Policy Institutes

With the temperature in Washington, D.C. in the mid-90s, it is perhaps worthwhile to recall what life was like before the arrival of air-conditioning. Below are a few excerpts from a New Yorker essay about air conditioning penned by the great Arthur Miller in 1998:

Exactly what year it was I can no longer recall—probably 1927 or ’28—there was an extraordinarily hot September, which hung on even after school had started and we were back from our Rockaway Beach bungalow. Every window in New York was open, and on the streets venders manning little carts chopped ice and sprinkled colored sugar over mounds of it for a couple of pennies. We kids would jump onto the back steps of the slow-moving, horse-drawn ice wagons and steal a chip or two; the ice smelled vaguely of manure but cooled palm and tongue…

Even through the nights, the pall of heat never broke. With a couple of other kids, I would go across 110th to the Park and walk among the hundreds of people, singles and families, who slept on the grass, next to their big alarm clocks, which set up a mild cacophony of the seconds passing, one clock’s ticks syncopating with another’s. Babies cried in the darkness, men’s deep voices murmured, and a woman let out an occasional high laugh beside the lake…

Given the heat, people smelled, of course, but some smelled a lot worse than others. One cutter in my father’s shop was a horse in this respect, and my father, who normally had no sense of smell—no one understood why—claimed that he could smell this man and would address him only from a distance…

There were still elevated trains then, along Second, Third, Sixth, and Ninth Avenues, and many of the cars were wooden, with windows that opened. Broadway had open trolleys with no side walls, in which you at least caught the breeze, hot though it was, so that desperate people, unable to endure their apartments, would simply pay a nickel and ride around aimlessly for a couple of hours to cool off. …

Elsewhere in the essay Miller writes, a “South African gentleman once told me that New York in August was hotter than any place he knew in Africa.” That was exactly the impression I got when I visited Charlottesville in August of 2000 – my first trip to the United States in summer time. I remember saying to my friends back home in Johannesburg that I have never experienced such oppressive heat on my travels through Africa.

Air-conditioning makes our lives more comfortable, but let us not forget the importance of air conditioning for the economy. As Walter Oi writes in The Welfare Implications of Invention, temperature and humidity have a strong influence on labor productivity. For example, in machine shops, labor productivity is at its peak at 65 degrees Fahrenheit with humidity between 65 and 75 percent. Productivity is 15 percent lower at 75 degrees Fahrenheit and 28 percent lower at 86 degrees Fahrenheit. Moreover, accident rates are 30 percent higher at 77 degrees Fahrenheit than at 67 degrees Fahrenheit. In many factories, temperature and humidity also affect the product, ruining paper, threads of textiles and so on. Similarly, in the old days, main-frame computers required climate control to function effectively. It was undoubtedly the introduction of air-conditioning that caused value-added per employee in manufacturing in the South to increase from 88.9 percent of the national average in 1954 to 96.3 percent of the national average in 1987.

Best of all, air-conditioning is much, much cheaper and more available than it has ever been!

 

 

 

 

Allow me to liberally paraphrase a piece from the current issue of the AMS’s publication “Notices.” Thereafter, I’ll contrast my version with the original.

The US presents particular obstacles to achieving technological improvement at a national scale, deriving from its social and economic diversity and also from an entrenched tradition of entrepreneurship and private industry which precludes a federal role in any primary initiatives. Yet to achieve real improvement at scale requires some national coherence.

The laws of physics are the same in Florida and Montana; it makes little sense in a highly mobile population for more than one cell phone technology to exist within our borders. It would be like building a national railway system with different gauge tracks in each state.

Readers will no doubt realize that this argument is undermined by the substantial advances Americans have witnessed in Cell phone technology over the years, despite—perhaps even because of—the existence of alternative suppliers developing different hardware and operating systems. All the while, we are somehow still able to call/text one another without worrying whether our interlocutor is an Apple addict or an aficionado of Android. And scale hasn’t proven to be a problem. Apple and Google have managed to serve very, very large numbers of people indeed.

So far as I know, few people are seeking a federal takeover of cell phone manufacturing or service in the hope that this would improve the user experience or increase “national coherence.”

And of course the American Mathematical Society is not propounding such a silly idea. What they actually published was a piece by award-winning mathematician Hyman Bass in which he writes:

The US presents particular obstacles to achieving educational improvement at a national scale, deriving from its social and economic diversity and also from an entrenched tradition of “local control,” which precludes a federal role in any primary initiatives. Yet to achieve effective reform at scale requires some national coherence….

Fractions are the same in Florida and Montana; it makes little sense in a highly mobile population for the math curriculum to change at state lines. It would be like building a national railway system with different gauge tracks in each state.

Why, given what we know about the diversity, interoperability, and dissemination of excellence within our private sector industries, would anyone imagine that the way to improve our centrally planned state school systems would be to centralize control over them even further, at the national level? Should we not perhaps draw the opposite conclusion? That the reason education has not enjoyed the same relentless pattern of useful innovation and the “scale-up” of excellence that we now expect in other fields is that we don’t allow the same freedoms and incentives in education that we do in all those other fields. Might it not be that state-run monopolies work no better in American education than they have ever worked in any other industry in any other country (which is to say: very poorly)?

How about freeing education from the stifling pall of monopoly, unleashing both parental choice and entrepreneurial freedom on a grand scale? It adds up.

A number of cases have been filed recently against the Securities and Exchange Commission (SEC), challenging its use of in-house administrative law judges (ALJs).  As I discussed in my earlier post on this topic, the SEC’s use of ALJs has come under close scrutiny lately because of concerns that, in the wake of a provision in Dodd-Frank expanding ALJs’ power, the SEC has elected to use its in-house procedures more frequently and that this use may have increased the SEC’s ability to prevail in enforcement actions.  Of particular concern is the fact that administrative proceedings lack many of the protections for defendants that litigation in federal courts provide, including: the option of having the case decided by a jury; access to the government’s evidence; and the ability to exclude certain evidence traditionally believed to be unreliable (such as hearsay).    

While a number of these cases have been dismissed, Monday finally garnered a win: Charles Hill succeeded in getting a federal court to issue an injunction that prohibits the SEC from continuing its case against him using its in-house ALJ.  Having been charged with insider trading and brought before an SEC ALJ, Hill filed suit against the SEC in federal court claiming the administrative proceeding was unconstitutional on three different grounds.  Although the court disagreed with two of his arguments, it found in his favor on the third – that the ALJs’ appointment violates the appointments clause because ALJs are “inferior officers.”

The constitution states: “the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.”  Inferior officers are those who “exercis[e] significant authority pursuant to the laws of the United States[.]”  Because this person is “invested by legal authority with a portion of the sovereign powers of the federal Government,” the constitution requires that the person remain accountable at least indirectly to the head(s) of one of the three branches of the federal government.

Administrative Law Judges (ALJs) preside over the hearings, issuing subpoenas, hearing witness testimony, and making findings of law and fact – just like judges in courts established under Article III of the constitution (what we typically think of as “federal judges”).  Unlike Article III judges, which require presidential appointment and senate confirmation, ALJs are hired as employees of their respective agencies.  Although labeled simple “employees,” the court found that ALJs are in fact  “inferior officers” and therefore must be appointed in accordance with the constitution, which states: “the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” 

As the judge noted in her opinion, there is a fairly easy fix available to the SEC: the five commissioners can simply appoint the existing ALJs to their current positions.  There may be some procedural hurdles to clear in other cases pending before SEC ALJs in ironing out their appointments, but these should not be too difficult to overcome.  As for Hill, the SEC can wait to re-appoint its own ALJs or it can refile the case against him in federal court.  The injunction doesn’t get him off the hook.

