Feed aggregator

Sentencing Reform and Clemency

Cato Op-Eds - Thu, 04/24/2014 - 15:19

Tim Lynch

Today’s Washington Post has an article about Obama’s new clemency project and talks about the work of former Catoite, Julie Stewart.  Julie left Cato to start Families Against Mandatory Minimums (FAMM) in 1991.  Here’s an excerpt from the Post story:

An Obama administration initiative to encourage nonviolent drug offenders in federal prison to seek clemency is likely to trigger tens of thousands of petitions, and the government could be processing applications for the next three years, according to lawyers and civil rights activists….

“We will get tens of thousands of applications,” said Julie Stewart, president of Families Against Mandatory Minimums. “This is a very complicated, many-layered project. It will go on until the end of the Obama administration.”…

For some of the activists, the issue is deeply personal. Stewart’s brother, Jeff, was sent to federal prison for a mandatory five years for growing marijuana.

He had cultivated 365 six-inch marijuana plants in his garage in Washington state, where the drug is now legal. She thought what he did was “stupid” but assumed he would get off with a relatively light sentence because it was “only marijuana.”

“The judge said, ‘I don’t want to give you this much time but I have no choice because Congress has determined your sentence when they passed the mandatory sentencing laws for drug crimes,’ ” Stewart said. “That was the spark that ignited my mission. I always thought judges judge and determine the punishment that fits the crime. But the judge couldn’t do anything about my brother’s sentence.”…

“When I started my group, sentencing reform was such a fringe issue,” she said. “Nobody knew anything about it and nobody cared. We’ve been working so hard for so many years to build bipartisan support. People are serving decades behind bars for nonviolent mistakes they made in their 20s.”

Over at the FAMM web site, there are profiles of persons serving long sentences in federal prisons.  A few weeks ago, before this week’s clemency announcement, Julie and I discussed these issues in a Cato audio roundtable discussion.  We both criticized Obama for not exercising his pardon power.  Were our criticisms were picked up by the NSA?  In any event, you have our permission to listen to that conversation here.

Previous post on the clemency initiative here.

Categories: Policy Institutes

A Visual Aid to Prevent Future Core Shock

Cato Op-Eds - Thu, 04/24/2014 - 14:46

Neal McCluskey

While almost certainly not intended to do this, yesterday the Council of Chief State School Officers – one of the creators of the Common Core – held a revelatory panel discussion with four state superintendents. Revelatory, because Core-supporting two state superintendents said pretty much what many Core opponents have long explained: Even if the standards are of outstanding quality, the Core won’t work because “accountability” won’t be rigorously implemented.

Starting around the 30-minute mark of the event video you can start catching comments from Tennessee Supe Kevin Huffman, and New Mexico’s Hanna Skandera, lamenting past failure to translate high standards into performance, and the abandonment of Common Core testing by teacher unions. Huffmann seems especially shocked and angry that state unions he thought were on board with the Core and all its attendant accountability measures are suddenly fighting tooth and nail against it.

Said Huffmann, whose state is on the brink of delaying Core testing: “Our union leadership, which started out…in support of the standards and the assessments…has quit on the process. And they have come out against the transition to more robust assessments….I find that a shocking deviation from the past.”

Alas, had Huffman and other Core supporters been listening to opponents such as myself, or Jay Greene at the University of Arkansas, they would not have been the least bit shocked by this. For instance, as I wrote in the 2010 report Behind the Curtain: Assessing the Case for National Curriculum Standards:

[T]eachers and administrators whose livelihoods depend on public schooling are highly motivated to focus on education, and so exert outsized power over politicians on education issues. And because employees are naturally averse to management raising the standards for their performance, it is unsurprising that teachers’ unions and administrators’ associations use their political influence…to keep standards low.

I should note that in the now-blistering Common Core battle, I sympathize with a lot of the substance that teacher unionists offer against the Core, such as one-size can’t fit all; the Core is totally untested; and the standards were implemented with barely a semblance of a “democratic” process. All those very valid concerns aside, however, I also don’t think you can expect people to willingly subject themselves to outside accountability if they don’t have to. It’s not evil. It’s just human.

Anyway, Jay Greene has offered pretty much the same analysis, especially to conservatives who have long decried the outsized influence of public school employees over public schooling politics. As he colorfully put it in 2011 testimony to the U.S. House of Representatives:

Second, to the extent that there will be change in a nationalized system of standards, curriculum, and assessments, it will be directed by the most powerful organized interests in education, and probably not by reformers. Making standards more rigorous and setting cut scores on assessments higher would show the education system in a more negative light, so teachers unions and other organized interests in education may attempt to steer the nationalized system in a less rigorous direction. In general, it is unwise to build a national church if you are a minority religion.

Mr. Huffman, you were warned.

So that folks like Mr. Huffman – and the whole country – can avoid future bracing slaps in the face by the political process, perhaps a visual aid would help to understand the likely effects of top-down efforts to impose “rigorous” standards and accountability. Thankfully, my long-ago introduced “Top-Down Standards Outcomes Matrix” is just such an aid:

So be shocked no more, Core supporters! It will now take but a moment to see why top-down plans won’t work out the way you want.  

Categories: Policy Institutes

Federal Government Often Selfish, Not Selfless

Cato Op-Eds - Thu, 04/24/2014 - 13:53

Chris Edwards

A new Rasmussen poll finds that just 19 percent of voters think that the federal government “does the right thing nearly all the time.” The poll also finds that two-thirds of voters think that the government “looks out primarily for its own interests.”

These public perceptions about the federal government are correct, as frequent stories in the Washington Post confirm. Today, the newspaper has front-page stories about how the Navy’s Blue Angels may have been a “hotbed of hazing, sexual harassment and other forms of discrimination,” and how the Department of Homeland Security (DHS) has been apparently acting corruptly at the highest levels.

Regarding the Blue Angels, the Post reports:

… an internal military document that a Navy official inadvertently e-mailed to a Washington Post editor states that a former member of the Blue Angels filed a complaint last month accusing [Blue Angels commander Gregory] McWherter of promoting a hostile work environment and tolerating sexual harassment. The complaint described an atmosphere rife with sexually explicit speech, the open display of pornography and jokes about sexual orientation. The Navy officer is the latest in a string of senior military commanders to come under investigation for sexual misconduct or other misbehavior.

It does sound like top Pentagon officials are taking a harder line than in the past against such bad behavior, no doubt due to all the negative press these sorts of incidents have been generating.

That’s why I find the new DHS revelations more disturbing. The Post story indicates that rather than trying to stomp out bad behavior, top DHS officials were collaborating in the appalling rule-breaking of its former inspector general (IG), Charles Edwards.

IGs are the internal watchdogs that the public counts on to keep the massive $3.5 trillion federal government operating with at least some degree of propriety. But, as the Post reports, the DHS IG was apparently working with top DHS officials to selfishly undermine the public trust for narrow political ends.

The top watchdog for the Department of Homeland Security altered and delayed investigations at the request of senior administration officials, compromising his independent role as an inspector general, according to a new report from a Senate oversight panel.

Charles K. Edwards, who served as acting DHS inspector general from 2011 through 2013, routinely shared drinks and dinner with department leaders and gave them inside information about the timing and findings of investigations, according to the report from an oversight panel of the Homeland Security and Government Operations Committee.

