After a grueling seventeen hours of negotiation, German, French, Ukrainian, and Russian leaders emerged with a compromise agreement aimed at ending the conflict in Eastern Ukraine. Although similar to last September’s failed Minsk accords, the new deal provides more details on timing and implementation, which may help a ceasefire to hold. After so many prior failures, strong skepticism is understandable. But if U.S. and European leaders actually commit to the specifics of the deal, it can provide Ukraine with much-needed time to rebuild, reform and address its dire economic problems.
The all-night negotiations between leaders in Belarus showed how far apart the parties were on a number of key issues, including whether the deal should rely on the boundaries laid out in the Minsk I ceasefire, or on the current situation in Eastern Ukraine. Since rebel forces have made substantial territorial gains since September, neither side is keen to concede on the issue. Other issues, including which side will control border crossings into Russia, and the withdrawal of foreign fighters and equipment, proved equally thorny.
Admittedly, the deal still leaves many issues unsettled. It calls for an immediate ceasefire, the withdrawal of heavy weapons and a demilitarized buffer zone in Eastern Ukraine. It also mandates constitutional reform to allow the eastern regions increased autonomy, as well as amnesty for those involved in the fighting. But the issue of boundary lines is left effectively unsolved, requiring Kiev to adhere to the current front lines when withdrawing weaponry, and the rebels to adhere instead to the boundaries agreed upon in September. There is also no real mechanism to ensure compliance, although the situation will be monitored by the OSCE.
Read more at http://www.cato.org/blog/new-minsk-not-quite-same-old-minsk
2015-09-09
Cato: FCC’s Net Neutrality Nuclear Option
Proponents of network neutrality regulation are cheering the announcement this week that the Federal Communications Commission will seek to reclassify Internet Service Providers as “common carriers” under Title II of the Telecommunications Act. The move would trigger broad regulatory powers over Internet providers—some of which, such as authority to impose price controls, the FCC has said it will “forbear” from asserting—in the name of “preserving the open internet.”
Two initial thoughts:
First, the scope of the move reminds us that “net neutrality” has always been somewhat nebulously defined and therefore open to mission creep. To the extent there was any consensus definition, net neutrality was originally understood as being fundamentally about how ISPs like Comcast or Verizon treat data packets being sent to users, and whether the companies deliberately configured their routers to speed up or slow down certain traffic. Other factors that might affect the speed or quality of service—such as peering and interconnection agreements between ISPs and large content providers or backbone intermediaries—were understood to be a separate issue. In other words, net neutrality was satisfied so long as Comcast was treating packets equally once they’d reached Comcast’s network. Disputes over who should bear the cost of upgrading the connections between networks—though obviously relevant to the broader question of how quickly end-users could reach different services—were another matter.
Now the FCC will also concern itself with these contracts between corporations, giving content providers a fairly large cudgel to brandish against ISPs if they’re not happy with the peering terms on offer. In practice, even a “treat all packets equally” rule was going to be more complicated than it sounds on face, because the FCC would still have to distinguish between permitted “reasonable network management practices” and impermissible “packet discrimination.” But that’s simplicity itself next to the problem of determining, on a case by case basis, when the terms of a complex interconnection contract between two large corporations are “unfair” or “unreasonable.”
Read more at http://www.cato.org/blog/fccs-net-neutrality-nuclear-option
Two initial thoughts:
First, the scope of the move reminds us that “net neutrality” has always been somewhat nebulously defined and therefore open to mission creep. To the extent there was any consensus definition, net neutrality was originally understood as being fundamentally about how ISPs like Comcast or Verizon treat data packets being sent to users, and whether the companies deliberately configured their routers to speed up or slow down certain traffic. Other factors that might affect the speed or quality of service—such as peering and interconnection agreements between ISPs and large content providers or backbone intermediaries—were understood to be a separate issue. In other words, net neutrality was satisfied so long as Comcast was treating packets equally once they’d reached Comcast’s network. Disputes over who should bear the cost of upgrading the connections between networks—though obviously relevant to the broader question of how quickly end-users could reach different services—were another matter.
Now the FCC will also concern itself with these contracts between corporations, giving content providers a fairly large cudgel to brandish against ISPs if they’re not happy with the peering terms on offer. In practice, even a “treat all packets equally” rule was going to be more complicated than it sounds on face, because the FCC would still have to distinguish between permitted “reasonable network management practices” and impermissible “packet discrimination.” But that’s simplicity itself next to the problem of determining, on a case by case basis, when the terms of a complex interconnection contract between two large corporations are “unfair” or “unreasonable.”
Read more at http://www.cato.org/blog/fccs-net-neutrality-nuclear-option
Cato: Bitcoin Regulation: “Assume the Existence of Public Interest Benefits!”
