Cato Op-Eds

Individual Liberty, Free Markets, and Peace
Subscribe to Cato Op-Eds feed

Roger Pilon

In his op-ed at the New York Times yesterday, Yascha Mounk, a fellow at New America, asked “Is Harvard Unfair to Asian-Americans?” A century ago, Harvard had a problem, he writes: “Too many Jews.” Today it’s Asian-Americans. Euphemistic admissions criteria like “character and fitness” solved Harvard’s problem back then. Today, numbers do the job. To get into the top schools, Mounk writes, Asian-Americans “need SAT scores that are about 140 points higher than those of their white peers.” And that’s brought on a suit by a group called Students for Fair Admissions.

If this case is decided eventually under current law, as is likely, the result will be less than clear or satisfying in several respects. To see why, just follow Mounk’s argument. One reason this “new discrimination” is tolerated, he notes, is that “many academics assume that higher rates of admission for Asian-Americans would come at the price of lower rates of admission for African-Americans.” But the two issues are unrelated, he continues:

As recognized by the Supreme Court, schools have an interest in recruiting a “critical mass” of minority students to obtain “the educational benefits that flow from a diverse student body.” This justifies, in my view, admissions standards that look favorably on underrepresented groups, like African-Americans and Latinos. But it can neither explain nor justify why a student of Chinese, Korean or Indian descent is so much less likely to be admitted than a white one.

Then what does explain why an Asian-American student is so much less likely to be admitted than a white one? Mounk continues:

Conservatives point to Harvard’s emphasis on enrolling African-Americans (currently 12 percent of freshmen) and Hispanics (13 percent) but overlook preferences for children of alumni (about 12 percent of students) and recruited athletes (around 13 percent). The real problem is that, in a meritocratic system, whites would be a minority—and Harvard just isn’t comfortable with that.

Ah! There we have it, Mounk believes. But notice that this “explanation” mentions, almost in passing, “a meritocratic system,” as if that were what we had. If we did—at least one based heavily on SAT scores—the aforementioned academics would be right: Harvard would admit far more Asian-Americans and far fewer African-Americans and Hispanics—and perhaps fewer legacy and athletic applicants as well.

But under current law, what we have instead is a system in which discrimination based on academic merit varies. As Mounk correctly notes, universities may discriminate to achieve “diversity”—and, in particular, a “critical mass” of minority students. What that means, of course, is that the distinction between “majority” (read “white”) and “minority” (“non-white”) looms large in admissions decisions. What it means in practice, however, is that academic merit weighs more heavily in white than in non-white decisions—except in the case of Asian-Americans, where it weighs more heavily even than with whites. For Mounk, there’s the rub. Indeed, it gives new meaning to “reverse discrimination”—not against the majority, as we usually think of it, but against a minority.

So what’s to be done? Mounk grants, of course, that there are inescapable trade-offs among admissions criteria and that there is no one right answer to the question of which are to weighed more heavily than others. But he never goes to the principled solution—perhaps because our modern antidiscrimination law precludes that solution. For that, we’ll need to notice that Harvard is, after all, a private institution. As such, its board and administration should be free to shape its incoming classes however they wish, much as religiously affiliated institutions are mostly free to do today—and of course the rest of us would be free as well to judge Harvard’s policies as we wished. That would solve a host of problems, if our law permitted it. Unfortunately, it does not.

The issue is more difficult, however, in the case of public institutions, which belong to all of us. In fact, Students for Fair Admissions also has the University of North Carolina at Chapel Hill in its sights. But the problem there is that equal protection comes into play, which means that the university, like all public institutions, is forbidden to discriminate except on grounds that are narrowly tailored to serve its function. But what does that mean in practice? Does it mean that academic merit should be the dominant or perhaps the only admissions criterion? Or does it mean instead that the university should be open to all? Indeed, don’t the parents of less gifted children pay taxes to support the University of North Carolina too?

Reflections on the implications of our vexed antidiscrimination law bring us, then, to a more basic question: Given that these admissions decisions are so freighted with controversial and incommensurable value judgments, why do we even have public institutions of higher education (or of any level of education, for that matter)? Couldn’t these insoluble questions be avoided if all education, like religion, were private? Now there’s a modest proposal. See here for a fuller discussion.

Matthew Feeney

Uber has not had a good month. In the wake of an Uber executive’s worrying remarks regarding a possible smear campaign against critical journalists, the company has been on the receiving end of unflattering reporting related to its privacy policy and what one commentator has referred to as its “[something stronger than “jerk”] problem.” While it is certainly the case that Uber does have legitimate privacy issues to address, it should not be forgotten that existing regulations could hamper some of the privacy reforms many Uber passengers would like to see implemented.

For many, Uber is more convenient than taxis because of its ease of use. Once a passenger creates an account a ride that is paid for automatically is only a push of a button away. Drivers and passengers are rated by each other, providing an incentive for both parties to behave well. However, while the Uber platform’s simplicity is a major attraction, there have been disturbing reports of Uber drivers accessing passengers’ information.

In March of this year, Olivia Nuzzi, a reporter for The Daily Beast, wrote about two creepy interactions with Uber drivers in New York City. In her writing about the first incident, Nuzzi describes her driver showing her a photo he had taken of her before the ride began. Nuzzi was understandably upset and rated the driver poorly. Uber deactivated the driver, who later emailed Nuzzi, The Daily Beast, and a journalist who had written about Nuzzi. After this incident Nuzzi was told by an Uber employee there was no way the Uber driver could have accessed her full name and that he must have recognized her. 

Yet the second incident reveals that Uber drivers can discover the full names of their passengers, thereby making them easier targets for stalking. Months after Nuzzi’s first disturbing incident, one of her friends was contacted by an Uber driver over Facebook. The driver asked whether Nuzzi was single. When Nuzzi asked an Uber spokeswoman for comment regarding this incident she was informed that Uber drivers could in fact access the full names of their passengers. The Uber spokeswoman went on to explain that this data collection is possible because:

The New York City and Limousine commission, along with the vast majority of jurisdictions across the country, do require first and last names on what is commonly called a waybill or trip record. It’s intended to prevent gypsy cabbing in the taxi and livery industry… So Uber does provide trip sheets to drivers so that they can comply with those regulations that exist in most cities. 

