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Last week, the federal Centers for Medicare & Medicaid Services (CMS) issued a “guidance letter” that makes it easier for states to exclude abortion providers (chiefly Planned Parenthood) from Medicaid. According to the National Right to Life Committee 19 states have passed laws excluding abortion providers from Medicaid, and such laws are currently in effect in 11 states (Arizona, Arkansas, Iowa, Kansas, Kentucky, Michigan, Oklahoma, South Carolina, Tennessee, Texas, and Wisconsin). The letter does so by rescinding an Obama-era letter that, according to the new letter, “raises legal issues under the Administrative Procedure Act.”

If you support the existence of the Medicaid program, you have no right to complain about states trying to block abortion providers from the program or the Trump administration making it easier for states to do so.

Health care is where people express their deepest-held values, when it comes to both their own care and what they are willing to purchase for others. Medicaid, like all government health care programs, forces everyone to pay for health care in the manner Washington, DC deems appropriate, on pain of prison, whether they like it or not. It therefore turns such personal questions into political ones. It guarantees one side or another’s values will always get trampled. When Democrats run Medicaid, they use it to trample Republican values. They will allow abortion providers to participate in the program, even though many Republicans consider it morally repugnant that the government should force them to subsidize an organization that practices what they consider legalized murder. When Republicans run Medicaid, they use it to trample Democratic values. They will exclude abortion providers, even though Democrats find any kind of discrimination against abortion providers unconscionable. Those who complain about this change are really just complaining that they don’t get to impose their will on other people. 

Congress should instead let Republicans and Democrats keep their money and decide for themselves what health care they will purchase for the disadvantaged.

Classical liberal economists oppose minimum wage laws because they restrict mutually beneficial labor market trades.  

This is the basic economic case for complete freedom of contract. Wage floors mean potential employees who would otherwise be willing to sell their labor at a lower price are unable to. Employers are banned from employing more people or giving workers longer hours at a lower wage too.

It is in this spirit that Colorado State Rep. Dave Williams has proposed an amendment to the state’s minimum wage law. Williams’ legislation  would allow an opt-out in cases where applicants for jobs or employees and employers mutually agreed to a wage below the state minimum. Paying less than the minimum wage would essentially be legal again in cases where the employee or applicant had agreed to waive their minimum wage “right” (though the employer would still be bound by the federal minimum).

This has potential benefits similar to lowering or abolishing the state minimum wage. On the margin, it would help workers with low productivity levels looking for entry-level jobs. It would also reduce the risk of hiring for employers in cases where potential employees had little work experience. While there would of course be a not insignificant risk that employees might later claim the agreement was not truly “voluntary,” such a waiver would overall shift Colorado labor market law closer to the freedom of contract that libertarians prize.

For that reason, it will of course be opposed by most minimum wage proponents. Traditionally, minimum wage advocates have recognized that such laws outlaw exchanges. But they believe this is a good thing, asserting that market-based wage setting is unfair or exploitative, or appealing to older theories such as monopsony, which says that employers in certain industries have significant market power and are able to hold wages below productivity levels absent regulation. In such a scenario, minimum wages can even raise employment levels.

Almost all minimum wage studies these days are empirical in nature, testing whether minimum wages or increases have the classical or monopsonistic effect. Though the degree of the effect differs, the overwhelming majority find negative employment or job growth consequences from minimum wage increases. From an employment perspective then, any reform in the direction of Williams’ should be welcome.

But another benefit of a debate around this law could be educational. It is difficult to make the case for complete abolition of minimum wage laws, in part because opponents lament that some workers would see pay cuts. No doubt there would be some companies that sought to move to a model with lower pay, with attempts to get employees to sign forms waiving the wage. This is the “seen” effect. But what is not seen is that there are people out there willing to work in Colorado between the federal and state minimum wages, who are currently unable to do so.

Williams’ legislation highlights that minimum wage laws are coercive, ceasing to give us control over our own labor. Indeed, under Williams’ legislation, employers would have to post notices to inform applicants and employees that they have the right to negotiate wages. Well, above the federal minimum at least!

There is therefore a principle and a consequence at stake. The principle is freedom to contract your labor. The consequence is that minimum wage laws tend to cause “unemployment”. While complete abolition of minimum wages would be preferable, Williams’ legislation helps highlight the principle and ameliorate the consequence. 

Among last week’s news items that had colleagues asking me, “What’s your answer to this?,” was a piece by Quartz’s John Detrixhe, telling its readers that, according to “300 years of financial history,” rolling back bank regulations is a good way to trigger a financial meltdown.

Though you may be surprised to hear me say it, there’s some truth to Mr. Detrixhe’s thesis. While government intervention in banking typically does more harm than good, it’s also true that, unless it’s done carefully, deregulation can itself lead to trouble. As I put it some years ago in a Cato Journal article (reprinted recently in Money: Free and Unfree), “Dismantling bad bank regulations is like cutting wires in a time bomb: the job is risky and has to be done in carefully ordered steps, but it beats letting the thing go on ticking.”

Back in the 1980s, for example, when U.S. bank regulators phased-out depression-era regulation-Q type restrictions on the interest rates depository institutions could pay to their depositors, they unwittingly freed a moral hazard genie that those regulations had kept bottled-up for several decades.

Did that make deregulating interest rates a bad idea? It didn’t, first of all because had those rates not been deregulated banks and S&Ls would have taken a licking from new Money Market funds, and also because regulators might have avoided the moral hazard problem by allowing banks to offer competitive interest rates on uninsured deposits only. The phasing-out of reg Q and its S&L counterparts would then have proceeded only to the extent that it went hand-in-hand with deregulation of another sort, namely, more limited deposit insurance, which would have gone a long way toward avoiding the S&L crisis later that decade. (And if you think banking stability depends on deposit insurance you really do need to review some non-U.S. banking history.)

However, as the last example suggests, the fact that careless deregulation sometimes sets the stage for financial crises doesn’t mean that deregulation isn’t desirable, or that a deregulated banking system can’t be safe. On this point the three centuries of experience to which Mr. Detrixhe’s article refers speak eloquently, provided one bothers to consult the relevant case studies. Compare, for example, Canada’s banking system, especially between 1867 and 1935, to the system or systems of the U.S. Will anyone deny that Canada’s system was both far less heavily (and less heedlessly) regulated, and far more stable? The same conclusion holds for a comparison of the Scottish and English banking systems between 1772 (the year of the Ayr Bank’s failure, in which unwise regulation also played a part) and 1845 (when Scottish banks were compelled, for no good reason, to abide by Peel’s Bank Charter Act). Showing that misguided bank regulations were also an important cause of crises elsewhere than in the U.S. and England is also child’s play, provided one bothers to try. (Have a look for starters, at Charles Calomiris and Stephen Haber’s Fragile by Design.)

Not trying, especially by not even considering the performance of the world’s least-regulated banking systems, is the main reason why so many economists learn the wrong lessons from history. I made that point several years ago in reviewing Gary Gorton’s book, Misunderstanding Financial Crises; and I fear that what goes for Gary Gorton may go for Mr. Detrixhe as well.

Consider Detrixhe’s discussion of the Financial Crisis of 1825. In the years leading up to it, he notes, the prices of securities trading on the London Stock Exchange “were soaring, and members of parliament sat on the boards of some of the firms quoted on the exchange.” Quite true. But lax regulation of British banks had nothing to do with it. To the extent that England’s “country” banks (meaning all those apart from the privileged Bank of England) contributed to the boom, they did so, as I explained in my 1992 article “Bank Lending ‘Manias’ in Theory and History,” only by following the Bank of England’s lead:

The ratio of country note circulation to Bank of England issues remained within the narrow range of .64 to .663 for most of the years 1818 to 1825. The sole exceptions were 1823 and 1824 — the two years preceding the crisis — when the ratios were .572 and .588, respectively. These figures suggest that, insofar as country banks behaved unusually in the years just prior to the crisis, they did so by becoming more conservative than usual, resisting any impulse to extend their liabilities beyond levels consistent with available, liquid reserves of Bank of England notes.

The Bank of England, on the other hand, had been engaged since 1822 in what Elmer Wood (English Theories of Central Banking Control, p. 82) refers to as “a general plan for cheap money and credit expansion,” involving a reduction in its discount rate to 4 percent from its traditional value of 5 percent and an increase in the maximum maturity of bills eligible for discounting from 65 to 95 days. The country banks, and London discount houses, I observed in the above-mentioned article, having long been accustomed to treating Bank of England deposits and notes as so much cash, “could hardly be expected to do other than respond positively to the increased abundance of their own reserves, by reducing their own discount and deposit rates” (ibid.).

As for the Bank of England’s own capacity to fuel a bubble, that stemmed entirely from the Bank’s monopoly privileges, including its unique enjoyment of joint-stock status, and its monopoly of note issue within London and its surroundings.

As the Bank’s liabilities grew, its stock of bullion, which was just shy of £14 million in May 1824, declined continuously and rapidly. By the the end of 1825, it had fallen to just £1.26 million. When at last the Bank of England took steps to conserve its dwindling reserves, in part by once again raising its discount rate to 5%, the country banks, having been “kept in the dark about the status of the Bank’s bullion reserves” (ibid.), were among the firms and persons that bore the brunt of its policy reversal. “By the end of 1825,” Mr. Detrixhe observes, “markets were in a ‘full blown panic’…leading to bank runs and failures.” “A year later,” he continues, “nearly 10% of England’s banks had collapsed, sparking the first major global banking crisis.”

