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During the election campaign, Donald Trump complained that “our airports are like from a Third World country.” Indeed, America’s airports could be a lot better. The problem is that they are virtually all owned by governments and run as bureaucracies.

By contrast, many airports abroad are private and run in a more entrepreneurial fashion. Almost half of European Union airports have been privatized, including the main airports in Antwerp, Budapest, Edinburgh, Glasgow, Lisbon, London, Birmingham, Brussels, Copenhagen, Naples, Rome, Venice, Vienna, and Zurich.

Robert Poole and I explore airport reforms in a new Cato study, “Privatizing U.S. Airports.” We examine the early history of U.S. airports, discuss global reform trends, explain the advantages of privatization, and describe the needed policy changes.

In the early years of commercial aviation, the major airports in numerous U.S. cities were privately owned. Unfortunately, government policies squeezed out the private airports over time. We can and should correct that mistake, and bring back the entrepreneurs to the airport industry.

We don’t know yet how transportation policies will shape up under the new president, but the incoming administration should know that airports and air traffic control are ripe for major reforms.

Airports are a crucial part of America’s infrastructure. Privatization would increase efficiency and innovation, and thus generate benefits to travelers and the broader economy.

“Well we’re living here in Allentown
And they’re closing all the factories down
Out in Bethlehem they’re killing time
Filling out forms
Standing in line
Well our fathers fought the Second World War
Spent their weekends on the Jersey Shore
Met our mothers in the USO
Asked them to dance
Danced with them slow
And we’re living here in Allentown.”

– Billy Joel, “Allentown,” 1982

Nearly 35 years after the release of Billy Joel’s wistful lament about the decline of iconic Bethlehem Steel and the selfless virtues of America’s “Greatest Generation” along with it – the U.S. steel industry may be getting the last laugh. Yesterday, former Nucor Steel CEO Dan DiMicco and longtime Washington trade attorney Robert Lighthizer, who has devoted much of his professional career to building walls between foreign steel and the U.S. companies that want to buy it, were appointed heads of President-elect Trump’s “Landing Team” at the Office of the United States Trade Representative.

To those who have been holding out hope that Trump’s anti-trade campaign bluster would moderate before it could be converted to policy, the selection of DiMicco and Lighthizer is pretty devastating news. Neither has met a tariff he didn’t like or a trade agreement he did. To the non-political staff at USTR, the DiMicco/Lighthizer duo must feel like a real poke in the eye. After all, the mission of the agency is “to work toward opening markets throughout the world to create new opportunities and higher living standards.” The staff is generally committed to trade liberalism and good will among nations and their sensibilities are informed by foreign service backgrounds.  DiMicco and Lighthizer bring an enforcement and prosecution ethos to the USTR, which will send a lot of the existing staff to the exits, while ensuring that the agency’s budget is devoted primarily to bringing complaints against our trade partners, rather than negotiating new and better deals.

Of course, Trump mistakenly cites the U.S. trade deficit as evidence that the United States is losing at trade.  We are losing, he bellows, because our trade agreements are disastrous. And, they are disastrous, he reasons, because U.S. negotiators always get outsmarted by their crafty foreign counterparts. What better way not to get outsmarted than to appoint people who would take a wrecking ball to existing agreements instead of crafting new ones?

For reasons unsupported by facts, DiMicco abhors the North American Free Trade Agreement and wants it shredded.  He also wants the United States to withdraw from the Trans-Pacific Partnership – which, yesterday, became one of Trump’s Day One priorities. Trump has been outspoken about his intentions to declare China a currency manipulator and to respond with punitive unilateral measures. To the extent that Trump’s actions are constrained by U.S. treaty commitments under the World Trade Organization, Lighthizer has a long history of challenging the veracity of the WTO dispute settlement system, which he claims embodies an anti-American bias. He has long advocated for closer scrutiny and, if warranted, U.S. withdrawal from the WTO.

Ten years ago, I debated Lighthizer in this week-long back-and-forth hosted by the Council on Foreign Relations. His affinity for wanting to bend the WTO to be more responsive to U.S. demands (i.e., “All animals are equal but some are more equal than others”) was very much on display then.

The U.S. steel industry has been one of America’s most protectionist and litigious industries for more than a century. Its model was never to compete on economics or commercial considerations. It was always to invest in K Street and use the levers of politics to cordon off the U.S. market for domestic steel. As a trade attorney, Lighthizer brought hundreds of antidumping and countervailing duty cases against foreign producers with the aim of raising the cost of foreign steel to downstream, steel-consuming U.S. industries, such as appliance, automobile, and pipe and tube manufacturers. Often testifying in hearings before the U.S. International Trade Commission, where Lighthizer argued for the imposition of tariffs, was Dan DiMicco, in his capacity as Nucor CEO.

It’s not that the steel industry isn’t entitled to its day in court. The problem is that the industry’s interests are so overrepresented in Washington. After all, “primary metal” manufacturing (which is a sector that includes more than just steel-making) accounted for $56 billion of value-added output last year. That’s a lot – until you recall that total value-added in the U.S. economy last year (GDP) was over $18 trillion. In other words, the direction of the administration’s trade policy is being shaped by two men who speak on behalf of interests that account for less than 0.3 percent of the U.S. economy. What about agricultural interests?  What about the tech industry? Pharmaceuticals? Equipment manufacturers? Professional services? Will the interests of the other 99.7 percent of the U.S. economy have a voice in the formulation of trade policy? 

Most of us don’t live in Allentown.

I have been vigorously recommending that President-elect Trump replace Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB). I still think that replacing Director Cordray is necessary for reasons I’ve enumerated elsewhere; but on Friday the CFPB filed a petitionfor a rehearing of a recent and crucial case. So it’s time to talk about the legal hurdles President Trump will have to clear before he can install a new director. It is possible that there will be a long road ahead.

To understand these hurdles, we have to go back to the CFPB’s founding document, the Dodd-Frank Act. In Dodd-Frank, the Bureau was established as an independent agency. That means that although the President appoints the Director, and although that appointment must be confirmed by the Senate, the President’s ability to remove the director is very limited. Under Dodd-Frank, President Trump would be able to remove Director Cordray only for cause — e.g., for neglecting his duty or actual bad behavior. He would not be able to remove him because the two disagreed on policy or the direction the agency should take.

The rules for an independent agency can be contrasted with those for an executive agency, such as the Department of Justice or the Department of the Treasury. The Attorney General, for example, can be removed by the President at will. And there have been examples in the past when a cabinet member has resigned over policy disagreements with the sitting President.

The CFPB is not the only independent government agency. But it is unusual in that it is headed by a single individual. The Securities and Exchange Commission (SEC), for example, is an independent agency. Its Commissioners can be removed by the President only for cause. The Chair of that agency, however, serves as Chair at the President’s will. If President Obama wanted to remove the current Chair Mary Jo White, he could remove her from her position as Chair but could not prevent her continuing as a member of the Commission for the duration of her term.

All of this changed, however, last month when a federal appeals court ruled the CFPB’s structure unconstitutional. In that case, the court found that, unlike a multi-seat commission where commissioners must work together, there is no check on the Director’s power. The court ruled that, to cure the constitutional defect, the Director must serve at the will of the President. That is, the court said that the President can fire the Director for any reason at all, including a disagreement on policy.

It is customary for officials who serve at the pleasure of the President to step down when a new President is elected. For example, Chair White has announced she will step down from the SEC at the end of President Obama’s term.

But Director Cordray isn’t stepping down. Instead he’s doubling down on the law suit. Here things get technical, so bear with me. In a federal appeals court, a case is first heard by a panel of three judges. They confer and issue an opinion. This opinion is binding, but can be appealed. The first step in that process is for the losing party to seek what is called a rehearing en banc. That is when all of the judges on the court — in this court, the D.C. Circuit, there are 11 active judges — hear the case together and then issue an opinion that supersedes the opinion already issued by the three-judge panel. From there, the losing party can seek to have the case heard by the Supreme Court. No one has a right to either a rehearing en banc or a hearing before the Supreme Court; the judges and justices have discretion to take what cases they want.