Although the problem may have an easy fix for the SEC, other agencies could face greater difficulties.  The constitution states that inferior officers may be appointed by “heads of departments.”  This clearly includes the 15 cabinet-level departments, and it has been found to include the SEC, but the question remains unsettled for several other agencies, including several with ALJs.  It’s unclear at this point whether other agencies will take any action in response to this ruling.  Judge May is in the Northern District of Georgia and her jurisdiction is limited to that district.  This means that other districts are not bound in any way by her ruling.  At the same time, the issue has gotten a fair amount of attention recently and agencies may already be examining their internal processes.  It’s very likely that more defendants in ALJ proceedings will file similar claims in federal court, hoping for a similar result.  

As we await a Supreme Court decision on gay marriage, we take note that 48 years ago today the Court struck down Virginia’s ban on interracial marriage.

Mildred Jeter, a black woman (though she also had Native American heritage and may have preferred to think of herself as Indian), married Richard Loving, a white man, in the District of Columbia in 1958. When they returned to their home in Caroline County, Virginia, they were arrested under Virginia’s anti-miscegenation statute, which dated to colonial times and had been reaffirmed in the Racial Integrity Act of 1924. The Lovings were indicted and pled guilty. They were sentenced to a year in jail; the state’s law didn’t just ban interracial marriage, it made such marriage a criminal offense. However, the trial judge suspended the sentence on the condition that they leave Virginia and not return together for 25 years. In his opinion, the judge stated:

Almighty God created the races white, black, yellow, malay, and red, and he placed them on separate continents. And but for the interference with his arrangement there would be no cause for such marriages. The fact that he separated the races shows that he did not intend for the races to mix.

Five years later they filed suit to have their conviction overturned. The case eventually reached the Supreme Court, which struck down Virginia’s law unanimously. Chief Justice Earl Warren wrote for the court,

The freedom to marry has long been recognized as one of the vital personal rights essential to the orderly pursuit of happiness by free men. Marriage is one of the “basic civil rights of man,” fundamental to our very existence and survival.

Here’s how ABC News reported the case on June 12, 1967:

Report on Loving Case 1967

David Boies and Ted Olson, the two lawyers who led the challenge to California’s Proposition 8, which outlawed same-sex marriage in 2008, connected the Loving case to the case of Perry v.Schwarzenegger here:

“Loving” and the Fight for Marriage Equality

In 2011, as their case proceeded through the federal courts, Boies and Olson spoke at the Cato Institute, joined by John Podesta, then president of the Center for American Progress, and Robert A. Levy, chairman of Cato. Podesta and Levy served as co-chairs of the advisory committee of the American Foundation for Equal Rights, the nonprofit group that brought the Perry case. They wrote in the Washington Post in 2010:

Now, 43 years after Loving, the courts are once again grappling with denial of equal marriage rights — this time to gay couples. We believe that a society respectful of individual liberty must end this unequal treatment under the law….

Over more than two centuries, minorities in America have gradually experienced greater freedom and been subjected to fewer discriminatory laws. But that process unfolded with great difficulty.

As the country evolved, the meaning of one small word — “all” — has evolved as well. Our nation’s Founders reaffirmed in the Declaration of Independence the self-evident truth that “all Men are created equal,” and our Pledge of Allegiance concludes with the simple and definitive words “liberty and justice for all.” Still, we have struggled mightily since our independence, often through our courts, to ensure that liberty and justice is truly available to all Americans.

Thanks to the genius of our Framers, who separated power among three branches of government, our courts have been able to take the lead — standing up to enforce equal protection, as demanded by the Constitution — even when the executive and legislative branches, and often the public as well, were unwilling to confront wrongful discrimination.

In his remarks at Cato, and in this newspaper column, Levy argued that it would be best to get the government out of marriage entirely—let marriage be a private contract and a religious ceremony, but not a government institution, a point that I have also made. For some, that’s a libertarian argument against laws and court decisions that would extend marriage to gay couples: it would be better to privatize marriage. But Levy goes on to say:

Whenever government imposes obligations or dispenses benefits, it may not “deny to any person within its jurisdiction the equal protection of the laws.” That provision is explicit in the 14th Amendment to the U.S. Constitution, applicable to the states, and implicit in the Fifth Amendment, applicable to the federal government.

When it comes to the current marriage case of Obergefell v. Hodges – and if only the Court had made the parallel case of Love v. Beshear the main case, so that the Loving decision could be followed by the Love decision – there are legitimate federalist and democratic objections. One might say that marriage law has always been a matter for the states, and it should stay that way. Let the people of each state decide what marriage will be in their state. Leave the federal courts out of it. Federalism is an important basis for liberty, and that’s a strong argument. There’s also a discomfiting argument that a Supreme Court decision striking down bans on gay marriage is undemocratic, that it would be better to let the political process work through the issue. Some people, even supporters of gay marriage, warn that a court decision could be another Roe v. Wade, with decades of cultural war over an imposed decision.

Those are valid objections. Not all issues have an obvious right side. In this case, I always ask critics of the federal court decisions striking down gay marriage bans and the possibility of a Supreme Court decision confirming those decisions, How do you feel about the Loving case? Do you think the Court should have declined to strike down state bans on interracial marriage (which were still highly popular in 1967, according to the Gallup poll)? And if you do support the Loving decision, then how are these cases different? The Cato Institute has urged the Court, in an amicus brief, to find that bans on same-sex marriage violate the equal protection clause of the Constitution.

Here is one more video, featuring the speakers from the Cato forum on Perry v. Schwarzenegger (plus me):

The Constitutional Case for Marriage Equality

Controversial Supreme Court decisions are often handed down at the end of the Court’s term, in June. A decade from now, will we celebrate the joint anniversary of the Loving and Obergefell decisions, both of which extended liberty and justice—and the freedom to marry—to all? Or will we have to explain how the Court managed not to find that the principles of Loving applied to Obergefell?

According to the South African newspaper Mail and Guardian, “African leaders on Wednesday signed a potentially historic, 26-nation free-trade pact to create a common market spanning half the continent, from Cairo to Cape Town. The deal on the Tripartite Free Trade Area (TFTA) is the culmination of five years of negotiations to set up a framework for preferential tariffs easing the movement of goods in an area that is home to 625-million people…. The deal will integrate three existing trade blocs – the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa (Comesa) – whose countries have a combined gross domestic product (GDP) of more than $1-trillion.”

“Potentially historic” is the right term for what could be a greatly beneficial agreement. African parliaments will have two years to ratify the agreement – and that is the easy part. Proper implementation and enforcement will be much more difficult in countries with deeply underdeveloped institutions of rule of law and protection of private property. Still, the TFTA is a step in the right direction, for it signals an important ideological shift on the part of the African elite. Historically, African governments have been deeply skeptical of free trade and capitalism. Instead, they preferred protectionism and state-led development. To the extent that they were interested in trade, the African governments emphasized access to Western markets, while eschewing liberalization of their own. The consequences were catastrophic. As I wrote in a 2005 Cato paper,  

[T]rade liberalization in the developed world as a cure for world poverty is often overemphasized. Simply abandoning developed-world protectionism would not substantially change the lives of the people in the poorest parts of the developing world. That is particularly true of sub-Saharan Africa (SSA), where the main causes of impoverishment are internal. SSA is not poor because of lack of access to world markets. SSA is poor because of political instability and because of a lack of policies and institutions, such as private property rights, that are necessary for the market economy to flourish.

Despite substantial declines in applied and bound tariffs throughout the world, protectionism [in SSA] is still very much alive. Developing countries’ average tariff rates are more than three times higher than those of developed countries… According to the WTO, only 10 percent of African (including sub-Saharan African) exports were intraregional (i.e.: traded to other African countries). In contrast, 68 percent of exports from countries in Western Europe were exported to other Western European countries. Similarly, 40 percent of North American exports were to other countries in North America.

It is hypocritical for African leaders to call for greater access to global markets while rejecting trade openness at home. It is also self-defeating, because domestic protectionism contributes to perpetuating African poverty. Research shows that countries with the greatest freedom to trade tend to grow faster than countries that restrict trading. SSA governments have complete control over the reduction of their own trade barriers. If they are truly serious about the benefits of trade liberalization, they can immediately free trade relations among SSA countries and with the rest of the world. They should do so regardless of what the developed world does.

