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Like countless similar news stories recently, a report on Business Insider claims: “Residents from 5 US states could soon need a passport for a domestic flight.” The idea is that the Transportation Security Administration will begin to enforce the REAL ID Act in 2016 by denying airport access to travelers from non-compliant states.

It’s not true.

Nobody needs to get a passport to fly domestically. No state needs to implement the REAL ID Act’s national ID mandates.

I’ve been collecting examples of misleading reports like this at the Twitter hashtag “#TakenInByDHS.” A recent blog post of mine, also called “Taken In by DHS,” fleshes out the story of widespread misreporting on the situation with our national ID law.

In brief, the Department of Homeland Security is trying to get the states to convert their driver licensing systems into components of a U.S. national ID system. The REAL ID Act, which Congress passed in 2005, allows DHS to refuse IDs from non-compliant states, including IDs travelers present at TSA’s airport checkpoints.

This concerns some people when they first learn about it, but the REAL ID compliance deadline passed more than seven years ago with not one state in compliance. DHS has improvised deadline after deadline since then, and it has caved every single time its deadlines have been reached. I went through the history last year in my Cato Policy Analysis, “REAL ID: A State-by-State Update.”

DHS’s latest story is that it might start to enforce REAL ID in 2016. It won’t. 

Contrary to DHS claims, not one state is in compliance with the national ID law. Not one. Some years ago, the department created a whittled down “material compliance checklist,” and it has freely given out deadline extensions to states that make enough of a show that they might go along with the federal government’s plans.

The story now being spun is that TSA will categorically turn away people from a small group of remaining outlier states—if you can actually call New York small—when enforcement starts next year. I am 100% certain they will not. Every state will be out of compliance for the entire year, and the TSA will not implement a policy of refusing travelers from non-compliant states.

The reason for my confidence is a basic understanding of the politics involved. If TSA—perhaps the most despised U.S. federal agency in history—refuses people the right to travel because they do not carry a national ID, the uproar will be intense and lasting. The lawsuits that follow such an action will make their heads spin. And it will all be focused at the federal government: the TSA, the DHS, and the U.S. Congress with its flaccid oversight of the security bureaucracy.

DHS officials can do basic political calculations, and, while they will communicate through back-channels and proxies that they plan to enforce REAL ID this time, there is no chance that they will actually bring a storm like this down upon themselves. State officials who do similar calculations from their end realize that they don’t have to follow federal mandates this time, or ever, and that their states will be worse off if they do. All this issue requires is a little sunlight.

Americans, you don’t have to have a passport to fly domestically. American states, you don’t have to obey federal national ID mandates. America, you don’t need to comply with the REAL ID Act.

Today’s Cato Online Forum essay comes from economist Laura Baughman, who laments the typical methodological approaches to estimating relationships between trade agreements and jobs, pointing out how those approaches seem to be used to validate a priori positions, either pro- or anti-trade, rather than reveal best estimates.  While economists are better at estimating the relationships between trade agreements and output or between trade agreements and trade flows, Baughman explains that if the likely impact of on jobs is sought, there is a more objective approach to take.  And the results of that method suggest that “it will be hard to argue that [TTIP] will not be a job ‘winner’ for the United States.”

Read it. Provide feedback.  And sign up for the Cato TTIP conference on October 12.


In a romantic view of democracy, legislators act with the interests of the general public in mind. They grapple with policy issues, work toward a broad consensus, and pass legislation that has strong support. They frequently reevaluate existing programs and prune the low-value and harmful ones. They put citizens first and limit their actions to those allowable under the U.S. Constitution.

Unfortunately, that is not how Congress works. It often enacts ill-conceived laws that do not have broad public support. Many programs perform poorly year after year, yet Congress gives them growing budgets. Congress almost never terminates programs because members have a hard time admitting that their policies have failed. Indeed, members try to evade blame for government failures, and they only try to fix problems after high-profile scandals have occurred.

A new essay, “Congressional Incentives and Government Failure,” at DownsizingGovernment.org looks at how Congress operates. It examines the incentives that induce members to support policies counter to the general public interest.

This is the sixth post in a series covering the advance of educational choice legislation across the country this year. As of my last update in early July, there were 17 new or expanded choice programs in 14 states. On Friday, North Carolina lawmakers finally passed a long-overdue budget that expanded the state’s two school voucher programs for low-income and special-needs students, bringing the total number to 19 new or expanded programs in 15 states. The updated tally is below.

A lawsuit against the Tar Heel State’s voucher law impeded implementation so only 1,216 low-income students participated last year, barely 10 percent of the 12,000+ applications the state received. In July, the North Carolina Supreme Court upheld the program, clearing the way for the legislature to expand it. 

Meanwhile, opponents of educational choice have launched a second legal attack on Nevada’s new education savings account law. Last month, the ACLU filed a similar lawsuit. The state of Nevada has hired one of the top law firms in the nation to help defend the ESA program. In addition, the Institute for Justice will be defending the law against both challenges on behalf five families who would benefit from the ESAs. You can learn about their stories in this short video:

In other school choice news, Indiana is poised to surpass Wisconsin as the state with the most students receiving school vouchers with more than 33,000 students. However, that number is dwarfed by the nearly 70,000 students who received tax-credit scholarships in Florida during the last school year.

