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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. 

Two killers are on the loose, having escaped from a New York prison, but federal prosecutors in New York are hunting for some individuals who posted comments to a blog post over at the Reason web site.  Stay with me as I try to explain…

By way of background, Reason’s Nick Gillespie wrote a blog post about the federal prosecution of the man behind the Silk Road project, a sophisticated narcotics distribution operation. (If you’re tempted to comment on that post, please finish reading this post first. Seriously.) That man, Ross Ulbricht, was recently sentenced to life in prison, without the possibility of parole.  Like Cato, Reason has been a long time critic of the drug war.  Thus, most of Reason’s web site readers believe that nearly all criminal prosecutions for narcotics violations are misguided and unjust.  So it was no surprise to learn that the comments to Gillespie’s post had harsh things to say about the government, including the sentencing judge, in that case.  Some evidently went so far as to say the judge should be killed.   Enter the federal government with subpoenas to Reason so agents can track down those anonymous commentators for further investigation.

Ken White at Popehat broke the story and has a very good post that dismantles the government’s actions in detail here (be advised that there is some profanity).

I have not spoken to our friends at Reason on this matter, but it seems safe to say that they are likely outraged by this subpoena.  (Remember that failure to comply with a subpoena will be considered a federal crime!  Being threatened in these circumstances is outrageous!)   They are being asked (excuse me, ordered) to assist the government to track down and harass (perhaps even arrest and prosecute) some of their readers.  And for what?  Expressing opinions that are supposed to be protected by the Constitution.  Our friends can try to fight the subpoena by going to court and having it quashed, but that could entail thousands of dollars in attorneys fees – and the chances of success are not that great. 

Perhaps as the word gets around, the feds will withdraw the subpoena under pressure.  That might happen, but the downside of that is that this subpoena power will, in law, remain virtually unchecked.  When will it resurface, and against who?  Maybe a person or organization that is in an even weaker position to resist and fight back in court.  Establishing a legal precedent would be desirable here, but, again, it could be very expensive to wage a court battle.  

For Cato scholarship regarding the power of grand juries, go here.

For another example of what New York federal prosecutors think about their power vis-a-vis free speech, go here.   

 

Conservatives are fond of saying, usually in regard to homosexuality, “Everything not forbidden is compulsory.” At National Review recently, Kevin Williamson reminded readers of the provenance of that particular formulation:

One of the finest books ever written about politics is The Once and Future King, in which young Arthur, not yet king, is transformed by Merlin into various kinds of animals in order to learn about different kinds of political arrangements: Hawks live under martial law, geese are freewheeling practitioners of spontaneous order, badgers are scholarly isolationists, and ants live under totalitarianism, with T. H. White famously rendering their one-sentence constitution: “Everything not forbidden is compulsory.”

The District of Columbia can go the ants one better: It makes things simultaneously forbidden and compulsory. D.C. banned discrimination on the basis of sexual orientation in 1973, but didn’t repeal its sodomy law until 1993. So for 20 years you couldn’t be fired for being gay, but you could be arrested.

Now the District has extended its confusion to the mundane matter of taxicab regulation. WAMU reports that

Several Washington cab companies may miss a June 29 deadline to upgrade at least 6 percent of their fleets to wheelchair-accessible vehicles….Under the D.C. Taxi Act of 2012, the 27 cab companies with fleets of at least 20 taxis were supposed to convert or purchase accessible vehicles….After meeting the 6 percent ratio this month, D.C. cab companies will be faced with upgrading to 12 percent by the end of 2016 and 20 percent by Dec. 31, 2018. 

Disability-rights advocates are angrily demanding that the companies “give us the taxicabs we deserve.”

But meanwhile the District limits entry into the taxi business with a tag system, so that:

Because of the District’s freeze on the issuance of H-tags, independent drivers may not purchase and operate their own wheelchair-accessible taxis. Instead drivers have to rent the taxi, usually a minivan with a rear ramp for power wheelchairs or motorized scooters, off a company’s lot.

D.C. native Arika Woodson, 35, approached the D.C. Taxicab Commission with a proposal to operate her own taxi company exclusively for people in wheelchairs, but was turned away because of the H-tag freeze.

So the District government is requiring taxi companies to spend money to make their cabs wheelchair-accessible. At the same time, it’s also refusing to grant taxi licenses to entrepreneurs who want to put wheelchair-accessible cabs on the streets. It’s compulsory and forbidden all at the same time!

And one more point: Before the conversion mandate, “Two government-subsidized ride programs, Roll DC and Transport DC, provided 19 vehicles for people in wheelchairs, primarily to make doctors’ visits.” So wheelchair-accessible taxis are forbidden, compulsory, AND taxpayer-subsidized in the District of Columbia. It’s a trifecta of interventionism.

As President Obama gears up to deliver a major address on the supposed successes of the Affordable Care Act, a study by one of the nation’s top health economists is pouring cold water on the ACA’s main engine for expanding health-insurance coverage: its expansion of Medicaid to cover able-bodied, childless adults.

MIT’s Amy Finkelstein has won a slew of awards, including the prestigious John Bates Clark Medal, for her work in health economics. In “The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment,” Finkelstein, Nathaniel Hendren, and Erzo Luttmer, used various econometric methods to quantify the benefits that enrollees receive from Medicaid. They drew from the Oregon Health Insurance Experiment, on which Finkelstein was a lead investigator.

