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Criminal justice reform in 2018: A conversation with Rep. Hakeem Jeffries (D-NY) and Rep. Doug Collins (R-GA) - Is self-regulation an option for cryptocurrency exchanges?

Fri, 06/29/2018 - 19:28

More than 650,000 people are released from federal and state prison every year, and more than 75 percent of them will be behind bars again within five years. With such high rates of recidivism, what evidence-based models and programs are available to improve the odds of success for released prisoners?

Please join AEI for a conversation with FIRST STEP Act cosponsors, Rep. Hakeem Jeffries (D-NY) and Rep. Doug Collins (R-GA), for a discussion on how policymakers can help the formerly incarcerated successfully reintegrate into work and society.

Join the conversation on social media with @AEI on Twitter and Facebook.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Here are some of bad arguments being made about the Trump tax cuts - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 17:44

What does it mean to say the Trump tax cuts are “working?” What would be the evidence if that were true? Even before the tax cuts were passed, GOP politicians and pundits were pointing to the rising stock market as early proof investors were already factoring in a massive whoosh of new economic growth. Mr. Market is forward looking!

U.S. President Donald Trump reacts during a news conference to mark six months since the passage of the Tax Cuts and Jobs Act, in the White House East Room in Washington, U.S., June 29, 2018. REUTERS/Kevin Lamarque

But the market has been flat since the president actually signed the bill last December. What’s more, economic growth in the first quarter was a tepid 2%. Nor has there been some rapid acceleration in wage growth.

Still, maybe all that is about to change. Plenty of economists are forecasting 4% growth or higher in the second quarter. Faster wage growth, too. And if that growth surge actually happens, GOP politicians and pundits will assuredly point to the upturn as evidence the Trump tax cuts are indeed working to make the economy great again. They will say all those gloomy Democrats and left-wing experts who were declaring the US economy couldn’t grow at 3% —  much less 4% —  have now been proven wrong. The libs have been owned yet again.

And when I hear those claims being made on July 27 — that’s when the BEA releases the advance estimate of Q2 GDP growth — these are the sorts of thoughts that will likely flash across my mind

1. Faster GDP growth is most welcome. But let’s remember that there were hypergrowth quarters (which I define as quarters of 4% growth or faster) during the Obama years — even as fast as 5.2% in Q3 2014 — but never faster sustained growth. So we’ll see.

2. The anti-tax cut or pessimist argument was never that the US economy is incapable of growing faster than 2%. Indeed, it is the Wall Street-Washington consensus that fiscal stimulus from the Trump tax cuts and higher government spend will bounce growth higher for a couple of years. The actual pessimist argument is that because of demographics, sustained growth of 3% or higher won’t happen without historically high productivity growth. And productivity growth has been moribund since before the Financial Crisis.

3. So to judge the tax cuts as “working” — at least according to traditional GOP “supply side” economics — we would want to see higher business investment, higher productivity growth, and thus faster real GDP growth over a numbers of years. And maybe that will happen. The changes to the corporate tax code were significant. Of course, “time will tell” is an unsatisfying cable-news hot take. And even if productivity growth accelerates, it will be tricky to separate the impact of the tax cuts from other trends already in place, such as the advance and spread of artificial intelligence and other technologies. Plus, one might still expect to see a natural cyclical upturn in productivity growth as the Financial Crisis recedes further in time.

4. One more thing: All those forecasts showing a growth surge also show a worsening federal budget deficit. Trillion-dollar deficits are fast as the eye can see. A sugary growth surge doesn’t solve that problem, Even sustained faster growth doesn’t. Growth solves a lot of problems, but this unfortunately ain’t one of them. (Please check out some real talk on debt and deficits from my AEI colleague James Capretta.) This from the Committee for a Responsible Federal Budget:

Because faster growth results in both higher revenue and spending, a substantial acceleration in growth would be necessary to put the debt on a downward path. Assuming this growth came from higher productivity, it would need to be nearly twice the levels projected simply to stabilize the debt somewhat below current levels, based on rough CRFB calculations. To put the debt on a downward path to reach its historical average by 2040, productivity would need to be three times as high as projected. In other words, for growth alone to solve the debt, the country would need sustained annual productivity growth between 2.5 and 4 percent. By comparison, the historical record for any 25-year period since 1950 is 1.9 percent.

Indeed, the CBO is forecasting 3% growth this year and next. And here is its debt forecast:

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In Europe, immigration restrictionism is the new mainstream - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 15:12

The tense summit of the European Council last night confirmed trends that have been in the making since the refugee crisis of summer 2015. If there is going to be a common EU asylum migration policy following the fragile and incomplete agreement that European leaders reached on Friday morning, it will bear little resemblance to Angela Merkel’s Willkommenskultur from three years ago.

An armed French policeman works at the border check point Saint-Ludovic at the Franco-Italian border in Menton, France, June 29, 2018. REUTERS/Eric Gaillard

Besides committing to “effective control of the EU’s external borders and to step up the effective return of irregular migrants,” the summit will lead to the creation of processing centers for asylum seekers in North African countries to “distinguish between economic migrants and those in need of international protection,” in addition to EU-funded refugee camps (“controlled centers”) in frontline EU countries such as Italy and Spain. That is a major change in European policy, which scrupulously avoided even the slightest hint of refouling asylum seekers.

Unlike previous European deliberations, the summit did not include the possibility of creating a permanent resettlement scheme that would allocate refugee quotas to individual countries – an idea adamantly opposed by Visegrád countries. Moreover, in a nod both to Mrs. Merkel’s political partners in Bavaria and to Austria’s Chancellor Sebastian Kurz, the conclusions of the summit urged “member states [to] take all the necessary measures to prevent secondary movements of asylum seekers.

