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A recent Gallup poll finds that government employees are considerably more satisfied than their private sector counterparts with their compensation fringe benefits–namely government retirement plans (+25), health insurance benefits (+23), and vacation time (+17).

The poll compared satisfaction with 13 different job aspects for both government and nongovernment employees, ranging from stress on the job, flexibility, recognition, salary, relations with coworkers and bosses, etc. In 9 of the 13 characteristics, government and private sector workers reported similar levels of satisfaction (all above 60%) with job stress, recognition, flexibility, safety, salary, hours, promotion opportunities and job security. 

However, 82 percent of government workers reported being completely or somewhat satisfied with their retirement plan compared to 57 percent of their private sector peers, a +25 point difference. Government workers typically receive defined benefit pension plans, which typically offer employees a guaranteed monthly amount in retirement. In contrast, private sector workers’ retirement plans are not guaranteed but based on the amount they save, their employer contributes, and investment returns.

Again, 80% of government workers say they are satisfied with their health insurance benefits compared to 57% of private sector workers (a +23 point difference). Gallup reports that government worker health insurance plans typically require lower out-of-pocket costs than found in the private sector, which may explain these differences.  

In addition, fully 9 in 10 government employees are satisfied with their vacation time compared to 74% of private sector employees (a +17 point difference).

These stark disparities in satisfaction with retirement and health insurance benefits and vacation between government and private sector workers may indicate that government workers receive “above market” fringe benefits, meaning they receive more than what the market would pay. The fact that government and non-government workers report similar satisfaction with their salaries, but significant differences in non-salary perks raises the question if government employee compensation packages should be adjusted to match market offerings.

Research Assistant Nick Zaiac contributed to this post.

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In June I took note of Sen. Sheldon Whitehouse’s (D-R.I.) op-ed “urg[ing] the U.S. Department of Justice to consider filing a racketeering suit against the oil and coal industries for having promoted wrongful thinking on climate change, with the activities of ‘conservative policy’ groups an apparent target of the investigation as well.” I pointed out that this was a significant step toward criminalizing policy differences and using litigation and government enforcement to punish opponents in public debate, and meshed with an existing fishing-expedition investigation of climate-skeptic scholarship by Whitehouse and other Democrats on Capitol Hill. Others had already gone farther than the senator himself, calling for making “climate denial” a “crime against humanity,” holding public trials of fossil fuel executives for having resisted the truth, and so forth. (Gawker: “arrest climate change deniers.”) And I noted a recurring argument – “we did it to the tobacco companies, so there’s no reason we can’t do it here too” that tended to confirm my fears that the federal government set a dangerous precedent back then when it “took the stance that pro-tobacco advocacy could amount to a legal offense.”

Now there are further signs that a concerted campaign is under way. “Letter To President Obama: Investigate Deniers Under RICO” is the headline over a letter from twenty scientists, most at respected institutions, endorsing the Whitehouse idea and calling for the federal government to launch a probe under the racketeering (RICO) law. The letter was soon being widely promoted around the web, even at BoingBoing, often regarded as a pro-free-speech outlet.

It is not clear that all the scientists who signed the letter have thought carefully about the tension between what they are asking and the continuing freedom to pursue lines of inquiry in public debate that the government may find unwelcome or unreasonable.  “I have no idea how it affects the First Amendment” says one Vermont scientist who backs the probe, quoted by Bruce Parker of Vermont Watchdog. In a companion piece, Parker interviewed me about the constitutional implications of this extremely bad idea. (I should note that when I discuss RICO in the interview transcript, I’m referring to the civil-litigation side of the law, so-called civil RICO, which seems to be the part of the law the advocates hope to use.)

It is remarkable how many advocates of this scheme seem to imagine that the First Amendment protects only truthful speech and thus (they think) has no application here because climate skepticism is false. 

That’s not the way it works. As Cato and many others (compare ACLU of Ohio) argued at various stages in the case of Susan B. Anthony List v. Driehaus, which reached the Supreme Court on a different issue last year, controversial speech need not be true to be protected. In practice an “only truth has rights” approach chills advocacy generally and gives the state (or sometimes private litigants and complainants) a dangerous power to stifle advocacy in debates that it considers settled.

It is certainly strange to see many supporters of the Whitehouse approach suggest that the speech they dislike is actionable because they find in it half-truths, selectively marshaled data, scientific studies that spring from agendas, arguments whose ultimate sincerity is open to question, evasion of telling points made by the other side, and so forth. Those are the common currency of everyday debate in Washington (and not just in Washington). Nothing could be more common than to find both sides in an argument using these argumentative techniques. Hawks and doves do it; protectionists and free traders; labor interests and business interests. The same techniques are also accepted as standard currency within the adversary process itself, in which the law takes such pride, which makes it particularly absurd to propose defining it as unlawful racketeering to (quoting one paraphrase) “use dubious information to advance a cause.” The interview, again, is here.

[adapted from two recent posts at Overlawyered] 


Data from the Tax Policy Center show that 45 percent of U.S. households (“tax units”) will pay no federal income tax in 2015. That figure has risen in recent decades.

In raw numbers, 94 million households will pay some income tax in 2015, while 78 million will pay none. As the TPC table shows, virtually all higher-income households pay income tax, while the nonpayers are mainly in the bottom half.

Presidential candidate Donald Trump says that he would take another 31 million off the tax rolls, in addition to what he says are 42 million current nonpayers. As you can see, the Trump and TPC data do not match regarding the current number of nonpayers.

Let’s go with the TPC data. Adding tens of millions more nonpayers would push the total number over 100 million. There would be more “tax eaters” in America than taxpayers, at least in terms of the federal income tax.

To be fair, not all 100+ million nonpayers would be tax eaters. If someone paid no income tax, but also received no subsidies from the federal government, she could be called tax neutral. However, millions of moderate-income people receive the earned income tax credit (EITC), which is “refundable.” Those folks pay no income tax but get a check from the government when they file their tax return. They are tax eaters.

So a missing detail from the Trump proposal is his plan for the EITC. By zeroing out income tax for 31 million additional tax filers, he would automatically be boosting spending through the EITC. The refundable, or spending, part of the EITC is already $60 billion a year. Would Trump push that spending even higher?

I like many features of Trump’s overall tax plan. But taking more people off the tax rolls is not a good way to keep the government limited. If something is “free,” people will demand more of it. Under Trump, 31 million more households would have an incentive to demand more spending from Washington.

