Policy Institutes

Ariana Eunjung Cha reports on the newest target of public shaming in China:

Long before the Internet was invented, China’s Communist Party was already skilled in the art of public shaming.

Dissidents have been known to disappear and then reappear after having published essays of self-criticism. On state-run television, business people, celebrities and editors have appeared so regularly from behind prison bars speaking about their misdeeds that the segments were like an early take on reality TV.

Now officials are using the tactic on another group that it feels has wronged the country: smokers.

Beijing has not relied just on public humiliation. It has banned smoking in indoor public places and workplaces, complete with large fines and massive propaganda campaigns. It also plans to

take more dramatic measures by posting the names of those breaking the law three times on a Web site in order to shame them.

That may not sound like a big deal, but in Asia the reaction of online citizens to inappropriate behavior can be harsh. Among the most infamous cases is one in 2005 when a woman in South Korea who refused to clean up her dog’s waste was caught in photos that were posted online. Internet users quickly discerned her identity and she was harassed so badly that she reportedly quit her university.

We expect this sort of thing in a country ruled by the Chinese Communist Party and still influenced by Maoist ideas and practices. What’s disappointing is to see such tactics spreading in a country founded on the principles of life, liberty, and the pursuit of happiness. Where once people feared harassment for giving to gay-rights groups, now we see people harassed for giving money to oppose gay marriage. Silicon Valley CEO Brendan Eich was forced to resign for having donated $1000 to the campaign for Proposition 8. A small-town pizzeria in Indiana was faced with a firestorm of media, Twitter harassment, and death threats after one of its family owners said they wouldn’t provide pizzas for a hypothetical gay wedding reception. Two gay entrepreneurs, generous contributors to gay causes, were targeted after they had dinner with anti-gay-rights senator Ted Cruz. Numerous people caught in such crosshairs, including Eich and the dinner hosts, have issued statements of self-criticism, just like during the Cultural Revolution in China. Andrew Sullivan, a pioneering crusader for gay marriage, deplored the defenestration of Eich, asking in a blog post titled “The Hounding of a Heretic”:

Will he now be forced to walk through the streets in shame? Why not the stocks? The whole episode disgusts me – as it should disgust anyone interested in a tolerant and diverse society. If this is the gay rights movement today – hounding our opponents with a fanaticism more like the religious right than anyone else – then count me out. If we are about intimidating the free speech of others, we are no better than the anti-gay bullies who came before us.

And now we have “drought shaming” in California. The state refuses to do something sensible like charging market prices for water, so it’s forced to rationing and hectoring. And bring on the shaming:

California’s drought is turning neighbor against neighbor, as everyone seems to be on the lookout for water wasters….

In this new age of social media and apps for everything, so called “droughtshaming,” can be much more public, and nastier than what Demian got a taste of.

Just look at Twitter. If you search the social media site for the hashtags #DroughtShame or #DroughtShaming,” you’ll find hundreds, if not thousands of very public reprimands of water wasters, often with pictures, video, and a lot of addresses….

And there’s more — droughtshaming apps….

There’s another, newer app devoted only to droughtshaming, and it’s called, obviously, DroughtShameApp. Creator Dan Estes, a Santa Monica real estate agent, says he made the app just a few weeks ago out of a feeling of responsibility.

“I think like a lot of Angelenos, I’m a little freaked out by the drought,” he told NPR. “It just seems like something has to be done to avoid a long-term catastrophe.” Estes’ app lets users upload geo-located photos, with captions and addresses to report water wasters.

In many of these cases, actual legal coercion goes along with the public shaming. Beijing will fine smokers and bars, florists are being forced to supply flowers for gay weddings, and California has mandatory water restrictions. But the public shaming adds a new dimension of mob behavior and chilling effects.

Technology is part of the problem here. Back in 1978, when gays and their allies feared being on a list of opponents of the antigay Briggs Initiative, the list of donors was officially public. But you had to go to the office of the secretary of state (or maybe the county clerk) to inspect such a list. By 2008, when Proposition 8 was on the ballot, donor lists could be downloaded and posted on the internet in alphabetical and searchable form. From the privacy of your own home you could find out whether your friends, neighbors, or favorite celebrities had contributed to the side you found morally reprehensible. Today Facebook, Twitter, and specialized apps make it easier than ever to point a public finger at anyone who offends you.

I’m a First Amendment absolutist. I don’t want anyone forbidden to publicly criticize others. But I don’t want to live in a Cultural Revolution either. Chinese novelist Murong Xuecon remembers his childhood:

[My] teacher summoned me before an assembly of the whole school to read a 600-word essay of self-criticism that he had made me write. I admitted I was lazy. I said I didn’t respect discipline and had let down my teachers and parents. My classmates appeared amused and my teacher satisfied. For me it was like I had been exposed naked to all.

This kind of scene is not uncommon. From primary school to university, I witnessed countless such public humiliations: for fighting, cheating or petty misdemeanors. Caught committing any of these offenses and you may have to stand before the student body, criticizing your own “moral flaws,” condemning your character defects, showing yourself no mercy, even exaggerating your faults. Only those who have endured it can know the depth of shame one feels.

Our new bouts of Twitter shaming and demands for firings and public apologies feel too much like that. Murong went on to write:

Socialist countries tend to emphasize national and collective interest ahead of individual rights and dignity. This has been a constant throughout 66 years of Communist rule in China, but in the past two years the tendency has become increasingly strident. Cases of public shaming show us how in the name of some great cause, individual rights, dignity and privacy can all be sacrificed.

Respecting the rights of individual citizens — even wrongdoers — is a fundamental principle of a moral society. 

Indeed it is. Calling out genuine prejudice or threatening behavior is one thing. But public denunciations of people for holding the positions that, say, President Obama held a few years ago are too reminiscent of the forced conformity of authoritarian regimes. Let’s not let technology turn us into a new theocracy.

By nature, human beings can be pessimistic. But, depending on their political persuasion, people tend to focus on different things. Among the Progressive shibboleths in recent decades were concerns over overpopulation, exhaustion of natural resources and coming widespread famine. Data, however, tells a different story. The population growth is leveling off and food is more plentiful than before. The New York Times and the National Public Radio were forced to admit as much in two articles over the last couple of days.  

On May 31, 2015, the New York Times published a story entitled “The Unrealized Horrors of Population Explosion.” The article admits that the planet is not facing a problem of overpopulation. In fact, due to increased prosperity around the world, women have access to more information, education, and career choices. Female empowerment combined with the massive improvements in healthcare and dramatically falling infant mortality rates, have led to total fertility rate plummeting from 5 babies per woman in the 1950s to 2.5 in 2010s. 

To put it in the dry language of economics, as women’s earning potential increases, the opportunity cost of having babies increases as well. As such, more women chose to enter the labor force rather than stay at home and raise the children. The TFR of 2.5 babies per woman is still above the replacement rate of 2.1, but United Nations’ demographers predict that the world’s population will level off at 9 billion people and then start falling. That is already happening in a number of European countries. German population, for example, is predicted to decline from 80 million today to 71 million in 2060. 