It may seem paradoxical that immigration and asylum are still contentious at a time when illegal border crossings into the EU are at their lowest point in years. But there is a simple reason why the 2015 crisis is casting a long shadow. It is not migration per se, nor is it primarily Islam or the memory of the terror attacks of 2015 and 2016. Instead, it is the vivid memory shared by most Europeans that throughout that fateful summer 2015 their governments were visibly not in control and thus not delivering on their side of the social contract. Last night’s summit, dominated by leaders elected in the popular backlash that ensued, provided a belated reckoning with those events – and hopefully a first step towards closing that chapter of the EU’s recent history.

While the agreement offers immediate political respite to Mrs. Merkel, it is clear that the anti-immigration side has won the day, for better and for worse. The prospect of returning boats with migrants to North African “disembarkation platforms” and their detention in refugee camps in Europe must feel like a vindication for Visegrád leaders, who argued for such policies since the crisis’ onset.

It remains to be seen if a commitment to policing the EU’s external border, including the entire Mediterranean, is sustainable and whether it could withstand a wave of migration on a scale comparable to 2015. The bet European leaders are making is – as European Council President Donald Tusk tweeted before the summit – that such tough policies will be enough to keep the real extremists at bay. Let us hope that they are right.

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Free speech on campus – interview with Keith E. Whittington | Viewpoint - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 14:54

Is free speech under attack on America’s campuses? Keith Whittington discusses his new book, Speak Freely, with AEI’s Nat Malkus.

US fiscal policy may burst asset bubble - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 13:56

Last year, President Donald Trump opted for a highly expansionary budget policy stance at a time when the US economy was at or beyond full employment. In 2018, ignoring economic troubles abroad, the administration is reinforcing its commitment to ‘America first’ policies, raising the risk of retaliation from trade partners.

@rn_rigor via Twenty20

The principles of sound budget management dictate that while budget deficits might be helpful during times of economic weakness, they should not be tolerated in times of strength. If not, the government’s debt would be on an ever increasing path. In addition, as the budget deficit widens during times of strength, the government would not have the room for fiscal policy stimulus in times of weakness.

Seemingly oblivious to these principles, the Trump administration opted in 2017 for an unfunded tax cut that will increase the public debt by an estimated $1.5tn over the next decade. The administration also assented to a $300bn congressional increase in public spending.

Years of easy monetary policy by the world’s major central banks have led to overvaluation in global equity and housing markets. At the same time, ample global liquidity has caused credit risk to be seriously mispriced around the world.

Pursuing expansionary fiscal policy risks causing long-term interest rates to rise sharply. As the Federal Reserve shrinks its bloated balance sheet, an increase in the US budget deficit is bound to push long-term rates markedly higher.

That threatens to burst asset price bubbles and could lead to a painful repricing of credit around the world. It risks suddenly halting capital flows to emerging markets. That could be especially damaging for countries like Argentina, Brazil, Indonesia, South Africa and Turkey.

Escalation in Trump’s protectionist posturing on trade policy further exacerbates already tense global conditions. This goes well beyond taking punitive trade actions against China, where such measures might well be justified. Rather, it includes the imposition of steel and aluminium import tariffs on US allies in the Americas and Europe. It also includes the adoption of a much tougher stance in negotiations around the North American Free Trade Agreement, an antipathy towards trade agreements in general, and the threat of much higher tariffs on imports of German cars.

The reason given for increasing import tariffs is that the administration wishes to eliminate the country’s trade deficit. But this contradicts its expansionary budget policy.

If there is one point on which almost all economists can agree, it is that a country’s trade balance is arithmetically the difference between its savings and its investment rates. By following policies that increase the budget deficit and reduce the country’s savings rate, Washington is increasing the probability that the US will return to the twin deficit problem of the 1980s. That, in turn, raises the chances that the administration will intensify its protectionist stance on trade policy when the country’s trade deficit widens.

The timing of Washington’s beggar-thy-neighbour policies is especially unfortunate for Europe. At a time when developments in Italy threaten the return of the European sovereign debt crisis, the last thing the region needs is a trade war with the US that might further undermine investor confidence.

If Trump’s budget and trade policies trigger a global economic recession, the US will hopefully be compelled to co-operate with trade partners to promote a quick recovery. However, such optimism seems misplaced in the light of the administration’s major macroeconomic mistakes and high-handed treatment of US allies.

Frustrated Mexicans are set to elect their own populist strongman - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 13:49

Today, the “problem on the United States’ southwest border” refers to an influx of illegal immigrants. Next week, that problem may be an unstable Mexico—a nation of 130 million people that on Sunday will likely elect a populist firebrand to confront rampant insecurity and corruption.

Mexican presidential candidate Andres Manuel Lopez Obrador waves to supporters during his closing campaign rally at the Azteca stadium, in Mexico City, Mexico June 27, 2018. REUTERS/Edgard Garrido TPX IMAGES OF THE DAY TPX IMAGES OF THE DAY

Opinion polls reflect a commanding lead by Andres Manuel Lopez Obrador (“AMLO,” as the candidate is universally known). Although AMLO has been in public life for 40 years and enjoyed national prominence for nearly two decades, Mexicans are not sure whether
the maverick has matured or if he will govern as a caudillo (or “strong man”).

Critics paint AMLO as an adherent to the “21st Century Socialism” model espoused by Venezuela’s Hugo Chavez and inspired by Fidel Castro. In fact, AMLO’s core economic philosophy resembles that of president Luis Echeverria (1970-76), which places him squarely within the tradition of Mexican populism, nationalism, and caudillismo.

If AMLO’s antiquated policies further stunt economic growth and destabilise already weak institutions, Mexico may become even more vulnerable to the transnational organised crime already wreaking havoc in Central America and Venezuela.

Mexicans know plenty about AMLO. Beginning 30 years ago, the native of oil-rich Tabasco state emerged as a charismatic champion of peasant farmers and oil workers, speaking up for the half of the country left behind by the free-market economic policies adopted by the ruling Institutional Revolutionary Party (PRI) in the late 1980s.