But did the 1825 Panic really trigger a global banking crisis? Not unless Scotland had somehow taken leave from planet earth, for as far as the British Isles were concerned, the banking crisis was an English and Welsh episode only; it left nary a trace in Scotland, whose bankers emerged from it unscathed. To a contemporary English cartoonist, the difference looked like this:

The different experiences of England and Wales on one hand and Scotland on the other reflected, not more heavy-handed regulation of the Scottish banks, but just the opposite. Most importantly, Scottish banks were, unlike their English and Welsh brethren, not subject to hampering restrictions on bank ownership, including the notorious six-partner rule. As Kevin Dowd explains (Laissez-Faire Banking, p. 35), Parliament had imposed that rule, limiting all English and Welsh banks apart from the Bank of England to six partners or less, back in 1709, as a means for reinforcing the Bank’s privileges in return for its having granted Parliament a subsidized loan. The measure

effectively prohibited reliable (that is, large) aggregations of capital in banking, as those partnerships that were allowed to enter the industry were too small to withstand any substantial shock. People knew how vulnerable the banks were and, whenever there was any disturbance, rushed to withdraw their gold (ibid.).

As Robert Jenkinson, the 2nd Lord Liverpool, told Parliament the year after the crisis, under the six-partner rule,

a cobbler or a cheesemonger, without any proof of his ability to meet them, might issue his notes, unrestricted by any check whatever; while, on the other hand, more than six persons, however respectable, were not permitted to become partners in a bank, with whose notes the whole business of a country might be transacted. Altogether, this system was one so absurd, both in theory and practice, that it would not appear to deserve the slightest support, if it was attentively considered, even for a single moment (ibid., pp. 47-8).

Thanks in part to Liverpool’s efforts, the absurd rule, enacted in the first place to gratify the Bank of England’s shareholders, was finally scrapped. In the ensuing decades, 138 English joint-stock banks were established, of which only 19 either failed or went into voluntary liquidation prior to the passage of Peel’s Act in 1844 (Newton n.d., p. 4). I hope I’m right in thinking that Mr. Detrixhe, had he also been an MP in 1826, would not have been tempted to plead for sticking to the six-partner rule on the grounds that getting rid of it would increase the risk of another financial meltdown.

Certainly Mr. Detrixhe can’t be accused of favoring any sort of government regulation. He recognizes, for example, that U.S. government housing policies contributed to the recent panic. On the other hand he seems to believe that the Dodd-Frank Act’s many provisions are capable of preventing another crisis, if only Republicans will let them stand, whereas in truth those provisions hardly address any of that crisis’s root causes.

And although Mr. Detrixhe never actually claims that the subprime meltdown itself illustrates the supposedly general tendency for panics to follow deregulation, one suspects that he, like many others, believes this to be the case. But while many have blamed the crisis on deregulation, and especially on the partial 1999 rollback of Glass-Steagall, such claims seem to be based on little more than their authors’ preconceived notions. A close look at the evidence suggests, on the contrary, that although the crisis had many causes, deregulation wasn’t one of them.

So let’s by all means learn as much as we can from 300 years of financial history. But let’s also remember that to do so one must delve deep into that history, and not just skim the surface.

[Cross-posted from Alt-M.org]

 

 

 

 

 

 

 

 

 

 

I recall quite vividly the day I first witnessed the potency of the “get out of jail free” cards issued by Police Benevolent Associations. I was a teenager in the New Jersey suburbs headed to a concert with a car full of friends, and our driver was so caught up in conversation about what a great show it was going to be that, despite our feeble warning shouts, he barrelled through a solid red light going about 40 miles per hour—a red light with a police car stopped on the opposite side of the intersection. Predictably, the police car immediately flipped on its siren and tore after us. The passengers resigned ourselves to missing the start of the show. At the very least we were going to be stuck waiting through a sobriety test. The driver was surprisingly calm. He explained that he had both a card and a silver shield in the rear window identifying him as a family member of a law enforcement officer. To our astonishment, the stop was the shortest I’ve ever sat through before or since. The officer made some small talk with the driver, asked (without checking) whether his record was clean, then apologized for the delay before sending us on our way. As our friend explained on the way to the show, an ordinary paper card—the sort given to friends of police or folks who’ve made a donation to a PBA—would have been torn up after such an encounter, providing immunity for only a single minor infraction, while the family versions were permanent.

Since I don’t own a car, I hadn’t thought about these in years, until a story in the New York Post—about officers livid that the union was cutting their allotment of cards to distribute—provoked a flurry of discussion on social media. Readers who’d never heard of the practice before reacted with shock that this form of petty corruption could be so normalized that there would actually be official cards, openly distributed by police departments or their unions, for the explicit purpose of placing friends, family, and donors above the law—even if only for relatively minor infractions. The idea that family of police might get more lenient treatment was not particularly surprising, but many seemed taken aback that the practice could be so shamelessly institutionalized on such a large scale. Is there, after all, any conceivable non-corrupt reason for issuing wallet-sized cards identifying the bearer as a relative of police?

That sense of shock was, I immediately recognized, the correct reaction. As long as laws are enforced by human beings, a bit of small-scale local nepotism in the enforcement of the law is probably unavoidable. But there is something quite toxic about institutionalizing it, to the point where officers feel so entitled to special treatment for themselves and their friends and family that they express open outrage when the law is applied to them as it would be to any other citizen. Getting out of a speeding ticket may not seem like a dire threat to the rule of law—though you do have to wonder how many cardholders feel emboldened to drive intoxicated—but I think one can reasonably draw a link between this sort of petty favoritism and the more serious abuses that leave so many minority communities regarding their local police less as public servants than an occupying force.

Think about the message these cards send to every officer who’s expected to honor them. They say that the law—or at least, some ill-defined subset of it—isn’t a body of rules binding on all of us, but something we impose on others—on the people outside our circle of personal affection. They say that in every interaction with citizens, you must pay special attention to whether they are members of the special class of people who can flout laws, or ordinary peons who deserve no such courtesy. They say that, at least within limits, officers of the law should expect to be able to break the law and not be punished for it. They say that a cop who has the temerity to hold another officer or their family to the same standards as everyone else is a kind of traitor who should expect to suffer dire consequences for the sin of failing to respect that privileged status. Moreover, they say that this is not merely some unspoken understanding—a small deviation from impartial justice to be quietly tolerated—but a formalized policy with the explicit support of police leadership.

Can we really be surprised, when a practice like this is open and normalized, that the culture it both reveals and reinforces has consequences beyond a few foregone speeding tickets? Should we wonder that police fail to hold their own accountable for serious misconduct when they’re under what amounts to explicit instructions to make exceptions for smaller infractions on a daily basis?

There is a popular approach to policing known as the “broken windows theory.” The theory encourages local governments to prioritize enforcement of minor “quality of life” laws, on the premise that when small violations of the law (such as petty vandalism) are visible in a neighborhood, it encourages more serious forms of lawbreaking. Punishing litterbugs and graffiti artists, on this line of reasoning, is important less because graffiti and litter are inherently great harms, but because they contribute to a sense of social disorder and lawlessness that encourages potential malefactors to think, if only subconsciously, that assaults and robberies are also unlikely to be punished. Criminologists continue to debate the validity of the theory and the magnitude of its effects, but whatever signal a broken window sends, it must surely be weaker than an overt policy that makes some laws applicable only to the little people.

Policies like this survive, of course, because they’re hugely popular with police and their families, while not imposing an obvious burden on everyone else. Nobody likes getting a speeding ticket, but few are going to muster too much outrage that the deputy’s spouse didn’t get one. But beyond being an affront to the ideal of the rule of law in the abstract, it seems plausible that these “get out of jail free” cards help to reinforce the sort of us-against-them mentality that alienates so many communities from their police forces. Police departments that want to demonstrate they’re serious about the principle of equality under the law shouldn’t be debating how many of these cards an average cop gets to hand out; they should be scrapping them entirely.

Private schools are the preserves of rich, white people, and if they weren’t around education would be more racially integrated. That’s probably the assumption many people have, and it could be what people reading about a recent Shanker Institute report on segregation in Washington, DC, might have gathered.

“It’s no secret that the District’s public schools are highly segregated, with a recent analysis showing that nearly three-quarters of black students attend schools where they have virtually no white peers,” began a Washington Post story on the Shanker analysis. “But a recent report examines the role that enrollment in private schools, which are disproportionately white, plays in the city’s segregation woes.” Similarly, a story on WAMU—a DC NPR affiliate—intoned: “’In a very loose sense,’ the authors explain, ‘D.C.’s private schools serve as the segregation equivalent of a suburb within a city.’ That’s because white students in D.C. tend to enroll in private schools.”

So are the city’s private schools really preserves of white people? And are they a big impediment to integration? The answer appears to be “no” to both questions.

Importantly, the Shanker report, while saying that a disproportionate share of private school students are white, also noted that African-American students in private schools had greater exposure to white students than black children in public schools, an indicator that for African-American kids in private schools the racial mix is less isolating. The typical black student in a DC public school (traditional and charter) goes to an institution in which only 3.5 percent of students are white. For the typical black private schooler, the student body is 24.5 percent white.

Those numbers indicate greater exposure to whites for African American private schoolers, but that the latter is not a much higher number also indicates that many African Americans attend private schools that are predominantly minority, which the WAMU story notes at the very bottom: “While there are fewer students of color in private schools, when they do attend private school it’s usually with students who look like them. 65 percent of an African-American student’s peers in D.C. private schools are also African-American.”

