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Supporters of the RAISE Act are counting on the media, voters, and policy makers to focus on talking points supporting the bill rather than its actual substance.  Those supporters want the debate over this bill to be “skilled or merit based immigrants versus family-based immigrants” – a debate that they could win.  But they can only do that if everybody focuses on the talking points and they remain ignorant of the actual contents of the bill.  The RAISE Act talking points are grossly deceptive, at best, and do not accurately describe the bill’s contents or what its effects would be.  Each heading below is a major talking point that RAISE’s supporters are using followed by what the facts actually are.

“The RAISE Act creates a merit and skills-based immigration system.”

The RAISE Act does not increase merit and skills-based immigration over the existing cap.  The bill sets an annual cap of 140,000 green cards annually for merit and skills-based immigrants – the exact same number apportioned to the current employment-based green card for skilled workers.  The RAISE Act merely cuts other immigration categories, such as family-based green cards, while creating a points system for obtaining one of the 140,000 merit and skills-based green cards.  Cutting family reunification does not create a merit or skills-based immigration system.  

“The RAISE Act is very similar to the merit-based Canadian and Australian immigration systems”

The Canadian and Australian merit-based immigration systems are far more open than either current U.S. immigrant law or what the RAISE Act would create.  As a percent of the population, which is the only meaningful way to compare the size of immigrant flows in different countries or across time, the Australian and Canadian merit-based immigration policies allow about 3.5 and 2.4 times as many immigrants annually as the United States, respectively.  The RAISE Act would widen this gulf even further whereby the annual immigrant flows to Australia and Canada would be about 7.9 and 5.3 times as great as to the United States.  

The comparison is even more lopsided when it comes to skilled immigrants.  The annual skilled immigrant flow to the United States under current law (and if the RAISE Act is implemented) is equal to 0.04 percent of the population – and that includes their family members!  The workers themselves are only 0.02 percent of the American population.  The annual skilled immigrant inflow to Canada is equal to 0.18 percent of their population and in Australia, it is a whopping 0.26 percent – 9 and 13 times as great as in the United States, respectively.

The Canadian and Australian systems even allow more family-based immigrants as an annual percentage of their population at 0.23 and 0.26 percent, respectively, than the United States.  In Canada, immigrants are awarded more points if they have distant relatives living there already.  The RAISE Act does no such thing. 

The Australian and Canadian immigration systems are far more open than the current U.S. immigration and what has been proposed by the RAISE Act. The Australian and Canadian immigration systems have very little in common with what’s proposed by the RAISE Act.

“The RAISE Act will increase wages for working Americans.”

The last time Congress cut legal migration in order to raise the wages of lower-skilled Americans, wage growth actually slowed down.  Michael Clemens, Ethan Lewis, and Hannah Postel looked at Congress’ 1964 cancellation of the Bracero program for low-skilled Mexican farm workers discovered that farm worker wages rose more slowly after the migration was cut because farmers turned toward mechanization and planted crops that required less labor.  Not only did the supposed wage gains from cutting legal migration not occur after 1964, the rate of wage increase actually slowed.

The details and justifications for the RAISE Act and Congress’ 1964 cancellation of Bracero are eerily similar.  The Bracero program allowed in half a million workers a year before it was eliminated – which is roughly the number of green cards that RAISE would cut.  Bracero workers have a relatively similar skills level, compared to Americans, of the workers who currently enter of the family-based green cards that the RAISE Act intends to cut.  Braceros were also concentrated in some states just like new immigrants are.

More fundamentally, immigration bears little blame for low wages.  This point is not controversial among economists who study this issue.  The National Academy of Sciences’ (NAS) literature survey on the economic effects of immigration concluded that:

When measured over a period of 10 years or more, the impact of immigration on the wages of native-born workers overall is very small.  To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills.

Immigration’s long-run relative wage impact on native-born American workers is close to zero.  The only potential exception by education group is high school dropouts who might face more labor market competition from immigration that would produce a maximum relative decline of about 1.7 percent from 1990 to 2010.  All groups of native-born Americans by education, which accounts for 91 percent of adults, see relative wage increases from immigration during the same time studied.

Restricting immigration doesn’t raise wages and, even if it did for those Americans who directly compete with immigrants, it would lower wages for the roughly 91 percent of Americans who do not.

“The RAISE Act would restore immigration to historical numerical norms.”

This statement only makes sense if American history began in 1925 – a year after the National Origin Quota Act became law.  Because the United States is more populated than it was in the past, the only way to reasonably compare immigrant flows over time is to view the as a percentage of the population.  After all, a million immigrants in 1790 would have a far greater impact on the American population than a million immigrants in 2017. 

As my colleague David Bier pointed out, the average historical immigration rate from 1820 to 2017 (the government did not count annual immigrant entries before 1820), was 0.45 percent of the U.S. population – higher than the approximately 0.32 percent of today.  In other words, current U.S. immigrant flows are actually 29 percent below the historical norms and would have to rise by over 400,000 a year to be them.  That’s very different from RAISE’s proposed cut of approximately 500,000 green cards annually.

“Current immigrants are very low skilled.”

New immigrants to the United States are more highly educated than native-born Americans.  About 39 percent of immigrants admitted to the United States in 2015 had a college degree or above compared to about 31 percent of adult natives.  The share of new immigrants to the United States with at least a college degree is almost double the 21 percent that it was in 1995.  About 29.4 percent of all immigrant adults living in the United States in 2015 had a college degree or above, slightly below the 30.8 of all native adults who have the same education.  These facts show that new immigrants are more educated than people realize, are increasingly better educated over time, the annual immigrant flow is making the stock of immigrants more educated, and this is happening under the current immigration policy.   

“Our current immigration system has increased economic inequality.”

This is an odd argument for Republicans to make but Senior Trump administration aide Stephen Miller did so at a press briefing earlier this week.  The evidence on how immigration affects economic inequality in the United States is actually mixed – which is more than you can say about Miller’s other economic invocations where he’s dead wrong.  Some research finds relatively small effects of immigration on economic inequality and others find substantial ones.  The variance in findings can be explained by different research methods.  For instance, outcomes vary considerably between studies that measure how immigration affects economic inequality among only natives and another study that includes immigrants and their earnings.  Both methods seem reasonable but the effects on inequality are small compared to other factors.  I don’t see the problem if an immigrant quadruples his income by coming to the United States, barely affects the wages of native-born Americans here, and increases economic inequality as a result.  The standard of living is much more important than earnings or wealth distribution – especially when the gains are so vast. 

“Amnesty for illegal immigrants punishes legal immigrants who got in line and tried to do things the right way.  That’s unfair.”

RAISE Act supporters don’t make this argument in support of this specific bill but many of them have in opposition to legalizing illegal immigrants.  However, the RAISE Act punishes virtually every wannabe immigrant who is currently in line to get a green card by kicking them out of the running.  If RAISE becomes law, it would continue the clear the green card backlog for one year and then cut those who have been in line but didn’t make the cut in the first year.  As a meaningless concession, the RAISE Act awards those who are eliminated from the backlog with 2 points under the new points system that requires a total of 20 to get in the new line for another green card.  How can RAISE Act supporters complain about the unfairness of an amnesty while supporting this bill? 

The RAISE Act says, “you’ve been in line for a green card for 20 years and followed all of the rules?  Too bad!  You’re out.  Here are a few points that will not add up to a green card in compensation.”  What kind of message does that send to immigrants who tried to follow the rules the right way?

Why are Americans less likely to move to better opportunities than they used to be? The Wall Street Journal reports:

When opportunity dwindles, a natural response—the traditional American instinct—is to strike out for greener pastures. Migrations of the young, ambitious and able-bodied prompted the Dust Bowl exodus to California in the 1930s and the reverse migration of blacks from Northern cities to the South starting in the 1980s.

Yet the overall mobility of the U.S. population is at its lowest level since measurements were first taken at the end of World War II, falling by almost half since its most recent peak in 1985.

In rural America, which is coping with the onset of socioeconomic problems that were once reserved for inner cities, the rate of people who moved across a county line in 2015 was just 4.1%, according to a Wall Street Journal analysis. That’s down from 7.7% in the late 1970s.

One particular problem with today’s immobility is that people find themselves in areas where jobs are dwindling and pay tends to be lower. Why don’t they move to where the jobs are? This comprehensive article for the Journal by Janet Adamy and Paul Overberg points to a few factors:

For many rural residents across the country with low incomes, government aid programs such as Medicaid, which has benefits that vary by state, can provide a disincentive to leave. One in 10 West Branch [Mich.] residents lives in low-income housing, which was virtually nonexistent a generation ago.

And then there are regulations that discourage mobility:

While small-town home prices have only modestly recovered from the housing market meltdown, years of restrictive land-use regulations have driven up prices in metropolitan areas to the point where it is difficult for all but the most highly educated professionals to move….

Another obstacle to mobility is the growth of state-level job-licensing requirements, which now cover a range of professions from bartenders and florists to turtle farmers and scrap-metal recyclers. A 2015 White House report found that more than one-quarter of U.S. workers now require a license to do their jobs, with the share licensed at the state level rising fivefold since the 1950s.

Brink Lindsey wrote about both land-use regulations and occupational licensing as examples of “regressive regulation”—regulatory barriers to entry and competition that work to redistribute income and wealth up the socioeconomic scale—in his Cato White Paper, “Low-Hanging Fruit Guarded by Dragons: Reforming Regressive Regulation to Boost U.S. Economic Growth.”

The Journal notes that 

the lack of mobility has become a drag on the entire U.S. economy.

“We’re locking people out from the most productive cities,” says Peter Ganong, an assistant professor of public policy at the University of Chicago who studies migration. “This is a force that widens the urban-rural divide.”

