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One story about poverty in the United States goes like this: Poverty is simple to escape. Finish high school. Get a job, even a menial one. Do not have kids until you’re married. And if you do all these things, you’re pretty unlikely to be poor.

Conservatives like this story because it suggests that no significant social changes are needed to end poverty. On this view, poverty may even be just a personal choice. It’s largely up to you whether you follow the so-called “success sequence” or not.

Critics, though, are quick to point out that the success sequence is much easier described than followed, and that following it is much easier for some people than for others. Failing or dangerous schools offer little reason for students to remain. Getting a job is easier in some places than others, and easier for some types of people than others. In some communities, marriage partners are all too few. And avoiding having children is a lot to ask, because it’s a natural human desire to want to have them.

If the success sequence doesn’t hold up so well, what do we do about it? And what specifically libertarian steps remain to be done to fight poverty?

This month at Cato Unbound, we’re debating the usefulness of the success sequence as a tool for thinking about American poverty. Cato Senior Fellow Michael Tanner has written the lead essay, which I encourage you to read. Comments are open, and we welcome readers’ feedback. Discussion with a panel of diverse outside experts will continue through the end of the month.

Compliance Week invited me to write on what’s wrong with the Foreign Corrupt Practices Act. Excerpt

Scenario: an American city hires an Asian-based bank to float a bond deal. Scandal! Turns out the bank wined and dined the mayor and council and treated them to sports events. After an investigation, the Asian bank agrees to put things right by paying millions of dollars to the government of France.

That’s crazy, right? What does any of this have to do with the government of France? But it’s certainly no crazier than the workings of our own Foreign Corrupt Practices Act, under which European companies have been made to pay penalties of $398 million and $240 million to the U.S. government over bribes paid to officials in Nigeria and Iran, respectively….

FCPA oversteps the proper bounds of federal lawmaking in at least four ways: it is extraterritorial, vicarious, punitive, and vague….

The business community in Washington has been pressing for legislation to clarify the 1977 law’s requirements, but I suggest we go further and re-examine things more fundamentally, including (beyond the problems above) the law’s break from principles of mutualism and comity in foreign relations and its role in scaring capable bidders away from infrastructure projects that could help lift some rural populations out of desperate poverty. “Making us feel better isn’t a good enough reason for a law.”

Full text here, and earlier FCPA coverage here, here, here, here, and here

In 2005 the Malaysian political leader Anwar Ibrahim visited the Cato Institute. In the photo at right, I’m giving him a copy of my book Libertarianism: A Primer, which he told me he had already read – in prison. What a thing for an author to hear! After becoming leader of the opposition People’s Justice Party, he was again imprisoned on trumped-up charges in 2015. He remains in prison today. But thanks to yesterday’s elections, it now seems that Anwar may soon not only be released from prison but be named prime minister.

It’s a complicated story. Anwar was a youth leader and rising star in UNMO, the party that has ruled Malaysia for six decades since independence. He became finance minister and deputy prime minister under Mahathir Mohamad, who became well known for his defense of “Asian values” against supposedly Western notions of democracy and human rights. But Anwar fell out with Mahathir over the Asian crisis and charges of corruption. In 1998 Anwar was removed from office and then jailed in a trial that was criticized around the world. Amnesty International said that his trial “exposed a pattern of political manipulation of key state institutions including the police, public prosecutor’s office and the judiciary.” He was released in 2004 but banned from participation in politics for five years. After his return to opposition politics, he again angered the ruling party and was sent back to prison. Throughout his travails he was smeared in state-dominated media as homosexual, pro-Israel, and pro-American, the usual sorts of charges that authoritarian governments make against their critics. It should be noted that Anwar is no saint, and he tried to turn some of the same charges back against his persecutors.

Meanwhile, Mahathir retired as the world’s longest-serving elected leader in 2003. He became a sharp critic of his UNMO successors, Abdullah Ahmad Badawi and later Najib Razak. This year, at age 92, he became the opposition candidate for prime minister. From jail Anwar supported him. This week Mahathir led his new party to victory and has just been sworn in as prime minister. He has promised to release Anwar from prison and make him prime minister within two years. Observers are hopeful that Anwar’s leadership would mean reform in Malaysia: an end to kleptocracy and corruption and perhaps an economy that is “inclusive, rules-based and competition-oriented with a large, well-funded social safety net,” much like Singapore. According to the Human Freedom Index, Malaysia could use improvement in all areas.

Last year I complained that President Trump was welcoming Anwar’s jailer, Najib Razak, to the White House. Now of course Anwar is joining forces with his original jailer. What a long strange trip it’s been. But hopefully it’s not over.

Congress looks set to pass long-awaited changes to the Dodd-Frank Act that would relieve small and medium-sized banks from some of the onerous burdens of the post-crisis financial legislation package, the Hill reports:

The Senate in March passed a bipartisan bill to exempt dozens of banks from the stricter Federal Reserve oversight under Dodd-Frank and scores more from lending restrictions and reporting requirements. The deal, sponsored by Senate Banking Committee Chairman Mike Crapo (R-Idaho), passed by a 67-31 vote with support from more than a dozen Democrats.

A deal between the House and Senate would clear the way for Congress to pass the biggest changes to the Dodd-Frank financial rules since the law was enacted in 2010. The House and Senate have squabbled over the Senate bill, which Ryan vowed to freeze unless the Senate agreed to take up provisions from the House.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said he was “excited that our negotiations over the last few weeks have culminated in the Senate agreeing to vote on our House bills.”

