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Dr. Melik: This morning for breakfast he requested something called “wheat germ, organic honey and tiger’s milk.”

Dr. Aragon: [chuckling] Oh, yes. Those are the charmed substances that some years ago were thought to contain life-preserving properties.

Dr. Melik: You mean there was no deep fat? No steak or cream pies or… hot fudge?

Dr. Aragon: Those were thought to be unhealthy… precisely the opposite of what we now know to be true.

Science hasn’t yet advanced as far as Woody Allen imagined in the movie Sleeper. But the Washington Post does report on its front page today, as the House Agriculture Committee holds a hearing on the government’s official Dietary Guidelines, that decades of government warnings about whole milk may have been in error. 

In fact, research published in recent years indicates that the opposite might be true: millions might have been better off had they stuck with whole milk.

Scientists who tallied diet and health records for several thousand patients over ten years found, for example, that contrary to the government advice, people who consumed more milk fat had lower incidence of heart disease.

By warning people against full-fat dairy foods, the U.S. is “losing a huge opportunity for the prevention of disease,” said Marcia Otto, an assistant professor of epidemiology at the University of Texas, and the lead author of large studies published in 2012 and 2013, which were funded by government and academic institutions, not the industry. “What we have learned over the last decade is that certain foods that are high in fat seem to be beneficial.”

The Post’s Peter Whoriskey notes that some scientists objected early on that a thin body of research was being turned into dogma:

“The vibrant certainty of scientists claiming to be authorities on these matters is disturbing,” George V. Mann, a biochemist at Vanderbilt’s med school wrote in the New England Journal of Medicine [in 1977].

Ambitious scientists and food companies, he said, had “transformed [a] fragile hypothesis into treatment dogma.”

And not just dogma but also government pressure, official Dietary Guidelines, food labeling regulations, government support for particular lines of research, bans on whole milk in school lunches, taxes and regulations to crack down on saturated fats and then on trans fats and salt. Earlier today Walter Olson noted numerous past examples of bad government advice on nutrition.

It’s understandable that some scientific studies turn out to be wrong. Science is a process of trial and error, hypothesis and testing. Some studies are bad, some turn out to have missed complicating factors, some just point in the wrong direction. I have no criticism of scientists’ efforts to find evidence about good nutrition and to report what they (think they) have learned. My concern is that we not use government coercion to tip the scales either in research or in actual bans and mandates and Official Science. Let scientists conduct research, let other scientists examine it, let journalists report it, let doctors give us advice. But let’s keep nutrition – and much else – in the realm of persuasion, not force. First, because it’s wrong to use force against peaceful people, and second, because we might be wrong.

This last point reflects the humility that is an essential part of the libertarian worldview. As I wrote in The Libertarian Mind:

Libertarians are sometimes criticized for being too “extreme,” for having a “dogmatic” view of the role of government. In fact, their firm commitment to the full protection of individual rights and a strictly limited government reflects their fundamental humility. One reason to oppose the establishment of religion or any other morality is that we recognize the very real possibility that our own views may be wrong. Libertarians support a free market and widely dispersed property ownership because they know that the odds of a monopolist finding a great new advance for civilization are slim. Hayek stressed the crucial significance of human ignorance throughout his work. In The Constitution of Liberty, he wrote, “The case for individual freedom rests chiefly on the recognition of the inevitable ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depends…. Liberty is essential in order to leave room for the unforeseeable and unpredictable.” The nineteenth-century American libertarian Lillian Harman, rejecting state control of marriage and family, wrote in Liberty in 1895, “If I should be able to bring the entire world to live exactly as I live at present, what would that avail me in ten years, when as I hope, I shall have a broader knowledge of life, and my life therefore probably changed?” Ignorance, humility, toleration—not exactly a ringing battle cry, but an important argument for limiting the role of coercion in society.

Today’s scientific hypotheses may be wrong. Better, then, not to make them law.

Humanity’s excitement about space exploration is evident, from the reaction to the recent announcement of potential water on Mars, to the box office success of The Martian–a movie about a manned mission to the red planet.  Given the public interest in space travel, why hasn’t a man or woman actually stepped foot on Mars yet? Let’s consider some key factors affecting the pace of progress.

First, there is the obvious: appropriate technology takes time to develop. The journey from rudimentary hot air balloons and gliders to supersonic jets did not happen overnight. There is good news on this front, however.  Thanks to better communications and computing, human knowledge has the potential to expand at an exponential rate.

Second, competition is a major driver of progress, and the space industry has not been subject to intense competition since the Cold War’s end. Increasing private sector involvement may change that. For example, even after civil aviation took off, flight was a luxury enjoyed by few. But as deregulation opened up the industry to more intense competition, flight rapidly became more accessible. Today, more people fly than ever.

Competition between the U.S. and the Soviet Union during the Space Race fueled most of humanity’s spaceflight achievements, but the Cold War’s conclusion brought this competition to an end. Today, governments have limited incentive to push the boundaries of the final frontier. As a result, space exploration has stagnated.

Fortunately, a new era of private space exploration may be dawning, enabling competition to once again flourish as profits drive a new space race. The conditions have never been better. There exist potential customers eager to pay large sums for the chance to go to space for a few minutes, and still others willing to leave Earth for a lifetime on Mars. Private enterprises like SpaceX, while still in their early phases, could rekindle competition and help spark a renewed sense of urgency in the realm of spaceflight.