The flow of unauthorized immigrants to the United States has collapsed.  The apprehension of illegal immigrants by Customs and Border Protection (CBP), the best proxy measurement of the flow of such people, along the Southwest Border is way down (see below). 

All Apprehensions on Southwest Border

                       

Source: Customs and Border Protection.

What explains this?  A number of factors are at play.  Economic conditions in the United States, economic or other conditions in other countries, and immigration enforcement all explain part of the decrease in unauthorized immigration over the years.    

Mark Krikorian of the Center for Immigration Studies (CIS) gives most of the credit to beefed up immigration enforcement along the border.  Krikorian seconds a quote by Marc Rosenblum, deputy director of the Migration Policy Institute, who says:

Every month or quarter that the economy continues to improve and unauthorized immigration doesn’t pick up supports the theory that border security is a bigger factor, and it’s less about the economy and we have moved into a new era.

But if immigration enforcement is the main reason why unauthorized immigration hasn’t collapsed, why are the numbers of unlawful immigrants from countries Other than Mexico (OTMs) increasing?  CBP apprehensions don’t discriminate based on country of origin because they can’t tell where the immigrants are from until they’re apprehended.

Apprehensions on Southwest Border, Mexico and OTMs

 

Source: Customs and Border Protection

OTM Apprehensions on Southwest Border and Border Patrol Agents

 

Source: Customs and Border Protection

The decrease in unlawful immigration is due entirely to the fall off in Mexicans who were 98 percent of all apprehended illegal immigrants in 2000 but just 47 percent in 2014.  From 2000 to 2014, the correlation between apprehensions of Mexicans and the number of border patrol agents is very negative (-.93 ), supporting Krikorian’s theory that enhanced border enforcement is deterring unlawful Mexicans. 

The economic indicators aren’t irrelevant though.  Mexican per capita GDP (PPP$) and apprehensions of Mexicans have a correlation of -.89, which means that as Mexican income goes up apprehensions of Mexicans goes down.  The richer Mexicans are in Mexico, fewer of them emigrate illegally to the United States.  The correlation between U.S. unemployment and Mexican unlawful immigration is less negative (-.81), showing that when unemployment is high fewer unlawful Mexican immigrants come.  The relationship between housing starts and unlawful Mexican immigration is also high (.79). 

Mexicans became richer at the same time that U.S. border enforcement increased.  Maybe throwing billions of dollars of taxpayer resources at the border or changing tactics actually worked or maybe Mexicans became rich enough that they didn’t have to come or maybe it was a combination of both of those factors and others that haven’t been considered.  Regardless, enforcement is not the only variable that has changed here.  OTMs add another wrinkle.

The number of border patrol agents and OTMs is positively correlated (0.37).  U.S. unemployment rates and housing starts have no relationship to OTM apprehensions.  OTMs are mostly Central Americans, virtually all from nations that are poorer and more violent than either the United States or Mexico.  U.S. immigration enforcement is not deterring them, what is pulling them in and pushing them out of their home countries?

Economic explanations of the flow of unlawful immigrants depend upon more than just the unemployment rate in the United States.  The economic conditions on the countries of origin must also be considered before we conclude that immigration enforcement deserves the credit and blame for stopping unlawful immigration.

Whenever someone declares opponents of the Common Core “misinformed,” get ready: there’s probably a lot more misinformation coming your way. Case in point, a new offering from Washington Post blogger Jennifer Rubin attacking Wisconsin Gov. Scott Walker (R) over his Common Core stance in a recent Des Moines Register op-ed. Her post is chock-full of misinformation, ironically intended to make Core opponents seem confused.

Start with this, in which Rubin asserts that Walker tried to conflate overall federal education funding with the Common Core:

As virtually all GOP contenders but Jeb Bush do, he then takes a swing at Common Core. “Nationwide, we want high standards but we want them set by parents, educators and school board members at the local level. That is why I oppose Common Core. Money spent at the local and state level is more efficient, more effective and more accountable. That is why I support moving money out of Washington and sending it to states and schools. Students deserve a better education.” This is confusing since Common Core per se does not affect how and where money is coming from.

This isn’t actually confusing when you read Walker’s piece, at least the online version (which I assume is like the print version, and is also likely the version Rubin read.) Why? Because Walker separated his ideas into paragraphs, which Rubin eliminated in the quote above, and the placement of the paragraphs makes clear that Walker’s Common Core thought and his federal funding thought were separate ideas. Directly from Walker’s piece:

Now, more than ever, we need to push big, bold reforms to improve our schools. If we can do it in Wisconsin, there is no reason we can’t push positive education reforms across the country.

Nationwide, we want high standards but we want them set by parents, educators and school board members at the local level. That is why I oppose Common Core.

Money spent at the local and state level is more efficient, more effective and more accountable. That is why I support moving money out of Washington and sending it to states and schools. Students deserve a better education.

And every student in the our [sic] nation’s capital should have access to a great education. Therefore, we should expand the options for families in the District of Columbia to choose the school that is best for their children.

Rubin proceeds to make the funding befuddlement worse by writing, “It is Race to the Top that affords states money if they can show either through Common Core or other standards that they are setting high expectations for students.” First, the Race to the Top that provided the primary impetus for states to adopt the Core de facto only allowed the Core – not “other standards” – saying that only states that were part of a standards-and-assessment consortium including “a majority of the States in the country” (p. 59689) could get maximum points in the funding contest. Only the Core met that criterion, and it was clearly the intent of many Core supporters and the Obama administration to have RTT push the Core specifically. That first Race to the Top, however, was basically a very powerful one-shot deal, not one that continuously “affords states money.” It was subsequent waivers out of No Child Left Behind requirements – which let states either use the Core or have a state university system certify state standards as “college- and career-ready” – that are currently in effect and offer two standards options.

Subsequent to the original Race to the Top there have been other programs with “Race to the Top” in their names, and Rubin conflates the original, which drove Common Core, with the Race to the Top–Early Learning Challenge. The conflation gives the impression that in claiming that the ELC program would help Wisconsin, as he did in 2013, Walker was praising the original Race to the Top. Rubin compounds that erroneous connection by noting that among 2016 GOP presidential candidates only Rick Perry of Texas had “turned down” RTT money – actually, he refused to compete for it – which is meaningless since Walker wasn’t governor when the original RTT was in play.

Rubin moves on to assert that it is problematic for governors to tout success in their schools that occurred while Common Core was “in place” and then attack the Core. Rubin doesn’t egregiously misrepresent facts with this observation, but everyone should refrain from crediting or blaming the Core for outcomes even after it has been in place for years. There are far too many variables at play in education to simply say that during a certain period outcomes improved, we had Common Core during that period, therefore Common Core worked.

More directly, though, Common Core hasn’t been in place for years. Indeed, for the vast majority of states – Wisconsin included – 2014-15 was the first school year that Core-connected tests were administered. That means implementation is just now being completed, and the Core wasn’t in full effect during the advances Walker cited, which he connected to his 2011 seniority and tenure reforms.

Finally, again not an egregious misrepresentation of fact, but Rubin asserts that it is a clear myth to say that the Core is a “curriculum.” But the delineation between “standards” and “curricula” is no bright line, much though Core supporters like to say it is when smearing opponents as misinformed. As an extreme illustration, if I say the “standard” is to be able to add 2 and 2 using a traditional algorithm, that’s also curriculum; it tells you “how” you must do the addition.

In this vain, the Core explicitly calls for instructionalshifts” – again, how you do things, not just what students should be able to do – and gets fairly explicit about content in much of its math and a bit of the English Language Arts sections. More important, federally funded tests go with the Core – though many states have moved away from them – and what they ask will likely de facto fill in curricular specifics over time. If every year a problem requires multiplication using area models, area models must be taught. And keep in mind that while educators may have their own definition of “curriculum” – specifics of how something is taught – the common definition is much more in line with how they define “standards”: what is broadly to be learned. As the Merriam-Webster online dictionary defines it: “1:  the courses offered by an educational institution; 2: a set of courses constituting an area of specialization.”