Contrary to what many people likely imagine, DC’s private schooling sector is not lily white: private schools serve all sorts of kids. Breaking down the city’s 63 private elementary and secondary schools using National Center for Education Statistics and GreatSchools.org data indicates that almost half—31 schools—serve predominantly minority student bodies, defined as more than 50 percent black and Hispanic. Roman Catholic schools—which have traditions of serving first dispossessed Catholics, then other poor and marginalized groups—disproportionately serve such populations, with 58 percent of Catholic schools doing so. Catholic schools, especially diocesan institutions, also tend to be less expensive than non-Catholic schools, making them more affordable to African Americans and Hispanics, who tend to have lower incomes.

This brings us to a powerful, underlying factor in school selection: where one lives. People typically do not want their children traveling long distances or durations to get to school, and will tend to choose schools—public, private, or charter—fairly close to home.

The map below plots the percent white in each DC private school on top of median household income by census tract. (It also indicates Catholic or non-Catholic). What is seen pretty clearly is that the predominantly white private schools are largely found in the wealthier parts of the city, the less white in the poorer. Racial stratification in DC private schools, then, does not appear to be a private school problem, but a wealth and housing issue.

There is one other, even deeper possibility to consider, and the Shanker report notes it: absent predominantly white private schools, many white families might not even be in DC, or they might move to catchment areas with predominantly white public schools. It could be that the ultimate factor in segregation, then, is neither public nor private, wealth, nor housing, but that white people tend to prefer to live with other white people, and for that matter African Americans with other African Americans, and Hispanics with other Hispanics.

That said, private schools may actually have the key ingredient, at least within education, to erode those tendencies. They are free to espouse strong, coherent values and offer unique communities, which could attract diverse students and, via their shared values and school cultures, create new, lasting identities that bridge racial divides. Of course, price would still be a major obstacle, but not if public policy were to move in the direction it should: attach education funds to students and empower families to choose.

Key House Republicans with the support of the White House have introduced the Securing America’s Future Act (H.R. 4760) as their solution to the immigration impasse in Congress. But the bill would have far-reaching negative effects on economic and labor force growth in the United States, instituting the most severe restriction on legal immigrants since the 1920s.

H.R. 4760 would reduce the number of legal immigrants by more than 420,000, or 38 percent, in 2019. This is far larger than the 260,000, or 25 percent, cut advertised by the bill’s authors. In fact, the bill has far more in common with a Trump-endorsed bill in the Senate—the RAISE Act (S. 1720)—that would reduce the entry of legal immigrants by more than 470,000, or 43 percent, in 2019. Each would further reduce legal immigration over time.

Both bills would end the diversity green card lottery and ban the entry of all legal immigrants sponsored by U.S. family members, except for spouses and minor children of U.S. citizens. The RAISE Act would also reduce the age at which U.S. citizens can sponsor minor children from 21 to 18, while the House bill would, in effect, roughly halve the number of asylees. The House bill modestly increases the employment-based quota. Shockingly, both bills immediately cancel applications for millions of people who have waited years to become legal immigrants.

Table: Existing Laws and Proposed Changes to Legal Immigration

*Based on FY 2016 figures, accounting for the FY 2018 cut in refugees

The authors of H.R. 4760 calculated a much smaller reduction in legal immigration by using the average flow of parents from 2006 to 2015 rather than the most recent level in 2016. They also ignore that the bill aims to reduce grants of asylum by, among other changes, imposing a much higher evidentiary standard even to apply (p. 233), which will likely reduce the number of new asylees by at least 50 percent.

Finally, the House Republicans assume that spouses and children of legal permanent residents will continue to receive green cards. But their bill reduces this category by the number of parolees who live here for longer than a year (p. 6). Based on available data and analysis, this number is likely larger than the quota. The authors of the RAISE Act appear to implicitly recognize this fact, which explains why their calculation of the new level under their bill is about the same as ours. House authors would have to amend the bill if they did intend to keep this category.

The RAISE Act authors also recognize that the cut will grow over time as fewer immigrants are able to obtain citizenship and sponsor new spouses and children. They estimate that after 10 years, it will have further decreased legal immigration by 100,000, leading to a 50 percent reduction. Based on this estimate, H.R. 4760 would also almost halve the number of legal immigrants by 2028. Fewer U.S. births to immigrants would further compound the damage.

In the entire history of the United States, the only policy-driven cuts in legal immigration that rival the effects of these bills were the Emergency Quota Act of 1921 and the Quota Act of 1924, which cut the number of legal immigrants by 496,000 in 1922 and 413,000 in 1925, respectively. Congress enacted these laws to keep out Italians and Eastern Europeans, specifically Jews, and were used throughout the 1930s to prevent the entry of German Jews.

These cuts lack any reasonable justification. Labor force growth is an essential component of economic growth. Immigrants already increase U.S. Gross Domestic Product by roughly $2 trillion annually. For the United States to remain competitive internationally, it needs an expanding workforce. These proposals will harm domestic growth and make it more difficult for U.S. businesses to out-produce their competitors around the world.

U.S. immigrants who primarily enter under the family sponsorship and diversity categories are the most highly educated in American history. True “merit-based” immigration reform would give these immigrants more opportunities to immigrate, not fewer. In any case, America needs workers at both ends of the skills spectrum to grow job opportunities for all Americans. There is simply no economic justification for banning so many legal immigrants.

In advance of the January 30 conference here at Cato—The Trump Doctrine at One Year—I review public attitudes toward Trump’s “America First” vision and his foreign policy handling over his first year in office. Join us for a what will undoubtedly be a spirited conversation with a fantastic group of experts.

Donald Trump’s America First rhetoric during the 2016 presidential campaign marked a sharp departure from the fundamental tenets of liberal internationalism that have guided U.S. foreign policy since World War II. Trump’s tirades against free trade, NATO allies, immigrants (legal and otherwise), and his general disinterest in engaging with the world unless there was money in it for the United States horrified the foreign policy establishment of both parties.

Beyond concerns about Trump, many observers worried that his success reflected the demise of public support for internationalism. Though the public supported robust internationalist policies after World War II and during the Cold War, Trump’s emergence coincided with rising economic insecurity and inequality, intense political polarization, and dropping confidence in government to solve the problems facing the nation. Had the public perhaps decided that internationalism’s time had come and gone? Would Trump’s presidency usher in rising support for nativist and protectionist policies and calls to turn inward, away from the international arena?

A wide array of poll data from Trump’s first year in office strongly suggests the answer is no. A large majority of Americans disapprove of Trump’s handling of foreign policy and his America First policies are among the most unpopular elements of his foreign policy.

Trump’s fiery attacks on unfair trading practices by China and Japan and his criticism of NAFTA as “the worst deal ever made” may have energized his base during the campaign, but since taking office Trump’s course on trade has not been a popular one. Though Trump pulled the United States out of the Trans-Pacific Partnership as soon as he took office and appears likely to pull out of the North American Free Trade Agreement, Americans remain committed to free trade. A June 2017 survey from the Chicago Council on Global Affairs found that 72% of the public thinks international trade is good for the United States. An October 2017 poll from the Pew Research Center echoed this result, finding that Americans are more likely to believe NAFTA is good for the United States by 56-33%. 

Trump is also clearly in the minority camp when it comes to immigration, another key pillar of the America First vision. Only 39% approved of Trump’s handling of immigration as of November 2017. Most Americans simply don’t share the president’s dim view of immigrants. Trump began his campaign in 2015 complaining of Mexican immigrants that “They’re bringing drugs. They’re bringing crime. They’re rapists.”

Last week in a meeting about immigration at the White House, Trump’s views again stirred debate after he complained about people coming from “shitholes” like Haiti and Africa and asked why the United States didn’t get more people from Norway. But according to a June 2017 Chicago Council on Global Affairs poll, just 37% of Americans see immigrants and refugees as a critical threat to U.S. interests. Seventy-one percent say that immigration is a good thing for the country today. Poll after poll finds that a majority of Americans think that even illegal immigrants should have the opportunity to stay in the United States—68% in a recent Quinnipiac poll say they should be able to apply for citizenship. Unsurprisingly, Trump and the Republicans face the same political headwinds in the debate over DACA reform. Seventy-nine percent thinks the “Dreamers”—undocumented immigrants brought to the United States as children—should be allowed to stay and become citizens.

Despite the disconnect on immigration, Trump has found somewhat more support on issues where Americans do sense security threats. During the campaign, Trump argued that refugees fleeing the civil war in Syria should not be allowed to enter the United States, a view that receives majority support. Two-thirds of Americans supported preventing Syrian refugees from coming to the United States in a June 2017 poll, for example. And though poll results have varied widely, it appears that a majority of Americans approves Trump’s “travel ban” temporarily restricting visa applicants from six Muslim-majority countries to those who can show a close family relationship. The most recent poll by Politico/Morning Consult in July 2017 found that 60% of Americans support Trump’s “travel ban.”

On the other hand, most Americans have never been keen on Trump’s favorite construction project. Despite his non-stop efforts to frame the southern border wall as a critical security issue, support for building it has remained below 40% since the month after Trump took office and a poll released last week found that Americans oppose building a wall on the Mexican border by 63-34%.