Humanity has dreamt of space travel for as long as we have gazed up at the stars, and increased competition could help bring those dreams to fruition. This short video beautifully depicts some of the possibilities of human space exploration. You need only look back on how far humanity has come since 1915 to gain perspective on how far we may go in the next century.

According to Peter Whoriskey’s Washington Post report this morning, the latest conventional wisdom to reverse in the nutrition world is on whole versus low-fat milk:

U.S. dietary guidelines have long recommended that people steer clear of whole milk, and for decades, Americans have obeyed. Whole milk sales shrunk. It was banned from school lunch programs. Purchases of low-fat dairy climbed.

…[But] research published in recent years indicates that the opposite might be true: millions might have been better off had they stuck with whole milk.

Scientists who tallied diet and health records for several thousand patients over ten years found, for example, that contrary to the government advice, people who consumed more milk fat had lower incidence of heart disease.

Readers of this space will be familiar with the pattern. Previous advice from Washington about the supposed hazards of eggs and other cholesterol-laden foods, the advantages of replacing butter and other animal fats with trans fats, and the gains to be made from switching from regular to diet soda, have all had to be re-evaluated and sometimes reversed in later years. And yet some in the public health establishment — including a few who are quoted in today’s Post article— still aspire to use the power of government to coerce changes in citizens’ diet. They seem to imagine that with people like themselves in charge, next time will be different.

In today’s Cato Online Forum essay, George Washington University Professor of Foreign Affairs Susan Ariel Aaronson argues that the “TTIP provides an opportunity to think differently about how policymakers in advanced industrialized economies can protect labor rights, encourage job creation, and empower workers.”  After describing some of the concerns workers have about the TTIP and explaining why certain parts of the agreement could serve to undermine labor rights, Susan provides some fresh recommendations for making the TTIP more appealing to workers.

Read it. Provide feedback.  And register for Cato’s October 12 TTIP conference.


Brookings scholar Elaine Kamarck has a new study favoring partial privatization of the U.S. Postal Service (USPS). Her study comes on the heels of a solid study by Clinton administration economist Robert Shapiro, who looked at the subsidies and regulatory protections enjoyed by the USPS.

Conservative and libertarian scholars have discussed the advantages of USPS privatization for years. Britain, Germany, the Netherlands, and other countries have privatized their systems. But the mainstream media and leaders in Congress have taken little notice. Kamarck’s study generated a respectful news story in the Washington Post, so hopefully the addition of centrist scholars to the debate will generate momentum for reform.

Kamarck discusses the rise of the Internet, the plunge in snail mail volume, and the postal system’s endemic red ink. She discusses the increasing concerns about the USPS competing against private firms in areas such as package delivery.

Kamarck advocates splitting the USPS into two pieces: a government piece that fulfills the “universal service” mandate for delivering mail to every address, and a private piece that would handle activities that compete with other companies.

With due respect, I think her discussion in favor of retaining a universal service mandate is rather weak and internally inconsistent. She says, “the concept of ‘binding the nation together’ seems to be as strong in the information age as it was in the beginning of the republic.” But if that is true about the “information age,” it is because Americans use all the new electronic tools, such as email and Facebook, to bind themselves together with friends and family—without any government mandate.

Kamarck talks about how people hardly receive personal letters in the mail anymore, even Christmas cards. And she points to polls showing that two-thirds of people would be just fine with ending Saturday delivery. So given all this, why should the government force any postal organization to spend money on delivery that people are increasingly ambivalent about?

All in all, Kamarck’s study raises the right issues, and is a great addition to the debate. That debate needs a shot in the arm, because, as Kamarck notes, a stalemate over reforms has persisted in Congress for years, despite the steady downward spiral of the government’s postal system.

Indeed, if you want an example of a dysfunctional Congress and a lack of pro-market leadership by House and Senate Republicans, this is it. Look at Britain: moderate David Cameron was able to privatize the 500 year old Royal Mail in 2013 under a coalition government with a liberal party. So whoever the new Republican speaker of the U.S. House is, this would be a great issue to move forward and demonstrate some boldness to the party’s voters.    

For more on postal privatization, see here.  

Last week a bipartisan group of senators, led by conservative Senate Judiciary Chairman Chuck Grassley (R-IA), announced the Sentencing Reform and Corrections Act of 2015.

The bill clearly represents a compromise between criminal justice reformers and more conservative law-and-order legislators, but the aggregate effect on the criminal justice system would be a substantial improvement.

On the positive side, the bill reduces several mandatory minimums relating to non-violent drug and firearm offenses (notably reducing the “three strikes” life sentence to 25 years), adds several safety valves to allow judges to adjust the penalties for certain non-violent offenses, and in many cases works retroactively to lower the excessive sentences of those already convicted of the relevant crimes.  Further, the bill would require the federal government to compile and publish a database of all federal crimes, their elements, and their potential penalties.  In addition, the bill would restrict the use of solitary confinement on juvenile offenders, create a new system for assessing the risk level of federal prisoners, among several other corrections changes.

