Cato: “Underground Regulations” Violate the Constitution as Much as Headline-Grabbing Executive Actions

Small business owners aren’t typically lawyers, though they are undoubtedly familiar with the thousands of inscrutable pages of new regulations published every year in the Federal Register. Instead of devoting their energies to growing their businesses, owners must expend significant time and resources ensuring compliance with these voluminous and often vague regulations, with costly fines looming as consequences for failure to comply. “The Fourth Branch & Underground Regulations,” a new report by the National Federation of Independent Businesses (NFIB), details the processes by which administrative agencies skirt “notice-and-comment” requirements to impose new interpretations of rules that avoid the constitutional system of checks and balances. Unfortunately, operating on this shifting field disproportionately affects small businesses, as they are most poorly equipped to lobby for favorable rules.

The Administrative Procedure Act established “notice-and-comment” as a means for regulated businesses to voice concerns with or offer suggestions to improve proposed regulations. However, “non-legislative rules,” or “general statements of policy” and “interpretive rules,” are not required to undergo this process. This grants administrative agencies – the “Fourth Branch” of government – significant leeway in how “legislative rules” are interpreted and implemented, essentially giving them law making power. The recent Supreme Court ruling in Perez v. Mortgage Bankers Association allows agencies not only to interpret rules without undergoing “notice-and-comment,” but also the ability to change their interpretation at any point.(Cato filed an amicus brief in the case.)

Read more at http://www.cato.org/blog/underground-regulations-violate-constitution-much-headline-grabbing-executive-actions

Cato: The Xi-Ma Meeting: A Small Victory for Peace

The weekend meeting between Chinese President Xi Jinping and President Ma Ying-jeou of Taiwan was a positive development for peace in the Taiwan Strait, despite the meeting’s mostly symbolic nature. No grand bargains or binding statements resulted, but the meeting highlights the importance of high-level discussions and constructive dialogue.

The question of Taiwan’s political status, as an independent country or renegade province, is of serious concern to the United States. A forceful military “reunification” of Taiwan with China could draw the United States into war. U.S. government officials should encourage steps that reduce the possibility of armed conflict such as the Xi-Ma meeting.

Figuring out a way to settle the Taiwan question peacefully has been complicated by the fact that the military balance across the Taiwan Strait has shifted firmly in China’s favor. China’s military capabilities have also raised the cost that the United States would have to pay in a war over Taiwan.

Read more at http://www.cato.org/blog/xi-ma-meeting-small-victory-peace

Cato: Whatever Happened to the Left’s Love of Free Speech?

There was a time in America when the Left could be counted on to defend free speech. But as countless examples today demonstrate, those days are long gone. From campus speech codes to campaign finance to prosecutorial threats against climate change critics and more, the evidence is as fresh as this morning’s newspapers.

Campus assaults have been so well documented by the Foundation for Individual Rights in Education (FIRE) that they need no elaboration here. But the latest campaign finance “reform”—“until the court reverses its decision in Citizens United”—can be found championed in an op-ed in this morning’s Washington Post by such stalwarts of the Left as Yale Law School’s Bruce Ackerman and Ian Ayers. On Tuesday last, it seems, Seattle voters approved a measure that would “give” each registered voter a $100 “democracy voucher” that could be spent “for only one purpose—to support their favorite candidates for municipal office.” The city can of course “give” that $100 voucher only if it first “takes” the $100 from its taxpayers, which it will do in all the unequal ways that modern tax systems exhibit. Thus is the political speech of private individuals reduced by forcing the funds they might otherwise direct to candidates of their choice to be redirected through this public funding scheme to candidates they may oppose.

Read more at http://www.cato.org/blog/whatever-happened-lefts-love-free-speech

Cato: Police Union Planning “Surprise” for Quentin Tarantino

After filmmaker Quentin Tarantino delivered an impassioned speech at a rally denouncing as “murder” some recent police uses of force against civilians, pro-police groups called for a boycott of his films.  So far, so dull. But now, according to the Hollywood Reporter, things have taken a new and remarkable turn.

"In a veiled threat, the largest police union in the country says it has a “surprise” in store for Quentin Tarantino.

Jim Pasco, executive director of the Fraternal Order of Police, would not go into any detail about what is being cooked up for the Hollywood director, but he did tell THR: “We’ll be opportunistic.” "

Pasco specified that the “surprise” in question would be in addition to the standing call for a boycott.

"“Something is in the works, but the element of surprise is the most important element,” says Pasco. “Something could happen anytime between now and [the premiere]. And a lot of it is going to be driven by Tarantino, who is nothing if not predictable.

“The right time and place will come up and we’ll try to hurt him in the only way that seems to matter to him, and that’s economically,” says Pasco.

When asked if this was a threat, Pasco said no, at least not a physical threat."

Read more at http://www.cato.org/blog/police-union-planning-surprise-quentin-tarantino

Cato: Ohio’s Issue 3: The Runt of the Marijuana Crop

By nearly a 2 to 1 margin, Ohio’s Issue 3 has failed. It may be just as well. Jacob Sullum writes at Reason:

"[I]t’s not clear whether the rejection of Issue 3 reflects general resistance to legalization or opposition to the initiative’s most controversial feature: a cannabis cultivation cartel that would have limited commercial production to 10 sites controlled by the initiative’s financial backers. The ballot description highlighted that aspect of the initiative, saying Issue 3 “grants a monopoly for the commercial production and sale of marijuana for recreational and medicinal purposes” and would “endow exclusive rights for commercial marijuana growth, cultivation, and extraction to self-designated landowners who own ten predetermined parcels of land.”"

This is nothing like the model that prevailed in Colorado, and that seems to be working well so far.

Establishing a permanent commercial pot cartel has no clear public policy rationale. It appears rather to have been an instance of shameless self-dealing by individuals who hoped to extract rents based on the public’s anxiety about change. Even – and I don’t say this lightly – even a state monopoly on commercial sales might have been better, in that the rents would have gone to a public purpose, rather than to some well-connected speculators, who ought not to profit from a law written specifically to favor them. Indeed, such laws are not properly called laws at all; they are privileges – private laws, rather than public ones, and as such they come under grave suspicion.

Read more at http://www.cato.org/blog/ohios-issue-3-runt-marijuana-crop

Cato: They Represent D.C. in New Mexico

In a recent The Hill piece on the REAL ID debate in New Hampshire, I wrote about the complaint against federal legislators who cease representing their states in Washington, D.C., and start representing Washington, D.C., in their states.

That seems to be happening in New Mexico, where four of five members of the congressional delegation are at best standing by worrying about a Department of Homeland Security attack on their state. At worst, they are lobbying the state legislature to cede authority over driver licensing to the federal government.

The DHS is pushing New Mexico toward compliance with REAL ID, the national ID law, by saying that it will not offer another extension of the deadline for compliance. The statutory deadline passed seven years ago and no state is in compliance. No state will be in 2016. The national ID law is as unworkable as it is weak as a security tool.

Read more at http://www.cato.org/blog/they-represent-dc-new-mexico

Cato: More Mission Creep in an Illegal War

In the 15 months since the president unilaterally launched our latest war in the Middle East, he’s repeatedly pledged that he wouldn’t put U.S. “boots on the ground” in Syria. As he told congressional leaders on September 3, 2014, “the military plan that has been developed” is limited, and doesn’t require ground forces.

Alas, if you liked that plan, you can’t keep it. Earlier today, the Obama administration announced the deployment of U.S. Special Forces to Northern Syria to assist Kurdish troops in the fight against ISIS. U.S. forces will number “fewer than 50,” in an “advise and assist” capacity; they “do not have a combat mission,” according to White House press secretary Josh Earnest. Granted, when “advise and assist” missions look like this, it can be hard for us civilians to tell the difference.

Asked about the legal authorization for the deployment, Earnest insisted: “Congress in 2001 did give the executive branch the authority to take this action. There’s no debating that.”

Read more at http://www.cato.org/blog/more-mission-creep-illegal-war

Cato: Why Is Washington the Policeman of the South China Sea?

For months, the United States has contemplated launching a series of naval patrols in the South China Sea.  Pentagon leaders are especially determined to defy China’s position that building “reclaimed” or artificial reefs and islands also creates rights to new territorial waters surrounding those entities.  On October 27, the Navy sent the guided-missile destroyer USS Lassen on a “freedom of navigation” patrol within 12-miles of a man-made island in the Spratly chain.  That action triggered an immediate outburst, with China’s Foreign Ministry admonishing the United States to “immediately correct its mistake and not take any dangerous or provocative acts that threaten China’s sovereignty and security interests.”

Washington’s action is a dangerous escalation of already worrisome tensions in the South China Sea.  It is understandable that, as the world’s leading maritime power, the United States is unwilling to accept Beijing’s extremely broad territorial claims in that body of water.  The full extent of China’s claims would cover nearly 90 percent of the South China Sea.  U.S. officials stress the importance of the sea lanes that pass through the area.  They note that some $5 trillion in oceanic commerce is involved, and that unimpeded navigation is especially crucial to the trade and overall economies of Japan, South Korea, Australia, and other U.S. allies in East Asia.

Read more at http://www.cato.org/blog/why-washington-policeman-south-china-sea

Cato: Budget Deal Is as Bad as You Think

In Washington, the word “bipartisan” usually means “watch your wallet.”  If anyone needs any further proof, just look to the bipartisan budget agreement announced yesterday.

Hailed in the name of “coming together” and “compromise” to “get things done,” the proposed deal is a dog’s breakfast of every bad budgetary idea to land on the table in recent months.

It’s a deal so bad that even incoming House Speaker Paul Ryan says it “stinks” (although, it appears, he will still be voting for it). Still, current speaker John Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Mitch McConnell, and Senate Minority Leader Harry Reid, who hammered out the deal behind closed doors, can probably put together enough votes to push it through, with a united Democratic caucus and just enough pro-defense spending Republicans.

The deal essentially guts the spending limits in place under the 2011 Budget Control Act which brought about sequestration. It would increase spending by at least $80 billion over the next two years above current spending limits, split equally between domestic and defense spending. It would also increase funding for the military’s Overseas Contingency Operation slush fund by $32 billion, meaning the total spending hike would top $112 billion. More domestic spending for Democrats. More defense spending for Republicans.  Everyone wins except the taxpayers.

