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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.

Volatility is a well-recognized impediment to the success of Bitcoin as a currency. An example of the argument for volatility-based caution about Bitcoin, chosen at random, appears in Professor David Yermack’s December 2013 NBER working paper, “Is Bitcoin a Real Currency? An Economic Appraisal.” Wide swings in the price of bitcoins vis á vis other things will obviously tend to suppress its utility as a store of value or unit of account. Nobody wants to deal with recalculating prices denominated in Bitcoin day over day or hour over hour.

But I’ve long felt the volatility knock on Bitcoin to be slightly unfair. My favorite response line has been to say that judging Bitcoin based on its current volatility is like declaring a 10-year-old unfit to play in the NBA because he’s too short.

As a new asset class (or very different member of the “cash or cash equivalent” asset class), Bitcoin has yet to find its place in the world. The uses to which it is put will ultimately translate into a dollar price based on a recognized, relatively steady level of demand. Right now, speculation about where demand for Bitcoin will end up takes place in thinly traded markets. Just those two ingredients — uncertain future use and thin markets — are recipe enough for plentiful volatility.

But there’s every reason to believe that the market for Bitcoin will deepen and grow in sophistication, tempering its volatility. The capacity of the Bitcoin protocol to transfer and store value in exciting new ways will produce transaction demand — supplanting speculative demand, which today dominates because of anticipated price appreciation. Transaction or “use” demand will also increase because of Bitcoin’s capacity to administer countless economic and social functions beyond value transfer, including messaging, proof of authorship, land and title registry, and identity/naming. This will drive volatility down, I believe, both because it will shift bitcoins out of speculation and because it will give the markets more concrete information about what use demand is and will be.

Based on an estimate from two years ago or so — eons in Bitcoin time — I spent much of 2014 saying that Bitcoin volatility was dropping at a rate of about two or three percent per year. This suggested that it would have dollar-price stability similar to that of the Euro in ten to fifteen years. That’s not bad for an all-new currency (or whatever Bitcoin is). It’s looking, though, like that time estimate was wrong.

Eli Dourado at the Mercatus Center recently updated his site for tracking Bitcoin volatility to include some other currencies and assets. The update opens new and interesting windows. In particular, it reveals that earlier this year, the Euro and Bitcoin had nearly the same 30-day volatility against the dollar. On June 8th, Bitcoin had volatility of 1.13% and the Euro’s was 1.00%.

That doesn’t suggest at all that Bitcoin’s volatility problem is solved. When the two volatilities air-kissed, Bitcoin’s was near a historic low and the Euro’s was at a high. Bitcoin’s volatility has risen again since, with jumpy Bitcoin prices attributable to the summer’s machinations in Greece and Bitcoin’s “blocksize” debate. But the overall trend shows a marked and relatively rapid drop in volatility relative to my earlier prediction of ten- to fifteen-year parity.

Using Dourado’s data, it’s easy to make a graph that, while far less attractive, shows the strong downward slope to Bitcoin’s volatility. That trend won’t continue, and it will still be some while before Bitcoin has the kind of low volatility that makes it a reasonable store of value or unit of account for people whose alternatives are the dollar, the Euro, and other major currencies. But many people around the world are not in that category. They may adopt Bitcoin to protect themselves from local currencies with even greater swings, or consistent loss of value. This will improve the volatility picture for the rest of us.

I see many virtuous dynamics around Bitcoin volatility in the offing. These may be relevant, or they may be evidence of my need for education. Eli takes pains to point out on his site that the Bitcoin and Euro volatility numbers are incompatible because markets for fiat currency are closed on weekends and holidays. The data “are presented for entertainment purposes only,” he says. I agree with the sentiment, and offer this post in the same spirit.

[Cross-posted from]

As the Argentine Pope, ever critical of capitalism, visits the United States, my colleagues at have posted this graph.


It shows that in 1896, income per person in the United States and Argentina, two of the richest countries in the world, was about identical. Argentina subsequently eschewed the free market, replacing it with trade protectionism and other corporatist policies intended to help the poor by redistributing wealth. By 2010, Argentine income was a third of that of the United States.

Perhaps Pope Francis doesn’t endorse Argentine economic policies, but having just arrived from Cuba, he missed an opportunity to denounce the lack of freedoms that have kept that island and other Latin American countries poor and repressed. He met with none of the many admirable Cuban dissidents, in or out of prison, who have been peacefully advocating basic rights. Nor did he mention the plight of the Cuban people they represent, even as authorities arrested or detained 250 Cuban activists during his visit.

The Cuban Forum for Rights and Liberties (Foro por los Derechos y Libertades), an independent group of dissidents in Cuba, summed up how it felt about, and experienced, the Pope’s visit. It read, in part:

            “We human rights activists, regime opponents and independent journalists have experienced days full of threats, harassment, telephone connections being cut off, homes besieged by the authorities, and violent, arbitrary arrests.

            The behavior of the regime was expected. However, the position of the church has been surprising. The exaggerated and repeated shows of approval of the dictatorship, the silence toward its excesses, and the refusal to hear dissident voices have created broad discontent among Cuban believers and non-believers both within and outside of the island.”

