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The economic plight of low-skilled workers has received considerable attention during the presidential campaign. The problem is older than the primary season however, as the share of prime-age U.S. workers without a high school degree with jobs has been declining for decades. Yet at the same time, low-skilled immigrant men have been unaffected by this trend. While some commentators have attempted to blame the failure of native-born men to work on immigrants, the evidence points to other causes.

This post will expand on the lessons from Nicholas Eberstadt’s wonderful new book Men Without Work to give five reasons why low-skilled men who have immigrated to the United States tend to work more often than similarly educated men who were born here.

Figure 1 highlights the problem. For as far back as we have data, immigrant men without high school degrees in their prime years (25-54) have held jobs far more often than similar native-born men. Moreover, the gap in employment between the average low-skilled immigrant man and the similar native-born man is growing. In 1995, there was an 18 percentage point difference in the employment rates of the two groups. By 2014, the difference was 31 points.

Source: Census Current Population Survey March Supplement

1. Low-skilled immigrant men look for work. The single most important reason that immigrants perform better than lower-skilled natives is that they actually search for jobs in the labor market. As Figure 2 shows, more than 1 in 3 low-skilled native-born men in their primes are not even looking for jobs, compared to just 1 in 13 immigrant men. The gap is also growing. In 1995, there was a 17 percentage point difference between the share of low-skilled immigrant men and low-skilled native-born men who were out of the workforce entirely. By 2014, the difference had reached 25 points. It’s hard to get a job without first looking.

Source: Census Current Population Survey March Supplement

2. Low-skilled immigrants use less welfare. As a 2013 paper by the Cato Institute demonstrated, poor immigrants use significantly less welfare than poor native-born citizens. Moreover, as I have shown previously, immigrant labor force participation rates grew in response to the welfare reform that Congress passed in 1996. The 1996 law barred all noncitizens from welfare, except for legal permanent residents who had been in the country for more than five years. This incentivized them to seek jobs, and during this time, overall immigrant employment rates surpassed the native-born rates. This surge in employment caused their income to rise so much that their rates of poverty actually declined. Native-born men have faced much less pressure to reenter the labor market.

3. Low-skilled immigrant men commit far fewer crimes. Immigrant men are much less likely to be incarcerated than similar native-born men. Figure 3 provides the incarceration rates for native and foreign-born men ages 18 to 39, and in every Census year since 1980, the foreign-born rate is half or less than half the native-born rate. This is also true for high school dropouts from the top sending countries for unauthorized immigrants. Almost 1 in 9 native-born men ages 18 to 39 without a high school degree was incarcerated in 2010, compared to just 1 in 59 Mexican-born men. Criminal records and unemployment resulting from incarceration provide serious obstacles to the ability of native-born men to find employment.

Source: American Immigration Council 

4. Low-skilled immigrant men are more likely to marry. For both immigrants and natives, married prime-age men are much more likely to work than never-married men (Figure 5). For immigrants, there was an almost 10 percentage point difference in employment rates between these two groups of men. Natives had nearly twice the gap. As Figure 6 shows, low-skilled immigrant men were nearly twice as likely to be married in 2014. The best theory is that married men are more motivated to work because they often need to provide for their families.

Source: Census Current Population Survey March Supplement (2014)

5. Native male workers are more likely to get educated. As I have previously explained, the greater share of natives who fail to graduate high school or obtain employment is explained entirely by the fact that working natives are much more likely to get educated today than in the past. In fact, as Figure 7 shows, the absolute number of native-born high school dropouts without work (purple line) has actually declined slightly since 1995, just not as quickly as the total population of dropouts has declined (red line). As native workers are leaving this population by getting educated, low-skilled immigrants are entering from abroad (blue line) and finding jobs much faster than others are leaving the workforce (green line).

Source: Census Current Population Survey March Supplement

Opponents of immigration note that several studies have found that low-skilled immigration causes small declines in wages for native-born high school dropouts. But all of the studies finding declines for low-skilled native wages have found substantially larger declines for low-skilled immigrant wages. If those small wage declines forced natives out of the workforce in large numbers then we should expect even larger declines in labor force participation rate for low-skilled immigrant workers. That we do not is telling. As Eberstadt notes:

No matter their race or educational status, married men raising a family work more, and never-married men without children or children in their home work less. No matter their ethnicity or race, prime-age men who come to this country work more than those here by birth. Neither a wedding nor a green card confers innate advantage in the competition for jobs. Rather, marriage and migration decisions point to motivations, aspirations, priorities, values, and other intangibles that do so much to explain real-world human achievements.

Government policies—such as reforming welfare programs and the criminal justice system—could help some of these native-born Americans to reenter the labor force. But the main reason that low-skilled immigrant men work more often than other low-skilled men is that these immigrants have made better personal decisions. They seek out work and commit fewer crimes. They start and provide for their families. They make these decisions despite facing stiffer competition for jobs from newer immigrants and lacking the language proficiency of native workers—the most important hurdle to employment in the United States.  

In other words, immigrants don’t just provide important economic benefits by preventing the U.S. labor force from declining—they are also bringing with them many important cultural benefits that the United States desperately needs. Punishing these immigrant workers will not aid struggling native-born workers—it will only hurt them and the economy as a whole.

Don B. Kates, a pioneer in the revival of the Second Amendment, has died at 75. Eugene Volokh writes in the Washington Post that 

Don wrote “Handgun Prohibition and the Original Meaning of the Second Amendment,” 82 Mich. L. Rev. 204 (1983), the first modern article in a major law review arguing for the individual-rights view of the Second Amendment, and since then he wrote or co-wrote over 15 more law review articles, as well as writing, co-writing or editing four books. His work has been heavily cited both by courts and by scholars.

His writing career may have begun with Inquiry magazine, published in the 1970s by the Cato Institute. His article “Handgun Control: Prohibition Revisited” appeared in Inquiry’s second issue, December 5, 1977. For some reason that piece appears to have been excerpted in the Washington Post three years later.

Libertarian movement historian Brian Doherty expands on his seminal influence:

As explained in an excellent 2014 essay on Kates’ contributions to modern Second Amendment thought by California-based gun law scholar C.D. Michel, “Kates was a nearly lone voice in the constitutional law wilderness….Kates’ work, both as a constitutional scholar and criminologist….largely ignited the counter revolution against the American gun control movement” by arguing and demonstrating that the Amendment was certainly intended to protect an individual right to possess weapons.

Kates’ article became an ur-source to later articles by more academically well-connected authors, such as Sanford Levinson’s 1989 Yale Law Review article “The Embarrassing Second Amendment,” that spread the new understanding of that Amendment as guaranteeing an individual right to the more liberal side of legal academia.

As Michel notes, “All the scholarship that Kates indirectly ignited eventually fueled legal briefs filed before the Supreme Court in District of Columbia v. Heller.”

According to Wikipedia, Kates grew up in the San Francisco Bay Area and later attended Reed College and Yale Law School. During the Civil rights movement, he worked in the South for civil rights lawyers including William Kunstler, an experience that informed his understanding of the need for armed self-defense. After three years of teaching constitutional law, criminal law, and criminal procedure at Saint Louis University School of Law, he returned to San Francisco where he practiced law and began writing on criminology and guns. Dave Kopel has more on his background and influence here.

Watch Don Kates talk about gun control in this 1989 speech at Libertarianism.org.

The prospect of Donald Trump as president is only slightly less ridiculous than the idea of Charlie Sheen with nukes—and possibly more frightening. And yet, it looks as though the verbally incontinent celebreality billionaire has a one in three chance of being elected come Tuesday. 

Terrifying, yes, but fear can be useful. In this case, it ought to concentrate the mind wonderfully: if someone so manifestly unfit, so transparently likely to abuse power, can come within striking distance of the presidency, then maybe it was a bad idea to concentrate so much power in the Oval Office in the first place.    

It’s no secret that the “most powerful office in the world” grew even more powerful in the Bush-Obama years. Both presidents stretched the 2001 Authorization for the Use of Military Force into a wholesale delegation of congressional war powers broad enough to underwrite open-ended, globe-spanning war. Bush began—and Obama continued—the host of secret dragnet surveillance programs revealed by Edward Snowden—and others we’re still largely the dark about. And lately, on the home front, Obama has used the power of the pen to rewrite broad swathes of American law and spend billions of dollars Congress never appropriated. 