Read more at http://www.cato.org/blog/budget-deal-bad-you-think

Cato: Chicago’s Sheriff Crusades against Online Ads

Prior restraints—legal prohibitions on disseminating information before publication—are an odious burden on the freedom of expression and come with a “heavy presumption” against their constitutionality. Indeed, they are so disfavored in the law as to be virtually impossible to obtain outside of wartime.

Informal prior restraints—government pressure without formal sanction—are even more unconstitutional than formal ones, as the Supreme Court noted in Bantam Books v. Sullivan (1963). In that case, the Court forbade the Rhode Island Commission to Encourage Morality in Youth from sending threatening letters to book distributors in an attempt to nudge the distributors into not carrying “obscene” material.

But that strong precedent didn’t stop Cook County (Chicago) Sheriff Thomas Dart and his crusade against Backpage.com, an online commerce site similar to Craigslist. Rather than trying to get a formal prior restraint from a court, Dart used his office, letterhead, and title to send letters threatening investigation to Visa and MasterCard (Backpage’s primary financial transaction processors) to pressure them into dropping Backpage as a customer. Dart justifies his actions by asserting that there have been “years of growth in the online sex trade,” “driving demand even higher and increasing the enslavement of prostituted individuals, including children” due to commercial sites like Backpage.com hosting “adult services” classified ads.

It worked: when Backpage sued to stop Sheriff Dart, the district court denied a preliminary injunction, accepting Dart’s claims and ruling that the public interest weighed against the website. Backpage.com appealed to the U.S. Court of Appeals for the Seventh Circuit.

Read more at http://www.cato.org/blog/chicagos-sheriff-crusades-against-online-ads

Cato: What Should Presidential Candidates Say about Judges?

As predictable as the sun’s rising in the East is NRO’s Ed Whelan’s rush to the barricades when George Will (or many others, for that matter) is found defending a judiciary “actively” engaged in defending a right not expressly found in the Constitution.

The occasion this time was Will’s piece in yesterday’s Washington Post, “The false promise of ‘judicial restraint’ in America.” In it, Will notes that, given the advanced age of several Supreme Court justices, a supremely important presidential issue is being generally neglected in the presidential debates, namely, the criteria by which a candidate would select judicial nominees. And that is “because Democrats have nothing interesting to say about it and Republicans differ among themselves about it.” Drawing on a speech that Randy Barnett recently gave at UC Berkeley, Will defends what we at Cato have long defended, namely, a judiciary actively engaged in reading and applying the Constitution as written. And that includes accurately reading the Ninth Amendment: “The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people”

It’s on that matter, especially, that Whelan leaps to the defense of “judicial restraint.” When the Constitution’s text “fails to yield a sufficiently clear answer to a constitutional question,” he writes, judges should not be inventing rights “that are not in the Constitution” but instead should defer to the people—to democratic majorities.

Read more at http://www.cato.org/blog/what-should-presidential-candidates-say-about-judges

Cato: Bernie Sanders and the Missing GI Bill Evidence

As I’ve written before, the case for “free” college is decrepit, and Bernie Sanders’s op-ed in today’s Washington Post does nothing to bolster it. It sounds wonderful to say “everyone, go get a free education!” but of course it wouldn’t be free – taxpayers would have to foot the bill – and more importantly, it would spur even more wasteful over-consumption of higher ed than we have now.

Because I’ve rehearsed the broad argument against free college quite often, I’m not going to go over it again. But Sen. Sanders’ op-ed does furnish some “evidence” worth looking at: the notion that the post-World War II GI Bill was a huge economic catalyst. Writes Sanders:

"After World War II, the GI Bill gave free education to more than 2 million veterans, many of whom would otherwise never have been able to go to college. This benefited them, and it was good for the economy and the country, too. In fact, scholars say that this investment was a major reason for the high productivity and economic growth our nation enjoyed during the postwar years."

I’ve seen this sort of argument before, as I’ve seen for government provision of education generally, and have always found it wanting, especially since we have good evidence that people will seek out the education they need in the absence of government provision, and will get it more efficiently. Since Sanders links to two sources that presumably support his GI Bill assertion, however, I figured I’d better give them a look.

Read more at http://www.cato.org/blog/bernie-sanders-missing-gi-bill-evidence

Cato: The History of U.S. Recessions and Banking Crises

I have never been entirely satisfied with how either economists or historians identify and date past U.S. recessions and banking crises. Economists, as their studies go further back in time, have a tendency to rely on highly unreliable data series that exaggerate the number of recessions and panics, something most strikingly but not exclusively documented in the notable work of Christina Romer (1986b, 1989, 2009). Historians, on the other hand, relying on more anecdotal and less quantitative evidence, tend to exaggerate the duration and severity of recessions. So I have created a revised chronology in the table below. From the nineteenth century to the present, it distinguishes between three types of events: major recessions, bank panics, and periods of bank failures. I have tried to integrate the best of the approaches of both economists and historians, using them to cross check each other. My chronology therefore differs in important ways from prior lists.

Read more at http://www.cato.org/blog/history-us-recessions-banking-crises

Cato: Kasich Aims to Revive Federalism

The Republican congressional leadership has failed to articulate strong themes to counter the big-government policies of President Obama and the Democrats. People don’t know what the Republican Party stands for, partly because they rarely, if ever, see leaders such as John Boehner and Mitch McConnell on television presenting a coherent vision or a specific program of cuts.

Republicans have particularly dropped the ball on federalism, or the devolving of power back to the states and the people. Reviving federalism was a central theme of the Reagan administration, and it was also a focus of Republican reform efforts in the 1990s.

Read more at http://www.cato.org/blog/kasich-aims-revive-federalism

Cato: I’m from the Government and I’m Here to Help You—Again!

Most everyone believes that government is an essential institution, necessary to do what people cannot do on their own. And that sounds like a pretty good justification for the state. But it rarely describes what government actually does.

For instance, late last year Rachel Kennedy wanted to bring a Cuban food truck to North Kansas City, Missouri, a town of four square miles and 4500 people. The city agreed to allow the trucks to operate during lunch time and several other operators came too. What could possibly go wrong?

The restaurant owners might lobby to expel the food trucks, that’s what! Complained Monte Martello, a local Dairy Queen operator: “They bring the truck in, they compete against us for four hours, and then they drive away.”

Worse, Martello went on, “They don’t actually contribute to the community in any way.” All the food trucks do is provide hungry people with lunch! Asked city councilman Gene Bruns, “Why are we trying to rob our local businesses with vendors that come in from outside?” Once the protest got going city officials ran for cover.

Most Americans take for granted the opportunity to drive into a gas station, fuel their auto, and get back on the road. But not in New Jersey and Oregon. These two states ban self-service stations.

Read more at http://www.cato.org/blog/im-government-im-here-help-you-again

Cato: What Is Russia’s Intervention in Syria All About?

There’s been a lot of speculation in the press recently about Russia’s motives for its military intervention in Syria, and many are quick to attribute the intervention to a desire to – metaphorically speaking - poke America in the eye. Surrounding this speculation are images of Vladimir Putin as a strategic genius, playing geopolitical chess at the grandmaster level.

Nothing could be further from the truth.  It’s certainly convenient for Putin to make the United States look bad in any way he can. But there are a variety of other reasons for Russia’s involvement in Syria. And though Putin may briefly look like he is in control of the situation in Syria, the intervention is likely to end badly for him.

It’s notable that while many reports are portraying the Russian intervention in terms of U.S.-Russian relations, and intimating that Russia is in some way ‘winning’, Russia specialists are more likely to point to other factors, and to view the intervention as ill-fated.

Read more at http://www.cato.org/blog/what-russias-intervention-syria-all-about

Cato: Japan’s Vanishing Pacifism?

Last month, the upper house of Japan’s parliament approved legislation that shifted Japan’s defense policy away from traditional self-defense towards collective self-defense. The new law enables the Japan Self-Defense Forces (JSDF) to come to the aid of allies in the event of armed conflict. It is the latest in a series of measures that represent Prime Minister Abe’s drive to increase Japan’s military power and burnish its status as a great power in East Asia.

Without a military capable of deploying abroad, Japan was seen as a kind of abnormal country, a second tier global player, despite its first-tier economy. In the wake of the recent legislation, it is tempting to believe that Japan will begin to exercise more power in its region. One optimistic commentator hopes by opening the door to collective defense, the JSDF might be used to shape and preserve international order. Taking a more aggressive and fearful tone, Chinese commentators warn against the resurrection of Japan’s old war machine and lambast Abe as a hawkish historical revisionist who wants to destabilize East Asia.

Read more at http://www.cato.org/blog/japans-vanishing-pacifism-0

Cato: Trans-Pacific Partnership Deal Reached! Now What?

After six years of negotiations, a final Trans-Pacific Partnership agreement has been reached in Atlanta.  Check your pacemakers, trade policy wonks. This is about as exciting as it gets in our world.

First, congratulations are in order for the TPP negotiators, who worked extremely hard over the past several years in an environment of profound public skepticism – much of it driven by pervasive scaremongering – to arrive at this moment. Reaching accord on a broad array of subjects between 12 countries at different levels of economic development with disparate policy objectives is not a task for the faint of heart.

Second, there is still quite a bit of work to be done on the domestic front. Even with the deal “concluded,” the president cannot sign the agreement until 90 days after he officially announces his intention to do so.  During that period, there will be intensive consultations between the administration and Congress over the details; the legal text of the agreement will be made available to the public on the internet; the USTR advisory committees will submit their assessments of the deal to Congress; and there will be ample opportunity for informed, robust domestic debate about the deal’s pros and cons.

Read more at http://www.cato.org/blog/trans-pacific-partnership-deal-reached-now-what

Cato: Russia Follows U.S. Script to Intervene in Syria and Embarrass Washington

Vladimir Putin opened a new game of high stakes geopolitical poker, backing Syria’s President Bashir Assad. But Washington has no complaint. America has been meddling in Syria’s tragic civil war from the start.

Russia’s dramatic backing for Syria’s beleaguered Assad government formally buries any illusion that “what Washington says goes,” even in the Middle East. Moscow has begun bombing regime opponents. Sounding almost like the George W. Bush administration, the Putin government insisted that it was fighting terrorism and there really wasn’t a “moderate opposition.”