The trio found that Medicaid enrollees receive very little benefit from each dollar spent on Medicaid. The absolute minimum enrollees receive is 15 cents of benefit per dollar spent. The authors’ best guess is that enrollees receive somewhere around 20-40 cents of benefit per dollar spent. The maximum is 90 cents–that is, no matter how the authors sliced the data, Medicaid’s costs exceed the benefits to enrollees. If the government just gave enrollees the money, Medicaid is such a bad deal that enrollees would not buy Medicaid coverage with it.

Medicaid spends, non-enrollees receive about 60 cents of benefit. The authors don’t identify who Medicaid’s real beneficiaries are, but they likely include those who receive Medicaid subsidies (hospitals, insurance companies, pharmaceutical companies, doctors, device manufacturers) and people who would otherwise make charitable contributions to provide medical care to enrollees. In other words, Medicaid’s actual beneficiaries are different from its intended beneficiaries.

That’s something to keep in mind when President Obama says, “There are outcomes we can calculate” like “the number of newly insured families” and that “those numbers add up to success.”

The current debate over Trade Promotion Authority proves, once again, that the classic description of the anti-globalization movement—as “largely the well-intentioned but ill-informed being led around by the ill-intentioned and well informed”—still holds true. Despite the tireless efforts of trade policy experts to explain why TPA and the U.S. trade agreements it’s intended to facilitate are, while imperfect, not a secret corporatist plot to usurp the U.S. Constitution and install global government, myths and half-truths continue to infect traditional and social media outlets.

Because these myths—originating with the same old anti-trade bedfellows that have been with us for decades—have duped a lot of good folks who are otherwise predisposed to support liberty and free markets (including some in Congress), and because the House of Representatives is poised to vote on TPA in the coming days, here is one last debunking of the top nine myths about TPA, the Trans-Pacific Partnership (TPP), and U.S. free-trade agreements (FTAs) more broadly.

To save some time, you can skip to your favorite myth by clicking on the links below.

Myth 1: TPA and U.S. FTAs are unconstitutional and undemocratic!

Myth 2: TPA grants the president new and unlimited powers!

Myth 3: TPA sets legally binding congressional rules for U.S. trade negotiations!

Myth 4: Once TPA is approved, Congress will be powerless to stop TPP or other FTAs!

Myth 5: TPP is being negotiated via a dangerous and unprecedented level of secrecy!

Myth 6: FTAs, completed via TPA, undermine U.S. sovereignty!

Myth 7: TPP is a secret backdoor for a parade of horribles (and TPA lets that happen)!

Myth 8: FTAs (and free trade generally) benefit large corporations at the expense of working people!

Myth 9: TPA doesn’t matter!

Myth 1: TPA and U.S. FTAs are unconstitutional and undemocratic!

Totally false. Cato’s Bill Watson and I explained this at length in The Federalist last year, but here’s former Attorney General Ed Meese to reinforce our conclusions:

The TPA legislation… is clearly constitutional because Congress retains its authority to approve or reject all future trade agreements. It might be unconstitutional if Congress tried to delegate its authority to approve the final deal–but that is not at issue. Congress may always kill any future international agreement by withholding its final approval. The only difference under TPA is that Congress consents not to kill the agreement by amendment (i.e., the ‘death by a thousand cuts’). The Constitution grants each house of Congress the authority to establish its own rules of procedure, and it makes perfect sense for Congress to limit itself to straight up-or-down votes on certain resolutions, such as base closures and its own adjournment motions.

Constitutional law professor John O. McGinnis also recently reviewed TPA and concluded that TPA “simply permits Congress under its ordinary procedures to commit to a future majority vote of Congress to vote up or down on an agreement that the President has negotiated. Representative democracy is thus served by the later vote on an agreement whose text is known.” And then there’s the U.S. Supreme Court in the 1890 case of Field v. Clark approving the constitutionality of an analogous law—the McKinley Tariff Act of 1890, which granted the president even more authority than TPA. It was no big deal.

Finally, it’s important to reiterate that, contrary to some claims, FTAs are not treaties (which are typically “self-executing,” require two-thirds approval by the Senate, and have the force of law upon ratification). They are “congressional-executive agreements” that, even after being signed by the president, have absolutely no legal force until they are converted into implementing legislation (which would amend current law), passed by Congress, and signed into law by the president. Such agreements have for decades been used by the United States for many different issues, including trade liberalization, and U.S. courts have repeatedly rejected constitutional challenges thereto.

In short, a constitutional argument against TPA requires you to reject over a century of precedent, the repeated rulings of U.S. courts, and the opinions of even the strictest of constitutional scholars.

Myth 2: TPA grants the president new and unlimited powers!

Totally false. As already noted above (and reiterated here by Cato’s Dan Ikenson and here by the Congressional Research Service), Congress under TPA retains total control over the international trade authority granted to it by Article I, Section 8 of the U.S. Constitution. Any trade agreement negotiated by the president (which he has constitutional authority to do under Article II) still must be approved by Congress.

As noted by the CRS, “TPA reflects decades of debate, cooperation, and compromise between Congress and the executive branch in finding a pragmatic accommodation to the exercise of each branch’s respective authorities over trade policy.” It represents a “gentleman’s agreement” between the legislative branch and the executive branch—with the former promising the latter “fast track” rules for the requisite congressional approval of an FTA, if, and only if, the latter (i) agrees to follow a detailed set of congressional “negotiating objectives” for the agreement’s content; and (ii) engages in a series of consultations with Congress on that content. As discussed more fully below, each branch of government retains its constitutional authority to abandon this gentleman’s agreement, but doing so will essentially kill any hope of signing and implementing new FTAs. So, with limited exceptions, Congress and the executive toe the line.

