On Wednesday, the Congressional Budget Office (CBO) released a cost-estimate for the Legal Workforce Act (H.R. 1772). That bill is one part of the House Republican’s immigration reform package that would nationally mandate a version of E-Verify.
Source: CBO Cost Estimate for H.R. 1772 Legal Workforce Act, page 2.
CBO notes that many unverifiable employees will be pushed deeper into the underground economy by E-Verify – something that is already occurring in states that mandate its use. Some employers would no doubt continue to pay unverified employees, but would do so off the books and off the radar of the IRS and Social Security Administration. While the government would receive an expected $49 billion in on-budget revenues from new sources of income tax revenue and payroll tax revenue from 2014 to 2023, it would lose $88 billion in off-budget revenue during the same period – mostly from Social Security payroll taxes lost as workers join the underground economy. That’s a $39 billion net loss to revenues due mainly to E-Verify.
My colleagues and I have written extensively about the threat that E-Verify poses to employees, employers, and civil liberties. The CBO estimates that expanding E-Verify would cost the federal government $635 million over the 2014-2018 period, followed by a similar amount from 2018 to 2023. That translates to roughly $1.2 billion in new hires, data retention systems, enforcement tools, and other goodies for the Department of Homeland Security.
The Legal Workforce Act would also impose costly new mandates on state and local governments and the private sector. The CBO estimates at least $10 million in total annual costs to be imposed on state and local governments that will be forced to comply (currently, only 20 states mandate the use of E-Verify for new public hires). And the office estimates a minimum cost of $200 million annually from 2016 to 2018 for private sector employers as they struggle to verify an estimated 50 million employees.
The Legal Workforce Act imposes new costs on the federal government, on state and local governments, on employers and employees, and will push some workers further into the underground economy – all without (thankfully) achieving its core objective of excluding unauthorized immigrants from the workforce. While the CBO may not be known for its accurate fiscal projections, the inevitable net fiscal costs of this bill make it hard to draw anything positive from this recent report.
This post was written wtih the help of Scott Platton.
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.” In this edition, we cover an important story that we missed back in 2008.
People send us stuff. As a result of our recent Global Science Report on global warming ruining our bananas, one of our fans directed our attention to an important effect of climate change that we somehow missed, back in 2008, when the alarmists at the BBC wrote that it was threatening haggis.
Haggis, for the uninitiated, is sheep stomach stuffed with minced lung, liver, heart, tongue, suet, onions and oats. How offal!
While there’s no accounting for taste, it tastes as bad as it smells.
According to the story, there has been a rise in a parasite effecting Scottish sheep that renders the lung “unfit for consumption” (something that many of you probably thought was the case already).
And, so as not to miss the bandwagon, an official from the Scottish Agricultural College Veterinary Investigation Centre told the BCC that:
Part of the reason will be the parasite is able to live a pretty happy life on the ground because of higher temperatures. Maybe it’s climate change.
Or maybe not.
It turns out that another potential cause of the increase in the lung parasite is that Scottish farmers have reduced their application of parasite treatment due to declining infections of roundworm. The treatment of roundworm also killed the lung parasite.
There was no mention made in the BCC article as to whether global warming was behind the decrease in roundworm infestations.
Instead, the article went on the describe the events which took place in the World Haggis Eating Championship, won by Willie Robertson from Dunkeld, who managed to put away a pound of haggis in 125 seconds. For his victory, Mr. Robertson was awarded a trophy and a bottle of whiskey—no doubt a key feature in the rest of the day’s merrymaking.
BBC’s writing in the haggis story appears similarly merry. Here are the last three paragraphs of their report, verbatim, a candidate for first place in the 2008 International Nonsequitur Competition.
The championship was held as part of the 125th Birnam Highland Games, and attracted competitors from Australia, New Zealand and the US.
Climate change, meanwhile, has been blamed for affecting natural habitats in Scotland and across the world.
Most notably, scientists and conservationists say it threatens survival of polar bears.
Federal Reserve chairmen are famous for their opaque but sophisticated-sounding comments designed to make it appear that they know more about the shape of the economy than they really do. But outgoing chairman Ben Bernanke’s direct and transparent assertions yesterday about fiscal policy also left me scratching my head.
In response to a reporter’s question about why the economy has not created more jobs:
Bernanke saw several of the usual reasons: the nature of the financial crisis, the housing bust and trouble in Europe. But he added one more. ‘On the whole, except for in 2009, we’ve had very tight fiscal policy,’ he said. ‘People don’t appreciate how tight fiscal policy has been.’
In the usual (and weird) Keynesian view of the economy, government deficits are stimulative while surpluses are “tight” or destimulative. The following chart (based on CBO) shows that in the four years after 2009, we had $4.4 trillion of federal deficit spending, or supposed Keynesian stimulus. Calling that “very tight fiscal policy” is absurd.