If WIRED magazine was looking to get the attention of the heads of American and British intelligence agencies, it has a story today that is sure to do the trick.

The magazine’s Andy Greenberg has a major piece about a new non-profit organization dedicated to encouraging morally troubled intelligence officers to resign and go public with any allegations or information they have that prove waste, fraud, abuse or criminal conduct at NSA or it’s UK equivalent, GCHQ. Known as, the organization has a professionally produced “resignation pitch” video featuring nationally-known security researcher and author Bruce Schneier and former NSA senior executive-turned-whistleblower Thomas Drake. The website of the Berlin-based organization provides a resignation letter generator, an FAQ on how and why to leave the intelligence business, and advice on how to use secure messaging means like Tor and PGP to communicate with staff. 

The launch of comes just over a year after the Institute for Public Accuracy, in conjunction with the Freedom of the Press Foundation, launched, a journalism project designed to encourage whistleblowers to use the SecureDrop system to submit classified or otherwise senstive or embarrassing government documents for review and possible publication by established media outlets. advisory board includes former Pentagon Papers whistleblower Daniel Ellsberg, former Associated Press journalist Robert Parry, and former State Department official Matthew Hoh, among dozens of others.

I have written previously about the rise of a “digital resistance movement” to the kinds of government mass surveillance programs exposed by Edward Snowden over two years ago. In the immediate wake of Snowden’s revelations, a number of public interests groups and civil liberties advocates renewed their calls for the public to adopt personal encryption technology to help shield themselves from warrantless, mass electronic surveillance by NSA. The establishment of and are a clear sign that opponents of mass surveillance are taking the conflict with the American and UK governments on this issue to a new level. Only time will tell whether those behind will succeed in motivating a current intelligence officer to become the next Edward Snowden.

In recognition of private philanthropy’s role in promoting human wellbeing, has just added a new category of data: charity.

Most people agree that charity is a good thing, but laws may restrict or dis-incentivize philanthropic action. Higher tax rates, for example, may negatively impact charitable giving. State-run welfare may also discourage charity, replacing “a welfare system of mutual aid based on reciprocity to one of paternalistic dependency based on hierarchy,” as David T. Beito has argued in his book, From Mutual Aid to the Welfare State.

In the United States, the structure of the welfare system may contribute to generational cycles of hardship. Jo Kwong of the Philanthropy Roundtable eloquently summarized the situation, describing how private philanthropy can be used to help people escape generational cycles of poverty and welfare-dependency, and make their way in the free enterprise economy.

How charitable is your country? Explore the data.

Chaos is spreading from the Middle East outward as hundreds of thousands of Syrian refugees pour into Europe. Over the last decade millions of Iraqis and Syrians have fled their homes. Western governments are proving far better at assigning blame than finding solutions.

The Republican Party meme is that every problem, including in the Middle East, is Barack Obama’s fault. According to the GOP, George W. Bush left America and the world secure. The feckless Obama administration allowed the collapse of Iraq and rise of the Islamic State.

These claims are self-serving, a political fantasy. The George W. Bush administration created many of today’s worst geopolitical problems.

First, President Bush used a terrorist attack conducted by Saudi citizens trained in Afghanistan as an excuse to invade Iraq, a long-time objective of neoconservatives as part of their plan to reorder the Middle East. Administration officials justified preventive war based on the claims of a dishonest informant provided by a crooked émigré hoping to rule Iraq.

War advocates planned to establish a liberal government aligned with the West, governed by an American puppet, and home to bases for U.S. military operations against its neighbors. These deluded plans came to naught.

Second, after ousting the Sunni dictator whose authoritarian rule held the nation together, the administration mishandled the occupation at every turn. The administration established a sectarian regime in Iraq as conflict flared and Iraq disintegrated. The administration underwrote the “Sunni Awakening,” through which Sunni tribes turned against al-Qaeda in Iraq, but Washington failed to achieve its objective of sectarian reconciliation.

Al-Qaeda in Iraq survived, mutating into the Islamic State. The Bush administration then became one of the Islamic State’s chief armorers when Iraqi soldiers fled before ISIS forces, abandoning their expensive, high-tech weapons which U.S. aircraft had to destroy last year.

Third, President Bush failed to win Iraqi approval of a continuing U.S. military presence and governing Status of Forces Agreement. Retired Army Chief of Staff Gen. Raymond Odierno explained: “us leaving at the end of 2011 … was always the plan, we had promised them that we would respect their sovereignty.” Attempting to stay would have been much worse.

Washington would have had leverage only by threatening to withdraw its garrison. U.S. troops would have had little impact on Iraqi political developments, unless augmented and deployed in anti-insurgency operations, which Americans did not support. And a continuing military occupation would have provided radicals from every sectarian viewpoint with a target.

The Obama administration has played a malign, but secondary, role. For instance, President Obama continued to back Iraq’s Maliki government despite the latter’s sectarian excesses. In Syria Washington inadvertently discouraged a negotiated compromise between Bashar al-Assad and the peaceful opposition by insisting on the former’s departure. Then, according to former Finnish president Martti Ahtisarri, the administration rejected a Russian initiative to ease Assad out of power.

The Obama administration turned Libya into another fulcrum of conflict.  Murderous Islamic State acolytes recently filled the void.

President Obama also put U.S. credibility on the line by making ISIS’s sectarian war in Iraq and Syria America’s own. The Obama administration became a source of weapons for the Islamic State after “moderate” insurgents backed by Washington repeatedly surrendered both personnel and arms to more radical forces.

Unfortunately, inadvertently promoting war rather than peace did not begin with the George W. Bush administration. In 1992 Washington torpedoed the Lisbon Agreement, negotiated by Britain’s Lord Peter Carrington and Portugal’s European Commission mediator Jose Cutileiro to end Bosnia’s civil war by providing extensive regional autonomy.

It is impossible to ignore the tragedy now overwhelming the Middle East. As I pointed out in National Interest online: “Washington bears substantial responsibility for the catastrophic conflict. George W. Bush made the most important decisions leading to the destruction of Iraq and rise of ISIL. No candidate unable or unwilling to learn from their disastrous mistakes is qualified to sit in the Oval Office.”

