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This small news bite from the Washington Post yesterday caught my eye:

Moving costs: Booz Allen Hamilton, the McLean, Va., consulting and government contracting giant, is receiving a $750,000 loan from a Maryland economic development fund and a grant of $250,000 from Montgomery County to relocate 750 Maryland workers from offices in Rockville to a new 65,000-square-foot workplace in Bethesda by the end of 2019.

This strikes me as absurd.

The economy is growing strongly, and yet one of the highest-income states is dishing out “economic development” subsidies to a big, profitable company in one of the nation’s wealthiest counties. The move is entirely in-county, so officials can’t even claim they are attracting new jobs to the area.

Booz Allen Hamilton lives high on the hog from government contracts, receiving about $4 billion a year. It is a true Beltway Bandit, ranking as one of the largest federal contractors, and gaining almost all of its growing revenues from governments. One of the great things about the government as a client is that you can make tens of millions of dollars even when projects fail.

Why would Maryland and Montgomery County want to fatten Booz Allen’s bottom line with subsidies to cover its routine expenses? Are they going to pay moving expenses for every local business, or is the idea to give this Beltway Behemoth an advantage over smaller firms with less lobbying power?  

Shame on Maryland officials for wasting taxpayer money, and shame on Booz Allen for taking it. 

In a December 28, 2017 column for the Washington Post entitled, “Opioid Abuse in the US Is So Bad It’s Lowering Life Expectancy. Why Hasn’t the Epidemic Hit Other Countries?,” Amanda Erickson succumbs to the false narrative that misdiagnoses the opioid overdose crisis as being primarily a manifestation of doctors over-prescribing opioids, goaded on by greedy, unethical pharmaceutical companies. The National Survey on Drug Use and Health revealed less than 25% of people using opioids for non-medical reasons get them through a prescription. A study reported in the Journal of the American Medical Association found just 13% of overdose victims had chronic pain conditions. Multiple Cochrane analyses show a true addiction (not just dependency) rate of roughly 1% in chronic pain patients on long-term opioids. Yet despite the 41% reduction in the prescription of high-dose opioids since 2010, the overdose rate continues to climb, and for the past few years heroin and fentanyl have been the major causes of death, as death from prescription opioids has stabilized or receded.

In actual fact, the rise in drug abuse and overdose is multifactorial, with socioeconomic and sociocultural components. This helps explain the Washington University study reporting 33% of heroin addicts entering rehab in 2015 started with heroin, as opposed to 8.7% in 2005.

It also helps explain why, contrary to Ms. Erickson’s reporting, opioid overdoses have reached crisis levels in Europe, despite a European medical culture that historically has been stingy with pain medicines, and has encouraged stoicism from patients. And the overdose crisis in Canada, ranked second in the world for per capita opioid use, has alarmed public health authorities there. But at least the Europeans and Canadians have the good sense to emphasize harm reduction measures to address the crisis, such as safe injection rooms and medication-assisted treatment, rather than focusing on inhibiting doctors from helping their patients in pain.

 

 

President Trump began 2018 by tweeting about Pakistan. He wrote that over the last 15 years, the United States has “foolishly” given $33 billion in aid to Pakistan for “nothing but lies & deceit” in return. He ended his tweet by saying, “They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!” The tweet was followed by UN Ambassador Nikki Haley’s announcement that the United States would be withholding $255 million in military assistance to Pakistan because of the “double game” they have been playing for years by harboring terrorists that attack U.S. troops in Afghanistan. 

Pakistan’s reaction was predictable: there was official outrage, with the Pakistani government summoning U.S. ambassador David Hale to the foreign office to explain the tweet. Foreign Minister Khawaja M. Asif tweeted that the world would soon find out the “difference between fact and fiction,” while the Ministry of Defense tweeted that Pakistan has been an ally to the United States, giving free access to “land & air communication, military bases & intel cooperation that decimated Al-Qaeda over last 16yrs.” Riots broke out in Karachi, with protestors shouting anti-American slogans and burning the U.S. flag. Finally, this morning, Foreign Minister Asif stated that Pakistan no longer sees the U.S. as an ally.

Is Pakistan overreacting? What impact will all of this have on the war in Afghanistan and future U.S. troop withdrawal?  

Despite the ostentatious barbs from both sides, it isn’t all that clear yet what kind of assistance, and how much of it, is actually being withheld. Pakistan has received aid through several programs, such as the coalition support fund (CSF), a reimbursement program in which the United States pays Pakistan for using its military bases, and foreign military financing (FMF), a loan or grant that allows countries to purchase U.S. defense equipment, services, and training. The Trump administration is currently withholding the FMF, not the CSF. Considering how lucrative the CSF has been for Pakistan, Islamabad’s response to Trump’s tweets is an overreaction, which also explains why Pakistan’s National Security Committee has decided not to take any retaliatory actions against the United States.

Like sanctions, cutting foreign aid rarely changes state behavior. With respect to Pakistan, in 2013 the Obama administration did cut the Pakistan Counterinsurgency Fund, which was established in 2009 to provide training and equipment to Pakistan’s military and paramilitary force for domestic counterinsurgency operations in the Federally Administered Tribal Areas. Yet, here we are again with a new administration, a new year, and the same discussion: the United States wants Pakistan to stop aiding and abetting the Haqqani Network and Afghan Taliban.

While U.S. military assistance to Pakistan needs to be evaluated, cutting the CSF outright will hurt U.S. troops in Afghanistan more than changing Pakistan’s militant sponsorship for one main reason: the most efficient supply routes to Afghanistan are through Pakistan. If the CSF is eliminated, Pakistan could simply shut down the routes as it has done in 2010, 2011, 2012, and 2014. In fact, Pakistan’s parliament discussed shutting down the supply routes again this past summer. Professor Christine Fair’s suggestion of using Iran’s Chabahar Port as an alternative route is interesting, but as she points out, highly unlikely given U.S.–Iran relations. Basically, the U.S. is stuck with Pakistan, especially so long as U.S. troops remain in Afghanistan.  

Without Pakistan, the United States will have an even harder time achieving a feasible and practical political resolution in Afghanistan, which will involve both Pakistan and the Afghan Taliban. The CSF, therefore, still provides the United States with some leverage with the Pakistanis despite its problems.

I remain optimistic about diplomacy, and think it can work. Both the United States and Pakistan want the Afghanistan war to end and U.S. troops to withdraw. But today, that’s about all they can agree on. They have very different visions of what a post-conflict Afghani government will look like. Pakistan has always thought that the Taliban will be an active player and that they can’t be defeated so they want to make sure that when the Americans leave (regardless of when), they have a strategic ally in Kabul. The United States doesn’t want to reconcile/negotiate/talk (etc.) with the Taliban, which is a mistake—and something the U.S. is beginning to realize. Basically, for a successful U.S. withdrawal, it needs to be done hand-in-hand with diplomacy.

Therefore, if the president wants Pakistan to change its behavior, he has to learn about the kinds of military assistance Pakistan has been receiving over the years, and then use diplomacy to meet U.S. interests in Afghanistan. But first, he needs to stop tweeting. 