Daniel J. IkensonEarlier this month in Bali, WTO ministers reached agreement on a set of negotiating issues known as “trade facilitation,” which deal mostly with customs reform and related measures to reduce the time and cost of transporting goods and services across borders. If removing tariffs is akin to turning on a water spigot full blast, trade facilitation is the act of untangling and straightening out the attached hose. A kinked hose impedes the flow as an administratively “thick” border impedes trade. This paper, which I wrote a few years ago, describes the importance of trade facilitation reforms to economic growth, and explains why subjecting such self-help reforms to negotiation – instead of just undertaking them as a matter of surviving in a competitive global economy – would only delay the process of removing inefficiencies. Five years after the paper was written and 12 years after multilateral negotiations were launched in Doha, a deal was reached obligating governments to reform and streamline their customs procedures, with technical and financial assistance provided by the wealthy to the developing countries. As I wrote yesterday, this is small relative to the overall Doha Round agenda and relative to what might have been accomplished over these past 12 years in the absence of Doha (i.e., without adhering to the pretensions that our own domestic barriers to foreign commerce are assets to be dispensed with only if foreigners dispense of theirs). But perhaps nobody has been more gifted at exposing the absurdity of administrative trade barriers with pithy wit and grace than the 19th century French classical liberal business and economics writer Frederic Bastiat. Around 1850, Bastiat made a case for trade facilitation that can scarcely be improved: Between Paris and Brussels obstacles of many kinds exist. First of all, there is distance, which entails loss of time, and we must either submit to this ourselves, or pay another to submit to it. Then come rivers, marshes, accidents, bad roads, which are so many difficulties to be surmounted. We succeed in building bridges, in forming roads, and making them smoother by pavements, iron rails, etc. But all this is costly, and the commodity must be made to bear the cost. Then there are robbers who infest the roads, and a body of police must be kept up, etc. Now, among these obstacles there is one which we have ourselves set up, and at no little cost, too, between Brussels and Paris. There are men who lie in ambuscade along the frontier, armed to the teeth, and whose business it is to throw difficulties in the way of transporting merchandise from the one country to the other. They are called Customhouse officers, and they act in precisely the same way as ruts and bad roads. Congratulations, negotiators, for agreeing to remove the kinks from your hoses.
Daniel J. Mitchell
After nearly five years in office, what’s President Obama’s most significant accomplishment?
This is a serious question, so no jokes about the Nobel Prize he received for not being Bush. And no partisan GOP answers about the 2010 election, either.
Put yourself in the position of a future historian and think about what you would put in a book to describe Obama’s biggest accomplishment.
Proponents of big government, by contrast, also aren’t big fans of the stimulus, though they’re dissatisfied because they think Obama should have wasted even more money.
Another potential answer is Obamacare. Libertarians and conservatives, needless to say, would say it was a significant accomplishment in the same sense that the Titanic had a significant maiden voyage.
Leftists, by contrast, obviously can’t be pleased by the way Obamacare is imploding in the short run, but they nonetheless may think that it will be worth it in the medium run because more people will be dependent on government (though they may regret their choice in the long run).
Killing Osama bin Laden is probably a good answer, but if terrorism and conflict with the Islamic world are still big issues in the future, then I suspect the achievements of Seal Team Six won’t be seen as making that much of a difference.
For what it’s worth, I think the change in public opinion may be the President’s most long-lasting and significant accomplishment. Take a look at these remarkable results just published by Gallup. A record share of the population now say that big government is the biggest threat to the nation’s future.
Wow. I’m tempted to say that this is strong evidence of the effectiveness of the Cato Institute (and there is independent data to support that position), but I feel compelled to admit that Obama also deserves a good bit of the credit.
Even more amazing, President Obama has done something that is probably beyond even the ability of Cato. He’s convinced partisan Democrats that big government is a serious threat. Look at how the numbers have dramatically changed since 2008.
What’s particularly amazing about the shift among Democrats isn’t that 56 percent now view big government as the major threat today, compared to 32 percent about five years ago. What’s shocking is that this change happened with a Democrat in the White House.
This is newsworthy because partisan Republicans and Democrats have a tendency to say things are good or bad depending on whether “their team” is in charge.
While these numbers are remarkable, I suppose it’s too early to say the growing concern about big government is the most significant accomplishment of the Obama presidency.
That being said, anxiety about big government may lead to big political changes in 2014 and 2016, and those political changes may then lead to big policy changes such as entitlement reform and tax reform.
And if that happens, then the shift in public opinion during the Obama years may turn out to be profoundly important. In other words, Obama may turn out to be another Herbert Hoover – a politician whose statist policies set the stage for dramatic changes in public policy.
And if that happens, Obama truly will deserve to be named “libertarian of the year.”
From the Seven Days publication:
In recent weeks, Vermont Chief Justice Paul Reiber has gone public with an unusually assertive critique of the war on drugs and the “tough on crime” approach that has defined criminal justice for decades.
Reiber, who holds an office in which occupants usually avoid saying anything remotely controversial, has stopped short of recommending policy or criticizing any individuals or government bodies. But in a pair of speeches and a brief interview with Seven Days, he has declared ineffective the current reliance on police and punishment, and touted the merits of treatment-based models for dealing with crime rooted in substance abuse….
In his Boston speech, Reiber highlighted reforms in Portugal, which in 2001 abolished criminal penalties for possession of all drugs, and replaced incarceration with drug treatment. Vermont’s chief justice called the results of that experiment “astonishing,” citing a study from the libertarian Cato Institute showing that Portugal experienced a large drop in drug use and a spike in the number of people seeking treatment.
Check out the Cato report on Portugal’s drug decriminalization policy here.
BERLIN—Germany’s Christian Democrats and Social Democrats have formed another “Grand Coalition.” The political center in Europe’s wealthiest and most populous state now swallows most of the ideological spectrum. However, the entire political spectrum has lurched to the left.
The Christian Democratic Union-Christian Social Union combination (sister parties which run as one) is a pale version of the Republican Party. The CDU-CSU long ago made peace with Germany’s generous welfare state.