On the other hand, the bill creates brand new federal mandatory minimum sentences for interstate domestic violence crimes that result in death and for providing prohibited support to terrorist organizations. It’s unclear why legislators feel that terrorism suspects are treated too leniently by the current sentencing structure, and taking discretion away from judges to impose sentences based on the particular facts of the cases before them is a step back.  Also on the negative side, the bill increases the mandatory minimum for felons caught in possession of a firearm from 10 to 15 years.  There are nearly 6 million convicted felons in the United States, a great many of them having been convicted of non-violent drug offenses. Once again, it is unclear why legislators, rather than judges and juries, should determine the proper punishment for a felon who is caught with a firearm, or why the current 10 year mandatory prison sentence is considered insufficient.

Overall, however, the bill would surely reduce many more sentences than it would extend. Thousands of current non-violent inmates and countless future inmates will have years or even decades taken off of their excessive sentences.  While the bill stops well short of putting an end to mandatory minimums, as the Justice Safety Valve Act would do, and still imposes harsh sentences on many categories of non-violent offenders, many of its provisions are steps in the right direction and serve as further proof that now is a ripe moment for criminal justice reform on both sides of the aisle.

For the full text of the proposed legislation, click here.

For a section-by-section summary of its provisions, click here.

And for further analysis from the excellent Families Against Mandatory Minimums, click here.

Arne Duncan announced Friday that he is resigning as Secretary of Education, effective sometime in December. He will be replaced – sort of – by Deputy Education Secretary John King, who will not be put up for the permanent job but will be kept until the end of the administration in an “acting” – and Senate confirmation-less – capacity.

Of course, what Duncan has done as Secretary reflects what the Obama administration wanted, not what Duncan did on his own. Regardless who was ultimately calling the shots, though, Duncan presided over a period that has fulfilled some of the worst fears of anyone who has ever said, “It might be a bad idea to have a federal education department. They might start trying to run things.”

The overarching theme under Duncan has been huge consolidation of power not just at the federal level – alone blatantly unconstitutional – but in the Department itself.

What’s the distinction? Basically, the Obama administration started making policy unilaterally. First it was with the massive “stimulus” at the beginning of the term, which included the infamous $4.35 billion Race to the Top (RTTT) program. Then, even more dubiously – at least Congress passed the stimulus – it offered waivers out of the No Child Left Behind Act’s most hated provisions, but only if states agreed to conditions set by the administration. (Go ahead and check NCLB. The secretary does not have authority to unilaterally set waiver conditions.) RTTT and waivers together helped drive adoption of the Common Core national curriculum standards; funded and pushed adoption of PARCC and SBAC tests aligned to the Core; prescribed a lot about how teachers would be evaluated; and more.

How did Duncan and the administration justify all this, especially the waivers? By declaring they couldn’t wait for Congress to pass legislation. They had to act now!

It hasn’t only been in K-12 education, of course, that Duncan has presided over huge increases in federal power. In higher education, Duncan has led the department as inflation-fueling student aid has been greatly expanded; for-profit colleges have been unfairly demonized in both word and deed; and the department’s Office of Civil Rights has conducted a crusade against campus sexual assaults that, while likely well-intentioned, has disregarded basic rights of the accused and been based on dubious information. Duncan has also pushed for greatly expanding government preschool programs despite the dearth of evidence that they work, including depressing findings from some of the federal government’s own, sometimes very quietly released, studies.

While again, Duncan likely didn’t call most of these shots himself, when he has spoken he has indicated enthusiasm for them. This is perhaps no better captured than when he insulted “white suburban moms” in order to suggest Common Core opponents were largely blinkered suburbanites or goofy fringe types. And then there was his cajoling states to either do what he said, or keep letting their kids suffer.

What has all this done for schooling outcomes? While it is very hard to attribute ups or downs to just one – or even several – policies, there’s little evidence all this top-down control has translated, ultimately, into better outcomes. Yes, high school graduation rates are up, but that may well be a function, at least partially, of bureaucratic workarounds more than increased student desire to stay and thrive in school. Supporting this, scores on the National Assessment of Education Progress have been pretty darn stagnant, sitting at the same level for 17-year-olds – the schools’ “final products” – that we’ve seen for decades, and SAT scores have declined. Meanwhile, higher education is all too empty a shell, with skyrocketing prices, terrible completion rates, huge underemployment for graduates, and major credential inflation.

The promotion of John King to acting Secretary suggests that the administration, at least rhetorically, will be maintaining its “we know best” approach. King was the most high-profile and vocal supporter of Common Core in New York as that state rushed, and fumbled, implementation, and he helped kick off the Core defense of belittling opponents – often parents just learning about the Core – rather than dealing with the numerous substantive objections they and others offered. This may be why the administration does not plan to nominate King for the full Secretary position: it wants to avoid a confirmation fight that would bring the ongoing Core war to DC, while keeping a true-believer in Duncan’s old chair.

And, of course, that is fitting: The hallmark of this administration has been doing and saying what it wants while avoiding Congress and public debate. It looks like that will continue.

The Transatlantic Trade and Investment Partnership has generated quite a lot of opposition – or at least pockets of very loud opposition – especially in Europe. Among the major points of contention is the matter of investment protection and, specifically, the investor-state dispute settlement mechanism, which gives foreign investors the option to bypass the domestic legal regimes of host governments and go straight to third party arbitration panels with claims concerning domestic policies, laws, regulations, or actions that have a discrimintory effect and adversely affect the value of their investments.