The group might have added that the disappointment has spread more widely in the Americas.

Like countless similar news stories recently, a report on Business Insider claims: “Residents from 5 US states could soon need a passport for a domestic flight.” The idea is that the Transportation Security Administration will begin to enforce the REAL ID Act in 2016 by denying airport access to travelers from non-compliant states.

It’s not true.

Nobody needs to get a passport to fly domestically. No state needs to implement the REAL ID Act’s national ID mandates.

I’ve been collecting examples of misleading reports like this at the Twitter hashtag “#TakenInByDHS.” A recent blog post of mine, also called “Taken In by DHS,” fleshes out the story of widespread misreporting on the situation with our national ID law.

In brief, the Department of Homeland Security is trying to get the states to convert their driver licensing systems into components of a U.S. national ID system. The REAL ID Act, which Congress passed in 2005, allows DHS to refuse IDs from non-compliant states, including IDs travelers present at TSA’s airport checkpoints.

This concerns some people when they first learn about it, but the REAL ID compliance deadline passed more than seven years ago with not one state in compliance. DHS has improvised deadline after deadline since then, and it has caved every single time its deadlines have been reached. I went through the history last year in my Cato Policy Analysis, “REAL ID: A State-by-State Update.”

DHS’s latest story is that it might start to enforce REAL ID in 2016. It won’t. 

Contrary to DHS claims, not one state is in compliance with the national ID law. Not one. Some years ago, the department created a whittled down “material compliance checklist,” and it has freely given out deadline extensions to states that make enough of a show that they might go along with the federal government’s plans.

The story now being spun is that TSA will categorically turn away people from a small group of remaining outlier states—if you can actually call New York small—when enforcement starts next year. I am 100% certain they will not. Every state will be out of compliance for the entire year, and the TSA will not implement a policy of refusing travelers from non-compliant states.

The reason for my confidence is a basic understanding of the politics involved. If TSA—perhaps the most despised U.S. federal agency in history—refuses people the right to travel because they do not carry a national ID, the uproar will be intense and lasting. The lawsuits that follow such an action will make their heads spin. And it will all be focused at the federal government: the TSA, the DHS, and the U.S. Congress with its flaccid oversight of the security bureaucracy.

DHS officials can do basic political calculations, and, while they will communicate through back-channels and proxies that they plan to enforce REAL ID this time, there is no chance that they will actually bring a storm like this down upon themselves. State officials who do similar calculations from their end realize that they don’t have to follow federal mandates this time, or ever, and that their states will be worse off if they do. All this issue requires is a little sunlight.

Americans, you don’t have to have a passport to fly domestically. American states, you don’t have to obey federal national ID mandates. America, you don’t need to comply with the REAL ID Act.

Today’s Cato Online Forum essay comes from economist Laura Baughman, who laments the typical methodological approaches to estimating relationships between trade agreements and jobs, pointing out how those approaches seem to be used to validate a priori positions, either pro- or anti-trade, rather than reveal best estimates.  While economists are better at estimating the relationships between trade agreements and output or between trade agreements and trade flows, Baughman explains that if the likely impact of on jobs is sought, there is a more objective approach to take.  And the results of that method suggest that “it will be hard to argue that [TTIP] will not be a job ‘winner’ for the United States.”

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


In a romantic view of democracy, legislators act with the interests of the general public in mind. They grapple with policy issues, work toward a broad consensus, and pass legislation that has strong support. They frequently reevaluate existing programs and prune the low-value and harmful ones. They put citizens first and limit their actions to those allowable under the U.S. Constitution.

Unfortunately, that is not how Congress works. It often enacts ill-conceived laws that do not have broad public support. Many programs perform poorly year after year, yet Congress gives them growing budgets. Congress almost never terminates programs because members have a hard time admitting that their policies have failed. Indeed, members try to evade blame for government failures, and they only try to fix problems after high-profile scandals have occurred.

A new essay, “Congressional Incentives and Government Failure,” at looks at how Congress operates. It examines the incentives that induce members to support policies counter to the general public interest.

This is the sixth post in a series covering the advance of educational choice legislation across the country this year. As of my last update in early July, there were 17 new or expanded choice programs in 14 states. On Friday, North Carolina lawmakers finally passed a long-overdue budget that expanded the state’s two school voucher programs for low-income and special-needs students, bringing the total number to 19 new or expanded programs in 15 states. The updated tally is below.

A lawsuit against the Tar Heel State’s voucher law impeded implementation so only 1,216 low-income students participated last year, barely 10 percent of the 12,000+ applications the state received. In July, the North Carolina Supreme Court upheld the program, clearing the way for the legislature to expand it. 

Meanwhile, opponents of educational choice have launched a second legal attack on Nevada’s new education savings account law. Last month, the ACLU filed a similar lawsuit. The state of Nevada has hired one of the top law firms in the nation to help defend the ESA program. In addition, the Institute for Justice will be defending the law against both challenges on behalf five families who would benefit from the ESAs. You can learn about their stories in this short video:

In other school choice news, Indiana is poised to surpass Wisconsin as the state with the most students receiving school vouchers with more than 33,000 students. However, that number is dwarfed by the nearly 70,000 students who received tax-credit scholarships in Florida during the last school year.