So much, then, for the “settled” overpopulation consensus, which led, among other things, to forced sterilization of thousands of Indian men and women. As one author writes, “Incentives – radio sets, cash, food – were offered at first to volunteers who put themselves under the knife. When these failed to attract big numbers, Sanjay [Gandhi who was the son of the then Prime Minister Indira Gandhi and in charge of forced sterilization] handed down targets to government officials. The ‘find and operate’ missions that followed were directed at the most vulnerable and defenseless individuals in the country…. One [Indian] state reported 600,000 operations in two weeks…. Policemen on sterilization assignments ransacked entire villages in their pursuit of adult men. The threat to drop bombs on villages was issued.”

(The Stanford University professor Paul Ehrlich, who more than anyone was responsible for the overpopulation hysteria that gripped the late 1960s and 1970s, is still alive, still publishing, still listened to and still admired. He owes the world an apology.) 

Let’s turn to the question of food supply. On June 1, 2015, the NPR published an article entitled “There Are 200 Million Fewer Hungry People Than 25 Years Ago.” According to the state broadcaster, “The world isn’t as hungry as it used to be. A U.N. report has noted that 795 million people were hungry in the year 2014. That’s a mind-boggling number. But in fact it’s 200 million lower than the estimated 1 billion hungry people in 1990. The improvement is especially impressive because the world population has gone up by around 2 billion since the ’90s.”

Put differently, hunger is in retreat in spite of a still-growing population. Why? Because of increasing crop yields facilitated by modern machinery, synthetic fertilizers and faster transport. To give one example, in 1866, American farmers produced 24 bushels of corn per acre. In 2012, they produced 122 bushels of corn per acre. Concomitantly, the price of corn declined from $5.55 in 1866 (1982 dollars) to $3.15 in 2012.

As Professor Jesse H. Ausubel of the Rockefeller University points out, “If the world farmer reaches the average yield of today’s US corn grower during the next 70 years, ten billion people eating as people now on average do will need only half of today’s cropland. The land spared exceeds Amazonia. This will happen if farmers sustain the yearly 2 percent worldwide yield growth of grains achieved since 1960, in other words if social learning continues as usual.”

(The hero of increasing crop yields and improved global food supply was the father of the Green Revolution, Norman Borlaug, who is credited with saving more human lives than anyone in history. The world owes him a great deal of gratitude.)

It took a while for the New York Times and NPR to acknowledge what anyone familiar with Professor Julian Simon’s work has known since the publication of Simon’s 1981 book The Ultimate Resource. The key to feeding a growing population is to realize that human beings are intelligent animals. Unlike rabbits, people can find ways around scarcity.

Officials often try to implement dubious or controversial initiatives over weekends or holidays, when journalists and the public are likely to be less vigilant than normal.  Three-day holiday weekends are especially popular candidates for such maneuvers.  It is perhaps unsurprising that there were indications of a significant change regarding U.S. policy toward Syria on the Sunday before Memorial Day.  Turkey’s foreign minister announced that his country and the United States had agreed in principle to provide air protection for some 15,000 Syrian rebels being trained by Ankara and Washington once those insurgents re-enter Syrian territory.

Granted, an agreement in principle could break down over the details of implementation, and the Obama administration has yet to confirm the Turkish account.  Nevertheless, there are hints of an impending escalation of U.S. involvement in Syria’s murky civil war.  A lobbying effort by proponents of U.S. aid to factions trying to unseat dictator Bashar al-Assad is definitely taking place.  The number two Democrat in the Senate, Dick Durban of Illinois, has openly endorsed establishing and protecting “safe zones” for insurgents, and he is hardly alone.  

In essence, the United States and its Turkish ally appear to be contemplating the imposition of a “no fly” zone over northern Syria to prevent Assad’s forces from suppressing the rebel fighters.  It is pertinent to recall that a fateful step in America’s disastrous entanglement in Iraq was the creation of such zones against Saddam Hussein to protect Kurdish and Shiite insurgents in the 1990s.  A similar measure should not be undertaken lightly in Syria.

Indeed, the Syrian conflict is a cauldron of ethno-religious feuds involving multiple factions.  To a significant extent, it represents a bitter struggle for power between Assad’s coalition of religious minorities (including his Alawite political base and its Christian allies) and the Sunni Islamic majority.  That, in turn, is at least partly a broader regional power struggle between Shiite Iran and the major Sunni powers, primarily Saudi Arabia, Qatar, and Turkey, using Syrian factions as proxies. To make matters even more complex, Kurdish secessionists are exploiting the turmoil to try to establish an autonomous region in Syria’s north and northeast akin to the successful de facto Kurdish state in northern Iraq.

To be blunt, America does not have a dog in that fight.  It is especially naïve to believe that U.S. and Turkish-trained insurgents would be a strong “moderate” alternative to both Assad and ISIS.  The mythical moderate Syrian majority is just that: mythical.  Too many of the supposedly moderate rebel factions that we supported earlier in the conflict turned out to be radical Islamic fellow travelers.  Having been burned by that experience, U.S. policymakers should be doubly cautious about further entangling the United States in Syria’s troubles.

Establishing a de facto no fly zone would be a momentous, potentially very dangerous step.  At a minimum, such a change should be implemented only after a far-reaching public discussion, an extended debate in Congress, and a formal congressional vote authorizing that action.  It is disgraceful that officials might even consider trying to smuggle such an escalation of policy into practice through an announcement by an allied government in the middle of a holiday weekend.

The Transportation Security Administration (TSA) has another failure on its hands. In recent tests, undercover investigators smuggled mock explosives and banned weapons through U.S. airport checkpoints 96 percent of the time. According to ABC, “In one case, agents failed to detect a fake explosive taped to an agent’s back, even after performing a pat down that was prompted after the agent set off the magnetometer alarm.”

The unionized TSA has a history of inept management. Reports in 2012 by various House committees found that TSA operations are “costly, counterintuitive, and poorly executed,” and the agency “suffers from bureaucratic morass and mismanagement.” Former TSA chief Kip Hawley argued in an op-ed that the agency is “hopelessly bureaucratic.” And in 2014, former acting TSA chief Kenneth Kaspirin said that TSA has “a toxic culture” with “terrible” morale.

TSA has a penchant for wasting money on useless activities, leaving it less to spend on things that benefit travelers, such as more screening stations. A GAO report, for example, found that TSA continues to spend $200 million a year on a program to spot terrorists by their suspicious behaviors — yet the program does not work.

Perhaps most importantly, studies have found that TSA security performance is no better, and possibly worse, than private-sector screening, which is allowed at a handful of U.S. airports. I list some of the studies here.

The solution is to dismantle TSA and move responsibility for screening operations to the nation’s airports. The government would continue to oversee aviation safety, but airports would be free to contract out screening to expert aviation security firms. Such a reform would end TSA’s conflict of interest stemming from both operating airport screening and overseeing it.

Private airport screening is a successful approach used by other nations. All major airports in Canada use private screening firms, as do about three quarters of Europe’s major airports. That practice creates a more efficient security structure, and allows governments to focus on aviation intelligence and oversight.

Over a decade of experience has shown that the nationalization of airport screening under the Bush administration was a mistake. Let’s learn from reforms abroad, and bring in the private sector to boost the quality of our aviation security system.

For more on TSA’s failures and reform options, see here.

Every so often, I get asked why I’m so rigidly opposed to tax hikes in general and so vociferously against the imposition of new taxes in particular.

In part, my hostility is an ideological reflex. When pressed, though, I’ll confess that there are situations - in theory - where more taxes might be acceptable.

But there’s a giant gap between theory and reality. In the real world, I can’t think of a single instance in which higher taxes led to a fiscally responsible outcome.