In 1988, AMLO helped form the dissident Party of Democratic Revolution (PRD). After losing a disputed election for governor of Tabasco in 1994, his prominence grew as the PRD’s national leader. Six years later, he was elected mayor of Mexico City, exceeding expectations and winning positive reviews in that complicated post.

In 2006, AMLO lost the presidency to Felipe Calderon of the National Action Party (PAN) by a razor-thin margin. His image suffered when he protested against his defeat using confrontational street tactics that disrupted life in the sprawling capital for many months. In 2012, he was defeated by current president Enrique Peña Nieto of the PRI by a margin of 3.5 million votes.

Today’s campaign is a referendum on Peña Nieto’s mishandling of the country’s security situation and rampant corruption. Although the president promised to end Calderon’s “war on drugs”, he failed to deal effectively with deadly turf battles among splintered crime syndicates; the projected number of murders has doubled since 2014.

Worse still, the notorious kidnapping and murder of 43 students committed by local narco gangsters and complicit local PRD officials in Guerrero is dramatic evidence of staggering corruption at all levels of government.

After security, corruption is the second most important issue, according to polls. The PRI’s corrupt history has never been adequately addressed and several notorious corruption cases involving president Peña Nieto, his family, and his party have convinced voters that only an outsider can clean house.

Lopez Obrador, who has an evangelical background and is known to lead an austere lifestyle, is widely regarded as honest. However, his Movement for National Renovation (MORENA) has attracted the support of some members of other parties who have brought their chequered records with them, and AMLO has failed to break with politicians suspected of criminal behaviour.

As is frequently the case, populist outsiders get political traction precisely because of the failures of the political establishment. In Mexico, the PRI fielded as its presidential candidate Jose Antonio Meade, a wonkish bureaucrat who has failed to connect with voters. According to local analysts, PAN nominee Ricardo Anaya’s pledge to target corruption in Peña Nieto’s administration drove disenchanted PRI voters to AMLO, who has vowed to attack corruption without naming names.

When AMLO was in a tight three-way race, he tempered his rhetoric and moderated his style. That has led some to observe that he has “matured.” During the course of the campaign, AMLO’s positions have shifted on scuttling energy deals or cancelling education reforms—both of which are fundamental to economic growth. To foreign investors eyeing opportunities in Mexico’s energy section, it is not at all clear that AMLO has abandoned his nationalistic and populist attitudes regarding Mexico’s natural patrimony.

The other conundrum is whether AMLO, a political “lone wolf,” is capable of governing. MORENA has a fraction of the party structure and membership of the rival parties. However, as AMLO builds a lead in the presidential race, it is quite possible that MORENA will win a plurality in the Congress.

Ordinarily, the leading party bloc would reach out to like-minded parties to forge a governing majority. However, the other smaller parties hold polar opposite views. What’s more, MORENA’s own congressional candidates are politically independent, and some advance extremist positions. So, the caudillo Lopez Obrador may find it difficult to assemble a coalition to advance a coherent platform. The first year of an AMLO administration may look fairly conventional—as the country proceeds under the budget written by the outgoing PRI government.

However, the policy initiatives during the remaining years of his six-year term will determine Mexico’s fate. Although AMLO may be moderating his campaign rhetoric, his leadership style is reflected in his disdain for institutions. After his 2006 defeat, he declared in frustration, “They can go to hell with their institutions.”

AMLO’s nostalgia for Mexico’s centralised, presidentialist system—where the head of state passed judgement on all issues, large and small—may suggest that he will seek to run roughshod over the opposition or alienate potential allies. And as the congress or other institutions fail to comply, AMLO may seek to overhaul the system. Mexicans should be wary of sweeping constitutional reforms, the likes of which Chavez and other South American acolytes used to decimate institutions and concentrate power in the president’s hands.

Such unaccountable institutions tend to lose legitimacy and may be more vulnerable, not less, to abuse and corruption. Although most Mexicans have benefited from the modernisation advanced by their last three presidents, tens of millions have been left behind. Worse yet, most Mexicans feel that they are at the mercy of crime and corruption.

They also believe that AMLO—the caudillo, the maverick, the outsider—could not possibly make matters worse. Only time will tell if they’re right.

Roger Noriega was US ambassador to the Organization of American States and Assistant Secretary of State for Western Hemisphere Affairs from 2001-05. He is a visiting fellow at the American Enterprise Institute.

The spectrum sweet spot: How mid-band waves will help power 5G wireless - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 12:00

A recent article from the front line of autonomous vehicles illuminates at least two policy areas that we’ve highlighted in recent months: wireless spectrum and prioritized data traffic. Writing in The Wall Street Journal, Tim Higgins begins the story:

Some Phoenix-area residents have been hailing rides in minivans with no drivers and no human safety operators inside. But that doesn’t mean they’re on their own if trouble arises.

From a command center, employees at Alphabet Inc.’s Waymo driverless-car unit monitor the test vehicles on computer screens, able to wirelessly peer in through the minivan’s cameras. If the robot brain maneuvering the vehicle gets confused by a situation — say, a car unexpectedly stalled in front of it or closed lanes of traffic — it will stop the vehicle and ask the command center to verify what it is seeing. If the human confirms the situation, the robot will calculate how it should navigate around the hazard.

Computers may be poised to take control of driving in the future, but humans will be backing them for some time yet.

This is just one of many examples of humans doing new jobs in an automated world. Digital cameras are inexpensive enough to be ubiquitous, and broadband is powerful enough to transmit floods of video from these cameras. Together, they enable all kinds of new applications.


Last month, I noted the case of Aira smart eyeglasses, which help the blind navigate the world. Cameras on the glasses transmit real-time video wirelessly to a remote agent, who audibly describes the surroundings to the  visually impaired. Testifying before Congress, Aira’s Paul Schroeder explained how an uninterrupted video feed was imperative for the service to be useful and, therefore, why this might be a perfectly legitimate case for prioritized data.

