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In 2009, Canada and the European Union launched negotiations on a trade agreement, commonly known as CETA (which does not stand for Canada-EU Trade Agreement, as you might expect, but rather the Comprehensive Economic and Trade Agreement). This past weekend they reached a milestone, resolving a few outstanding issues so that the Agreement will soon be “provisionally applied” (after approval by the European Parliament). Full ratification will have to wait for some EU court decisions on the division of powers between the EU itself and the EU member states over certain issues (most importantly, the controversial investor-state dispute settlement provisions), and, depending on the court rulings, may also have to wait for approval by these member states for some aspects of the Agreement.

So if you’re counting, seven years into these trade negotiations, a final implemented deal still has not been concluded. And this is a deal with Canada, which is probably one of the least controversial trading partners around.

This all suggests that EU trade policy may face even more challenges than U.S. trade policy does right now. And this is something that worries people following the Brexit vote, in relation to upcoming UK trade negotiations to leave the EU and to come up with a new set of UK-EU trade arrangements. (They also worry more generally about the prospects for UK trade deals with anyone.) This is from the Guardian:

There are still several more chapters in the stop-start drama over the European Union’s comprehensive economic and trade agreement (Ceta) with Canada. The lifting of the Walloon veto clears the way for 28 EU governments to sign the treaty, allowing it to come into force on a temporary basis.

But 38 national and regional assemblies will have the final say on whether the treaty becomes a permanent legal document. It is a story that is likely to have implications for EU trade policy, but also for post-Brexit Britain.

“This Ceta saga has illustrated an additional layer of complexity that the UK will have to deal with,” said Lourdes Catrain, a partner at law firm Hogan Lovells. 

The British government is wary of parallels with Canada, although a government source acknowledged that Ceta showed “if we do end up in a world of an FTA [free trade agreement] outside the EU it isn’t going to be terribly easy”. …

I’ve written about how the UK should approach trade negotiations after Brexit, and I think the CETA experience confirms my earlier thoughts. If governments focus their trade deals on aspects of trade liberalization that are most beneficial and least controversial – such as lower tariffs, or mutual recognition of product regulations – the negotiations will not take very long and will generate wide support. On the other hand, if they insist on including provisions of questionable value that have strong opposition, such as investor-state dispute settlement, the process could drag on for many years. In my view, this makes a decision on what the UK should include in its trade negotiations pretty easy: Stick with the core trade liberalization issues, and get the deals done quickly.

Recently, I’ve worked with the excellent Cato Multimedia team on the first edition of a project you’ll be seeing more of: Ask a Cato Expert.

In this first episode, I’ve answered the question of “Should you take the government’s dietary advice?” I highlight the history behind our current dietary guidelines, and come to the conclusion one should not. Please take a look at the video below, and tweet us new questions at #AskACatoExpert!


The folks at the Kaiser Family Foundation will publish studies that explain how ObamaCare creates “an incentive to avoid enrolling people who are in worse health” such as “by making [insurance] products unattractive to people with expensive health conditions.”

Then, when their own polling shows three of the public’s top four health care concerns are the very sort of health-insurance features ObamaCare pushes insurers to adopt, they spin it as evidence the public does not want Congress to reopen ObamaCare.

As many predicted, especially us at Cato, the Affordable Care Act is beginning to make health insurance less affordable for many Americans. Part of the problem, in a nutshell, is precisely what my colleague Michael Cannon described in 2009, the young and the healthy avoiding signing up for health insurance and choosing to pay the fine, or, as Chief Justice John Roberts would call it, a tax.

MIT economist Jonathan Gruber, often described as an architect Obamacare, recently said that some of these problems can be alleviated by increasing the “tax” on those without insurance. “I think probably the most important thing experts would agree is we need a larger mandate penalty,” said Gruber.

Depending on how high the penalty goes, there could be a constitutional problem with that. In the opinion that converted the “penalty” into a constitutional “tax,” Chief Justice Roberts described the characteristics of the “shared responsibility payment” that made it, constitutionally speaking, a tax rather than a penalty. One of those characteristics is that the penalty was not too high: “for most Americans the amount due will be far less than the price of insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance, unlike the ‘prohibitory’ financial punishment in Drexel Furniture.” In Drexel Furniture, also known as the Child Labor Tax Case, the Court struck down a 10 percent tax on the profits of employers who used child labor in certain businesses. One reason the Court struck it down was because its “prohibitory and regulatory effect and purpose are palpable.”

Roberts actually went out of his way to describe paying the “tax” as a voluntary and permissible act. Even though they won, this should have irked the government a bit because the Chief was essentially giving millions of people permission to not buy insurance, which the government knew would severely undermine the law. In Roberts’s words:

Neither the Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurance, they have fully complied with the law.

Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance. We would expect Congress to be troubled by that prospect if such conduct were unlawful. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health insurance.

So could raising the “tax” turn it into a “penalty” and thus make it unconstitutional? Possibly. At some point, the tax would take on a punitive character, and, if people like Gruber get their way, the tax might have to be pretty stiff. With health insurance prices going up, it can still be cheaper to pay the “tax” rather than purchase insurance. And that tax might have to go up a lot to make some people change their minds. If the government ever tries to attach criminal penalties to noncompliance, then the argument is even stronger that it would become an unconstitutional regulation of commerce, given that the Court held that the individual mandate isn’t a valid use of the commerce power.

It’s all just another act in the ACA’s tragic comedy of errors.

When things aren’t going so well for a president, it can be useful to find a scapegoat. Foreign threats are also useful distractions. The movie “Wag the Dog” told us that, as if we hadn’t seen the pattern repeated many times in our political history.

We can see the same phenomenon in a recent Washington Post dispatch from Moscow about the Russian parliamentary elections, which resulted in a big win for political parties aligned with President Vladimir Putin. Andrew Roth interviewed a Moscow pensioner:

“The president’s party, who else would I vote for?” said Nadezhda Osetinskaya, a 67-year-old pensioner and former nurse who lined up before polls opened at 8 a.m. at a school in northwest Moscow.

Osetinskaya had her share of complaints. Prices for food and medicine are increasing, she said, and she required support from her children to live on her $250 monthly pension. She was unhappy with the quality of care at a hospital where she receives treatment for a kidney ailment. The city had carried out years of road work, she said, but the potholes on her neighborhood streets are legion, probably the result of corruption. 

But on broader questions, she enthusiastically supported Putin, lauding the recent annexation of Crimea and blaming Russia’s economic difficulties on a Western conspiracy. Voting for United Russia was a way to support Putin, she reiterated.

So this voter is unhappy with rising prices, poor health care, and government corruption. But she supports the longtime incumbent because he’s fighting a war and blaming Russia’s problems on someone else. (Maybe Snowball!) Blaming America has worked for the dictators of Cuba and Venezuela, not that they’ve ever allowed a real election.

Writers have often seen the true nature of rulers and politics. Henry Adams wrote a century ago, “Politics, as a practice, whatever its professions, had always been the systematic organization of hatreds.”

And Shakespeare understood the value of foreign military adventures to rulers long before that, when he wrote in Henry IV, Part 2,

I cut them off and had a purpose now To lead out many to the Holy Land, Lest rest and lying still might make them look Too near unto my state. Therefore, my Harry, Be it thy course to busy giddy minds With foreign quarrels… It still works. 

