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This weekend, I appeared on C-SPAN’s Washington Journal alongside Families USA’s Frederick Isasi to discuss “the role of health care  in the 2018 mid-term elections.” Specific topics were covered include Cato’s latest health care book, Overcharged: Why Americans Pay Too Much For Health Care; the recent vote by Senate Democrats that would have thrown patients with preexisting conditions out of their health plans and left them with no coverage; how ObamaCare’s preexisting-conditions provisions are unpopular and reduce quality; how markets make access more secure for the sick than employer-sponsored plans; the benefits and costs of short-term plans; the Veterans Health Administration; the single-payer two-step; and how ObamaCare supporters want to take away your freedom to choose your health benefits. 
 

Prepare yourself for the greatest 55 minutes and 30 seconds of your life.

Last week, NPR.org published a story entitled “D.C.’s Aggressive Confiscation of Illegal Guns Leaves Residents Feeling Targeted.” The report explains how the D.C. Metropolitan Police Department (MPD) is particularly adept among major cities at getting illegal guns off the streets, but a recent uptick in gun violence has ramped up efforts of their Gun Recovery Unit (GRU). The aggressive tactics of the GRU—using what locals call “jump-out cars” to stop and search individuals for weapons—contribute to the longstanding animosity between some community residents and the police.

While it is true that, per capita, D.C. leads other cities in gun confiscation, the high number of recovered weapons only tells part of the story. That is, what MPD did and the numbers of stops they made to recover that many weapons are part of a larger problem of harassment and distrust in the community. The MPD is quick to point to D.C.’s 44 percent increase in homicides since last year as the justification for their policy, but it’s uncertain as to whether “jump-out” tactics will help at all.

Aggressive and invasive police stops can lead to recovering firearms and other contraband from individuals, but there is no statistical evidence that ties those tactics to decreases in crime rates or violence. Indeed, as described in recent testimony in Little Rock, Arkansas, evidence shows that a heightened visible police presence can have positive effects on crime rates and violence in affected areas without the use of invasive stops.

Another problem with MPD policy is whom in particular the GRU is stopping. The jump-out cars are not used equally throughout the District. Indeed, friend of Cato and now-retired judge Janice Rogers Brown had some harsh words about the GRU in a 2015 case before her in the U.S. Court of Appeals for the D.C. Circuit:

As a thought experiment, try to imagine this scene in Georgetown. Would residents of that neighborhood maintain there was no pressure to comply, if the District’s police officers patrolled Prospect Street in tactical gear, questioning each person they encountered about whether they were carrying an illegal firearm? Nothing about the Gun Recovery Unit’s modus operandi is designed to convey a message that compliance is not required. While viewing such an encounter as consensual is roughly equivalent to finding the latest Sasquatch sighting credible, I submit to the prevailing orthodoxy, but I continue to reject its counterintuitive premise. (Brown, J. concurring, U.S. v. Gross 784 F.3d 784, 790 (2015))

Although she never mentions race once in her opinion, Judge Brown all but dared the MPD to try this method of policing in Georgetown—a posh, predominantly white residential and shopping district—instead of Southeast D.C., where GRU operates and the residents are predominantly poorer and black. She likens the idea that Georgetowners would think such treatment would be fair to the likelihood of seeing Bigfoot, but because the politicians and the courts have tolerated these heavy-handed tactics mostly used in poor black areas, they remain legal.

Indeed, as Jessie Liu, U.S. Attorney for the District of Columbia, told NPR, “I think that both the police department and our office are doing a great deal to train on what the legal requirements are.” But legality and propriety are often not one in the same. As one resident testified at a public hearing on the GRU tactics, the police “look at everyone in the community like [they are] villains.” While it is true that Georgetown and Southeast D.C. have different problems, each area’s residents are entitled to the same respect and treatment by police officers.

Perhaps most crucially, curbing illegal gun possession requires understanding why these individuals are carrying guns in the first place: fear. Putting aside the imprudence of carrying an illegal gun while fearful and lacking proper training, even tough-on-guns police executives admit that the fear of being killed is a major driver of these illegal gun possession cases. In 2017, nearly 45 percent of homicide victims were black men, and data shows homicides generally cluster in low-income areas of medium-to-large cities. A young black man in Southeast D.C. may have good reason to fear for his safety and security, and when the police have deemed themselves untrustworthy through their policies and actions, carrying an illegal gun may appear to be a reasonable—though reckless, flawed, and desperate—option.

By targeting people for searches based in part on where they live—and the same people resent the police and justifiably fear for their lives—it’s hard to see how MPD expects to either reduce crime and foster cooperation by using the GRU and its tactics. The rift between these communities and the police poses a problem when police are trying to solve crimes of tragic violence. Local activist Jay Brown told NPR, after the shooting death of a 10-year-old girl this summer, that the relationship between the community and police is so bad that, “We can’t even trust the police. [I]f anybody does know anything about what happened…they’re not going to talk to the police [because] it’s just like talking to another gang.”

And, thus, the vicious cycle continues.

Of course, both police and communities want to lower the murder rate—no one wants the killing to stop more than the people who live in the areas suffering the highest violence—but those desires don’t excuse each and every means the police contrive to find illegal guns. Antagonistic interactions between police and the public have real costs, and the stated intent of quelling gun violence does not make those costs disappear. If the police violate the trust of the community by shaking down and mistreating community members—even if it’s technically legal to do so—they risk the community’s cooperation when people get hurt. This lack of cooperation can enable the most violent offenders to go free, defeating the goal the police are trying to achieve.

The police need the public’s trust to be effective at deterring and solving crimes. It doesn’t make sense for them to direct the GRU to violate that trust and then expect the community to respond well. That’s not how trust works.

Before President Trump nominated now-Justice Brett Kavanaugh to fill Justice Anthony Kennedy’s Supreme Court seat, I wrote a piece about Judge Amul Thapar, a top contender for the seat who may yet find his way onto the Court. Thapar is on the Cincinnati-based U.S. Court of Appeals for the Sixth Circuit and is a judge who has displayed a deep understanding of our founding principles. He’s also a clear writer with a fondness for movie references. Two of his recent opinions illustrate his commitment to individual liberty and due process through a nuanced, contextualized view of the Constitution.

Morgan v. Fairfield County concerned a “knock and talk,” where county policy involved forming a police perimeter around a suspect’s house while one officer attempts to talk to the residents. One of the perimeter officers behind the house saw marijuana plants on a balcony, pursuant to which the police eventually secured a search warrant. The majority found that the county’s “knock and talk” policy directed the officers to conduct a warrantless search – that forming the perimeter involved invading the “curtilage” of someone’s house – and so the county could be held liable for a Fourth Amendment violation (though the officers had qualified immunity because they were just following standard policy).

Judge Thapar dissented in relevant part, arguing that while the officers did have qualified immunity if all they were doing was preserving officer safety or preventing the destruction of evidence, the county’s policy itself did not direct the officers to conduct a search. Accordingly, there was no constitutional violation unless the police actively searched while they formed their perimeter. Looking at the history of the Fourth Amendment, Thapar defined a search as a “purposeful investigative act.” He argues that the Supreme Court muddies Fourth Amendment protections by describing them as relating to a reasonable expectation of privacy, rather than to the reasonableness of a search. That gives too much wiggle room to police and courts alike, as judges struggle to define subjective expectations of privacy. Thapar maintains that the question should instead be whether officers engaged in a purposeful investigative act – and indeed would have remanded the case for a determination of that issue. This would simplify the analysis and allow courts to apply the original meaning of the Fourth Amendment to the facts before them. 

If Morgan puts Judge Thapar’s intellectual chops on display, then Doe v. Michigan showcases the effectiveness of his vibrant writing style. Here, a fraternity boy (“John Doe”) and sorority girl (“Jane Roe”) at the University of Michigan drank and had sex at a party. Roe filed a report, claiming she was too drunk to consent. Doe said the sex was consensual and he didn’t know she was intoxicated. He introduced witnesses, all of whom were his male fraternity brothers, and she brought her own, all female, most of whom were her sorority sisters. The two sets of witnesses presented two conflicting stories. The school was at an impasse, ultimately deciding in favor of Roe. Doe filed a claim against the school, citing due process violations.

The Sixth Circuit has established that in a public university disciplinary hearing where credibility is at issue, the accused must have an opportunity to cross-examine witnesses. Judge Thapar thus writes for the court that, since the case turned on Roe and her witnesses’ credibility, Doe had a right to cross-examine. Cross-examination, he argued, allows us to determine the truth when the accuser’s story sounds as plausible as the accused’s version of events. The accused has the chance to reveal inconsistencies in a witness’s story, and the trier of fact can evaluate someone’s demeanor. In a footnote, Thapar cited A Few Good Men and My Cousin Vinny as examples of why, even in pop culture, cross-examination is so highly regarded; it can be incredibly effective to “both undermine and establish the credibility of witnesses.”

The clarity of Judge Thapar’s opinions demonstrate his effectiveness as an originalist. Not only does he rely on the liberty-protecting context surrounding constitutional text to determine its proper meaning, but he applies it to the facts with style. He merits his place on a future Supreme Court short list.

Cato legal associate Patrick Moran contributed to this blogpost.

The Wall Street Journal takes the Trump administration to task this morning, and rightly so, over a proposed rule from Health and Human Services to impose price controls on what Medicare Part B pays for certain drugs. The rule would set the prices HHS pays at 126% of what other developed countries pay, down from 180% today.

Why do Americans pay so much more for drugs than foreigners? That’s the question that’s driving this proposal. The simple answer is that compared to foreign countries with their price controls under single-payer health systems, the U.S. still has a relatively free drug market. But the issues underlying that answer are anything but simple. In recent years they’ve swirled around proposals to end U.S. restrictions on “reimporting” cheaper drugs from Canada and Europe, which would amount to reimporting foreign price controls, critics rightly argue, and hence to reducing incentives to invest in years of expensive research and development. I’ve addressed those issues in detail in a 2004 Cato Policy Analysis and in the Wall Street Journal here and here. This new proposal is more of the same, in different garb.

