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Today is the 60th anniversary of the desegregation of public schools in Little Rock, Arkansas, a deeply disturbing event for the explosive racism it revealed, but also an inspiring episode for the courage displayed by the children who braved it.

One thing for which it serves as a reminder is that it was public schooling and government generally that for decades forced segregation. Recent attacks against school choice have glossed over this fact, as well as that the absence of choice meant even those who wanted something different were almost certainly hard-pressed to get it.

The anniversary also reminds us that repairing race relations that have been poisoned by centuries of slavery, Jim Crow, and still-present hate, racism, and racial suspicion, is not likely something that will happen quickly—would it were otherwise—including with any kind of public policy panacea. Too much history, too many emotions, and increasingly, diversity that makes race relations more than black and white, are all in play. Which may be another argument for school choice: we need to let myriad educational arrangements be offered because no solution might be right for any two people, much less the entire country. Different individuals—and that is what we are, though race is an often crucial component of our identities—may desire different discipline policies, or curricula, and by allowing numerous arrangements to proliferate we can discover which ideas work best, for whom, without education being a zero-sum, winner-take-all contest.

Alas, the Little Rock 60th anniversary has been eclipsed by President Donald Trump’s remark that National Football League owners should fire players who refuse to stand for the national anthem, resulting, in a few cases, in entire teams this weekend refusing to come out of locker rooms for the singing of the Star Spangled Banner. Perhaps this too offers a lesson in the dangers to race relations posed by government, in this case highlighting how politics can amplify divisions and animosity. What had been an ongoing but relatively calm national debate about some players taking a knee during the anthem to protest what they see as racial injustice in the country exploded into a massive, headline-dominating demonstration by players and owners. This is partly because the current president seems to revel in aggravating people. But anytime a politician comments on something it almost inherently becomes a more political—and politicized—issue, and politics by its nature tends to make people act in ugly and divisive ways.

This, too, suggests that the nation would be better off if we looked not for sweeping government solutions to racial divides, but to the maximum extent possible left it to individual people and communities—to civil society—to do the complex, highly personal work of healing and uniting.

President Trump extended, expanded, and made some important alterations to his earlier executive travel ban. However, the national security justification for the new order is just as weak as for the original order because it could only have prevented nine terrorists who planned domestic attacks, at the maximum, from entering. Since four of the nine terrorists were Iranian students in 1979 who would not have been banned under this order, it’s likely that it would have stopped only five terrorists from entering and saved zero lives if it was applied backward in time.

The Number of Immigrants, Migrants, and Travelers Impacted

Gauging the impact of this new executive order requires looking at the number of foreigners blocked by it. The following calculations are based on the number of visas issued at Foreign Service posts by the State Department in 2016. The number of visas issued by the State Department under this metric is different from the number of those who actually enter and yet still different from the number of actual admissions. The new regulations for Venezuelans only apply to tourists who are related to government officials. There is not a good way to estimate that so Table 1 leaves that category blank for Venezuela. Still, this gives a decent approximation of how President Trump’s new travel ban will impact the flows of immigrants, migrants, and travelers. 

If this new proclamation was active in 2016, it would have halted the travel, migration, or immigration of roughly 66,000 people from these eight countries (Table 1). That’s equal to about 0.6 percent of all visas issued by the State Department at Foreign Service posts in that year. About 58 percent of those blocked would have entered on tourist visas while about 39 percent were immigrants. 

Table 1

Visas Issued by Category/Type that are Banned under the New Executive Proclamation

Country Immigrant Visas Nonimmigrant Visas Total Visas in Banned Categories Chad

40

900

940

Iran

7,727

25,036

32,763

Libya

383

1,445

1,828

North Korea

9

100

109

Somalia

1,797

0

1,797

Syria

2,633

9,096

11,729

Venezuela

0

?

?

Yemen

12,998

3,933

16,931

Total

25,587

40,510

66,097

Source: 2016 Visas Issued by the State Department.

The other way of measuring this is the number of admissions as calculated by the Department of Homeland Security. As a percentage of all admissions in 2015, the last year for which data is available that was not affected by President Trump’s previous executive orders, this new executive order would have stopped 0.04 percent of all admissions—or about 81,306 out of approximately 181,300,000 admissions. In relation to the number of visas issued and admissions, this new order will have a small impact.

Economic Effects

This section uses a simple method to estimate the economic effects of this executive order over the next decade. This method specifically calculates the immigration surplus which is the wage benefits that accrue to native-born Americans as a result of immigration.This only counts the new green card holders and ignores the tourists and economic effects of nonimmigrants. George Borjas estimates the immigration surplus at 0.24 percent of America’s $18.57 trillion GDP, which works out to an average of $1,018.95 in positive wage spillovers per immigrant in 2016.

If the ban continues to block 25,587 green cards each year for ten years then the total loss in wages to native-born Americans would be equal to about $1.4 billion. That’s a small percentage of GDP but it still does not pass a cost-benefit test. Blocking that many immigrants would have to save about 96 lives in thwarted terrorist attacks to be equal to the expected economic damage borne entirely by native-born Americans based on a high $15 million per statistical life saved valuation

Conclusions

President Trump’s new executive proclamation would not pass a cost-benefit test. Foreigners from those countries have killed zero people on American soil in terrorist attacks from 1975 through the end of 2015 and the 96 deaths that would have to be prevented are more than all of the non-9/11 domestic victims of foreign-born terrorism from 1975 through 2015. There are other costs associated with this new iteration of the travel ban such as the continuation of the cut in refugees that also impacts American wages negatively, fewer nonimmigrants, and a falloff in tourism as a result. It’s near-impossible for this to pass a cost-benefit test even when the welfare of immigrants, foreigners, and their American families are taken into account beyond the economic effects.

 

 

 

Senators Tillis (R-NC), Lankford (R-OK), and Hatch (R-UT) today introduced the Solution for Undocumented Children through Careers, Employment, Education, and Defending our Nation (SUCCEED) Act to legalize some DREAMers. After analyzing this bill and performing a residual statistical analysis to isolate DREAMers in the American Community Survey (ACS), this blog estimates that SUCCEED would allow approximately 1.5 million unlawful immigrants eventually to earn citizenship. Our population estimates are close to those of the Migration Policy Institute.

SUCCEED allows DREAMers to legalize if they earn an associate’s degree or higher, enlist in the military, or work for a period. We assume that about half of those with a high school degree and below eventually earn citizenship. 

Using the National Academy of Sciences (NAS) Table 8-14 as a framework, we find that that SUCCEED will boost revenues by about $94.7 billion above expenditures, in net present value, relative to keeping the DREAMers in illegal status along with a steady rate of deportation. These extra revenues would accrue to the federal, state, and local governments. They are 75-year projections discounted at 3 percent as the NAS recommends. This long-term projection and discounting guarantees that the future fiscal costs of entitlements and the descendants of the DREAMers are included. Our estimate is similar to another conducted by the Niskanen Center.