Because neither branch gets expansive new powers or short-changed, Congress has granted every U.S. president since FDR some form of trade negotiating authority (source):

Pretty boring when you think about it, huh?

Myth 3: TPA sets legally binding congressional rules for USTR and U.S. trade negotiations!

Mostly false. As already noted, TPA sets congressional negotiating objectives on a range of issues (some more palatable than others), but, contrary to the statements of TPA antagonists and even some supporters, these objectives are not legally binding on the executive branch. Instead, the president retains his authority to negotiate with foreign governments, and, as Meese notes, that’s a good thing: “under well-established constitutional rulings, it would raise serious constitutional concerns for Congress to try to mandate the President’s negotiating positions.”

The president and his U.S. trade representative thus technically have discretion to ignore these objectives, but doing so would obviously jeopardize any final congressional vote. As the CRS explains:

To take the fullest advantage of these benefits, Congress, drawing on its constitutional authority and historical precedent, defined the objectives that the President is to pursue in trade negotiations. Although the executive branch has some discretion over implementing these goals, they are definitive statements of U.S. trade policy that the Administration is expected to honor, if it expects trade agreement implementing legislation to be considered under expedited rules [i.e., ‘fast track’].

The negotiating objectives constitute one part of the gentleman’s agreement between Congress and the president: “follow our wishes when you negotiate, and we’ll limit our meddling when a final deal is struck.” If the president doesn’t follow them, then the deal is off.

Which brings us to…

Myth 4: Once TPA is approved, Congress will be powerless to stop TPP or other FTAs!

Totally false. Not only does the latest version of TPA include new language expressly stating that the House or Senate can dismantle the “fast-track” rules for various “disapproval” reasons, but—even more importantly—Congress has always retained this power because it has plenary authority over its rules of procedure, including “fast track.”

The new TPA, like previous versions before it, acknowledges this fact in Sec. 106(c), which states that the fast-track rules are enacted as “as an exercise of the rulemaking power of the House of Representatives and the Senate,” but “with the full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to the same extent as any other rule of that House.” The CRS summary of TPA reiterates this fact: “Congress reserves its constitutional right to withdraw or override the expedited procedures for trade implementing bills, which can take effect with a vote by either House of Congress.”

Such power is not merely theoretical. It is precisely what then-Speaker Nancy Pelosi did to the Colombia FTA in 2008 after President Bush submitted its implementing legislation. Her move effectively dismantled the “fast track” procedures and thus delayed congressional consideration of the agreement indefinitely.

In short, Congress retains total control over the FTA implementation process under TPA and can only be bound by the “fast track” rules if it wants to be bound.

Sensing a theme here yet?

Myth 5: TPP is being negotiated via a dangerous and unprecedented level of secrecy!

Totally false. Probably the most-repeated myth right now isn’t even related to TPA but instead to the TPP, which is still being negotiated. According to the anti-TPA script, the TPP is so secret that nobody knows what’s in it, and—much like Obamacare legislation—nobody, not even Congress, will know what’s in it until the agreement is passed into law. Once again, however, nothing could be further from the truth:

  • First, Obama’s USTR and Congress have been consulting on the TPP since December 14, 2009, when then-USTR Kirk notified Congress that President Obama intended to enter into TPP negotiations. USTR then held initial consultations with Congress in 2010 and, according to a January 2015 fact-sheet, has since held almost 1,700 congressional briefings on TPP alone. USTR also previewed various TPP proposals with key congressional committees before taking them to our trading partners. (Odd that the TPP talks have been going on for six years, but the vast majority of these “secrecy” complaints have only emerged in the last few months, huh?)
  • Second, USTR has provided “access to the full negotiating texts for any Member of Congress, including for Members to view at their convenience in the Capitol, accompanied by staff members with appropriate security clearance.” This access began in 2012, and several House members and senators—both supportive of TPA (like Mike Lee) and opposed (like Sens. Jeff Sessions and Elizabeth Warren, as well as Rep. Rosa DeLauro)—have reviewed the draft negotiating texts. Moreover, the level of security surrounding these TPP texts isn’t part of some scary Obama administration plot; it’s set by Congress (which, as you’ll recall, is controlled by Republicans these days). A U.S. government official confirmed to me that “the Senate and House security offices determine the procedures for viewing classified material in the Capitol reading room where the TPP text is kept for Members—not the administration… some people claim that it’s more difficult to view military or intelligence information, but it’s all subject to the same rules that are set and enforced by Capitol security.”
  • Third, USTR has engaged the public on the TPP via published reports and “stakeholder meetings” with groups like labor unions, consumer groups, and, of course, corporations and trade associations. Some of these stakeholders have even reviewed the negotiating texts and US proposals. Admittedly, the official texts aren’t available to the general public, but this is common practice for all FTAs (as a quick Google search reveals) and for good reason: just like other high-value negotiations among private parties or governments, revealing draft proposals before a deal is struck emboldens the opposition, undermines the parties’ negotiating positions, and exposes negotiators to public scrutiny over provisions that might not even be in a final deal. Publishing draft FTA texts would make completing a deal difficult, if not impossible, and it’s thus no coincidence the most vocal advocates for “full transparency” in free trade negotiations are actually those most opposed to free trade.It’s also important to understand just how unoriginal this “secrecy” canard is:

    Today’s history lesson: Nutty ol’ Perot on NAFTA’s scary secrecy. Sound familiar? #TPP #TPA https://t.co/YLjlJfusUr pic.twitter.com/l1LGWPftzV

    — Scott Lincicome (@scottlincicome) June 5, 2015

    Yes, protectionists have been using the same “secrecy” lines for over 20 years. In fact, if you replaced “NAFTA” with “TPP” in those old Ross Perot commercials, they’d be almost indistinguishable from the ones on our TVs today.