A year-long bipartisan investigation by the panel also found that Edwards improperly relied on the advice of top political advisers to then-Homeland Security Secretary Janet Napolitano and acquiesced to their suggestions about the wording and timing of three separate reports.

… Edwards was particularly close to members of Napolitano’s inner staff and often communicated more with them than with his own senior leadership team, the Senate inquiry found.

… Federal law requires inspectors general to remain independent of the agencies they oversee and to seek legal advice only from their own counsel or another IG’s counsel …  [But] the Senate report said Edwards conferred regularly with both [DHS general counsel John] Sandweg and Noah Kroloff, Napolitano’s chief of staff, at the same time he was allegedly pushing to delete embarrassing information from the Secret Service report.

So if the new bipartisan report is correct, the DHS IG was an enabler of bad behavior in the DHS, rather than an investigator of it. He aided top officials in pursuing their selfish political ends, rather than calling them to task. To me, that’s corruption and it’s disgraceful. Too often, federal officials work against the public interest, not for it, and that is one reason why we should downsize the government.

Categories: Policy Institutes

Further Thoughts on Schuette v. Coalition

Cato Op-Eds - Thu, 04/24/2014 - 13:13

Walter Olson

A few more notes on the Michigan higher education racial-preferences case already covered in this space by Roger and Ilya:

Justice Scalia could hardly have set the rhetorical stage more vividly: “[In this] jurisprudential twilight zone… we confront a frighteningly bizarre question: does the Equal Protection Clause of the Fourteenth Amendment forbid what its text plainly requires?” Some readers will be let down to discover on proceeding further that the case doesn’t actually turn on that question: all eight participating Justices agree at least formally that the issue this time was not whether Michigan voters could end racial preferences at all, but instead whether they chose a method of doing so (constitutional amendment, in this case) that itself survives Equal Protection scrutiny.  

A technicality? To me, it made the case far more interesting. So many big cases have tackled the constitutionality of racial preferences as a matter of substance that anyone who cares has had ample opportunity to reflect on those big questions. By contrast, there’s been far less attention to the Hunter/Seattle “political process” line of Equal Protection cases, by which the Court occasionally and selectively intervenes to strike down democratic processes as unfair after they arrive at the “wrong” policy conclusions. (Hunter v. Erickson (1969) and Washington v. Seattle (1982) descended from Reitman v. Mulkey (1967), in which the Warren Court decided 5-4 that California voters had no right to enshrine freedom of association in their state constitution as a way of heading off then-new “fair-housing” enactments.)

Scalia and Thomas regard this line of cases (and I agree) as unprincipled, un-administrable, and lacking in any particular stopping point: the “radical logic” of Hunter and Seattle (to quote the syllabus) would lead toward general judicial review of any and all government action on the basis of whether it has “disparate impact” on minority residents, no matter how unintended. The two Justices are accordingly ready to overrule this bad line of cases directly as a mistake of its era; the plurality, for better or worse, are not (yet) willing to do so, and instead recharacterize the cases’  facts to limit their reach in ways that neither Scalia nor Sotomayor find logically defensible.

Sotomayor’s mantra “Race matters” is likely to thrill some readers — it has already been in use for a while as a catch-phrase in academia and elsewhere — but as a device for organizing a legal opinion, it’s at best – how shall we say? – imprecise. All the Justices agree that race matters, but disagree on how. As Ilya Somin and David Bernstein point out at Volokh Conspiracy, Sotomayor also gerrymanders the word race itself in a way convenient to her purposes, using it to include Hispanics (who, as official forms remind us, “can be of any race,”) while breathing not one word about Asian-Americans (a more widely racially classified group whose situation of being both historically disadvantaged and discriminated against in university admissions cries out for recognition).

“Race matters,” indeed. 

[adapted from Overlawyered]

Categories: Policy Institutes

White House Helicopter Fleet

Cato Op-Eds - Wed, 04/23/2014 - 15:26

Chris Edwards

Did you know that the White House has a fleet of 19 helicopters? The Washington Post today discusses efforts to replace this fleet of aging Sikorsky’s with 21 new vehicles yet to be procured. The fleet is used by the president, vice president, and cabinet secretaries.

The size of the helicopter fleet seems excessive. For one thing, I understand that cabinet secretaries have become mere minions to presidential aides, so I’m surprised that they would generally need access to such high-cost transportation.

The Post story focuses on the $3.2 billion flushed down the drain the last time the White House tried to replace its helicopter fleet:

The last time the Pentagon tried to upgrade the president’s coolest ride — the fleet of helicopters that drop him at his doorstep on the South Lawn of the White House — it didn’t go well. Costs doubled. Delays sparked ridicule, then outrage. And President Obama, then just a few weeks in office, said it was “an example of the procurement process gone amok” before defense officials killed the program outright.

It was an embarrassing debacle that cost $3.2 billion and produced no usable helicopter, turning an iconic symbol of presidential power into an illustration of government waste and incompetence … 

In the wake of the Sept. 11, 2001, attacks, replacing the helicopters — which fly under the call sign “Marine One” when the president is aboard — became a priority for the Pentagon. In 2005, a team led by Lockheed Martin won the contract, beating out Sikorsky, which built the helicopters currently used in the Marine One program.

But soon it became a case study in how not to build a helicopter, analysts say. The design became so overloaded with new requirements — to be able to hover longer and at high altitudes, travel great distances without refueling, and defend against missile attacks — it essentially became an impossible task. “Too many people had a seat at the table,” said Richard Aboulafia, an aviation analyst at the Fairfax-based Teal Group …

Rep. Mac Thornberry (R-Tex.), the vice chairman of the House Armed Services Committee, said that the last effort failed because “it was almost like they were trying to cram rotors onto Air Force One. This time, there has been careful monitoring, and the process seems much more realistic thus far” …

Some are skeptical that once the helicopters start being built, the Navy, the White House, the Secret Service or any of the other agencies involved will be able to resist restoring expensive features that had been scrapped for savings and efficiency. “Some bright person is going to say, ‘I know we took it out in order to get the contract signed in the first place, but I think we really underestimated our needs,’” said John Pike, the director of GlobalSecurity.org. “Sikorsky will sell you as much helicopter as you’re willing to pay for. And nothing is too good for the president. So you have to be concerned that they have temporarily scaled it back, but that it will bloat up again down the road.”

Sen. Charles E. Schumer (D-N.Y.), who has been pushing for Lockheed to get the contract because much of the work would be done at its facility in Upstate New York, said that the cost will be heavily scrutinized.

As most people know, the Pentagon has had chronic cost overruns in procurement for decades. It is interesting that the agency has yet to solve these problems because military leaders surely do not enjoy being repeatedly lambasted by Congress and the media.

The Pentagon promises to get the new helicopter project right, and Senator Schumer says that he is watching closely. So taxpayers can breathe easy that at least this military project will come in on-time and under-budget. :-)

Note on Downsizing Government: Nicole Kaeding is updating this essay on government cost overruns, so look for that in coming months.

Categories: Policy Institutes

Obama's Clemency Project

Cato Op-Eds - Wed, 04/23/2014 - 15:03

Tim Lynch

Today, James Cole, Deputy Attorney General of the United States, announced a new “Clemency Initiative.”  The gist is that the Obama administration is soliciting more clemency petitions as a part of its “Smart on Crime” plan to address our “vastly overcrowded prison population.”