Given the importance of the CFPB’s case, it is likely that Director Cordray’s petition will be granted. A clever person would say “aha, but that might take awhile and once Trump is inaugurated, he can direct the CFPB to drop its suit!” This is indeed a clever thought, but it leaves out one other important legal tool: the injunction. An injunction would prevent President Trump from removing Director Cordray from office until the case is over. To be granted an injunction, Director Cordray would have to show, among other things, that he would suffer irreparable harm without it. Since the entire case would likely end and Director Cordray would likely be booted out of office if there were no injunction, it is likely that the court would grant it. Especially given the political and public interest issues at stake.

Hearing the case en banc, the D.C. Circuit may decide that it doesn’t have to decide whether the CFPB is unconstitutional. The judiciary typically does not address constitutional questions unless it has to. The opinion issued by the three-judge panel was not unanimous; one judge dissented, saying that the CFPB was wrong in how it had handled the specific case, and that since the court could find against the CFPB on those grounds, it should not consider the question of the agency’s structure. It is possible that the entire court would agree.

As for what might happen if the case reaches the Supreme Court, that’s still anyone’s guess. It will depend on who’s sitting on the bench at that time.

What can be done, then? There are several options. First, President Trump could decide to fire Director Cordray for cause. Under Dodd-Frank, the President can remove the Director “for inefficiency, neglect of duty, or malfeasance in office.” It can be argued (and I have myself argued) that Director Cordray has violated due process in running the agency and has even been abusive in his use of the considerable power he holds. It would be a bold move on the part of the President to remove Director Cordray for cause, but if any President were to make bold moves, it would be this one. Second, Congress could pass legislation to reform the Bureau. That would most likely take the form of changing it into a commission with presumably a structure similar to the SEC’s: a five-member seat, with a chair serving at the pleasure of the President, and with a requirement that no more than three seats be filled by members of the same party. Third, President Trump could wait for Director Cordray’s term to expire, which will happen in July 2018.

It would be nice to think there would be a new Director at the CFPB come 2017, but in fact there is a long road ahead. Director Cordray’s announcement Friday just confirmed it.

[Cross-posted from Alt-M.org]

In Federalist 10, James Madison warned of “a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens or to the permanent and aggregate interests of the community.” These groups—“factions” in Madison’s terms—come together to seek concentrated benefits from favorable legislation and regulation rather than competing in the marketplace, while spreading the costs throughout society.

While Madison conceded that such interests could not be stopped completely, he suggested that certain steps could be taken to mitigate the “effects” of these groups, and the damage that they can do to the public interest. The First Amendment is one such protection.

The New York legislature, however, ignored the First Amendment rights of both merchants and consumers when—at the behest of the credit-card lobby—it passed a law restricting how retailers can convey pricing schemes, as well as the public’s right to know about them. New York’s no-surcharge law—like those in 10 other states—insulate credit-card companies from consumer knowledge about who is actually causing the higher prices on goods when they use their credit card (“swipe fees”). The law does this not by restricting the merchants’ ability to charge different prices as between cash and credit payments—that’s legal everywhere—but by regulating the communications about the different prices.

To put it simply: the law allows merchants to offer “discounts” to cash-paying customers, but makes it a crime to impose economically equivalent “surcharges” on those who use plastic. By mandating how these merchants convey their pricing structure, New York is restricting speech on the basis of its content, which would seem to be an obvious First Amendment violation.

A federal district court agreed—as have two other federal courts, including the U.S. Court of Appeals for the Eleventh Circuit when it struck down a similar Florida law. The district court held that the law “plainly regulates speech”—not conduct—by drawing a line between prohibited “surcharges” and permissible “discounts” based solely on words and labels. The Second Circuit disagreed, however, holding that the law regulates “merely prices,” not speech. Cato filed an amicus brief urging the Supreme Court to take up this important case, and the Court has agreed to do so.

Along with the Pacific Legal Foundation, we have now filed another brief asking the Court to rule that collusion between business interests and state government can’t be used to circumvent constitutional rights. Indeed, the Framers sought to protect speech from the type of cronyism and rent-seeking the New York’s no-surcharge law manifests.

We also argue that the Court should clarify that the First Amendment covers speech even if it involves commercial matters. When legislatures abridge these protections, judges should apply the highest form of scrutiny to these laws rather than limply deferring to majoritarian will. The law not only violates the First Amendment rights of merchants and consumers, however, but also—as often happens with laws based on cronyism—has disproportionate effects on lower-income individuals. When merchants are not allowed to effectively communicate the price difference between cash and credit, they will, in some instances, charge the higher credit price for users of both. This creates a perverse regressive subsidy from poorer consumers—who are more likely to use cash than those with a higher income—by making those cash users pay for swipe fees they could avoid if merchants could convey the price difference. 

The Framers foresaw—and sought to protect against—these types of cronyist effects, so the Supreme Court should make clear that the First Amendment will protect individuals from factions.

The Supreme Court will hear Expressions Hair Design v. Schneiderman early in the new year.

Amtrak issued its F.Y. 2016 unaudited financial results last week with a glowing press release claiming a “new ridership record and lowest operating loss ever.” Noting that “ticket sales and other revenues” covered 94 percent of Amtrak’s operating costs, Amtrak media relations called this “a world-class performance for a passenger carrying railroad.” The reality is quite a bit more dismal.

Many new high-tech firms attract investors despite losing money, but a 45-year-old company operating an 80-year-old technology shouldn’t really brag about having its “lowest loss ever.” The “world-class performance” claim is based on the assumption that passenger trains all over the world lose money, which is far from true: most passenger trains in Britain and Japan make money, partly because they are at least semi-privatized.

Moreover, a close look at the unaudited report reveals that Amtrak left a lot of things out of its press release: passenger miles carried by Amtrak declined; ticket revenues declined; and the average length of trip taken by an Amtrak passenger declined. The main reasons for Amtrak’s positive results were an increase in state subsidies (which Amtrak counts as passenger revenue) and a decrease in fuel and other costs.

Ridership grew by 1.3 percent, but passenger miles fell because the average length of trips fell by 3.1 percent. One of the biggest drops in trip lengths was on the New York-Savannah Palmetto. Starting at the beginning of F.Y. 2016, Amtrak added stops at Metropark, New Brunswick, Princeton Junction, and Baltimore-Washington Airport, effectively turning the supposedly long-distance train into a Northeast Corridor train. In 2015, the train’s average trip length was 396 miles, but in 2016 that dropped to 257 miles.

A decline in passenger miles means more empty seats. In 2015, Amtrak filled 51.4 percent of its seat-miles; in 2016, this fell to 50.0 percent. In other words, the average Amtrak train is half full; when was the last time you were on a half-full airliner? The biggest declines were on the Washington-Richmond state-supported train, the Seattle-Los Angeles Coast Starlight, and the Auto Train.

Some trains did show an increase in passenger miles. One of the biggest increases was the Chicago-Indianapolis Hoosier State, which saw an 11 percent increase in passenger miles and a 16 percent increase in revenues. This train is supported by Indiana, which got fed up with Amtrak service and contracted it out to another operator, Iowa Pacific. Amtrak is a “partner” because it allows people to make reservations on the train from its web site. But the lesson may be that privatization (or semi-privatization) can result in bigger ridership gains than Amtrak.

The biggest increase in Amtrak’s revenue was state subsidies for trains such as Washington-Norfolk, Chicago-St. Louis, Seattle-Eugene, and the California trains. In 2015, these trains earned $1.62 in total revenues for every $1 in actual ticket revenues; in 2016, this grew to $1.76 per dollar. Most of the difference between total revenues and ticket revenues is state subsidies, which grew from $222.9 million to $227.5 million. 

Decreasing costs, not increasing revenues, accounted for most of the increase in the share of operating costs covered by revenues. Fuel costs declined by $53 million. Wages fell by $12 million (though executive salaries grew by $17 million). The biggest savings was a $79 million decline in employee benefits, due to late F.Y. 2015 cuts in both pensions and health benefits.