You’ve probably heard some version of the joke about the chemist, the physicist, and the economist stranded on a desert island. With a can of food but nothing to open it, the first two set to work on ingenious technical methods of accessing nutrition. The economist declares his solution: “Assume the existence of a can opener!”…
There are parallels to this in some U.S. state regulators’ approaches to Bitcoin. Beginning with the New York Department of Financial Services six months ago, regulators have put proposals forward without articulating how their ideas would protect Bitcoin users. “Assume the existence of public interest benefits!” they seem to be saying.
When it issued its “BitLicense” proposal last August, the New York DFS claimed “[e]xtensive research and analysis” that it said “made clear the need for a new and comprehensive set of regulations that address the novel aspects and risks of virtual currency.” Yet, six months later, despite promises to do so under New York’s Freedom of Information Law, the NYDFS has not released that analysis, even while it has published a new “BitLicense” draft.
Read more at http://www.cato.org/blog/bitcoin-regulation-assume-existence-public-interest-benefits
There are parallels to this in some U.S. state regulators’ approaches to Bitcoin. Beginning with the New York Department of Financial Services six months ago, regulators have put proposals forward without articulating how their ideas would protect Bitcoin users. “Assume the existence of public interest benefits!” they seem to be saying.
When it issued its “BitLicense” proposal last August, the New York DFS claimed “[e]xtensive research and analysis” that it said “made clear the need for a new and comprehensive set of regulations that address the novel aspects and risks of virtual currency.” Yet, six months later, despite promises to do so under New York’s Freedom of Information Law, the NYDFS has not released that analysis, even while it has published a new “BitLicense” draft.
Read more at http://www.cato.org/blog/bitcoin-regulation-assume-existence-public-interest-benefits
2015-09-08
Cato: Vaccination and the Social Contract
By Patrick J. Michaels
There are two distinct classes of vaccinations: those for communicable diseases like measles, rubella, and chicken pox, and those for non-communicable ones like tetanus.
There is no reason to be vaccinated against non-communicable diseases if you don’t want to. If you believe that your small chance of getting tetanus isn’t worth the (very, very) much smaller risk of crippling Guillan-Barre syndrome after the vaccination, that’s your business.
But vaccination for communicable diseases is part of a social contract that maintains civil society with a general ethic that no one has the right to harm someone without serious provocation. The fact that someone else may avoid vaccination gives no license to avoidably infect that person, however foolhardy he or she might be.
From http://www.cato.org/blog/vaccination-social-contract
There are two distinct classes of vaccinations: those for communicable diseases like measles, rubella, and chicken pox, and those for non-communicable ones like tetanus.
There is no reason to be vaccinated against non-communicable diseases if you don’t want to. If you believe that your small chance of getting tetanus isn’t worth the (very, very) much smaller risk of crippling Guillan-Barre syndrome after the vaccination, that’s your business.
But vaccination for communicable diseases is part of a social contract that maintains civil society with a general ethic that no one has the right to harm someone without serious provocation. The fact that someone else may avoid vaccination gives no license to avoidably infect that person, however foolhardy he or she might be.
From http://www.cato.org/blog/vaccination-social-contract
Cato: Does the Government Require Your Hotel to Spy on You?
If you’re a privacy conscious traveler, you may have wondered from time to time why hotels ask for ID when you check in, or why they ask you to give them the make and model of your car and other information that isn’t essential to the transaction. What’s the ID-checking for? There’s never been a problem with fraudsters checking into hotels under others’ reservations, paying for the privilege to do so…
Well, in many jurisdictions around the country, that information-gathering is mandated by law. Local ordinances require hotels, motels, and other lodgers (such as AirBnB hosts), to collect this information and keep it on hand. These laws also require that the information be made available to the police on request, for any reason or no reason, without a warrant.
That’s the case in Los Angeles, which not only requires this data retention about hotel guests for law enforcement to access at will or whim. It also requires hoteliers to check a government-issued ID from guests that pay cash.
Open access to hotel records may have been innocuous enough in the early years of travel and lodging. Reading through hotel registers was a social sport among the wealthy, who could afford long-distance travel and lodging. Today, tourism is available to the masses, and hotel records enjoy tighter privacy protections. Most people would quit a hotel that left their information open to the public, and many would be surprised that hoteliers’ records are open to law enforcement collection and review without any legal process.
Read more at http://www.cato.org/blog/does-government-require-hotelier-spy-you
Well, in many jurisdictions around the country, that information-gathering is mandated by law. Local ordinances require hotels, motels, and other lodgers (such as AirBnB hosts), to collect this information and keep it on hand. These laws also require that the information be made available to the police on request, for any reason or no reason, without a warrant.
That’s the case in Los Angeles, which not only requires this data retention about hotel guests for law enforcement to access at will or whim. It also requires hoteliers to check a government-issued ID from guests that pay cash.
Open access to hotel records may have been innocuous enough in the early years of travel and lodging. Reading through hotel registers was a social sport among the wealthy, who could afford long-distance travel and lodging. Today, tourism is available to the masses, and hotel records enjoy tighter privacy protections. Most people would quit a hotel that left their information open to the public, and many would be surprised that hoteliers’ records are open to law enforcement collection and review without any legal process.