Methods

This figure is calculated by weighting the findings in Table 8-14 of the NAS by the age of entry and eventual education level of DREAMers who would be legalized under SUCCEED. A general finding of the NAS is that the fiscal impact of an immigrant is more positive when he or she is more educated and younger. The NPV fiscal estimate in Table 8-14 is positive for immigrants who arrive between ages 0 and 24 regardless of eventual education level. All DREAMers must have entered the United States before their 16th birthday under the SUCCEED Act so they are fiscally positive. According to the NAS findings.

We estimated the eventual level of education for DREAMers using the ACS by assuming that all those under the age of 25 would eventually be as educated as those aged 25 years or older. This likely undercounts their eventual education level and, hence, their net contribution to the federal budget. We assumed that unlawful immigrants consumed 35.7 percent fewer benefits and paid 10 percent lower taxes than other workers of the same age until 40 years old, based on estimates from Figure 8-21 of the NAS. We picked age 40 as we assumed it would take 15 years for DREAMers to earn citizenship because their current average age is 25 according to our ACS sample.

Conclusion

There are many reasons to legalize the DREAMers. This is their home, they did not intentionally violate American immigration laws when they entered, and they are culturally American. But, the argument for economic self-interest is also compelling. Only a few commentators doubt that there is a positive economic effect from immigration in general. However, the welfare state could turn those economic benefits negative and actually cost Americans more than they gain in boosted income. Fortunately, the American welfare state is not so far gone and DREAMers came at young enough ages, earned enough education, and worked to an extent to make up for the expensive deficiencies of our bloated government. 

Today we’re releasing one question from the forthcoming national Cato 2017 Free Speech and Tolerance Survey of 2,300 Americans conducted by the Cato Institute in collaboration with YouGov.

The national survey finds that a solid majority, 61%, of Americans oppose firing NFL (National Football League) players who refuse to stand for the national anthem before football games in order to make a political statement. These results stand in contrast to President Trump’s remarks over the weekend and his urging NFL teams to fire players who refuse to stand for the anthem. A little more than a third (38%) of Americans align with Trump and support firing these players. 

Conservative Republicans stand out in their support for firing NFL players who refuse to stand for the national anthem. Nearly two-thirds (65%) of Republicans say NFL players should be fired for this reason. Only 19% of Democrats and 35% of independents agree. Punishing NFL players for their political speech distinguishes political Conservatives from Libertarians. Using a political typology method to identify these ideological groups, the survey finds that Conservatives (62%) are the only political group to support firing NFL players. Conversely, 60% of Libertarians, 85% of Liberals, and 62% of Communitarians (social conservatives who support larger government) all oppose punishing players.

People who are older, with less education, and living in smaller towns and rural communities are most likely to support punishing NFL players who kneel during the national anthem in political protest.

A majority (57%) of Americans over 65 think such players should be fired while 71% of Americans under 30 think they should not. Those without college degrees (44%) are more likely than college graduates (32%) and those with post-graduate degrees (26%) to similarly support punishing NFL players who engage in this form of political protest. Americans living in rural communities are divided in half over whether teams should fire NFL players who refuse to stand for the national anthem. Conversely, those living in large urban centers solidly oppose (69%) such firings.

Majorities across racial groups oppose firing NFL players who kneel during the national anthem before football games. However, African Americans (88%) are about 30 points more likely than Hispanics (60%) and whites (55%) to oppose. 

Not wanting to fire NFL players because of their political speech doesn’t mean that most Americans agree with the content of this speech. Surveys have long shown, as well as this one, that most oppose burning, desecrating, or disrespecting the American flag. Thus, Americans appear to make a distinction between allowing a person to express (even controversial) political opinions and endorsing the content of their speech. The public can be tolerant of players’ refusing to stand for the national anthem, even while many disagree with what the players are doing.

In sum, Americans don’t want to strip people of their livelihoods and ruin their careers over refusing to stand for the national anthem. Even if they don’t agree with the content of the speech, that doesn’t mean they support punishing people who do.

Topline results and methodology can be found here.

The Cato Institute 2017 Free Speech and Tolerance Survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online August 15-23, 2017 from a national sample of 2,300 Americans 18 years of age and older. The margin of error for the survey is +/- 3.00 percentage points at the 95% level of confidence. The full survey report is forthcoming.

President Trump signed a new proclamation this weekend that bans or restricts the travel and immigration of nationals from eight countries. This order drops the pretext of being a temporary measure and includes no end date. In our amicus brief for the Supreme Court case challenging his prior executive order banning travel from six countries, we criticized the ban as lacking a basis in the evidence regarding terrorism threats and terrorism vetting failures. This new order fares no better. It is even further divorced from threats of terrorism to the United States than the prior order.

The new targets are the nationals of the following eight countries: Chad, Iran, Libya, North Korea, Syria, Venezuela, and Yemen. Like prior orders, it justifies the restrictions based on the false premise that the government needs certain information to adjudicate visas. In reality, because the visa applicant bears the burden of proof to prove his claim, the lack of information hurts the applicant, not the government. In any case, very few visa vetting failures have allowed terrorists to enter since 9/11 from these countries. Here are the facts:

  • Only one nationality (Somalia) of the eight targets has had any immigration vetting failures for terrorism offenders since 9/11. This compares to two nationalities under the second executive order, and three nationalities under the first executive order.
  • The three vetting failures of terrorism offenders from Somalia were refugees who the new proclamation does not exclude. The other executive order covered refugees.
  • This new travel ban would have prevented no terrorists—that is, people who planned to attack the United States—from entering the United States since 9/11. The only offender whose entry would have been prevented by the new order radicalized after entry—and so was not a vetting failure—and did not attempt an attack in the United States. He played a “minimal role” in sending a small amount of money to a terrorist group overseas.

In a prior post, I identified just 34 individuals who entered through the U.S. immigration system legally since 9/11—when the visa vetting system was revamped—and who went on to be killed or convicted of terrorism offenses as of March 2017 when the president signed the second executive order. Of these, I could plausibly describe only 18 as likely vetting failures—people who the government determined radicalized prior to entry or people who committed attacks soon after entry (see here for a longer explanation). Just half of these planned attacks in the United States, and only one killed anyone.

As seen in the table below, the 34 offenders who entered after 9/11 came from 22 different countries and the 18 vetting failures from 13 countries. Only two nationalities (Somalia and Iran) of the seven targeted in the new executive order had any terrorism offenders who entered since 9/11 at all. Only one (Somalia) had any terrorism vetting failures. Critically, as my colleague Alex Nowrasteh points out, no person of a designated country has killed anyone in the United States in a terrorist attack in over 40 years.

