Policy Institutes

If People Are Like Polar Bears, We’ll Be Fine

Cato Op-Eds - Fri, 03/28/2014 - 15:07

Patrick J. Michaels and Paul C. "Chip" Knappenberger

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.”

 

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) is meeting in Japan this week to finalize the second part of its latest compendium on climate change.

The first part, the Working Group I report, focused on the physical science of climate change.  The main findings of that report, released last fall, have been widely panned for not telling the truth about how the latest science is stacking up in support of modest rather than alarming climate change.

The second part, making the news this week, is from the IPCC’s Working Group II and focuses on the effects of climate change.

In an interesting piece in a blog hosted by the United Kingdom’s The Telegraph, Andrew Lilico reports that if leaked drafts are to be trusted, the new report will mark a “formal moving on of the debate from the past, futile focus upon “mitigation” to a new debate about resilience and adaptation.”

We can only wonder what took them so long to realize this—something that we have been saying from virtually day one of this whole global warming thing.

That is not to say that the new IPCC report won’t proclaim that a whole lot of bad things are going to happen as a result of climate change. It most assuredly will say that. But, as we last reported, much of that concern is overblown hype.

Here is another example:

In his story on the new IPCC report, Associated Press “climate-change-is-always-worse-than-we-thought” reporter Seth Borenstein starts off with this analogy:

If you think of climate change as a hazard for some far-off polar bears years from now, you’re mistaken. That’s the message from top climate scientists gathering in Japan this week to assess the impact of global warming.

In fact, they will say, the dangers of a warming Earth are immediate and very human.

“The polar bear is us,” says Patricia Romero Lankao of the federally financed National Center for Atmospheric Research in Boulder, Colo., referring to the first species to be listed as threatened by global warming due to melting sea ice.

As coincidence would have it, researchers at the University of Alaska–Fairbanks recently issued a press release summing up their latest research findings on the genetic evolution of polar bears—research that has shown the animals to be a genetically distinct species from brown bears for about 1.2 million years.

Here is how Mathew Cronin, the lead researcher, described the implications of his team’s findings:

“The ramifications are that if the polar bear was an independent species for about 1 million years, it survived previous cold and warm periods,” Cronin said. “This means the polar bear has been an independent lineage a long time through glacial and interglacial and warm periods.”

The last glacial period was at maximum extent about 22,000 years ago, and was preceded by a warm interglacial period about 130,000 years ago. Other warm and cold periods preceded that. Cronin thinks that if polar bears survived previous warm periods in which there was little or no arctic summer sea ice, this should be used in models predicting the species’ response to current climate change.

“It seems logical that if polar bears survived previous warm, ice-free periods, they could survive another. This is of course speculation, but so is predicting they will not survive, as the proponents of the endangered species act listing of polar bears have done.”

Apologies to Borenstein, but it’s even better than this. For six millennia, around 120,000 years ago, the “eemian” period saw July temperatures some 12°F warmer than modern. Dorethe Dahl-Jensen’s work shows not only that, but that the ice thickness across Greenland was only about 1,000 feet thinner than it is now, or 11,000 feet. There’s tons of other evidence showing that the Arctic Ocean was ice-free, or nearly so, at the end of most summers back then.

And the polar bear survived (and prospered)! So it turns out that if indeed the “polar bear is us,” we should make out OK. Even if we, like the polar bear, must rely on adaptation over mitigation.

Seems like the alarmists can’t even get the scare stories right these days!

 

References:

Cronin, M. A., et al., 2014. “Molecular Phylogeny and SNP Variation of Polar Bears (Ursus maritimus), Brown Bears (U. arctos), and Black Bears (U. americanus) Derived from Genome Sequences.” Journal of Heredity, doi:10.1093/jhered/est133

Dahl-Jensen, D., et al., 2013. “Eemian Interglacial Reconstructed from a Greenland Folded Ice Core.” Nature 489, doi: 10.1038/nature11789.

Categories: Policy Institutes

Slovakia’s Strongman Heading for a Defeat?

Cato Op-Eds - Fri, 03/28/2014 - 13:24

Dalibor Rohac and Marian L. Tupy

A presidential election in Slovakia is usually a dull affair. The head of state plays a largely ceremonial role and, since 1993, the post has been occupied by fairly pedestrian, aging figures whose footprint on either domestic politics or on Slovakia’s reputation abroad has been negligible. 

Nevertheless, the stakes are higher in the second round of this year’s presidential election that will take place on Saturday. The leading candidate is the current prime minister, Robert Fico, whose party, Smer, has enjoyed a comfortable majority in the Slovak Parliament since the election in 2012. Fico, who has led Smer since its birth in 1999, served one term as prime minister between 2006 and 2010 and has traditionally enjoyed significant public support. A former member of the Communist Party, he once said that he “had not noticed” the Velvet Revolution of 1989, insinuating that free markets and an open political system have brought little good for ordinary people.

While presenting himself as a social democrat, Fico has successfully courted Slovak nationalists. For example, he has been a vocal opponent of recognizing Kosovo’s independence, for fears that the Hungarian-majority areas of southern Slovakia could follow the Kosovar example. While such concerns are baseless, as Slovak Hungarians display very little interest in secessionism, the rhetoric was successful in attracting Slovak voters that had previously supported fringe nationalist parties.

Fico’s cabinets have adopted several controversial policies, including the 2008 press law, which enabled politicians and companies to file successful lawsuits against newspapers. That has resulted in grossly disproportionate sanctions against Slovak media. One Slovak weekly was recently ordered to print a 54-page apology to a former member of parliament. In 2009, the weekly published an article about the parliamentarian’s company that allegedly received large payments from the European Union’s structural funds. Another weekly is currently being sued over another piece of investigative journalism. The €20 million in damages sought exceed, by an order of magnitude, the earnings of the magazine.

According to some, the presidency is an attractive exit option for Fico, whose two years in government have not produced the results that his electoral base hoped for. The country’s chronically high unemployment, especially among young people, shows no signs of receding, and many of the measures adopted by the government—including the repeal of the flat tax or the re-regulation of labor markets—have done little to foster economic growth and sound public finances.

Whereas Fico is a veteran of Slovak politics, his rival in the presidential race, Andrej Kiska, comes from the world of business and philanthropy. Kiska made his fortune in the 1990s with a successful consumer lending business that provided financing for the purchases of household appliances. He later founded a popular charity, Dobrý Anjel (“Good Angel”), that enables Slovaks to make charitable donations to poor households struck by various calamities, typically cancer. Little is known about his specific policy positions, but for voters it seems more relevant that Kiska is not tarnished by the corruption scandals and shady deals that have marked Slovak political life in recent years.