In contrast, Russia’s intervention has resulted in much wailing and gnashing of teeth in allied capitals. In a joint statement America, France, Germany, Qatar, Saudi Arabia, and United Kingdom claimed that Moscow’s intervention would “only fuel more extremism and radicalization.” The Gulf States separately warned of more “violent extremism” and “terrorists” and increased refugee flows.

Alas, promiscuous American military intervention in the Middle East long has promoted the worst forms of violence and terrorism. Further, for years Qatar and Saudi Arabia have been important sources of finance for “extremism and radicalization.”

Nevertheless, President Barack Obama declared that Moscow risked a “quagmire.” Probably true. Of course, the U.S. understands quagmires, having spent 13 years unsuccessfully attempting to bring democracy to Afghanistan and being drawn back toward a combat role in Iraq.

Read more at http://www.cato.org/blog/russia-follows-us-script-intervene-syria-embarrass-washington

Cato: Taking on the Conventional Wisdom about NATO at the Council on Foreign Relations

It should surprise no one that Cato tends to be an outsider in Washington. At least on the domestic policy side we usually have some allies hiding somewhere along the ideological spectrum. Conservatives are more likely to support free markets; liberals are more likely to back civil liberties.

But on foreign policy Cato often stands pretty much alone. Almost everyone in the foreign policy field can be counted on to endorse every existing alliance and insist that it be “strengthened.” No matter that the Cold War is over, Soviet Union and Warsaw Pact are gone, Maoist China has disappeared, and most of America’s friends and allies have “grown up,” becoming democratic and prosperous. Whatever has been must always be is the seeming motto for liberals and conservatives alike on foreign policy.

Unfortunately, most of the debate in Washington occurs between opposing establishment advocates of the status quo. Everyone knows we should intervene. The only questions are how much more bombing is appropriate, what new tactics might prove to be more effective in imposing Washington’s will, and, most important, how to get a different result doing a lot more of the same?

Read more at http://www.cato.org/blog/taking-conventional-wisdom-about-nato-council-foreign-relations

Cato: The United States Should Stop Treating Russia as an Enemy

The private meeting between President Obama and Russian President Vladimir Putin at the United National General Assembly session in New York apparently did not go well. The atmosphere was frosty, and both leaders also used their speeches before the UN body to take verbal shots at the other country. That outcome is most unfortunate, because Russia and the United States have important interests in common that are being damaged by ongoing bilateral tensions. In particular, both Moscow and Washington want to see ISIS decisively defeated and the overall threat of radical Islamic terrorism diminished.

Yet the Obama administration objects strongly to Russia’s growing political and military presence in Syria to support the beleaguered government of Bashar al-Assad against ISIS insurgents. Washington seems to resent any manifestation of Russian geopolitical influence outside the borders of the Russian Federation, even when it might indirectly benefit U.S. interests. Worse, U.S. leaders continue to cling to the fantasy that simultaneously seeking to defeat ISIS and Assad is a coherent policy.

Washington’s clumsy handling of relations with Russia has brought the two countries dangerously close to a second cold war. As I discuss in a new article in Aspenia Online, both sides bear responsibility for the deterioration of the bilateral relationship, but the bulk of the blame lies at the doorstep of the United States. And trouble began long before Russia’s 2014 annexation of Crimea and support for separatists in eastern Ukraine triggered the most acute crisis.

Read more at http://www.cato.org/blog/united-states-should-stop-treating-russia-enemy

Cato: Shooting a 68-Year-Old Who Poses No Threat Violates Clearly Established Law

Can it really be the case that a police officer violates the Fourth Amendment’s prohibition on using excessive force when he points a live firearm at a non-threatening individual, but not if he actually shoots and kills this person? That’s the argument being made in Stamps v. Town of Framingham, which is now before the U.S. Court of Appeals for the First Circuit.

During a military-style SWAT raid on the home of 68-year-old grandfather Eurie Stamps—to execute a drug-search warrant regarding his stepson’s alleged activities—Officer Paul Duncan pointed an assault rifle at Stamps with the safety disengaged and his finger on the trigger, even though Stamps lay on the floor with his hands up. Duncan now claims that he became immune from suit when he unintentionally fired the rifle and killed Stamps.

Under the doctrine of “qualified immunity,” government officials—including police officers—are immune from suit if their actions don’t violate a “clearly established” constitutional right. The crux of Duncan’s argument is that when his weapon discharged, he became immune from suit even if pointing an assault rifle at Stamps was an unconstitutional act by itself—because there’s no clearly established right against accidental death. This ridiculous argument was duly rejected by the lower court, because it’s both legally unsound and practically dangerous.

Read more at http://www.cato.org/blog/shooting-68-year-old-who-poses-no-threat-violates-clearly-established-law

Cato: To Russia with Love: Why Obama Should Be Glad Russia Is Getting Involved in Syria

Russia’s push to support Assad in Syria and its agreement to share intelligence with Syria, Iran, and Iraq has evoked the predictable handwringing here in the United States. Some worry that Russian involvement will derail the U.S. fight against IS. Others worry that Russia’s engagement will weaken U.S. influence in the Middle East and further embolden Vladimir Putin in his various misadventures. Such concerns are misplaced. Even though Putin has no intention of helping the United States his maneuverings have in fact done just that. Rather than ramping up U.S. engagement to outdo the Russians, as hawks are calling for, Obama should instead take this opportunity to reassess and redirect U.S. policy.

Russian actions have improved Obama’s Middle East “strategy” in three ways.

First, Russian initiative in 2013 kept the United States from getting involved in Syria too early. As horrendous as the $500 million training initiative turned out to be, it was a drop in the bucket compared to what the United States would have spent by now had the United States engaged earlier and more aggressively. When Assad’s regime blew past Obama’s ill-advised “red line” on chemical weapons, it was Russia that came in to save the day, brokering an arrangement that led Syria to give up its chemical weapons. Had Obama instead launched a few meaningless missile strikes at the Assad regime the United States would have shouldered greater responsibility for the regime’s behavior. Both Republicans and liberal interventionists in his own party would have pushed Obama toward deeper and ultimately more costly intervention.

Read more at http://www.cato.org/blog/russia-love-why-obama-should-be-glad-russia-getting-involved-syria

Cato: Liberty Usually Violated before the “Ban”

It is Banned Books Week, designated by the American Library Association and others as the time for “celebrating the freedom to read.” Of course, having the freedom to read whatever one wants is essential to a free society. But regular abuse of the term “banning,” and the violations of freedom that often occur before any so-called banning is attempted, are just as crucial to recognize if we really care about liberty.

Unfortunately, just about any time a parent or taxpaying citizen challenges the presence of a book in a public library or school, deafening alarm bells are rung that there is an attempted banning underway. But, as this Slate article nicely explains, there is very little actual “banning” being attempted, if by banning we mean “officially or legally prohibiting” someone from accessing a book. Just because you may not be able to get a book at a library does not mean you cannot legally obtain it at all. For the most part, it just means you have to hop onto Amazon and buy the book yourself. Which takes us to the violation that occurs before most “banning” is even tried.

As I explained a few years back, when a public library or school purchases a book with taxpayer dollars, it compels taxpayers to support someone else’s speech – a violation of liberty. This is even more the case if the library decides that it will purchase some books and not others, which it must do unless it has, essentially, infinite funds. Then a government entity not only compels support of speech, but chooses to elevate some speech above others.

Read more at http://www.cato.org/blog/liberty-usually-violated-ban

Cato: Police Militarization Leads to Extreme Constitutional Violations

When a police SWAT team raided Andrew Cornish’s home in Cambridge, Maryland at 4:30am, the officers were heavily armed, dressed in black, wearing helmets and goggles, and carrying battering rams. (They were investigating small-time drug possession—seriously.) They stormed the residence without announcing themselves and killed Cornish seconds later as he emerged from his bedroom in his underwear.

Cornish’s estate sued the Cambridge police. At trial, Cornish’s estate claimed that the police violated two Fourth Amendment rules. First, the police violated the knock-and-announce rule when they failed to wait more than five seconds for him to answer the door after knocking. Second, the police violated the prohibition on excessive force when they shot him to death. The jury found for Cornish’s estate on the knock-and-announce violation and against him on the excessive force violation, awarding damages to the estate.

The U.S. Court of Appeals for the Fourth Circuit arrogated to itself the role of the jury—the resolution of questions of fact—and determined that because “the Officers’ illegal entry was not the legal cause of Cornish’s death,” the estate was only entitled to nominal damages to “vindicate the deprivation of Cornish’s constitutional rights.” Cornish’s estate has now appealed to the Supreme Court.

The knock-and-announce rule is an ancient one rooted in the English common law. In the early 17th century, Lord Coke noted that if a sheriff “break the house when he may enter without breaking it (that is, on request made, or if he may open the door without breaking), he is a trespasser.” That rule continues to this day: “law enforcement officers must announce their presence and provide residents an opportunity to open the door.” Hudson v. Michigan (2006).

Read more at http://www.cato.org/blog/police-militarization-leads-extreme-constitutional-violations

Cato: Rules versus Discretion: Insights from Behavioral Economics

For half a century now, the “rules versus discretion” debate in monetary economics has focused on the so-called “time inconsistency” problem.  The problem is that, although a discretionary central bank might promise not to allow the inflation rate to rise above zero (or some other ideal value), the fact that an inflation “surprise” can boost employment and output in the short run will tempt it to break its promise.  Realizing this, market participants will anticipate higher inflation.  The long-run result is a higher inflation rate with no improvement in either employment or output.  By limiting the central bankers’ options, a monetary rule solves the time inconsistency problem.

An earlier rules-versus-discretion debate had taken place in the 1920s and 1930s.1  The later one, which was inspired by the stagflation of the 1970s, differed in that it was influenced by the New Classical revolution that was taking place around the same time.  Consequently, the later critics of monetary discretion, including Finn Kydland and Edward Prescott,  Guillermo Calvo, Benn McCallum, Robert Barro and David Gordon, and John Taylor,2 differed from their predecessors by building their arguments on the premise that central bankers were both well (if not quite perfectly) informed and well intentioned.  Discretion, according to them, leads to less than ideal outcomes not because central bankers are ignorant or misguided, but because of misaligned incentives.