In a nutshell, the miracle drugs that have so revolutionized modern medicine don’t come cheaply. On average it takes a billion dollars and 15 years of research and development to meet FDA safety and efficacy requirements, which most new drugs fail. But once a drug succeeds, the second pill costs pennies to produce, which is why patents are so crucial, failing which no one would invest in such risky ventures. When companies look at the world, however, they see socialized systems imposing price controls—except in America. So they charge market prices here (half the world market) and take what they can get abroad. What that means, of course, is that American’s pay the lion’s share of R&D costs while foreigners get drugs “on the cheap,” and therein lies the political problem here and the call for reimporting “cheaper” drugs from abroad.

It’s more complicated still, however. Given different levels of demand abroad, companies segment markets and price differentially. But that means they have to guard against not only reimportation but “parallel markets”—local vendors in low-price markets reselling to high-price markets at a discount—or all the drugs will end up in low-price markets, only to be resold to high-price markets, undercutting companies’ profit-making venues. They can try to preserve their market segmentation with no-resale contracts and supply limits. But those contracts are illegal in Europe from a mistaken belief that they’re anti-free trade, which is why there’s a thriving parallel market there. And since proposals in Congress to lift the ban on reimportation here have included bans on no-resale contracts and supply limits abroad, companies have understandably fought them.

This new HHS proposal is not as far-reaching as the earlier reimportation proposals, but the implications for future drug R&D investment are the same. As the Journal writes, “any investor who wants to bankroll the cure for Alzheimer’s is already staring at a very small chance of success—and the Trump HHS proposal adds another potential limit on return,” likely driving investment “into less difficult drug categories” or into other ventures altogether. Government funded drug R&D might not then be far behind. That would further politicize the development of drugs, much like European formulary limits do by rendering unavailable many of the modern miracle drugs we Americans enjoy.

Both are consistent with free market principles. Back in 1987, however, drug companies took a short cut: they asked Congress to ban drug reimports. They won a statutory, public law solution to a private law problem, and therein lie difficulties.

In effect, third-party Americans were told they couldn’t buy from willing foreign sellers. (In fact, Canadian provincial officials are actually encouraging local pharmacies to resell to Americans.) Thus, by opposing reimportation, the administration comes off as anti-free trade. Americans resent the price differences and the interference — especially those who understand the free-rider issue.

What’s to be done, then? Clearly, the situation today is politically unsustainable, as events are proving. The ban should be lifted, therefore, not to encourage reimportation, which isn’t likely to happen, but simply to allow market practices to surface. Today, with their high-profit American market protected, companies don’t have to bargain hard abroad. The ban shields them, allowing them to claim they have to accept foreign price controls. Practically, Americans are subsidizing socialized medical systems abroad.

But with the ban lifted, and the threat of underpriced drugs flooding the American market, companies would be “forced” to adjust. They could still try to maximize profits by segmenting markets. But they’d have to guard against parallel markets the right way, through no-resale contracts or supply limits. They could offer a country lower prices, but the country would have to police its exports, since America would no longer be policing imports. That places the incentive where it belongs, on the country benefiting from the bargain. And if that failed, companies could limit supplies, as they’re doing now with Canada.

In Europe, however, no-resale contracts are illegal — from a mistaken belief that they’re anti-free trade. That’s why there’s a thriving parallel market there. If that’s the way Europeans want it, companies will have no choice but to limit supplies or raise prices. That’s how markets work. Companies should be free to segment markets. But if it doesn’t work, international prices will move toward equality. And if that happens — as is likely, given enforcement difficulties — there’ll be no reimportation, which moots the safety issue as well.

With the ban lifted, no one knows whether prices will rise abroad and fall here, or just rise abroad. That’s for markets to decide. The last thing we want, however, is the bipartisan Dorgan-Snowe Senate bill, which would lift the ban and then prohibit companies from “gaming the system” — limiting supplies or raising prices abroad. In effect, the sponsors want to freeze the current situation, then import below-cost drugs from abroad — at those prices. The sponsors seem not to appreciate that the only reason a company can sell a drug for $20 in Germany is because it’s sold for $100 in America. The bill would actually import foreign price controls, and that would be the end of future R&D and the miracle drugs it produces.

Opponents of lifting the ban say that if we “forced” market practices on the world, countries would balk at paying those prices and would steal American patents. But a close reading of the WTO Trips Agreement, protecting intellectual property, should allay those fears. The administration needs to watch the issue, however; and in treaty negotiations it should encourage a clear separation of commercial and charitable undertakings. In particular, the “compulsory licensing” arrangements designed to help poor countries with their drug needs should be scrapped in favor of a more market-oriented approach to this problem.

Drug reimportation is thus more complex than at first it seems, but as with so many other issues on the public’s plate today, a healthy dose of market principles is the right prescription.

Picking up on Vice President Mike Pence’s speech at the Hudson Institute several weeks ago, Hudson’s Seth Cropsey detailed a plan in the Wall Street Journal on “How to Win a Cold War with Beijing.” At the center of Cropsey’s op-ed is a dramatic increase in the U.S. presence in Asia that would require, among other things, accelerating the current naval buildup, increasing naval patrols, and bolstering naval and Marine forces in Australia. In effect, Cropsey wants to apply the strategy that helped end the former Cold War to America’s growing conflict with China. Quoting Ronald Reagan, Cropsey explains “The objective in this strategic competition [is] ‘We win, they lose.’”

Cropsey’s approach, however, is based on several flawed assumptions, including about the inevitability of conflict between the United States and China. He also places undue faith in the United States’ capacity to face down its rising rival by building more warships and deploying them close to China’s shores.

Implicit in Cropsey’s call for a large naval arms race with China is the assumption that China will back down in the face of it. Convinced of the futility of such competition, Cropsey appears to believe, the Chinese will simply accede to our demands, including on Taiwan. But I have seen no evidence to support such an assumption. The more likely result of an arms race is…a further arms race, as my colleague John Glaser explained earlier this year. Cropsey also ignores the fact that the world is moving into an era of defense-dominance, which puts America’s exquisite, but enormously costly, naval platforms at increased risk from small, smart, and cheap weapons.

The current Sino-U.S. competition is unlike any we’ve seen – at least in a very long time. The Cold War was, in large part, a zero-sum fight between two diametrically opposed ideologies. However, whereas Soviet Communism and Western Capitalism couldn’t coexist, China’s and America’s current systems can. Or at least might.

If you doubt that, consider that Americans have helped to lift hundreds of millions of Chinese out of desperate poverty over the last quarter century through trade, greatly enriching China in the process. That wasn’t the intention, per se; as Adam Smith famously explained, trade is driven by mutual “self-love.” “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,” he wrote, “but from their regard to their own interest.” 

And, even now, as President Trump wages a trade war with China, he’s not seeking to end trade between the two countries, but rather to have it on terms more favorable for Americans. Whether he can pull that off is an open question, as Dan Ikenson recently noted, but the end result could be an even greater degree of economic interdependence than already exists.

Contrast that possibility against the reality of U.S.-Soviet trade relations. Actually, you can’t; there was hardly any economic exchange between the two superpowers during much of the Cold War. Most Americans during the darkest days of that standoff wouldn’t have been caught dead buying Soviet-made goods – and not just because they were of dubious quality. At another level, doing so would have been seen as treasonous, literally trading with the enemy.

Cropsey’s plan overlooks another critical difference between the Sino-U.S. conflict and the Cold War: the Soviet Union was a declining power; China is rising. We can’t compete in the same way today as we did in the 1950s and 60s, engaging in an arms race that eventually grinds the other side into the dirt – or drowns them in the sea. On the current trajectory, I’m sad to say, we’d drown first.

Cropsey fails to account for this possibility by ignoring the United States’ crushing fiscal imbalance. I’m not merely referring to the current-account deficit, which passed $779 billion in the last fiscal year, the highest level since 2012, but also the long-term crisis caused by out-of-control spending on Social Security, and, especially, Medicare. Awkwardly for Cropsey, his call for accelerating an already dramatic expansion of the U.S. Navy appeared on the very day that the Trump administration called for cutbacks in military spending precisely because of the yawning deficit.

By contrast, Cropsey offers no suggestions for what other spending must be cut, and what taxes increased, to cover the cost of his proposed military buildup. Instead, he is essentially assuming that these spending increases will be paid for by additional debt – while ignoring that the very country we are arming against is the largest foreign holder of such debt.

America should not ignore an increasingly assertive China, and that includes calling attention to bad behavior. I thought it noteworthy, for example, that Vice President Pence called out China’s shameful human rights record, including the ongoing persecution of Muslim Uyghurs. The crackdown on peaceful political dissent in also troubling. More broadly, U.S. policymakers must consider novel approaches to territorial disputes in the South and East China Seas without privileging any one claimant. Indeed, Washington should always take account of the perspective of other countries in the region. Notably, none are calling for the kind of military confrontation that Cropsey favors – and a number, including most recently Japan, are doing the opposite by actively exploring deeper trade and diplomatic ties with Beijing.

Closer to home, it is in our interest to develop policies and procedures that protect intellectual property and our sprawling cyber infrastructure. This may mean considering what regulations can and should be imposed on Americans that would like to do business in China, or with Chinese firms. I would prefer, however, that Americans rethink how they safeguard their precious assets without politicians in Washington, DC, having to tell them to do so.

A long-term strategy for Sino-US relations should be forward looking, and based on present realities, not on outdated thinking and false assumptions. Most importantly, the United States should work with China to find diplomatic solutions to those issues that could lead to war (including the toughest issue of all - Taiwan). We should seek solutions that advance U.S. interests, but also contributes to long-term peace and stability in the region.

The alternative to a win-win is that we both lose.

p.s. If you want to hear more on U.S.-China relations, and reactions to the Pence speech, check out my conversation with Bryan McGrath (@ConsWahoo) and Melanie Marlowe (@profmarlowe) at “Net Assessment,” War on the Rocks’ newest podcast.

Thanks to Travis Evans for his help with this post.