In the election’s first round, Fico earned 28 percent of the popular vote compared to only 24 percent for Kiska. But several candidates who failed to make it into the second round have urged their supporters to vote for Kiska. Those include Radoslav Procházka, a graduate of Yale Law School, who is seen by many as the potential leader of the currently fragmented political right, and Milan Kňažko, one of the leaders of the Velvet Revolution in 1989. The two jointly received over 34 percent of the vote in the first round, and have pledged to support Kiska’s candidacy in the second round.

Unless Fico mobilizes voters who abstained during the first round of the election, it seems unlikely that his presidential bid will be successful. For many Slovaks that would be a cause for celebration, particularly given Fico’s promise that a defeat in the presidential election would lead him to “reconsider his future in Slovak politics.” While he made that statement in order to energize his supporters, it has also invigorated his opponents.

The election carries a deeply symbolic meaning for many Slovaks. Just like Fico, all Slovak presidents since the country’s independence in 1993 have been former members of the Communist Party. Some, such as Rudolf Schuster who was president between 1999 and 2004, were even former high-ranking party officials. Many in Slovakia feel that it is time to break with that tradition and elect someone untainted by a communist past.

Categories: Policy Institutes

The Most Wonderful Video You'll See Today

Cato Op-Eds - Fri, 03/28/2014 - 11:53

Marian L. Tupy

The most wonderful video you’ll see today:

Joanne Milne’s Implants are turned on and she hears for the first time

Watch as a deaf woman, Joanne Milne, is overwhelmed by hearing for the first time after having her cochlear implants switched on. This is just another way in which modern technology improves lives of the less fortunate. For more on technological and medical breakthroughs, follow us on Twitter.

Categories: Policy Institutes

Obama Meets the Pope

Cato Op-Eds - Fri, 03/28/2014 - 11:09

Marian L. Tupy

President Obama met with Pope Francis at the Vatican yesterday. After the meeting, Obama said that he was “was grateful to have the opportunity to speak with him [the Pope] about the responsibilities that we all share to care for the least of these, the poor, the excluded… And I was extremely moved by his insights about the importance of us all having a moral perspective on world problems and not simply thinking in terms of our own narrow self-interests.”

Later, in an interview with the Italian newspaper Corriere della Sera, “Obama pointed to the Pope’s concern for income inequality, saying … ‘Given his great moral authority, when the Pope speaks it carries enormous weight.’ Continuing to focus on income inequality, Obama said, ‘And it isn’t just an economic issue, it’s a moral issue. I think the Pope was speaking to the danger that over time we grow accustomed to this kind of inequality and accept it as normal. But we can’t.’”

Writing in The Atlantic last December, I took issue with some of Pope Francis’ assertions about the state of the world, including income inequality:

Academic researchers—from Xavier Sala-i-Martin of Columbia University, to Surjit Bhalla, formerly of the Brookings Institution and RAND Corporation, to Paolo Liberati of the University of Rome—all agree that global inequality is declining. That is because 2.6 billion people in China and India are richer than they used to be. Their economies are growing much faster than those of their Western counterparts, thus shrinking the income gap that opened at the dawn of industrialization in the 19th century, when the West took off and left much of the rest of the world behind.

Similarly, in a recent ReasonTV video, I explained why more—rather than less—capitalism is good for the poor. Simply put, poor people in countries with more economic freedom earn a higher share of the national income and have higher per capita incomes than poor people in countries with less economic freedom.

If Pope Francis and President Obama want to help the world’s poorest people, they should advocate for:

  • Free trade, so that African farmers and Asian tailors can sell their goods in Europe and America free of tariffs and quotas.
  • Ending agricultural (and other) subsidies, which are the products of modern crony capitalism and benefit agricultural conglomerates and large corporations at the expense of everyone else.
  • Property rights, so that poor people can gain title to their land and use it as collateral for borrowing.
  • Privatization of education, water supply, health care and other supposedly public goods, which the corrupt and unaccountable governments in poor countries have underdelivered for decades.
Categories: Policy Institutes

The Transit Train Wreck

Cato Op-Eds - Fri, 03/28/2014 - 08:40

Randal O'Toole

Investigators have concluded that the driver of the CTA train that crashed at O’Hare earlier this week slept through the stop. Moreover, she apparently had a record of falling asleep at work before. However, investigators also concluded that two back-up systems that should have stopped the train before it crashed even without a waking driver failed as well.

We’ve spent roughly $1 trillion on transit since 1970 for not much return. Capital spending before 1990 is not available, but probably followed a trajectory similar to operating subsidies (=op costs minus fares). Click image to download a spreadsheet with these and other data mentioned in this post.

Meanwhile, the American Public Transportation Association (APTA) defends its claim that recent ridership statistics represent a genuine “shift in American travel behavior.” While it admits that per capita ridership has declined since 2008, it blames that on the recession. It prefers to go back to 1995, “because after that year, ridership increased due to the passage of the landmark ISTEA legislation and other surface transportation bills which increased funding for public transportation.” Effectively, APTA argues that people will ride transit if you subsidize them enough, and so therefore subsidies should be increased still further.

(By the way, APTA responded to my statement that virtually all of the growth in ridership in 2013 took place in New York City, saying, “That statement is not true… . Many other systems across the country saw ridership gains last year.” But I never said that every single transit system outside of New York declined, only that the sum total, minus New York, declined, which is easily verified from APTA’s own data.)

APTA is correct that transit ridership bottomed out in 1995, at least according to its numbers. (Federal Transit Administration numbers are a little different and show ridership bottoming out in 1993.) But it is a stretch to say that subsidies are responsible for the growth in ridership since 1995 (or ‘93). Both operating and capital subsidies to transit have grown steadily since the mid 1960s, but ridership hasn’t always followed.

In particular, ridership declined through 1972 to about 6.6 million trips, then increased through 1980 to about 8.5 million trips, hovered around there for about a decade, then declined from 8.9 million trips in 1989 to 7.8 million trips in 1995, then increased to 10.5 million trips in 2008, and has hovered around there since then. If increased subsidies were responsible for the increase after 1995, why didn’t increased subsidies lead to increased ridership between 1965 and 1972 or between 1989 and 1995?

Obviously, many things influence ridership other than subsidies. Employment, for example, has grown from 117 million jobs in 1995 to 136 million in 2013. Gas prices have grown from $1.64 (in today’s dollars) in 1995 to $3.58 in 2013. Admittedly, neither of these explanations are, by themselves, satisfactory: transit trips per worker have grown by 19 percent since 1995, and gas prices didn’t start increasing until 2000.