Naturally, champions of discretionary monetary policy also regarded monetary policy makers as well-meaning and well-informed experts.  Their counterargument was simply that such experts could in principle out-perform any rule.  Well-trained monetary technocrats might, after all, resist the short-run temptation to take advantage of established inflation expectations by creating inflation surprises.

Read more at http://www.cato.org/blog/rules-versus-discretion-insights-behavioral-economics

Cato: Reserve Requirements Basel Style: The Liquidity Coverage Ratio

Over the last couple of decades, reserve requirements all but vanished as a means of bank regulation and monetary control. But now a new variation on reserve requirements is being introduced through the capital controls of the Basel Accords.

Canada, the UK, Sweden, Australia, New Zealand, and Hong Kong have all abolished traditional reserve requirements. In many other countries, reserve requirements have become a dead letter. In the U.S., for instance, the Fed under Alan Greenspan reduced all reserve requirements to zero except for transactions deposits (checking accounts), while permitting banks to evade reserve requirements on transactions balances by using sophisticated computer software to regularly “sweep” those balances into money market deposit accounts, which have no reserve requirement. In 2011 Congress went a step further by allowing the Fed to eliminate all reserve requirements if it so desired. The Eurozone, for its part, began with a reserve requirement of only 2 percent, which was reduced to 1 percent in January 1999.

There were good reasons for this deregulatory trend. Economists consider reserve requirements an implicit tax on banks, requiring them to hold non-interest earning assets, while central banks considered changes in such requirements too blunt an instrument for monetary control. The Fed discovered the latter shortcoming when, in the midst of the Great Depression, having just gained control over the reserve requirements of national banks, it doubled them, contributing to recession of 1937.

Ostensibly designed to keep banks more liquid, reserve requirements can prevent them from drawing on their liquidity when it is most needed. As Armen A. Alchian and William R. Allen point out in University Economics (1964): “To rely upon a reserve requirement for the meeting of cash-withdrawal demands of banks’ customers is analogous to trying to protect a community from fire by requiring that a large water tank be kept full at all times: the water is useless in case of emergency if it cannot be drawn from the tank.”

Read more at http://www.cato.org/blog/reserve-requirements-basel-style-liquidity-coverage-ratio

Cato: Puerto Rico Edges to Default

Greece is expected to default on its government debts tomorrow as its bailout package from the European Union (EU) expires. The country will also hold a referendum on Friday on whether to accept the latest round of terms from its EU funders. Greece continues to grab all the headlines, but there is another government closer to home that is in a similar situation: Puerto Rico. Over the weekend, the governor of the island announced that Puerto Rico is unable to repay its $70 billion in debt.

The Washington Post describes the situation:

A U.S. commonwealth with a population of 3.6 million, Puerto Rico carries more debt per capita than any state in the country. The island has been staggering under the increasing weight of those obligations for years as its economy has tanked, triggering an exodus of island residents to the mainland not seen since the 1950s.

"Meanwhile, the government has raised taxes, cut government employment and slashed pensions in a futile effort to get its debt burden under control. Those actions have only slowed the acceleration of debt creation, while harming efforts to reignite the economy."

Read more at http://www.cato.org/blog/puerto-rico-edges-default

Cato: Ten Things Every Economist Should Know about the Gold Standard

At the risk of sounding like a broken record (well, OK–at the risk of continuing to sound like a broken record), I’d like to say a bit more about economists’ tendency to get their monetary history wrong. In particular, I’d like to take aim at common myths about the gold standard.

If there’s one monetary history topic that tends to get handled especially sloppily by monetary economists, not to mention other sorts, this is it. Sure, the gold standard was hardly perfect, and gold bugs themselves sometimes make silly claims about their favorite former monetary standard. But these things don’t excuse the errors many economists commit in their eagerness to find fault with that “barbarous relic.”

The false claims I have in mind are mostly ones I and others–notably Larry White–have countered before. Still I thought it would be useful to address them again here, because they’re still far from being dead horses, and also so that students wrapping-up the semester will have something convenient to send to their misinformed gold-bashing profs (though I urge them to wait until grades are in before sharing!).

For the sake of those who don’t care to wade through the whole post, here is a “jump to” list of the points covered:

* The Gold Standard wasn’t an instance of government price fixing. Not traditionally, anyway.

* A gold standard isn’t particularly expensive. In fact, fiat money tends to cost more.

* Gold supply “shocks” weren’t particularly shocking.

* The deflation that the gold standard permitted wasn’t such a bad thing.

* It wasn’t to blame for 19th-century American financial crises.

* On the whole, the classical gold standard worked remarkably well (while it lasted).

* It didn’t have to be “managed” by central bankers.

* In fact, central banking tends to throw a wrench in the works.

* “The “Gold Standard” wasn’t to blame for the Great Depression.

* It didn’t manage money according to any economists’ theoretical ideal. But neither has any fiat-money-issuing central bank.

Read more at http://www.cato.org/blog/ten-things-every-economist-should-know-about-gold-standard

Cato: Clearly Worded Contracts Should Be Enforced

Freedom of contract—the right of individuals to manage and govern their own affairs—is a basic and necessary liberty. The appropriate role of the government in contract-law disputes is to hold parties to their word, not to enforce its own policy preferences.

The New Jersey Supreme Court recently struck a blow against that basic freedom, however, in ruling that clearly worded arbitration provisions—one of the most common parts of consumer contracts—are unenforceable unless the parties comply with multiple superfluous formalities. The case arose when Patricia Atalese retained a law firm, U.S. Legal Services Group, to negotiate with creditors on her behalf. Atalese signed a retainer agreement with a standard arbitration provision: she checked a box that unambiguously indicated that she read and understood that all disputes would be settled via arbitration. Then, after a dispute over legal fees, Atalese disregarded the arbitration agreement and filed a lawsuit in state court.

The trial court dismissed her complaint and compelled arbitration, a ruling that was affirmed by the intermediate appellate court. But instead of letting that decision stand, the New Jersey Supreme Court broke from years of tradition and federal precedent found the arbitration provision unenforceable because it lacked certain magic words stating, in addition to all disputes being resolved by arbitration, that the parties were waiving their right to a civil jury trial.

Read more at http://www.cato.org/blog/clearly-worded-contracts-should-be-enforced

Cato: Illinois Uses Racial Preferences for No Good Reason

Since before the Declaration of Independence, equality under the law has been a central feature of American identity. The Fourteenth Amendment expanded that constitutional precept to actions by states, not just the federal government. For example, if a state government wants to use race as a factor in pursuing a certain policy, it must do so in the furtherance of a compelling reason—like preventing prison riots—and it must do so in as narrowly tailored a way as possible.

This means, among other things, that race-neutral solutions must be considered and used as much as possible. So if a state were to, say, set race-based quotas for who receives its construction contracts and then claim that no race-neutral alternatives will suffice—without showing why—that would fall far short of the high bar our laws set for race-conscious government action.

Yet that is precisely what Illinois has done.

Illinois’s Department of Transportation and the Illinois State Toll Highway Authority have implemented the U.S. Department of Transportation’s Disadvantaged Business Entity (“DBE”) program, which aims to remedy past discrimination against minority and women contractors by granting competitive benefits to those groups. While there may be a valid government interest in remedying past discrimination, Illinois’s implementation of the program blows through strict constitutional requirements and bases its broad use of racial preferences on studies that either employ highly dubious methodology or are so patently outdated that they provide no legal basis on which to conclude, as constitutionally required, that there remains ongoing, systemic, widespread racial (or gender) discrimination in the public-construction-contracting industry that only the DBE program can rectify.

Read more at http://www.cato.org/blog/illinois-uses-racial-preferences-no-good-reason

Cato: States Must Preserve Voter Equality

When you go to vote for state legislators, you don’t expect that some other voters in your state will have their votes weighed double yours, just because they happen to be neighbors with people who can’t vote. But that, in effect, is what Texas is trying to do.

When Texas draws its state legislative districts, it looks only to equalize the total population in each district, ignoring how many of those people are actually citizens of voting age. The result is a plan that would create one senate district where 74% of the residents can vote and another where only 47% can vote. Depending on where you live, you might be one of 383,000 people who get to choose a senator, or one of 611,000.

This is a blatant violation of the principle of “one person, one vote” (OPOV) that the Supreme Court established 50 years ago under the Fourteenth Amendment’s Equal Protection Clause: no matter where you live in your state, your vote should have the same weight. Nonetheless, a three-judge federal district court upheld the plan, following a flawed Fifth Circuit precedent holding that the Equal Protection Clause was ambiguous as to whether total population or voter population should be equalized.

But if a state really only has to care about total population, it could create districts of 10%, 5%, or even 1% eligible voters—and the tiny groups of voters in those districts would each be able to choose one senator all the same. Cato, joined by the Reason Foundation, has filed an amicus brief in the Supreme Court arguing against this absurd result, focusing on rebuttals to two supposed justifications for allowing states to violate OPOV.

Read more at http://www.cato.org/blog/states-must-preserve-voter-equality

Cato: Patients and Doctors, not the FDA, Should Choose Right Medicine

Good ideas in Congress rarely have a chance. Rep. Fred Upton (R-Mich.) is sponsoring legislation to speed drug approvals, but his initial plan was largely gutted before he introduced it last month.

Drug discovery is an uncertain process. Companies consider between 5,000 and 10,000 substances for every one that ends up in the pharmacy. Of those, only one-fifth actually makes money—and must pay for everything.

As a result, the average per drug cost exceeds $1 billion, most often thought to be between $1.2 and $1.5 billion. Some estimates run more.

Naturally, the Food and Drug Administration insists that its expensive regulations are worth it. Unfortunately, while the agency undoubtedly prevents some bad pharmaceuticals from getting to market, it delays or blocks far more good products.

The average delay in winning approval of a new drug rose from seven months in 1962, when the FDA’s power was dramatically increased, to 30 months in 1967. Approval time now is estimated to run as much as 20 years.

Economist Sam Peltzman found no evidence that changing the law reduced the introduction of ineffective or unsafe pharmaceuticals. After all, companies don’t make money selling medicines that don’t work. And putting out something dangerous is a fiscal disaster. Observed Peltzman:  the “penalties imposed by the marketplace on sellers of ineffective drugs prior to 1962 seem to have been enough of a deterrent to have left little room for improvement by a regulatory agency.”

