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Seattle’s $15 minimum-wage law has received plenty of attention from those on both sides of the issue. What has received less attention is the way in which this ordinance distinguishes between businesses—and discriminates against interstate commerce.

The ordinance separates employers into two categories, those with 500 or more employees (Schedule One) and those with fewer (Schedule Two), and mandates that the first category implement wage increases more quickly than the second. But the law creates a special rule for Seattle franchises, placing them into the first category if the total number of employees in the franchise network is 500 or more.

A group of franchise owners, led by the International Franchise Association, challenged the ordinance, to no success in the lower courts. Cato is now supporting their petition to the Supreme Court. Seattle insists that this categorization is neutral as between in-state and interstate commerce, because a franchise network could be entirely within Washington. The reality is that all Seattle franchises that are in Schedule One have either an out-of-state franchisor or are associated with out-of-state franchises of the same brand. The law thus discriminates against interstate commerce in precisely the way the Commerce Clause was intended to prevent.

When the delegates met in Philadelphia in 1787 to revise the Articles of Confederation, one of their main concerns was the protectionism the states exhibited under the Articles. As James Madison said at the time, “Most of our political evils may be traced to our commercial ones.” The Constitutional Convention debated many things between May and September 1787, but there seems to have been general agreement that the new Constitution would give Congress power to regulate—“make regular”—interstate commerce.

Although today’s federal government has far exceeded the positive Commerce Clause power the Framers intended to give it—in terms of federal programs and regulations—the principle that states and local governments may not enact laws that discriminate against interstate commerce dates back to Chief Justice Marshall’s opinion in Gibbons v. Ogden (1824), and indeed all the way to the animating purpose of the Convention. That principle—known as the negative or Dormant Commerce Clause—applies both when Congress has passed legislation in the area and when it hasn’t. See Case of the State Freight Tax (1873).

One scholar has remarked that, under the Articles, the states were “marvelously ingenious” at designing protectionist measures. Seattle’s franchise categorization is just one such measure, which discriminates against interstate commerce in a subtler way than most of the protectionism that courts have considered.

While arguing that its law is constitutional, Seattle points to the fact that the burden of the law will fall on in-state actors (the Seattle franchises). Where the burden falls, however, is irrelevant to whether a law discriminates against interstate commerce. Just last term, in Comptroller of the Treasury of Maryland v. Wynne, the Supreme Court held that Maryland’s income tax scheme violated the Commerce Clause by taxing residents on income they earned out-of-state—even though, by definition, the burden of the income tax law fell on Maryland residents. Seattle’s franchise categorization also violates the Dormant Commerce Clause’s extraterritoriality principle because it makes the wage burden placed on Seattle franchisees dependent on the hiring decisions of independent (and most likely unknown) franchises in other states.

The Supreme Court should take up International Franchise Association v. City of Seattle and consider not the economic wisdom of minimum-wage requirements generally but the effect of this particular law on interstate commerce.

Washington, DC opened its long-delayed streetcar for business on Saturday. Actually, it’s a stretch to say it is open “for business,” as the city hasn’t figured out how to collect fares for it, so they won’t be charging any.

Exuberant but arithmetically challenged city officials bragged that the streetcar would traverse its 2.2-mile route at an average speed of 12 to 15 miles per hour, taking a half hour to get from one end to the other (which is 4.4 miles per hour). If there were no traffic and it didn’t have to stop for passengers or run in to any automobiles along the way, they admitted, it would still take 22 minutes (which is 6 miles per hour).

“After more than $200 million and a decade of delays and missteps,” observed the Washington Post, “it took the streetcar 26 minutes to make its way end-to-end on the two-mile line. It took 27 minutes to walk the same route on Saturday, 19 minutes on the bus, 10 minutes to bike and just seven minutes in a Uber.” After all the costs are counted, the Uber trip probably cost less.

The streetcar opening caught the attention of the Economist, which called it “pointless” because it follows a route that is already served by a bus that is faster, can get around parked cars that are slightly sticking into the right of way, and actually goes somewhere beyond the already gentrifying H Street neighborhood. Despite the problems and criticisms, DC officials were already talking about extending the line another 5 miles. 

Washington isn’t the only city caught up in the streetcar fad. Following Portland’s example, Atlanta, CharlotteCincinnati, Kansas City, and several other cities have opened or are building streetcar lines. Most of these lines are about two miles long, are no faster than walking, and cost $50 million or more per mile while buying the same number of buses would cost a couple million, at most.

Portland wants to build 140 miles of streetcar lines. At the average cost of its most recent line, this would require as much money as it would take to repave every street in the city–streets that are falling apart because the city doesn’t have enough money to maintain them. According to the latest census, seven times as many downtown Portland employees bicycle to work as take the streetcar, but another survey found that two out of three Portland cyclists “have experienced a bike crash on tracks.” 

New York’s Mayor de Blasio wants to spend $2.5 billion on a 16-mile streetcar between Brooklyn and Queens. Apparently that city is so flush with cash that it doesn’t have anything better to spend its money on than a slow transit line that won’t even stop near a subway station.

These cities argue that streetcars stimulate economic development. Yet a recent study sponsored by the Federal Transit Administration found that not only was there no evidence of such stimuli, none of the cities that had built streetcars were systematically measuring such impacts. Instead, most were busy subsidizing or coercing (through prescriptive zoning) new development along the streetcar routes.

In fact, there is no reason to think that a slow, congestion-causing, bicycle-accident-inducing rail line would promote new development. Streetcars were technologically perfected in the 1880s, so for Washington to subsidize the construction of a streetcar line today is roughly equal to New York City subsidizing the opening and operation of a factory in Manhattan that would make non-QWERTY typewriters, or Los Angeles subsidizing the manufacture of zoopraxiscopes. Rather than build five more miles of obsolete line, the best thing Washington can do is shut down its new line and fill the gaps between the rails with tar.

For the last 20 years, Ohio has had its own kind of “Ministry of Truth,” otherwise known as the Ohio Elections Commission (OEC). Anyone who claimed that someone – typically a political opponent – was lying to advance or defeat a politician could file a complaint such that a panel of bureaucrats would determine the “truth.”

What will go down as the abuse of the “political statement law” was in 2010 when Rep. Steven Driehaus complained that a pro-life advocacy group accused him of supporting “taxpayer-funded abortions” by voting for the Affordable Care Act. The OEC determined that there was probable cause that the statement was false. The ruling was widely publicized in the media less than a month before the election. Then discovery started on the formal prosecution, requiring disclosure of all of the targeted group’s communications with allied organizations, political parties, and members of Congress.

Imagine just the time and money required to respond to this kind of complaint in the last month before an election – not to mention the PR fallout – such that the damage is done regardless of the result of the legal process. Accordingly, Susan B. Anthony List brought a lawsuit challenging the Ohio law (a version of which existed in about a dozen states). But after the election, Driehaus withdrew his complaint, the prosecution was shuttered, and so the OEC claimed that no harm was ultimately done and so the lawsuit had to be dismissed as moot. 