Read more at http://www.cato.org/blog/does-government-require-hotelier-spy-you
Cato: Managing Sugar Markets Gets Even Messier
In a previous blog post I discussed the implications of the proposed agreement to settle the antidumping and countervailing duty (AD/CVD) cases brought by U.S. sugar producers against imports from Mexico. That article amounted to a lament on the difficulties of trying to balance sugar supply and demand by government fiat. Market managers employed by the U.S. Department of Agriculture (USDA) and the Department of Commerce (DOC) have a really hard job, as do their counterparts in the Mexican government. Not only do the supply, demand, and price of sugar tend not to stay quiet and well behaved, but important firms involved in the business also can prove (from the perspective of the program managers) to be vexing and disputatious.
Such is the case with Imperial Sugar Company and AmCane Sugar, both of which are U.S. cane refiners that rely on ample supplies of raw sugar to run their operations. Much of that raw sugar comes from other countries; in recent years Mexico has been the largest supplier to the United States. It now appears that U.S. cane refiners were not too happy with either the original proposed settlement that was announced on October 27, 2014, or the final suspension agreements announced December 19 that set aside the underlying AD/CVD investigations.
One source of that unhappiness seems to have been that the initial proposal would have allowed 60 percent of imports from Mexico to be in the form of refined sugar rather than raw. The U.S. and Mexican governments acknowledged that concern in the December 19 agreement by reducing the allowable level of refined sugar imports to 53 percent. Another issue bothering U.S. refiners likely was the relatively narrow spread between the original proposal’s import reference prices, which were 20.75 cents per pound for raw sugar and 23.75 cents per pound for refined. U.S. refiners may have feared suppression of their processing margins, if imported refined sugar from Mexico could have been sold at only 3 cents per pound above the price of raw sugar imports. The December 19 version increased that price spread to 3.75 cents (22.25 cents for raw and 26.0 cents for refined). From the standpoint of the refiners, that margin still may be uncomfortably narrow.
Read more at http://www.cato.org/blog/managing-sugar-markets-gets-even-messier
Such is the case with Imperial Sugar Company and AmCane Sugar, both of which are U.S. cane refiners that rely on ample supplies of raw sugar to run their operations. Much of that raw sugar comes from other countries; in recent years Mexico has been the largest supplier to the United States. It now appears that U.S. cane refiners were not too happy with either the original proposed settlement that was announced on October 27, 2014, or the final suspension agreements announced December 19 that set aside the underlying AD/CVD investigations.
One source of that unhappiness seems to have been that the initial proposal would have allowed 60 percent of imports from Mexico to be in the form of refined sugar rather than raw. The U.S. and Mexican governments acknowledged that concern in the December 19 agreement by reducing the allowable level of refined sugar imports to 53 percent. Another issue bothering U.S. refiners likely was the relatively narrow spread between the original proposal’s import reference prices, which were 20.75 cents per pound for raw sugar and 23.75 cents per pound for refined. U.S. refiners may have feared suppression of their processing margins, if imported refined sugar from Mexico could have been sold at only 3 cents per pound above the price of raw sugar imports. The December 19 version increased that price spread to 3.75 cents (22.25 cents for raw and 26.0 cents for refined). From the standpoint of the refiners, that margin still may be uncomfortably narrow.
Read more at http://www.cato.org/blog/managing-sugar-markets-gets-even-messier
2015-09-07
Cato: Expand Trade by Repealing Monopoly Unionism
Republicans say they favor cutting regulations to spur growth and create jobs. And they generally favor expanding international trade. They can attain those goals by reforming labor union laws.
America’s West Coast seaports are getting hammered by aggressive unionism. The damage spreads out across the economy during labor disputes, affecting billions of dollars worth of trade. It’s an economically absurd situation, and it’s hugely unfair to the millions of workers whose jobs depend on trade. It should not be happening in America in the 21th century.
In her official response to President Obama’s SOTU, new GOP senator Joni Ernst (Iowa) said, “Let’s tear down trade barriers in places like Europe and the Pacific. Let’s sell more of what we make and grow in America over there so we can boost manufacturing, wages, and jobs right here, at home.”
She’s right, and she should use her prestige and tough-gal credentials to push for change. In the 1980s, Margaret Thatcher broke the militant unions in Britain and she privatized most of that nation’s seaports. Senator Ernst has an opportunity to push for the same reforms here.
Read more at http://www.cato.org/blog/expand-trade-repealing-monopoly-unionism
America’s West Coast seaports are getting hammered by aggressive unionism. The damage spreads out across the economy during labor disputes, affecting billions of dollars worth of trade. It’s an economically absurd situation, and it’s hugely unfair to the millions of workers whose jobs depend on trade. It should not be happening in America in the 21th century.
In her official response to President Obama’s SOTU, new GOP senator Joni Ernst (Iowa) said, “Let’s tear down trade barriers in places like Europe and the Pacific. Let’s sell more of what we make and grow in America over there so we can boost manufacturing, wages, and jobs right here, at home.”