When it comes to dealing with the ultimate threat—nuclear weapons—Trump’s approach is again clearly at odds with a majority. Trump’s hard-line opposition to the Iran nuclear deal, for example, contrasts with the 67% of Americans who think the United States should not withdraw from the deal.

And though Trump’s approach to North Korea has involved a good deal of saber rattling, tough talk on Twitter, and warnings that “time is running out,” a majority of the public believes diplomacy needs more time. Fifty-nine percent of the public believes the U.S. can solve the situation with diplomacy compared to just 27% who think force will be necessary. Further, 54% think it is more important to avoid war with North Korea than to remove its nuclear arsenal, while 39% think the opposite. Overall just 36% of Americans have confidence in Trump to handle the North Korea situation.

At a more general level, many Americans worry about Trump’s temperament and his ability to handle crises. A recent poll, for example, found that 69% do not believe Trump is level-headed, while a Pew poll found that public confidence in Trump’s ability to handle an international crisis dropped from 48% in April to 39% by October 2017.

And more broadly, Americans are worried about Trump’s handling of foreign policy and the effect of the Trump Doctrine on the United States. Public support for Trump’s handling of foreign policy during his first year—at just 33% in November 2017—has been significantly lower than for other presidents at the same stage of their presidencies going back to Ronald Reagan. Furthermore, 66% of Americans think that Trump’s actions have damaged the United States’ reputation around the world, while 55% believe that Trump has weakened the country’s global leadership position compared to 31% who feel he has strengthened it.

For those who worried what Trump’s election meant about the public’s foreign policy attitudes, the polls provide a degree of solace. After a year in the White House with all the advantages conferred by his office and the bully pulpit, Donald Trump has utterly failed to increase support for the America First vision. Not only that, public confidence in Trump to manage international affairs has eroded significantly. 

At the same time, the fact that even this much support exists in the United States for the illiberal, counterproductive, and dangerous policies espoused by Trump signals to political leaders that public support is not a given. It also reveals that traditional justifications for American foreign policy no longer command such widespread support. To ensure that Trump’s combination of nativism and isolationism does not become the doctrine of the future, the United States will need other leaders to articulate a new foreign policy vision that acknowledges public concerns while doing a better job of explaining how and why the nation must engage the rest of the world.

This will not be an easy task. Globalization, automation, populism, and other powerful trends that are reshaping both international and domestic politics will not relent any time soon. To the extent that these forces help explain both Trump’s success and public attitudes, we should expect continued debate and division over the future of American foreign policy. If responsible politicians do not address these issues, Americans worried about economic competition from other nations or concerned about terrorism, immigration, and the influence of other cultures on their way of life may continue to look to leaders like Trump for answers.

Any bipartisan deal to reopen the federal government and deal with DACA would have to legalize some of the DREAMers, increase border enforcement, amend the diversity immigrant visa program, and fund the construction of a border wall. Democrats have compromised on the border wall but they are still only going to fund about half the lowest estimated cost of about $8 to $10 billion. There is a way to fund construction of the border wall without using taxpayer money or for Congressional Democrats to allocate a penny more than the $8 to $10 billion that they are considering: The Border Wall Investment Visa Program (BWIVP).

As proposed here, this new program would take 10,000 green cards from the 50,000 currently allocated diversity immigrant visa program, or whatever successor program Congress creates to replace it. Congress could then shift those 10,000 green cards to a new immigration category called the Border Wall Investment Visa Program (BWIVP), which would auction them to the highest bidders each year. Under such a system, each green card could sell for at least $100,000 and potentially much more. At that high of a price, the BWIVP would raise $1 billion each year to fund the construction of a border wall without raising taxes. Congress should write into law that all funds raised through the BWIVP should automatically go toward wall construction and maintenance. Of course, Congress could also auction more or fewer than 10,000 green cards a year but this is a nice round number for the purpose of an example.

The $1 billion a year raised through the BWIVP would fund the construction of an additional 46 miles of fencing a year without taxpayers spending a dime, if the recent estimated cost of replacing the border fence were any guide to the costs of future construction. An extra $1 billion a year raised through a BWIVP would significantly stretch the eventual length of the wall relative to other funding options. Nobel Prize Winning economist Gary Becker proposed a $50,000 price per green card in 2011 but suggested selling a million annually. Prices will have undoubtedly risen since then and the BWIVP would only auction 10,000 green cards a year, so the price for each one would be higher. 

A Congressional allocation of $10 billion to build the border wall would only increase its length to 780 miles, assuming construction is finished one year after passage (Table 1). Further extensions of the wall would rely on Congress appropriating funds. Future Congresses might be unwilling to do that, meaning that the wall would not extend beyond 780 miles after the original appropriation. However, a fresh infusion of funds each year from the BWIVP would guarantee that border wall construction would continue each year without Congressional interference. After eight years with a BWIVP that raises $1 billion annually, the border wall would be 370 miles longer than with only the funds from Congress. If the BWIVP raised $1.5 billion a year, after eight years the border wall would be 555 miles longer. If it raised $2 billion a year, it would be 740 miles longer. Under each of the three revenue projections, the border wall would continue to lengthen by 46 miles, 69 miles, and 93 miles a year, respectively.

Table 1

Length of Border Wall, Border Wall Investment Visa Program Revenue Projections

Year

Fencing without BWIVP (Miles)

Fencing with BWIVP

$1 Billion Annually

(Miles)

Fencing with BWIVP

$1.5 Billion Annually

(Miles)

Fencing with BWIVP

$2 Billion Annually

(Miles)

Current

317

317

317

317

1

780

826

849

872

2

780

872

918

965

3

780

918

988

1,057

4

780

965

1,057

1,150

5

780

1,011

1,126

1,242

6

780

1,057

1,196

1,335

7

780

1,103

1,265

1,427

8

780

1,150

1,335

1,520

Sources: DHS, Reuters, CBS News, Author’s Calculations.

The percentage of the border with Mexico that would be covered by a fence under the BWIVP would also increase every year (Table 2). Under the BWIVP revenue projections, it would cover 59 percent to 78 percent of the border after 8 years. The BWIVP could also pay for fence maintenance rather than new construction. BWIVP revenue of $1 billion a year would pay for the annual maintenance of about 1,200 miles of border fencing under current estimates.

Table 2

Percent of Border Covered by a Wall under Different Border Wall Investment Visa Program Revenue Projections

Year

Fencing without BWIVP (Miles)

Fencing with  BWIVP $1 Billion Annually (Miles)

Fencing with BWIVP $1.5 Billion Annually (Miles)

Fencing with $2 Billion Annually   (Miles)

Current

16%

16%

16%

16%

1

40%

42%

43%

45%

2

40%

45%

47%

49%

3

40%

47%

51%

54%

4

40%

49%

54%

59%

5

40%

52%

58%

64%

6

40%

54%

61%

68%

7

40%

56%

65%

73%

8

40%

59%

68%

78%

Sources: DHS, Reuters, CBS News, Author’s Calculations.

Immigration restrictionists complain that previous Congresses always amnesty illegal immigrants but they never follow up with border enforcement. Their complaint isn’t based on reality, but that doesn’t make it any less politically salient. Creating a BWIVP where the revenue directly goes to wall construction is a way for Congress to commit credibly to funding border enforcement in the future. If immigration restrictionist complaints are sincere then this mechanism should alleviate much of their concern.

Auctioning 10,000 visas is not a radical policy idea. In 2016, the United States allocated 3,422 EB-5 green cards to applicants who invested $500,000 to $1 million in the United States. The government charges $4,000 for each H-1B petition submitted by employers that the government deems to be H-1B dependent as well as a whole host of other protectionist fees. In 1882, the government imposed a head tax of $0.50 per immigrant that it then raised to $4.00 in 1907, and then to $8.00 in 1917. In 1959, the U.S. government levied a $12 tariff on farmers for every guest worker they hired under that short-lived Bracero program. Pricing immigration is common in the rest of the world, especially in many merit-based systems. Singapore has a monthly levy for workers based on their skill level and the concentration of foreign workers by economic sector. The United Kingdom, Australia, Canada, and New Zealand all levy substantial fees to defray social service costs. For instance, the fee for the permanent Contributory Parent visa category in Australia is AU$31,555Antigua allows anybody to qualify for citizenship in exchange for a $250,000 direct payment to the government, a $400,000 real-estate purchase, or a business investment of $1.5 million. The United States is a more desirable location than those other nations so the government could raise more money for border security this way. If the United States wants to have a more merit-based immigration system, a BWIVP auction system is one way to move in that direction.

President Trump’s administration wants to raise visa fees to make it appear that immigrants will pay for the wall. Auctioning a small number of green cards through a BWIVP can pay for more border security in a more open, transparent, and publicly obvious way than increasing fees that are generally hidden from the public. The BWIVP would stretch the roughly $8 to $10 billion in wall funding to cover more of the border without increasing the amount of taxpayer dollars that Democrats would have to allocate for such an unpopular construction project. Even better, it would come from an economic liberalization that would more efficiently allocate scarce green cards to the highest bidders. I dislike the wall and have written extensively against it, but if it must be built, this is a better way to make sure it gets constructed than other competing proposals. Auctioning green cards through the BWIVP would raise large sums of money for border security in a way that could help resolve the shutdown, fulfill a major campaign promise by President Trump, legalize the DREAMers, and preserve the number of legal immigrants. 

The Republican tax bill’s reduced corporate tax rate is a boon for many companies. But reducing the corporate rate lowers the value of tax credits and may negatively affect businesses that rely on them. The New York Times recently described one such case and argued that the value of the Low-Income Housing Tax Credit (LIHTC) would fall and the supply of affordable housing would fall along with it.