Recently I’ve received some criticism on my position on paid leave as outlined in Parental Leave: Is There a Case for Government Action? In my report, I provide evidence that the private market is providing a growing amount of paid leave over time and I suggest that providing paid leave through a government mandate or social insurance program is likely to include a variety of trade-offs and/or may not meet some of advocate’s purported objectives.

Although Nathan J. Robinson’s criticism of my report is steeped in vitriol, it still provides an opportunity to clarify my position. If I had to boil his critique down to one or two major criticisms, it would be that, in his view 1) I did not include a representative discussion of the benefits of creating a government paid leave program (and some of these benefits are mentioned in papers I cite for costs) and 2) I do not take the same position as certain academics I cite.

To the first point: Although not obvious from the paper, when I speak about paid leave publicly, I almost always first state that paid parental leave holds benefits for companies and parents and I am in favor of businesses voluntarily providing paid leave.

Moreover, voluntarily provided paid parental leave arguably holds greater benefits for parents than government supported or mandated leave, because employers incorporate the costs and benefits of leave-taking into their business model and therefore have reduced incentives to discriminate against likely leave-takers, including childbearing-age women. 

Why focus this paper on government supported leave’s trade-offs? First and foremost, because research groups and news outlets have spilled untold amounts of ink describing possible and likely benefits of government supported paid leave elsewhere. Those benefits are mostly well-known in policy circles and easily understood.

The main contribution of this paper is to challenge the prevailing view that government benefits could be realized without costs or trade-offs to workers (and indeed, workers’ lives may not be “markedly improved” after all, once associated trade-offs are taken into account). Indeed, the paper is intended to bring some balance to the existing debate by outlining trade-offs that are rarely seriously considered.

The paper is not a comprehensive review of the paid leave literature. However, it does carefully and accurately relay findings from the paid leave literature on potential costs and trade-offs of government intervention.

The second criticism–that I do not share all the same views on paid leave as academics I cite–does not make sense. Think tank scholars and academics cite other scholars all the time whom they disagree with on many points. 

As always, I enjoy hearing thoughtful criticisms of my work but the Current Affairs’ critique is off the mark. Moreover, by selecting two Cato studies and drawing conclusions about the whole of Cato research, Robinson commits one of the logical errors he spends so much time deriding: cherry-picking.

Harvey. Irma. Maria. Michael.  Four strong (category 3 or higher) hurricanes in 14 months. Something is happening, right?

When category 4 hurricane Harvey banged into Rockport, Texas, and then decided to hang around for five days visiting the fine folks of Houston and vicinity, it broke the 11.8 year “hurricane drought”, by far the longest period in the record without a major (category 3 or higher) landfall.[1],[2] Because of its unfortunate stall, Harvey also broke the record for a single-storm rainfall in the U.S., with 60.58 inches at Nederland, Texas.

What about a human influence from dreaded carbon dioxide? The National Oceanic and Atmospheric Administrations (NOAA) Geophysical Fluid Dynamics Laboratory (GFDL) dryly stated on September 20:

In the Atlantic, it is premature to conclude that human activities–and particularly greenhouse gas emissions that cause global warming–have already had a detectable impact on hurricane activity.

This was from a GFDL publication “Global Warming and Hurricanes”.  This is a frequently revised publication designed to keep readers current with the evolving scientific literature on the subject, but the statement about prematurity has been in the document for many years.

But wait. Everything else being equal,[3] (“EEBE”) hurricanes—and their generic name, tropical cyclones—acquire their energy from warm water, and, globally, sea surface temperatures (SSTs) are around 0.5°C warmer than they were when the data become reliable around 1880.  There was a decline of around 0.3°C from then to the low point in the record, around 1910, which means from bottom to top (1910 to 2016) there’s a change of around 0.8°C for the past 100 years or so.

There’s usually not enough energy to fuel a tropical cyclone if the ocean’s upper layer temperature is less than 26.5°C which limits their “seasons” to the late summer and early fall in each hemisphere, with the exception of the western Pacific, where there’s enough warm water to spin up storms year-round, although the maximum occurs at nearly the same time as it does in the North Atlantic. Owing to climatologically cooler temperatures, there are very few tropical cyclones in the South Atlantic.

Beyond the threshold, increasing the oceanic heat content (i.e. the vertically integrated temperature) should, EEBE, increase either the number of storms (holding their power constant), or their power (holding the number constant).

Meteorology wizard (and Cato adjunct scholar) Ryan Maue’s relatively recent PhD from Florida State was squarely over the bridge between tropical and temperate-zone storm climatology. Ryan knows hurricanes, and, beginning in grad school, has generated the comprehensive history of global tropical cyclone power.   Although some tropical cyclones occur in pretty remote places, the onset of global weather satellite coverage in 1970 means his record is largely complete

Obviously EE is not E.  Despite an SST rise of nearly 0.5°C since 1970 and a global surface temperature rise of around 0.65°C[4], there’s simply no warming-related trend in tropical cyclone power:

Figure 1.  Maue’s Accumulated Cyclone Energy (ACE) Index shows no changes that can be related to overall temperature trends since 1970.  Figures are 24-month moving averages.  The top circles are for the globe, and the bottom ones for the Northern Hemisphere.  If you’re paying attention, the space between the two gives the ACE index for the Southern Hemisphere.

As Roy Spencer (www.drroyspencer.com) recently has shown, there’s been a decline in the number of category 3 or higher storms hitting the coterminous US.

Figure 2.  Roy Spencer’s plot of major (category 3 or higher) hurricanes hitting the lower-48 states. Note that there’s still two years to go for the decade beginning in 2011.  There certainly could be more by 2020; if we take the historical average frequency of major hurricane hits and add that in, there’s nearly a 50-50 chance that the actual number will be four instead of three.  Does not include two strikes in Puerto Rico (Cat 4 Maria last year and Cat 3 Hugo in 1989).

Historical Perspectives

The 2014 “National Assessment of Climate Change Impacts on the United States” made a big deal out of a seemingly large increase in the hurricane Power Dissipation Index.  The principal difference between it and Maue’s Accumulated Cyclone Energy index is the PDI uses the cube of the wind speed while the ACE index uses the square.  The National Assessment highlighted a rise from 1980 through 2009.  But the authors certainly had data through 2013 at their disposal. 

There is also is another record of Atlantic hurricanes back to 1851, called HURDAT and put together by the National Oceanic and Atmospheric Administration’s Hurricane Research Division.  Prior to satellites (pre-1970) and aircraft reconnaissance (beginning in World War II), it would likely to have missed some storms, but HURDAT is about a complete a record as can be generated.  Further, any errors in it are likely to be omissions of storms rather than calling ones that actually didn’t exist.

Ryan Maue used HURDAT and calculated the PDI back to 1920, and his analysis shows that the 2014 National Assessment picked a rather prominent cherry when it decided to emphasize the 1980-2009 rise.  

Figure 3.  North Atlantic hurricane Power Dissipation Index (PDI).  Despite being published in 2014, the most recent National Assessment emphasized the period 1980-2009, displaying an upward trend line during that time.   It’s quite clear that the increase from the 40s to the early 60s is quite similar to what was displayed in the Assessment.  

Roy Spencer recently looked at the frequency and windspeed of landfalling Category 3 or higher storms striking Florida. There’s obviously no trend, either in intensity or in frequency. 

Figure 4.  Category 3 strikes in Florida since 1900, along with highest sustained winds.  Maximum gust speeds are higher. Category 3 hurricane Matthew in 2016 is not listed as the center never crossed the coast—but the Cape Canaveral area was very close to the western eyewall, and experienced considerable damage.

Hurricane Damages

Colorado State’s Phil Klotzbach and three co-authors recently published what should be the last word on U.S. hurricane frequency and damages. One of the co-authors was University of Colorado’s Roger Pielke, Jr., who contributed a plot of what he calls “normalized hurricane damage”, which essentially projects current property values onto past hurricanes.

Again, there is no significant trend. 2017 had the third-highest normalized damage total in the continental US (note that does not include Puerto Rico), around $130 billion.  That pales, compared to 1926, when total damages would have been around $230 billion for today’s property values.

All in all, recent hurricane activity isn’t particularly remarkable.  Following a record 11.8-year major hurricane drought, recent activity is surely impressive, but imparts no overall trend when viewed in terms of the entire record since 1900.  Further, Maue’s global accumulated cyclone energy, going back to 1970 (the start of global weather satellite coverage), shows no relationship to global surface temperature.  2018 appears to be a record for activity (not number) in one basin—the Eastern North Pacific, but, again, that isn’t going to impart a trend.

[1] Adjusting the damage costs for inflation, and property values, Harvey was the third most costly hurricane, at $125 billion.  The Great Miami Hurricane of 1926 takes the prize, at $210 billion, with 2005 Katrina at $168 billion.  Data from Klotzbach et al. (cited below) and NOAA. Reliable estimates for damages extend back to 1900.

[2] The record goes back to 1851.  The second-longest period was nine years and one month, from 1860 to 1869.   That may be a bit suspect because contained within is the only three consecutive-year period without any landfall of even a Category 1 storm.  That was 1862 through 1864, when the nation may have had a bit more to do than count hurricanes.

[3] Perhaps the most dangerous words to use when speaking climatically.  The atmosphere is an integrated fluid over a rotating, highly heterogenous surface composed of liquid water, land, ice and snow. Everything else is never equal, and the atmosphere is never at rest.

[4] Data from the Climate Research Unit at the University of East Anglia.  There’s a low point in the record that occurs in the mid-1970s, thanks to a slight cooling from 1945-75.

“Where do we have tariffs?” President Trump asked yesterday. One obvious answer is on imported clothing and footwear, where tariffs are both substantial and hit low-income consumers hard.

The United States raised $33.1 billion in tariff revenue in 2017, but $14 billion of that came from tariffs on apparel and footwear alone. These items account for 4.6 percent of the value of U.S. imports, but 42 percent of duties paid. That means while the average effective tariff rate for U.S. imports overall is just over 1.4 percent, rates for apparel and footwear are 13.7 percent and 11.3 percent, respectively.[i]

My colleague Daniel Ikenson has previously examined the evolution of clothing and textile protectionism. He concludes that such high tariffs do not protect domestic apparel manufacturing. Data from the U.S. Trade Representative shows that 91 percent of manufactured apparel goods and 96.5 percent of footwear are imported.