The notion that domestic regulations can have discriminatory impacts on imports (amounting to protectionism) isn’t controversial. Nor is it a revelation that having to comply with different sets of regulations in different jurisdictions that are intended to achieve the same safety or health or environmental outcome is superfluous and costly to businesses. Reducing or eliminating those kinds of costs could produce enormous saving. Indeed, many observers have suggested that the greatest gains from a TTIP agreement would come from a robust “regulatory coherence” outcome.

In today’s Cato Online Forum essay, trade scholar Simon Lester offers some much needed clarity about the substance and process of TTIP’s so-called regulatory coherence negotiations, while providing suggestions on how best to proceed.

Simon’s essay is offered in conjunction with a Cato Institute conference on the TTIP taking place October 12.  Read it. Provide feedback.  And please register to attend the conference.

It’s been a challenge to assess Donald Trump’s fiscal policies since they’ve been an eclectic and evolving mix of good and bad soundbites.

Though I did like what he said about wanting to pay as little tax as possible because the government wastes so much of our money.

On the other hand, some of his comments about raising tax burdens on investors obviously rubbed me the wrong way.

But now “The Donald” has unveiled a real plan and we have plenty of details to assess. Here are some of the key provisions, as reported by the Wall Street Journal. We’ll start with the features that represent better tax policy and/or lead to lower tax burdens, such as somewhat lower statutory tax rates on households and a big reduction in the very high tax rate imposed on companies, as well as a slight reduction in the double tax on capital gains.

…no federal income tax would be levied against individuals earning less than $25,000 and married couples earning less than $50,000. The Trump campaign estimates that would reduce taxes to zero for 31 million households that currently pay at least some income tax. The highest individual income-tax rate would be 25%, compared with the current 39.6% rate. …Mr. Trump also would cut the top capital gains rate to 20%, from the current 23.8%. And he would eliminate the alternative minimum tax. …For businesses, Mr. Trump’s 15% rate is among the lowest that have been proposed so far.

But there are also features that would move tax policy in the wrong direction and/or raise revenue.

Most notably, Trump would scale back certain deductions as taxpayers earn more money. He also would increase the capital gains tax burden for partnerships that receive “carried interest.” And he would impose worldwide taxation on businesses.

To pay for the proposed tax benefits, the Trump plan would eliminate or reduce deductions and loopholes to high-income taxpayers, and would curb some deductions and other breaks for middle-class taxpayers by capping the level of individual deductions, a politically dicey proposition. Mr. Trump also would end the “carried interest” tax break, which allows many investment-fund managers to pay lower taxes on much of their compensation. …The Trump plan would raise revenues in at least a couple of significant ways. It would limit the value of individual deductions, with middle-class households keeping all or most of their deductions, higher-income taxpayers keeping around half of theirs, and the very wealthy losing a significant chunk of theirs. It also would wipe out many corporate deductions. …The plan also proposes capping the amount of interest payments that businesses can deduct now, a change phased in over a long period, and would impose a corporate tax on future foreign earnings of American multinationals.

Last but not least, there are parts of Trump’s plan that leave current policy unchanged.

Which could be characterized as “sins of omission” since many of these provisions in the tax code - such as double taxation, the tax bias against business investment, and tax preferences - should be altered.

…the candidate doesn’t propose to end taxation of individuals’ investment income… Mr. Trump would not…allow businesses to expense all their new equipment purchases, as some other Republicans do. …All taxpayers would keep their current deductions for mortgage-interest on their homes and charitable giving.

So what’s the net effect?

The answer depends on whether one hopes for perfect policy. The flat tax is the gold standard for genuine tax reform and Mr. Trump’s plan obviously falls short by that test.

But the perfect isn’t the enemy of the good. If we compare what he’s proposing to what we have now, the answer is easy. Trump’s plan is far better than the status quo.

Now that I’ve looked at the good and bad policies in Trump’s plan, I can’t resist closing with a political observation.  Notwithstanding his rivalry with Jeb Bush, it’s remarkable that Trump’s proposal is very similar to the plan already put forth by the former Florida Governor.

I’m not sure either candidate will like my interpretation, but I think it’s flattery. Both deserve plaudits for proposing to make the internal revenue code less onerous for the American economy.

P.S. Here’s what I wrote about the plans put forth by Marco Rubio and Rand Paul.

There may be no sadder political spectacle than a Republican governor running for president. He knows nothing about foreign policy. But he panders to Neocons who dominate the GOP and expect the nominee to advocate perpetual war. Then his presidential campaign collapses.

So it was with Rick Perry. Now it is with Scott Walker, who last week abandoned his presidential bid.

The Wisconsin governor won some significant domestic political victories. He tried to compensate for his nonexistent foreign policy credentials by claiming to be tougher and meaner than any other Republican presidential candidate.

Walker assumed that to prosper “we need a safe and stable world.” Which was simple nonsense. When has the earth been “safe and stable”?

Naturally, Walker lauded Ronald Reagan, who deployed the military in only three limited actions. Reagan was appalled by the possibility of war. Neocons denounced him as an appeaser for dealing with the Soviet Union’s Mikhail Gorbachev and withdrawing from Lebanon’s civil war.

Walker contended that “America is not safer” than seven years ago. True, but mainly because of the dangerous military interventions he and other Republican candidates reflexively supported.

The Wisconsin governor talked in clichés: “We just need to lead again,” he declared. The U.S. did lead in Iraq, with disastrous results.

On the Islamic State Walker declared: “I’d rather take the fight to them than wait for them to bring the fight to us.” Alas, Walker confused ISIS with al-Qaeda. The latter attacked the U.S. The former wanted to create a state, which gave ISIS reason not to attack America—until the U.S. joined the Mideast’s latest sectarian war. Yet, argued Walker: “we have to be prepared to put boots on the ground.”

Walker wanted the U.S. to jump into the Syrian quagmire: train more “moderate” guerrillas, establish a no-fly zone, and create “a broader, U.S.-led regional coalition, with real buy-in and iron-clad guarantees from our allies that they will help us shoulder the burden.” The first has been a bust. The second would trigger much deeper American military involvement. The third is a joke.

The governor promised to tear up President Obama’s nuclear agreement on his first day in office. Then, he said, he would apply “crippling economic sanctions and convince our allies to do the same.”

How? America’s friends would be less than pleased with Washington leaving them high and dry. Nor would Tehran be likely to yield to American pressure, having responded to every previous U.S. rebuff by expanding its nuclear activities.