People shopping around on the insurance exchanges when the Affordable Care Act’s Open Enrollment period begins next week will find that the choices they have are limited and that insurance premiums have gone up significantly. A new brief from the Department of Health and Human Services reports an average increase of 22 percent for benchmark plans, and consumers in some states will face hikes as high as 116 percent in Arizona. 

The high profile exits of Aetna and UnitedHealth were covered at the time, but the report gives new insights into the aggregate effects of smaller exits and discontinuations as well. In the states included in the HHS brief, there was a net reduction of 73 issuers from last year, with Iowa and Maine being the only states to see a net increase in the number of issuers.

As might be expected, this significant drop in the number of issuers has led to a corresponding reduction in the number of choices available to consumers in most states. The trend prior to this year had been a reduction in the number of counties with only one insurer, but that quintupled this year in the wake of insurer exits, from 182 last year to 960 this year according to calculations by Sarah Frostenson.  In this year’s open enrollment 21 percent of the consumers in the 38 states the HHS brief included only had one issuer to choose from, and only 56 percent had three or more. The weighted average number of qualified health plans to choose from in a county dropped from 47 to 30.

Number of Issuers by State

Source: ASPE, “Health Plan Choice and Premiums in the 2017 Health Insurance Marketplaces.”

Note: Made with Datawrapper.

In the starkest illustration of this lack of choice and competition, 5 states have only one insurer in the entire exchange this year: Alaska, Alabama, Oklahoma, South Carolina, and Wyoming.

Two other states are in virtually the same position. Arizona, which made headlines earlier this year when it looked like Pinal County may end up with zero options on the exchange, has only on insurer in every county but one. North Carolina has only one insurer in 95 percent of its counties.

Many people are increasingly finding that when it comes to the ACA exchanges, there’s not much choice at all. Part of the reason there have been so many insurer withdrawals is that they’ve struggled to find a way to be profitable, or even sustainable, in this sphere. The plans that are remaining are implementing substantial premium increases this year, and in some cases they requested even higher increases in response to other issuers leaving in anticipation of absorbing some of their costly enrollees.

It might not be surprising that the premium increases are even higher in these states as remaining insurers aren’t being forced to compete and trying to reduce premiums as they would if there was more room for the free market here. The premium increase for the benchmark plan was well above the national average in every one of these states except for Wyoming, reaching as high as 69 percent in Oklahoma and an astronomical 116 percent in Arizona.

Premium Increases for States with Available Data

Sources: Charles Gaba, for weighted average increases; ASPE for benchmark increases.

Notes: Only states included in ASPE brief are included in the figure. * is for states with requested but not approved increases. Weighted averages assume enrollees renew existing policies.  Increases listed are prior to any applicable subsidies. For the roughly 1.4 million people who are losing their plan, no estimate for increase as they cannot be assumed to re-enroll. Made with Tableau.

Not everyone has the benchmark plan, some might opt for more comprehensive Gold plans, while others might decide to go with the more affordable Bronze plans, so looking beyond the benchmark increases is also important. The weighted average increase of all plans before subsidies is roughly 25 percent according to estimates from, with some variations between the sates.

While the majority of enrollees in the ACA exchanges are subsidized, those that are not and people buying plans off-exchange will have to bear the full brunt of these increases, and many of them could find maintaining coverage increasingly difficult, calling into question the ‘Affordable’ part of the law’s name. In Arizona, for example, more than a quarter of on-exchange enrollees last year were unsubsidized, and this share ranges from 9 percent to 32 percent in the states, accounting for millions of people.

Fewer choices and higher premiums are just two of the latest high-profile problems with the law. Their associated costs will feel all too real to millions of people trying to find some kind of coverage that won’t drain their pocketbooks in Open Enrollment next week. The Affordable Care Act has left a series of broken promises in its wake, but the biggest one might be in the name. 

Sam Hammond and Robert Orr of the Niskanen Center have published a very thoughtful paper proposing the establishment of a Canadian-style Universal Child Benefit. They make a compelling argument that replacing the current mish-mash of child-centered social welfare programs with a single cash benefit would be both more efficient and more humane than what we have today. But, before we get carried away and rush down the road to another new entitlement, there are many questions that need further exploration.

Hammond and Orr call for the elimination of eight existing programs (the dependent tax exemption, the portion of food stamps (SNAP) going to child recipients, five separate school nutrition programs, and the dependent care credit). They would also fold the existing Child Tax Credit (CTC) into their new benefit. This would free up $147.5 billion annually, allowing for a $2,000 per child cash grant on a budget-neutral basis.  The benefit would be phased out for incomes above $75,000 for single heads of household and $110,000 for a married couple.

There are several important advantages to this approach. First, cash is almost always preferable to in-kind programs. Cash payments are transparent, treat recipients like adults, and allow for greater flexibility of individual preferences and circumstances.  Moreover, the shift to cash will help break up the concentrated lobbying power of special interests who benefit from in-kind programs, reducing the constant pressure to increase benefits.  In general, as I have argued, we should be transitioning our entire social welfare system to cash.

Second, Hammond and Orr’s approach would treat families more equitably.  For example, current benefits reward parents who purchase external child care services, but do not benefit traditional stay-at-home parents.  Existing programs also tend to benefit those individuals, often more educated and even middle-class, who have the time and expertise to navigate the bureaucracy, rather than those families most in need.  A universal child benefit would extend benefits to many who have not been able to access them.

And, third, a universal child benefit could help reduce poverty.  Hammond and Orr estimate that their proposal would reduce poverty by 1.7 percentage points and bring some families out of deep poverty, using the Supplemental Poverty Measure.  If we can reduce poverty without any increase in expenditures, that has to be considered a positive.

Why then am I cautious about heading down this road?  First, while Hammond and Orr are sanguine about the effect on work incentives, I am less so. No doubt, the availability of funds for child care would help many mothers enter the labor force. But, at the same time, previous studies with guaranteed cash benefits have resulted in a decline in work participation.  Most recently, a study by David Price and Jae Song found some evidence that cash-assistance could lead to unintended and unanticipated long-term reductions in work effort for adult recipients, although it’s not yet clear what the underlying mechanisms are.

We should also recognize that a child benefit is a reward for having children, not for work.  Should we be in the business of redistributing from childless families to those with multiple children?  For that matter, should we be in the business of rewarding child-bearing by families well above the poverty level?  We may well want to offset the cost of having children for the poor, but do we want to do the same for the families earning $110,000?  And, what does this say about the relationship between individuals, the state, and the choices we make?

Finally, and most importantly, Hammond and Orr envision their proposal as a substitute for existing social welfare programs.  In this regard, they are heading down the road to a Universal Basic Income (UBI) advocated by Charles Murray. However, many liberal advocates of a UBI or child benefit see such a program as being added on top of existing welfare programs. Indeed, Hillary Clinton has called for doubling the current credit for children ages 4 and under, and eliminating the earnings exclusion for refundability.  Such an add-on approach would both increase dependence on government and be unaffordable. 

In particular Hammond and Orr’s call for eliminating child SNAP and school nutrition benefits would be heavy political lifting.  The demagoguery from advocates of the current welfare state would be amazingly easy.  That doesn’t mean that it’s an approach that shouldn’t be pursued.  It does mean that it should be pursued with great caution.

There are two types of markets for parking in Washington DC: the private market, which tends to charge what the market will bear, and the government, which charges a price that’s deemed to be “fair” and “non-exploitative” to the constituents in residential areas. How’s that working out for everyone?