America’s center-left papers of record have lately begun to notice that the vast powers recent presidents have forged would be available to Trump as well. The New York Times’s Carl Hulse writes that Obama’s assertion of a presidential power of the purse could have ”huge consequences for our constitutional democracy…. How would lawmakers react if a willful new chief executive, unable to win money from Congress for a wall on the Mexican border, simply shifted $7 billion from another account and built it anyway?” And a month ago, the Washington Post kicked off a series of half a dozen editorials warning what would befall the republic should Trump ascend to Real Ultimate Power: “A President Trump could, unilaterally, change this country to its core,” the Post’s editorialists argued, and the other branches won’t be able to stop him: “in the U.S. System, the scope for executive action is, as we will lay out in a series of editorials next week, astonishingly broad.” 

It was nice to see the Post editorial board, which had called Obama’s recess-appointments gambit “a justifiable power grab,” evince some concern about potential abuses of executive power. Through five more editorials, they’d go on to observe that a President Trump could, among other abuses: “launch wars”; “take the oil”; “assassinate foreigners who opposed him”; issue a secret legal opinion overturning the torture ban; “launch surveillance programs targeting foreigners without informing Congress”; pull out of NAFTA, start a trade war, and “destroy the world economy.” An imposing parade of horribles, all leading up to the limpest of takeaways: “the nation should not subject itself to such a risk.” In other words, don’t vote for Trump. OK, then: Problem solved?

I don’t disagree with the Post’s argument that Trump represents a unique threat to what remains of constitutional government. But whatever happens on Tuesday, we’re sure to be facing a deeply unpopular, ethically challenged, and potentially abusive president. Hillary Clinton has, you may have noticed, a penchant for all the secrecy she can “get away with,” a hairtrigger enthusiasm for “dumb wars,” and a Nixonian ruthlessness that some of her supporters consider a virtueA broad majority of Americans—far more than will end up voting for Trump—distrust Hillary Clinton, the second most reviled candidate in the history of polling. Are they wrong to worry about her having the power to “unilaterally change this country to its core”? Should anyone have that kind of power? 

If Hillary Clinton is elected Tuesday, will centrists and liberals manage to keep in mind just how close we came to handing unchecked power to a figure like Donald Trump? Or having careened right to the edge of the cliff, are they just going to blurt: “Crikey: that was a close one!”, and go on to cheer every “justifiable power grab” Clinton undertakes? I worry about the answer to that question, but I’d like to think that all the recent hand-wringing about unchecked executive power will lead somewhere. 

In 1967, Arthur Schlesinger Jr., erstwhile court intellectual to JFK, and dean of the liberal historians, had a minor epiphany. As he put it in his journal, “It is evident now that this delight in a strong presidency was based on the fact that, up to now, all strong presidents in American history have pursued policies of which one has approved.” There was an artful evasiveness to that third-person formulation: Schlesinger had earlier backed Harry Truman’s claim of unlimited war powers, and would only publish his classic The Imperial Presidency when a Republican, Nixon, was in the White House. (It’s a shame when a man feels like he has to dissemble to his own diary.) But Schlesinger’s point stands: partisan myopia forged the Imperial Presidency, in his day and ours. 

Conservatives pushed for a stronger presidency during the era of the Emerging Republican Majority, believing they’d hold the office more often than not. They pushed even harder during the second Bush presidency, passing on a presidency with radically enhanced powers to Barack Obama. Liberals, in turn, adopted a “what-me-worry?” attitude toward unchecked war powers, so long as Obama was in charge, and cheered 44’s promise to govern via the pen and the phone. 

But, as Jonathan Turley observed last December: “While the policies [one favors] may not carry over to the next president, the powers will…. The problem with allowing a president to become a government unto himself is that you cannot guarantee who the next president might be.”

It’s an insight that should be blindingly obvious to anyone capable of thinking past a single presidential election cycle, but one that’s seemed beyond the ken of most political elites. If the next president can turn out to be a tyrant, then “tyrant-proofing the presidency,” in Conor Friedersdorf’s phrase, is our most pressing political task.

The number of gas stations in the United States has fallen by nearly 30 percent in the last two decade and the DC government says it is determined to arrest that decline, at least in this jurisdiction. Why it feels this way is a complete mystery, and that it has taken action on this front is absurd.

It is easy to surmise why we have fewer gas stations: more stringent regulations on underground gas tanks increased the cost of operating a station and spurred many operators to close their doors in the late 1990s. Also, many gas station operators these days see selling gas as primarily a way to attract a lot of shoppers to their store and are willing to cut their margin to the bone to get those ancillary sales. As a result, the average fuel sales (and non-fuel sales) of gas stations has been growing steadily. The days of a mom and pop station selling gas, fixing cars, and selling a little candy by the cashier are long gone.

In Washington DC, the number of gas stations has been further reduced by the sharp increase in real estate prices. The opportunity cost of operating a station jumps when the land would be much more profitable with a multi-story building on it instead of gas pumps.

Few people see this economic evolution towards fewer gas stations as a bad thing in and of itself: The economy today looks vastly different than the economy four decades ago–there are many more restaurants, fewer music stores, and a wide variety of entities today that didn’t even exist in the 1970s and 1980s. Few people across the country complain that it is difficult to buy gas–because if there were an excess demand, there would be an incentive for an entrepreneur to build a gas station.

Nevertheless, Washington DC has a Gas Station Advisory Board that must approve all station closings, and there is a good chance it will stand in the way of a developer hoping to convert a gas station into condos in tony Dupont Circle.

That such an entity exists is a wonderful commentary on the priorities of the progressive nomenclatura that govern the Nation’s Capital. For the most part these people oppose driving and the car culture that exists in the rest of the country, but at the same time they are reflexively opposed to all new development for the ironic reason that a new development means more people with cars will be competing against them for scarce on-street parking that the city inexplicably gives away.

it’s easy to surmise who the losers from this insipid policy will be: the middle and lower classes, who are increasingly priced out of the city’s housing market because the city prizes the protection of the elite carred class above all else. The wealthy car owners who park their cars on the street have the juice to delay and diminish all new developments, and the city council can pretend that giving the working class new rent controls will somehow make up for the utter lack of new housing being developed in Northwest DC. And one of the tools to stop development is a board that has to approve all gas station closures.

My suspicion is that the new condo building will eventually get built in a way that preserved the “historic” gas station, albeit three or four or more years from now and in a size that’s much smaller than what they have proposed, and the city councilmen and bureaucrats will congratulate themselves for reducing the “rapacious” profits of a developer.

But no one will ever stop to contemplate that their obstinacy on this project–and literally hundreds just like it across this town–combine to create unaffordable prices for middle-class families in this town. And at the same time they are fighting this condo development they will be pondering elsewhere how to create more affordable housing in this city, completely oblivious to the contradiction in their actions. 

The First Amendment guarantees the right to speak freely without fear of official retribution. One aspect of this right is that a government agency may not punish someone for speaking out, supporting a candidate, or running in an election. Allowing such retribution would be to allow the government to extort citizens into supporting a particular political orthodoxy.

But such extortion is exactly what happened in Nebraska. Robert Bennie, a financial advisor, became active in the Tea Party movement in 2010. Before then, he had never received any disciplinary action from the Nebraska Department of Banking and Finance, a regulatory agency that monitors brokerage advertisements for compliance with financial regulations. After Bennie became politically active, the Department suddenly began a campaign of investigations and threatening letters, despite the fact that Bennie remained fully compliant with all regulations.

Suspecting that these developments were retaliation for his political stands, Bennie sued the Department. Both the district court and the U.S. Court of Appeals for the Eighth Circuit agreed with Bennie that the government took an adverse action against him that was motivated in part by his First-Amendment-protected speech. And yet the courts nonetheless denied Bennie any relief, imposing yet another hurdle: the “ordinary firmness” test.

Under this test, a court must find that the adverse government action was “severe enough to chill a person of ordinary firmness from continuing to speak.” The district court found that the Department’s actions were not “severe enough” to meet this threshold, a holding which the Eighth Circuit affirmed.

Cato, joined by the Reason Foundation and the National Right to Work Legal Defense Foundation, has filed an amicus brief urging the Supreme Court to review the case and put an end to the misguided “ordinary firmness” test. The test was originally devised as a means of determining whether seemingly trivial allegations of retaliation could survive a motion to dismiss. But as shown here, courts no longer use the “ordinary firmness” test to distinguish true retaliation from trifling pushback. Instead, the test allows the government to get away with blatant campaigns of intimidation, so long as it can convince a factfinder that the plaintiff was insufficiently “firm.”