Like my colleague Simon Lester and I, Axel Berger of the German Development Institute is skeptical of the need and propriety of ISDS provisions.  In today’s Cato Online Forum essay, Axel raises some important points and makes a good case for excluding ISDS provisions from the TTIP.  Read it. Provide feedback.  And register for Cato’s October 12 TTIP conference.

After six years of negotiations, a final Trans-Pacific Partnership agreement has been reached in Atlanta.  Check your pacemakers, trade policy wonks. This is about as exciting as it gets in our world.

First, congratulations are in order for the TPP negotiators, who worked extremely hard over the past several years in an environment of profound public skepticism – much of it driven by pervasive scaremongering – to arrive at this moment. Reaching accord on a broad array of subjects between 12 countries at different levels of economic development with disparate policy objectives is not a task for the faint of heart.

Second, there is still quite a bit of work to be done on the domestic front. Even with the deal “concluded,” the president cannot sign the agreement until 90 days after he officially announces his intention to do so.  During that period, there will be intensive consultations between the administration and Congress over the details; the legal text of the agreement will be made available to the public on the internet; the USTR advisory committees will submit their assessments of the deal to Congress; and there will be ample opportunity for informed, robust domestic debate about the deal’s pros and cons.

After the 90-day consultation period, the president can return to the TPP partners with input from Congress, which may or may not warrant modifications to the deal to improve its chances of ratification. Once the deal is signed, the administration then has a maximum of 60 days to prepare a list of all U.S. laws that will need to be changed on account of TPP; the U.S. International Trade Commission will have a maximum of 105 days to do an analysis of the likely impact of the TPP on the U.S. economy; the congressional trade committees will perform mock markups of the implementing legislation; and, then, the final TPP implementing legislation will be introduced in both chambers.  After the legislation is introduced, the House will have 60 days and the Senate will have 30 days to hold votes.

These requirements stem from the Trade Promotion Authority legislation enacted over the summer. If the TPP is going to be ratified by this Congress under this president, the timelines suggest that there isn’t much room for delay. Although it has become an article of faith that trade bills don’t move during election years, there is simply no avoiding the TPP landing in Congress’s lap and animating the presidential debates and primary elections. Expect a vote anytime after July 2016, including, possibly, during the lame duck. (And watch to see whether and how Hillary Clinton contorts her position to come back around to supporting the deal she helped launch as Sectretary of State.)

As to substance, I’m not offering any endorsements until I have a chance to review the text.  In fact, my trade center colleagues and I intend to do a chapter-by-chapter assessment of the deal, rating each on a scale of 0 (protectionist) to 10 (free trade), and providing an aggregate TPP grade.  We expect the scores for some chapters will be pulled down by certain terms that amount to baked-in protectionism.  For example, apparently the United States “secured” a 25 year phase-out period for our 2.5% auto import tariffs and a 30 year phase-out for our 25% pick-up truck tariff.  Gee, thanks for that shot glass of economic freedom.

Like most legislation that comes before Congress, there will be both good and bad terms in the TPP.  If the agreement is net liberalizing, I will likely offer my endorsement.  And, as I like to say about these trade deals, don’t make the perfect the enemy of the good.

New data show that worker compensation is rising faster in the federal government than in the private sector. After rapid growth in federal pay during the George W. Bush years, growth slowed from 2011 to 2013 after policymakers enacted a partial freeze on federal wages.

That era of restraint is now over. The latest data from the Bureau of Economic Analysis (BEA) show that wages rose 2.9 percent in the federal government in 2014, on average, compared to 1.7 percent in the private sector. When benefits such as pensions and health care are included, federal compensation increased 2.8 percent, on average, compared to 1.3 percent in the private sector.

Federal civilian workers had an average wage of $84,153 in 2014, compared to an average in the private sector of $56,350. The federal advantage in overall compensation (wages plus benefits) is even greater. Federal compensation averaged $119,934 in 2014, which was 78 percent higher than the private-sector average of $67,246. This essay discusses trends in federal and private pay.

The BEA provides compensation data by industry. The figure shows average compensation in 17 major private industry groups, as well as compensation for federal civilian workers, the military, state and local governments, and federal government enterprises (mainly the postal service).

The federal government has the fourth highest paid workers in the United States, after utilities, mining, and the management of companies. Federal compensation is higher, on average, than compensation in the information, finance and insurance, and professional and scientific industries. Federal compensation is more than twice as high as compensation in the education industry, and it is more than three times higher than compensation in the retail trade industry.

For more information, see here.

According to the World Bank, for the first time in human history, “less than 10 percent of the world’s population will be living in extreme poverty by the end of 2015.” The bank has “used a new income figure of $1.90 per day to define extreme poverty, up from $1.25. It forecasts that the proportion of the world’s population in this category will fall from 12.8 percent in 2012 to 9.6 percent.”

As scholars have noted, historically speaking, grinding poverty was the norm for most ordinary people. Even in the most economically advanced parts of the world, life used to be miserable. To give one example, at the end of the 18th century, ten million of France’s twenty-three million people relied on some sort of public or private charity to survive and three million were full-time beggars.