The 849-page Dodd-Frank Act introduced 27,000 new regulations on the financial sector. The Senate bill, which the House now appears ready to support, is only a modest step to relieve the burden of such a massive exercise in rule-making.

But the effort is nonetheless welcome. Since Dodd-Frank’s passage in 2010, compliance costs have rocketed up, especially for small banks. The number of new banks has virtually ground to a halt, while there is evidence that reduced small-business lending has adversely affected local communities across America.

To ease the supervisory burden on small and medium-sized institutions, and to exempt them from trading restrictions of which they were never the target, is thus necessary and appropriate. This the Senate bill does, and for that reason it constitutes a positive move to facilitate lending, competition and access to financial services.

study published last year by researchers at the University of Pennsylvania and Pennsylvania State University found that state Prescription Drug Monitoring Programs (PDMPs), a popular method used to drive down the opioid prescription rate, do not drive down opioid overdose death rates, but might have the unintended consequence of adding to them, by driving users to the underground market where dangerous drugs like fentanyl and heroin await them. Another study last October by a Purdue University researcher found that while PDMPs drove down the prescription rate of oxycodone, they significantly drove up the rate of heroin use.

Yesterday the Annals of Internal Medicine published a systematic research review by Columbia University epidemiologist David Fink and others that drew the same conclusion. The authors stated, “Evidence that PDMP implementation either increases or decreases nonfatal or fatal overdoses is largely insufficient, as is evidence regarding positive associations between specific administrative features and successful programs.” They added, “implementation of PDMPs may have unintended negative outcomes—namely, increased rates of heroin-related overdose.”

Meanwhile, all 50 states have implemented PDMPs and state and federal policymakers seem focused on beefing them up. This is driven by the mistaken belief that the opioid overdose rate is primarily the result of doctors over-prescribing opioids to patients. As I have written numerous times, the overdose crisis is primarily a product of drug prohibition, as non-medical users access drugs in the dangerous black market. PDMPs might be responsible for the dramatic drop in the opioid prescription rate these last 8 years (the rate peaked in 2010), but as the prescription rate has dropped the overdose rate has increased—while fentanyl and heroin are now causing these overdoses the majority of the time.

How much more evidence will it take before policymakers finally realize their approach is not evidence-based but is contributing significantly to the overdose crisis?

Over a decade ago, Rickey Kanter’s company, Dr. Comfort, shipped diabetic shoe inserts to a podiatrist in Florida. Dr. Comfort sold the inserts as being Medicare-approved, but they were not. Because of these events, Kanter, to this day, cannot legally own a gun.

U.S. and Wisconsin law prohibit anyone convicted of a crime “punishable by imprisonment for a term exceeding one year” from possessing any firearm or ammunition. In 2011, Kanter pled guilty to a single count of mail fraud for Dr. Comfort’s 2006 delivery of non-compliant shoe inserts to a podiatrist. Kanter has no other criminal convictions, is not under indictment, or a fugitive from justice, or an unlawful user of any controlled substance. He has not been judged mentally defective, been dishonorably discharged from the armed forces, renounced his citizenship, or been the subject of a restraining order relating to an intimate partner. In fact, Kanter has no history of any violent behavior at all.

So he brought suit in federal court, arguing that the categorical prohibition of firearms possession by felons was unconstitutional as applied to him: a non-violent, one-time offender. The district court sided with the government, which argued that a permanent revocation of Second Amendment rights for all felonies—no matter how serious or remote in time—passes constitutional muster. The court paid lip service to Kanter’s Second Amendment rights, finding that the commission of any felony shows that he “clearly disrespected important laws in the past,” which justifies completely stripping him of his rights. Kanter appealed to the U.S. Court of Appeals for the Seventh Circuit.

Because fundamental rights cannot be so summarily disregarded, Cato filed a brief as amicus curiae supporting Kanter. The scope of what is considered a felony has changed dramatically in recent decades, with more and more minor offenses carrying criminal penalties. This poses a serious concern where the government does not distinguish terrorism and armed robbery from falsification of fishing records or Martha Stewart’s infamous white lies in stripping a person of fundamental rights.

The district court was motivated by efficiency of administration—that simply treating all felons the same makes it easier for the government—and by a broad conception of legislative power to “establish certain ‘categorical disqualifications’” to the rights of the people. We disagree. Where any constitutional rights are at stake, courts must engage in meaningful review—especially of individualized challenges to such broad and overreaching laws. If the government wants to strip an individual of his rights, it must demonstrate, with actual evidence, that the deprivation survives an exacting level of scrutiny.

Falsely advertising a shoe insert may not be admirable conduct, but arguing that doing so means that a person should not be able to defend himself with a gun seems like shooting from the hip.

On May 9, CIA Deputy Director Gina Haspel will get her chance to shape–or reshape–the narrative surrounding one particular episode in her 30+ year CIA career: her time running one of the now-infamous Agency “black site” interrogation centers used in the Bush administration’s torture program. Haspel’s challenge will be in getting Senators and the public to look beyond existing media accounts about her alleged role in running the “black site” at which al Qaeda suspect Abd al-Rahim al-Nashiri was repeatedly waterboarded, and her role in carrying out the destruction of videotapes showing the gruesome sessions. 