Why then are such highly regressive tariffs imposed? The answer appears to be the lobbying efforts of the capital-intensive U.S. textile industry. Textiles are the major input for labor-intensive apparel production, which largely occurs overseas. To quote Ikenson directly:

The U.S. textile industry insists on preserving those tariffs as leverage to compel foreign apparel producers to purchase their inputs. Preferential access [to U.S. markets] is conditioned on use of U.S. textiles. The high rates of duty apply, generally, to all “normal trade relations” partners. But those duties are much lower or excused entirely for trade agreement partners, provided that the finished garment comprises of textiles made in countries that are signatories to the agreement.

U.S. consumers pay the price of this protectionism, and poorer consumers especially. In 2016, the average household in the bottom income quintile spent $860 on apparel and footwear, or 3.4 percent of overall spending—the highest proportion of any income quintile. The average single-parent household put 4.5 percent of total expenditure toward these goods. The poor spend a disproportionate amount on clothing and footwear, and family structures most likely to be recipients of means-tested welfare programs (single-parent households) spend most of all.

But this protectionism is not just regressive because of relative spending patterns. Edward Gresser’s work has shown how, often, luxury clothes and shoes face lower tariff rates than inexpensive products.

Consider Table 3 from my report below (an updated version of Gresser’s work.) Where duties are applicable, a pure cashmere sweater import incurs a 4 percent tariff, a wool sweater a 16 percent tariff, and an acrylic sweater a whopping 32 percent. Men’s silk shirts see a 0.9 percent tariff, cotton shirts a 19.7 percent tariff, and cheaper polyester shirts a 32 percent tariff. Leather dress shoes have an 8.5 percent tariff, whereas cheap sneakers would see a 43 percent tariff. Windbreakers, leggings, tank tops, and other clothes made cheaply from synthetic fabrics face a 32 percent tariff if sourced from countries that the United States does not have a free-trade agreement with. Assuming poorer households tend to buy cheaper products, these differential tariffs have perniciously regressive effects.

The true overall cost of all this to poorer families is difficult to calculate. To get an accurate estimate would require detailed information on the effect on domestic substitute goods’ prices, knowledge of products bought by poor families and their propensity to import in the absence of protectionism.

Nevertheless, we can develop cautious lower-bound estimates. The average household in the poorest income quintile spends $655 on apparel and $206 on footwear per year. Assuming the import propensities for the population as a whole apply to poorer people implies $595 of apparel spending and $199 of footwear spending is on imported goods. Taking average effective tariff rates for apparel and footwear for this spending (13.7 and 11.3 percent) implies a combined direct tariff cost of $92 per year for the average household in the poorest income quintile, or $204 per year for the average single-parent household.

These figures likely underestimate the true burden, because they only represent the direct cost from current spending on imported goods. They assume tariffs do not raise domestically produced goods prices, though in reality the anti-competitive effect of the tariffs would be expected to raise prices here too. It also assumes the same effective tariff rates for apparel and footwear apply for the poorest households as for the whole population, but we have seen that products that the poor are more likely to buy tend to face higher tariff rates. Consumer welfare losses from tariffs, of course, are higher than the implied costs here, since tariffs make consumers less willing to buy imported products that they would otherwise prefer.

In short, next time the President asks where tariffs are applied, someone shout “apparel and footwear.” They are both large and regressive.

[i] U.S. International Trade Commission, “Interactive Tariff and Trade DataWeb,” at http://dataweb.usitc.gov. Data for imports for consumption, and effective rates calculated using “customs value” and “calculated duties” for 2017.

President Trump has made no secret about his intentions to deport illegal immigrants. His statements as well as administrative actions to remove certain guidelines that focused enforcement efforts on criminals has understandably caused a lot of concern among illegal immigrants, their American families, and those concerned with their plight. They should take comfort that the Trump administration’s efforts to boost arrests, the necessary precursor to a deportation, are stymied by limited local and state law enforcement cooperation with the federal government when it comes to identifying illegal immigrants.

Recently released data on the number of arrests by Immigration and Customs Enforcement (ICE) shows that they are arresting many fewer illegal immigrants under Trump’s administration than under President Obama’s, at least through June of 2018.  During the first full 17 months of the Obama administration, from February 2009 through June 2010, ICE arrested 437,671 illegal immigrants.  For the same first full 17 months of the Trump administration, ICE arrested 226,138 illegal immigrants, about half the number arrested during the same period in Obama’s administration.

Relative to the last full month of the previous administrations, the number of ICE arrests under Trump is up by a whopping 37 percent (Figure 1).  Over the same time, President Obama’s ICE was arresting 25 percent more people than under the last full month of the Bush administration, quite a significant increase on its own.  The increase under Trump is larger as a percentage because it started from a low base, but the increase in the number of arrests under Obama was larger.  For instance, the number of arrests under Obama was 5,803 greater in June 2010 than in December of 2008.  At the same point in the Trump administration in June of 2018, the number of arrests was up 8,965 over December 2016.

Figure 1: ICE Arrests by President

There are two broad categories of arrests by the ICE.  The first is called custodial arrests, which is when ICE picks up an illegal immigrant arrested by another law enforcement agency such as state or local police departments.  The second is called ICE arrests, which is when ICE itself arrests illegal immigrants on the streets.  Figure 2 shows that the number of custodial arrests have fallen dramatically since October 2008 while the number of ICE arrests has stayed relatively constant.  This means that local and state non-cooperation with ICE works to reduce the number of ICE arrests as between 70 percent and 90 percent of those arrests are custodial over the entire time.

Figure 2: ICE Arrests by Type of Arrest

Some states, like Texas, are fully cooperating with ICE when it comes to immigration enforcement while others like California are resisting mightily.  In Texas, there were 3,963 ICE arrests in May 2018 compared to 2,584 in December 2016, a 53 percent increase.  In California, there were 1,587 ICE arrests in May 2018 compared to 1,356 in December 2016, a 17 percent increase.  ICE is more active everywhere in the country, in sanctuary states and non-sanctuary states, but the difference is stark across such jurisdictions. 

The federal government under Presidents Bush and Obama convinced virtually every locality in the United States to sign up for the Secure Communities program that essentially turned over the vast majority of the arrested illegal immigrants to ICE for deportation.  Since President Obama was a Democrat, there was little initial political opposition to the massive increase in states and localities cooperating with the feds via Secure Communities – especially in Democratically controlled states with large numbers of illegal immigrants.  However, political reluctance to cooperate via Secure Communities built rapidly.  In 2011 Massachusetts, Illinois and New York requested to opt out of the program.  States like California then limited statewide cooperation with ICE and then President Obama replaced Secure Communities with a less punitive version called the Priority Enforcement Program that targeted criminals, which was in effect from 2015 to 2017.  Today, most states and localities with large numbers of illegal immigrants are not cooperating with President Trump’s ICE nearly as much as they cooperated with President Obama’s ICE – which is preventing Trump from arresting and, eventually, deporting large numbers of illegal immigrants.

There are other, lesser reasons why the Trump administration is unlikely to reach President Obama’s deportation record.  One is bureaucratic incompetence in the Department of Homeland Security, the Department of Justice, and other executive branch chaos that has so far prevented an orderly and organized deployment of law enforcement resources.  As a partial result of those administrative problems, they are incapable of convincing states and localities to enforce federal immigration laws.  Another reason is that illegal immigrants in 2018 are savvier than they were in the past, are better able to avoid law enforcement, and the few who were criminals were deported over the years, fewer new illegal immigrants have taken their place, and those remaining are less likely to come into contact with law enforcement. 

State and local government reluctance to enforce federal immigration laws and cooperate with the Trump administration has limited its ability to arrest and, eventually, deport large numbers of illegal immigrants.  At the current rate, ICE under the Trump administration will be able to arrest about half a million fewer illegal immigrants relative to the Obama administration even if President Trump serves two full terms.  Those who are dispirited by the Trump administration’s efforts to deport large numbers of otherwise law-abiding illegal immigrants should take some solace that their efforts to block full local and state cooperation with ICE is bearing fruit.

President Trump recently said that he would deploy troops to the Mexican border in response to the 3,000-4,000 Central American migrants and asylum seekers who are walking to the U.S. border.  This follows President Trump’s earlier deployment of about 4,000 National Guardsmen (2,100 troops remain) to the border to respond to another caravan earlier this year.  American Presidents have ordered troops to the border to assist in immigration enforcement several times when the flow of illegal immigrants was significantly greater than it is today.  Deploying additional troops to deal the approaching migrant caravan is unjustified and unnecessary. 

Previous U.S. presidents have deployed troops to the U.S. border to assist in immigration enforcement and drug interdiction.  The first such request after World War II was in 1954 when the old Immigration and Naturalization Service (INS) launched Operation Wetback (yes, that is what the government called it).  Then-Attorney General Herbert Brownell asked the U.S. Army to help round up and remove illegal immigrants.  According to Matt Matthews in his “The US Army on the Mexican Border: A Historical Perspective,” the Army refused to deploy troops for that purpose because it would disrupt training, cost too much money at a time of budget cuts, and it would have required at least a division of troops to secure the border.  Then-head of the INS General Swing remarked in 1954 that deploying U.S. Army troops on the border was a “perfectly horrible” idea that would “destroy relations with Mexico.”  It was also unnecessary. 

In 1954, the 1,079 Border Patrol agents made 1,028,246 illegal immigrant apprehensions or 953 apprehensions per agent that year along all U.S. borders.  For the entire border, Border Patrol agents collectively made 2,817 apprehensions per day in 1954 with a force that was 94 percent smaller than today’s Border Patrol.  In other words, the average Border Patrol agent apprehended 2.6 illegal immigrants per day in 1954.  Neither President Eisenhower nor the Army considered that inflow of illegal immigrants to be large enough to warrant the deployment of troops along the border despite Brownell’s request.   