Some readers might be wondering why Uber cannot simply anonymize passenger information in order to prevent the sort of stalking Nuzzi endured. The reason that passenger names are not made anonymous is that New York City Taxi and Limousine Commission (TLC) regulations prevent such information from being hidden, as Polly Mosendz explained this month in Newsweek:

While a user’s Uber profile only shows the first name and a small picture, the driver does have access to the full name as soon as the ride is ordered. Showing the full name opens up a number of issues, such as drivers Facebook messaging their riders or finding their homes, but Uber is unable to anonymize this unless the TLC changes its regulations.

In New York City, it seems that Uber must find a way to tackle TLC regulations in order to prevent the sort of awful behavior Nuzzi reported.

Of course, there are other complaints related to Uber and privacy, such as the tracking of journalists and “known people.” Uber is investigating the improper use of its so-called “God View” tool, which allows corporate employees to view the current location of Uber cars and users looking for rides. According to Uber, a New York executive’s use of “God View” to track a journalist on her way to Uber’s New York headquarters was in violation of the company’s privacy policy.

Perhaps unsurprisingly, Uber announced last week that it was working with the law firm Hogan Lovells in order to strengthen its privacy policy. It is welcome news that Uber is addressing the legitimate privacy concerns that have been raised by some passengers, but those watching Uber’s attempts to reform its privacy policy should keep in mind that there are some changes Uber cannot make under existing regulations make that task considerably more difficult. 

Patrick J. Michaels

The shameful Obama Administration practice of proposing dreadful environmental regulations on or near national holidays continues. Last year they were on global warming, and this year it’s low-level ozone. Neither regulation will have a detectable “benefit,” but both impose enormous costs. Perhaps President Obama’s placing this announcement in the news cycle just before Thanksgiving and Black Friday is indicative of how popular he thinks these regulations will be.

So it goes. The lessons of November 4 remain unlearned, with the administration doubling down in the service of all of its green friends that didn’t vote. The fact is that the ground zero of the thermonuclear electoral explosion three weeks ago was in the coal mining areas of Kentucky and West Virginia. In Kentucky, Mitch McConnell was supposedly in a close race with Alison Grimes and instead won by a whopping 18 points. Nick Rahall, a 19-term (!) Democratic congressman from West Virginia saw a similar swing: he won his seat by eight points in 2012 and lost by 10 in 2014, with the net change in two years totaling 18. 

The proposed ozone rules are yet another example of what happens when good ideas go bad. Pretty much everyone agrees that EPA, along with the states, have done a remarkable job in cleaning up our air. The eye-stinging smogs of Los Angeles are history. Pittsburgh was once so dirty that masonry turned black, causing people to wonder what was happening in their lungs. We have done great things and enjoy air that is cleaner than that of any economic superpower in the history of this planet.

Environmental protection is what systems engineers call a “heuristic device,” defined as “a solution which is not guaranteed to be optimal, but is good enough for a given set of goals.” The problem, of course, is that heuristic devices don’t tell you when to stop. Instead they keep being applied, in this case by the bureaucracy-for-life known as the Environmental Protection Agency, producing massively diminishing returns for massively increased costs. And, at President Obama’s urging, it will never hear the word “stop.”

Millions of people are increasingly disenchanted with the administration’s high-handed approach to command-and-control regulations imposed when we aren’t supposed to be looking.  If enough people remain grumpy about this, Barack Obama may yet again stand in the way of a Hillary Clinton presidency.

Emma Ashford

As I discussed in an op-ed published at Al Jazeera America last week, it seems as though the Ukraine crisis is slowly solidifying into a ‘frozen conflict.’ This is bad for everyone:

Allowing the Ukraine crisis to metastasize into a frozen conflict effectively guarantees future conflict in the region. It leaves the government in Kiev with a long-term insurgency within its borders, costing it dearly and inhibiting the greatly needed reform of the Ukrainian state. In addition, it keeps Russia and the West locked in a diplomatic stalemate and sanctions war which benefits no one.

The intrinsic uncertainty of the situation in Eastern Ukraine continues to pose the very real threat of escalation. Last week saw tensions ratchet up as the OSCE reported large convoys of weapon and armor crossing the border, but fears of a new offensive by separatists proved unfounded. Such periods of heightened tension are likely to continue, along with consistent low-level violence which has become the hallmark of the conflict.

Some parts of the U.S. government are also keen to escalate the conflict by providing Ukraine with lethal aid. There is strong pressure from Congress to do so, and Sen. John McCain, widely expected to be the next chairman of the Senate Armed Forces Committee, has promised to work closely with his colleagues on the Intelligence and Foreign Relations committees to arm Ukraine. Although the Obama administration has thus far limited aid to non-lethal and humanitarian supplies, there may be some support for lethal aid within the administration too. Deputy National Security Advisor Tony Blinken, during his confirmation hearings for Deputy Secretary of State, divulged that the White House is considering lethal aid to Ukraine, and that he believed such aid would discourage further Russian aggression.

Even ignoring the potential of such aid to escalate the situation, it is unlikely to help. Ukraine’s armed forces are weak, requiring substantial reform and retraining. Lethal aid to Ukraine will antagonize Russia while doing nothing to win back the separatist regions.

Ukraine’s other problems are myriad: The country is in major economic trouble, and the Ukrainian political system is characteristically dysfunctional. A high-profile visit to Kiev last week by Vice President Biden was turbulent, with American officials reportedly irate that competing factions cannot agree on the formation of a new government a month after Ukraine’s parliamentary elections. Ukrainian leaders also recently announced that they would hold a referendum on NATO membership, a move which is both asinine (NATO member states determine membership, not voters) and inflammatory.

At this point, there are few good solutions to the Ukraine crisis. The longer the current ‘ceasefire’ continues, the more likely we are to see escalation. It is increasingly baffling, therefore, that American and European leaders aren’t seeking a political solution to the crisis. No progress was made at the G20 summit in Australia, though leaders employed harsh rhetoric towards Russia. Nor does Ukraine appear to be a priority for the Obama administration, with reports indicating that one reason for Chuck Hagel’s departure as Secretary of Defense was his strong insistence that the White House pay more attention to Russia, which he considers a larger threat than ISIS. But the Wall Street Journal reports that such comments were not well received by the White House, with one official noting: “I can’t imagine us focusing more on Russia.”