She’s right, and she should use her prestige and tough-gal credentials to push for change. In the 1980s, Margaret Thatcher broke the militant unions in Britain and she privatized most of that nation’s seaports. Senator Ernst has an opportunity to push for the same reforms here.
Read more at http://www.cato.org/blog/expand-trade-repealing-monopoly-unionism
Cato: Loretta Lynch’s Worrisome Answer on Civil Asset Forfeiture
Referring to the federal government’s forfeiture regime as “an important tool” in fighting crime, attorney general nominee Loretta Lynch staunchly defended the concept of civil asset forfeiture during the first day of her confirmation hearings.
After Sen. Mike Lee (R-UT) questioned the “fundamental fairness” of Americans having their property taken by the government without any proof (or often even suspicion) of criminal wrongdoing, Lynch asserted that there are “safeguards at every step of the process” to protect innocent people, “certainly implemented by [her] office … as well as an opportunity to be heard.”
Even setting aside the litany of federal civil asset forfeiture abuses that have come to light recently across the country, Lynch’s reference to her own office’s handling of civil forfeiture is particularly concerning.
Lynch is currently the U.S. attorney for the Eastern District of New York, and her office, despite its safeguards, is responsible for one of the more publicized and questionable uses of the asset forfeiture program. In May of 2012 the Hirsch brothers, joint owners of Bi-County Distributors in Long Island, had their entire bank account drained by the Internal Revenue Service working in conjunction with Lynch’s office. Many of Bi-County’s customers paid in cash, and when the brothers made several deposits under $10,000, federal agents accused them of “structuring” their deposits in order to avoid the reporting requirements of the Bank Secrecy Act. Without so much as a criminal charge, the federal government emptied the account, totaling $446,651.11.
Read more at http://www.cato.org/blog/loretta-lynchs-worrisome-answer-civil-asset-forfeiture
After Sen. Mike Lee (R-UT) questioned the “fundamental fairness” of Americans having their property taken by the government without any proof (or often even suspicion) of criminal wrongdoing, Lynch asserted that there are “safeguards at every step of the process” to protect innocent people, “certainly implemented by [her] office … as well as an opportunity to be heard.”
Even setting aside the litany of federal civil asset forfeiture abuses that have come to light recently across the country, Lynch’s reference to her own office’s handling of civil forfeiture is particularly concerning.
Lynch is currently the U.S. attorney for the Eastern District of New York, and her office, despite its safeguards, is responsible for one of the more publicized and questionable uses of the asset forfeiture program. In May of 2012 the Hirsch brothers, joint owners of Bi-County Distributors in Long Island, had their entire bank account drained by the Internal Revenue Service working in conjunction with Lynch’s office. Many of Bi-County’s customers paid in cash, and when the brothers made several deposits under $10,000, federal agents accused them of “structuring” their deposits in order to avoid the reporting requirements of the Bank Secrecy Act. Without so much as a criminal charge, the federal government emptied the account, totaling $446,651.11.
Read more at http://www.cato.org/blog/loretta-lynchs-worrisome-answer-civil-asset-forfeiture
Cato: To Vaccinate, or Not to Vaccinate: That Is the Question
With Gov. Chris Christie and Sen. Rand Paul now having weighed in on the growing compulsory vaccination debate—Paul telling a radio host yesterday that most vaccines “ought to be voluntary”—the question arises whether there’s a “libertarian” position on the question. Rightly suspicious of government compulsion, a libertarian’s first instinct is to say that this is a question for individual parents to decide. But second thoughts suggest that the matter is more complicated. After all, it isn’t simply a matter of assessing the risk to one’s own child, about which the state is not entirely disinterested—enforceable parental obligations to one’s children come with becoming a parent. It’s also a question of how much risk one can impose, even through one’s children, on others. And on the matter of risk, the rights analyses that easily sort out so many other human conflicts start to break down—or, more precisely, require turning to values as well, about which reasonable people can have reasonable differences. Some people are risk averse, after all, others are risk takers, and between the two there is no principled line, which is why we often have to turn to public solutions through public line-drawing.
Read more at http://www.cato.org/blog/vaccinate-or-not-vaccinate-question
Read more at http://www.cato.org/blog/vaccinate-or-not-vaccinate-question
2015-09-06
Cato: Frenemy Saudi Arabia Makes the World More Dangerous
Saudi Arabia is a medieval system whose horrid human rights practices match its antiquated political system. Official Washington breathed a sigh of relief at the smooth transition after King Abdullah died last week. President Barack Obama is visiting Riyadh to pay his respects.
Secretary of State John Kerry called the departed king a “man of vision and wisdom.” President Barack Obama declared that Abdullah “was always candid and had the courage of his convictions.”
U.S. officials long have celebrated their friendship with the Saudi royals, who sit atop vast oil reserves. Even more important, the American military continues to act as the Saudi royals’ bodyguard.