This simply does not square with the Supreme Court’s own “longstanding recognition that the Government may not retaliate for exercising First Amendment speech rights.” Wilkie v. Robbins (2007). As the Court has observed, “Official reprisal for protected speech offends the Constitution because it threatens to inhibit exercise of the protected right.” Hartman v. Moore (2006).The justices can eliminate the “ordinary firmness” test without risking a spate of frivolous lawsuits, because courts already have several early avenues for ensuring that trivial suits for truly minimalharms are thrown out.

The Supreme Court should take up Bennie v. Munn and ensure that the government can no longer punish citizens for their political views.

Over at Cato’s Police Misconduct web site we have selected the worst case for the month of October.  It goes to the City of Minneapolis for its handling of an excessive force complaint against Officer Blayne Lehner.

Here’s the background: Lehner and his partner responded to domestic disturbance call at an apartment building where they found two women arguing with one another.   According to the news reports, the encounter was captured on video.  The owner of the apartment building was so disturbed by what he saw–Lehner pushing one of the women without cause–that he filed a complaint with the department.

Later, Police Chief Janee Harteau agrees that Lehner’s conduct was unacceptable.  The Chief terminates Lehner’s employment with the police department.

Only now a labor arbitrator has overturned that employment decision and has ordered the city to reinstate Lehner along with compensation for the time he has been off the force.

News reports also show that Lehner has been the subject of previous complaints and lawsuits:

City records show that since 2000, more than 30 complaint investigations have been opened against Lehner. The vast majority of investigations were closed with no discipline. One case from 2014 with the Office of Police Conduct Review is still open. Records show Lehner was suspended twice in 2013. However, the reasons for the discipline were not listed. Lehner was also issued two letters of reprimand in 2012.

In 2015, Lehner was sued by a man who claimed the officer kicked him in the face, breaking a few of his teeth and causing him to briefly lose consciousness. In a rare move, the city decided not to defend Lehner. However, the city later settled the case for $360,000.

Officer Lehner will soon be back to policing again.

This coming Tuesday, nine states will consider ballot initiatives that legalize marijuana for medical or recreational purposes under state law. Twenty-five states have already legalized marijuana for medical use, and four have legalized fully, and polls suggest many or most of the new initiatives will pass. Opponents nevertheless make strong claims about adverse consequences from existing and proposed legalizations. We argue, based on the evidence, that such claims are exaggerated, misleading, or outright false.

Legalizing marijuana dramatically increases use: Several countries (Portugal, the Netherlands, Australia, and part of the U.K.) have liberalized their marijuana laws with little or no impact on marijuana use. Research on U.S. medical marijuana laws suggests that adult marijuana use has increased only modestly. Preliminary data in Colorado and Washington, the two first states to legalize recreational marijuana, display similar trends in use before and after legalization.

Legalizing marijuana increases other substance use: Whether legalization affects other substance use depends on whether new consumers progress to drugs such as cocaine or heroin (the gateway effect) and whether existing consumers substitute marijuana for other substances.  No scientifically convincing evidence supports the gateway hypothesis for marijuana.  In fact, some research suggests that users substitute from alcohol toward marijuana after liberalization. Rates of cocaine use appear unchanged in the wake of recreational marijuana laws. Research on medical marijuana laws shows little impact on alcohol or cocaine use.

Marijuana is more dangerous than alcohol: In fact, abundant medical evidence points to alcohol as more dangerous than marijuana. Regular alcohol use, for example, can generate life threatening diseases such as cirrhosis of the liver; regular marijuana use has no similar effect.  Indeed, if legalization leads users to substitute from alcohol towards marijuana, as some research suggests, this implies reduced harm from marijuana and alcohol use overall.

Legalization generates crime. States adopting recreational marijuana laws display large declines in arrest rates for drug offenses and no changes in violent and property crime rates. Research on international changes in marijuana policy and U.S. medical marijuana laws similarly show that relaxing marijuana prohibitions does not increase crime. Moreover, the Drug War consumes significant resources and diverts police and judicial attention away from more serious crimes, so liberalizing marijuana may help to reduce other crime.

Marijuana legalization increases traffic fatalities: Colorado, Washington, Alaska, and Oregon have seen no significant change in fatal traffic crash rates or traffic fatalities post-legalization. Research on medical marijuana laws and decriminalization even suggests that liberalization leads to fewer traffic accidents.  Colorado has seen a rise in marijuana-related traffic fatalities, but this likely reflects increased testing for, or labelling of, the presence of marijuana in crash victims – rather than increased accidents caused by marijuana use – because declines in other drug-related traffic fatalities have offset those related to marijuana, resulting in no net change in drug-related traffic fatalities.

Marijuana legalization endangers public health.  On the contrary, legalization promotes public health by providing individuals with safer options to treat their pain. Medical marijuana laws are associated with fewer suicides. Recreational marijuana laws appear to have little or no impact on suicide rates, and they have not led to any public health epidemics. Meanwhile, medical marijuana laws have reduced admissions for substance abuse treatment.  During the years when marijuana dispensaries proliferated in Denver, marijuana-related emergency department admissions were stable.

Marijuana legalization harms youth.  Recent health survey data indicate that relaxing marijuana prohibition does not greatly increase adolescent marijuana use (perhaps in part because these liberalizations do not change the legal status of marijuana for minors). No evidence suggests that marijuana use causes poorer educational outcomes or lower standardized test scores.  The correlation between adolescent marijuana use and cognitive functioning disappears in analyses that control for relevant confounding variables.

Evidence on the liberalization of marijuana laws suggests that this loosening may have increased marijuana consumption modestly, at least among adults. It also seems to have reduced traffic fatalities, suicide rates, and crime rates. Although some drug use may harm users and others, policies more directly targeting these harms could reduce harms more cheaply and effectively.

Yesterday morning, Rep. John Lewis (D-GA) tweeted a picture of himself being arrested as a young man. He captioned it: “I’ve marched, protested, been beaten and arrested–all for the right to vote. Friends of mine gave their lives. Honor their sacrifice. Vote.”

That tweet has gotten 35,000 retweets at this writing, and it will get many more. It’s one of many efforts mainstream politicians and parties are mounting in the final days before the 2016 elections to drive more voters to the polls.

I do honor the sacrifices of Mr. Lewis and so many others in the civil rights movement. If only the vote had made the civil rights strugle an episode in history and not the ongoing struggle that it is.

But it can be stated with certainty that Mr. Lewis’s tweet won’t make the difference in any election. It’s impossible to identify any one voter that may be convinced to go to the polls by that tweet. And if you could find that person, the chance that he or she might change the outcome in any election would be infinitesimal.

Is near-thirty-year office holder Mr. Lewis some kind of time-wasting fool for sending this tweet? Of course not.

John Lewis and the Democrats, just like his counterparts in the Republican party, are working to solve a collective action problem. Each individual acting solely on his or her own behalf would waste time and energy by voting, but acting in concert they move elections and public policy in the directions they prefer.

I’m more convinced than I was before we debated the topic this week that libertarians should adopt the same tactics to work toward their ends. A single vote does have an infinitesimally small chance of swaying any particular election, but the chances get better as you go down the ballot and with years of being a voter. Votes also signal a wide variety of political actors about the desires of the populus. Elected officials, their staffs, political parties, journalists, opinion leaders, future candidates, and donors all incorporate vote information—not just wins and losses, but margins of victory—into their many judgments and actions beyond election day.

Being a voter also positions you to talk to non-libertarians as a brother or sister in a joint enterprise—making our country a better place—which opens them to your ideas. Being a non-voter communicates indifference to people who are voters. If you explain your philosophical reasons for not voting, you’d better have a lot of their time and be really, really good at it, because you’re most likely to just come off a prig.

Professional politics includes efforts to suppress the vote of the other side. I’m not talking about anything illegal, but the artful and subtle ways that the major parties work to dispirit their opposition’s voters. We libertarians are so smart that we have people within our own ranks who drive down the libertarian vote by arguing that it’s irrational. I like those folks—can’t think of single anti-vote libertarian who I don’t—but they would serve our cause well by holding their tongues on the voting question and being smarter than us voters in the privacy of their basements.

As for me, I’m a libertarian and I vote.

Has the United States reached peak incoherence in foreign policy?