Both the Aira case and the autonomous vehicle case also reinforce the need for more wireless coverage, capacity, and robustness, which points toward the next generation of wireless, called 5G. As Higgins notes:

Most companies have resisted real-time remote driving because of concerns about dropped cellular signals.

Ford Motor Co. tested a remote driving system on Georgia Tech’s campus about three years ago, but the vehicle kept losing its 4G LTE signal, cutting the video feed to the operator. Researchers assumed the signal got jammed when classes let out and students started using their cellphones.

“If you lose one or two seconds of connection in a vehicle, you could potentially have just hit a car or a pedestrian,” said Bert Bras, a Georgia Tech engineering professor who was part of the program that Ford wound down.

See why we need more wireless spectrum? And more small cells? And better coverage, capacity, and robustness? The first four generations of wireless have changed the way we communicate and consume and create media. But the next generation, 5G, will also provide mission-critical support for smart infrastructure across many industries in “the rest of the economy.” The services that 5G enabled will grow in number and diversity, and often they will require real-time service that simply must work without fail.

One of the biggest near-term ways to get more spectrum is to open up and repurpose what’s known as mid-band spectrum — roughly the range between 3 and 6 GHz. And right now the Federal Communications Commission is finalizing rules for a new auction at 3.5 GHz, which is just the first step. In years past, mid-band was thought to be a kind of no man’s land of uninteresting airwaves. But with the advent of new radios and architectures, such as small cells, mid-band is now the sweet spot of spectrum innovation. The frequencies are just high enough to deliver fast data rates but also low enough to support decent range, measured in distance. It’s perfect for the coming 5G small-cell networks.

Opening the mid-band for new uses could unleash massive amounts of spectrum — between 200 and 300 MHz to start and eventually an additional 500 MHz. That’s nearly as much spectrum as is deployed in all of our existing mobile networks. So we’re talking about nearly doubling the wireless airwaves available for today’s familiar mobile applications, such as smartphones, and for all of tomorrow’s exciting services, too. And that’s even before we discuss the potential of the high-band millimeter wave spectrum that often gets most of the 5G attention.

Smart glasses and driverless cars are just two of a multitude of new wireless services that will be possible if we continue moving quickly on spectrum, especially in the mid-band.

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Reaction to Justice Kennedy’s retirement shows Supreme Court’s inflated importance - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 10:30

How dare an 81-year-old man retire from the Supreme Court? How dare he?

That, in a nutshell, seems to be the widespread reaction among many liberals to the announcement that Supreme Court justice Anthony Kennedy will step down from the bench next month.

U.S. Supreme Court Justice Anthony Kennedy (L) chats with Chief Justice John Roberts (R) during a new U.S. Supreme Court family photo including Justice Neil Gorsuch (not pictured), their most recent addition, at the Supreme Court building in Washington, D.C., U.S., June 1, 2017. REUTERS/Jonathan Ernst

“Anthony Kennedy Just Destroyed His Legacy as a Gay Rights Hero,” announced a headline at Slate. Twitter, that great Hieronymus Bosch painting of our collective id, was aflame in what can only be described as full-on liberal panic. “The future of our democracy is at stake,” proclaimed House minority leader Nancy Pelosi.

This gnashing of teeth and rending of cloth is a symptom of the dysfunction and corruption of the constitutional order. The reason Kennedy’s retirement matters so much is that he was the swing vote — the justice who could bequeath victory or defeat to the liberal or conservative bloc in any important case that divided the court.

And the reason the swing vote matters so much is that we’ve made the Supreme Court far too important in our lives. By being the deciding vote on so many issues, Kennedy in effect became the court itself, making him the de facto incarnation of the judicial branch, the way the president is the physical personification of the executive branch. This became all the more problematic because Kennedy’s philosophy of judicial review all too often took the form of a deep personal inventory of his feelings rather than of Constitution’s text.

Thus, Kennedy’s decision not to live forever — or at least until a Democratic appointee could replace the Reagan-appointed justice — was seen as a personal betrayal, because the political has become so personal for so many.

“I never thought I’d say this, but you’re only 81!” late-night comedian Stephen Colbert exclaimed. “You know what they say: They say 81 is the new 79! And don’t tell me your mind’s going, because I’ve read Bush v. Gore and Citizens United; you never had one!”

A Comedy Central writer tweeted (and later deleted) that he wished “this Kennedy had been shot instead of the other ones.” To think such things, never mind to state them publicly, can be seen as a symptom of deranged mental health, but also of a deformed civic health.

How did we get here? Two tracks converged to deliver us this dysfunction. The first is narrowly political. The Democrats, confident that they were on the right side of history, thought there was no harm in accelerating the rush to total victory. For years, Democrats practiced the rule that all is fair in judicial-confirmation battles, starting with the war on Judge Robert Bork in 1987. Then, under the leadership of Barack Obama and then–Senate majority leader Harry Reid, they did away with the filibuster on judicial appointments short of the Supreme Court, opening the door for Republicans to nudge it slightly more wide open.

The second track is longer. Starting over a century ago, progressives began emphasizing ends over means. If the Supreme Court could deliver wins unattainable at the ballot box and unsupported by the Constitution, so be it. Thus was born the “living Constitution” — the doctrine that holds that the magical parchment should mean whatever progressives need it to mean at any moment. This was how Anthony Kennedy became an (apparently temporary) gay-rights hero. After consulting his feelings, he found a constitutional right no one had found in the text before.

This idea that the Supreme Court is there to serve as a Praetorian Guard around progressive policies was on full display this week. Prior to Kennedy’s retirement announcement, the court issued a 5–4 ruling in Janus v. AFSCME, which held that public-sector unions can’t compel nonunion members to pay fees for union representation, thus violating the First Amendment.

Justice Elena Kagan caustically disagreed. For her, the problem with the decision was that “public employee unions will lose a secure source of financial support.”