Even less inclined to act is CDU Chancellor Angela Merkel. She pulled her party leftward in 2005 into a Grand Coalition with the Social Democratic Party, which went on to do essentially nothing.
She won a second term in 2005 but did little more to liberate German life. Her latest reelection campaign was based on keeping everything the way it was.
The CDU-CSU fell only five votes short of a majority. However, the poll was a disaster for the CDU-CSU’s coalition partner, the Free Democratic Party. Created in 1948 out of the ruins of the Third Reich, the FDP emphasized civil liberties, economic freedom, and entrepreneurship. In 2009, the Free Democrats enjoyed their best showing ever, 14.6 percent, and their support made Merkel Chancellor.
However, they proved to be less adept in governing. As the September election approached, the Free Democrats lacked any noticeable achievements.
A new political competitor, Alternative for Germany criticized the endless Euro bail-outs while backing the same market-oriented economic policies as the Free Democrats. Many FDP voters shifted allegiance.
The FDP fell just short of the five percent threshold, receiving 4.76 percent of the vote. It went from 93 Bundstag seats to none. The Free Democrats still hold some seats in regional parliaments and the European Parliament, but have no obvious path back to national power. The AFD came in just behind the FDP, with 4.7 percent, and also won no seats. However, it is well-positioned to advance, putting the FDP’s survival at risk.
The Free Democrats’ collapse left the Bundestag with a narrow left-wing majority. However, both the SPD and Greens pledged not to join forces with Die Linke, or Left party, since it was the successor to the Communists who once ruled East Germany.
Although the CDU-CSU was much stronger in the Bundestag, the Social Democrats demanded specific concessions, such as a national minimum wage, which will reduce Germany’s employment advantage over its European neighbors, limitations on temporary employment, which will cut job opportunities, expanded pension benefits, which will add to the financial burden of an aging society, higher than necessary state pension contributions, which will be looted to fund political initiatives, and urban rent controls, which will discourage apartment construction and maintenance.
The Economist magazine warned of “Die Grosse Stagnation” likely to come. Europe’s largest economy faces slow labor productivity, falling investment, and minimal reforms since the start of the Euro crisis.
It is not just the government which has moved left. During the last Grand Coalition the FDP was the largest opposition party, leaving its leader the unofficial opposition leader. In this Bundestag the largest opposition party will be Die Linke. Just behind will be the Greens, traditionally known for their environmental commitment but of late pushing leftist economic nostrums as well.
Nor does the drift stop with the left-wing parties. The Free Democrats held a special party congress in Berlin and responded to the election debacle by making Christian Lindner of North Rhine-Westphalia the new party chairman. Lindner is seen as less committed to the party’s liberal principles.
Like Americans, the German people have worked hard to prosper despite an ever-expanding regulatory welfare state. But they will find it ever more difficult to succeed as their government moves further left. Then they will come to miss having a voice for economic and social liberty in the Bundestag.
K. William Watson
As Cato’s Dan Ikenson has pointed out before, the Obama administration likes grand trade policy proposals, like the Trans-Pacific Partnership or the proposed U.S.-EU trade agreement, but isn’t putting in the political effort needed on the domestic side to secure approval of these agreements.
The president’s decision to nominate Senator Max Baucus (D-MT) to be the next U.S. ambassador to China is a perfect example of this problem. Three years into negotiations toward the Trans-Pacific Partnership agreement, the president finally decided to seek fast track trade promotion authority this fall, and Baucus has been instrumental in putting together a bipartisan bill. With Baucus being sent to China, there will be no prominent Democrats in either the House or the Senate supportive of fast track.
This development should surely not engender confidence in the ultimate success of the TPP, but there’s one counterintuitive way to help bring much-needed focus to U.S. trade policy: Stop worrying about fast track.
Fast track authority is an arrangement between the president and Congress designed to ease the passage of trade agreements. Congress agrees to hold a timely, up-or-down vote on future trade agreements. In exchange, the president agrees to adopt a series of negotiating objectives demanded by Congress.
Many trade advocates believe that fast track authority is necessary to gain Congressional approval of free trade agreements, but I have a new bulletin out today explaining how, right now, fast track will do more harm than good.
First, with the current partisan alignment in Congress, we don’t need fast track to pass the TPP. And second, the negotiating objectives Congress imposes through fast track include bad policies that could disrupt the negotiations at this late stage, and even delay completion of the agreement.
If there were a chance that Congress would use the fast track bill to make the TPP a better free trade agreement, then I would support it. But there is absolutely no indication that anyone in Congress is going to push for that. Taking up fast track now accomplishes nothing of value, but will serve as divisive political theater while ultimately reducing the quality of the TPP.
You can learn more by reading the bulletin.
At some point, I hope someone does a thorough, empirical study of the impact of NSA spying on U.S. companies. But for now, all we have is anecdotal evidence, like this:
Today Brazil’s government announced it won’t buy $4.5 billion worth of US fighter jets in a move attributed to anger over controversial US intelligence-gathering that targeted Brazilian citizens and officials, including president Dilma Rousseff.
The Brazilian government’s official statements pointed to performance and cost issues as the reason to pick Sweden’s Saab AB to develop 36 fighters, though many observers had believed Boeing had the upper hand while bidding to expand Brazil’s air force.