The focus on the share of operating costs that is covered by revenues conveniently ignores the fact that not all costs are operating costs. Amtrak reported ticket revenues of $2.1 billion and total expenses of $4.2 billion, so passenger fares actually covered just 50 percent of total costs. There’s a big difference between 94 percent and 50 percent.

That difference is largely due to an issue that I’ve noted before, which is that Amtrak has defined away a lot of operating costs by calling them capital costs. It’s also difficult to tell how much Amtrak is reducing costs by deferring maintenance on its infrastructure and rolling stock.

The truth is that not much is different from 2015. Amtrak still requires well over a billion dollars in federal subsidies per year. That makes Amtrak a world-class money loser, just like most European state-owned railroads. Despite the implicit promise of “declining operating losses,” that’s not going to change anytime soon unless Congress kills the program.

On Friday, the Heritage Foundation held a conference entitled “Budget Process Reforms in the Next Congress.” Paul Winfree organized the event and provided opening remarks.

The federal budget process is a mess. Congress does not pass bills on time, and then jams huge omnibus measures through at the last minute. Spending exceeds revenues by $600 billion a year and rising. Congress does not scrutinize programs to see whether the benefits actually outweigh the costs. And most of the budget grows on auto-pilot, allowing politicians to pretend that they are not responsible for the government’s massive debt.

I was on the first panel, which looked at budgeting lessons from other countries. Barry Poulson and John Merrifield discussed Switzerland’s “debt brake” and proposed that the U.S. federal government adopt a similar budget cap. Dan Mitchell also likes the Swiss debt brake. In my remarks, I agreed that a cap was a good idea, but argued that a simpler restraint would be better, such as a 3 percent annual growth limit on total outlays.

What we really need is for Congress and incoming President Trump to focus on eliminating low-value programs. I provided evidence that politicians are capable of major spending cuts. In particular, Canada cut federal spending from 23 percent of GDP in the early 1990s to 14 percent by 2015. (Unfortunately, Canada has recently elected a government that seems to believe that deficit spending and debt helps the economy, despite the country’s own experience over two decades that shows the opposite).

On the second panel, former federal budget official Marcus Peacock described how federal agencies tend to maximize their costs, while private businesses focus on minimizing their costs and improving efficiencies. Fiscal restraint can lead to innovation, he argued.

On the third panel, Rick May and George Everly of the House and Senate Budget Committees, respectively, described Republican efforts to overhaul congressional budget procedures. Background materials on these efforts are here.

If you are interested in budget issues and enjoy free lunches, please attend our November 30 panel on Capitol Hill featuring Senator James Lankford. The senator will describe wasteful programs he found in the budget, and experts will discuss spending-cut opportunities during the Trump administration.

President-elect Donald Trump. That’s a phrase I never expected to see. Like most Washingtonians, journalists, and political observers around the country, I never took his candidacy seriously. And now here we are, in thoroughly uncharted waters. I don’t think we’ve ever had a president with less apparent knowledge of or interest in policy, which makes it difficult to assess the direction of policy over the next few years. The few issues that did seem to motivate Trump were strikingly unattractive from a libertarian perspective, notably his hostility to international trade and immigration.

Back in January I wrote this in a National Review symposium:

From a libertarian point of view—and I think serious conservatives and liberals would share this view—Trump’s greatest offenses against American tradition and our founding principles are his nativism and his promise of one-man rule.

Not since George Wallace has there been a presidential candidate who made racial and religious scapegoating so central to his campaign. Trump launched his campaign talking about Mexican rapists and has gone on to rant about mass deportation, bans on Muslim immigration, shutting down mosques, and building a wall around America. America is an exceptional nation in large part because we’ve aspired to rise above such prejudices and guarantee life, liberty, and the pursuit of happiness to everyone. Equally troubling is his idea of the presidency—his promise that he’s the guy, the man on a white horse, who can ride into Washington, fire the stupid people, hire the best people, and fix everything. He doesn’t talk about policy or working with Congress. He’s effectively vowing to be an American Mussolini, concentrating power in the Trump White House and governing by fiat. It’s a vision to make the last 16 years of executive abuse of power seem modest.

Nothing much changed over the ensuing 10 months. Except that Trump won the election. He is now president-elect, and scholars and activists on all sides are waiting to see what his actual policies will be. Some of my friends are excited about the prospects for tax cuts, deregulation, repeal of Obamacare, the appointment of conservative or classical liberal Supreme Court justices, and a change in our interventionist foreign policy. Others—and sometimes the same people—worry about threats to world trade and an open society, religious tests, and a president who seems vindictive, inclined to conflate his private business with public affairs, and predisposed toward an authoritarian mindset.

I worry that Americans across the political spectrum are fulfilling one of Hayek’s warnings in The Road to Serfdom:

We must here return for a moment to the position which precedes the suppression of democratic processes and the creation of a totalitarian regime. In this stage it is the general demand for quick and determined central government action that is the dominating element in the situation, dissatisfaction with the slow and cumbersome course of democratic processes which make action for action’s sake the goal. It is then the man or the party who seems strong and resolute enough to ‘get things done’ who exercises the greatest appeal.

Clearly that was part of Trump’s appeal: “I alone can fix it.” But President Obama made the same point when he said, “We can’t wait for Congress to do its job, so where they won’t act, I will.” Hillary Clinton made the same promise to her supporters. 

President Obama, like President George W. Bush before him, built up the power of the presidency and the potential for abuse. Now he is handing that powerful presidency to a man he declared unfit to hold such power. Libertarians, liberals, and constitutional conservatives need to come together to rein in the powers of the executive and restore Congress as the constitutionally designated legislative body. Some conservatives understand that. Here’s Michael Gerson in the Washington Post:

In Federalist No. 10, James Madison says that we can’t always assume the existence of “enlightened statesmen.” And, by golly, he got that one right. The Constitution is designed to channel and balance conflicting interests, making the whole system less vulnerable to a bad leader. The founders might have been appalled by the election of a Trump-like president; they would not have been surprised by it….

Republicans will genuinely agree on parts of Trump’s agenda. But the republic is likely to depend, at certain defining moments, on stubborn Republican institutionalists willing to defy the wrath of populists. Democrats may find this unlikely. It is incumbent on GOP leaders to prove them wrong.

George Will also sought hope in the principles the Republican party proclaims:

For constitutional conservatives, the challenge is exactly what it would have been had Clinton won: to strengthen the rule of law by restoring institutional equilibrium. This requires a Republican Congress to claw back from a Republican executive the legislative powers that Congress has ceded to the administrative state, and to overreaching executives such as Obama, whose executive unilateralism the president-elect admires.

We also need to make clear that America’s founding principles of liberty, limited government, and equality under the rule of law apply to all Americans. Many conservatives and libertarians had a good time mocking the “special snowflakes” on elite college campuses who were so traumatized by Trump’s election that they needed exams canceled and therapy dogs brought in. They’re an easy target—smart, affluent students in the best colleges in the richest country in the history of the world unable to handle losing an election. But as Radley Balko said on Twitter, imagine being a Latino student when the president-elect has promised to deport 11 million Latinos. Or a Muslim student worried that the next president views you as a terrorist. Or a black student who fears that the police are going to read the president and his attorney general as indifferent to police abuse. Republicans say they don’t want to appeal to people as racial blocs, they want to implement policies that benefit all Americans. Then they might take a leaf from Hillary Clinton’s concession speech:

Let’s do all we can to keep advancing the causes and values we all hold dear….

And breaking down all the barriers that hold any American back from achieving their dreams. We spent a year and a half bringing together millions of people from every corner of our country to say with one voice that we believe that the American dream is big enough for everyone.

For people of all races, and religions, for men and women, for immigrants, for LGBT people, and people with disabilities. For everyone.

Libertarians believe that. I hope that conservatives and Republicans and even President-elect Trump will say—and demonstrate—that they believe it, too.