The Cato Institute filed an amicus brief before the Supreme Court mocking the absurdity of the law, joined by America’s leading political satirist P.J. O’Rourke (also an H.L. Mencken Research Fellow at Cato). Using humor to illustrate absurdity, we showed the silliness (and danger) of allowing potential criminal penalties for “false” statements like “Read my lips: no new taxes!” or “If you like your healthcare plan, you can keep it.” The brief generated a great response, so much so that it was reprinted in Politico and the Pennsylvania Journal of Constitutional Law, and The Green Bag gave it one of its “Exemplary Legal Writing” honors for 2014. Ultimately, the Supreme Court unanimously held that the statute could indeed be challenged.

On remand, the federal district court quickly enjoined the Ohio statute as violating the First Amendment. Then last week, the U.S. Court of Appeals for the Sixth Circuit affirmed that ruling, effectively killing the “False statement” law. The court described many good reasons for its decision, including the timing and resource-draining issues noted above. However, even if these problems were solved, the government still should not be in the business of evaluating core political speech prior to an election. The result was a victory for the freedom of speech.

While Donald Trump may wish to eviscerate the First Amendment, the state of Ohio (and effectively any state government) can no longer threaten their political candidates and advocates into silence.

Presidential candidate Donald Trump, speaking Friday: “We’re going to open up those libel laws. So when The New York Times writes a hit piece which is a total disgrace or when The Washington Post, which is there for other reasons, writes a hit piece, we can sue them and win money instead of having no chance of winning because they’re totally protected.” Trump also said of Amazon, whose Jeff Bezos owns the Washington Post, a newspaper that just ran an editorial seeking to rally opposition to Trump: “If I become president, oh do they have problems. They’re going to have such problems.”

The President has no direct power to change libel law, which consists of state law constrained by constitutional law as laid out by the Supreme Court in New York Times v. Sullivan. A President could appoint Justices intent on overturning the press protections of Sullivan or promote a constitutional amendment to overturn it. Assuming one or the other eventually was made to happen, further changes in libel law would probably require action at the state level, short of some novel attempt to create a federal cause of action for defamation.

But although Trump is unlikely to obtain the exact set of changes he outlines, the outburst is psychologically revealing. Donald Trump has been filing and threatening lawsuits to shut up critics and adversaries over the whole course of his career. He dragged reporter Tim O’Brien through years of litigation over a relatively favorable Trump biography that assigned a lower valuation to his net worth than he thought it should have. He sued the Chicago Tribune’s architecture critic over a piece arguing that a planned Trump skyscraper in lower Manhattan would be “one of the silliest things” that could be built in the city. He used the threat of litigation to get an investment firm to fire an analyst who correctly predicted that the Taj Mahal casino would not be a financial success. He sued comedian Bill Maher over a joke.

I have been writing about the evils of litigation for something like 30 years, and following the litigious exploits of Donald Trump for very nearly that long. I think it very plausible to expect that if he were elected President, he would bring to the White House the same spirit of litigiousness he has so often shown as a public figure.

[cross-posted from Overlawyered]



The RAND Corporation has published the second report in its “Strategic Rethink” series, this one entitled “America’s Security Deficit: Addressing the Imbalance between Strategy and Resources in a Turbulent World.” It is a noble undertaking, conducted by well-respected scholars and analysts. But I’m not particularly optimistic that conditions are ripe for the strategic rethink that they seek, and that the country desperately needs.

The strategy-resources gap should be corrected by adopting a new strategy, one that pares down the United States’ permanent overseas presence, and compels other countries to take on more responsibilities for their own defense (as Japan shows signs of doing). Instead, U.S. policymakers seem willing to undertake merely incremental changes at the margins, retaining U.S. primacy, and trying to cover the strategy-resources gap with wishful thinking and unrealistic assumptions.

RAND’s summary of the report explains “currently projected levels of defense spending are insufficient to meet the demands of an ambitious national security strategy.” And its Key Finding reads as follows:

Limitations on defense spending in the context of emerging threats are creating a “security deficit.”

  • Fielding military capabilities sufficient, in conjunction with those of our allies and partners, to deal with the disparate challenges faced by the United States will require substantial and sustained investments in a wide range of programs and initiatives well beyond what would be feasible under the terms of the Budget Control Act.

Advocates for higher military spending have been saying this since the BCA was first passed. Those who also claim to care about the nation’s persistent fiscal imbalance typically note that the Pentagon’s budget is not the primary driver of the nation’s debt, and they would focus, first, on so-called mandatory spending (Social Security, Medicare, and Medicaid) which accounts for a far higher share of total federal expenditures, in order to find the additional money needed to close the security gap.

They are correct on the first point, the need to reform entitlements, but not on the need for more military spending.

We should be clear about what that entitlement solution would look like, and why it hasn’t yet occurred. As a practical matter, it entails telling people to accept cuts in benefits that they have been told (falsely) are theirs by right. Millions of American retirees actually believe that the money that they receive every month under Social Security, or the health care funded by Medicare, is actually their money, the money that they paid into the system during their working years.

Of course, it isn’t “their” money. The benefits for current retirees are paid by taxes on current workers.

But, leaving that aside, under the necessary overhaul, entitlement benefits will be cut, but not enough to cover the difference. Thus, higher payroll taxes, too. Bitter pills all around.

Unsurprisingly, very few American politicians have actually proposed such measures, and the few who have done so have mostly focused on reducing payments to future beneficiaries, not to those already in the system, or nearing retirement. As my colleague Dan Mitchell points out, in a moment of uncharacteristic optimism, such half-measures would be better than doing nothing at all, but it will take a major political shift before any such proposal ever becomes law.

Remember where the current anxiety over supposedly inadequate spending levels for the military all started: the Super Committee, and the hoped-for Grand Bargain of tax and entitlement reform. Then there was the failure to reach any agreement, and the BCA-imposed caps on discretionary spending (divided evenly between defense and non-defense).

But Congress has managed to work around the caps through special legislation in nearly every fiscal year since they first passed the budget-capping law in 2011. Which suggests that they weren’t all that serious about controlling costs in the first place.

So, we are back to where we started: a mismatch between our strategic ends, and the resources available to execute that strategy. And this represents a particularly difficult challenge for people like Marco Rubio and Ted Cruz who have called for huge increases in the military’s budget. Where will they find the money?

There are alternatives for solving America’s security deficit, besides simply spending more. We could adjust our strategy to our fiscal reality, and stop pretending that our money problems will magically sort themselves out.

The Obama administration hasn’t considered those alternatives, however, in part because choosing among competing strategic priorities is difficult, but mostly because Congress’s repeated evasions of the BCA have convinced the administration that actually aligning our strategy with our resources isn’t really necessary. Only serious spending discipline, enforced by a Congress committed to resolving our long-term fiscal imbalance, will prompt the strategic rethink that is long overdue. 

Yesterday, a dispute settlement panel at the World Trade Organization released an official report finding that local content requirements in India’s solar power scheme violate global trade rules.  The ruling condemns a particular protectionist policy that dilutes the effectiveness of solar subsidies by diverting them to inefficient domestic manufacturers.  The case is one more example of how global trade rules help to prevent green energy initiatives from becoming expensive crony boondoggles.