Not very well, it turns out. The “fair” price on residential streets is just $25 a year, which is less than one percent of the private market rate. As a result there’s a large excess demand for parking on city streets, which has created a few predictable and undesirable consequences: For starters, people spend a lot of time driving around looking for “free” on-street parking, which congests streets, increases pollution, and makes streets less safe for pedestrians, as automobiles do quick U-turns and other risky maneuvers to claim a spot that suddenly opens.

The pro-free-on-street parking people will acknowledge these costs to some degree but would dismiss them in the name of “fairness” by trotting out the canard that some poor people drive to work and therefore this reduces inequality. The problem is that most people with cars parked on city streets are wealthy and most of the attendant consequences of the lousy deal are all borne by the less-well-off, most of whom do not own cars.

Making residential on-street parking nearly free means that those who avail themselves of it fight fiercely to limit competition for those spots. As a result, every proposed housing development in these neighborhoods are bitterly fought in the name of (pick one) historical preservation, neighborhood harmony, architectural purity, or some other vague sentiment that belie the true motive. In the last few years residents of Northwest DC have sought to declare an empty lot and a parking lot as “historic” and prevent any development on them, for no reason other than some fraction of those in the new apartment buildings to be constructed may also want to park on the street.

New developments in the city take years to get approved and are invariably shorter than the existing buildings they abut. The result of all this is that housing becomes more expensive, and middle-income residents find themselves struggling to remain in the neighborhood.

The city has come to realize this problem and has decided to combat it–not by tackling free parking or explicitly encouraging the construction of more housing but by strengthening rent controls in the city. Such a step would only exacerbate the housing shortage: if we are going to cap rental prices then developers will build less rental housing and either build more condos that they can sell and escape before more restrictions enter that market or else they will forego investing in housing altogether. There is already considerable backlash against developers who buy, expand, and subdivide large townhomes in the area for being “anti-family” although having four two bedroom apartments that cost $500,000 each is infinitely more amenable to middle income households than a single $2 million home.

Rent control will only make the city’s housing problem worse, but from a political perspective it works because it allows the rich progressives who benefit from the city’s inane parking giveaway to tell themselves that they aren’t the cause of the problem. Rent control helps those who currently have housing that will be protected but it hurts every middle class family who will be looking for housing in the future.

The true solution to high housing costs is simple: The government should stop giving away a scarce asset and set a market price to be charged to the wealthy residents of Washington DC who park their cars on city streets. Providing an implicit subsidy to some of the richest people in town is not only bad land-use policy but it also costs the low and middle income earners plenty by creating the economic conditions that dampen the construction of new homes, pushing up their rents.

And if the progressives and activists who make up the bulk of my neighbors have a problem with a policy change that reduces inequality, improves the environment, and makes the city more livable, they’re going to have to work a lot harder to defend their free parking. 

Some decent news to report: The latest National Assessment of Educational Progress (NAEP) science results are in, and scores for 4th and 8th graders have improved since 2009, the first year of the test. Unfortunately, 12th grade scores remained flat. Sound familiar?

Why the increases at the lower levels? A lot of people will trot out their pet reform: the Common Core, the Next Generation Science Standards, some federal program—I’ll throw in school choice—but my suspicion is none of these had much effect. My guess is people are simply focusing a little more on science than they were in 2009, driven by their personal feeling that grasping science is important, and will be increasingly so as the economy evolves. At this point many folks have probably been exposed to the mantra “STEM fields, STEM fields, STEM fields” enough times that a new emphasis on science has seeped into their brains, even if they don’t explicitly think to yell at their kids, “Jane and Johnny, STEM is important, and there’ll be no Xbox tonight unless you make a volcano in the kitchen right this instant! I mean it! I’ll get the baking soda…”

Few people could probably tell you what STEM stands for (that would be science, technology, engineering, and mathematics) but they have a strong sense science needs learnin’!

Or that could be wrong, too. If nothing else, it fails to explain why no improvement was seen in 12th grade scores. The fact is, just looking at NAEP scores tells us very little about why we got them, and the best we can do is make educated guesses. There is, frankly, no exact science when it comes to interpreting NAEP—especially given only two or three years of data—even if people may talk like there is.

Back in July 2015 I reminded Alt-M readers of a paper I presented at the 2012 Mont Pelerin Society meetings in Prague, as part of a session in which Otmar Issing, one of the euro’s architects, also took part. As I remarked in that last post, although Mr. Issing “put a much more favorable spin on the euro’s prospects for survival” than I did, I argued at the time that our apparent disagreement boiled down to the fact that while he chose to regard “the merest heartbeat from Frankfurt” as proof of the euro’s vitality, I considered it “for all intents and purposes already brain-dead.”

The gist of my argument was that the viability of the euro depended on strict enforcement of the 1997 Stability and Growth Pact. However, when both France and Germany were allowed to violate it in 2003, the pact ceased to be credible. “That change meant, in effect, that either the ECB’s independence or the no bailout commitment or both would have to give way, as both have indeed done.” That stage having been reached, I argued, the euro’s eventual disintegration was all but certain.

I’m bringing this up yet again because Central Banking Journal recently published a remarkable (but, unfortunately, gated) interview with Mr. Issing in which he acknowledges that the euro is indeed falling apart. What’s more, he agrees that the euro’s fate was sealed when “Germany and France violated the pact in 2003, delivering a fatal blow to the pact from which it has never recovered.”

The idea of installing a politically controlled mechanism of fiscal policy of member states via the Stability and Growth Pact has more or less failed. Market discipline is done away with by interventions by the ECB. So there is no fiscal control mechanism from markets or politics. This has all the elements to bring disaster for monetary union.

The euro’s other, critical flaw, according to Issing, consisted of European authorities’ decision to make the ECB responsible for banking supervision. Issing and other ECB economists strenuously opposed that step, having been

concerned about conflicts with monetary policy and interactions with politics when it comes to rescuing individual banks — as, ultimately, rescues involve taxpayer money, rather than central bank money. This brings the central bank unavoidably into contact and conflict with national fiscal policy.

“How,” Issing and his colleagues wondered, “can you separate monetary policy from effort that supports the weak banks to ensure they survive?” How indeed! Once the Stability and Growth Pact was a dead letter, “[q]uite a few countries — behaved as though they could still devalue their currencies.” Those countries’ creditors in turn, European banks among them, had reason to expect the ECB to intervene in the bond markets to keep them from failing. Indeed, “nobody” really believed

that the ‘no-bail-out’ principle would be observed in a crisis. There was a belief the ECB would come in. And now of course, the ECB is heavily invested in these bonds whose spreads are artificially low, meaning an exit from QE policy is more difficult, as the consequences potentially could be disastrous.

Another problem with the design of the European Monetary Union, Issing observes, “was that once a member, you remain a member.” In retrospect,

It would have been better to demonstrate a country could leave the euro and rejoin from a much stronger position later. Such an event would have clarified that being a member of the ‘euro club’ can only come by meeting the club’s economic rules. But this opportunity was missed.

And now? “Realistically,” Issing says,

it will be a case of muddling through, struggling from one crisis to the next one. It is difficult to forecast how long this will continue, but it cannot go on endlessly.  Governments will pile up more debt — and then one day, the house of cards will collapse.