Read more at http://www.cato.org/blog/patients-doctors-not-fda-should-choose-right-medicine

Cato: The FDA’s Trans Fat Ban: Their Laws, Your Body

The Obama administration’s Food and Drug Administration today announced a near-ban, in the making since 2013, on the use of partially hydrogenated vegetable fats (“trans fats”) in American food manufacturing. Specifically, the FDA is knocking trans fats off the Generally Recognized as Safe (GRAS) list. This is a big deal and here are some reasons why:

* It’s frank paternalism. Like high-calorie foods or alcoholic beverages, trans fats have marked risks when consumed in quantity over long periods, smaller risks in moderate and occasional use, and tiny risks when used in tiny quantities. The FDA intends to forbid the taking of even tiny risks, no matter how well disclosed.

* The public doesn’t agree. A 2013 Reason-RUPE poll found majorities of all political groups felt consumers should be left free to choose on trans fats.  Even in heavily governed places like New York City and California, where the political class bulldozed through restaurant bans some years back, there was plenty of resentment.

* The public is also perfectly capable of recognizing and acting on nutritional advances on its own. Trans fats have gone out of style and consumption has dropped by 85 percent as consumers have shunned them. But while many products have been reformulated to omit trans fats, their versatile qualities still give them an edge in such specialty applications as frozen pizza crusts, microwave popcorn, and the sprinkles used atop cupcakes and ice cream. Food companies tried to negotiate to keep some of these uses available, especially in small quantities, but apparently mostly failed.

Read more at http://www.cato.org/blog/fda-bans-trans-fats-keep-laws-body

Cato: Does EPA’s Supreme Court Loss Doom Obama’s Climate Agenda?

In a 5-4 decision today, the Supreme Court struck down the Obama Administration EPA’s signature “Mercury and Air Toxic Rule,” which regulates emissions by fossil-fuel-fired power plants. Before regulating, EPA was obligated to decide whether regulation under one the Act’s most burdensome programs was “appropriate and necessary.” EPA interpreted that language to preclude it from considering the costs of regulation—some $10 billion per year, in exchange for $4 million or so in direct benefits. That interpretation, the Court decided, was ludicrous.

The decision may well leave the Obama climate agenda in tatters. Why that is requires a bit of explanation. In the usual case when the Court finds a rule to be unlawful, it vacates the offending action—in other words, deprives it of legal force. But that’s not what the Court did here. Instead, it sent the case back down to the D.C. Circuit for further proceedings, knowing full well that that court will follow its usual practice of “remand without vacatur”—in other words, let the agency fix any flaws in its rule while leaving the rule in place.

This is a very big deal. The centerpiece of the Obama Administration’s climate agenda is EPA’s so-called “Clean Power Plan,” which aims to cut power plants’ carbon-dioxide emissions by around 30 percent and force the phase-out of coal-fired generation. But the statutory authority that EPA claims supports this effort explicitly carves out any regulation of facilities that are already subject to regulations like the Mercury Rule. So if the rule remains in place—as seems likely—then the Clean Power Plan should be dead in the water.

Read more at http://www.cato.org/blog/does-epas-supreme-court-loss-doom-obamas-climate-agenda

Cato: EPA: Fracking Doesn’t Affect Groundwater

Last week the Environmental Protection Agency released a study that concluded that hydraulic fracturing, so-called “fracking” of oil and natural gas wells, does not contaminate drinking water, except in extremely unusual cases involving improper drilling techniques. The study should reduce the concerns of some of the technique’s vocal critics whose fears have led to restrictions on its use.

The EPA study reviewed the results from thousands of wells and found few faults with the drilling technique. When problems occurred, they stemmed from improperly sealed wells, which can affect any oil or gas well and not just those that utilize hydraulic fracturing.

Read more at http://www.cato.org/blog/epa-fracking-doesnt-affect-groundwater

Cato: Dealing with the California Drought

California has had several years of record low rainfall, resulting in a severe water shortage. Gov. Jerry Brown (D) has responded by ordering a 25 percent reduction in urban water system use.

Are there any solutions to the state’s water shortage other than government mandates? Gary Libecap, professor of environmental management at the University of California, Santa Barbara, argues in a recent issue of Regulation that the restoration of clear water ownership rights and the cultural and political acceptance of water markets is an easier solution.

Conventional accounts of water problems in the West often blame farmers and their excessive use of water in places like the vegetable-farming Central Valley. But according to Libecap, “farmers are not the source of the problem. … Most would be pleased to sell or lease water that could earn more than is generated in agricultural production.”

Read more at http://www.cato.org/blog/dealing-california-drought

Cato: Air Traffic Control Modernization

The Senate Commerce Committee held a fascinating hearing on Wednesday regarding air traffic control (ATC). The hearing showcased the momentum to proceed with ATC restructuring. Because aviation is crucial to the economy, such a reform would create wide-ranging benefits.

At this point, industry experts are ahead of Congress in thinking about ATC reform. At the hearing, some of the senators seemed short-sighted and parochial. They had not done their homework and they nit-picked instead of considering the big-picture benefits.

However, the witness testimony was powerful and so it hopefully helped sway the skeptics. America’s ATC needs a big upgrade to meet rising passenger demand. Airspace is getting crowded and our antiquated ATC is causing delays and wasting fuel. Other countries have improved performance by separating ATC from their governments. That is the reform that America needs.

The testimonies of former Democratic senator Byron Dorgan (here), Paul Rinaldi of the National Air Traffic Controllers Association (here), and Jeff Smisek of United Airlines (here) were impressive. Kudos to them all for embracing change.

Dorgan heads an ATC reform group, and he clearly had done his homework. If he were still a sitting senator, he might be skeptical of ATC changes, but he now favors restructuring. He argued that separating ATC finances from the federal budget is a crucial step to take. His testimony illustrates that when politicians take the time to learn about policy issues in detail, they are more likely to embrace reform.

Read more at http://www.cato.org/blog/air-traffic-control-modernization

Cato: Put Harriet Tubman on the $20 Bill

Washington’s latest symbolic battle is looming. America’s money celebrates its early political leaders, all white males. There’s now a campaign to add a woman. A recent poll named antislavery activist Harriet Tubman the favorite, ahead of First Lady Eleanor Roosevelt.
Of course, it wouldn’t be the first time that a woman appeared on America’s money. Suffragette Susan B. Anthony and Native American Sacagawea graced ill-fated dollar coins which were little used and quickly forgotten.

President Barack Obama indicated his interest in showcasing more women. Republican legislators should take up the challenge and introduce a resolution urging the Treasury to add Tubman. There’s nothing sacred about the present currency line-up. After all, America was created by many more people than presidents and other politicians. Indeed, replacing Andrew Jackson makes a certain sense since he resolutely opposed a federal central bank.

Moreover, Tubman would be a great choice to replace him. She was born between 1820 and 1822 in Maryland to slave parents. Tubman was hired out and often beaten. After her owner’s death in 1849, which led his widow to begin selling their slaves, she escaped through the Underground Railroad to Philadelphia.

However, a year later she returned to Maryland to rescue her niece and the latter’s two children, beginning a career of leading slaves to freedom. She was daring and creative; her plans were sophisticated. Although she trusted God she also saw value in arming herself. She directed her last rescue in December 1860.

Read more at http://www.cato.org/blog/put-harriet-tubman-20-bill

Cato: Why Can’t We Have Great Trains? Because We Don’t Want Them

“Why can’t America have great trains?” asks East Coast writer Simon Van Zuylen-Wood in the National Journal. The simple answer is, “Because we don’t want them.” The slightly longer answer is, “because the fastest trains are slower than flying; the most frequent trains are less convenient than driving; and trains are almost always more expensive than either flying or driving.”

Van Zuylen-Wood’s article contains familiar pro-passenger-train hype: praise for European and Asian trains; selective statistics about Amtrak ridership; and a search for villains in the federal government who are trying to kill the trains. The other side of the story is quite different.

For example, he notes that Amtrak “ridership has increased by roughly 50 percent in the past 15 years.” But he fails to note that the biggest driver of Amtrak ridership is gasoline prices, which 15 years ago were at an all-time low (after adjusting for inflation). Now that prices are falling, so is Amtrak’s ridership.

He also ignores the fact that Amtrak’s ridership is minuscule compared with flying or driving. Whereas highways moved around 87 percent of passenger travel and airlines around 12 percent in 2012, Amtrak’s share was just 0.14 percent. While that is an increase from 0.11 percent in 1999, it is a decrease from 0.15 to 0.16 percent in most of the years from 1975 through 1993, when gas prices were high.

Trains are great for moving large volumes of goods from point A to point B. America’s freight railroads are the envy of the world, but they make most of their money moving coal from mine to power plant; grain from elevator to port; and containers from port to inland distribution center. The railroads conceded less-than-carload shipments, the freight equivalent of passengers, to trucks and air freight back in 1975 when the Railway Express Agency went out of business.

Read more at http://www.cato.org/blog/why-cant-we-have-great-trains-because-we-dont-want-them

Cato: This Is Why Amtrak Should Get More of Your Money?

An Amtrak locomotive caught fire yesterday on its way from Chicago to Milwaukee. Fortunately, all 51 passengers were safely evacuated from the six-car train.

At about the time the locomotive was burning, a reporter was telling me that “everyone” in Washington was saying that the Philadelphia accident proves that Amtrak needs more money. No doubt the Wisconsin incident will add to those calls for more funding.

But go back and read the first paragraph: There were only 51 passengers on that train. All of them could have fit on one motorcoach, many of which have 52 or more seats. The Horizon coaches used on this train typically have 60 seats, which means the train was less than one-sixth full. According to Amtrak’s performance report for fiscal year 2014, the Chicago-Milwaukee Hiawatha trains filled an average of 36 percent of their seats in 2014, or about two-and-one-half buses worth.

Amtrak fares for its seven daily trains each way between Chicago and Milwaukee start at $24. According to Busbud, Greyhound and Megabus together offer 13 trips per day each way between Chicago and Milwaukee, and their fares are often as low as $7 and never higher than $10.