Ganong made similar points in a Cato Research Brief, “Why Has Regional Income Convergence in the U.S. Declined?

Declining mobility hurts U.S. innovation and economic growth and widens the rural-income culture gap. Government regulation plays a major role in declining mobility. But as Lindsey noted, those regulations are “guarded by dragons”—”the powerful interest groups that benefit from the status quo, all of which can be counted upon to defend their privileges tenaciously.” Despite the potential for agreement by right, left, and libertarian policy analysts on the problems with regressive regulation, all those wonks together may be no match for organized dentists, barbers, massage therapists, and homeowners who perceive that they benefit from keeping others out.


The Department of Housing and Urban Development (HUD) spends $10 billion a year on “community planning and development” subsidies to state and local governments. Community development sounds uplifting, but it involves mundane activities such as filling potholes.

Budget expert Tad DeHaven alerted me to this article in the Altoona Mirror yesterday:

City Council recently approved a fairly standard plan for spending its annual entitlement money from the federal Department of Housing and Urban Develop­ment.

… This year’s funding for [Community Development Block Grant] CDBG was $1.42 million — not much different from last year’s amount.

Loan paybacks of $162,000 brought this year’s CDBG total to $1.58 million, according to a summary provided by CDBG program Manager Mary Johnson.

Of that, $346,000 will go for rehabilitation of single-family homes; $306,000 for demolition of blighted properties; $301,000 for program administration; $332,000 for street paving; $235,000 for the city’s bike patrol and $67,000 for code enforcement all in low- to moderate-income areas.

Of $193,000 in HOME funding, $129,000 will go for rehabilitation of rental properties, $44,000 for an upgrade of Improved Dwellings for Altoona’s Woodrow Wilson Gardens parking lot in Garden Heights and $19,000 for program administration.

These activities are entirely local in nature, so why involve the federal government? The Woodrow Wilson apartment company pays $674,000 a year in local property taxes. Why not let the company keep some of that cash and pave its own parking lot? That would be easier than imposing federal income taxes on Altoona residents, sending the money to Washington to pay for the HUD bureaucracy, and having some of it trickle back down to Altoona.

Check this out: in the news story, “program administration” costs are $301,000 + $19,000 = $320,000 a year. Those costs consume a rather stunning 20 percent of the $1.58 million in federal aid. It goes toward the salaries of Mary Johnson and other officials, plus the costs of putting together 77-page “action plans,” 292-page “consolidated plans,” 48-page “downtown plans,” and other items listed here.

If Altoona is representative, then $2 billion of the $10 billion in federal aid is consumed by such local bureaucracy.

In addition, there are federal bureaucratic costs. The HUD “budget justification” says that 729 workers are in “community planning and development” costing $103 million in wages and benefits, or $141,000 each. These expensive paper-pushers simply hand out recycled money to the states, thus adding nothing to nation’s overall output. Indeed, because they are not producing useful goods and services in the private sector, their compensation represents a loss to the economy.

For a discussion of why HUD’s community development activities ought to be abolished, see DeHaven’s analysis here.

Talk of oil sanctions is in the air. Some would like the Trump administration to ban the importation of crude oil from Venezuela in response to that country’s recent fraudulent election. And some are predicting that if such a boycott were implemented, gasoline prices would increase by 10–15 percent, or 25–30 cents a gallon.

Venezuelan production is about 800,000 barrels a day, approximately 1 percent of the 80.4 million barrels a day world output. If 1 percent of world output were suddenly and permanently removed from the world market, then a 10 to 20 percent increase in price would certainly be a reasonable prediction, given what economists know about the relationship between reduced quantity and increased price in oil markets in the short run.

But boycotts are not true supply reductions; they are supply rearrangements. The United States and Venezuela both purchase and sell oil on a world market. In such a large market, country-of-origin and country-destination information quickly become blurred as crude oil and its refined products slosh from buyers to sellers, oftentimes via third parties. And even if the United States could somehow be a stickler at tracking and avoiding Venezuela-originated products, they would simply get re-routed to some other buyer—perhaps China or India—while other oil products would reroute to the United States.

Another factor is the nature of Venezuelan oil. Oil is not a homogenous, uniform worldwide product, but an idiosyncratic mixture of different hydrocarbons (and impurities) that varies from one country to the next and one oil field to the next. Venezuelan crude is “heavy,” meaning it contains more of the larger hydrocarbon molecules that are difficult to break down into usable products like gasoline. And some of the products it does yield aren’t especially valuable, like bunker oil. Refineries have to be specially configured to process the oil they receive, and heavy crude configurations are especially demanding. The United States does have such refineries, but the availability of light crude from the shale oil boom, which is much easier to break down into valuable products, has made the use of the extra configurations unnecessary.

Still, a U.S. boycott of Venezuelan oil could cause a short-lived price increase as markets adjust to the news. That increase could be extended depending on the actions of petroleum investors, who are a notoriously skittish lot. They could respond to a boycott by stockpiling oil in fear of lasting supply constraints. But U.S. inventories are currently relatively high, and stockpiling oil—pumping it into large storage tanks or leaving it on tankers at sea—is costly, which means the investors would shoulder a cost for their skittishness. Meanwhile, world oil production—including Venezuela’s—would likely not change from its current high level, except perhaps to produce a little extra to sell to the skittish investors. So we doubt any gas price increase would last for long.

Does this mean the United States should go ahead with a boycott? We are wholly agnostic on the wisdom and justice of boycotts, embargoes, and other such sanctions. (For a discussion of this topic, click here.) Rather, we argue that, economically, these policies seem to be pointless. Venezuela would simply sell its oil to other nations; a U.S. boycott would be as ineffective as similar policies against Cuba, Russia, and other countries.

World oil prices shift because of changes in world supply and demand, e.g., wars that block trade routes, recessions that reduce demand, expansions that increase demand, or producer collusion that constrains supply. A rift between the United States and Venezuela would be small potatoes in comparison, and any boycott would be made meaningless by the world market. Hence our skepticism that there would be much of a boycott price spike.

On August 3, The American Conservative ran a lengthy piece of mine dealing with the whistleblower protection nightmare that is the Department of Defense. One of the subjects of that piece is now former NSA IG George Ellard, and because I had even more on his case than I could fit into the TAC piece, I wanted to share the rest of what I know–and don’t know–about the allegations against Ellard, the final disposition of the case, why the Obama administration’s whistleblower retaliation “fix” is itself broken, and what might be done to actually provide meaningful protections for would-be national security whistleblowers in the Pentagon and elsewhere in the national security establishment.

Regarding what little we know about the specifics of Ellard’s case, I had this to say in the TAC piece:

As the Project on Government Oversight first reported in December 2016, a three-member interagency Inspector General External Review Panel concluded in May 2016 that the then-Inspector General of the National Security Agency (NSA), George Ellard, had, according to POGO, “himself had previously retaliated against an NSA whistleblower[.]” This apparently occurred during the very same period that Ellard had claimed that “Snowden could have come to me.” The panel that reviewed Ellard’s case recommended he be fired, a decision affirmed by NSA Director Mike Rogers. 

But there was a catch: the Secretary of Defense had the final word on Ellard’s fate. Outgoing Obama administration Defense Secretary Ash Carter, apparently indifferent to the magnitude of the Ellard case, left office without making a decision.

In the months after Donald Trump became president, rumors swirled inside Washington that Ellard had, in fact, escaped termination. One source, who requested anonymity, reported that Ellard had been seen recently on the NSA campus at Ft. Meade, Maryland. That report, it turns out, was accurate.

On July 21, in response to the author’s inquiry, the Pentagon public affairs office provided the following statement:

“NSA followed the appropriate procedures following a whistleblower retaliation claim against former NSA Inspector General George Ellard. Following thorough adjudication procedures, Mr. Ellard continues to be employed by NSA.”

After I’d finished the TAC piece, Ellard’s attorney, Terrence O’Donnell of the Washington mega law firm of Williams & Connolly, sent me the following statement about his client, George Ellard:

The Office of the Assistant Secretary of Defense (ASD) examined and rejected an allegation that former NSA Inspector General, George Ellard, had retaliated against an NSA employee by not selecting that employee to fill a vacancy in the OIG’s Office of Investigations.

In a lengthy, detailed, and well-reasoned memorandum, the ASD concluded that Dr. Ellard had not played a role in that personnel decision or, in the terms of the applicable laws and regulations the ASD cited, Dr. Ellard “did not take, fail to take, or threaten to take or fail to take any action” associated with the personnel decision.

This judgment echoes the conclusion reached by the Department of Defense’s Office of the Inspector General.  An External Review Panel (ERP) later came to the opposite conclusion, leading to the ASD review.  The ASD concluded that “the evidence cited in the ERP report as reflective of [Dr. Ellard’s] alleged retaliatory animus toward Complainant … is of a character so circumstantial and speculative that it lacks probity.”

In assessing Dr. Ellard’s credibility and in rendering its decision, the ASD also considered Dr. Ellard’s “distinguished career of public service, spanning more than 21 years of service across the executive, legislative, and judicial branches, culminating in almost 10 years of service as the NSA IG.”  Dr. Ellard, the ASD noted, has been “entrusted to address some of our nation’s most challenging national security issues”; successive NSA Directors have consistently rated Dr. Ellard’s performance as “Exceptional Results” and “Outstanding”; and he has been “commended by  well-respected senior officials with whom [he has] worked closely over the years for [his] ability and integrity.”

Dr. Ellard is serving as the NSA Chair on the faculty of the National War College, a position he held prior to the ERP review.