As I’ve opined before, Common Core advocates have made a central part of their political strategy tarring Core opponents as “misinformed.” But they are too often guilty of peddling misinformation themselves.

A new GAO report describes failures in the federal government’s information technology (IT) activities. The government spends $80 billion annually on IT. These “investments frequently fail, incur cost overruns and schedule slippages, or contribute little to mission-related outcomes,” concludes GAO.

The new report summarized some of the failures:

  • the Department of Defense’s (DOD) Expeditionary Combat Support System, which was canceled in December 2012, after spending more than a billion dollars and failing to deploy within 5 years of initially obligating funds;
  • the Department of Homeland Security’s Secure Border Initiative Network program, which was ended in January 2011, after the department obligated more than $1 billion to the program, because it did not meet cost-effectiveness and viability standards;
  • the Department of Veterans Affairs’ (VA) Financial and Logistics Integrated Technology Enterprise program, which was intended to be delivered by 2014 at a total estimated cost of $609 million, but was terminated in October 2011 due to challenges in managing the program;
  • the Office of Personnel Management’s Retirement Systems Modernization program, which was canceled in February 2011, after spending approximately $231 million on the agency’s third attempt to automate the processing of federal employee retirement claims;
  • the National Oceanic and Atmospheric Administration, DOD, and the National Aeronautics and Space Administration’s National Polar-orbiting Operational Environmental Satellite System, which was a tri-agency weather satellite program that the White House Office of Science and Technology stopped in February 2010 after the program spent 16 years and almost $5 billion; and
  • the VA Scheduling Replacement Project, which was terminated in September 2009 after spending an estimated $127 million over 9 years.

The GAO attributes the problems to “a lack of disciplined and effective management and inadequate executive-level oversight.” That is certainly true, but I would also point to more fundamental problems with the nature of government bureaucracy, which I discussed in testimony yesterday.

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

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Yesterday, we posted some excerpts from the Background section of our submitted Comment on the draft report on climate and health from the U.S. Global Change Research Program (USGCRP). In that section, we argued that the USGCRP was overlooking (ignoring?) a vital factor that shapes the influence of climate change on the health and well-being of Americans—that is, that the adaptive process is actually spurred by climate change itself. Without recognition of this fact, projections are often alarmist and pessimistic.

Today, we wanted to highlight what we found to be the fatal flaw in the entire USGCRP report—that the USGCRP fails to describe the net impact of climate change on public health, instead, presenting only a narrow and selective look at what they determine to be negative impacts (and even those examples tend to be miscast).

Here’s what we had to say about this:

The first sentience of the Climate and Health Assessment exposes the report’s fatal flaw “Climate change is a significant threat to the health of the American people.” This statement is based upon the untested assumption that the climate of the mid-to-late 20th century in the United States is the optimal one for the health of Americans. Yet nowhere, to our knowledge, can the basis for such an assumption be found in the scientific literature. Without establishing the ideal climate, it is pure speculation to make a statement like the one noted above. The USGCRP Climate and Health Assessment is not a comprehensive review of how climate impacts all aspects of the well-being of Americans, but rather a narrow and selective look at how projected changes in climate (projections that are largely grounded in climate model projections which have known faults and limitations) may impact some narrow and selective facets of human health. Sure, there are negatives associated with any change, but that is not the overarching question. The relevant question, and the one not answered by the USGCRP, is what is the net outcome of climate change on the population of Americans.

Admittedly, answering such a question is exceedingly difficult, if not impossible. There are so many confounding factors in play. Obvious examples include changing population demographics (including age-structure), changing medical technologies, changing health care, changing diets, and changing habits. On the climate side of things, additional complicating factors are to be found including improving weather forecasts, improving warning systems, improving observational systems, and improving preparation. But it is quite likely that it is the non-obvious influences which are most at play.

Compounding the situation is that the impacts of a changing climate are not constant over various timescales. Climate change provokes the development and adoption of adaptive measures-measures which insulate us against future impacts and lowers the future threat. Depending on the types of adaptive measures deployed, these may become effective on timescales from weeks to decades (or even longer). For example, an unusual summer heatwave may increase daily mortality in unprepared localities for a few days, but adaptive measures ranging from simple actions (community awareness programs and cooling centers) with deployment in times in weeks to months, to more elaborate (heat watch/warming systems, building design), with deployment horizons from years to decades.

And one must be careful not to fall prey to confusing climate change with climate (including climate variability).  Too often reports like these are written with blinders on that mislead the authors into thinking that all impacts are a result of climate changes, when, in fact, climate change plays but a tiny role in the overall climate—with the role of human-caused climate change extremely difficult to identify, much less even be anticipated in a robust manner.

Perhaps the largest hurdle the USGCRP has to overcome to establish a growing threat from climate change is that the simplest measure of human well-being, life expectancy, shows a large increase since the beginning of the 20th century (Figure 1).

Figure 1. Life expectancy at birth, United States, 1900-2013 (data source: Centers for Disease Control, http://www.cdc.gov/nchs/data/nvsr/nvsr64/nvsr64_02.pdf).

Life expectancy is indicative of the sum total of all influences on the well-being of Americans and shows that the overall climate has been increasing favorable. This has occurred at the same time as a rise in global and national temperatures (from whatever the cause).

But, climate (including variability and change) is eminently more complex than a simple annual average of a large area temperature can indicate (a parameter that no individual experiences). As we try to decrease the temporal and spatial scales to those relevant for human health, the complexities of the climate overwhelms our abilities to project them more than a few days into the future.

Oversimplifications therefore become commonplace, such as using coarse resolution climate model output involving a limited number of variables to downscale to local time and places. This procedure is one is widely recognized as being fraught with uncertainty, and thus produces non-robust and unreliable results.

 Our bottom line is not pretty for the USGCRP and their Climate and Health Assessment:

[This] compounds to produce a nearly intractable situation in which determining the role on anthropogenic climate change in the overall health and well-being of Americans, now and in the future, becomes fraught with nearly unavoidable pitfalls, many of which the USGCRP has stepped directly in. In doing so, the USGCRP has produced a document that serves not to inform the public as to the existing state of robust science on the topic of climate and human health, but rather to misinform them and local, state and national policy as well.

An outbreak of bird flu has prompted the untimely demise of 35 million hens, seriously disrupting the supply of eggs in the United States.  Now we get to watch the relationship between supply disruption and price changes play out, which is fun (if you’re into that sort of thing).  There have already been reports of rationing by retailers and of significant price hikes

With eggs costing up to 3 times their normal price, a lot of retailers and restaurants are “rationing” eggs.  The goal of the rationing is most likely to avoid raising prices.  For example, Whataburger chose to stop offering late night breakfast rather than raise prices. And some grocery stores are limiting the number of eggs shoppers can purchase in an effort to keep prices low for regular customers without attracting hordes of commercial users.

High prices are also pushing consumers toward premium egg products.  The Guardian reports:

The higher prices have driven some consumers to buy specialty eggs including cage-free and organic, which typically cost more but haven’t seen a similar increase because specialty-egg chicken houses haven’t been hit as hard, Urner Barry egg industry analyst Brian Moscogiuri said. He noted that specialty-egg prices are closer to regular eggs, leading some consumers to justify the purchase.

With a large portion of America’s egg production capacity suddenly wiped out, the only way to get prices back down quickly is to find new sources of supply.  Thankfully, the U.S. Department of Agriculture has a way to do that.  According to the Associate Press:

The bird flu outbreak has caused the U.S. Department of Agriculture to approve importing egg products from the Netherlands to be used for baking and in processed foods.

The USDA said last week the Netherlands should begin shipping egg products within days.