  • Finally, unlike the oft-analogized Obamacare legislation, the actual text of any final TPP deal will be required by law to be publicly available (online) for months—yes, months—before Congress votes on it. As you can see from the table below (source), under TPA the president must make the entire text of any trade agreement, including TPP, available to the public for 60 days before he can even sign it.Once it’s signed, Congress will have weeks, maybe months, to scour the deal, hold “mock markups” in various committees, and suggest changes to the agreement before the president sends Congress legislation implementing the FTA for a final vote. Also, within 105 days of the FTA’s signing, the U.S. International Trade Commission must issue a report on the deal’s economic impact—again prior those bills being submitted to Congress. And once the bills finally are submitted, Congress will then have up to 90 legislative days (which is like five months in normal human days) to review the bills and hold final votes.

Bottom line: when or if TPA is passed, the general public will have months—and if the presidential elections interfere, maybe years—to review the TPP before Congress acts on it. Think that’s crazy? Well, it’s precisely what happened to U.S. FTAs with Colombia, Panama and South Korea, which were signed by President Bush but sat around (online) for years before they were submitted to, and passed by, Congress in 2011.

Myth 6: FTAs, completed via TPA, undermine U.S. sovereignty!

Totally false, as Watson and I explained last year:

FTAs embody unenforceable promises governments make to each other. Domestic governments—here, Congress—retain the sole authority to ignore those promises and violate international commitments, and they (unfortunately) do so frequently. Foreign governments cannot force their trading partners to comply with the terms of an FTA—the only extra-national consequence of a violation is that other parties to the agreement may abrogate their commitments in a commensurate amount (e.g., by raising tariffs on imports from the United States from levels that were lowered in the FTA). Moreover, every U.S. trade agreement permits the parties to act outside the agreed disciplines in the name of, among other things, national security, public health and safety, or environmental protection. Thus, the idea that TPA and FTAs violate U.S. sovereignty or regulatory autonomy is patently false.

These principles hold true for the TPP, including its dispute settlement and controversial “investor-state” provisions. Despite what Warren (and some media outlets) would like you to believe, there is nothing—absolutely nothing—that can force the United States to comply with an adverse dispute settlement ruling issued under the TPP or any other U.S. trade agreement. Period.

But, hey, if you don’t believe me, here’s Attorney General Meese again:

Future trade deals would not be unconstitutional, nor would they undermine U.S. sovereignty, if they contained an agreement to submit some disputes to an international tribunal for an initial determination. The United States will always have the ultimate say over what its domestic laws provide. No future agreement could grant an international organization the power to change U.S. laws.
A ruling by an international tribunal that calls a U.S. law into question would have no domestic effect unless Congress changes the law to comply with the ruling. If Congress rejects a ruling or fails to act, other countries might impose a trade sanction or tariff, but they are more likely to impose high tariffs now without any agreement. The fact remains that no international body or foreign government may change any American law. Moreover, Congress may override an entire agreement at any time by a simple statute. Nations also may withdraw from international agreements by executive action alone. That is one reason why such agreements do not interfere with the underlying sovereignty of each nation to chart its own course in the world. In short, the U.S. Constitution and any laws and treaties we enact in accordance thereto are the only supreme law of our land.

If that’s not clear enough for you, then I don’t know what is.

Myth 7: TPP is a secret backdoor for a parade of horribles (and TPA lets that happen)!

Totally false. Various politicians and pundits have sought to arouse suspicions by claiming, among other things, that TPA will permit President Obama to bypass Congress and use the TPP as a backdoor to, among other things, lawlessly expand immigration, curtail gun rights, or restrict Internet freedom. At this point, however, I hope you can see just how ridiculous these claims are. Regardless of the issue, the fact will always remain that nothing can be implemented via the TPP unless Congress agrees to implement it via a formal vote.

This would include things like new work visas (something that U.S. FTAs haven’t actually done for years now) or Internet regulations or gun rules or minimum wages or whatever: it all has to become law before it has any legal force, and the only people making law are Congress (and, again, according to their own procedural rules). So, if in the TPP the president committed the United States to toss every AR-15 into the Atlantic Ocean, those guns aren’t going anywhere unless Congress formally agrees, subject to all of the constitutional, procedural, and transparency rules already discussed.

And, really, do you think this Congress is going to do anything of the sort? Really? (For more specific debunking of these crazy ideas, go here, here, here and here.)

We still don’t know precisely what’s in the TPP, and final judgment—by Congress and the public—should therefore be withheld until we do. But the idea that TPP, empowered by TPA, will grant President Obama any new legal authority to ignore or change U.S. immigration or gun or whatever laws without Congress is simply ludicrous.

Myth 8: FTAs (and free trade generally) benefit large corporations at the expense of working people!

Mostly false. There is little doubt that FTAs benefit some U.S. corporations and workers, while harming others—that’s kinda free-market competition’s thing.