Calling the decision “disappointing” in a statement, Boeing says it isn’t done trying to sell to Brazil, a major client for the company’s commercial air business, noting that ”over the next several weeks, we will work with the Brazilian Air Force to better understand its decision.”
One way to understand it: “The NSA problem ruined it for the Americans,” a Brazilian government official told Reuters. Public opinion turned against the US, and Brazil is leading the charge for a United Nations resolution that would limit electronic surveillance. Edward Snowden, the former National Security Agency contractor whose leaks revealed the US surveillance, obliquely requested asylum in Brazil earlier this week, but it looks the country isn’t interested in hosting the whistleblower.Today, a White House panel charged with assessing American electronic snooping released a report urging new limits on US intelligence agencies. One of its recommendations is to more carefully assess the costs of surveilling foreign leaders like Brazil’s Rousseff. On this front, Brazil’s decision on the fighter planes is a costly object lesson for the US government.
Other than providing generous pay and fat pensions, many federal agencies are not great places to work, according to federal employees themselves on a new survey.
“The average government worker comes in 13 points below the average private-sector employee in terms of job satisfaction, according to the ‘Best Places to Work in the Federal Government’ report.
‘This is an ongoing train crash,’ said Max Stier, president of the Partnership for Public Service.
Hay Group, which collaborated on the data, found that job satisfaction in the private sector was not only higher than in the public sector, it even climbed since last year — from 70.0 to 70.7 points out of 100 — all while the government numbers fell.
Of the 10 questions that both public and private employees answered, government scored higher on only question: Do you like the kind of work you do?
On every other question, including how well colleagues cooperate and how well management keeps employees informed, private-sector workers gave their organizations higher marks.”
During the Bush years, government failures were explained away by liberal pundits as being the result of a Republican administration that (supposedly) did not believe in government. But the government-loving Obama administration has now been in office five years and federal employees are more dissatisfied than they have been in at least a decade.
Many liberal experts—such as these folks—will admit that the government bungles a lot of its activities. They usually call for reforms like more coordination, reduced overlap, and better leadership to solve the government’s mismanagement problems.
However, the government will never operate as effectively as private enterprise for many reasons. One is that government workplaces will always be buried under piles of rules and regulations that frustrate workers and stifle initiative. Another is that the government has rigid pay structures that don’t differentiate between the slackers and the hard workers. Ludwig von Mises discussed some of the fundamental differences between private enterprises and government bureaus in his book Bureaucracy seven decades ago. Little has changed since then, despite repeated efforts to “reinvent government.”
One reason why our federal government is a particularly poor performer is that it has become so large, complex, and immune to oversight. If Americans want Washington to work better, they should insist that it be downsized as much as possible. Some agencies should be abolished, such as the lowest scoring agency on the new survey, the Economic Development Administration, which is an unneeded pork barrel machine. Other agencies should be privatized, such as the low-scoring Transportation Security Administration.
Less would be more when it comes to government and its performance.
Four years is too long to wait for a ruling on a constitutional claim. Not for the ultimate vindication of a right that’s been summarily denied, mind you, but a mere ruling in a case asserting this right that has long ago been briefed and argued.
That’s the situation faced by my colleague Tom Palmer and his fellow plaintiffs in a lawsuit challenging the District of Columbia’s complete ban on carrying guns for self-defense outside the home. Palmer v. District of Columbia was one of many suits filed in the wake of the Supreme Court’s 2008 ruling in District of Columbia v. Heller, which found that the Second Amendment protects an individual right to keep and bear arms. (Recall that two years ago the Seventh Circuit struck down a similar ban in Chicago, the only other place in the country where there is no legal way to exercise the right to carry – forget places like New York, New Jersey, and Maryland, where it’s possible in theory even if local law enforcement can, and always do, deny requests in practice.)
This case has now been pending for more than four years without a resolution of cross-motions for summary judgment – both parties agreed that the case can be decided by the judge on the law, without fact-finding or a trial. The docket (see pages 37-42 of this document) is one of the weirdest I’ve ever seen for a federal case: Palmer was filed in August 2009 and a hearing was held in January 2010, at which point Judge Henry Kennedy took the case under advisement. In July 2011, Chief Justice John Roberts (!) reassigned the case from Judge Kennedy to Judge Frederick J. Scullin, Jr. of the Northern District of New York. (In other words, Judge Kennedy sat on the case for 18 months and then retired.) There was a status conference soon after, then a motion hearing scheduled for August 2012 (more than a year later), which was rescheduled for October 2012, after which Judge Scullin took the case under advisement, and then… nothing. Plaintiffs’ counsel Alan Gura (my friend and sometime co-author) filed a motion to expedite in August 2013, and then a petition for a writ of mandamus – a request that a higher court command a government official to do something – with the U.S. Court of Appeals for the D.C. Circuit in October 2013.
This past Monday, the D.C. Circuit denied the petition in a one-paragraph order, saying, “Petitioners have not shown that the district court’s delay in ruling on the pending cross-motions for summary judgment is so egregious or unreasonable as to warrant the extraordinary remedy of mandamus at this time. [citations omitted] We are confident that the district court will act on the motions as promptly as its docket permits.”
Not “unreasonable”?! This case has now been pending for than two years before the current judge – after spending two years before a different judge – who’s had the full briefing papers from the beginning and held a hearing 14 months ago. In the time since this lawsuit was filed, several other similar cases have produced circuit court (appellate) rulings in Second Amendment-related cases, and the Supreme Court has considered cert petitions in many of those. And yet, here a district court has not ruled at all as to whether there’s any right to bear arms at all.