Table 1
Foreign Terrorism Offenders Killed or Convicted Who Entered Through the Immigration System After 9/11

  Country of Birth All Terrorism Offenders Who Entered Since 9/11 Likely Vetting Failures

1

Somalia

4

11.4%

3

16.7%

2

Iraq

3

8.6%

2

11.1%

3

Pakistan

3

8.6%

2

11.1%

4

Uzbekistan

3

8.6%

2

11.1%

5

Sudan

2

5.7%

1

5.6%

6

Albania

1

2.9%

1

5.6%

7

Bangladesh

1

2.9%

1

5.6%

8

Jordan

1

2.9%

1

5.6%

9

Kuwait

1

2.9%

1

5.6%

10

Lebanon

1

2.9%

1

5.6%

11

Nigeria

1

2.9%

1

5.6%

12

Saudi Arabia

1

2.9%

1

5.6%

13

United Kingdom

1

2.9%

1

5.6%

14

Kyrgyzstan

2

5.7%

0

0.0%

15

Mexico

2

5.7%

0

0.0%

16

Cuba

1

2.9%

0

0.0%

17

Ethiopia

1

2.9%

0

0.0%

18

India

1

2.9%

0

0.0%

19

Iran

1

2.9%

0

0.0%

20

Kenya

1

2.9%

0

0.0%

21

Kazakhstan

1

2.9%

0

0.0%

22

Nicaragua

1

2.9%

0

0.0%

23

Philippines

1

2.9%

0

0.0%

24

Libya

0

0.0%

0

0.0%

25

Syria

0

0.0%

0

0.0%

26

Chad

0

0.0%

0

0.0%

27

North Korea

0

0.0%

0

0.0%

28

Venezuela

0

0.0%

0

0.0%

  Total

35

100%

18

100%

Sources: Author’s Calculations Based on Global Terrorism Database; Department of Justice National Security Division; Department of Justice; New America Foundation; George Washington University Project on Extremism

Here are the five terrorism offenders from the two nationalities that entered through the U.S. immigration system since 9/11:

Not vetting failures

  • Ahmed Nasir Taalil Mohamud, 2004 entry, was a Somali national who, at the age of 28, won a green card through the diversity visa lottery. He lived in the United States for seven years before he committed his terrorism offense in 2011. He played what prosecutors described as a “minimal role” in a scheme to send money to a terrorist organization overseas. He deposited money into an account for the conspirators. The federal judge described him as a “law-abiding and productive” member of U.S. society before falling in with the conspirators who he only met years after his entry.
  • Adnan Fazeli, 2009 entry, was an Iranian national who, at the age of 31, entered the United States as a refugee. After his entry, he converted from Shia Islam to radical Wahhabism. Government investigators established that he radicalized after his entry to the United States. He was killed in 2015 in Lebanon as part of an Islamic State attack on the Lebanese army.

Possible Vetting Failures

  • Abdinasir Ibrahim, 2008 entry, committed immigration fraud by claiming that he was a member of a persecuted minority clan in Somalia in order to obtain refugee status in fiscal year 2008. In fact, he was a member of a clan persecuting other clans. He attempted to send material support to the al-Shabaab terrorist organization in Somalia in 2014.
  • Amina Esse, 2009 entry, entered the United States as a refugee from Somalia. She played a small role in sending $850 to al-Shabaab in 2011 and 2012. Her abusive husband who she married in the U.S. was an al-Shabaab supporter gave her the money to send, and her conspirators in Somalia initially told her that the money was for war orphans. She voluntarily cut off support soon after she discovered the truth. She chose to testify against her co-conspirators, and prosecutors asked for no jail time for her. It seems likely that she was not a vetting failure, but the government did not make a determination one way or another.
  • Adul Razak Artan, 2014 entry, came to the United States as a refugee in 2014. In 2016, he attempted to run over students at Ohio State University with his car and then stab them. He failed to kill any and was killed himself. While investigators never discovered any evidence of pre-entry radicalization, the timing of the attack after just two years in the United States suggests that he may have been radicalized at the time of his entry.

Only one of the five terrorism offenders attempted to carry out an attack in the United States. None of the refugees on the list above would have been stopped by this proclamation, which targets only people traveling on visas (refugees receive special status to enter without a visa). Thus, only Ahmed Mohamud who won his immigrant visa in the diversity visa lottery would have been subject to the ban, and he did not attempt an attack against the United States.

President Trump has now issued three different orders targeting terrorist travel, each replacing the prior order. The first singled out Iraq, Iran, Somalia, Sudan, Syria, Libya, and Yemen. The second removed Iraq, and the third removed Sudan and added North Korea, Chad, and Venezuela. Table 2 compares the three executive orders. As it shows, each successive order has actually become less targeted toward nationalities that have a history of evading screening procedures in order to commit acts of terrorism. The share of targeted nationalities which have, at least in one case, evaded screening and committed terrorism offenses since 9/11 has shrunk as well—from 38 percent (3/8) to just 13 percent (1/8).

Table 2
Executive Orders Targeting Terrorist Travel

  Targeted Nationalities Targeted Nationalities With Offenders Entering Since 9/11 Targeted Nationalities With a Post-9/11 Vetting Failure Share of All Vetting Failures First

7

4

3

33.4%

Second

6

3

2

27.8%

Third

8

2

1

16.7%

Sources: Author’s Calculations Based on Global Terrorism Database; Department of Justice National Security Division; Department of Justice; New America Foundation; George Washington University Project on Extremism

This exercise shows the inherent difficulty with blanket discrimination based on national origin. Even if the executive order was perfectly aligned with past incidents, the fact that it is dealing with such rare, low probability, and low-risk events inevitably means that the past will be a poor predictor of the future. But the administration has consistently relied on past events as justification for the restrictions, and yet it fails to match its policies with these events.

President Trump issued a new proclamation that expanded a list of the so-called “travel ban” countries that were the subject of an executive order he issued early in his administration. His first order temporarily banned the entry of nationals from six countries for dubious national security reasons. His new order expands the list to eight countries (as I somewhat predicted). They include Chad, Iran, Libya, North Korea, Somalia, Syria, Venezuela, and Yemen. From the original six, he subtracted Sudan and added Chad, North Korea, and Venezuela. The new executive order is also not a complete ban for all of those countries. All North Koreans and Syrians are barred from obtaining visas while nationals from the other six countries face varying degrees of additional security checks on specific visas or broader categories (such as nonimmigrant or immigrant).

President Trump issued an executive order earlier this year that temporarily banned the entry of all nationals from six foreign countries in order to “protect the nation from terrorist activities by foreign nationals admitted to the United States.” The six (originally seven) Muslim-majority countries were targeted because of the supposed inability of those governments and the United States to sufficiently vet nationals from there for terrorist intent. The order is currently tied up in the courts.

From 1975 through the end of 2015, zero Americans have been killed by foreign-born terrorists on U.S. soil who hail from any of the eight countries on the new executive order (Figure 1). Only nine terrorists from those countries have carried out an attack or actually been convicted of planning an attack on U.S. soil during that time.  About 42 percent of all convictions for terrorism-related offenses are for non-terrorist crimes and very few of them could even be considered vetting failures.

Figure 1

Terrorists and Murders by Country

 

Terrorists

Murders

Chad

0

0

Iran

6

0

Libya

0

0

North Korea

0

0

Somalia

2

0

Syria

0

0

Venezuela

0

0

Yemen

1

0

Source: John Mueller, ed., Terrorism Since 9/11: The American Cases; RAND Database of Worldwide Terrorism Incidents; National Consortium for the Study of Terrorism and Responses to Terrorism Global Terrorism Database; Center on National Security; Charles Kurzman, “Spreadsheet of Muslim-American Terrorism Cases from 9/11 through the End of 2015,” University of North Carolina–Chapel Hill; Department of Justice; Federal Bureau of Investigation; New America Foundation; Mother Jones; Senator Jeff Sessions; Various news sources; Court documents.