SHOCK: FTA predicted to reflect/amplify USA’s comparative advantages & disadvantages: http://t.co/PUgLrpL3O8 pic.twitter.com/INypfluXSk — Scott Lincicome (@scottlincicome) March 16, 2015

In general, however, the corporate winners (who tend to be in growing, innovative industries) from U.S. FTAs outnumber the losers (who tend to be in archaic, uncompetitive ones). And every legitimate economic analysis of the TPP confirms this general rule. FTAs also contain rules and exceptions for well-connected stakeholders. As I’ve repeatedly discussed, this is a big reason why FTAs are “third best” option for U.S. trade policy.

Nevertheless, there is also little doubt that (i) FTAs are pretty much the only trade liberalization game in town these days; (ii) while unpalatable, the cronyist exceptions in U.S. FTAs, are relatively minor compared to the overall liberalization; and (iii) the biggest winners from such liberalization aren’t corporations or the mega-rich, but consumers, particularly poor ones.

Hey, average American [especially low-income ones], here’s how you benefit from free trade http://t.co/0T2XnveplW pic.twitter.com/sLf8p6p62c

— Scott Lincicome (@scottlincicome) May 20, 2015

(More here.) These gains wouldn’t be possible without FTAs (as much as we free traders wish they would be).

Good oped from NRF’s Matt Shay on how US FTAs, made possible by #TPA, benefit US consumers: http://t.co/PLck4zo6dI pic.twitter.com/0IYlQwwV0L — Scott Lincicome (@scottlincicome) May 11, 2015

Thus, the idea that FTAs like the TPP, or any other reduction in global trade barriers, benefit the 1 percent at the expense of working class is just not true. Indeed, as we at the Cato Institute are constantly pointing out, the real cronyism in trade policy takes place on the anti-trade side of the ledger: corporations and unions lobbying government to shield them from free-market forces, always at consumers’ expense. It’s precisely for this reason that many of the U.S. lobbying dollars spent on TPP aren’t from pro-export mercantilists (although there are plenty of those, too) but from those anti-competitive industries (autos, steel, textiles, sugar, etc.) and unions that are seeking to scuttle the deal or secure their own special exemptions.

Myth 9: TPA doesn’t matter!

Mostly false. Look, in an ideal world, all of these trade deals would be totally unnecessary: every government in the world would lower its trade barriers, kill its subsidies, and trade freely across borders, thereby enriching us all in the process. But that’s not our world. And even though some pro-TPA rhetoric is exaggerated, the legislation still has value for at least one big reason: U.S. trading partners take it seriously and won’t sign off on a final deal with the United States until TPA’s in place.

Indeed, over the last few months, officials from Japan, Canada, and Chile (among others) have each made clear that their governments won’t finalize TPP until Congress passes TPA. And, again, it’s precisely for this reason that U.S. protectionists are spending major dollars to stop TPA: they don’t really think it’s going to destroy constitutional democracy and install a world government ruled by Emperor Obama; they just oppose free trade or the TPP. And they’re more than happy to prey on conservative insecurities to achieve their goal.

Since the 1940s, the United States, whether governed by Democrats or Republicans, has been the world’s leader on global trade policy. This leadership, due in part to President Obama’s mismanagement and disinterest, has waned in recent years. A defeat for TPA—and any resulting death of the TPP—would accelerate this decline.

There are legitimate (although not horrifying!) concerns about the contents of the final TPP deal, but it’s certainly not a harbinger of an economic or constitutional apocalypse. The American public should scrutinize the final agreement closely, but that won’t happen until TPA becomes law. For supporters of free markets, there’s no legitimate reason why it shouldn’t.

The federal Supplemental Security Income (SSI) program provides income to low-income, disabled individuals, including children. In 2014, SSI paid benefits totaling $56 billion to 8 million people. A new Government Accountability Office (GAO) report suggests that a substantial share of that money was spent improperly.

GAO reports that in 2014, SSI wasted $5.1 billion, or almost 10 percent of SSI spending, on improper payments. GAO says that much of the problem is due to SSI’s “management challenges that constrain its ability to ensure program integrity.” SSI is not conducting proper reviews of current beneficiaries in a number of ways.

First, SSI is failing to review files to ensure that beneficiaries continue to be eligible for benefits based on their health. When a person’s health improves, they are supposed to exit the program. According to GAO, SSI’s review backlog totaled 1.3 million files as of January 2014.  Eliminating this backlog would save SSI billions of dollars as ineligible persons would be removed from the program. For instance, children comprise 15 percent of SSI beneficiaries. In 2012 SSI had 435,000 children cases waiting to be reviewed. Many of those cases had been pending for review for six years. Seventy percent of those pending for six years involved cases where the child was projected to improve within three years. Likely, thousands of children received benefits for years past their eligibility due to SSI’s inability to conduct to reviews. GAO estimated that eliminating the backlog of reviews for children would save $1.3 billion over five years. Eliminating SSI’s entire backlog would save millions more.

Second, SSI is also failing to conduct appropriate reviews of beneficiaries’ financial information. SSI beneficiaries must earn less than $721 in monthly income ($1,082 if married) and have less than $2,000 in assets. SSI is supposed to review financial information on an ongoing basis to ensure that beneficiaries continue to be eligible, but that isn’t happening according to GAO.  Inappropriate financial reviews compose a large share of SSI’s overpayments.  It represented 37 percent in fiscal year 2011.

When SSI does find that an individual received too much in benefits, it rarely makes an individual repay the overage. In 2011, SSI approved 76 percent of overpayment waivers, meaning the individuals got to keep their excess payments.

These problems mirror those within the Social Security Disability Insurance program (SSDI) which operates in tandem with SSI. A report from last year highlighted that over 630,000 individuals were waiting to apply for benefits with hundreds of thousands waiting on appeals. SSDI’s trust fund will also be exhausted in late 2016.