Walker also pledged to continue treating American defense policy as welfare. He echoed other GOP contenders in arguing that “we need to stand with our friends” since “our allies are among our greatest source of strength.” In fact, Washington collects allies like Facebook Friends. The Europeans, South Koreans, and Japanese all could defend themselves but don’t.

Of course, Walker wanted to spend more on the military, even though very little of the Pentagon’s effort actually goes for America’s defense. The bulk is devoted to defending wealthy allies, rebuilding failed societies, propping up dictatorial allies, engaging in foreign social engineering, and undertaking other similarly dubious tasks.

Being a superpower means America has interests everywhere, but few of them are vital or even important. Being a leader means distinguishing between critical and minimal interests.

 “America will not be intimidated,” Walker insisted. But that’s not the issue. Avoiding involvement in unnecessary wars is the issue. He claimed: “we can no longer afford to be passive spectators while the world descends into chaos.”

But as I pointed out for Forbes online, “there is little the U.S. can do to create order out of chaos. Far more often Washington inadvertently delivers disaster. It would be far better to stay out of foreign imbroglios instead.”

Other candidates likely soon will follow Walker out of the presidential race. Posing as uber-hawks is likely to work no better for them than for Scott Walker.

Pope Francis has finished his U.S. visit and his message went well beyond the Catholic faithful. As he declared in the recent encyclical Laudato Si, he was addressing “every person living on this planet.”

The Pontiff’s predominant appeal is spiritual, not political. His commitment to the poor and our shared world is obvious. Most people yearn for meaning in their lives which no government can provide.

However, the papal visit generated controversy because Pope Francis appears to be a man of the Left.

Of course, religious imperatives may have political implications. For instance, Christian Scripture and church tradition require concern for the poor and environment. But there is no specific “Christian” answer to the many social ills.

Unfortunately, the Holy Father sometimes blurs the line between the spiritual and the political. The Pope overestimates the wisdom and efficacy of politics while minimizing the power and virtue of markets.

Consider environmental issues. Stewardship is an important Christian responsibility. However, the relationship between humans and the world around them always has been complex.

The pontiff assumes the worst regarding the environment. Yet much of the environmental news actually is quite good.

Important environmental problems remain, of course. However, capitalism helps answer even the toughest questions. For instance, greater economic development and innovation provide the means to solve often complex problems. Markets also promote efficient trade-offs, highlighting the benefits and costs of various policies.

Yet in Laudato Si the Pontiff appeared to suggest the common good yields only one correct environmental standard. However, facts are not a matter of faith.

For instance, the consensus that the climate is warming does not extend to how much and how fast temperatures are likely to rise, as well as how great the likely social impact and how best to cope with those effects. Even if one believes temperatures are rising and the consequences will be serious, there still are many possible solutions.

The most cost-effective strategy is adaptation, adjusting to specific problems. What is best is a matter of man’s wisdom rather than God’s commandment.

When markets do not operate and property rights do not exist, some government action is necessary to ensure environmental protection. Nevertheless, policymakers must recognize the inherent infirmities of politics. There is no guarantee that increasing the power of parliaments, bureaucracies, and courts will solve environmental or other social problems.

Yet the Pope in Laudato Si largely ignored the government’s own woeful environmental record. Not everyone who claims to represent the common good does so; politicians and environmentalists are no more virtuous than businessmen and conservatives.

Perhaps the most important trade-off ignored by the Pope is the importance of the free economy in providing wealth and opportunity—which improves the chance of living a fulfilling life—for the poor and disadvantaged.

Thus, while the pontiff’s moral judgments deserve respect, his economic opinions warrant less consideration. His formative economic experience came in Argentina, a statist kleptocracy which enshrined injustice. The principal lesson from Argentina and similar systems should be the importance of rejecting political restrictions on the economy.

As I wrote for the American Spectator: “Economic liberty, that is, freedom to work, invest, trade, and create is an outgrowth of the wondrous creativity with which God has infused mankind.” Still, the pontiff helpfully reminded us that there is far more to life than economic growth.

Pope Francis deserved a warm welcome in the U.S. He is an important moral and spiritual leader who speaks to people’s deepest human needs.

However, Americans should respond more skeptically when the pontiff moves from spiritual to political matters. His status as the Vicar of Christ gives him no special qualification as a political pundit.

Over the weekend, I was shocked and saddened to learn that Doug Kendall, founder and president of the Constitutional Accountability Center, had died from complications of colon cancer. I knew that Doug had had some health problems earlier in the year, but wasn’t aware of their continuing severity.

Doug started CAC, a public-interest legal organization devoted to the idea that the text and history of the Constitution shows our Founding document to be profoundly progressive, as a successor to his more narrowly focused Community Rights Counsel. He, along with his colleagues, have become among the closest “frenemies” of Cato’s Constitutional Studies Center.

As Randy Barnett notes, even though Doug and CAC are typically at loggerheads with libertarian thinking, they compete on the same originalist playing ground. The battle is joined fairly and honestly, and even when I’ve most vehemently disagreed with Doug, Elizabeth Wydra, David Gans, Simon Lazarus, Brianne Gorod, and the rest of CAC’s formidable team, I’ve known that they approach their vocation with rigor and integrity. (Alas, I can’t say this about all the critics of Cato’s legal positions.)

And there are times when we’ve been aligned. The battle to restore the proper understanding of the Privileges or Immunities Clause in the context of the right to keep and bear arms (McDonald v. Chicago) was one. Same-sex marriage was another, including when we joined together to file briefs in Perry v. Hollingsworth and United States v. Windsor to make common cause regarding the Equal Protection Clause. (As we illustrated in the 2012-2013 Cato Supreme Court Review, Cato and CAC don’t always agree, but when we do, it’s the most interesting brief in the world.) I’ve often joked that after taking on guns and sex together, with a focus on two of the Fourteenth Amendment’s main provisions, the next time we join forces will be on a drug case relating to the Due Process Clause.

Doug Kendall was a man of principle who lived his ideals. My condolences go out to his wife, daughter, and extended family and friends.

I’ve written often about the global competition to attract foreign investment, and have made the point that investment flows to jurisdictions with good policies in place. Globalization of production and the mobility of capital mean that national policies (regulations, tax policy, immigration, trade, energy, education, etc.) are on trial, with net investment inflows rendering the verdicts.

But some countries (and some U.S. states) use tax holidays and other forms of tax forgiveness, in lieu of adopting good policies, to attract investment, which burdens taxpayers and subverts the process of matching investment to its optimal location. These are subsidies – like so many other programs – that distort markets and should be discouraged.