Despite the benefit of an unprecendeted (and in my view very legally questionable) CIA domestic influence operation on her behalf, Haspel has her work cut out for her. It’s unlikely that the “I was just following orders” line will do anything other than sink her nomination. If she has and claims to Senators, as former CIA Station Chief John Bennett has suggested, that she has learned the proper lessons from the episode (i.e., that torture is wrong, that she would refuse a Trump order to restart a new torture program, etc.), should she get the chance to lead the Agency? Would she actually serve as a check on Trump? On the latter question at least, I think the answer is a resounding “no.” The reason is that America’s first torture program got off the ground because lots of people in government–not just at the CIA–elected to not only go along with it, but facilitated it.

It took a pliant Secretary of State to not make waves about the “black sites” being set up and run outside the control of the local U.S. ambassadors, generally the person in charge of all U.S. government activities, programs, and relationships with the host nation. It took an eager group of lawyers in the Department of Justice’ Office of Legal Counsel (OLC) to write the opinions effectively redefining torture out of existence, thus providing a legal shield for anyone participating in the program. If there’s one issue that is more important than who is running the CIA, it is who is in charge at DoJ, and especially what kind of lawyers populate OLC. Just because the McCain-Feinstein anti-torture amendment is law does not mean the next John Yoo or Jay Bybee won’t try to redefine it for executive branch agencies charged with starting a new torture program. 

In the first torture program’s aftermath, a new and untested president insisted that Americans “….look forward as opposed to looking backward” on the U.S. torture program. Because the CIA is one of the federal agencies exempted from normal Office of Personnel Management rules (i.e., CIA is an excepted service), Obama didn’t actually need to have a federal prosecutor file charges to get rid of CIA personnel involved in the torture program. He could’ve fired them himself. He didn’t, and that’s one reason why Gina Haspel now has a shot to run the CIA. 

To recap: At the State Department, we now have a pliant Secretary who in the past has clearly stated his support for the first torture program, like President Trump. We have a Justice Department that is constantly under siege from a White House that clearly has a “loyalty test” it tries to impose on those working there. And we have a previous manager of America’s first torture program teed up to lead the federal agency that ran that same program. The conditions are certainly ripe for a Torture Redux. The question now is whether the Senate recognizes the danger and will act accordingly. We will know soon enough.

A recent report from the Governors Highway Safety Alliance suggests that the legalization of recreational marijuana in many U.S. states has been associated with increases in pedestrian traffic fatalities. To substantiate this claim, the report cites that:

“[t]he seven states (Alaska, Colorado, Maine, Massachusetts, Nevada, Oregon, Washington) and DC that legalized recreational use of marijuana between 2012 and 2016 reported a collective 16.4 percent increase in pedestrian fatalities for the first six months of 2017 versus the first six months of 2016, whereas all other states reported a collective 5.8 percent decrease in pedestrian fatalities.” 

This statistic, however, does not indicate the impact of legalization on pedestrian fatalities because many states did not legalize between the time periods cited.  An appropriate analysis should examine what happens, state-by-state, at the time of each state’s own legalization.

The graphs below depict pedestrian fatalities for states that legalized recreations marijuana between 2012 and 2016. The red lines represents the year in which the state legalized.  The graphs suggest no relation between legalization and pedestrian deaths.

For the states that did legalize in 2016 (Maine, Massachusetts, and Nevada), the provisional January-June 2017 used in the GHSA report are the only data available for comparison. Yet, between January-June 2016 and January-June 2017, these three states saw an average decrease in pedestrian fatalities of 4.45 percent.

Furthermore, on average, all states saw an average decrease of 12% in pedestrian traffic fatalities in the first six months after legalizing relative to the same six months of the prior year, indicating no clear effect of legalization on pedestrian traffic fatalities.

The concern about legalization and traffic fatalities is also inconsistent with several recent studies on the topic. One study, published in the American Journal of Public Health, concluded that “[t]hree years after recreational marijuana legalization, changes in motor vehicle crash fatality rates for Washington and Colorado were not statistically different from those in similar states without recreational marijuana legalization.”

Additionally, preliminary research indicates that marijuana legalization may reduce traffic fatalities. In their study of statewide medical marijuana liberalization, Anderson et al find that “the legalization of medical marijuana is associated with a 13.2 percent decrease in fatalities in which at least one driver involved had a positive BAC level.”  Marijuana and alcohol are substitute goods, meaning that consumers’ preferences are often indifferent between the use of one good or the other. By allowing individuals to legally use marijuana, many choose to do so instead of using alcohol, thus decreasing the prevalence of drunk driving. Furthermore, medical marijuana legalization does not seem to result in an increase in “driving while high” deaths, for the same study reports that total “traffic fatalities fall by 8–11 percent the first full year after legalization.” 

 

Robert Capodilupo contributed to this blogpost.

Christopher Fettweis will be at Cato on Monday, April 16, at noon to present and discuss his new book, Psychology of a Superpower: Security and Dominance in U.S. Foreign Policy.

Columbia University’s Warner Schilling once observed that “at the summit of foreign policy, one always finds simplicity and spook.” In his lively book, Fettweis elaborates and underscores that observation. Things are worst, suggests Fettweis, if the country it is, or thinks itself to be, a superpower. And we all know what country that would be.