That’s true on the national level. And it’s also true at the state level.

Speaking of which, the Wall Street Journal is - to put it mildly - not very happy at the tax-aholic behavior of Connecticut politicians. Here’s some of what was in a recent editorial.

The Census Bureau says Connecticut was one of six states that lost population in fiscal 2013-2014, and a Gallup poll in the second half of 2013 found that about half of Nutmeg Staters would migrate if they could. Now the Democrats who run the state want to drive the other half out too. That’s the best way to explain the frenzy by Governor Dannel Malloy and the legislature to raise taxes again… Mr. Malloy promised last year during his re-election campaign that he wouldn’t raise taxes, but that’s what he also said in 2010. In 2011 he signed a $2.6 billion tax hike promising that it would eliminate a budget deficit. Having won re-election he’s now back seeking another $650 million in tax hikes. But that’s not enough for the legislature, which has floated $1.5 billion in tax increases. Add a state-wide municipal sales tax that some lawmakers want, and the total could hit $2.1 billion over two years.

In other words, higher taxes in recent years have been used to fund more spending.

And now the politicians are hoping to play the same trick another time.

Apparently they don’t care that they’ve turned the Nutmeg State into a New England version of Illinois.

…the state grew a scant 0.9% in 2013, the last year state data are available. That was tied for tenth worst in the U.S. The state’s average compounded annual growth for the last four years is 0.42%. Slow growth means less tax revenue but spending never slows down. Some “40% of the state budget goes to government employee compensation and benefits, including payroll, state pensions, teacher pensions and current and retiree health care,” says Carol Platt Liebau, president of the Hartford-based Yankee Institute. …The Tax Foundation ranks Connecticut as one of the 10 worst states to do business. The state finished last in Gallup’s Job Creation Index in 2014 and now ties with Rhode Island for the worst job creation in the index since 2008.

What’s particularly discouraging is that Connecticut didn’t even have an income tax twenty-five years ago. But once the politicians got a new source of revenue, it’s been one tax hike after another.

Not too many years ago Connecticut was a tax refuge for New York City workers, but since it imposed an income tax in 1991 the rate has kept climbing, as it always does.

There are a couple of lessons from the disaster in Connecticut.

First and foremost, never give politicians a new source of revenue, which has very important implications for the debate in Washington, DC, about a value-added tax.

Unless, of course, you want to enable a bigger burden of government.

And for the states that don’t already have an income tax, the lesson is very clear. Under no circumstances should you allow your politicians to follow Connecticut on the path to fiscal perfidy.

Yet that’s exactly what may be happening in America’s northwest corner. As reported by the Seattle Times, there’s a plan percolating to create an income tax in the state of Washington. It’s being sold as a revenue swap.

State Treasurer Jim McIntire has a “grand bargain” in mind on tax reform and he wants to bend your ear. …the McIntire plan would institute a 5 percent personal-income tax with some exemptions, eliminate the state property tax and reduce business taxes. The plan would raise billions of dollars… The proposal also would lower the state sales tax to 5.5 percent from 6.5 percent.

But taxpayers should be very suspicious, particularly since politicians are talking about the need for more “investment,” which is a common rhetorical trick used by politicians who want to squander more money.

It certainly happens all the time in Washington, and it’s also happening in the Pacific Northwest.

“It is mathematically impossible for us to sustain an adequate investment in education on a shrinking tax base,” he said.

And when you read the fine print, it turns out that the politicians (and the interest groups in the government bureaucracy) want a lot more additional money from taxpayers.

…the plan would raise $7 billion in state revenue but would lower local levies by $3 billion, for an overall increase of about $4 billion.

Advocates of the new tax would prefer to avoid any discussion of big-picture principles.

“We need to have less of an ideological conversation about this,” he said in a news conference.

And their desire to avoid a philosophical discussion is understandable. After all, the big spenders didn’t fare so well the last time voters had a chance to vote on whether the state should impose an income tax.

Voters may not welcome McIntire’s argument, either. In 2010, a proposed income tax on high earners failed by a nearly 30-point margin.

The voters in Washington were very wise back in 2010, so let’s hope they haven’t lost their skepticism about the revenue plans of politicians over the past few years.

There’s every reason to suspect, after all, that the adoption of an income tax would be just as disastrous for the Evergreen State as it was for the Nutmeg State.

To close, I want to share some great advice that was presented by the always sound Professor Richard Vedder. I was at a conference a few years ago where he was also one of the speakers. Asked to comment on whether the Lone Star State should have an income tax, he threw his hands in the air and cried out with passion that, “Texas should give the Alamo to Osama bin Laden before allowing an income tax.”

So if I’m ever asked to speak in Seattle on fiscal policy, I’m going to steal Richard’s approach and and warn that “The state of Washington should give the Space Needle to North Korea before allowing an income tax.”

I doubt I’ll capture Professor Vedder’s rhetorical flair, but there won’t be any doubt that I’ll be 100-percent serious about the dangers of a state income tax.

And what about my home state of Connecticut?

Well, I don’t know of any big landmarks that they could have traded to avoid an income tax. About the only “good” thing to say is that New York’s tax system is probably even worse.

It has been 800 years since English barons negotiated a written peace agreement with King John. The original June 1215 agreement was revised and reissued numerous times, with the 1217 version gaining the title Magna Carta (“Great Charter”). Over the centuries, the document has had a powerful influence of the evolving British legal system and government.

The Great Charter will be explored at a Cato conference this week, and David Boaz recently blogged about the document’s importance to the American founding.

If you are interested in a very brief primer, I noticed this article (page 64) by British historian David Starkey in BBC History magazine. Starkey describes the 1215 charter as a radical break, and also the beginning of a long evolutionary process of building parliamentary government in Britain.

Here is the magazine’s summary of a conversation with Starkey, who has an upcoming book on the topic:

Magna Carta was initially drafted in 1215 in an attempt to broker peace between England’s barons and the unpopular King John. It failed, and the country was plunged into civil war. Following John’s death the charter then underwent a series of revisions over the next decade. An updated version was issued in 1216 by the government of his successor, the young Henry III, in an attempt to placate the rebels. Having won the war, the king issued a new edition in 1217 in order to cement peace. The final version was produced in 1225 in return for a grant of taxation.

And here are some of Starkey’s thoughts:

[Magna Carta] set out to do three things. Firstly, to bridle a king, John, who was dangerous and unpredictable  and made his whim the law, and secondly, to make it impossible for any other king to rule in the same way. It was successful in both of those things. The third thing was the great change, and something very different: it set out to create machinery that absolutely bound any king in iron to its measures.

… One of the things that we forget is that the Magna Carta of 1215 had 62 or 63 clauses, while the long-term one has in the region of 40. A third of it was struck out in 1216 …

… It had an immense and immediate impact on law and on the development of law. Individual clauses are very quickly pleaded. What’s striking is how many copies were circulated. It forced governments to behave differently, and set rules for good behaviour and, once the charter was reissued in 1225, it became impossible to impose general taxation without consent.

I think you are repeatedly struck by the ambition of 1215. Whatever you may think about the motives of the people like Robert Fitzwalter, clearly I rather respect ambition. I respect radicalism; I don’t necessarily like it, but I respect it. They are intellectually ambitious, which is impressive whatever one thinks. How do we go about setting an absolute monarch in chains?