[Cross-posted from]

At a monetary conference in Vienna back in 2014, the distinguished Frenchman, my friend, and occasional collaborator Jacques de Larosière proclaimed that the current world monetary order should be termed an “anti-system.” He has a point – an important point. Among other things, such an anti-system invites an enormous amount of instability, as well as uninformed loose talk that influences public opinion and policy.

The Chinese yuan has been at the center of much of the recent misinformation and disinformation about currencies. For example, during the first presidential debate between Donald Trump and Hillary Clinton, Trump fingered China as the world’s best practitioner of currency devaluations – devaluations that Trump claims power China’s exports. Clinton didn’t object to Trump’s thesis. Indeed, she boarded the same bandwagon. And with the Chinese yuan making new lows, the ever-misinformed mercantilists who populate Washington, D.C. are clinging to the bandwagon, too.

What are the facts? Well, they contradict the Beltway’s conventional wisdom. Chinese exports have steadily risen since 1995, but they have not been powered by a depreciating yuan. In fact, the yuan has slightly appreciated in both nominal and real terms. The accompanying charts tell that story. Note that the real and nominal charts tell the same story because the inflation rates in the U.S. and China have been similar over the past two decades.

You Ought to Have a Look is a regular feature from the Center for the Study of Science.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

One of our favorite lukewarmers, Matt Ridley, was invited by the Global Warming Policy Foundation to give its 2016 Annual Lecture. He certainly did not disappoint. While Matt titled his speech “Global Warming Versus Global Greening” that title only suggested part of what he had to say. We offer “The Hows and Whys of Lukewarming” to be a more apt descriptor:

These days there is a legion of well paid climate spin doctors. Their job is to keep the debate binary: either you believe climate change is real and dangerous or you’re a denier who thinks it’s a hoax.

But there’s a third possibility they refuse to acknowledge: that it’s real but not dangerous. That’s what I mean by lukewarming, and I think it is by far the most likely prognosis.

I am not claiming that carbon dioxide is not a greenhouse gas; it is.

I am not saying that its concentration in the atmosphere is not increasing; it is.

I am not saying the main cause of that increase is not the burning of fossil fuels; it is.

I am not saying the climate does not change; it does.

I am not saying that the atmosphere is not warmer today than it was 50 or 100 years ago; it is.

And I am not saying that carbon dioxide emissions are not likely to have caused some (probably more than half) of the warming since 1950.

I agree with the consensus on all these points.

I am not in any sense a “denier”, that unpleasant, modern term of abuse for blasphemers against the climate dogma…. I am a lukewarmer.

And from there, Ridley goes on to do a laudable job of laying out the case that future climate change from human activities will prove to be towards the low end of climate model projections—but squarely within the bounds of consensus expectations. As Matt puts it:

…I am not disagreeing with the consensus on climate change.

There is no consensus that climate change is going to be dangerous. Even the IPCC says there is a range of possible outcomes, from harmless to catastrophic. I’m in that range: I think the top of that range is very unlikely. But the IPCC also thinks the top of its range is very unlikely.

Be sure to check out the whole thing for a great review of why carbon dioxide emissions are not the civilization-ending monster that many climate activists would have you believe (plus there are a few surprises in there that you won’t want to miss).

If Matt’s arguments are not enough to convince you that urgent actions to mitigate carbon dioxide-induced climate change are not required, then, perhaps, Dave Roberts’ piece for Vox should at least illustrate to you why they are not working.

In his in-depth article “The Left vs. a Carbon Tax,” Roberts describes the goings-on in Washington state where Initiative 732, a revenue neutral carbon tax (of the type featured by many pitches to conservatives), is on the ballot this year, but is garnering very little support from environmental organizations. Roberts illuminates the many alliances and allegiances among the various climate activist groups operating in the state and the complicated reasons why, by and large, they oppose I-732. Probably the biggest reason is that it is revenue neutral—a feature that was supposed to be its main selling point. It seems rather than give the money collected through a carbon tax back through a combination of corporate tax cuts, a reduction of the state sales tax, and tax rebates for low income households, most activist organizations want to spend the money on their particular pet projects—green energy initiatives, climate justice, clean water, healthy forests, etc. (however they define those things). Consequently, they have pulled (or never even offered) their support.

Here’s a teaser:

Here’s the situation. There’s a carbon tax on the ballot in Washington this November, meant not just to put the state on the path to its climate targets but to serve as an example to other states.

The measure, called Initiative 732, isn’t just any carbon tax, either. It’s a big one. It would be the first carbon tax in the US, the biggest in North America, and one of the most ambitious in the world.

And yet the left opposes it. The Democratic Party, community-of-color groups, organized labor, big liberal donors, and even most big environmental groups have come out against it.

Why on Earth would the left oppose the first and biggest carbon tax in the country? How has the climate community in Washington ended up in what one participant calls a “train wreck”? (Others have described it in more, er, “adult” terms.)

That turns out to be a complex and ill-fated story, revealing divisions among climate hawks — over who pays, who benefits, and who decides — that will not long stay confined to the West Coast. The future of climate politics is playing out in Washington state, and it is not pretty.

The full article is a remarkable story and provides further evidence for our view that a carbon tax is a bad idea, both in theory and in practice.

Restricting carbon? No. But what about restricting hydrofluorocarbons (HFCs)?

An amendment to the Montreal Protocol (which phased out ozone destroying chlorofluorocarbons, CFCs) was agreed to at a U.N. meeting in Kigali, Rwanda last week. Under the agreement, HFCs—manmade chemicals primarily used in refrigeration systems and air-conditioners, and which are safe for the ozone layer but which are powerful greenhouse gases—are to be phased down over the next several decades.

Some future projections suggest rapid growth in HFC use in developing countries as air conditioning systems become more affordable, and cheap, reliable energy becomes more available. Recent estimates of the amount of global warming that will result from the projected expansion of HFC use range from near 0.0°C up to about 0.5°C by 2100.  Unsurprisingly, the 0.5°C number is the one touted by the amendment’s supporters—but the closer we look, the more this figure is a bald-faced exaggeration. It basically assumes that HFCs come to dominate the refrigerant market in developing countries by 2050, and continue to do so to 2100. It also assumes the sensitivity of temperature to a doubling of carbon dioxide is about 3.0°C.

More recent analyses (as we have described in this series) indicate that the sensitivity is perhaps half of that value, which drops the top temperature change to around 0.25°C. And the assumption that HFCs will be everyone’s go-to refrigerant through 2100 is ludicrous.

There are already a number of refrigerants available that can do many of the jobs that HFCs do; several are cheaper, more efficient and simple. Ammonia, for example, used to be the refrigerant of choice but it was replaced by chlorofluorocarbons because of occasional leaks and fires. Use of these ozone-damaging chemicals was cheaper and easier than making a disaster-safe cooler, which nonetheless is certainly possible. Good old carbon dioxide is another viable replacement for some applications and can provide a double benefit.  It requires a much higher pressure which makes the compressor quite hot—and those clever Norwegians are already selling combined units where that heat is then used to provide hot water. What’s not to like? And there are others (see here for a rundown).

So the 0.25°C maximum temperature reduction is itself high, depending on what comes along to replace HFCs with or without the Kigali amendment.     