APTA’s answer to why subsidies boosted ridership in the last two decades but didn’t necessarily do it before then is found in its claim that “Cities that have invested in high frequency public transportation and transit-oriented development policies are experiencing significant ridership growth.” But this simply isn’t true: as I’ve previously noted, 2013 transit ridership declined in Charlotte, Dallas, Portland and several other cities that have invested in such transit.

For the sake of argument, let’s say subsidies were responsible for much of the growth in transit ridership. Is it worth it? From 1995 to 2012, transit ridership grew by 35 percent. During that same period (after adjusting for inflation), operating subsidies grew by 56 percent and capital subsidies by 67 percent. In today’s dollars, the average subsidy per trip in 1995 was $3.33, but the subsidy for the added trips in 2012 averaged $5.62.

Even if you think it is worth $5.62 to get one person out of their car for one trip, the changes we’ve seen can hardly be considered a major shift in American travel habits. The Census Bureau reports that 4.7 percent of people took transit to work in 2000. That’s grown to 5.0 percent in 2012, which might sound good except it was 5.3 percent in 1990. (The Census Bureau has made annual surveys since 2005, but didn’t do so in the 1990s.)

APTA also says, “The cities that have invested in public transportation are reaping the benefits of ridership and economic growth.” Yet I’ve shown elsewhere that cities that spend the most on public transit grow slower than ones that spend less.

APTA looks at all these numbers and argues that, “We need to expand public transportation access so more people have travel choices.” I look at the numbers and see that we have spent an awful lot of money to get some very minor changes. In order to get these minor changes, cities are not only spending billions of dollars on obsolete transportation systems, they are trying to impose huge lifestyle changes on Americans, such as by reducing the share of households in single-family homes from 65 percent to 41 percent, as Portland seeks to do.

Recently, a Michigan reporter asked me whether SMART–Detroit’s suburban transit agency–was an efficient transit operator, as it says it needs a tax increase to keep going. I pointed out that its bus fares covered only 18 percent of bus operating costs in 2012, well below the industry average of 28 percent.

But even 28 percent is a pretty pathetic benchmark. What do we get for all these subsidies? We get transit systems that run nearly empty buses and trains much of the day so that, on average, they are no more energy efficient or climate friendly than driving. We get construction of expensive transit systems that cities like Chicago can’t afford to maintain. We get highly paid workers who fall asleep on the job expecting that their passengers will be protected by back-up systems that fail because we didn’t bother to maintain them.

Fundamentally, we get a system that’s broken because no one is beholden to the customers whose fares cover, on average, a mere 25 percent of the costs. Instead, they cater to the politicians who allocate the other 75 percent to agencies based on political muscle and back room payoffs. (Does anyone think that their mayor wouldn’t take bribes, or at least campaign contributions, from railcar manufacturers and contractors in exchange for their support for rail boondoggles?) Contrary to APTA’s claims, the transit industry is in deep trouble and must be reformed by reducing, not increasing, subsidies so that transit agencies will be responsive to users, not politicians.

Categories: Policy Institutes

Obama Sends More U.S. Troops to ...Uganda?

Cato Op-Eds - Thu, 03/27/2014 - 16:52

Ted Galen Carpenter

The Obama administration seems determined to demonstrate that there is no place in the world so geographically remote or strategically and economically irrelevant that U.S. military intervention won’t take place.  Any doubt on that score was eliminated earlier this week when the administration deployed another 150 Special Operations Forces personnel (along with CV-22 Osprey aircraft) to help the government of Uganda track down rebel warlord Joseph Kony.  The new deployment augments the 100 troops Washington previously dispatched to the region in October 2011.  At that time, the administration assured skeptics that the mission was strictly limited in nature.  Clearly, it has now become somewhat less so, and one must wonder whether there will be future deployments to enlarge Washington’s military intervention.

Make no mistake about it, Kony is a repulsive character.  Among other offenses, his followers have drafted children as young as 12 into the movement’s armed ranks, and there are numerous allegations of other human rights abuses.  But no rational person could argue that Kony’s forces pose a security threat to the United States.  And under the Constitution, the purpose of the U.S. military is to protect the security of the American people, not engage to quixotic ventures to rectify bad behavior around the world.

The willingness of the U.S. officials to send Special Operations personnel, who have been trained and equipped at great expense to American taxpayers, on such a mission underscores a growing problem: the unwillingness or inability of U.S. leaders to set priorities in the area of foreign policy.  America’s security interests can (and should) be divided into four broad categories: vital, secondary or conditional, peripheral, and barely relevant. Each category warrants a different response.

Unfortunately, in recent decades, U.S. leaders have had a tendency to lump almost everything into the “vital interest” category.  The reality is that for any nation, truly vital interests are few in number.  National survival is obviously the most important one, but the preservation of political independence, domestic liberty, and economic well-being from external threats all are part of the mix as well.  When vital interests are threatened, maximum exertions and sacrifices are justified.

But that ought to be the great exception, not the rule, when it comes to the conduct of America’s foreign policy.  Even an effort to protect the next highest category, secondary or conditional interests, requires a rigorous cost-benefit calculation.   Secondary interests are assets that are pertinent but not indispensable to the preservation of America’s physical integrity, independence, domestic liberty, and economic health.  An example would be the goal of keeping a key strategic and economic region such as Western Europe or Northeast Asia from being dominated by a hostile major power.  The defense of secondary interests justifies significant, but nevertheless limited, exertions–especially if they involve military measures.

The cost-benefit calculation shifts even more in the direction of restraint when the matter involved is one of peripheral interests.  That category consists of assets that marginally enhance America’s security, liberty, and economic well being, but the loss of which would be more of an annoyance than a significant blow.  The existence of an unpleasant regime in a mid-size country in Latin America (Venezuela comes to mind) is an example of a threat to a peripheral interest.  Russia’s crude coercion of Ukraine is another example.  It may be asking too much for Washington to be indifferent to such matters, but there is nothing at stake that normally requires more than a diplomatic response.

Many situations in the world do not rise even to the level of peripheral interests.  They instead fall into the category of barely relevant (or often entirely irrelevant) matters.  Whether Bosnia remains intact or divides into a Muslim-dominated ministate and a Serb republic, or whether East Timor is well governed, can and should be a matter of indifference to the United States.  It is highly improbable that such developments would have a measurable impact on America’s security, liberty, or economic health.  Washington ought to confine its role to one of routine diplomatic involvement on the margins—and sometimes not even that.

Joseph Kony’s activities in Central Africa are a textbook example of a largely irrelevant development.  That conflict certainly does not warrant the expenditure of defense budget dollars, much less putting the lives of American military personnel at risk.

Categories: Policy Institutes

Could Vice President Biden Help Save the Administration's Trade Agenda?