In today’s Cato Online Forum essay, which is associated with the TTIP conference taking place on October 12, Ted Alden from the Council on Foreign Relations puts forward a strong proposal to end this madness via the Transatlantic Trade and Investment Partnership negotiations.

Read it.  Provide feedback.  And please register to attend the conference.

What would life be like without exchange or trade? Recently, a man decided to make a sandwich from scratch. He grew the vegetables, gathered salt from seawater, milked a cow, turned the milk into cheese, pickled a cucumber in a jar, ground his own flour from wheat to make the bread, collected his own honey, and personally killed a chicken for its meat. This month, he published the results of his endeavor in an enlightening video: making a sandwich entirely by himself cost him 6 months of his life and set him back $1,500.

(It should be noted that he used air transportation to get to the ocean to gather salt. If he had taken it upon himself to learn to build and fly a plane, then his endeavor would have proved impossible).

The inefficiency of making even something as humble as a sandwich by oneself, without the benefits of market exchange, is simply mind-boggling. There was a time when everyone grew their own food and made their own clothes.  It was a time of unimaginable poverty and labor without rest.

The greater the number of people involved in exchange, the more beneficial the process becomes. This morning, thanks to international trade, I am drinking coffee grown in Latin America, viewing a computer screen with eyeglasses made in Europe, and typing this blog post on a keyboard made in Asia. Fortunately, freedom to trade internationally has improved, on average, around the world. Increased trade has helped raise living standards and decrease global poverty.

However, the recent trend in the United States is less positive. If trade protectionist politicians, like Bernie Sanders on the left and Donald Trump on the right, have their way, then U.S. freedom to trade internationally may deteriorate further. They put down trade by claiming that it harms the U.S. economy and destroys jobs. Yet, there is a widespread agreement among economists that free trade is key to prosperity. (Learn more about the relationship between increased trade and jobs here).

This morning, as you drink your coffee, take a moment to consider where it comes from. You probably would not be drinking it right now if it were not for trade. This video elegantly draws attention to the myriad ways in which the exchange of goods and services across national borders touches lives and helps raise living standards. Almost everything you use is the product of a complex web of human cooperation, often extending beyond your country. Even something as simple as a bag of groceries or a pencil is the end result of a “symphony of human activity that spans the globe.”

How do other countries compare on freedom to trade internationally? Explore the data and find out.


During pregnancy “occasional, small doses of diazepam (the generic name for Valium) are considered safe,” writes Nina Martin in a new ProPublica investigation. “But one morning a few weeks later, when [Casey] Shehi was back at her job in a nursing home and the baby was with a sitter, investigators from the Etowah County [Alabama] Sheriff’s Office showed up at the front desk with a warrant. She had been charged with ‘knowingly, recklessly, or intentionally’ causing her baby to be exposed to controlled substances in the womb — a felony punishable in her case by up to 10 years in prison. The investigators led her to an unmarked car, handcuffed her and took her to jail.” 

Read the whole thing here to learn what happened next. “Shehi had run afoul of Alabama’s ‘chemical endangerment of a child’ statute, the country’s toughest criminal law on prenatal drug use.” It provides for imprisonment of up to ten years in cases where the developing baby has suffered no ill effects from an exposure, as in this case. More than 1,800 women have been arrested under its terms since its passage in 2006. 

In the 2001 case of Ferguson v. City of Charleston the Supreme Court ruled 6-3 that a joint state hospital-police program in Charleston, D.C., infringed the Fourth Amendment rights of pregnant women by subjecting them to drug screening without their knowledge or consent and relaying the results to authorities for prosecution. My colleague Tim Lynch wrote about that case here

You can explore Cato’s decades of research on the Drug War and its consequences for liberty here (adapted and expanded from Overlawyered).

China’s announcement of the implementation of a cap and trade system is not the first we’ve heard of their efforts to combat their rising carbon emissions. In November, China and the United States hyped an agreement in which China “intends” to curb emissions “around” 2030. Reproduced below is an article on that “agreement,” which will certainly be greatly referenced over the course of Xi Jinping’s visit.

For today’s announcement, as with all international pronouncements on climate change, we must wait until we see the fine print. The road to global warming has traditionally been paved with good intentions.

Nothing New, as China “Intends” to Cap Emissions

Originally Posted November 12, 2014

Most every paper in the country is trumpeting today that China has finally agreed to limit its emissions of carbon dioxide, gutting the principal objection of people opposed to unilateral and expensive reductions in ours. 

Too bad it’s not true.

According to the official pronouncement, all China said was that they “intend” to cap their emissions “around 2030”. Anything new here?  In November, 2009, prior to the (failed) UN climate fest in Copenhagen, they announced their “intention” to reduce their emissions per unit economic output (called “carbon intensity”)  by 40-45% by 2020. Since then, things haven’t appreciably changed—so they now have five years to execute this huge drop, which isn’t going to happen.

The road to global warming is paved with China’s good “intentions”.

We also note that they “intend” to derive 20 per cent of their energy from non-carbon based sources by 2030. No doubt working late into last night (as did we; this story broke at 10:30), the estimable Roger Pielke, Jr., has already calculated that this means that the Chinese will have to put the equivalent of one nuclear power plant per week on line between now and then. As Roger wryly noted, “some people take it seriously”.

Don’t. But we should take seriously President Obama’s announcement that the US will double its scheduled emissions reductions by 2025. Thanks to the 2007 Supreme Court (5-4) decision that incredulously said that the 1992 Clean Air Act Amendments gave the President the power to command and control virtually our entire energy economy, he indeed can do what he just said.

It would take an act of Congress to prevent him, an act that would most certainly be vetoed, without the necessary two-thirds majority to override.

One might think that he would care about what the voters think—but that’s not the case. A careful read of election returns reveals that the cap-and-trade, and not health care, cost his party control of the House in 2010, and, in 2014, the epicenter of electoral carnage was in the coal mining regions of Kentucky and West Virginia, costing his party the Senate.

While China has good “intentions” we get real “unemployment”. Such a deal!

Last week, Georgia Governor Nathan Deal’s Education Reform Commission released its draft recommendations for improving and expanding the state’s school choice programs. While some of the commission’s proposed changes are meritorious, the commission failed to recommend expanding the state’s highly popular, nearly universal scholarship tax credit (STC), instead proposing that the state create a new STC that is highly regulated and much more limited in scope.