Earlier in 2018, President Trump ordered about 4,000 troops to help the 16,605 Border Patrol agents on the southwest border apprehend the roughly 1,000 Central American migrants from an earlier caravan.  About 2,100 of those troops remain.  At that time, there were about 16.6 Border Patrol agents for each Central American migrant.  As for the current caravan approaching, assuming the number does not decrease any further, there are 4 to 6 Border Patrol agents for each person traveling from Central America in this caravan.  It’s likely that troops deployed on the border will outnumber the most recent caravan when (if) it arrives.   

In fiscal year 2018, Border Patrol apprehended about 396,579 illegal immigrants or about 24 per Border Patrol agent over the entire year on the southwest border, which works out to one apprehension per Border Patrol agents every 15 days.  By that measure, Border Patrol agents in 1954 individually apprehended an average of 40 times as many illegal immigrants as Border Patrol agents did in 2018.  If the current caravan makes it to the United States border, it would add about one and a half days worth of apprehensions at the 1954 level.  Border Patrol should be able to handle this comparatively small number of asylum seekers and migrants without military aid as they have done so before many times with a much smaller force.

Other Border Deployments

Since 1982, most U.S. military deployments and operations along the Mexican border were intended to counter the import of illegal drugs.  Joint Task Force 6 was deployed to the border in 1989 to aid in drug interdiction.  The regular deployment of troops for that purpose ended in 1997 after a U.S. Marine shot and killed American citizen Esequiel Hernandez Jr.  By July of that year, Secretary of Defense William Cohen suspended the use of armed soldiers on the border for anti-drug missions. 

On May 15, 2006, President Bush ordered 6,000 National Guard troops to the border as part of Operation Jump Start to provide a surge of border enforcement while the government was hiring more Border Patrol agents.  In 2006, there were about 59 apprehensions per Border Patrol agent or one per agent every four days.  Operation Jump Start ended on July 15, 2008.  In that year, there were an average of 41 apprehensions per agent or one apprehension every nine days per agent during the entire year.  President Obama also deployed 1,200 troops to the border in 2010 to assist Border Patrol, but they left in 2012.  In that year, Border Patrol agents on the southwest border individually apprehended an average of one illegal immigrant every 19 days. 

The two recent deployments to assist in enforcing immigration law along the border occurred when there were fewer apprehensions, represented by more days between each apprehension for each agent (Figure 1).  The higher the number for the blue line in Figure 1, the fewer people Border Patrol agents individually apprehend.  From about 1975 through 2006, the Border Patrol faced an annual inflow of illegal immigrants far larger than anything seen in recent years. 

Figure 1

The Average Number of Days Between Each Border Patrol Apprehension on the Southwest Border, 1975-2018

Figure 1: Average Number of Days Between Each Border Patrol Apprehension on the Southwest Border

In years and decades past, the average amount of time between Border Patrol apprehensions of illegal immigrants could be measured in hours while now it is measured in weeks.  The proposed deployment of American troops to the border at a time of low and falling illegal immigrant entries is an unnecessary waste of time and resources.  

Welcome to the Defense Download! This new round-up is intended to highlight what we at the Cato Institute are keeping tabs on in the world of defense politics every week. The three-to-five trending stories will vary depending on the news cycle, what policymakers are talking about, and will pull from all sides of the political spectrum. If you would like to recieve more frequent updates on what I’m reading, writing, and listening to—you can follow me on Twitter via @CDDorminey

  1. This week has been all Intermediate-Range Nuclear Forces Treaty (INF), all the time. If you’re wondering about the potential upsides, check out “Trump Is Right to Leave The INF Nuclear Treaty” by Kori Shake. If you’re wondering about the potential downsides, I suggest this overview by the New York Times’ editorial board, “‘Getting Tough’ Over a Missile Pact Could Weaken America.” If you have no idea where to start on this issue, stay tuned for tomorrow’s Cato Daily Podcast featuring Eric Gomez and yours truly. (Or you could always start at Wikipedia.) 
  2. Funding for Overseas Contingency Operations and Its Impact on Defense Spending,” Congressional Budget Office (CBO). Since 2001, a significant portion of the annual defense budget has been hived off to pay for wartime operations. But the CBO found that since 2006, at least $50 billion  of annual wartime funds (70 percent of the total OCO account) actually went to enduring activities (i.e. what it takes to run a military this size during peacetime). That’s a substantial misuse or misallocation of funds. 
  3. What Can 24 Satellites Do for U.S. Missile Defense?,” Thomas Roberts. This is pretty in the weeds, but if you follow missile defense or satellite aquisition then you’ll find this brief interesting. It offers a rebuttal to a 2011 report that claimed space-based missile systems could be incorporated in the existing force structure without incurring large program costs. 
  4. Here’s The Pentagon’s Initial Plan for Creating A Space Force,” Marcus Weisgerber. DefenseOne got ahold of an internal document on how the Pentagon is planning to organize the Space Force. Not many firm details are included—but coupled with Secretary Heather Wilson’s estimate of 13,000 people and $13 billion over the next five years, things seem to be in motion. 

If someone told you that public high schools have taken people with political and social power and brought them together, to the exclusion of other people, would you celebrate those schools? Probably not. But that is essentially what a new Atlantic article does in extolling public high schools and attacking school choice.

The piece, by English professor Amy Lueck, asserts that public schools—particularly high schools—have been crucial, unifying institutions. After criticizing U.S. Secretary of Education Betsy DeVos for calling public schools a “dead end” (DeVos actually said monopolistic public schooling is a dead end for innovation) Lueck offers the following:

Far from being a “dead end,” for a long time the public school—particularly the public high school—served an important civic purpose: not only as an academic training ground, but also as a center for community and activity in American cities.

The public high school’s unifying importance, especially compared to private schooling, is very much wanting for proof. Lueck talks a lot about public high school football games, dances, yearbooks, and supporting the country in World War II to back her thesis, but says nothing about whether private schools did the same things. Of course, they did. She also says nothing about whether public high schools were especially effective in forming good citizens, while the research suggests that private schools and other schools of choice actually do better jobs than traditional public schools inculcating civic values such as voting, political tolerance, and volunteering in one’s community.  

More important than ignoring what private schools have done, though, is what Lueck concedes in a few welcome but quick admissions: public high schools have a highly discriminatory history. This is not just with egregious segregation of African Americans, which Lueck mentions, but also in some places Mexican Americans and Asian Americans. Public schools have also been demeaning places for immigrants, and from early on in the history of public schooling numerous Roman Catholics felt that they had no choice but to stay out of the often de facto Protestant—and sometimes openly hostile—public schools. Indeed, by 1970 more than 1 million students attended Catholic high schools. But Lueck somehow doesn’t mention Catholics at all, including the recent evidence that Catholic schools are powerful forces for community cohesion. And Catholics have hardly been the only religious dissenters to the coerced uniformity of public schooling.

It is easy to say that public schools are essential unifiers, and that choice threatens cohesion. But what one says, and reality, are not always the same.

Yesterday, President Trump tweeted that “unknown Middle Easterners are mixed in” with the migrant caravan approaching the U.S. border. Vice President Pence later tried to justify President Trump’s comment by arguing that, “It is inconvincible that there are not people of Middle Eastern descent in a crowd of more than 7,000 people advancing toward our border.” Todd Bensman of the Center for Immigration Studies wrote that “the president was obviously referencing … ‘special interest aliens’ … U.S.-bound migrants moving along well-established Latin America smuggling routes from [Muslim] countries.” Perhaps President Trump was referencing special interest aliens but the clear implication is that they are potential terrorists who are using the caravan to sneak into the United States and murder Americans.  

The members of the migrant caravan will either apply for asylum at the U.S. border or try to enter illegally. From 1975 through the end of 2017, 9 Americans have been murdered in attacks committed on U.S. soil by 20 foreign-born terrorists who entered illegally or as asylees. During that time, the annual chance of being murdered in a terrorist attack committed by an asylum seeker or an illegal immigrant was about 1 in 1.3 billion per year. Those estimates are based on this methodology with updated numbers. 

During that time, about 31.3 million illegal immigrants entered the U.S. illegally (most have since emigrated, legalized, or passed away) and about 732 thousand asylum seekers have been admitted. Nine of the 20 terrorists who entered did so as illegal immigrants, meaning that about 1 terrorist entered hidden amongst every 3.48 million illegal immigrants. They killed zero people in domestic terror attacks. The 11 terrorists who entered as asylum seekers murdered 9 people in terrorist attacks or about 1 murder for every 81,000 asylum seekers let in.    

Of those 9 terrorists who entered illegally, only 3 did so along the border with Mexico: Shain Duka, Britan Duka, and Eljvir Duka crossed as children with their parents in 1984. They are ethnic Albanians from Macedonia. They were 3 conspirators in the incompetently planned Fort Dix plot that the FBI foiled in 2007, long after they became adults and more than two decades after they entered illegally. There is no evidence that the Fort Dix plot was more than 23 years in the making. 

As far as we can tell, virtually all the members of the migrant caravan come from Central America while the asylum-seeker and illegal immigrant terrorists who committed or attempted to commit attacks on U.S. soil came from Cuba, Lebanon, Pakistan, Palestine, Canada, Algeria, Somalia, Macedonia, Kyrgyzstan, and Afghanistan. Not a single terrorist in any visa category came from Mexico or Central America during the 43-year period.

None of the above estimates are meant to imply that those asylum seekers or illegal immigrants who committed or attempted to commit attacks were terrorists when they entered. Some, like Ramzi Yousef, obviously did enter as terrorists but the Boston Bombers Dzhokhar Tsarnaev and Tamerlan Tsarnaev entered as children too young to be plotting a terrorist attack years later. My colleague David Bier has shown just how rare it is that a foreign-born terrorist intends to come to the United States and how infrequently the government fails to stop him or her. 

This issue is complicated by the recent statements of Guatemalan president Jimmy Morales, who announced that his government “apprehended close to 100 persons completely involved with terrorists, with ISIS and we have not only detained them within our territory, but they have been deported to their country of origin.” Morales then stated that information about these supposed terrorists (like their names or countries of origin) was classified, which should raise a red flag as governments love to brag about their anti-terrorism actions with specifics even when such bragging is unjustified.