Cato Op-Eds - Thu, 03/27/2014 - 14:42

Daniel R. Pearson

Francisco Sanchez, former undersecretary of Commerce for international trade in President Obama’s first term, commented on the administration’s trade efforts in a March 21 article in Politico.  His view is that the president will need to get directly involved in making the case for liberalization if he wants his trade agenda to succeed.  Presidential leadership no doubt will be essential.  Certainly few congressional Democrats would be eager to stick their necks out on behalf of freer trade, if they think the president might leave them high and dry by backing away from his commitment to Trade Promotion Authority (TPA or “fast track”), the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).

But as I noted in a recent paper, it seems unlikely that the president is sufficiently committed to his trade agenda.  It also is unclear whether developments elsewhere in the world would permit him to devote the time and energy to trade issues that Mr. Sanchez correctly argues is needed.  That raises the question of whether other senior officials in the administration might be able to augment the president’s efforts. 

Would it be feasible for Vice President Joe Biden to play a useful role in achieving the administration’s trade objectives?  Biden knows Congress well and cast many trade votes during his career in the Senate.  He consistently voted in favor of trade liberalization in his early years, starting with the Trade Act of 1974.  Perhaps the Senate was a happier place then, with both parties placing relatively greater emphasis on keeping the United States actively engaged in strengthening the global economy.  Biden’s pro-trade voting record continued throughout the 1990s on behalf of trade policy initiatives – including NAFTA and the Uruguay Round – supported by President Clinton.  However, his approach appears to have changed rather abruptly when George W. Bush became president.  Since then Biden’s only pro-trade votes on major issues were to support the FTAs with Australia and Morocco in 2004.  He wrapped up his Senate career by voting against DR-CAFTA, Oman and Peru.

This background may position Biden to provide helpful outreach to members of Congress who have doubts about the administration’s trade agenda.  Since he has found himself voting both for and against market-opening initiatives, perhaps he would have credibility in explaining why liberalization is the right choice now.

Categories: Policy Institutes

Michelle Malkin Browses Colorado Marijuana Store

Cato Op-Eds - Thu, 03/27/2014 - 12:07

Tim Lynch

Michelle Malkin on her recent experience at a Colorado marijuana store:

For the past three months, my mother-in-law, Carole, whom I love with all my heart, has battled metastatic melanoma. After a harrowing week of hospitalization and radiation, she’s at home now. A miraculous new combination of oral cancer drugs seems to have helped enormously with pain and possibly contained the disease’s spread. But Carole’s loss of appetite and nausea persist.

A month ago, with encouragement from all of her doctors here in Colorado, she applied for a state-issued medical marijuana card. It still hasn’t come through. As a clerk at Marisol Therapeutics told us, there’s a huge backlog. But thanks to Amendment 64, the marijuana drug legalization act approved by voters in 2012, we were able to legally and safely circumvent the bureaucratic holdup. “A lot of people are in your same situation,” the pot shop staffer told us. “We see it all the time, and we’re glad we can help.”

Our stash included 10 pre-rolled joints, a “vape pen” and two containers of cheddar cheese-flavored marijuana crackers (they were out of brownies). So far, just one cracker a day is yielding health benefits. Carole is eating better than she has in three months. For us, there’s no greater joy than sharing the simple pleasure of gathering in the kitchen for a meal, with Grandma Carole at the head of the table.

Do I worry about the negative costs, abuses and cultural consequences of unbridled recreational pot use? Of course I do. But when you get past all the “Rocky Mountain High” jokes and look past all the cable-news caricatures, the legalized marijuana entrepreneurs here in my adopted home state are just like any other entrepreneurs: securing capital, paying taxes, complying with a thicket of regulations, taking risks and providing goods and services that ordinary people want and need. Including our grateful family.

Read the whole thing.

Flashback: Ms. Malkin reviewed my book After Prohibition: An Adult Approach to Drug Policies in the 21st Century.  Here’s a snippet: “The war on drugs is an expensive quagmire that needlessly punishes people who’ve already punished themselves beyond repair.”

For additional background, go here and here.

Categories: Policy Institutes

U.S. Policy Blunder Made Ukraine Vulnerable to Russian Coercion

Cato Op-Eds - Wed, 03/26/2014 - 16:12

Ted Galen Carpenter

There is a lot of hand wringing in Washington and other Western capitals about Russia’s sudden invasion and annexation of Crimea. But as I point out in a recent article in The National Interest Online, a policy that the United States adopted more than two decades ago made such an outcome nearly inevitable. The administrations of George H. W. Bush and Bill Clinton bribed and pressured Kiev to give up the nuclear weapons it had inherited upon the demise of the Soviet Union, thus making Russia the only nuclear-armed successor state.

As University of Chicago professor John Mearsheimer pointed out at the time in Foreign Affairs, that policy was extremely myopic. He argued that a Ukrainian nuclear deterrent was “imperative to maintain peace between Russia and Ukraine. That means ensuring that the Russians, who have a history of bad relations with Ukraine, do not move to reconquer it.” In a prophetic passage, he added: “Ukraine cannot defend itself against a nuclear-armed Russia with conventional weapons, and no state, including the United States, is going to extend to it a meaningful security guarantee. Ukrainian nuclear weapons are the only reliable deterrent to Russian aggression.”

The Crimea incident demonstrates how ill-advised it was for Ukraine to relinquish its inherited nuclear deterrent. Under intense U.S. pressure, Kiev discarded the one strategic asset that would have made the Kremlin exercise caution. Now, Ukrainians have no alternative but to accept a humiliating territorial amputation. Despite the abundance of rhetorical posturing, there is little that the United States and its European allies will or can do to prevent Russia from pursuing its goals regarding Ukraine—unless they are willing to risk a military confrontation with a nuclear-armed power in its own neighborhood. And no sane person advocates that. Even ultrahawks such as Senator John McCain concede that a U.S.-led military intervention is not an option.

True, if Ukraine had retained its nukes and Putin had nevertheless gone ahead with his military conquest of Crimea, that crisis would have been more dangerous than the current version. But it is highly improbable that the Kremlin would have adopted such a risky course against a nuclear-armed country. Moscow received a great geopolitical gift when Washington succumbed to its obsession to oppose nuclear proliferation in all cases, regardless of the strategic circumstances. That move effectively disarmed Ukraine and made it vulnerable to coercion by its much stronger neighbor. Both Ukraine and the United States are now paying the price for that policy blunder.

Categories: Policy Institutes

Visiting Nigeria: Tragic Failure, Greater Potential

Cato Op-Eds - Wed, 03/26/2014 - 14:54

Doug Bandow

ABUJA, NIGERIA—Arriving in Abuja, Nigeria results in an almost simultaneous impression of poverty and potential.  After decades of economic disappointment, even collapse, much of Africa is growing. Yet even its leading states, such as Nigeria, remain locked in an impoverished past and fail to live up to their extraordinary potential.