President George H.W. Bush inaugurated the first Gulf War as much to safeguard Saudi Arabia as liberate Kuwait. He left a garrison in Saudi Arabia later targeted by the 1996 bombing of the Khobar Towers barracks. America’s presence on sacred Saudi soil was one of Osama bin Laden’s grievances.
While American officials are conflicted by the tension between democracy and stability, the Saudis suffer no such indecision. Essentially a totalitarian dictatorship at home, the House of Saud favors whoever and whatever reduces threats to the monarchy abroad.
Saudi Arabia joined the U.S. against the Islamic State. Unfortunately, many of the Sunni insurgents/terrorists likely attended extremist mosques and were educated in radical madrassas funded by Riyadh.
Read more at http://www.cato.org/blog/frenemy-saudi-arabia-makes-world-more-dangerous
Secretary of State John Kerry called the departed king a “man of vision and wisdom.” President Barack Obama declared that Abdullah “was always candid and had the courage of his convictions.”
U.S. officials long have celebrated their friendship with the Saudi royals, who sit atop vast oil reserves. Even more important, the American military continues to act as the Saudi royals’ bodyguard.
President George H.W. Bush inaugurated the first Gulf War as much to safeguard Saudi Arabia as liberate Kuwait. He left a garrison in Saudi Arabia later targeted by the 1996 bombing of the Khobar Towers barracks. America’s presence on sacred Saudi soil was one of Osama bin Laden’s grievances.
While American officials are conflicted by the tension between democracy and stability, the Saudis suffer no such indecision. Essentially a totalitarian dictatorship at home, the House of Saud favors whoever and whatever reduces threats to the monarchy abroad.
Saudi Arabia joined the U.S. against the Islamic State. Unfortunately, many of the Sunni insurgents/terrorists likely attended extremist mosques and were educated in radical madrassas funded by Riyadh.
Read more at http://www.cato.org/blog/frenemy-saudi-arabia-makes-world-more-dangerous
Cato: Employers Aren’t Mind-Readers and Shouldn’t Be Forced to Pry Into Employees’ Religious Beliefs
The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws against employment discrimination. Along with enforcing these laws—most notably, Title VII of the Civil Rights Act, which outlaws discrimination on the basis of race, color, religion, sex, or national origin—the EEOC tells employers how not to discriminate. For example, the EEOC’s Best Practices for Eradicating Religious Discrimination in the Workplace instructs that an employer should “avoid assumptions or stereotypes about what constitutes a religious belief” and that managers “should be trained not to engage in stereotyping based on religious dress and grooming practices.”
It’s passing strange, then, that the government is now arguing before the Supreme Court not only that employers can do these things, but that they must, or face liability under Title VII, in the context of reasonable accommodations that companies have to make for religious practice. Discerning when such accommodations are necessary can be difficult because people practice religion differently—and often in their own personal, non-obvious way.
Title VII has thus traditionally been understood to leave it to the employee to determine when a company policy conflicts with his or her religious practice and then to request an accommodation. This interpretation leaves employers free to pursue neutral policies up to the point that they have actual knowledge of such a conflict.
Read more at http://www.cato.org/blog/employers-arent-mind-readers-shouldnt-be-forced-pry-employees-religious-beliefs
It’s passing strange, then, that the government is now arguing before the Supreme Court not only that employers can do these things, but that they must, or face liability under Title VII, in the context of reasonable accommodations that companies have to make for religious practice. Discerning when such accommodations are necessary can be difficult because people practice religion differently—and often in their own personal, non-obvious way.
Title VII has thus traditionally been understood to leave it to the employee to determine when a company policy conflicts with his or her religious practice and then to request an accommodation. This interpretation leaves employers free to pursue neutral policies up to the point that they have actual knowledge of such a conflict.
Read more at http://www.cato.org/blog/employers-arent-mind-readers-shouldnt-be-forced-pry-employees-religious-beliefs
Cato: Ukraine’s Fight With Russia Isn’t America’s Business
Ukraine’s military has lost control of the Donetsk airport and the rebels have launched another offensive. Fortune could yet smile upon Kiev, but as long as Russia is determined not to let the separatists fail, Ukraine’s efforts likely will be for naught.
As I point out on Forbes online: “Only a negotiated settlement, no matter how unsatisfying, offers a possible resolution of the conflict. The alternative may be the collapse of the Ukrainian state and long-term confrontation between the West and Russia.”
Ukraine’s most fervent advocates assume anyone not ready to commit self-immolation on Kiev’s behalf must be a Russian agent. However, there are numerous good reasons for Washington to avoid the fight.
1) Russia isn’t Serbia, Iraq, Afghanistan, or Libya.
While the Obama administration has resisted proposals for military confrontation with Moscow, a gaggle of ivory tower warriors has pushed to arm Ukraine, bring Kiev into NATO, and station U.S. men and planes in Ukraine. These steps could lead to war.
Americans have come to expect easy victories. However, Russia would be no pushover. In particular, Moscow has a full range of nuclear weapons, which it could use to respond to allied conventional superiority.
