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Some prominent conservatives like Larry Kudlow, David Bossie, and Ann Coulter have now called for a complete moratorium on immigration because of the threat of Islamic terrorism.  However, they all focus on the benefits and neglect the costs of such a policy.  An immigration moratorium will cost the U.S. economy about $200 billion annually on net, even if it is successful at significantly reducing terrorism.

Costs of Terrorism and the Benefits of an Immigration Moratorium

According to the New America Foundation, jihadists have killed 45 Americans on U.S. soil since 9/11.  John Mueller estimates that each murder by jihadists costs about $15 million – double that of other deaths.  That means the cost of jihadist terrorism on American soil, just taking in to account the loss of life, is about $50 million a year since 9/11.  Let’s double that to $100 million to try and take account of other costs, excluding counter-terrorism spending. 

Under the most pessimistic assumptions, 73 percent of convicted terrorists in the decade after 9/11 were foreign-born.  Assuming that those 73 percent of immigrant terrorists are responsible for 73 percent of the jihadist murders since 9/11, their annual cost is $73 million.  At best, assuming there are no immigrant terrorists currently in the United States, the benefits of reducing terrorism via an immigration moratorium are $73 million annually.       

Costs of a Moratorium

Of course, measuring just the benefits of a moratorium is only half of the relevant calculation.  We must also estimate the economic costs of a moratorium on all future immigration.  Professor Benjamin Powell of Texas Tech University estimated the economic costs of a total immigration moratorium at $229 billion annually – $193 billion in rent-seeking costs and an additional loss of the conservatively estimated $36 billion annual immigration surplus.  Powell’s estimate is remarkably similar to Raul Hinojosa-Ojeda’s related estimate that removing 11 million unauthorized immigrants would lower GDP over a ten period by $2.6 trillion (Powell’s ten-year cost is $2.3 trillion).

For the purposes of this projection, I’m going to round down the economic costs of a moratorium to a mere $200 billion annually.  Thus, an immigration moratorium that eliminates 73 percent of Islamic terrorism in the U.S. will produce a net cost to our economy of $199,927,000,000 a year.  Under the current threat faced by Islamic terrorism, the cost of a moratorium is about 2000 times as great as the benefits under assumptions that greatly exaggerate the threat and undercount the costs.  A moratorium produces huge economic costs for very minor benefits. 

When Is a Moratorium Worth It?

There are situations where a total moratorium on immigration would be a cost effective counter-terrorism measure, assuming there are no cheaper or more effective security options available.   

For an immigration moratorium that costs the U.S. economy $200 billion annually and reduces the number of terrorist murders by 73 percent, it would have to prevent 800 San Bernardino-sized terrorist attacks each year (73 percent of the 1,096) just to break even as a counter-terrorism policy – leaving 296 additional attacks a year undeterred (see Table 1, row 4).  If we lived in such a dire security situation then 15,344 Americans inside of the United States would be murdered each year by Islamic terrorists and we would be suffering almost 5.6 San Bernardino-level attacks per week.  As tragic and brutal as the San Bernardino terrorist attack was, we can all be grateful that it is rare and that the number Americans actually murdered by jihadists every year is about one-five-thousandth of that number.            

Table 1

Breakeven Costs of Terrorist Attacks and Immigration Moratorium

Risk Reduction (Percent)

San Bernardino

Boston Marathon

September 11th

 

$250,000,000

$500,000,000

$200,000,000,000

10

8,000

4,000

10

25

3,200

1,600

4

50

1,600

800

2

73

1,096

548

1.37

75

1,067

533

1.33

90

889

444

1.11

100

800

400

1.00

Source: Table design and formulas from CHASING GHOSTS by John Mueller and Mark Stewart, pp. 140-147.  Mueller and Stewart estimated the costs for the Boston Marathon and 9/11 attacks while I estimated the costs for Fort Hood and San Bernardino.      

Conclusion

A moratorium on all immigration to reduce the threat of Islamic terrorism will cost about $200 billion a year more than it will produce in benefits under the very generous, and unrealistic, assumptions I’ve made here.  Security is an important service vital to the maintenance and prosperity of every civilization but we must still judge its worth using the same economic cost-benefit tools we apply to every other decision.      

Although the threat from immigrant-caused terrorism is low, some small immigration reforms like allowing immigration agents to search social media or to focus their efforts entirely on detecting security concerns rather than fake marriages will be far more cost effective than a $200 billion annual immigration moratorium.  Perhaps we should try those cheaper methods first? 

Would more vigorous antitrust enforcement reduce income inequalityHow should genetically modified organisms be regulatedHow should government regulate speech by professionals?

The answers to these questions can be found in the Winter issue of Regulation.

The short answer to the first question is no.  For the longer answer read Professor Dan Crane’s article.  The short answer to the second question, provided by Henry Miller and John J. Cohrssen, is that the regulation of biotechnology should be proportional to the risks it creates.  And those are generally less than the risks created by traditional cross breeding techniques that are widely accepted and unregulated.  Tim Sandefur rhetorically answers the third question by asking why can government regulate professionals’ speech, when non-professionals can freely engage in the same speech though they lack the professional expertise?

In another article on professional speech, University of Michigan, Flint professor Thomas Hemphill explores the implications of recent court rulings about what manufacturers can “say” to health professionals about so-called “off-label” uses of prescription drugs.

Many believe that early-childhood-intervention programs reduce the educational achievement gap between low-income and other children.  Many of these programs have been subject to random-assignment evaluation and the results often do not show positive effects.  Even though all policy professionals support the use of scientific evaluation of social programs in theory, many have resisted the implications of negative evidence for the particular programs they favor.  University of Missouri Law professor Philip Peters examines the evaluation of such programs and argues we should follow the evidence and terminate those programs that do not work.

Cal State, Northridge economist Robert Krol finds that transportation project projections consistently under predict costs by at least 25 percent.  They also over predict rail passenger traffic and under predict road utilization.  And these errors have not improved over time.

In “Using Delegation to Promote Deregulation” legal scholar Michael Rappaport argues that while libertarians would prefer that Congress enact statutes with explicit instructions for agencies, most laws delegate policy problem definitions and solutions to agencies.  Because efforts to fight Congressional delegation to agencies appear ill-fated, Rappaport advocates the creation of a special agency that would have the same incentives and abilities to deregulate that regulatory agencies have to regulate.

The review section contains reviews of books on a range of interesting topics. Included are reviews of Edwards Stringham’s new book Private Governance by Thomas Hemphill, Christopher and Rachel Coyne’s Flaws and Ceilings by David Henderson, and George Leef’s review of Daniel DiSalvo’s Government Against Itself.

Finally, my Working Papers column this issue describes papers on air pollution, CAFE standards, and cigarette taxation.

Read the full issue here.

There has a recent surge of allegations that the underlying motive for outrages such as the attacks in Paris and San Bernardino is that radical Islamists hate Western values. Senator Marco Rubio is perhaps the most blatant in pushing that thesis. One of his campaign commercials asserts flatly that such violent extremists target us because we let women drive and girls attend school.

That argument is simply an updated version of the meme that President George W. Bush highlighted in the period following the 9-11 attacks. According to Bush and his supporters, Islamists hated us “because of our freedoms.” Just nine days after the assault on the World Trade Center and the Pentagon, Bush addressed Congress and emphasized that theme. “They hate our freedoms,” he said, “our freedom of religion, our freedom of speech, our freedom to vote and assemble and disagree with each other.” Such an argument was simplistic and misleading then, and it is simplistic and misleading now.

That is not to say that it is impossible to find a jihadist somewhere who is so unhinged that he would want to slaughter Americans simply because of a virulent hatred of Western culture. But even the bipartisan commission that investigated the 9-11 attacks conceded that the primary driving force for Islamist terrorism was anger at U.S.-led foreign policy in the Middle East. And there were no pacifists, “blame America first” types, or “isolationists” on that commission. The members made the grudging admission that Western actions in the Middle East were root cause of Islamic terrorist blowback because there was overwhelming evidence that it was true.

The Marco Rubios of the world act as though Western policy and the wreckage it has caused in the Muslim world is an irrelevant factor with respect to terrorism. But the United States and its allies have been meddling extensively throughout the region for decades. Indeed, beginning with the military intervention in Lebanon in 1982, they have been almost continuously imposing punishing economic sanctions on, bombing, or invading Muslim countries. Such conduct, and the acute suffering it has caused, might have a little something to do with the rage that is now directed at the West.

Indeed, there are more than a few hints of that motive from the statements of radical Islamic operatives. Osama Bin Laden responded directly to Bush’s facile argument that al-Qaeda attacked the United States because of a hatred of Western values. Bin Laden noted that his group had not attacked countries such as Sweden. That was true even though Scandinavian culture (especially its liberal sexual mores) was far more offensive than American culture to conservative practitioners of Islam. The reason for the restraint, Bin Laden emphasized, was that Sweden had not attacked Muslim countries. Indeed, he stated categorically that “any nation that does not attack us will not be attacked.”

It is also pertinent to remember the words of the terrorist gunmen at the Bataclan concert hall in Paris. They did not shout out: “This is because you let women drive!” Instead, they shouted: “This is for Syria!” France (along with the United States and other Western allies) had been bombing areas controlled by ISIS in Syria for more than a year. The Paris attacks were bloody payback.

Lest the usual flock of neoconservative hawks try to distort this analysis as a “justification” for terrorism, let’s make it perfectly clear: deliberately attacking innocent civilians is never justified, no matter what the underlying grievance. But stressing that point is far different from pretending that there is no underlying grievance, which is what Rubio and his ideological cohorts are attempting to do.

Ending the U.S.-led policy of militarized meddling in the Middle East might not mean the end of radical Islamic terrorism directed against the West—at least not immediately. But the old adage that when you find yourself in a hole, your first action should be to stop digging, applies here. As a first step, we need to stop pursuing the policies that have produced such catastrophic blowback.