I’ve arrived with a journalist group organized by SLOK Holding Co., chaired by former Gov. Orji Uzor Kalu, a potential presidential contender. Although cities such as Abuja (Nigeria’s capital), Lagos (Nigeria’s most populous urban area), and Port Harcourt (dominated by the nation’s oil industry) enjoy significant development, poverty is never far away. 

In Lagos, wealth has created a genuine skyline on Victoria Island. Yet crowded streets filled with poor street vendors sit in the shadows of these fine structures. Electrical outages are constant, requiring any serious enterprise to maintain a generator. 

Rural Nigeria is much poorer. Even the main highways are in desperate need of minimal maintenance, while burned and rusted wrecks, stripped of anything useful, litter the sides and medians.

Trash is tossed alongside or piled in medians. Roads off the main drag are dirt, always rutted, often muddy, and barely adequate. Most shops are shacks built on dirt just feet from traffic. 

Still, hope remains. Every where in Nigeria I saw enterprise. Open-air markets, which seem to occur every couple miles, are bustling, with people dashing hither-and-yon selling most everything you can find in a department store or supermarket. At major intersections and along busy streets, people sit in the median and walk into traffic hawking most anything, including triangular hazard signs (quite appropriate given Nigeria’s roads!). 

Intellectual capital also is growing. Citizens of this former British colony typically speak English, the global commercial language. I visited a university filled with bright and engaging students hoping to make better lives for themselves and their country. 

What is desperately needed, said one business executive, is an “enabling environment” for enterprise. In this, the government fails miserably.

One problem is insecurity. Nigeria has suffered dictatorship, civil war, insurgency, militant violence, Islamic extremism, and crime. Gov. Kalu said “internal security is critical,” because without a police escort you cannot move throughout much of the country. Business executives, political figures, and expatriate workers routinely travel with armed escorts.

Corruption is rife. One expatriate worker observed, “Nigeria is not a country.  It is an opportunity.” Mundane economic mismanagement bears even greater blame. The World Bank ranks Nigeria among the bottom third of nations in its Doing Business report. 

Average Nigerians are commonly, indeed uniformly, frustrated. The young especially crave opportunities currently absent. Even the more optimistic Nigerians with whom I spoke who see some progress say much more has to be done. 

Some see hope in Kalu, a wealthy businessman who understands entrepreneurship and promotes political reform. As a teen, he started trading palm oil. His success—without using government office to his own advantage—is unusual. 

When talking about his nation’s future, Kalu denounced restrictive licensing and promoted markets; he advocated privatization. He told me that he “would like to see small government and big enterprise” and spoke with admiration of Ronald Reagan.

Kalu may run for president in 2015. Could he actually implement his message of market liberalization if elected? Kalu forcefully argued that committed leadership could make the difference.

Obviously industrialized states have their problems, including sometimes galloping regulation (think ObamaCare!) and fail to fully live up to their potential. Yet they remain far freer, especially in economic affairs, enabling bright, enthusiastic, and hard-working people to prosper. Nigeria needs to follow the same broad growth path that enriched America and Western Europe, and more recently East Asia, including China.

As I wrote in my column for the Freeman: “The greatest tragedy of Nigeria’s poverty is that it is so unnecessary. Its people know what to do. The spirit of enterprise is everywhere.  It’s time for the Nigerian people to liberate themselves. It’s time for freedom to come to Nigeria.”

Categories: Policy Institutes

Dan Snyder’s Indian Initiative

Cato Op-Eds - Wed, 03/26/2014 - 12:00

Chris Edwards

The owner of the Washington Redskins, Dan Snyder, has launched the Original Americans Foundation to “provide resources that offer genuine opportunities for tribal communities.” Snyder and his staff have recently visited a couple dozen Indian reservations, and they are determined to “work as partners to tackle the troubling realities facing so many tribes across our country.”

This sounds like a very worthwhile initiative. However, Snyder’s efforts so far seem to be focused on providing hand-outs, such as coats, shoes, and a backhoe. Such aid may provide short-term relief, but it will not change the long-term prospects of the many reservations that have deep-seated problems of poverty and economic stagnation.

If Snyder wants to drive fundamental change, I’d suggest that his new foundation focus on the need for institutional reforms in tribal governments and in the relationship between tribes and the federal government. Indian reservations are often lacking individual property rights to land, dependable security of contract, efficient administration, and impartial legal proceedings. As a result, they can be starved of commercial business lending, real estate development, entrepreneurship, and capital investment.

In this essay, I note that American Indians and the federal government have a long, complex, and often sordid relationship. The government has taken many actions depriving Indians of their lands, resources, and freedom. The aims of federal policies have gyrated wildly over two centuries, and most policies have failed, as is evident from the continued high poverty rates on many reservations.

These days, Congress often ignores the serious problems on Indian reservations that it played a large part in creating. Congress hands out subsidies, and it gives special preferences to those tribes that are good at lobbying, but it puts little effort into pursuing fundamental reforms that would benefit all reservations. Meanwhile, the Bureau of Indian Affairs has long been one of the most dysfunctional agencies in government.

In sum, good for Dan Snyder in engaging on these issues. But I hope he uses his funding and influence to draw attention to the need for fundamental policy reforms.  

For more, see Indian Lands, Indian Subsidies, and the Bureau of Indian Affairs.

Categories: Policy Institutes

Family Members Use Most Employment-Based Green Cards

Cato Op-Eds - Wed, 03/26/2014 - 11:48

Alex Nowrasteh

Many critics of American immigration policy claim there is too much emphasis on family reunification and not enough on employment. It’s not a problem that families can reunify in the United States, but those critics are right that the American immigration system highly favors families – even in the employment-based green card category set-aside for workers.

The underlying issue is that the families of immigrant workers must use employment-based green cards. Instead of a separate green card category for spouses and children, they get a green card that would otherwise go to a worker. In 2012, 56 percent of all supposed employment-based green cards went to the family members of workers. The other 44 percent went to the actual workers. Some of those family members are workers, but they should have a separate green card category or be exempted from the employment green card quota of approximately 140,000 a year. If family members were exempted from the quota, or there was a separate green card for them, an additional 81,245 highly skilled immigrant workers could have entered in 2012 without increasing the quota.