Although the report was just released, we’ve known what the outcome would be since last September.  At the time, I wrote about how India’s local content requirement harms its own green energy initiative:

The ruling ought to be celebrated by advocates of solar power.  The local content requirement acts as a drag on the program by making solar power plants more expensive to build.  Allowing solar energy producers to purchase panels on the global market not only reduces prices for those producers, it also furthers the development of efficient supply chains for solar panel production.

Predictably, however, some green groups are not happy with the decision.  According to the Sierra Club, “the WTO has officially asserted that antiquated trade rules trump climate imperatives.”  They’re fully committed to the idea that—contrary to the lessons of history and economics—full-fledged green industrial policy will lead to a future of “100 percent clean energy.”  They believe filling the economy with “green jobs” is politically and economically necessary to achieve their environmental goals.

But this policy approach is self-defeating, and I’ve pointed out its shortcomings on this blog before:

The inconvenient truth is that green industrial policy isn’t going to lead to a future of renewable energy, but it does benefit cronies and politicians.  Bureaucrats who don’t make decisions based on market realities still respond to incentives, making them susceptible to capture by special interests at public expense (see Solyndra).  Even if bureaucrats are enlightened saints, the centralization of decision-making benefits large firms at the expense of entrepreneurs and other innovative competitors.  Over time, the relationship between commercial success and political acumen leads businesses to invest more in lobbying and leads to a culture of rent-seeking and privilege

But the Sierra Club does rightly note that the U.S. government is being somewhat hypocritical in going after India’s solar subsidies at the WTO.

Bringing this case is a perverse move for the United States.  Nearly half of U.S. states have renewable energy programs that, like India’s solar program, include “buy-local” rules that create local, green jobs.

And the United States doesn’t just include protectionist local content requirements in its subsidies.  Like India and Europe, the U.S. government also imposes import tariffs in the form of antidumping and anti-subsidy duties on solar panels and wind turbines.  Simon Lester and I have argued that these sorts of tariffs should also be prohibited.

Taxing the same products you subsidize is inherently counterproductive.  The same is true when you condition subsidies on the use of domestic products.  Unless, of course, you are a domestic manufacturer that gets all the money and faces no competition. 

The “Bootleggers and Baptists” dynamic of green energy cronyism is a powerful driver of public policy.  International trade rules and dispute settlement can help to counteract that.

Watching the Presidential primary debates, there are numerous instances where I – and no doubt many others here at Cato and elsewhere – think, “I should really correct that inaccuracy in a blog post tomorrow.”  But sometimes you wake up and find someone else has already done the job for you.  Here are Washington Post fact checkers Glenn Kessler and Michelle Ye Hee Lee skillfully taking down one of Donald Trump’s ridiculous statements on trade:

“I don’t mind trade wars when we’re losing $58 billion a year [to Mexico], you want to know the truth. We’re losing so much. We’re losing so much with Mexico and China — with China, we’re losing $500 billion a year.”

— Trump

Trump has the numbers right on the trade deficit with Mexico and overstates them with China — but he gets the economics very wrong in both cases. A trade deficit means that people in one country are buying more goods from another country than people in the second country are buying from the first country.

So in Mexico’s case, Americans in 2015 purchased $294 billion in goods from Mexico, while Mexico purchased $236 billion in goods from the United States. That results in a trade deficit of $58 billion. In the case of China, Americans in 2015 bought $482 billion in goods from China, while Chinese purchased $116 billion from the U.S., for a trade deficit of $366 billion.

But that money is not “lost.” Americans wanted to buy those products. If Trump sparked a trade war and tariffs were increased on those Chinese goods, then it would raise the cost of those goods to Americans. Perhaps that would reduce the purchases of those goods, and thus reduce the trade deficit — but that would not mean the United States would “gain” money that had been lost.

Trump frequently suggests, as he did in the debate, that Mexico could pay for the wall out of the $58 billion trade deficit. But that is nonsensical. The trade deficit does not go to the government; it just indicates that Americans are buying more goods from Mexico than the other way around.

It’s been nearly two weeks since we heard about Justice Antonin Scalia’s untimely passing. Given the demands of the news cycle, I found myself on CBS radio about 20 minutes after I got wind (in a phone call from the ubiquitous Josh Blackman) of this tragic development that would upend the holiday weekend.  And then it was into the media maelstrom for the next 72 hours or so, the waves from which continue with no end in sight.

That week was one of the most difficult of my professional life. Not because churning out op-eds, delving into a jurist’s work, and responding to the political narrative is particularly new or challenging – to use the line from the GEICO ads: if you’re a think tank scholar, it’s what you do – but because, like most in the originalist legal community, I was in mourning. Scalia wasn’t a libertarian, but he helped our movement immensely (and was typically in dissent where we disagreed). Besides, for lawyers under 50 or so, it’s impossible to imagine a Supreme Court without him. 

Unlike Roger Pilon and Walter Olson, however, I didn’t know him personally. In fact, I only met him a few times, essentially just for a quick handshake or book-signing. The only meeting of note was when a Federalist Society officer introduced me at the 2012 lawyers convention, describing me as coordinator of the amicus-brief effort in NFIB v. Sebelius (the first Obamacare case). Justice Scalia nodded, sighed, and said, “yeah, sorry about that.”

And yet, when his funeral rolled around this past Saturday, I was shaken. I had thought about attending, but didn’t want to be out of place among people who truly knew him. Besides, I was doing some more media commentary before the ceremony started and then needed to get home to help care for my seven-week-old son. So I watched the funeral on TV, mesmerized and misty-eyed. In retrospect, I probably should’ve directed the car from CBS studios to head up to the Basilica of the National Shrine of the Immaculate Conception – I would’ve arrived maybe 15 minutes after the funeral started – but I wasn’t really thinking straight.

At least there will be a memorial at the Supreme Court at some point later this winter or spring. (I had stood in line last Friday to pay my respects when Justice Scalia was lying in state, but ultimately abandoned that effort when the line stopped for President Obama’s arrival and I started freezing after foolishly neglecting to bring my coat – so alas it would not be a repeat of my experience waiting overnight to say goodbye to President Reagan.) Hopefully I will have regained my bearings by then.

In the meantime, Justice Scalia’s absence – while a huge loss for the nation – hardly hampers the functioning of the Supreme Court even if his seat remains vacant until after the election, as it should.

Why are independent, strong-minded courts so important to a free society? One reason is that they – and often only they – are the ones who can stop government agencies from trampling on the rights of the citizens.

Consider, for example, the Obama Administration’s present aggressive campaign to push the bounds of federal employment and labor law far beyond anything Congress has been willing to pass. As I’ve noted before, judges have repeatedly found these administration power plays to overstep the law. See, for example, posts here (Equal Employment Opportunity Commission suffers epic Sixth Circuit loss in EEOC v. Kaplan), here (Breyer and liberal Supreme Court majority, even while siding with plaintiff in underlying case, smack around EEOC “guidance” ploy); see also here (many more examples, at Overlawyered).  

Now here are four more examples from recent months.