And speaking of tax credits, a new poll from Quinnipiac University finds that New York Gov. Andrew Cuomo’s most popular education proposals were the personal-use and scholarship tax credits that he unsuccessfully pushed this year. More than half of respondents–including 62 percent of Millennials–supported tax credits for donations to private schools (though the question should have asked about donations to nonprofit scholarship organizations, which was Cuomo’s actual proposal).

Additionally, 65 percent of respondents–including 72 percent of Millennials and 70 percent of respondents ages 35-49–voiced support for a $500 state income tax credit for low- and middle-income parents to pay private school tuition.

Updated tally for new and expanded choice programs in 2015:

New Educational Choice Programs (7 in 6 states)

  • Arkansas: vouchers for students with special needs.
  • Mississippi: ESAs for students with special needs.
  • Montana: universal tax-credit scholarship law.
  • Nevada: tax-credit scholarships for low- and middle-income students.
  • Nevada: nearly universal ESA for students who previously attended a public school.
  • South Carolina: voucher-like “refundable” direct tuition tax credit for students with special needs. 
  • Tennessee: ESAs for students with special needs.

Expanded Educational Choice Programs (12 in 9 states)

  • Alabama: Raised the annual scholarship tax credit cap from $25 million to $30 million and raised the contribution cap from $7,500 to $50,000. However, the expansion came at a price: the legislation lowered income eligibility threshold from 275 percent of the federal poverty level to 185 percent (from about $67,000 to about $45,000 for a family of four). Current scholarship recipients are grandfathered in.
  • Arizona: Expanded ESA eligibility to include students living in Native American tribal lands.
  • Arizona: Expanded the types of businesses that can receive tax credits for donations to scholarship organizations.
  • Florida: Expanded ESA eligibility to include more categories of students with special needs and increased the budget from $18.4 million to nearly $55 million.
  • Indiana: Increased amount of tax credits available for donations to scholarship organizations ($2 million over two years).
  • Indiana: Eliminated cap on the number of vouchers available for elementary school students.
  • Louisiana: Expanded school voucher program (funding roughly 600 additional vouchers).
  • North Carolina: Expanded school voucher program for low-income students ($17.6 million in 2015-16, $24.8 million in 2016-17). 
  • North Carolina: Expanded school voucher program for students with special needs (vouchers increased from $6,000 to $8,000, total funding increased by $250,000 to $3.25 million annually).  
  • Ohio: Increased the value of several categories of vouchers and raised the funding caps for special-needs vouchers.
  • Oklahoma: Expanded eligibility for its special-needs tax-credit scholarships and raised the tax credit value from 50 percent–tied with Indiana for the lowest in the nation–to 75 percent. 
  • Wisconsin: The state budget raises and eventually eliminates the statewide voucher cap.

Like North Carolina, Pennsylvania lawmakers have been embroiled in a budget battle all summer. Early proposals included expansions of the states two tax-credit scholarship programs, but it is unclear what the final budget will contain.

The biggest mistake of well-meaning leftists is that they place too much value on good intentions and don’t seem to care nearly as much about good results.

Pope Francis is an example of this unfortunate tendency. His concern for the poor presumably is genuine, but he puts ideology above evidence when he argues against capitalism and in favor of coercive government.

Here are some passages from a CNN report on the Pope’s bias.

Pope Francis makes his first official visit to the United States this week. There’s a lot of angst about what he might say, especially when he addresses Congress Thursday morning. …He’ll probably discuss American capitalism’s flaws, a theme he has hit on since the 1990s. Pope Francis wrote a book in 1998 with an entire chapter focused on “the limits of capitalism.” …Francis argued that…capitalism lacks morals and promotes selfish behavior. …He has been especially critical of how capitalism has increased inequality… He’s tweeted: “inequality is the root of all evil.” …he’s a major critic of greed and excessive wealth. …”Capitalism has been the cause of many sufferings…”

Wow, I almost don’t know how to respond. So many bad ideas crammed in so few words.

If you want to know why Pope Francis is wrong about capitalism and human well-being, these videos narrated by Don Boudreaux and Deirdre McCloskey will explain how free markets have generated unimaginable prosperity for ordinary people.

But the Pope isn’t just wrong on facts. He’s also wrong on morality. This video by Walter Williams explains why voluntary exchange in a free-market system is far more ethical than a regime based on government coercion.

Is Capitalism Moral?

Very well stated. And I especially like how Walter explains that markets are a positive-sum game, whereas government-coerced redistribution is a zero-sum game (actually a negative-sum game when you include the negative economic impact of taxes and spending).

Professor Williams wasn’t specifically seeking to counter the muddled economic views of Pope Francis, but others have taken up that challenge.

Writing for the Washington Post, George Will specifically addresses the Pope’s moral preening.

Pope Francis embodies sanctity but comes trailing clouds of sanctimony. With a convert’s indiscriminate zeal, he embraces ideas impeccably fashionable, demonstrably false and deeply reactionary. They would devastate the poor on whose behalf he purports to speak… Francis deplores “compulsive consumerism,” a sin to which the 1.3 billion persons without even electricity can only aspire.

He specifically explains that people with genuine concern for the poor should celebrate industrialization and utilization of natural resources.

Poverty has probably decreased more in the past two centuries than in the preceding three millennia because of industrialization powered by fossil fuels. Only economic growth has ever produced broad amelioration of poverty, and since growth began in the late 18th century, it has depended on such fuels. …The capitalist commerce that Francis disdains is the reason the portion of the planet’s population living in “absolute poverty” ($1.25 a day) declined from 53 percent to 17 percent in three decades after 1981.