While intercity bus operators pay a discounted fuel tax, the buses otherwise operate without subsidy. Amtrak’s Hiawatha trains produced $16.8 million in ticket revenues in 2014 against $24.5 million in operating costs, for a net loss of $5.7 million (not counting amortized capital costs). The trains carried slightly less than 800,000 riders, for an average subsidy of slightly more than $7 per trip.

In other words, the subsidy alone would have been enough to give every single Hiawatha rider a free trip on Greyhound or Megabus (at the low cost of $7 per trip).

Read more at http://www.cato.org/blog/why-you-should-give-amtrak-more-money

Cato: The School Choice Myth That Just Won’t Die

The myth that there’s no evidence that school choice works has more lives than Dracula. Worse, it’s often repeated by people who should know better, like the education wonks at Third Way or the ranking Democrat on the U.S. Senate education committee. In a particularly egregious recent example, a professor of educational leadership and the dean of the University of Wisconsin-Madison School of Education wrote an op-ed repeating the “no evidence” canard, among others:

"The committee also expands the statewide voucher program. There is no evidence privatization [sic] results in better outcomes for kids. The result will be to pay the tuition for students who currently attend private school and who will continue to attend private school—their tuition will become the taxpayers’ bill rather than a private one. Additionally, the funds for the expansion would siphon an estimated $48 million away from public schools, decreasing the amount of money available for each and every school district in the state."

It is astounding that a professor and a dean at a school of education in Wisconsin would be unfamiliar with the research on the Milwaukee voucher program, never mind the numerous gold standard studies on school choice programs elsewhere.

Read more at http://www.cato.org/blog/school-choice-myth-just-wont-die

Cato: Mr. President, Don’t Scapegoat Private Schools

It is not often I get a chance to latch on to someone as high profile as the President of the United States saying that public schools “draw us together.” But in his appearance at Georgetown University a couple of days ago, President Obama blamed, among other things, people sending their children to private schools for breaking down social cohesion and reducing opportunities for other children.

First, let’s get our facts straight: Private schools are not the main way better-off people, or people with high social capital, isolate themselves from poor families. Only 9 percent of school children attend private schools, and as Matt Ladner points out in a great response to the President, that percentage has been dropping over the years. No, the main way the better-off congregate amongst themselves is buying houses in nice places, which translates into access to good school districts. Even the large majority of the mega-rich appear to send their children to public schools, but rather than paying school tuition, their tuition is the far-steeper, far more exclusive price of a house. And let’s not pretend – as the President hinted – that we’ve seen anything close to long-term decreased funding for public schools. Even with a slight dip during the Great Recession, inflation-adjusted, per-pupil spending in public schools has well more than doubled since 1970.

Read more at http://www.cato.org/blog/mr-president-dont-scapegoat-private-schools

Cato: Nevada Enacts First Nearly Universal Education Savings Account

On Tuesday, Nevada Gov. Brian Sandoval signed into law the nation’s fifth education savings account (ESA) program, and the first to offer ESAs to all students who previously attended a public school. Earlier this year, Sandoval signed the state’s first educational choice law, a very limited scholarship tax credit. Despite their limitations, both programs greatly expand educational freedom, and will serve as much-needed pressure-release valves for the state’s overcrowding challenge.

When Nevada parents remove their child from her assigned district school, the state takes 90 percent of the statewide average basic support per pupil (about $5,100) and instead deposits it into a private, restricted-use bank account. The family can then use those funds to purchase a wide variety of educational products and services, such as textbooks, tutoring, educational therapy, online courses, and homeschool curricula, as well as private school tuition. Low-income students and students with special needs receive 100 percent of the statewide average basic support per pupil (about $5,700). Unspent funds roll over from year to year.

Read more at http://www.cato.org/blog/nevada-enacts-first-nearly-universal-education-savings-account

Cato: Yet More Empirical Evidence That Yes, Federal Student Aid Fuels College Price Inflation

For a few years, I have been posting an evolving list of empirical studies that have found that federal student aid programs help fuel rampant college price inflation. Why? Because I continually encounter people, often who work for or in higher education, who insist that there is no meaningful empirical evidence of big subsidies enabling big price increases, even if the possibility makes mammoth intuitive and theoretical sense.

A few days ago a new entry arrived for the list, a paper from the Federal Reserve Bank of New York. It finds that student loans have big inflationary effects, especially at four-year private schools not focused on top academic performers, and that Pell Grants have smaller direct effects, but also likely lead to reductions in aid funded by institutions. It is yet one more study that shows that, contrary to the hopes of the American Council on Education–the premiere higher ed advocacy group–the inflationary effect of student aid is absolutely a subject that should “play a major role” in discussions about college affordability.

Read more at http://www.cato.org/blog/yet-more-empirical-evidence-yes-federal-student-aid-fuels-college-price-inflation

Cato: Criminal Law 2.0

Alex Kozinski, a federal appellate judge on the Ninth Circuit, has just published a powerful critique of the American criminal justice system in the Georgetown Law Journal (titled “Criminal Law 2.0”).  He begins, “much of the so-called wisdom that has been handed down to us about the workings of the legal system, and the criminal process in particular, has been undermined by experience, legal scholarship, and common sense.”

Here are the common myths that he goes on to persuasively debunk:

1. Eyewitnesses are highly reliable

2. Fingerprint evidence is foolproof

3. Other types of forensic evidence are scientifically proven and therefore infallible

4. DNA evidence is infallible

5. Human memories are reliable

6. Confessions are infallible because innocent people never confess

7. Juries follow instructions

8. Prosecutors play fair

9. The prosecution is at a substantial disadvantage because it must prove its case beyond a reasonable doubt

10. Police are objective in their investigations

11. Guilty pleas are conclusive proof of guilt

12. Long sentences deter crime

Judge Kozinski continues: Because the items listed above are untrue, there are “reasons to doubt that our criminal justice system is fundamentally just….I think it’s fair to assume–though there is no way of knowing–that the number of exculpations in recent years understates the actual number of innocent prisoners by an order, and probably two orders, of magnitude.”

Read more at http://www.cato.org/blog/criminal-law-20

Cato: An Unnecessary Indictment of Dylann Roof

Today, the Justice Department indicted Dylann Roof on 33 federal hate crime charges for the killings of nine people at Emanuel A.M.E. church in Charleston last month. This indictment is entirely unnecessary.

Hard as it may be for some to imagine now, there was a long time in this country when racially and politically motivated violence against blacks was not prosecuted by state and local authorities. Or sometimes, as in the case of Emmett Till—the young boy from Chicago who was lynched in Mississippi for allegedly being too forward with a white woman—prosecution was a farce and the perpetrators were acquitted.

But in the present case, South Carolina authorities moved quickly and effectively to catch Roof and did not hesitate to charge him with nine counts of murder. This was South Carolina’s duty and their law enforcement officers have appeared to perform professionally and competently.

The Department of Justice should be more judicious with its funds and resources. The opportunity costs of a duplicative prosecution takes resources away from crimes that fall more appropriately in the federal purview, such as interstate criminal enterprises and government corruption. Today’s indictment is federal meddling in a case the state already has under control.

Read more at http://www.cato.org/blog/unnecessary-indictment-dylann-roof

Cato: Police Misconduct — The Worst Case in July

Over at Cato’s Police Misconduct web site, we have selected the worst case for the month of July.  It was the case involving Officer Eric Paull.

Paull worked as a sergeant for the Akron Police Department.  He also taught a course on criminal justice at the University of Akron.  One of his students was a single mom.  According to news reports, the woman (name withheld) says they started a romantic relationship.  But after a year or so, that relationship turned ugly and violent.  After he beat her up on a Thanksgiving holiday, Paull told her that he was legally “untouchable.”

She believed him–so she did not file a complaint right after the beating.  Instead, she just tried to avoid him.  But Paull stalked her and her boyfriends, using police databases to discover addresses, phone numbers, and vehicle information.  Paull would also text pictures of himself holding his gun and leave bullets on their automobiles.  There were threats to kill the woman and her boyfriend.  The woman did lodge complaints with the police and would later obtain a protective order, but the police department seemed indifferent.  Paull would not stop.

Read more at http://www.cato.org/blog/police-misconduct-worst-case-july-0

Cato: Loretta Lynch Confirmed as Attorney General

After one of the longest confirmation processes in the history of the Attorney General’s office, Loretta Lynch was confirmed by the Senate today as Eric Holder’s successor.

From a criminal justice perspective, whether Lynch will embrace or abandon Holder’s position on state-level drug legalization and his announced commitment to reforming civil asset forfeiture are two questions that spring immediately to mind.

Loretta Lynch zealously defended civil asset forfeiture during her confirmation hearings, and was a devoted practitioner of it as a U.S. Attorney in New York.  One of her seizure cases, that of the Hirsch brothers [$], garnered widespread attention and condemnation, and helped spur the nationwide calls for reform to which Eric Holder responded.

Read more at http://www.cato.org/blog/loretta-lynch-confirmed-attorney-general

Cato: Sec. Clinton’s Criminal Justice Reform Proposals

Today, presidential candidate Hillary Rodham Clinton addressed criminal justice reform in a speech at Columbia University. Earlier in the week, the Brennan Center released a book with chapters from politicians across the political spectrum discussing the need for criminal justice reform, and Secretary Clinton contributed one of them. Now that the Democratic front-runner has joined Republican presidential aspirants in addressing reform, criminal justice appears to be a significant 2016 campaign issue.

Three of Clinton’s policy suggestions are problematic.

First, and perhaps the one that will get the most headlines, she called for making police body cameras “the norm everywhere,” by using federal grants and matching funds. Putting aside the considerable price tag to subsidize the roughly 18,000 American law enforcement agencies to buy body cameras, how officers use those cameras and how law enforcement uses their data must be of utmost concern. As my colleague Matthew Feeney noted in a blogpost yesterday, the proposed body camera policy in Los Angeles would allow officers to review body camera footage before giving statements on use of force incidents. That policy would not serve transparency interests, but instead police officer self-interest.

Throwing money for cameras to local police departments as a solution to police transparency may sound good in theory, but making it work will be much more difficult in practice.

Read more at http://www.cato.org/blog/sec-clintons-criminal-justice-reform-proposals

Cato: Montana Reins in Civil Asset Forfeiture

It’s been a nice few weeks for civil liberties in Montana.  On the heels of the nation’s most comprehensive restrictions on police militarization, Montana Governor Steve Bullock (D) has signed a bill reforming civil asset forfeiture in the state.