The book is a catalogue of delusion in high places. Like monarchs who believed their own propaganda about being divine, our superpower fancies itself to be indispensable, exceptional, all-powerful, and the sole entity that can bring order to a misshapen world. Yet it envisions existential threat from tiny bands of terrorists and finds its naval majesty besmirched by little artificial islands in the South China Sea.

As Harvard psychologist Steven Pinker (author of The Better Angels of Our Nature and Enlightenment Now) puts it, Fettweis uses “a trove of insight from psychological science” to present a “picture with a far better resemblance to reality.”

Fettweis is the author of three previous books and is associate professor of political science at Tulane University.

Commenting will be Keir Lieber, Director of the Center for Security Studies at Georgetown University. I will be moderating. And there is, as always, a luncheon to follow—except for those taking it in online.

Click here to register or to learn more.

This afternoon, Donald Trump will make an announcement regarding the future of the Iran nuclear deal. Ahead of a May 12th deadline, the President is widely expected to announce that he will not be waiving the sanctions. This decision would place the United States in violation of the deal. But while it may not kill the JCPOA completely – European states and Iran could decide whether to keep some version of the deal going without the United States – it will start a period of profound uncertainty about the future of U.S-Iranian relations.

In some ways, this uncertainty is the most concerning thing about the current administration’s approach to the JCPOA. Trump’s decision is unlikely to be paired with any clear alternate strategy. It probably won’t be followed by public debate over whether conflict with Iran is desirable, a proposition that many in the administration seem to favor, but which most Americans would undoubtedly oppose.

Instead, by blowing up the nuclear deal today without offering any clear strategy or plan for an alternative, Donald Trump is opening Pandora’s Box, increasing the risks of escalation and bringing us gradually closer to conflict with Iran.

Initially, it probably won’t look that bad. The President’s decision today may not even look like an absolute withdrawal from the deal. Even if he declines to waive sanctions, penalties will not kick in for 180 days, and Trump or his advisors may well suggest that European states can continue to negotiate during this period.

Yet the act of refusing to waive sanctions itself will deter companies from investing in Iran, and there is little chance that Iran will agree to the additional sanctions and restrictions that the Trump administration is now proposing as unilateral amendments to the deal. Otherwise, the Trump administration has given no indication of any diplomatic follow-on steps they will take with regard to Iran’s nuclear program.

Nor has the administration given any indication that they intend to have a broad public discussion on military action against Iran, though it is clear that many members of the administration -  from new Secretary of State Mike Pompeo to National Security Advisor John Bolton – favor such an approach. Instead, the steps that Trump has already taken, such as increasing troops in Syria, and his decision to withdraw from the deal generally raise the risk of escalation and conflict with Iran or Iranian proxies throughout the region.  

Conflict between the US and Iran may not happen; we could get lucky. But Trump’s choice to withdraw from the JCPOA today – and his choice to move to a more confrontational approach to Iran – raises that risk substantially. If US troops come into conflict with Iranian proxies inside Syria, broader conflict could easily result. Likewise, escalation is possible if US allies like Israel decide to take matters into their own hands and strike Iran’s nuclear facilities.

Put simply, Trump’s decision today doesn’t mean we’re about to have a public discussion like the one in 2003 that helped to set the US on a course to war in Iraq. Yet his administration’s choices and actions are nonetheless raising the likelihood of small-scale conflict that could easily spiral into something bigger. The President’s decision today may well end up counted among the worst blunders in recent U.S. foreign policy.

Here’s a quick Cato Daily Podcast chat with Neal McCluskey about the recent teacher uprisings in Oklahoma, Colorado, Arizona, Kentucky, and West Virginia. How justified are they?

Neal goes through some of the data here, here, and here.

The Republicans have so forgotten how to control spending, even when they try something conservative it is not really conservative. Consider the House GOP’s proposed reforms to the food stamp program in the upcoming farm bill.

The GOP wants to put work requirements on a small share of food stamp (“SNAP”) recipients. The Congressional Budget Office says: “starting in 2021 certain SNAP recipients must either be employed or in a state-government-sponsored training program unless they qualify for certain waivers. CBO estimates that this provision would reduce spending on benefits by $9.2 billion over the 2019-2028 period because it would cause some people to lose eligibility.”

That sounds like a good change, and change is needed in this program. Spending on food stamps doubled under President Bush then doubled again under President Obama, as shown in the chart below. It rose from $18 billion in 2001 to $80 billion in 2013. It has since dipped to $68 billion, but we are in the ninth year of an economic expansion so it should have fallen much more.

Anyway, the GOP bill would trim food stamps $9.2 billion over 10 years, or less than $1 billion a year. But here is the next line in the CBO report: “The federal government’s administrative costs for this provision would increase by $7.7 billion over the same period.”

The GOP plan would blow most of the cost savings on new bureaucracy! The rest of the savings would be consumed by other spending increases, according to the CBO. The scorekeeping agency finds that the plan would create an overall increase on food stamp spending over 10 years of $0.5 billion.

There are no net taxpayer savings from the Republican food stamp plan. Democratic Representative Colin Peterson said of the plan, “It mystifies me how the party that doesn’t like government wants to make it so much bigger.” Me too! Except, as I discuss here, most Republicans like government and want to make it bigger.

The proposed food stamp changes may induce some people to get jobs and job training, but federal job training programs have a poor record. Also, what the GOP envisions as $1 billion a year in spending on food-stamp job training, liberals are already pushing to make $4 or $5 billion.