* The U.S. Department of Labor sued oil field contractor Gate Guard demanding it reclassify some independent contract workers as employees. As our friends at the Washington Legal Foundation recount, Judge Edith Jones ruled on behalf of a Fifth Circuit appeals panel that Gate Guard was entitled to fees under an unusual “bad faith” provision (footnotes omitted here and below): 

It is often better to acknowledge an obvious mistake than defend it. When the government acknowledges mistakes, it preserves public trust and confidence. It can start to repair the damage done by erroneously, indeed vindictively, attempting to sanction an innocent business. Rather than acknowledge its mistakes, however, the government here chose to defend the indefensible in an indefensible manner. As a result, we impose attorneys’ fees in favor of Gate Guard as a sanction for the government’s bad faith.

At nearly every turn, this Department of Labor investigation and prosecution violated the department’s internal procedures and ethical litigation practices. Even after the DOL discovered that its lead investigator conducted an investigation for which he was not trained, concluded Gate Guard was violating the Fair Labor Standards Act based on just three interviews, destroyed evidence, ambushed a low-level employee for an interview without counsel, and demanded a grossly inflated multi-million dollar penalty, the government pressed on. In litigation, the government opposed routine case administration motions, refused to produce relevant information, and stone-walled the deposition of its lead investigator.


* We commented one year ago on the amazing case of EEOC v. Freeman Cos., in which the Fourth Circuit found that the federal commission had relied on “pervasive errors and utterly unreliable analysis” in its attempt to go after a Maryland employer’s policies on criminal background checks of employees. The appeals court sent the case back for further proceedings to district judge Roger Titus, who had previously shredded the EEOC’s proffered expert evidence as “laughable” and “mind-boggling.” Then the EEOC – feeling that perhaps its luck was due to turn – resisted an award of attorneys’ fees to the defendant. As Alison Somin recounts for the Federalist Society, this was a sure loser bet. Somin quotes the resulting order in which Judge Titus wrote:

World-renowned poker expert Kenny Rogers once sagely advised, “You’ve got to know when to hold ‘em. Know when to fold ‘em. Know when to walk away.” In the Title VII context, the plaintiff who wishes to avoid paying a defendant’s attorneys’ fees must fold ‘em once its case becomes so groundless that continuing to litigate is unreasonable, i.e. once it is clear it cannot have a winning hand. In this case, once Defendant Freeman revealed the inexplicably shoddy work of the EEOC’s expert witness in its motion to exclude that expert, it was obvious Freeman held a royal flush, while the EEOC held nothing. Yet, instead of folding, the EEOC went all in and defended its expert through extensive briefing in this Court and on appeal. Like the unwise gambler, it did so at its peril. Because the EEOC insisted on playing a hand it could not win, it is liable for Freeman’s reasonable attorneys’ fees.”  

* That wasn’t the only bad news for the EEOC’s legal team recently. A Wisconsin federal judge in EEOC v. Flambeau has rejected the commission’s notion that employers violate the Americans with Disabilities Act when they ask employees to take medical exams as part of so-called wellness programs in their health insurance coverage (discussion, Littler and Proskauer; background here and here). 

* And in another widely watched case, the Seventh Circuit in EEOC v. CVS Pharmacy (via Jon Hyman) has rejected the commission’s position that employers violate the law when they proffer widely used garden-variety exit agreements to departing workers (on the theory that the language is not sufficiently encouraging of later legal action, which supposedly constitutes “retaliation”).

Imagine what these agencies and others would be getting away with were our judiciary someday reduced to a spirit of subservience to the executive branch of government.



Calls for higher tax rates often suffer from a myopic focus on the one percent, but these proposals largely fail to acknowledge that tax rates, and the incentives they create, influence work decisions for everyone.  Nowhere is narrow focus more evident than the tax proposals from the two rivals for the Democratic nomination. Bernie Sanders has proposed more than $19 trillion in new taxes over the next decade, and Hillary Clinton’s own plans only look modest by comparison. My colleague Alan Reynolds briefly alluded to a recent paper from Mario Alloza of University College London that examines the relationship between tax rates and income mobility. He finds that higher marginal tax rates reduced mobility over the period analyzed, particularly for people with low incomes or less education. These findings imply that proposals to significantly increase taxes could make it harder for people at the bottom of the income distribution to work their way up.

Alloza looks at panel data between 1967 and 1996 to examine whether tax rates affect the probability of staying in the same decile in the following two years. He examines different scenarios including pre-tax, post-tax and post-tax and transfer. Most of the paper focuses on federal taxes, but he also examines a case where state and payroll taxes are included as well. Increases in the marginal tax rate are associated with a reduction in short-run relative income mobility. Households are roughly 6 percent more likely to stay in the same income quintile when the marginal tax rate is increased by one percentage point. This mechanism holds for all of the different tax and transfer scenarios. Even accounting for the impact of transfers and benefits, higher rates curbed the upward mobility of people at the lower end of the income distribution. This suggests that the impact of tax rates on income mobility is not confined to redistribution effects, but the changes in labor market incentives.

These effects are even more pronounced for people with low-income or less than a college degree. Tax changes focused on compressing the income distribution by taking more from those at the top could also make it harder for these people at the bottom to climb the economic ladder. When Alloza restricts his sample to non-college households, he finds that a one percentage point increase in the marginal tax rate increases the probability of moving down to lower deciles by roughly one percent, increases the likelihood of remaining in the same decile by roughly the same amount, and reduces the probability of moving up to a higher income decile by almost one and a half percent. For households in the lowest income decile, an increase in the marginal tax rate reduces their probability of moving up to a higher decile by almost one and half percent in the post-tax and transfer scenario.  Higher marginal tax rates reduce the mobility for these groups in particular.

These results provide more evidence that taxes matter for all people when they make decisions about work. Higher tax rates limit income mobility by changing work incentives, particularly for people near the bottom of the income distribution. Public policy should not further reduce the scope of opportunity for these people, and increasing tax rates would likely do just that.  

In a confounding ruling that breaks with a general consensus among federal courts, federal District Court Judge Mark Kearney of the Eastern District of Pennsylvania has ruled that recording police officers is not protected by the 1st Amendment unless the recorders are making an effort to “challenge or criticize” the police.  On Judge Kearney’s logic, standing silently and recording the police is not sufficiently expressive to warrant 1st Amendment protection.

The reasoning behind this distinction is bizarre, and is out of step with rulings in several federal circuits that recording police in public is constitutionally protected without regard for whether the recorder is attempting to make a statement or issue a challenge to law enforcement.  

A couple quick takes from civil liberties scholars disputing Judge Kearney’s attempt to distinguish the facts of this case:

 Radley Balko’s take at The Washington Post:

 Under Kearney’s standard, most of the citizen-shot videos of police abuse and shootings we’ve seen over the past several years would not have been protected by the First Amendment. In the overwhelming majority of these videos, there’s none of the “expressive conduct” Kearney apparently wants to see from the camera-wielder. In many of them, the police officers are never made aware that they’re being recorded. That’s how some of these videos were able to catch the officers lying about the incident in subsequent police reports.