Thirty years ago, in the case Williamson County Regional Planning Commission v. Hamilton Bank (1985), the Supreme Court created a rule that effectively bars regulatory-takings plaintiffs from ever receiving the just compensation they are due under the Fifth Amendment. Williamson County’s noxious rule says that federal courts won’t hear Takings Clause claims until the state has not only issued a final order taking the plaintiff’s property but the plaintiff has been denied just compensation after seeking it “through the procedures the State has provided for doing so.”

This state-litigation requirement means that when the government issues a regulation that diminishes property values—for instance, by saying that the owner can’t do any excavation on rocky terrain that can’t be developed without it, as was the case in Arrigoni Enterprises v. Town of Durham—the landowner can’t file its claim in federal courts until it has lost in state court. Not only does this state-litigation rule severely delay the landowner’s remedy; in most cases, it means that the taking will go unremedied altogether.

One reason to have federal courts is to ensure that citizens whose rights have been violated by their state can have their rights vindicated by a truly impartial judge. The state-litigation requirement, however, often prevents federal courts from ever seeing such cases because a number of legal doctrines intended to promote fairness and efficiency bar the plaintiff from even seeking redress in federal court after a state court has already considered the matter. This means that the only way for many plaintiffs to get federal judicial review is to ask the U.S. Supreme Court to take their case after exhausting state courts—an uphill battle to say the least.

Arrigoni Enterprises decided not to pursue its federal Takings Clause claim in state court, and thereby presents the Supreme Court with the opportunity to overrule Williamson County’s state litigation requirement once and for all. Cato has filed a brief supporting Arrigoni’s petition. We argue that Williamson County’s rule was not tenable when written and has proven unworkable. The rule relegates Takings Clause claims to second-class status among other federal constitutional provisions, even though these claims are no more premature and state courts have no greater experience to address them than any other constitutional claims.

Four justices indicated 10 years ago in San Remo Hotel v. San Francisco (2005) that they would be willing to reconsider the wisdom of the state-litigation requirement in an appropriate case. That case has arrived, but if the Court declines to overrule the requirement outright it should at least resolve the current circuit split by ruling that the state-litigation rule is merely prudential such that federal courts can disregard it under the right circumstances and hear Takings Clause cases not litigated through state courts. 

This post, and the brief it discusses, was co-authored by Cato legal associate Jayme Weber.

The federal government owns more than one quarter of the land in the nation, about 640 million acres. The holdings are concentrated in the West, where it owns about half of the 11 westernmost states.

The policy issues surrounding federal land are complex, but there is a good argument that much of the land would be better managed, and would generate more value for Americans, if it was transferred to state governments and the private sector. There is a movement in the West to gain more local control over federal lands because the economic and environmental decisions made in faraway Washington often do no reflect local needs. Randy O’Toole and I wrote about some of these issues here.

The “action fund” of the Center for American Progress (CAP) recently issued a study on federal land issues. If you want an example of how D.C. policy debates can become harsh and mean-spirited, this is it. I don’t know how the two political parties will come together on reforming anything if leading liberal organizations like this one are spreading such vitriol.

Here are some of the words and phrases that CAP uses for those favoring devolving or privatizing federal lands: “radical,” “fringe,” “reckless,” “Koch brothers,” “anti-government extremists,” “land seizure movement,” “far right wing,” “white supremacists,” “militias,” “extreme antigovernment beliefs,” “extreme elements,” “dog-whistle language,” “fossil fuel interests,” “fringe militia groups,” “radical members of the Republican base.”  I’m surprised they didn’t throw in cannibals, bloodsuckers, and Nazis.  

The purpose of the report seems to be to tie GOP presidential candidates to these phrases. It includes quotes from the candidates on land issues, presumably the most extreme ones they could find. Carly Fiorina is quoted, “The federal government does a lousy job of managing forests. The private sector does a much better job of managing forests. The federal government controls too much land in this country.” They quote Ted Cruz saying, “We should be reducing the amount of federal land that the BLM controls and the amount of land that the federal government owns.” And CAP says that Chris Christie even wanted to contract out management of New Jersey’s state golf courses and park concessions. Wow, extreme stuff!

The weird thing about the report is that the coauthors, Nicole Gentile and Matt Lee-Ashley, seem to have experience on federal land issues. They should know that there is some policy agreement on many land and resource issues between small-government conservatives and libertarians on the one hand, and liberals and environmentalists on the other. The underpricing of federal resources—such as water, timber, and grazing land— is seen as bad policy by experts across the political spectrum. Libertarians and environmentalists also agree on the negative environmental effects of farm subsidies, and on the poor environmental record of federal agencies such as the Department of Energy and Army Corps of Engineers.

From a historical perspective, devolving or privatizing federal lands is not the least bit radical or extreme. For the nation’s first century and a half, the general policy of the government was to unload federal lands by giving them away or selling them to state governments, businesses, and individuals.

As CRS discusses in this report, the federal government privatized 792 million acres of land between 1781 and 1940. One of the “radical” and “extremist” privatizers during that era was Abraham Lincoln, who signed into law the Homestead Act of 1862. On top of those transfers, the federal government has handed over to state governments 470 million acres of land over the decades.   

In sum, the CAP report is embarrassing. The authors seem unable to believe that nonliberals could be concerned about the environment and sound land management. In reality, the authors’ end goals on such policies may overlap with the supposed extremists they decry more than they realize.

This is the seventh and likely final entry in a series on the expansion of educational choice policies in 2015. As I noted at the outset, the Wall Street Journal declared 2011 “The Year of School Choice” after 13 states enacted new school choice laws or expanded existing ones. As of my last update in late September, 15 states had adopted 21 new or expanded educational choice programs, including three education savings account laws, clearly making 2015 the “Year of Educational Choice.” As I wrote previously:

ESAs represent a move from school choice to educational choice because families can use ESA funds to pay for a lot more than just private school tuition. Parents can use the ESA funds for tutors, textbooks, homeschool curricula, online classes, educational therapy, and more. They can also save unused funds for future educational expenses, including college.

Readers will find a complete tally of the new and expanded programs at the bottom of this post, as well as a list of anti-school-choice lawsuits decided in 2015 or still pending.

Lawmakers across the nation are already beginning to consider educational choice proposals for the 2016 legislative session, including Maryland, OklahomaSouth Dakota, TennesseeTexas, and several others, but Florida will likely be the first state to expand choice next year. 

Florida: Expanded Choice on the Horizon But Legal Threats Loom 

Florida’s legislature is currently considering legislation to expand both the number and types of students who are eligible to receive ESAs, known in Florida as Personalized Learning Scholarship Accounts. The legislation has already cleared committees in both the Florida House and Senate, but the legislation is not expected to reach the governor’s desk until the new year.

Meanwhile, a Florida judge delivered a partial legal victory to families using tax-credit scholarships. Leon County Circuit Judge George Reynolds ruled that petitioners in a lawsuit contending that the state is not adequetely funding district schools do not have standing to challenge the constitutionality of the state’s scholarship tax credit law. However, the judge allowed the petitioners to proceed in their challenge to the constitutionality of the McKay Scholarships for students with special needs. The petitioners may also present any evidence that either of the choice programs contribute to what they argue is the inadequate level of funding of district schools. That will be a hard case to make, given that Florida’s nonpartisan Office of Program Policy Analysis and Government Accountability estimated that the state saves $1.44 for every $1.00 in reduced revenue resulting from the tax credits. Likewise, a Friedman Foundation fiscal analysis calculated that the McKay Scholarships have saved the state more than $835 million over 12 years.

The scholarship tax credit law is also still facing a second legal challenge to its constitutionality. 

Pennsylvania: Budget Stalemate Threatens Scholarships

Earlier this year, Pennsylvania appeared poised to expand the amount of tax credits available for its two scholarship programs. Now, however, a stalemate over budget negotiations has jeopardized even this year’s tax credits because some state officials say the state cannot award the credits without a state budget:

Approval letters have not gone out to businesses for the 2015-16 year.

“Without those approval letters, businesses are not going to be willing to write those checks without knowing they’re going to get credit for it,” said Aaron Anderson, CEO and Head of School at Logos Academy. “By Dec. 31 if this hasn’t happened, they’re going to have to pay their tax bills.”

Jeff Sheridan, spokesman for Gov. Tom Wolf, said letters can’t go out until there is a 2015-16 state budget. Without a budget, the state doesn’t know what limits will be put on the amount of tax credits that can be legally issued, he said.

“The Department of Community and Economic Development has been accepting and reviewing all applications and is prepared to issue award letters as soon as possible once there’s a budget,” he said.

However, proponents of the choice laws disagree with that interpretation. According to Ina Lipman, executive director of Children’s Scholarship Fund Philadelphia, the scholarship tax credit laws require the state to issue the credits whether or not the state adopts a new budget:

“This is not a matter of appropriation that needs yearly approval,” Lipman said. “So many of the arguments that Gov. Wolf’s administration are setting forth are smokescreens. The governor is in full control of whether the DCED can issue these approval letters and issue them in time for this tax credit year and not jeopardize so many organizations that are really in the field to help low-income children to gain access to educational opportunities across the board.”

More than 40,000 low-income students depend on the tax-credit scholarships, so community leaders are speaking out and holding prayer vigils and rallies to encourage lawmakers to take action. If legislators fail to reach a budget compromise or fix the issue outside of the budget process, it’s not only the scholarship students who will suffer. The state would soon find that failure to approve the credits was a costly error. According to a 2014 Show-Me Institute report, if every scholarship student were to enroll at their local district school instead, the schools “would require an additional $892 million in revenue to handle the additional enrollment.”  

Montana and Colorado: Exclusion of Religious Schools Invites Lawsuits

Earlier this year, Montana adopted a new scholarship tax credit law. Unfortunately, not only did the law have several flaws that will limit the ability of scholarship organizations to raise money and issue scholarships, but bureaucrats at the Montana Department of Revenue (DOR) unilaterally decided to forbid scholarship organizations from granting scholarships to students to attend religious schools. Legislators who passed the law are not pleased. According to a poll of Montana legislators, a majority believe the revenue department officials are not following the legislature’s intent. 