Such thinking is short-sighted. As I argue in the article, we must seek a diplomatic solution to the crisis. Delay will only lead to escalation and further conflict. 

Doug Bandow

The United States is over-burdened militarily and effectively bankrupt financially, but Washington is determined to preserve every base and deployment, no matter how archaic. Case in point: the many military facilities in Okinawa. No wonder the Okinawan people again voted against being conscripted as one of Washington’s most important military hubs.

The United States held on to the island after World War II, finally returning the territory to Japan in 1972. Even now, the Pentagon controls roughly one-fifth of the land.

Opposition to the overpowering American presence crystalized nearly two decades ago after the rape of a teenage girl by U.S. military personnel. The bases remain because no one else in Japan wants to host American military forces.

After a decade of negotiation, Tokyo and Washington agreed in 2006 to shift Futenma airbase to the less populated Henoko district of Nago city. Few Okinawans were satisfied.

Three years later, the Democratic Party of Japan took power and promised to address Okinawans’ concerns. But the Obama administration proved to be as intransigent as its predecessor, thwarting the efforts of then-Prime Minister Yukio Hatoyama. 

Tokyo has since attempted to implement the relocation agreement, despite strong local opposition. However, earlier this month Naha Mayor Takeshi Onaga defeated Kirokazu Nakaima on an anti-base platform.

Onaga’s victory demonstrates the depth of popular feeling. Nakaima had flip-flopped in favor of the relocation plan in return for $2.6 billion in economic aid from Tokyo and enjoyed strong support from Prime Minister Shinzo Abe. Onaga campaigned against Tokyo’s attempt to buy off islanders and won handily.

The Abe government promised to move forward with its relocation plan, but faces early elections on December 14. Although the Liberal Democrats are expected to win, they likely will possess a smaller majority and will have a correspondingly harder time overriding local opinion against the bases.

“Okinawa has suffered a lot. Why do we have to suffer more?” Onaga asked before his election. There’s no good answer.

Nakaima cited Tokyo’s confrontation with China. Other advocates of America’s base presence pointed to North Korea. The Marine Corps highlighted all of the nearby places where the Marine Expeditionary Force could be quickly deployed.

But Washington should not be plotting new wars. The United States should leave day-to-day defense responsibilities to friendly Asian states, most notably Japan, and pull its forces back to America. Seven decades after the end of World War II, there’s no need for permanent U.S. garrisons in the region.

Devoting only one percent of its GDP to defense has allowed Tokyo to create a potent “Self-Defense Force.” Spending more would enable Japan to build a military well able to deter Chinese adventurism. South Korea needs no help in confronting the so-called Democratic People’s Republic of Korea.

Australia, Vietnam, Singapore, and other countries have been boosting their military outlays in response to increasing Chinese assertiveness. India is expanding its involvement in Southeast Asia, acting as another counter to Beijing.

As I point out in Forbes online:  “Pulling U.S. forces back from Japan—there’s no reason to stop with the units deployed in Okinawa—would shift the basic responsibility for that country’s defense to Tokyo. Japanese citizens then could decide how to fill the gap. It’s not America’s place to tell its friends how much they should spend on what.”

A genuine “rebalancing” by America, not the fake transformation heralded by the Obama administration, almost certainly would impel Tokyo to do more, though exactly what would be a matter of debate. Such a shift would place greater pressure on Japanese officials to forge better relations with their neighbors, starting with South Korea.

Of course, the Japanese people could decide to do nothing, which would be their right. But the consequences of making that choice would be their own as well.

Washington’s defense commitments and force deployments should be adapted to circumstances. After nearly 70 years, Okinawans deserve relief. So do Americans, who pay to defend most of the globe.

Chris Edwards

James L. Buckley’s new book, Saving Congress from Itself, examines federal aid-to-state programs. The federal government spends more than $600 billion a year on 1,100 such programs for education, welfare, and many other state and local activities.

The whole system is a damaging mess, and Buckley proposes in his book that Congress “eliminate all federal grants-in-aid to state and local governments.” That action would “have a profound effect on how we govern ourselves.” A profoundly positive effect, that is, which is a bold claim, but I’ve come to the same conclusion in my writings on the aid system (here, here, and here).   

Buckley’s analysis is grounded in his distinguished career as a U.S. senator from New York, a judge on the U.S. Court of Appeals for the D.C. Circuit, and a high-level Reagan administration official. He argues that repealing aid-to-state programs would free the federal government to focus on truly national matters, put the government on sounder financial footing, and improve the ability of states to increase the quality and efficiency of their own programs.

Buckley’s book is a fairly quick read at 95 pages, but he hits the key legal and practical problems with aid to the states. Buckley believes, as I do, that the aid system is a hidden, or at least underexamined, factor steadily corroding the quality of American governance, particularly since the aid expansion of the 1960s. He notes, for example: “Congress’s current dysfunction is rooted in its assumption, over the years, of more responsibilities than it can handle. As a result, its members now live a treadmill existence that no longer allows them time to study, learn, and think things through. Instead, they substitute political reflex for thought.”

Federal aid is not the free lunch that state governments think it is. Nonetheless, a free lunch is available to you this Monday: please join James Buckley, Roger Pilon, and me at a Capitol Hill forum on December 1 to discuss the book. Details are here.

Jim Harper

The administration is working to implement the DATA Act, which, if implemented well, could produce a sea-change in government transparency, and a shift of power from government insiders to the people.

Yesterday, I submitted to the Treasury Department’s Fiscal Service our 2012 “Grading the Government’s Data Publication Practices” study, along with the following comment, which notes the glaring absence of a machine-readable government organization chart.

In partial response to the notice, I’m pleased to submit the attached study, which may assist your inquiry.

Over several years, I have been studying transparency, which remains largely undelivered because it has been undefined.

In “Grading the Government’s Data Publication Practices,” you’ll find the results of that study. Transparency is produced by data that comes from an authoritative source, data that is complete, that is machine-discoverable, and that is machine-readable. When good data publication conditions obtain, the public and government managers alike, through information services, apps, and websites, will make use of the data to make the government more legible.

