of the Vietnam War for American security was not enough to vanquish the domino theory. It continued to motivate American intervention in Central America and elsewhere until the collapse of the Soviet Union.

The 9/11 attacks in turn spawned what we might call the pandemic theory. According to this theory, terrorism spreads as the terrorism “contagion” jumps from person to person, oblivious to distance or national borders. Thanks to its viral spread, which can occur via interpersonal contact or online through propaganda and chat rooms, terrorism anywhere in the world is a threat to reach the U.S eventually. As with infectious diseases, even a small outbreak of terrorism in a faraway land can be used to justify extreme responses. The best time to eradicate a disease, after all, is before it gets a foothold and infects a large number of people.

The pandemic theory looks compelling at first glance. But like many popular theories, it is dangerously inaccurate. 

First, terrorists themselves do not suffer from a disease. Instead, they almost always have a specific political goal, and their choice of violence to achieve that goal typically derives from a coherent thought process. Scholars have shown that even seemingly unthinkable acts like suicide bombing follow a strategic logic, with their horrific nature making such acts particularly potent tools for generating fear and attention. The bombers themselves are a mix of the willing and angry and those forced into it, including the young and mentally disabled. But suicide terrorism occurs not because terrorists are sick, but because terrorist organizations believe it is a useful coercive weapon. 

Second, terrorism does not spread like an infectious disease. Ideas animating the group may have appeal (e.g., esprit de corps and income for unemployed males, promises of power for the disenfranchised). However, terrorism’s spread is limited to those who are willing to kill their fellow human beings. Thankfully, there are very few of those people. Indeed, the act is so unnatural that militaries have difficulty training recruits to kill. Evidence shows that even in combat, soldiers will often fail to kill unless they have been repeatedly conditioned to do it. It is no wonder, then, that most terrorist groups eventually decide to enter the political process or wind up marginalized after failing to reach their objectives.

Third, unlike a pandemic, terrorism’s deadly impact is geographically limited. The historical evidence shows that the vast majority of attacks occur in war zones or failed states. Just one country—Iraq—endured nearly a quarter of all terror attacks over the past 16 years, while ten countries account for 73 percent of the total. All ten of the countries experienced a war during that time. Conversely, stable and developed countries rarely experience terror attacks. The United States and nine peers (e.g., Canada and the UK) only experienced two percent of the attacks.

What makes the pandemic theory so attractive, then? The psychological shock and fear induced by 9/11 probably has something to do with it. It is also true that some terrorist groups, like Al Qaeda and ISIS, have managed to spread, at least to some degree.

But a clear-eyed assessment shows that the Islamist “virus” is severely self-limiting. Though Al Qaeda and the Islamic State have shown some capacity to inspire lone wolf attacks against America and other nations, those attacks are relatively few in number. Moreover, there is no sign that their ideology has taken root within the United States (or anywhere else) despite massive levels of terrorism in the Middle East and their purported mastery of digital propaganda.

In short, though terrorism is a terrible scourge and sometimes a threat to the United States, it does not behave like a pandemic. Terrorism elsewhere, whether in the Middle East, Latin America, or the Philippines, is not automatically a threat to America.

Unfortunately, bad theories lead to bad policy. Just as the domino theory led to tragic and unnecessary wars to contain communism, pandemic theory has led the United States to wage a costly and fruitless war on terrorism. As long as pandemic theory dominates official thinking, there is no end to the war in sight.

The Trump administration has quietly made immigration more difficult for people seeking to immigrate to the United States. It has increased the length of immigration applications significantly. Since January, it has increased the length of 15 immigration forms, yet at the same time, it claims that most of these forms will take no more time to complete. The table below presents a list of all of the forms that the new administration has increased since January and how long each administration estimated the forms would take to complete.