… The year 1215 really is the beginning of a very particularly English politics – and I’m daring to use the word English – which has actually survived 800 years. The futures of England and the English political system are first sketched out in 1215 – or rather, in that crucial decade-long crisis of the charters from 1215 to 1225. You can trace so much back to that point: the whole dialogue of Whig and Tory; particular models of statesmanship that constantly repeat themselves; this crisis of charters leading directly to the establishment of parliament. The whole structure of parliamentary government really begins with the reissue of the charter in 1225.

For more on Magna Carta, the British Library website has useful resources.

True to form, in Elonis v. United States the Supreme Court continued its unparalleled defense of free speech – this time in the social-media context. Also true to form, however, Chief Justice John Roberts put together a near-unanimous majority by shying away from hard questions and thus leaving little guidance to lower courts.

The case involved a statute that made it a federal crime to transmit in interstate commerce – the Internet counts – “any communication containing any threat … to injure the person of another.” Based on a bizarre series of Facebook posts styled largely on the lurid lyrical stylings of Eminem, Anthony Elonis was convicted under that law of threatening his wife, the police, an FBI agent, and a kindergarten class. Yet prosecutors didn’t prove that Elonis intended to threaten anyone or even understood his words as being threatening. All they showed was that the individuals in question felt threatened by the posts. The Supreme Court correctly ruled that that’s not enough, that negligently throwing around violent rap lyrics shouldn’t get someone thrown in prison. As Roberts noted, the general rule is that a “guilty mind” – what lawyers call mens rea – is a necessary element of any crime.

But alas that’s as far as Roberts went: since the statute in question doesn’t specify the requisite state of mind, mere negligence isn’t enough. He did not say – the Court did not rule at all – whether an amended statute criminalizing negligent speech would pass First Amendment muster. (This issue was the focus of Cato’s amicus brief.) Indeed, as Justice Alito points out in partial dissent, the majority opinion doesn’t even say whether “reckless” Facebook posts come under the statute’s purvey (or whether that reading would in turn satisfy the First Amendment).

In short, I’m glad that amateur poet “Tone Dougie” (Elonis’s nom de rap) won’t be practicing his art in the hoosegow, but the Supreme Court’s minimalism has guaranteed this type of case – and maybe even this defendant – an encore. Particularly as social media and other new means of expression evolve, the justices need to do more than narrowly slice speech-chilling criminal laws.

Reversing the Tenth Circuit, the Supreme Court this morning ruled to allow an Equal Employment Opportunity Commission (EEOC) suit to go forward against retailer Abercrombie & Fitch in the widely noted “headscarf case.” The retailer had turned away a Muslim applicant who wore head covering, rather than considering whether its prescribed salesperson “look” might reasonably be refined to accommodate her wish. The outcome was not a surprise, given the way the case had developed, and in the end turned on narrow issues of statutory interpretation not much connected to the other religion-and-law cases that have riled the Court and the nation in recent years. And while the Court declined Cato’s invitation to draw a clearer line that would have averted more future disputes, its ruling is likely to be of limited direct significance: there just aren’t that many discrimination disputes that hinge on whether an employer has been explicitly told of someone’s religious beliefs.  

The Court’s near-unanimous ruling (Justice Clarence Thomas dissented in part) was unsurprising in part because the facts in evidence were not favorable toward Abercrombie: even though Samantha Elauf had not declared that her wish to wear a scarf was based on her religious beliefs, managers apparently did realize that it was so based, which mean that later, when lawyers argued that she had not put the company on notice of it being a religious issue, it seemed, well, lawyerly of them.  As Justice Antonin Scalia observed in Footnote 3 of his majority opinion – and as Justice Samuel Alito made clear as well in his concurrence – this does not mean employers will lose if they genuinely don’t know about an employee’s religious beliefs, or if they have an inkling about them but are motivated in their decision by other factors.

Even if not many future cases fall into the Abercrombie pattern, employers are still at risk in at least two other ways. First, they will be tempted to ask explicitly whether some requested accommodation (such as weekend scheduling) is based on religious belief, and such questions will sometimes rouse a suspicion of religious discrimination (or perhaps even be an act of discrimination itself). Second, they will be encouraged to make assumptions about employees’ unvoiced religious preferences that will shade into stereotyping (“She seemed so pious, we figured she probably wouldn’t want to be assigned Sunday work.”) One good way to avoid situations of being sued if you do, sued if you don’t is for judges to spell out clear rules that are easy to follow. In its concern to craft a modest statutory reading, the Court missed a chance to do that today.

A New York Times/CBS News poll from 2013 asks, “Which is more important to you – to protect American industries and jobs by limiting imports from other countries, or to allow free trade so you can buy good products at low prices no matter what country they come from?” I like this question because it addresses protectionism as a policy rather than trade agreements.

When the options were protectionism or free trade, the result was 51% in favor of limiting imports and 41% supporting free trade.  Now that isn’t a majority of American favoring free trade, but it strikes me as an incredibly high number considering how broadly the question is worded.  It didn’t ask if we should lower tariffs; it asked if we should have any at all?  Do 41% of Americans really oppose all tariffs?

That’s worth keeping in mind as the public becomes more involved in the debate over trade promotion authority and the Trans-Pacific Partnership.  We’re going to be hearing more from the news media about Americans’ attitudes toward trade and globalization, and it’s important to remember that polls about trade vary greatly depending on how the question is worded. 

A 2013 Gallup poll focusing on general attitudes toward trade asked respondents, “Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?”  The problem with this question is that it assumes that trade is supposed to meet some mercantilist goal of exports exceeding imports and asks whether that goal is being met.  Unfortunately, this is how most supporters of the TPP have framed their arguments.  Still, the poll found support for trade at 57% with 35% opposed.

A new Pew Research Center poll shows that most Americans think trade agreements have been good for the United States, but when asked whether those agreements have been good for them personally, the results are more mixed:

Majorities across income categories say free trade agreements have been a positive thing for the U.S., but there are much wider income differences in opinions about the personal impact of free trade agreements.

Overall, somewhat more say their family’s finances have been helped (43%) than hurt (36%) by free trade agreements. Among those with family incomes of $100,000 or more, far more feel they have been helped (52%) than hurt (29%) financially. But among those in the lowest income group (less than $30,000), 38% say their finances have benefited from free trade agreements, while 44% say they have been hurt.

My colleague Simon Lester has noted that these results might be different if people were more informed about the regressive costs of protectionism.

Trade opponents have been quick to point out that polls about past agreements don’t actually ask if people support the TPP.  They also point to other polls that show strong public opposition when the question links trade agreements to specific hot-button issues like currency manipulation or outsourcing. 

Shawn Donnan of the Financial Times has noted how the Pew poll demonstrates a disconnect between the American public and their elected representatives.

What is remarkable is the consistency with which polls have pointed to support for trade and trade agreements in some important demographics.

Polls have shown a majority of Democratic voters support trade agreements even as most of the party’s representatives in both houses of Congress do not. The same is true for Republicans, voters under 30 and Hispanics, last week’s Pew poll found.

In fact the Pew survey found that a majority in all income groups thought trade agreements had been a “good thing” for the US economy even if they took contrasting views on what the impact had been on their own family finances.

Largely because of the political discourse in Washington, the US often looks from the outside like a parochial nation in retreat from the world, particularly when it is put up against a resurgent China. But from the ground, the US seems more comfortably interconnected with the world than it has in decades.