The Montana DOR officials claim that the state’s constitution prohibits using tax-credit scholarships at religious schools, but the state attorney general’s office sent a letter to the DOR advising them that they are in error:

The DOR has proposed excluding religious schools from the rule on the grounds that the Montana Constitution bars appropriations to sectarian schools, organizations or affiliated groups.

However, in his letter, [Solicitor General Dale] Schowengerdt argues, “The Montana Constitution does not authorize, much less require, the wholesale exclusion of religious entities from being considered qualified education providers under SB 410.”

He later argues that the rule’s rationale “that the Montana Constitution requires categorical exclusion of religious entities from SB 410’s tax credit program is in error because the tax credit envisioned by SB 410 is not a direct or indirect appropriation by the state to a religious entity.” And he said it excludes religious entities from a neutral benefits program without good reason.

Schowengerdt said Attorney General Tim Fox did not believe the proposed rule would be defensible in court.

The attorney general’s office also warned the DOR that it is their proposed rule, not the scholarship law, that is unconstitutional because discriminating against religious schools would put “Montana’s Constitution in potential conflict with the U.S. Constitution.”

Indeed, the U.S. Supreme Court may soon consider that very issue. In June, a plurality of the Colorado Supreme Court interpreted the state constitution’s historically anti-Catholic Blaine Amendment to prohibit the use of vouchers at religious schools. Now four educational choice organizations are asking SCOTUS to review that decision and consider striking down Blaine Amendments across the United States. The Goldwater Institute, the Foundation for Excellence in Education, the Hispanic Council for Reform and Educational Options, and the American Federation for Children argue that the Blaine Amendments were “motivated by bigotry” and “present an obstacle to the provision of high-quality educational opportunities for millions of American schoolchildren” that must be removed in order “to vindicate our nation’s sacred promise of equal educational opportunities.” 

Likewise, in an interview with RedefinED, Michael Bindas of the Institute for Justice argued that the First and Fourteenth Amendments forbid discriminating against religious schools. “Singling out religious schools is not even handedness,” Bindas argues. “It is discrimination.”

Louisiana: Legal Victory for a Flawed Voucher Program

In a stinging rebuke, the Fifth Circuit Court of Appeals rejected the U.S. Department of Justice’s “disingenuous” attempt to use a decades-old desegregation lawsuit to curb or control Louisiana’s voucher program for low-income students assigned to failing district schools. The DOJ claimed the voucher program imperiled desegregation efforts but two studies showed that the vouchers actually improved racial integration. Indeed, since the vast majority of voucher recipients are black, a victory for the DOJ would have meant keeping black students trapped in failing schools. Fortunately, the court ruled differently.

Educational choice advocates can issue three cheers for the court’s decision, but the voucher program itself deserves only one. Unfortunately, the program is hobbled by excessive regulations that are intended to guarantee quality but might actually be undermining it. For example, the state requires private schools that accept vouchers to administer state test, which drives what schools teach and even how and when they teach it. As I explained in a recent symposium on testing and educational choice at RedefinED:

First, the mandate puts significant pressure on schools to teach subjects at the same time and in a similar manner. A school that taught subjects in years that they are not tested or taught them in a manner that is not aligned with the test would be putting its students at an unnecessary disadvantage. That creates a powerful incentive to conform.

Second, such mandates drive down school participation in school choice programs. A recent American Enterprise Institute study found that states with lightly regulated school choice programs had much higher rates of school participation than highly regulated states. Nearly every private school in Arizona is willing to accept tax-credit scholarship students while only about one-third of Louisiana private schools are willing to accept voucher students due to the program’s regulatory burden.

What’s the difference between the schools that accept the vouchers with all their attached strings and those that don’t? We don’t yet know for certain, but Professor Jay P. Greene warns that it’s likely the least successful and most desperate private schools that accept the regulations:

“The only schools who are willing to do whatever the state tells them they must do are the schools that are most desperate for money,” Greene said. “If you don’t have enough kids in your private school and your finances are in bad shape, you’re in danger of closing — probably because you’re not very good — then you’re willing to do whatever the state says.”

Pelican State lawmakers should study the impact of the excessive regulations and consider modifying the law to allow private schools to administer one of the many nationally norm-referenced tests as an alternative to the state exam.

The Year of Educational Choice: The Final 2015 Tally

Here is the (likely) final tally for new and expanded choice programs in 2015, as well as the private educational choice lawsuits decided this year or still pending:

New Educational Choice Programs (8 in 7 states)

  • Arkansas: Vouchers for students with special needs.
  • Mississippi: ESAs for students with special needs.
  • Montana: Universal tax-credit scholarship law.
  • Nevada: Tax-credit scholarships for low- and middle-income students.
  • Nevada: Nearly universal ESA for students who previously attended a public school.
  • South Carolina: Voucher-like “refundable” direct tuition tax credit for students with special needs. 
  • Tennessee: ESAs for students with special needs.
  • Wisconsin: Vouchers for students with special needs.

 Expanded Educational Choice Programs (13 in 9 states)

  • Alabama: Raised the annual scholarship tax credit cap from $25 million to $30 million and raised the contribution cap from $7,500 to $50,000. However, the expansion came at a price: the legislation lowered income eligibility threshold from 275 percent of the federal poverty level to 185 percent (from about $67,000 to about $45,000 for a family of four). Current scholarship recipients are grandfathered in.
  • Arizona: Expanded ESA eligibility to include students living in Native American tribal lands.
  • Arizona: Expanded the types of businesses that can receive tax credits for donations to scholarship organizations.
  • Florida: Expanded ESA eligibility to include more categories of students with special needs and increased the budget from $18.4 million to nearly $55 million.
  • Indiana: Increased amount of tax credits available for donations to scholarship organizations ($2 million over two years).
  • Indiana: Eliminated cap on the value of each voucher. Vouchers are worth 90 percent of the state’s per-pupil funding.
  • Louisiana: Expanded school voucher program (funding roughly 600 additional vouchers).
  • North Carolina: Expanded school voucher program for low-income students ($17.6 million in 2015-16, $24.8 million in 2016-17). 
  • North Carolina: Expanded school voucher program for students with special needs(vouchers increased from $6,000 to $8,000, total funding increased by $250,000 to $3.25 million annually).  
  • Ohio: Increased the value of several categories of vouchers. 
  • Ohio: Raised the funding caps for special-needs vouchers.
  • Oklahoma: Expanded eligibility for its special-needs tax-credit scholarships and raised the tax credit value from 50 percent–tied with Indiana for the lowest in the nation–to 75 percent. 
  • Wisconsin: The state budget raises and eventually eliminates the statewide voucher cap.

Legal Challenges to Educational Choice Laws Decided in 2015

  • Alabama: The state supreme court upheld the state’s refundable scholarship tax credit law against a Blaine Amendment challenge.
  • Colorado: A plurality of the state supreme court declared that the state’s Blaine Amendment prohibits the use of public funds at religious schools. One justice held that vouchers violated other statutes.
  • Florida: A judge tossed out a procedural challenge to the legislation creating the state’s ESA program.
  • Louisiana: The Fifth Circuit Court of Appeals ruled against the U.S. Department of Justice’s “disingenuous” attempt to use a decades-old desegregation lawsuit to curb or control the state’s voucher program.
  • North Carolina: The state supreme court upheld the state’s voucher law.

Pending Educational Choice Lawsuits

  • Alabama: Public school superintendents claim that the Alabama Accountability Act, which created the state’s refundable scholarship tax credit law (among other things), was improperly adopted by the state legislature in violation of certain provisions of the state constitution.
  • Florida: The state’s largest teachers union claims that the scholarship tax credit law violates the state’s Blaine Amendment and “uniformity” clause, which they claim bars the state from funding or otherwise aiding any school system besides the public schools. A lower-court judge previously threw out the lawsuit, but the union has appealed.
  • Florida: A public education group claims the state is failing in its constitutional duty to adequately fund public schools. They amended their lawsuit to challenge two school choice programs as well. A county circuit judge denied standing for petitioners to challenge the constitutionality of the state’s scholarship tax credit law, but allowed them to proceed with their challenge to the constitutionality of the McKay Scholarships for students with special needs. Petitioners may also present evidence that either or both programs contribute to the supposed inadequacy of the state’s funding of public education. 
  • Georgia: The Southern Education Foundation claims Georgia’s scholarship tax credit law violates the state’s Blaine Amendment.
  • Nevada: The ACLU claims Nevada’s ESA program violates the state’s Blaine Amendment and other provisions of the state constitution.
  • Nevada: A public education group, Educate Nevada Now, claims Nevada’s ESA program is improperly funded because it violates the state constitution’s requirement that the legislature fund “a uniform system of common schools,” among other provisions. The Institute for Justice is seeking intervenor status to defend Nevada’s ESA from both lawsuits.
  • Oklahoma: Plaintiffs claim Oklahoma’s voucher program for students with special needs violates the state’s Blaine Amendment.

To learn more about how educational choice benefits students — and how defenders of the status quo are attempting to use the courts to deprive families of that choice — watch the Cato Institute’s short documentary, “Live Free and Learn”:
https://youtu.be/zmUrrns9ozs

It is distressing, at least to economists, how many problems could be solved by adopting basic free-market principles, yet those solutions are ignored or stridently opposed by the very people who would benefit from them. California’s drought is one of those: California actually has plenty of water, it is just poorly priced.

An even more pervasive problem is traffic congestion, which (according to the Texas Transportation Institute) wasted more than 3 billion gallons of fuel and nearly 7 billion hours of people’s time for a total cost of $160 billion in 2014. Brookings economist Anthony Downs wrote a whole book about congestion that concluded there was no solution to the problem–except, he noted almost parenthetically, congestion pricing which Downs decided was politically impossible. Of course, that’s a self-fulfilling prophecy because if no one argues for something because it’s impossible, it will truly be impossible.

Fortunately, more people are beginning to argue for congestion pricing. A November 27 report from an economic group in Canada called the Ecofiscal Commission argues that “pricing traffic congestion is critical to beating it.”

Click image to download a 13.3-MB PDF of this report.