HB463 requires a criminal conviction before seized property can be forfeited, requires that seized property be shown by “clear and convincing evidence” to be connected to the criminal activity, and bolsters the defenses for innocent owners by shifting the burden of proof to the government.

The effort was spearheaded by State Representative Kelly McCarthy (D), who credited the work of the Institute for Justice and other civil liberties organizations for bringing the abuses of civil asset forfeiture to light.

Read more at http://www.cato.org/blog/montana-reins-civil-asset-forfeiture

Cato: Fifth Time’s a Charm? Why the Court Should Strike Down the Armed Career Criminal Act as Unconstitutionally Vague

The Armed Career Criminal Act (ACCA) increases the minimum criminal penalty for defendants convicted of illegal firearm possession who also have three prior violent crime convictions. While the Act lists many crimes as qualifying as “violent”—such as burglary, arson, and extortion—it also contains a catch-all provision, a “residual clause,” that includes crimes that “otherwise involve conduct that presents a serious potential risk of physical injury to another.”

While that language may seem clear, its precise meaning has bedeviled courts for decades. In fact, Johnson v. United States represents the fifth time since 2007 that the Supreme Court has been asked to clarify what the residual clause means. For example, does drunk driving count? How about fleeing from officers in a high-speed chase? Even though the high court only hears about 75 cases per year—and it rarely revisits a law within such a short time-span—the ACCA’s residual clause keeps coming back. As Justice Antonin Scalia quipped in the last such case, “We try to include an ACCA residual-clause case in about every second or third volume of the United States Reports.” Justice Scalia’s comment came in a dissent in which he argued that the residual clause is unconstitutionally vague, and it seems that the rest of his colleagues paid attention. This is the second time this term that this case will be argued before the Court.

Last November, the issue was whether merely (illegally) possessing a short-barreled shotgun is a crime that fits into the residual clause. In January, however, the Court ordered that the case be re-argued on the larger question of whether the residual clause is itself unconstitutionally vague. Apparently, in discussing the law for the fifth time, the justices got tired of trying to answer questions that Congress should have addressed by writing a clearer law.

Read more at http://www.cato.org/blog/fifth-times-charm-why-court-should-strike-down-armed-career-criminal-act-unconstitutionally

Cato: Missouri Bill Would Keep Most Police Camera Footage From Public View

One week after it was reported that Ferguson, Missouri police officer Darren Wilson would not be indicted for killing of Michael Brown, President Obama announced that the federal government would spend $75 million on police body cameras. Wilson was not wearing a body camera when he shot Brown at least six times, and some have reasonably suggested that if Wilson had been wearing a body camera during his interaction with Brown that it would have been easier to determine if Brown’s killing was a justified or unjustified use of force.

Police in Missouri were in the news again after recently released dash camera footage revealed that an officer warned colleagues who were arresting a suspect that the camera was live before it was suddenly turned off. Both Brown’s killing in August and the footage of the April 2014 arrest highlight not only the fact that body cameras would provide investigators looking into allegations of police misconduct with valuable evidence, but also that there needs to be clear policies in place that relate to police and the cameras they use.

One lawmaker in Missouri proposed legislation that would make law enforcement camera footage policy clearer, but it should worry anyone concerned with law enforcement accountability and transparency.

Read more at http://www.cato.org/blog/missouri-bill-would-keep-most-police-camera-footage-public-view

Cato: Police Officers Must Keep the Cameras Rolling

Recently released dash camera footage of an arrest in St. Louis, Missouri offers an example of the disturbing flippancy with which cameras can be turned off during police interactions with the public.

According to a police report, on the evening of April 10, 2014, officers Nathaniel Burkemper and Michael Binz stopped a silver Ford Taurus after it made an illegal U-turn and “abruptly parked.” Only minutes earlier, 911 operators had received calls reporting shots fired. One of the calls mentioned a silver car with big rims.

Footage from the dash camera on Burkemper and Binz’s cruiser shows that shortly after the Ford Taurus pulls over, Binz moves to the passenger side of the vehicle, where he searches and handcuffs the passenger. Burkemper speaks to the driver, Cortez Bufford. Burkemper filed a report stating that he smelled marijuana and that both Bufford and his passenger did raise their hands when asked. However, Bufford reportedly “became agitated.”

Read more at http://www.cato.org/blog/police-officers-must-keep-cameras-rollings

Cato: Quiet Change Expands ATF Power to Seize Property

A quick glance at the Federal Register (Vol. 80, No. 37, p. 9987-88) today reveals that Attorney General Eric Holder, who earned cautious praise last month for a small reform to the federal equitable sharing program, has now delegated authority to the Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to seize and “administratively forfeit” property involved in suspected drug offenses.  Holder temporarily delegated this authority to the ATF on a trial basis in 2013, and today made the delegation permanent while lauding the ATF for seizing more than $19.3 million from Americans during the trial period.

Historically, when the ATF uncovered contraband subject to forfeiture under drug statutes, it was required to either refer the property to the DEA for administrative forfeiture proceedings or to a U.S. Attorney in order to initiate a judicial forfeiture action.  Under today’s change, the ATF will now be authorized to seize property related to alleged drug offenses and initiate administrative forfeiture proceedings all on its own.

The DOJ claims this rule change doesn’t affect individual rights (and was thus exempt from the notice and comment requirements of the Administrative Procedure Act) and that the change is simply an effort to streamline the federal government’s forfeiture process.  Those who now stand more likely to have their property taken without even a criminal charge may beg to differ.

Read more at http://www.cato.org/blog/quiet-change-expands-atf-power-seize-property

Cato: Merely Saying “I Do” Multiple Times Shouldn’t Be a Crime

Saying “I do” and calling someone your spouse who legally isn’t shouldn’t be a crime, but it can be in Utah. While polygamy—being lawfully married to multiple people—isn’t legal in any state, due to its unique history, Utah has some of the strictest anti-bigamy laws in the country. Which probably makes starring in a reality TV show based on your plural marriage not the best idea for Utahns.

Nevertheless, TLC’s Sister Wives revolves around Kodi Brown, his four partners (Meri, Janelle, Christine, and Robyn), and their 17 children. While Kodi is only legally married to one of women, he claims he is in a “spiritual union” with each of the others, and describes all four as his wives—and that puts the Browns on the wrong side of Utah’s bigamy law. The day after the show premiered in 2010, local authorities announced they were investigating the family.

Because the potential sentences are quite severe (five years for each of the women, and up to 20 years for Kodi), the Browns took preemptive action, filing a federal lawsuit challenging the constitutionality of Utah’s law. The district court agreed. In granting the Brown’s motion for summary judgment, the court held that because the law criminalizes “spiritual cohabitation” (arrangements where the participants claim to be part of multiple religious marriages, but make no attempt to obtain state recognition), it violated the First and Fourteenth Amendments, and was “facially unconstitutional.” The state has appealed that ruling.

Read more at

Cato: Third Greek Bailout Is Not the Charm

Nearly a month ago Greek voters rejected more economic austerity as a condition of another European bailout. Today Athens is implementing an even more severe austerity program.

Few expect Greece to pay back the hundreds of billions of dollars it owes. Which means another economic crisis is inevitable, with possible Greek exit (“Grexit”) from the Eurozone.

Blame for the ongoing crisis is widely shared. Greece has created one of Europe’s most sclerotic economies. The Eurocrats, an elite including politicians, journalists, businessmen, and academics, determined to create a United States of Europe irrespective of the wishes of European peoples.

European leaders welcomed Athens into the Eurozone in 2001 even though everyone knew the Greek authorities were lying about the health of their economy. Economics was secondary.

Unfortunately, equalizing exchange rates cemented Greece’s lack of international competitiveness. Enjoying an inflated credit rating, Greece borrowed wildly and spent equally promiscuously on consumption.

Greece could have simply defaulted on its debts. However, Paris and Berlin, in particular, wanted to rescue their improvident banks which held Athens’ debt.

Thus, in return for tough loan conditions most of the Greek debt was shifted onto European taxpayers through two bail-outs costing roughly $265 billion. Greece’s economy has suffered, and the leftwing coalition party Syriza won Greece’s January election. Impasse resulted at the end of June as the second bailout expired.

Athens denounced its creditors for insisting on repayment. Prime Minister Alexis Tsipras criticized “ultimatums, blackmail and fearmongering.”

But writing off Greek debt would require European governments to confess their financial folly to their taxpayers. Restructuring Greek debt also would set off similar demands from other heavily indebted states.

Read more at http://www.cato.org/blog/third-greek-bailout-not-charm

Cato: Sugar and the TPP

How much Australian sugar should be allowed to enter the U.S. market?  That’s a key question the U.S. government must answer prior to concluding the Trans-Pacific Partnership (TPP) negotiations.  The United States is the largest sugar market in the TPP, consuming about 11 million metric tons (MMT) per year.  It also is the largest producer (7-8 MMT) and importer (3 MMT) in the group.  Australia generally is believed to be the most cost-competitive sugar producer among the12 TPP nations.  It also is the largest exporter, annually shipping 3-4 MMT to other countries.

To complicate matters further, sugar liberalization was explicitly excluded from the 2004 Australia-United States Free Trade Agreement (AUSFTA) due to U.S. political sensitivities.  Australian sugar producers understandably want to redress that omission.  Failure to obtain commercially meaningful access to the U.S. sugar market could lead to rejection of the pact by the Australian parliament.

The U.S. sugar program includes a price-support level for raw cane sugar of 22.25 cents per pound ($490/MT), with refined sugar supported at 26 cents.  Those levels effectively have been raised more than 10 percent to around 24.7 cents ($545/MT) and 30-32 cents, respectively, under the trade-restricting terms of the recent settlement agreement in the antidumping/countervailing-duty (AD/CVD) dispute involving imports from Mexico. (For more on U.S.-Mexico sugar issues, see here and here.)  Mexico is the largest supplier of U.S. sugar imports, generally providing between 1.0-1.5 MMT per year.  Suffice it to say that the agreement between the U.S. and Mexican governments will limit the amount of sugar Mexican producers can export to the United States, and also force that sugar to be sold at higher prices.