“The First Amendment was meant for better things,” Kagan concluded in her dissent. “It was meant not to undermine but to protect democratic governance — including over the role of public-sector unions.”

In short: The Supreme Court isn’t there to protect the meaning of the First Amendment; the Supreme Court is there to protect a secure source of financial support for public-sector unions. If the First Amendment gets in the way, that’s okay.

The panic unfolding across the progressive landscape stems from the creeping fear that the Supreme Court might start doing its job — and not the job progressives have assigned it.

What teachers’ unions should expect from the Supreme Court’s unexpected ruling - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 10:30

The Supreme Court‘s widely expected decision in Janus v. AFSCME struck down public sector unions’ ability to charge agency fees to public employees who aren’t union members, delivering a significant blow to teachers unions’ power.

Justice Samuel Alito’s majority opinion overturned Abood v. Detroit Board of Education, the 1977 precedent that affirmed the legality of “fair share” fees. Alito bluntly argued that Abood was poorly reasoned, and that agency fees violate “the free speech rights of nonmembers by compelling them to subsidize private speech on matters of substantial public concern.”

In a strident dissent, Justice Elena Kagan argued that stare decisis should have retained the precedent: “Reviewing those decisions not a decade ago, this Court — unanimously — called the Abood rule ‘a general First Amendment principle.’”

The bulk of the minority opinion focused on how the ruling will affect labor and collective bargaining. “More than 20 states have statutory schemes built on (Abood),” she argued, “Those laws underpin thousands of ongoing contracts involving millions of employees … judicial disruption does not get any greater than what the Court does today.” Anticipating this verdict, many experts predicted membership declines of 20, 30, or even 50 percent. But an unexpected part of the ruling could make these losses even greater.

The primary reason for anticipated membership declines is that eliminating agency fees changes the real cost of union membership. The petitioner for instance, Mark Janus, could have paid full dues, but choosing not to join the union still had to pay 78 percent of dues as an agency fee. For Janus, the real cost of membership was the difference: 22 percent of dues. Without agency fees, the choice is either 100 percent or nothing, nearly quadrupling the real cost of membership. Agency fees didn’t drive Janus to join the union, but many members who joined under this marginal cost of membership could now defect.

Again, this was expected and teachers’ unions — which collectively may be the nation’s most powerful public sector interest group — have budgeted for losses. The National Education Association’s (NEA) 2017–18 budget anticipates losing 10 percent of members, while the United Federation of Teachers, the AFT’s New York City affiliate, expects losses between 20–30 percent. Now, in response to Janus, unions are doubling down on traditional member-recruitment and retention tactics. For instance, New York teachers’ unions pushed their allies to enact a state law barring non-members from receiving certain union benefits. It’s an open question whether drawing brighter lines will stem losses.

But one small but pivotal aspect of the ruling was not expected: that public employees must now opt-in, rather than opt-out of the union. Arguing that compelled fees violate workers’ First Amendment rights, and joining a union is thus a waiver of First Amendment rights, the opinion demands that teachers declaratively opt-in to the union. In Alito’s words, the union cannot collect any fee “unless the employee affirmatively consents to pay.” This seemingly small addition will exacerbate union declines, and make it all the harder for unions to fight attrition.

Small changes in default positions can make enormous differences. Take the example of organ donation rates, which in Austria are more than 90 percent, and in neighboring Germany are about 15 percent; the difference is that Austrians have to opt-out of organ donation, while Germans must affirmatively opt-in. By adding the opt-in requirement on top of ruling out agency fees, the Janus ruling went further than most expected.

Not coincidentally, Janus paves the way for another case on this very issue, Yohn v. CTA, which is waiting in the wings. Ryan Yohn and seven other California teachers challenge the California Teachers Association’s (CTA) burdensome opt-out restrictions, the very types of measures some unions have pushed as an answer to Janus.

“The opt-in/opt-out issue is just as much a First Amendment issue as the compulsory dues issue,” Yohn argued. Now, even if Janus doesn’t quite assure a defeat in Yohn in lower courts, there is little doubt about how the Supreme Court would rule.

Teachers’ unions may have underestimated Janus’ breadth, but Kagan’s dissent did not underestimate the ruling’s impacts, which affect untold thousands of contracts, and could — as many union officials have argued or threatened — erode labor peace. Some labor unrest after Janus is a real possibility, and the statewide teacher strikes this spring demonstrated its potential. But those strikes ignited in states with weak unions, where teacher pay and education spending was markedly low. In contrast, agency-fee states have stronger unions, better pay and higher spending, meaning the very states Janus will hit hardest won’t have the fuel to ignite a resurgence.

Janus solves one problem but may allow another. The Abood precedent allowed unions in some states to collect arguably inflated agency fees, and thereby keep membership artificially high year after year. These overpowered unions led to the judicial crusade to stop what opponents considered clear abuses. Janus ends them, but it doesn’t end the story. Unions now face the free rider problem that the court ruled could not justify agency fees.

Make no mistake, Janus is an unequivocal loss for unions. With no middle path to balance the free rider challenge unions face, Janus offers a legal solution, but leaves serious practical questions unresolved. Anti-union forces will certainly celebrate the ruling, and unions will decry it, but many in the middle may come to see this as an overcorrection, one that will force teachers’ unions to reinvent themselves to retain their once monumental influence.

Happy 217th Birthday to French classical liberal economist Frederic Bastiat! - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Fri, 06/29/2018 - 04:01

Today, June 29, marks the 217th anniversary of the birth of the great French classical liberal economist Frédéric Bastiat (born June 29, 1801) whom economist Joseph Schumpeter called the “most brilliant economic journalist who ever lived.” Celebrating Bastiat’s birthday has become an annual tradition at CD, and below I present some of my favorite quotes from the great liberty-loving, influential French economist!

1. One of Bastiat’s most famous and important writings was “The Candlemakers’ Petition,” which is such a clear and convincing satirical attack on trade protectionism that it often appears in textbooks on economics and international trade. Here’s an excerpt from that famous 1845 essay (emphasis added):

We [French candlemakers] are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself, our trade leaves us — all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is none other than the sun, wages war mercilessly against us.