An even more recent report, released on December 8 by the Royal Academy of Engineering, makes a similar argument for roads in Britain. The report compares a wide variety of programs, including transit improvements, smart roads, and urban redevelopment, and concludes that road pricing offers the greatest value for the money and has no net cost to taxpayers.

Click image to download a 5.5-MB PDF of this report.

One reason congestion pricing doesn’t happen is that many people see it as an attempt to force people off the roads and out of their cars. So it is disappointing that neither of these reports notes the critical finding of my Cato policy analysis on congestion pricing, which is that road pricing actually increases the capacity of roads to move people and vehicles during busy times of the day.

As the paper shows, a freeway lane can move up to 2,000 vehicles per hour at 55 miles per hour, but when traffic slows due to congestion, throughput can fall below 1,000 vehicles per hour. By preventing such traffic slowdowns, road pricing can paradoxically double road capacities during rush hour, thus giving everyone more options to get where they want to go without delay, not less.

Another obstacle to congestion pricing is that people don’t trust government. Optimally, highway managers would set prices just high enough to keep traffic flowing and use net revenues to pay for more congestion relief, not boondoggles elsewhere. Some of the most-efficiently constructed tollways in the world follow these principles.

Unfortunately, other systems have not followed these principles, giving tollroads everywhere a black eye. One of the worst is the Dulles Toll Road, which was built by the state of Virginia in 1984 and worked well for many years. Then the state gave it to the Metropolitan Washington Airport Authority, which more than quadrupled tolls so it could use the surplus to subsidize the Silver Line boondoggle.

Yet one bad toll road is not an argument against congestion pricing, any more than the failure of A&P is an argument against all supermarkets. Congestion pricing is the best and may be the only way to end the fuel, time, and dollars wasted in traffic, and free-market advocates should support such pricing to solve local traffic problems.

After claiming a special expertise in foreign policy, GOP presidential wannabe Marco Rubio finds himself under fire because of his neoconservative tendencies. He’s responded in the usual way for someone whose policies would keep America perpetually at war: accuse his critics of being “isolationists.”

Trying to defend his record of supporting such disastrous misadventures as Iraq and Libya, he denounced unnamed foes who sought “to derail the postwar consensus about America’s role in the world.” This outrageous yet anonymous “they,” he added, “will never call themselves isolationists, but that is exactly what they are.”

Against Ted Cruz, the likely intended target, the claim obviously is nonsense. After all, Cruz recently proposed carpet-bombing the Islamic State.

What Rubio unintentionally illustrated was the fact that “isolationist” today has been stripped of almost all meaning to become an all-purpose epithet. Indeed, if “isolationist” means anything today, it simply is “you don’t want to intervene where I want to intervene.”

There are no isolationists in America today, or at least any seriously involved in influencing foreign policy. Even the strongest critics of Rubio’s militarism tend to promote free trade, liberal immigration, and international cooperation. That’s hardly “isolationism.”

And most everyone is for at least some military action. The number of analysts who opposed social engineering in the Balkans, nation-building in Afghanistan, democracy-promotion in Iraq, and humanitarian intervention in Libya would fill a Washington phone booth, if one could be found.

Perhaps the greatest irony is how Rubio and his fellow neoconservatives parade as internationalists even as their policies disrupt the international order. Indeed, it is a curious internationalism which views itself as in full flower when the U.S. military is bombing, invading, and occupying other nations. As I point out in National Interest online: “Anything else—diplomacy, economic sanctions, even threatening future military action—is the worst form of ‘appeasement,’ another meaningless yet all-purpose insult.”

Certainly doing nothing is utterly inconceivable. No handing off the problem to those states with the greatest interest.

A better definition for isolationist would be someone who wants America to be isolated. The starting point would be military—no alliances, of course, but also no other cooperation of any sort. There actually aren’t many of those people around, even among non-interventionists.

Next would be economic isolation, or autarchy. It’s an ancient yet stupid economic policy held by few in America, even among avowed protectionists.

Then there are people. Even Donald Trump is at most a selective isolationist in this regard, targeting Muslims, and for reasons other than an abstract desire for Americans to be alone.

Thus, it would be more helpful if Rubio dropped the name-calling and participated in a serious debate over how the U.S. should engage the world. That should begin with examining the catastrophic consequences of the military policies which he supported in Iraq and Libya.

Indeed, Rubio might discuss whether he believes peace itself to be an “isolationist” policy. For instance, he declared: “I will use American power to oppose any violations of international waters, airspace, cyberspace or outer space.” Any violations?

He also promised to treat as a casus belli “the economic disruptions caused when one country invades another, as well as the chaos caused by disruptions in choke points such as the South China Sea or the Strait of Hormuz.” Does that mean America has to fight any war involving any trading partner?

When it comes to Rubio, “isolationist” really means good old-fashioned common sense. Don’t go to war unless you have to. Don’t risk your own people’s lives and money in misbegotten crusades abroad.

Far from highlighting Rubio’s qualifications for the presidency, his foreign policy views demonstrate a world view which is both simplistic and dangerous. When coming from the Florida Senator, “isolationist” should be viewed as a compliment.

When the Federal Open Market Committee (FOMC) meets in Washington next week, its members are widely expected to vote to raise interest rates for the first time since June 2006.  By doing so, they will move towards monetary policy normalization, after more than seven years of near-zero interest rates, and a vast expansion of the central bank’s balance sheet.

But how did monetary policy become so abnormal in the first place?  Were the Fed’s unconventional monetary policies a success?  And how smoothly will implementation of the Fed’s so-called “exit strategy” go?  These are among the questions addressed by Dan Thornton, a former vice president of the Federal Reserve Bank of St. Louis, in “Requiem for QE,” the latest Policy Analysis from Cato’s Center for Monetary and Financial Alternatives.

Thornton begins with an account of the Fed’s deliberations and actions during the early stages of the financial crisis.  What’s particularly striking, looking back, is how the Fed resisted letting its balance sheet grow, or otherwise departing from its conventional, funds-rate targeting procedure, until the Great Recession was well underway.

In fact, from August 2007, when BNP Paribas suspended redemption of three of its investment funds, to September 2008, when Lehman Brothers filed for bankruptcy, the Fed loaned banks and others more than $300 billion.  But these loans were sterilized—meaning that the Fed sold an equal amount of government securities.  As a result, the Fed’s balance sheet didn’t grow, and neither did total bank reserves or the monetary base.  For over a year, in other words, the Fed reacted to a growing liquidity crisis not by taking steps to boost credit in general, but rather by reallocating the existing supply of credit towards particular, troubled firms — a move George Selgin examined (and criticized) in detail in a recent post on this blog.

The Fed’s approach flew in the face of widely-acclaimed research presented by Milton Friedman and Anna Schwartz in their A Monetary History of the United States.  As Thornton points out, Friedman and Schwartz “connected substantial reductions in the nominal quantity of money and credit to correspondingly large declines in economic activity, and declared it the Fed’s duty to act quickly to prevent such reductions by expanding the monetary base.”  In 2007–08, however, no such action was forthcoming, and the crisis continued to intensify.

The sad part is that then-Fed chairman Ben Bernanke knew all this.  Back in 2002, he concluded a speech in honor of Milton Friedman’s 90th birthday by declaring: “I would like to say to Milton and Anna:  Regarding the Great Depression.  You’re right.  We did it.  We’re very sorry.  But thanks to you, we won’t do it again.”  And yet, as Thornton makes clear, “it” — failing to expand the balance sheet in order to prevent a collapse of credit — is “precisely what the Fed did in the months leading up to Lehman Brothers’ failure.”

Eventually, the Fed was forced to change tack.  Once Lehman Brothers collapsed, it found itself lending and buying assets on a scale that couldn’t possibly be sterilized via correspondingly large asset sales.  The Fed’s balance sheet grew, bank reserves began to pile up, and the federal funds rate dropped well below the FOMC’s target.  Unofficially, and almost by accident, quantitative easing (QE) began.

Quantitative easing was put on a formal footing in March 2009, when the FOMC announced the combined purchase of $750 billion of mortgage-backed securities and $300 billion of Treasuries.  From the very beginning, however, it was clear that the Fed was not belatedly adopting a Friedmanite approach.  The stated purpose of their asset purchases was not to boost the monetary base — that was just a side effect.  Instead, the Fed’s goal was to manipulate the yields on certain long-term assets, in the hope that this would spill over into broader markets, and the economy as a whole.

How was it meant to work?  Well, as Thornton points out, the rationale was “vague and highly uncertain,” and developed over time as QE was put into effect.  But the general idea was twofold.

First, by forcing down yields on the long-term assets it was purchasing, the Fed hoped other investors would be induced to substitute those assets for similar, but somewhat higher-yielding alternatives.  In turn, that shift in demand would push down yields on the alternative assets, encouraging investors who held them to rebalance their portfolios as well.  As this ripple effect spread through the financial markets, equilibrium interest rates would fall.

Second, the Fed hoped that QE announcements would signal to markets that monetary policy was going to be “persistently more accommodative” — Ben Bernanke’s words — than previously thought.  This would lower investor expectations for the path of short-term interest rates, and in so doing put additional downward pressure on long-term interest rates.

In short, then, the Fed expected QE to boost the economy through the interest rate channel of monetary policy: lower interest rates would boost equity prices and weaken the dollar; lower borrowing costs, higher wealth, and greater international competitiveness would drive spending, investment, and exports, and stimulate an ailing economy.

So did QE actually work in this way?  Thornton assesses these claims in detail (see, in particular, pp. 12–22 of his analysis), and finds little — either in economic theory or in empirical evidence — to support them.

For one thing, as large as the Fed’s asset purchases were relative to previous open market operations, they were modest compared to financial markets as a whole.  It is therefore “difficult to believe,” as Thornton puts it, “that the distributional effects of the FOMC’s quantitative easing policy could have had a significant effect on either relative yields or the level of the entire interest rate structure.”  What’s more, the event-study literature on QE announcements does not offer any convincing evidence of their effectiveness, once you account for the effect of other, simultaneous announcements (Fed statements typically contain a variety of news capable of influencing bond yields).