Read more at http://www.cato.org/blog/ukraines-fight-russia-isnt-americas-business
As I point out on Forbes online: “Only a negotiated settlement, no matter how unsatisfying, offers a possible resolution of the conflict. The alternative may be the collapse of the Ukrainian state and long-term confrontation between the West and Russia.”
Ukraine’s most fervent advocates assume anyone not ready to commit self-immolation on Kiev’s behalf must be a Russian agent. However, there are numerous good reasons for Washington to avoid the fight.
1) Russia isn’t Serbia, Iraq, Afghanistan, or Libya.
While the Obama administration has resisted proposals for military confrontation with Moscow, a gaggle of ivory tower warriors has pushed to arm Ukraine, bring Kiev into NATO, and station U.S. men and planes in Ukraine. These steps could lead to war.
Americans have come to expect easy victories. However, Russia would be no pushover. In particular, Moscow has a full range of nuclear weapons, which it could use to respond to allied conventional superiority.
Read more at http://www.cato.org/blog/ukraines-fight-russia-isnt-americas-business
2015-09-05
Cato: Judges Shouldn’t Tell Businesses Which Products to Make and Market
New York State is standing athwart medical progress yelling “STOP!” In a move straight from the pages of Atlas Shrugged, the state sued Forest Laboratories, the subsidiary of pharmaceutical giant Actavis that makes the Alzheimer’s drug Namenda IR, to force the company to continue making the drug, which was being phased out in favor of the new Namenda XR (which, among other improvements, need only be taken once a day rather than twice—a not insignificant plus when dealing with Alzheimer’s patients!).
Why would New York’s attorney general want to interfere with medical progress and the development of a better drug that would improve the lives of potentially millions of Americans? Perhaps to reduce state drug costs—maybe the state feels that the marginal benefit from switching to XR isn’t worth the marginal cost—or to provide a competitive advantage to the generic pharmaceutical industry (under New York law, when a patent expires—as IR’s will in a few months—the remaining prescriptions automatically switch to generics).
The state’s claim relies on some very dubious antitrust law and seeks to force Forest Labs to keep producing and offering IR under the same “terms and conditions” as before XR came out. Not only would this keep patients using an older, inferior drug, it would effectively compel Forest to support its competitors’ business strategy. The generics were already set to benefit from the hundreds of millions of R&D dollars Forest Labs spent developing IR, but now they get free advertising too.
Read more at http://www.cato.org/blog/judges-shouldnt-tell-businesses-which-products-make-market
Why would New York’s attorney general want to interfere with medical progress and the development of a better drug that would improve the lives of potentially millions of Americans? Perhaps to reduce state drug costs—maybe the state feels that the marginal benefit from switching to XR isn’t worth the marginal cost—or to provide a competitive advantage to the generic pharmaceutical industry (under New York law, when a patent expires—as IR’s will in a few months—the remaining prescriptions automatically switch to generics).
The state’s claim relies on some very dubious antitrust law and seeks to force Forest Labs to keep producing and offering IR under the same “terms and conditions” as before XR came out. Not only would this keep patients using an older, inferior drug, it would effectively compel Forest to support its competitors’ business strategy. The generics were already set to benefit from the hundreds of millions of R&D dollars Forest Labs spent developing IR, but now they get free advertising too.
Read more at http://www.cato.org/blog/judges-shouldnt-tell-businesses-which-products-make-market
Cato: The Oil Price Plunge Won’t Cause Russia or Iran to Capitulate
The recent dramatic drop in global oil prices has significant geopolitical as well as economic implications. Consumers in the United States and other countries enjoy substantial savings, while marginal producers, both here and abroad, find their profit margins severely squeezed. As I discuss in an article at Aspenia Online, some of the oil-producing states that have been especially hard hit include Russia, Venezuela, and Iran. All of those countries are governed by regimes that are on bad terms with the United States, so there is a temptation among American political leaders and pundits to relish the current discomfort of those governments.
Greater restraint is warranted. The geopolitical benefits to the United States from the current depressed pricing environment are not trivial. Increased economic constraints appear to be one factor making Iran’s clerical regime more willing to negotiate seriously about that country’s nuclear program. Venezuela’s already substantial financial woes, caused by the leftist government’s chronic economic mismanagement since the late 1990s, has made that country a less appealing political model for the rest of Latin America. Washington’s worries about a leftist “Bolivarian” revolution sweeping the region, which were prominent just a few years ago, have faded considerably.
Read more at http://www.cato.org/blog/oil-price-plunge-wont-cause-russia-or-iran-capitulate
Greater restraint is warranted. The geopolitical benefits to the United States from the current depressed pricing environment are not trivial. Increased economic constraints appear to be one factor making Iran’s clerical regime more willing to negotiate seriously about that country’s nuclear program. Venezuela’s already substantial financial woes, caused by the leftist government’s chronic economic mismanagement since the late 1990s, has made that country a less appealing political model for the rest of Latin America. Washington’s worries about a leftist “Bolivarian” revolution sweeping the region, which were prominent just a few years ago, have faded considerably.