Thanks to industrial revolution and trade, economic growth in the West accelerated to historically unprecedented levels. Over the course of the 19th and 20th centuries, real incomes in the West increased fifteen-fold. But the chasm that opened up as a result of the Western take-off is now closing.  

The rise of the non-Western world is, unambiguously, a result of economic growth spurred by the abandonment of central-planning and integration of many non-Western countries into the global economy. After economic liberalization in China in 1978, to give one example, real incomes rose thirteen-fold.

As Princeton University Professor Angus Deaton notes in his book The Great Escape, “[T]he rapid growth of average incomes, particularly in China and India, and particularly after 1975, did much to reduce extreme poverty in the world. In China most of all, but also in India, the escape of hundreds of millions from traditional and long established poverty qualifies as the greatest escape of all.”

Vladimir Putin opened a new game of high stakes geopolitical poker, backing Syria’s President Bashir Assad. But Washington has no complaint. America has been meddling in Syria’s tragic civil war from the start.

Russia’s dramatic backing for Syria’s beleaguered Assad government formally buries any illusion that “what Washington says goes,” even in the Middle East. Moscow has begun bombing regime opponents. Sounding almost like the George W. Bush administration, the Putin government insisted that it was fighting terrorism and there really wasn’t a “moderate opposition.”

In contrast, Russia’s intervention has resulted in much wailing and gnashing of teeth in allied capitals. In a joint statement America, France, Germany, Qatar, Saudi Arabia, and United Kingdom claimed that Moscow’s intervention would “only fuel more extremism and radicalization.” The Gulf States separately warned of more “violent extremism” and “terrorists” and increased refugee flows.

Alas, promiscuous American military intervention in the Middle East long has promoted the worst forms of violence and terrorism. Further, for years Qatar and Saudi Arabia have been important sources of finance for “extremism and radicalization.”

Nevertheless, President Barack Obama declared that Moscow risked a “quagmire.” Probably true. Of course, the U.S. understands quagmires, having spent 13 years unsuccessfully attempting to bring democracy to Afghanistan and being drawn back toward a combat role in Iraq.

Secretary of State John Kerry intoned that “Russia has made a catastrophic mistake because they will be siding … against the entire rest of the community in that part of the world,” which mostly means the dictatorial Gulf monarchies, highlighted by totalitarian Saudi Arabia. He also complained about the potential ill consequences—after Washington’s extraordinary record in destabilizing the region, destroying nations, spreading conflicts, creating refugees, and harming noncombatants.

“Any military support to the Assad regime for any purpose, whether it’s in the form of military personnel, aircraft, supplies weapons, or funding, is both destabilizing and counterproductive,” asserted White House spokesman Josh Earnest. Actually, U.S. support for Assad’s overthrow is both destabilizing and counterproductive. Just like invading Iraq and intervening in Libya.

There’s little the U.S. actually can do, at least at reasonable cost, to stop Russia. Washington could push for more sanctions, but the Europeans aren’t going to destroy what remains of their relationship with Moscow over Syria. Even the most war-happy neoconservative hasn’t called for blasting the Russian planes out of the sky.

Certainly U.S. officials have no credibility in claiming that their policy will yield a better result. Washington has intervened repeatedly in the Middle East with disastrous consequences.

America’s participation in the 1953 coup in Iran set that nation on a path toward violent Islamic revolution. Fear of the new Islamic republic caused Washington to back Saddam Hussein’s Iraq against Tehran, which encouraged Hussein to assume he could attack Kuwait with impunity, which in turn triggered America’s first war with Iraq.

To “drain the swamp” Washington invaded Iraq in 2003, wrecking that society, triggering violent sectarian conflict, generating millions of casualties and refugees, expanding Iranian influence, and empowering a new sectarian Shia government. The Sunni insurgency morphed into the Islamic State which, with the aid of former Baathist soldiers, grabbed control over much of Iraq and Syria.

As I point out on Forbes online: “The U.S. and its European allies also helped destroy Libya, resulting in more chaos and another fertile ground for the Islamic State. In Yemen Washington is backing Saudi aggression which has turned a long-term civil war into another horrid sectarian conflict. Weapons given to supposedly moderate Syrian insurgents have ended up with ISIL forces.”

Yet Washington is filled with voices demanding that America intervene more.

The Assad regime is blood drenched and Moscow’s efforts in Syria are likely to have ill effects. But Washington bears most of the blame for wrecking and destabilizing the Middle East.

Russia’s intervention is merely the latest unintended consequence of foolish, irresponsible U.S. behavior. Maybe Vladimir Putin can make Washington policymakers finally learn from their many mistakes.

Friday’s disappointing jobs report reminds us that we are still in a very slow recovery from the 2007 recession. Not only were far fewer jobs created in September than economists predicted, the estimates for July and August were revised downward. And the size of the total workforce slipped to 62.4 percent of the population, the lowest level since 1977.