Executive Orders like these have big and guaranteed economic costs with negligible and unlikely boosts to security. The risk of being murdered in a terrorist attack committed by a foreigner on U.S. soil from 1975 through 2015 was about 1 in 3.6 million per year. Four of the Iranian terrorists (44 percent of the total domestic terrorists from all eight countries) attempted to kidnap the governor of Minnesota in 1979. This list of eight countries is not a list of nations whose citizens are the most likely to kill Americans in domestic terrorist attacks. Due to the high guaranteed cost of Executive Orders like these and the small potential security benefits, the administration should supply an excellent reason for this order along with sufficient evidence to demonstrate their claim. It speaks volumes that they have not done so.

 

 

One of the original arguments for establishing a system of common schools was that children from different backgrounds would learn to get along with one another and become proper citizens. However, when students throw rocks at a seven-year-old boy with a rare genetic condition, call him a monster on a daily basis, and push him towards contemplating suicide, we must wonder if our public schools are actually creating good citizens.

Over 90 percent of school-aged children in the U.S. attend public schools. While it is clear that government-run schools have a nearly perfect monopoly on education funding, they do not have a monopoly on producing tolerant citizens. In fact, it isn’t even close. According to the ten experimental or quasi-experimental studies that exist on the topic, none find that public schools outperform private schools on increasing student tolerance or civic engagement. As discussed in a recent Cato Policy Forum, and shown in table 1 below, a majority of the findings reveal that private school choice programs improve civic outcomes.

While the existing evidence may have surprised the father of the common school movement, Horace Mann, I am not all that shocked. Since it is highly costly for families to escape residentially assigned public schools that do not produce proper citizens, public school leaders do not have the incentives nor the information necessary to significantly improve character education. Alternatively, private schools must cater to families’ desires to have their children become functioning members of society.   When students engage in conversations about controversial subjects, they are more likely to understand and tolerate opposing views. But why would public school teachers – or anyone – spend much time fostering difficult debates about sensitive topics if they are incentivized to focus on standardized tests? 

Complaints about illegal immigration are constant and repetitive.  They’re sowing chaos along the border, using welfare, taking American jobs, and their mere presence is destroying respect for the law.  Some oppose legalizing any illegal immigrants until the border is secure.

Good news: The border is secure and it has been for a long time.

99.7 percent of all people who successfully enter the United States do so legally (Figure 1).  Whether as a tourist, guest worker, or refugee, the vast majority of all admissions to the United States have been legal from 2003 through 2015.  A mere 0.3 percent of all entries to the United States during that time were illegal.  The big red arrow on Figure 1 points to where illegal entries peaked in 2004 at 0.42 percent of all entries.  The last year for which data is available, 2015, provides evidence that illegal entries are falling as 99.81 percent of all admissions were legal while only 0.19 percent were illegal. 

Figure 1

All Legal and Illegal Admissions into the United States

Sources: DHS Yearbook of Immigration Statistics and Center for Migration Studies.

Figure 1 includes all entries on the I-94, new immigrant arrivals, and refugees – an admittedly back-of-the-envelope calculation but close enough to the real number.  Figure 1 actually overstates the percentage of entries that are illegal because this data excludes the majority of short-term legal admissions from Mexico and Canada. 

99.7 percent compliance is remarkably high for our complex immigration and border control system (Figure 2).  Most of the admissions in Figure 1 do not have to pass through this system as it’s remarkably easy for tourists from rich countries to legally enter through the Visa Waiver Program.  Tourists from poorer countries face other hurdles while guest workers, students, lawful permanent refugees, refugees, and others face legal hurdles similar to those in Figure 2.

Figure 2

Simplified Map of the Legal Immigration System

Source:  Immigrationroad.com. 

In 2015, about 5 out of every 100,000 foreigners entered the United States illegally (99.995 percent did not).  In that same year, 189 out of every 100,000 Americans entered jail (99.8 percent did not).  The annual flow of Americans into prison would drop by 97.4 percent, from roughly 608,300 to about 16,093, if Americans were as respectful of criminal laws as foreigners are of our immigration laws.  If that happened, then federal and state prisons would mostly empty out in about 3 years.

About 99.995 percent of all foreigners did not unlawfully enter the United States in 2015 despite the vast economic incentive to do so.  The median wage gain from coming to the United States from the developing world is about 3.95 fold – an increase in wages that would transform the lives of virtually every human alive.  American immigration enforcement and foreign respect for American laws keep compliance high.  Despite rumors to the contrary, the United States does not have open borders. 

Border Patrol and CBP apprehended or turned back an additional 529,459 people at ports of entry in 2015 but many of them were humanitarian cases or did not intend to break our immigration laws.  Although some of them eventually succeeded in illegally entering the United States, this barely adjusts the final figures when avoiding double counting.

Building a wall along the Southwest border is a gargantuan expenditure of resources that would barely diminish an already tiny flow of new illegal immigrants.  Such an endeavor would be comical if it did not cost taxpayers around $43.8 billion over 10 years.  Mandating E-Verify, creating an entry and exit system, and restricting legal immigration with the RAISE Act are all huge overreactions to a legal system with 99.7 percent compliance when crossing the border and 99.995 percent annual compliance from foreigners.  Wasting resources on more immigration enforcement would make us less safe by squandering resources that could be spent on tackling real crimes with real victims.  Most of those immigration enforcement programs would also be enforced against Americans anyway.    

The marginal cost of reducing illegal immigration is prohibitively high at this point.  After all, it is hard to move a system where 99.7 percent of all actions on the border are legal toward one with higher compliance.  How much would taxpayers be willing to pay to move that 99.7 percent compliance to 99.8 percent?  Very little.

Counterintuitively, border security could actually lock in more illegal immigrants by obstructing the natural circular flow of migration.  As a result, cutting border security may actually decrease the stock of unlawful immigrants in the United States by encouraging circular migration.   

There is a popular media narrative that illegal immigration at the border is out of control.  An army of Border Patrol agents, hundreds of miles of fencing, and the collapse of illegal immigration in recent years has not convinced people that the border is less chaotic than at any point in my lifetime.  Border enforcement has probably contributed to that change by not as much as many want to claim.  The fact that 99.7 percent of all border crossers do so legally and that 99.995 percent of all foreigners respect our immigration laws should bust the myth that the Southern border is chaotic and uncontrolled.  Congress can finally get on with the business of reforming immigration.  

Trump’s threat to “totally destroy North Korea” at the United Nations this week generated concern in many corners but a round of applause from many hawks here in the United States. Former ambassador to the United Nations John Bolton, for example, called it “the best speech of the Trump Presidency,” praising Trump for his tougher approach to North Korea’s nuclear program. Japanese Prime Minister Shinzo Abe also voiced strong support for Trump’s approach. In a New York Times oped, Abe wrote that, “I firmly support the United States position that all options are on the table.”

Abe’s choice of the phrase “all options are on the table” was not accidental. As Figure one indicates, the phrase has steadily gained in popularity since the September 11 attacks, with its use spiking in the first year of the Trump administration, as tensions with North Korea have risen. 