Quite a bit to unpack in that statement. Let’s start with the ASD’s decision to overrule the External Review Panel (ERP), a key component of the Obama-era PPD-19, the directive designed to prevent in all government departments or agencies the very kind of thing Ellard allegedly did. Here are the key paragraphs of PPD-19 with respect to ERP recommendations:

If the External Review Panel determines that the individual was the subject of a Personnel Action prohibited by Section A while an employee of a Covered Agency or an action affecting his or her Eligibility for Access to Classified Information prohibited by Section B, the panel may recommend that the agency head take corrective action to return the employee, as nearly aspracticable and reasonable, to the position such employee would have held had the reprisal not occurred and that the agency head reconsider the employee’s Eligibility for Access to Classified Information consistent with the national security and with Executive Order 12968. (emphasis added)

An agency head shall carefully consider the recommendation of the External Review Panel pursuant to the above paragraph and within 90 days, inform the panel and the DNI of what action he or she has taken. If the head of any agency fails to so inform the DNI, the DNI shall notify the President. (emphasis added)

Taking the ERP’s recommendations is strictly optional.

What’s so significant about the ERP recommendation in Ellard’s case was that the ERP not only apparently believed that the whistleblower in question should be given a fair chance at getting the position he or she originally applied for within the IG itself, but that Ellard’s actions were–in the view of three non-DoD IG’s who examined the case–so severe that they recommended he be terminated. 

O’Donnell quoted from a Pentagon memo clearing Ellard that is not public. The ERP’s findings, along with their record of investigation, are not public. Nor do we know how thorough–or cursory–the ASD’s review of the Ellard case was prior to the decision to clear Ellard. Given all of that, who are we to believe?

There are some key facts we do know that lead me to believe that the ERP’s recommendations were not only likely soundly based, but that the whistleblower retaliation problem inside the Pentagon is deeply entrenched.

O’Donnell’s statement also claimed that the ASD’s decision to reverse the ERP and clear Ellard of wrongdoing “…echoes the conclusion reached by the Department of Defense’s Office of the Inspector General.” But it’s the DoD IG itself, as an institution, that is also under a major cloud because of other whistleblower retaliation claims coming from former NSA or DoD IG employees–specifically former NSA senior executive service member Thomas Drake and for DoD Assistant Inspector General John Crane. As I’ve noted previously, the independent Office of Special Counsel found adequate evidence of whistleblower retaliation and document destruction to refer the matter to the Justice Department’s own IG; Crane’s case is getting a look from the Government Accountability Office (GAO), Congress’s own executive branch watchdog.

The DoD and NSA IG’s have clear conflicts of interest when employees from within their own ranks are implicated in potential criminal wrongdoing. PPD-19 was supposed to be the answer to such conflicts of interest, but it’s lack of teeth from an enforcement standpoint renders it a badly flawed remedy for an extremely serious integrity problem.

And what about Congress? PPD-19 speaks to that as well:

On an annual basis, the Inspector General of the Intelligence Community shall report the determinations and recommendations and department and agency head responses to the DNI and, as appropriate, to the relevant congressional committees. 

But Congress doesn’t need to wait for the IC IG to tell it what is already publicly known about the Ellard, Drake, and Crane cases. It has ample cause to not only investigate these cases, but to take action to replace PPD-19 with a whistleblower protection system that actually protects those reporting waste, fraud, abuse, or criminal conduct and punishes those who attempt to block such reporting. Two options that deserve consideration are 1) empowering OSC to examine these kinds of cases and issue unreviewable summary judgments itself or 2) revive the expired Independent Counsel statute, rewritten with a focus on whistleblower reprisal case investigations.

One thing is beyond dispute. The PPD-19 process is not the answer for protecting whistleblower and punishing those who retaliate against them. We need a credible system that will do both. The only question now is whether anybody in the House or Senate will step up to the task of building a new one. 

For years, Randal O’Toole has warned governments that urban rail systems usually make no economic or practical sense. They are more expensive and less flexible than bus systems. But cities keep making wildly optimistic assumptions about rail costs and ridership, and new lines keep getting built. It is a triumph of politics over experience.

The other day, the Washington Post reported ridership data on phase 1 of D.C. Metro’s Silver Line:

But of the five stations that opened in July 2014, only the end-of-line Wiehle-Reston station has come close to projected ridership. At three stops in Tysons — McLean, Greensboro and Spring Hill — ridership is a mere fraction of what planners projected in a 2004 environmental impact report. In May of this year, for example, average daily weekday ridership was 1,618 at the McLean station, slightly below the 1,634 in May 2015 and well below the 3,803 the Silver Line was projected to serve in its first year of operation, according to the 2004 report.

So actual ridership on some parts of this Northern Virginia line are less than half of the original estimate. By the way, the cost of the project ended up almost doubling from what the planners and politicians had promised. Federal taxpayers picked up part of the tab.

Phase 2 of the project is under construction, and it will extend the Silver Line to Dulles Airport, 28 miles from D.C. The project never made sense to me. The airport already has the dedicated and congestion-free Dulles Access Road that connects the airport to the inner suburbs and downtown.

Let’s say you are a NYC businesswomen flying into Dulles for some lobbying in D.C. If you take the rail system, it will probably take you much longer to get downtown than if you took a taxi along the Access Road. Then when you get off the Metro downtown, you may still need a cab to get to your final destination.

Or let’s say you are a Virginia family flying out of Dulles on vacation. Would you want to drive to a Metro station with all your bags, leave your car parked there, and then risk missing your plane by taking the unreliable rail system? I don’t think so. I’ll bet ridership on Phase 2 of the Silver Line will come in low as well.

For decades, federal subsidies have induced state and local officials to build costly and inefficient light- and heavy-rail systems when bus systems and highway expansion generally make more sense. Congress should end the bias in favor of rail by ending federal aid for urban transit, as discussed at

One reason why the Venezuelan regime has been so effective in slowly—but surely—installing a full-fledged dictatorship is because of the internal divisions of the opposition. Unfortunately, those divisions are once again coming to the fore, even now that Nicolás Maduro’s fraudulent constituent assembly has revealed the regime’s ultimate goal beyond reasonable doubt.   

The opposition boycotted the legislative elections of 2005 in protest of the lack of independence of the Electoral National Council (CNE), which granted the government total control of the National Assembly for five years. It only decided to participate again in elections once it perceived it could beat Chavismo in the polls. However, as the popularity of the government began to wane—once the economy started to deteriorate—the regime became more ruthless in its approach: disqualifying candidates, jailing opponents, blackmailing voters, rigging the electoral registry, calling off scheduled elections, and engaging in massive voter fraud. Even when Chavismo accepted some electoral defeats, such as some gubernatorial elections or the legislative election of 2015, the government swiftly moved to strip those offices held by the opposition of meaningful power or resources.

In 2013, Maduro was elected president in a highly questionable election that undoubtedly involved CNE sanctioned voter fraud—enough to tip the election for Maduro. However, the opposition continued to insist on pursuing an electoral path forward. After winning an absolute majority in the legislative election of 2015, the opposition saw how the government-controlled Supreme Court systematically stripped powers from the National Assembly effectively rendering it useless. Even then, the opposition insisted in getting rid of Chavismo through democratic means. Last year, the opposition triggered the mechanism calling for a recall referendum on Maduro. Polls indicated that the vote would have gone in the opposition’s way with a comfortable margin. Unsurprisingly, the CNE arbitrarily suspended the process, leaving the opposition with no alternative other than civil resistance.

Sunday’s fraudulent vote to elect the members of Maduro’s constituent assembly exemplifies the glaring corruption in the CNE. According to its authorities, 8.1 million people voted in the election. Yet, Reuters reported that at 5:30 pm—just a couple of hours before the polls closed—only 3.7 million people had voted. Moreover, the software company that set up the country’s voting system denounced yesterday that the government had rigged the vote by “at least” one million votes. No wonder that the head of the CNE, Tibisay Lucena, is one of the 13 senior officials of the Venezuelan regime recently sanctioned by the U.S. government.

Yesterday, Henry Ramos Allup, former president of the National Assembly and leader of the Democratic Action Party, made a perplexing statement: his party will stand for scheduled gubernatorial elections in December. Other figures of the Democratic Unity Roundtable, the umbrella opposition group, are also considering participating. Diosdado Cabello, perhaps the second most powerful government figure, appropriately mocked Ramos Allup for agreeing to participate in elections under a CNE that the opposition accuses of perpetuating massive fraud.

This division is a problem for the opposition. While some leaders insist in the immediate departure of the regime through civil resistance, others are willing to compromise in exchange for bogus regional elections. It is no wonder that, despite backing from the majority of Venezuelans, the opposition parties do not command their enthusiastic support.

Albert Einstein once said that the definition of insanity is “doing the same thing over and over again and expecting different results.” This definition certainly fits certain elements of the opposition.

Courts in modern times are generally protective of the First Amendment, specifically our freedoms of speech and press. On the whole, they vigorously oppose any attempt by government to minimize those essential liberties; they recognize that a free press is critical to any society that values expression and intellectual diversity. The Supreme Court’s 1983 ruling in Minneapolis Star v. Minnesota Commissioner of Revenue (1983), striking down certain taxes on ink and paper, shows that attempts to regulate the media as a group, even when broadly applied, are considered unacceptable if they crowd out certain viewpoints.

The University of California San Diego (UCSD), a public university, attempted to do something similar when it defunded certain student organizations in a thinly veiled attempt to censor one organization’s opinions. The Koala, a satirical newspaper funded by student activity fees, published an article mocking “safe places” that sparked controversy on campus and debate in the school’s student government. In response, the student government enacted a “Media Act” that defunded all student-printed media organizations, in order to prevent the The Koala from publishing further articles that contradicted the student government’s political sensibilities.

The Koala sued in an attempt to restore its funding, but the federal district court remarkably ruled against them. Cato has joined the Foundation for Individual Rights in Education on an amicus brief supporting its claim.