The study graded the quality of data publication about key entities in the legislative and budgeting/spending processes. The striking upshot was the absence of good data about a very elemental topic: the organizational units of the federal government. There is no machine-readable organization chart for the U.S. federal government. The absence of a machine-readable government organization chart stifles public and congressional oversight, and it frustrates internal management.

Producing machine-readable data that articulates what the organizational units of the federal government are should be a priority. It is probably one of the easier things to do technically, and it will produce important gains in transparency. Failure to produce and maintain a machine-readable federal government organization chart would also stand out if it is not done early on in DATA Act implementation.

We are currently in the process of re-grading data publication in the areas covered by the prior study. In future iterations of the grading study, I look forward to reporting that there is well-organized, complete information about all agencies, bureaus, programs, and projects, and the relationships among them.

Thank you!

Jim Harper

A cynic—and there might be one or two reading this blog!—would say that the government will never make itself transparent. Well, it certainly won’t if you don’t ask it to…

Patrick J. Michaels

Today the Supreme Court granted a writ of certiorari on EPA’s 2012 ruling, Mercury and Air Toxics Standards. This ruling, projected in 2012 to result  in the closing of 68 power plants supplying electricity to 22 million homes, is EPA’s version of swatting a gnat with an atomic bomb. Here’s some sobering numbers, from a 2010 article in the refereed scientific journal Atmospheric Chemistry and Physics Discussions:

Total emissions of mercury (in metric tons):

  • From natural sources (mainly volcanoes and forest fires): 5200 tons
  • From human activity: 2320 tons
  • Total, natural and human: ~7500 tons
  • Human activity in the US: 117 tons, or about 1.6% of global emissions
  • From coal-fired electrical generation in the US: 48 tons, or about 0.6% of global emissions
  • Amount that actually falls on our soil from our power plants: 12 tons, or about 0.2% of global emissions.

Mercury can reside in the atmosphere for up to two years, unless it is rained out as “wet deposition,” which means that a lot of what comes out of the volcanoes of the Pacific Rim and wildfires winds up here.

If EPA was really serious about Mercury it would issue regulations capping volcanoes and outlawing wildfires.

Patrick J. Michaels

We’d be remiss if we didn’t acknowledge Winter Storm “Cato” is probably going to do a pretty good job limiting the government tomorrow, as well as shortening tempers throughout the country if it jams up the BosNYWash flyway on the day before Thanksgiving. Surely many climate alarmists will blame this garden-variety coastal cyclone on global warming.

Rational minds should know that these types of storms are largely powered by the midlatitude jet stream. The jet is nature’s way of dissipating the difference in energy between warm tropical air and polar cold on a rotating earth—the larger the temperature difference is between the tropics and the North Pole, the more powerful it is. Greenhouse gas-induced climate change warms the poles much more than the tropics, which reduces the temperature difference and should make storms of Cato’s ilk less powerful and/or frequent. 

Many pundits are fond of blaming these storms on changes in the “polar vortex” (which itself has existed ever since the earth acquired an atmosphere) caused by global warming, a notion that was thoroughly debunked by Colorado State’s Elizabeth Barnes last year in Geophysical Research Letters.

Walter Olson

President Obama has called on the nation to accept the decision of the Ferguson grand jury. But looking forward, across much of this country, our system for dealing with police use of deadly force is broken. Police shoot and kill civilians at a rate unheard of in many other advanced nations, and even after incidents where there are indications that excessive force was used, police across many parts of the country seldom face trial or even dismissal from the force. A system for review of police misconduct must take care to vindicate and protect the innocent cop, but it also needs to deliver a credible promise of justice to the communities being policed. As a front-line means of regulating lethal force, grand juries – which are secret, remote from the truth-finding of an adversary process, and dependent on prosecutors’ guidance – do not command broad public confidence.  We see that in Ferguson today.

Tim Lynch

The grand jury’s decision not to indict Darren Wilson is not surprising because police officers are rarely prosecuted for on-duty shootings.  And in the rare instances in which criminal charges are ever brought against police, juries are reluctant to hold them accountable with a felony criminal charge.  A report on Cato’s Police Misconduct web site found a conviction rate of only 33% – roughly half the percentage in non-police, civilian prosecutions.  It remains to be seen whether Wilson will be held accountable in some other way.  We must remember that just because a jury has declined to bring criminal charges does not automatically mean that Wilson should return to duty.  Police commanders may conclude, given all the surrounding circumstances, that he may not be right for police work. Certainly his involvement in Brown’s death will create problems for prosecutors who will have to rely on his future work. Wilson’s testimony in future trials could be very problematic.

With respect to the unrest in Ferguson, there seems to be a reluctance to acknowledge the crimes that are being committed by thugs who are taking advantage of the situation.  It seems wildly inaccurate to say that protesters have started fires and are looting stores, for instance.  The people doing that are criminal troublemakers, not “protesters.”

Trevor Burrus

The violence in Ferguson is inexcusable. But it should not be seen as primarily a reaction to the grand jury’s decision not to indict Darren Wilson. Rather, it should be seen as a reaction to years of racially charged policing and a discriminatory justice. Focusing on Officer Wilson’s culpability detracts from the bigger, nation-wide story: That every month there are innumerable police abuses throughout the country that go unnoticed and unreported, and, even if they are reported, the accused officers will likely never be disciplined, much less charged with a crime. Unfortunately, many of these abuses are disproportionately felt by people of color. Abuses can be small and nearly impossible to discover, such as stopping a car full of black men without probable cause, or they can be large and public, such as unjustifiably gunning down an unarmed black teenager. Sometimes the police action may be justified, and sometimes it may not, but the systems in place for determining culpability are egregiously biased in favor of police officers. Add to this an over-militarized police force that uses surplus military gear to violently break into homes 100 times per day, usually to only execute search warrants, and you have a recipe for disaster and an urgent need for reform. We should take advantage of this time of heightened awareness to reform a justice system that has too much power and too little accountability. Hopefully the violence in the street will not overshadow the legitimate protests, but I fear it may. 

Daniel R. Pearson

 The World Trade Organization (WTO) seems on the verge of approving an agreement with India to allow the Trade Facilitation Agreement (TFA) to move forward.  The TFA is to be applauded.  It will make a useful contribution toward helping goods move across borders more efficiently, which will tend to increase trade and promote economic growth.