The Minneapolis Federal Reserve Bank has a handy tool for monitoring the depressing news, allowing you to compare this recovery to past recoveries since World War II. Output (GDP) is recovering more slowly than in past recoveries, along with employment:

Why is the recovery so slow? John Cochrane of the Hoover Institution examined that question in the Wall Street Journal a year ago. Here’s part of his answer:

Where, instead, are the problems? John Taylor, Stanford’s Nick Bloom and Chicago Booth’s Steve Davis see the uncertainty induced by seat-of-the-pants policy at fault. Who wants to hire, lend or invest when the next stroke of the presidential pen or Justice Department witch hunt can undo all the hard work? Ed Prescott emphasizes large distorting taxes and intrusive regulations. The University of Chicago’s Casey Mulligan deconstructs the unintended disincentives of social programs. And so forth. These problems did not cause the recession. But they are worse now, and they can impede recovery and retard growth.

If you put obstacles in the way of investment and employment, you’ll likely get less investment and employment.

A new e-book edited by Brink Lindsey, Reviving Economic Growth, presents ideas from 51 economists of widely varying perspectives on this crucial question.

It should surprise no one that Cato tends to be an outsider in Washington. At least on the domestic policy side we usually have some allies hiding somewhere along the ideological spectrum. Conservatives are more likely to support free markets; liberals are more likely to back civil liberties.

But on foreign policy Cato often stands pretty much alone. Almost everyone in the foreign policy field can be counted on to endorse every existing alliance and insist that it be “strengthened.” No matter that the Cold War is over, Soviet Union and Warsaw Pact are gone, Maoist China has disappeared, and most of America’s friends and allies have “grown up,” becoming democratic and prosperous. Whatever has been must always be is the seeming motto for liberals and conservatives alike on foreign policy.

Unfortunately, most of the debate in Washington occurs between opposing establishment advocates of the status quo. Everyone knows we should intervene. The only questions are how much more bombing is appropriate, what new tactics might prove to be more effective in imposing Washington’s will, and, most important, how to get a different result doing a lot more of the same?

But I recently had an opportunity to crash an establishment event. Actually, perhaps more surprising, I was invited to participate. The Council on Foreign Relations staged a discussion on NATO’s future in which I joined James Goldgeier, dean of the School of International Service at the American University. Thom Shanker of the New York Times served as moderator.

It was an eminently civil affair, as Council events almost inevitably are. Goldgeier enjoys disagreeing without being disagreeable; in fact, he has participated in Cato events at our invitation. Shanker, a long-time reporter before ascending to editor, has strong interest in the issues and knowledge of the facts. The audience joined in, asking good, serious questions.

Perhaps most striking was the fact that everyone appeared to acknowledge that the alliance was seriously dysfunctional, with European countries unwilling to spend much on their own behalf while expecting America to make up any gaps. Where Goldgeier and I disagreed was whether the organization was too important for Washington to abandon. He thought so, while I contended that the end of the Cold War and rise of Europe allows America to finally turn over defense duties to those being defended.

The audience also seemed greatly frustrated with the behavior of our “allies.” While I can’t say the majority were ready to join my “out of NATO” parade, they did not seem shocked by my criticism of Washington’s most important pact. Even on foreign policy Cato’s ideas increasingly have a place in serious policy discussions. That’s all to the good, given how dramatically status quo ideas have failed. Especially in the international arena.

We still have a long way to go to change policy. But events continue to affirm the warnings that Cato scholars have made since the Institute’s founding about the dangers of promiscuous intervention. I look forward to more events, like that held by the Council, to make the case for a foreign policy that more effectively protects America—its people, territory, market economy, constitutional order, and dedication to individual liberty.

Today the U.S. underwrites the defense of wealthy nations across the globe. Washington should stop using the Pentagon as a global welfare agency.

Uncle Sam at least should charge for his defense services, as Donald Trump has suggested. America shouldn’t be defending its rich friends for free.

Most Republican Party presidential candidates insist that Washington do more on behalf of its already subsidized, protected, coddled, and reassured allies. Why do U.S. politicians put the interests of other nations before those of America?

The Pentagon devotes much of its resources to defend other nations, mostly wealthy industrialized states. In most of these cases America has no important, let alone vital, interests at stake. Instead, Washington should allow allies and friends to protect themselves.

But if Washington policymakers are determined to remain in charge irrespective of Americans’ interests, a second best would be to make those being defended pay. As Trump observed: “I keep asking, how long will we go on defending South Korea from North Korea without payment?”

How much should Washington charge? Consider some rough numbers. For instance, Washington might charge one percent of GDP for providing a standard defense.

Defending countries with globe-spanning interests could result in greater complications for America. In such cases the U.S. should add another percent to its fee.

Some nations are enmeshed in military confrontations which threaten to draw in allies and friend. Add an extra percent to the price.

An American nuclear guarantee takes the risks for America to a new level. Providing a “nuclear umbrella” warrants another one percent. Finally, countries which don’t seem interested in their own defense, or at least interested enough to spend much on their own behalf, should pay a one percent surcharge.

Such an approach would generate significant revenues for the U.S.

European states would owe a base one percent, or $185 billion. For devoting so little to the military the EU, minus the four countries spending more than two percent of GDP on the military, would have to kick in another $147 billion.

The Baltic States and Poland would owe an extra $13 billion for being involved in a potential conflicts and receiving a nuclear guarantee. France, United Kingdom, and Germany would need to kick in an extra $96 billion for extras (global interests or nuclear umbrella).