There is a longstanding, constitutionally based tradition of public universities’ serving as conduits for freedom of expression, a tradition that UCSD has unceremoniously abandoned. By providing funding to certain groups and not others, the university is effectively restricting certain members of the public from a public forum, in blatant violation of the First Amendment.

The lower court misread well-established jurisprudence regarding the scope of such forums, and failed to consider the evidence of viewpoint discrimination prevalent in the school’s Media Act. Not only does this rule have a discriminatory effect, but also it constitutes unconstitutional retaliation in direct response to the controversy surrounding The Koala’s article.

In addition, the Supreme Court has established that student activity fee programs are required to respect viewpoint-neutrality, in order to ensure that political bias does not stifle speech. UCSD has violated all of these core constitutional principles in pursuit of political correctness and the comfort of ideological homogeneity.

In The Koala v. Khosla, the U.S. Court of Appeals for the Ninth Circuit should reverse the lower court’s decision and stop UCSD’s efforts to seek vengeance against student groups for satirical articles.

With President Trump’s backing, Senators Tom Cotton (R-AR) and David Perdue (R-GA) introduced the RAISE Act, which would reduce legal immigration by 50 percent over 10 years. See here, here, here, and here for our earlier commentary about why this goal makes little sense and the justifications for it are spurious. But how it would achieve this goal is also revealing.

  • The senators no longer consider parents of U.S. citizens “immediate family” (p. 7). Such is these senators’ view of family relations in 2017.
  • Through an opaque formula—see here for an explanation—it eliminates virtually all hope for legal immigrants to sponsor their spouses and minor children for visas. Immigrants, I suppose, don’t deserve “immediate family.”
  • They end all of the current green card categories and void all applications from all legal immigrants (p. 16) despite them having waited in line in many cases for decades. This is so cruel that it’s almost impossible to imagine putting the idea on paper.
  • Their new point-based “merit” system has no more visas for employment-based immigrants than current law and counts the family of the workers against the quota, meaning that half will not even be “merit-based” (p. 17).
  • Its “merit” track would assign points in the following scheme. You need 20 points:
    • simply being age 26 is worth nearly twice as much (10) as being an entrepreneur who invests $1.4 million in their U.S. business (6).
    • Being fluent in English is worth as much as being an entrepreneur who invests $1.8 million in their U.S. business (12).
    • A 30-year-old fluent in English with any bachelor’s degree (28 points) is better off than a 36-year-old foreign STEM master’s degree holder with 10 years of work history with limited English (17).
    • It downgrades qualified applicants with spouses who are less qualified. Such that:
      • a 46-year-old Nobel laureate with a doctorate in a non-STEM field who is proficient in English and invests $1.4 million in a new business start-up but has a 46-year-old wife with a high school degree and no English gets fewer points (35.9) than a couple of bachelor degree holders who get jobs for $70,000 in Mississippi and who can speak English (36).

This strange ill-conceived proposal should go nowhere for many other reasons, but this bill’s cruelty toward legal immigrants who tried to come to the country the right way and its nonsensical “merit” system are good enough.

Occupational licensing started with the idea that jobs with serious consequences – doctors being the prototypical example – require some sort of government certification and oversight. But that rather innocuous motivation has ballooned into a harmful and unsustainable state of affairs.

From laws requiring licenses to braid hair to ones requiring licenses for floral design and casket manufacturing, occupational licensure has put barriers in the way of people who wish to do non-dangerous jobs and has done little to protect consumers. Instead, it’s frequently used as a way for politically well-connected people and state licensing boards to freeze out their competition, a textbook example of regulatory capture. The end result makes it harder for people to find fruitful employment, particularly low-income workers who often don’t have the time or money to get licenses.

Fortunately, the Supreme Court has offered some hope for those who don’t want needless barriers thrown their way when they want to make a living. In 2014, the Court held in North Carolina State Board of Dental Examiners v. Federal Trade Commission that a licensing board that had banned non-dentists from offering teeth-whitening services had violated federal antitrust laws – and that all licensing boards do the same when they engage in anticompetitive practices. (This was incidentally the first and only case in which Cato filed a brief supporting the federal government.) The Court further clarified that licensing boards have antitrust immunity if they’re subject to “active supervision” by the state in question.

States can get around this requirement by simply rubber-stamping everything done by the licensing boards, undermining the intended procompetitive effects of the decision in the process. In addition, there are valid concerns that the decision undermined state sovereignty in light of the fact that under Parker v. Brown, 317 U. S. 341 (1943), the Sherman Antitrust Act doesn’t apply to state government agencies.

Sen. Mike Lee (R-UT), who chairs the judiciary committee’s antitrust subcommittee, has been thinking about these issues and last week unveiled an innovative proposal. Joined by Sen. Ted Cruz (R-TX) and Sen. Ben Sasse (R-NE), Lee introduced legislation that would give states incentives to reform their licensing laws by giving them paths to immunity from liability. S.1649, or the “Restoring Board Immunity Act,” establishes a limited exemption for state licensing boards under antitrust law, but conditions that exemption on a state’s implementing one of two reforms. Option one is for a state to establish day-to-day supervision of licensing authorities through a new occupational-licensing oversight board, which would periodically review occupational regulations. Option two is for a state to create a cause of action that would allow for judicial review of occupational-licensing laws under a standard of intermediate scrutiny – requiring the state to prove that a licensing law meets that standard should it be challenged in a court of law, and award attorney fees in successful challenges.

The bill is not perfect. The “Office of Supervision” created to supervise the licensing authorities that are mentioned in Section 5 of the bill may be subject to similar public-choice and regulatory-capture problems as the current licensing boards, for example. It nonetheless represents a massive improvement over current occupational-licensing regimes. It provides an incentive for states to reform their laws and helps clarify the NC Dental case to ensure that states can’t simply rubber-stamp whatever licensing boards do.

This sort of out-of-the-box thinking is what we need from both Congress and state legislatures to ensure that all Americans can earn an honest living without needless interference from those claiming to protect them.

The Fed is embarked on a program of rate hikes, namely increases in the interest rates it pays on reserve balances and on reverse repos. Its justification is what it perceives to be a strong labor market and an expected rise in inflation. The two criteria are interconnected because in the economic model it employs, a strong labor market (as indicated by employment growth and a falling unemployment rate) will eventually result in a rise in the inflation rate. Thus far, the Fed has proved to be wrong.

The Fed in effect is targeting inflation at 2 percent, as measured by the personal-consumption expenditures (PCE). But actual inflation remains stubbornly below 2 percent. It was up 1.4 percent, year over year, in June. The core rate is running at 1.5 percent. Two percent is not in sight.

Fed officials appear committed to further rate hikes, though with less conviction. Why pursue a policy when the facts do not support it?

I believe there are two possible explanations. First, officials are willing to follow the predictions of a model even when it clearly has ceased to explain the economic facts (if it ever did). Second, there other unstated reasons for raising short-term interest rates. The first explanation is likely true for some Fed officials, especially so for Chair Yellen.

The second explanation likely drives policy for other officials. There is fear that unconventional monetary policy (a prolonged period of low interest rates) has generated asset bubbles. Those officials realize the Fed is in danger of repeating policy errors that led to the dotcom bubble and bust, and the housing boom and bust. It would be impolitic to say so, however. Code language is used, such as the need to return to “normal” monetary policy.

What prognosis is there for future rate hikes? The model points to higher interest rates, and reality to no further rate hikes. I opt for the latter, at least for the rest of this year.

Senior Trump administration aide Stephen Miller gave a press briefing yesterday defending the RAISE Act - a bill introduced by Sens. Cotton (R-AR) and Perdue (R-GA) that would slash the number of legal immigrants without increasing skilled or merit-based immigration.  The purpose of the RAISE Act is to restrict low-skilled immigration in order to raise the wages of American workers.      

When asked by a reporter for evidence that restricting low-skilled immigration would raise wages, Miller cited research by Harvard economist George Borjas on the Mariel Boatlift.  The Mariel Boatlift produced an unexpected surge of 125,000 Cubans (henceforth Marielitos) to Miami in 1980.  Because at least 60 percent of the Marielitos were high school dropouts, Borjas tested whether they lowered the wages of American dropouts. Since Borjas published his Mariel paper, there have been many rebuttals, criticisms, and additional research on it that should substantially diminish confidence in his findings.  Below I will briefly summarize these results.

The first such criticism is by economists Michael Clemens and Jennifer Hunt.  They conclude that the entirety of the wage decline observed by Borjas can be explained in how the wage survey in Miami increased the proportion of black workers surveyed, far in excess of their proportion of the population, when the Boatlift occurred (the CPS change was unrelated to the Boatlift).  Black American workers with less than a high school degree have lower wages than similarly skilled non-black Americans for myriad reasons that have nothing to do with immigration.  By including more of them in the survey at the same time the Marielitos were arriving made it look like there was a drastic wage decline when the observed effect was entirely due to shifting the demographics of the surveyed population.  That survey shift entirely explains the negative wage effect observed by Borjas.  Borjas’ response to Clemens and Hunt is weak.

The second criticism of Borjas’ Mariel Boatlift research is by economists Giovanni Peri and Vasil Yasenov.  They note that wages in Miami must be compared to wages in similar cities at the same time to measure how wages changed.  By selecting a set of comparison cities using the Synthetic Control Method, a different method than Borjas used, they found no statistically significant deviation in Miami’s wages compared to similar cities that did not absorb the Marielitos.  Furthermore, Borjas relied on smaller surveys with few relevant observations for Miami and other cities.  Peri and Yasenov used the larger to get even more data on wages.  Including the additional data also showed that the Marielitos did not lower wages.