What we’re saying here is pretty much in agreement with a recent post by Oren Cass of the Manhattan Institute:

Here, the chosen baseline appears to be a 2013 study in Atmospheric Chemistry and Physics that rejected previous forecasts for HFC growth and introduced a much higher one. The authors acknowledged this and explained their scenario was “not necessarily a more accurate forecast of future HFC emissions than other scenarios, but a projection of what can happen if developed countries continue current practices in [adopting] HFCs and if developing countries follow this path as well.” Generally, their model discounted “technological and economic developments,” which are already leading to adoption of HFC alternatives in the developed world. It assumed HFC use, still in its infancy today, would be ubiquitous and still growing alongside GDP by the end of the twenty-first century.

Now, all of our analyses could be wrong and the world is just going to opt in to HFC-only refrigeration.  But given the behavior of technological development over the past 100 years, we doubt it.

Having said all that, there’s one reason to support the largely  irrelevant  Kigali amendment:  It has to be approved by a two-thirds majority of the U.S. Senate.  And when that comes up, how about the House and the Senate declare last December’s Paris agreement on climate change to be precisely what it is—another treaty requiring the same treatment in order to have the force of law.

If that sounds like faint praise, it is!

Recent reportage in the Wall Street Journal by Matt Wirz, Carolyn Cui, and Anatoly Kurmanaev states that Venezuela’s annual inflation rate is 500 percent. The authors fail to indicate the source for that 500 percent figure. Knowing that the most accurate estimate of Venezuela’s current annual inflation rate is 55 percent, I concluded that the Journal was way off and set out to determine the source for its incorrect figure. The most likely candidate turned out to be the International Monetary Fund’s (IMF) October 2016 World Economic Outlook (WEO), which contains an estimate for Venezuela’s annual inflation. This report projects Venezuela’s annual inflation to average 475.8 percent for 2016, a far cry from my current estimate of 55 percent. The IMF’s figure, though, gives the appearance of a finger-in-the-wind approach because no methodology accompanies the IMF’s October report. The 95% rule reigns – 95% of what you read in the financial press is either wrong or irrelevant. 


So, how does one make an accurate estimate of inflation in countries experiencing elevated inflation levels? The Johns Hopkins-Cato Institute Troubled Currencies Project calculates reliable inflation estimates. These are based on changes in black market (read: free market) exchange rates. The principle of purchasing power parity (PPP) is used to translate exchange rate changes into estimates of implied inflation rates. When inflation is elevated, this method provides deadly accurate estimates.

In the third and final debate last week, Hillary Clinton tried to flex her fiscal responsibility bona fides by vowing  that she “will not add a penny to the debt” on three separate occasions. That must mean she has comprehensive reforms to address entitlements, rein in other spending, and reduce our commitments abroad, if she is not going to add a penny to the current gross debt of $19.7 trillion, right? No, not really.

She is only promising not to make things worse relative to the current baseline, which projects the debt increase to $28.2 trillion over the next decade. To be fair, her plans would add less to the debt than Donald Trump’s, although that’s almost entirely due to an array of new taxes. Even with those hikes, the debt would increase a lot more than a penny were she to win, and neither major party candidate has put forward a substantive plan to address the problems with the country’s fiscal health.

And that’s just the projection over the next decade. The long-term fiscal picture is even bleaker. In the baseline scenario from the most recent Long-Term Budget Outlook from the Congressional Budget Office, federal debt held by the public will almost double by midcentury, from around 77 percent of GDP to more than 140 percent by 2046. Kicking the can down the road, which is effectively the plan by for both candidates in the debate due to their lack of an actual plan, would only increases the magnitude of the changes that will eventually be needed.

Clinton may have meant that her specific proposals are paid for, but even that is not accurate, as the Committee for a Responsible Federal Budget (CRFB) estimated that her proposals would add $200 billion to it, even with the assumption that she would be able to help shepherd immigration reform through Congress and attributing that positive fiscal impact to her. If she were to stabilize the debt to GDP ratio and restrict herself to her preferred method of hiking taxes on high earners (eschewing spending cuts or entitlement reform), she’d have to raise the top tax rate all the way to 61 percent, which would impose significant new disincentives and economic distortions. 

She is not promising that she would not “add a penny to the debt” or at least that can’t be what she means, unless she wants to set herself up to break that promise shortly after taking officer were she to win. She’s promising not to further accelerate our movement down the unsustainable fiscal path we’re on now, which is hardly comforting. Neither of the candidates at the debate last week has put forward any substantive plan to do anything to address the debt or our fiscal trajectory, despite what promises they may have made. 

Last Friday, I gave the opening remarks at the International Finance Corporation’s annual FinTech CEO Summit — a meeting of many of the top executives involved in developing cutting-edge alternatives to conventional means for raising capital and making payments, among other things. Because the event wasn’t recorded, I thought I’d share the remarks with you here.


I’m honored to be able to address an audience consisting of many of the world’s leading financial-market innovators. I don’t often get invited to speak on the subject of financial technology. That’s probably because the most advanced piece of financial technology concerning which I possess any real expertise is the steam-powered coining press that James Watt and his business partner Matthew Boulton designed a bit more than three centuries ago.

Still I know enough about more recent developments to realize that, so far as the future progress of financial innovation is concerned, these are critical times. Never has there been a more crying need for financial innovation — innovation to overcome the infirmities, not only of conventional private-market sources of capital and payments services, but also of the world’s official monetary systems. Yet never has the threat government regulators and their academic advisors pose to the unfolding of such innovations been so obvious.

Consider Harvard (and former IMF) economist Ken Rogoff’s proposal for doing away with official paper money, as presented in his new book, The Curse of Cash, which I happened to be reading when I was asked to speak to you today. A decision by the Fed to quit issuing paper currency would ordinarily create new opportunities for private-market innovators to supply new and perhaps superior substitutes for cash.  But so far as Rogoff is concerned, for his plan to succeed in cutting back on crime and tax evasion, the government would have to be “vigilant about playing Whac-a-mole as alternative transaction media come into being,” by making it difficult if not impossible for retailers and financial institutions to accept them. That sort of talk sends chills up my spine; it ought to scare you as well.

Or consider this remark, also from Rogoff’s book:

As currency innovators have learned over the millenia, it is hard to stay on top of the government indefinitely in a game where the latter can keep adjusting the rules until it wins. If the private sector comes up with a much better way of doing things, the government will eventually adapt and regulate as necessary to eventually win out.

For some reason Rogoff doesn’t seem to mind this. Yet surely it ought to be obvious that, when governments “win-out” by suppressing “much better ways of doing things,” the public as a whole — and not just or mainly drug dealers and tax evaders — looses.

But the more serious consequences of a “Whac-a-mole” approach to financial innovation consist, not of its immediate costs to consumers, but to the downstream innovations that it prevents.

As economist Israel Kirzner puts it in an excellent essay, “The Perils of Regulation,” while regulations of the sort Rogoff favors are only supposed to block particular innovations that may have some undesirable features, those regulations also end up blocking desirable innovations that haven’t been foreseen by anyone, including the regulators. What’s more, the same regulatory interference is instead likely to “set in motion a series of entrepreneurial actions that … may well lead to wholly unexpected and even undesirable final outcomes.”

In any event, Rogoff is surely mistaken in claiming that governments are bound to prevent financial innovations from taking place even when they are desirable. Whether they do so or not depends on public opinion.