Did we experience heavenly peace in public schools this December? No, but the month tends to be more peaceful than most. With schools typically out for about the latter third of the month, there’s just less time to fight. We also, though, observed something that was out-of-the-ordinary peaceful for the month: no conflicts over Christmas in schools hit our radar. The last time that happened was in 2010. Every other year going back to 2005 we catalogued at least one, and typically three or four, battles over Christmas displays, singing religious carols in concerts, or other Christmas-related flaps. (The Map, by the way, lists years going back to 2001, but we only started collecting in 2005, and any years before that are there because conflicts we found in 2005 or later originated in those years.) Is this absence of acrimony because President Trump ended the war on Christmas? It’s just as likely that he sucked up so many headlines that less reporting was directed at Yuletide tiffs, but it could also be there just weren’t any significant Christmas battles in public schools this year.

Of course, there were some battles, including a couple of trends:

  • Dress Codes: This was also a trend in November, and in December it included an Iowa district dress coding a cancer patient who wore a knit beanie after a round of chemotherapy, and a girl in Kentucky who was sent home for an exposed collarbone.
  • Teacher Language: In New York City, a teacher who is also a comedian, and whose act is about her experiences as an educator, came under fire because part of her show involved her quoting an unidentified child saying, “Yo, n—a. What’s poppin’?” Meanwhile, a Colorado teacher was placed on administrative leave for writing on the classroom whiteboard, “I want to kill children but I am a loving Christian man who never would hurt a flee (sic) so please sit down and read.” Some parents believed it was a joke and supported the teacher.

Perhaps the biggest headline-grabbing incident of the month was the firing of a teacher in Utah for, he says accidentally, allowing grade school children to see some famous nude paintings, setting off a dispute over where art ends and indecency—or age inappropriateness—begins. This does not constitute a trend—there are no similar fights over nude paintings in the Battle Map database—which is perhaps a bit of a surprise. It could be, like teaching rigorous evolution, that most art teachers skip nudes to avoid controversy. Or perhaps most art taught in schools simply never reaches that level of sophistication. Or maybe people just aren’t that uncomfortable with nude paintings.

No matter what the reason for the dearth of art vs. decency battles, our newest (unscientific) poll on the Battle Map Facebook page asks whether schools should show nude paintings or sculptures in class. (By the way, you’ll love Venus’s shirt.) Vote now! Earlier December polls found 79 percent of respondents opposing corporal punishment in schools and 21 percent supporting it; 65 percent saying public schools should “formally recognize Christmas with displays, songs, or parties” and 35 percent opposing; and 74 percent believing that 2018 will be even more contentious in public schools than was 2017.

Will that 74 percent be correct? Stay tuned!

Today, Attorney General Jeff Sessions announced that the Department of Justice rescinded the “Cole Memo,” and other internal enforcement guidelines from the Obama Administration that de-prioritized enforcement of federal marijuana prohibition against individuals and businesses complying with state laws regarding recreational marijuana. This move endangers state-legal businesses and violates the principle of federalism that has been central to the Republican Party for decades.

This was made possible, in part, by the failure of the judiciary to rein in the power of an overzealous federal government. The Supreme Court has twice approved of this type of overreach. In Wickard v. Filburn (1942) and Gonzales v. Raich (2005), the Court ruled that individuals growing crops exclusively for personal consumption—wheat and marijuana, respectively—could be regulated by the interstate commerce clause of the U.S. Constitution despite the crops never entering a market of any kind, let alone across state lines.

While the average marijuana consumer is not going to be targeted or arrested by the federal government, business owners directly and indirectly involved in state-legal recreational marijuana distribution may see their freedoms and livelihoods threatened by this action. Put simply, the DOJ is using the criminal law to trample on state prerogatives and individual rights.

My colleague Jeffrey Miron has also commented on this unfortunate development. For more on how Republicans could more responsibly handle federal marijuana policy, see here and here.

From President Donald Trump to the rise of new nationalist political parties in Europe to a general resurgence of the term in recent years, nationalism seems to be on the march.  Nationalism is a political movement that has made major inroads in recent years while preaching a message of immigration restrictionism, trade protectionism, and a stronger government devoted to defending citizens from (mostly) imaginary harms.  But besides some policy positions and a style of governance, there is not a good working definition of nationalism widely used in popular discourse and there is almost no attempt to distinguish it from patriotism.  My base assumption was that nationalism must be something more than crude jingoistic tribalism, but few ventured beyond that.  Those reasons prompted me to read several thousand pages on the topic – and I learned quite a bit.  Below are some lessons I learned and a useful taxonomy of different types of nationalism.

The first thing I learned is that most research on nationalism is terrible.  Most writers on this subject poorly define their terms or define them so broadly that they are meaningless.  I wish I could go back in time and tell an earlier version of myself to skip lots of papers and books.  Even worse, many scholars of nationalism are either critics or supporters of the concept, which forces them to make absurd statements like claiming that the National Socialist German Workers Party wasn’t a nationalist political party.  This makes it difficult for lay outsiders like myself to figure out what nationalism is.

The second thing I learned is that there is no simple division between patriotism and nationalism, but George Orwell’s division probably comes closest when he wrote:

Nationalism is not to be confused with patriotism. Both words are normally used in so vague a way that any definition is liable to be challenged, but one must draw a distinction between them, since two different and even opposing ideas are involved. By ‘patriotism’ I mean devotion to a particular place and a particular way of life, which one believes to be the best in the world but has no wish to force on other people. Patriotism is of its nature defensive, both militarily and culturally. Nationalism, on the other hand, is inseparable from the desire for    power. The abiding purpose of every nationalist is to secure more power and more prestige, not for himself but for the nation or other unit in which he has chosen to sink his own individuality. 

In other words, patriotism is love of country while nationalism is love of country combined with dislike of other countries, their peoples, or their cultures.  Nationalism also extends to dislike of fellow citizens who are different, which is why nationalists frequently support nation-building campaigns of government schooling to assimilate citizens to a state-determined norm, national languages, and other means of creating ethnic, religious, or other forms of uniformity.    

The third thing I learned is that there are at least five types of nationalism.  Obviously, the nationalism of Edmund Burke or George Washington is different from the blood-worshipping nationalism of Adolf Hitler, but only the late American historian Carlton J.H. Hayes divides these types of nationalism into a useful five-part taxonomy:

  1. Humanitarian Nationalism:  An outgrowth of Enlightenment philosophy influenced by Henry Bolingbroke, Jean-Jacque Rousseau, and Johann Gottfried Herder, who all emphasized local self-rule through democratic forms of government based on the peculiar characteristics of each nation (body of people), as opposed to the large multi-ethnic empires that then dominated Europe.
  2. Jacobin Nationalism:  A state ideology adopted by the revolutionary French government to solidify its hold on power.  Its four characteristics were suspicion and intolerance of internal dissent, heavy reliance on force and militarism to attain government goals,  fanatical support for the state, and a missionary zeal to spread their nation. 
  3. Traditional Nationalism:  A brief nationalist reaction to the Jacobins in favor of the status quo ante bellum.  This is the most conservative type of nationalism.  Edmund Burke, Friedrich von Schlegel, and Klemens von Metternich were the most well-known supporters of this brief style of nationalism.  This form of nationalism did not survive long, as the cultural changes begun by the Industrial Revolution undermined it. 
  4. Liberal Nationalism:  This style of nationalism is midway between the Jacobin and Traditional varieties.  It emphasizes the absolute sovereignty of the national state but, in seeming contradiction, also seeks to limit the power of the government to interfere with individual liberty by proclaiming the goal of the state to be to protect individual liberty and provide public goods.  If you have ever taken an economics class, the ideal of liberal nationalism comes closest to what economists think of as the proper role of the state.  If you also see the tensions between absolute sovereignty and the protection of individual liberties, then the next phase of nationalism should be unsurprising.    
  5. Integral Nationalism:  This stage of nationalism centers the nation and its state in the life of all citizens.  Instead of a state being committed to supplying public goods to citizens, this form of nationalism emphasizes individual sacrifice for the benefit of the nation and its government.  It also frequently embraces blood-worship (the Latin root of nationalism is natio, meaning tribe, ethnic group, or division by birth) and seeks to expand the state to include all co-ethnics living in other territories.  Hayes summarized this form of nationalism as intensely “anti-individualistic and anti-democratic”, where all other loyalties are absorbed into loyalty to the national state and a right-makes-right ideology.   