Cole Blondin and I wrote the third response, which is not a rebuttal to Borjas’ work but shows other implications.  We assumed that Borjas’ methods and data were beyond reproach so we copied them.  We found that Americans in Miami with only a high school degree saw a significant increase in wages that coincided with Mariel.  Because Miamians with only a high school degree outnumbered dropouts, the wage losses reported by Borjas were more than offset by wage gains made by Miamians with only a high school education in most of our estimates.  We also found that wages for dropout Hispanic workers in Miami actually increased right after the Boatlift, relatively, compared to Hispanic workers in other cities as the Marielitos arrived.  Since Hispanic workers are the most substitutable with the Marielitos, this result is wholly inconsistent with Borjas’ explanation.  

The fourth response by David Roodman points out substantial methodological critiques of Borjas’ paper that should raise serious concerns such as the fact that his analysis excludes women entirely and that the wage drop observed by Borjas took years to develop when it should have happened more rapidly.  There is no good methodological reason for excluding the wages of working women from the analysis. 

The other big problem with Miller’s response was that he responded to a question about how the RAISE Act would boost wages by citing research that argues an increase in immigration lowers wages under the exceptional circumstances of the Mariel Boatlift.  The actual research that examines wage effects from immigration restriction finds that wage growth for American workers slows after Congress passes restrictions for that purpose.

Economists Michael Clemens, Ethan Lewis, and Hannah Postel recently wrote a groundbreaking paper that took advantage of Congress’ 1964 cancellation of the Bracero program to see how a cut in legal migration affect American wages.  The Bracero program allowed hundreds of thousands of Mexican workers to work legally on American farms from 1942 to 1964.  Congress canceled Bracero due to lobbying from labor unions and others that argued such a cancellation would raise wages.  Clemens, Lewis, and Postel found that farm worker wages rose more slowly because farmers mechanized production and planted crops that required less labor.  Not only did the supposed wage gains from cutting legal migration not occur, the rate of wage increase actually slowed.

The details and justifications for the RAISE Act and Congress’ 1964 cancellation of Bracero are eerily similar.  The Bracero program allowed in half a million workers a year before it was eliminated – which is roughly the number of green cards that RAISE would cut.  Bracero workers have a relatively similar skills level, compared to Americans, of the workers who currently enter of the family-based green cards that the RAISE Act intends to cut.  Braceros were also concentrated in some states just like new immigrants are.

George Borjas’ research on the Mariel Boatlift is not the empirical slam-dunk that Stephen Miller thinks it is.  At a minimum, the work I summarize above should raise doubts and diminish his confidence in the RAISE Act. Supporters of the RAISE Act need to deal with the totality of the economics research on the effect of cutting legal immigration.  The fact that they are ignoring most of it and cherry-picking findings should raise alarm bells that are louder than a debate over the history of the Statue of Liberty.

One might expect that a report with a title referring to “more findings about school vouchers and test scores” would include the latest studies. However, Mark Dynarski, a Senior Fellow at the Brookings Institution, and Austin Nichols, a Principal Associate of Social and Economic Policy at Abt Associates, recently argued that the new voucher evidence is negative, even though the two most recent studies in Louisiana and Indiana show null to positive effects on student achievement.

How did these researchers come to their counterintuitive conclusion?

It appears that the researchers did not include the two most recent evaluations of voucher programs in Figure 1 below, which is taken from their report. That would not be much of a problem if the title and body of the report did not indicate otherwise.

Figure 1: Findings from Four Current Studies of Vouchers and Eight Previous Studies


If the researchers simply used previous results, the article (and its title) should not indicate that the latest estimates from Indiana and Louisiana are used. Further, the forest plots should not indicate that multiple years of results are used.

So what does the experimental voucher research actually say?

The Actual Test Score Results – and Their Implications

Even the latest experimental results, which show that voucher students in Louisiana and Indiana caught up with or did better than their public school peers on test scores, are less optimistic than prior voucher studies. However, there is not a clear theory for why voucher programs ought to be less-effective now than they used to be, all else equal.

I suspect that the regulatory environment may have something to do with the recent lackluster experimental results. For example, private schools participating in the Louisiana Scholarship Program (LSP) must administer the state standardized test, prohibit parental copay for families using vouchers, report finances to the government, and surrender their admissions process over to the state. As the recent study by me and my colleagues at the University of Arkansas finds, only a third of the private schools chose to participate in the LSP, and those schools were less likely to be the higher quality institutions.

As shown in Figure 2 below, the recent meta-analysis of 19 experimental voucher studies, by researchers at the University of Arkansas, finds that student test score impacts improve over time (also shown by the most recent results in Louisiana and Indiana). Indeed, students using a voucher to attend a private school have around half a standard deviation higher academic achievement in reading than their traditional public school peers by the fourth year. That is quite significant; a study by Stanford economist Eric Hanushek indicates that the effect is equivalent to around a 6.5 percent increase in lifetime earnings—more than $75,000.

Figure 2: Experimental Impacts of Vouchers on Student Test Scores by Year


While the positive test score trend is encouraging, I am skeptical about the implications. The trend could indicate that children are settling into their new schools and that private schools are improving in academic quality over time. However, the trend could also simply be a reflection of the new incentive structure for private schools in voucher programs. Since test scores are the state’s preferred accountability measure, private schools in voucher programs must shift their focus towards standardized testing.

The latter explanation could be problematic. As Jay Greene from the University of Arkansas has pointed out, there are nine school choice studies showing a disconnect between test scores and long term outcomes that we actually care about—such as graduation rates, criminal activity, and income. The shift towards focusing more on standardized testing could very well harm the ability of private schools to shape the character skills necessary for success.

If we really want to help all children achieve the best education possible, we must be humble about our ability to measure progress and determine what is best for people who have unique needs. Rather than using a single crude measure to determine who ought to have access to more educational options and a better life, we should have faith in the abilities of parents to select schools based on the numerous institutional factors that play a part in children’s educational experiences.

Senators Tom Cotton (R-AK) and David Perdue (R-GA) are promoting their legislation titled “the RAISE Act” at the White House today. It would reduce immigration by 50 percent over 10 years by eliminating several categories of legal immigration. The legislation would reduce the per capita rate of immigration to the lowest amount since just after the Great Depression. Immigration would fall to a rate three times less than the historical average and 11 times less than the historical high.

Yet the senators claim that the RAISE Act would “restor[e] legal immigration levels to their historical norms.” This statement is so misleading that it borders on outright deception. The “level” is just the absolute number of immigrants each year. But this treats the number of immigrants in 1900 the same as the number of immigrants in 2017, despite the fact that the U.S. population quadrupled during that time. You have to control for the size of the country. It’s like saying a million immigrants to China is the same as a million immigrants to Estonia—despite the fact that China is 1,000 times more populous.

The figure below provides the true picture of the amount of immigration to the United States: the number of new legal permanent residents divided by the number of people in the United States (the per capita immigration rate). From 1820 to 2017, the immigration rate averaged 0.45 percent of the population annually. In 2017, that rate was 0.32 percent. In other words: 28 percent below the average historical rate. If the United States were to adopt the “historical norm,” it would need to raise immigration quotas by about the amount that RAISE lowers them: 411,000. By contrast, under the senators’ proposal, immigration would fall to 0.14 percent—more than three times less than the “historical norm.”

The figure below graphs the annual legal immigration rate from 1820—the first year that the U.S. recorded immigrant arrivals—to 2017. It assumes that the RAISE Act will actually be implemented in 2018 and uses the Census population projections to forecast the impact of the legislation through 2030. As it shows, the rate of immigration would dramatically drop in the first year and continue to fall until it reached a level not seen since just after World War II and far below the tradition of immigration prior to the progressive movement in the 1920s.

U.S. Per Capita Immigration Rates and Projected Rates Under the RAISE Act, 1820-2030

Sources: 1820–2017: Department of Homeland Security; 2018–2030: Tom Cotton and Census Bureau (Census population figures reduced by immigrants denied under RAISE Act minus the number who would’ve emigrated from the U.S. after initial entry in any case, using Borjas; the rate of decline in immigration for 2028–2030 based on Cotton’s projections for 2018–2027)

Below is a table of the immigration rates for every year from 1820 to 2030. If the RAISE Act becomes law, 2030 would have the lowest rate of immigration since 1954, and of the 30 years out of 211 with lower rates, 18 of them occurred during the Great Depression or World Wars, and seven were in the 1820s before steam power transformed the Atlantic crossing. Are these periods what the senators consider normal?

Immigration Rates Ranked Lowest to Highest

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“Designed by Apple in California; Assembled in China” are the words engraved on the back of Apple’s ubiquitous iPods, iPads, and iPhones.  Might that soon change? 

Foxconn, the Taiwan-headquartered company that does Apple’s assembling in China, announced last week that it will invest up to $10 billion in production facilities in Wisconsin. That sounds like something to cheer. After all, investment is essential to economic growth and foreign direct investment tends to nourish the domestic commercial eco-system by bringing in companies with new ideas and better ways of doing things.

But Foxconn is in the business of contract manufacturing—producing, but mostly assembling, electronics products branded and owned by other companies. It’s not a high value-added operation requiring high-skilled workers. It’s the kind of supply chain operation better suited to economies with an abundance of low-skilled workers willing to work for much lower wages than Wisconsin’s work force expects to earn. Then again, economic considerations aren’t the only determinants of investment decisions.

Back in 2011 at a dinner in Silicon Valley, President Barack Obama asked Apple’s founder and CEO Steve Jobs why all of the production and assembly of the company’s products couldn’t be done in the United States. Jobs was a bit dismissive, responding that those kinds of jobs weren’t coming back. 

But the message wasn’t lost on other business executives, including GE’s Jeff Immelt, who was quick to announce repatriation of some operations that had recently been outsourced to China. The president was in a political jam and his reelection efforts might benefit if he were to show that U.S. companies were reshoring and bringing those manufacturing jobs back stateside.