Both SSI and SSDI need large-scale reform. Congress should use the opportunity of SSDI’s trust fund bankruptcy to reform these two programs. The issues within the programs are well documented.

Citing the work of David Burton and Richard Rahn, I warned last July about the dangerous consequences of allowing governments to create a global tax cartel based on the collection and sharing of sensitive personal financial information.

I was focused on the danger to individuals, but it’s also risky to let governments obtain more data from businesses.

Remarkably, even the World Bank acknowledges the downside of giving more information to governments.

Here are some blurbs from the abstract of a new study looking at what happens when companies divulge more data.

Relying on a data set of more than 70,000 firms in 121 countries, the analysis finds that disclosure can be a double-edged sword. …The findings reveal the dark side of voluntary information disclosure: exposing firms to government expropriation.

And here are some additional details from the full report.

…disclosure has important costs in allowing exposure to government expropriation… We show that accounting information disclosure can be detrimental to firm development… Such disclosure allows corrupt bureaucrats to gain access to firm-level information and use it for endogenous harassment. …once firm information is disclosed, the threat of government expropriation is widespread. Information disclosure thus allows rent-seeking bureaucrats to gain access to the disclosed information and use it to extract bribes. …Our paper offers a vivid illustration that an important hindrance to institutional development—here in the form of adopting information disclosure—is government expropriation. …The results are thus supportive of Acemoglu and Johnson (2005) on the overwhelming importance of constraining government expropriation in facilitating economic development.

Yet this doesn’t seem to bother advocates of bigger government.

Indeed, they’re using a Paris-based international bureaucracy to push a “base erosion and profit shifting” initiative designed to produce global rules that would give governments far greater access to business data.

Their goal is to extract more money openly with tax policy rather than surreptitiously with bribes, but the net effect will be just as bad for the global economy.

A new study from the Center for Freedom and Prosperity has the disturbing details.

Under direction of the G20, the Organization for Economic Cooperation and Development (OECD) began two years ago a major initiative on “base erosion and profit shifting” (BEPS). …Through the BEPS project, the OECD is continuing its war against tax competition.

For all intents and purposes, politicians from high-tax nations are using the G20 and OECD to undermine the liberalizing force of tax competition.

They want to rewrite international tax policy to prop up nations with uncompetitive tax systems.

[BEPS] would…lead to an overall higher tax environment as politicians freed from the pressures of global tax competition inevitably raise rates to levels last seen in the early 1980s, when reforms by Reagan and Thatcher sparked a global reduction in corporate tax rates that has continued to this day. Through tax competition, the average corporate tax rate of OECD nations declined from almost 50% in 1981 to 25% in 2015. …The [BEPS] Action Plan…considers the benefits of tax competition to be the real problem, explaining that “there is a reduction of the overall tax paid by all parties involved as a whole.” The prospect of there being less money to be spent by politicians is perceived as a problem to be solved.

Even though there’s no evidence of a problem, even from the perspective of revenue-hungry politicians.

Particularly since the OECD’s own data shows that corporate tax revenue keeps increasing, as noted in the CF&P study.

The OECD’s BEPS Report itself undercuts the argument that there is a pressing need for a global response when it acknowledges that “revenues from corporate income taxes as a share of GDP have increased over time.” Likewise, the Action Plan admits when discussing hybrid mismatch that “it may be difficult to determine which country has in fact lost tax revenue.”

So BEPS isn’t a response to the nonexistent problem of falling revenue. Instead, the real goal is to make it easier to impose higher tax rates and change other rules to raise additional revenue.

Even if the required policies have very troubling implications. As part of this new campaign against tax competition, here’s some of what the OECD is seeking.

Proposed recommendations for transfer-pricing documentation and country-by-country reporting, for instance, feature broad reporting requirements that go far beyond what is required for purposes of tax collection. …Information contained in the local and master files are particularly vulnerable, since it would take a breach in only a single jurisdiction for it to be exposed. The OECD makes assurances for the confidentiality of these reports, but they are empty promises. Such government assurances of privacy protection are contradicted by experience and the long history of leaks of taxpayer information. In the United States alone tax data has frequently been exposed thanks to inadequate safeguards, or even released by officials to attack political opponents. …Even without malicious intent, governments are ill equipped to protect sensitive information from outside access. …As poor as the United States has proven at protecting privacy, there are likely to be nations even more vulnerable. Through the master file and other reporting mechanisms, BEPS will demand of corporations propriety information and other sensitive data that they have every right to keep private.

Requiring more information is just one part of BEPS.

There are many other elements, all of which are designed to facilitate higher tax burdens. Indeed, the Wall Street Journal warned that, “this is an attempt to limit corporate global tax competition and take more cash out of the private economy.”

But as bad as BEPS is now, the study from the Center for Freedom and Prosperity explains it will get worse over time.

Of particular relevance for understanding the BEPS initiative is the pattern demonstrated by the OECD during the course of this campaign. After each recommendation was widely adopted – typically under duress in the case of low-tax jurisdictions – the OECD immediately pushed a new requirement that was more radical and invasive than the last. First was a call to adopt a certain number of Tax Information Exchange Agreements and a standard of information exchange upon request, then a peer-review process whereby tax policies are judged according to the standards of high-tax welfare states. Then, after years of meetings and costly compliance efforts, the old standard for information exchange upon request was replaced with a call for global automatic exchange.

The OECD’s strategy of moving the goalposts is worth noting because the BEPS project almost certainly will evolve in ways that enable ever-higher tax burdens.