It’s the first time in more than a decade the U.S. has bought eggs from a European nation.

In recent years, only Canada held certification to sell liquid, dried and frozen egg products to U.S. companies.

Allowing more imports is a great idea.  Local supply shocks like the bird flu outbreak have much less impact on prices and availability when there is a diverse array of sources available.  There are still costs associated with shifting supply chains, but basic commodity prices are much more stable and less prone to shocks in a global market.

It’s good that the USDA has responded rationally to alleviate this problem by permitting egg imports from the Netherlands, but the move raises an important question: Why was it not okay to import eggs from the Netherlands before?  Were Dutch eggs unsafe?  Are they safer now?

The USDA is supposed to allow egg imports from countries with equivalent safety standards.  It seems pretty clear that the way the system is currently being managed results in an overly protected U.S. egg market.  It’s more than a little silly to think that Canada and the United States are the only places with sufficient regulatory oversight to ensure the production of safe egg products.

In 2013, Sallie James and I wrote a paper explaining how regulatory protectionism is often disguised as safety standards.  If U.S. authorities are willing to allow certification to prevent price surges, have they been denying certification based on price control considerations?  That would be an abuse of sanitary and phytosanitary measures for protectionist purposes in violation of international trade rules. 

While it’s great that the USDA is working to find new sources of supply now, the bird flu outbreak wouldn’t have caused as much disruption for consumers if the U.S. market had been more open to begin with.

Today South Carolina Governor Nikki Haley will sign S.47, a body camera bill. The bill requires state and local law enforcement agencies in South Carolina to use body cameras and to develop body camera policies and procedures. It also establishes a “Body-Worn Cameras Fund” and prohibits police body camera footage from being accessed via Freedom of Information (FOIA) requests. The increased use of police body cameras is worthwhile, but limiting access to the footage hinders attempts to increase law enforcement accountability.  

Lawmakers fast-tracked S.47 following the death of Walter Scott, a 50-year-old man who in April this year was shot in the back while fleeing Michael Slager, a North Charleston, South Carolina police officer.

A passerby, Feidin Santana, filmed Scott’s shooting, and his footage will undoubtedly play a key role in Slager’s upcoming murder trial. Shortly after the shooting I wrote that it is impossible to know for sure how Slager would have reacted if he had been wearing a body camera, but nonetheless that “It is hard to imagine that if Slager had been wearing an operating body camera that he would have behaved the way he did.”

Although prioritized after Slager killed Scott, S.47 will limit public access to body camera footage of worrying police interactions with members of the public. Among those permitted to access police body camera footage are: the subjects of a body camera footage, criminal defendants, civil litigants, and attorneys representing any of these people.  

It is good that S.47 allows for some access to body camera footage, but the access is too limited. With police body camera footage exempt from FOIA requests it will be difficult for citizens who don’t meet the legislation’s access requirements, such as journalists, to request footage that might be of interest to the public.

The FOIA exemption was added to the bill in large part because of the costs associated with body cameras. It is true that storing, replacing, and maintaining body cameras can be expensive. For instance, Cleveland is expecting to spend $3.3 million over five years on 1,500 body cameras. But some lawmakers have tried to tackle the fiscal impact of body cameras. An Illinois body camera bill on Gov. Rauner’s desk includes a $5 fee for traffic tickets aimed at mitigating the cost of body cameras.

Body cameras can only be used as tools for increased law enforcement accountability while governed by sensible policy. S.47 does include some good proposals, such as requiring law enforcement agencies to use body cameras, but when it comes to access to body camera footage it is too restrictive.

Are journalists across the nation working to establish a national ID in the United States? Most would object, “Certainly not!”

But in reporting uncritically on the Department of Homeland Security’s claimed deadlines for implementing the U.S. national ID law, many journalists are unwittingly helping impose a system that the federal government may one day use to identify, track, and control every American. Today I’ve started Tweeting about news articles in which this occurs with the hashtag #TakenInByDHS.

Under the terms of the REAL ID Act, which became law more than ten years ago, states were supposed to begin issuing licenses according to federal standards by May of 2008. States that didn’t follow federal mandates would see their residents turned away at airports when the Transportation Security Administration declined their drivers’ licenses and ID cards.

The DHS failed to issue implementing regulations timely, and backed off of the statutory deadline by regulatory fiat. No state was in compliance with REAL ID on deadline, and no state is compliant with REAL ID today. Over the years, the Department of Homeland Security has declared a variety of milestones and deadlines in a fairly impotent effort to bring state driver licensing policy under federal control. Many states have resisted.

The reason for DHS’s impotence is that making good on the threat to prevent Americans from traveling would almost surely backfire. If already unpopular TSA agents began refusing Americans their right to travel, it would be federal bureaucrats and members of Congress getting the blame—not state legislators.

But most state legislators haven’t done this calculation. They are reluctant to create a national ID, and they don’t want to expend taxpayer funds on a program that undercuts their constituents’ privacy. But told of their potential responsibility for bedlam at local airports, they will accede to such things.

States Should Reject the REAL ID Law

It is often state-level bureaucrats in DHS-friendly motor vehicle bureaus and public safety agencies who inform state leaders of the bind they’re in—and the impending deadline. Without more information, state legislators think the sensible step is REAL ID compliance.

When journalists report uncritically on the premise that there is a real 2016 deadline for REAL ID compliance, they contribute to the disinformation problem. They inadvertently help goad state legislators into complying with the federal government’s national ID plans.

The fact is that there is no real cost to state non-compliance with REAL ID. States have rejected the REAL ID mandate with impunity. Indeed, there are savings of several types from refusing REAL ID. State legislators can save their constituents’ tax money and save them from time in line at motor vehicle bureaus. They can save themselves from committing important state policies to federal control. They can save the privacy of their constituents. And they can help save American liberty from the long, slow shift of power to the central government in Washington, D.C.

Welcome, journalists and those curious about the #TakenInByDHS hashtag. I hope this blog post informs you a little more about REAL ID. I encourage you to be skeptical of DHS compliance deadlines and the choices our constitutionally autonomous U.S. states face.

Two years ago protestors took over the streets of Istanbul, Turkey’s first city. Prime Minister Recep Tayyip Erdogan beat them down and last year he was elected president. His critics feared his plan to invest the largely ceremonial post with Putin-like authority. On Sunday, however, Turkish voters revoked his party’s majority.

The Justice and Development Party (AKP) came to power in 2002. Erdogan initially allied with liberals to systematically dismantle the authoritarian system that had replaced the Ottoman Empire.

The military came to dominate politics. At times, they executed and jailed opponents. Eventually, the nationalist establishment imploded. Weak coalition governments tolerated corruption and delivered economic malaise. In 2002, the AKP won a dramatic victory.

With Erdogan at its head, the party delivered liberty and prosperity. The new government dismantled repressive elements of the “Deep State,” put the military back in its barracks, created a more business-friendly environment, moved towards Europe, and pushed social reforms. The Turkish people rewarded the AKP with a steadily larger proportion of their votes.

Today, however, Erdogan denounces critics domestic and foreign, using every repressive tool of the state against them. He dallies with Islamist and terrorist forces as he tries to make Turkey into a regional Weltmacht. He lives in a $615 million presidential palace, four times the size of Versailles.

But now the Turkish economic engine is slowing. Growth greatly increased opportunities for corruption, yet Erdogan has attempted to shut down all investigations.

Although elections remain free, Freedom House rated Turkey only as partly free. The State Department’s human rights assessment notes interference with freedom of assembly and expression and impunity for security forces.

After battling against misuse of security laws, Erdogan deployed the legislation against military officers and civilians. He has led a particularly virulent campaign of intimidation against journalists, as Turkey has led the world in the number of imprisoned journalists for years.

Several reporters and columnists with whom I spoke feared criticizing the prime minister. Their editors were reluctant to pursue stories against the government. The government also applies sustained though often invisible pressure on media organizations, including the threat of public investigations and loss of television licenses.