In addition, 87.5 percent of those who gained an employment-based green card in 2012 were already legally living in the United States. They were able to adjust their immigration status from another type of visa, like an H-1B or F visa, to an employment-based green card. Exempting some or all of the adjustments of status from the green card cap would almost double the number of highly skilled workers who could enter. Here are some other exemption options:

  • A certain number of workers who adjust their status could be exempted in the way the H-1B visa exempts 20,000 graduates of American universities from the cap.
  • Workers could be exempted from the cap if they have a higher level of education, like a graduate degree or a PhD.
  • Workers could be exempted if they show five or more years of legal employment in the United States.
  • Workers could be exempted based on the occupation they intend to enter. This is a problem because in involves the government choosing which occupations are deserving, but so long as it leads to a general increase in the potential numbers of skilled immigrant workers without decreasing them elsewhere, the benefits will outweigh the harms.

 

2012 Employment Based Green Cards

  EB 1 EB 2 EB 3* EB 4^ EB 5~   All EB Percent Workers`

16,286

24,719

17,689

1,703

2,295

 

62,692

43.56%

Workers Adjusted`

15,770

24,261

15,297

1,400

428

 

57,156

  Workers New Arrivals`

516

458

2,392

303

1,867

 

5,536

  Family

23,030

26,240

21,532

6,153

4,290

 

81,245

56.44%

Family Adjusted

22,029

25,153

15,906

5,240

501

 

68,829

  Family New Arrival

1,001

1,087

5,626

913

3,789

 

12,416

               

0

  Adjustment of Status

37,799

49,414

31,203

6,640

929

 

125,985

87.53%

New Arrival

1,517

1,545

8,018

1,216

5,656

 

17,952

12.47%

                  Total

39,316

50,959

39,221

7,856

6,585

 

143,937

                      EB 1 EB 2 EB 3* EB 4^ EB 5~       Workers Adjusted

96.83%

98.15%

86.48%

82.21%

18.65%

      Worker New Arrivals

3.17%

1.85%

13.52%

17.79%

81.35%

                        Family Adjusted

95.65%

95.86%

73.87%

85.16%

11.68%

      Family New Arrivals

4.35%

4.14%

26.13%

14.84%

88.32%

      *Some data on spouses and children withheld.           ^Some data on spouses, children, and workers withheld.         `Investors for the EB-5.               ~Some data on spouses, children, and investors withheld.         Source: 2012 Yearbook of Immigration Statistics          

 

 

Categories: Policy Institutes

Congress Likes at Least One Type of Fast Track

Cato Op-Eds - Wed, 03/26/2014 - 11:39

Daniel R. Pearson

Seasoned observers of U.S. trade policy have been chagrined with the reluctance of Congress to pass fast-track negotiating authority. However, a small glimmer of hope appeared on March 25. That day, a statue honoring Dr. Norman E. Borlaug, recipient of the 1970 Nobel Peace Prize, was installed in Statuary Hall of the U.S. Capitol. His work in developing high-yielding grains is credited with enabling billions of people to eat better and to achieve higher living standards, objectives strongly supported by Cato. (See this 2009 post by Cato Executive Vice President David Boaz honoring the life of Dr. Borlaug.)

Capitol visitors who were fortunate to be associated with the state in which he was born (Iowa), the school where he studied (University of Minnesota), or where he spent the final years of his career (Texas A&M), were able to receive special tickets to enter Statuary Hall. These tickets were designated “Fast-Track Viewing,” which enabled the holders to bypass the long lines normally associated with a visit to the Capitol’s interior. It is gratifying to learn that Congress is willing to utilize fast-track procedures in some circumstances. Let’s hope they soon decide to apply the concept more broadly.

 

Or, is the incurable optimist in me wanting to ignore another possible interpretation? After all, a “viewing” is sometimes associated with paying respects to the deceased. Is it possible that “fast-track viewing” means that Congress thinks the concept is dead and that those who wish to pursue trade reform should do so through other means? Might be best not to overanalyze this issue.

Categories: Policy Institutes

Is Religious Liberty an “Exception” to Government Rule?

Cato Op-Eds - Tue, 03/25/2014 - 16:08

Roger Pilon

In a free society, employers would be at liberty to offer their employees group health insurance, if they wished, and to offer whatever coverage they wished to offer. In the Supreme Court today, however, so basic a premise barely surfaced during oral argument in Sebelius v. Hobby Lobby, the Obamacare “contraceptive mandate” case. Rather, Justices Sotomayor, Kagan, and Ginsburg, clearly supporting the mandate, pressed Hobby Lobby’s attorney Paul Clement as to whether an “exception” should be provided for religious employers who are otherwise required by regulation to offer contraceptive coverage, and whether such an exception could be limited or instead would have no principled bounds. By contrast, Chief Justice Roberts, Justice Kennedy, and even Justice Breyer were at pains to show how such a religious “accommodation” could in fact be limited.

Thus have we come to a point at which religious liberty is recognized, if it is, as an exception to the general rule that government may require us to act as it dictates—and we have to be careful not to extend that accommodation too far lest it gobble up the rule.

That’s a remarkable inversion of First Principles: government first, liberty second, as a limited exception. True, we don’t allow the religious, in the name of religious liberty, to proselytize by the sword. And we don’t because that “exception” is perfectly consistent with a general rule in favor of liberty and against forced association—as in murder. Here, however, religious employers are asking simply to be free from a rule that would otherwise restrict their liberty or require forced association, a rule that would force them to choose between not offering their employees insurance, and paying the Obamacare penalty for so choosing, and offering their employees coverage that offends the employers’ religious beliefs. And it’s no answer to say that, absent the mandate, the employees’ liberty is restricted. They’re at perfect liberty to obtain contraceptives, but not free to force their employer to provide them.

In other words, if you start with freedom of association, then it’s association that must be justified, by mutual consent, not individual liberty. But if “we’re all in this together”—as President Obama so often says and as Obamacare so clearly manifests—then liberty has to be treated as an “exception,” an “accommodation,” carved out from that general rule. For more on this see here and here.

Categories: Policy Institutes

Dumping the Core? Washington Still Owns the Hoosiers

Cato Op-Eds - Tue, 03/25/2014 - 15:55

Neal McCluskey

From an immediate political perspective, it’s great news: Yesterday, Gov. Mike Pence (R) signed legislation making Indiana the first state to officially drop the Common Core. (Four states never adopted it.) Now other states don’t have to be the first to say “sayonara, Core,” and anti-Core forces appear to have real political potency. But the change may well be superficial: While the new law officially dumps the standards called “Common Core,” Hoosiers are still taking curricular orders – and quite possibly the Core by another name – from the federal government.

Here is the operative part of the legislation:

Before July 1, 2014, the state board shall adopt Indiana college and career readiness educational standards, voiding the previously adopted set of educational standards. The educational standards must do the following:(1)Meet national and international benchmarks for college and career readiness standards and be aligned with postsecondary educational expectations.(2) Use the highest standards in the United States.(3) Comply with federal standards to receive a flexibility waiver under 20 U.S.C. 7861, as in effect on January 1, 2014

Unless I’m totally bleary eyed, there are two giant red flags billowing in the wind here.