Whatever the misgivings I had about candidate Trump—and candidate Clinton—the election is over. Donald Trump will be the next president. Like all Americans, my colleagues and I will deal with that. I hope that when Trump puts his hand on the Bible and recites George Washington’s oath of office, he will indeed be inspired to put campaign rhetoric behind him and to preserve, protect and defend the Constitution of the United States. In 1968 the Washington Post columnist Herblock, who had savaged Richard Nixon for two decades, usually drawing him with a sinister 5 o’clock shadow, drew a cartoon depicting his office as a barbershop and wrote, “This shop gives to every new president of the United States a free shave.”

In January we will publish the 8th edition of the Cato Handbook for Policymakers, a collection of 80 chapters of policy advice ranging from tax reform and health care to foreign policy and congressional governance. We trust that members of both parties in Congress and the administration will be seeking to implement policies that will enhance the liberty, security, and prosperity of the American people, and that they will thus take an interest in our recommendations. And we will also remember that eternal vigilance is the price of liberty.

Discussion of President-elect Trump’s approach toward Russia, and what that means for U.S. policy in the Syrian civil war, is heating up. Last week, Senator John McCain warned Trump that “the price of another ‘reset’ would be complicity in Putin and Assad’s butchery of the Syrian people.”

Donald Trump doesn’t necessarily see it that way. During the campaign, he tangled with his running-mate Mike Pence over Syria, and late last week Trump admitted that he “had an opposite view of many people regarding Syria,” and suggested that he would withdraw support for anti-Assad rebels, and focus on fighting ISIS.

Although he sometimes speaks derisively of regime-change wars and nation building, Donald Trump is hardly an anti-war dove and there are reasons to believe that his administration will be quite hawkish. At a minimum, he is likely to be receiving advice from many establishment voices who have been urging the U.S. government to play a much more active role in the Syrian civil war.

The president-elect should go out of his way to consider other perspectives. President Obama was caught between wanting to see Bashar al-Assad’s regime overthrown, but not wanting to see violent extremists take its place (for example, Jabhat Fatah al-Sham, formerly known as Jabhat al-Nusra). Unsurprisingly, the Obama administration’s efforts to arm the few factions that cleared the vetting process were an abject failure.

Despite the anxiety surrounding the election, and the expectations that Hillary Clinton would have substantially increased U.S. military intervention globally, the great irony is that Clinton’s foreign policy vis-à-vis Russia and Syria might not have been all that different from Trump’s. Clinton’s so-called smart power would have struggled to find the moderate elements capable of prevailing in the Syrian civil war, and would have struggled to keep them alive once found. She, too, might have dropped the demand that Assad and his followers evacuate the country, and tacitly worked with Russia to target the very worst extremists, including ISIS, a group that poses a threat not merely to Assad, but to many others around the world.

Clinton also would have confronted a skeptical Congress, reflecting the sentiments of a skeptical public. As I note over at The Skeptics, “Some in Congress have pushed back against the executive branch’s occasional zeal for intervention in Syria,” and that is likely to continue. Recall that:

In the late summer and fall of 2013, members of Congress were flooded with phone calls urging them to block U.S. military action there. Obama got the message too, and backed away from his ill-advised red line that would have entailed direct U.S. military action in the civil war.

But the Obama administration continued to funnel money to some anti-Assad rebels. Since then, a few in Congress have tried to cut off funds for the so-called “Syrian Train and Equip” program. An amendment to the Defense Appropriations Bill sponsored by Reps. Tulsi Gabbard (D-HI) and Austin Scott (R-GA) garnered 135 votes from both Republicans and Democrats, despite opposition from party leaders and the White House. It is reasonable to believe that a similar effort would fare even better in the post-election environment.

You can read the whole thing here.

You Ought to Have a Look is a regular feature from the Center for the Study of Science.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary.

 —

Last week in this space, we highlighted a couple of areas where burdensome carbon dioxide policies exist that we hoped were not being overlooked by the Trump transition and planning teams in their push to reverse the more prominent Obama Administration actions like the Paris Climate Accord and the Clean Power Plan.

We want to draw a bit more attention to one of these—overturning federal regulations that were handed down on greenhouse gas regulations offered by the Department of Energy (DOE) and the EPA.

Wayne Crews, vice president for policy at the Competitive Enterprise Institute has a couple of great articles (see here and here) describing how this can be done through elements of the Congressional Review Act (CRA), which was passed in 1996. The beauty of using the CRA is that it only requires a simple majority vote (i.e., no worries of a filibuster) in Congress. To date, the CRA has been pretty ineffective at overturning “midnight rules” (in this case rules finalized since about mid-May) because the incoming president would veto them. But with Trump’s ascendency, this should not be the case. Crews has compiled, and is maintaining, a running list that is currently 140+ items strong (and growing) of “Significant Federal Rules Containing Potential Candidates for Trump Administration Congressional Review Act Resolutions of Disapproval.” There are many among them that either directly regulate greenhouse gas emissions or include (improperly in our estimate) the so-called “social cost of carbon” on the benefits side of the cost/benefit analyses that are used to support greenhouse gas reductions. These misguided and ill-informed should be prime targets for Congressional undoing.

We also want to highlight a couple of other pieces that get into the technical (or legal) details of how Trump may go about disassembling elements of Obama’s Climate Action Plan. These include analysis by:

Andrew Grossman: (Cato podcast) “Undoing Executive Action in a Trump Presidency

David Bookbinder and David Bailey: “Does Trump Spell Climate Doom?”

Greenwire’s Amanda Reilly: “Clean Power Plan: Rule’s demise looms, but how Trump will ax it remains unclear

Climatewire’s Jean Chemnick: “Paris Agreement: Here’s what could happen under Trump

And a good overview by Greenwire’s Robin Bravender: “Can Trump deliver and immense energy, climate promises?

It worth reading through these if you want to familiarize yourself with the myriad ways that the Trump Administration may clearing the climate policy slate.

And finally, the hard environmental left continues to fret about what is going to come to pass under the new Trump Administration. Much of the fretting is about whether or not Trump decides that “turnabout is fair play” when it comes to matters like research funding, research direction, respect of opposing views, personal attacks on scientists, etc. The new Administration’s approach, in fact, may offer refreshing new directions in both science and policy that were actively oppressed under the Obama Administration. A couple of commentaries over the past week cautiously embrace such possibilities. While we may not agree with everything that is being expressed in these articles, we highlight them because their authors were not afraid to offer at least a glimmer of (cautious) optimism for opportunity. They include essays by:

Dan Sarowitz: “Science and innovation policies for Donald Trump

Pat Michaels: “Trump Should Shine Spotlight on Shrouded Climate ‘Science’

And those ideas expressed by Judy Curry in this article “Climate scientists brace for funding battles under Trump

You ought to have a look!

The Internal Revenue Service has filed a “John Doe” summons seeking to require U.S. Bitcoin exchange Coinbase to turn over records about every transaction of every user from 2013 to 2015. That demand is shocking in sweep, and it includes: “complete user profile, history of changes to user profile from account inception, complete user preferences, complete user security settings and history (including confirmed devices and account activity), complete user payment methods, and any other information related to the funding sources for the account/wallet/vault, regardless of date.” And every single transaction:

All records of account/wallet/vault activity including transaction logs or other records identifying the date, amount, and type of transaction (purchase/sale/exchange), the post transaction balance, the names or other identifiers of counterparties to the transaction; requests or instructions to send or receive bitcoin; and, where counterparties transact through their own Coinbase accounts/wallets/vaults, all available information identifying the users of such accounts and their contact information.

The demand is not limited to owners of large amounts of Bitcoin or to those who have transacted in large amounts. Everything about everyone.

Equally shocking is the weak foundation for making this demand. In a declaration submitted to the court, an IRS agent recounts having learned of tax evasion on the part of one Bitcoin user and two companies. On this basis, he and the IRS claim “a reasonable basis for believing” that all U.S. Coinbase users “may fail or may have failed to comply” with the internal revenue laws.