After taming the traditional press, the Erdogan government began targeting internet freedoms. Those charged for their comments include a former Miss Turkey and a 16-year-old student.

While relaxing unfair restrictions on Muslims—such as the ban on women wearing headscarves—the government has yet to address the lack of legal protection for religious worship and practice by every faith. Anti-Semitism also is on the rise.

Turkey needs an Arab Spring of sorts, but one within the democratic process. On Sunday, that movement began. The AKP received less than 41 percent of the vote, down from roughly 50 percent four years ago. The ruling party fell 18 seats short of a majority in the 550-member Grand National Assembly.

Prime Minister Ahmet Davutoglu may not survive. Certainly Erdogan’s vision of an enhanced presidency appears dead. The government no longer can even pass common legislation if the opposition unites.

The electoral result also is likely to embolden Erdogan’s opponents. For the first time in more than a decade, AKP rule no longer appears inevitable.

As I point out in Forbes online: “Indeed, Erdogan may find it hard to control his party. Davutoglu holds the stronger institutional position and may enjoy making his own decisions. Erdogan might try to oust his critics, but an intra-party civil war could wreck the AKP and government. Potential aspirants for power abound, led by Abdullah Gul, a former AKP prime minister, foreign minister, and president.”

Of course, fear of losing power could impel Erdogan to launch a crackdown. But doubling down would be risky. He can’t fully trust the military or the police, and has lost popular support.

President Erdogan made the democratic transformation of Turkish politics possible. The Turkish people must take full advantage of their opportunities in a new Turkey. Only they can ensure a prosperous and free Turkey.

Global Science Report is a feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”

On June 8th, the public comment period on the draft report on climate and health from the U.S. Global Change Research Program (USGCRP) closed. Never liking to miss an opportunity to add our two cents’ worth to the conversation, we submitted a set of comments that focused on the weakness of the underlying premise of the report, more so than the specific details (although we did include a sample set of those to show just how pervasive the selective and misuse of science is throughout the report).

Our entire Comments are available here. But, for convenience, here’s the highlight reel. In summary, we found:

What is clear from this report, The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment, and all other similar ones that have come before, is that the USGCRP simply chooses not to accept the science on human health and climate and instead prefers to forward alarming narratives, many based on science fiction rather than actual science. To best serve the public, this report should be withdrawn. By going forward without a major overhaul, its primary service [will] be to misinform and mislead the general public and policymakers alike.

Here we lay out the general problem:

The authors of the USGCRP draft of The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment report have an outstanding imagination for coming up with ways that climate change may negatively impact the health and well-being of Americans, but a profound lack of understanding in the manner in which health and well-being is impacted by climate (including climate change).

In modern American society, we have largely insulated our health and welfare from the climate. The United States has a population of nearly than 320 million people living across a diverse range of climates—a range that is an order of magnitude (or more) larger the projected impacts of human-cause climate change—and yet the health and well-being differences of the population across these diverse climates [are] extremely minimal. Those differences with a direct component of climate associated with them are even smaller. For example, in examining trends and patterns of temperature-related mortality in America, Davis et al. (2004) concluded “The overarching implication of this result indicates that there is no net mortality benefit to one’s place of residence derived from the location’s climate.”

Rather than speculate on how human-caused climate change from greenhouse gas emissions may impact our health and well-being in the future—speculation which is open to influence of preconceived notions, policy preferences, and other matters of personal belief, any or all of which may differ from individual to individual—a more grounded approach is to look across existing climate space and examine the character of the response. In doing so, it is readily obvious that Americans, across all climates, are well-adapted to the prevailing climate (and its inherent weather events, both mild and extreme).

However, this adaptation remains imperfect, as evidenced by the number of Americans still negatively impacted by components of the climate that they live in. Less than perfect, yes, but static, no.

For example, research such as the Davis et al., (2003a, 2003b) shows that while heat waves still lead to elevated daily mortality totals in some cities across the United States (mostly Midwestern and Northeastern cities where heat waves are still relatively uncommon), the sensitivity of urban populations to extreme heat events has been on the decline since at least the mid-1960s (Figure 1). More recent research (e.g., Bobb et al., 2014) shows that these declines have continued. Not only has our adaptive response greatly lowered our sensitivity to extreme elements of climate, but we continue to make improvements going forward.

Figure 1. Annual heat-related mortality rates (excess deaths per standard million population on days in which the decadal-varying threshold apparent temperature (AT) is equaled or exceeded) by city and decade, and long-term trend in summer afternoon AT. Each histogram bar indicates a different decade: from left to right, 1960s–1970s, 1980–1989, and 1990–1998. Decades without histogram bars exhibit no threshold ATs and no heat-related mortality. Decades with gray bars have mortality rates that are statistically significantly different from the decades indicated by black bars. The average excess deaths across all 28 cities is shown at the lower left. AT trends are indicated beneath each city abbreviation (from Davis et al., 2003).

There is no tenable reason to think that further improvements will not continue to be achieved and a greater level of adaptation to extreme heat events attained—along with ever less impact on human health and well-being.

Looking beyond extreme temperature impacts on mortality, Goklany (2009), in a major study, found that for the entire collection of extreme weather impacts, mortality has greatly declined over the course of the past several decades, not only in the U.S., but for the globe in general. These findings are extremely relevant to the proper understanding of climate and health in the U.S. Goklany (2009) summarizes:

Current deaths and death rates from extreme weather events for both the U.S. and the globe are, in general, lower than in previous decades. Predictably, annual death rates have declined more rapidly than annual deaths, confirming results from previous studies. This indicates that the total risk of death from such events has actually declined, notwithstanding any increases in the number or intensity of extreme weather events that some claim to have occurred. Globally, as well as for the United States, the aggregate contribution of extreme weather events to the mortality burden is currently minor—on the order of 0.06%.

In the U.S, more lives are lost in an average year to extreme temperatures—both heat and cold—than to more heavily publicized events such as tornados, hurricanes, and floods. According to CDC data, extreme cold, on average, claims more lives than extreme heat, tornados, floods, lightning, and hurricanes combined. In general, mortality and mortality rates from the various categories of extreme events examined here are lower today than in the past. Mortality during the 2000s was lower than in earlier peak periods by 59%–81% for floods, lightning, tornados, and hurricanes, while mortality rates were 72%–94% lower. However, there are no consistent trends for mortality due to floods.

These improvements have occurred despite increases in the populations at risk, in large part because of greater access to the capital and technology necessary to protect against and to cope with adversity in general and extreme weather events in particular. Even if the number of events has increased—and the long-term record is inadequate for ascertaining whether it has—wealth, technology, and human and social capital for the most part have, despite notable exceptions, apparently been of greater importance than any global warming or changes in climatic variability in determining mortality.

Finally, despite population increases, over the long term cumulative mortality from extreme weather events has declined both globally and for the United States, even as total (all-cause) mortality has increased. This indicates that humanity is coping better with extreme weather events than with far more important health and safety problems.

Through our increasing ability to shelter ourselves from the climate, we have greatly reduced the overall impact that the elements of climate have on our overall health/mortality.

The biggest thing missing from virtually all assessments of the impacts of climate change is the very real fact that climate change itself spurs us become better prepared for what it brings. If you ignore this fact (as the USGCRP typically does), your report is overly pessimistic and overly alarming—characteristic features of all USGCRP assessments:

What all of the above tells us can be summed up like this: climate—and for the matter more relevant to the USGCRP Climate and Health Assessment, climate change—begets the human adaptive response.

This is being increasingly being recognized in the scientific literature. For example, Knappenberger et al. (2014), in discussing the response to an increasing frequency of extreme heat events, notes: 

Some portion of this response probably reflects the temporal increase in the frequency of extreme-heat events, an increase that elevates public consciousness and spurs adaptive response. In this manner, climate change itself leads to adaptation. It is insufficient to ignore this effect when compiling and discussing the impacts of climate change. If an increasing frequency of heat events raises public awareness and gives rise to an adaptive response that lowers the population’s relative risk due to extreme heat, this must be properly weighed against any increases in mortality that result from a greater number of mortality-inducing heat events…Our analysis highlights one of the many often overlooked intricacies of the human response to climate change. [emphasis added]

And, unfortunately, the USGCRP and the author team of the Climate and Health Assessment are among those who have completely overlooked this intricacy.