The claim that QE announcements changed expectations for the path of short-term interest rates is similarly hard to substantiate, not least because event studies only show the immediate impact of such announcements — and for QE to reduce long-term interest rates via this signaling channel, its effect on expectations must be persistent.  It is telling, moreover, that the Fed’s QE announcements did not even produce a consensus among FOMC participants about the expected path of the federal funds rate.  That being the case, it is hard to see how those same announcements could have had a significant impact on market expectations — especially when it is well-established that interest rates are, in Thornton’s words, “essentially unknowable beyond horizons of a few months.”

Of course, that QE did not work as the Fed hoped does not mean it had no effect at all.  As Thornton points out, “a monetary policy directed at keeping interest rates on low-risk securities near zero … is sure to cause people to seek higher yields by purchasing more risky assets.”  Thornton suggests that pension funds, in particular, have been forced to hold riskier portfolios to generate the returns necessary to meet their obligations.  As well as raising concerns about future financial crises, this distortion of investor behavior has had distributional effects: wealthy investors, who are better able to assume more risk, have benefited from booming equity prices, whereas as less well-off pensioners — who have good reason to be risk averse — have had to settle for miserly returns on their fixed-income portfolios.

What QE hasn’t done, however, is enhance the aggregate supply of credit to the market.  This is hardly surprising, given that the Fed began paying interest on bank reserves in October 2008 — a move designed to encourage banks to build up excess reserves, instead of increasing lending.  Indeed, when it came up at FOMC meetings, Ben Bernanke, Janet Yellen, and others expressly rejected the idea that QE would stimulate the economy by boosting bank lending.  Still, when you couple this absence of increased credit with the lack of evidence that QE worked the way the Fed thought it would, you would be forgiven for wondering whether QE had any significant impact on output and employment at all.

What now?  The Fed’s large-scale asset purchases are over, and the FOMC’s interest rate target looks set to gradually rise.  But the Fed’s “exit strategy” remains a work in progress.  Interest on reserves (IOR), for example, may yet prove a troublesome way of raising the federal funds rate.  As Thornton points out, “An IOR of 3 percent … would see the Fed paying nearly $80 billion a year in interest to the commercial banking sector — something that is unlikely to prove popular in Congress or among the general public.”

Meanwhile, the Fed’s preferred alternative, overnight reverse repurchase agreements, would have to be rolled over continuously to have any effect on the size of the Fed’s balance sheet.  A better approach, according to Thornton, would be to “begin the process of policy normalization by selling long-term securities slowly … If things go well, sales could subsequently be accelerated.”  But the Fed seems reluctant to consider outright asset sales at all.  This suggests that the bloated central bank balance sheet that QE created could be with us for some time to come — whether or not the FOMC votes next week to begin the process of policy normalization.

Yet the real legacy of QE may come in how the FOMC reacts to the next crisis.  One concern is that the Fed seems to have lost “all confidence in the ability of markets to heal themselves,” and now assumes that “only monetary or fiscal policy actions” can “restore the economy’s health.”  Another worry is mission creep: “If the Fed can support the mortgage and commercial papers markets … why shouldn’t it support the market for student loans — or any other market for that matter?”  It’s a dispiriting prospect, but both of these observations suggest an increasingly hyperactive monetary authority going forward.

Ultimately, says Thornton, we should prepare ourselves for more of the same: given the opportunity, “the Fed will continue to distort markets until, by some as-yet-unknown magic, those markets return to normal.”  One suspects that such magic may be a long time coming.

[Cross-posted from Alt-M.org]

This fall, the Department of Homeland Security and its pro-national ID allies staged a push to move more states toward complying with REAL ID, the U.S. national ID law. The public agitation effort was so successful that passport offices in New Mexico were swamped with people fearing their drivers’ licenses would be invalid for federal purposes. A DHS official had to backtrack on a widely reported January 2016 deadline for state compliance.

DHS continues to imply that all but a few holdout states stand in the way of nationwide REAL ID compliance. The suggestion is that residents of recalcitrant jurisdictions will be hung out to dry soon, when the Transportation Security Administration starts turning away travelers who arrive at its airport checkpoints with IDs from non-compliant states.

At this writing, DHS’s “REAL ID Enforcement in Brief” page lists just two non-compliant jurisdictions: Minnesota and American Samoa. You’d take this as a signal of broad compliance. But look closely at the list of “Compliant/Extension” jurisdictions, and you see that more than half of them are non-compliant and enjoying extensions themselves.

But here’s the kicker: Even the ‘compliant’ states aren’t compliant. DHS treats states as ‘compliant’ if they’re synched up with a pared-back “material compliance checklist.” It’s DHS reducing the obligations of the law by fiat, and it’s no different than extending the deadline indefinitely on a subset of the law’s actual requirements.

When DHS bureaucrats tell state elected officials that the agency can no longer offer them extensions, this is false. DHS is currently giving every state in the union, including the ones it calls “compliant,” extensions with respect to provisions of the law and regulations that don’t appear on its checklist.

To help clarify what REAL ID compliance actually is, we’ve compiled a list of REAL ID’s actual requirements, what the law and regulations would mean for states. REAL ID has nearly 100 requirements, ranging from very easy, standard ID-card practices to things that are currently impossible and ill-advised. States have to do all of them to be compliant.

We’ve grouped the requirements together for easy reading. Many are back-end mandates, requiring states to meet standards for facilities, data storage, employee background checks, and so forth. Notably, REAL ID requires states to make driver data available to every other state, which means that every DMV must open its state’s residents’ data to the risk of exposure to any state that lacks sufficient information controls. That ill-advised policy is currently impossible, luckily, because the data sharing network has not yet been built. Congress puts money into the project annually in the DHS appropriations bill.

The full REAL ID requirements make it easy to see why no state is in compliance today, and why no state should expend their taxpayers’ money on the onerous, complex scheme to implement the U.S. national ID law.

Data Storage and Sharing Requirements

The regulations governing REAL ID require issuing authorities to meet certain standards for data storage, as well as to engage in data sharing with issuing authorities in other states and with DHS. This data sharing is the heart of the national ID, creating as it does a network of ostensibly state-level databases linked together according to federal standards.
•    States must maintain copies of source documents, applications and signed declarations
•    If the state allows for/recognizes name changes, it must maintain copies of the evidence of name change
•    If the state allows for/recognizes name changes, it must maintain a record of both the original and recorded names
•    If the state allows for alternate documents, it must maintain copies of the alternate documents
•    Paper copies of documents must be maintained for at least 7 years; digital copies and microfiche copies must be maintained for at least 10 years
•    States must store photo images (the aforementioned “mandatory facial image capture”) in JPEG 2000 format
•    States must maintain copies of the digital photograph of the applicant for a minimum of five years if no card is ultimately issued or for two years past the date of the card’s expiration if issued
•    States must store signature copies in TIF or TIF-compatible format
•    States must make photos retrievable for law enforcement, who can access said photos if they request properly
•    States must maintain databases that contain all fields printed on licenses/IDs and SSNs of holders
•    Databases must contain full legal names of drivers
•    Databases must contain all other data presented by driver to the DMV but not printed on license
•    Database must contain full drivers’ histories
•    States must provide electronic access to the driver database(s) to other states

“Visible” Card Regulations

These are regulations that are the most basic visible requirements of REAL ID: the physical format of the license/ID card and what information has to be displayed on it. These include the most basic information of the license holder, some of which are common to both REAL ID and “non-federal” licenses. They include:
•    Full legal name
•    Date of birth
•    Gender
•    Unique license/ID number
•    Digital photograph (black-and-white or color)
•    Holder’s primary address
•    Signature of holder (or an alternate mark/signifier for those unable to sign)
•    Machine readable bar code
•    Visible expiration date
•    Date of issuance
•    State/jurisdiction of issuance
•    Compliance mark (“Gold Star”)
•    Text exclusively in Latin script
Many of these requirements have been standard components of driver’s licenses for decades. The machine readable bar code requirement and the REAL ID compliance mark (the “Gold Star” on compliant licenses) are new with the act. In the event that the state/jurisdiction continues to make non-compliant licenses and IDs available to residents alongside compliant versions, two additional visible requirements exist:
•    Non-REAL ID licenses and IDs must prominently state on face that they are not for federal purposes
•    Non-REAL ID licenses and IDs must use unique designs and/or color indicators to differentiate them from compliant versions

Non-Visible Card Regulations

These are regulations which also deal with physical requirements for compliance. However, they are requirements which are not apparent from a casual inspection of a license, or which would not be apparent without some knowledge of REAL ID’s regulatory requirements or without special equipment. (Encoded information is dealt with in the next section). They include:
•    A digital photo which meets ISO/IEC 19794-5:2005(e) requirements (an international standard for identity document photographs)
•    A digital photo which is either black-and-white or color
•    A digital photo which has been taken with facial image capture technology
•    Name field of no less than 39 characters, and with truncation of longer names in case of extreme length
•    Multi-layered anti-fraud features (like watermarks, holograms and non-standard inks)
•    Durable physical materials used in production, which are unavailable to the general public and able to withstand inspection and use

Barcode Regulations

Machine readable barcodes are typically placed on the back of compliant licenses. These barcodes are encoded with the bearer’s personal information, largely duplicating the visible printed data, and including information on the card’s current design and how it was produced (an inventory control number). The barcode is designed to be scanned by law enforcement, government entities, and others with access to the appropriate reader.
•    Encoded legal name
•    Encoded date of birth
•    Encoded gender
•    Encoded address
•    Encoded state/jurisdiction of issuance
•    Encoded expiration date
•    Encoded date of issue
•    Encoded identification number
•    Encoded revision date of license/ID design
•    Encoded inventory control number

Application Requirements

These requirements deal with what has to be presented by the applicant during the application process for a REAL ID compliant license or ID card. They are the only set of requirements incumbent upon the applicant; all the other requirements are incumbent upon the issuing authority or the Department of Homeland Security. To receive a compliant license or ID, the applicant must present:
•    Recognized photo ID document
•    Proof of name change (if applicable)
•    Proof of date of birth
•    Proof of Social Security number OR proof of ineligibility for a number
•    Documentation of permanent address
•    Proof of lawful status
•    No foreign documents allowed, except for a foreign passport
•    Signature
•    Signature upon document attesting, under penalty of perjury, validity of everything presented

Issuing Requirements

These requirements are the counterpart to the application requirements; they are the requirements incumbent upon the issuing authority during the application and license/ID issuance process.
•    Verification of photo ID
•    Verification of date of birth
•    Verification of full Social Security Number
•    Verification of documentation of permanent address
•    Verification of proof of lawful status
•    Verification of presented ID documents with issuing authority
•    Subject each applicant to a photo utilizing “mandatory facial image capture”
•    Resolve any issues arising from SSN verification or document verification
•    Confirm with other appropriate states/jurisdictions that any prior out-of-state licenses have been terminated (or will be terminated upon receipt of the new license)
•    Make a reasonable effort to ensure that the applicant does not hold a license in another jurisdiction under a different name
•    Verify out-of-state REAL IDs (if presented as a form of ID) with the issuing authority
•    Limit validity of new license/ID to 8 years maximum
•    States are not required to comply with all of the requirements if the license/ID is to be issued in support of federal, state, or local criminal justice (i.e. witness protection programs, federal judges with protected addresses, federal law enforcement officials etc.)