So why doesn’t Pope Francis understand economics?

Perhaps because he learned the wrong lesson from his nation’s disastrous experiment with an especially corrupt and cronyist version of statism.

Francis grew up around the rancid political culture of Peronist populism, the sterile redistributionism that has reduced his Argentina from the world’s 14th highest per-capita gross domestic product in 1900 to 63rd today. Francis’s agenda for the planet — “global regulatory norms” — would globalize Argentina’s downward mobility.

Amen (no pun intended).

George Will is right that Argentina is not a good role model.

And he’s even more right about the dangers of “global norms” that inevitably would pressure all nations to impose equally bad levels of taxation and regulation.

Returning to the economic views of Pope Francis, the BBC asked for my thoughts back in 2013 and everything I said still applies today.

Dan Mitchell Discussing the Pope, Capitalism, and How to Genuinely Help the Poor

Today’s Cato Online Forum essay takes a look under the hood – or, rather, describes what should be under the hood – of a Transatlantic Trade and Investment Partnership deal, if it is to succeed at minimizing trade diversion and spreading its benefits to third countries. In her essay, Inu Barbee explains why today’s globalized value chains necessitate smart rules of origin and inclusive regulatory standards in the TTIP. Read it. Comment. And register to see and hear more at Cato’s TTIP conference on October 12.

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.


From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.

The nation is abuzz with the visit of Pope Francis. There is, of course, a lot that could be discussed with the coming of the Pope, but for education it is a good time to remember the crucial importance of freedom. After all, for much of our history the biggest fights in education were over the public schools’ inability to accommodate Roman Catholics.

From the earliest advocacy of public schooling, arguably the primary goal has been to unite diverse people. As Founding Father Benjamin Rush put it in his Thoughts upon the Mode of Education Proper in a Republic, “Our schools of learning, by producing one general and uniform system of education, will render the mass of the people more homogeneous and thereby fit them more easily for uniform and peaceable government.”

Of course, there is a fundamental problem with this: diverse people will almost certainly want diverse things out of education, so conflict – and suppressing of politically weak minorities to end it – is inevitable.

For much of American history, there was no bigger flashpoint than religion.

Notably, the first religious disputes over “common schools” were not between Catholics and Protestants, but among Protestants. In the Massachusetts of common schools “father” Horace Mann, many orthodox Protestants took issue with the public schools that were to teach “nonsectarian” Christianity, a lowest-common-denominator Protestantism that, among many things, appeared to be Unitarian – Mann’s denomination. It is likely that Mann just wanted to avoid doctrines that would spur theological disputes, but even that proved impossible, with the absence of such doctrines also appearing sectarian.

Even with this divide among Protestants, it was the arrival of large numbers of Roman Catholics that really amped up religious combat over the nascent public schools. Driven by ancient European animosities and fears of Church authority being incompatible with democracy, defenders fought hard to keep a distinctly Protestant cast to the common schools, including reading only from the King James version of the Bible and using textbooks that at times featured content hostile to Catholicism.

Earlier, I used the term “combat” to describe the fights between Catholics and Protestants over the schools. Usually that only applied metaphorically, but not always, most shockingly with the Philadelphia Bible Riots, which were touched off by an ongoing conflict over whose version of the Bible could be used in the public schools. By the end of two waves of street-level warfare hundreds of people had been injured, tens killed, and millions of dollars of property damage inflicted.

Of course, there was not always conflict. Some districts found ways to work with Catholics, and many Catholics accepted the status quo. Still, a huge way by which peace was achieved was Catholics withdrawing from the public schools and starting their own institutions. But that meant paying twice for education: once for hostile public schools, a second time for schools that taught their religion and shared their values. It was an inherently unequal, unfair system.

Today, Catholic schools are not nearly as numerous as they were at their peak in 1965, when roughly 12 percent of all school-aged children – about 5.5 million kids – attended them. There are myriad reasons for this, including Catholics’ full integration into American society, movement from urban areas to suburbs, and the huge decline in school staffing by clergy and sisters who kept personnel costs at rock-bottom levels. But it is also clear that it is very hard to get people to pay for private schooling when there are free public schools, even if the free education is not as good. Making matters worse are charter schools, schools of choice that many parents perceive as private schools but which are, in fact, free public institutions.

Troublingly, it is perhaps now more than ever that we need school choice, because Americans are more diverse than ever.

There continues to be major religious diversity, and options outside of public schools appear to be especially in demand among evangelical Protestants who see public institutions as hopelessly devoid of God. There are also Lutheran, Episcopalian, Quaker, and other religious schools in demand by people who either want specific religious tenets taught to their children, or just access to schools with strong and coherent moral anchors. And then there are public schools where many atheists or members of minority religions perceive too much religious influence.

Of course, diversity doesn’t stop with religion…at all As you can see on Cato’s Public Schooling Battle Map, Americans have diverse and conflicting views on moral issues apart from religion; on what should be taught in history classes; on how freely students should be able to express themselves in school; and as recent headlines makes clear, on how strict discipline policies should be. And, of course, there are ongoing fights over how to treat racial and ethnic groups that have suffered far worse discrimination that Roman Catholics.

All of this – the incessant forced conflict and the subjugation of the politically weak often needed to end it – is utterly inconsistent with the individual liberty that is supposed to be at the core of American life. Perhaps the arrival of Pope Francis can spur us to remember how painfully that has played out in the past.