Read more at http://www.cato.org/blog/oil-price-plunge-wont-cause-russia-or-iran-capitulate
Cato: Cutting Spending Is the Best Approach
On Monday, the White House will release President Obama’s budget proposal for Fiscal Year 2016. The president is expected to reemphasize his previous fiscal approach of higher spending coupled with higher taxes, while completely ignoring the country’s long-term fiscal problems.
A new study published by the National Bureau of Economic Research (NBER) provides evidence of the best way to solve those problems, should the president decide to tackle the nation’s fiscal mess. The study, by Alberto Alesina, Omar Barbiero, and others, tries to answer one central question: What is the best way for a country to rebalance policy to solve a fiscal crisis?
The study looked at Organization of Economic Cooperation and Development member countries and their response to the financial crisis from 2009 to 2013. Following the crisis, many of those countries became burdened by large amounts of debt and deficit as a result of rising spending and falling revenues. Government spending grew to an average of 43 percent of gross domestic product (GDP) within the European Union.
Read more at http://www.cato.org/blog/cutting-spending-best-approach
A new study published by the National Bureau of Economic Research (NBER) provides evidence of the best way to solve those problems, should the president decide to tackle the nation’s fiscal mess. The study, by Alberto Alesina, Omar Barbiero, and others, tries to answer one central question: What is the best way for a country to rebalance policy to solve a fiscal crisis?
The study looked at Organization of Economic Cooperation and Development member countries and their response to the financial crisis from 2009 to 2013. Following the crisis, many of those countries became burdened by large amounts of debt and deficit as a result of rising spending and falling revenues. Government spending grew to an average of 43 percent of gross domestic product (GDP) within the European Union.
Read more at http://www.cato.org/blog/cutting-spending-best-approach
2015-09-04
Cato: US Lifts Ban on Long Haul Truck Deliveries From Mexico
The United States has finally ended a ban on long haul truck deliveries from Mexico. The U.S. government promised to lift the ban twenty years ago as part of the North American Free Trade Agreement, but caved in to pressure from the Teamsters union claiming that Mexican trucks would be a safety hazard on U.S. roads. Twenty years of data and two pilot programs seem to have been enough to convince your government that, in this case at least, Mexicans are just as good at doing things as other people.
But surely, you protest, the complaint could not have been that Mexicans are incompetent, but that Mexican safety standards and regulations are overly lax or poorly enforced. To be fair, the Teamsters union has claimed that Mexican trucks are subject to inadequate regulation and that their drivers are poorly trained. This argument would perhaps be meaningful if it weren’t so inexcusably misleading. The fact is that all Mexican trucks operating in the United States have to get permits that require prescreening and regular inspections.
In short, Mexican trucks operating in the United States are regulated by the U.S. government. The only difference is the nationality of the truck’s driver and owner.
Read more at http://www.cato.org/blog/us-lifts-ban-on-long-haul-truck-deliveries-from-mexico
But surely, you protest, the complaint could not have been that Mexicans are incompetent, but that Mexican safety standards and regulations are overly lax or poorly enforced. To be fair, the Teamsters union has claimed that Mexican trucks are subject to inadequate regulation and that their drivers are poorly trained. This argument would perhaps be meaningful if it weren’t so inexcusably misleading. The fact is that all Mexican trucks operating in the United States have to get permits that require prescreening and regular inspections.
In short, Mexican trucks operating in the United States are regulated by the U.S. government. The only difference is the nationality of the truck’s driver and owner.
Read more at http://www.cato.org/blog/us-lifts-ban-on-long-haul-truck-deliveries-from-mexico
Cato: Big Brother Wants to Watch You Drive
In 2008, the Washington legislature passed a law mandating a 50 percent reduction in per capita driving by 2050. California and Oregon laws or regulations have similar but somewhat less draconian targets.
The Obama administration wants to mandate that all new cars come equipped with vehicle-to-infrastructure communications, so the car can send signals to and receive messages from street lights and other infrastructure.
Now the California Air Resources Board is considering regulations requiring that all cars monitor their owners’ driving habits, including but not limited to how many miles they drive, how much fuel they use, and how much pollution or greenhouse gases they emit.
Put these all together and you have a system in which the government will not only know where your vehicle is at all times, but can turn off your vehicle if it decides you are driving too much or driving in a way that emits too many grams of carbon dioxide or is otherwise offensive to some bureaucratic imperative.
I sometimes think privacy advocates are a paranoid bunch, seeing men in black around every corner and surveillance helicopters or drones in the air at all times. On the other hand, if a technology is available–such as the ability to record cell phone calls–the government has proven it will use it.
Read more at http://www.cato.org/blog/big-brother-wants-watch-driving
The Obama administration wants to mandate that all new cars come equipped with vehicle-to-infrastructure communications, so the car can send signals to and receive messages from street lights and other infrastructure.