If that evidence is enough to create a reasonable basis to believe that all Bitcoin users evade taxes, the IRS is entitled to access the records of everyone who uses paper money.

Anecdotes and online bragodaccio about tax avoidance are not a reasonable basis to believe that all Coinbase users are tax cheats whose financial lives should be opened to IRS investigators and the hackers looking over their shoulders. There must be some specific information about particular users, or else the IRS is seeking a general warrant, which the Fourth Amendment denies it the power to do.

Speaking of the Fourth Amendment, that rock-bottom “reasonable basis” standard is probably insufficient. Americans should and probably do have Fourth Amendment rights in information they entrust to financial services providers required by contract to keep it confidential. Observers of Fourth Amendment law know full-well that the “third-party doctrine,” which cancels Fourth Amendment interests in shared information, is in retreat.

The IRS’s effort to strip away the privacy of all Coinbase users is more broad than the government’s effort in recent cases dealing with cell site location information. In the CSLI cases, the government has sought data about particular suspects, using a standard below the probable cause standard required by the Fourth Amendment (“specific and articulable facts showing that there are reasonable grounds to believe”).

In United States v. Benbow, we argued to the D.C. Circuit that people retain a property right in information they share with service providers under contractual privacy obligations. This information is a “paper or effect” for purposes of the Fourth Amendment. Accordingly, a probable cause standard should apply to accessing that data.

Again, the government in the CSLI cases sought information about the cell phone use of particular suspects, and that is controversial enough given the low standard of the Stored Communications Act. Here, the IRS is seeking data about every user of Bitcoin, using a standard that’s even lower.

Coinbase’s privacy policy only permits it to share user information with law enforcement when it is “compelled to do so.” That implies putting up a reasonable fight for the interests of its users. Given the low standard and the vastly overbroad demand, Coinbase seems obligated to put up that fight.

During the post-World War II period, opposition to U.S. militarism and involvement in dubious military conflicts has usually been stronger on the political left than the right.  Left-wing, anti-war sentiment reached its peak during the Vietnam War, when groups opposed to that conflict could sometimes mobilize tens of thousands of demonstrators.  Opposition to subsequent U.S. military crusades was less robust, but even as late as the Iraq War, there were sizable anti-war demonstrations in the streets.

There have been warning signs for some time, though, that opposition to unnecessary armed conflicts has lost its appeal to much of the political left.  For one thing, there was always a partisan bias to anti-war movements.  Even during the heyday of resistance to the Vietnam War, the criticism became more intense after Republican Richard Nixon took over the White House than it had been when Democrat Lyndon Johnson occupied the Oval Office.  The bias was even more apparent in later decades.  There was far more criticism of Republican George H.W. Bush’s Persian Gulf War than there was of Democrat Bill Clinton’s wars in Bosnia and Kosovo.  Indeed, a distressing number of prominent liberals found reasons to praise Clinton’s military crusades in the Balkans.

The partisan factor has grown even more intense in the twenty-first century.  Left-wing groups mounted a fairly serious effort to thwart Republican George W. Bush’s invasion of Iraq.  But when Democrat Barack Obama greatly escalated U.S. military involvement in Afghanistan and led a NATO assault to remove Libya’s Muammar Qaddafi from power, the reaction was very different.  Except for a few hard-left organizations, such as Code Pink, the sounds coming from the usual supposed anti-war liberal quarters were those of crickets.  Likewise, there has been little push-back to Obama’s gradual return of the U.S. military presence in Iraq or the entanglement of the U.S. military in Syria.

Some on the left hoped that the campaign of Senator Bernie Sanders for the Democratic Party’s presidential nomination signaled a revitalization of opposition to the warfare state among progressives.  That did not prove to be the case.  Foreign policy in general, and opposition to Washington’s wars in particular, was a secondary and anemic theme in his campaign against Hillary Clinton.

And Sanders may now have sounded the death knell for the liberal anti-war movement.  Just days after Donald Trump’s upset victory in the 2016 presidential election, Sanders published a high-profile article in the New York Times outlining the policy agenda for progressives going forward.  The piece contained the usual laundry list of identity politics and spending proposals that left-wing types have been pushing for decades.  What was striking, though, is that the article contained not a single word—not a single word—about foreign policy.  The United States is mired in the longest war in its history in Afghanistan, it has returned to the scene of its last major interventionist disaster in Iraq, and it is already entangled to a dangerous degree in Syria.  The president-elect has indicated that he may tear up the agreement with Iran, wants to adopt a confrontational trade policy toward China, and wants to pour even more money into the Pentagon.

Yet the most visible and prominent political figure on the left apparently deems all of this unworthy of a comment in America’s most prestigious newspaper.  That omission suggests that Sanders may believe his followers do not consider foreign policy very important.  That would be worrisome.  The other possibility is even worse: that he believes they have accommodated themselves to the warfare state—that as long as they can get the funding for their pet domestic programs, they are willing to back even more generous funding of the Pentagon and other elements of the national security apparatus.  Such an assumption would also suggest that they would remain largely mute as Washington embarks on future military crusades. 

If the latter scenario proves true, we are witnessing the demise of anti-war liberals.  It would then be up to libertarians and limited government conservatives to redouble their efforts to wage campaigns for peace, despite knowing that we may have few, if any allies, on our left flank.

A lot of well-intentioned people think it is not enough for families to be able to choose schools. They have to choose “good” schools. Those people often do not think private school choice programs that give parents a lot of control over which schools they select are up to par. Fine. But just because you don’t like something doesn’t make it a “clear flop.”

Writing at The 74, Richard Whitmire warns that we should beware Trumps bearing school choice gifts. He argues that President-elect Trump’s proposal to spend $20 billion on school choice could be dangerous not because of, say, federal rules that might be attached to unconstitutional largesse, but because the money might not be restricted to “great” schools. “Great,” presumably, should be defined by legislators or bureaucrats. After all, you don’t want to replicate the Milwaukee voucher program:

Those in the school reform movement learned the hard way that choice alone does not produce more seats in great schools. If that were the case, we’d all be praising the early voucher program in Milwaukee and the widespread charters in Ohio and Michigan. But in all those cases, choice alone produced nothing.

In Milwaukee, for example, which I visited repeatedly while researching my book On the Rocketship, about the creation of one best-in-class charter network, the more-than-two-decade-old voucher experiment proved to be a clear flop. (Note that I didn’t say unpopular. Who objects to free tuition for their kid’s parochial schools?)

Set aside the first evidence that Milwaukee’s program isn’t a “clear flop”: It is popular, indicating that the people it is supposed to serve are at least getting something they want. What about other important measures, including test scores, graduation rates, competitive effects, and costs? According to researchers at the University of Arkansas’ School Choice Demonstration Project, who intensively studied Milwaukee:

Our main findings included that the program had a positive effect on a student’s likelihood of graduating from high school and enrolling and persisting in a 4-year college. We found little evidence that the Choice program increased the test scores of participating students, though our final analysis revealed a positive effect of the program on reading scores when combined with high stakes testing. There was no evidence of program effects on math scores. Competition from the Choice program appears to have boosted the test scores of students who remained in Milwaukee Public Schools (MPS), but those systemic effects of the program were modest in size. Because the maximum value of the voucher…is substantially less than what the government pays to educate students in MPS, the state saves over $50 million per year from the operation of the program. 

Is the choice program transformative? No. But a flop? It appears to have produced somewhat better outcomes at much lower taxpayer expense than the public schools. It is also nowhere near a free market, with regulations constraining admissions policies, hours of instruction, and testing. And freedom is the key to unleashing competitive pressures, specialization, and innovation.

The Milwaukee voucher program is not a flop, and making policy based on the idea it is would be a mistake.