In 2012, Exit Polls revealed that President Obama garnered 71% of the Hispanic vote, while his Republican rival Mitt Romney captured a mere 27%. In 2008, Republican John McCain didn’t do much better, capturing only 31% of the Latino vote to Obama’s 67%. In sum, Latinos have demonstrated a strong affinity towards the Democrats. Is that because they hate Republicans? The data suggests no. 

A recent MSNBC/Telemundo/Marist poll finds that while Latinos are more favorable towards Democratic presidential candidates they are not antagonistic towards Republican candidates either, they just don’t know them—except for Trump.

On average, 17% of Hispanics gave negative ratings to potential Democratic nominees  Hillary Clinton, Joe Biden, and Bernie Sanders. Nearly the same share—15% gave negative ratings on average toward Republican candidates including Ben Carson, Marco Rubio, Jeb Bush, Ted Cruz, and Scott Walker. This number excludes, however, the 70% who gave a negative rating of Donald Trump, immigration provocateur.

While Hispanics don’t disproportionately view Republicans unfavorably, they do give more positive marks towards the Democrats. On average, 35% of Latinos had positive ratings of Democratic candidates and 20% had positive ratings of Republican candidates. 

A major difference between Republican and Democratic candidates was the share of Latinos who had never heard of, or had no opinion of, the candidates. On average, 42% of Latinos had no opinion of Republican candidates (again, excluding Trump from his average) compared to 27% who had no opinion of Democratic candidates. 

This data indicates that Latinos don’t hate Republicans. Instead, Republicans haven’t showed up in community venues or in news mediums to garner greater exposure in Hispanic communities as much as Democrats. When Republicans do make headlines in Hispanic communities, its typically for bombastic proposals like Trump’s plan to forcibly deport 11 million unauthorized immigrants, necessarily breaking apart families and loved ones.

Perhaps surprisingly, Latino’s negative attitudes toward Trump do not spillover toward the other GOP candidates. This means GOP candidates can stake out different positions on immigration and potentially win over a fast growing demographic in the country.

Donald Trump the Exception Not the Rule?

Donald Trump is the one Republican that Hispanics have disproportionately heard about—and what they hear is not good. While Republican candidates on average received negative marks from only 15% of Hispanics, Trump got a 70% negative rating.  Trump has made a number of provocative and controversial statements on the campaign trail, and his positions on immigration are likely behind his inability to connect with Latinos. 

A recent Washington Post/ABC news survey model found that immigration attitudes are the strongest statistical predictor of Trump support. Trump is not a limited government conservative, and neither are many of his supporters. But rather his controversial immigration positions are key to his support, and negatively define him among Hispanics as well.

For more public opinion analysis sign up here for Cato’s weekly digest of Public OpinionInsights.

A sense of historical perspective and responsible rhetoric may be too much to ask of candidates at this stage in a presidential campaign. With fifteen contenders all looking to score points some hyperbole is to be expected. Even so the level of threat inflation and “world in flames” talk last night was troublesome given how at odds it is with fundamental trends in world affairs.

Here is just a sampling of last week’s overheated discussion of global dangers:

Donald Trump: “The world is blowing up around us. …These are extraordinarily dangerous times that we live in.”

Ben Carson: “We’re talking about global jihadists who want to destroy us. …They are an existential threat to our nation.”

Rick Santorum: “Yes, they (Iran) are radical Islamists, that’s true. But their particular version of it, which is an apocalyptic version, which is a death cult, they believe in bringing about the end of the - end of the world. If you - if you poll Iranians and Iraqis, Shiites in the region, more than two-thirds of them believe that the end of the world is going to come within their lifetime. …They believe in bringing about the end of times. That’s their theological goal and we are in the process of giving them a nuclear weapon to do just that.”

Mike Huckabee: “This is really about the survival of Western civilization.”

With the candidates competing to outdo each other’s apocalyptic visions of the threats facing the U.S., it is no surprise that their policy prescriptions for Russia, Syria, Iran, and ISIL displayed a distinct tendency toward irresponsibility and overkill. Of the candidates in the debate, only Rand Paul and John Kasich articulated more temperate visions of U.S. foreign policy, Paul suggesting that sometimes intervention makes things worse and Kasich that the U.S. should actually wait to see how Iran behaves before simply ripping up the Iran deal and pursuing more aggressive options.

Just a few of the GOP debate’s policy proposals included:

  • Spending billions of dollars to “rebuild” a military that is already by far the most powerful in the world
  • Arming Israel with earth-penetrating ordnance to bomb Iran’s nuclear facilities
  • Conducting offensive cyber attacks on China as a form of deterrence
  • Sending 10,000 (or more) U.S. ground troops in to Syria to take on the Islamic State

The reality is that the world, though troubled, is more peaceful than at any other point in modern history. As scholars like Steven Pinker (The Better Angels of our Nature), John Mueller (Retreat from Doomsday), and Joshua Goldstein (Winning the War on War) have powerfully argued, warfare – indeed conflict of all kinds – has been on the decline for decades. The result, concludes the recent Cato volume, A Dangerous World?, is that the United States enjoys unprecedented security despite the presence of the Islamic terrorism and other troubles abroad. Nor is the good news limited to the decline of war. As the Cato project HumanProgress.org documents, the world has made steady progress in the past 100 years on all fronts from life expectancy and poverty reduction to the expansion of political and economic freedoms.