The third thing I learned is that imperialism is the highest stage of nationalism (not capitalism as Lenin thought), and is inseparable from Jacobin Nationalism, Integral Nationalism, Traditional Nationalism, and probably from the other varieties as well.  Nationalists seek to expand their nations, and imperialism was one way to accomplish that goal.  Many of the liberal nationalists of the 19th century expanded their colonial empires, while the integral nationalists went even further.

The fourth thing I learned is how linked the French Revolution is to the rise of nationalism.  Most writers, especially conservatives, write off the French Revolution as a mad left-wing Jacobin craze that swept away institutions and traditions in favor of worshipping reason.  Those things were part of the French Revolution and its chaotic aftermath, but it was also a deeply nationalistic revolution and movement, honed by the Ancien Regime’s creation of a “cult of the nation” in an attempt to lower the cost of military conscription in the 17th and 18th centuries.  It is entertaining to see modern conservatives criticize the French Revolution on one hand while embracing an eerily similar form of Jacobin Nationalism on the other in their recent flirtations with populism. 

The fifth thing I learned is that nationalism is the second deadliest political ideology of the 20th century after communism.  The late political scientist RJ Rummel estimated the number of people killed by different governments over time.  Communist governments killed about 150 million people in his estimation.  Nationalists killed about 92 million.  Those 92 million include those killed by the Chinese Nationalists, Japanese Nationalists, Turkish Nationalists, and by the European Nationalists in the colonial era.  I excluded slaughters committed by pre-communist Russians, Mexicans, and Pakistanis, as they were less outwardly nationalistic than the other regimes.  American conservatives and libertarians frequently, loudly, and rightly criticize Communists for their ideology’s legacy of slaughter.  It’s time we all start criticizing nationalists for their ideology’s not-as-bad-but-still-evil legacy of brutality. 

Some nationalists, like Thierry Baudet, are seeking to redefine nationalism is nonsensical ways such as claiming that nationalists can’t be imperialists which, if true, would mean that the age of European nationalism could not have begun until about 1997, when decolonization was largely complete.  Regardless, the brutal humanitarian legacy of nationalist governments is something that serious nationalist thinkers must grapple with, rather than attempting to change definitions as communists do when they claim that the Soviet Union wasn’t really communist in an attempt to excuse its crimes.        

Nationalism is a simple and relativist political ideology that holds tremendous sway with millions of voters and many governments.  Nationalism’s adaptability to most local conditions allows it to thrive, especially when supported by a government intent on expanding its own power domestically and internationally.  It’s an attractive ideology for political leaders, as it provides a ready-made and widely-believed justification for increased political power in order to Make the Nation Great Again.       

From the AP:

Attorney General Jeff Sessions is going after legalized marijuana. Sessions is rescinding a policy that had let legalized marijuana flourish without federal intervention across the country.

That’s according to two people with direct knowledge of the decision. They were not allowed to publicly discuss it before an announcement expected Thursday and spoke on condition of anonymity.

The move will leave it to U.S. attorneys where pot is legal to decide whether to aggressively enforce federal marijuana law. The move likely will add to confusion about whether it’s OK to grow, buy or use marijuana in states where it’s legal, since long-standing federal law prohibits it.

The decision comes days after California began selling recreational marijuana.

Sessions compares marijuana to heroin and blames it for spikes in violence.

While not unexpected, this is terrible news.   

Marijuana liberalizations (decriminalization, medicalization, and legalization) have generated none of the negatives asserted by Sessions; in fact, the evidence shows minimal impact on use, health, traffic safety, education, or crime. 

The one consistent impact of legalization has been a modest bump in state tax revenue.  Libertarians might have mixed feelings about this, but it’s a far cry from Sessions’ baseless assertions.

At my Cato blog Overlawyered I’ve been pulling together month-by-month highlights of stories from last year. I’m currently up to May in the series. Here’s a small sampling of my favorites: 

Read the whole series here.

When does 32,200 – 60,000 = 109,000? That seemingly inaccurate equation represents the estimated number of Islamist-inspired terrorists when the war on terror began, how many the U.S. has killed since 2015, and the number that fight today. And it begs the question of just how can the terror ranks grow so fast when they’re being depleted so rapidly.

As early as 2003, then-Secretary of Defense Donald Rumsfeld hinted at the potential mathematical problem when he asked, “Are we capturing, killing, or deterring and dissuading more terrorists every day than the madrassas and the radical clerics are recruiting, training and deploying against us?” In his memo, Mr. Rumsfeld correctly identified that both sides have a vote: the U.S. can deplete the terror ranks, while the terror groups and their supporters can replenish them.

What Rumsfeld had not yet imagined, however, was the possibility that military force might inadvertently benefit terror recruitment efforts. Specifically, he ignored the blowback a marauding U.S. military might engender among the Muslim world.

In 2009, General Stanley McChrystal pushed the conversation in that direction. He pointed to the counterintuitive aspects of terror recruiting. Calling it “COIN Mathematics,” he laid out his argument. “Let us say that there are 10 [insurgents] in a certain area. Following a military operation, two are killed.  How many insurgents are left?  Traditional mathematics would say that eight would be left, but there may only be two, because six of the living eight may have said, ‘This business of insurgency is becoming dangerous so I am going to do something else.’ There are more likely to be as many as 20, because each one you killed has a brother, father, son and friends, who do not necessarily think that they were killed because they were doing something wrong. It does not matter – you killed them.  Suddenly, then, there may be 20, making the calculus of military operations very different.” 

Though McChrystal did not explicitly connect U.S. military operations to the perceptions of the broader Muslim community, Osama bin Laden and his number two, Ayman al-Zawahiri, certainly did. Five years before 9/11, bin Laden railed against the presence of the U.S. military in Saudi Arabia, home to the two holiest sites of Islam. On other occasions he spoke of the “American crusader forces” and “American occupiers.” His recurring theme of grievance centered on the U.S. waging war with Islam. Later, in 2005, al-Zawahiri put an exclamation point on it. In a letter to the leader of al Qaeda in Iraq, he reminded him, “The Muslim masses…do not rally except against an outside occupying enemy, especially if the enemy is firstly Jewish, and secondly American.”