The GOP food stamp changes would shuffle the deck chairs, but the CBO finds that the reduction in government dependence would be relatively tiny. By 2028, “the SNAP caseload under the bill’s proposed work requirement would be lower by about 1.2 million people in an average month than it is under current law, or about 3.7 percent of the total caseload.”

The GOP farm bill needs some real cuts—both to farm subsidies and to food stamps. Real cuts are the topic of this farm study and the focus of this Friday forum on Capitol Hill. As for food stamps, a good start would be to cut $15 billion on junk food.

If you thought that the congressional spending orgy would slow down after the bloated omnibus bill passed in March, you were wrong. Republicans are preparing to bring to the House floor a farm bill that will cost taxpayers at least $867 billion over 10 years.

While this is a “farm bill,” one-quarter of the spending will be for farm subsidies and three-quarters for food stamps. The latter is officially called “nutrition” spending. But since almost one-quarter of food stamp spending is for junk food, that label is as absurd as calling Social Security’s Ponzi-style accounting a “trust fund.”

The essence of the farm bill is a giant log roll. Much of the spending likely does not have majority support in Congress or among the public, so politicians mash together hand-outs to different groups in a broad farm-food omnibus. As the number of farmers has fallen over the decades, politicians have had to buy off an increasing number of special interest groups to pass the “farm bill.” The Congressional Research Service recently discussed how the farm bill logroll developed:

The economic depression and dust bowl in the 1930s prompted the first “farm bill” in 1933, with subsidies and production controls to raise farm incomes and encourage conservation. … The 1973 farm bill was the first “omnibus” farm bill; it included not only farm supports but also food stamp reauthorization to provide nutrition assistance for needy individuals. Subsequent farm bills expanded in scope, adding titles for formerly stand-alone laws such as trade, credit, and crop insurance. New conservation laws were added in the 1985 farm bill, organic agriculture in the 1990 farm bill, research programs in the 1996 farm bill, bioenergy in the 2002 farm bill, and horticulture and local food systems in the 2008 farm bill.

We’re subsidizing horticulture now? What’s next—subsidies for grocery stores, restaurants, flower shops, and landscape architecture?

Even with the wide-ranging logroll in the current House bill, supporters may have difficulty getting enough votes. Many Democrats are objecting to changes in food stamps, which would cut a net $583 million over 10 years in spending from a 10-year food stamp baseline of $664 billion. (That’s one-tenth of 1 percent). Some Republicans are objecting to the high spending on both farm and food subsidies. We will see what happens in coming weeks. 

Join us Friday at noon on Capitol Hill for a briefing on the farm bill featuring myself, Daren Bakst of the Heritage Foundation, and Scott Faber of the Environmental Working Group.

CBO’s cost estimate of the farm bill is here.

Logrolling is explained here.

An overview of farm subsidies is here.

Contract law is premised on a “meeting of the minds”: the common agreement between two parties to strike a mutually beneficial bargain to which they both assent. When unions and employers spar over wages and working conditions, they align their divergent interests in a manner that is fair to both parties.

California, alone among the 50 states, is dissatisfied with the fairness of this procedure. Instead, it requires a “mandatory mediation and conciliation process” for agricultural employers. Under this law, unions need not use their market power to negotiate with the employer. Instead, a state-sanctioned “mediator” drafts the agreement and imposes its terms on the parties. Such “contracts” dictate not simply wage rates or benefits packages, but the full spectrum of employment policies in a particular workplace.

And particularity here is the precise issue: the power of the state injects itself into the employment relationship not by setting general standards of conduct applicable to all employers, as with minimum wage laws or workplace safety standards, but by singling out employers for idiosyncratic treatment. This is not a “collective bargaining agreement,” but a mini-labor code applied to a single employer, who must now compete in the marketplace under a regulatory regime unique to him.

There are no safeguards to ensure that similarly situated employers or unions will be treated as similarly. Indeed, the law by its terms singles out a single industry for no discernable reason (other than possible rent-seeking by agricultural unions). Arbitrary burdens violate the core principle of the Fourteenth Amendment, which guarantees each of us the equal protection of the laws. A law for me but not for thee is no law at all.

An employer named Gerawan Farming challenged this imposition on its rights, but the California Supreme Court failed to recognize the constitutional principle at stake. Gerawan now petitions the U.S. Supreme Court to review its case. Cato has joined in a brief with the Pacific Legal Foundation urging the Court to take the case and require unions in California to vindicate their interests in the same manner as unions in the rest of the country: at the bargaining table.

Last week Secretary Carson’s Department of Housing and Urban Development (HUD) proposed changes to federal rental assistance programs. There were a variety of changes in the HUD proposal, but so far reactions have focused mainly on tenant rents. This narrow focus on a single element of the proposal doesn’t do the full proposal justice.

The three major changes are the ability to institute work requirements, the changes to tenant rents, and reductions in paperwork and monitoring. A few words on each, below.

1) Work Requirements

The proposal allows housing authorities to institute work requirements. Despite concerns from activist groups like the National Low-Income Housing Coalition (NLIHC), the proposal does not allow housing authorities to apply work requirements to the elderly, disabled, or minors.

According to the Center for Budget and Policy Priorities, 60 percent of households on public assistance are elderly or disabled. These households would be exempt. Of the remaining households, some are already working and so ostensibly they would not need to change their behavior.