The Times article focuses on San Francisco and reports that the falling value of LIHTC increases building costs for affordable housing. In San Francisco housing is already in short supply, so increased costs are a real concern for low-income residents and city officials.

But this concern is misplaced; LIHTC is a complex and costly tool that should be eliminated. As Vanessa Brown Calder and Chris Edwards explain, the convoluted process which housing tax credits are distributed through creates large federal and state administrative costs, results in complicated application procedures and compliance efforts, and mostly benefits corporate interests rather than low-income tenants. The program is also susceptible to fraud and abuse.

These issues contribute to significant efficiency losses. As a result, LIHTC projects are more costly on average than equivalent private projects. In the end, the program’s intended recipients may receive just 24 percent of the LIHTC subsidy. Corporate interests capture the rest.

Considering the program’s inherent problems, officials should contemplate other strategies to increase housing affordability. One option is to eliminate project-based assistance, including housing tax credits, and rely more heavily on tenant-based assistance (e.g. housing vouchers).

In the summer 2015 issue of Regulation, economist Edgar O. Olsen suggests this approach. Olsen contends that project-based assistance is more costly than tenant-based assistance, and as a result contributes to longer waits for low-income units. That means fewer of the lowest income families receive assistance.

Since 70 percent of households receiving rental assistance receive project-based assistance, there are major gains to be gained by shifting resources toward tenant-based assistance. Olsen estimates that increasing tenant-based assistance would cost 10 percent less and serve 75 percent more people than the status quo.

That’s helpful, but addressing the underlying causes of housing affordability issues would be even more effective. One cause of housing affordability issues is restrictive land use regulations and zoning. In a recent analysis, Calder found that in 44 states more intensive land-use regulation is associated with increasing home prices. 

Unfortunately, regulatory barriers to affordability continue to grow. In San Francisco and other heavily regulated coastal cities, removing regulatory barriers could substantially increase housing supply and lower costs.

And if zoning reforms were combined with replacing programs like LIHTC with tenant-based assistance, officials could increase housing supply, lower housing costs, and more effectively provide subsidies to people who need them. Unfortunately, the Times article suggests damaging proposals like increasing the size of LIHTC and applying rent controls.

That is not an effective solution if improving housing affordability is the objective. Instead, officials should cut regulations that create supply shortages and move towards more effective forms of housing assistance. LIHTC isn’t one of them.

Written with research assistance from David Kemp.

Part of the federal government is closed today because the two parties cannot agree on a discretionary spending plan for the balance of fiscal 2018. No compromise has yet secured the 60 needed votes in the Senate. The government had been operating under a “continuing resolution” (CR) that has now expired.

When policymakers cannot pass regular appropriations bills or a CR, nonessential federal activities are shut down. In particular, “agencies are required to begin a shutdown of all activities not essential to the protection of property or the safety of human life and furlough all non-excepted employees.”

Shutdowns are embarrassing for policymakers, as they suggest to the public that Washington is run by squabbling kids. But it is hard to make the trains run on time under current budget rules given the supermajority barrier in the Senate and the divergent policy views of the parties.

As it turns out, the solution to the shutdown problem is simple: An automatic CR that fixes discretionary spending at current levels. If a fiscal year begins, and the parties have not agreed on a spending plan, then agencies may continue existing spending activities. The auto CR would be in force until normal appropriations bills were enacted.

An auto CR law might include declining spending levels and other mechanisms, but simpler is probably better. An auto CR would avert shutdown crises, decrease partisan acrimony, modestly tilt the budget process toward restraint, and reduce the chance of time-pressurized spending deals that blow the bank.

Brian Riedl discusses some of the advantages of an auto CR, and CRS discusses some possible disadvantages. I think the former outweigh the latter. 

It’s the first day of National School Choice Week , a time when most school choice advocates embrace all types of educational choice programs. Many school choice promoters believe that every single incremental policy that expands educational options is an overall improvement. I disagree. You might be surprised about this, but I promise I have not pulled a Diane Ravitch. While I used to share the view that any incremental policy weakening government monopoly power would improve the education system overall, I have realized that there are potentially large costs that could result from expanding certain types of educational choice programs. While this is not a comprehensive list, here are three key concerns that I have with enacting and expanding every single choice option that becomes available.

Regulated Choice

The main problem with expanding regulated choice is that existing autonomous private schools will be nudged to behave like public schools. Independent private schools currently have to compete with educational institutions that are free at the point of entry. They have a clear financial incentive to accept school choice funding, even if it requires them to change what and how they teach. As Lindsey Burke and I have recently discovered empirically, voucher program regulation could lead to less specialization in the supply of private schools. In other words, we could end up with a more homogenous supply of schools than we had absent the choice system. Also, even if a private school choice program is completely unregulated today, policy-makers could decide to change that in the future, especially if the program is funded by public dollars. If a private school already serves a large portion of voucher students, they will have a huge incentive to put up with new regulations, which would essentially turn them into government schools.

Unbalanced Competition

Because I am confident in the ability of the price system to provide the information and the incentives necessary to increase quality and reduce costs, I used to believe that every single type of choice ought to be welcomed. After all, with a level playing field, the market would determine which types of choice would succeed and which would fail. However, this is not necessarily the case. School choice programs do not all receive the same amount of public funding, even within the same geographic location. In D.C., for example, the 2016 per pupil public funding amount for charter schools was about $14,000, while the average voucher amount was only around $9,600. Why should we expect educational outcomes to be equal across choice types when government favors public charter schools by giving them 46 percent more resources? In this sense, we shouldn’t be surprised that the most recent experimental evaluation of the D.C. voucher program found negative effects on student achievement relative to students in district and charter schools.

Opportunity costs

Of course, human capital is needed to push for expansion of educational options. But time and effort are the scarcest resources available. When human capital is allocated towards expanding inferior types of school choice, it is not being allocated towards expanding optimal solutions. This is the basic economic problem of opportunity costs. When hamstrung forms of choice—like public charter schools or heavily regulated vouchers—are expanded, and they fail to produce highly impressive results in the short-run, critics of choice are quick to declare market failure. Because this could shape public opinion against markets in education—and educational choice in general—acceptance of economically inferior school choice systems could reduce the possibility of future enactment of programs that more closely reflect market scenarios.

So what should we do? As with most interesting political debates, there is not a clear solution. But we should not simply look at the short-run costs and benefits of each individual program that is proposed. We need to make school choice policy decisions while considering long-run costs and benefits. To avoid my major concerns, the best politically feasible option we can embrace is a privately funded education savings account at the state level. Education savings accounts allow families to customize educational environments based on their children’s unique needs, and they allow for more price differentiation, which is necessary for a market to function properly. And because policy-makers could alter how they define which dollars are public, we should enact these policies at the state level.

And remember, even if it is counterintuitive, more school choice is not always an enhancement for educational freedom, especially when it reduces the diversity of schools in the long-run.

Legalizing the DREAMers, building the wall, boosting border security, and reforming the diversity immigrant visa program are the components of a successful legislative deal to reopen the federal government.  Reforming the diversity visa presents some unique challenges because Congress does not want to cut the number of green cards, but many Democrats–especially members of the Black and Hispanic Congressional Caucuses–worry that any substantial change to the program would diminish the number of immigrants from the nations that are favored under the current system. 

Fortunately, there is a policy solution that should satisfy both sides: convert the diversity visa into a merit-based system that still favors immigrants from the regions of the world that qualify for the diversity visa.

Before explaining this reform idea and how it would satisfy both political parties, some background on the diversity immigrant visa program is necessary.  This immigration category allocates 50,000 green cards annually to foreign nationals, distributed by lottery. These green cards go only to applicants from low-admission countries that sent fewer than 50,000 immigrants to the United States in the last five yearsLottery winners must have at least a high school education or demonstrate two years of work experience within the past five years in an occupation that requires at least two years of training or experience.  Applicants must also pass the required health, crime, and national security checks.  No more than 7 percent of all winners can come from any one country in a given year.

The first portion of this reform idea would make many Republicans happy by canceling the diversity visa program and shifting those 50,000 green cards to a new merit-based green card category that would allocate the visas via a points system.  The assignment of points under this immigration category is up to Congress, but copying the system outlined by Senators Tom Cotton (R-AR) and David Perdue (R-GA) in the RAISE Act would take a lot of ire out of their opposition.  However, Congress should make some changes to the RAISE Act’s points scheme to prevent absurd outcomes.  The diversity visa requirement that only 7 percent of the new green cards can go to applicants from any one country should also be removed to make it more meritorious.  The green cards under this new category would then be allocated to applicants who get the most points, assuming they are eligible and meet some minimum point threshold.        

The second portion of this reform idea would make many Democrats happy by continuing to allocate these green cards to applicants from low-admission countries as defined under the law currently governing the diversity visa.  By copying the diversity visa’s definition of low-admission countries, only foreign nationals from countries that sent fewer than 50,000 immigrants to the United States in the previous five years would be eligible for the new merit-based green card.  This would guarantee that, at least initially, new immigrants under this merit-based points scheme would come from broadly similar countries as those who qualify for the current diversity immigrant visa program. 

Depending on the actual points system created by Congress, the specific immigrants from these countries would likely be more educated and fluent in English, but their countries of origin would be similar to those under the diversity visa program. 