Just as polls show Americans are more comfortable with gay marriage than they once were they also reflect the fact that Americans are more accepting of globalisation than they have been in the past.

One of the criticisms of the Trans Pacific Partnership (TPP) is that it’s “not about trade.”  While it is true that the TPP goes beyond trade, and addresses issues such as labor, environment and intellectual property protection (in ways that I’m not always happy about), its impact on traditional protectionist measures such as tariffs should not be ignored.  Here is Politico on this issue:

Vietnam slaps tariffs of 70 percent on U.S. cars and machinery, 35 percent on U.S. chemicals, 30 percent on U.S. biscuits and baked goods, and 25 percent on U.S. recording equipment. Japan marks up our oranges 16 percent from June through November and 32 percent from December through May; it marks up our beef exports 38.5 percent all year long. Cars made in America face a 30 percent tariff in Malaysia, which might not seem stiff compared to 50 percent on motorcycles or 35 percent on plywood, except that cars made in Japan and other Asian nations don’t face any tariff in Malaysia.

These burdensome overseas tariffs, provided to POLITICO by US Trade Representative Michael Froman, are the kind of problems President Obama hopes to address with the free trade deal known as the Trans-Pacific Partnership, which has not yet been finalized but has recently erupted into one of the most contentious topics on Washington’s agenda. 

Overall, the U.S. imposes an average tariff of 1.4 percent on foreign goods, less than half the average for the rest of the nations Froman is negotiating with, barely a fourth the average in Vietnam and Malaysia. And it can get much worse for specific industries and products. TPP nations have tariffs ranging up to 100 percent on textiles, 87 percent on corn, and 75 percent on consumer goods, not to mention selected Japanese tariffs that amount to 189 percent on U.S. shoes and a don’t-even-think-about-it 778 percent on U.S. rice above a certain annual quota.

Even our friendly trading partner to the north has some brutal anti-American protectionism on its books. The North American Free Trade Agreement of 1994 broke down a slew of barriers between the U.S. and Canada, but it exempted the poultry and dairy industries, which is why U.S. eggs face tariffs of up to 163.5 percent—and not less than 79.9 cents per dozen—in the land of ice hockey and eh. U.S. yogurt, milk, cheese, and frozen chicken all face tariffs between 237.5 percent and 249 percent in Canada.

Of course, when you talk to a U.S. government official, the focus will be on the protectionism of others, and U.S. protectionism will be ignored.  In reality, the U.S. is not all that great either.  Among other things, we have some “tariff peaks” of our own, we abuse anti-dumping duties, and there is lots of protectionism in government procurement (e.g., Buy America laws).  But the overall point is still valid: There is plenty of protectionism for trade agreements to take on.  The key, from my perspective, is how much of it the TPP actually gets rid of.  For that, we need to wait for the TPP to be completed, and see what the negotiators have accomplished.  Then, whatever has been achieved in this regard needs to be balanced against the other parts of the TPP.

Secretary of State John Kerry recently visited Seoul and South Korean President Park Geun-hye will head to Washington later this month. The main agenda item: what to do about North Korea.

As usual, no one knows what is going on in Pyongyang. Its internal politics appears to be bloodier than usual. Ironically, this might provide an opportunity for Washington to initiate talks over a more open bilateral relationship.

The latest rumor is that young dictator Kim Jong-un had his defense minister executed with anti-aircraft fire for disrespectful conduct. Hyon Yong-chol probably has been purged, though South Korea’s intelligence agency acknowledged that it could not confirm his gruesome death. If Hyon was executed, it probably was because the military man was plotting, or at least feared to be plotting, against the North’s leadership.

There has been striking turnover among party and military officials since Kim Jong-un took over after his father’s death in December 2011. Most dramatic was the arrest and execution of Kim’s uncle, Jang Song-taek, seen as the regime’s number two, in December 2013. Overall some 70 top apparatchiks and more than 400 lower level officials apparently have been killed this year.

This brutality towards the power elite sets Kim apart from his father and grandfather. While Kim Jong-un’s apparent penchant for executions may reflect a peculiarly sadistic nature, it more likely grows out of insecurity. Only 28 or maybe 27 when his father died, Kim’s succession was pushed extremely quickly after his father suffered a stroke in August 2008.

Although there is no sign of organized resistance to the latest Kim, continuing turnover suggests that Kim is not, or at least does not see himself, as yet secure. Instead of cowing resistance, promiscuous executions, even for acts short of actual rebellion, might make subordinates believe it is worth going for broke.

Repression is rising in other ways. For instance, the regime apparently has been employing “Patrol Teams” as press gangs to fill out its construction work force for projects to be finished by October, the 70th anniversary of the founding of the Korean Workers’ Party. The regime also has strengthened border controls with China.

If Kim retains control, none of this might matter. However, everyone is wary of something other than the usual predictable unpredictability in Pyongyang. South Korean President Park Geun-hye noted “growing concern” over “an extreme reign of terror within North Korea.”

Governance matters since the North continues to expand its nuclear capabilities. While nothing suggests that Kim is suicidal—members of the dynasty appear to prefer their virgins in this world rather than the next—Pyongyang’s decision-making process could become more unilateral, unpredictable, or both.

Unfortunately, there is little that the U.S. can do to directly influence events within the DPRK. War would be foolhardy, tougher sanctions aren’t likely to work, and the Kim regime is well beyond the reach of moral suasion.

Nor is negotiation likely to have much effect. While the North recently launched an international charm offensive, it continues to highlight weapons development and spout rehashed threats against America and the South. The Kim regime is not likely trade away the one factor causing the world to follow events in the DPRK.

Nevertheless, as I point out in Forbes, “the possibility of division and dissension in Pyongyang gives Washington a new reason to suggest direct discussions without preconditions, but with the prospect of benefits for a change in direction. If the regime is unsettled, those disaffected might benefit if Washington stood ready to reward a new approach.”

A peace treaty, diplomatic relations, and end of economic sanctions all should be on the table. It’s still a long-shot, but so is almost any other proposal to address the North.

Someday Pyongyang will change. Engagement is the best way to prepare for that day.

Like the 2009 Oscar award-winning Pixar film Up, Venezuela’s annual inflation rate has soared sky high (see the chart below). On December 31, 2014, Venezuela’s bolivar traded at a VEF/USD rate of 171 and the implied annual inflation rate stood at 169%. In May of 2015, Venezuela’s bolivar collapsed and the implied annual inflation rate broke the 500% barrier. On May 28, 2015, the VEF/USD rate was 413, a 59% depreciation in the bolivar since January 1st. Not surprisingly, the implied annual inflation rate stood at a staggering 495%.

Daniel Hannan writes in the Wall Street Journal today about Magna Carta, whose 800th anniversary will also be celebrated at a Cato conference next week. Alas, he persists in an error that I regret to say he’s made before.

Hannan is a great advocate of liberty and particularly of English liberty. His patriotism is admirable in an English representative to the European Parliament. But he fails to grasp the shift in the idea of liberty that took place in America in the 1770s. Hannan, I think correctly, celebrates Magna Carta as the great foundation of ordered liberty, of what I have called the greatest libertarian achievement in history, bringing power under the rule of law:

As Lord Denning, the most celebrated modern British jurist put it, Magna Carta was “the greatest constitutional document of all time, the foundation of the freedom of the individual against the arbitrary authority of the despot.”