According to Cole, Obama is anxious to commute more prison sentences, but something has been amiss thus far.  To respond to Obama’s new directive, Cole tells us that a new team of lawyers will be taking over the Office of the Pardon Attorney within the Department of Justice and the new team is going to expedite clemency applications for Obama’s consideration.

The new initiative is aimed at inmates who meet the following criteria:

1.  Presently serving time federal prison.  (Inmates in state prison ineligible).

2.  Would have received a lesser sentence if current sentencing rules had been in place when they were sentenced way back when.

3.  No significant ties to gangs, cartels, or mafia families.  “Low-level” offenders.

4.  No significant criminal history.

5.  Record of good conduct while in prison.

6.  No history of violence prior to, or during, prison stay.

7.  Must have already served 10 years of prison sentence.

The administration is really hyping this initiative and raising expectations about dramatic moves by Obama as this gets underway. I remain skeptical for a few reasons.  First, I question the narrative that it has only recently occured to Obama that there ought to be more meritorious clemency petitions on his desk. 

Second, I note that the administration is expecting to receive thousands of petitions and applications.  That language is important.  Later on, Obama’s people may say, “As expected, we received thousands of applications! We never said there would be hundreds or thousands of commutations.” 

Third, there’s just no way of telling how the criteria are going to applied.  What are “significant ties” to gangs?  “Significant” criminal history?  A “history” of violence?  For example, maybe there is a guy who was caught driving a truck full of marijuana.  Maybe he was sentenced to 20 years in prison because of the amount of drugs.  Suppose he had no real ties to any gang or cartel and suppose he has already served 12 years for the non-violent offense.  Good candidate?  Wait, there’s a problem.  While in prison, he was disciplined a few times for fighting with other inmates.  (The prison authorities couldn’t tell whether the candidate was only defending himself, as he claimed, or not.)  According to a strict reading of the criteria, the candidate’s petition will fail #5 and #6 above.  But is it wise to keep a person like this locked up?

Obama deserves some credit for turning his attention to clemency.  But we will have to await his actions.  For many non-violent drug offenders, the wait has already been too long. 

For related Cato work, go here and here.  More background at the PardonPower blog.

Categories: Policy Institutes

Reflections on Schuette v. Coalition to Defend Affirmative Action

Cato Op-Eds - Wed, 04/23/2014 - 14:58

Roger Pilon

Right on cue, the New York Times editorialized this morning against yesterday’s Supreme Court decision upholding the right of Michigan’s citizens to amend their constitution to prohibit the state from engaging in affirmative action, which they did in 2006 by passing, by a large margin, a proposition prohibiting racial, gender, ethnic, and national origin preferences in public employment, education, and contracting. The Times was not alone, of course. NPR’s lament this morning was a solo interview of Lee Bollinger, president of my undergraduate alma mater, Columbia University, and the defendant in the 2003 Gratz and Grutter affirmative action decisions when he was president of the University of Michigan.

It was a bad day for affirmative action, but a good day for the Constitution. Yet neither of those commentaries, nor any of the five opinions that issued from this split decision, came to terms with the discrimination that is inherent and hence inescapable in government undertakings as such, and is at the core of this problem today.

Among other things, the editorialists at the Times note that “the justices disagreed about whose rights were at issue: the minorities who would be affected by the ban or the majority of the state’s voters who passed it.” Justice Kennedy, writing for a three-judge plurality, sided with the voters, taking no position on the constitutionally of race-conscious public practices. Justice Sotomayor, joined by Justice Ginsburg in dissent, wrote that “Our Constitution places limits on what a majority of the people may do,” such as when they pass laws that “oppress minorities,” the Times adds.

Conflicting rights? If there were a right to preferential treatment by the state, the Constitution’s Equal Protection Clause would have no meaning—as Justice Scalia, joined by Justice Thomas, made clear in his concurrence. But that’s not the right the plaintiffs in this case brought before the Court. Their claim, rather, was that by prohibiting the state from considering only certain factors—race, for example, in university admissions, but not others, such as legacy—those with such characteristics are disadvantaged vis-à-vis the latter because, to be given preferences, they must not only win in the legislative arena, but must also overturn a state constitutional amendment; all of which amounts to unequal treatment in violation of the U.S. Constitution’s Equal Protection Clause.

The argument is not without merit: In fact, it persuaded eight of the fifteen Sixth Circuit judges who were sitting en banc below, producing five dissenting opinions. And the issue cannot be resolved, of course, unless we go to the underlying question of whether preferences themselves violate equal protection, which they do, but which Kennedy, unlike Scalia, was unwilling to say.

The deeper issue, however, unaddressed by all, is why we stop at race, gender, ethnicity, national origin…and sexual orientation, marital status, appearance, socio-economic background, etc., etc. Why, that is, can the University of Michigan take legacy, or athletic ability, or musical talent into consideration when making admissions decisions, but not race, gender, etc.? Is legacy permitted because that’s likely to lead to more alumni contributions, and athletic and musical talent for the same reason, plus the long history of college football and marching bands? For that matter, why does academic aptitude play so prominent a role in admissions decisions? Don’t the parents of the academically less gifted pay taxes to support the University of Michigan too? The dirty little secret of public higher education, of course, is that it amounts to a massive transfer of wealth from the lower to the upper classes of any state in which we find it, as Justice Thomas pointed out in his Grutter dissent.

And so we come to the point of it all, to the discrimination that is inherent and hence inescapable in government undertakings as such. All public institutions, like their private counterparts, have to discriminate in countless ways if they’re to function. But whether they’re educating, hiring, contracting, what have you, they belong to all of us and so may discriminate only on grounds that are narrowly tailored to serve their functions. But what are those functions—and those grounds? Education may be the main function of a public university—hence the presumptive centrality of academic merit as a legitimate ground for discrimination. But are there other functions? Is football central to the function of a university—and hence athletic ability a legitimate ground for discriminating? Tell that to another of my alma maters, the University of Chicago.

Plainly, if we go to these core questions—these First Principles—this argument can go either way: If athletic ability can justify discriminating in favor of an applicant—and against another—then why may not a public university’s admissions officers take race into consideration, just like a private university may—at least in an ideal world?  The reason, doubtless, is because of our long history with racial and, to a lesser extent, gender and ethnic discrimination. Under the Equal Protection Clause, those factors are singled out for special consideration, understandably, just as sexual orientation today increasingly is. But the principle of the matter is perfectly general. If, before public decisionmakers, all must be treated equally, meaning that discrimination must be narrowly tailored to serve a public institution’s function, then a decisionmaker’s discretion must be limited.

The broader conclusion, however, is that there no clear, undisputable answers to these questions. But what is clear is that much of this could be avoided—not eliminated, as we will always have a public sector—if we did less through the public sector. Why, for example, is government involved in higher education—or in education generally, for that matter? Public universities should not be permitted to discriminate on the basis of race, which is what affirmative action amounts to, but private universities ought to be free to engage in all the affirmative action of whatever kind they wish. There’s the solution to the problem: once again, less government.

Categories: Policy Institutes

Risking Taxpayer Dollars on DOE Loan Guarantees

Cato Op-Eds - Wed, 04/23/2014 - 14:42

Nicole Kaeding

In February, I highlighted the Department of Energy’s issuance of a $6.5 billion loan guarantee to build a nuclear power facility in Georgia. At the time, the project was behind schedule with cost overruns, and the project’s owners had already secured private financing. Yet DOE issued the loan guarantee anyway.