The commission’s two proposed changes to the existing STC (having the Department of Revenue count actual contributions against the tax credit cap rather than mere pledges and changing the start date for claiming credits) would make it easier for scholarship organizations to raise funds. The commission also explored the possibility of converting the STC into an education savings account (possibly still funded through tax credits, though the report is not clear about that), enabling families to use the scholarship funds for a variety of educational goods and services beyond private school tuition along the lines of what I described in my testimony before the commission in May. 

However, while the commission recommended some minor improvements the existing STC, it is unclear why they did not recommend expanding it. This is especially puzzling because donors not only hit the $58 million tax credit cap on the first day credit were available this year, but taxpayers actually applied for about $91.5 million in credits–$33.5 million more than the cap. Additionally, one 2014 poll found that 62 percent of Georgia voters supported raising the cap to $100 million while another poll found that 64 percent of Georgia voters and 70 percent of parents of school-aged children wanted to raise the cap.

Moreover, the commission’s proposed new STC contains numerous troubling features that the policymakers who designed the existing STC wisely avoided.

Income Eligibility Requirements

Unlike Georgia’s existing STC, the commission’s proposed STC would limit the scholarships to low-income students. Although well-intentioned, this proposal would reduce the overall support for the program exclude some needy families.

As Wilbur Cohen observed in a debate with Milton Friedman: “a program for the poor people will be a poor program.” Friedman later accepted Cohen’s view because he realized that broader eligibility translates into broader political support. Survey data supports this observation. In a recent poll by the Friedman Foundation for Educational Choice, 66 percent of respondents nationwide supported universal educational choice while only 36 percent supported restricting eligibility based on income. Likewise, one of the aforementioned polls of Georgia voters found that 55 percent of respondents supported a universal STC while only 11 percent supported restricting access based on income.

Moreover, a family’s need is not always reflected on their tax statements. Families in which there was an illness, a parent lost his or her job, there is a student with special needs, or other exigent circumstances may be denied assistance under a strict income eligibility requirement. By contrast, Georgia’s existing STC gives scholarship organizations the flexibility to consider each family’s unique situation. 

Like other nonprofits, scholarship organizations tend to prioritize based on need. Indeed, the available evidence suggests that the STC primarily benefits those most in need. As I detailed in my testimony:

The Peach State’s largest [scholarship organization], Georgia GOAL, has awarded more than 92 percent of its scholarship funds since its inception to students from families with a household income of $48,000 or less, including more than 80 percent to families earning $36,000 or less. [page 7] They are not alone. Studies of education tax credit laws in Arizona, Florida, and New Hampshire have found that SSOs target low-income families to a greater extent than required by law.

According to the most recent data, three-quarters of scholarships statewide were awarded to students from families earning less than $62,202 annually. Moreover, as the Atlanta Journal-Constitution’s Kyle Wingfield observed, families in the top income quartile could still qualify for for a free-or-reduced-price lunch at their district school depending on their family size.

The commission’s proposal is a solution in search of a problem.

Eliminating Scholarship Organization Missions

The commission’s proposal would “require that scholarships are portable during the school year and can be used at any qualifying school that accepts the eligible student according to a parent’s wishes.” At first glance, that seems like a sensible policy that prioritizes parental choice. However, in practice, this policy would prohibit private organizations from setting their own institutional missions and substantially constrict the freedom of donors.

Under Georgia’s existing STC law, scholarship organizations are free to set their own mission and donors are free to choose the organizations that align with their values. There are currently dozens of scholarship organizations with a variety of different missions. Some serve families who want to send their children to Christian or Jewish schools; others support students attending schools with a particular pedagogical approach; and others have their own unique mission, such as a focus on students who serve their communities. These organizations foster stronger communities by bringing together scholarship recipients, private schools, and individual and corporate donors.

Under the commission’s proposed STC, scholarship organizations would be forbidden from setting their own institutional mission. Just as customers could choose any color Model T so long as it was black, donors could choose from any type of scholarship organization so long as it granted scholarships to low-income students attending any school of their choice. That’s a noble model, but it’s not the only worthy model.

As it happens, the largest scholarship organizations under the existing STC tend to be those that prioritize the needs of low-income families and grant scholarships to students to attend any school their families choose. Donors to Georgia GOAL, for example, can recommend that their contributions be used for scholarships to (unspecified) families desiring to attend particular private schools or types of schools or who live in a particular community, or they can contribute to the general fund that helps families wherever they choose to enroll. Individual and corporate donors are free to support them in their mission or they are free to support any number of smaller organizations with more specific missions. Eliminating that freedom is unnecessary and counter-productive.

Again, this is a solution in search of a problem.

Emphasis on Corporate Donors

This change could also affect the composition of the donor base. The ability to recommend the private schools at which donors desire their contributions be used to provide scholarships is a popular feature of the existing STC because donors can help low- and middle-income families in their communities. The proposed STC prohibits donors from doing so, which will likely depress individual taxpayer participation, so the vast majority of new credits will likely be claimed by large corporations.

Corporate donors have previously raised the concern that individual donors are better positioned to claim the existing credits because their income is more predictable, therefore the majority of the credits are claimed by individuals before the corporations have an opportunity to apply for the credits. Why this is problematic is not clear–what’s most important is that there is sufficient funding available for the scholarship students, regardless of the source. For that matter, a model that relies on a large number of smaller individual donors rather than a smaller number of large corporate donors has several advantages. The individual-donor model is likely to be more reliable through changing economic circumstances and it fosters a wider base of support and more community involvement than the corporate-donor model.

Ideally, the state would eliminate the cap altogether, but short of that, there are other ways to give corporations the opportunity to donate through the existing STC. As Kyle Wingfield has explained:

If simply raising the cap substantially won’t work, a sensible compromise would be to spread out the credits throughout the year, maybe semiannually or even quarterly. That would give potential donors more time to determine their tax liability. To the extent that increased corporate donations, it could increase funds for low-income families without moving Georgia away from choice for all.

 Once again, this is a solution in search of a problem.