Unfortunately, this kind of good news won’t help Republicans get elected. And thanks to this relentless overselling of global dangers, few Americans understand the world’s peaceful trajectory and too many support shortsighted and counterproductive interventionist strategies.

The Chicago Council on Global Affairs just released its 2015 survey documenting American foreign policy attitudes. Entitled “America Divided: Political Partisanship and U.S. Foreign Policy,” the Council’s report emphasizes the stark disagreements between Republicans and Democrats over foreign policy goals and the means for achieving them. While there are certainly important differences between the two camps, there is a dangerous underlying consensus today that unites left and right: Americans of all stripes suffer from an “interventionist itch.” With respect to fighting terrorism and the Islamic State, Americans are far too supportive of the kinds of military intervention that have proved ineffective and counterproductive in the past.

As 9/11 receded and the war in Iraq descended in to insurgency, Americans became less interested in having the United States play an active role in world affairs and more wary of military intervention. Over the past year, however, as concerns have mounted over the Islamic State, so has the public’s willingness to support various measures to combat terrorism. Drawing on the CCGA survey, Table One reveals public support across party lines for a host of interventionist activities. In addition, the CCGA report notes, a majority of Americans would support cyberattacks and airstrikes (though not the use of ground troops) against Iran should Iran renege on the nuclear agreement.

American Support for Military Intervention: In order to combat international terrorism, please say whether you favor or oppose each of the following measures (% favor)*






US air strikes against terrorist training camps and other facilities





Using drone strikes to assassinate individual terrorist leaders





Assassination of individual terrorist leaders





Attacks by US ground troops against terrorist training camps and other facilities





Providing military assistance to Arab governments to combat violent Islamic extremists groups





Keeping some US troops in Afghanistan beyond 2016 for training and counterterrorism





These figures suggest several sobering conclusions. First, they clearly indicate a stable interventionist consensus that includes both obvious advocates (Republicans) and less obvious advocates (Democrats and even Independents). Such a consensus is somewhat surprising considering all evidence from the past 14 years of intervention makes clear just how poorly such tactics have worked and because the public has repeatedly come to oppose the interventions they previously favored after they prove ineffective. On the other hand, the presence of this consensus is understandable given the interventionist agendas of the Bush and Obama administrations and the vocal support from both Republican and Democratic leaders for more intervention of various kinds.

Second, the consensus illustrates the degree to which the threat of terrorism has come to dominate the U.S. conversation about national security. The 2015 CCGA study finds no increase in support for the use of military force to aid Taiwan, or Israel, or South Korea. But terrorism, even 14 years after 9/11, remains a lighting rod capable of inducing overheated rhetoric and overheated fears.

Finally, these figures indicate that interventionist cries from the candidates will find a receptive audience as we approach the 2016 elections. All of the Republican candidates (Rand Paul aside) as well as Hillary Clinton have staked out positions arguing for more intervention. There is thus every reason to believe that the United States will find itself further entangled in the Middle East in the near future.

*Source: Chicago Council on Global Affairs, “America Divided,” 2015. http://www.thechicagocouncil.org

The FOMC decided last week against raising interest rates given its concerns about the global economy and financial conditions. While these concerns are reasonable, the FOMC’s decision highlights a growing problem that has increasingly plagued the Fed since the crisis erupted: its incredibly ad-hoc approach to monetary policy.

Just a few months ago the FOMC was signaling it would almost certainly raise interest rates, but now it has changed its mind. This change would not be so bad if it were predictable, but it was not so. No one expects the Fed to perfectly forecast the economy, but we should expect the Fed to make clear how it would respond to differing states of the economy. This simply has not happened. From the QE programs to forward guidance to lifting interest rates from zero, Fed policy has been made up on the fly. This unpredictable behavior has meant that no one, including Fed officials, knows for sure what will happen from one FOMC meeting to the next.

As a result, markets have become more and more obsessed with every word coming from the mouths of Fed officials. Post-FOMC press conferences like the one last Thursday became must-watch TV for anyone concerned about investments. Ironically, then, the Fed’s attempt to calm markets through these ad-hoc measures has only made them more fragile.

It would be far better for the Fed to focus on a narrow mandate in a rule-like manner that makes conditional forecasts possible. For example, if the Fed were to target a stable growth path for total dollar spending and adjust policy as needed to hit it there would be far less of the Fed’s current guessing game. The FOMC’s decision last week highlights how sorely this change is needed.

[Cross-posted from Alt-M.org]

The federal government spends almost $4 trillion a year. It has hundreds of agencies and runs more than 2,300 subsidy programs. It employs 2.1 million civilian workers, 1.4 million uniformed military personnel, and 560,000 postal workers. It is a huge organization.

It also fails a lot and is increasingly distrusted. One new Gallup poll finds that three-quarters of Americans think that government corruption is widespread, while another shows that half of Americans believe that the federal government is a threat to our freedom.

A new essay, “Bureaucratic Failure in the Federal Government,” at DownsizingGovernment.org examines structural features of the executive branch that cause federal failure and help to engender such a dim view from the public.

Four of the participants in next month’s Cato conference have written essays pertaining to the geopolitics surrounding TTIP.  Today, we publish two of those essays in our Online Forum.