President Obama spent seven years expanding the war on terror and intervening inconsistently and incoherently in the Middle East, only to acknowledge in recent interviews that Libya was his greatest mistake. The frontrunners in the presidential campaign are no better. Hillary Clinton supported the Iraq War before she later opposed it, and promoted the TTP and TTIP while Secretary of State but now says they’re a bad idea. Donald Trump’s foreign policy views have doubled back on themselves so often it’s hard to tell where he stands.

Observers on both the right and the left agree that the United States has lost its vision of how to succeed in the international arena. This makes it impossible to craft sound strategy or to build any sort of public consensus around it. What the United States needs is a new paradigm to help cut through the many conundrums that currently have the United States flummoxed. This new vision must clarify the primary goals of American foreign policy and identify the appropriate means for achieving those goals.

Crafting consensus around such a vision will be challenging, however, and in the meantime we need strategies to save us from our worst tendencies towards threat inflation, overspending, and excessive military intervention around the world.

Today I would like to propose a mechanism for doing just that. I call it the Switzerland Test. Applying the test is simple. When assessing threats, making decisions about defense budgets, or thinking about whether to intervene in another civil war, our political leaders should just ask: What would Switzerland do?

Switzerland provides a compelling vision for American foreign policy for several reasons. First, the Swiss assess security threats rationally. The Swiss are lucky, surrounded by mountains as they are, which has allowed them to fend off would-be invaders and occupiers for most of their history. Even Hitler didn’t bother. And today, the Swiss share borders with friendly neighbors. As a result, the Swiss waste little time or money on unnecessary national security initiatives. The most heated security debate in Switzerland recently has been whether or not even to have an army.

The United States will surely keep its army, but notice the parallels here. The United States, like Switzerland, is surrounded by imposing natural obstacles and friendly, militarily weak allies. Beyond this the United States also enjoys the safety of a secure nuclear deterrent. Unlike Switzerland, unfortunately, the United States sees threats everywhere and thus the legacy military-industrial complex from the Cold War continues to rumble along, sucking up trillions of dollars that the private sector economy could put to far better use.

Second, Swiss foreign policy is mostly geared toward improving its economic well being by expanding international trade through the development of cooperative agreements. And because it is so tiny, Switzerland has had to become competitive economically through investments in its people, its educational infrastructure, and its physical infrastructure.

The United States could learn a lot from this effort as well. Rather than focus on military power, which costs a lot but does little to advance the nation’s economic interests, the United States should focus on improving its economic power. Rather than flirt with protectionism like Clinton and Trump have done throughout the campaign, the United States should embrace the cause of free trade much more fully.

Third, Switzerland accepts the world as it is and does not seek to change it or to control it, only to make money by working with it. Unlike the United States, Switzerland does not seek to control the behavior of other nations, to resolve other nations’ internal conflicts through force, or to reshape the world to make it safe for democracy.

To be sure, as a tiny country with zero ability to project military power, Switzerland has little choice in this regard. But the benefits to Switzerland are many. In the United States pundits decry the turmoil in the Middle East and worry about which group of moderate rebels to support in Syria, Yemen, Libya, or Iraq. Does anyone think Switzerland won’t end up making money by trading with whichever government winds up emerging? There is simply no reason for the United States to struggle so hard against what is. Instead, like Switzerland the United States should accept the world as it is and work to get rich and happy by working with the world.

Finally, Switzerland ensures that it will not wind up doing stupid things by staying neutral and maintaining its strategic independence. Rather than entangling themselves in the EU or in NATO, the Swiss stay neutral in most things but remain willing to cooperate to solve problems on a situational basis.

The United States would benefit from the Swiss example here as well. Though the threat of Soviet attack justified American participation in NATO during the Cold War, today there is no reason for the United States to hitch its wagon to Europe’s security. Today, neither Russia nor the Islamic State poses the sort of military threat that requires American assistance. Likewise, though China certainly scares its neighbors in the Pacific, but many of them can take care of themselves and none of them are worth the United States risking major military conflict with China. The United States has more to gain by trading with China than confronting China.

The Switzerland Test is simple, clear, and easy to apply. The primary goals of U.S. foreign policy are national security and prosperity. Since the security angle is almost entirely taken care of by geography and nuclear weapons, most U.S. foreign policy should be focused on expanding America’s economic connections with the rest of the world and enabling those efforts with the appropriate investments in education and infrastructure.

When confronting a foreign policy question, the United States just needs to ask: What would Switzerland do?

Two experiments in a new working paper find some evidence that some drivers using popular ride-hailing platforms discriminate against riders. In some cases African-American riders faced longer wait times or higher probabilities of having a driver cancel on them. To some extent, these findings should temper hopes that these new technologies and platforms would succeed in quickly rooting out these forms of discrimination. It is important to note, however, that this study examined whether there was discrimination within these platforms, it did not compare ride-hailing platforms and traditional taxi companies. These new platforms do offer some advantages over the status quo when it comes to identifying the channels of discrimination through richer data, while the rating system gives riders some recourse to penalize discriminating drivers and an incentive for drivers to maintain a high rating.

In the study the researchers undertook two large-scale experiments to try to determine whether there was a pattern of discrimination for riders using these ride-hailing platforms.

In the Seattle experiment research assistants of different racial backgrounds requested rides along pre-determined, randomized routes. They logged speed of service, directness of the route, and the passenger ratings received. For each of the services analyzed (UberX, Lyft, and the traditional taxi-hailing app Flywheel), African-American riders had longer acceptance times than white riders. In UberX, they also waited about 30 percent longer to be picked up, while there were no significant differences in the other two.

In Boston, research assistants varied the names they used to request rides, with one more “white sounding” and the other a “distinctively black name.” Here wait times and acceptance times did not differed significantly, in one platform the rate of trip cancellations did: in UberX the rate of cancellation for hailers using African American-sounding names was 10.1 percent, compared to 4.9 percent for the white-sounding names, while there were not signs of racial discrimination in Lyft (and women using the African-American names actually had a lower cancellation rate).

Some of this variation in discrimination might be due to differences in the way platforms provide rider information to the drivers. Lyft drivers see the passenger name and photo (if the passenger has chosen to upload one into their profile) before accepting a ride request, in UberX the drivers only get a name after accepting, and in Flywheel there are no passenger photos in traveler profiles at all. The authors suggest that platforms could alter the timing and content of the rider information provided to reduce the possible channels for discrimination.

Again,  this study examines whether there are signs of discrimination within these ride-hailing platforms, that is, differences in wait times, routes, and acceptance rates by gender or race. As the authors are careful to point out, they “do not claim that [transportation network companies] are “worse” than the status quo.”

The authors do provide one brief illustration of the discrimination present in traditional taxis, and find that there is also a substantial different in acceptance rates for traditional taxis when research assistants of different racial background tried to hail a cab.  The first taxi stopped roughly 60 percent of the time for a white hailer, compared to less than 20 percent of the time for an African-American rider. White riders never had more than four taxis pass before one stopped, while African-Americans saw six or seven taxis pass by in 20 percent of the time. So there is unfortunately a substantial amount of discrimination in the traditional taxi industry, but it is has been opaque and harder to measure or understand.  Also, riders who are discriminated against in those instances have fewer options to choose a different platform, give the offending drivers negative feedback, or provide information to the taxi company to make the extent of the discrimination clear.  

Number of Traditional Taxis Passing Waiting Travelers, by Race

Source: Ge et al. (2016).

While these ride-hailing platforms may offer many improvements over traditional taxis when it comes to convenience and cost, this new paper shows that some individual drivers discriminate against riders on the basis of their race or gender. It’s not clear how this level of discrimination compares to traditional taxis, and the study shows that there is a significant amount in the old framework as well. These new platforms make it easier for riders and companies to identify which drivers are doing this, and they give riders more recourse to penalize offending drivers and more options to choose from that might be better on these measures.

Armed with this new information and a fuller understanding of how this driver discrimination is taking place, platforms can experiment with changes to the timing and content of the rider information they provide to drivers to try and address these issues. Ride-hailing platforms have not yet solved the difficult problem of discrimination in that sphere, but they might still make significant progress in reducing it, and they can do it without the need for heavy-handed new government intervention.

The Guardian reports on calls by German chancellor Angela Merkel for internet platforms to “divulge the secrets of their algorithms”:

Angela Merkel has called on major internet platforms to divulge the secrets of their algorithms, arguing that their lack of transparency endangers debating culture.

The German chancellor said internet users had a right to know how and on what basis the information they received via search engines was channelled to them.