I’m sorry to say that I’m much less confident than is the D.C. Circuit that Judge Scullin will act promptly. He’s had plenty of time (as did Judge Kennedy before him) but apparently has no desire to rule on what would obviously be another high-profile case involving that inconvenient, “embarrassing” Second Amendment.
But the implications of this delay go well beyond the Second Amendment. What does the inability to reach a ruling in Palmer v. District of Columbia mean for the right to access the courts? If the government prosecutes someone for violating a challenged law, they don’t wait four years in incarcerating you. What are civil rights lawyers supposed to tell their client? That federal courts don’t think that certain claims are important enough to even bother ruling on?
This is a significant constitutional issue involving an outright ban of an enumerated right. If Judge Scullin wants to write some cute opinion that says that D.C.’s ban is just a time-place-manner regulation – e.g., you don’t have absolute freedom of speech, everywhere, all the time – the place being Washington and the time being always, let him do that. Alan Gura will then get on with his appeal.
In the meantime, this is a black eye on the judiciary. Judges dismiss meritless lawsuits all the time, so the only conclusion we can draw here is that the district court knows that there’s no way to square D.C.’s law with the Constitution but doesn’t want to say so.
H/t Josh Blackman
A few weeks ago, the Drug Policy Alliance had its annual convention in Denver. I was on a panel that addressed jury nullification. The other panelists were Clay Conrad (author, Jury Nullification: The Evolution of a Doctrine), Kirsten Tynan (Fully Informed Jury Association), and Steve Silverman (Flex Your Rights). Steve Silverman transcribed the discussion. Here is an excerpt:Clay Conrad
Today judges tell jurors to commit injustice in the name of the law, and we call that progress –Clay Conrad
Clay Conrad is currently a lawyer in private practice. He discusses the history and background of jury nullification. (Jump video of Clay’s talk.)What is Jury Nullification?
“Jury nullification is the act of a criminal trial jury in refusing to convict on conscientious grounds in spite of proof of guilt beyond a reasonable doubt, because they think the law is unjust, the law is misapplied, or the punishment is inappropriate.”
“Juries have always had [a political] role. That’s what the founders intended to protect in the 6th Amendment, and that’s what’s guaranteed in the constitutions of all 50 states.”
“The understanding of the phrase ‘judges of both fact and law’ has changed over the years because our understanding of where the law comes from has changed. Back in that period of history, people believed in natural law doctrine. That was the generally accepted view of where the law comes from. Law was considered part of natural science to be discovered.”
“Today we have a much more technocratic understanding of the law. Natural law doctrine has given way to a positive, formalistic conception of law. But under natural law doctrine when you say the jury is the finder of fact and law, it means they can determine where justice lies, because justice is what the law was. It was the understanding of what was just that was their understanding of the law.”
“Today judges tell jurors to commit injustice in the name of law, and we call that progress.”
Cato will soon be releasing an e-version of Clay Conrad’s book.
Daniel J. Ikenson
The future of multilateral trade has presented some vexing questions for policy watchers over the past few years. With the Doha Round of multilateral trade negotiations hopelessly stalled and the proliferation of regional and bilateral agreements in its stead, contemplation and debate about the fate of the World Trade Organization, its successful adjudicatory body, international trade governance, and globalization have been all the rage.December continues to shine a particularly bright light on these issues, as U.S. and EU negotiators are in Washington this week discussing the proposed bilateral Transatlantic Trade and Investment Partnership. Last week, negotiators from the United States and 11 other nations met in Singapore in an effort to advance the regional Trans-Pacific Partnership deal. The week prior, representatives of 159 WTO members were in Bali, Indonesia for the Ninth Ministerial Conference (MC-9), where a multilateral agreement was reached on a set of issues for the first time in the WTO’s 19-year history.
The significance of the Bali deal depends on whom you ask. Those heavily vested in the current architecture of the multilateral system tend to hail Bali as proof that multilateral negotiations are back in business and that there is renewed promise for completing the long-stalled Doha Round. Frankly, taking 12 years to forge an agreement on trade facilitation (basically, reform of customs procedures, which constitutes a tiny fraction of the Doha Round’s objectives) plus some concessions to permit more subsidization of agriculture in the name of food security is not exactly convincing evidence that Doha Round negotiators have demonstrated their cost effectiveness or the utility of this approach.
The most enlightening (and liberating) conclusion from Bali is that the agreement killed the Doha Round. By peeling off the trade facilitation negotiations and reaching agreement, Bali circumvented what has been, arguably, one of the greatest obstacles to the Doha Round’s success: the commitment of negotiators to the “single undertaking,” which pledges that “nothing is agreed until everything is agreed.”
With Bali a direct hit on that unwieldy concept, WTO negotiators are free to take-up Doha Round issues in other, more manageable fora, thus liberating governments to pursue global trade barrier reduction in myriad new ways. Why not have a series of mini-rounds and pursue fewer issues at a time by matching negotiations on, say, agricultural and industrial liberalization? Or by matching talks on services with talks on rules, like antidumping? Yes, there need to be adequate tradeoffs in a world of reciprocity-based trade agreements, but the notion that everything needs to be on the table to accomplish those tradeoffs has been rendered quaint–if not inutile–by the changing composition and interests of the WTO membership. If particular governments are the problem, why not pursue more plurilateral deals? Why not establish a mechanism in the WTO through which demonstrably successful provisions from the universe of existing and brewing bilateral and regional agreements can be adopted as best practices by taking up these issues and voting on an annual basis? These approaches could facilitate liberalization and give the WTO new credibility.