Renewal Requirements

These requirements follow from the issuing requirements, and deal with additional protocols during a renewal. One non-in-person renewal is allowed for a REAL ID compliant license/ID during each renewal cycle; the next renewal must be in person.
•    States may permit remote renewal, if state law allows for it
•    During a remote renewal, the state must re-verify the license holder’s SSN
•    However, states must require in-person renewal of the license/ID no less frequently than every 16 years
•    Re-verify the license holder’s SSN during an in-person renewal
•    Re-verify the license holder’s proof of legal presence if the holder is a non-citizen/permanent resident
•    Take an updated digital photograph of the holder
•    If there has been a material change in the applicant’s material information (i.e. a name change, a sex change etc.) an in-person renewal is mandatory
•    Renewed licenses issued prior to the material compliance date set by DHS will be accepted for official purposes until that date

Exemption/Alternate Requirements

•    States may establish a well-documented and DHS-approved exemptions process for applicants able only to present alternate/non-standard documents
•    States with exemption processes must make an effort to authenticate alternate documents and they must note the use of alternate documents in their records
•    States must conduct period reviews of the exemptions process
•    States will only issue temporary REAL ID-compliant licenses/IDs to persons under certain categories of legal status (like refugees, certain visa holders)
•    Temporary licenses/IDs shall only be valid for the period of authorized stay or, if indefinite, one year (subject to renewal)
•    Temporary licenses must prominently display expiration date
•    Temporary licenses shall only be renewed upon presentation of valid documentary proof of continued/extended status
•    Presented documents for continued/extended status must be verified with the appropriate federal authorities

DMV Security/Physical Requirements

•    States must produce a security plan, which must be submitted to DHS as part of REAL ID certification
•    The plan must ensure the physical security of locations where licenses and ID cards are produced
•    The plan must ensure the physical security of document materials and papers from which licenses and IDs produced
•    The plan must address the security of personal information held at responsible DMV facilities
•    The plan must address document and physical security features of the card, consistent with regulations
•    The plan must address access control for employees and systems
•    The plan must establish fraudulent document recognition training programs for DMV employees
•    The plan must address emergency/incident response at facilities
•    The plan must address internal audit controls
•    The plan must include an affirmation that the State possesses both the authority and the means to produce, revise, expunge, and protect the confidentiality of REAL ID driver’s licenses or identification cards issued in support of Federal, State, or local criminal justice agencies or similar programs that require special licensing or identification to safeguard persons or support their official duties
•    States must ensure the physical security of materials and locations used in the production of licenses/IDs, consistent with security measures detailed in the security plan
•    The state must subject all persons authorized to manufacture or produce licenses and IDs to appropriate security requirements
•    The state must perform background, criminal history, employment history, and reference checks on REAL ID-responsible DMV employees
•    Employees subject to checks prior to 2006 need not be rechecked

A group of prominent conservatives recently released an ObamaCare replacement plan that would replicate many of that law’s worst features. As I explain in a new post at Darwin’s Fool, conservatives need to examine this proposal closely against the alternative. An excerpt:

If you’re a conservative and you’re reading this, chances are good you have a gun to your headConservatives are so averse to health policyNational Review‘s Ramesh Ponnuru once quipped that “Republicans will do anything to repeal ObamaCare–except think about health care.” This is no small problem. Indeed, it is how we got ObamaCare in the first place: conservative neglect enabled a raft of very un-conservative health care ideas to germinate at the Heritage Foundation for a decade and a half. By the time Democrats picked up those ideas and ran with them in 2009, it was too late. Conservatives were powerless to stop them.

Conservatives may indeed be just one election away from repealing ObamaCare, which is all to the good. But some conservatives have proposed replacing ObamaCare with refundable tax credits for health-insurance.  Tax credits are ObamaCare-lite. They would cement in place many of ObamaCare’s worst features, and replicate its awful results. If those features acquire a bipartisan imprimatur, we will never in our lifetimes be rid of them. Unless conservatives give tax credits the scrutiny they should have applied to the Heritage Foundation plan in the 1990s, they will make the same mistake all over again.

Conservatives don’t have to repeat history. A better set of reforms offers a clear path toward a market system, and away from ObamaCare, by building on the bedrock conservative idea of health savings accounts (HSAs). “Large” HSAs would deliver better, more affordable, and more secure health care, particularly for the most vulnerable. At the same time, Large HSAs would give workers a larger effective tax cut than all the Reagan and Bush tax cuts combined, and nine times larger than repealing ObamaCare.

Read the whole thing.

The other night, Fox News host Bill O’Reilly again insisted that ISIS poses a dire threat to the United States.  On this occasion, though, O’Reilly surpassed the shrill warnings of his ideological colleagues, insisting that the situation was the same as the nation faced in 1938 with the rise of Nazi Germany and its fascist allies.  

It is a preposterous comparison.  In 1938, three of the top seven world powers were governed by fascist regimes and were linked together in the Tripartite Alliance.  Those three countries, Germany, Italy, and Japan, were all modern, powerful nation states, with large, productive economies.  They also were able to field several million ground troops backed by extremely capable air and naval forces.  Together, those countries posed a credible threat not only to American security but to the entire global balance of power.

The resources ISIS can draw upon are puny by comparison.  The movement controls a very limited territory, the shaky “caliphate” in western Iraq and eastern Syria, and that redoubt is nearly surrounded by hostile regional forces—Iran and its Shiite allies in Iraq, the Kurds, and the Alawite-led government in Syria.  The correlation of forces was not favorable to ISIS even before Russia added its considerable military weight to the anti-ISIS coalition.

The closest historical model to the ISIS threat is not the menace that the fascist powers posed in the late 1930s, but the far more limited one that radical anarchists mounted in the last half of the nineteenth century.  Akil N. Awan, Associate Professor in Modern History, Political Violence and Terrorism at the University of London, ably shows the similarities in a recent article in National Interest Online.

Awan points out that anarchists were responsible for an alarming series of mass shootings, bombings, and high-profile assassinations. An 1893 attack on the opera house in Barcelona, Spain, which killed 22 people and wounded another 35, was eerily similar to the recent incident in Paris.  In a period of less than five decades, anarchists assassinated two U.S. presidents, a Russian czar, an Austria-Hungarian empress, an Italian president, a French president, an Italian king, and two Spanish prime ministers.  And as in our own era, there was a growing atmosphere of panic, with calls for drastic measures that would do lasting damage to fundamental civil liberties.

We should keep that historical precedent firmly in mind when we see similar efforts to hype the ISIS threat and use it as a justification for draconian security measures. The recent ISIS attacks are scary (indeed, that is the whole point of terrorist tactics), but my colleague Mike Tanner correctly placed the risk in context in an article on National Review Online.  Mike notes that the risk for Americans dying in a terrorist assault is still an infinitesimal one in 20 million.  Indeed, the chance of dying in an automobile accident is nearly 200 times greater.  It is far more rational to worry about an incompetent, distracted, or drunk driver barreling down the road at you the next time you get into your automobile than it is to fret about being the victim of a terrorist attack.

ISIS is the twenty-first century equivalent of the nineteenth century anarchists—a movement of violent malcontents with very limited power.  It is a wild exaggeration to compare the threat they pose to the fascist powers of the 1930s (or the Soviet Union during the Cold War).  Invoking such a false historical analogy to panic the American people does a profound disserve both to historical truth and fabric of liberty.  

The two Koreas recently chatted at Panmunjun, the truce village within the Demilitarized Zone. They reached an agreement - to talk some more, starting on Friday.

That’s the way it usually is. When there’s a specific issue that must be resolved, real results sometimes are reached. But promises of future talks usually fall short.

Will this time be any different? The two sides scheduled talks with vice ministers for December.

Even if the discussions actually occur, the agenda remains unclear. The joint statement pointed to “issues that will improve relations between the South and the North.”

But those issues, of which there are many, rarely have been susceptible to settlement via negotiation. Most problems on the peninsula grow out of the North Korean regime’s determined misbehavior.

Topping the list for the South was family reunions, or “divided families,” according to MOU spokesman Jung Joon-hee. Visits are a fine humanitarian gesture, but irrelevant to the larger geopolitical conflict.

Jung said at their meeting the so-called Democratic People’s Republic of Korea focused on restarting tours of its Mount Kumgang resort. But they were suspended years ago after a North Korean guard shot and killed a tourist who wandered into a forbidden area.

Although it went unmentioned at the Thanksgiving meeting, North Korea also desires a resumption of aid, which was suspended (the “May 24 measures,” as they oft have been called) after the sinking of a South Korean warship and bombardment of a South Korean island in 2010. But the DPRK never accepted responsibility for the first and justified the second as defensive.

There also could be discussion of reunification, but no serious person believes it is possible with the current regime in Pyongyang. Conventional arms control would be a logical topic, but so far the North has seen little reason to drop its threatening military posture.