We ask you to pass a law requiring the closing of all windows, skylights, dormer-windows, outside and inside shutters, curtains, blinds; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun has been in use to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves that we have accommodated our country — a country that, in gratitude, ought not to abandon us now to a strife so unequal.

2. In 1845, as a solution to counteract job losses in some French domestic industries (like textiles) due to free trade, Bastiat proposed to the King of France that he “forbid all loyal subjects to use their right hands.” Bastiat predicted that:

…as soon as all right hands are either cut off or tied down, things will change. Twenty times, thirty times as many embroiderers, pressers and ironers, seamstresses, dressmakers and shirt-makers, will not suffice to meet the national demand. Yes, we may picture a touching scene of prosperity in the dressmaking business. Such bustling about! Such activity! Such animation! Each dress will busy a hundred fingers instead of ten. No young woman will any longer be idle. Not only will more young women be employed, but each of them will earn more, for all of them together will be unable to satisfy the demand.

3. Here’s Bastiat’s famous quote on legal plunder (now frequently referred to as “crony capitalism”), from Bastiat’s book The Law:

Legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole—with their common aim of legal plunder—constitute socialism.

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Note: As I pointed out several years ago on CD, the minimum wage law is a form of legal plunder because it takes money from some persons (business owners) what belongs to them, and gives it to other persons (unskilled workers) to whom it does not belong. The minimum wage law clearly benefits some citizens (entry-level workers) at the expense of employers by doing what the workers cannot do without committing a crime of theft. So let’s put aside all of the economic arguments about what economic theory and empirical evidence show regarding the possible employment effects of government-mandated minimum wages, and consider something even more basic and fundamental: the minimum wage is legalized, government-sanctioned plunder/theft from business owners, and therefore on that basis should be considered morally objectionable, unethical and unacceptable.

4. Four days before his death in 1850, Frederic Bastiat sent this message to a friend:

Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.

5. When a new railroad line was proposed from France to Spain, the French town of Bordeaux lobbied for a break in the tracks so that “all goods and passengers are forced to stop at that city,” which would, therefore, be “profitable for boatmen, porters, owners of hotels, etc.” Using reductio ad absurdum, Bastiat proposed that if a break in the tracks provided economic benefits and jobs for one town and served the general public interest, then it would be good for breaks in the tracks at dozens and dozens of other French towns, to the absurd point that there would be a railroad composed of a whole series of breaks in the tracks, so that it would actually become a “negative railway.”

6. In his famous essay “What Is Seen and What Is Not Seen,“ Bastiat was one of the first economists to make the very important distinction between the immediate, concentrated and visible effects of legislation, trade protection or regulation and the delayed, dispersed and invisible effects:

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.

To illustrate the principle of “what is seen and what is not seen,” Bastiat told a story that became known as the “The Parable of the Broken Window,” which was modernized in the 1940s by Henry Hazlitt in his book “Economics in One Lesson.” Here’s a quick summary:

A baker has saved $50 to buy a new suit, but then a young hoodlum throws a brick through the shop owner’s window and the baker now has to spend $50 to replace the window and forgo the purchase of the new suit. If one ignored the invisible effects of the broken window, one could then argue that the hoodlum was, in fact, a public benefactor by stimulating business for the window company that now receives $50 to replace the window. But instead of the baker having $50 for a new suit and a window, he now only has the window and no suit. And the invisible unseen party in the parable is the tailor, who would have benefited $50 from selling the baker a new suit, but now loses that business. Observers will see the visible new window but will never see the invisible new suit, because it will now never be made.

Here’s how Bastiat explains the unseen, invisible effects of the shopkeeper spending six francs to replace the broken window:

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.

7. “The State [government] is the great fiction, through which everybody endeavors to live at the expense of everybody else.”

~The State in Journal des Débats (1848).

8. “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”

~Economic Sophisms, 2nd series (1848)

9. “Everyone wants to live at the expense of the State. They forget that the State lives at the expense of everyone.”

~Source unknown

10. “Trade protection accumulates upon a single point the good which it effects [for domestic producers], while the evil inflicted is infused throughout the mass [of consumers]. The one strikes the eye at a first glance [benefits to producers], while the other becomes perceptible only to close investigation [losses to consumers].”

~Source unknown

Bottom Line: Bastiat was truly an economic giant and deserves credit for his many significant and important intellectual contributions to economic thinking that are as relevant today as they were in France in the mid-1800s when Bastiat was writing, including: a) Bastiat was one of the first economists to warn us of the dangers of legal plunder, crony capitalism and trade protectionism, b) he helped us understand the importance of looking at both the unseen and delayed effects of legislation and regulation in addition to the immediate and visible effects, c) he was one of the most eloquent and articulate defenders of individual freedom and liberty who ever lived, d) he was probably the strongest advocate for the consumer in human history, and e) his use of wit, parody, and satire to convey economic wisdom and insights was unparalleled!

Happy 217th Birthday Frederic Bastiat!

Congrats, Trump voters. You’ve been vindicated. - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 23:30

For those conservatives who voted for Donald Trump because of the Supreme Court, congratulations: You’ve been vindicated.

Supporters wave signs as US President Donald Trump speaks in support of Republican congressional candidate Rick Saccone during a Make America Great Again rally in Moon Township, Pennsylvania, March 10, 2018. Reuters

Had Hillary Clinton won the 2016 election, she would have replaced the late conservative Justice Antonin Scalia with a liberal jurist — giving the Supreme Court a left-wing activist majority for a generation. Because Trump won, Neil M. Gorsuch was confirmed to replace Scalia, securing the court’s 5-to-4 conservative majority.