In short, if all housing authorities adopted strong work requirements a minority of HUD households would be impacted, perhaps 13 - 18 percent. Work requirements are likely more of a symbolic change that expands the universe of what’s possible under government rental assistance than a provision that would dramatically change rental assistance.

2) Rent Changes

This change has drawn a lot of attention. The increase from 30 to 35% of income for rent is not ideal from a policy standpoint, because it reduces tenant incentives to earn additional dollars (or to report additional dollars if they are earned).

If rents need to be raised, the change from $50 to $150 for minimum rent is superior to the increase from 30 to 35% of income for rent. In fact, HUD would likely be better off moving all of their units to flat rate rents, similar to how minimum rents are structured.

HUD’s view is that rent changes must be made as a result of budgetary constraints. Indeed, changes in rent due to budget constraints are not unprecedented in HUD housing. In 1981, Congress increased rent from 25 to 30% of income for HUD rental assistance programs for this reason.

One important point: where the rent changes result in a financial hardship, tenants are exempt under the proposal. Examples of financial hardship include A) risk of being evicted, B) financial issues (like lose their job, a death in the family, a change in circumstances) C) tenants have lost eligibility for other welfare benefits, or are waiting to find out if they’re eligible for them, etc. Despite activists’ concerns the proposed reform would put people out on the street, it looks as though it’s designed not to.

3) Less Paperwork, Less Monitoring

There are a couple of changes related to reducing paperwork and bureaucracy in the program. The first is changing the rent calculation from adjusted income to gross income. Determining what counts as income for tenants is a very complicated process which leads tenants of similar economic circumstances to be treated differently. That’s a fairness issue, one among many in the provision of housing benefits. It’s nice to see an attempt to simplify and treat tenants similarly.

Finally, HUD rental assistance recipients currently have to recertify their income annually. The proposal changes the certification to be less frequent, from annually to once every three years. The idea is to give low-income tenants greater ability to grow their income while eliminating paperwork. Both libertarians and liberals should find this element of the proposal at least somewhat appealing.

In short, a fair analysis of the proposal requires greater nuance than what’s being offered.

Yesterday the New York Times reported that in early April Ukraine’s president, Petro Poroshenko, ordered his chief federal prosecutor to halt four anticorruption investigations involving Ukrainians connected to Paul Manafort, Donald Trump’s former campaign chairman and a central figure in Robert Mueller’s investigations here in the United States.

Perhaps not coincidentally, Ukraine announced on April 30 that it had received 210 Javelin antitank missiles, purchased from the United States to bolster its fight against Russian proxies in the Donbass region of Ukraine. Though the State Department initially approved the sale in December and Pentagon gave its blessing in March, Trump himself was reluctant to arm Ukraine given the potential effect on the U.S. relationship with Russia.

The burning question is whether anyone in the Trump administration suggested this course of action to Ukraine. Ukraine, of course, is free to pursue whatever policies it deems necessary to defend itself from encroachments by Russia. But to use arms sales to interfere with the Mueller investigation would represent obstruction of justice on a truly epic scale.

To be sure, Ukraine already had plenty of motivation to help the Trump administration. If Ukraine shuttered the investigations to curry Trump’s favor, it was only one of several efforts designed to garner American support. Concerned that Trump’s affection for Vladimir Putin would translate into anti-Ukraine policies, Ukraine has gone out of its way to butter up Trump since he took office. Ukraine has promised U.S. construction firms contracts for future infrastructure projects in Donbass, brokered a $80 million coal deal with the U.S., signed a $1 billion deal with GE Transportation for new locomotives, and hired former Republican National Committee chairman Haley Barbour to help Ukraine lobby the Trump administration.

But even if this has nothing to do with the Mueller investigation, the sale of Javelin missiles to Ukraine reflects both poor judgment on the part of the Trump administration and a longstanding neglect of the potential negative consequences of American arms sales.

Arming Ukraine makes little strategic sense. A couple hundred antitank missiles will not alter the military balance between Ukraine and Russia in Donbas in any meaningful way. Russia can quickly move additional forces and equipment to the region at will. The bigger danger is that arming Ukraine will in fact prompt Russia to do just that, thereby risking an intensification of the conflict and potentially leading to more casualties than the 10,000 already suffered. It is clear, in fact, that this is exactly how Russia sees things. In December after the State Department approved the sale, Russian Foreign Ministry spokesperson Maria Zakharova said, “The United States is, in fact, encouraging the resumption of large-scale bloodshed in Donbass, where the situation is already on the edge due to continuing shelling from the Kiev-controlled side…Washington, in fact, becomes an accomplice in the killing of people.”

Arming Ukraine also raises the political stakes and risks turning Ukraine into a test of the president’s foreign policy effectiveness, increasing the likelihood of the United States getting entangled more deeply in the conflict. It seems clear that encouraging greater U.S. involvement is a key element of Ukraine’s strategy. Major General Volodymyr Havrylov, Ukraine’s defense attaché to the U.S., told a reporter that the missiles were “a political symbol that allows others to understand that Ukrainian security is important to the U.S.” The risk of entanglement is not trivial given the presence of powerful advocates for doing more in the U.S. Congress. Senator Bob Corker, chairman of the Senate Foreign Relations Committee approved of the sale back in December, telling the press that “This decision was supported by Congress in legislation that became law three years ago and reflects our country’s longstanding commitment to Ukraine in the face of ongoing Russian aggression.”