The most important issue is Pyongyang’s nuclear weapons program. However, to believe that Kim Jong-un is prepared to negotiate away the military’s most important and expensive weapon is to believe in the Tooth Fairy or Great Pumpkin.

Still, talks are better than no talks. As Winston Churchill observed, better to “jaw-jaw” than “war-war.”

Perhaps the best policy is to seek to expand North Korean contacts with the West. That should include the U.S.

First, there is no reason to think the Kim monarchy (with Communist characteristics) is likely to disappear. The regime has withstood famine, poverty, and the death of two dominant dictators.

Second, the regime has been less confrontational when engaged diplomatically. That suggests the North actually desires engagement, and perversely is willing to threaten to get it. There’s little reason not to respond positively, as long as expectations are kept low.

Third, change actually is occurring in North Korea. Private markets continue to spread. Moreover, Paul Tjia, a Dutch business consultant who works in North Korea, recently observed: “The country is really opening up. They want more investment and trade.”

Most important, the DPRK economy has been growing. Cho Dong-ho, a professor at Ewha Women’s University, recently argued that annual growth was likely close to five percent. Felix Abt, who co-founded a business school in the North, reported: “Poverty has dropped and, equally visible, a middle class has emerged.”

Fourth, coercion has failed. As long as China refuses to cut off energy and food, the Kim regime is likely to survive. If the West is forced to live with Pyongyang’s current rulers, it’s worth considering another approach. Abt contended that in his experience “intense interaction can lead to many changes.” He acknowledged fears of propping up the regime, but believed involvement “also helps transform it.”

As I explain in National Interest online: “Rather than the gift that keeps giving, North Korea is the horror story that keeps playing. Attempting to ignore it isn’t working, however. The U.S. should follow the South in addressing Pyongyang.”

Expectations should be low, even nil. But society is changing within the DPRK. When no other policy seems to work, why not give engagement a try?

President Obama has just signed the Every Student Succeeds Act, ending the era of No Child Left Behind. If nothing else, that big majorities of both parties in Congress felt the need to greatly ease federal force in elementary and secondary education – at least overt federal force – is a powerful testament to the breadth of the public backlash against federally driven standardization, testing, and “accountability.” That backlash may well have hit a tipping point thanks to the Common Core, through which the federal government attempted to get states not just to have state curriculum standards and tests, but national standards and tests. In other words, Washington began to influence the specifics of what children across the country would learn.

Is the ESSA much better than NCLB? No, and it could potentially end up taking very little power away from Washington even though the language surrounding it has been all about returning authority to states and districts. But that the rhetoric about the federal role has had to change so greatly is a very encouraging thing.

Of course, the work of getting Washington to obey the Constitution by getting out of education – and of fundamentally changing the education system to one based in freedom – is nowhere near complete. But at least things may be heading in the right direction.

A bill before Congress would practically give the Forest Service a blank check for firefighting. HR 167, the Wildfire Disaster Funding Act, proposes to allow the Forest Service to tap into federal disaster relief funds whenever its annual firefighting appropriation runs out of money. It’s not quite a blank check as the bill would limit the Forest Service to $2.9 billion in firefighting expenses per year, but that’s not much of a limit (yet), as the most it has ever spent was in 2006 when it spent $1.501 billion.

The Forest Service puts out fires by dumping money on them.

Having a blank check is nothing new for the Forest Service. In 1908, Congress literally gave the agency a blank check for fire suppression, promising to refund all fire suppression costs at the end of each year. As far as I know, this is the only time in history that a democratically elected legislature gave a bureaucracy a blank check to do anything: even in wartime, the Defense Department had to live within a budget.

Due to rising firefighting costs, Congress repealed the Forest Service’s blank check in about 1978, giving the agency a fixed amount each year and telling it to save money in the wet years to spend in the dry years. The agency actually reduced its costs for about a decade, but then two severe fire years in 1987 and 1988 led the Forest Service to borrow heavily from its reforestation fund. Congress eventually reimbursed this fund, and costs have been growing ever since.

In the 1970s, when firefighting costs were so out of control that Congress repealed the blank check, the agency spent about 10 to 20 percent of its national forest management funds on fire. Today, even though the agency’s budget has kept up with inflation, more than half goes for fire.

Yet there is some restraint on what the agency spends. In severe fire years, it has to borrow money from its other programs, putting a crimp in those activities. Congress eventually reimburses that money, but in the meantime fire managers are aware that their spending is having an impact on other agency projects.

The new law would eliminate even this restraint. Proponents argue that this will protect those other Forest Service programs from disruption, but since they are eventually funded anyway all it will really due is unleash fire managers to spend without limit (at least up to $2.9 billion, after which Congress will no doubt up the limit).

The Bureau of Land Management and other agencies in the Department of the Interior (the Forest Service, for those who don’t know, is in the Department Agriculture) have never had a blank check and spend considerably less on wildfire than the Forest Service. From 2010 to 2014, the Forest Service spent an average of $914 per acre burned, while Interior agencies spent an average of just $171. That’s a difference of more than five times.

Firefighters on the ground are acutely aware of this difference. They sometimes say that the Forest Service fights fires by dumping money on them. Firefighters who work for the BLM, Park Service, or other Interior agencies look with awe on Forest Service firefighters and the resources they can bring to bear against fire.

Yet a lot of that spending is of little value. The rest of the saying about the Forest Service dumping money on fires goes, “… until it rains, and then the rain puts the fire out.”

Some in the Forest Service argue that firefighting costs have grown because decades of fire suppression have left the forests more prone to fire. This is contradicted by a 2002 Forest Service report that found that, unlike southern forests, most western forests are not susceptible to becoming more fire prone in the absence of fire, and of those that are, only a portion have been significantly altered by years of fire suppression (which frankly, wasn’t very successful anyway). The report concluded that only about 6 percent of federal lands in the West were more susceptible to fire due to fire suppression.

Historically, acres burned have always been a function of the percent of land that is severely to extremely dry in the summer months (July, August, and September). The correlation between this number and the number of acres burned is greater than 90 percent. If a few fires have been larger in recent years, it is mainly because, since the 1994 South Canyon Fire that killed 14 firefighters, the Forest Service has allowed more acres to burn in order to protect firefighter lives.

The best solution would be to stop subsidizing national forest management altogether and let forest managers figure out how much to spend on fire out of the user fees they collect. Short of that, the Forest Service could contract out its firefighting needs to state forest fire agencies, which the BLM and other Interior agencies sometimes do to save money.

Instead, HR 167 proposes to deal with fire by dumping money on it. “Let’s be clear: we are always going to pay whatever it costs to fight catastrophic wildfires,” say the bill’s proponents. “We do this today, and we will continue to do so.” They obviously don’t realize that this approach simply makes firefighting more expensive.

Today is Human Rights Day, a time we should celebrate great advances in human freedom through history—the rise of the rule of law, the abolition of slavery, the spread of religious liberty, the secular decline of violence, respect for free speech, etc.—as well as honor those groups and individuals working to promote or safeguard human rights in the many parts of the world they are currently being violated or threatened.

At Cato, we have been honored to host and work with human rights champions from around the globe, all of whom have suffered persecution for speaking truth to power. The list includes renowned Soviet dissident Vladimir Bukovsky, independent Cuban blogger and journalist Yoani Sanchez, Malaysian politician and former deputy prime minister Anwar Ibrahim, Venezuelan opposition leader Maria Corina Machado, Russian liberty advocate Garry Kasparov, Chinese activist  Chen Guangcheng (sometimes known as the blind, “barefoot lawyer”) and many more.

Because we believe in the inherent dignity of individuals, human freedom is worth defending. For that reason, and because freedom plays a central role in human progress, it is also worth gaining a better measure and understanding of the spread of,  and limitations on, freedom around the world. That’s why we created the Human Freedom Index in conjunction with the Fraser Institute and the Liberales Institute. The index is the most comprehensive global measure of civil, personal and economic freedom so far devised. And although Human Rights Day technically commemorates the Universal Declaration of Human Rights, we think the Human Freedom Index and its definition of freedom—the absence of coercive constraint—can help us think more carefully about the state of freedom around the world.

You may view the index here, see how countries and regions of the world rank, examine how income and democracy relate to freedom, get a sense of how various freedoms relate to one another, and otherwise gauge how the world is doing on 76 distinct indicators.

Other Cato activities and publication that may be of interest on Human Rights Day include:

Recent events

“The Deteriorating State of Human Rights in China”

“Property Rights Are Human Rights: Why and How Land Titles Matter to Indigenous People”

“Islam, Identity, and the Future of Liberty in Muslim Countries”

“Magna Carta and the Rule of Law around the World”

“The Moral Arc: How Science and Reason Lead Humanity toward Truth, Justice and Freedom”

Publications

The Tyranny of Silence by Flemming Rose

The Power of Freedom: Uniting Human Rights and Development by Jean-Pierre Chauffour

Realizing Freedom by Tom Palmer

“Islam and the Spread of Individual Freedoms: The Case of Morocco” by Ahmed Benchemsi

“Capitalism’s Assault on the Indian Caste System,” by Swami Aiyar

“Magna Carta’s Importance for America,” by Roger Pilon

Before becoming wedded to statism in America, liberalism was a philosophy of liberation. But while leading liberals of the past advocated peace, many foreign (“classical”) liberals today favor war—at least, if conducted by America.

For instance, former chess champion Garry Kasparov has taken on the heroic but thankless task of battling for democracy in his Russian homeland. Alas, he also is surprisingly generous with other people’s lives. He recently declared: “Anything less than a major U.S. and NATO-led ground offensive against ISIS will be a guarantee of continued failure and more terror attacks in the West.”

Kasparov is confused over cause and effect, since terrorism most often follows intervention, as did the recent Islamic State strikes against France, Hezbollah and Russia. But there is a more basic point.

It’s easy for a celebrity Russian living in the West to argue that it is the job of Americans, with maybe a couple Europeans tossed in, to destroy ISIS, save Syria, and more. But there’s actually nothing liberal in pushing a broader, longer war on others.