Polling indicates that bin Laden and al-Zawahiri’s strategy has significant traction throughout Muslim-majority countries. When asked if “the United States’ interference in the region justifies armed operations against the United States everywhere,” more citizens agreed than disagreed among the 11 nations surveyed. That staggering trend even held true among the populations of supposed allies like Kuwait, Jordan and Iraq. Only in Egypt did more disagree than agree, though 39% still expressed support for attacks on Americans everywhere.

The implication is clear: it is time to stop focusing on killing terrorists. The seventeen-year American military campaign against terrorism, which began in Afghanistan but spread to Pakistan, Iraq, Yemen, Libya, Syria, Somalia, and most recently to Niger, has failed to stem the jihadist tide and has created more problems than it has solved. It has also cost the United States nearly 7,000 lives, more than 52,000 wounded, and an estimated 5 trillion dollars.

The idea that the United States should kill fewer terrorists may strike some as heresy and others as simply foolish. But as General McChrystal said, “I have found that the best answers and approaches may be counterintuitive; i.e. the opposite of what it seems like you ought to do is what ought to be done.” 

So if killing terrorists isn’t working, what will? We do not pretend to have all the answers. But the time-honored military practice of “murder boarding” may help provide inspiration. Despite its ghoulish name, “murder boards” have been successfully used throughout America’s military history. The process, as the name implies, is meant to be merciless. The privilege of military rank gets set aside, as does the pride of those assembled. The goal is to assess – as objectively as possible – through all that has happened to avoid repeating mistakes and to ensure mission success.

Sixteen years in, the President and Congress should finally “murder board” the war on terror and consider new strategies. Until then, counterinsurgency math will continue to frustrate the country’s lacking strategy.

Rumors abound that the Trump administration will soon pursue “significant” retaliatory actions in response to alleged Chinese intellectual property rights (IPR) violations, pursuant to “Section 301” of U.S. trade law. While Chinese government IPR policies are indeed cause for concern and while Section 301 does permit the U.S. executive branch to act unilaterally in response to certain foreign trade actions, there is a smart and a not-so-smart approach to these issues, with the latter likely to be unintended by Congress, inconsistent with U.S. trade agreement obligations, ineffective, harmful for U.S. consumers and exporters, and met with a legitimate rebuke from not only China but also other U.S. trading partners. The alternative, on the other hand, would present the President with a golden opportunity to pursue a smart U.S. trade policy response to a serious issue that could achieve the same objectives as the other option, but in a more strategic and effective manner.

If reports are to be believed, the President is unfortunately not inclined to take the smart approach.

Section 301 of the Trade Act of 1974 provides the U.S. executive branch with the authority to enforce U.S. rights under international trade agreements and to respond to certain foreign “unfair” practices not covered by trade agreements. Section 301 is the principal statutory mechanism under which the President may unilaterally (1) determine that a foreign country has violated existing trade agreements or has engaged in acts that are “unjustifiable” or “unreasonable” and burden U.S. commerce; and (2) take retaliatory action to enforce U.S. rights under a trade agreement or to obtain the elimination of the foreign country act in question. The United States Trade Representative (USTR) makes determinations, initiates and conducts investigations, and implements any retaliatory action under Section 301.

Prior to the advent of the World Trade Organization (WTO) dispute settlement system in 1995, USTR frequently invoked Section 301 to seek to eliminate “unfair” foreign government trade practices. The mechanism’s frequent use was in large part due to the fact that the WTO’s predecessor – the General Agreement on Tariffs and Trade (GATT) – provided for less coverage and less accountability than the new WTO system. With the WTO now online and with new WTO rules against Members’ unilateral retaliation (more on this below), Section 301 fell into disuse, with only a few actions since the late 1990s.

In August of last year, however, USTR initiated an investigation of China under Section 301, which sought “to determine whether acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.” USTR’s notice of initiation lists four types of conduct that were to be examined in the investigation (emphasis mine):

  1. The Chinese government reportedly uses a variety of tools, including opaque and discretionary administrative approval processes, joint venture requirements, foreign equity limitations, procurements, and other mechanisms to regulate or intervene in U.S. companies’ operations in China, in order to require or pressure the transfer of technologies and intellectual property to Chinese companies;
  2. The Chinese government’s acts, policies and practices reportedly deprive U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations with Chinese companies and undermine U.S. companies’ control over their technology in China;
  3. The Chinese government reportedly directs and/or unfairly facilitates the systematic investment in, and/or acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate large-scale technology transfer in strategic industries; and
  4. The investigation will consider whether the Chinese government is conducting or supporting unauthorized intrusions into U.S. commercial computer networks or cyber-enabled theft of intellectual property, trade secrets, or confidential business information.

USTR’s findings are officially due by August 2018, but various media outlets report that the Trump administration’s USTR has already completed the Section 301 investigation and is now considering whether to impose steep tariffs on a large swath of Chinese imports. Inside U.S. Trade[$] says that “the 301 remedies against China would include what some called ‘significant’ tariffs covering retaliatory action in the trillion-dollar range,” with USTR arriving “at such a high number by calculating the cumulative damage the U.S. believes China’s IP and tech transfer policies have caused over the past 10 years.” Private groups are expecting tariffs because, as one source put it, “[Trump] seems to like tariffs, not because they’ll do much good.” Axios generally agrees, noting that it’s likely Trump in January will “put tariffs on Chinese consumer electronics as retaliation against the country’s widespread theft of American companies’ intellectual property.”

A massive unilateral tariff response by the United States would be a big mistake rife with legal and economic problems. This is unfortunate because there is widespread, bipartisan agreement in the United States that Chinese IPR practices are a problem – a concern shared by many U.S. trading partners – and because, as noted below, there’s a far smarter approach to this problem under Section 301.

On the other hand, tariffs of the sort mentioned above raise at least four serious concerns:

  • First, they could defy the will of Congress, which has delegated through Section 301 its constitutional authority over U.S. trade policy but has expressly directed USTR to take unilateral action under Section 301 for only those foreign trade barriers that fall outside of the WTO Agreements. The binding Statement of Administrative Action (SAA) for the Uruguay Round Agreements Act, which implemented the WTO Agreements into U.S. law, states that USTR “will” (not “may” or “could”) invoke the WTO’s dispute settlement procedures for any “alleged violation of a Uruguay Round agreement or the impairment of U.S. benefits under such an agreement”; the SAA adds that “[n]either section 301 nor the DSU will require the Trade Representative to invoke DSU dispute settlement procedures if the Trade Representative does not consider that a matter involves a Uruguay Round agreement.”

    The SAA thus makes clear that USTR cannot act unilaterally against foreign trade policies falling under the WTO Agreements and instead must bring a WTO dispute (and, if necessary, retaliate after receiving the WTO’s agreement that a trade violation indeed exists). This is precisely what the Obama administration did in a 2010 Section 301 investigation of China’s green energy subsidies, which resulted in a WTO dispute (subsequently joined by the EU and Japan) and China’s voluntary elimination of the subsidies at issue. The SAA also list certain policies, such as anti-competitive practices and IPR actions that “fall outside the disciplines of [the applicable WTO] agreements,” for which unilateral Section 301 retaliation would remain viable.