More broadly, the dangers generated by U.S. arms sales go well beyond Ukraine. Ukraine is just one of many risky customers to whom the United States has sold advanced weapons over the past fifteen years. In pursuit of short-term foreign policy influence and economic gains, the United States has turned a blind eye to what happens after the deals are done. Among the list of questionable clients are countries like Saudi Arabia, which has used American weapons in its disastrous intervention in Yemen; Iraq, whose army managed to provide the Islamic State with three army divisions’ worth of American tanks, armored vehicles, and infantry weapons; and Nigeria, whose human rights record, internal conflicts, and overall state fragility call into serious question whether it will use its latest purchase of Super Tucano attack aircraft in a responsible manner.

Time will tell if the smoke surrounding the sale of Javelin missiles to Ukraine stems from collusion to obstruct the Mueller investigation or simply misguided foreign policy making. Either way, arming Ukraine reflects a reckless approach to the use of arms sales that the Trump administration seems all too eager to embrace.

I have previously laid out the case that the government has cheated legal immigrants for decades by erroneously counting the spouses and children of immigrants against the quotas for immigration, thereby reducing the total amount of immigration substantially. My argument relied primarily on the text of the law and not the legislative history. But I have recently come across evidence that proves that members of Congress believed that spouses and children wouldn’t count against the cap.

The Immigration Act of 1990 provided the basis for issuing green cards to spouses and children of legal immigrants in section 203 of the Immigration and Nationality Act (INA). Congress divided section 203 into subsections. Subsection (a) provides green cards for certain family-members of U.S. citizens and residents, subsection (b) for employment-based immigrants, and subsection (c) for diversity lottery winners. Each of these categories have a quota. Subsection (d) separately awards green cards to the spouses and minor children of the primary applicants under subsections (a) through (c).

This means that if an employee, for example, qualifies for a green card through employer sponsorship under subsection (b), their spouses and children qualify for green cards under subsection (d). Subsection (d) has no quota, while subsections (a) through (c) do have quotas, so the question is, do the spouses and children count under subsection (d) without a limit or under the other subsections with limits?

While no member of Congress directly addressed this question in 1990, they made comments that we can only interpret as indicating that they believed spouses and children would not count toward the quotas. In the same bill in 1990, Congress created the EB-5 Investor Program in subsection (b) of section 203. Under the law, up to 10,000 immigrants can receive green cards if they invest in a new commercial enterprise that creates at least 10 jobs. Thus, a minimum of 100,000 jobs would be created if all the green cards went to investors. However, if their families count against the green card limit, then fewer than 10,000 investors would receive green cards and fewer than 100,000 jobs would be created.

All members of Congress made the same calculation: that up to 100,000 jobs would be created because the 10,000 green cards would go to investors. On October 26, 1990, Sen. Paul Simon (D-IL) stated, “This one provision will generate over $8 billion annually in new investment in small and independent U.S. businesses and provide up to 100,000 new jobs for Americans.”

Rep. Lamar Smith (R-TX) spelled out the calculation explicitly, stating, “if these 10,000 investor visas are taken advantage of, it will create a minimum of 100,000 jobs in the United States” (emphasis added). Another member interrupted him to ask where the figure came from, and Rep. Smith responded that “10,000 investors may come into the country if they are going to start a business that will employ at least a minimum of 10 employees. That is where the figure comes from of 100,000 guaranteed jobs.” Rep. John Bryant (D-TX) who opposed the provision described the relationship between subsection (b) and subsection (d) in the EB-5 context this way:

We do not have room for all the family unification that was in the bill when it left the House, but we have room for 10,000 persons who can qualify for the United States by buying citizenship here if they have a million bucks to do it. What the bill says, if they will come into the country and invest enough to create 10 jobs, they can stay. This is all they have to do. After that, they can bring in their wife and kids.

In other words, Rep. Bryant also understood the provision to allow 10,000 investors who, if they created 10 jobs, could then additionally bring their spouses and children. This means that the current EB-5 backlog for Chinese investors simply should not exist because it is entirely the result of the government’s inaccurate interpretation of the law, namely, that the spouses and children of investors count against the quota. But members of Congress explicitly envisioned 10,000 investors under the quota of 10,000.

The really important fact in this is that the provision that grants green cards to the spouses and children of EB-5 investors also applies to all other immigrants under section 203: family-sponsored immigrants, employer-sponsored immigrants, or diversity lottery winners. If Congress believed that provision did not count spouses and children of EB-5 investors against its quota, then the same would have to be true for the other categories, which also have long backlogs.  

This evidence comes in addition to a tremendous amount of textual support for this position. In fact, there is absolutely no indication in the text of the law that spouses and children should count against the cap, and every reason to believe that they should not. It is abundantly clear that the government is cheating legal immigrants, forcing them to wait much longer than they should have to. The government should stop this erroneous practice, or someone should sue to stop it.

Are patents property rights, or are they governmentally created privileges that can be altered without judicial proceedings?  The Supreme Court recently decided in Oil States Energy Services v. Greene’s Energy Group for the latter view and upheld the constitutionality of an administrative review process that opponents say violates the right to a trial by jury.  The current issue of Regulation contains two articles that argue strongly for and against the property-rights view of patents.  