This week Kris Kobach, Kansas Secretary of State and Trump transition team adviser, told Reuters that Trump’s team had discussed his plan to restore a registry of immigrants from predominantly Arab and Muslim counties. The registry, which was part of the National Security Entry-Exit Registration System (NSEERS), operated from 2002 until 2011. The Obama administration suspended it, citing efficiency issues. Although NSEERS was suspended it could very easily be resuscitated and made worse. This is by design. A 2012 Department of Homeland Security Office of Inspect General (OIG) report reveals that the Department of Homeland Security (DHS) rejected a recommendation to terminate the NSEERS program, saying that the system would allow DHS to register “a category of aliens” in the future.

In the wake of 9/11 the Department of Justice (DOJ) built NSEERS. DHS took control of the program after it was established in 2003. Under NSEERS, nonimmigrant aliens from 25 countries were fingerprinted, interviewed, photographed, and required to check in with officials at regular intervals. Twenty-four of these 25 countries were majority-Arab and Muslim (North Korea was the other country).

Although in place for almost a decade, NSEERS was ineffective as an anti-terrorism tool. Because of the inscrutable rules associated with NSEERS, thousands of men and boys were deported while the system was up and running.

It shouldn’t come as a surprise, then, that in February 2012 a DHS OIG report found that, “The NSEERS program for special registration of certain categories of aliens from predominantly Arab and Muslim countries, and the database that supports this program, is obsolete and should be terminated.”

Note that the argument being made here for termination is based on the NSEESR program being obsolete. While the OIG reported was being put together DHS announced that it was removing all 25 countries from the NSEERS program. In that announcement DHS also highlighted that technology improvements, not concerns for civil liberties, motivated them to make the change:

Over the past six years, the Department of Homeland Security (DHS) has implemented several new automated systems that capture arrival and exit information on nonimmigrant travelers to the United States, and DHS has determined that recapturing this data manually when a nonimmigrant is seeking admission to the United States is redundant and no longer provides any increase in security.

But the DHS only suspended rather than eliminated NSEERS. When responding to the OIG report’s recommendation that NSEERS be fully terminated DHS’ assistant secretary for policy wrote the following (emphasis mine):

The Secretary’s authority, as exercised under the NSEERS regulations, is broader than the information collection program based on country designation described in the Office of Inspector General’s draft report. The Secretary has chosen to retain this regulatory framework to enable prompt action to require registration of a category or categories of aliens, if necessary, through rapid publication of a Federal Register Notice. The retention of this regulatory framework has no direct cost to the Department while a formal rulemaking to rescind the regulations would be costly and time consuming now, with the possibility that another costly and time consuming rulemaking would be necessary if specific registration was needed in the future. Indeed, in light of the legally required time to promulgate new regulations, it might not be possible to reestablish a categorical registration regime in time fully to protect the United States from a future, perhaps imminent threat. The regulation is being kept in place to ensure that the Secretary retains a legal discretionary regulatory framework in case it is needed in the future.

Almost identical points were made in a May 2011 DHS newsletter:

Because the Secretary of Homeland Security’s authority under the NSEERS regulations is broader than the manual information flow based on country designation that has now ended, the underlying NSEERS regulation will remain in place in the event a special registration program is again needed.

Clearly, Kobach and other Trump supporters seem to think that a registration program similar to NSEERS is needed. Without swift action before Trump’s inauguration his team will walk into the White House in January with a system in place for the establishment of a “Muslim registry” that could target immigrants from more than 25 countries.   

House Speaker Paul Ryan (R-Wis) held a press conference a few days ago where he said that GOP control of the Congress and White House afforded his party the opportunity “to go big, to go bold.”  There has been talk of rolling back regulations and Obamacare.  That’s good news, but Ryan should consider a bigger and bolder move: End federal income tax withholding. 

The “political establishment” has created a situation where the U.S. is trillions of dollars in debt.  How will the new Congress address that?  The fiscal scandal is too abstract for many voters to grasp so too many of them don’t think twice about supporting new spending measures, such as free college tuition or what have you.  To build the necessary political support for otherwise unpopular spending cuts, Ryan should quickly move to end federal income tax withholding.  If American households would stop viewing their tax refund checks as happy windfalls from politicians and instead better understood how much big government is costing them every year, one would expect to see louder demands to bring runaway spending under control and to downsize the scope of federal programs and operations.  The GOP honeymoon will be over in a few months.  Ending federal withholding will help build support for spending cuts over the next few years and perhaps beyond.

Ironically, it was the late, great Milton Friedman who helped devise the modern income tax withholding system when he worked in the Treasury Department during World War II.  He was fixated on tax collection efficiency at that time, not limiting the size of government.  Late in his life, Friedman said that he wished “there were some way of abolishing withholding now.”  Former congressman Dick Armey (R-Tex) proposed ending withholding when the GOP took control of the House in 1994, but Bill Clinton was never going to sign that measure into law.  Now that the GOP has both the Congress and the White House, it has a real opportunity to go big and bold.  Grant Friedman his wish and get our fiscal house in order.

For related Cato scholarship, go here.

“Trump has heaped scorn upon those Republicans who have worshiped at the alter of unfettered free trade.”  - Joe Scarborough, May 22, 2016

“I wouldn’t say that you know this free trade obsession is something that can’t get looked at in regard to making things more fair.” – Incoming White House Chief of Staff Reince Priebus, November 14, 2016

One of the most pervasive themes of the last year is the notion that America’s populist uprising, and the success of President-elect Donald Trump, has in large part been a direct response to the United States’ – and in particular the Republican Party’s – libertarian obsession with “unfettered” free trade.  MSNBC’s “Morning Joe” Scarborough, quoted above, has been a big cheerleader of this argument, which has been treated on his show and elsewhere in the media as obvious truth.  And now we see one of the few official members of the future Trump administration, Reince Priebus, repeating the notion, signaling to the country that America’s great free trade moment might be ending.  Clearly, the idea is prevalent and persuasive. 

But it is also dead wrong.

First, although the United States maintains a relatively low average import tariff of around 3 percent, it also applies high tariffs on a wide array of “politically-sensitive” (read: highly lobbied) products: 131.8% on peanuts; 35% on tuna; 20% on various dairy products; 25% on light trucks; 16% on wool sweaters, just to name a few.  (Agriculture is particularly bad in this regard.)  We also maintain a long list of restrictive quotas on products like sugar, cheese, canned tuna, brooms, cotton, and baby formula.  And although the U.S. has 14 free trade agreements (FTAs) with 20 different countries and is a longstanding member of the World Trade Organization (WTO), many of these same “sensitive” products have been exempted from the agreements’ trade liberalization commitments.  Free trade for thee, but not for me.

Second, while America’s tariffs and other “formal” trade barriers have indeed been declining for decades, they are only a small part of the overall story.  U.S. non-tariff barriers – export subsidies, discriminatory regulations, “buy local” rules, “fair trade” duties, etc. – have exploded in recent years.  In fact, according to a recent analysis by Credit Suisse, when you add up all forms of trade barriers imposed between 1990 and 2013, the biggest protectionist in the world isn’t China or Mexico but none other than… the United States:

A look at U.S. “trade defense” measures (what we call “trade remedies” – anti-dumping, countervailing duty and safeguards measures) is revealing in this regard.  According to the U.S. International Trade Commission, the United States as of October 31 imposes 373 special protective duties on a wide range of products, more than 90 of which came in the last three years alone (i.e., since chart above on U.S. protectionism was produced):

AD/CVD Orders as of Oct. 31, 2016

Product Group

Total

Agricultural, forest,  and processed food products

22

Chemicals and pharmaceuticals

47

Iron & steel:  Mill products

101

Iron & steel:  Other products & castings

44

Iron & steel:  Pipe products

46

Metals and minerals

24

Miscellaneous manufactured products

64

Plastics, rubber, stone, and glass products

19

Transportation

3

Textiles and apparel

3

Total

373

 

Chinese imports face 140 of these special duties, which can often be as high as 100%, and one sector in particular has benefited from the import protection: iron & steel.  Incredibly, the U.S. industry that benefits from over half of all anti-dumping and countervailing duty (AD/CVD) orders on imports is also the same sector that has been constantly cited by President-elect Trump and his political and media cheerleaders as the biggest victim of America’s supposed religious devotion to “unfettered” free trade:

Other sectors supposedly crushed by the scourge of libertarian trade policy, such as chemicals and agricultural products, also disproportionately benefit from trade remedies protection. 