Canada would owe $18 billion. Saudi Arabia should pay three percent, or $22.4 billion: basic fee plus add-ons for potential conflict and a combination of (reduced) charges for commercial global involvement and possible nuclear guarantee. The other Gulf States should pay $8.9 billion.

Japan would owe four percent—for standard defense, nuclear umbrella, minimal military outlays, and a combination of economic international involvement and limited potential conflict—or $184 billion. South Korea would owe the standard fee plus surcharges for potential conflict and nuclear guarantee, or $42 billion. Australia should pay one percent, or $15 billion. The Philippines would owe two percent, given the potential for conflict, yielding $5.7 billion.

The grand total comes to $737 billion, which would cover the roughly $570 billion likely to be spent on the military next year. The extra would go for defense-related expenses, such as veterans’ benefits and the interest on money borrowed to pay to defend other states.

Of course, some countries might refuse to pay. But Washington should indicate that if they don’t, they will be on their own. The easiest way for states to avoid paying America for its efforts would be to defend themselves.

As I explained on Forbes online: “With the U.S. functionally bankrupt, Washington should lay down the burden of acting as the globe’s combination policeman, social engineer, and welfare agent. But if policymakers can’t get over the idea of attempting to manage the affairs of every other nation, at least they should insist on charging for services provided at American citizens’ expense. That would allow Washington to cover its own defense costs, which would be a good start.”

SHANGHAI, CHINA—Shanghai, China’s financial capital, enjoys a double skyline. The city proper, or “old city,” sports a fascinating mix of colonial buildings and modern architecture. The “New Area” of Pudong hosts Shanghai’s four tallest structures, on the east bank of the Huangpu River.

In contrast, when I first visited Shanghai a couple decades ago there were few buildings, commercial or residential, racing skyward. Pudong was mostly empty, with more brush and trash blowing down the streets than buildings with people working in them.

But there is another China. More distant towns offer a vision into the past—more traditional, less advanced, more isolated. Shift to the nearby countryside and incomes drop substantially, averaging less than $2000 per capita. My traveling group stopped by the remains of an ancient fortress and the Great Wall, which required walking along dirt roads lined by homes constructed with bricks taken from the ruins. The primitive toilet had holes in the wooden floor, through which the ground was visible.

However, while poor, the residents, too, were increasingly better off. The main street sported two stores with modern food and sundries. I spotted a farmer leading two cows with one hand while speaking on his cellphone in the other. Now modernity meets tradition even in rural China.

Much depends on the People’s Republic of China’s future. Political and business leaders alike agree that economic development remains Beijing’s priority. And continued economic growth is the Chinese Communist Party’s principal claim to legitimacy.

National pride mixes with personal frustration over government restrictions on liberty. Virtually everyone, including CCP officials, publicly affirm the importance of democratic values and human rights. But they soon follow with warnings against threats of disunity and the sort of chaos evident in the Arab Spring.

Younger Chinese speak with horror of what their parents went through during the Cultural Revolution. Criticism of government policy is freely expressed in conversation. Censorship and repression usually appear only when such sentiments are magnified through social or traditional media.

No one outside of government seems happy with internet restrictions. However, some people noted that bans on sites such as Twitter, YouTube, and the New York Times were of interest mostly to elites who speak English. And these people are most able to circumvent such restrictions.

While there are American-style liberals in China, some intellectuals and others view freedom through a different, and they say Chinese, prism. Some reject U.S.-style democracy without exactly affirming CCP-led autocracy.

No one in the PRC wants conflict with America. Although China’s military power is growing, that of the U.S. is unmatched. Moreover, Beijing policymakers are aware of the close economic connection between the two nations which has proved to be so profitable for the PRC. Still, virtually everyone backs their government’s broad territorial claims in the Asia-Pacific.

Despite everything, it’s hard not to come away from visiting China with a sense of hope. The country is so much more prosperous than before, which increases Beijing’s stake in a stable international order.

The PRC also is freer, despite the recent crackdown on dissent. Religion is spreading despite attempts to reduce its visibility. Criticism is widespread, even though such views cannot be broadcast.

As I wrote in Forbes: “While Chinese international power undoubtedly is increasing, Beijing will remain constrained by poverty, demography, and geography. A more assertive foreign and military policy has encouraged the PRC’s neighbors to arm themselves, cooperate with their neighbors, and move toward the U.S., a dubious trifecta for China.”

Both sides need to work to maintain peace. In Shanghai the Chinese have built a modern, world-class city out of colonial humiliation. Yet citizens of the one-time oppressors are joining to create a prosperous city and nation.

Today Shanghai is a natural in its new financial role, just like London and New York. Hopefully its success, and that of the rest of China, will help keep the Chinese people focused on building a peaceful future.

In the federal government, employees are paid to faithfully execute the laws, but they often pursue self-serving goals counter to those of the general public. Unionized federal workers actively oppose legislators who support reforms. Agency leaders try to maximize their budgets by exaggerating problems in society. They leak biased information to the media to ward off budget cuts. They put forward the most sensitive spending cuts in response to proposed reductions, which is the “Washington Monument” strategy.

Federal officials signal to the public that they are solving problems without actually solving them. Security agencies, for example, use “security theater” techniques that are visible to the public but do not make us safer.

Officials often trumpet the supposedly great jobs they are doing, but hide agency failures from the public. And officials stonewall congressional requests for information that may shed a bad light on them.