Foxconn’s investment in Wisconsin is the commitment Obama was seeking from Steve Jobs, who knew that assembling iPhones in the United States would be, if not cost prohibitive, irrational from a commercial perspective. But sometimes investment location decisions are driven more by political considerations than economics. Fear of political retribution and ingratiation to key policymakers are just as relevant as the regulatory environment, taxes, infrastructure, and skills of the workforce when deciding upon where to locate production. The rapid and virtually uninterrupted growth of Washington, DC over the past decade, while the rest of the country stagnated and limped along, attests to those unfortunate facts. The dividends from political investment are often greater, and more reliable, than growing a business the old-fashioned way.

With plans to build a facility in the United States that it estimates will employ thousands of workers, Foxconn has succeeded in winning Trump’s affections. That the plant will be built smack dab in the middle of the House Speaker’s district makes the deal all the more laudable from a politically strategic perspective. But, most importantly, Foxconn’s investment in the United States is savvy because it will provide some insulation for Apple products – and many other U.S. and western branded electronics – from the worst effects of an increasingly likely U.S.-China trade war.

The heat is being turned up on a low-grade, high-tech trade war that has been simmering and sometimes churning over the past decade, with the U.S. Trade Representative’s Office announcing it will initiate an investigation into China’s forced technology transfer policies, which could lead to the imposition of trade restrictions. 

Compelling China to change course with respect to these kinds of market access barriers is long overdue, but U.S. missteps (such as imposing restrictions unilaterally through channels not sanctioned by the World Trade Organization) could initiate a much larger and more deleterious sequence of protectionist measures. The prospect of that happening is what Foxconn is hedging against with its investment inside the U.S. tariff wall.

Depending on how things turn out, you may soon find engraved on the back of your smart phones the words: “Designed by Xiaomi in Shenzhen; Assembled in Wisconsin.”

Republican Senators Tom Cotton (AR) and David Perdue (GA) are unveiling a bill today at the White House that would slash the number of legal immigrants by about 50 percent over the next decade.  This bill will be very similar to the RAISE Act that both Senators introduced in February, which I criticized here.  Their new bill, if it is similar to RAISE, would cut legal immigration by about 50 percent by reducing family reunification, eliminating the diversity visa, and statutorily limiting refugees without increasing skilled-worker immigration.  So much for the talking point that immigration hawks are “only against illegal immigration.”

Cotton-Perdue Does NOT Create a Skills-Based Immigration System

Supporters are saying that this bill would create a “skills-based immigration” policy but nothing could be further from the truth.  Cotton-Perdue does not increase skilled immigration at all – it only cuts non-employment categories like families and the diversity visa while creating a points-based system for employment-based green cards that does not increase the numerical cap.  The new Cotton-Perdue bill would do nothing to boost skilled immigration and it will only increase the proportion of employment-based green cards by cutting other green cards.  Saying otherwise is grossly deceptive marketing.

President Trump stated that he wanted to create a merit or skills-based immigration system like in Canada or Australia, but the Cotton-Perdue bill would not come close to achieving that goal.  The immigration systems in Canada and Australia do emphasize skilled immigrants over family members but their immigration systems allow in far more immigrants, as a percentage of the population in both countries, than the United States.  It is important to control for the population of the destination country when comparing the relative openness of different immigration systems. 

New immigrants to Canada who arrived in 2013 were equal to 0.74 percent of that country’s population.  New immigrants to Australia in 2013 were equal to a whopping 1.1 percent of their population.  By contrast, immigrants to the United States in the same year equaled just 0.31 percent of our population.  The only OECD countries that allow in fewer immigrants relative to their populations than the United States are Portugal, Korea, Mexico, and Japan.  Seventeen other OECD countries allow in more immigrants than the United States as a percentage of their populations.

In 2013, the number of skilled-worker immigrants to Canada was equal to 0.18 percent of that country’s population.  If the Cotton-Perdue bill intended to copy Canada’s skills-based immigration system, then it would increase the number of annual employment-based green cards from the current level of about 75,000 to about 592,000 annually – a 7.9-fold increase in the number (Figure 1).  If the Cotton-Perdue bill wanted to copy Australia’s skills-based immigration system then it would have to increase employment-based immigration to about 852,000 annually – an 11.4-fold increase.

Figure 1

Annual U.S. Employment-Based Immigrants under Different Immigration Regimes, 2013


Sources: OECD, EuroStat, E-Stat, Citizenship and Immigration Canada, Department of Homeland Security, Author’s Calculations.

Because Canada and Australia allow in more skilled immigrants, the number of family-based immigrants admitted as a proportion of their respective populations is also higher relative to the United States.  In 2013, family-based immigrants to Australia and Canada were equal to 0.26 percent and 0.23 percent of their respective populations.  Family-based immigrants to the United States in 2013 were equal to just 0.21 percent of our population in that year.  An important caveat is that Canada and Australia do not allow in as many distant relatives as the United States.  If Canada and Australia are the models for a skills-based immigration system, as President Trump stated, then the result would be more family-based immigrants in addition to more skilled-immigrants.

Canada and Australia also have large-scale regional immigration systems that allow Provinces and States, respectively, to allow in foreign workers in addition to their federal systems.  Senator Johnson (R-WI) introduced a bill this year to create just such a state-sponsored migration system in the United States that is modeled on the Canadian program and would accrue tremendous benefits to Americans.  Senator McCain (R-AZ) recently became a co-sponsor.  Any bill that would seek to create a skills-based immigration system based on the Australian or Canadian models would include a state-sponsored migration system like the type proposed by Senator Johnson.

Cotton-Perdue Will Not Raise Wages

The RAISE Act was named after its intent to raise the wages of native-born American workers by reducing the supply of lower-skilled immigrants.  However, that has not been the effect of immigration restriction in American history.  Congress restricted immigration to raise American wages at least three times in American history –  1882, 1924, and 1964.  It failed each time. 

Congress’ 1964 cancellation of the Bracero program is most instructive.  Bracero was a guest worker visa that allowed Mexican workers to migrate to American farms. Congress canceled it after intensive lobbying by labor unions and bad publicity due to flaws in the program.  Economists Michael Clemens, Ethan Lewis, and Hannah Postel took advantage of this natural experiment that was “designed to raise domestic wages and employment by reducing the total size of the workforce” to see how American farm wages adjusted.  Their superb paper found that canceling Bracero had little measurable effect on wages.    

Figure 2

Farm Worker Wages before and after Bracero, by State

Source: “Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion” by Michael A. Clemens, Ethan G. Lewis, Hannah M. Postel.

Figure 2 from their paper compares the quarterly average real farm wages by states where Braceros made up more than 20 percent of seasonal agricultural labor (black line), states where Braceros were fewer than 20 percent of the workforce (gray line), and states where there were no Braceros at all or only negligible numbers (dashed line).  Clemens et al. write that “[t]he figure shows that pre- and post-exclusion trends in real farm wages are similar in high exposure states and low-exposure states.  It also shows that wages in both of those groups rose more slowly after bracero exclusion than wages in states with no exposure to exclusion.”  The farmers did not adapt to the decline in legal migrants by raising wages.  Instead, they mechanized and planted less labor-intensive crops. 

The similarities between Bracero’s cancellation and the Cotton-Perdue bill are enough to make this new research a compelling reason to reject the bill out of hand.  The first similarity is that the Bracero program allowed in half a million workers a year before it was eliminated – which is about the same number of green cards that the Cotton-Perdue bill would cut.  Second, Bracero workers are somewhat similar to the workers who would enter on the family-based green cards that Cotton-Perdue intends to cut.  Third, Braceros were also concentrated in some states just like new immigrants are.  The historical and economic experience with cutting legal immigration in the past should deter would-be supporters of this bill.            

Furthermore, immigration bears little blame for low wages.  The National Academy of Sciences’ (NAS) literature survey on the economic effects of immigration concluded that:

When measured over a period of 10 years or more, the impact of immigration on the wages of native-born workers overall is very small.  To the extent that negative impacts occur, they are most likely to be found for prior immigrants or native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills.

Furthermore, the small long-run relative wage impacts on native-born American workers by education are close to zero according to the most authoritative studies by economists George Borjas and Gianmarco Ottaviano and Giovanni Peri, both of which take up much of the NAS report.  They disagree when it comes to immigration’s impact on the wages of dropouts, even though the effect is small and positive for all native-born workers lumped together in both studies (Figure 3).  The 2015 American Community Survey reports that only 9.4 percent of native-born Americans over the age of 25 are dropouts – the category of native-born workers who are most likely to be negatively affected.  Thus, over 90 percent of American workers are in education-skill categories where immigrants increase relative wages according to George Borjas’ relatively negative findings.

Figure 3

Relative Impact of Immigration on Native Wages by Education


Sources: Borjas, p. 120; Ottaviano & Peri, Table 6.

Note: Borjas looks at 1990–2010. Ottaviano and Peri look at 1990–2006.

Assuming that the Bracero research by Michael Clemens, Ethan Lewis, and Hannah Postel does not apply to Cotton-Perdue, which is extremely unlikely, the main potential beneficiaries are other immigrants.  Both Borjas and Ottaviano & Peri find that the wages of immigrant workers do drop because of competition with new immigrants even though native wages do not (Figure 4). That is because new immigrants have skills and educations most similar to previous immigrants, so they compete against each other more than with natives who have different skill and education levels.  Reducing immigrant wage competition with immigrants is not a popular goal for the population most affected.  Figure 25 of this Bulletin shows that immigrants are much more likely to support liberalized immigration in spite of wage competition.

Figure 4

Relative Impact of Immigration on Immigrant Wages by Education


Sources: Borjas, p. 120; Ottaviano & Peri, Table 6.