It was at Runnymede, on June 15, 1215, that the idea of the law standing above the government first took contractual form. King John accepted that he would no longer get to make the rules up as he went along. From that acceptance flowed, ultimately, all the rights and freedoms that we now take for granted: uncensored newspapers, security of property, equality before the law, habeas corpus, regular elections, sanctity of contract, jury trials.

But he goes wrong when he glosses over the change in thinking that occurred around 1776 in the American colonies:

The American Revolutionaries weren’t rejecting their identity as Englishmen; they were asserting it. As they saw it, George III was violating the “ancient constitution” just as King John and the Stuarts had done. It was therefore not just their right but their duty to resist, in the words of the delegates to the first Continental Congress in 1774, “as Englishmen our ancestors in like cases have usually done.”

Nowhere, at this stage, do we find the slightest hint that the patriots were fighting for universal rights. On the contrary, they were very clear that they were fighting for the privileges bestowed on them by Magna Carta. The concept of “no taxation without representation” was not an abstract principle. It could be found, rather, in Article 12 of the Great Charter: “No scutage or aid is to be levied in our realm except by the common counsel of our realm.” In 1775, Massachusetts duly adopted as its state seal a patriot with a sword in one hand and a copy of Magna Carta in the other.

I recount these facts to make an important, if unfashionable, point. The rights we now take for granted—freedom of speech, religion, assembly and so on—are not the natural condition of an advanced society. They were developed overwhelmingly in the language in which you are reading these words.

When we call them universal rights, we are being polite.

It’s true that the colonists came here with the spirit of English liberty running in their veins. They brought with them the books of Locke and Sydney, the examples of Lilburne and Hampden, the writings of Edward Coke. In the 18th century they read Cato’s Letters and William Blackstone. They petitioned Parliament and the king for their rights as Englishmen. 

But the Declaration of Independence marks a break in that thinking. When Thomas Jefferson sat down to write “an expression of the American mind,” he did not appeal to the rights of Englishmen. Instead, the Americans declared:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. (emphases added)

They appealed not to the British Parliament nor to King George III, but rather to “the opinions of mankind…a candid world…the Supreme Judge of the world.” Hannan glosses over this when he makes reference to 1774 and writes, “Nowhere, at this stage, do we find the slightest hint that the patriots were fighting for universal rights.” True, not in 1774. But by 1776, when Thomas Paine published Common Sense, in which he defended “the natural rights of all mankind” and denounced kings as “ruffians” and “a French bastard landing with an armed banditti,” and the Continental Congress made its case on the basis of the unalienable rights of all men, American thinking had changed. Americans declared their belief in universal rights and their independence from a nation that denied those rights.

As I was researching this post, I found a similar argument from Tim Sandefur a year ago. Alas, Hannan persists in making this error year after year. Besides citing the argument of the Declaration, Sandefur presents in evidence the thoughts of John Quincy Adams on the 50th anniversary of the Constitution:

English liberties had failed [the Patriots]. From the omnipotence of Parliament the colonists appealed to the rights of man and the omnipotence of the God of battles. Union! Union! was the instinctive and simultaneous cry throughout the land. Their Congress, assembled at Philadelphia, once—twice had petitioned the king; had remonstrated to Parliament; had addressed the people of Britain, for the rights of Englishmen—in vain. Fleets and armies, the blood of Lexington, and the fires of Charlestown and Falmouth, had been the answer to petition, remonstrance and address.

Independence was declared. The colonies were transformed into States. Their inhabitants were proclaimed to be one people, renouncing all allegiance to the British crown; all co-patriotism with the British nation; all claims to chartered rights as Englishmen. Thenceforth their charter was the Declaration of Independence. Their rights, the natural rights of mankind. Their government, such as should be instituted by themselves, under the solemn mutual pledges of perpetual union, founded on the self-evident truths proclaimed in the Declaration…. The omnipotence of the British Parliament was vanquished. The independence of the United States of America, was not granted, but recognized. The nation had “assumed among the powers of the earth, the separate and equal station, to which the laws of nature, and of nature’s God, entitled it.”

Daniel Hannan is a thoughtful, forceful, and eloquent advocate of liberty under law. But he needs to read the Declaration of Independence and respect what it says, that the United States of America, though inspired by the tradition of English liberty, was founded on the self-evident truth that all men are endowed by their Creator with certain unalienable Rights, and that those rights reside in all men and women in every country of the earth.

 

In my prior post, “The Futility of Stimulus,” I examined whether Federal Reserve Policy has provided economic stimulus. I employed standard measures of money-supply growth to evaluate the question. I concluded that Federal Reserve policy has resulted in less expansion of the money supply than would normally be expected. The weakness of the current economic expansion testifies to that.

In this post, I employ an alternative measure of monetary stimulus. I rely on a recent lecture at the University of Nevada Reno by Professor John Taylor of Stanford University. With a series of charts, he made a convincing case that successive rounds of Quantitative Easing provided no monetary stimulus. Taylor looked at the interest-rate channel, particularly longer-term interest rates. If monetary policy stimulates the economy through real capital investment, then we must look to longer-term interest rates.

Taylor specifically examined the effects on 10-year Treasury yields of each round of Quantitative Easing by the Fed. In each case, there was an announcement effect. When the Fed announced a new round of bond purchases, interest rates on 10-year Treasuries did drop. As QE was executed, however, the 10-year rate recovered to its previous level or even moved higher. On the assumption that rates on corporate bonds price off Treasuries, there was no measurable effect on investment and economic growth. Again, the weakness of the economic expansion is consistent with Taylor’s argument.

There is policy background here. Taylor is the author of a monetary rule, which others have dubbed the Taylor Rule. It is a rule for adjusting short-term interest rates (the Fed Funds rate) to changes in inflation and real economic activity. The Taylor Rule calculates that the Fed Funds should by 1.5 percent versus the current reality of near-zero. Taylor did not advocate an immediate increase to that level, but the beginning of gradual increases.

What of the economic recovery? If Taylor is correct, then low short-term interest rates have not contributed to the economic expansion and raising them will not slow economic growth.

Have very low short-term interest rates had any effect? Janet Yellen recently hinted they might have contributed to unsustainably high equity prices. I will not argue with the Fed Chair on that point, but only suggest that other financial bubbles may also have been financed by Fed policy. To repeat a hackneyed phrase (nonetheless accurate), Wall Street has benefited but not Main Street.

To sum up, following Taylor’s analysis of the interest-rate channel, I conclude that Fed policy has not stimulated economic growth. It has had consequences, which some would consider undesirable. Taylor has provided a reasonable case for beginning to raise interest rates. I doubt that will happen soon. But the debate should continue.

This morning, a car bomb exploded outside a mosque in Saudi Arabia, the second such attack in a week. The attacks, which have killed at least 25 people, were aimed at the minority Saudi Shi’a community. In doing so, ISIS is expertly capitalizing on Saudi Arabia’s internal sectarian divide, which is worsened not only by domestic repression, but by the propaganda supporting Saudi Arabia’s activist foreign policy in Syria, Yemen and elsewhere. Saudi rulers should remember that sectarianism, though convenient for political purposes, also carries substantial risk.

In an interview shortly before the recent Camp David summit, President Obama committed the faux-pas of pointing out the internal problems faced by many of the GCC states. He noted that these states contain “populations that, in some cases, are alienated, youth that are underemployed, an ideology that is destructive and nihilistic, and in some cases, just a belief that there are no legitimate political outlets for grievances… The biggest threats that they face may not be coming from Iran invading. It’s going to be from dissatisfaction inside their own countries.”