I describe these and other bureaucratic failures in this new essay at Downsizing Government.

The Washington Post reports on other ways that bureaucrats serve themselves and not the public. In one story the other day, the paper reported:

An assistant director of the Secret Service urged that unflattering information the agency had in its files about a congressman critical of the service should be made public, according to a government watchdog report released Wednesday.

That effort to smear Rep. Jason Chaffetz is disgraceful, but it is topped by another one in the Post the same day:

Senior executives at the Department of Veterans Affairs manipulated the hiring system to coerce two managers to accept job transfers against their will — then stepped into the vacant positions themselves, keeping their pay while reducing their responsibilities.

The executives also gamed VA’s moving-expense system for a total of $400,000 in what a new report by the agency’s watchdog described as questionable reimbursements, with taxpayers paying $300,000 for one of them to relocate 140 miles, from Washington to Philadelphia, Pa.

Rubens and Graves kept their salaries of $181,497 and $173,949, respectively, even though the new positions they took as directors of the Philadelphia and St. Paul, Minn. regional offices had way less responsibility, overseeing a fraction of the employees at lower pay levels. Rubens had been deputy undersecretary for field operations.

By and large, the federal government is not full of people that help us. They tax us, regulate us, defend their bureaucracies, and some of them try to actively fleece us. So in structuring the government, a basic assumption should be that it will not be populated by “public servants,” but by people who are in it for themselves. That is one reason why all of us should want to keep the government’s power strictly limited.

For more of the workings of the bureaucracy, see “Bureaucratic Failure in the Federal Government.”

As expected, Chinese President Xi Jinping raised the issue of antidumping abuse during his recent visit to Washington.  Specifically, he called on the United States to stop using “nonmarket economy” methodology when imposing antidumping duties on imports from China.  The issue is going to become more and more pressing as a diplomatic problem over the next year, because the United States is required under WTO rules to end NME treatment by December 2016. 

NME methodology is one of many ways the United States inflates the protectionist impact of U.S. antidumping law.  My colleague Dan Ikenson has thoroughly documented the senselessness of NME treatment.  Last year, I wrote a Cato Policy Analysis looking at how U.S. officials and policymakers might respond to the December 2016 deadline.

That deadline coincides closely with the end of President Obama’s term in office.  The president can choose to leave his successor years of trade conflict and WTO litigation by refusing to act.  Or he can do the right thing for the American economy and U.S.–China relations by ending NME treatment as soon as possible. 

In today’s Cato Online Forum essay, Per Altenberg from the Swedish Board of Trade makes an interesting political economy argument and a compelling practical case for why the Transatlantic Trade and Investment Partnership will be a tough slog. Altenberg argues that the old model for trade negotiations, premised as it is on mercantilist reciprocity, which leverages the interests of exporters against import-competing industries to secure domestic support for liberalization, is no longer functional in a world where trade is dominated by intermediate goods trade along global value chains. Today, openness to trade is seen as essential, and trade negotiations cover matters that probe deeply into domestic regulatory space. To sum up, Per writes:

Traditional 20th-century reciprocity in market access negotiations will thus not be an effective mechanism in the context of 21st-century deep integration negotiations such as TTIP. Instead, deep integration issues require new approaches to trade negotiations.

Per’s essay elaborates on those approaches.  Read it.  Provide feedback.  And please register for Cato’s TTIP conference on October 12. 

Is capitalism a coercive system that creates poverty, as a recent article in the Washington Post argued, or is it a system of voluntary exchange that has led to the greatest reduction in poverty the world has ever seen?

According to the article, “capitalism is a coercive economic system that creates persistent patterns of economic deprivation,” and should be altered through the introduction of a universal basic income. While a guaranteed income is an interesting policy proposal with pros and cons, the article’s claims that capitalism is coercive and creates economic deprivation are both unfounded.

First, let us consider whether capitalism is “coercive.” The author writes,

The only way to break the coercion at the core of the employment relationship is to give people the genuine ability to say no to their employers. And the only way to make that feasible is to guarantee that [they] have some way to support themselves whether they work or not.

Of course, people already possess the genuine ability to say no to their employers. In the United States alone, around 2 million people voluntarily leave their jobs every month—and that’s despite a lackluster economy. Employees in a capitalist system choose to engage in a relationship of mutually beneficial exchange. Employers recognize this and companies compete to become more attractive as workplaces. According to Gallup, the majority of Americans are satisfied with most aspects of their workplace—particularly with their job security, the flexibility of their schedules, and with their immediate supervisors.

Second, let us examine the article’s claim that capitalism creates economic deprivation. According to the author, capitalism harms both workers and those who cannot work. If that is so, can the author, or anyone else for that matter, point to a time in history when the vulnerable were better off? In many ways, today’s poor live better than the kings of yesteryear.

Over the last few decades, infant and child mortality have been drastically reduced, lifespans are at an all-time high, fewer people are undernourished, educational attainment is growing, gender inequality is decreasing, and access to technology is expanding.

Free enterprise and innovation have done more to uplift humanity from a state of universal poverty than any international aid program or welfare scheme. Capitalism, far from being a cause of poverty, is the reason that there is enough wealth today to even contemplate a proposal like a universal basic income.