These facts demonstrate quite clearly that American manufacturing and agribusiness, as well their workers, are, in fact, a far cry from being the “unprotected” victims of “unfettered” free trade.  They also should indicate that the commercial failures of U.S. steel or textiles or other sectors, as well the suffering of America’s working class, have not resulted from a lack of trade protectionism.  There is plenty of protection available, and many U.S. industries take full advantage. 

If this is “free trade,” then I shudder to think of what’s coming next.

For the steel industry, at least, things are looking up: they have a true champion, former Nucor CEO Dan DiMicco, in charge of picking the next U.S. Trade Representative – a move that, you’ll be shocked to learn, has been cheered by Leo Gerard, the president of the U.S. steelworkers union.  Finally, these poor, unprotected saps will get the fair shake in the global economy that they, and President-elect Trump, think they deserve.

Unfortunately, American consumers, including the millions of workers employed in steel-consuming industries, will be stuck with the bill.

A US Park Police officer stands at the Vietnam Veterans Memorial Wall during Veterans day celebrations on November 11, 2016 in Washington, DC. / AFP / Olivier Douliery (Photo credit should read OLIVIER DOULIERY/AFP/Getty Images)

Another Veterans Day brought another round of lamentations about the Department of Veterans Affairs and promises to fix it.

President-elect Donald Trump promised to do so throughout the campaign. Paul Rieckhoff, founder and CEO of Iraq and Afghanistan Veterans of America, is skeptical. Veterans are “used to big promises and disappointing results,” he says. “Fixing the VA might be one of the biggest challenges for President Trump. Every president says they’re going to do it, yet we’ve still got a VA with backlogs and massive problems.”

If Trump tries to fix the VA the same way other presidents have, he will fail. But there is a way he can succeed.

Trump’s predecessors failed because they tried to work within a model of top-down, centralized economic planning. The Veterans Health Administration is America’s only purely government-run health system. Its closest analogue is probably the United Kingdom’s National Health Service. The VHA even produces the same results as the NHS: chronic shortages and long waits for care alongside idle and wasted resources, instances of horrific care, and often good care, you know, if you can get it.

Presidents can and have fixed such problems temporarily by moving resources from here to there, or investing in some new system. It never lasts, though. The VHA is a socialist enterprise. Unlike a market system, it has no price mechanism or competitive pressures that automatically fix such problems when they re-emerge. And not only do they always re-emerge, Congress usually takes forever to get off its duff. If Trump retains the VA’s basic structure, he will join a long line of presidents who have failed our nation’s veterans.

How to Privatize the VA 

Trump can distinguish himself from other presidents by working with Congress to create a system of veterans benefits that fixes problems automatically. Here’s how.

First, the federal government should increase military pay sufficient to enable workers to purchase–from private insurers at actuarially fair rates–a package of life, disability, and health benefits equivalent to what the VA provides. Benefits would kick in as soon as they leave active duty and cover veterans’ service-related disabilities or illnesses for life.

Second, having privatized the insurance component of veterans benefits, the federal government should then privatize the delivery component. It should incorporate the VHA as a private company and issue shares to active-duty personnel and veterans based on length of service or other criteria.

You read that right. Military personnel and veterans would literally own the VHA, including its many hospitals and other facilities. Privatizing the VA would both increase the pay of active-duty personnel, and create a massive wealth transfer to active-duty personnel and veterans. Veterans would be able to receive medical care from health systems owned and operated by veterans, for veterans.

Third, the federal government should give current veterans vouchers to purchase insurance and medical care from the insurers and health systems of their choice, including the new veteran-owned and -operated systems.

Privatization Means Better Benefits for Veterans 

Privatization would improve the quality of veterans’ benefits immeasurably.

The federal government promises veterans’ benefits to military personnel once they leave active duty. Only it’s not an explicit promise. And Congress doesn’t fund it. As a result, Congress can–and does–renege on that commitment.

A system run by veterans, for veterans would keep those commitments and focus on quality in a way the VA cannot, in part because it would eliminate the VHA’s monopoly. Competing insurers and health systems would know their customers have options. If they provide service as lousy as the VA does, veterans would fire them and active-duty personnel would avoid them.

But that’s not even the best part. As Radley Balko wrote five Veterans Days ago, “The best way to honor our war veterans is to stop producing more of them.”

NEW YORK, NY - NOVEMBER 11: A Veteran lights a cigar during the annual Veterans Day Parade on November 11, 2016 in New York City. Known as ‘America’s Parade’ it features over 20,000 participants, including veterans of numerous eras, military units, businesses and high school bands and civic and youth groups. (Photo by Michael Loccisano/Getty Images)

Privatizing the VA Can Prevent Unnecessary Wars

The greatest benefit of this system is that it could help prevent unnecessary wars.

Veterans benefits are one of the largest financial costs of any armed conflict. Yet Congress does not pre-fund those obligations. It only funds them once they come due. That allows Congress and the president to pretend these costs do not exist when they are making the decision about whether to send troops off to war.

The increase in military pay I describe here would effectively pre-fund veterans benefits. Congress would have to fund each soldier’s and sailor’s veterans benefits from the moment she joins the military until she leaves. Importantly, since the added pay would reflect the cost of purchasing veterans benefits at actuarially fair premiums, the added pay would rise when the United States is at war or when war is imminent. The added risk of deaths and injuries would cause premiums to rise, which would increase the amount of added pay Congress must provide each service member.

The result is that future Congresses and presidents would have to confront this enormous cost of war at the moment they decide to send U.S. troops off to war, and every day they decide to keep them there. Privatizing the VA would help future Congresses and presidents avoid unnecessary wars by making them confront more of the costs of war.

There are still further benefits to this approach. Read about them here and here.

Follow me on Twitter at @mfcannon.

Each time the government defines the characteristics of an acceptable product, some competition in the market is lost. The New York Times published an article on Wednesday that illustrates this perfectly.

The 1990 Organic Foods Production Act instructs the Department of Agriculture to set up a process for certifying food as organic. As part of that certification, organic farmers develop organic plans that “contain provisions designed to foster soil fertility, primarily through the management of the organic content of the soil through proper tillage, crop rotation and manuring.”

Should plants grown hydroponically be allowed under an organic plan? Hydroponic farming does not use soil, but instead uses nutrient-rich water. The futuristic technique is intended to be environmentally friendly and healthful—the same intention as organic farming. Yet in 2010 the National Organic Standards Board recommended to the secretary of agriculture that hydroponically grown plants be ruled ineligible for organic designation. The secretary of agriculture never acted on the recommendation.

David Chapman, an organic farmer in Vermont who has been a leader of the opposition to certifying produce from the hydroponic systems, said he would be driven out of business if the Department of Agriculture declared hydroponically grown tomatoes could be certified as organic. “Most people have no idea that the organic tomatoes and peppers they’re buying are hydroponically grown,” Chapman said. “I think most consumers believe those things are grown in the soil, and that farmers like me are taking care of the soil as they grow them.”

Colin Archipley, a hydroponic farmer in San Diego, is frustrated that there is even a debate over whether his produce is organic. “The reason this has become such a big deal is that systems like ours are becoming more popular because they’re more efficient, which means farmers are more sustainable and profitable,” he said. “That’s put competition on farmers, specifically in Vermont, and so what this really is about is market protection.”

The founders of our country understood that government should not arbitrate the struggles among competing religions and certify one rather than the others as state-sanctioned. Such insight applies not just to divine matters, but to profane ones like whether hydroponically grown food is or isn’t organic. Let consumers decide in the marketplace whether they think hydroponics is a good thing, rather than government decide through regulation.