I predicted back in 2013 that the end result will be “global formula apportionment,” a system that would enable dramatically higher tax burdens on the business community.

And I’m sticking with that prediction, in part because that’s what would be in the interests of politicians from high-tax nations. If national governments were able to tax on the basis of what companies sold inside their borders, regardless of how much income actually was being earned, there would be very little competitive pressure to keep tax rates reasonable.

Politicians could push corporate tax rates back up to 50 percent, or even higher.

The folks on the left certainly would like that kind of system. Here are some excerpts from a CNN story.

It’s time for a complete overhaul of the global tax system to ensure each company pays their fair share, says Nobel laureate Joseph Stiglitz. …”Multinational corporations act and therefore should be taxed as single and unified firms. It is time for our [political] leaders to be bold,” Stiglitz said. …Stiglitz said that creating a new worldwide tax system is realistic, but all nations would have to work together to agree rules and close loopholes. The group of economists said in a statement that it was critical to “curb tax competition to prevent a race to the bottom.” Developed nations should take the first step by agreeing on a minimum rate of corporate tax, possibly under the auspices of the Organisation for Economic Cooperation and Development. …The economists also suggest establishing an intergovernmental tax body within the United Nations that would combat abusive tax practices.

The bottom line is that politicians and statist interest groups both want to extract more money from the productive sector of the economy.

And OECD bureaucrats have been assigned the task of crafting rules to undermine tax competition so that companies can’t escape those higher burdens.

Developing new rules is actually the easy part. The hard part is when the bureaucrats try to rationalize how higher tax rates and bigger government are somehow good for the global economy.

Particularly since economists who work at the OECD have written that lower tax rates and tax competition result in better economic performance.

P.S. To add insult to injury, American taxpayers provide the biggest share of the OECD’s budget. This means that our tax dollars are being used to generate policies that will result in higher tax burdens. Which is why I’ve argued, on a per-dollar-spent basis, that subsidies to the OECD are the most destructively wasteful part of the federal budget.

P.P.S. And to add insult upon insult, OECD bureaucrats get tax-free salaries, so they are insulated from the negative effects of policies they’re trying to impose on the rest of the world.

There is an old lawyers’ adage: “When the facts are on your side, argue the facts. When the law is on your side, argue the law. When neither are on your side, pound the table.” President Obama will deliver a speech today in which he pounds the table with the supposed successes of the Affordable Care Act. The address is part effort to influence the Supreme Court’s upcoming decision in King v. Burwell, part effort to spin a potential loss in that case.

The problem is, those supposed successes are not due to the ACA. They are the product, two federal courts have found, of billions of dollars of illegal taxes, borrowing, and spending imposed by the IRS at the behest of the president’s political appointees.

The president can pound the table all he wants about his theories of what Congress intended, or how, in his opinion, those illegal taxes have benefited America. No speech can change the fact that he signed into law a health care bill that makes it unmistakably clear that those taxes and subsidies are only available “through an Exchange established by the State.” If he didn’t like that part of the bill, he shouldn’t have signed it.

The president thinks it is “a contorted reading of the statute” to insist on the unmistakably clear distinction Congress drew between Exchanges established by “States” versus the federal government. The Congressional Research Service disagrees. So do the D.C. Circuit, and even the Fourth Circuit. Even Harvard law professor Noah Feldman says the president’s theories “seem forced.”

Two federal courts have found the law is clear, and the president is on the wrong side of it. The president would rather that you not focus on that small detail. But the Supreme Court’s job is to hold the president to the law he enacted. Let’s hope they do. Because if the Court instead allows the IRS to tax and spend without congressional authorization, the disruption will be much greater than any caused by ObamaCare.

Last week the Environmental Protection Agency released a study that concluded that hydraulic fracturing, so-called “fracking” of oil and natural gas wells, does not contaminate drinking water, except in extremely unusual cases involving improper drilling techniques. The study should reduce the concerns of some of the technique’s vocal critics whose fears have led to restrictions on its use.

The EPA study reviewed the results from thousands of wells and found few faults with the drilling technique. When problems occurred, they stemmed from improperly sealed wells, which can affect any oil or gas well and not just those that utilize hydraulic fracturing.

More evidence about the costs and benefits of fracking appears in the forthcoming summer issue of Regulation. The Barnett shale area splits the Dallas–Forth Worth area in half; all of the wells are in the western part of the metro area. Because many other factors are constant within the metro area, this geological accident allows researchers to determine whether shale development produces net benefits and thus increases housing values. Read the full study here.

In Texas the value of oil and gas rights is part of the local property tax base. Thus localities receive tax revenues from oil and gas development and can finance local public amenities without increasing property taxes. Over the entire 1997–2013 period, houses in the shale ZIP codes in the Dallas–Fort Worth area appreciated 5 to 6 percentage points more than houses in non-shale ZIP codes. These results suggest that improved local finances have more than offset whatever disamenities result from shale development for the typical homeowner. “Fracking” is just another drilling technique, and needs to not be regulated in any special way beyond that of normal oil and gas drilling.

Environmentalists often assume that free markets work against their goals. But the market is the best friend of the natural world because it generates constant pressure to innovate, to cut costs, and to use resources efficiently. The price system prompts consumers and businesses to minimize consumption of dwindling resources. To ease California’s water problems, for example, we need markets not regulatory controls.