Now we’ve learned that DOE’s actions were even more foolish than previously thought. DOE waived the credit fees charged to the company—which are meant to offset the risk to taxpayers—when it issued the loan.

According to the Washington Examiner:

“Developers of a Georgia nuclear project didn’t have to pay millions of dollars in fees designed to prevent risk for taxpayers when it secured $6.5 billion in loan guarantees from the Energy Department in February, the agency confirmed Tuesday to the Washington Examiner.

The DOE calculated a zero dollar “credit subsidy fee,” which protects taxpayers if developers default, for electric utility Georgia Power – a subsidiary of Southern Co. – and Oglethorpe Power Corp. to spur completion of two large, next-generation nuclear reactors at the Vogtle power plant in Waynesboro, Ga.”

This isn’t the first time that DOE has been criticized for the handling of its loan guarantee programs, and thus risking losses to taxpayers. In 2012, the Government Accountability Office said, “if DOE underestimates these costs [credit subsidies], taxpayers will ultimately bear the cost of default.” GAO said that DOE did not follow its own processes for handling applications “potentially increasing the taxpayer’s exposure to financial risk from an applicant’s default.”

Energy loan guarantee programs should be eliminated, but closing them doesn’t seem likely under the current administration. But you would think that even this administration would favor DOE following sound lending practices to try and minimize taxpayer losses.

Categories: Policy Institutes

The Progressive Income Tax Enriches the Envious and Greedy

Cato Op-Eds - Wed, 04/23/2014 - 14:38

Doug Bandow

Most Americans dislike the income tax, now more than a century old. The rates are too high. The provisions are unfair. The record-keeping is onerous. The revenues are wasted.

But there are fans, certainly, such as the politicians of both parties. What good would it do to serve in Congress if you didn’t have money to spend? 

The beneficiaries of the politicians’ largesse also share in the income tax lovefest. Uncle Sam needs money to write checks. He can borrow, but there’s a limit to the credulity of investors. Borrow too much and they might doubt Washington’s ability to repay. 

Then there are the fans of expensive and expansive government. Never mind the endless mess created by Uncle Sam. Something he does must work!

More dangerous may be the social engineers. For instance, Yale economic professor Robert J. Shiller suggested using the income tax to mitigate “some of the worst consequences of income inequality.” He proposed indexing taxes to income inequality.

It’s a genuinely nutty idea. Inequality measures are sensitive to data distortion. Moreover, they incorporate no moral judgment as to how the inequality arose. Were opportunities obstructed and systems manipulated, or did a generally free society operate naturally and deliver ever-changing income and wealth patterns? 

As I point out in the Freeman:

“Worse, though, is the weird presumption that seizing private wealth from mostly productive taxpayers and giving it to political operators noted for their electoral skills rather than economic judgment would somehow remedy financial disparities.  There is no evidence that increasing Washington’s resources would yield greater social or economic justice, improve economic efficiency or growth, or make people wealthier or freer.”

To the contrary, experience demonstrates that the majority are likely to end up worse off. Extensive bureaucracies soak up much money before it leaves government hands. Cash is tossed at influential interest groups. Benefits for the poor are dwarfed by middle class welfare, such as Social Security and Medicare. 

Providing more money to expand these and other programs is supposed to close the income and wealth gaps?

Unfortunately, the income tax creates additional harms. By taxing work, the levy discourages work. Moreover, credits and deductions give legislators the opportunity to play social engineers.

The greater the resulting complexity, the more wealth wasted in compliance activities. There is no financial privacy, since Uncle Sam is empowered to rummage through everyone’s personal affairs. 

Moreover, as Edwards pointed out, the entire enforcement process is built around a denial of due process. From start to finish, the burden of proof falls on the taxpayer, not the government. 

Contrast this with the sales tax: You pay it when you purchase something and you are done with it. 

Even social engineering usually is at a minimum. Politicians don’t claim that they can use the sales tax to solve the “problem” of income inequality.

The first income tax in U.S. history was proposed in 1814 to fund the ill-fated War of 1812. In 1861 a desperate national government turned to the income tax to fund its war to conquer the southern states seeking to separate. 

A search for revenue to replace declining tariff collections led to another income tax in 1894, but the Supreme Court declared the levy unconstitutional. Fifteen years later, Congress proposed a constitutional amendment, which was approved on February 2, 1913, during the heyday of the Progressive Era. From modest beginnings it has grown into a monster.

There is a necessary role for government, but it is far more limited than today’s Leviathan. Moreover, today’s income tax has made it far too easy for politicians to mulct the public.  The income tax has greatly contributed to Americans’ steady and serious loss of liberty.

Categories: Policy Institutes

What’s Really Impeding Progress in the TPP?

Cato Op-Eds - Wed, 04/23/2014 - 14:31

Daniel R. Pearson

Japan and the United States have undertaken a series of high-level negotiations over the past several weeks in an effort to reach a bilateral agreement that could lead to completion of the 12-country Trans-Pacific Partnership (TPP). Japanese Minister of State for Economic and Fiscal Policy, Akira Amari, has met with U.S. Trade Representative Michael Froman both in Tokyo and Washington in an effort to resolve differences prior to President Obama’s visit to Japan this week. Reports indicate that the talks have made some progress.  However, large gaps remain that are expected to preclude any breakthrough announcement when the president meets on April 24 with Japanese Prime Minister Shinzo Abe.

The stated obstacles to concluding the talks have been Japanese reluctance to eliminate tariffs on sensitive agricultural products – beef, dairy, pork, rice, sugar and wheat – and U.S. reluctance to eliminate the 2.5 percent tariff on automobile imports and the 25 percent tariff on light trucks. Each side is very much in the right to ask the other to change these protectionist policies. They have the effect of stifling comparative advantage. They reduce economic welfare by raising consumer costs while curtailing opportunities for efficient producers to make export sales. Ending these trade restrictions would not only help the country requesting the changes, but would also help the economy of the country making the change. What’s not to like about this deal?

Stepping back from the details of the requests and offers, the real problems facing each country are the underlying political realities. Japanese farmers strongly resist reductions in the level of support they receive from tariff protection, and have done so consistently for decades. Those farmers also have been consistent and dedicated supporters of Prime Minister Abe’s Liberal Democratic Party (LDP). If Japan’s agricultural community becomes sufficiently unhappy with the Abe administration, it is entirely possible that his government could fall. Nonetheless, Prime Minister Abe seems willing to push agricultural policy in the direction of reform. He knows that updating Japan’s agricultural policies is an essential condition for becoming a member of the TPP.

Political considerations in the United States are somewhat different. Yes, the automobile industry would give up tariff protection on imports from Japan. But the reality is that a 2.5 percent duty isn’t all that high in the first place, and the protective effect of the 25-percent duty on light trucks has been undermined significantly by Japanese firms’ investments in U.S. manufacturing facilities. A whole lot of “Japanese” vehicles already are built in the United States. Nonetheless, the U.S. auto industry and its workers are not enamored of tariff reductions, and the Obama administration no doubt keeps this in mind.