In an interview this weekend, Donald Trump officially dumped plans to deport all unauthorized immigrants, stating that he would focus only on criminals. Trump didn’t specify how he would handle non-criminals, but he shouldn’t hold back on advocating full legalization for fear of losing his backers. His earlier attempts at softening show he can maintain their support; in fact, Trump’s supporters appear more interested in border security than deportation anyway.

During the early part of his campaign, Trump secured a huge amount of support among primary voters who opposed legalization. He then spent the remainder of his campaign trying to convince other Republicans that mass deportation was the way to go.

But it never worked. In fact, Pew Research Center polls show that more Republicans supported legalization after his campaign than before it—rising from 56 percent to 59 percent from March 2015 to March 2016. By the time of the election, 60 percent of self-described Trump voters told Pew that they favored legalization. Trump simply failed to win the argument.

In late August, it seemed like Trump realized that his case was falling on deaf ears, so he toyed with a pivot. During an interview on Fox, he polled a very large audience of supporters. When he asked if they favored mass deportation, the room remained mostly quiet. When he asked about a plan to let non-criminal unauthorized immigrants “stay in some form,” the crowd cheered. He promised that “we’ll work with them,” saying it was “tough to throw them out.”

The crowd’s reaction was in tune with most major Trump backers. While Rep. Steve King (R-IA) warned Trump to back away from his softening, he was pretty much alone in doing so. Sen. Jeff Sessions (R-AL), Trump’s top immigration advisor and Rep. King’s longtime Senate ally on immigration, insisted that he would continue to support Trump. He told Fox News he would “be supportive of” a plan that dealt with “people who have been here a long time.”

Trump surrogate Rep. Tom Marino (R-PA) said somewhat vaguely that he saw the posture as “a tweak” to accommodate “the fair, humane, human side of dealing with this.” Rep. Larry Bucshon (R-IN) said that Trump didn’t “change what his principles are,” arguing that the goal was always securing the border. While the congressman still supported “enforcing the law,” he said he also considered himself a “humanitarian” and would be open to Trump’s new ideas.

Rep. Chris Collins (R-NY), one of the first members of Congress to back Trump, agreed, telling CNN that “there’s just no logical way to deport 12 million people.” Instead, he called for a “rhetorical deportation,” where immigrants would “go into a room as illegal immigrants” and emerge “with work papers and Social Security numbers.”

Other members of Congress were more direct. Rep. Kevin Cramer (R-ND), another Trump backer, said he was open to a plan to give legal status to those here illegally. Rep. Glenn Grothman (R-WI) went further, saying that he never believed Trump would really carry out 11 million deportations. “You have to use common sense,” he told the Wall Street Journal.

But after consulting further with his team, Trump reversed course, reading a speech a week later that said, “For those here today illegally who are seeking legal status, they will have one route and only one route: to return home.” But this plan is unrealistic, and many of his most committed supporters know it. Even Trump himself apparently now thinks it’s impractical. The only alternative to this plan is legalization, something Trump’s supporters already back.

Trump has proven that he can get away with advocating for real immigration reform—if he wants to. There is no reason to wait any longer to endorse a realistic path forward on the issue.

With both major party platforms calling for a return to some version of Glass-Steagall, it was a given that, whoever won the Presidential election, the issue would return to the public debate. However, we still need to do considerable work ending bailouts, and a return to Glass-Steagall would most likely divert us from that goal.

In order to help clarify this debate, the Cato Institute is proud to today offer a new paper on the topic, The Repeal of the Glass-Steagall Act: Myth and Reality by Oonagh McDonald, CBE. Dr. McDonald is an international financial regulatory expert, having held senior positions in several U.K. financial regulatory agencies. She was also a member of the British Parliament from 1976–87. Her most recent book details the failure of Lehman Brothers.

The new paper lays out a legislative history of Glass-Steagall, pointing out that of the provisions relating to the separation of commercial and investment banking (sections 16, 20, 21, and 32) only two of those four (sections 20 and 32) were repealed in 1999 by the Gramm-Leach-Bliley Act. Two remain current law today. Dr. McDonald further demonstrates how the two repealed provisions had already been largely eliminated by court and regulatory decisions long before 1999.

Dr. McDonald also reviews the economic literature, concluding that Glass-Steagall was not even the appropriate response to the banking problems of the 1920s and 1930s in the first place. What’s more, had Glass-Steagall remained fully in force after 1999, the financial crisis of 2008 would have largely looked the same. As I’ve written elsewhere, Glass-Steagall has essentially become a symbolic lens—a “Rorschach Test” that reflects one’s views on the power of big banks. However, if we truly wish to end bailouts, we need to get the history, law and economics right. Dr. McDonald’s paper makes an important contribution in that direction.

Ben Schreckinger at POLITICO has a story out today that every American concerned about the current political climate in our country should read. With the lede of “Trump Protesters Plan to Build ‘Tea Party’ of the Left,” Schreckinger quotes several progressive activists, including former Occupy Wall Street veteran Micah White. It’s worth quoting White in full, because his comments will absolutely draw the attention of officials at the FBI and DHS:

American activists are finally starting to understand that protest is broken. The people cannot attain sovereignty over their governments by collective protest in the streets. There are only two ways to achieve sovereignty in this world: Win elections or win wars. Now that street protest is not an option, we will see the Trump resistance split into these two fronts. Some will pursue the strategy of using social movements to [win] elections while others go down the dark path of ’70s guerrilla insurrection. I advocate winning elections.

Without question, the Founders would agree with much of what White says. American colonists spent over a decade trying to get Crown authorities to understand that every new tax or regulation imposed on them without their consent was creating resentments and opposition to British rule that, if not resolved peacefully, would lead to armed conflict.

Some in Parliament understood the dangers and sympathized with Americans—but not enough. It’s worth remembering that the Continental Congress was formed almost a full year before the Declaration of Independence was issued. The warning signs were there, but George III doubled-down on repression rather than negotiate with the colonists. The rest, as they say, is history. The question raised by White’s comments and the rest of Schreckinger’s piece is whether that history is about to repeat itself, this time with the federal government in the lead role of political oppressor.

Earlier this year, Cato launched American Big Brother: A Century of Political Surveillance and Represssion. The project is an effort to chronicle the over 100-year history of federal government efforts to suppress—and sometimes destroy—political movements and ideologies deemed a threat to the prevailing political and economic order. While some of the federal government’s domestic surveillance and political subversion activities have been aimed at individuals or groups on the right side of the political spectrum, most of the documented cases we have involved assaults on leftist groups or activists—including White’s Occupy Wall Street movement.

White’s allusion to “70s guerilla insurrection” is probably a reference to the Weather Underground and related movements, all of which were targeted and ultimately destroyed by the FBI, in coordination with state and local law enforcement entities. But as noted in the American Big Brother timeline, you don’t have to be a bomb maker or Molotov cocktail thrower to become the target of FBI surveillance. Simply speaking out during public marches or other protests is more than enough.

As journalist Cora Currier of The Intercept noted the day before Trump was elected:

In recent years, the FBI has ramped up its domestic intelligence-gathering apparatus, growing the ranks of informants and mapping neighborhoods in order to identify potential sources. The FBI has sent informants into mosques and targeted Muslim student associations, political groups, and protestors. And there have been widespread reports of the FBI using immigration status as leverage to push people to work with the government.

If the incoming Trump administration ramps up deportations of undocumented immigrants, intensifies and further securitizes “countering violent extremism” programs aimed at Arab- and Muslim-Americans, and continues the conflict between federal authorities and Black Lives Matter activists, White’s prediction of a bifurcated resistance movement—part political, part violent and insurrectionary—may well come to pass. But without joining hands with those on the right who also oppose such political repression in a broader political coalition, White and other activists on the left will only play into the hands of National Security State hawks, who will capitalize on the divisions among their opponents to destroy or silence them, one by one.

Just as it took more than one political faction to create this country, it will take more than one political faction to confront and eradicate our National Security State and free all Americans from the threat of domestic surveillance and political repression.

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