But this does not come as surprising.

We have been through this exercise repeatedly, having submitted voluminous comments on previous USGCRP reports dealing with health, including the first, second, and third National Climate Assessment. While we’ve seen some changes in response to a few of our specific comments, there is never any response to our most general comment, that the overall tone of the USGCRP on the topic is overly pessimistic in light of demonstrable gains in human well-being, even coming in the face of a change climate.

This Climate and Health Assessment is but another in this same mold.

Again, for those wanting more, be sure to check out our set of comments in its entirety.

References:

Bobb, J.F., R.D. Peng, M.L. Bell, and F. Dominici, 2014. Heat-related mortality and adaptation in the United States, Environmental Health Perspectiveshttp://dx.doi.org/10.1289/ehp.1307392

Davis, R.E., P.C. Knappenberger, P.J. Michaels, and W.M. Novicoff, 2003a, Decadal changes in summer mortality in U.S. cities. International Journal of Biometeorology, 47, 166–75.

Davis, R.E., P.C. Knappenberger, P.J. Michaels, and W.M. Novicoff, 2003b, Changing heat-related mortality in the United States. Environmental Health Perspectives111, 1712–1718.

Davis, R.E., P.C. Knappenberger, P.J. Michaels, and W.M. Novicoff, 2004. Seasonality of climate-human mortality relationships in US cities and impacts of climate change. Climate Research, 26, 61-76.

Goklany, I.M., 2009. Deaths and Death Rates from Extreme Weather Events: 1900-2008. Journal of American Physicians and Surgeons, 14, 102-109, http://www.jpands.org/vol14no4/goklany.pdf

Knappenberger, P., Michaels, P., and A. Watts, 2014. Adaptation to extreme heat in Stockholm County, Sweden. Nature Climate Change, 4, 302-303.

Today Cato Senior Fellow Nat Hentoff is 90.  Happy Birthday Nat!

Check out this interview with Nat by the Foundation for Individual Rights in Education (FIRE).

Nat Hentoff on Free Speech, Jazz, and FIRE

Rather than retread the ground Michael Cannon ably covered today regarding President Obama’s healthcare speech – short version: we’re all in this together, so if you’re against Obamacare, you’re for letting people die in the streets – I want to look ahead to what our fearless leader will do if the government does indeed lose King v. Burwell.

We’ve famously been told that the Department of Health & Human Services has no Plan B. But what if the Supreme Court forces the executive branch’s hand? Yes, there’ll be plenty of finger-pointing and demagoguery as a high-stakes game of chicken unfolds among the White House, Congress, and various state governments. But what could Obama/HHS do? Remember, this is the president who has a pen and a phone, and “if Congress won’t act, I will.”

The running joke is that HHS/IRS will simply promulgate another rule deeming all federal exchanges to be state exchanges. But that couldn’t possibly be the answer, could it?

Actually, that’s an option, as described by Josh Blackman, co-author of Cato’s amicus brief in the case, in a new paper he wrote for the Federalist Society titled “The Legality of Executive Action after King v. Burwell.” Here’s the scenario:

HHS could determine that the fourteen states that declined to establish an exchange, but continued to perform certain regulatory activities that overlap with the ACA [what is known as “plan management”] have in effect established an exchange. As a result, consumers in these states could continue to receive subsidies. This approach would be inconsistent with the ACA, and disregard the choices the sovereign states made not to establish an exchange. If HHS issued such regulations—likely without notice and comment—it would amount to an end-run around an adverse ruling in King v. Burwell, and open the door to future litigation.

In other words, HHS would consider some states to have established exchanges without knowing it. Such an action would “distort political accountability and disregard the considered judgment of the sovereign states,” but hey, we’re all in it together, right? The clever lawyers who came up with the after-the-fact justifications for the IRS rule regarding federal subsidies in states lacking “exchanges established by the state” could surely come up with some legalistic language to justify such a radical move. Note that of the 14 states that currently perform certain “plan management” functions seven have a “state-partnership exchange” (AR, DE, IL, IA, MI, NH, and WV) and seven has a “federally facilitated exchange” (KS, ME, MT, NE, OH, SD, and VA). All of these states explicitly disclaimed setting up their own exchanges and lack the “State law or regulation” required by the ACA of all state exchanges.

Another option would be for HHS to streamline the gauntlet states currently have to run to set up exchanges:

Under the current regime, it is impossible for a state to establish an exchange this quickly [before the end of 2015]. However, HHS may alter the guidelines in the Blueprint to expedite the process. As a report for the National Academy of State Health Policy observed, “It is possible that HHS might revisit, allow for phased compliance, or otherwise adapt these requirements in light of King to allow for state exigencies.” Because the states are attempting to work with HHS, the federal government would have more leeway to streamline the establishment of exchanges. Though at bottom, the state still must take specific actions to actually establish an exchange, rather than just deeming the federal exchange as a state-based exchange. 

One problem here is that 18 of the 34 states at issue passed Healthcare Freedom Acts, which prevent state officials from taking any actions that enforce Obamacare’s penalties. In some of the other states, (mostly Republican-controlled) legislatures would have to act to enable even the newly streamlined path to state exchanges. Perhaps in a handful, governors would be able to establish exchanges via executive order, but it’s unclear whether HHS action would be of any moment in any such decision.

Finally, the Justice Department could take the position that King’s scope is limited to the four named plaintiffs in the case. While this bizarre tactic was suggested by otherwise levelheaded University of Chicago law professor Will Baude in the New York Times, it really belongs in the realm of the trillion-dollar platinum coin that was floated (and rejected by Obama) as a possible solution to the debt-ceiling debate several years ago.

In all of these scenarios, the litigation would be titanic, but the Supreme Court would presumably not take kindly at the government’s attempted end-run around its ruling. We can presume that the government would lose, at least with the current composition of justices. But it will have extacted a political cost on its enemies, who will presumably be seen as trying to stop the subsidies that the administration is valiantly trying to preserve. Of course, that’s what was said about King v. Burwell in the first place.

So we really are back to square one. President Obama can try to run out the clock on his administration, kicking the ultimate resolution of this mess to his successor, but at the end of the day there really is no legal administrative plan B: only Congress can fix the mess it created when it passed Obamacare more than five years ago. As Josh says, “If the ACA is to succeed, it will be based on a partnership between the states and federal governments, complying with the law Congress drafted.” 

It’s all such a shame because it didn’t have to come to this, weakening and gumming up the healthcare system overall just to get a few more people covered (while driving up overall costs and slowing the economy). The ACA is the only major federal program, the only new social-welfare architecture, that was rammed through Congress on a partisan basis and against the obvious will of the people.

The people have tried valiantly to get rid of it, of course – even in 2012, when Obama was reelected, more Americans opposed the law than supported it – and they may get another opportunity in 2016. To that end, I look forward to Josh’s next paper, on the various political scenarios that could play out the day after victory in King through the presidential election.

According to recent reportage in The Economist, “Many economists point to Iceland as a case study of what should be done during an economic crisis: devalue your currency, impose capital controls and avoid excessive austerity.” Not so fast.

Capital controls are for the birds. Nobelist, Friedrich Hayek, got it right in his 1944 classic, The Road to Serfdom:

The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.

The latest validation of Hayek’s warning is being served up by Iceland. Iceland is in the process of phasing out capital controls [$]. Those controls reduced foreign investments. Fine. But, what about property rights and the taking of property?