First, in this piece, Phil Levy of the Chicago Council on Global Affairs and Northwestern University’s Kellogg School of Management notes the interrelatedness of economic and security interests in the TTIP and writes that “A successful TTIP would have a number of salutary effects on the geopolitical scene. The necessary corollary is that a failed TTIP effort could be costly…”

Second, in this piece, while acknowledging that “TTIP can be a valuable geopolitical tool for the United States,” Peter Rashish of Transnational Strategy Group LLC, also cautions that “policymakers need to weigh carefully how far trade policy should go in promoting U.S. foreign policy objectives.”

Your comments are welcome.

Today’s essay for Cato’s Online Forum on the Transatlantic Trade and Investment Partnership comes from Berkeley Political Science Professor Vinod K. Aggarwal, who explains the growing popularity of trade liberalization outside the WTO, and discusses how third countries might react to a TTIP agreement between the United States and European Union.

This essay and this forum are associated with an upcoming TTIP conference at Cato on October 12.

Desperately searching for an establishment Republican who can block Donald Trump, many observers are ignoring the strong and politically astute performance of Rand Paul in Wednesday night’s Republican debate. A classic example this morning is Michael Gerson, the big-government Republican who has written for George W. Bush and the Washington Post and is the most anti-libertarian pundit this side of Salon. Recognizing the need for the Republican party to reach new audiences, especially “with minorities, with women, with younger voters, with working-class voters in key states,” Gerson writes:

The relatively rare moments of economic analysis and political outreach in the second Republican debate — Chris Christie talking about income stagnation, or Marco Rubio lamenting the “millions of people in this country living paycheck to paycheck,” or Ben Carson admitting the minimum wage might require increasing and fixing, or Jeb Bush setting out the necessary goal of accelerated economic growth, or John Kasich calling for a “sense of hope, sense of purpose, a sense of unity” — served only to highlight the opportunity cost of the Trump summer.

What’s missing? Well, Rand Paul talked about marijuana reform, an issue that is far more popular than the Republican Party, especially among younger voters. And criminal justice and incarceration, an issue of special concern to minorities. And especially about our endless wars in the Middle East, at a time when 63 percent of Republicans and 79 percent of independents say that the Iraq war was not worth the costs, and when 52 percent of Americans say the United States “should mind its own business internationally and let other countries get along the best they can on their own.” (Not the best formulation, as noninterventionists are not opposed to international activity, just to imprudent military action. But you go to print with the polls you have, not the polls you wish you had.) Those are attempts to reach new audiences that a fair-minded debate watcher would have noticed.

Fortunately, not everyone was deaf to Paul’s arguments. Even at the Washington Post people noticed:

Eugene Robinson: Rand Paul seems to have become a libertarian again, sticking up for individual rights. And unlike the others on the stage, he spoke out for peace rather than war.

Charles Lane: For my money, Paul has delivered the two pithiest critiques of Trump of anyone so far in the debates.

In Cleveland, he pointed at Trump, who actually boasts about his promiscuous political donations, and declared, with complete accuracy, “I mean, this is what’s wrong. He buys and sells politicians of all stripes.”

Last night, Paul was also spot-on regarding Trump’s over-the-top rudeness: “Do we want someone with that kind of character? With that kind of careless language? I think there’s a sophomoric quality about Mr. Trump… about his visceral response to attack people on their appearance, short, tall, fat, ugly.” He added: “Do we really want someone in charge of our nuclear arsenal who goes around basically using the insults of a junior high or a sophomore in high school?” Lately, Paul’s stump speeches hammer on these themes, too.

And in the conservative media:

Tim Carney of the Washington Examiner: Rand Paul just gave the smartest comments on foreign policy from a GOP debate stage in decades.

Guy Benson of Fox News and Townhall: Rand Paul making case that Iraq war didn’t make us safer… which most Americans agree with.

And in the heartland of America, John Kass at the Chicago Tribune:

Rand Paul won the Republican presidential debate.

It wasn’t even close….

Paul, the senator from Kentucky, spoke like a thoughtful grown-up, overshadowing them all on foreign policy, explaining that intervening in Middle East civil wars is a recipe for disaster….

“Sometimes both sides of the civil war are evil, and sometimes intervention sometimes makes us less safe,” Paul said. “This is the real debate we have to have in the Middle East….

There is no buzz to such rhetoric, no bloody gusto, no King Leonidas abs of steel, no Joan of Arc with a sword.

It’s just grown-up talk, and so, quite likely, not entertaining at all.

Right now 50 percent of Republicans tell pollsters they support two candidates who have never before sought or held public office, and who are highly unlikely to succeed in this race. That means the race is still wide open. As Rand Paul said Wednesday night, “If you want boots on the ground, and you want them to be our sons and daughters, you got 14 other choices.” Millions of Republicans believe in free enterprise, smaller government, less punitive drug laws, and a more cautious approach to military intervention. If Paul can convince them that he’s the only candidate who shares their perspective, he has every opportunity to move up sharply in the polls. But there’s powerful Establishment resistance to new ideas and new policies.

We had our second debate of the primary season on Wednesday, a grueling five hour affair pitting fifteen Republican hopefuls against each other in two debate sessions. When CNN’s hosts weren’t asking inane questions – i.e., whether candidates had considered their Secret Service nickname or whether they would trust Donald Trump with the nuclear codes – they did find some time to focus on foreign policy issues. I have a piece over at the National Interest discussing the debate, and highlighting some of the misleading narratives underlying much of the GOP debate.