The real reason for the impasse is lack of fast-track negotiating authority (also known as Trade Promotion Authority, or TPA) that would allow the TPP agreement to be submitted to Congress for an up-or-down vote. Fast-track arrangements that prohibit amendments have been used for congressional consideration of trade agreements since the Trade Act of 1974. This process was developed in response to the failure of Congress in the 1960s to adopt key provisions of the Kennedy Round agreement dealing with customs valuation and antidumping procedures. The Kennedy Round’s tariff reductions were approved, but there had been no prior congressional commitments to limit amendments, so it wasn’t possible to find the votes needed to pass the controversial provisions. Any controversial parts of a TPP agreement that conceivably could be presented to Congress in the absence of fast track also would prove difficult (impossible?) to enact. Frankly, TPP may have a hard time being approved by the current Congress even if fast track already was in place.

What’s more, opposition to passage of fast-track authority is very broad and deep within the president’s Democratic Party. Anti-fast-track forces include not only organized labor and many left-leaning civil-society organizations, but also Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi, and many fellow Democrats in Congress. Although the Obama administration supports the concept of fast track, it has not yet endorsed a specific legislative proposal. It is noteworthy that the administration chose not to support the bipartisan approach introduced in January this year by then-chairman of the Senate Finance Committee Max Baucus (D-MT), Ranking Member of Senate Finance Orrin Hatch (R-UT), and House Ways and Means Chairman Dave Camp (R-MI). The new Finance Committee chairman, Sen. Ron Wyden (D-OR), has indicated that he is considering how or whether to propose fast-track legislation, but appears to be on a timetable that would delay introduction of any bill until at least after the November 2014 election.

The administration has given no indications that it is making progress in overcoming Democratic resistance to fast track; recent objections by members of Congress timed to coincide with the president’s Asian trip suggest that the administration may be losing ground. The April 21 op-ed in the Los Angeles Times by Reps. George Miller (D-CA), Rosa DeLauro (D-CT), and Louise Slaughter (D-NY) amounts to a kick in the pants as the president sets off on his diplomatic mission. (It makes one wonder what these Democrats would be saying if the president was a Republican rather than a member of their own party.) There is no precedent from the administration’s first five years in office in which the White House pushed back effectively against such strong objections from key parts of its political base. It seems unlikely they will find a way to do so with fast track, especially since this could be seen as favoring Republicans over Democrats. That meaningful progress toward trade liberalization could be put on hold at least until a new administration takes office in 2017 is reason for concern.

Japanese officials no doubt have been paying close attention to U.S. trade politics. Prime Minister Abe can see that United States is not in a terribly strong position to push TPP to a completely trade-liberalizing conclusion. But President Obama is coming to Tokyo and it’s necessary to do something. Should Japan go ahead and commit to eliminate agricultural tariffs before the United States even has fast-track authority? Does the United States really want to conclude an agreement at this point when U.S. negotiators appear to have only limited credibility and leverage, or have the recent rounds of bilateral TPP talks just been for show? If Japan takes the plunge and agrees to painful cuts now, what happens if it becomes clear following the November election that their U.S. partners are not able to move forward?  Will the future of the Abe government be at risk?

The net result is that Prime Minister Abe appears to have backed away from what may have been his intention to pursue a truly far-reaching reform of Japan’s agricultural policies.  He can’t afford to put everything on the table when he can see that the U.S. side simply isn’t in a position to deliver.

It is unfortunate that a presidential trip to Japan – certain to raise expectations – has come at a time when the United States has relatively little negotiating leverage. Pressure to achieve a deal apparently has led U.S negotiators to agree that Japan would be allowed to maintain a significant degree of agricultural tariff protection. Even though the TPP talks might not be concluded for several years (if ever), important ground now has been lost. It will likely be impossible to reclaim a position of greater liberalization later in the course of the negotiations. It also is unclear whether the other 11 nations involved in TPP will be willing or able to keep the process going for several years in hopes that the United States eventually will get its act together. Perhaps soon it may be time to think about how to maintain the hope for a broad Pacific trade agreement that might be achieved at some point further in the future.

Categories: Policy Institutes

School Choice Lawsuit Explained

Cato Op-Eds - Wed, 04/23/2014 - 14:06

Jason Bedrick

Last week, the New Hampshire Supreme Court heard oral arguments in Duncan v. New Hampshire, concerning the constitutionality of the “Live Free or Die” state’s trailblazing scholarship tax credit program. The Cato Institute filed an amicus brief in support of the program. Over at the Friedman Foundation’s blog, I summarize the law’s history and the primary legal arguments on each side, including legal standing, public versus private money, and the use of public funds at religious schools. I conclude by outlining four possible outcomes:

1. The court rules that the plaintiffs lack standing. In this case, the trial court’s opinion would be overturned and scholarship students would be able to attend the school of their choice, religious or secular.

2. The court rules in favor of the program on the merits. That would mean either the court holds that tax credits are private money or that public money may be spent at a religious school so long as it reaches the schools in a manner that is indirect and incidental to the choices of parents. As in the first scenario, scholarship students would be able to attend the school of their choice, religious or secular.

3. The court upholds the trial court’s decision. In this case, the tax-credit scholarship program would continue as it has in the last year. The trial court forbid the use of scholarships at religious schools but allowed their use at secular private schools, out-of-district public schools, and homeschool environments. In this scenario, the Institute for Justice likely would challenge the decision in federal court for violating the Free Exercise clause of the First Amendment since such a decision would require legislative hostility toward religion rather than neutrality.

4. The court rules against the program and rejects the severability clause. The trial court found that the severability clause that the legislature had added was valid, therefore the program could continue for parents selecting secular schools or homeschooling. The state supreme court could reach the same conclusion on the merits, but reject the severability clause. This would be the most devastating outcome for educational choice in New Hampshire, as it would completely obliterate the tax-credit scholarship program.

Ideally, New Hampshire’s Supreme Court will follow the precedent of the U.S. Supreme Court and the Arizona Supreme Court by holding that taxpayers’ money is their own until it reaches the tax collector’s hand.

Categories: Policy Institutes

Removing the 3/10 Year Bars Is Not Amnesty

Cato Op-Eds - Wed, 04/23/2014 - 14:05

Alex Nowrasteh

It’s no secret that the Senate’s proposed legalization for some unauthorized immigrants was a deal breaker in 2013. Detractors labelled such a legalization “amnesty” even though it is anything but that – and that label has stuck. That, at minimum, some unauthorized immigrants become legalized is economically and ethically imperative, so it’s time to consider less-than-comprehensive, keyhole solutions that will fix at least some of the problems with our immigration system.

One such solution, which even many of those opposed to immigration reform have endorsed, is a small legislative reform to the 3/10 year bars that will allow some unauthorized immigrants to depart and apply for reentry under the legal system without special treatment. This reform would avoid the so-called amnesty objection to immigration reform.

 

Removing the Bars

The 3/10 year bars require any immigrant who stays in the United States illegally for more than six months but less than one year may not leave, reenter, or apply for a green card for three years. Any immigrant who illegally stays for more than a year may not leave, reenter, or apply for a green card for 10 years. Any immigrant who violates it triggers a twenty-year ban from reentering the United States for any reason. That’s a problem because almost all applicants for a green card or visa have to visit a U.S. embassy or consulate abroad to apply which, in the case of unauthorized immigrants, requires them to leave the Untied States thus triggering the bars. The 3/10 year bars prevent any unauthorized immigrant from using the legal immigration system. 