This week, the dividends of that appointment for conservatives were apparent in two landmark conservative rulings. In National Institute of Family Life Advocates v. Becerra, the high court ruled that the state of California cannot force crisis pregnancy centers to advertise access to abortion to their clients, in violation of the owners’ conscience. And in Janus v. AFSCME, the court ruled that public workers cannot be forced pay union dues to support public policies with which they fundamentally disagree. These were critical 5-to-4 rulings that buttressed the First Amendment freedoms of all Americans.

Trump was able to preserve the status quo before Scalia’s passing. But now, with the news that Justice Anthony M. Kennedy is retiring, Trump has a chance to do something much bigger: He can not only preserve but also expand the court’s conservative majority. If he replaces Kennedy — a swing vote who often joined the court’s liberal bloc on important matters — with a reliable conservative in the mold of Scalia and Gorsuch, the president may have transformed the court for a generation.

To do this, Trump will have to break the mold of his Republican predecessors. Over the past three decades, presidents from his party have picked seven justices, and several have turned out to be disappointments to conservatives. President Ronald Reagan picked three justices (Sandra Day O’Connor, Scalia and Kennedy), but only one, Scalia, was a consistent conservative. President George H.W. Bush picked one solid conservative (Clarence Thomas) and one (David Souter) who was not. George W. Bush did better, appointing two conservatives, Samuel A. Alito Jr. and John G. Roberts Jr. But even Roberts disappointed conservatives when he cast the deciding vote to uphold the Affordable Care Act in a stroke of judicial activism. If Trump picks not one, but two reliable conservative justices, he will secure the best record of Supreme Court appointments by any modern Republican president.

Liberals understand exactly what is at stake. That means whomever Trump picks will face a barrage of attacks unprecedented even by the standards of past confirmation brawls. But thanks to the Democrats’ imprudent decisions to break precedent and change Senate rules to confirm lifetime appointments to the federal circuit court under President Barack Obama, and then to filibuster Gorsuch, Senate Republicans need only a simple majority to confirm Trump’s choice. So long as Republican senators stick together, Trump’s nominee will be confirmed.

Already some Democrats are protesting that the Senate should not confirm a Supreme Court justice during a midterm election year. Sorry, the Senate confirmed Obama appointee Elena Kagan in August 2010, just before the midterm elections — and did so with a bipartisan 63-to-37 vote. Democrats are grasping at straws because the timing couldn’t be worse for them as they seek to gain control of the Senate in November. Senate Majority Leader Mitch McConnell (R-Ky.) has announced that the confirmation vote will take place in the fall, which would put Kennedy’s replacement on the bench when the court’s new term begins on the first Monday in October. Pity the Democratic senators such as Joe Manchin III (W.Va.), Heidi Heitkamp (N.D.), Jon Tester (Mont.), Claire McCaskill (Mo.) and Joe Donnelly (Ind.), who are running for reelection in states Trump won by double digits. Their political survival depends on being perceived as centrists, and they will now have to spend months campaigning while caught in the crossfire of a liberal-conservative battle royal over a Trump-nominated Supreme Court justice. Vote yes, and their liberal base will be apoplectic; vote no, and their pro-Trump constituents could revolt.

For all these reasons, Trump’s appointee is likely to be confirmed. If that happens, Trump will have led one of the most consequential conservative presidencies in modern American history. Not only is Trump expanding the conservative Supreme Court majority, he is also moving at record pace to fill the federal appeals courts with young conservative judges who will preside for decades. Imagine if it were Clinton making all these appointments. The consequences for human life, religious liberty, the Second Amendment and limited government would have been disastrous.

Instead, the choice of the next Supreme Court justice is in President Trump’s hands. So, to all the conservatives who cast their ballots in 2016 for just this moment — you did the right thing.


Incredibles 2: A realistic depiction of modern day gender dynamics - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 20:40

The amount of ink spilled analyzing the feminist messages of the new Disney/Pixar movie Incredibles 2 is, well, incredible. From the shape of Elastigirl’s backside to the “Mr. Mom” routine by Mr. Incredible, the long-awaited sequel seems made for our current cultural moment. But the movie doesn’t seem to be as much of an ideological crusade as it is an accurate representation of modern day gender dynamics.


The concept of the new movie is clever enough: The superheroes in hiding are offered the chance to spearhead the effort to make superheroism legal again. (The past destruction they have wrought, not to mention the attending lawsuits, led governments around the world to determine that the heroes’ death-defying feats simply weren’t worth it anymore.) But the mogul launching this new legalization effort thinks that Elastigirl, not Mr. Incredible, would make a better face for the campaign.

And, frankly, he is right. Mr. Incredible has his heart in the right place but he makes big messes and doesn’t always think about the consequences of his actions. Elastigirl, though, takes on this assignment only reluctantly. She has three kids at home—an adolescent girl, a boy struggling with school, and a baby who is not even talking yet. Like most mothers of young children, Elastigirl is happy to work part time. She can fight crime and still help the kids with their homework, spend time with the baby during the day, and make a nice family dinner each evening.

But the new offer is something much more time-consuming. She has to leave her family, go stay in a hotel room, and be on call from morning until night. There is, of course, the initial rush that comes for any mother who suddenly gets to focus on only one task when she’s been at home juggling too many different tasks when she gets to focus on only one—and get a good night’s sleep. The evening that Helen Parr calls her husband to tell him about all the excitement of her day is also realistic. But for her husband, who has longed for nothing in recent years as much as the chance to be a superhero—all the while engaged in dreary jobs at insurance companies and the like—the jealousy is palpable. One senses that she could be perfectly happy settling down to a normal family life, but he would never get enough fulfillment out of it.

Which is not to say that Mr. Incredible is some kind of a throwback to a 1950s dad. He enjoys his children and encourages them. He is involved in their lives without being involved in all of the logistical details. But he has always been a family man. The most heart-wrenching scene of the first installment was when Mr. Incredible was trapped and he thought that his family had been killed. Never has a cartoon character gone from full strength to total deflation faster.