He’s not wrong. Saudi Arabia is well-known as one of the world’s most repressive states, with little political representation and no rights for women or minorities. Further, oil prices remain low, and while the Saudi state has massive cash reserves, the rise of shale oil has diminished its role as the world’s main oil producer. Saudi Arabia also has a growing youth population, with 51% of the population under the age of twenty five.

This is itself less concerning than the inability of the oil-dependent Saudi state to provide stable employment opportunities; the unemployment rate for those between fifteen and twenty-five years of age is at least 30%. It is no wonder that many of the unemployed youth of Saudi Arabia are attracted by movements like ISIS. Indeed, by some estimates, more than 2,500 of the foreign fighters in Syria come from Saudi Arabia. The newest iteration of this threat is seen in attacks like those of the last week, as young men susceptible to ISIS avoid travel to Syria, and instead carry out attacks inside Saudi borders.

Yet the ISIS attacks also highlight the pernicious influence of state-supported sectarianism. The bombers astutely aimed the bombings not at Sunnis, but at the state’s minority Shi’a population. While targeting Sunnis would likely have increased resolve among Saudi citizens, targeting Shi’a mosques instead served to cast worshippers as heretics, highlighting domestic sectarian tensions.

The attacks remind Saudi Shi’ites that their own government uses sectarian messaging on state TV, and has close ties to clerics which rail against Shi’a heretics. Shi’ites in Saudi Arabia don’t even enjoy the same minimal political rights that their Sunni compatriots do, and the state has repeatedly cracked down on calls for increased representation.

These tensions are being further inflamed by the war in Yemen, which is being presented by Saudi state TV as a crusade against Houthi Shi’ites. The same applies to the state’s newly activist foreign policy, which is portrayed broadly as a challenge to Iranian and Shi’a interests across the region. The high civilian death toll in Yemen – as many as 2,000 people – and the reticence of the Saudi government to seek a political settlement with the Houthis also contributes.

In short, the ISIS attacks targeted a potential cause of instability within the Saudi state, requiring Saudi rulers to strike a delicate balancing act. They must show support for the attacked communities, while avoiding upsetting the hardline Sunni clerics which support the royal family. Balancing these factors while continuing to use sectarian language to justify the state’s wars in Yemen and elsewhere may prove impossible.

As the Arab Spring illustrated, even states which appear relatively stable can suffer from instability and chaos. It also showed that once the Pandora’s Box of sectarianism has been opened, it is extremely difficult to shut. As ISIS attacks within Saudi Arabia seek to increase tensions between Sunni and Shi’a populations, this is a lesson Saudi Arabia’s rulers would be wise to bear in mind.  

I’ve argued that the centralization of government spending in Washington over the past century has severely undermined good governance. Citizens get worse outcomes when funding and decisionmaking for education, infrastructure, and other things are made by the central government rather than state and local governments and the private sector. The problem is the same in the European Union, as a new article in Bloomberg on the funding of Polish airports illustrates:

Local authorities are spending some 205 million zloty ($58 million), including more than $44 million in EU subsidies, to build runways and a new terminal that could accommodate more than 1 million passengers a year. The Olsztyn Mazury Airport is scheduled to open next January, but traffic and revenue forecasts developed by the project’s backers are “very far from reality,” says Jacek Krawczyk, a former chairman of LOT Polish airlines who advises the EU on aviation policy through its European Economic and Social Committee.

Szymany adds to a burgeoning supply of costly new airports across Poland. Since 2007, the EU has spent more than €600 million ($666 million) to build or renovate a dozen Polish airports.

… Mostly, though, Poland’s new airports have been a financial bust. A report in December by the European Court of Auditors found that EU-subsidized airport projects in Poland, as well as others in Estonia, Greece, Italy, and Spain, had “produced poor value for money.” Traffic at most airports fell far short of projections, and there was little evidence of broader economic benefits, such as job creation, the report found.  

With respect to U.S. infrastructure, there is ongoing pressure to increase federal investment, despite decades of experience on the inefficiency of it. Politicians and lobby groups constantly complain that America does not spend enough on infrastructure. But they rarely discuss how to ensure efficiency in spending, or cite any advantages of federal spending over state, local, and private spending.

I’ve discussed the many downsides to federal aid for infrastructure and other local activities here and here. But I was alerted to an additional argument against aid from this Regulation article by William Fischel and this book by James Bennett. Federal aid encourages local governments to expropriate private property, often for dubious purposes.

The article and book discuss the expropriation of Detroit homes for the benefit of General Motors in the 1980s. The “Poletown” project would not have happened without $200 million in federal and state loans and grants to the city. So Fischel makes the point that (abusive) government uses of eminent domain—such as the Kelo case in New London, Connecticut—are encouraged by the flow of federal and state funds to cities. That is, money for “economic development” and the like.

State and local governments would make better decisions if they were responsible for their own funding of programs and projects. The annual flow of more than $600 billion in federal aid to state and local governments should be phased out over time and eliminated.

Discontent at a land-use control process perceived as “condescending and obnoxious” helped fuel a surprise voter revolt in affluent Chevy Chase, Md., just across the D.C. border in Montgomery County, reports Bill Turque at the Washington Post. Aside from intensive review of requests to expand a deck or convert a screened-in porch to year-round space, there are the many tree battles:

[Insurgents] cite the regulations surrounding tree removal as especially onerous. Property owners seeking to cut down any tree 24 inches or larger in circumference must have a permit approved by the town arborist and town manager attesting that the tree is dead, dying or hazardous.

If turned down, residents can appeal to a Tree Ordinance Board, which applies a series of nine criteria to its decision, including the overall effect on the town’s tree canopy, the “uniqueness” or “desirability” of the tree in question and the applicant’s willingness to plant replacement trees.

MorePhilip K. Howard with ideas for fixing environmental permitting. [cross-posted from Overlawyered and Free State Notes]

With debate about NSA spying continuing in the Senate, it’s worth looking at some of the historical and modern precedents for protecting our communications and communications data. A few highlights:

  • The earliest precedent for protection of communications in the United States is the treatment of mail. The founders used postal mail to communicate their revolutionary ideas and even to plan their insurrection against the tyranny of King George, so they prioritized protecting the privacy of the mail. In the Act of Feb. 20, 1792, passed a few short years after ratification of the Constitution, the U.S. Congress enshrined protections for mail in the law, creating heavy fines for opening or delaying mail.
  • The Supreme Court confirmed the existence of constitutional protection for postal communications in Ex Parte Jackson. In that 1877 case, the Court described the Fourth Amendment’s guarantees in very interesting and clear language: “Letters and sealed packages … are as fully guarded from examination and inspection, except as to their outward form and weight, as if they were retained by the parties forwarding them in their own domiciles.” Though we place mail in the hands of government agents, the Fourth Amendment protects it like it’s inside our homes.
  • The year Ex Parte Jackson case was decided, both Western Union and the Bell Company began providing voice telephone service. The Supreme Court addressed constitutional protection for phone calls some decades later in 1928. The Olmstead case was wrongly decided, we now know. It found that telephone communications weren’t protected by the Constitution. So the dissents are where to look for precedential language. Justice Brandeis’s famous dissent spoke of the “right to be let alone,” but Justice Butler provided thinking and language that should have more lasting value: “The contracts between telephone companies and users contemplate the private use of the facilities employed in the service,” he wrote. “The communications belong to the parties between whom they pass.” The communications belong to the parties. That’s a fasacinating and important way to think about our communications, as property that we own.