The problem is not with the TFA, but rather with the high price that the global community seems ready to pay for it.  India has asked that it be allowed to exceed the level of domestic agricultural subsidies to which it agreed twenty years ago in the Uruguay Round negotiations.  For the first time in history, those talks led to limits on the ability of countries to use trade distorting agricultural supports.  Those subsidies had been rampant, often leading to surplus production that depressed crop prices in global markets.  Farmers who were being subsidized generally were happy enough with that arrangement, but it was a very different story for unprotected farmers in other countries.  Many of the world’s farmers are quite poor to start with.  Government-driven decreases in commodity prices make them even poorer.

A teachable moment is slipping away because no WTO member has been willing to stand up and explain what’s going on.  India sanctimoniously declares that it needs to promote food security through use of a robust public stockholding program, and would like the world to believe that existing WTO rules prohibit them from doing so.  This is simply not correct.  The Uruguay Round includes specific provisions detailing how public stockholding may be used for food security purposes.  A great deal of time, effort and tough negotiating went into developing those provisions.  There is no limit on government expenditures to provide food – including free or reduced-price food – to low-income people.  However, there is a clear requirement that purchases of commodities for public stocks must be made at open-market prices.  It is not allowable to purchase commodities at above-market prices in order to provide a subsidy to farmers. 

India’s public stockholding program does exactly that – purchase commodities from farmers at prices set well above the market.  Those high purchase prices provide incentives for farmers to increase production of subsidized crops.  Not surprisingly, this has led to surpluses of rice, sugar and wheat that are diverted to export markets.  In 2013 India was the world’s largest exporter of rice, the fifth largest exporter of sugar, and the ninth largest exporter of wheat.  Not bad for a country that thinks it needs even higher levels of distorting subsidies to promote its food security.  The fact that India ranks second in the world in terms of arable acreage underscores the potential for its subsidies to do damage to global markets.

It would not be difficult for India to bring its agricultural support regime into harmony with WTO requirements.  It would start by purchasing its food stocks at market prices.  This would save billions of dollars that now are being spent on above-market purchases.  Those savings could be devoted to some of the many policy measures that were explicitly agreed in the Uruguay Round to be considered non-distorting.  Those include providing “decoupled” income support payments (not linked to current production or price of a crop) directly to farmers.  They also include policy options designed to spur development in underprivileged rural communities, such as:  agricultural research, pest and disease control, extension advisory services, marketing services, infrastructure services (roads, electricity, irrigation, etc.), and insurance programs.

The argument is sometimes raised that developed countries, including the United States, also utilize distorting agricultural subsidies, so why criticize India?  Other countries have made efforts to bring their farm support programs into conformity with WTO commitments; those support regimes create fewer distortions now than in the past, but further liberalization is badly needed.  A key goal of the still-unfinished Doha negotiations was to continue to reduce or eliminate distorting agricultural subsidies. The world of agriculture still is beset by an abundance of within-the-rules subsidies.  However, expanding the rules to permit even more subsidies does nothing to help the situation.  Granting India’s request would shift the reform process into reverse.

It is to be hoped that WTO members will remember the origins of the organization, which was created to pursue open markets and freer trade.  Policy backsliding would be tantamount to abandoning the vision of the WTO’s founders.  There seems little doubt that millions of poor farmers would bear the costs of a decision that leads to more-highly-distorted global agricultural markets.

Kat Murti

In their effort to provide the public with information about controversial yet important world events, journalists face constant intimidation. Whether it takes an extreme form—such as beheading or death threats—or a less violent one—like government censorship or enforced political correctness—it nonetheless constricts their ability to convey truthful information about key issues.

No one knows this better than Flemming Rose.

In 2006,  the Danish newspaper Jyllands-Posten published 12 cartoons of the prophet Muhammad, stoking the fires of a worldwide debate about what limits—if any—should constrain freedom of speech in the 21st century.

Rose, then the paper’s culture editor, defended the decision to print the drawings, quickly becoming the target of death threats and more, all of which he recounts in his new book, published by the Cato Institute.

In The Tyranny of Silence: How One Cartoon Ignited a Global Debate on the Future of Free Speech, Rose provides a personal account of an event that has shaped the global debate about what it means to be a citizen in a democracy and how to coexist in a world that is increasingly multicultural, multireligious, and multiethnic. Rose writes about the people and experiences that have influenced his understanding of the crisis—including meetings with dissidents from the former Soviet Union and ex-Muslims living in Europe—and takes a hard look at the slippery slope of attempts to limit free speech.


Rose’s message clearly resonates with lovers of liberty around the world. A special one-on-one conversation between Rose and Jonathan Rauch of the Brookings Institution, hosted at the Cato Institute in mid-November, saw over 100 in-person attendees with another 53 people tuning in online.

That impressive showing, however, was far outpaced by the mass response to Cato’s very first Reddit AMA, featuring Rose, which has been viewed well over 200,000 times since it was first published on November 13th, and continues to draw thousands of Reddit viewers every hour, almost two weeks later.

Rose’s AMA, entitled “I am a journalist and free speech advocate who has received hundreds of death threats since 2006. AMA,” quickly broke into the top ten discussions on the iAMA forum that week. As questions continues pouring in, Rose sat down for a second full hour session the day after the original session was scheduled.

You should definitely read the AMA yourself, but here are some highlights:

Enjoyed the discussion? You can read the whole thing here. And, of course, don’t forget to buy the book to read all of Rose’s harrowing tale.

Ilya Shapiro and Gabriel Latner

Title VIII of the Civil Rights Act, also known as the Fair Housing Act (FHA), makes it illegal to deny someone housing on the basis of race and other protected characteristics. Applicable to governments, private entities, and individuals, the FHA prohibits racially discriminatory practices in most if not all transactions relating to housing.

For example, a landlord can’t refuse to rent an apartment to an otherwise qualified tenant, solely on the basis of race. Similarly, banks and credit unions can’t take a borrower’s race into account when deciding whether and on what terms to extend credit for the purpose of buying a home.