It’s true that the public has mixed feelings about financial innovation; it has seen both good and bad consequences of such. But there are good reasons for believing that unhindered financial innovation, whatever its risks, is ultimately a lot safer than heavy-handed government interference in the financial sector. Those reasons are necessarily based on the historical record, since no one, except perhaps some of you, can know just what sorts of financial innovations the future may offer.

Consider U.S. experience. Contrary to conventional wisdom, unwise regulations have  been responsible for most if not all of the 19th-century woes of the U.S. financial sector, from wildcat banking and counterfeiting prior to the Civil War to recurring banking crises afterwards. I would regale, or more likely bore you, with the details if I had time. But instead I must settle for pointing out that Canada, with its then-identical gold dollar, avoided practically all of them. Yet Canadian banks were less, not more, heavily regulated than their U.S. counterparts. Nor did Canada establish a central bank until 1935. (Can anyone guess how many of its banks failed during the 1930s?)

When regulations cause trouble, private-market financial innovation sometimes comes to the rescue. Those crises that rattled the U.S. economy in the decades before the Fed’s establishment were due in large part to government regulations that made it very costly, if not impossible, for banks to issue enough paper currency to meet their customers’ needs. Crises happened when customers, anticipating shortages, rushed to get cash before the banks ran out. In response, private clearinghouses in New York City and elsewhere began supplying their own emergency currencies to supplement banks’ supplies. In all they issued hundreds of millions of dollars worth of “clearinghouse certificates” which, believe it or not, was a lot of money back then — enough to make the panics a lot less destructive than they might have been otherwise.

Regulatory solutions to crises are, in contrast, often less reliable to private market ones. During the Great Depression, when bank failures once again threatened to trigger a rush for cash, some old-timers from the New York Clearinghouse begged for permission to issue clearinghouse certificates again. But Fed officials wouldn’t let them. “We’re in charge now,” they said. “And we can issue all the genuine currency that’s needed.” I suppose you know how well that went.

In response to crises the root causes of which are often traceable to misguided past regulatory interference, regulators also tend to erect further barriers to desirable financial innovations. Yet where one sort of innovation is prevented, other, sometimes far more dangerous innovations, often take root.

To take an extreme case, in the very earliest days of banking in the U.S., many states and territories, chose to ban banks altogether. As banking historian Bray Hammond put it, people back then were convinced that, because banks were dangerous monopolies, it was best to have as few of them as possible!

How did that go? Instead of having their own banks to turn to, and no local currency they could rely on, the citizens of those places were compelled to use the notes of far-away banks — or what they imagined to be such. For they quickly became the favorite victims of counterfeiters, who supplied them with fake currency purporting to be from the best of New England banks; and not having those banks nearby to root out the fakes, they fell for it all too often. (Those same fakes were, on the other hand, never seen in New England itself, where alert bank tellers would have spotted them in no time.)

Nor have things changed much. In the 30s, regulators decided they might protect bank customers by preventing bankers from paying interest on deposits. It took some time, and plenty of inflation, but by the mid 80s that step had given rise to Money Market Mutual Funds, which eventually came to play a central part of the “shadow banking system” the collapse of which marked ground zero of the recent financial crisis. The point isn’t that Money Market Funds are necessarily a bad thing; its simply that regulators are not very good at anticipating the ultimate consequences of the regulations they impose. Regulation weaves a tangled web, indeed.

Financial systems, like economies generally, are organic entities. They must be allowed to flourish in a natural way.  Financial innovations will, no doubt, lead to occasional troubles even absent government interference. But those troubles will in turn sponsor further innovations aimed at correcting them. Over time, a stable and highly efficient system tends to develop. That’s what happened in Canada, while its system was relatively free; and it is what happened in numerous other countries.

With your help, if we let it, it may finally happen here.

Thanks very much.

[Cross-posted from]

This video, “Playground” [YouTube, Facebook] makes quite an impression. It shows a scene of schoolyard bullying but takes the side of the jeering, taunting mob – in the name of voting. It is one of a series of 30 second videos put out by a group calling itself Civic Innovation Works, encouraging a vote in the general election on November 8 and seemingly intended as public service announcements.  The others in the series appear to be similar in message, but lacking in this one’s outrageousness (although one does present a fantasy about publicly shaming a non-voter).  

On the off chance that Civic Innovation Works was someone’s idea of an elaborate parody I looked them up. I found that Fenton, the well-known progressive/”social change” public relations agency, takes credit for one of the other videos in the series.

So it would look as if they are on the level. It is almost as if they were trying with “Playground” to convince viewers that electoral politics makes people worse.

Sweden punches way above its weight in debates about economic policy. Leftists all over the world (most recently, Bernie Sanders) say the Nordic nation is an example that proves a big welfare state can exist in a rich nation. And since various data sources (such as the IMF’s huge database) show that Sweden is relatively prosperous and also that there’s an onerous fiscal burden of government, this argument is somewhat plausible.

A few folks on the left sometimes even imply that Sweden is a relatively prosperous nation because it has a large public sector. Though the people who make this assertion never bother to provide any data or evidence.

I have five responses when confronted with the why-can’t-we-be-more-like-Sweden argument.

  1. Sweden became rich when government was small. Indeed, until about 1960, the burden of the public sector in Sweden was smaller than it was in the United States. And as late as 1970, Sweden still had less redistribution spending that America had in 1980.
  2. Sweden compensates for bad fiscal policy by having a very pro-market approach to other areas, such as trade policy, regulatory policy, monetary policy, and rule of law and property rights. Indeed, it has more economic freedom than the United States when looking an non-fiscal policies. The same is true for Denmark.
  3. Sweden has suffered from slower growth ever since the welfare state led to large increases in the burden of government spending. This has resulted in Sweden losing ground relative to other nations and dropping in the rankings of per-capita GDP.
  4. Sweden is trying to undo the damage of big government with pro-market reforms. Starting in the 1990s, there have been tax-rate reductions, periods of spending restraint, adoption of personal retirement accounts, and implementation of nationwide school choice.
  5. Sweden doesn’t look quite so good when you learn that Americans of Swedish descent produce 39 percent more economic output, on a per-capita basis, than the Swedes that stayed in Sweden. There’s even a lower poverty rate for Americans of Swedish ancestry compared to the rate for native Swedes.

I think the above information is very powerful. But I’ll also admit that these five points sometimes aren’t very effective in changing minds and educating people because there’s simply too much information to digest.

As such, I’ve always thought it would be helpful to have one compelling visual that clearly shows why Sweden’s experience is actually an argument against big government.

And, thanks to the Professor Deepak Lal of UCLA, who wrote a chapter for a superb book on fiscal policy published by a British think tank, my wish may have been granted. In his chapter, he noted that Sweden’s economic performance stuttered once big government was imposed on the economy.

Though the Swedish model is offered to prove that high levels of social security can be paid for from the cradle to the grave without damaging economic performance, the claim is false (see Figure 1). The Swedish economy, between 1870 and 1950, grew faster on average than any other industrialised economy, and the country became technologically one of the most advanced and richest in the world. From the 1950s Swedish economic growth slowed relative to other industrialised countries. This was due to the expansion of the welfare state and the growth of public – at the expense of private – employment.57 After the Second World War the working population increased by about 1 million: public employment accounted for c. 770,000, private accounted for only 155,000. The crowding out by an inefficient public sector of the efficient private sector has characterised Sweden for nearly half a century.58 From being the fourth richest county in the OECD in 1970 it has fallen to 14th place. Only in France and New Zealand has there been a larger fall in relative wealth.