Kasparov is not alone. A number of foreign liberals—Lithuanian, Russian, Slovakian, Swedish, for instance—have criticized American libertarians for advocating a non-interventionist foreign policy. They’ve instead argued that a “compelling” argument can be made for a “globalist” strategy.

Actually, that’s true only so long as one isn’t paying the cost of the foreign policy. As foreigners typically do not for American intervention, unless it is directed at them.

Indeed, foreign liberals who call for intervention mostly talk about America. After all, the Russian government is interventionist, but not in the right way. Lithuania, Slovakia, and Sweden have minuscule militaries. No one cares whether the latter three countries even have a foreign policy.

About the only option for them is to ask someone else, namely America, to defend them. Thus, when they advance “collective security,” they really mean Americans should do the creating and investing—and, ultimately, fighting.

But U.S. foreign policy should, indeed, must, be guided by what is in the interest of those doing the paying and dying, namely the American people. The Pentagon exists to protect them, and the liberal republic which governs them, not conduct grand “liberal” crusades around the world.

First, as social critic Randolph Bourne warned, “War is the health of the state.” Military spending is the price of one’s foreign policy. Moreover, war kills, disables, and wounds. The national security state generates economic controls, restraints on civil liberties, and restrictions on political freedoms.

Second, U.S. alliances act as a form of international welfare. Washington doing it ensures that no one else will do it. Yet today the European Union enjoys a greater GDP and population than America.

Third, an interventionist, warlike policy kills. Not just Americans, but foreigners. The foolish Iraq invasion unleashed sectarian war that killed perhaps 200,000 Iraqis before ebbing, only to flare again under the Islamic State, a malign force spawned by the conflict.

Fourth, Washington does badly at social engineering at home. It does far worse attempting to remake the world, especially the Middle East.

As I argue in the American Conservative, “Given these realities, the kind of aggressive U.S. policy toward Russia desired by many foreign liberals would be foolish and, yes, illiberal, for America. Russian activities harm the liberties of other peoples. Doing more to stop Moscow would do greater damage to the liberties of Americans.”

Moreover, where is Europe? The continent enjoys around eight times the GDP and three times the population of Russia.

Is the result a good outcome? No. But nothing in liberal philosophy requires residents of the globe’s most powerful “liberal” nation to bankrupt themselves, sacrifice their liberty, and court national destruction to try to remake the earth. Americans, especially traditional liberals, should choose domestic peace over international conflict. 

Fool me once, shame on you; fool me twice, shame on me. In this case, the Palmetto State, following the lead of other state and federal regulators, has added a new twist to that old saying: fool no one, pay $124 million to the treasury.

Ortho-McNeil-Janssen (“Janssen”) is a pharmaceutical company that distributes a popular antipsychotic drug known as Risperdal. In the 1990s and early 2000s, Risperdal was in fierce competition for market dominance and made some questionable claims about the drug’s side effects. The FDA investigated and compelled the company to correct some defective warning labels.

South Carolina regulators, however, despite the FDA’s settlement of the matter, commenced state action against Janssen under the state’s Unfair Trade Practices Act. That action worked its way up to the state supreme court, which ultimately confirmed a $124 million penalty against the company. That massive fine was sustained on the theory that each labeling violation was its own violation of the statute, worth up to $5,000 each, rather than the overall labeling violation counting as one singular misdeed.

Such a large penalty, disproportionate to the actual harm caused (none) runs afoul of the Eight Amendment requirement that “excessive fines [not be] imposed.” Cato has filed an amicus brief calling for the U.S. Supreme Court to reverse the decisions below and clarify the scope of the Excessive Fines Clause.

South Carolina’s statute, like many similar state laws, is poorly worded and fails to define whether each individual manifestation of a regulatory violation is cognizable as an offense. Taking advantage of that lack of specificity, South Carolina converted a potential $5,000 fine into a $124 million one. Because of the huge numbers that can be achieved by multiplying even modest per-violation fines, state and federal regulators are often able to secure grandiose settlements and thereby insulate their fines from judicial review.

Moreover, the state supreme court here accepted this theory in the face of no evidence of harm resulting from the allegedly improper statements. The U.S. Supreme Court has said that under the Excessive Fines clause, the monetary penalty imposed shall not be “grossly disproportional to the gravity of the defendant’s offense.” United States v. Bajakajian (1998). A finding of no harmful effect attached to 9- or 10-figure penalties blows any notion of proportionality out of the water.

And South Carolina is not the only state where this is occurring. For example, an Arkansas court imposed a $1.2 billion penalty for purported misstatements about the same drug at issue here, on the theory that the Arkansas Medicaid Fraud False Claims Act was violated each time the drug was prescribed or re-filled. Other cases have revealed penalties as high as 20 or 46 times the harm suffered by consumers.

The Supreme Court should take this opportunity to reaffirm that the Eighth Amendment’s Excessive Fines Clause imposes a judicially enforceable limit on grossly disproportional fines. It will consider next month whether to take up Ortho-McNeil-Janssen Pharmaceuticals, Inc. v. South Carolina.

The federal government uses protectionist country-of-origin labeling (COOL) regulations to privilege a certain segment of the U.S. cattle industry at the expense of meat processors, retailers, and consumers.  Due to a successful challenge by Canada and Mexico at the World Trade Organization, and the resulting threat of trade retaliation, Congress may finally repeal the law.  This is good news.

I explained last month in The Hill(Online) what’s wrong with the COOL law:

Under current U.S. regulations, meat produced in the United States and sold in American grocery stores must carry a label indicating in which country or countries the animal was born, raised, and slaughtered. In order to comply with this law, American meat processors have to keep track of where each animal was born or raised and segregate any border-crossing cattle to ensure accurate labels. The requirement imposes a significant cost on processors, which they can avoid if the only cattle they purchase are born and raised in the United States.

The WTO ruled against the labeling law because much of what the law requires burdens processors who buy Canadian cattle without conferring any benefit on consumers.

In a free market, consumers receive product information if they care enough about it to pay for that information.  Sometimes providing that information is cheap and sometimes it’s expensive. 

When the government comes in to mandate labels, it’s because someone wants consumers to have information that consumers don’t actually care enough about to pay for.  Mandated labels also reflect what the government (and lobbyists) want people to know, not what actually matters to consumers.  In the case of COOL, protectionists think Americans will buy beef from U.S.-origin cattle if they have that information thrust upon them even though what Americans really want is high-quality food at a low price. There’s a second layer of rent-seeking here, because compliance costs privilege domestic ranchers regardless of consumer response to the labels.

Supporters of the law rely largely on the claim that consumers have a “right to know” where their food comes from.  A quick look at the costs and benefits of providing this “right to know” through the existing mandatory country of origin labeling scheme reveals how simplistic formulations of positive rights do more harm than good.

If Americans have the right to know what country the animals they eat were born or raised in, do they also have a right to know what state a domestic animal came from?  What about the ranch it lived at or the direction it typically faced while grazing?  Do we have a right to know the animal’s name or favorite Taylor Swift song? 

The questions may sound silly, but can you answer them and explain why such labels should or should not be required?  The answer surely depends on what limiting principle, if any, defines the contours of the “right to know.”  Perhaps the right to know depends on the costs of acquiring or providing the information.  The rhetoric of rights, however, implies that the costs are irrelevant.  Weighing costs and benefits certainly won’t justify the COOL law, which was found to have a net negative impact on the U.S. economy by the Office of Management and Budget in 2004 and by the USDA itself in 2015.

Perhaps we only have a “right to know” things that matter—but does it matter that the animal whose meat you’re eating was born in Canada?  Who decides what matters?  Personally, I can’t think of a single reason to care what side of the 49th parallel my steak was on when it began its life.  Why is that more important than knowing which Dakota it came from or what pitch it mooed on?  Assertions of a vague right to know don’t answer any of these questions, which are at the heart of a policy debate over how strict and expensive COOL regulations should be.

What we do know is that the “right to know” is a catalyst for cronyism and inefficiency.  In a free market, the simple desire to know is enough to prompt the supply of information to consumers at a price they want to pay.

Over the last month, GOP presidential hopeful Donald Trump’s counterterrorism policy prescriptions have included creating a database of Arab and Muslim Americans, and more recently, a call for a ban on all Arab/Muslim immigration to the United States. While he has yet to call for the creation of WW II-style ethnic/religious concentration camps for our Arab/Muslim American neighbors, at this point nothing seems beyond the pale for Trump. Unfortunately, as I have noted before, when it comes to stigmatizing–if not de facto demonizing–Arab/Muslim Americans, he’s getting some help from DHS, DoJ, and the legislative branch.

Indeed, in the ongoing legislative battle to pass dubious cybersecurity legislation, House Homeland Security Chairman Mike McCaul (R-TX) is being wooed to support the revised cyber information sharing bill with a new carrot: the inclusion of his “countering violent extremism” (CVE) bill in the FY16 omnibus spending bill–a measure condemned earlier this year by civil society groups from across the political spectrum.

To date, McCaul has been opposed to the Senate’s approach to cybersecurity issues in the form of the Cybersecurity Information Sharing Act (CISA), and, keeping that in mind, House and Senate supporters have largely excluded him from their negotiations over a final cyber bill. By dangling the inclusion of his CVE legislation in the omnibus is a clear effort to get McCaul to drop his opposition to CISA by giving him one of his priorities: Passage of CVE legislation would create yet another bureaucracy in DHS to essentially monitor the Arab/Muslim American population for signs of extremism. 

The fact that a similar CVE effort in the U.K. failed miserably has not deterred Congressional boosters like McCaul from pursuing that same discredited approach at the expense of the civil and constitutional liberties of a vulnerable minority population. Additionally, the expense of American taxpayers is likely to be at least an additional $10 million per year for the proposed DHS CVE office. 

As former NBC Nightly News anchor Tom Brokaw reminded us this week, Arab and Muslim Americans have died for the United States in Iraq and Afghanistan. They have paid for our freedom with their blood and their lives. Proposals that would strip them of their rights and attempt to turn them into political and societal lepers should be repudiated–vocally and forcefully. Those who propose such un-American and unconstitutional discrimination are the ones who should be shunned and permanently confined to the unhinged fringes of American political and social life.

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