Now the California Air Resources Board is considering regulations requiring that all cars monitor their owners’ driving habits, including but not limited to how many miles they drive, how much fuel they use, and how much pollution or greenhouse gases they emit.
Put these all together and you have a system in which the government will not only know where your vehicle is at all times, but can turn off your vehicle if it decides you are driving too much or driving in a way that emits too many grams of carbon dioxide or is otherwise offensive to some bureaucratic imperative.
I sometimes think privacy advocates are a paranoid bunch, seeing men in black around every corner and surveillance helicopters or drones in the air at all times. On the other hand, if a technology is available–such as the ability to record cell phone calls–the government has proven it will use it.
Read more at http://www.cato.org/blog/big-brother-wants-watch-driving
Cato: Adam Smith on Infrastructure
I love Adam Smith. He didn’t get everything right, but he got the big things right. Oftentimes, he really nailed it.
Today, I woke up early and my newspaper had not arrived yet. So I cracked open The Wealth of Nations on the infrastructure section, Book V, Part III.
With the highway bill soon in front of Congress, and there being lots of agitation to increase federal funding, Smith had words of wisdom for policymakers. He advocated user-pays and decentralization.
Read more at http://www.cato.org/blog/adam-smith-infrastructure
Today, I woke up early and my newspaper had not arrived yet. So I cracked open The Wealth of Nations on the infrastructure section, Book V, Part III.
With the highway bill soon in front of Congress, and there being lots of agitation to increase federal funding, Smith had words of wisdom for policymakers. He advocated user-pays and decentralization.
Read more at http://www.cato.org/blog/adam-smith-infrastructure
2015-09-03
Cato: Final Hurdle to Keystone XL Pipeline Decision Lifted
Today, the Nebraska Supreme Court overturned a lower court ruling and held that the power to approve a route for the Keystone XL pipeline through the state lay with the governor. Nebraska Gov. Dave Heineman had previously approved the pipeline’s route, but his authority was challenged by a group of landowners (pipeline opponents) who claimed the authoritative power was held by the state’s Public Service Commission rather than the governor.
President Obama repeatedly referred to this pending decision as the reason why he could not made a final decision on whether to approve or deny the pipeline. As recently as earlier this week, when indicating the president would veto a measure to approve the pipeline that is currently making its way through Congress, Obama press secretary Josh Earnest referred to a “well-established process in place” for making such decisions. The Nebraska case was the last remaining part of that process, as the State Department has already given the pipeline a clean bill of environmental health.
Read more at http://www.cato.org/blog/final-hurdle-keystone-xl-pipeline-decision-lifted
President Obama repeatedly referred to this pending decision as the reason why he could not made a final decision on whether to approve or deny the pipeline. As recently as earlier this week, when indicating the president would veto a measure to approve the pipeline that is currently making its way through Congress, Obama press secretary Josh Earnest referred to a “well-established process in place” for making such decisions. The Nebraska case was the last remaining part of that process, as the State Department has already given the pipeline a clean bill of environmental health.
Read more at http://www.cato.org/blog/final-hurdle-keystone-xl-pipeline-decision-lifted
Cato: Community College Courtesy of the Federal Taxpayer? No Thanks
Word came out last night that in a speech in Tennessee today President Obama will propose that two years of community college be made free to all “responsible” students, primarily funded by federal taxpayers. But one look at either community college outcomes or labor market outlooks reveals this to be educational folly.
The fact of the matter, according to the federal government’s own data, is that community college completion rates are atrocious. The federal Digest of Education Statistics reports that a mere 19.5 percent of first-time, full-time community college students complete their programs within 150 percent of the time they are supposed to take. So less than 20 percent finish a two-year degree within three years, or a 10-month certificate program within 15 months. And that rate has been dropping almost every year since the cohort of students that started in 2000, which saw 23.6 percent complete. Moreover, as I itemize in a post at SeeThruEDU.com, even when you add transfers to four-year schools, the numbers don’t improve very much. Meanwhile, interestingly, the for-profit sector that has been so heavily demonized by the administration has an almost 63 percent completion rate at two-year institutions, and that has been rising steadily since the 2000 cohort.
Read more at http://www.cato.org/blog/community-college-courtesy-federal-taxpayer-no-thanks
The fact of the matter, according to the federal government’s own data, is that community college completion rates are atrocious. The federal Digest of Education Statistics reports that a mere 19.5 percent of first-time, full-time community college students complete their programs within 150 percent of the time they are supposed to take. So less than 20 percent finish a two-year degree within three years, or a 10-month certificate program within 15 months. And that rate has been dropping almost every year since the cohort of students that started in 2000, which saw 23.6 percent complete. Moreover, as I itemize in a post at SeeThruEDU.com, even when you add transfers to four-year schools, the numbers don’t improve very much. Meanwhile, interestingly, the for-profit sector that has been so heavily demonized by the administration has an almost 63 percent completion rate at two-year institutions, and that has been rising steadily since the 2000 cohort.
Read more at http://www.cato.org/blog/community-college-courtesy-federal-taxpayer-no-thanks
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