Speaking to a media conference in Munich, Merkel said: “I’m of the opinion that algorithms must be made more transparent, so that one can inform oneself as an interested citizen about questions like ‘what influences my behaviour on the internet and that of others?’.

“Algorithms, when they are not transparent, can lead to a distortion of our perception, they can shrink our expanse of information.”

An algorithm is the formula used by a search engine to steer a request for information. They are different for every search engine, highly secret and determine the significance or ranking of a web page.

Merkel has joined a growing number of critics who have highlighted the dangers of receiving information that confirms an existing opinion or is recommended by people with similar ideas.

“This is a development that we need to pay careful attention to,” she told the conference, adding that a healthy democracy was dependent on people being confronted by opposing ideas.

“The big internet platforms, through their algorithms, have become an eye of a needle which diverse media must pass through [to access their users],” she said.

My sense is that some Europeans are frustrated at how American companies dominate many aspects of the Internet. However, instead of trying to compete with the American companies in the marketplace (which would be a welcome development, as more competition is good), they have decided that regulating these companies (e.g., through antitrust scrutiny) is their best strategy for reducing American dominance.

Here, the demand to divulge algorithms strikes me as very odd. Would Chancellor Merkel ask newspapers such as Der Spiegel to divulge the decision-making process for how they decide to present information to their readers? Of course not. That would be absurd. Similarly absurd is telling Google and Facebook to divulge their algorithms for presenting information.

Now, these companies might have their own incentives to be transparent about their decision-making, in response to market forces. But there’s no need for governments to get involved with any of this, and Chancellor Merkel’s efforts may be mostly based on anti-Americanism and frustration with losing in the competition for Internet dominance.

They’ll be watching you: King County (Seattle) uses grocery loyalty card data to figure out who owns pets, according to a new report from local station KOMO. It then sends them letters warning of a $250 fine if they do not license the animals. The “county said they pay the company who pays stores such as Safeway …for access to customer data contained in every one of those reward card swipes.” And “the mailers work. Just last year they brought in more than $100,000 in new pet licenses.”

But remember, government needs access to Big Data to fight terrorism.

In 2008, Georgia’s General Assembly enacted the Qualified Educational Tax Credit Program in an effort to expand educational opportunities for schoolchildren and provide alternatives for parents concerned about underperforming public schools. Under the program, individual and corporate donors can receive a credit against their state income tax liability in exchange for contributions to qualified, nonprofit Student Scholarship Organizations that aid Georgia families in paying tuition at qualified private schools of their choice.

Unfortunately, opponents of school choice are once again trying to restrict parents’ ability to select the best education for their children. Because many of the scholarship students use them to attend religiously affiliated schools, the plaintiffs in this case argue that the tax-credit program entangles government in religion. Specifically, they claim that the program violates the Georgia constitution’s No-Aid Clause—one of the historically anti-Catholic Blaine Amendments—which forbids the taking of money “from the public treasury, directly or indirectly, in aid of any church, sect, cult, or religious denomination or of any sectarian institution.” They also allege a violation of the Gratuities Clause, which says that “the General Assembly shall not have the power to grant any donation or gratuity or to forgive any debt or obligation owing to the public.” Several families who have benefitted from the program, represented by the Institute for Justice, have intervened to defend the law.

The trial court held that plaintiffs lacked standing to challenge the tax-credit program. It further ruled that, even if they had standing, plaintiffs’ constitutional arguments failed because tax credits are not government funds. Violations of the No-Aid Clause require that public funds be spent in aid of a sectarian institution, and the Gratuities Clause could not have been violated because “the General Assembly cannot donate or give what it does not own.” Plaintiffs appealed and Cato has now filed an amicus brief, in collaboration with Neal McCluskey and Jason Bedrick of our Center for Educational Freedom, before the Georgia Supreme Court.

We urge the court to affirm the determination that the tax-credit program does not violate the state constitution, focusing on the fact that it does not involve spending public funds for any sectarian purpose. Because the program makes no expenditures from the public fisc, it cannot violate the No-Aid Clause. Taxpayers choose to donate voluntarily using their own private funds and receive a tax credit for the amount of the donation; no money ever enters or leaves the treasury.

The challengers attempt to get around this fact by claiming that the credits constitute an indirect public expenditure, but this argument relies on a budgetary theory known as “tax expenditure analysis” that finds no support as a legitimate means of constitutional interpretation under Georgia (or federal, or any other state) law. Indeed, the U.S. Supreme Court rejected this type of reasoning in Arizona Christian School Tuition Organization v. Winn (2011).

The argument that the program constitutes an unconstitutional gratuity is likewise incorrect because the tax credits are not public funds, and the government cannot give away that which it does not own. Even if Georgia were giving up something of value, it would not be a “gratuity” because the state receives a substantial benefit in return: increased educational attainment, plus the secondary effects that increased competition and a more educated citizenry create.

The Georgia Supreme Court should affirm the lower court’s decision and uphold the state’s Qualified Educational Tax Credit Program—ensuring educational choice for Georgia families, regardless of how much money they make.

This week and last, the Cato Institute filed amicus briefs urging the Supreme Court to take up two cases dealing with the constitutional status of “cell site location information,” or “CSLI.” This data, collected of necessity by cellular communications providers, creates detailed records of their customers’ movements. The briefs invite the Court to accept these cases so it can revise Fourth Amendment practice to eschew doctrine and more closely adhere to the language of the Fourth Amendment.

The Fourth Amendment states that “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated.” Presumably, when called upon to determine whether a Fourth Amendment violation has occurred, courts would analyze the elements of this language as follows: Was there a search? Was there a seizure? Was any such search or seizure of “their persons, houses, papers, [or] effects”? Was any such search or seizure reasonable?

And in cases involving familiar physical objects, courts usually do a sound textual analysis, at least implicitly. But in harder cases dealing with unfamiliar items such as communications and data, courts retreat to “reasonable expectation of privacy” doctrine that emerged from Katz v. United States in 1967, and offshoots of it like the “third-party doctrine.” The “reasonable expectation of privacy” test asks whether defendants’ feelings about things government agents accessed were reasonable. The corollary “third-party doctrine” cancels Fourth Amendment interests in information and things that are shared on the theory that expectations of privacy evaporate in that context.

The “reasonable expectation of privacy” test is the product of one non-essential concurrence in Katz, and the third-party doctrine was wrong when the Supreme Court created it in 1976 to ratify a law that deputized banks into financial surveillance. That doctrine grows further out of synch with each step forward our society takes in modern, connected living. Today, third-party service providers collect incredibly deep reservoirs of information about us: Cellular telephone networks, Internet service providers, search engines, and payment systems have data that can throw open windows onto our relationships, feelings, health conditions, business dealings, sexuality, emotions, and more.

In United States v. Carpenter, the U.S. Court of Appeals for the Sixth Circuit turned aside the appeal of two men convicted of armed robbery, whose CSLI had been used as evidence against them. Relying most heavily on an application of the “reasonable expectation of privacy” test in Smith v. Maryland, the court said that, while the contents of communications are protected by the Fourth Amendment, routing information is not. The court backhandedly dismissed the crucial question of whether the defendants had a property right in the data the government had seized, even though contracts and regulation both allocate property rights in data about communications use to consumers.

And in a similar case, Graham v. United States, the Fourth Circuit held that CSLI isn’t constitutionally protected because “an individual enjoys no Fourth Amendment protection ‘in information he voluntarily turns over to [a] third part[y]’” (quoting Smith v. Maryland).

Rather than relying on misshapen precedent as the appeals courts did, the Supreme Court should find that communications and data are items that can be seized and searched. Consistent with precedents both longstanding and recent, the Court should recognize that telecommunications customers can have property rights in such data, and that when the government seeks to seize and search such data, it generally requires a warrant. This will permit courts below to address seizures and searches of communications and data forthrightly, confidently assessing the reasonableness of government searches and seizures even when communications and data are involved.

The briefs join a merits brief filed this summer in United States v. Benbow, a CSLI case pending in the D.C. Circuit.

A large number of Republican candidates are openly opposing the Donald Trump’s immigration position. As I’ve noted before, 10 of the 11 GOP Senate candidates have campaigned on pro-immigration platforms. In the closest 40 House races according to Cook Political Report’s ratings, a majority of Republicans representing have already expressed openness to a pathway to legalization for unauthorized immigrants.