While it’s clear that the FHA bars such discriminatory intent, it remains an open question whether it covers claims of “disparate impact,” where a neutral policy disproportionately harms members of the protected class. Under this theory, a landlord insisting that all applicants pass a credit check could be held liable if it turns out that applicants from one protected group are disproportionately unlikely to have a sufficiently high credit score. That landlord would be held liable even though a satisfactory credit score is required of all potential tenants, regardless of race, and the landlord’s only intent was the (perfectly legal) desire to avoid tenants who would get behind on their rent—not to deny housing to any particular group.

In the decades since the FHA was passed, disparate impact has been used by the government and private litigants to exact tens of millions of dollars in fines and settlements from banks and developers whose facially neutral policies were alleged to have excluded members of a protected class from the housing market. The problem is that unlike with other anti-discrimination laws, such as the Americans with Disabilities Act—which expressly prohibits policies that have a disparate impact—the text of the FHA explicitly forbids only intentional discrimination.

In 2011, the Supreme Court agreed to decide once and for all the simple question of whether the FHA allows for disparate-impact claims. Before the Court had the chance to rule on the case, however, the government and certain interest groups intervened – in part at the instigation of Labor Secretary Thomas Perez, who was then head of the Justice Deaprtment’s Civil Rights Division. Fearing (not without justification) that the Court would decide that the FHA only allows claims based on intentional discrimination, they arranged a settlement package that induced the parties challenging the FHA to drop their case. The same thing happened in 2013.

Now the Court is facing the issue a third time, in a case arising out of a Texas program that allocated federal tax credits for developers to build low-income housing projects. An advocacy group called the Inclusive Communities Project sued the Texas Department of Housing and Community Affairs, claiming that by attempting in good faith to spend the federal funds in the poor neighborhoods where they’re most needed, the Department violated the FHA by concentrating low-income housing in predominantly minority neighborhoods.

Together with the Pacific Legal Foundation and five other groups, Cato has filed a brief arguing that the FHA can’t be read to prohibit innocently adopted policies that happen to have a statistically disproportionate impact on one group.

The brief makes three key points. First, the text of the FHA doesn’t support disparate-impact claims. The relevant provision—making it unlawful to “refuse to sell or rent … because of race”—connotes a purposeful, causal connection between the refusal to deal and the person’s race. Second, the FHA’s legislative history reveals that Congress only intended to target intentional discrimination, not the unpredictable consequences of nondiscriminatory policies.

Finally, allowing for claims against government bodies to be based on disparate impact forces them to engage in unconstitutional race-conscious decision making to avoid potential liability. The only way to avoid claims based on disparate impact is by designing policies which work backwards from the desired result, essentially requiring unconstitutional devices like racial quotas.

But discrimination can’t lead to equality. As Chief Justice John Roberts wrote for a Supreme Court plurality in 2007: “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”

The Supreme Court will hear the case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project on January 21. Regardless of Tom Perez’s whereabouts between now and then, this case is unlikely to settle.

Brink Lindsey

Today we add the following essays to Cato’s online growth forum:

1. Enrico Moretti wants to increase the R&D tax credit.

2. Daniel Ikenson calls for more foreign investment.

3. Scott Sumner argues for better monetary policy based on nominal GDP targeting.

4. Don Peck worries about growing dysfunction in the middle class.

5. William Galston offers a potpourri of proposals for faster, more inclusive growth.

6. David Audretsch highlights the central importance of entrepreneurship.

The remaining essays will posted next week.

Daniel J. Mitchell

Since I’ve accused the Congressional Budget Office of “witch doctor economics and gypsy forecasting,” it’s obvious I’m not a big fan of the organization’s approach to fiscal analysis.

I’ve even argued that Republicans shouldn’t cite CBO when the bureaucrats reach correct conclusions on policy (at least when such findings are based on bad Keynesian methodology).

So nobody should be surprised that I think the incoming Republican majority should install new leadership at CBO (and the Joint Committee on Taxation as well).

So why, then, are some advocates of smaller government - such as Greg Mankiw, Keith Hennessey, Alan Viard, and Michael Strain - arguing that Republicans should keep the current Director, Doug Elmendorf, who was appointed by the Democrats back in 2009?

Before answering that question, let’s look at some of what was written today for the Washington Post’s Wonkblog.

After a series of highly-regarded conservatives voiced their support for Doug Elmendorf, the director of the Congressional Budget Office whose term is up in January, Elmendorf haters fired back on Friday, urging Republicans to jettison the Democratic appointee as soon as possible. …This argument is advanced most forcefully in an open letter to GOP congressional leaders by Grover Norquist of Americans for Tax Reform, who…is most famous as the author of the anti-tax pledge that binds virtually every Republican in Congress never to vote to raise taxes. So why is Norquist against Elmendorf? For one thing, because CBO, under Elmendorf, has not demonized higher taxes. Instead, the agency promotes a “Failed Keynesian Economic Analysis,” Norquist says, that asserts that “higher taxes are good for the economy, even to the point of implying that growth is maximized when tax rates are 100 percent.”

And where did Grover get the idea that CBO believes that ever-higher taxes lead to more growth?

Umm…well, from something I wrote.

As evidence, Norquist points to a 2010 post by the Cato Institute’s Dan Mitchell, titled “Congressional Budget Office Says We Can Maximize Long-Run Economic Output with 100 Percent Tax Rates.” “I hope the title of this post is an exaggeration,” Mitchell writes, “but it’s certainly a logical conclusion based on” CBO’s claim that paying down the national debt – regardless of whether it’s through higher taxes or lower government spending – would be a good thing for the economy. “There’s nothing necessarily wrong with CBO’s concern about deficits,” Mitchell goes on. But “what’s missing from CBO’s analysis is any recognition or understanding that the real problem is excessive government spending.” In other words, what’s missing is conservative ideology about fiscal policy.

I have two reactions, one minor and one major.

My minor point is that the author of the piece is supposed to be a neutral, even-handed reporter, yet she refers to opponents of Elmendorf as “haters” and she implies that we’re simply upset because CBO’s analysis is missing “conservative ideology about fiscal policy.”  Given that she was writing for Wonkblog, which is more akin to an editorial page, there’s nothing wrong with being opinionated. But ask yourself whether someone with such hostility can be impartial when doing straight news stories.