But Bali doesn’t only offer guidance to WTO negotiators. Before U.S. and EU negotiators get too far along–where they are near certain to get stuck in the deep mud created by trying to resolve dozens of highly contentious and highly technical issues on “one tank of gas”–they should consider the alternative of taking the negotiations in smaller bites. Despite the original announced deadline of 2014, negotiators are quietly acknowledging that projection is overly ambitious. But so too are 2015, 2016, and 2017. There are simply too many issues on the table and too much suspicion that local autonomy over traditionally domestic matters is up for bargaining that the amount of time needed for public debate has been vastly underestimated. Meanwhile, it is unclear that government’s can stay committed to the TTIP agenda if it drags on for several years.
This short paper explains in greater detail the rationale for breaking the TTIP up into three, two-year negotiations that yield three successive agreements. The ideas conveyed are certainly bound to raise objections and even scorn. But by exposing the single undertaking as an obstacle to liberalization, the Bali Agreement has some lessons that TTIP negotiators would be wise to understand.
Though the NCAA still runs ads suggesting that college sports is all about students who happen to be athletes, big-time college football and basketball programs have basically given up the pretense of being about anything other than big bucks and big wins. See, for instance, the latest power play by the “BCS” football conferences.
That’s fine – better they be open about what drives them. Unfortunately, as I write in this SeeThruEdu post, the rest of higher ed is similarly self-interested. Problem is, it won’t admit it, and uses the notion that it’s all about the “common good” to get taxpayer money, often without producing any real benefit for the people paying the bills.
In the wake of a tragedy, there is a natural and understandable desire to prevent something similar from ever happening again. Unfortunately, legislators too often respond hastily to the passionate demands that they “do something” without thinking through the consequences of their actions. This phenomenon gave rise to the morbid truism that “dead kids make bad laws,” such as “Kyleigh’s Law” in New Jersey. In the wake of a fatal car accident involving a teenage driver, the state legislature passed a law requiring teens to drive vehicles with special decals to make it easier for police to enforce an 11:00pm curfew. When irate parents raised concerns that the decals put their children at risk of being followed by pedophiles, 13 legislators who had initially voted for the law filed a bill to repeal it.
The story that gave rise to “Teddy’s Law” (Senate Bill 248) in Ohio is similarly heartbreaking and the legislative response has been similarly misguided. After teachers reported their suspicions about abuse to Children’s Services, Teddy Foltz-Tedesco’s mother pulled him out of school under the pretense that she would homeschool him. Instead, her boyfriend, Zaryl Bush, tortured and killed the 14-year-old Teddy. Bush is now serving life in prison.
Teddy’s story is a tragic failure of the system to protect him after years of warning signs and reports from neighbors. However, the legislators’ response goes in the wrong direction. Rather than address why social services failed to act on repeated reports of abuse, “Teddy’s Law” treats all would-be homeschooler parents as child abusers until proven innocent. The legislation further assumes that all children belong to the state, as it requires families to seek permission from the government to homeschool their own children. They would have to submit to background checks and a social services investigation in which parents and children are interviewed separately. The law grants the agency the authority to deny the right to homeschool if it “determines it is not in the best interest of the child,” without providing any guidelines as to how that determination should be made.
And while it unconstititionally treats all parents as possible criminals, the Home School Legal Defense Association argues that “Teddy’s Law” likely would not have even saved Teddy:
Even if, as SB 248 would require, his mother had sought social service’s approval to homeschool and was denied, he still would have been at home subject to abuse after school. Regardless of where he went to school, Teddy was left by authorities in a home where they knew abuse was occurring.
Clearly, SB 248 would not have saved Teddy.
SB 248 turns fundamental American values upside down. Parents have been deemed by the United States Supreme Court in Parham v. JR to act in their children’s best interests. In Pierce v. Society of Sisters, the Court ruled that parents have a fundamental right to direct the education of their children. This law replaces parents with unqualified social workers to make educational decisions for children.
Moreover, as HSLDA notes, by treating all parents as child abusers, “Teddy’s Law” diverts scarce resources away from focusing on parents actually suspected of child abuse. Instead of protecting children like Teddy, the misguided law would make it more likely that future Teddys would fall through the cracks.
North Korea’s “Dear Leader” Kim Jong-il has been dead not quite two years, but his son, Kim Jong-un, appears to have taken control. And in a much bloodier fashion than predicted, with the execution of his uncle and one-time mentor Jang Song-taek. However, no one knows whether the regime is stabilizing or destabilizing.
The ascension of Kim fils never seemed certain. Not yet 30 when his father passed, Kim had had little time to secure the levers of power. Moreover, Pyongyang is a political snake-pit.
Over the last two years hundreds of officials, many in the military, have been removed from office. Until Jang the most dramatic defenestration was of army chief of staff Ri Yong-ho. His departure in July 2012, alleged for reasons of health, was dramatic and sudden.
Of greater concern to the West was North Korean policy. The country had established a reputation for brinkmanship and confrontation. The new government reinforced this approach.
For instance, rhetorical attacks on and threats against South Korea and the U.S. rose to unprecedented heights. The Democratic People’s Republic of Korea recently detained an 84-year-old American Korean War veteran and tourist for six weeks on bizarre charges.