The large number of supporters of a compassionate immigration policy could be seen as surprising not only because the Republican presidential nominee has strongly opposed this approach, but also because only 6 of the districts are currently held by Democrats who back a legalization measure. However, it is important to note that these members are not out of step with their Republican constituents who, polls show nationally and on a state by state basis, support allowing unauthorized immigrants to stay.

Because some members were not directly asked about their views on legalization, support could be even greater, but here are the 21 members in tight races who have taken humane, pro-immigration positions:

1. Don Young (AK): “We want our country’s 11 million undocumented individuals to be welcomed and to have a place to belong – free of fear…. Immigrants have always recharged our country have been reliable sources of economic growth, cultural diversity and innovation…. like our colleagues drafting the bill, we believe this legislation should… provide a clear and responsible path to citizenship for those already here.”

2. Scott Jones (CA-7): “For those folks who are here illegally, I would advocate, as I have always advocated, a pathway to legal status for each any every one of them if they can pass a background check.”

3. Denham (CA-10): “I believe our immigration system is broken and in need of real and effective reform. I support providing an earned path to citizenship for those who want it…. Reform will ensure that all undocumented immigrants are added to the tax rolls, ensuring that everyone pays their fair share.”

4. David Valadao (CA-21): “Immigration reform is something I’m still very supportive of and continue to work on behind the scenes…. Every bill that I’ve been a part of is about allowing immigrants who are here to go through a process to become legal… For the people who are working hard in the fields, in the restaurant industry, in the service industry, I mean we’ve got to come up with a system that addresses the 11 million who are here. You have to a process that makes sure that you have guest worker programs that work, visa programs that work.”

5. Darrel Issa (CA-49): “Beyond border security, any reform package must make an immediate determination of who stays and who goes, based on our national interests. Those who demonstrate the ability to contribute to our society in a meaningful way should have a path forward to guide them, be placed at the end of the legal-immigration line, meet the strict standards established and face a rigorous but fair application process. Those who are migrant workers should be put into a temporary guest-worker program.”

6. Coffman (CO-6): “Immigration reform… has to be compassionate about keeping families together…  I cosponsored legislation this summer that would give [immigrant children of unauthorized immigrants] a legal status and then a path to citizenship… For the adults who knowingly broke the law who are here today, I think they ought to have the opportunity to come out of the shadows and have a legal status.”

7. Jolly (FL-13): “I support… comprehensive immigration reform that has remediation and penalties and so forth…. I don’t support a pathway to citizenship for people who came here illegally. But I do support a pathway to legal status and residency.”

8. Brian Mast (FL-18): “I do not support a pathway to citizenship… But I am open to a conversation of a pathway to legal work status for people who are here in the United States.”

9. Curbelo (FL-26): “I have been for comprehensive immigration reform… We need to have a guest worker program… We need to create a path to citizenship for those families who are undocumented but are contributing to our economy. A lot of people talk about the undocumented but they don’t realize that these are some of the hardest workers.”

10. David Young (IA-3): “Why are they coming in illegally? It’s probably because our legal system is so messed up… We need to put a human face on it, have some compassion… allow them to come out of the shadows, and have that guest worker program where they are allowed to work, receive a paycheck, not worried about going to jail, so they can live in peace with their families… I am not one who wants to round up and deport people.”

11. Dold (IL-10): “Last year, I had the honor of bringing a Round Lake DREAMer named Erika Martinez to the State of the Union Address. Every day that Congress fails to act on immigration reform, families like Erika’s are forced to continue living in fear of being torn apart. Although divisive, partisan rhetoric may make for better TV, today’s forum is proof that there is bipartisan support to move immigration reform forward.”

12. Tim Walberg (MI-7): “There’s a comprehensive plan that’s needed… we need to understand that without immigrants we don’t have the resources for the jobs that are here.” Walberg said there needs to be a “cooling off” period to stop “some of this anti-immigrant, anti-refugee rhetoric that’s out there.” “They’re in the agricultural industry and construction industry and high tech industry. There are people that could add to this melting pot in very positive ways.” WKAR: “Many of those people we’re talking about giving a pathway to citizenship aren’t necessarily asking for citizenship. Many are simply asking for a temporary work opportunity.”

13. Erik Paulsen (MN-3): Via MPRNews: He is open to giving illegal immigrants citizenship or permanent residence. “It’s not a realistic proposition to round up 11 million people and send them out of the country,” Paulsen said.

14. Don Bacon (NE-2): “Once we do that and employer enforcement and some other measures to secure the border, I would take a more moderate approach to handle the 12 million folks who are here… Some people are good neighbors are doing good in their community, we ought to provide a pathway to legalization.”

15. Hardy (NV-2): Hardy said he believes most of them don’t want to become citizens but want to become legal so they can work and live here without fear of deportation. “I think you give them a pathway to legal status, not necessarily to citizenship.”

16. John Faso (NY-19): “Farm employers must also have better access to seasonal labor. I don’t support citizenship for those illegally in the country; I would support legal status however — but not citizenship — for those who have not committed crimes and are willing to pay a fine. We should emphasize immigration for those who bring specific skills beneficial to the economy.”

17. John Katko (NY-24): “You get back to what immigration is all about. That’s that big group of people who are leading law-abiding lives here, maybe even starting families here and are employed. Those individuals we have to have a discussion about. And the discussion is really going to boil down to do you create a path to citizenship for millions of people who are here illegally or do you do some sort of resident alien status for them? I’m leaning towards the latter, but I still want to discuss it more with individuals.”

18. Mike Fitzpatrick (PA-8): “Once you secure the border, the next question is how to deal with the undocumented immigrants that are in this country, and I believe that they need to be dealt with humanely that are becoming of American values. Immigration is not a bad thing. It’s a good thing. We are a nation of immigrants. I am the grandson of Irish immigrants… Mass deportation is a silly idea. It shouldn’t even be discussed. It’s not workable. It’s not humane.”

19. Lloyd Smucker (PA-16): “If you’re here, you want to work hard, provide for your family or future family and want to contribute, we should encourage that… We are a nation of immigrants. We should encourage people who want to come here, who want to work hard, who want to give back, who want to provide for their families. That’s what has made America great in the first place. We need a comprehensive immigration reform that starts with securing our borders and that provides opportunities for those who want to live the American Dream… I don’t want you taking from the system. I want you to be able to get a good job. I want you to be able to pay taxes. I want you to be able to be part of society here.”

20. Will Hurd (TX-23): “We need to increase access to legal immigration. We are a nation of immigrants. We have benefited from the brain drain of every other country for the last couple of decades. I want to see us continue that. But I also want to see us benefit from the hard workers drain too. If you’re going to be productive member of our society, I want to get you here as quickly as possible. I’m against giving people who broke the law a special pathway to citizenship, but I think there is a way to get them into the system… whether paying fines and back taxes, making sure that they have a job and are going to be educated.

21. Mia Love (UT-4): Question: Should there be a path to citizenship for undocumented residents? “I am committed to immigration and legal immigration… We have to secure the border… We also have to track people… It is our job to make sure that we have a front door in, and we close the backdoor. In order for us to fix it and give people opportunities whether they want to become citizens or just have legal status, we have to fix those three first…. This is an area in which we can show our compassion as Americans and fix the problem permanently…. If we fix it permanently, we would make sure that families don’t have to go through the difficult situations that they are going through, that they don’t know where to go right now.”

I’m in Sweden today, where I just spoke before Timbro (a prominent classical liberal think tank) about the US elections and the implications for public policy.

My main message was pessimism since neither Donald Trump nor Hillary Clinton support genuine entitlement reform.

But I’ve addressed that topic many times before. Today, motivated by my trip, I want to augment my analysis about Sweden from 10 days ago.

In that column, I highlighted some research from Professor Olle Kranz showing that Sweden became a rich nation during a free-market era when government was relatively small. And as you can see from his chart (I added the parts in red), this is also when per-capita economic output in Sweden caught up with - and eventually surpassed - per-capita GDP in other advanced countries.

Then Sweden began to lose ground. Some of this was understandable and inevitable. Sweden didn’t participate in World War II, so its comparative prosperity during the war and immediately afterwards was a one-time blip.

But the main focus of my column from last week was to show that Swedish prosperity began a sustained drop during the 1960s, and I argued that the nation lost ground precisely because statist policies were adopted.

In other words, Sweden enjoyed above-average growth when it relied on policies I like and then suffered below-average growth when it imposed the policies (high tax rates, massive redistribution, etc) that get Bernie Sanders excited.