Even if we assume that some members of the migrant caravan are Middle Easterners who might pose a higher terrorism risk, that is still no good reason to bar the Central American migrants from applying for asylum. If some Middle Easterners are in this caravan, they too will be able to apply and face the same terrorism vetting procedures that work so well. There is little evidence that there are Middle Easterners in this caravan, even less that there are actual terrorists, and the risk from terrorists crossing the border has been tiny historically. This time could be different, but there is no real evidence to suggest that it is. Whatever problems may arise due to this caravan, the actual threat of terrorism from its members is very small.

Immigrant criminality and its impact on the United States is one of the most important issues in the public debate over immigration. In order to provide new insight into this topic, my coauthor Michelangelo Landgrave and I have attempted to estimate the illegal immigrant incarceration rate. I have also written a short paper on Texas criminal conviction rates by immigration status and crime based on data provided by the state of Texas. All three papers found that illegal immigrants were less likely to be convicted or incarcerated for crimes than native-born Americans.

My paper on illegal immigrant crime rates in Texas is based on data from the Texas Department of Public Safety (DPS) that I obtained through a Public Information Act request. The Texas DPS data separately show the number of convictions and arrests of illegal immigrants, legal immigrants, and native-born Americans for 44 and 46 different crimes, respectively, in the state of Texas by year from January 1, 2011, to November 15, 2017.

One of the persistent criticisms of my paper on Texas criminal conviction rates is that the DPS data do not record the number of illegal immigrants who commit crimes but are not convicted. Given data limitations, that is probably an impossible question to answer in a satisfactory way for immigrants and for natives.  However, I try to address this criticism in my Texas paper by showing that the gap between the arrest rates and conviction rates for illegal immigrants and the gap between the arrest rates and conviction rates for native-born Americans are similar, indicating that there are few illegal immigrants who are arrested for offenses who then disappear or are deported before their convictions relative to natives who are arrested and then not convicted.

A related criticism is that illegal immigrants flee Texas and then go back to their home countries after they commit crimes, which means that the Texas state conviction data would not count them. Thus, the criminal conviction rate for illegal immigrants is so low because they commit their crimes and flee – an option that few native-born American criminals possess. This argument makes a certain amount of sense in Texas as it shares a long border with Mexico, the source of a majority of illegal immigrants in Texas.

To answer that second criticism, we decided to investigate whether police clearance rates are correlated with the number of illegal immigrants on the state level. According to the FBI’s Uniform Crime Reporting (UCR) Program, law enforcement agencies can clear offenses by one of two means. The first is called “cleared by arrest” whereby a person must be arrested, charged with an offense, and turned over to a court for prosecution.  The second is called “cleared by exceptional means,” whereby the police must identify the offender, gather enough evidence for an arrest and to charge them with a crime, identify the offender’s exact location, and have encountered a circumstance out of law enforcement’s control that prevents an arrest. The death of the offender or the lack of an extradition treaty with the country harboring a suspected criminal are common causes of clearances by “exceptional means.” Mexico and the United States have an extradition treaty. An offense is cleared when the police have taken certain actions to solve the underlying crime short of a criminal conviction.

Landgrave ran many regressions between clearance rates (logged) and the proportion of the population of each state who were illegal immigrants (logged) with state-year and region-year fixed effects. The regressions control for demographic characteristics, the number of police officers for every 100,000 residents, education, and population density. He ran regressions for clearance rates by major crime and the entire crime index. All he found is that motor vehicle theft and burglary clearance rates are positively correlated with the proportion of the population who are illegal immigrants, but only at the 10 percent level for the state-year fixed effects (Table 1, click for larger version). There were no other statistically significant results.

Table 1: Correlation between State Police Clearance Rates and Illegal Immigrant Population

As a quick exercise to test this persistent criticism, these results reveal that there is no nationwide link between clearance rates and the proportion of the population who are illegal immigrants. The only exception is that police clear more motor vehicle and burglary offenses in states with more illegal immigrants as a proportion of their population, but only in one permutation and only at the 10 percent level. Although the theory that illegal immigrants commit crimes and then flee states seems plausible, we see no evidence of that in the aggregate clearance rates.

This cover image in the New Yorker, titled – obviously – “Fat Cats,” is brought to you by Gucci, Fidelity Investments, Gemfields, Northern Trust, Big Pharma, Mastercard Black Card, First Republic Private Wealth Management, Ocean Reef Club, Swann Auction Galleries, Suntrust Private Wealth Reserve, Ike Behar, Wells Fargo, and other purveyors of goods and services to … well, fat cats.

And most especially, on the flip side of this cartoon mocking rich men in suits, as economist Lawrence H. White noted on Facebook, is a two-page spread advertising made-to-measure suits from Giorgio Armani. 

Who was it who first said, “Think left, live right”?

 

 

President Trump’s announcement that he plans to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty is worrying news for U.S.-Russian relations and for the prospect of effective arms control moving forward.

The INF Treaty was negotiated by President Ronald Reagan and Soviet leader Mikhail Gorbachev. Each party agreed to eliminate their nuclear and conventional ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 km. It was a quite successful arms control agreement, at least until recently. In the last few years, Moscow has tested and deployed cruise missiles that appear to violate INF limits.  

This is the Trump administration’s rationale for terminating the agreement. And the reasoning has a powerful logic. If Russia isn’t going to fully comply with the treaty, why should the United States?

The problem is that simply withdrawing is the most extreme option available and robs us of viable diplomatic solutions while doing nothing to pressure Russia to get back into compliance. Indeed, terminating the agreement is probably the option most likely to generate a new arms race. 

It is worth noting that the Russians claim we cheated first by deploying missile defense systems in Europe that, if used offensively, would violate the terms of the INF treaty. It’s a debatable accusation, but this mutual suspicion is resolvable over the negotiating table. Unfortunately, the Trump administration has barely made an effort to discuss it with Moscow.

Instead of pressuring Moscow to bring itself back into compliance with the treaty, Trump’s planned withdrawal – along with not-so-subtle hints that the administration plans to ramp up production of just the type of missiles the INF prohibits − merely gives the greenlight to Russia to expand their own capabilities in this area.

Ironically, the United States doesn’t have much strategic use for intermediate-range missiles of the kind the INF covers. As the Arms Control Association points out, “The United States can already deploy air- and sea-launched systems that can threaten the same Russian targets that ground-launched missiles that are prohibited by INF Treaty would.”

Withdrawing from the INF could also make extending New START more difficult. New START is a treaty that sets limits on American and Russian deployed strategic nuclear warheads and delivery systems and will expire in 2021 if it is not extended. The Trump administration, and especially national security advisor John Bolton, have shown little interest in extending New START thus far. While there is still time to negotiate an extension, the death of the INF Treaty does not bode well for the future of arms control under the Trump administration.

The other potential target of American INF-range missiles is China. Since Beijing is not a party to the INF it has produced many cruise and ballistic missiles that are banned by the treaty. Supporters of leaving INF argue that adhering to it ties America’s hands in the military competition with China.

While it is true that U.S. cruise and ballistic missiles in Asia would improve operational flexibility, it wouldn’t make a significant enough impact on the military balance with China to warrant the costs of leaving the treaty. The chief military advantage of China’s INF-range missiles is their ability to strike a few large U.S. air and naval bases in the region. American missiles would likely target similar installations in China, but there are many more Chinese bases than American ones. Fielding a U.S. missile force that can threaten enough targets to significantly alter the current balance of power in Asia would be expensive and very time consuming, and China would be able to counter U.S. deployments by growing their own force.

Moreover, there is no guarantee that U.S. allies in Asia will support missile deployments on their territory. In fact, Japan has already cautioned Washington against terminating the treaty. While China is a major source of concern to U.S. allies, their threat perceptions do not neatly line up with the United States’. U.S. allies certainly want to maintain good relations with Washington, but they also want to avoid antagonizing China. 

The long and short of it is that the Trump administration is choosing to initiate a competition in nuclear and missile capabilities (i.e., an arms race) for no good reason. The diplomatic options to bring Russia back into full compliance have not been exhausted. And in any case, even under INF restrictions, the United States currently possesses the capability to hit any Russian or Chinese target. The INF Treaty is simply a low cost way to discourage an arms race and maintain a cooperative relationship on such issues with Russia. Terminating it is short-sighted and will come with serious costs. 

Although the Jones Act’s stated purpose is to ensure that the United States “shall have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce and serve as a naval or military auxiliary in time of war or national emergency,” this plainly isn’t the case. But don’t take my word for it, just listen to ardent backers of the law such as Rep. John Garamendi (D-CA):

Our military relies on privately-owned sealift capacity and highly trained and credentialed merchant mariners to transport and sustain our armed forces when deployed overseas during times of conflict. But the number of ocean-going U.S.-flag vessels has dropped from 249 in the 1980s, to 106 in 2012, to at most 81 today.

The consequences of this steep decline are not just theoretical. Our military has had to turn to foreign-flagged vessels for sustainment in times of war, and experience shows that can have dangerous consequences. In the 1991 Gulf War, our armed forces relied on 192 foreign-flagged ships to carry cargo to the war zone. The foreign crews on thirteen vessels mutinied, forcing those ships to abandon their military mission. Would foreign flag carriers be any more reliable today, especially for a long-term deployment into active war zones?

But the number of ships is not the only issue: The U.S. Transportation Command and Federal Maritime Administration estimate that our country is now at least 1,800 mariners short of the minimum required for adequate military sealift, even with the Jones Act firmly in place. Without the Jones Act, our nation would be wholly unprepared to meet the labor demands of rapid, large-scale force projection for national security.