Removing these bars and allowing unauthorized immigrants to leave and apply for green cards would legalize millions of unauthorized immigrants without an amnesty – although the numbers who could be legalized are uncertain. If unauthorized immigrants could leave and apply, which would happen by removing the 3/10 year bars, about 20 percent of the unauthorized population could immediately become eligible for a visa, and as many as half could become eligible after leaving. 

One reason why the number of unauthorized immigrants has increased so much in recent decades is that the 3/10 year bars raise the cost of returning to their home countries.  Prior to the bars being enacted in 1996, unauthorized immigration was a largely circular phenomenon. Unlawful immigrants would come for a few years, work here, return home, and often return to the United States again before eventually settling back in their home countries.  The 3/10 year bars raised the cost of leaving the United States and, predictably, more undocumented immigrants stayed longer and thus increased the size of the unauthorized immigrant population.

 

Source: Adapted and slightly edited from Doug Massey’s “Chain Reaction: The Causes and Consequences of America’s War on Immigrants.” http://www.iza.org/conference_files/amm2011/massey_d1244.pdf#page=29 

 

Ironically, these restrictions did more to lock unauthorized immigrants in the United States than to keep them out. The chance of an unauthorized immigrant leaving soon after his or her first trip to the United States has dropped from 50 percent to near zero since 1996. And the percentage of unauthorized immigrants who have resided in the United States for long periods of time has increased.

 

 

 

Source: Pew Hispanic Center. http://www.pewhispanic.org/2011/12/01/unauthorized-immigrants-length-of-residency-patterns-of-parenthood/

The number of unlawful immigrants who entered annually after 1996 was about the same as entered annually before, but since fewer left after the bars were enacted the population grew much more rapidly after the 3/10 year bars were put in place. According to Doug Massey at Princeton, if the same percentage of unauthorized immigrants had left during the 1990s and 2000s as left before the bars, there would be 5.3 million fewer unauthorized immigrants here today. Many would have returned home and others would have earned green cards through the family-based immigration system.

Keyhole Solution

All else remaining equal, immigration policy should encourage unauthorized immigrants to apply through the legal system – many of whom would now be able to reenter lawfully through the family immigration system if the 3/10 year bars were removed. Removing the 3/10 year bars would not be an amnesty for unauthorized immigrants, even though it would allow some of them here illegally to use the current system without a comprehensive reform.

Removing or Reforming the 3/10 Year Bars Isn’t Amnesty …

… but don’t take my word for it.  Here are what many people, including some noted immigration restrictionists and conservative Republicans (no, they aren’t the same), have said in support of removing or reforming the bars:

  • Mark Krikorian, Executive Director of the Center for Immigration Studies:   “The 3/10 year bar  … is not something I’m a big fan of.  I think there are other ways of penalizing illegal immigrants for being illegal aliens. But no, that would not be [amnesty]—first of all, if [someone here illegally] got legal status, she would get legal status because she was the spouse of U.S. citizen through the normal immigration process.”
  • Jessica Vaughn, Director of Policy Studies for the Center for Immigration Studies: “A responsible but still compassionate solution would be to offer [family members eligible for green cards] the opportunity to maintain eligibility, not through an amnesty … but by agreeing to wipe out their previous unlawful presence if they leave the country (emphasis added).”
  • Paul Virtue, former general counsel of the Immigration and Naturalization Service:  “Far from curtailing illegal immigration and deterring people from overstaying their visa as intended, [the] bars to admissibility are actually contributing to the unprecedented rise in the number of undocumented immigrants.”
  • Former- Sen. Jim Demint (R-SC), President of the Heritage Foundation:  Sen. Demint endorsed the Krieble Foundation’s “Red Card Solution” which waives the bars and permits unauthorized immigrants to leave and return on work visas.  As Demint wrote, “Congress could consider ideas for a practical, temporary worker program such as that being promoted by businesswoman Helen Krieble, called the Red Card Solution.”
  • Rep. Bob Goodlatte (R-VA), Chairman of the Judiciary Committee: “If you address some kind of reform of that aspect of it [3/10 year bars] you can avail people of an opportunity that they don’t have now.”   
  • Rep. Raúl Labrador (R-ID), Republican Judiciary Committee member and former immigration attorney: “No one is going to go back home for 10 years.  If we get rid of what we call ‘the bars’ … we could fix the problem for about 25 percent of the people that are here illegally.  And we would do it through the proper legal system, so there’s no amnesty.”
  • Rep. Steve Pearce (R-NM), the only Republican congressman with a border district (press release): “This bipartisan immigration bill would grant discretionary authority to review specific cases for a small number of Americans who are separated from their families due to minor earlier violations which are technical in nature or occurred when the family member was a minor.  Such review was permissible until 1996, when the current regulations were put in place … The American Families United Act would allow a judge or the Secretary of Homeland Security to review these cases and determine whether relief is in the public interest, an option not currently available.  The legislation would prohibit this review for individuals without a legal basis to live in the U.S., or those with a serious criminal record.”

None of the people listed above would support broad-based legalization or amnesty. However, they all agree that removing or reforming the 3/10 year bars is a desirable reform that falls far short of “amnesty” but would nevertheless legalize many current unauthorized immigrants.  

Categories: Policy Institutes

Taming the Cyberlibertarians

Cato Op-Eds - Wed, 04/23/2014 - 12:06

Jim Harper

New York Attorney General Eric Schneiderman made some interesting rhetorical choices in a New York Times op-ed yesterday taking after share economy leaders AirBnB and Uber. The challenge they present to outdated regulation leads him to call these businesses “cyberlibertarians” and “cybercowboys.” The latter awkward metaphor inhabits the title of the piece: “Taming the Digital Wild West.”

It’s an awkward metaphor because “Wild West” was an epithet leveled at the Internet itself in its early days. Thank heavens the forces of stasis didn’t prevent us from inhabiting this place—and here’s hoping they won’t prevent us from finding new terrain. How safe and impoverished we would be, both materially and spiritually, if we didn’t have the rollicking, wide-open Internet.

But the most interesting rhetorical choice is his effort to push community-enhancing job-creation into the “libertarian” corner of Times’ readers’ vistas. His hope, it appears, is that readers’ revulsion around the word “libertarian” (if not liberty itself) will overcome what they know about car- and room-sharing. People all over New York and the world are operating small businesses, and these small businesses bring them in close personal contact with others. They build wealth, and they build community.

Calling that “cyberlibertarian” may just cause some reflexive progressives and conservatives to take a fresh look at liberty. While we’re working toward miracles, maybe people will drop the “cyber” prefix, too!

(Disclosure: I’ve used both AirBnB and Uber with generally wonderful results.)

Categories: Policy Institutes

Counting the Wrong Winners and Losers

Cato Op-Eds - Wed, 04/23/2014 - 10:59

K. William Watson

Debates about trade liberalization often focus on identifying the winners and losers of increased openness to foreign competition.  Protectionists regale us with sad stories of closed factories, and free traders point to lower prices for consumers and the broad benefits of economic growth.  But this whole exercise is completely backwards.  We should instead be talking about the winners and losers of protectionism.

Free trade is not a trade policy.  Trade policies—such as tariffs, quotas, restrictions on foreign service providers, and protectionist regulations—exist to divert the benefits of free exchange toward politically powerful special interests.  Free trade is merely the absence of those policies. 