Canceling the diversity immigrant visa program, transferring its green cards into a new merit-based points category, and only allowing applicants from low-admission countries to apply for those visas should satisfy most Republicans and Democrats who want a middle-ground solution that would reopen the federal government.

People use email for many things: to collaborate at work, catch up with old friends, share baby pictures, or, sometimes, to coordinate the operations of an international narcotics trafficking ring. The federal government believes certain Microsoft-hosted email accounts were used for this last purpose and is demanding Microsoft provide them access to the communications stored within.

The Stored Communications Act (SCA) governs federal law enforcement’s authority to search email and other electronic records. They must obtain a warrant, subject to constraints similar to those imposed by the Fourth Amendment, and then provide an opportunity for the target company (e.g. Microsoft here) to contest the warrant.

Microsoft chose to contest the warrant in this case on the ground that the emails in question are stored on servers in Ireland, arguing that federal law enforcement may not claim jurisdiction over the entire globe. The federal government argues that the happenstance of the server’s location is invisible to the user, who, while sitting in his apartment in Manhattan (or wherever), is oblivious to whether his email server is in Galway or Yonkers. Because this is an important and recurring question, the Supreme Court decided to step in and sort the matter out.

To assist the court in sorting through the difficult legal questions in the case, Cato has filed an amicus brief, joining the Competitive Enterprise Institute, TechFreedom, Reason Foundation, Individual Rights Foundation, and American Consumer Institute Center for Citizen Research. The brief focuses on elucidating the ways in which the Fourth Amendment and the SCA interact with modern technology. We argue that the law is increasingly, and correctly, recognizing that personal data belongs to the individual, much like the “houses, papers, and effects” mentioned in the text of the Fourth Amendment. Digital communications are different than physical things, of course, but the Terms of Service between Microsoft and its customers recognize the users’ property interests in the data. Therefore, while the warrant procedure under the SCA deviates slightly from the normal process, it nonetheless should be examined with the same rigor as a traditional warrant, and that means the traditional presumption against extraterritorial application should be respected in this case. Finally, we argue that concerns over gamesmanship—for example, American companies stashing their servers in Zanzibar to aid and abet criminality—can be more prudently addressed with other tools. The Court should affirm that the right of people to be secure in their papers and effects has not been abrogated by modern technology and that the long arm of the law shall not extend across all oceans without express authorization from the legislature.

Yesterday Jim Hansen, now with Columbia University, and several of his colleagues released their summary of 2017 global temperatures. Their history, published by the NASA Goddard Institute for Space Studies, has constantly been evolving in ways that make the early years colder and the later years hot. I recently posted on how this can happen, and the differences between these modified datasets and those determined objectively (i.e. without human meddling).

For a couple years I have been pointing out (along with Judith Curry and others) that the latest fad—which puts a lot of warming in recent data—is to extend high-latitude land weather station data far out over the Arctic Ocean. Hansen’s crew takes stations north of 64⁰ latitude and extends them an astounding 1200 kilometers into the ocean.

This, plainly speaking, is a violation of one of the most fundamental principles of thermodynamics, which is that when matter is changing its state (from, say, solid to liquid), a stirred fluid will remain at “freezing” until it is all liquid, whereupon warming will commence.

This also applies in the Arctic, where the fluid is often stirred by strong winds. So if, say, Resolute, one of the northernmost land stations, is 50⁰F, and the Arctic is mixed water-ice (it always is), that 50 degrees will be extended out 1200 kilometers where the air-sea boundary temperature has to be around 30⁰F, the freezing point of seawater up there.

Hansen et al. did pay some attention to this, noting this extension, which they normally apply to their data, was responsible for making 2017 the second-warmest year in their record. If they “only” extended 250km (still dicey), it would drop their “global” temperatures by a tenth of a degree, which would send the year down a rank. The result of all of this is that the big “spike” at the end of their record is in no small part due to the 1200km extension that turns thermodynamics on its head.

There’s another interesting pronouncement in the NASA announcement; many people have noted that the sun is a bit cool in recent years, and that it continues to trend slightly downward. The changes in its radiance are probably good for a tenth of a degree (C) of surface temperature or so. Hansen et al. use this to provide covering fire should warming stall out yet again:

Therefore, because of the combination of the strong 2016 El Niño and the phase of the solar cycle, it is plausible, if not likely, that the next 10 years of global temperature change will leave an impression of a ‘global warming hiatus’.

The significance of this will all fall out in the next year or so. If temperatures head back down all the way to their pre-El Niño levels, that will ultimately bring back the post-1996 “pause.” We’re going to guess they are going to remain a couple of tenths of a degree above that, based on what happened after the big one in 1998, where they settled a small amount above the pre-El Niño of the earlier 1990s.

If the recent warming rate (adjusting for El Niño) continues, we’ll hear that it is doing so “despite” the sun. Given that one year (2018) can have little influence on a recent trendline, that copy may already have been written!

All of this begs the question: Hansen notes in his release that the warming rate since 1970 has been fairly constant, about 0.17⁰C per decade, and didn’t note that the average of the UN’s climate models say it should be about twice that now. More lukewarming.

Republican Congressman Scott Perry (PA) was a guest on Tucker Carlson Tonight last night in a segment about the continuing investigation into the Las Vegas shooting earlier this year. Congressman Perry said:

I have been made aware of what I believe to be credible evidence, credible information regarding potential terrorist infiltration through the southern border regarding this incident.

When pressed by another guest, Congressman Perry offered zero evidence but did say that “I have received what I feel to be and believe to be credible evidence of a possible terrorist nexus.”  With all due respect to Congressman Perry’s feelings, they are not evidence and a serious charge like his requires evidence.  If he does have such evidence, he should release it immediately.  

In researching my 2016 policy analysis on terrorism and immigration, I discovered nine terrorists who planned or carried out terrorist attacks on U.S. soil after entering illegally.*  Those nine terrorists killed zero people in terrorist attacks on U.S. soil from 1975 through 2017.  Of those nine terrorists who entered illegally, only three did so along the border with Mexico: Shain Duka, Britan Duka, and Eljvir Duka crossed as children with their parents in 1984.  They are ethnic Albanians from Macedonia.  They were three conspirators in the incompetently planned Fort Dix plot that the FBI foiled in 2007, long after they became adults and more than two decades after they entered illegally.  There is no evidence that the Fort Dix plot was more than 23 years in the making.  The Dukas murdered nobody in a terrorist attack.

The border with Mexico is a terrible way for terrorists to attempt to enter the United States, which is why so few have tried.  The arguments for additional border security are bad but at least they are grounded in some facts.  It is a sign of the desperation of immigration restrictionists that so many have to resort to conspiracy theories about terrorists to justify spending taxpayer dollars on more border security. 

More convicted or actual terrorists who planned an attack on U.S. soil actually entered or attempted to do so through the Canadian border.  The deadly foreign-born terrorists since 1975 have overwhelmingly used non-immigrant visas to enter.  Conspiracy theories about a wide-open southern border that terrorists cross to commit attacks are common but they should not be peddled by a member of Congress.  If Congressman Perry does have evidence that a terrorist or terrorists entered through the southern border and committed the Las Vegas attack, I implore him to release it as soon as possible to prove me wrong.

 

 

*In my original analysis, I reported that ten foreign-born terrorists initially entered illegally but I incorrectly counted 1993 World Trade Center bomber Ahmed Ajaj as an illegal immigrant when he actually initially entered on a student visa.  

Every week the news cycle seems to deliver a brand new bombshell, followed by panic and endless commentary decrying a nationalist shift in U.S. policy positions. Trade policy provides a prominent example. Though it is exciting to see broader interest in the trade debate, the tendency to declare every little thought or action taken by the administration or by U.S. trade partners as a sign of a trade war is getting a little out of hand. Like the boy who cried “wolf,” the media’s incessant “trade war” refrains are losing credibility. Yes, there are trade disputes. There is trade conflict. And, perhaps, there are even trade skirmishes. But when every little administrative action or tweet is treated as part and parcel to “war,” it gets difficult to take the reporting seriously.

For instance, recent reports that the Canadian government thought the Trump administration was planning to withdraw from the North American Free Trade Agreement (NAFTA) caused immediate shock, riling North American markets, despite the fact that the reports were mere speculation. Moreover, the rumor was based on something President Trump has been saying all along:  If a deal that favors the United States can’t be reached, he would withdraw from NAFTA.  (That’s a position not too different from those mouthed by Barack Obama and Hillary Clinton on the campaign trail in 2008).  Yes, it’s true that the 6th round of NAFTA talks is scheduled to begin January 21st, and many are nervous about its outcome. However, it is also true that every round has been touted as the “tipping point” in the negotiations. But just this week, President Trump suggested that he was open to continuing negotiations until after the elections in Mexico this summer. Those don’t sound like the words of someone preparing to kill NAFTA anytime soon.

In addition, there have been a number of needless alarm bells rung regarding a recent action by Canada at the World Trade Organization (WTO). On January 10, Canada requested consultations with the United States regarding certain aspects of U.S. trade remedy laws.  U.S. Trade Representative Robert Lighthizer called the action, “a broad and ill-advised attack on the U.S. trade remedies system,” and others suggested that the action was an unnecessary provocation by Canada that could threaten to derail the NAFTA talks.