The House Coast Guard and Maritime Transportation Subcommittee’s ranking member is absolutely correct about the sad state of the U.S. merchant fleet. Some of his numbers, however, are off the mark. The drop in the number of ocean-going U.S.-flag vessels is even more dramatic than what he states, declining from 737 in 1985 to a current figure of 180. Regarding the 1991 Gulf War, meanwhile, the actual number of foreign-flagged ships used as part of the U.S. sealift was 177 rather than 192. It’s also inaccurate to say that thirteen vessels were forced to abandon their military mission, with eight of those vessels ultimately delivering their cargo after initial hesitations. 

Although an article of faith in pro-Jones Act circles, the congressman’s claim that the United States would be in even more dire straits absent the law is open to question. The Jones Act’s domestic build requirement, for example, forces U.S. carriers to purchase vessels at vastly inflated prices compared to foreign shipyards (4x is a figure used by many observers while a 2017 Congressional Research Service report placed the U.S. price at 6-8x higher). Using basic microeconomics we can intuit that higher prices mean fewer ships, and thus fewer mariners to crew them. 

Linking to a Cato Institute analysis of the Jones Act, Garamendi then turns his attention to accusations that the law is an “outdated protectionist anachronism”:

Opponents of the Jones Act routinely claim that it is an outdated protectionist anachronism that does more harm than good, but nothing could be further from the truth. A comprehensive 2018 survey of seafaring and industrial nations around the world shows that cabotage laws such as the Jones Act, which provide for domestic preference for shipping policies, are the norm, not the exception. Ninety-one U.N. member states comprising 80 percent of the world’s coastlines have cabotage laws protecting domestic maritime trade. The conclusive fact from this survey is clear: seafaring nations understand the importance of their domestic maritime industries, and have laws on the books to safeguard them.

This misses the point. While cabotage laws are indeed common, the Jones Act’s stringent requirements—and in particular its mandate that ships must be built in the United States—place it well outside the mainstream. Indeed, the World Economic Forum calls the Jones Act the world’s “most restrictive example” of cabotage laws, noting that not even China has a domestic build requirement. 

Finally, he addresses the Jones Act’s economic impact on Puerto Rico:

Just as important, a recent nonpartisan economic study found that the Jones Act does not impact consumer prices in Puerto Rico. Rather, the Jones Act has a net positive economic impact, because the certainty of the regularly scheduled coastwise trade allows shippers to invest in state of the art maritime technologies and local port investments. In fact, consumer price comparisons of common household commodities between Puerto Rico and other Caribbean islands found that consumer prices on Puerto Rico are commonly lower.

The referenced study may have been “nonpartisan” but it was hardly the product of disinterested observers, having been funded by the pro-Jones Act American Maritime Partnership. As discussed in a previous blog post the study’s methodology is dubious and its claims should be treated with a great deal of skepticism.

In addition, the logic behind the claim that the Jones Act has a net positive economic impact on Puerto Rico is unclear. State of the art maritime technologies and local port investments are certainly good for the carriers, but it is unclear how this benefits the average Puerto Rican. If the argument is that these confer efficiencies that allow Jones Act carriers to lower transport costs, then they should have little to fear from competing against foreign-flag ships. The fact that they steadily refrain from doing so and instead cling to the Jones Act’s protections, however, is telling. 

It’s also worth noting that regularly scheduled trade with Puerto Rico happens outside of the Jones Act, with Tropical Shipping (whose owner, Saltchuk, also owns Jones Act carrier TOTE Maritime), for example, offering regular service from Halifax, Canada. 

Although the Jones Act’s alleged economic benefits to Puerto Rico are fictional its costs are very real and well documented. A 2012 report from the Federal Reserve Bank of New York, for example, stated that shipping a twenty-foot container of household and commercial goods from the East Coast to Puerto Rico costs roughly twice that of shipping the same goods to nearby Jamaica or the Dominican Republic.

In addition, a 2013 GAO report points out that the high cost of shipping resulting from the Jones Act results in Puerto Rican farmers purchasing grain from Canada instead of New Jersey and jet fuel from countries such as Venezuela rather than the Gulf Coast. The report also highlighted price fixing in the Jones Act trade servicing Puerto Rico, with a federal investigation resulting in three of four Jones Act carriers pleading guilty and fined about $46 million. Six executives were sentenced to a total of more than 11 years in prison.  

All of these points and much more will be discussed during the Cato Institute’s upcoming conference on the Jones Act in December, the culmination of which will be a debate between those who favor and oppose the law.

We invite Rep. Garamendi to participate in this debate and defend the Jones Act in this public setting. 

The end of this month (31 October 2018) will mark the 10th anniversary of the online posting of the now-famous white paper by “Satoshi Nakamoto” outlining the concept of “Bitcoin: A Peer-to-Peer Electronic Cash System.” This is an opportune occasion to compare what Bitcoin has achieved with what Satoshi wanted to achieve. While Bitcoin’s rise to a market valuation of over $100 billion is certainly a remarkable accomplishment of one sort, the founder had other aims.

Three problems with the status quo

In announcing the new project in February 2009 Satoshi emphasized three institutional problems with the status quo payment system that Bitcoin would address. First, inflation from central banks that issue fiat money:

The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust.

Second, a lack of privacy and security from commercial banks:

We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.

Third, the high cost of bank-mediated payments:

Their massive overhead costs make micropayments impossible.

How well has Bitcoin addressed these three problems?

Inflation risk and purchasing power volatility

Satoshi wanted to create a currency with less risk of inflation and devaluation. It is of course true that the history of fiat currencies is full of breaches of trust in purchasing-power stability. Central banks issuing fiat money have chronically, and sometime acutely, diluted the value of their currencies by expanding them too rapidly. Bitcoin’s source code, which predetermines the quantity path of the stock of Bitcoins, does solve that problem. There can be no unexpectedly rapid expansion. This code provides a valuable object lesson in how to write a constitutional monetary rule that is fully automatic and free from discretion.

However, Bitcoin’s fixed quantity path creates a different problem that inhibits its widespread use as currency. With the number of Bitcoins unresponsive to demand shifts, all the burden of adjustment falls on the price (purchasing power). As a result the market price of Bitcoin is enormously volatile week-to-week and even day-to-day. This makes it very risky to hold or accept BTC as a payment medium for monthly bills that are denominated in anything other than BTC (e.g. in US dollars, other fiat currencies, or commodity index baskets).

Satoshi recognized that demand growth would cause secularly rising value, but said little about the problem of high-frequency volatility of value. He did not design Bitcoin to have an automatically demand-responsive supply, because he did not know how to do it without creating the need for a trusted authority:

[I]ndeed there is nobody to act as central bank or federal reserve to adjust the money supply as the population of users grows. That would have required a trusted party to determine the value, because I don’t know a way for software to know the real world value of things. If there was some clever way, or if we wanted to trust someone to actively manage the money supply to peg it to something, the rules could have been programmed for that.

What Satoshi didn’t know how to do is still not known. The desirability of a stable-valued cryptocurrency has, however, has stimulated dozens of “stablecoin” projects in recent years.  There are two main types: (a) coin supply managed by an “algorithmic central bank” that automatically (given a data feed) varies quantity to stabilize purchasing power, and (b) coin supply made endogenous by pegging the coin to a relatively stable fiat currency, to gold, or to a commodity basket. A recent report on “The State of Stablecoins” has identified 57 projects, of which 23 are up and running. Tether USD, imperfectly pegged to the US dollar, is by far the largest of the live projects. Of the 57, twelve use the “algorithmic central bank” approach, the remainder being “asset-backed” either by fiat currency collateral or by cryptoassets. The problem remains unsolved of feeding a program with real-world data in a tamperproof way, or of running a currency peg without any risk to customers from dishonesty or incompetence by the party holding the reserves.

Satoshi  suggested—somewhat inaccurately—that Bitcoin would behave like gold under a gold standard:

In this sense, it’s more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes.

In fact, as I have noted before, the classical gold standard system provided a great deal of long-run elasticity to the quantity of money. A rising purchasing power of gold incentivized the owners of existing mines to dig deeper and increase their output, and encouraged prospectors to seek new sources of gold. The accumulation of increased gold flow over time pushed the purchasing power back to its nearly flat long-run trend. The gold standard thereby historically constrained the inflation rate to near zero in the long term.

F. A. Hayek’s vision of competing non-commodity private monies imagined that issuers would maintain purchasing power stability by actively managing supply. A new project called Initiative Q takes basically this approach: not a cryptocurrency governed by a program, but a private non-commodity money whose quantity is governed by a human board that pledges to stabilize its purchasing power. Full disclosure: I have been a paid consultant on this project.

Satoshi anticipated a feature of Bitcoin’s fixed supply path that has played an important role in its enormous appreciation, and in its high volatility:

As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value.

In this way attracting speculators who want an appreciating store of value (and don’t care much about short-term volatility) is at root incompatible with attracting potential currency-users who want short-term value predictability. Having attracted speculative “hodlers,” it is harder to expand the set of Bitcoin users much beyond them.

Retail use of Bitcoin remains small, from all available indicators. The largest BTC retail payment processor, Bitpay, reported in October 2017 that its merchants are receiving “$110 M+ in bitcoin payments per month,” which multiplies out to $1.32 billion per year. For comparison, VISA reported in June 2018 an annual payment volume of $11 trillion, or $11,000 billion.

Coinmap.org lists 13,365 brick-and-mortar Bitcoin acceptance points worldwide, which is of course a tiny subset of retail establishments. Checking the map for Fairfax County, VA, I find that there are only seven sellers of goods and services listed, plus another 7 Bitcoin ATMs.

Privacy

Satoshi wanted to create a payment system with greater privacy. Bitcoin does enable users to send funds outside the financial panopticon that is the regulated banking system, where “Know Your Customer” and “Anti- Money Laundering” edicts require banks to surveil customer account use and report certain kinds of activity. This escape hatch has allowed ordinary people to protect their wealth from restrictions such as exchange controls and from confiscatory taxes. For example, Bitcoin became suddenly popular in Cyprus when the government imposed controls on international bank transfers and proposed to take 10 percent of bank balances during a banking crisis in 2013.