The first is that points 1 and 2 call for meeting or beating some kind of national benchmark, and point 1 calls for hitting international benchmarks. To my knowledge, the only standards-producing group claiming to hit international benchmarks is the Common Core, and the Core is the only existing national benchmark. (The National Assessment of Educational Progress, to my knowledge, does not claim to offer “standards.”) At the very least, if the goal isn’t to de facto stick with the Core – as some standards writers claim is happening – these points raise two mammoth questions: Who will determine if new Hoosier standards meet international and national benchmarks, and who will decide if they are “the highest standards in the United States”?

Unfortunately, point 3 likely gives the answer to these questions: the federal government – more specifically, the U.S. Secretary of Education – will decide whether Indiana’s new standards cut the mustard. As NCLB waiver regulations currently stand, Indiana really only has two ways to meet the “college- and career-ready standards” provision: Either adopt the Common Core – or some set of standards the Secretary is willing to say are so close to the Core they are “common to a significant number of States” – or have a state college system declare the state’s standards college- and career-ready. And I don’t see the latter anywhere in the new law.

It is possible I am missing something – legislation, regulation, and unilateral waiver decisions can often be very opaque – but from what the statute seems to say, Indiana may be giving up the Core in name only. And even if it really can distance itself from the Core, Indiana doesn’t at all appear to be telling Washington, “we’ll run our own education system, thank you very much!”

There is one upside to this: It illustrates once again the great power of federal NCLB waivers, a power Core supporters continue to disingenuously pretend does not exist.

Categories: Policy Institutes

Is There No Alternative to Forcing People to Violate Their Religious Beliefs?

Cato Op-Eds - Tue, 03/25/2014 - 12:54

Ilya Shapiro

On a day full of bluster both in and outside the Supreme Court, Hobby Lobby and it’s super-lawyer Paul Clement had the better of the argument over Obamacare’s contraceptive mandate. While Solicitor General Don Verrilli gamely pressed the plight of the “third-parties” who would lose out if the challengers get an exemption – employees whose contraceptives wouldn’t be paid by their employer – there didn’t seem to be a majority on the Court who saw it that way. Justice after justice probed such issues as whether the government’s interest here was really that compelling given all the exemptions it had already granted (to small employers, religious nonprofits, and grandfathered plans) and whether there was no other way to achieve the same goal. And those are probably the points on which this case will ultimately turn: (1) the contraceptive mandate was not one of the Obamacare requirements that became mandatory as of January 1 (or whenever the administration stops illegally delaying them), and (2) the government could’ve ensured the provision of the contraceptive mandates a different way (e.g., new tax credits or existing public health programs). Despite the parade of horribles invoked by Justice Sotomayor regarding religious objections to blood transfusions and vaccines, at least five justices seemed to recognize that religious-liberty claims are meant to be adjudicated on a case-by-case basis – maybe six given Breyer’s lukewarm and infrequent interjections.

The government fared even worse on its position that for-profit corporations can’t assert religious-exercise interests in the first place. Even Justice Kagan recognized that under certain circumstances, for-profit enterprises may engage in religious activity. While Cato’s amicus brief argued that this “standing” issue is purely academic anyway – the individual corporate owners feel the mandate/fines regardless of who is exercising religion or bringing lawsuits – I count seven votes for getting past this threshold issue.

As I left the argument, I had a bit of spring in my step, even as the snowstorm that greeted me lacked any spring whatsoever. The Court is likely to stop this callous, arbitrary, and needless bending of the will of a small religious minority to the federal grindstone. But alas that’s just this case; the more that the government expands and takes over areas properly left to civil society, the more clashes of conscience will result. Today it’s religious belief, tomorrow something else, but all these liberty-destroying mandates come with the collectivized territory.

Categories: Policy Institutes

Peter Schuck at Cato Thursday

Cato Op-Eds - Tue, 03/25/2014 - 11:42

Walter Olson

On Thursday Cato will welcome Peter Schuck, professor emeritus of law at Yale, to discuss his new book “Why Government Fails So Often, And How It Can Do Better,” with Arnold Kling commenting. (I’ll be moderating). Today Peter Berkowitz reviews the book at Real Clear Politics. An excerpt: 

…the belief—which public polls show is shared by a majority of Americans—that the federal government wastes great quantities of taxpayer money and frequently fails to fulfill its promises is confirmed by reams of social science research. … Schuck, professor emeritus of law at Yale University, demonstrates that the problem goes to the core of big government. … Combining an exhaustive review of the scholarly literature in political science and law with detailed case studies, Schuck concludes that government’s failures “are not just random, occasional, or partisan; they are large, recurrent, and systemic.”

They derive from what Schuck—following the writings of political scientists John DiIulio and the late James Q. Wilson—characterizes as the replacement of the Old System of American governance by the New System. …The New System abandoned questions of constitutional limits and legitimacy in favor of the assumption that government possesses unlimited power to do what representatives deem beneficial to society….   Schuck shows that the structural sources of our sprawling federal government’s endemic policy failures are numerous—and explainable.  

For more, follow the link. You can register for the lunch here, or watch live at cato.org/live.  

 

 

Categories: Policy Institutes

Russians And Ukrainians Battle Over Crimea: The Tragic Perils of Nationalism

Cato Op-Eds - Tue, 03/25/2014 - 11:29

Doug Bandow

No good end to the Crimean crisis is likely.  Moscow seized territory historically part of Russia and won’t retreat.  Ukraine won’t accept Moscow’s land grab. 

The West can’t ignore flagrant aggression and is headed toward a “cool war” with Russia.  Crimeans unwilling to shift allegiance will have to leave their homes.  Such are the perils of nationalism, which remains sadly popular today.

Russia has officially absorbed Crimea.  The veneer of legality doesn’t disguise Moscow’s act of war.  A majority of the territory’s people may have wanted to leave, but a referendum framed by Russian advocates and conducted under Russian military occupation was certain to yield the result desired by Vladimir Putin, not Crimea’s citizens. 

Kiev is no more interested in the desires of Crimea’s people.  The West proclaimed itself shocked at Moscow’s move, even though the former routinely intervenes militarily for its own ends. 

While the Russian government deserves to be punished for its bad behavior, there is no chance it will reverse course.  The U.S. and Europeans are heading toward extended confrontation with Russia. 

The biggest losers are Crimeans who prefer Ukraine’s inefficient and corrupt, but still functioning—at least until the violent overthrow of the elected government—democracy to Putin’s wealthier but increasingly authoritarian wannabe empire.  Even some ethnic Russians might have preferred to deal with Moscow from afar. 