    USTR retains the sole discretion as to whether an issue falls under the WTO Agreements – a potential excuse for the Trump administration’s unilateralism in the current case. However, USTR’s decision may be subject to challenge at in U.S. courts, and there is a very strong argument that most of the Chinese practices that USTR has targeted are actually covered by the WTO – either through the WTO Agreement on Trade Related Intellectual Property Rights (which the U.S. successfully invoked in a 2007 WTO dispute that, again, led to China’s voluntary elimination of the IPR measures found to be inconsistent with the Agreement) or through the “WTO-plus” commitment that China made as part of its accession to the WTO. In particular, China’s WTO Accession Protocol (Article 7.3) requires China to ensure that “the distribution of import licenses, quotas, tariff-rate quotas, or any other means of approval for importation, the right of importation or investment by national and sub-national authorities, is not conditioned on…performance requirements of any kind, such as local content, offsets, the transfer of technology, export performance or the conduct of research and development in China.” USTR could attempt to argue that China’s technology transfer or licensing requirements (i.e., allegations 1-3 above) don’t implicate this commitment, but the breadth of Article 7.3 (and USTR’s own characterization of the investigation as focusing on “technology transfer”) would make that a real stretch – one that Congress or U.S. companies might not be willing to accept.

  • Second, and relatedly, broad retaliatory tariffs under Section 301 would almost certainly be challenged by China at the WTO and could actually result in a WTO panel ruling that both the tariffs and the law itself were inconsistent with the United States’ WTO obligations. A core tenet of the WTO, carried out in the SAA, is that each Member will not act unilaterally in response to a foreign trade action that supposedly violates the WTO Agreements and instead will pursue formal dispute settlement through the WTO. In the late 1990s, the EU challenged Section 301 as inconsistent with this fundamental rule, but a WTO Dispute Settlement Panel found that, although unilateral action taken by the United States pursuant to Section 301would constitute a prima facie violation of the WTO Agreement, the SAA and representations by the U.S. government during the dispute removed the threat of a violation and thus the aforementioned inconsistency. If the Trump administration were to depart from the U.S. representations made to the Panel by unilaterally adjudicating Chinese IPR practices that fall under the WTO Agreements and by imposing remedies (i.e., tariffs) that also fall under the WTO Agreements, this finding of consistency may no longer be warranted.

    WTO rulings against the Trump administration’s Section 301 action could provide China with authorization to retaliate against American exports – but unlike the U.S., under the cover of international respectability and lawfulness (cover that might also obscure the Chinese government’s own, more “creative” unilateral retaliation against American companies). Even worse, other WTO Members would likely join China in condemning the United States’ chest-thumping unilateralism, perhaps even joining in on the underlying WTO dispute challenging the overall lawfulness of Section 301. So, in one fell swoop, the Trump administration could expose its exporters to WTO-consistent foreign retaliation, kill the remaining legitimacy of Section 301, and paint the United States as a global scofflaw (and China as the law-abiding victim). That’s a trifecta of bad, totally-avoidable outcomes.

  • Third, if history is any guide, these Section 301 tariffs probably won’t result in actual changes in Chinese Government policy. As I wrote last summer, past (pre-WTO) efforts to remove foreign-trade barriers unilaterally through Section 301, produced, at best, mixed results: U.S. negotiating objectives were “successfully” achieved less than half the time (35 cases, or a 48.6 percent “success ratio”), most often when the targeted country was dependent on the U.S. market. Even more damning, retaliation (tariffs, suspension of preferential access, etc.) under Section 301 achieved U.S. negotiating objectives only 17 percent of the time it was used.  These dismal results stand in stark contrast to the United States’ impressive (well over 80 percent) success rate at the WTO – and, as indicated by the examples above, China’s eventual compliance in response to U.S. WTO challenges. It beggars belief that, given China’s domestic political situation and the fact that the United States accounts for only 18.3 percent of all Chinese exports, Trump’s loud unilateralism under Section 301 would actually push China to change course on IPR.
  • Finally, it must be noted that U.S. tariffs “in the trillion-dollar range” could impose significant costs on American families and businesses. As I wrote for National Review in 2016:

    The consumer gains from trade disproportionally accrue to America’s poor and middle class. A 2015 study by Pablo Fajgelbaum and Amit Khandelwal finds that these groups, because they concentrate spending in more-traded sectors such as food and clothing, enjoy almost 90 percent of the consumer benefits of trade. These benefits are even more concentrated for Chinese imports, since poor and middle-class American consumers are more likely than their richer counterparts to shop at “big box” stores such as Target and Walmart that carry a lot of made-in-China goods.

    American businesses, of course, also benefit. More than half of all imports (including those from China) are inputs and capital goods consumed by other American manufacturers to make globally competitive products. Raising these firms’ costs via tariffs would mean fewer employees, if not outright bankruptcy — a particularly bad outcome given that downstream industries (e.g., steelmakers) typically employ far more workers than their upstream counterparts (e.g., steel users). Non-manufacturers benefit, too — whether they be retailers such as the Gap, transportation and logistics companies such as FedEx, or multinational firms such as Apple, which assembles iPhones in China but generates most of their final sale price through marketing, design, engineering, and even manufacturing done in the United States. (Chinese manufacturers themselves earn only a few dollars from an iPhone’s assembly.)

If Trump does indeed slap high tariffs on a large swath of consumer electronics from China, that means pain for lower-income Americans (right before the Super Bowl and peak HDTV season!), U.S. companies involved in the targeted products’ supply chain, and struggling U.S. retailers. Ouch.

In sum, broad retaliatory tariffs under Section 301 in this case would likely impose high political, economic and legal costs, while likely failing to achieve needed policy changes in China. These problems do not mean, however, that the Trump administration is powerless to act here. Instead, a smart course of action could entail both unilateral and multilateral responses that would be more consistent with U.S. law and WTO rules, more likely to achieve Chinese policy changes, and less likely harm U.S. economic and geopolitical interests. In particular: (1) a broad WTO dispute following the procedures set forth in Section 301 and the SAA and joined by other WTO Members with similar complaints against Chinese IPR practices; and (2) a targeted unilateral response for those Chinese government acts (e.g., allegation 4 above on state-sponsored hacking) that clearly fall outside the WTO Agreements. The first U.S. action would reassert the United States’ leadership on an important global trade issue and deny China that same position, while the second U.S. action would let President Trump brag about his strong unilateral response to Chinese “economic aggression” (though he’d need to use something other than tariffs to be perfectly consistent with WTO rules).

If the latest reports are to be believed, however, it’s unlikely that the President will pursue this course and will instead demand big, broad tariffs. If so, the costs will likely be significant – not just for U.S. consumers and exporters, but for the future of U.S. trade policy more broadly.

The views expressed herein are those of Scott Lincicome alone and do not necessarily reflect the views of his employers.

Democracy in America can only work when members of the public are free to participate in the political process. That’s exactly what Fane Lozman was trying to do when a Riviera Beach, Florida, city official ordered him arrested 11 years ago.

Lozman sued the city, arguing that his arrest was in retaliation to his First Amendment-protected criticism of city policies and corruption. Before this arrest, city council members were on record suggesting “intimidating” him due to his opposition of the city’s redevelopment plan. The city had also made Lozman “the target of a string of legal pressures,” including attempting to evict him from the local marina (which a jury found to be retaliation for Lozman’s First Amendment expression), arresting and removing him from a different council meeting, and much more.