I suppose you could argue that recording something as noteworthy as a police shooting or an incident of clear brutality would be self-evidently an act of either expression or news-gathering. But judging from his opinion, it’s far from clear that Kearney would make this distinction. It’s also hard to see how he could. It would mean that whether or not your decision to record the police is covered by the First Amendment would be dependent on whether the recording itself captures the police violating someone’s rights or doing something newsworthy. Even the courts often disagree over what is and isn’t a violation of someone’s constitutional rights (this ruling itself is as good an example as any). And “newsworthiness” is of course a highly subjective standard. You could make a strong argument that both of the events in these two cases — an anti-fracking protest and a 20+ officer police response to a house party — are plenty newsworthy.

 And over at Volokh Conspiracy, Eugene Volokh notes:

 [T]he court held, simply “photograph[ing] approximately twenty police officers standing outside a home hosting a party” and “carr[ying] a camera” to a public protest to videotape “interaction between police and civilians during civil disobedience or protests” wasn’t protected by the First Amendment.

I don’t think that’s right, though. Whether one is physically speaking (to challenge or criticize the police or to praise them or to say something else) is relevant to whether one is engaged in expression. But it’s not relevant to whether one is gathering information, and the First Amendment protects silent gathering of information (at least by recording in public) for possible future publication as much as it protects loud gathering of information.

Your being able to spend money to express your views is protected even when you don’t say anything while writing the check (since your plan is to use the funds to support speech that takes place later). Your being able to associate with others for expressive purposes, for instance by signing a membership form or paying your membership dues, is protected even when you aren’t actually challenging or criticizing anyone while associating (since your plan is for your association to facilitate speech that takes place later). The same should be true of your recording events in public places.

The ACLU has already announced an appeal, which would give the 3rd Circuit Court of Appeals an opportunity to knock down the strange distinction drawn by Judge Kearney.

The ability of individuals to record police in public without fear of reprisal is an essential mechanism for injecting transparency where it is sorely lacking, for holding the government accountable for misconduct, and in many cases for protecting good police officers from misattributed blame.

 For more of our work on recording police, check out this video:

Cops on Camera

These are challenging times for monetary economists like myself, what with central banks making one dramatic departure after another from conventional ways of conducting monetary policy.

Yet so far as I’m concerned, coming to grips with negative interest rates, overnight reverse repos, and  other newfangled monetary control devices is a cinch compared to meeting a challenge that nowadays confronts, not just monetary economists, but economists of all sorts.  I mean the challenge of  getting one’s ideas noticed by that great arbiter of all things economic, Tyler Cowen.

Last week, however, Tyler may have given me just the break I need, in the shape of a brief Marginal Revolution post entitled,  “Simple Points about Central Banking and Monetary Policy.”

Tyler’s “simple points” are these:

Central banks around the world could raise rates of price inflation, and boost aggregate demand, if they were allowed to buy corporate bonds and other higher-yielding assets.  Admittedly this could require changes in law and custom in many countries[.]

There is no economic theory which says central banks could not do this, as supposed liquidity traps would not apply.  These are not nearly equivalent assets with nearly equivalent yields.

Tyler isn’t one to traffic in banalities, so it’s no surprise that his claims are controversial.  Why so? Because the prevailing monetary policy orthodoxy, here in the U.S. at least, insists that, rare emergencies aside, the Fed should stick to a “Treasury’s only” policy, meaning that it should limit its open-market purchases to various Treasury securities.  For the Fed to do otherwise, the argument goes, would be for it to involve itself in “fiscal” policy,  because its security purchases would then influence, not just the overall availability of credit, but its allocation across different firms and industries.  So far as the proponents of “Treasuries only” are concerned, Tyler’s remedy for deflation would create a set of privileged or “pet” corporate securities, analogous to, and no less obnoxious than, the “pet banks” of the Jacksonian era.

All of which is good news for me, because I’m prepared, not only to side with Tyler in this debate, but to offer further arguments in support of his position.  For I took essentially the same position in a paper I prepared for Cato’s 2011 Monetary Conference.  In that paper, I first counter various arguments against having the Fed purchase private securities, and then proceed to recommend a set of Fed operating-system reforms involving broad-based security purchases.  I figure that, with a little luck, Tyler may find those arguments and suggestions worthy of other economists’ attention.

Here is a quick summary of my paper’s arguments and suggestions.

Concerning the “pet corporate securities” argument, to give it that name, I find both it and the anti-Jacksonians’ original complaint against pet banks equally unpersuasive.  If those state banks to which Jackson distributed government’s funds yanked from the  second Bank of the United States were “pet banks,” just what, prey tell, was the B.U.S. itself while it held all of the government’s deposits, if not a single (and correspondingly more odious) government “pet”?

Likewise, if purchasing corporate bonds means favoring particular corporations, and venturing thereby into “fiscal” policy, isn’t “Treasuries only” not itself a means of shunting scarce credit to one particular economic entity — in this case, the federal government — at the expense of all the others?  Is there not, indeed, something positively Orwellian about the suggestion that, by buying Treasury securities, the Fed steers clear of “fiscal” policy?

Though they never heard of Orwell, the Fed’s founders would certainly have considered such talk perverse.  Far from seeing “Treasuries only” as a means for keeping the Fed and the fisc at arms length, they took precisely the opposite view: so far as they were concerned, to allow a central bank to purchase government debt was to risk having it become a tool of inflationary finance. Consequently they favored a “commercial paper only” rule, or rather a “commercial paper and gold only” rule, with a loophole allowing purchases of government paper only for the sake of stabilizing the Fed’s earnings at times of low discount activity.  Like all loopholes in the Federal Reserve Act, this one was not left unexploited for long.  Yet it was not until 1984 that the opposite, Treasuries only alternative took force.  Nor is Treasuries only the rule elsewhere.  The ECB, in particular, ordinarily accepts euro-denominated corporate and bank bonds with ratings of A- or better as collateral for its temporary open-market operations.

The operating system reform I recommended involved replacing both the discount window and the anachronistic and unnecessary primary dealer system with an arrangement resembling the Term Auction Facility (TAF) created in December 2007, at which the Fed auctioned off credit to depository institutions against the same relatively broad set of collateral instruments, including corporate bonds, accepted at its discount window.  To assure competitive allocation of credit among bidders offering different types of collateral, the facility could make use of a “product-mix” auction of the sort Paul Klemperer developed for the Bank of England.  To rule out subsidies and limit its exposure to loss, the Fed could also follow the Bank of England’s example by setting bid rates for the various types of eligible collateral, reflecting predetermined penalties or “haircuts.”  Finally, to allow emergency credit to be supplied as broadly as possible, and therefore in a manner fully consistent with Walter Bagehot’s last-resort lending principles, the Fed could open its auction facility to various non-depository counter-parties, including money market mutual funds.