Note: Borjas looks at 1990–2010. Ottaviano and Peri look at 1990–2006.

Cotton-Perdue Is a Bad Political Bargaining Chip

More seasoned political observers around Washington DC suspect that the Cotton-Perdue bill is intended to be a bargaining chip that they can drop in exchange for other reforms like mandated E-Verify or another large-scale increase in immigration enforcement.  This is similar to when proponents of the 1996 Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) originally included cuts to legal immigration but had to settle for only boosting enforcement when many Republicans supported preserving the legal immigration system

Cotton-Perdue is not a good political bargaining chip for at least two reasons.  First, virtually zero Democrats would support a cut to green cards and at least half of Republicans would join them.  Cotton-Perdue will die on its own due to lack of support – like the RAISE Act did a few months ago – or be stripped out of any immigration bill in which it was included.  The bill has no chance so it cannot be credibly used as a bargaining chip to gain concessions elsewhere despite what President Trump says today.  Second, the public is more supportive of immigration than it was in the mid-1990s when Congress last seriously considered cuts in the legal system.  In 1995, 65 percent of Americans wanted less immigration while only 38 percent do today.  Cotton-Perdue would not be popular on Capitol Hill or with the American electorate so it is not a credible bargaining chip.


The Cotton-Perdue bill would not create a skills-based immigration system as President Trump has said he wants, it will not increase American wages, and it is not a credible bargaining chip in any future negotiations in Congress.  Interestingly, the current U.S. immigration system is gradually selecting a higher proportion of skilled immigrants over time without Congressional reform.  The Cotton-Perdue bill deserves to be criticized but it is not a serious threat that should gain concessions from Congressmen or Senators in both parties who either support immigration reform or the current level of admissions.

This week, the worst-kept secret in international sports became official: Paris will host the 2024 Olympic Summer Games and Los Angeles will host in 2028. There were plenty of happy faces in Paris and L.A. over the announcement—and there should be some in Boston too.

Just four years ago, Boston was a frontrunner in the sweepstakes for the 2024 Games. A group of city businessmen put together a multi-billion-dollar plan for the Games, including proposed construction of a large, temporary stadium for the main events and a beach volleyball venue that would be erected on Boston Common. The group then set to work getting political leaders and the public onboard.

In an article forthcoming in the fall issue of Regulation, Andrew Zimbalist, a Smith College economist and internationally renowned expert on the finances of mega-events like the Olympics, tells what happened next:

At first, Bostonians were excited by the Olympic prospect, inspired by claims that the event would yield long-lasting benefits in economic stimulus, international prestige, and tourism. But then they began to learn from people like Zimbalist that hosting the Olympics usually isn’t the net positive that proponents claim.

He writes of recent American Olympic history:

Lake Placid 1980 experienced cost overruns of 321% and ultimately required a bailout. The State of New York contributed $63 million (17% of total costs) and the federal government spent $179 million (50% of total costs). … Atlanta 1996 had cost overruns of 147%. … Approximately one-third of all spending—$823 million—came from taxpayers. … The federal government planned to spend $342 million on the 2002 Salt Lake City Winter Olympics. The Salt Lake City municipal government planned to spend $75 million and the Utah state government committed an additional $150 million. The final public bill was considerably higher.

Outside the United States, the Olympic experience has been even worse; barrels of red ink and/or horrifying events marked the Mexico City Games of 1968, the Munich Games of 1972, the Montreal Games of 1976, the Athens Games of 2004, the Sochi Games of 2014, and the Rio Games of 2016. And afterward, Zimbalist writes, the costs continue:

Beijing 2008’s “Bird’s Nest” stadium has been converted into a museum for tourists to visit at $12 a pop, but there is little interest. Meanwhile, the facility costs millions of dollars annually to operate and maintain. Rio’s Olympic Park has many venues that were slated for post-game use, but there was either no money to convert them or there were no private developers willing to take on the responsibility of remodeling and management. As in Athens (2004), most of Rio’s venues are now falling into disuse. London’s $700 million Olympic Stadium has been converted (at a $400 million additional public expense) into a new stadium for the West Ham soccer club, but West Ham had a perfectly good stadium beforehand.

As for claims that the Olympics bring tourism benefits, he argues this probably isn’t true on net. Major cities like Boston already attract plenty of tourists, but they’ll be inclined to stay away during the Olympics because of the chaos of the Games. And the Lyle Lanley notion that the Games would “put Boston on the map”? Well, Boston is already a pretty big dot on the map.

Put simply, host cities and nations rarely benefit from the Games. Instead, the beneficiaries are the International Olympic Committee (IOC) and the developers and other businessmen who profit from the construction and operation of the venues. For most everyone else, the Olympics are a sucker’s bet.

Once Bostonians learned this, public opinion turned sharply against the city’s hosting the Games. In late July of 2014, the city withdrew its application for the Games.

So why the smiles in Los Angeles? Because L.A. has figured out the politics and economics of the Olympics and refuses to make the costly mistakes that other host cities make. And this isn’t the first time the City of Angels has been so shrewd.

As Zimbalist chronicles, when L.A. hosted the 1984 Games, it roughly broke even—and perhaps even made a small profit. The city achieved this in part through aggressive use of corporate sponsorships. But the main reason for the success was L.A.’s heavy use of existing venues: the Coliseum, which hosted the 1936 Games, was also the main site of the 1984 Games; and the campuses of USC and UCLA were used to house athletes and staff instead of lodging them in a newly constructed “Olympic Village.”

L.A. was able to take this miserly approach because it was the only bidder for the 1984 Games. It thus drove a hard bargain with the IOC, instead of trying to “wow” the committee with exorbitant public works for the Games, as Athens (2004), Beijing (2008), Sochi (2014), and Rio (2016) did to their later regret.

Los Angeles’s 2028 proposal revisits this strategy, with plans to re-use the Coliseum, Staples Center, Pauley Pavilion, and other venues, use USC and UCLA again for the Olympic Village, and use a new football stadium in the LA suburb of Inglewood that is being built for the NFL’s Rams and Chargers franchises. Like in 1984, L.A. was able to strike this hard bargain with the IOC because—after the experiences of Rio et al.—only Paris and L.A. were serious candidates for 2024 and 2028 Games.

Still, L.A., California, and U.S. taxpayers should be on guard. The L.A. bid does envision the construction of some “temporary facilities,” and those can be expensive. Temporary stadiums (albeit far larger venues than what L.A. envisions) that were planned for Chicago’s unsuccessful 2016 Olympic bid and Boston’s withdrawn 2024 bid were estimated (optimistically) to cost $392 million and $175.5 million, respectively, for construction alone.

Generally speaking, hosting the Olympic Games has been a bad deal for taxpayers. Hopefully, Los Angeles is once again avoiding being the IOC’s sucker and will have both a terrific and financially responsible 2028 Games.

Writing in Monday’s New York Times, Katherine Stewart–author of 2012’s The Good News Club: The Christian Right’s Stealth Assault on America’s Children–has purportedly uncovered what “what the ‘government schools’ critics really mean.” According to Stewart, those who criticize government schools “have their roots in American slavery, Jim Crow-era segregation, anti-Catholic sentiment and a particular form of Christian fundamentalism.” She then catalogues a litany of unsavory characters who opposed “government schools” because they believed in the righteousness of slavery or because they saw the schools as insufficiently fundamentalist.

I’m not going to directly address Stewart’s claims about people like Robert Lewis Dabney or James W. Fifield Jr., both of whom, according to her, opposed government schools for unsavory purposes. I wouldn’t be surprised if they did. Many policy proposals can attract unsavory people, but the mere existence of such adherents is not a sufficient reason to abandon the policy. If it was, then the fact that many early-20th century Progressive economists and social reformers championed the minimum wage because it would unemploy “racially undesirable” immigrants would be a sufficient reason to oppose the minimum wage.   

Instead, I’ll focus on two fundamental errors in Stewart’s article. First, she ignores the extensive historical provenance of critics of state education, i.e. “government schools.” To demonstrate this, I can’t do better than refer you to intellectual historian and contributor George H. Smith, who has done yeoman’s work on the history of critics of state education. Smith has paid particular attention to 19th century British Voluntaryists, such as Herbert Spencer and Auberon Herbert. In a series of essays on Cato’s, Smith tells the history of those critics. “Rather than giving to government the power to decide among conflicting beliefs and values,” writes Smith, “they [British Voluntaryists] preferred to leave beliefs and values to the unfettered competition of the market.” Smith continues:

One must appreciate this broad conception of the free market, which includes far more than tangible goods, if one wishes to understand the Voluntaryist commitment to competition and disdain for government interference.

British libertarians had a long heritage of opposition to state patronage and monopoly, reaching back to the Levellers of the early seventeenth century. The Voluntaryists, like their libertarian ancestors, believed that government interference in the market, whatever its supposed justification, actually serves special interests and enhances the power of government, thereby furthering the goals of those within the government. The various struggles against government intervention were seen by Voluntaryists as battles to establish free markets in religion, commerce, and education. It was not uncommon to find the expression “free trade in religion” among supporters of church-state separation; when the editor of the Manchester Guardian stated in 1820 that religion should be a “marketable commodity,” he was expressing the standard libertarian position.

When fellow free-traders, such as Richard Cobden, supported state education, the Voluntaryists took them to task for their inconsistency. Those who embrace free trade in religion and commerce but advocate state interference in education, argued Thomas Hodgskin (a senior editor of The Economist) in 1847, “do not fully appreciate the principles on which they have been induced to act.” “We only wonder that they should have so soon forgotten their free-trade catechism,” wrote another Voluntaryist, “and lent their sanction to any measure of monopoly.”