Creditors of Iceland’s failed banks have two options to remove the shackles and escape the ring fence imposed by capital controls. The creditors’ first option is to come to an “agreement” with the state liquidators by December 31st and take a haircut. Alternatively, the creditors can escape by paying a tax of 39 percent on their assets. In either case, the creditors will take a heavy hit.

Iceland provides a concrete example that supports Hayek’s conclusions about capital controls: “Complete delivery of the individual to the tyranny of the state” and “the suppression of individual liberty”. 

Senator Ron Wyden wants the government to track imports of e-cigarettes more closely.  Specifically, he has asked the U.S. International Trade Commission to create a specific reporting category for e-cigarette imports, which are not currently tracked as a distinct category from other small electronic devices.  But why does it matter where the e-cigarettes come from?

Senator Wyden never really answers that question in his letter to the ITC. 

The e-cigarette market in the U.S. is already a multi-billion dollar market and growing.  Unlike the traditional U.S. market for tobacco products where less than 6% of products are imported, it appears that most e-cigarettes are imported, as are the nicotine-containing liquids used in them.  Although the health risks of these products are not fully known, the FDA and [CDC] have warned of their use.  In 2014, the [FDA] proposed to deem e-cigarettes to be tobacco products under the [Tobacco Control Act].  Currently, because they are not a traditional tobacco product, e-cigarettes and liquids can be sold without restriction to vulnerable segments of the population.  CDC recently reported that use among middle and high school students tripled in just the past year from 4.5% of students in 2013 to 13.4% in 2014.  Nonetheless, at this point, these products are not subject to health-based regulation, unlike traditional tobacco products imported into the U.S.  Similarly, these products are not subject to unique import tariffs or federal excise taxes.

Because of the large and growing size of the e-cigarette market and because of the potential revenue, public health and economic impacts of e-cigarette and related imports, I respectfully request that the interagency 484(f) committee adopt statistical reporting numbers for e-cigarette devices, e-cigarette parts, and e-cigarette liquids and cartridges respectively.

He notes that e-cigarettes are increasingly popular, that their health risks are unknown, that the government wants to regulate them, and that they are being imported.  But that doesn’t explain how the product’s foreign origin could possibly impact whether and how the government should regulate the product’s use.  How will it help health regulators to know how many of the products are made abroad and in what countries?

I suppose import statistics could be relevant if the government wanted to impose  a tariff on e-cigarette imports.  But tariffs are by their nature discriminatory taxes—they exist to protect the domestic industry from foreign competition.  If you wanted to impose sin taxes on e-cigarettes, tariffs would be a silly way to do that.

The foreign origin of e-cigarettes may not legitimately impact the justification for regulation, but it could certainly impact the political calculus driving regulatory efforts.  As Wyden noted, the vast majority of tobacco products sold in the United States are made in the United States, while “most e-cigarettes are imported with upwards of 90% coming from China.”  As bootleggers and Baptists push for regulation, the fact that these tobacco alternatives are made by foreigners and competing against domestic products virtually guarantees that regulations will benefit the tobacco industry at the expense of e-cigarette users.

Recently, the U.S. Trade Representative’s office has begun pushing lower tariffs as a crucial part of the Trans Pacific Partnership (TPP).  For me, this is a welcome development, because I worry that the focus on some of the other aspects of the TPP could obscure the positive impact of eliminating or reducing tariffs.  In a press release related to a report issued last week, USTR put it like this:

The United States has one of the most open economies in the world, with an average applied tariff of 1.4%.  In fact, nearly 70% of the products we import do not face any tariffs at all.  However, when our exporters work to sell Made-in-America goods to other countries, they’re burdened with tariffs over twice as high on average.  American manufactured goods face tariffs of up to 100% on certain goods in TPP markets, and American agriculture exports face tariffs over 700% on some products.

That’s all sort of true, but there’s more to the story.  To get a better sense of tariff levels for the TPP countries, I went to a publication from the World Trade Organization called World Tariff Profiles.  Tariffs are a little complicated, because there are individual tariffs for thousands of products, and they are lower for some countries than for others due to various free trade agreements.  But a good general measure is the average applied tariff.  Here is that tariff rate for all of the TPP parties except Brunei (for which there was no data) for 2013, sorted from lowest to highest, as well as the two general product categories where tariff levels were the highest: 

Country

Average applied tariff (%)

Highest tariffs (%)

Singapore 0.2 Beverages & tobacco (21.3), all else is duty-free New Zealand 2 Clothing (9.7), Transport equipment (3.2) Australia 2.7 Clothing (8.9), Transport equipment (4.8) Peru 3.4 Clothing (11.0), Textiles (8.4)  United States 3.4 Dairy products (20.5), Beverages & tobacco (18.9)  Canada 4.2 Dairy products (248.9), Animal products (24.5)  Japan 4.9 Dairy products (135.3), Cereals & preparations (52.0)  Chile 6 Flat 6.0% applied duty across almost all products  Malaysia 6 Beverages & tobacco (105.5), Transport equipment (11.1) Mexico 7.9 Sugars & confectionery (57.9), Animal products (36.0) Vietnam 9.5 Beverages & tobacco (42.8), Coffee & tea (26.7)

Note that even where average tariffs are low, there remain some categories of products for which tariffs are fairly high.

The United States does OK in this comparison, although it is not right at the top (I’m not sure why the USTR average applied tariff figure differs from the World Tariff Profiles figure).  Chile deserves some special praise, because while its tariff is not the lowest, it charges the same tariff for virtually all products, which reduces the burden on customs officials of classifying imports. 

The lesson I draw from all this is that there are still plenty of tariffs out there, imposed by the U.S. and others, and it would be great if trade agreements could do something about it.

In a case called King v. Burwell, the Supreme Court will soon decide whether it agrees with two lower courts that President Obama is breaking the law by subjecting 57 million employers and individuals to illegal taxes, and spending the illegal proceeds to hide the cost of HealthCare.gov coverage from 6.5 million enrollees. Today the president delivered a speech designed to cow the Supreme Court Justices into turning a blind eye to the law. Instead, he offered what for some is the missing piece of the King v. Burwell puzzle. He displayed the very ideological fervor that leads powerful people to break the rules.

“We have an obligation to put ourselves in our neighbor’s shoes, and to see the common humanity in each other,” the president said. Yet the president of the United States has an even more important obligation to “take Care that the Laws be faithfully executed.”  It’s right there in Article II, Section 3 of the U.S. Constitution, which President Obama swore to uphold. King v. Burwell is about his failure to meet that obligation.  

“Five years in, what we’re talking about is no longer just a law,” the president said. Indeed, the ACA has become almost a blanket grant of power allowing the president to do whatever he wills to promote his conception of the public good.

President Obama delivers a speech on health care to the Catholic Health Association.

“This isn’t about the Affordable Care Act. This isn’t about Obamacare. This isn’t about myths or rumors that won’t go away. This is reality. This is health care in America,” he said. He spoke passionately about some of the people who have received subsidies. “Once you see millions of people having health care…you’d think it would be time to move on,” the president said, and that his illegal taxes and subsidies have been “woven into the fabric of America.”  Should we move on if the president achieved these things by violating the law? 

The president is correct in this respect, however. King v. Burwell is not about the Affordable Care Act. It is about the president doing an end-run around the law and the voters.

The broader health care debate is between those who believe more government will increase access to health care, and those who think the only way to expand health care access is with less government and more freedom. (It is not, as the president suggests, a debate between people who want make health care more accessible and those who don’t.) Those who favor the less-government/more-freedom approach scored a victory when, buoyed by public opposition to ObamaCare, they convinced the majority of states not to implement the ACA. That outcome that effectively forces Congress to reopen the statute. The president implemented those taxes and subsidies illegally in the 38 states that had blocked them in order to prevent (a Republican) Congress from reopening his health care law. Rather than take care that the laws be faithfully executed, he did an end-run around around the law and the people. Today’s speech merely tells us why.

The president appealed to “security,” “dignity,” and “freedom.” We will have more of all of those things if the Supreme Court holds the president to his own health care law. 

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