By demanding an explanation for increased openness, the trade debate implicitly legitimizes the protectionist status quo.  As a consequence, the news media often accept the argument that opening the U.S. market to foreign competition should be accompanied by programs that alleviate the suffering of the losers of increased trade.  But why is anyone entitled to the current arrangement?  Perhaps the winners of protectionism owe reparations to those of us who had to suffer the consequences of their rent-seeking. 

Who wins and who loses from policies that increase the price of food?  Who wins and who loses from regressive taxes on shoes and clothes?  Who wins and who loses from shipping restrictions?  Who wins and who loses from protectionist overregulation?  I could go on.

Last Sunday’s New York Times included an editorial calling on the Obama administration to “Get Global Trade Right” by adding a handful of protectionists’ pet issues to the Trans-Pacific Partnership. Threatening our trade partners with sanctions if they don’t adopt specific labor, environment, or monetary policies is not going help the United States get trade right, but it will make us a bully and reduce our ability to make real progress tearing down genuine barriers. 

After (wrongly) blaming increased economic openness for the loss of millions of manufacturing jobs and growing income inequality, the Times—without a hint of irony—says that President Obama needs “to make a strong case for why these new agreements will be good for the American economy and workers.”  Well, that is certainly true.

Let me offer some humble advice to the president then on how he might take on that task: Stop selling trade agreements as a way to grow export markets for goods produced in the United States, and start extolling the virtues of agreements as a way to fight cronyism and to tear down bad policies. Thinking about trade agreements this way will not only help you sell the agreement, it could actually make the agreements better.

Categories: Policy Institutes

Liberalizing Investment in Cuba

Cato Op-Eds - Wed, 04/23/2014 - 10:43

Simon Lester

I’m no Cuba expert, but I have followed the events of recent years with interest. It seems that there have been tentative steps towards liberalizing the Cuban economy, as well as slightly better economic relations between the United States and Cuba. I’m hopeful the long-term trend is towards Cuba becoming a free market democracy, with normal relations with the United States.

In the short-term, though, I’m frustrated by how the “liberalization” of foreign investment is being carried out there. Here’s the Economist:

But on March 29th Cuba’s parliament approved a new foreign-investment law that for the first time allows Cubans living abroad to invest in some enterprises (provided, according to Rodrigo Malmierca, the foreign-trade minister, they are not part of the “Miami terrorist mafia”). The aim is to raise foreign investment in Cuba to about $2.5 billion a year; currently Cuban economists say the stock is $5 billion at most.

The law, which updates a faulty 1995 one, is still patchy, says Pavel Vidal, a Cuban economist living in Colombia. It offers generous tax breaks of eight years for new investments. However, it requires employers to hire workers via state employment agencies that charge (and keep) hard currency, vastly inflating the cost of labour.

Welcoming new foreign investment is great. Here’s the problem, though: In order to liberalize investment, a government really doesn’t need to do anything fancy. It can just say, “foreign investment is permitted, and will be treated like domestic investment.” Very simple. Furthermore, lower tax rates and reduced regulatory burdens can help encourage such investment. Again, very simple.

In practice, though, governments make this process difficult and less liberalizing. Here, what Cuba seems to have done is offered special tax breaks for new foreign investments, and then subjected receipt of these tax advantages to certain hiring conditions. In effect, it introduces two distortions as part of the liberalization process: favoring new foreign investors over other investors through the tax code and then subjecting the favored investors to additional regulation.

To be clear, Cuba is not the only country who does this; this is what many countries do. But there’s just no reason to approach it this way. The simpler way, with low tax rates for all investors, is the more economically beneficial way. Unfortunately, it seems as though “liberalization” is often just a catchword, and governments insist on using their power to intervene in private economic transactions, even when ostensibly moving away from interventionist policies.

Categories: Policy Institutes

It's Constitutional for Voters to Stop Their Government from Discriminating Based on Race

Cato Op-Eds - Tue, 04/22/2014 - 15:55

Ilya Shapiro

Today the Supreme Court finally ruled on Schuette v. Coalition to Defend Affirmative Action, in which Cato filed a brief last summer. This is the case involving a challenge to a voter-approved Michigan state constitutional amendment that bans racial discrimination (including racial preferences) in higher education. The U.S. Court of Appeals for the Sixth Circuit had somehow manage to conclude that such a law violates the Fourteenth Amendment’s Equal Protection Clause, which … requires that state governments treat everyone equally, regardless of race. The ruling was fractured – six justices voted to reverse the lower court, but for three separate reasons, plus a separate concurrence from Chief Justice John Roberts to respond to the two-justice dissent – but ultimately achieved the correct result: Michigan’s Proposal 2 stands.

But really Schuette is a much easier case than the above description might indicate. Indeed, it’s no surprise that six justices found that a state constitutional provision prohibiting racial discrimination complies with the federal constitutional provision that prohibits state racial discrimination. To hold otherwise would be to torture the English language to the point where constitutional text is absolutely meaningless. The only surprise – or, rather, the lamentable pity – is that Justices Sonia Sotomayor and Ruth Bader Ginsburg somehow agreed with the lower court’s confused determination that the Constitution requires what it barely tolerates (racial preferences in university admissions).

To quote the conclusion of Justice Antonin Scalia’s concurring opinion, for himself and Justice Clarence Thomas:

As Justice Harlan observed nearly a century ago, “[o]ur Constitution is color-blind, and neither knows nor tolerates classes among citizens.” Plessy v. Ferguson, 163 U. S. 537, 559 (1896) (dissenting opinion). The people of Michigan wish the same for their governing charter. It would be shameful for us to stand in their way.

This case was so easy precisely because it didn’t involve the fraught question of whether states can pursue race-conscious measures in order to achieve (some mythical) diversity. Instead, it was about the democratic process and whether voters can rein in the powers of their state government. The answer to that question, like the answer to the question of whether the Equal Protection Clause mandates racial preferences, is self-evident. 

Here’s the full decision, which begins with a plurality opinion by Justice Anthony Kennedy, for himself, the chief justice, and Justice Samuel Alito.

Categories: Policy Institutes

Justice Scalia on Anonymous 911 Tipsters

Cato Op-Eds - Tue, 04/22/2014 - 13:55

Tim Lynch

Today, the Supreme Court decided Prado Navarette v. California, a Fourth Amendment search case.  The Fourth Amendment limits the government’s power to stop and search people and the question in this case was whether the police overstepped their authority.

Highway patrol pulled over a pick-up truck and the police smelled, and then found, marijuana.  The men arrested later challenged the legality of the stop in court.  If the stop was illegal, the marijuana would not be admitted into evidence, and the men would probably go free.

The police said the stop was proper.  They received an anonymous 911 call from a woman who said a pickup had almost run her off the road.  The dispatcher took her information and the description of the truck.  The police found a pickup that matched the description, and then followed it for five minutes, and finally pulled it over.  Marijuana discovered, men arrested, case starts moving its way thru the courts. 

By a 5-4 vote, the Supreme Court upheld the legality of the stop.  Interestingly, the case scrambled the usual right-left split among the justices.  Justice Breyer joined Thomas, Kennedy, Roberts and Alito for the majority.  Justice Scalia joined Ginsburg, Kagan, and Sotomayor in dissent.