Besides making liquidity traps relatively easy to avoid, as Tyler suggests, adopting such an alternative system would have many other advantages.  It would reduce the systemic importance of  present primary dealers.  It would guard against the risk of having the Fed gobble-up collateral that’s essential to private-sector credit creation.  It would allow a single operating system to meet both ordinary and emergency demands for credit.  Like the TAF, it would avoid the “stigma” of discount-window lending.  In fact, it would dispense entirely with the need for direct lending to troubled financial (and perhaps some troubled non-financial) institutions.  Most importantly, it would render any sort of ad-hoc central bank lending during financial crises otiose, and by so doing would bring the Federal Reserve System one step closer to being based on the rule of law, instead of the arbitrary rule of bureaucrats.

[Cross-posted from Alt-M.org]

While we at the Center for the Study of Science recommend you listen to the Cato Daily Podcast, well, daily, today’s edition may be of particular interest. Host Caleb Brown spoke with Senator James Inhofe (R-OK) about the Clean Power Plan, regulatory overreach and American competitiveness. While they didn’t delve much into climate science, they touched on the inadequacy of global climate agreements.

We don’t want to spoil all the fun, so take a look below–or, better yet, subscribe to the Cato Daily Podcast on your app of choice (iTunes / Google Play / CatoAudio).

The Clean Power Plan (Sen. James Inhofe)

New research on Louisiana’s voucher program revealed mixed results. Yesterday, the Education Research Alliance for New Orleans (Tulane University) and the School Choice Demonstration Project (the University of Arkansas) released four new reports examining the Louisiana Scholarship Program’s impact on participating students’ test performance and non-cognitive skills, level of racial segregation statewide, and the effect of competition on district-school students. Here are the key findings:

  • Students who use the voucher to enroll in private schools end up with much lower math achievement than they would have otherwise, losing as much as 13 percentile points on the state standardized test, after two years. Reading outcomes are also lower for voucher users, although these are not statistically different from the experimental control group in the second year.
  • There is no evidence that the Louisiana Scholarship Program has positive or negative effects on students’ non-cognitive skills, such as “grit” and political tolerance.
  • The program reduced the level of racial segregation in the state. The vast majority of the recipients are black students who left schools with student populations that were disproportionally black relative to the broader community and moved to private schools that had somewhat larger white populations.
  • The program may have modestly increased academic performance in public schools, consistent with the theory behind school vouchers that they create competition between public and private schools that “lifts all boats.” [Emphasis added.]

The positive impact on racial integration and evidence that competition improved district-school student performance are both positive signs, but the significant negative impact on the performance of participating students is troubling. (Ironically, the evidence suggests that the voucher program may have improved the performance of non-voucher students more than the voucher students.) That said, although the impact on student performance is negative, the second year results show improvement over the first year. 

What caused the negative effects is a topic of intense debate. Until NBER published a study on Louisiana’s voucher program last month, all the previous random-assignment studies had found neutral-to-positive effects on students’ test performance and student outcomes such as the likelihood of graduating high school and enrolling in college. Several education policy researchers (myself included) suspect that Louisiana’s high degree of regulations drove away higher-performing private schools, leaving only the most desperate private schools that were willing to accept intrusive government regulations in order to slow or reverse declining enrollment. Louisiana’s voucher program forbids private schools from charging more than the value of the voucher, requires an admissions lottery rather than the school’s own admissions standards, and mandates that schools administer the state standardized test. The findings of the latest study are consistent with this view, although they are not conclusive:

Less than one-third of the private schools in Louisiana chose to participate in the LSP in its first year, possibly because of the extensive regulations placed on the program by government authorities (Kisida, Wolf, & Rhinesmith, 2015) combined with the relatively modest voucher value relative to private school tuition (Mills, Sude & Wolf, 2015). Although it is only speculation at this point, the Louisiana Scholarship Program regulatory requirements may have played a role in preventing the private school choice program from attracting the kinds of private schools that would deliver better outcomes to its participants. 

However, other researchers, including the authors of the latest study, offer other plausible explanations. For example, it’s possible that the performance of private-school students suffered on the mandatory state test because the schools’ curriculum was not yet aligned with the state curriculum. If so, merely adjusting to the new test (rather than actual gains in learning) would explain at least a part of the improvement in performance in the second year. It’s also possible that reforms improving district and charter schools may have made the private schools look relatively worse. However, the authors not that there were negative effects outside of New Orleans (where the reforms over the last decade have been the most intense), so this does “not completely explain [the negative] results.”

Next Friday (March 4th) at noon, the Cato Institute will be hosting a policy forum exploring whether Louisiana-style school choice regulations are helpful or harmful. Neal McCluskey, director of the Cato Institute’s Center for Educational Freedom, will moderate a discussion featuring two of the recent study’s authors, Dr. Patrick Wolf of the University of Arkansas and Dr. Douglas Harris of Tulane University, along with Michael Petrilli, President of the Thomas B. Fordham Institute, and yours truly. The forum will be followed by a sponsored lunch.

Readers interested in attending can RSVP at this link.

If you can’t make it to the event, you can watch it live online at www.cato.org/live and join the conversation on Twitter using #SchoolChoiceRegs.

An important and timely paper from Columbia University economist Karl Mertens finds that amount of income reported on tax returns is highly sensitive to marginal tax rates, and that the effect is mainly from changes in real activity not tax avoideance.   Mertens estimates “elasticities of taxable income of around 1.2 based on time series from 1946 to 2012. Elasticities are larger in the top 1% of the income distribution but are also positive and statistically significant for other income groups… . Marginal rate cuts lead to increases in real GDP and declines in unemployment.”  Other recent research also shows that “higher marginal tax rates reduce income mobility” while eliminating higher tax brackets improves upward mobility.   Both Democrat candidates for the presidency, Sanders and Clinton, want to greatly increase marginal tax rates on high incomes and on realized capital gains. By contrast, all Republican candidates propose to reduce marginal tax rates.    Mertens’ research unambiguously predicets that economic growth would slow or stop under the Democrats’ proposed tax increases, but accelerate under Republicans’ tax reforms.  

Arguing that “It’s been clear that the detention center at Guantanamo Bay does not advance our national security,” and that “It undermines our standing in the world,” President Obama has at last presented a plan to close Gitmo. The plan Obama outlined today was already well-known in most of its particulars. After transferring the 35 detainees already eligible and quickly reviewing the threat posed by the rest, the United States would then seek to move the remaining detainees to American prisons and military bases. 

The arguments for closing Gitmo are powerful. As Obama himself has long argued, the facility has provided terrorists with a potent recruiting narrative. The tortured policy of labeling the prisoners non-combatants in order to circumvent Geneva Convention prohibitions on torture and the need for due process violated both the Constitution and American ideals of justice. As Obama noted today, “Keeping this facility open is contrary to our values. It undermines our standing in the world. It is viewed as a stain on our broader record of upholding the highest standards of rule of law.” Closing the facility will not only deprive terrorist organizations of recruiting material it will also save the United States a good deal of money.