Despite all that, the U.S. Court of Appeals for the Eleventh Circuit ruled that Lozman was barred from suing the city because there may have been probable cause for his arrest, and further that the existence of probable cause categorically barred a claim for retaliatory arrest. What’s worse is that the crime for which “probable cause” the city relies on—“disturbance of a lawful assembly”—wasn’t mentioned or identified until trial eight years later.

The Supreme Court agreed to hear the case. Because a categorical bar on First Amendment retaliation claims for arrests supported by probable cause would deal a serious blow to our First Amendment freedoms, Cato joined the Institute for Justice on an amicus brief supporting Lozman. Under the lower court’s approach, courts would be forbidden from looking into the government’s motives in retaliatory-arrest cases the way they do with ease in other First Amendment retaliation cases. This would encourage local governments simply to arrest dissenters, knowing endless justifications could be manufactured after the fact and virtually eliminating any constitutional check on their retaliation.

For example, the offense that was ultimately claimed as the basis for Lozman’s arrest—“disturbing a lawful assembly”—requires only that one act with reckless disregard for whether one’s conduct will “impede the successful functioning of the assembly.” That vagueness could include anyone who speaks passionately at a public meeting. The result is to insulate arresting officials from liability even where, as here, the circumstances of the arrest strongly indicate a retaliatory motive.

Whether your First Amendment rights are protected should not be predicated on how the government infringes them, but that is the result of requiring judges and juries to close their eyes to the reasons for arrests. In these cases, there’s no reason to keep a jury from assessing that motivation and holding the government liable if the arrest was in retaliation for protected speech.

Retaliation forces the intolerable choice of speaking out and facing personal jeopardy or keeping silent. Faced with that choice, all but the most courageous will keep quiet—undermining the “uninhibited, robust, and wide-open” debate on public issues that the First Amendment protects. If the Supreme Court lets the lower court’s decision stand, local governments seeking to silence political activists will be empowered to abuse them. 

This is from Marc Thiessen, writing in the Washington Post:

Trump inherited a regulatory state that had grown to unprecedented levels under President Barack Obama. One way to measure the growth in regulations is by counting the number of pages in the Federal Register, the book the government publishes containing all new regulations. Seven of the eight largest annual page totals in American history occurred under Obama. Before Obama, no president had ever exceeded 80,000 pages in the Federal Register. In 2016, Obama became the first president to break the 90,000-page mark—96,702, to be exact—and if you add his last 20 days in office, the total reaches 103,432.

Trump cut that number nearly in half. From Jan. 23 through Dec. 19 of this year, he has added just 53,550 pages to the Federal Register. And many of those pages were not new regulations but announcements of regulations being withdrawn. His efforts exceeded even those of President Ronald Reagan, who cut Federal Register pages by more than one-third during his time in office.

This sounds like good news, although perhaps it is partly due to the Trump administration taking a while to get its bearings during its first year. If it ever gets around to infrastructure, as Trump keeps threatening, we may see a lot more regulating. In addition, I thought it was worth pointing out that in trade policy, we are going in the opposite direction, as the Trump administration proudly proclaims the increase in regulatory actions it is taking. Here’s something from a recent press release from the Commerce Department:

Enforcement of U.S. trade law is a prime focus of the Trump administration. From January 20, 2017, through December 18, 2017, Commerce initiated 79 antidumping and countervailing duty investigations—a 52 percent increase from 52 initiations in the previous year. 

To clarify, there is an existing set of laws and regulations that allow companies and unions to petition the U.S. government to impose extra tariffs on their foreign competitors, in the form of antidumping and countervailing duties. There may be multiple reasons for the increase pointed out by the Commerce Department, and much of this would likely have happened even under a President Hillary Clinton. Nevertheless, when you hear people tout Trump’s push for lessening the burden of regulation, keep in mind that with trade policy, we are seeing a regulatory expansion, including the investigations noted above, as well as, potentially, other new measures under consideration.

Amy Fabbrini and Eric Ziegler of Redmond, Oregon have not been accused of abuse or neglect, and “both have standard high school diplomas,” reported Samantha Swindler in The Oregonian this summer. But the state of Oregon deems their IQs to be too low and has seized their two sons in what has turned into a four-year battle.  

I was a guest in August on Glenn Beck’s radio show to discuss the case. The Blaze summarizes:

Essentially, the state doesn’t have to prove anything definite to take away a child; the argument is that they are going by the expert’s recommendation for what’s best just in case something could happen. In Fabbrini’s case, her estranged father has told authorities that she is an unfit mother; however, people closer to her have vouched for her ability to parent.

“If they [authorities] want to take your child, they’ve got him,” Olson said….

“It’s been called [‘worst-first’] thinking,” he explained. “If you’re in the child protection business, then, you know, everything looks like a danger. … You always think the worst possible thing could happen.”

And now, from The Oregonian, word of a joyous—though only partial—reunion

Four days before Christmas, a Redmond couple received their miracle. Amy Fabbrini and Eric Ziegler’s 10-month-old son Hunter will spend his first Christmas at home after a judge found the couple’s limited cognitive abilities did not make them unfit to parent.

But the ruling does not reverse the termination of the couple’s parental rights over 4-year-old Christopher, who is deemed to have more complex needs because of developmental hurdles; they will be back next month in court to fight that. 

As they say, hug your loved ones close this holiday season and rejoice if you have the good fortune to be together (adapted from Overlawyered).

The New York Times recently covered the downfall of Cape Wind, the planned installation of 160 wind turbines off the coast of Massachusetts. The article portrays Cape Wind, and its founder Jim Gordon, as clean energy martyrs and the determined affluent opponents, who did not want their ocean views impaired, as villains. While the opposition to the project played a role, Cape Wind power also would not have been competitive in the marketplace.

Two Regulation articles have described the economic problems of Cape Wind. Ryan Murphy and Sophia Morales discuss  Cape Wind’s prices. Even with hundreds of million dollars in government subsidies, the off-shore wind farm would still have charged 26.4 cents per kilowatt hour in 2023. Compared to both traditional energy sources and other green energy—10.5 cents per kWh from a Canadian wind farm and as low as 6 cents per kWh from Quebec hydroelectric—Cape Wind prices would have been high.

Supporters of green energy projects often argue that they help create jobs. The Times article even mentions in passing that Cape Wind would have spurred other wind farm projects on the East Coast. In the Winter 2009-2010 issue, however, John Lesser analyzes this claim. While subsidized green energy creates some visible jobs, it increases the price of electricity and thus eliminates other jobs indirectly. As Lesser argues, “This course of action will cost jobs because businesses, forced to pay higher electricity prices, will either relocate, contract, or disappear altogether.”

The story of Cape Wind, despite the narrative the Times presents, is one of bad economics. The protracted political battle and the fact that it took this long for the project to officially end speak less about the viability of Cape Wind and more about the damage caused by green energy subsidies.

Written with research assistance from David Kemp

Like all states, California has licensed medical centers of every kind. One particular type, often known as a “crisis pregnancy center,” provides pregnancy-related services with the goal of helping women to make choices other than abortion. Based on opposition to these centers, the California legislature enacted a law, the FACT Act, requiring licensed clinics “whose primary purpose is providing family planning or pregnancy-related services” to deliver to each of their clients the following message: “California has public programs that provide immediate free or low-cost access to comprehensive family planning services (including all FDA-approved methods of contraception), prenatal care, and abortion for eligible women.” But the law also creates an exception for clinics that actually enroll clients in these programs—so, in effect, the law applies only to clinics that oppose the very program they must advertise.