Though there were some factual errors, the bigger problem was the reliance of most candidates on fundamental ideas which are effectively untrue, like the idea that the U.S. military is weak or small compared to that of other nations:

Ben Carson noted that “our Air Force is incapable of doing the same things that it did a few years ago. Carly Fiorina argued that “we need the strongest military on the face of the planet,” while Marco Rubio noted that “… we are eviscerating our military.” Such claims are entirely false: the U.S. military is among the world’s largest, spending more than the next 13 countries combined in 2013 (including China and Russia)!  Today, the United States makes up 38.4% of all global military spending, and spends substantially more on the military than it did on average during the Cold War.

Many candidates also expressed support for the idea that it is U.S. absence from conflicts which creates problems, rather than U.S. intervention itself. Again, this narrative has proven to be demonstrably false in the last ten years, as examples from Libya, Iraq and elsewhere show:

Jeb Bush noted that “when we pull back, voids are created. We left Iraq… and now we have the creation of ISIS.” Again, this narrative is convenient for many candidates, allowing them to blame President Obama’s troop withdrawals, rather than the initial disastrous decision to invade Iraq, for the rise of ISIS. Unfortunately, it is similarly false: Iraq’s sectarian problems existed long before the U.S. withdrawal of troops in 2011, and the rise of ISIS is at least partly a result of the Bush administration’s decision to disband the Iraqi army.

When we base our foreign policy debates on such misleading ideas, candidates will present policy options which are unworkable or even counterproductive. Voters deserve a better debate, one which acknowledges the nuance and complexity of foreign affairs. You can read the whole piece here

Pope Francis asked all Catholics to pray for those “who seek a home where they can live without fear” but went further by actually praising those who help refugees.  In arguing for the admission of more Syrian refugees, he said the goal should be “to give them a concrete hope, and not just to tell them: ‘Have courage, be patient!’”  No doubt the Pope would go further than many of us in arguing for welfare for refugees even though merely getting the governments of the way to stop hurting refugees is enough, but his full-throated support for granting them refuge is commendable.

But Pope Francis didn’t just talk about refugees fleeing violence, he also discussed those fleeing poverty:

We see these refugees, these poor people who are escaping from war, escaping from hunger, but that’s the tip of the iceberg.  But underlying that is the cause, and the cause is a socio-economic system that is bad, unjust, because within an economic system, within everything, within the world, speaking of the ecological problem, within the socio-economic society, in politics, the person always has to be the center.  And today’s dominant economic system has removed the person from the center, and at the center is the god of money.  [Emphasis added]

The Pope is correct that free-markets are to blame for immigration, but not in the way he thinks.  The prosperity of free-market countries attracts large numbers of immigrants from less-free ones.  Economists Maryam Naghsh Nejad and Andrew T. Young recently found that improving economic freedom is a huge attraction for immigrants.  Fortunately that movement does not decrease economic freedom in receiving nations and may actually increase it according to this paper, but the lesson is that people who vote with their feet prefer relatively freer economic systems.

The Pope is deeply and rightly concerned with poverty but he should consider that immigration is an excellent way to fight it.  Migration is one of the most successful strategies the World Bank has developed to fight poverty – raising the wages of Tongan migrants in this example almost 10-fold in a short period of time.  No other development project has shown such dramatic improvements and the improvements are scalable.  Crucially, as economist Michael Clemens pointed out, that increase in Tongan wealth also made New Zealand a wealthier nation through the benefits of mutually voluntary exchange.

Pope Francis is generally supportive of liberalizing immigration policy and reducing poverty around the world, but he should realize that free-markets and the migration of poor people to them is the cheapest and fastest way to alleviate much human suffering.

Last week, the Department of Justice announced a new policy regarding its approach to corporate criminal investigations.  Instead of focusing first on the company and, having resolved that portion of the investigation, turning to the task of identifying potential individual criminal suspects, prosecutors are now directed to build their cases against individual wrong doers from the start.  Media coverage of this policy statement has focused on criticism levied against the administration for being too soft on Wall Street and too cozy with corporate donors.  The New York Times trotted out the old complaint that no one went to jail in the wake of the financial crisis (even though, to my knowledge, no one has ever identified a criminal law the violation of which caused any part of the crisis).  While the administration’s rhetoric about equal justice before the law is admirable, the policy memo and its surrounding coverage have a distressing whiff of scapegoating about them. 

Deputy Attorney General Sally Yates asserted that the DOJ would not simply “accept…a company’s cooperation when they just offer up the vice president in charge of going to jail.”  Yet the incentives inherent in the new policy risk provoking just that response.  It is clearly the intent of the new policy to procure more criminal charges against individuals.  Prosecuting attorneys will therefore be under pressure to find individuals to charge.  Additionally, the first principle stated in the memo is “To be eligible for any cooperation credit, corporations must provide to the Department all relevant facts about the individuals involved in corporate misconduct.”   Companies therefore will be highly incentivized to identify at least one individual and provide as much information as possible, as quickly as possible, to the DOJ on that person’s conduct.  Despite the memo’s insistence that the company identify all individuals involved in the alleged misconduct, “regardless of their position, status or seniority,” company management, knowing that at least one individual is likely to face criminal charges, will be motivated to point fingers at anyone but themselves.  The more quickly their accusations can coalesce around one individual – the Chief Going to Jail Officer – the more quickly the DOJ may end its “send individuals to prison” phase and turn to settling up with the corporation itself.  As the memo acknowledges, corporate criminality is difficult to prove, especially “[i]n large corporations, where responsibility can be diffuse and decisions are made at various levels[.]”  In these circumstances, “it can be difficult to determine if someone possessed the knowledge and criminal intent necessary to establish their guilt beyond a reasonable doubt.”  All the more reason, if management is convinced someone is headed to prison, to ensure the arrows all point at one culpable and easily convictable individual, saving the skins of everyone else. 