First, for domestic political reasons, Lighthizer had to respond strongly, so we shouldn’t be reading too much into his statement. Second, there is nothing extraordinary about Canada’s request, as the issues brought up have been lingering for a long time. Though the timing may seem inconvenient, given ongoing NAFTA negotiations, it could also be seen as Canada trying to get some leverage in relation to the resolution of the softwood lumber dispute. Third, Canada is unlikely to take any action that would seriously harm its most important trading relationship. It is worth remembering that the Canadian Constitution enshrines the principle of “peace, order and good government,” so it is actually rather un-Canadian to rock the boat, so to speak.

Finally, just because a country files a request for consultation does not mean that the issue will lead to contentious litigation. In fact, of the 537 requests for consultations that have been filed since 1995, roughly a third have led to formal dispute settlement. Many disputes are settled or dropped before formal adjudication begins because the complainant accomplished its goal of getting another member to sit down and resolve a problem quickly and amicably. Following a request for consultation at the WTO, the respondent (the defending member government) has 10 days to reply, after which a consultation period of up to 30 days ensues.  The parties have a total of 60 days to come to some sort of agreement from the date the request was originally made. If not, the complainant can request the formation of a panel to hear the dispute. These steps are all very important, but also explain why consultation requests on their own are no reason for alarm. Consultations facilitate diplomacy and often prevent litigation.

While the Trump administration’s unconventional approach to trade policy (as well as our partners’ reactions) may keep us on our toes, it is essential that we separate the trade policy signal from the noise.  The ambush of frivolous news should not distract us from the important issues, such as recent and potential U.S. reactions to China’s alleged intellectual property theft, forced technology transfer, and cyber-threats, as well as the administration’s blocking of appointments to the WTO’s appellate body.

While the stakes of NAFTA withdrawal are high, and the administration’s skepticism about the WTO is apparent, there hasn’t been much in the way of actual policy change that should cause us to panic. Let’s all take deep breaths and get back to doing our parts to preserve and improve the current trading system rather than ringing the alarm when there’s no fire.

Last night, POLITICO ran a FISA-related story with the lede,”Republicans authorize sharing of classified report on FBI, DOJ officials’ conduct.” These are the two opening paragraphs:

Republicans on the House Intelligence Committee have authorized their colleagues to access a highly classified report that they say details their concerns with the conduct of top FBI and Justice Department officials, as well as the agencies’ handling of a controversial surveillance program.

“We have concerns — FISA concerns — that all members of the body should know,” said Rep. Mike Conaway (R-Texas), a member of the committee, referring to the Foreign Intelligence Surveillance Act. Some of President Donald Trump’s allies in the House have argued that the program was inappropriately used to surveil a foreign policy aide to the Trump campaign.

Since then, several other House GOP members have weighed in on Twitter about the memo in question: Rep. Matt Gaetz (R-FL), Rep. Steve King (R-IA), Rep. Lee Zeldin (R-NY), and House Freedom Caucus chair Rep. Mark Meadows (R-NC).

Of the seven members I’ve seen raise this issue either in the POLITICO story or on Twitter, only one–Meadows–voted against the FISA surveillance expansion bill (S. 139) when it was before the House last week. That fact certainly raises some interesting questions the other six who did vote for S. 139 should answer:

  • When did the Representative learn of the HPSCI majority staff report in question—before or after the vote on S. 139
  • If the Representative learned of the memo before the vote on S. 139, why did he not publicly push for its release to all House members prior to the vote on S. 139? 
  • If the Representative learned of the memo before the vote on S. 139, why did the Representative vote in favor of a FISA bill that Fourth Amendment experts across the political spectrum argue would make such abuses more likely?
  • Since Meadows voted against S. 139, does he believe the House leadership should allow a new FISA reform bill to be brought to the floor to address the alleged abuses detailed in the memo?

This morning, I contacted the offices of the House GOP members quoted by POLITICO or who’ve tweeted about this issue, seeking answers to the questions above. As of 12:30pm, none had responded.

In the POLITICO story cited above, House Intelligence Committee ranking member Adam Schiff (D-CA) made his own allegations, which also contained some possible answers to the questions I posed above:

The Majority voted today on a party-line basis to grant House Members access to a profoundly misleading set of talking points drafted by Republican staff attacking the FBI and its handling of the investigation. Rife with factual inaccuracies and referencing highly classified materials that most of Republican Intelligence Committee members were forced to acknowledge they had never read, this is meant only to give Republican House members a distorted view of the FBI.

I know from working for a HPSCI member for years that votes of the kind that Schiff referenced almost never happen on short notice. It seems extremely likely that the memo in question was written well before the vote on S. 139, a fact that Conaway and other HPSCI GOP members would almost certainly have known. 

The allegations made by Conaway, King, Zeldin and the other GOP House members who’ve read the memo are serious, and like Zeldin and some of the others, I certainly believe the memo and the underlying intelligence allegedly supporting it should be made public. But the timing of these latest allegations make them suspect–even more so given how most of those Members calling for the memo to be made public voted for a bill that this author (and many others) believes will make innocent Americans more vulnerable to federal surveillance. The same skepticism should be applied to many of the sensational allegations of Trump-Russia collusion Schiff and a host of other Democrats have offered over the past several months.

What neither GOP or Democratic House Intelligence Committee members appear prepared to do is invoke the Constitution’s Speech and Debate clause and make public the classified material that allegedly supports their respective positions.

If each side really believes what they allege (Republicans, that Trump’s campaign was spied upon; Democrats, that Trump colluded with the Russians to help him win in 2016), neither side is taking the serious measures necessary to make their full case public to the American people. Thus, the FISA Political Follies continue. 

Well, that was fast. Only a day after I said that we are likely to see increasing calls for protectionism citing alleged national security concerns, Scott N. Paul took to the pages of The New York Times to urge the imposition of new restrictions on steel imports based on this same justification. Long on attempted tugs at emotional and patriotic heartstrings, the piece is strikingly short on data suggesting U.S. national security has been imperiled by foreign imports. Indeed, to the extent Paul, who serves as president of the Alliance for American Manufacturing, even attempts to make this case it is through the following:

Even in this digital age, steel undergirds our military power, not to mention critical infrastructure. Tanks, aircraft carriers and the energy grid all rely on high-strength, lightweight steel. That steel has been made in America for generations.

The security of our own steel industry, though, has been in doubt for a long time. Domestic steel production peaked in 1973. The industry is now operating at less than three-fourths of its capacity. Thousands of steelworkers have been laid off since 2015, and those still working know their jobs are under constant threat. Only one American company makes essential electrical steel, and only one other supplies the type of steel needed to make Virginia-class submarines, the generation of attack submarines that are expected to be in production until 2043.

This is thin gruel, with little on offer besides the banal point that steel is used in the manufacture of many defense platforms. Paul’s observation that steel production reached its apex 45 years ago, meanwhile, actually undermines his implication that a decline in steel production has been to the detriment of U.S. national security. After all, despite the steel industry operating below its production peak the United States has managed in the years since to conduct a massive defense buildup during the 1980s and engage in major conflicts in Kuwait, Iraq, and Afghanistan along with numerous other smaller-scale actions. And lest one think the steel industry has been in perpetual decline since 1973, a quick look at production statistics reveals current output to be rather unremarkable in the context of the last 30 years:

Furthermore, as Clark Packard and Megan Reiss of the R Street Institute note, such production easily satisfies U.S. defense requirements with “only about 3 percent of steel shipped domestically in 2016 used for national defense and homeland security.” And while Paul appears to imply that one American company for electrical steel and one for the steel used in the production of a particular type of submarine are insufficient, he makes no mention of why this is a problem or what a more appropriate number might be. Moreover, should the United States experience a shortfall or inability to produce the product domestically there is no reason why it couldn’t fill this gap via imports. The United States, Packard and Reiss point out, does not lack for viable options should foreign sources be needed:

The United States also has a number of options to source steel from allies and non-hostile trading partners. In fact, of the top ten exporters of steel to the United States in 2016, only China could be considered a potential threat. Moreover, that threat becomes far less pressing when one considers how small a share China has of overall U.S. steel imports. China is only the source of 3 percent of American steel imports. Otherwise, 60 percent of imported steel mill products come from six other countries, none of which could plausibly be considered a threat to national security. According to the most recent available data from the International Trade Administration, between January and October 2017, the top exporter of steel to the United States is Canada, which accounted for 16 percent of imports during this period; Brazil, which accounted for 13 percent; South Korea, which accounted for 10 percent; Mexico, which accounted for 9 percent; Turkey, which accounted for 6 percent; and Japan, which accounted for 5 percent. 

Following his unconvincing case for steel tariffs on national security grounds, Paul then offers the following odd commentary:

Industry has been one of America’s greatest achievements. This is the nation that transformed itself into the arsenal of democracy, and with it won the last world war. Industry powered the country into a golden age of wealth and was a foundation of middle class prosperity.

Today America too often outsources the material to manufacture its prestigious projects, like the San Francisco-Oakland Bay Bridge, in a quest for savings. Half of the steel used in our energy pipelines is imported.

…Steel is our nation’s strength. Mr. Trump should remember that.

Both practically and philosophically this falls short. If one considers industry writ large to be one of this country’s greatest achievements then the fact that far more American workers are found in industries which consume steel rather than produce it—roughly 147,000 in steel production versus 6.5 million in domestic manufacturers that use steel in the production process according to Tori K. Whiting of the Heritage Foundation—is an excellent reason to eschew import restrictions. And why is the use of outsourcing to reduce infrastructure construction costs, thus saving taxpayer dollars and freeing up resources to be used elsewhere, presented as a cause for worry? 