And here is Figure 1, which should make clear that what’s good in Sweden (rising relative prosperity) was made possible by the era of free markets and small government, and that what’s bad in Sweden (falling relative prosperity) is associated with the adoption and expansion of the welfare state.

But just to make things obvious for any government officials who may be reading this column, I augment the graph by pointing out (in red) the “free-market era” and the “welfare-state era.”

As you can see, credit for the chart actually belongs to Professor Olle Krantz. The version I found in Professor Lal’s chapter is a reproduction, so unfortunately the two axes are not very clear. But all you need to know is that Sweden’s relative economic position fell significantly between the time the welfare state was adopted and the mid 1990s (which presumably reflects the comparative cross-country data that was available when Krantz did his calculations).

You can also see, for what it’s worth, that Sweden’s economy spiked during World War II. There’s no policy lesson in this observation, other than to perhaps note that it’s never a good idea to have your factories bombed.

But the main lesson, which hopefully is abundantly clear, is that big government is a recipe for comparative decline.

Which perhaps explains why Swedish policymakers have spent the past 25 years or so trying to undo some of those mistakes.

One of the main arguments proponents of Medicaid expansion make, at least on the fiscal side, is that it would save money as people gaining Medicaid coverage would reduce their use of expensive visits to the Emergency Department (ED). An earlier study from the Oregon Health Insurance Experiment threw some cold water on that theory, as it found that getting Medicaid actually increased the number of ED visits by 40 percent. Some analysts postulated that this increase was only temporary because it was due to either pent-up demand for health care services, or because new enrollees did not have established relationships with doctors. The thinking was that after enrollees became familiar with their coverage or addressed long-gestating health problems, the reductions in ED use and the associated cost savings would materialize.

A new report analyzing a longer time horizon finds that this is not the case, and there is “no evidence that the increase in ED use due to Medicaid coverage is driven by pent-up demand that dissipates over time; the effect on ED use appears to persist over the first two years.” This is another blow to the oft-repeated claim that Medicaid expansion will lead to significant savings from reduced Emergency Department utilization, and the effect actually seems to work in the other direction.

The Oregon case is important because it is one of the few instances of random assignment in health insurance, as the state wanted to expand Medicaid but had funding constraints, so it employed a lottery to determine who would get coverage. 

In this new update, the researchers see if there are any time patterns or signs of dissipation when it comes to the impact of Medicaid percent of the population with an ED visit or the number of ED visits per person. They expand upon the earlier utilization study to analyze the two years following the 2008 lottery and break up into six-month segments to see if there are any signs of the effects dissipating.

As they explain, “there is no statistical or substantive evidence of any time pattern in the effect on ED use on either variable.” In the first six-month tranche Medicaid coverage increased the number of ED visits per person by about 65 percent relative to the control group, and the estimates for the following three periods were similar and mostly statistically indistinguishable from each other. They also find that Medicaid increases the probability of an ED visit in the first period by nine percent, and the impact in the subsequent periods does not differ significantly. 

Estimated Effect of Medicaid Coverage on Emergency Department Use over Time

Source: Finkelstein et al., New England Journal of Medicine (2016).

A similar analysis for hospital admissions comes to the same result: “no evidence statistically or substantively of a time trend in the impact of Medicaid on having a hospital admission or on the number of days in the hospital.”

They also fail to find evidence that Medicaid coverage makes doctor’s visits and ED use more substitutable, and again, if anything the effect works in the other direction. The authors suggest that this could be due to differences in how people respond to gaining access to Medicaid, or it could be that Medicaid increases the complementarity of these different dimensions of health care.

Whatever the underlying mechanism, there is no evidence here that Medicaid coverage leads to reductions in utilization in other dimensions. In fact, Medicaid coverage makes people more likely to visit the Emergency Department, and increases their number of visits relative to their baseline. This new study confirms that these effects were not temporary and do not dissipate, at least over the two year period they were able to analyze. Expanding Medicaid coverage will not lead to reductions in inefficient, inexpensive Emergency Department visits, and there will be no associated cost savings, undermining one of the common fiscal arguments for expansion. 

The Seattle Post-Intelligencer says it has found the best Seattle homes for Millennials. Judging by the former paper’s suggestions, Seattle Millennials should move to Houston. Houston may not have Mt. Rainier, but it has beautiful lakes, a sea coast that is just about as nice as Washington’s (though not as nice as Oregon’s), and most important, it doesn’t have urban-growth boundaries which means it has much more affordable housing.

Click any photo to go to the listing for that property.

The P-I’s first suggestion is a 720-square foot, two-bedroom, one-bath home on a 5,000-square-foot lot. On the plus side, the living room has hardwood floors. On the minus side, the asking price is $259,950–and if Seattle’s housing market is anything like Portland’s, it will go for more than that. At the asking price, the cost is $361 per square foot.

As an alternative, allow me to suggest this 720-square-foot home in Houston’s University Area, not too far from downtown. It has new paint and an updated kitchen and, like the Seattle home, it is on a 5,000-square-foot lot. Unlike the Seattle home, the cost is just $86,500, just under a third of the Seattle house. That’s just $120 per square foot–and the sellers will probably accept a little less.

The P-I’s next suggestion is this cute little home in North Seattle. At 770 square feet, it is only a little larger than the first one, but has hardwood floors throughout, plus a covered patio and a firepit in the backyard. The lot is about 6,500 square feet. The owners are asking a mere $349,000, which–if you can get it for that–is $453 a square foot.

As an alternative, consider this 3-bedroom, one-bath home in East Houston that is 902 square feet and sits on a 8,265-square-foot lot. At $108,000, it is less than $120 per square foot.

If 770 square feet isn’t going to do it for you and you really do have $350,000 to spend, how about this beautiful 4-bedroom, 3-1/2-bath, 3,458-square-foot home in Humble, a suburb just north of Houston? Sitting on a 9,000-square-foot lot that is just steps away from Lake Houston, the owners are asking $349,000, or $101 per square foot.

Or perhaps you don’t mind living in a smaller house, but like the idea of getting away to a lake now and then. If so, buy a smaller home in Houston for $100,000 or so and then also buy this home on Lake Tristan, which is about two hours from downtown Houston–perfect for weekend getaways.

The house is 716-square-feet with two bedrooms and two baths and has its own dock on the lake, as shown above. While it looks like the gazebo over that dock could use a little work, the house itself is in great shape and being offered for just $99,500, or $139 per square foot. This plus either of the less expensive home in Houston would cost far less than the least expensive home suggested by the P-I.

The Post-Intelligencer has one more suggestion, this condominium that has been carved out of what looks like a remodeled apartment building in the popular Capitol Hill neighborhood. It has hardwood and tile floors, and it includes a free exercise program: since it is on the top floor, you get to do stair climbs every day. The 1-bedroom, 1-bath condo is just 499 square feet, so you won’t have to do a lot of housekeeping, and it comes with a parking space–for your bicycle. The price is only $285,000 ($571 per square foot), plus annual maintenance fees of $356.

If you like the idea of a condominium near downtown, let me suggest this beautiful loft in Houston’s Eado (east of downtown) neighborhood, which claims to be the “Art & Soul of the City.” At 1,449 square feet, plus carport parking that’s actually big enough for your car, the two-bedroom, two-bath loft is nearly three times as big as the one on Capitol Hill. The kitchen features granite and stainless steel while the bathroom is also granite. Maintenance fees are slightly higher at $403 per year, but that’s more than offset by the lower price of $249,500 ($172 per square foot).