Mandatory Testing

Unlike Georgia’s existing STC, the commission’s proposed STC would mandate that all schools accepting scholarship students administer either the state test or a nationally norm-referenced test. Standardized tests are an important method to measure learning progress, which is why most private schools administer them, but requiring schools to administer the tests would be a mistake. A testing mandate would force schools and parents that are ideologically opposed to standardized testing to choose between their principles and their pocketbooks. Many parents are fleeing the district school system because they are concerned about over-testing. A testing mandate on private schools would leave them with no alternatives.

Parents who want their children to attend a school with high test scores currently have that prerogative, but parents generally want more than scores. A Friedman Foundation survey of Georgia scholarship families found that standardized tests scores ranked low among parents’ priorities when selecting a school for their children (only 10 percent listed it as one of their top five reasons for choosing a school). Parents were more concerned about their children receiving personal attention, the student-teacher ratio, the curriculum, student discipline and safety, and the college acceptance rate.

Under the current law, parents who want standardized testing can get it and parents who want to avoid it can also do so. Donors who want to ensure their money is being used wisely can choose scholarship organizations that require standardized testing while donors with other priorities can contribute accordingly.

Yet again, this is a solution in search of a problem.

Georgia’s existing STC is expected to serve about 20,000 students statewide this year and donors are prepared to support tens of thousands more. It is highly popular and has numerous advantages over the commission’s proposal. If Georgia lawmakers want to better serve all students, their best course of action is simply to raise the cap on the existing scholarship tax credit.

Glaciers have long been viewed as vulnerable to CO2-induced global warming, as many have experienced declines in thickness and/or extent over the past century. However, there remains much to be learned about this topic and how glaciers may respond to climate change in the future, as evidenced by the recent work of Farhan et al. (2015).

Introducing the rationale for their study, the team of five researchers write that it is “difficult to develop a clear understanding of climate-change impacts in the Hindukush–Karakoram–Himalaya region” of the Tibetan Plateau because of “substantial variability of glacier changes within the region (Fujita and Nuimura 2011), uncertainties related to the contribution of glaciers to runoff (Immerzeel et al. 2011), variable retreat rates (Kumar et al. 2008) and strong spatial variations in glacier behavior related to topography and climate (Scherler et al. 2011).” They also note that “uncertainties in projections of glacier changes (Cogley 2011; Lutz et al. 2012), controversial and erroneous reports stated by IPCC (2007) and revealed by Cogley et al. (2010), lack of knowledge, paucity of long term records (Kaser et al. 2006), unsuitable or uncertain data and methods, failure to publish existing data (Barnett et al. 2005), very limited mass balance records particularly in the Upper Indus River Basin (UIB) (Bhutiyani 1999), and even excessive classification and secrecy regarding fundamental hydrological data collectively make these problems much worse.”

Against this backdrop, the five scientists engaged in a new effort to reduce these uncertainties by investigating the impacts of climate change on this glaciated region. In doing so, they focused on the Astore Basin, a high-altitude 4,000 km2 sub-catchment of the Upper Indus River Basin located in the northwestern Himalayan region of Pakistan, analyzing the relationship between various meteorological, hydrological and satellite remote sensing data sets over the past four decades.

Among the many findings of their study, Farhan et al. report that trend analysis of the mean monthly snow cover area revealed “no significant depletion trends” over the period 2003–2010, which was “mainly because of the fact that there was also no trend in the summer mean temperature during that period.” In addition, they write that statistical analyses reveal the annual stream flow fluctuations in the Astore River over the period 1980–2010 were “predominantly influenced by variations in precipitation rather than the alteration in catchment temperatures; consequently, the stream flow fluctuations were not governed by enhanced glacier ablation and retreat.”

With respect to glacier change, Farhan et al. note that of the 98 glaciers in this region covering an area greater than one square kilometer, temporal image analysis for the period 1973-2013 showed that 28 glaciers experienced minor increases, 45 slightly decreased, and the remaining 25 appeared to be in a stable state. Not surprisingly, therefore, the overall total glacier area experienced a statistically insignificant decrease of 0.3 percent over the four-decade period, which the authors describe as a minor change, within the range of data accuracy and which suggests “quite stable conditions of Astore basin glaciers.” What is more, laser altimetry data of glacier thickness changes over the period 2003-2008 “also revealed stability or even a slightly growing trend.”

In summing up their findings, Farhan et al. state that the observed stability of Astore basin glaciers represents “a different response to global warming” in which “summer temperature reductions and positive trends in winter precipitation imply reduced ablation and increased accumulation … which may lead to balanced and/or positive glacier ice mass balance … and may explain one of the reasons for their relative insensitivity to warming.” 

Whatever the case may be, one thing is certain—four decades of data reveal they are not doing what typical global warming theory would suggest!


Barnett, T.P., Adam, J.C. and Lettenmaier, D.P. 2005. Potential impacts of a warming climate on water availability in snow-dominated regions. Nature 438: 303–309.

Bhutiyani, M.R. 1999. Mass-balance studies on Siachen Glacier in the Nubra valley, Karakoram-Himalaya. India 45: 112–118.

Cogley, J.G. 2011. Present and future states of Himalaya and Karakoram glaciers. Annals of Glaciology 52: 69–73.

Cogley, J.G., Kargel, J.S., Kaser, G. and van der Veen, C.J. 2010. Tracking the source of glacier misinformation. Science 337: 522.

Farhan, S.B., Zhang, Y., Ma, Y., Guo, Y. and Ma, N. 2015. Hydrological regimes under the conjunction of westerly and monsoon climates: a case investigation in the Astore Basin, Northwestern Himalaya. Climate Dynamics 44: 3015-3032.

Fujita, K. and Nuimura, T. 2011. Spatially heterogeneous wastage of Himalayan glaciers. Proceedings of the National Academy of Sciences, USA 108: 14011–14014.

Immerzeel, W.W., Beek, L.P.H., Konz, M., Shrestha, A.B. and Bierkens, M.F.P. 2011. Hydrological response to climate change in a glacierized catchment in the Himalayas. Climatic Change 110: 721–736.

IPCC. 2007. Climate change 2007: an assessment of the intergovernmental panel on climate change. Assessment Report 446: 12–17.

Kaser, G., Cogley, J.G., Dyurgerov, M.B., Meier, M.F. and Ohmura, A. 2006. Mass balance of glaciers and ice caps: consensus estimates for 1961–2004. Geophysical Research Letters 33: 1–5.

Kumar, K., Dumka, R.K., Miral, M.S., Satyal, G.S. and Pant, M. 2008. Estimation of retreat rate of Gangotri glacier using rapid static and kinematic GPS survey. Current Science 94: 258–262.