Unfortunately, the reality is that Obama’s plan is unlikely to go anywhere fast. In 2010 Congress passed a ban on bringing detainees to domestic prisons and there is little support among Congressional Republicans for lifting the ban. Speaker of the House Paul Ryan responded by arguing that “It is against the law – and it will stay against the law – to transfer terrorist detainees to American soil.” Obama might seek to close Guantanamo through an executive order, but the legality of that approach is highly dubious, and even the White House acknowledges that it is unclear whether that would be a politically viable route. Representative Lynn Jenkins (R-Kan)  summarized the sentiment among Republicans in Congress: “Submitting a plan to close the prison at Guantanamo Bay is yet another sign that President Obama is more focused on his legacy than the will of the American people. Republicans and Democrats are united on this issue: bringing the inmates housed at Guantanamo Bay to the United States is a nonstarter.”

The immediate beneficiaries of Obama’s plan won’t be the detainees; it will be the leading Republican candidates, all of whom oppose the plan. Last December Donald Trump criticized Obama’s plan to close Gitmo, saying “I would leave it just the way it is, and I would probably fill it up with more people that are looking to kill us.” At a recent town hall in South Carolina Ted Cruz argued that “The people in Guantanamo at this point, it’s down to the worst of the worst. A really alarming percentage of the people released from Guantanamo return immediately to waging Jihad, return immediately to going back trying to murder Americans.” And during the GOP debate in January that followed word that the administration was preparing a plan for closing Gitmo, Marco Rubio seized the moment to propose how he would deal with Islamic State supporters:  “The most powerful intelligence agency in the world is going to tell us where they are; the most powerful military in the world is going to destroy them; and if we capture any of them alive, they are getting a one-way ticket to Guantanamo Bay, Cuba, and we are going to find out everything they know.”

That’s bad enough for Obama, but it might wind up worse for Hillary Clinton. Clinton is on the record repeatedly calling on Obama to speed up the process of closing the base. In a secret memo to Obama in 2013 Clinton argued that “We must signal to our old and emerging allies alike that we remain serious about turning the page of GTMO and the practices of the prior decade.” Though this plays well with Clinton’s Democratic base during the primaries, it will prove a touchier subject during the general election. Even though a November Washington Post/ABC News poll showed that the public trusts Clinton more than any of the Republican candidates to handle the threat of terrorism, polling on Guantanamo specifically shows that a consistent and sizeable majority of the public supports keeping Gitmo open for business.

In the short run the most likely outcome of this latest clash is a few news cycles dominated by Republican criticism of Obama’s plan and little change in the status quo. Obama may desperately want to close Gitmo before he leaves office, but Republican control of Congress and the presidential election will combine to make that impossible. Obama’s biggest legacy will be to have reduced the number of detainees and to have avoided sending any new detainees there on his watch. In the long run, however, the decision about whether to close Gitmo for good lies with the next president.

Last week, a man in Kalamazoo, Michigan went on a shooting rampage, killing six people seemingly at random.

The suspected shooter is a man named Jason Dalton, who reportedly owns several firearms.  Up until this point, Dalton had no criminal record and has apparently never been adjudicated mentally ill.  In legal terms, this means that Dalton would have had no problem passing a background check to purchase his firearms.

Despite this fact, President Obama took time this week to suggest that his gun control measures make it more difficult for would-be spree shooters to acquire firearms.

Speaking to the National Governor’s Association, President Obama claimed:

As many of you read, six people were gunned down in a rampage in Kalamazoo, Michigan.  Before I joined all of you, I called the mayor, the sheriff, and the police chief there, and told them that they would have whatever federal support they needed in their investigation.  Their local officials and first responders, by the way, did an outstanding job in apprehending the individual very quickly.  But you got families who are shattered today.

Earlier this year, I took some steps that will make it harder for dangerous people, like this individual, to buy a gun.  

There is no support for that statement.

As I detailed last month, President Obama’s executive actions on guns amounted to a lot more pomp and rhetoric than substance.  Reforms included a “clarification” of who the federal government will consider “engaged in the business” of selling firearms and thus who is required to perform background checks, some alterations to the way heavily-regulated items like machine guns and suppressors could be obtained, and a loosening of privacy protections on the sharing of mental health information between states and the federal background check system.

There was no reason at that time to believe that President Obama’s executive actions would have any substantial effect on mass shootings or the rate of gun crime generally, and that remains the case today.

It’s a truism that a person who can pass (or has already passed) a background check will not be prevented from acquiring a firearm by expanding the categories of consumers required to undergo checks.

 Spree shootings are a tragedy, and policymakers should be open-minded about how to solve such a horrifying problem. But any good policy must be rooted in logic and evidence rather than appeals to emotion and a general sense that “we have to do something.”

Far from proving President Obama correct about background checks, tragedies like this emphasize the same flaws in President Obama’s logic on gun crime and mass shootings that we’ve highlighted in the past:

For all the pomp and ceremony, nothing in the president’s proposals is going to put a dent in U.S. gun crime or even substantially change the federal legal landscape. 


The most disappointing aspect of the proposals is that there is so little in them to suggest that President Obama is willing to address any of the major drivers of gun crime in America.  The sad irony is that President Obama could do far more to protect American lives and clean up our streets by ending the drug war than by expanding background checks.  Criminals, from gang members to spree shooters, have no trouble passing checks, finding straw purchasers, or simply buying guns on the inherently unregulated black market.  As long as there are hundreds of billions of dollars changing hands in the illicit drug market every year, the black market for firearms and the violent competition for market shares will continue to claim thousands of lives annually and make a mockery of the idea of gun control.

Gun crime is a serious problem, and it deserves attention.  Unfortunately, these proposals do not offer effective solutions. 

Note:  David Wojick, who holds a doctorate in the history and philosophy of science, sent me this essay.  It is thought provoking and deserves a read.

The US National Science Foundation seems to think that natural decades-to-centuries climate change does not exist unless provoked by humans. This ignores a lot of established science.

One of the great issues in climate science today is the nature of long-term, natural climate change. Long-term here means multiple decades to centuries, often called “dec-cen” climate change. The scientific question is how much of observed climate change over the last century or so is natural and how much is due to human activities? This issue even has a well known name – The Attribution Problem.

 This problem has been known for a long time. See for example these National Research Council reports: “Natural Climate Variability on Decade-to-Century Timescales (NAP, 1995)” and “Decade-to-Century-Scale Climate Variability and Change (NAP, 1998). The Preface of the 1998 Report provides a clear statement of the attribution problem:

The climate change and variability that we experience will be a commingling of the ever changing natural climate state with any anthropogenic change. While we are ultimately interested in understanding and predicting how climate will change, regardless of the cause, an ability to differentiate anthropogenic change from natural variability is fundamental to help guide policy decisions, treaty negotiations, and adaptation versus mitigation strategies. Without a clear understanding of how climate has changed naturally in the past, and the mechanisms involved, our ability to interpret any future change will be significantly confounded and our ability to predict future change severely curtailed.

Thus we were shocked to learn that the US National Science Foundation denies that this great research question even exists. The agency has a series of Research Overviews for its various funded research areas, fifteen in all. Their climate change research area is funded to the tune of over $300 million a year, or $3 billion a decade.

The NSF Research Overview for climate change begins with this astounding claim:

Weather changes all the time. The average pattern of weather, called climate, usually stays the same for centuries if it is undisturbed.