The good news is that Seattle Millennials don’t have to move to Houston to find affordable housing. All they have to do is convince the Washington legislature to repeal the state’s growth-management law and King County to repeal its growth-management plan and urban-growth boundary. Once that is done, Seattle prices will soon be as affordable as Houston’s.

Puget Sound Millennials who don’t want to wait the millennium or so that it will take for that to happen but who just have to live near the mountains might consider Boise, Colorado Springs, or another Rocky Mountain location. According to Coldwell Banker, a 4-bedroom, 2-bath, 2,200-square-foot home in Houston costs about $274,000, while in Seattle it is $726,000. The same-sized home in Boise would be $273,000; Colorado Springs is $252,000; and Logan, Utah is $188,000. For about the price of the 770-square-foot house in Seattle, you could buy a $179,000 home that is three times that large in Casa Grande, Arizona and another in Great Falls, Montana, and enjoy Montana winters and Arizona summers, or, if you prefer, the other way around.

As Donald Trump doubled down on his anti-immigration message in last night’s debate, Republican candidates for Senate across the country are not adopting his lines. In fact, they are overwhelmingly going the other way, rejecting mass deportation and endorsing legal immigration and various forms of legalization for those immigrants illegally in the United States. Here are what the candidates in the tightest races are saying:

1. Arizona – John McCain

It comes as little surprise that Sen. McCain, a longtime proponent of immigration reform and coauthor of the Senate 2013 reform bill, should be running on an openly pro-immigrant platform. He touted his accomplishment at his Senate debate last week. “I was able to get immigration reform through the United States Senate,” he said. “That is the very big difference between having working groups and talking about it and legislative accomplishment, and I promise you that the Dreamers were part of immigration reform.”

2. Florida – Marco Rubio

Sen. Rubio also coauthored the 2013 reform bill that passed the Senate. Although he has backed away from that approach, he continued to take a pro-immigration position at his debate. “I personally know people, children included, who are in this country out of status, illegally brought here at a very young age, and I see the sadness that they’re going through. I want to fix the problem,” he said. “The second step would be to modernize our legal immigration system so that it’s not as bureaucratic, and it works better. … Republicans would support doing something very reasonable with people that are not criminals, that have been here a long time.”

3. Illinois – Mark Kirk

Sen. Kirk who voted for the 2013 reform bill defended his pro-immigrant position during his campaign. In a campaign ad in Spanish, he said, “When Donald Trump says bad things about immigrants, I have spoken out against him. I don’t support Trump. I’ve worked with Republicans and Democrats to reduce gang violence in Chicago. And I support immigration reform so families can stay together.”

4. Indiana – Todd Young

Rep. Young has previously endorsed a form of legal status for the unauthorized immigrants in the country. In his race, he appears to have backed off this position a bit, while still taking a much more pro-immigrant position than Trump. “Immigration should be attractive to Americans so long as immigrants come to our country to contribute to our economy and society. I strongly support legal immigration,” he said in response to questions from a local news outlet. “I would consider proposals which require those who have entered the U.S. illegally to apply for their visas from their home countries and not from within the US…. Congress should work to find a rational middle ground between granting an automatic path to citizenship for every illegal immigrant and a program of mass deportation.”

5. Nevada – Joe Heck

Congressman Heck supported a form of legalization during the 2013 immigration reform debate and has maintained his pro-immigration stance in his current race for Senate. “When someone goes through the legal system,” he said at his debate, “they shouldn’t have to wait ten to twelve years to bring their spouse or family over.  Let’s develop a robust guest worker program…. Dreamers… should get a path to citizenship…. I have never talked about deportation, and I believe that when we talk about the 11 to 12 million undocumented, outside of the dreamers, those that have a criminal past should be deported. However, those who have been working should be given some kind of path to legal status.”

 6. New Hampshire – Kelly Ayotte

Sen. Ayotte also voted for the reform bill in 2013 and has continued to tout her record during her race. “I supported the bipartisan immigration bill in the Senate because I want to solve this problem,” she said at her debate last month. “For the people who want to be part of this country to work… have a better legal system that is fair…. Sometimes I take some heat because of this from my own party, but I’m for solving this.” 

7. North Carolina – Richard Burr

Sen. Richard Burr voted against the Senate immigration reform bill in 2013, but in this election, he has endorsed expanding legal immigration and giving temporary visas (which may or may not be renewable) to unauthorized immigrants. “Immigration reform… starts with fixing the legal system,” he said at his Senate debate last week. “Individuals who haven’t committed a crime in this country should have a legal status that’s temporary.”

8. Ohio – Rob Portman

Sen. Portman also voted against the Senate bill in 2013 due to enforcement concerns, but he has also favored a form of legalization and an expansion of legal immigration at the time. “We do need to do something with people who are here, who are living in the shadows. It’s wrong,” he said at the Senate debate this week. “We’re a country of immigrants. For those who are here, who have roots in the community, and are willing to come forward, pay a fine, and pay any back taxes – and if they have any criminal record of course they should be deported – but the others should have a path to legalization…. We ought to continue to bring refugees and immigrants who enrich our country.”

9. Pennsylvania – Pat Toomey

Sen. Toomey voted against the reform bill in 2013, but is a long-time proponent of expanding legal immigration. In this race, he appears to have maintained a broadly pro-immigration stance and rejected mass deportation, while staying vague on how he’d keep immigrants here. According to CBS Pittsburgh’s voter guide, “Toomey supports a guest worker program and increasing spending on border security. Toomey says Donald Trump’s proposal to build a wall along the U.S.-Mexico border is simplistic and says Trump’s plan to deport every immigrant living illegally in the United States is not realistic.”

10. Wisconsin – Ron Johnson

Sen. Johnson who voted against the 2013 bill but has favored giving work permits to unauthorized immigrants since 2013 continued to advocate for this approach during his race. “My concept of a border security bill would have a robust guest worker program pretty well governed by the states. They can set the number of people,” he said at his debate. “My guest worker program would actually address the people in this country, in Wisconsin milking cows…. Until you secure the border, you’re not going to have the public willingness to accept some kind of legalization, and I’m happy to do that. Once we secure the border, we will treat the people… with real humanity.”

Other Members

Roy Blunt of Missouri appears to be the only candidate in a close race that had virtually nothing positive to say about immigration in his recent debate. For members in less competitive races, it was harder to get details on their views. There are eight other incumbents running for reelection this year who voted against the 2013 reform bill and have not—as far as I could tell—adopted a pro-legalization stance for unauthorized immigrants, although that doesn’t mean they are anti-legal immigration.

On the other side, Sens. Lisa Murkowski in Alaska and John Hoeven of North Dakota voted for the 2013 bill, and Sens. James Lankford of Oklahoma and Rand Paul of Kentucky have advocated for legalization since 2013, and Sen. Paul has done so even during his presidential run this year. Chris Vance, the GOP candidate in Washington, also touts support for immigration reform on his website.

Overall, most serious GOP candidates are taking much more pro-immigration positions in the 2016 election despite the rise of Trump. As I explained during the week in which Trump considered reversing his immigration stance, this could be because Trump lost the argument with voters, even with Republican voters, a majority of whom favor legalization over deportation.