There is no right answer to the controversy.  Ukraine only had formal legal title to Crimea because in 1954 Soviet Communist Party General Secretary Nikita Khrushchev, who ran Ukraine before ascending to the summit of power in Moscow, transferred control of the territory from Russia to Ukraine.  At the time, no one imagined the Soviet Union dissolving.

But in 1992 Ukraine fled the collapsing Communist superstate with Crimea in tow.  Last month violent street protests shifted control in Kiev from Russophiles in eastern Ukraine to nationalists in western Ukraine. 

That angered the former and sparked a violent response from the Kremlin.  Putin’s conduct, though deplorable, was understandable.  As Henry Kissinger once said, even paranoids have enemies.

As I pointed out in my new column on Forbes online:

Since the end of the Cold War the West has pursued its version of the notorious Brezhnev Doctrine:  What’s mine is mine and what’s yours is negotiable.  The U.S. and Europe advanced NATO to Russia’s borders, poured money into Ukraine to promote pro-Western candidates, pressed Kiev to choose between Russia and the European Union, and pushed friendly politicians toward power after the ejection of Russia-friendly Yanukovich.

Yet none of this would have mattered if the majority of Crimeans had clearly wanted to switch allegiance and Putin had waited for them to act.  In general, people should be able to freely decide their political destinies.

However, even a voluntary transfer along ethnic lines would raise larger concerns.  In principle, there is nothing wrong with wanting to live with others who share family, traditional, historical, and cultural ties.  But setting up a government in the same way turns the state into a vehicle for ethnic aggrandizement rather than liberty advancement. 

Moreover, once ethnic division begins, the process usually leaves newly dissatisfied ethnic minorities, who have an equal right to demand ethnically-based states.  Indeed, the Versailles Treaty allowed friends of the winners, like the Czechs and Poles, to create ethnic-based states incorporating multiple minorities from the losers, particularly Germany.  The latter demanded similar self-determination, with Adolf Hitler’s backing. 

Of course, Putin is not Hitler and authoritarian Russia is not Nazi Germany.  Nevertheless, Moscow’s resort to nationalism has revived a tragically misguided approach to international affairs. 

From America’s standpoint whose flag flies over Crimea today is irrelevant.  But the revival of nationalism backed by military intervention sets an ominous precedent.  The allies still are reaping the whirlwind from the nationalist winds sown by the Versailles Treaty nearly a century ago.

 

Categories: Policy Institutes

Cutting the Tie Between Education and Housing

Cato Op-Eds - Tue, 03/25/2014 - 09:00

Jason Bedrick

We already have a market in education: the real estate market. Controlling for other factors, houses in districts with higher-performing government schools are more expensive than those in areas with lower-performing schools. In 2012, the Brookings Institution issued a report finding that in “the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school.” The report also found that “the average low-income student attends a school that scores at the 42nd percentile on state exams, while the average middle/high-income student attends a school that scores at the 61st percentile on state exams.”

Essentially, access to a quality education depends on one’s parents’ ability to purchase a relatively more expensive house in an area with a good school. That this is a horribly unjust policy for low-income children is obvious and oft-discussed, but what’s often overlooked is that the negative consequences also extend to middle-income families.

With quality education tied to housing, middle-income parents who desire the best for their children must seek out housing in areas with better government schools or scrape together money for private school tuition. Unfortunately, as a new Brookings report reveals, this too-often means purchasing a home that is just barely within a family’s financial means, creating a situation where millions of middle-income families live “hand-to-mouth” with very low levels of liquid savings though they have considerable non-liquid assets. The Atlantic’s Matthew O’Brien explains:

This shouldn’t be too much of a mystery. Imagine a couple that’s getting ready to have kids, and wants to buy a house near good schools. Well, that’s expensive. As Elizabeth Warren and Amelia Tyagi pointed out in The Two Income Trap, buying a house in a school district you can’t really afford is one of the biggest causes of bankruptcies. Couples can only afford the mortgage with both their salaries, so they’ll get in trouble if either of them loses their job. 

But even if everything goes right, they’ll still be cash-poor for a long time. They’ll probably have to use most of their savings on the down payment, and use a big part of their income on the mortgage payments. In other words, the wealthy hand-to-mouth are parents overextending themselves to get their kids into the best schools possible in our de facto private system.

As O’Brien notes, a system of school choice would sever the ties between housing and education, which is a policy that could keep “many people from becoming cash-poor and wealthy—a precarious thing—in the first place.” School choice also provides a passport out of poverty for those students whose parents could not afford an expensive house at all.

Categories: Policy Institutes

The Wall Street Journal on Halbig v. Sebelius

Cato Op-Eds - Tue, 03/25/2014 - 08:08

Michael F. Cannon

Today, the U.S. Court of Appeals for the D.C. Circuit will hear oral arguments in Halbig v. Sebelius, one of four cases that Jonathan Adler and I helped spur with our 2013 Health Matrix article, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.” Critics call Halbig the most significant existential threat to the Affordable Care Act.” In anticipation of the hearing, the Wall Street Journal wrote a lengthy editorial explaining the issues. Excerpts:

Halbig v. Sebelius involves no great questions of constitutional interpretation. The plaintiffs are merely asking the judges to tell the Administration to faithfully execute the plain language of the statute that Congress passed and President Obama signed.

The Affordable Care Act—at least the version that passed in 2010—instructed the states to establish insurance exchanges, and if they didn’t the Health and Human Services Department was authorized to build federal exchanges. The law says that subsidies will be available only to people who enroll “through an Exchange established by the State.” The question in Halbig is whether these taxpayer subsidies can be distributed through the federal exchanges, as the Administration insists…

In 2012, HHS and the Internal Revenue Service arrogated to themselves the power to rewrite the law and published a regulation simply decreeing that subsidies would be available through the federal exchanges too. The IRS devoted only a single paragraph to its deviation from the statute, even though the “established by a State” language appears nine times in the law’s text. The rule claims that an exchange established on behalf of a state is a “federally established state-established exchange,” as if HHS is the 51st state.

Careful spadework into ObamaCare’s legislative history by Case Western Reserve law professor Jonathan Adler and Michael Cannon of the Cato Institute has demonstrated that this jackalope rule-making was contrary to Congress’s intent…

Mr. Obama has conceded that “obviously we didn’t do a good enough job in terms of how we crafted the law.” The right and only lawful way to repair ObamaCare is through another act of Congress. In Halbig, the judiciary can remind the Obama Administration of this basic constitutional truth.

Jonathan Adler critiques the Halbig district court’s ruling in favor of the IRS here.

Find lots of commentary by me on the Halbig cases at DarwinsFool.com.

This reference guide contains all the information you could want about these cases – and more.

Categories: Policy Institutes

Pages