Figure One: The Rise of “All Options on the Table” 

Data source: Factiva Top U.S. newspapers database.

The meaning of the phrase, at least on paper, is clear: the United States is willing to use military force should diplomacy fail. And as tensions rise, as they have over the past months with North Korea, one would expect to hear the phrase more often.

The problem, however, is that despite occasional protests to the contrary, it is increasingly obvious that the Trump administration is ready to take the most important option off the table: diplomacy. By repeatedly arguing that, “talking is not the answer,” and that “we’re out of time” to deal with North Korea’s nuclear program, the administration is raising the stakes of the crisis and the chances that it ends in a military conflict.

No matter how happy that makes the hawks, conflict with a nuclear and well-armed North Korea would be both a military disaster and out of touch with the desires of the American public. In survey after survey over the years, Americans have voiced greater confidence in diplomacy than military strength as the best path to peace.

For those with concerns about Trump’s language, it is important to note that although Trump’s bellicose style is very different from that of his predecessors, he is not much more hawkish than either George Bush or Barack Obama. As Figure Two shows, the three post-9/11 presidents all have had “hawk indexes” higher than the three previous presidents. 

The hawk index is the ratio of how often a president appears in news stories that mention the words “war” or “military” compared to how often he appears in stories that mention the words “peace” or “diplomacy.” The score reflects not only the state of the international arena the president is coping with, but also the relative frequency that he discusses military options compared to diplomatic ones. As Figure Two reveals, American discourse and news coverage has always focused far more heavily on war than peace. 

Figure Two: The Hawk Index from Reagan to Trump

 

Data source: Factiva Top U.S. newspapers database.

Given this data, Trump’s tough talk at the United Nations should come as little surprise. Nor, given the American track record of almost non-stop military intervention since the end of the Cold War, should we be surprised if “all options on the table” actually turns out to mean: “we are about to fight another war.” 

 

 

 

 

 

Federal worker compensation is rising faster than compensation in the private sector. On average, federal workers now earn 80 percent more in wages and benefits than other Americans, as examined in this blog yesterday. The data come from the Bureau of Economic Analysis (BEA), and is discussed further in this study

The BEA breaks down the data by industry. The chart below shows average compensation for the BEA’s 19 major private industries and the military, state and local governments, federal civilian workers, and federal government enterprises (mainly the postal service).

The federal government has the third highest paid workers in the United States after utilities and the management of companies. Federal compensation is higher, on average, than compensation in the information, finance and insurance, and professional and scientific industries.

Federal compensation is twice as high as compensation in the education industry, and is almost three times higher than compensation in retail trade.

Further discussion of federal pay is here.

 

This has not been a good week for President Trump’s Iran policy. As the president has indicated, he plans in mid-October to decertify Iranian compliance with the nuclear deal, or the Joint Comprehensive Plan of Action (JCPOA), negotiated and signed in 2015, which rolled back Iran’s nuclear program, placed severe restrictions on it for the foreseeable future, and imposed the world’s most intrusive inspections regime on what remained.

Leaving aside for now the various and profoundly negative ramifications of Trump’s stated intention to declare Iran in violation of the agreement, the most immediate problem for the president has always been that Iran is, in fact, not in violation of the deal. As attested to by the International Atomic Energy Agency (IAEA) and all other signatories to the agreement – including Germany, France, the United Kingdom, China, and Russia – Iran is fully compliant with its obligations under the JCPOA.

But this week brought significant pushback to Trump’s plan. Following the president’s speech to the UN General Assembly on Tuesday, world leaders and diplomats reportedly pressured the president and members of his administration in numerous meetings to reconsider his plan to scuttle the JCPOA. Allies publicly criticized him. “Renouncing [the Iran deal] would be a grave error, not respecting it would be irresponsible,” said the French president Emmanuel Macron, suggesting further that decertification could create another nuclear crisis like North Korea.

In a press conference following a meeting with representatives from every signatory country, Federica Mogherini, High Representative of the European Union, said that if the United States walks out of the deal, Europe would make sure it remains in place anyways. She further indicated, “The international community cannot afford dismantling an agreement that is working and delivering…Iran is complying.”

Mogherini confirmed that all of the parties to the JCPOA, including the United States, agreed in the closed-door meeting that “there is no violation.” This prompted questions for Secretary of State Rex Tillerson, who had to sheepishly admit that “from a technical standpoint, the IAEA reports continue to indicate and confirm that Iran is in technical compliance of the agreement.”

Foreign Policy reported that the Trump administration’s ploy to use the threat of decertification to reopen negotiations on the JCPOA and squeeze more concessions out of Iran “collapsed on Wednesday as key European powers persevered in their effort to rescue the deal from an American walkout, and Iran’s president made clear his government wouldn’t revisit the terms of the pact.” The New York Times reported that Trump’s repudiation of the international consensus and his brash denunciation of the JCPOA was unintentionally generating global sympathy for Iran, while damaging U.S. credibility and trust.

Even members of Trump’s own party began to break ranks. On Tuesday, Rep. Ed Royce, Republican Chairman of the House Foreign Affairs Committee, told CNN that Trump should not withdraw from the Iran deal, but rather continue to “enforce the hell out of it.” Senator Rand Paul (R-KY), who opposed the deal when it was signed in 2015, told reporters, “if [Iran is] complying with it, I think we should stay in it.”

Then, on Wednesday afternoon, the Commander of U.S. Strategic Command, General John Hyten, in a speech at the Hudson Institute, said, “The facts are that Iran is operating under the agreement that we signed up for under JCPOA… We have an agreement that our nation has signed and I believe that if the United States of America signs an agreement, it’s our job to live up to the terms of that agreement, it’s our job to enforce that.”

It’s not clear that this overwhelming resistance to decertification will dissuade President Trump. But the American people should know that if Trump goes through with it, he’ll be doing it in defiance of the facts, the international community, much of his own cabinet, and at least some prominent members of his own party.

This may soon become Congress’s responsibility. According to legislation passed subsequent to the signing of the JCPOA, that requires the president to certify Iranian compliance every 90-days, decertification triggers a 60-day clock for Congress to decide by majority vote whether to re-impose nuclear-related sanctions on Iran. A decision to do so and join President Trump in his misbegotten scheme to unravel the Iran deal would be dangerous and irresponsible.

According to a new national poll just released by the Cato Institute, Americans know very little about the Federal Reserve. Not surprising. But among those who are familiar with its work, most think it should not be setting interest rates.

The poll, conducted in collaboration with YouGov, surveyed a nationally representative sample of 2,000 Americans.[1]

Only 20 percent of those surveyed said they have heard of the Federal Reserve and “understand what it does very well.”  Fifty percent said they had heard of the Fed, and 22 percent said they had heard of it, but were not sure what it does.  Six percent said they had never heard of the Fed before.

We then asked whether Fed officials or the free market should determine interest rates in the economy. Perhaps unsurprisingly, 44 percent said they hadn’t thought enough about the issue to have an answer.  While fewer than one in four said the Fed should manage rates, nearly a third said the free market should. Focusing only on those with an opinion, a majority (58 percent) said they preferred the free market system determine rates.