Lutz, A.F., Immerzeel, W.W., Gobiet, A., Pellicciotti, F. and Bierkens, M.F.P. 2012. New climate change scenarios reveal uncertain future for Central Asian glaciers. Hydrology and Earth System Sciences Discussions 9: 12,691–12,727.

Scherler, D., Bookhagen, B. and Strecker, M.R. 2011. Spatially variable response of Himalayan glaciers to climate change affected by debris cover. Nature Geoscience 4: 156–159.

Hillary Clinton had a big announcement the other day, declaring her opposition to the Keystone XL pipeline.  Her decision stems in part from her view that the particular oil that will be transported through this pipeline is “dirtier” than other oil, because it comes from “oil sands,” and thus we should not let it enter our pristine country.  In this regard, she said:  ”We shouldn’t be building a pipeline dedicated to moving North America’s dirtiest fuel through our communities,” and “American energy policy is about more than a single pipeline to transport Canada’s dirtiest fuel across our country.”

As it turns out, we also have some oil sands here in the U.S., out in beautiful, pristine Utah.  And guess what?  Someone is about to start producing oil from them (a Canadian company!): 

… the first commercial oilsands mine in the United States is just months away from starting up after receiving final regulatory approvals from officials in Utah late last week.

“We’ll be in production later in the fall with commercial production before the end of the year,” U.S. Oil Sands Inc. chief executive Cameron Todd said in a phone interview Tuesday.

Calgary-based U.S. Oil Sands is working through the summer to complete a 2,000-barrel-per-day oilsands mine in eastern Utah,  which would make it the first commercial oilsands mine in the United States when it begins producing later this year.

It sounds kind of inconsistent to block the transport of this oil through the U.S., while allowing its production in the U.S.  No doubt this inconsistency will play a role in any international litigation under NAFTA that might be taken against the U.S. government’s failure to approve Keystone, which is already being talked about by some international lawyers, if it comes to that.

Earlier this year, Senator Diane Feinstein (D-CA) inserted language into the annual Intelligence Authorization bill that would have forced social media companies like Twitter to act as de facto law enforcement agents and censors of the users of their service. The language in question read as follows:

SEC. 603. Requirement to report terrorist activities and the unlawful distribution of information relating to explosives.

(a) Duty To report.—Whoever, while engaged in providing an electronic communication service or a remote computing service to the public through a facility or means of interstate or foreign commerce, obtains actual knowledge of any terrorist activity, including the facts or circumstances described in subsection (c) shall, as soon as reasonably possible, provide to the appropriate authorities the facts or circumstances of the alleged terrorist activities.

(b) Attorney General determination.—The Attorney General shall determine the appropriate authorities under subsection (a).

(c) Facts or circumstances.—The facts or circumstances described in this subsection, include any facts or circumstances from which there is an apparent violation of section 842(p) of title 18, United States Code, that involves distribution of information relating to explosives, destructive devices, and weapons of mass destruction.

(d) Protection of privacy.—Nothing in this section may be construed to require an electronic communication service provider or a remote computing service provider—

(1) to monitor any user, subscriber, or customer of that provider; or

(2) to monitor the content of any communication of any person described in paragraph (1).

In a social media context, what constitutes “terrorist activity”? And how would a social media company “obtain knowledge” of undefined “terrorist activity” absent active monitoring of all of is users?

Feinstein’s proposal was constitutionally dubious and wildly impractical. It also generated strong opposition from social media and tech companies, the privacy and civil liberties community, and some of her own Senate colleagues.

In placing a hold on the bill after the Feinstein language surfaced, Senator Ron Wyden (D-OR) noted

“There is no question that tracking terrorist activity and preventing online terrorist recruitment should be top priorities for law enforcement and intelligence agencies. But I haven’t yet heard any law enforcement or intelligence agencies suggest that this provision will actually help catch terrorists, and I take the concerns that have been raised about its breadth and vagueness seriously. Internet companies should not be subject to broad requirements to police the speech of their users.”

Earlier this week, Wyden won the fight, as Feinstein agreed to drop the language–for now.

Feinstein spokesman Tom Mentzer told NextGov “Sen. Fein­stein still be­lieves it’s im­port­ant to block ter­ror­ists’ use of so­cial me­dia to re­cruit and in­cite vi­ol­ence and will contin­ue to work on achiev­ing that goal.”

In truth, if Feinstein got her way and social media companies managed to achiece the complete blocking of ISIS’ use of U.S.-based social media–a technically and operationally dubious proposition–it would have exactly the opposite effect she seeks.

A recent Fordham Law School study shows the FBI’s effectiveness in exploiting ISIS’ use of social media services like Twitter to try to radicalize and recruit young Muslim-Americans to find and charge alleged ISIS militants in the United States. Most of the ISIS-related indictments or convictions obtained by the FBI to date against alleged or actual ISIS-recruited terrorists in the United States are attributable to the FBI’s tracking of such activity on Twitter and other U.S.-based online services. Shutting down ISIS’ access to American-run social media services would simply lead to an ISIS migration to other, non-U.S. social media and messaging platforms–very likely in countries that would be less inclinded to cooperate with U.S. government agencies seeking information on known or suspected overseas terrorists communicating with individuals in the United States. This trend may already be underway with respect to ISIS’ use of encrypted messaging services.

When Members of Congress advocate censorship as a means of combating terrorist violence and propaganda, they give those same terrorists an unearned victory by sponsoring legislation that subverts the Bill of Rights. Kudos to Senator Wyden for reminding his Senate colleague of those facts.

In today’s Cato Online Forum essay, Gary Hufbauer and Tyler Moran explain why opening up more government procurement projects – especially U.S. procurement projects (and even more especially, state-level procurement projects) – to foreign competition is essential to a successful TTIP deal. Currently, even with the WTO Government Procurement Agreement in place, a treasure trove of U.S. business (in the trillions of dollars, unfortunately) is shielded from competition because it is “government spending” on “sensitive” projects.  

Those designations ensure that U.S. taxpayers get smaller bangs for their bucks, while entrenching inefficient firms as advantaged bidders.  Moreover, if TTIP fails to open U.S. procurement to more competition from EU firms, then EU negotiators will be less likely to meaningfully open their own markets to U.S. exporters and service providers.

Read it. Provide feedback. And sign up for the Cato TTIP conference on October 12.