When the Court reversed Olmstead in 1967’s Katz decision, it unfortunately and inadvertently produced a Fourth Amendment doctrine basing constitutional protection on “reasonable expectations of privacy.” People do reasonably expect privacy in their communications, but “reasonable expectations” doctrine is not well equipped for administering the Fourth Amendment. We saw that in Smith v. Maryland, the 1979 case in which the Court used no research or even consideration of the opposing view in finding that people have no expectation of privacy in data about their phone calls. Happily, the Court has eschewed “reasonable expectation” doctrine in many recent cases.

When the Second Circuit Court of Appeals ruled that the NSA spying program is illegal a few weeks ago, it treated data as property. When we reduce our thoughts and records to digital form and send them over the Internet, we’re doing the same thing the founders did when they wrote letters and put them in the mail. Those communications are still ours, and they should be protected in transit as if they are in the home. America’s private telecommunications system is not like the U.S. mail, of course. We’re not handing our calls over to the government like we hand our letters to the U.S. Postal Service. Our calls and Internet communications should be more protected than the mail because we are using service providers that are obligated by contract and regulation to protect our privacy.

The communications data the NSA is accessing belongs to the parties between whom it passes. It is not the government’s to take—not without a particularized warrant based on the requisite level of suspicion. There’s good precedent for that.

Back in March, I shared a remarkable study from the International Monetary Fund which explained that spending caps are the only truly effective way to achieve good fiscal policy.

And earlier this month, I discussed another good IMF study that showed how deficit and debt rules in Europe have been a failure.

In hopes of teaching American lawmakers about this international evidence, the Cato Institute put together a forum on Capitol Hill to highlight the specific reforms that have been successful.

I moderated the panel and began by pointing out that there are many examples of nations that have enjoyed good results thanks to multi-year periods of spending restraint.

I even pointed out that we actually had an unintentional - but very successful - spending freeze in Washington between 2009 and 2014.

But the problem, I suggested, is that it is very difficult to convince politicians to sustain good policy on a long-run basis. The gains of good policy (such as what was achieved in the 1990s) can quickly be erased by a spending binge (such as what happened during the Bush years).

Unless, of course, there’s some sort of constraint on the desire to spend money. And the panelists discussed the three most successful examples of reforms that constrain the growth of government.

We started with a presentation by Daniel Freihofer from the Swiss Embassy. He talked about Switzerland’s “Debt Brake,” which actually is a spending cap.

It’s remarkable how well Switzerland has performed while most other European nations have suffered downward spirals of more spending-more taxes-more debt. Here’s a chart I put together on what’s happened to spending in Switzerland ever since 85 percent of voters imposed the Debt Brake early last decade.

By the way, Herr Freihofer said during the Q&A session that support for the Debt Brake is now probably about 95 percent, so Swiss voters obviously understand that the policy has been very successful.

Our second speaker was Clement Leung, Hong Kong’s Commissioner to the United States. He talked about Article 107 and other rules from Hong Kong’s Basic Law (their constitution) that limit the temptation to over-tax and over-spend.

And if you want to see some of the positive results of these rules in Hong Kong, here’s some of what Commissioner Leung presented.

By the way, the burden of government spending in Hong Kong averages about 18 percent of economic output. That’s the most impressive result. And Commissioner Leung explained that there’s a commitment to keep the burden of spending below 20 percent of GDP.

The final panelist was Jonathan Williams from the American Legislative Exchange Council, and he talked about Colorado’s Taxpayer Bill of Rights, popularly known as TABOR.

Jonathan talked about how the pro-spending lobbies keep attacking TABOR, and he mentioned that they narrowly succeeded in getting a five-year suspension of the law back in 2005. But Colorado voters generally understand they have a good policy.

The most recent attempt to enable more spending came in the form an increase in the state’s flat tax back in 2013 and voters rejected it by a stunning 66-34 margin (almost as impressive as the recent vote against tax hikes in Michigan) even though Jonathan said advocates outspent opponents by a 289-1 margin.

Here’s a slide from his presentation showing what happened during other attempts to enable more spending.

By the way, Jonathan also mentioned that Colorado’s voters are about to get a TABOR-mandated tax cut because taxes on marijuana are pushing revenues above the limit. Talk about a win-win situation!

To wrap up, one of the big lessons from all the presentations is that governments generally get in trouble because they can’t resist over-spending when the economy is doing well and generating lots of tax revenue.

I fully agree, and I’ve previously explained this is why Alberta got in fiscal trouble, and also why California suffers a boom-bust budgetary cycle.

The way you solve this problem is not with a balanced budget requirement (which often serves as the justification for tax hikes), but some sort of spending limitation rule.

The skepticism was evident in conservative talk-show host Laura Ingraham’s voice when she referred to the working relationship between President Obama and Senate Majority Leader McConnell as a “burgeoning bromance.” Her sentiment is shared by a number of Republicans in Congress, who are unhappy that Senate and House leadership is working with the president to secure Trade Promotion Authority.

Perhaps it’s no longer axiomatic that trade divides Democrats and unites Republicans.  According to Politico, “about 40 to 45 of the 245 Republicans in Congress are hard ‘nos’ on [TPA]” with many asking: Why would Republicans want to give this president, who has aggrandized his authority and disregarded congressional prerogatives, any more power?  Well, they shouldn’t.  However, TPA would not give the president any power to make mischief.

Trade Promotion Authority is neither a congressional capitulation nor an executive power grab.  It is a compact between the branches, which effectively deputizes the president to negotiate trade agreements on behalf of Congress, which meet parameters and fulfill objectives spelled out by Congress, which are put to votes in both chambers of Congress. 

If the concluded trade agreement meets Congress’s parameters and fulfills its objectives, legislation to implement the agreement is considered without amendments on an expedited timetable by an up-or-down vote.  If the agreement fails to meet Congress’s parameters or fulfill its objectives, it can be taken off the so-called fast-track through a resolution of disapproval.  And, ultimately, members and senators can always vote “no” if they don’t like the deal.  

For members who see trade liberalization as a way to expand economic freedom and generate economic growth, rejecting trade promotion authority would be a mistake.  Without TPA, the Trans-Pacific Partnership agreement simply cannot be completed.  Negotiating partners would be unwilling to put their best and final offers on the table without the assurances – provided under TPA – that the agreement wouldn’t be picked apart and altered by Congress. 

The TPP will include provisions that reduce trade barriers and offer some of the economic opportunities that went missing over the past six years.  But it will also include some provisions that are protectionist or otherwise impede liberalization.  The TPP is managed trade, not free trade.  So without making the perfect the enemy of the good, each member of Congress should review the agreement and decide whether it is liberalizing on net, liberalizing enough, or whether it exceeds whatever benchmarks each deems appropriate.

Without TPA, there won’t be a TPP to assess.  If TPA is passed, the TPP can conclude and Congress, the public, and Cato’s trade analysts will have ample opportunity to scrutinize its details and make informed judgments about the desirability of TPP.  Concerns about granting the president more power are misplaced. The only mischief the president can make under this arrangement is mischief that earns the endorsement of majorities in both chambers.

Pages