When asked about the Fed’s independence, 57 percent said that the Fed operates independently while 38 percent said that it is influenced by Congress and the President. These responses were closely tied to education. Among those with post-graduate degrees, 70 percent said the Fed is independent while only 53 percent of those without a college degree thought so.

We also asked whether people thought that the Fed helped to stabilize the economy. The responses were mixed with 38 percent saying it does, 24 percent saying it does not, and another 36 percent saying they hadn’t heard enough to say. Responses were even more equally split when we asked about the Fed’s role in the 2008 financial crisis. While 30 percent said the Fed cut short the crisis, 33 percent said it had no impact, and another 33 percent said that it was a cause of the crisis. These responses were highly correlated with political views. Among those identifying as very liberal, 52 percent said that the Fed helps stabilize the economy and 23 percent said that the Fed was a cause of the financial crisis. Among those identifying as very conservative the views flipped: 50 percent said that the Fed was a cause of the crisis while only 26 percent said that the Fed helps stabilize the economy.

Ultimately, these findings highlight the urgent need for more education about what the Fed does, what it doesn’t do, and what it shouldn’t do. Cato’s Center for Monetary and Financial Alternatives was founded in part to provide just such an education to the public. While it’s disheartening to see how much we’re needed, it seems it’s a good thing we’re here.

Find the full survey results and analysis here.

_______________

[1] The Cato Institute 2017 Financial Regulation Survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online May 24-31, 2017 from a national sample of 2,000 Americans 18 years of age and older. Restrictions are put in place to ensure that only the people selected and contacted by YouGov are allowed to participate. The margin of error for the survey is +/- 2.17 percentage points at the 95% level of confidence.

[Cross-posted from Alt-M.org]

The Bureau of Economic Analysis (BEA) has released data on worker compensation for 2016. The data show that wages and benefits for federal-government workers grew faster than for private-sector workers last year. Federal workers now receive 80 percent more compensation, on average, than do workers in the U.S. private sector. I am including federal civilian workers here, not those in the uniformed military.

Average wages for federal workers increased 2.0 percent in 2016, which outpaced the average private increase of 1.3 percent. Federal workers had average wages of $88,809 in 2016, or 49 percent more than the average wages of private workers of $59,458.

However, the federal advantage in overall compensation (wages + benefits) is even larger because of gold-plated federal benefits, such as pension benefits. Total compensation for federal workers increased 2.5 percent last year, on average, more than double the 1.2 percent increase for private workers.

As a consequence, average federal compensation in 2016 was $127,259, which was 80 percent higher than average private compensation of $70,764. The federal advantage of 80 percent is up from just 50 percent in 2000.

The figure below shows that federal compensation grew much faster than private compensation during the 1990s and 2000s. Federal increases slowed during a brief wage freeze under President Obama, but have accelerated again in recent years. Since 2010, federal compensation increases have edged out private increases as a result of the strong growth in federal benefits.

This study examines the latest data and discusses federal compensation issues in more detail.

Donald Trump’s speech to the UN General Assembly underscored his intention to adopt highly confrontational policies toward both North Korea and Iran.  He threatened to “totally destroy” North Korea in the event of war and re-emphasized Washington’s long-standing determination to compel Pyongyang to renounce its nuclear and ballistic missile programs. The president scorned Iran as “an economically depleted rogue state” and described the current multilateral nuclear agreement with Tehran as “an embarrassment” to the United States. If Trump is not merely engaging in bombast, Washington appears to be ginning-up two major foreign policy crises simultaneously.

As I discuss in a new article in the National Interest Online, administration officials and hawks throughout the U.S. foreign policy community increasingly link the issues involving the two countries. Specifically, they seek to use the surge of tensions surrounding Pyongyang’s behavior to scuttle the P5+1 agreement, or Joint Comprehensive Plan of Action (JCPOA), that President Obama and other international leaders negotiated to place limits on Tehran’s nuclear activities.

Hawks contend that their goal is to “renegotiate” the JCPOA and produce a new agreement that would put greater restraints on Iran. However, statements past and present from leading neoconservative militants such as former U.S. Ambassador to the UN John Bolton, Foreign Policy Institute scholar Joshua Muravchik, and Colonel Ralph Peters, the former commander of U.S. forces in Okinawa, intensify suspicions that the real goal is forcible regime change. Those individuals and their ideological allies were in the forefront of the campaign that lured the United States into the disastrous regime-change war in Iraq, and apparently they want a second crusade against a Middle East regime.

The attack on the JCPOA suffers from one embarrassing difficulty: despite the allegations of UN Ambassador Nikki Haley and other Trump administration officials, the bulk of the evidence indicates that Iran has complied with its obligations under the agreement. President Trump and his advisers must resort to expressing complaints that Tehran is violating “the spirit” of the accord. That is an extremely lame argument. A key reason why nations spell out the binding aspects of an agreement through written provisions rather than relying on oral comments and handshakes is that disagreements about the spirit or intentions could be endless.

An increasingly popular line of argument among proponents of a militant policy toward Tehran is that North Korea’s behavior is a harbinger of what the United States will face regarding Iran, if Washington does not harden its approach. Hawks openly excoriate Bill Clinton for concluding the 1994 nuclear agreement with North Korea. Clinton’s naïve decision, they argue, enabled Pyongyang to flout the so-called restraints on its nuclear program, and we now face a much worse situation than we did two decades ago. They emphasize that U.S. leaders must not make the same error by adhering to a similar, fatally flawed, agreement with Iran.

Using North Korea’s conduct as an excuse to trash the nuclear agreement with Iran is dangerous ploy. The alternative to the JCPOA is not “a better agreement.” Both Tehran and the other members of the P5+1 (Britain, France, Germany, Russia, and China) have all made it clear that they vehemently oppose reopening negotiations. The United States stands alone in taking the contrary stance. The real alternatives to the JCPOA are a renewed Iranian nuclear-weapons program and a subsequent U.S. war against Iran. The former would be distressing, the latter would be catastrophic.

Even venturing down that path underscores the broader problem with U.S. policy toward Iran. North Korea is an obnoxious little state, and its nuclear ambitions are worrisome, but the country has little significance beyond its immediate neighborhood. Matters are quite different with Iran. Like it or not, that country is a major diplomatic, military, and economic player throughout the Middle East and even into Central and Southwest Asia. As the principal representative of Islam’s Shia branch, Tehran exercises considerable influence in such countries as Iraq, Lebanon, Syria, Bahrain and Yemen. Trying to isolate Iran has been—and will continue to be—an exercise in futility. And launching a military attack on that country would trigger another disastrous war in the Middle East with far-reaching and entirely negative consequences. The Trump administration needs to ignore the hawks and adopt a more sensible policy.

Peter Jamison, Washington Post

For several years, the nation’s capital has joined other left-leaning cities and states in pushing legislation to improve the plight of the working poor.

Now, facing growing unrest from business owners and internal division over their priorities, D.C. lawmakers are preparing to take a break from further beefing up labor standards.

The retreat, coming after a year in which the District adopted a plan to increase its minimum hourly wage to $15 and enacted a law guaranteeing private-sector workers some of the nation’s most generous family- and medical-leave benefits, is an abrupt shift for a city whose leaders have been in the vanguard of the national campaign for workers’ rights.