And speaking of tax credits, a new poll from Quinnipiac University finds that New York Gov. Andrew Cuomo’s most popular education proposals were the personal-use and scholarship tax credits that he unsuccessfully pushed this year. More than half of respondents–including 62 percent of Millennials–supported tax credits for donations to private schools (though the question should have asked about donations to nonprofit scholarship organizations, which was Cuomo’s actual proposal).

Additionally, 65 percent of respondents–including 72 percent of Millennials and 70 percent of respondents ages 35-49–voiced support for a $500 state income tax credit for low- and middle-income parents to pay private school tuition.

Updated tally for new and expanded choice programs in 2015:

New Educational Choice Programs (7 in 6 states)

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

Expanded Educational Choice Programs (12 in 9 states)

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

Like North Carolina, Pennsylvania lawmakers have been embroiled in a budget battle all summer. Early proposals included expansions of the states two tax-credit scholarship programs, but it is unclear what the final budget will contain.

The biggest mistake of well-meaning leftists is that they place too much value on good intentions and don’t seem to care nearly as much about good results.

Pope Francis is an example of this unfortunate tendency. His concern for the poor presumably is genuine, but he puts ideology above evidence when he argues against capitalism and in favor of coercive government.

Here are some passages from a CNN report on the Pope’s bias.

Pope Francis makes his first official visit to the United States this week. There’s a lot of angst about what he might say, especially when he addresses Congress Thursday morning. …He’ll probably discuss American capitalism’s flaws, a theme he has hit on since the 1990s. Pope Francis wrote a book in 1998 with an entire chapter focused on “the limits of capitalism.” …Francis argued that…capitalism lacks morals and promotes selfish behavior. …He has been especially critical of how capitalism has increased inequality… He’s tweeted: “inequality is the root of all evil.” …he’s a major critic of greed and excessive wealth. …”Capitalism has been the cause of many sufferings…”

Wow, I almost don’t know how to respond. So many bad ideas crammed in so few words.

If you want to know why Pope Francis is wrong about capitalism and human well-being, these videos narrated by Don Boudreaux and Deirdre McCloskey will explain how free markets have generated unimaginable prosperity for ordinary people.

But the Pope isn’t just wrong on facts. He’s also wrong on morality. This video by Walter Williams explains why voluntary exchange in a free-market system is far more ethical than a regime based on government coercion.

Is Capitalism Moral?

Very well stated. And I especially like how Walter explains that markets are a positive-sum game, whereas government-coerced redistribution is a zero-sum game (actually a negative-sum game when you include the negative economic impact of taxes and spending).

Professor Williams wasn’t specifically seeking to counter the muddled economic views of Pope Francis, but others have taken up that challenge.

Writing for the Washington Post, George Will specifically addresses the Pope’s moral preening.

Pope Francis embodies sanctity but comes trailing clouds of sanctimony. With a convert’s indiscriminate zeal, he embraces ideas impeccably fashionable, demonstrably false and deeply reactionary. They would devastate the poor on whose behalf he purports to speak… Francis deplores “compulsive consumerism,” a sin to which the 1.3 billion persons without even electricity can only aspire.

He specifically explains that people with genuine concern for the poor should celebrate industrialization and utilization of natural resources.

Poverty has probably decreased more in the past two centuries than in the preceding three millennia because of industrialization powered by fossil fuels. Only economic growth has ever produced broad amelioration of poverty, and since growth began in the late 18th century, it has depended on such fuels. …The capitalist commerce that Francis disdains is the reason the portion of the planet’s population living in “absolute poverty” ($1.25 a day) declined from 53 percent to 17 percent in three decades after 1981.

So why doesn’t Pope Francis understand economics?

Perhaps because he learned the wrong lesson from his nation’s disastrous experiment with an especially corrupt and cronyist version of statism.

Francis grew up around the rancid political culture of Peronist populism, the sterile redistributionism that has reduced his Argentina from the world’s 14th highest per-capita gross domestic product in 1900 to 63rd today. Francis’s agenda for the planet — “global regulatory norms” — would globalize Argentina’s downward mobility.

Amen (no pun intended).

George Will is right that Argentina is not a good role model.

And he’s even more right about the dangers of “global norms” that inevitably would pressure all nations to impose equally bad levels of taxation and regulation.

Returning to the economic views of Pope Francis, the BBC asked for my thoughts back in 2013 and everything I said still applies today.

Dan Mitchell Discussing the Pope, Capitalism, and How to Genuinely Help the Poor

Today’s Cato Online Forum essay takes a look under the hood – or, rather, describes what should be under the hood – of a Transatlantic Trade and Investment Partnership deal, if it is to succeed at minimizing trade diversion and spreading its benefits to third countries. In her essay, Inu Barbee explains why today’s globalized value chains necessitate smart rules of origin and inclusive regulatory standards in the TTIP. Read it. Comment. And register to see and hear more at Cato’s TTIP conference on October 12.

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.


From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.