Table: Immigration Form Lengths by Presidency

 

Form

President Trump

President Obama

    Form Pages Instruction Pages Minutes to Finish Form Pages Instruction Pages  Minutes to Finish

1

I-130 | Petition for Alien Relative

12

12

120

2

7

90

2

I-130 | Petition for Alien Spouse Supplement

18

12

170

2

7

90

3

I-526 | Immigrant Petition by Alien Entrepreneur

13

13

110

3

4

110

4

I-485 | Application to Register Permanent Residence or Adjust Status

18

42

390

6

8*

390

5

I-290B | Notice of Appeal or Motion

5

9

90

2

8

90

6

I-129F | Petition for Alien Fiancé(e)

13

15

195

6

9

95

7

I-485 Supplement A | Supplement A to Form I-485, Adjustment of Status Under Section 245(i)

4

11

13

2

4

75

8

I-730 | Refugee/Asylee Relative Petition

8

7

40

4

6

40

9

I-765 | Application for Employment Authorization

2

18

205

1

12

205

10

N-600 | Application for Certificate of Citizenship

15

13

95

9

9

95

11

N-600K | Application for Citizenship and Issuance of Certificate Under Section 322

13

16

125

8

9

125

12

I-693 | Report of Medical Examination and Vaccination Record

13

12

150

9

11

150

13

I-918 | Petition for U Nonimmigrant Status

11

17

300

8

9

300

14

I-914 | Application for T Nonimmigrant Status

10

14

135

9

9

135

  Total

155

211

2,138

71

112

1,990

*Note the form goes onto the ninth page, but USCIS doesn’t include those sections as part of the form instruction length.
Source: U.S. Citizenship and Immigration Services; Old Forms Obtained through Web Archive

An article in Politico today reports on a persistent problem with the Pentagon providing inaccurate numbers of U.S. troops deployed in foreign countries, particularly war zones like Afghanistan, Syria, and Iraq.

The Defense Department has long been among the worst federal offenders in terms of lack of transparency in public reporting on everything from where Americans are deployed to how tax dollars are spent. Specifically, though, Pentagon officials have recently resorted to some clever accounting tricks in order to make total troop levels appear lower than they actually are.

At least a few factors are motivating this “concealment of total troops in war-zones,” as Politico puts it. First, the Obama administration set certain caps on the number of troops permitted to be deployed in Afghanistan, Iraq, and Syria. In Afghanistan, for example, President Obama capped troop levels at 8,400. That is significantly lower than the 12,000-13,000 total troops actually present in Afghanistan, and once President Trump deploys another 4,000 or so as he outlined in his speech to the nation last week “the total will be nearly double the current public number,” Politico reports.

The reason for the undercounting is that the Pentagon has not been including troops present in the country for fewer than 120 days—including, for example, “construction engineers who are building a bridge or repairing an airfield, as well as the combat units like Marine artillery batteries that have deployed to Syria.” When military officials decide a short-term boost in troop numbers is necessary to achieve some tactical objective, they do so without counting them in the total numbers so as to avoid violating the caps imposed by the executive branch.

Another reason the Pentagon deliberately undercounts troop levels is because higher numbers of troop deployments can be a political liability for some U.S. clients, like Iraqi Prime Minister Haider al-Abadi, who is up for election next year amid widespread misgivings among Iraqis about the continued presence of U.S. troops there.

I ran into this problem while researching my recent Cato Policy Analysis on overseas basing. Official statements from the military and civilian sectors of government, as well as references to foreign troop numbers in the news media, were consistently lower than some more accurate (or inclusive) internal Defense Department estimates.

According to the Politico report, Secretary of Defense James Mattis is intent on fixing this problem. But his efforts may conflict with the preferences of President Trump, who has repeatedly indicated a desire to keep foreign governments, and the American people, ignorant of things like troop numbers or movements, the initiation of military action, strategy, and so on. Politico:

“We will not talk about numbers of troops or our plans for further military activities,” Trump said in his address [on Afghanistan].

Trump’s suggestion that his administration may stop releasing troop numbers is consistent with rhetoric he used on the campaign, when he lambasted the Obama administration for talking about the impending advance into the ISIS-held city of Mosul and told opponent Hillary Clinton during a debate that she was “telling the enemy everything you want to do.”

Trump’s remarks on Monday put the brakes on the plan to start disclosing more accurate numbers, at least as far as Pentagon spokesmen are concerned.

The number of troops the United States has in foreign countries, especially war zones, is unquestionably something the American people deserve to know. At the very least, it allows Americans, who are increasingly insulated from the costs of U.S. military engagements, to have a clear understanding of our efforts and commitments abroad and to make informed judgments about U.S. foreign policy. Greater transparency, and accuracy, on this issue is something to which the president and the military he commands ought to fully commit. 

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