More importantly, while industry has indeed proven to be an important source of American wealth and prosperity, it should be remembered that the foundation of such economic might firmly rests on this country’s commitment to individual liberty and freedom. It is this freedom, including to trade with those we wish, that is the country’s foremost triumph and that from which all other achievements have been realized. No country has barricaded its way to greatness, nor surrendered its freedom in exchange for prosperity. This is what President Trump should truly remember. 

We Washingtonians rightly get criticized for being hyper focused on politics. While D.C. natives gossip about the ups and downs of the powerful elite, most Americans are worrying about their marriages and mortgages. The disjuncture is even greater when it comes to foreign policy, an area in which public interest and knowledge are particularly limited. As many scholars have pointed out, to some degree this dynamic is the result of “rational ignorance” on the part of the public. Given the many other priorities citizens have in their private lives, the benefits of following policy debates closely is quite limited so long as people are generally confident that more knowledgeable people are paying attention. 

Taken too far, however, public apathy toward foreign affairs could become a problem for a democratic system. A central pillar of democratic politics is the ability of the marketplace of ideas to foster debate and produce sound policy. Without a certain level of public engagement, the marketplace of ideas cannot function effectively. If no one is paying attention, how can we have a meaningful debate over U.S. military operations in the Middle East and Africa, or what to do about North Korea’s nuclear arsenal, or China’s growing power? 

The traditional method for criticizing the public’s attentiveness to foreign policy is to note Americans’ astonishing lack of knowledge about the world. The June 2017 Pew Research “News IQ” survey finds, as usual, that most Americans know little even about events and people that have appeared regularly in the news. On the four questions most closely related to foreign policy, 60% of those surveyed knew that Britain is leaving the European Union, 47% could identify Robert Mueller as the person leading the investigation into Russian interference in the 2016 election, 44% could name Rex Tillerson as the Secretary of State, and just 37% could identify Emmanuel Macron as the president of France.

The public also typically lacks key facts informing specific foreign policy issues. Even as the Trump administration calls for new kinds of nuclear warheads, polls have routinely found that few Americans are aware that the United States already possesses thousands of nuclear weapons. And though 67% of Americans in 2014 knew that the Islamic State controlled territory in Syria, only half could identify the nation of Syria when it was highlighted on a map. In 2009, fewer than 30% knew that the United States had 70,000 troops in Afghanistan.

Thanks to Google we have another way to measure America’s foreign policy attention deficit. Google Trends gives us the ability to track how often people searched for a given term over a particular time period. If public ignorance is due to lack of interest, search activity on the Internet is a good way to measure that.

To illustrate what Google Trends data look like, Figure 1 displays people’s search interest in North Korea over the past year. The first spike reflects a series of North Korean missiles tests in April. The high point for Google searches on North Korea came in August when Kim Jong Un, after claiming North Korea now had the ability to hit the American mainland with nuclear weapons, threatened to fire missiles at Guam. President Trump responded that any North Korean provocation would be met with “fire and fury.” 

Google Trends also gives us the ability to compare the popularity of different search terms across regions. Using Google Trends, I looked at people’s search interest in eleven important foreign policy topics during 2017. The exercise confirms the political junkie stereotype of Washington, D.C. but also provides a new way to measure the lack of public attention to foreign affairs elsewhere in the United States. 

Unsurprisingly, Washington D.C. ranked highest in search activity for eight of the 11 topics. The three issues Washingtonians searched for less often than their peers were refugees (2nd, behind Vermont!), North Korea (10th), and the border wall (43rd). Table 1 introduces what I’m calling the “Beltway Index,” a simple measure of how much more attention people inside the Beltway pay to foreign policy than the rest of America.

Google Trends reports results on a 0 to 100 scale, with 100 pegged to the maximum level of search interest. Washington D.C. scored 100 in eight of 11 cases. A score of 50, on the other hand, means that a search term was half as popular as the maximum. Table 1 ranks the issues by what I call their Beltway Index – calculated by taking Washington’s search interest score and dividing it by the average score for the 50 states.

According to the Beltway Index, Washingtonians exhibit twice as much interest in foreign policy, on average, as Americans living outside the Beltway. The variations are illuminating. The highest index score is for the North American Free Trade Agreement. Despite NAFTA’s importance, and Trump’s promises to renegotiate a deal he has roundly criticized, trade policy makes for dull fodder. Trade negotiations unfurl slowly, behind closed doors without any compelling visuals, and the arcane details involved hold little interest for most Americans. On the other end of the spectrum, the only issue less popular in Washington than in the average state was Trump’s favorite construction project, the border wall. The three states most interested in the wall include Illinois (100) along with California (81) and Texas (77). Curiously, both Arizona (47) and New Mexico (41) are among the less interested states on the issue.

Table 1. Attention to Foreign Policy and the Beltway Index

Topic

Washington D.C. Search Interest

50 States Average Search Interest

Beltway Index

(Washington Interest/Avg State Interest

NAFTA

100

27

3.7

Iran

100

39

2.6

Terrorism

100

40

2.5

Immigration

100

44

2.3

Iraq

100

50

2.0

Refugees

89

47

1.9

Syria

100

55

1.8

Russia

100

62

1.6

China

100

73

1.4

North Korea

59

55

1.1

Border wall

43

53

0.8

Given the relatively low comparative level of interest in foreign policy shown by Americans outside of Washington D.C., we should not be shocked that public knowledge on these issues is so low. But given the low level of confidence in the government these days, and the high number of Americans who believe the nation is on the wrong track, it is surprising that so few people outside Washington D.C. feel the need to monitor events more closely. Leaving politics to the professionals only makes sense if citizens feel they can trust their political leaders. If there were ever a time when citizens might be expected to be paying more attention 2017 would seem like an excellent time do so.

Combining the Google Trends data with the 2016 popular vote for each state we can, in fact, find evidence of the connection between trust and attention. The 24 states that voted for Trump had an average search interest score of 45.8 while the 26 states (and Washington D.C.) that did not averaged 54.3 (or 52.9 excluding Washington, D.C.). This result is in line with the idea that people who trust Trump feel more comfortable paying less attention to foreign policy, while those who trust Trump less feel compelled to pay more attention. Table 2 provides data for the states with the strongest and weakest support for Trump. The ten states with the highest popular vote percentages for Trump averaged 44.3, while Washington D.C. and the nine other states with the lowest vote percentage for Trump averaged 60 (or 57 excluding Washington D.C.).

Table 2. Trump Support and Foreign Policy Interest by State

10 States with Highest Trump Support State Trump Popular Vote % Search Interest Score Arkansas 60.6 42.2 Tennessee 61.1 43.5 South Dakota 61.5 45.1 Kentucky 62.5 43.5 Alabama 62.7 41.9 North Dakota 64.1 46.9 Oklahoma 65.3 46.7 West Virginia 68.6 43.7 Wyoming 70.1 45.5 10 States with Lowest Trump Support State Trump Popular Vote % Search Interest Score District of Columbia 4.2 90.1 Hawaii 30 54.2 California 31.9 59.7 Vermont 32.6 61.0 Massachusetts 33.3 57.1 Maryland 34.5 61.2 New York 36.8 57.7 Washington 38.1 53.9 Illinois 38.9 54.9 Rhode Island 39.7 52.0

By most accounts Trump’s first year as president has been unusually turbulent. Every day holds the promise of another destabilizing tweet, a juicy revelation in the Russia interference investigation, or news about critical developments abroad. True, a lot of the day’s news turns out to be white noise – compelling for D.C. insiders but of little value most Americans. But on the other hand, when the president increases U.S. military presence in the Middle East by 33%, cranks up airstrikes in Afghanistan, announces that the U.S. will keep 2,000 troops in Syria indefinitely, and trades insults with North Korea on a weekly basis, paying more attention to the news starts to sound like a pretty good idea.

Last week I published an article critiquing Secretary Ben Carson’s disappointing first year at the Housing and Urban Development Department. It outlined some of the areas where Carson’s efforts have fallen short.

Senator Mike Lee subsequently introduced a bill addressing one of the issues Carson fell short on – facing an Obama-era rule called Affirmatively Furthering Fair Housing (AFFH).[1] Congressman Paul Gosar later introduced companion legislation in the House. Both bills would eliminate the HUD rule if passed.

That’s good news for legislative process, since the Obama-era rule that makes HUD an overseer of local demographic information seems to be only loosely based on the 50-year-old Fair Housing Act it claims to interpret. The rule is probably an example of the agency getting creative about ways to expand its mission. 

In other words, if legislators like the rule they should pass new legislation rather than abdicate legislative authority to HUD. Conversely, if legislators don’t like the rule Congress should pass legislation to nullify it.

The latter is precisely what Senator Lee and Congressman Gosar’s bill does – eliminate the controversial rule outright. And despite the bill’s rather unfortunate name, the “Local Zoning Decisions Protection Act,”[2] it is encouraging that Congress is taking deliberate legislative action.

After all, legislators are supposed to create laws, not agency professionals and not even political appointees. Regardless of how one feels about the HUD rule’s particulars, more legislating in Congress and less in the executive branch is a model everyone should be able to get behind.

[1] The rule makes HUD an overseer of local demographic information, with a special eye towards eradicating demographic segregation.

[2] Local zoning often erodes property rights and individual liberty and arguably is sometimes not in keeping with the U.S. Constitution’s takings clause. Property rights and individual liberty should be protected.

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