Before free-traders ask for state interference in education, Hodgskin argued, “they ought to prove that its interference with trade has been beneficial.” But this, by their own admission, they cannot do. They know that the effect of state interference with trade has always been “to derange, paralyze, and destroy it.” Hodgskin maintained that the principle of free trade “is as applicable to education as to the manufacture of cotton or the supply of corn.” The state is unable to advance material wealth for the people through intervention, and there is even less reason to suppose it capable of advancing “immaterial wealth” in the form of knowledge. Any “protectionist” scheme in regard to knowledge should be opposed by all who understand the principle of competition. Laissez-faire in education is “the only means of ensuring that improved and extended education which we all desire.”

Smith’s essays, as well as a forthcoming Smith-edited anthology of critics of state education to be published by Cato, give the lie to Stewart’s assertion that critics of “government schools” operate in the tradition of racists and fundamentalists. Instead, we operate in the tradition of people like Thomas Hodgskin–a man who straddled that strange area between libertarianism and socialism–and Joseph Priestley, the discoverer of oxygen.

Stewart’s second fundamental error is to conflate conservative and libertarian critics of state education. While I imagine Stewart thinks that there is hardly any meaningful difference between conservatives and libertarians–except perhaps to think that libertarians are more “radical”–the issue of the government provision of schools helps separate libertarians from conservatives and, in the process, demonstrates a fundamental difference between the two. Put simply: many conservatives do not actually oppose government schools, they only oppose government schools that they do not control. Libertarians, on the other hand, as we’ve seen with the British Voluntaryists, will oppose government schools even if they were libertarian.  

In that vein, Jesse Walker at Reason has discovered a significant error in Stewart’s piece that helps underscore this difference between conservative and libertarian views on education. Stewart cites Presbyterian minister A.A. Hodge as one of the first to use the phrase “government schools.” As Walker points out, Hodge was not against government schools, he was against centralized schools. Lest there be any doubt, here’s Hodge in his essay “Religion in the Public Schools”:

It is agreed that the perpetuity of a free state necessarily requires the general education of the people. It is also agreed that no agency can so effectually secure this necessary end as a school system supported by public taxation and controlled by the state herself.

Hodge feared the secularizing tendency of centralized schools, and he therefore wanted the government to control schools at a local level. Again, lest there be any doubt, here are Hodge’s words in his essay “The Engine of Atheism”:

I am as sure as I am of the fact of Christ’s reign that a comprehensive and centralized system of national education, separated from religion, as is now commonly proposed, would be the most appalling enginery for the propagation of anti-Christian and atheistic unbelief, and of antisocial nihilistic ethics, individual, social and political, which this sin-rent world has ever seen.

Strangely, and I would say dishonestly, Stewart quotes this passage as follows, completely distorting the meaning:

In 1887, he published an influential essay painting “government schools” as “the most appalling enginery for the propagation of anti-Christian and atheistic unbelief, and of antisocial nihilistic ethics, individual, social and political, which this sin-rent world has ever seen.”

Hodge clearly wasn’t talking about “government schools,” he was talking about a “comprehensive and centralized system of national education,” something akin to today’s common core.

Finally, racists and religious zealots have also conspired against private schools. In Oregon, in 1922, Walter Pierce won the governorship with the support of the Ku Klux Klan. The Klan had become quite powerful in the state, and they were pushing for a compulsory education act, which would force children to go to “government schools.” Because the KKK was viciously anti-Catholic, eliminating private Catholic schools was one of the Act’s goals. After the law passed, one Catholic school, the Society of the Sisters of the Holy Names of Jesus and Mary, challenged the law on constitutional grounds. In 1925, in the case Pierce v. Society of Sisters, the Court unanimously struck down Oregon’s law on the grounds that it violated the Due Process Clause of the Fourteenth Amendment.

Whether or not someone supports “government schools” often depends on whether they feel their views are being represented by the school. Conservatives have long believed that public schools are little better than watered-down communist indoctrination camps, and thus they’re often critical of public education. Similarly, if Ms. Stewart found her children’s school overtaken with fundamentalist propaganda, she might pull her kids out and send them to a private school. Libertarians often stand alone, criticizing the very idea of state education as a misguided and quixotic attempt to enforce “shared values”–i.e. those values that won 51 percent of the vote in the last election–on a population.

Rather than being the heirs of racists and fundamentalists, those who criticize government schools are part of proud tradition that includes classical liberals, voluntaryists, and proto-socialists. As Hodge shows, many conservatives are part of a different tradition: one that believes the state should engineer its citizens and only oppose government schools when they disagree with how the schools are being run.  

This week, Apple announced it had pulled several apps from its iOS App Store that offer virtual private network (VPN) services in China. As quoted by tech blog TechCrunch, Apple stated:

Earlier this year China’s [Ministry of Industry and Information Technology] MIIT announced that all developers offering VPNs must obtain a license from the government.  We have been required to remove some VPN apps in China that do not meet the new regulations. These apps remain available in all other markets where they do business.

One published report claims that as many as 60 VPNs were pulled from the China version of the App Store. A Google search on the topic generally shows Apple taking a public beating for the action, which, in fact, was unavoidable if Apple was to comply with the new Chinese government law. 

As David Pierson of the LA Times noted, it’s hardly Apple’s first anti-free speech accomodation to the Communist Chinese government:

This is not the first time Apple has acquiesced to authorities in China, the company’s second-biggest market after the U.S. It has pulled apps from its China app store that mention the Dalai Lama and ethnic Uighur activist Rebiya Kadeer. Apple also removed the New York Times app this year and disabled its news app in China in 2015.

Apple will face exactly the same situation in November, when a new Russian law banning VPNs comes into effect. 

Veteran Apple watcher John Gruber made the following observation on Apple’s decision:

The thing I keep thinking about is that iMessage and FaceTime are among the few protocols available inside China with end-to-end encryption. The Chinese just started blocking WhatsApp a few weeks ago. I don’t know why they allow iMessage and FaceTime to continue working, but they do, and both of those protocols are designed from the ground up to only work using end-to-end encryption. There is no “off switch” for iMessage encryption that Apple can flip inside China. If you’re using iMessage, it’s encrypted. It would surprise no one if China started blocking iMessage and FaceTime, but for now, their availability is a real benefit to the people of China that seems to go largely unrecognized.

You can pretty much take it to the bank that blocking iMessage and FaceTime will be next up for Chinese (and probably) Russian censors, with further demands that other apps offering end-to-end encryption be excised from the iOS App Store.

And it will be those kinds of precedents that incoming FBI Director Christopher Wray and his colleagues in the American Intelligence Community use to force Apple and other manufacturers of privacy technology and software to give them “back doors” into said apps and services or to seek an outright ban on them on “national security” grounds. If that happens, American citizens should remind their federal legislators that if House and Senate members are allowed to use encrypted messaging apps and services, so should the citizens who elect them and pay their salaries.

Cross-posted at the Urban Institute, following our online debate.

Across the country, many people are finding it harder and harder to pay their rent. Among the leading reasons for rising rents is that housing supply isn’t growing fast enough to keep up with demand. The shortage of affordable rental housing has generated surging interest in regulatory reform, especially in California.

Despite that trend, restrictive land-use regulations that reduce housing supply enjoy support from people with a wide range of political attitudes and affiliations, as these regulations promise to accomplish appealing objectives. They can ensure that new residents provide revenue through property taxes or development fees to support schools, roads, parks, open space, and affordable housing. They  sometimes reduce gentrification and often control neighborhood aesthetics. And regulations that reduce housing supply enough to raise housing prices benefit residents who own homes.

Given the breadth of support for restrictions from various corners, any efforts to reform regulation must be correspondingly broad. Results from an online debate last month cofacilitated by experts from the Cato Institute and the Urban Institute hint at the potential for new coalitions.

Where the experts agree

The debaters, whose ideological perspectives varied broadly, agreed that, sometimes, land-use regulations are too rigid, limit growth too much, and create too much uncertainty. Results include higher housing costs, racial and economic segregation, constrained economic opportunity and innovation, and slower economic growth.

Even supporters of regulation conceded that regulations fail to work as advertised. They often expose people to harms instead of protecting them; diminish, rather than enhance, aesthetic and environmental quality; and aggravate public service degradation instead of preventing it.

Reflecting agreement on the problems of regulation, some debaters found common ground on what to do about those problems. Most of the agreement centered on local reforms that loosen or reduce regulation for improvements in efficiency, affordability, and equity. Dana Berliner from the Institute for Justice suggested broadening permitted uses, eliminating parking requirements where parking is abundant, and removing restrictions on home garage uses. Tony Arnold of the University of Louisville favored reducing regulatory requirements for affordable housing and agreed with Berliner on the importance of reducing unnecessary permitting delays. And Robert Dietz of the National Association of Home Builders recommended lowering development impact fees used for general revenue collection.

Some debaters also agreed that state governments are important actors in driving local regulatory reform. Richard Rothstein of the Economic Policy Institute endorsed state “fair share” affordable housing plans. New Jersey’s decades-old approach to battling suburban exclusionary zoning hinges on these plans and is supported by affordable housing advocates, civil rights leaders, and for-profit builders. That support wouldn’t materialize without provisions that override local restrictions and guarantee that builders incorporate affordable housing in their developments. Rothstein, Arnold, and American University’s Derek Hyra supported inclusionary zoning, but without the quid pro quo of increased certainty and density, the policy can generate stiff opposition from for-profit builders.

Why further debate is crucial

Some debaters offered pros and cons of regulations and advocated for policies that others opposed. Many of these items deserve more thought and discussion, even if we don’t reach an agreement now, because they illuminate trade-offs and potential approaches for future policy designs that could ease the housing supply crisis. We hope you’ll come up with some ideas of your own when you read the full Cato Institute and Urban Institute debate here.