Read more at http://www.cato.org/blog/sugar-tpp

Cato: Wisconsin’s Unfair Sales Act and the Folly of Antidumping Laws

A Michigan-based supermarket trying to expand into Wisconsin has come up against an absurd law against selling products at “unfairly low” prices.  As reported by MLive, the Meijer grocery store chain is facing complaints that its grand opening sales violated Wisconsin law for offering products at prices below cost. Why is that bad?

The official rationale behind Wisconsin’s Unfair Sales Act of 1939 is revealing:

"The practice of selling certain items of merchandise below cost in order to attract patronage is generally a form of deceptive advertising and an unfair method of competition in commerce. Such practice causes commercial dislocations, misleads the consumer, works back against the farmer, directly burdens and obstructs commerce, and diverts business from dealers who maintain a fair price policy. Bankruptcies among merchants who fail because of the competition of those who use such methods result in unemployment, disruption of leases, and nonpayment of taxes and loans, and contribute to an inevitable train of undesirable consequences, including economic depression."

Some of these are simply a consequence of any market competition, a process that inevitably results in some companies failing.  But the idea that there is something uniquely harmful called “unfair competition” that occurs once a product is sold below cost is just false.  There are many reasons companies sell certain products at certain times for less than the cost of production.  For example, grand opening sales and seasonal sales are ordinary forms of competition.  It’s common in many retail sectors to use a low-priced “loss leader” product to draw customers into your store hoping they will buy other high-priced items as well.

Read more at http://www.cato.org/blog/wisconsins-unfair-sales-act-folly-antidumping-laws

Cato: Washington Arrests Foreign Soccer Officials as It Sanctions the World

It’s hard not to feel satisfaction at the indictment of soccer officials for apparently corrupting the globe’s Beautiful Game—soccer in America but football to most of the world. Yet emotional satisfaction is a bad basis for government policy. While the U.S. is not the only nation to assert extraterritorial jurisdiction, it does so more often and more broadly than anyone else.

Moreover, punishing foreigners creates future risks. Someday Americans might get indicted by other nations for “crimes” committed in the U.S.

How did Washington become the world’s policeman and prosecutor in the case of soccer? The sport remains a modest phenomenon in America. Most of the alleged crimes involve foreigners acting overseas.

The impact in the U.S. is less than that on almost every other nation on earth, since virtually everywhere the sport commands greater loyalty from a larger percentage of the population. Nevertheless, some of the criminal acts took place in America and the corruption affected interstate (and foreign) commerce, the boilerplate justification used by Uncle Sam for regulating most everything.

As American power has grown, so has Washington’s willingness to apply its laws to the rest of the world. Washington has routinely abducted foreigners overseas for drug offenses. Perhaps the most extreme example was the 1989 invasion of Panama, after which ousted dictator Manuel Noriega was transported to America and convicted of violating U.S. drug laws.

Even more problematic has been the Justice Department crusade to turn foreign banks into arms of the IRS. The U.S. has gone after Swiss banks with the greatest enthusiasm, paying informants, filing criminal prosecutions, and imposing multi-billion dollar fines for accepting deposits from Americans. Yet citizens of Switzerland and the rest of the world have no moral obligation to help fill Uncle Sam’s coffers to finance more waste and wars.

Read more at http://www.cato.org/blog/washington-arrests-foreign-soccer-officials-it-sanctions-world

Cato: African Free Trade Zone Is Good News - If Properly Implemented

According to the South African newspaper Mail and Guardian, “African leaders on Wednesday signed a potentially historic, 26-nation free-trade pact to create a common market spanning half the continent, from Cairo to Cape Town. The deal on the Tripartite Free Trade Area (TFTA) is the culmination of five years of negotiations to set up a framework for preferential tariffs easing the movement of goods in an area that is home to 625-million people…. The deal will integrate three existing trade blocs – the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa (Comesa) – whose countries have a combined gross domestic product (GDP) of more than $1-trillion.”

“Potentially historic” is the right term for what could be a greatly beneficial agreement. African parliaments will have two years to ratify the agreement – and that is the easy part. Proper implementation and enforcement will be much more difficult in countries with deeply underdeveloped institutions of rule of law and protection of private property. Still, the TFTA is a step in the right direction, for it signals an important ideological shift on the part of the African elite. Historically, African governments have been deeply skeptical of free trade and capitalism. Instead, they preferred protectionism and state-led development. To the extent that they were interested in trade, the African governments emphasized access to Western markets, while eschewing liberalization of their own. The consequences were catastrophic.

Read more at http://www.cato.org/blog/african-free-trade-zone-good-news-properly-implemented

Cato: Supreme Court to Consider Ending Forced Public-Sector Union Dues

Today, the U.S. Supreme Court announced that it would hear Friedrichs v. California Teachers Association, which asks the court to consider whether compulsory public-sector union dues violate the First Amendment right to free speech–which includes the right to be free from compulsory speech. The Cato Institute filed an amicus brief supporting the petitioners’ request that SCOTUS hear the case.

In 26 states, public-sector unions can force non-members to pay dues anyway. As I noted last year:

"The unions contend that these compulsory dues are necessary to overcome the free rider problem (non-union members may benefit from the collectively-bargained wages and benefits without contributing to the union), but plaintiffs in Friedrichs v. California Teachers Association point out that numerous organizations engage in activities (e.g. – lobbying) that benefit members and non-members alike without giving such organizations the right to coerce non-members to pay. That’s especially true when the individuals who supposedly benefit actually disagree with the position of the organization."


But even if unions could demonstrate that the dues were necessary to prevent freeriding, the U.S. Supreme Court held in Harris v. Quinn last year that “preventing nonmembers from freeriding on the union’s efforts” is a rationale “generally insufficient to overcome First Amendment objections.” Federal law allows dues-payers to opt out of the portion dedicated to express political activities (e.g. - lobbying), but the petitioners argue that public-sector collective bargaining itself is inherently political.

Read more at http://www.cato.org/blog/supreme-court-consider-ending-forced-public-sector-union-dues

Cato: Rand Paul’s “No” on Trade Promotion Authority Gets It Backwards

Not entirely unsurprisingly, the Senate failed to reach cloture on Tuesday, falling eight votes shy of the 60 needed to start the timer on debate over Trade Promotion Authority (TPA), which will be needed to conclude the Trans-Pacific Partnership (TPP) negotiations and bring it to a timely vote in Congress.  The cloture vote concerned two of four pieces of trade legislation voted out of the Finance Committee two weeks ago (TPA and Trade Adjustment Assistance).  Senate Majority Leader Mitch McConnell excluded the other two bills, which contain language that would attract Democratic support. So, while I wouldn’t bet the ranch on TPA’s passage, there’s still room for horse trading.

Read more at http://www.cato.org/blog/rand-pauls-no-trade-promotion-authority-gets-it-backwards

Cato: How a WTO Meat Labeling Dispute Could Prompt Congress to Change a Bad Law

After losing again at the World Trade Organization, U.S. regulations mandating country of origin labels (COOL) on meat may finally end.  Driven by the possibility that Canada and Mexico could retaliate with increased tariffs, Congress has already begun consideration of a bill to repeal the protectionist program.  If COOL regulations are indeed repealed, American consumers, meat packers, and retailers owe a debt to the WTO’s dispute settlement system.

In the latest WTO decision, the United States lost its appeal of a report originally issued last October.  At that time, I wrote about how the WTO process can help alter the political dynamics in ways that favor free market reform.

Read more at http://www.cato.org/blog/how-wto-meat-labeling-dispute-could-prompt-congress-change-bad-law

Cato: Is the TPP a Huge Deal or No Big Deal?

As more journalists and commentators discuss the Trans-Pacific Partnership, we’ve seen very conflicting descriptions of the agreement.  For some, the TPP isn’t about trade at all but about giving power to corporations and ending U.S. sovereignty, or about containing China and building U.S. influence in Asia.  When commentators do focus on the potential economic impact of the agreement, they either describe the TPP as a very big deal or as a very small one.  It all depends on your perspective.

My colleague Simon Lester has written about problems in how GDP gains from the TPP have been estimated.  I’d like to take issue with a different figure commonly cited to bolster the idea of the TPP’s hugeness—that the 12 countries involved account for almost 40% of global GDP.  This number is correct but highly misleading as a gauge of the TPP’s economic significance.

For one thing about 22.5% of global GDP comes from the United States.  So, one could claim accurately that the U.S.–Jordan Free Trade Agreement covers almost a quarter of the global economy.  Also, most of the remainder comes from Canada and Mexico, with whom the United States already has a free trade agreement.  In fact, the United States has free trade agreements with all but five countries in the TPP negotiations.

The only large economy country in the TPP that the United States doesn’t already have a free trade agreement with is Japan.  So, if you’re going to measure the “size” of the TPP, it would be best understood as a U.S.–Japan free trade agreement.  That’s a pretty big deal, actually, but it’s not two-fifths of the world.

Read more at http://www.cato.org/blog/tpp-huge-deal-or-no-big-deal

Cato: Congress Should Decide Whether Trade Agreements Abide the Terms of Trade Promotion Authority

Trade Promotion Authority (TPA or Fast-Track Negotiating Authority) is not an executive power grab.  It is a compact between the legislative and executive branches, which each have distinct authorities under the Constitution when it comes to conducting trade policy. The purpose of forging such a compact is that negotiations would be impracticable – and likely interminable – if each provision were subject to the whims of 535 legislators.

Opponents of trade liberalization have smeared TPA as a wholesale capitulation to the president, who allegedly is freed of any congressional oversight and given a blank check to negotiate unamendable trade deals in secret without any input from Congress – only the capacity to vote up or down on the final deal. In reality, though, TPA is the vehicle through which Congress conveys its trade policy objectives, conditions, and demands to the president, who negotiates with those parameters in mind. Provided the president concludes a negotiation that abides those congressional parameters, the deal is given fast track consideration, which means essentially that legislative procedures are streamlined and expedited.

The trade committees are reportedly close to introducing trade promotion authority legislation, although there remains some debate about what it should include. Enforceable provisions to discipline currency manipulation would be a bad idea, as would be including provisions to reauthorize the ineffective and misguided Trade Adjustment Assistance program (which is widely acknowledged to be a payoff to organized labor).

Read more at http://www.cato.org/blog/congress-should-decide-whether-trade-agreements-abide-terms-trade-promotion-authority