Several of these crisis pregnancy centers sued to block the law, arguing that it violated their First Amendment rights by forcing them to express a message to which they are opposed. But the U.S. Court of Appeals for the Ninth Circuit upheld the law, holding that it regulates only “professional speech” and therefore should be reviewed under a more deferential standard, rather than the normal strict judicial scrutiny that applies to laws compelling speech. The Supreme Court agreed to review that ruling in a case called National Institute of Family and Life Advocates (“NIFLA”) v. Becerra. Cato has filed a brief urging the justices to correct the lower court’s flawed reasoning.

Among its many problems, the lower court’s definition of “professional speech” is dangerously overbroad: it doesn’t limit restrictions to a professional’s specialized knowledge or require that the speech be appropriate to each client’s individual circumstances. By determining that the compulsory message required by the FACT Act is merely a regulation of professional speech, the Ninth Circuit both blessed the commandeering of professional speech to deliver any favored government message under the guise of protecting public health and gave itself permission to apply intermediate, rather than strict, scrutiny—contrary to Supreme Court precedent—to determine that the Act’s disclosure requirements are constitutional.

Compelled speech is potentially dangerous in any context. It violates the freedom of conscience that the First Amendment is meant to protect and allows the government to promote any message it deems desirable, which is why it typically receives the most exacting scrutiny. Likewise, by discriminating based on content—because the state mandates an exact message—and on the speaker’s viewpoint—by regulating only pro-life centers who do not already participate in the programs the state wishes to advertise—the FACT Act must be examined under strict scrutiny. That is, the law must be narrowly tailored to serve a compelling interest that can’t be achieved in any other way.

This is a test the law can’t survive because (1) exemptions to the disclosure requirements illustrate that they are underinclusive, and (2) any number of other methods for distributing the same information exist that wouldn’t impose significant burdens on speech.

In NIFLA v. Becerra, the Supreme Court should reverse the Ninth Circuit.

If we were creating our nation’s housing mortgage regulatory environment from scratch it would not look anything like our current morass, most people would agree. For instance, it is doubtful that anyone would agitate for creating anything akin to Freddie Mac and Fannie Mae, the government-sponsored enterprises that–now almost exclusively–buy, bundle, and resell home mortgages, let alone suggest that the government provide those mortgages an explicit guarantee. Countries without our heavy government footprint in the mortgage market–which includes the mortgage interest deduction as well as a near-universal 30-year mortgage–manage to achieve home ownership rates that exceed our own.

However, we are not starting from scratch, and political constraints preclude getting rid of Fannie Mae and Freddie Mac, so we need to ask what’s the best way to fix the financial scaffolding of the domestic housing market given that Fannie and Freddie–or some iteration thereof–are here to stay.

And for the record it is clear that there is a problem afoot: as I explained earlier this year, new housing starts post-great-recession have been well below historical levels: For instance, 2016 was the post-recession high and it was still below any non-recession year in the last half-century. Part of that decline has to do with a myriad of new regulations boosting the cost of home construction, and another part has to do with the senseless accretion of land regulations in Blue America, but it is also the case that for many it remains more difficult than it should to obtain a mortgage.

The result of these constraints is that in much of America, housing costs constitute a greater proportion of household income than at any other time since World War II, and an increasing share of households spend more than a third of their take home pay on housing costs.

One major cause of the mortgage market morass has been that Fannie and Freddie have little capital at their disposal. The Third Amendment–a 2012 Treasury directive from the Obama Administration mandating that Treasury “sweep” the net worth of the two entities into its coffers each quarter–has left them with insufficient working capital to do what the law tasks them to do. In 2018 they will, in fact, have no capital at all at their disposal unless and until Treasury acts to give them some. What’s more, tax reform has–albeit inadvertently–increased its need for a capital injection.

The hope of those who want a reform of the status quo was that the optics of a Treasury “draw” by the GSEs next year would be a motivating factor for Congress to resolve their status, but it is not clear that will, in fact, light a fire under Congress. There is some manifestation of Congressional dissatisfaction with the current mess-some members of the Senate Banking Committee–on both sides of the aisle–have been discussing some sort of reform, and Rep. Jed Hensarling–chair of the House Financial Services Committee–has begun working in earnest in an attempt to achieve some sort of bipartisan solution to the GSE limbo.

However, the odds of a substantive bipartisan bill getting through the Senate in the current environment are slim; among other reasons, it is difficult to see Senator Elizabeth Warren agreeing to what would undoubtedly be an unsatisfactory patch when the Democrats could conceivably be in charge of Congress in 12 months and legislate their own solution.

The political gridlock, along the approach of 2018 and the prospect of two GSEs becoming bereft of capital, has prompted Mel Watt, director of the Federal Housing Finance Authority, to announce that the GSES will retain $3 billion of capital to ensure they can keep doing their business.

Given the current gridlock it was a prudent step to take. It will not prevent the need for the GSEs to draw funds from Treasury at some point in 2018, but it will ensure that they can continue doing what they are supposed to do for the foreseeable future.

However, the GSEs need more than this palliative–Congress needs to address the current housing finance crisis in a timely fashion if the housing market is ever going to return to normalcy. Here’s hoping that 2018 results in a reform of our mortgage financing regulatory world that concomitantly reduces government exposure to the vagaries of financial markets while boosting the supply of housing in the U.S.

The Wall Street Journal reported December 14 on a proposal by Massachusetts Governor Charlie Baker to mandate the involuntary 72-hour detention of opioid overdose survivors rescued by first responders. This is another example of feel-good public policy that strains resources and personnel, arguably infringes the civil liberties and due process rights of those detained, and won’t work as intended.

While mandatory rehab has been employed in the criminal justice system for years, the rationale for this has not been evidence-based. A systematic review of over 400 studies on the subject published in the International Journal of Drug Policy in 2016 concluded, “Evidence does not, on the whole, suggest improved outcomes related to compulsory treatment approaches, with some studies suggesting potential harms.”

Furthermore, while the precise length of time needed for successful rehab is uncertain, 3 days is barely enough time to go through acute withdrawal.  Even if the 3 days are used to plug the patient into Medication-Assisted Treatment, significant numbers of MAT patients eventually drop out of these programs. Self-motivation and self-regulation play significant roles in successful rehab.

The alarm and frustration of policymakers addressing the overdose crisis is understandable and justifiable. But lashing out with new approaches that are not empirical or data-driven will not fix the problem and may make matters worse.

 

The Department of Homeland Security (DHS) and the Department of Justice (DOJ) today released a report that found that about 94 percent of foreign-born inmates in Federal prisons are illegal immigrants.  That is not surprising, as illegal immigrants convicted of an immigration offense are incarcerated in federal prison and account 7.3 percent of all inmates.  Likewise, drug traffickers who cross international borders are also in federal prison and account 46.3 percent of all prisoners.  Thus, illegal immigrants are overrepresented in federal prison because the federal government enforces immigration laws and many drug trafficking laws but only a small fraction of all those incarcerated for all crimes committed in the U.S. are in federal prisons. 