Equally important, there is no evidence of reform, either economic or political. Observed Bruce Klingner of the Heritage Foundation: Kim Jong-un “has increased public executions, expanded the gulags for political prisoners, and increased government punishment for anyone caught with information from the outside world.”
Now comes Jang’s ouster. There is no reason for the West to mourn his passing. But previously family members only disappeared.
Jang’s execution could demonstrate that Kim Jong-un is solidifying his rule. Removing another minder appointed by his father would seem to leave Kim more securely in charge. Moreover, a willingness to execute likely deters anyone but the most determined or desperate from challenging the leadership.
Nevertheless, the DPRK could be heading for further instability. The episode is unprecedented, which suggests that something is amiss in paradise. Jang could have been the casualty of a messy power struggle likely to grow worse. If he can be taken down, no one is safe. Fear may widen leadership divisions, spur internal resistance, and draw in the military.
Political uncertainty in Pyongyang almost certainly will reduce the already minimal likelihood of domestic reform and foreign engagement. If Kim truly has consolidated power, he might feel freer to act. However, even then orchestrating a wider purge would absorb time and effort. And if he fears continuing opposition to his reign he probably will put off any potentially controversial policies, especially if they conflict with the interests of the military, which still potentially wields ultimate power.
Further, Jang was associated with economic reform and China relations. After his death Jang was criticized for his economic activities. It is hard to imagine economic reform speeding up in a government sundered by a power struggle in which a top economic official was just executed.
The greatest danger is that Kim Jong-un’s apparent ruthlessness may be less constrained internationally than that of his father and grandfather. If the younger Kim is taking on full dictatorial power, he might misperceive domestic authority as translating into international strength. Or if his authority is under challenge at home, he might be tempted to provoke a foreign crisis.
The DPRK long has been the land of no good options, the geopolitical problem with no good answers. Even if Jang’s execution changes nothing, it reminds us that North Korea remains a threatening yet mysterious presence in Northeast Asia. And the ongoing leadership transition—whether solidified or unsettled—isn’t likely to bring peace or stability to the region.
Paul C. "Chip" Knappenberger and Patrick J. Michaels
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.”
We hear that there is looming banana crisis in Costa Rica—the world’s 2nd leading exporter of the fruit—as this year’s crop is being threatened by an infestation of mealybugs, scale insects, and fungal infection.
Petulance, plagues, disease? It must be climate change, of course!
The Director of the Costa Rican Agriculture and Livestock Ministry’s State Phytosanitary Services, Magda González, told the San José Tico Times, “Climate change, by affecting temperature, favors the conditions under which [the insects] reproduce.” González estimated that the rising temperature and concomitant changes in precipitation patterns could shorten the reproduction cycle of the insect pests by a third. “I can tell you with near certainty that climate change is behind these pests.”
This is bananas.
But there’s a method to Gonzalez’ madness. In it’s recent Warsaw confab on climate change, the UN has made it abundantly clear that one of its endgames is compelling “reparations” for climate damages cost by dreaded emissions of carbon dioxide. The more that poorer nations make these claims—however fatuously—the more momentum builds to extract capital from me and thee.
May we humbly suggest that calling Ms. Gonzalez’ claim “fatuous” is really being too nice. She should actually propose compensating the United States for all the excess bananas that are associated with warmer temperatures.
Figure 1 shows banana production in Costa Rica from 1961-2011. Figure 2 shows the temperatures there over the same period. We hate to burst anyone’s climate-change-is bad-bubble, but the correlation between these two variables is positive. That is, higher temperatures are associated with greater banana production (and yield).
Figure 1. Annual production (tonnes) and yield (Hg/Ha) of bananas in Costa Rica (data from FAOSTAT)
Figure 2. Annual temperature anomalies in Costa Rica, 1961-2011 (data from Berkeley Earth).
And as far as precipitation goes, the trends down there are all over the place—some stations show trends towards increasing rainfall amounts, while others nearby, towards decreasing amounts. The geography of the country, along with all sorts of external influences including tropical cyclone activity, sea surface temperature patterns, and larger-scale circulation systems in both the Pacific and Atlantic makes for a very complex pattern precipitation variability, both temporally and spatially, across Costa Rica. It is virtually impossible to assess the influence of recent human-caused climate change in such a complicated and highly variable natural system.
So you have a situation where annual precipitation variability is high and where warmer conditions seem to be associated with greater banana yields.
While it is probably not out completely out of the question that some sort of weather influence may, in part, play some role in the current affliction of the Costa Rica banana crop, to implicate human-caused global warming, you’d have to have gone completely…, well, you know.
But climate policy has always functioned best in a data-free environment, about the only way a cheap hustle like that of the Costa Rican National Phytosanitariest merits any attention at all.
Michael D. Tanner
Welfare advocates regularly urge Americans to look to the European welfare state as a model. At least in the case of the Netherlands, they might be on to something.
The Dutch have just announced a massive reform of their welfare system, designed to reduce dependency and put a new emphasis on work. For example, welfare applicants will now be required to prove that they spent at least 4 weeks actively searching for a job before they become eligible for any assistance. And once they begin to receive benefits they will either have to work or perform volunteer community service. Dutch welfare recipients would be required to take available jobs even if they had to move or commute up to three hours per day.