In particular, this may mean shelving the next priority on the agenda of the unions and their allied liberal groups, namely a law dictating methods by which employers may schedule workers, following a Seattle model (and editorially opposed by the Washington Post here). 

If the council chair gets his way, employers can look forward to fifteen whole months of not having new legal cinder blocks deposited on their backs: 

“Businesses like certainty, and if we’re constantly changing the tax burden or the tax environments, or constantly changing the regulatory burden, then it becomes more difficult to do business in the District,” said D.C. Council Chairman Phil Mendelson (D), who has proposed a moratorium through the end of 2018 on bills that would negatively affect businesses.

There is little here to surprise libertarians. Coercive employment legislation harms local economies as it does national, and gains no added rationality from being sentiment-based (the $15 number was selected because it made for easier organizing.) While D.C., like Seattle and San Francisco, has the slack to absorb large-scale folly thanks to its role in hosting a booming sector of today’s economy, it is not entirely immune from nearby competition, a few miles away in Virginia and Maryland.

What must worry unions is that the District’s retrenchment could break the momentum among what one analyst calls its “peer group of fairly progressive cities” and states to outdo each other in enacting laws regimenting employment relations and banning various workplace arrangements that are voluntary and desired by both sides. 

Let’s hope it does break that momentum. Washington loves to picture itself as the civic peer of that other capital of broad boulevards, Paris. And as it happens, the French themselves have finally been figuring out that dirigisme in the workplace leads to no good place. D.C. should back off too.

President Trump’s speech at the UN General Assembly yesterday has been getting a lot of attention, mostly for issues other than trade. But he did mention trade briefly:

For too long, the American people were told that mammoth multinational trade deals, unaccountable international tribunals, and powerful global bureaucracies were the best way to promote their success.  But as those promises flowed, millions of jobs vanished and thousands of factories disappeared.  Others gamed the system and broke the rules.  And our great middle class, once the bedrock of American prosperity, was forgotten and left behind, but they are forgotten no more and they will never be forgotten again.  

Almost everything in all of these sentences is misleading or inaccurate, but I’m going to focus on just the first sentence.  The reference to “multinational” trade deals – usually the word “multilateral” is used here – probably means the World Trade Organization (WTO), which has 164 countries in it.  From 1999 through 2001, I worked at the WTO, so I have some familiarity with the system he is criticizing.  Let’s go through his points one by one.

His first complaint is that these multinational trade deals are “mammoth.” He is right in a sense. There are thousands of pages of WTO legal texts. Let’s talk about why that is.

First of all, a large chunk of this is made up of what are referred to as schedules of tariff reductions. Each country in the WTO makes commitments, on a product by product basis, not to charge above a certain tariff (e.g., no higher than 10% on passenger cars). Clearly, it would be simpler and better if each country just agreed, in one sentence, to charge zero tariffs on all products. But for political reasons, this is the best we can do right now.

Beyond the tariff reductions, there are also long substantive texts of trade rules. For example, the Agreement on Trade-Related Aspects of Intellectual Property Rights is 28 pages. The Agreement on the Application of Sanitary and Phytosanitary Measures is 14 pages. But keep in mind here that many of the rules of this sort have been demanded by the U.S. government on behalf of U.S. business interests as a way to open foreign markets. Certainly, you could shorten the trade deals by excluding some of these rules. But they are mostly rules that somebody in the U.S. government or business community thinks are in the U.S. interest.

Trump and his team have been talking about pulling away from the multilateral, towards the bilateral. It’s possible they think this will somehow make trade deals less “mammoth,” but the reality is it would simply mean many more deals, all of which would be around the same length in terms of the rules they establish. If you are pursuing the same policies, for example on intellectual property protection, you would have the same rules in multiple agreements. All this would add to the system is complexity.

The second issue is Trump’s reference to “unaccountable” international tribunals. Unaccountable is a common term used to criticize courts, as judges are not usually elected. But if you want rules enforced, it is necessary to have some sort of judicial system to adjudicate complaints (as Trump does above, the U.S. often complains about other countries breaking the rules). Are the WTO tribunals any more “unaccountable” than domestic courts? It’s a complex comparison, but at the least, the WTO tribunals are accountable to the governments who are the members of the WTO: The WTO appeals judges are appointed directly by the governments themselves. The Trump administration can argue for scaling back the power of WTO tribunals, but it will come at the expense of enforcement of U.S. complaints about foreign protectionism.

Finally, Trump expresses a concern about powerful global bureaucracies. Here, it is important to understand how little power the WTO itself has. It is commonly said that the WTO is a “member driven” organization. People working at the WTO Secretariat are, for the most part, working on behalf of the governments who are members of the WTO. And there really aren’t all that many people there. The total number of staff is 634. That’s a pretty small number, and keep in mind that many of these people are technical and administrative staff, or economists gathering data. One area where you could argue that the bureaucracy has its own power is in the dispute process, discussed in the previous point. But here we should keep in mind the limits of that power. These tribunals can make rulings, but governments can and have ignored them when they disagree. One prominent example is a late 1990s ruling that an EU ban on hormone treated meat violates WTO rules. Well, the EU still bans hormone treated meat, and shows no sign of bowing to this “powerful”global bureaucracy. The U.S. has ignored a few rulings too, sometimes caving in to pressure eventually, but other times simply maintaining laws that violate WTO rules.

Trump and his team have focused much of their attention so far on renegotiating NAFTA, but there is a good chance they will propose changes to the WTO at some point, most likely in relation to the dispute process. There is always room for refinement of trade rules, so there is no need to panic just yet, but Trump’s misunderstandings of the WTO are not a good sign.

Today the Federal Reserve is set to announce the schedule for unwinding its balance sheet. This is a step in the right direction, but it also has the potential to increase the risk of a recession.

It’s past time to reduce the Fed’s balance sheet because its role in the economy is unnecessarily large. But without adding a strategy to eliminate the Fed’s interest payments on excess reserves that discourage bank lending, the Fed risks tightening monetary policy to the point where at best it makes it even harder for the Fed to hit its inflation target – and at worst risks another recession. Ultimately, the Fed must unwind its balance sheet in combination with ending interest on excess reserves in order to put the economy on a more solid monetary foundation.

George Selgin has been writing about the problem extensively in these pages and elsewhere. In particular, see his article “On Shrinking the Fed’s Balance Sheet,” and his American Banker piece with Norbert Michel on the Fed’s precarious balance sheet situation.

Watching the Fed’s announcement closely? The press release will appear here. And Yellen’s press conference can be viewed here.

[Cross-posted at Alt-M.org]

Yesterday, Nature Geosciences published an article by Richard Millar of the University of Exeter and nine coauthors that states the climate models have been predicting too much warming. Adjusting for this, along with slight increases in emissions reductions by the year 2030 (followed by much more rapid ones after then) leaves total human-induced warming of around 1.5⁰C by 2100, which conveniently is the aspirational warming target in the Paris Accord. Much of it is a lot like material in our 2016 book Lukewarming.