The authors of this DHS/DOJ report do deserve credit for highlighting its shortcomings.  On the first page, it states:

This report does not include data on the foreign-born or alien populations in state prisons and local jails because state and local facilities do not routinely provide DHS or DOJ with comprehensive information about their inmates and detainees.  This limitation is noteworthy because state and local facilities account for approximately 90 percent of the total U.S. incarcerated population.

The federal prison population is not representative of incarcerated populations on the state and local level, so excluding them from the report means that it sheds little light on nationwide incarcerations by nativity, legal status, or type of crime.  On the last point, it is shocking how unrepresentative federal prison is regarding the types of crimes its inmates are convicted of. In 2016, 67,742 people were sentenced to federal prison.  Almost 30 percent of them were for immigration offenses.  Those immigration convictions comprised 100 percent of the convictions for immigration crimes in the United States in 2016.  By contrast, there were only 85 federal convictions for murder out of a nationwide total of 17,785 murder convictions that year, comprising less than 0.5 percent of all murders.

    

If Garcia Zarate had actually been convicted of murdering Kate Steinle, then he would have been incarcerated in California state prison and he would not show up as an illegal immigrant murderer in this DHS/DOJ report.  What good is a federal report on illegal immigrant incarceration rates if it would have excluded Kate Steinle’s murderer had he been convicted? 

The DHS/DOJ report also explained why they did not include an estimate of illegal immigrants incarcerated on the state and local level:

DHS and DOJ are working to develop a reliable methodology for estimating the status of state and local incarcerated populations in future reports.

A March 2017 Cato Institute Immigration Research and Policy Brief employed a commonly used residual statistical methodology to analyze the incarcerated population in the U.S. Census for 2014.  We found that illegal immigrants were about 44 percent less likely to be incarcerated than native-born Americans.  I look forward to reviewing any methodology that the federal government comes up with but illegal immigrant criminals would have to be severely undercounted in prisons to give them an incarceration rate that even approaches native-born Americans.     

The broad finding among criminologists and economists who study this topic is that immigrants are less crime-prone than natives whether measured by the areas where they live or their incarceration rates.  Although there is less research on illegal immigrant criminals, the general finding is that they are less crime-prone or about as criminally inclined as native-born Americans.  The DHS/DOJ report reveals no new information about incarcerations on the federal level, does not provide evidence for a higher nation-wide illegal immigrant incarceration rate, nor does it support the administration’s plea for more border security.    

National Review’s Ramesh Ponnuru has a new article, “The Tax Cut Doesn’t ‘Tilt Toward the Middle Class.” The piece apparently responds to commentary by Veronique de Rugy and me about the effects of the GOP tax plan.

Ramesh says:

According to the Joint Committee on Taxation (JCT), households making between $20,000 and $30,000 pay 0.7 percent of all federal taxes now and will pay 0.8 percent of them under this law in 2025 … Households making $30-40,000 pay 1.3 percent of federal taxes now and will pay 1.4 percent of them in 2025. Households making between $40,000 and $75,000 will see their share of federal taxes unchanged at 10.2 percent.

His point is, “the tax cut reduces tax burdens proportionally,” rather than giving the biggest cuts to the middle, as I found here and here.

Alas, Ramesh used the wrong data. The tables published on the JCT website include reduced subsidies from repeal of the ACA individual mandate. Those would be almost entirely spending cuts, not tax increases. (This JCT score shows that the ACA effect will be $314 billion over 10 years, of which $297 billion, or 95 percent, will be spending).  

The JCT produces tables without the ACA subsidies, but they are not posted on the JCT site, in a typical example of the agency’s nontransparency. Phil Kerpen received them from GOP staffers, and they are attached below.

Anyway, here are Ramesh’s points rewritten from the JCT 2025 table that excludes the ACA piece:

Households making between $20,000 and $30,000 pay 0.7 percent of all federal taxes now and will pay 0.6 percent in 2025. Households making $30,000 to 40,000 pay 1.3 percent of federal taxes now and will pay 1.3 percent in 2025. Households making $40,000 to $50,000 will see their share of federal taxes fall from 2.2 to 2.1 percent, and households making $50,000 to $75,000 will see their share fall from 8.0 to 7.9 percent.

The non-ACA JCT table shows that the percentage tax cuts for the middle groups in 2025 are larger than the cuts for the top groups. So even aside from the (misguided) payroll tax issue raised by Ramesh, the JCT table shows that the GOP bill especially favors the middle class and will make the tax code more progressive (unfortunately).

Here is the JCT table.

The peculiarity of Congressional 10-year budgeting has left its mark on the tax debate. In the UK, if something like the Republican bill had passed, it would be regarded as a significant tax cut, pretty much across the board. And rightly so.

As JCT analysis has shown, in 2019, 44 percent would see tax cuts of more than $500, 17 percent tax cuts between $100 and $500, with just 8.1 percent seeing tax increases greater than $100. Even by 2025, just before most of the individual income tax cuts would expire, 56 percent would see tax cuts of more than $100, with just 13.5 percent seeing tax increases of $100 or more. And this includes as “tax rises” the reduction in subsidies paid out as the removal of the individual mandate penalty leads to fewer people opting for health insurance.

As Chris Edwards has explained, even on the JCT’s own figures (which attribute most of the burden of corporate income taxes to the rich), the biggest financial winners in terms of a reduction in the proportion of federal income and corporate taxes they bear will be the middle-class.

Yet the 10-year budget, with expirations of income tax changes required to pass the bill through Senate reconciliation procedures, means Democrats and much of the media have effectively portrayed the reforms as tax cuts for the wealthy. As the income tax cuts and the increase in standard deduction evaporate, the penalty associated with the individual mandate is removed (reducing the extent of subsidies) and the new lower inflation rate for uprating tax band thresholds is maintained, more and more households lower down notionally face a “tax increase” in financial terms according to the law.

The way the media has not explained this distinction between the short and longer-term implications of the law (and how it would be up to Congress to let provisions expire) is breathtaking. On Tuesday, for example, the Associated Press tweeted “BREAKING: House passes first rewrite of nation’s tax laws in three decades, providing steep tax cuts for businesses, the wealthy.” No wonder just 17 percent of people think they are getting tax cuts in 2018, against the 80 percent estimated to actually be getting a tax cut of any amount. Liberal economists such as Paul Krugman have embraced the seeming unpopularity of the reform package, and believe the political and electoral implications for Republicans will only be worse once they now start proposing spending cuts.

The Republicans say they want to keep the provisions in the bill in the longer term, making the tax cuts permanent. So what should their message be to voters to make tax reform durable?

First, it seems clear they need to make a huge deal of the expanded paychecks most people will see in February. Given how warped people’s view is of the bill now, critics of the bill will have their credibility undermined if individual voters suddenly realize they really have seen higher take-home pay.

But, second, and more importantly, Republican proponents need to flip critics’ attack lines around. Yes, under the law the income tax changes do expire, they should say. But we do not want that to happen. If you like your tax cut, and want to keep your tax cut, then you need to ensure it has Congressional support, and you should pressure your congressmen and congresswomen to curb spending growth so that the tax cuts can be locked-in sustainably.

In other words, they need to use the new baseline from the tax cuts to their advantage, and play on the endowment effect: if you want to keep this extra take-home pay, then push for lower spending delivered by members of Congress committed to smaller government.

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