Today, let’s build upon Professor Kranz’s analysis by extending his calculations. He did his research in the early part of last decade, and we now have many years of additional data that can be added to the chart.

But before doing that, it’s worth noting that the years of additional data basically coincide with a period of market-oriented reforms in Sweden. A study from the Reform Institute in Stockholm explains some of what happened, starting with the stagnation caused by the era of big government.

The seventies and eighties saw Sweden’s tax burden rise from an average European level to the world’s highest. The public sector expanded vastly. All facets of the welfare system were made more generous in international comparison. Meanwhile, labour market regulation increased… Throughout these years, Swedes’ individual after-tax real income stagnated, private sector job creation ceased, and public debt spiralled higher. This culminated in a severe economic crisis in the early 1990s. By then, Sweden had fallen to 14th place in the GDP per capita rankings of OECD countries.

That’s the bad news.

The good news is that this economic misery led to market-oriented reforms.

When the onset of the financial crisis coincided with election of a market-oriented centre-right government in 1991, the reform process began in earnest. Most emphasis at the time was placed on reforms that opened significant sectors in the economy to greater competition. Moreover, an important feature of these regulatory reforms was that the crisis spurred local authorities to implement less burdensome regulation. …significant changes were introduced to the tax system, macroeconomic policy framework, and social insurance system. …every aspect of the Swedish economy has changed due to implementation of reforms. …public sector employment has declined.

To be sure, none of the means Sweden became Hong Kong. It is currently ranked only #38 by Economic Freedom of the World, and its score only improved from 6.92 in 1990 to 7.46 today, hardly a huge jump.

But we nonetheless can now check whether this period of modest reform yielded any dividends. And, looking at an updated and extended version of Professor Kranz’s chart, there certainly seems to be a clear relationship between pro-market policy and Swedish prosperity.

Call me crazy, but it seems like there’s a lesson here about the right recipe for growth.

P.S. The 16 countries in the comparison are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Japan, Sweden, Switzerland, the United Kingdom, and the United States.

P.P.S. If you’re interested in more information about market-oriented reforms in Sweden, check out Lotta Moberg’s video and Johan Norberg’s video.

A recent piece by Mark Krikorian, executive director of the Center for Immigration Studies (CIS), argued for mandatory E-Verify as “an important enforcement tool” and metaphorical “wall” that would prevent the hiring of illegal immigrants.  Krikorian did not mention many of the problems with E-Verify so I will do that here after a brief description of the system.

The 1986 Immigration Reform and Control Act (IRCA) created the rudimentary employment verification known as the I-9 form that every new employee must fill out.  An E-Verify mandate would add another lay on top of the I-9 whereby employers, after collecting I-9 those forms, would enter the information on the form into a government website.  The system compares these data with information held in the Social Security Administration (SSA) and Department of Homeland Security (DHS) databases.  The employee is work authorized if the databases decide that the data are valid.  A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged.  If the employee and employer cannot sort out the errors then the employer must terminate the new employee through a “final non-confirmation.” 

First, Krikorian erroneously labels E-Verify as a “free online system.”  E-Verify is not a gift from heaven, it was created by the federal government and funded by taxpayers.  E-Verify is also not free because of the opportunity cost of the using the system.  The current I-9 form costs employers an estimated 13.48 million man-hours each year.  A national E-Verify mandate would add to that – perhaps substantially.  Those are a lot of hours that employers could otherwise spend on growing their businesses but instead must waste complying with government rules. 

Most E-Verify checks do not take much time but 46.5 percent of contested cases in 2012 took DHS eight work days or more to resolve.  During that time, employers are justifiably reluctant to train new employees who might not be work authorized.  Employers will likely avoid that cost by pre-screening job applicants and rejecting those who come back as tentative non-confirmations.  Workers could thus get rejected from every job they apply for but not know a simple and correctable error in the E-Verify database is the reason.  Although pre-screening employees would be illegal under a national E-Verify mandate, we shouldn’t expect it to work because the entire point of the system is to stop illegal behavior by employers in the first place.

Second, E-Verify is ineffective at detecting illegal immigrant workers. On top of that, E-Verify’s accuracy rates are notoriously difficult to judge.  An audit of the system by the firm Westat found that an estimated 54 percent of unauthorized workers were incorrectly found to be work authorized by E-Verify because of rampant document fraud.  E-Verify relies upon the documents presented by the workers themselves to their employer.  Frequently, identity information comes from deceased Americans – a loophole the government seems incapable of closing.  For instance, SSNs for roughly 6.5 million Americans who are 112 years old or older do not have a death date attached which means they can easily be used by illegal workers and nobody would complain.  An illegal worker using the SSN of a deceased American would likely end up work authorized.

Another gap in E-Verify’s wall is far more difficult to fill.  Many employers ignore E-Verify even when it’s mandated, just like they ignore other government immigration enforcement rules. Alabama, Arizona, Mississippi, and South Carolina all mandate usage at the state level, yet usage and enforcement have been lax.  In 2014, only 56 percent of employers in Alabama, 57 percent in Arizona, 43 percent in Mississippi, and 54 percent in South Carolina used E-Verify for new hires despite their state laws mandating that 100 percent of employers must use the system.  Since E-Verify isn’t enforced in states like Arizona currently, we can reasonably assume that there is no hope that it will be well-enforced nationwide.  E-Verify, like every enforcement system, must actually be enforced by people and these states show about as little interest in doing so as the federal government does in enforcing I-9 requirements.  Any of the proposed national E-Verify mandates will not change that dynamic.    

Third, some Americans would be kicked out of the labor market due to E-Verify.  E-Verify’s accuracy problems mean that Americans are and will continue to be barred from work due to false positives.  Roughly 0.15 percent of all E-Verify queries result in a false “final non-confirmation.”  While that is an admittedly small percentage, if applied nationwide to an American labor pool of roughly 125 million workers, it would result in 187,500 wrongly issued FNCs to American workers each year. 

Fourth, E-Verify is supposed to help curb illegal immigration by turning off the jobs magnet.  In the real world, E-Verify barely affects the wages of suspected illegal immigrants.  In Arizona, the E-Verify mandate lowered the expected wage gain of immigration from Mexico from 253 percent to 241 percent – hardly diminishing the strength of the wage magnet.  That small effect could even overstate E-Verify’s effectiveness because it includes a period of time when employers and employees were learning how to get around the system. A national mandate in the near future would confront many millions of employers and illegal immigrants who now know how to get around the system thanks to Arizona and other states.

Fifth, CIS’ chosen legislative vehicle for mandatory E-Verify is the so-called Legal Workforce Act.  Versions of this bill have been proposed in every new Congress for years and each version has failed to make it to the floor for a vote.  A new version of the bill is likely to be proposed next Congress and it is likely to be as expensive and problematic as previous versions. At the federal level, expanding E-Verify through the Legal Workforce Act would, per the CBO, cost the federal government $635 million from 2018 to 2023 while imposing $10 million in annual compliance costs on states and localities. The CBO also estimates a minimum $200 million cost to the private sector following passage, as employers are forced to verify an additional 50 million employees.  That’s a high price tag for a supposedly “free” program.

Sixth, government identity requirements for employment incentivize identity theft.  A huge cottage industry of forged identity documents sprung up after the government first mandated that employers check the identification of new hires in 1986.  Just as IRCA gave a big boost to the black market 30 years ago, nationally mandated E-Verify would subsidize it even further.          

Seventh, E-Verify’s errors and loopholes mean that the system will be quickly rendered useless if it is ever mandated universally – which is the most positive thing I’ll say about E-Verify until it is significantly reformed.  The government will not react to E-Verify’s failure by throwing up their hands and calling it a day.  The government would then integrate other biometric information like fingerprints or perhaps even DNA into a national identity system to close the E-Verify loopholes in an attempt to make the system more effective.  Such a beefed up E-Verify system could easily be used for other purposes that its proponents would be horrified by – like creating a national gun registry.  It is unwise to mandate participation in a new government identity tool that will expand in the future, especially in an era of serious privacy scandals.       

Interestingly, the government is already starting to link E-Verify to DMV photos in some states to reduce fraud.  Mississippi is one of those states but, as I noted above, it has the worst rate of employers actually checking new employees through E-Verify.  A fancy new biometric identity system combined with E-Verify does not exclude illegal immigrants from the workforce if nobody uses it.