In “The Patent System at a Crossroads,” Johnathan Barnett, a law professor at the University of Southern California, argues that Oil States is a pivotal moment in a decades-long erosion of intellectual property rights. In his view, this erosion is misguided.

Barnett contends that the criticisms of a strong patent-rights system overlook recent empirical evidence and have overestimated the impact and scope of problems including “patent trolls” (firms that own patents but do not manufacture products), “royalty stacks” (the total demands of multiple intellectual property holders for remuneration leave too little revenue left for the manufacturer), and “patent thickets” (complex and conflicting legal claims that increase transaction costs for manufacturers).

In “Miles to Go Before We Sleep,” Johnathon Stroud, chief intellectual property officer at Unified Patents, argues that Barnett ignores other evidence that supports the elimination of “weak” patents through an administrative process created by the 2011 America Invents Act.

Stroud argues that patents are and always have been a complex regulatory framework designed by Congress to incentivize innovation rather than simple property. The administrative process at issue in Oil States is just another in a long series of adjustments to the patent system. 

While the Supreme Court has agreed with Stroud’s view, the empirical impacts of the decision are yet to be seen. After reading these two articles, readers can decide for themselves whether the Court’s decision that patents are not property rights is correct. 

Written with research assistance from David Kemp.

For months, news articles and commentaries have decried the supposedly huge tax cuts for the rich passed by Republicans in December. In a classic rhetorical formulation, a New York Times editorial in February said, “Republicans designed the law to principally benefit wealthy families while offering crumbs to low-income and middle class families.”

Actually, the largest relative tax cuts went to the middle class, as I discuss here. But perhaps some people have fixed views on the tax cut, and can’t imagine the Republicans doing anything other than favors for plutocrats.

So let’s try a different angle and look at overall burdens under the GOP tax law, which went into effect January 1. The official tax scorekeeper, the Joint Committee on Taxation, recently published estimates of average income tax rates by income group for 2018, which are presented in the table below. The tax rates are income taxes paid divided by total income within each group.

Tax rates rise rapidly as income rises above $50,000 a year. The $1 million and over group pays a 10 times higher share (26.3 percent) of their income to taxes than does the middle $50,000 to $75,000 group (2.4 percent).

In aggregate, households with incomes of less than $50,000 do not pay any federal income taxes. Instead, they receive large subsidies from the U.S. Treasury in the form of refundable tax credits. Those subsidies to low earners are expected to jump from $83 billion a year before the tax law to $99 billion after the tax law (page 48).

That is more than crumbs.

 

Data from Table A-6.

Conservatives are railing against dual decisions by the British government to prevent Alfie Evans’ parents from transporting him to Italy for further treatment, and to order Alfie’s doctors to withdrawal life support from Alfie, which they did, and which soon led to Alfie’s death. Conservatives are claiming this is what you get under socialized medicine: heartless government will override parental rights to pull the plug on your children. My thoughts on Alfie’s case are still tentative, but I think that’s a total misreading. The tragic case of Alfie Evans had almost nothing to do with socialized medicine. 

As hostile as libertarians are to government, even we believe government can legitimately order the withdrawal of life support, and prohibit parents from moving a child to obtain further treatment, when that treatment would fruitlessly prolong a child’s suffering – i.e., when further treatment would be akin to torture. In such cases, the government intervenes to protect the child’s rights. (British law frames the decision in terms of the “best interests” of the child, but it seems to me that language clouds the issue and thereby unnecessarily inflames passions.) 

There is no objectively right place to draw the line between cases in which the government should and should not intervene. But I don’t know anyone who thinks it never should. If anyone does make that argument, they’re just wrong. 

There is plenty of room to argue about whether British law and courts drew the line in the right place here. It did not appear Alfie was suffering, but doctors could not completely rule it out. They all agreed that further treatment was futile, though. Is it torture to provide futile treatment to a kid who likely can’t feel pain?

The only way socialized medicine might have something to do with Alfie’s case is that decades of socialized medicine might have shaped the values and attitudes of the elites who make the ultimate decision about where to draw that line. It is not crazy to think that the incentives the British National Health Service creates to provide less care, and the stiff-upper-lip attitudes that lead Britons to tolerate queues and other forms of explicit and implicit government rationing all for the Greater Good, might influence where the elites draw that line. But if the influence of the NHS leads British elites to be more likely to pull the plug on Alfie, that is not obviously or objectively wrong. 

Nor is it the only way socialized medicine might influence where elites draw the line. The U.S. Medicare program is a system of socialized medicine that imposes no constraints on medical spending or consumption. Decades of experience with it and similar socialized-medicine programs have created a pervasive belief among U.S. physicians and policymakers that more medicine is always better. (Spolier alert: it’s not.) So if U.S. conservatives want to make the argument that decades of socialized medicine have made Britain’s elites too willing to pull the plug on Alfie, they must also confront the possibility that decades of socialized medicine have made them too willing to tolerate the torture of children like Alfie.

I don’t know what the right answer was in Alfie’s case. I do know Alfie’s case is not an illustration of the failures of socialized medicine.

I also know that advocates of socialized medicine have exactly zero right to complain about the ignorance of some opponents of socialized medicine, because socialized medicine also socializes the cost of ignorance.

And I know one more thing: there’s a hug and a pint waiting for Alfie’s parents, Tom and Kate, in Washington, D.C.

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