This represents a remarkable turnaround. At the time of Paris, one of the authors, Michael Grubb, said its goals were “simply incompatible with democracy.” Indeed, the apparent impossibility of Paris was seemingly self-evident. What he hadn’t recognized at the time was the reality of “the pause” in warming that began in the late 1990s and ended in 2015. Taking this into consideration changes things.

If Paris is an admitted failure, then the world is simply not going to take their (voluntary, unenforceable) Paris “Contributions” seriously, but Millar’s new result changes things. He told Jeff Tollefson, a reporter for Nature, “For a lot of people, it would probably be easier if the Paris goal was actually impossible. We’re showing that it’s still possible. But the real question is whether we can create the policy action that would actually be required to realize these scenarios.”

Suddenly it’s feasible, if only we will reduce our emissions even more.

Coincidentally, we just had a peer-reviewed paper accepted for publication by the Air and Waste Management Association and it goes Millar et al. one better. It’s called “Reconciliation of Competing Climate Science and Policy Paradigms,” and you can find an advanced copy here.

We note the increasing discrepancy between the climate models and reality, but what we do, instead of running a series of new models, is rely upon the mathematical form of observed warming. Since the second warming of the 20th century began in the late 1970s, and despite the “pause,” the rate has been remarkably linear, which is actually simulated by most climate models—they just overestimate the slope of the increase. However, one model, the INM-CM4 model from Russia’s E.M. Volodin, indeed does have the right rate of increase.

Figure 1. Despite the “pause”, the warming beginning in the late 1970s is remarkably linear, which is a general prediction of climate models. The models simply overestimated the rate of increase.

The Paris Agreement erroneously assumes all warming since the early 19th century is caused by greenhouse-gas emissions. That is patently absurd, as the warming of the early 20th century, from 1910-45, can have only little to do with them. If it were caused by them, the warming rate now would be astronomical, because the “sensitivity” of temperature to carbon dioxide would have to be inordinately high. Adjusting for the early warming means that the component from human activity is more likely to be about 0.5⁰ of the 0.9⁰C observed to-date. That leaves around 1.5⁰ more truly “permissible” under Paris.

Climate projections based upon past data tend to not be as hot as the models cited in Millar et al. Taking this into account, along with the fact there will be an economically-driven increasing substitution of natural gas for coal in electrical generation (which results in less than half the carbon dioxide emissions), and we come up with a total of 2.0⁰C of warming by 2100, which is the high-end cap in the Paris Agreement, without any more “commitments” to reductions.

So now the battle lines have been redrawn. One argument is that we can meet Paris but we have to reduce emissions dramatically, especially after 2030, and the other is that we will meet Paris because of economic factors, coupled with an adjustment for the overforecasting of the climate models.  

Republicans have promised major tax reform, and Cato has suggestions for policymakers. In today’s Wall Street Journal op-ed, Chris Edwards and I argue for the elimination of the Low Income Housing Tax Credit (LIHTC). For those unfamiliar with the program, LIHTC is a corporate tax loophole that endeavors to create low-income housing. Unfortunately, research suggests the program has substantial difficulty doing that.

In the article, we describe a few of LIHTC’s problems: LIHTC mostly benefits developers and intermediaries, crowds out private market housing development, and receives minimal oversight. The latter issue leads to abuse.

We also point out that there are more effective ways to increase the supply of low-cost housing. Still, LIHTC’s advocates stubbornly overlook its failings.

Although willful blindness might be a natural posture for interest groups, it is a bad look for policymakers. Legislators should use tax reform as an opportunity to reduce loopholes and corporate cronyism, while reducing rates. 

Read the details here

By a vote of 89-8, the Senate yesterday passed a $700 billion defense budget. That isn’t particularly newsworthy. As the New York Times reported, “The vote marked the 56th consecutive year that Congress has passed the defense policy bill—a point of personal pride for Senator John McCain, the Arizona Republican who chairs the Senate Armed Services Committee.”

The important story is that Sen. McCain et al. have no plan for actually raising the necessary funds, either through more taxes, cuts elsewhere, or more debt. Previous budget fights played by the rules—compromising to abide by the bipartisan Budget Control Act caps on discretionary spending. Willfully ignoring the BCA elephant in the room, as the Senate just did, runs the risk of a government shutdown and/or sequestration.

The Trump administration opened the Pentagon funding floodgates when it debuted a $668 billion budget request earlier this year. Trump made good on his promise to rebuild the military by cutting deeply from non-defense accounts, thus creating the illusion of fiscal discipline. But he also called for increasing the BCA defense caps.

At the time, Sen. John McCain declared Trump’s budget “dead on arrival” because it cut too deeply from these other programs. He also declared the Defense Department increase to be insufficient. It was never clear how McCain would square that circle.

It still isn’t. It appears that he expects someone else to solve the BCA problem, or that it will magically disappear.

But he isn’t alone. Many in Congress took Trump’s budget as a signal to spend even more on the military. Until now, Congress used its favorite loophole—the cap-exempt Overseas Contingency Operations account—to offset perceived funding shortfalls at the Pentagon. Congressional abuse of OCO was predictable but shortsighted. It allowed Congress to maintain the fiction that it was adhering to the BCA caps without actually doing so.

Last night’s vote dispensed with the charade. In the just-passed NDAA, funding for the base budget exceeds the $549 billion cap by $91 billion and puts $60 billion in OCO. The House version passed last month also put a majority of its plus-up in base funding, exceeding the BCA cap by $72.5 billion. The Trump administration’s budget seems almost sane in comparison by asking for $54 billion over the cap—which, to be clear, is unnecessary in order to keep Americans safe and maintain the U.S. military as the finest fighting force in the world.

89 Senators, not merely McCain and a handful of outspoken hawks, apparently believe that the Pentagon needs a 16 percent increase over the BCA caps in order to function next year alone. Plus another $60 billion for OCO. But no senator knows where those extra billions will come from.

The BCA was enacted in 2011 to impose some fiscal discipline by providing an upper bound for defense and non-defense discretionary spending. Since then, members of Congress found ways to either budget under or raise (2013, 2015) the caps. The one time they failed to avoid sequestration—the October 2013 government shutdown—lasted only 16 days.

As much as members of Congress bemoan the budget caps and fear sequestration for its damaging effects, you would think they would take the risk of a government shutdown more seriously. Senator Tom Cotton offered the only amendment to the NDAA that would have altered the Budget Control Act for this fiscal year. Rather than trying to strike a bipartisan deal to increase the caps or repeal the legislation entirely, Cotton sought to render the BCA toothless by partially repealing the automatic sequestration mechanism.

Cotton’s amendment was a political non-starter because it failed to reassure Democrats worried about caps on spending for non-defense programs. Even if it miraculously passed in the Senate, the amendment would have faced a tough fight from some House members while in conference. Predictably, Cotton’s proposal, along with several other controversial amendments, was never granted a vote.

Congress can’t afford to ignore the political and fiscal reality forever. A military budget that exceeds the BCA caps, and offers no plan for undoing those caps, should be—as Sen. McCain said of President Trump’s first budget submission— “dead on arrival.”

* Thanks to Cato research associate Caroline Dorminey for her assistance.

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