This post will end with a few value judgments.  The government should enforce its own laws rather than conscripting employers in its attempt to regulate the labor market.  If the government cannot enforce its own laws then that is a signal that its laws should change.  Also, Americans should not have to ask government permission to work.  Krikorian will respond that Americans already have to ask through the I-9 form.  In reality, current workers fill out a government form that nobody ever sees again before getting a job.  That is very different from having a government computer reject or accept a worker for employment.

There are many proposed fixes to the problems above but they will likely be just as disappointing as the lockdowns on SSNs.  Many Americans are opposed to mandatory E-Verify not out of some Democratic Party-inspired desire for open borders but rather because they are justifiably skeptical of an error prone, easily fooled, and deceptively expensive federal mandate that has great potential to diminish the privacy of Americans and lead to a national biometric identity program.  Krikorian and other E-Verify supporters should address the real arguments against E-Verify rather clumsy strawmen.      

The German Marshall Fund has just published an essay that I wrote in conjunction with a conference convened in Berlin six weeks ago. For a few hours in September, as Donald J. Trump’s poll numbers hovered around parity with Hillary Clinton’s (that is, before they fell and rose again), an array of American and European scholars contemplated Trump’s emergence as the de facto leader of one of the United States’ two major political parties.

What, if anything, did Trump’s rise portend for the future of transatlantic relations?

“Not much,” would be the safe, short and simple answer. After all, quite a number of GOP national security officials have raised the #NeverTrump banner. One group openly doubts that Trump has the “qualifications, the judgment or the temperament” to be president. Others bristle at his claim that U.S. allies are feckless free-riders, and reject his call for making them pay for the protection that they receive under the U.S. security umbrella. Hillary Clinton is even more adamant that NATO and other Cold War-era alliances should never be subject to scrutiny. As she said several years ago, American global leadership, which manifests in such alliances, “is in our DNA.

In short, if Trump loses next week, it isn’t obvious that his ideas will outlast his unconventional campaign. The reigning transatlantic consensus, in which U.S. taxpayers subsidize European countries that might otherwise be inclined to spend slightly more on defense, will survive, and foreign policy elites in both the Democratic and Republican parties will work hard to ensure that no one like Trump ever emerges to challenge them.

However, as I note in the piece:

The mere possibility that America’s obligation within the NATO alliance might be open to interpretation should…serve as a powerful incentive for European countries to hedge their bets and get serious about developing a credible defense capability, one that is capable of acting without the United States in the lead.

Regardless of whether that occurs, it was probably unwise for Europeans to have relied so much on a U.S. political system over which they had no control. The fact that a bipartisan consensus among U.S. foreign policy elites sustained the transatlantic bargain for decades didn’t mean that that consensus was permanent.

Defenders of the status quo, whether they call it primacy, deep engagement, or simply American leadership, often claim that our dominant position in the world order will never be challenged because the United States is uniquely poised to reassure others. Core classical liberal principles, such as the importance of the rule of law, and governmental transparency and accountability, make Uncle Sam a reliable partner. Checks and balances between competing branches supposedly ensure that no one individual is able to effect dramatic changes in the way that the United States conducts its affairs.

Over the course of his campaign, Trump has torched these ideas. But he didn’t start the fire. Trump and Clinton both score poorly on transparency. Meanwhile, the Clintons’ critics often complain that they operate under a different set of rules than everyone else. Others worry that the president’s powers are not constrained by Congress or the courts. 

America’s so-called liberal hegemony lacks another key feature of liberalism: self-determination.

individuals must have a say in who governs them and how they are governed. Yet, the vast majority of people that fall under the dominion of the United States will have no role in selecting its next leader. They can’t vote in U.S. elections. And the awkward realization that they have entrusted their security to another government, liberal though it may be, over which they have no control, is crashing down hard on them.

I conclude:

Trump’s emergence provides an opportunity for leaders of all countries to reconsider how much trust they wish to place in the United States as the guarantor of global security. Some, perhaps many, will…revisit their decision to sub-contract governance to an unpredictable partner…

Without intending to do so, or even realizing that he’d done so, the mercurial Mr. Trump may be responsible for a welcome change in global security policy. If the reaction against him creates a more resilient international order, one that is less dependent on the military power of a single country, that would be a silver lining to Trump’s otherwise dark cloud.

You can read the whole essay here.

Last night Jimmy Wales, the founder of Wikipedia, delivered the first Joseph K. McLaughlin Lecture at the Cato Institute. He talked about the vision, history, organization, and impact of Wikipedia, and the influence of F. A. Hayek and his essay “The Use of Knowledge in Society” on his own initial conception of a crowdsourced encyclopedia. He also discussed Wikipedia’s occasional influence on public policy decisions, such as the defeat of the Stop Online Piracy Act (SOPA) in 2012. But I was particularly struck by this line (about 43:00 in the video):

Far too often lawmakers propose laws, and it’s fairly clear that they do not even have the most rudimentary understanding of how the internet works.

It reminded me of something Bill Clinton said at the Clinton Global Initiative in 2010:

Do you know how many political and economic decisions are made in this world by people who don’t know what in the living daylights they are talking about?

That’s a lesson policymakers ought to keep in mind whenever they contemplate legislating about health care, marriage, minimum wage laws, net neutrality, banking regulations, overtime pay, or anything else. Do they really understand how the particular market or industry works? Do they really understand how the impact of a new law or regulation will ripple through affected industries? In most cases they don’t, as Aaron Powell wrote about the lessons of SOPA:

SOPA was not the exception to the rule. Instead, it was just how things are done in Washington.

An Oct. 29, 2016, article by Danny Hakim in The New York Times gives a decidedly skewed view of the benefits of agricultural biotechnology. It is based on the author’s presumption that genetically modified organisms (GMOs) were supposed to accomplish two things: (1) increase crop yields; and (2) reduce the use of chemical pesticides.  In essence, Hakim sets up two straw men and proceeds to knock them down using questionable analysis.

Hakim compares crop yields in the United States and Canada, where GMO use is widespread, with yields in Western Europe, where GMOs generally are not allowed.  He finds that North America had “gained no discernible advantage in yields” relative to France, Germany, and other European countries.

As an example, Hakim includes a chart showing that the trend lines for yield increases of rapeseed in Europe and canola (a variety of rapeseed) in Canada are parallel, so that both added a similar amount of output per hectare. What he neglects to explain (or perhaps doesn’t appreciate) is that the percentage increase in European yield from 1995 to 2014 was modest. It rose from about 3.1 metric tons (MT) to 3.7 MT per hectare, an increase of approximately 19 percent.[i] Canada’s yield grew about the same quantity per hectare – from 1.4 MT to 1.9 MT – but the percentage increase was much greater at roughly 36 percent.  This is because Europe grows winter rapeseed under conditions that allow for high yields, while Canada grows spring canola under conditions in which lower yields are the norm.

So which farmers experienced a greater increase in profitability? Compared to their 1995 earnings (assuming constant prices), European famers managed to increase their per-hectare revenues by 19 percent. Canadian famers, on the other hand, achieved an increase that was almost twice as high – 36 percent. Casual observation would suggest that Canadian canola growers have become relatively more profitable over time than their European colleagues. One factor that appears to have increased Canadian profitability is the planting of GMO seeds.

As for Hakim’s argument that herbicide use has increased in the United States, especially on soybeans, it’s not clear that this is a bad thing. Most of the soybeans grown in North America have been genetically modified so that they are not harmed by Roundup (glyphosate), an herbicide that kills many weeds. Roundup has the advantage of being less toxic than some other herbicides, and it breaks down quickly in the soil. Anyone who has spent hours in a soybean field on a hot, humid day pulling weeds by hand is not likely to object to the idea that the same result could be achieved by modern biotechnology.

The bottom line is that Hakim largely ignores the reality that many thousands of individual farmers make decisions each year regarding which seeds to plant and which agronomic practices to use. The fact that so many farmers choose to plant costly GMO seeds (in countries where they are allowed) indicates that the added expense produces a real benefit. It seems improbable that those agricultural entrepreneurs all are making poor decisions about what is best for their businesses. The safe assumption is that users of biotechnology expect it will lead to a marginal increase in revenue that is greater than the marginal increase in cost. In the real world, it looks like the use of GMOs is being driven by favorable economics.

Mr. Hakim may think that GMO “technology has fallen short of the promise.”  The marketplace, however, understands things very differently.

[i]The data included in the article are in graphic form, so it’s not possible to determine precise numbers.