My major point is about policy. Why is my concern about the size of government characterized as “ideology” while we’re supposed to believe CBO’s analysis is “scrupulously impartial” even though it produced analysis which implies you maximize growth with 100 percent tax rates?!?

If my views are blind ideology, then why is there research showing the economic damage of excessive government from international bureaucracies such as the World Bank and European Central Bank? And why are there studies about the harmful economic impact of government spending from the International Monetary Fund and the Organization for Economic Cooperation and Development? Nobody has ever accused these institutions of being hotbeds of libertarian thought.

But perhaps I’m not being fair to CBO. Did the bureaucrats really imply, as part of their analysis on what would happen to the economy if the Bush tax cuts were allowed to expire, that you maximize growth with 100 percent tax rates?

You can read my original post, which holds up very well four years later. And here’s some of what I wrote yesterday to someone who asked me to justify my views on the issue.

…let’s focus on the “subsequent years,” when CBO projectst that GDP would be lower with extended tax cuts. …I’m happy to be corrected, but my reading is that CBO was stating that fiscal balance is the tail that wags the economic dog. The extended tax cuts cause larger deficits, and CBO says that these larger deficits will divert national saving from productive investment and lead to lower output. But if the tax burden is higher, as in the baseline forecast, then deficits are lower and more saving is available for productive investment and output is higher. As far as I’m aware, CBO didn’t have any limiting language back then to suggest that higher tax rates led to growth, but only up to X point. So I think I was on solid ground in asserting the CBO’s analysis implied that ever-higher tax rates led to ever-higher growth.

Seems reasonable. Moreover, I strongly suspect the Wonkblog reporter would have found several people to condemn me had I over-stated the implications of CBO’s analysis.

Now let’s return to the issue of whether Mr. Elmendorf should be re-appointed. Which fiscal conservatives are correct, the ones who want to keep him or the ones who want him replaced?

I’m in the latter category, as explained here, but Elmendorf’s defenders make plenty of good points.

The bottom line is that he is a nice guy (based on my limited interactions), a thoughtful economist, and he has been a big improvement over his predecessor. Indeed, he’s almost certainly the best CBO Director ever appointed by Democrats.

Here’s an analogy that may help make sense of this issue. Elmendorf’s predecessor was a doctrinaire leftist named Peter Orszag. If Orszag’s policy views were a country, they would be France or Greece. By contrast, I’m guessing that Elmendorf would be like Sweden or Germany.

In other words, he wants more government than I do, but at least Elmendorf basically understands that there’s no such thing as a free lunch. He realizes 2+2=4, and he’s aware that there are tradeoffs. And since his arrival, CBO has been much better on issues such as the adverse impact of higher marginal tax rates and the debilitating effect of higher transfer payments.

That being said, while it’s much better to be Sweden rather than Greece, I obviously would prefer to be Hong Kong (or, even better, pre-1913 America).

Though, to continue the analogy, the best I can probably hope for is that Republicans appoint someone akin to Australia or Switzerland.

P.S. For more information about the economics of deficits and fiscal balance, here’s a video I narrated for the Center for Freedom and Prosperity.

Deficits are Bad, but the Real Problem is Spending

P.P.S. The Congressional Research Service made the same argument about higher taxes being pro-growth, asserting in 2010 that “The expiration of the tax cuts would nevertheless reduce the budget deficit, absent other policy changes, which economic theory predicts would have a positive effect on the economy in the long run.”

Neal McCluskey

Walk around a random college campus, and the odds are good the first student you’ll run into will be female. 57 percent of college students are women, versus 43 percent men, a 14 point gap. Look at Advanced Placement exams – those College Board tests that enable high-scoring takers to get college credit – and you’ll find that 56 percent of students taking the exams are girls, creating a 13 percent gap favoring women. But fear not! University of Miami president Donna Shalala assures us that the Common Core national curriculum standards will help address the “gender-based inequities” crushing female students.

Um, what?

As the data make obvious, there is no college-readiness gap unfavorable to women. Yet Shalala proclaims that, “These uniform, more rigorous K-12 education standards have the potential to reduce gender-based inequities by ensuring that every young woman receives the educational foundation she needs to be successful in college and career.”

Okay, maybe Shalala doesn’t really mean to suggest – as the quote does – that the Core will fix overall gaps. Maybe she only means differences in subjects like computer science and engineering that, as she writes, do lean male. But as Core proponents will point out if you assert the standards are too broad, the Core only furnishes math and English guidelines, not engineering or computer science. More important, of the two areas the Core tackles, AP-taking suggests women dominate one and hold their own in the other. 62 percent of students taking the AP English exams in 2014 were female, while 48 percent of Calculus AB takers were girls. At the very least, these figures belie any accusations of systematic efforts to exclude women from college-prep courses, even if girls tend to choose different courses than boys.

Sadly, superficial argumentation for the Core is widespread, if rarely quite so egregious as this. More common is proclaiming that “higher standards” will, simply by virtue of being higher, drive greater achievement and make the country economically triumphant.  This despite what the research actually says about national standards.

Ironically, Core supporters love to take opponents to task for being misinformed, and they are sometimes right: Core opponents do too often ascribe curricula they don’t like, or malevolent motives, to the Core and its creators. But supporters have been just as untethered to reality despite, often, having been involved with the Core for years, unlike lots of parents forced to scramble for information after the standards suddenly showed up at their doors demanding their children.  In the case of Shalala, at the very least she signed the Shanker Institute’s “manifesto” applauding the Core – and calling for an explicit national curriculum – in 2011.

Defense of the Common Core has too often come in the form of platitudes and ungrounded assertions. This latest effort hasn’t improved upon that.

Doug Bandow

MOSCOW—Red Square remains one of the globe’s most iconic locales. Next to the Kremlin wall is a small, squat, pyramidal building:  Vladimir Ilyich Ulyanov Lenin’s mausoleum.

Lenin is preserved within, dressed in a black suit, his face is grim and his right fist is clenched, as if he was ready to smite the capitalists who now dominate even his own nation’s economy.  He is one of history’s most consequential individuals. Without him there likely would have been no Bolshevik Revolution, Joseph Stalin, Cold War, and Berlin Wall.