Here is an excerpt from Scalia’s dissenting opinion:

The Court’s opinion serves up a freedom-destroying cocktail consisting of two parts patent falsity: (1) that anonymous 911 reports of traffic violations are reliable so long as they correctly identify a car and its location, and

(2) that a single instance of careless or reckless driving necessarily supports a reasonable suspicion of drunkenness. All the malevolent 911 caller need do is assert a traffic violation, and the targeted car will be stopped, forcibly if necessary, by the police. If the driver turns out not to be drunk (which will almost always be the case), the caller need fear no consequences, even if 911 knows his identity. After all, he never alleged drunkenness, but merely called in a traffic violation—and on that point his word is as good as his victim’s.

Drunken driving is a serious matter, but so is the loss of our freedom to come and go as we please without police interference. To prevent and detect murder we do not allow searches without probable cause or targeted Terry stops without reasonable suspicion. We should not do so for drunken driving either. After today’s opinion all of us on the road, and not just drug dealers, are at risk of having our freedom of movement curtailed on suspicion of drunkenness, based upon a phone tip, true or false, of a single instance of careless driving.

Categories: Policy Institutes

Central Africa’s Spreading Religious War

Cato Op-Eds - Tue, 04/22/2014 - 13:30

Doug Bandow

Although the Middle East is most known for religious conflict, sectarian violence is spreading ominously across Africa.  The only good news is that so far the conflicts appear to be national rather than regional. 

Sudan long has suffered from a complicated religious-ethnic conflict.  In Mali France was drawn into a religious-infused civil war.  Nigeria is a divided nation where long-standing sectarian antagonisms increasingly have been amplified by the Islamic terrorist group Boko Haram. 

Thankfully, fighting in the first two has ebbed.  Nigeria’s battle remains intense, but contained within its national boundaries.

As I warn in the New York Times:  “However, rising violence within the Central African Republic (CAR) threatens to swamp the other conflicts in regional impact.  Attacks on Christians following a takeover by the rebel Islamic Seleka coalition triggered retaliation by Christian militias.  Not only is the violence creating a host of angry victims, but the outward flow of refugees is planting seeds of conflict in surrounding nations.”

Of course, addressing even largely distinct national conflicts is not easy, as we have seen in Sudan and Nigeria.  Unfortunately, religion is one force capable of transcending normal political and ethnic differences.  The exodus from CAR creates an increased possibility of cooperation among various militants acting as friends if not quite allies. 

All of CAR’s neighbors share an interest in ending the sectarian killing.  Not just for humanitarian reasons, but also as a matter of basic self-interest.

Categories: Policy Institutes

Gas Prices Are Pinching Again, and You Can Thank U.S. Trade Policy For Some of the Pain

Cato Op-Eds - Tue, 04/22/2014 - 12:24

Scott Lincicome

The summer driving season is still weeks away, but rising U.S. gas prices are already back in the news.  Last week, the average price for regular gasoline at U.S. gas stations hit $3.6918 a gallon – the highest since March 22, 2013 and up 43 cents this year.  Much of this price depends on global supply and demand, but certainly not all of it.  In fact, two archaic, little-known U.S. policies – vigorously defended by the well-connected interest groups who benefit from them – restrict free trade in petroleum products and, as a result, force American consumers to pay considerably more at the pump.

First, the Jones Act - a 94-year-old law that requires all domestic seaborne trade to be shipped on U.S.-crewed, -owned, flagged and manufactured vessels – prevents cost-effective intrastate shipping of crude oil or refined products.  According to Bloomberg, there are only 13 ships that can legally move oil between U.S. ports, and these ships are “booked solid.”  As a result, abundant oil supplies in the Gulf Coast region cannot be shipped to other U.S. states with spare refinery capacity.  And, even when such vessels are available, the Jones Act makes intrastate crude shipping artificially expensive.  According to a 2012 report by the Financial Times, shipping U.S. crude from Texas to Philadelphia cost more than three times as much as shipping the same product on a foreign-flagged vessel to a Canadian refinery, even though the latter route is longer.

It doesn’t take an energy economist to see how the Jones Act’s byzantine protectionism leads to higher prices at the pump for American drivers.  According to one recent estimate, revoking the Jones Act would reduce U.S. gasoline prices by as much as 15 cents per gallon “by increasing the supply of ships able to shuttle the fuel between U.S. ports.”

Some of these costs could potentially be mitigated if it weren’t for the second U.S. trade policy inflating gas prices: restrictions on crude oil exports.  As I wrote for Cato last year, current U.S. law – implemented in the 1970s during a bygone era of energy scarcity and dependence – effectively bans the exportation of U.S. crude oil to any country other than Canada.  Because U.S. and Canadian refinery capacity is finite, America’s newfound energy abundance has led to a glut of domestic oil and caused domestic crude oil prices (West Texas Intermediate and Louisiana Light Sweet) to drop well below their global (Brent) counterpart.  One might think that this price divergence would mean lower U.S. gas prices, but such thinking fails to understand that U.S. gasoline exports may be freely exported, and that gasoline prices are set on global markets based on Brent crude prices.  As a result, several recent analyses – including ones by Citigroup [$], Resources for the Future and the American Petroleum Institute - have found that liberalization of U.S. crude oil exports would lower, not raise, gas prices by as much as 7 cents per gallon.

Thus, the Jones Act and the crude oil export ban – each implemented decades ago – together inflate U.S. gasoline prices by as much as 0.22 per gallon – or about 6% of the current price at your local gas station.  Not everyone in the United States, however, is harmed.  In the case of the Jones Act, the American shipping unions and shipbuilders that benefit from the law have long opposed any type of reforms, regardless of the pains imposed on the American economy and U.S. consumers.  The crude oil export restrictions, on the other hand, have found new support from a small group of U.S. refiners who profit handsomely from depressed domestic crude prices and the lack of any legal limits on their exports.  As is always the case with protectionism, these groups win and U.S. consumers lose.

Given this political dynamic, reform of either law appears unlikely in the near future, regardless of how dramatically the U.S. trade and energy landscape has changed since the laws were imposed.  So the next time you fill up the tank, note that about 6 percent of your bill pads the bottom lines of a few well-connected cronies.

Categories: Policy Institutes

Chinese Company 3-D Prints a House for $4,800

Cato Op-Eds - Tue, 04/22/2014 - 11:37

Marian L. Tupy

To paraphrase Lord Peter Bauer, the first recipient of the Milton Friedman prize, each child comes to this world not only with an empty belly, but also with a brain. Put differently, people are not parasites living off finite resources (though exception needs to be made in the case of most politicians and bureaucrats). They are discoverers and innovators, who look for ways to achieve more with less. They are the creators of wealth and drivers of human progress.

As a reminder of human ingenuity, consider that a Chinese company was able use a massive 3-D printer to print 10 houses in 24 hours at the cost of $4,800 per house.

Let’s put that in perspective. There are 30 million people in Afghanistan, or 7.5 million families of four. At a cost of $4,800 per house (expect the cost to drop significantly over the next few years), it would cost $36 billion to build all Afghani families a new house. The current foreign aid to Afghanistan is $6.7 billion, which means that – using foreign aid money alone – it would take 5.4 years to have each Afghani family housed in a brand new Chinese-made home.

Will it happen? Probably not, since most of the foreign aid money to Afghanistan is devoured by parasitic government officials.  

Categories: Policy Institutes

Pages