It may be, however, that the incentives of criminal prosecution will always include finger-pointing and scape-goating.  As I said, the argument that “[t]he public needs to have confidence there is one system of justice and it applies equally regardless of whether that crime occurs on a street corner or in a boardroom” is a compelling one.  I would add, however, that we should also have confidence that the laws apply equally whether the boardroom is a large expensive one or a shabby little one.  Companies facing a government investigation will often hire a law firm to complete an internal investigation on the company’s own dime.  The investigation, yes, may be ordered to fulfill the directors’ duty to the company and to compliance with the law, but is also almost always intended to help smooth the company’s negotiations with the government.  These investigations therefore occupy an uneasy space.  First, they encourage the corporation to, in effect, inform against itself.  Second, they provide the opportunity for a better settlement for the companies wealthy enough to afford the investigation.  Internal investigations are not cheap.  To be effective, they must be thorough and thoroughness is expensive.  It requires a large quantity of attorney hours to ensure that the investigation is conducted methodically, carefully documented, and that all leads are run to ground.  When the DOJ says that “providing all relevant facts” is the “threshold requirement” for eligibility to have its cooperation considered as a mitigating factor and that cooperation credit will be assessed based on factors such as “timeliness…diligence, thoroughness, and speed,” it suggests that companies with the money to pay for a high caliber firm to conduct the investigation is likely to get the best deal.  While this is not anything new, it nonetheless contradicts the stated purpose of the new policy: ensuring equal treatment under the law.

Charging executives individually may well encourage them to exercise more diligence in keeping on the right side of the law.  However, it would be irresponsible to ignore the potential side-effects of any policy whose intent is to put more individuals behind bars.  This is especially true when the policy appears to have been developed in reaction to public clamor that “someone” needs to pay.  No just law was ever written to placate witch hunters. 

The African Intellectual Property Organization (OAPI) has reportedly accepted the registration of “Scotch” as a geographical indication for whisky “made in Scotland from water, cereals and yeast, and matured for at least three years.”  It’s unclear what if any commercial consequences this move will have considering that the 17 West African countries of the OAPI are not major consumers of Scotch.  However, it does have significant importance as a step forward in the attempt to use GI protection to secure excessive privileges for Old World producers in foreign markets.

Perhaps the word “Scotch” does indeed refer only to whisky made in Scotland.  The Scottish producers of scotch certainly think so.  In no uncertain terms, the spokesperson of the Scotch Whisky Association says that GI registration will protect consumers from “fakes.” 

But the purpose of GI protection is generally not to fight against fakes (fraud is already illegal everywhere) but to prevent the use of place names as generic descriptions of products.  Scottish producers want to make sure that no where on earth are consumers allowed to think that “Scotch” simply means whisky made according to the methods historically used in Scotland. 

Consider the example of Champagne.   To some, champagne is a word that means bubbly white wine.  To others, it is a name for wine made near Epernay, France according to traditional methods.  French champagne producers have been fighting long and hard to claw back the word and prohibit its use as a generic term.

But there are many, many geographic words that are used as generic descriptors.  Consider Belgian waffles, French fries, Philly cheesesteak, or even Valencia oranges.  Despite being the names of places, these words tell you what the product is like, not where it came from.  

There are two big policy questions surrounding GIs: (1) whether a geographic term deserves protection and (2) what actions are prohibited once a GI is protected.  Let’s consider the second question for now.

Whenever a government decides to control the use of language to protect commercial interest, it runs the risk of overprotecting that interest at the expense of the public.  This is a basic problem for trademark law, where to prevent excessive protection, trademarks are not protected if they are merely descriptive terms, and the test for infringement of protected marks hinges on whether there is a likelihood of confusion as to the source of a product.  In the United States, GIs are generally protected under trademark law.

The OAPI’s GI protection laws are modeled after the European system, which does not employ those kinds of limitations.  Consider this provision of the OAPI’s GI rules:

it shall be unlawful to use, for commercial purposes, a registered geographical indication, or a similar designation, with respect to the products specified in the Register or similar products, even if the true origin of the products is indicated or if the geographical indication is in the form of a translation or is accompanied by terms such as “kind”, “type”, “make”, “imitation” or the like. [emphasis added]

In other words, use of the word “Scotch” is now illegal even if there is zero possibility that a consumer would think the whisky comes from Scotland because the bottle says “Pecos Bill’s Scotch-style Texas Whisky.”  This kind of rule does not benefit consumers in any way at all, but it does further the interests of Scottish whisky makers at the expense of common, accurate speech.

Why should this matter to anyone outside of Scotland and West Africa?  Because it is part of a very troubling movement within international economic policy. The European Union is using free trade agreements to pressure countries to adopt this excessive form of GI protection and to protect a list of specific GIs even if they are generic terms in that country.  These include wine names like champagne, port, and sherry as well as numerous generic cheese names like parmesan, asiago, feta, and gorgonzola. 

As the United States negotiates the Transatlantic Trade and Investment Partnership with the EU, it’s important for American policymakers to understand that Europe’s approach to GIs is protectionist and incompatible with the goal of free trade in a globalized economy.  This is true even if you think “Scotch” can only be made in Scotland.