Of course, without Lenin there still would have been a Bolshevik movement. But it would have lacked his intellect, tactical skills, and, most important, determination. So feared was he by his enemies that he became Germany’s secret weapon against Russia, sent back to Russia to spread the bacillus of radical revolution.

Lenin pushed the Bolsheviks toward power as the authority of the moderate Provisional Government, which had ousted the Czar, bled away. Lenin was no humanitarian whose dream was perverted by his successors. He insisted on solitary Bolshevik rule, brooked no dissent even within the party, established the Cheka secret police, and employed terror against opponents.

Lenin was left helpless by three strokes.  He died on January 21, 1924, just 53 years old. His body lay in state for four days, during which nearly a million people passed by.

Within a week of his passing the idea of preserving his body was broached. The mausoleum started as wood and turned into the current granite and marble structure in 1929.

Communist imagery, including Lenin’s mummy, came under attack with the dissolution of the Soviet Union. Moscow’s anti-communist mayor backed burying the corpse and restoring Red Square to its pre-revolutionary state. Boris Yeltsin, the first president of non-Communist Russia, also proposed to bury Lenin. But Yeltsin’s health faltered and political strength weakened.

In 2001 Yeltsin’s successor, Vladimir Putin, expressed fear that burial would suggest the Russian people had lived under “false values” all those years. He concluded in 2011 that the decision would be made when the time was right.

Yet the same year Vladimir Medinsky, then a leading member of Putin’s United Russia Party, proposed burying the corpse next to Lenin’s mother in St. Petersburg and turning the mausoleum into a museum. In 2012 Putin appointed Medinsky Minister of Culture, suggesting support for removing Lenin’s body. However, Putin failed to act and since has ignored the issue.

While Russia cannot escape its history, it should stop glorifying the country’s turn down one of humanity’s great deadends. Although an unjust despotism, Imperial Russia could have been transformed into some form of constitutional rule.

But by entering World War I the Czarist autocracy sacrificed that opportunity. The Provisional Government, led by liberal constitutionalists and democratic socialists, put the previous regime’s commitment to war before the Russian people’s interests.

Unfortunately, the victorious Bolsheviks suppressed free markets, stole private property, crushed political dissent, murdered political opponents, imposed materialist ethics, and exalted ruthless dictatorship. The result was a sustained assault on the history, traditions, ethics, and very essence of the Russian people. Although Russians finally were able to turn back from this deadly detour, the same old authoritarianism has been born again, repackaged to make it more palatable to Russians today.

As I point out on Forbes online, “Burying Vladimir Lenin would be a powerful symbolic gesture to close an era. That still might not help the West understand what Vladimir Putin is, but it would emphatically show what he is not. And that would be no small feat at a time of dangerously rising tensions between Russia and the West.”

Someday Russians will be free. Liberation will come only through the Russian people’s own efforts, however, not from the West. Only they can make their own future. The day liberty arrives will be the real Russian Revolution.

Doug Bandow

As U.S. relations with Russia go from bad to worse, even old agreements seem at risk.  Such as the INF (Intermediate-Range Nuclear Forces) Treaty.

The 1987 pact essentially cleared Europe of mid-range missiles (between 500 and 5500 kilometers).  But the State Department recently charged Moscow with violating the treaty.

The INF treaty has been to America’s advantage, since it does not cover U.S. military allies, such as Britain and France.  Even more important, the U.S. has no potentially hostile neighbors with such a capability, while Russia faces China, India, Iran, North Korea, and Pakistan.

Moscow officials have suggested that they may leave the agreement at some point.  To forestall that possibility the U.S. and Moscow should seek to include China and other regional powers in the pact.   

Although relations between Moscow and Washington obviously are strained, the U.S. should approach Russia about amending the INF Treaty to allow deployments in Asia, unless otherwise agreed.  The two governments should simultaneously propose that Beijing and its neighbors accede to the pact. 

Admittedly, winning signatures from other nations, especially China, would not be easy. The PRC believes its short- and medium-range missiles serve a significant security role. 

However, the PRC’s more aggressive approach to Asia-Pacific territorial issues has antagonized neighboring states.  Japan, South Korea, and Taiwan, in particular, are likely to become increasingly interested in developing countervailing missile capabilities. 

In the future the PRC may face a plethora of countervailing weapons deployed by several states. Then Beijing might view a ban as more to its liking. 

Negotiations over expanding the INF Treaty would make Beijing a full global partner on arms control, recognizing the country’s rising international status.  Although the PRC has tended to view such limits as a means of maintaining U.S. “hegemony,” Washington could suggest accession as the best means to forestall any further increase in U.S. military presence in the region as part of the famed “pivot” or “rebalance.” 

Some analysts instead advocate responding to the PRC’s military build-up by withdrawing from the pact and introducing comparable missiles.  As an alternative, David W. Kearn, Jr. of St. John’s University suggested enhancing U.S. offensive capabilities in the region and defensive responses to missile attacks. 

However, as I point out in China-US focus, “nearby nations should be responsible for maintaining regional security.  American policymakers should use expansion of the INF Treaty as a means to reduce U.S. defense obligations.”

China’s growing missile force challenges America’s dominance in Asia—most directly the ability to project power—not America’s survival at home.  The most likely contingency is an attack on Taiwan, which is quite different from a strike on the U.S.  The Cold War justification for America’s extensive military presence in the region has disappeared.

America’s friends and neighbors, no less than China, have prospered and are able to defend themselves.  That obviously is best for the U.S., since Beijing will always have an incentive to spend and risk more in its own neighborhood than will America. 

Restricting Washington’s role also would reduce the potential for a superpower confrontation over less than vital interests.  Ironically, America’s conventional superiority inflates the danger of a great power confrontation.  Explained Kearn:  “in a crisis or a conflict, regional adversaries may have incentives to escalate (or threaten escalation) against U.S. forces in the region or U.S. allies to de-escalate the crisis and ensure regime survival once the United States has become involved.”

Expanding the INF Treaty to Asia would help reduce growing military tensions and dampen geopolitical competition, especially over territorial issues.  Achieving this end won’t be easy, but it is an area where the U.S. and Russia can cooperate.  While China might initially be wary of joining such an effort, a new arms control regime would ultimately offer Beijing significant benefits as well.

Pages