However, the way Bitcoin’s distributed ledger system shares addresses and size information about every transaction provides less privacy than would a design sharing less information. Bitcoin is not anonymous, only pseudonymous, and the pseudonyms can be pierced. This shortcoming has inspired a number of “privacycoin” projects. The best known live projects are Monero, Dash, and Zcash (for head-to-head contrasts of these and three others see here). Two interesting up-and-coming projects, using a newer-generation blockchain technology called MimbleWimble, are Beam and Grin.

Cheaper payments

As far as making micropayments at negligible cost, the Bitcoin blockchain has turned out to be infeasible for doing so. It becomes quickly congested as it approaches the modest volume of 7 transactions per second. This technological limitation was discussed by insiders (Hal Finney, Nick Szabo) as early as 2010, but did not come to wider attention until massive congestion arose with Bitcoin’s expansion in popularity in 2017, bringing a sharp rise in fees for moving your transaction to the front of the queue. Developers are now working on “sidechains” for small payments—most famously the Lightning Network—that will settle only periodically on the main BTC blockchain. So there may be a technical workaround retaining the Bitcoin standard. The MimbleWimble projects represent another approach: because their blockchains are designed to transmit much less information among miners, they should not only provide greater privacy, but also handle many more transactions per second.

Conclusion

Bitcoin should not be regarded as the last word in private money, but should be appreciated as a remarkable technological breakthrough. Ten years after its launch, we must recognize it as the innovation that has launched financial and non-financial blockchain industries that are still in their early days. Bitcoin has established its value as an asset, and its usefulness as a medium of exchange for a certain subset of transactions. It is the main unit of account and payment medium, preferred to fiat monies, for markets in other cryptocurrencies below the top five. Whether it will achieve common use as a medium of exchange remains doubtful. The inbuilt volatility of its purchasing power makes it unlikely to displace the incumbent fiat currencies barring an inflationary explosion. Even in that case, gold seems likely to prove more popular. Whether a credible stablecoin built on Bitcoin’s shoulders, or some completely different approach, will achieve critical mass as a private money  remains to be seen.

[Cross-posted from Alt-M.org]

University of Massachusetts toxicologist (and Cato adjunct scholar) Edward J. Calabrese has arrived.  On October 3, he testified to the Senate Subcommittee on Superfund, Waste Management, and Regulatory Oversight, a part of the larger Committee on Environment and Public Works, chaired by John Barrasso (R-WY).

Calabrese was asked for his expert opinion on a draft EPA proposal to consider alternative regulatory models, including ditching the “Linear-No Threshold” (LNT) model that it employs, as does almost every other regulatory agency on earth.  You can read about EPA’s proposal here.

The LNT model assumes that the first photon of ionizing radiation (or the first molecule of a carcinogen) is capable of inducing a genetic mutation (i.e. altered DNA) that can be then transmitted to future generations.

Many years ago, Calabrese went looking for the scientific basis for the LNT, for it ran counter to what he was finding in his toxicological research—that low doses of some toxins or ionizing radiation may actually confer benefits. That, of course, is also the basis for much of modern chemical pharmacology.

Try as he could, and he tried for years, he could not locate the seminal science that gave rise to the LNT.  But he did find its progenitor, Hermann Muller, who claimed to have induced heritable point mutations with X-rays in the fruit-fly Drosophila. But where was the data and the peer-reviewed study?  Muller did author a brief article in Science on July 22, 1927, but, as Calabrese notes in his brand new paper, “He made this gene mutation claim/interpretation in an article that discussed his findings, but failed to include any data.”  The Science article said the data would be in a subsequent publication.

In fact, the data underlying what may have been the most important claim in the history of regulatory science, were never published in a peer-reviewed journal. 

Nonetheless amidst public concern about atomic radiation, the National Academy of Sciences formed the Biological Effects of Atomic Radiation (BEAR-1) panel, which reported its findings in Science in 1956.  Muller was obviously highly influential, and the Science report clearly established the LNT:

Any radiation dose, however small, can induce some mutations. There is no minimum amount of radiation dose, that is, which must be exceeded before any harmful mutations occur.

Calabrese documents that Muller’s good friend and another Drosophila geneticist, Edgar Altenberg, confidentially challenged Muller’s interpretation that he was inducing point mutations.  Rather, the very large doses of x-rays that Muller subjected the fruit flies to was simply knocking out wholesale portions of the chromosomes. 

But Altenburg never went public with his criticism.  Perhaps, Calabrese speculates, it was because of personal loyalty and a deep relationship.  When Muller attempted suicide in 1932, rather than addressing his family, his final note was to Altenburg. Muller and Altenburg ultimately lived until 1967, dying within months of each other.

Muller’s Science publication allowed him to claim research primacy, which landed him both prestige and the eventual 1946 Nobel Prize in Physiology or Medicine.

That prize validated Muller’s hypothesis and ultimately enshrined the LNT model as gospel, and it spread beyond ionizing radiation to other carcinogens and mutagens, as well as to many toxic chemicals in which, literally, the dose makes the poison. In Calabrese’s words,

…it has been Muller’s incorrect gene mutation interpretation and its legacy that created the LNT dose response model, leading to its recommendation by the US National Academy of Sciences in 1956…and then subsequently adopted by all regulatory programs throughout the world.

As a result of his recent testimony and publication, Calabrese may be changing the regulatory world. 

Unlinked References:

Biological Effects of Atomic Radiation Panel, 1956. Genetic effects of atomic radiation.  Science 123, 1157-64.

Muller H. J, 1927.  Artificial transmutation of the gene. Science 66, 84–87

 

In America’s strange legal immigration system, every country receives the exact same quota for green cards—7 percent of the number issued—regardless of how populous it is. When immigrants—mainly Indians, Chinese, Filipinos, and Mexicans—hit these “per-country limits,” nationals of other countries may pass them in line. This creates massive wait times for some immigrants, while cutting the waits for everyone else.

In 2018, for example, employer-sponsored immigrants with bachelor’s or master’s degrees waited more than three years for a green card if they were born in China, and about a decade if they were born in India, while those from other countries waited less than a year. Going forward, the Indian wait will stretch on for decades. The system is unfair, and for that reason alone, Congress should end it.

But the per-country limits are also economically senseless. They prioritize the right birthplace over the right skills. In the employer-sponsored categories, businesses could decide to pay Indian or Chinese applicants much more than other immigrants, yet Indian or Chinese employees would still suffer the same pointless discrimination. Discriminating based on nationality, rather than skills, undercuts the productivity of the United States and lowers the average wage of new immigrants to the United States.

To see if this was happening, I reviewed the data on approved labor certifications submitted by employers in the EB2 and EB3 employer-sponsored immigrant classifications to the Department of Labor (DOL). These labor certification applications contain the wage offered to the immigrant as well as their birthplace. Employers with approved labor certifications may petition for a green card on behalf of their workers, but the worker may only apply for a green card once a visa number is available under the quota. The Department of Labor validates the information provided on the labor certification in order to deal with concerns that immigrants are taking jobs from U.S. workers.

I used the latest DOL wage data from fiscal year 2018 to produce the estimates in Figure 1. To produce the weighted average wage with the country cap, I weighted the wages for each nationality by the number of their nationals admitted under the country caps in the EB2 and EB3 employer-sponsored categories. The average wage without the country cap is the average of the approved labor certification wages in 2018.[*] The weighted average wage with the per-country limits was $95,534, while the wage without it would be $107,126. The per-country limits depress the average wage for new employer-sponsored immigrants by $11,592.

Figure 1: Average Wages of EB2-EB3 Immigrants

In other words, the per-country limits strongly discriminate against higher-paid immigrants. Figure 2 shows the average offered wage for immigrants from India, China, and the rest of the world. The wages were $118,071 for Indian immigrants, $111,172 for Chinese immigrants, and $90,422 for the rest of the world. Indian and Chinese applicants have wage offers that are $27,649 and $20,750, respectively, more than other applicants. Yet Chinese and Indian immigrants must wait much longer than immigrants from the rest of the world.

Figure 2: Average Wages of EB2-EB3 Immigrants by Country of Origin

The per-country limits strongly discriminate against higher-paid immigrants. Immigrants who are offered higher wages actually wait longer under the U.S. legal system than other immigrants. That said, all employer-sponsored immigrants command much higher wages than the average income for all Americans (about $48,000).

Indian and Chinese immigrants are also more likely to be offered positions that require more experience and skills than other employer-sponsored immigrants. The Department of Labor categorizes jobs into five different “zones,” with Zone 5 commanding the most skills and experience. The average job zone was 4.1 for a position offered to an Indian immigrant, 4.0 for China, while all other immigrants were offered jobs with an average job zone of just 3.7.

Certainly, at least some of these differences come from forcing Indians and Chinese applicants to wait longer. They certainly do obtain higher wages and more experience while they wait longer for green cards. But whatever the reason for this difference, it makes no economic sense to continue to use country of birth as a factor in determining who receives a green card first.

The United States needs immigrants of all different skill and wage levels, but this diversity should emerge naturally from the free market, not from government attempting to micromanage America’s ethnic ancestry. According to a new study, the arbitrary delays are encouraging Chinese and Indian immigrants to leave the United States and take their talents elsewhere. Congress should repeal the per-country limits, and after that, it should revise or eliminate the arbitrary quotas on employer-sponsored immigrants, which have not been updated in nearly 30 years. The market—not government bureaucrats—should determine who will benefit the United States the most economically.

Table1

[*] Notes on methodology: Approved labor certifications include expired ones because they may still have been used to obtain a green card. At the high end of the wage distribution, there were some erroneous entries where wages were listed as hourly, weekly, or monthly when they should have been listed as yearly. As a data integrity measure, I excluded all labor certifications with listed wages of more than $1 million annually as well as anyone making more than $500,000 annually with a job zone of less than 5. This excluded about 30 people of a population of nearly 110,000. The offered wage of immigrants was annualized and, if necessary, was determined by taking the midpoint in any salary or wage range provided by the employer. EB2-EB3 employer-sponsored immigrants include all EB2-EB3 immigrants except for those who receive “national interest waivers,” but these immigrants do not need a sponsoring employer. Job zones were obtained by comparing Standard Occupation Classifications in DOL data to the relevant job zones.

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