This is simply not true. To begin with, there is the Little Ice Age to consider. This is a multi-century period of exceptional cold that is thought to have ended in the 19th century. Since then there have been two periods of warming, roughly from 1910 to 1940, and then from 1976 through 1998.  There’s real controversy about what happened since then.  Until our government joggled the measured ocean surface temperatures last summer, scientists could all see that warming had pretty much stopped—what happened has been attended to here, and to say the least, the new record is controversial. 

But the two agreed-upon warmings indeed are indistinguishable in magnitude—only the first one could not have been caused by increasing atmospheric carbon dioxide, because we had emitted so little by then.   If it were, i.e. if climate is that “sensitive”, it would be so hot now that there wouldn’t be a scientific debate on the Attribution Problem. 

Prior to the Little Ice Age there is good evidence that we had what is called the Medieval Warm Period, which may even have been as warm as today.

Thus it is clearly not the case that climate “stays the same for centuries.” So far as we can tell it has never done this. Instead, dec-cen natural variability appears to be the rule.

Why has NSF chosen to deny dec-cen natural variability? The next few sentences in the Research Overview may provide an answer. NSF says this:

However, Earth is not being left alone. People are taking actions that can change Earth and its climate in significant ways. Carbon dioxide is the main culprit. Burning carbon-containing “fossil fuels” such as coal, oil and gas has a large impact on climate because it releases carbon dioxide gas into the atmosphere.

NSF has chosen to promote the alarmist view of human-induced climate change. This is the official view of the Obama Administration. In order to do this it must deny the possibility that long-term natural variability may play a significant role in observed climate change, despite the obvious evidence from the Medieval Warm Period, the Little Ice Age and the early 20th century warming.  As an editorial this might be tolerable, but this is a Research Overview of a multi-billion dollar Federal research program.

NSF is supposed to be doing the best possible science, which means pursuing the most important scientific questions. This is what Congress funds the agency to do. But if NSF is deliberately ignoring the attribution problem, in order to promote the alarmism of human-induced climate change, then it may be misusing its research budget. This would be very bad science indeed.

In technology policy there is a standard rule that says the Government should not pick winners and losers. It appears we need a similar rule in science policy. In the language of science what we seem to have here is the National Science Foundation espousing one research paradigm – human induced climate change and no other cause – at the expense of a competing paradigm – long-term natural variability.

Thomas Kuhn, who coined the term paradigm for the fundamental assumptions that guide research, pointed out that it is common for the proponents of one paradigm to shield it from a competitor. NSF’s actions look like a clear case of this kind of paradigm protection.

An Uber driver is accused of killing six people and wounding two others in a shooting rampage that took place in Kalamazoo, Michigan on Saturday. The victims seem to have been picked at random and were shot at three different locations. An unnamed source told CNN that the suspected killer, Jason Dalton, completed rides in between the shootings, which took place over a seven-hour period. It might be tempting to think in the wake of the Kalamazoo shooting that Uber should reform its background check system, but this would be an overreaction to a problem a different background check process wouldn’t have solved. 

Uber screens its drivers by checking county, state, and federal criminal records. As I explained in my Cato Institute paper on ridesharing safety, Uber is oftentimes stricter than taxi companies in major American cities when it comes to preventing felons and those with a recent history of dangerous driving from using its platform. And Dalton did pass Uber’s background check.

However, it’s important to keep in mind a disturbing detail: according to Kalamazoo Public Safety Chief Jeff Hadley, the suspected shooter did not have a criminal record and was not known to the authorities. In fact, Dalton, a married father of two, does not seem to have prompted many concerns from anyone. The Washington Post reports that Dalton’s neighbors noticed “nothing unusual” about him, although the son of one neighbor did say that he was sometimes a “hothead.”

That an apparently normal man with no criminal history can murder six people is troubling, but it’s hard to blame Uber for this. It’s not clear what changes Uber could make to its background check system in order to prevent incidents like the Kalamazoo shooting. What county court record, fingerprint scan, or criminal database would have been able to tell Uber that a man with no criminal record would one day go on a shooting rampage?

The Kalamazoo shooting is a tragedy, but it shouldn’t distract from the fact that Uber and other ridesharing companies like Lyft have features such as driver and passenger ratings as well as ETA (estimated time of arrival) sharing that make their rides safer than those offered by traditional competitors.

With the information we have it looks like Dalton could have passed a background check to have been a taxi driver or a teacher. While perhaps an unnerving fact, criminal background checks cannot predict the future, whether they are used to screen potential school bus drivers, police officers, or rideshare drivers. 

The European Union faces so many different crises that it has been–until now–impossible to predict the precise catalyst for its likely demise. The obvious candidates for destroying the EU include the looming refugee crisis, the tottering banking structure that is resistant to both bail-outs and bail-ins, the public distrust of the political establishment, and the nearly immobilized EU institutions.

But the most immediate crisis that could spell the EU’s doom is Prime Minister David Cameron’s failure to wrest from Brussels concessions that he needs in order to placate the increasingly euro-skeptic British public. Prime Minster Cameron has failed because the EU cannot grant the necessary concessions. There are three special reasons, as well as one underlying reality, that have made Cameron’s task impossible.

First, a profound reform of the EU-British relationship, which Cameron initially promised, was always impossible, because it required a “treaty change” in each of the twenty-eight EU member-states. That could not happen without approval either by parliamentary votes or, as this is especially difficult, a national referendum that Brussels dreads. There is simply no appetite in Europe to run such risks just to appease the UK.

Second, Cameron was willing to settle for a compromise but failed to obtain most of what he needed, because Brussels fears that other member states will follow the British example and demand similar accommodations. That would result in a “smorgasbord EU” in which each country could pick and choose what serves its own best interests. In other words, it would make a mockery of “an ever closer Europe.”

And so, Cameron ended up with what one Conservative Member of Parliament, Jacob Rees-Mogg, called a “thin gruel [of a reform that] has been further watered down.”

To make matters worse, Cameron’s “thin gruel” will require a vote by the EU Parliament after the British referendum takes place. As a sovereign body, the EU Parliament will be able to make changes to any deal approved by the British public–an uncomfortable and inescapable fact that the advocates of “Brexit” will surely utilize to their advantage during the referendum campaign.

At the root of the conundrum faced by the British and European negotiators is a struggle between a national political system anchored in parliamentary supremacy and a supra-national technocracy in Brussels that requires pooling of national sovereignty in order to achieve a European federal union. The public debate over the referendum is driving this fundamental incompatibility home. The choice between one and the other can no longer be deferred.

The most common image of a failing Europe is that of something falling apart, unraveling, crumbling away, or even evaporating into thin air. This imagery is misleading. Following the British referendum, and perhaps even before it, the EU will most likely implode.

Once the odds of Britain’s exit from the EU increase from merely likely to near-certain, the rush for the exits will begin in earnest. It is impossible to predict which of the remaining member-states will lead the charge, but the floodgates are sure to open. Those pro-EU governments that still remain in office are under siege in almost every member-state. As in Britain, the establishment parties will have to appease increasingly hostile electorates by getting a “better deal” from the EU. Or they could face electoral oblivion.