Given that just 42 percent of U.S. welfare recipients are engaged in even broadly defined work activities (including job training, college, or job search), and that an attempt to restore work requirements to the food stamp program has been met with a storm of resistance, the Dutch appear to be much more pro-work than we are.
Other reforms would reduce benefits by treating families as a single unit, rather than as separate individuals. For instance a mother with two children would receive a single payment rather than three separate payments. The combined payment would be less, based on the assumption of “shared expense.”
According to the Dutch government, the reforms will ensure that welfare is seen as “a safety net, rather than a right.”
What the Dutch apparently understand is that, in the long run, welfare dependency hurts the very people it is designed to help. Making poverty a bit more comfortable may be satisfying in the short term, but the real goal should be to reduce the number of people in poverty. To do that requires people to take more responsibility for their own lives.
That’s a lesson in European compassion that the U.S. could learn from.
K. William Watson
Some members of Congress are upset that other countries around the world are taking action to protect their citizens from the U.S. spy machine. But rather than doing something within their own power to address the economic backlash from U.S. policies by, say, changing the policy, these members of Congress are blaming others and threatening to bully them. According to an AP report:
Germany has asked European Union officials to consider restrictions that would prevent U.S. companies from processing commercial and personal data from customers in Europe. That could affect the flow of information and hurt U.S. businesses such as Google, Facebook, Apple and Amazon.
A bipartisan group of House members — 12 Democrats and six Republicans — has sent a letter to U.S. Trade Representative Michael Froman, insisting that nations abandon such efforts as a condition of pending trade pacts. (emphasis added)
Maybe reducing the ability of Americans to do business with foreigners is the only way to keep terrible harm from coming to U.S. companies impacted by this scandal. I’m skeptical, so let’s ask them:
Lawmakers sent the letter a week after a coalition of businesses including Google, Apple, Yahoo, Facebook and Microsoft penned its own, asking Obama to curb the surveillance programs.
Silicon Valley has been fighting in the courts and in Congress for changes that would allow them to disclose more information about the secret government orders they receive. Several companies are introducing more encryption technology to shield their users’ data from government spies and other prying eyes. (emphasis added)
Since option B solves the problem and increases liberty, let’s try that one first, please.
(I would be remiss not to point out the House Intelligence Committee’s strident condemnation just last year of Huawei, and their subsequent recommendation that U.S. companies avoid doing business with the Chinese telecom giant to ward off vague dangers of cyber espionage.)
Last fiscal year Uncle Sam had some budget good news. After running $1 trillion-plus deficits four years in a row, Washington had to borrow “just” $680 billion in 2013.
True, that was the fifth highest deficit in history, 50 percent greater than the pre-financial crash record. But it’s only the taxpayers’ money, so what’s the big deal?
Now Republicans and Democrats have come together on Capitol Hill to increase both outlays and taxes. Bipartisanship in action!
That the Democratic Party wants to spend more is hardly surprising. But the GOP has demonstrated yet again that its principal role in Washington is to hold the coats of Democrats who raid the Treasury.
The legislation adopted by the House drops sequestration, which actually trimmed federal outlays, and hikes spending over the next two years by $62 billion. In return, Congress promises to lower the collective deficit over the next decade by $85 billion.
The accord raises revenue, including $12.6 billion in airline taxes. There are a few spending reductions—kind of.
in the same bill the House GOP voted to drop discretionary spending cuts for 2014 approved just two years ago. Yet the new entitlement caps are slated to take effect after two presidential elections and four congressional elections. Which means the reductions will never occur.
Of course, holding only the House means the Republican Party has to compromise, as it learned during the recent health care battle. However, a budget fight would have been far easier. The GOP merely had to support the fiscal status quo, sequester included, unless the Democrats offered equivalent alternative cuts.
Earlier this year the Congressional Budget Office highlighted the stakes: “Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946.” The debt-GDP ratio “is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percent at the end of 2007.”
Today the national debt exceeds both $17.2 trillion and runs nearly $150,000 per taxpayer. Before the GOP cave-in the CBO figured that in the best case Uncle Sam would add $6.3 trillion more in red ink over the next decade. Starting in 2016 deficits would begin another inexorable rise.
Unfortunately, CBO expected Congress to act like Congress—meaning to abandon fiscal discipline and avoid making hard decisions. The agency’s “alternative” fiscal scenario figures the added red ink over the coming decade could run $8.8 trillion.
Of course, the biggest long-term issue is entitlements. Explained CBO, absent serious and meaningful reforms in this area “debt will rise sharply relative to GDP after 2023.”
Putting everything together yields a mountain of liabilities. Economist Laurence Kotlikoff figured Uncle Sam’s total unfunded obligations exceed $220 trillion, around 14 years of our current GDP.
The only alternatives to spending reform are confiscatory taxation and irresponsible borrowing. However, warned CBO: “Increased borrowing by the federal government generally draws money away from (that is, crowds out) private investment in productive capital. … The result is a smaller stock of capital and lower output in the long run than would otherwise be the case.”
Which ultimately means a smaller economy and lower incomes even as government obligations increase. Concluded CBO, higher debts and marginal tax rates would “reduce real GNP by about 4 percent by 2038,” and as much as six percent. The more pessimistic but realistic “extended alternative fiscal scenario” yields even worse results, most likely a seven percent drop in GDP, and perhaps more.
As usual, the GOP is putting party politics before national interest. The Democrats do the same, of course, but at least they are less sanctimonious when doing so. Republican dishonesty and hypocrisy compounds Republican budget irresponsibility.