The Wall Street Journal today has a pair of stories on scrap metal recycling:

Waste has long been a major U.S. export, providing material to be melted in foreign steel mills or made into new paper products. But the strength of the dollar has made American waste pricier abroad, cutting demand…

… That has been hard on the network of waste dealers and scrap gatherers who are the backbone of the industry. Bob Hooper, who goes by Hoop, finds discarded metal on curbs and in dumpsters around Pittsburgh and carries it to scrapyards in a rusting Chevy pickup with a bungee cord to keep the driver’s door shut.

… On a recent day, he hauled in more than 1,000 pounds of scrap, including two discarded refrigerators, a water heater and a broken microwave buried in egg shells and other moist trash. After gasoline expenses, he netted about $80.

From a related story in today’s Journal:

Wherever he goes in his Chevy pickup, Bob “Hoop” Hooper scans for discarded metal—a mangled bike, a broken microwave, even a beer can. “That’s like the No. 1 rule of scrapping,” Mr. Hooper, 48 years old, explained recently. “Don’t pass up metal.”

Scrapping—gathering metal and selling it to scrap dealers—is a tough job, involving excavations inside dumpsters, forays into dangerous neighborhoods and, lately, falling metal prices.

… Most mornings he hits the road around 9 a.m., and by late afternoon has filled the back of his pickup and earned anywhere from $40 to several hundred dollars at scrapyards. In the evening, he dismantles appliances and sorts valuable metals like copper and brass into plastic buckets. “It gives me something to do while I’m watching TV,” he said.

One regular stop is a housing complex with 31 dumpsters. On a recent morning, he found an umbrella and a mop in one. “It don’t seem like much, but as long as you’re getting something from every stop, it piles up,” he said.

Green groups often confer awards on politicians who press for more control over markets. But they should instead champion people like Bob Hooper. He is devoting his career to recycling, which is helping to reduce landfill waste. His work also boosts the economy, which we know because he is earning a net return in the marketplace.

Bob Hooper has a dirty job, but he is creating a cleaner environment the market-based way.

If I had more time I’d write at greater length about this already infamous New York Times op-ed on student loans – which conspicuously fails to mention that the writer apparently got all of his degrees from pricey Columbia University – but the piece largely condemns itself. What I think is worth contemplating is how far out of mainstream thinking its sentiments are. Alas, maybe not that far.

No doubt most of the public wouldn’t support people not repaying their student loans just because they don’t like them, but the idea that freely chosen debt should be forgiven or curtailed is getting lots of play, from President Obama’s push for programs that would lead to forgiveness for big borrowers, to Senator Elizabeth Warren’s private debt buy-up proposal. And calls for free college are roughly the equivalent of calls for loan forgiveness. No, they aren’t saying that borrowers should renege on commitments they’ve already made, but they are saying that the college cost burden should be dropped even more squarely on the shoulder of taxpayers going forward.

Of course the ultimate problem, beyond the immediate, crushing cost, is that the more you have other people pay for students’ decisions, the more wasteful those decisions will tend to be. And even at current subsidy levels, those decisions are very, very wasteful. But that’s what happens when politicians decide taxpayers should never get in the way of a student’s bliss.

Over at Cato’s Police Misconduct Reporting Project, we have identified the worst case for the month of May.  It was was the death of Matthew Ajibade.

Ajibade’s girlfriend called the police because he was having a bipolar episode.  Georgia deputies arrested Ajibade but then took him to the jail instead of a hospital.  At the jail, he was placed in a restraint chair.  Deputies reportedly fired stun guns at him while he was restrained in the chair and then left him unattended in an isolation cell.  Ajibade, 22, died and the coroner now says it was homicide

Nine deputies were fired over the incident and a criminal investigation is on-going.

Last Friday a group of teenagers attended an end-of-year party at a community swimming pool in McKinney, Texas. According to some of the teens at the pool police were called to the scene after adults made racist remarks and a fight between adults and the teens began. A McKinney Police Department Facebook post states that officers responded to reports of “a disturbance involving multiple juveniles” who did not have permission to be at the pool.

One of the teens, 15-year-old Brandon Brooks, filmed the encounter between the youths and police officers. The video, which can be viewed below, shows officer Eric Casebolt handcuffing two teens before throwing a 14-year-old girl to the ground, using his knees to pin her, and pulling a gun on unarmed bystanders - something he is caught on camera denying. The girl was later released without charge.

Warning: This video contains profanity

“Super Trooper” Cops Crash Pool Party And Target Black Kids in McKinney, TX (Dallas)

Casebolt, who has been placed on administrative leave following the incident, was named Patrolman of the Year in 2008 and is reportedly a vice president of the McKinney police union. He was also once an instructor at Executive Self-Defense and Fitness, and was described on that company’s website as someone with “experience in the use of all levels of force” and “a strong working knowledge of human behavior.”

It is hard to imagine the incident earning as much attention as it has without Brooks’ footage, which serves as another reminder of how important it is that citizens film the police. In the forthcoming investigation into the incident Casebolt will not be able to plausibly claim that he felt threatened by a 14-year-old girl and that his use of force against her was justified. Nor will he be able to claim that he did not unholster his weapon and point it at unarmed teens.

Citizen footage of police officers can be instrumental in investigations into allegations of police misconduct. Today a grand jury indicted former North Charleston, South Carolina police officer Michael Slager for the killing of Walter Scott, whose death was caught on camera by an onlooker. Scott was shot multiple times in the back while running away from Slager. I wrote about Walter Scott’s death in April, noting how footage of the killing contradicted what was included in police reports.

The Cato Institute released a video on citizens filming police officers in 2010. It can be viewed below.

Cops on Camera

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