That brings us to his stint taking care of the kids. Though it’s true the film’s producers make Bob Parr seem overwhelmed by his new role, it is perfectly reasonable that he would be. In addition to having a baby who doesn’t sleep, imagine one who pops into other dimensions and cries himself into a state of self-immolation. Fathers are not usually the people that teen daughters want to talk to during a romantic crisis, but what if the guy your daughter liked had all his memories of her wiped out by a secret government agent? And then there is the math. Poor Bob is left to contend with his son’s math homework—doing it the way the teacher wants it done instead of the way he knows how to do it. We all know how that ends.

So, give the guy a break. Even the most competent stay-at-home mother might lose it in the midst of all this. Like most couples, the Incredibles have a division of labor. Not everything is split down the middle but frankly, it would be impractical if it were.

The final dose of realism with regard to gender dynamics comes at the end when they are finally almost done fighting the bad guys, and Helen finds out she has missed the baby’s first signs of superhero powers. She is disappointed and angry. She cannot wait to grab the baby back from her husband and tell him it’s his turn to go off and fight. It’s hard to imagine a movie where the husband makes a similar gesture.

Naomi Schaefer Riley is a senior fellow at the Independent Women’s Forum and a columnist for the New York Post. Her latest book is Be the Parent, Please: Stop Banning Seesaws and Start Banning Snapchat (Templeton Press).


Ep. 103: Is capitalism just not radical enough? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 18:55

This episode’s guest advocates abolishing private property as we know it and ditching one person democracy, one vote democracy. And he does this in the name of saving capitalism and a just, democratic society.

His name is Glen Weyl, co-author with Eric Posner of the new book “Radical Markets,” and he joins me to discuss his main arguments and convince me such radical steps are necessary at a time of steady economic growth and falling unemployment. Agree or not, it’s a fascinating discussion.

You can also subscribe to my podcast on iTunes or Stitcher, or download the podcast here.

Baseball is better than soccer, and other reasons for Sam Brownback to visit Taiwan - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 18:20

It’s not often that the United States has a chance to advance three varied foreign policy goals with one deft move. Next month, however, President Trump will have an opportunity to do just that.

Earlier this week, the US International University Sports Federation selected the Kansas University Jayhawks to represent the United States at the upcoming World University Baseball Championships (WCB), to be held in Chiayi, Taiwan. It just so happens that a senior Trump administration official is a Kansas native, and though he may be a Wildcat at heart, I bet Amb. Sam Brownback would welcome the opportunity to cheer on American athletes from his home state in international competition.

Republican Kansas Governor Sam Brownback speaks to supporters after winning re-election in the U.S. midterm elections in Topeka, Kansas, November 4, 2014. REUTERS/Mark Kauzlarich

Sam Brownback, of course, is the current ambassador-at-large for international religious freedom. Why dispatch him to Taiwan? Three reasons:

  1. Defending religious freedom is a persistent challenge in Asia. And there is, perhaps, no greater offender than China. (North Korea, of course, gives China a solid run for its money.) Recent reports have detailed mounting human rights abuses in Xinjiang, where China has established numerous “re-education camps” for Muslim Uighurs and Kazakhs, in which tens or hundreds of thousand are interned. Taiwan, of course, understands China better than other country. Experts and officials there may have unique insights on what is happening in Xinjiang and on how China intends to employ new regulations on religious affairs. In sending Amb. Brownback to Taiwan, moreover, President Trump could subtly signal American concern over the Vatican’s outreach to Beijing, the possibility that it will end its diplomatic relationship with Taipei, the potential implications for freedom of religion in China.
  2. America’s Asian allies are questioning Washington’s commitment. In March, President Trump signed into law the Taiwan Travel Act, which encourages (but does not mandate) high-level officials from the United States and Taiwan to meet each other in both countries. To date, however, the president has not dispatched any cabinet-level officials or general officers to Taiwan, which would demonstrate that the Taiwan Travel Act is more than just a piece of paper and that he cares deeply about the US relationship with Taiwan. Beijing has been applying unrelenting pressure on the island over the last two years and a crisis may be in the making. By sending Amb. Brownback to Taiwan, Pres. Trump would reassert the US role in the Taiwan Strait and demonstrated that he values the decades-old partnership with Taipei.
  3. The world is focused on the wrong international sporting event. The United States is currently absent from the FIFA World Cup, one of the world’s premier international sporting events. To be clear, I care not a whit about soccer (it’s baseball season, people), but sitting on the sidelines is not a good look for America. Amb. Brownback’s attendance at the WCB would draw attention to America’s Pastime (a sport which is—how do I put this?—actually enjoyable to watch and play), enhance American soft power, and (God willing) dilute mentions of the World Cup in my Twitter feed.

The relative merits of baseball and soccer aside, President Trump has good reasons—and now a good excuse—to send Amb. Brownback to Taiwan. Let’s hope he does so.

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Zombie policy ideas: anti-immigration/zero population growth edition - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 18:18

Some bad public policy ideas have remarkable staying power, such as “tax cuts pay themselves” or “deficits don’t matter” or “end the Fed.” Then there are those you think are dead but turn out are only “mostly dead.” You can put “protectionism brings prosperity” in that category. Also, surprisingly, “a growing population is a bad thing.” I thought we pretty much abandoned that sort of “zero population growth” nonsense in the 1970s — along with “we are running out of natural sources” — although I knew it still had a pulse in some extreme environmentalist environs, such as Hollywood.

Storm clouds loom over an American flag in Convent, Louisiana, U.S., June 11, 2018. Picture taken June 11, 2018.

(I have written, by the way, about the work of demographer Sanjeev Sanyal whose calculations find the world’s overall fertility rate falling to the replacement rate in 2025, although global population will continue to expand thanks in part to rising longevity, for another few decades. Then comes the Big Shrink with world population peak around 2055 at 8.7 billion and will then decline to 8.0 billion by 2100.

But it turns out that anti-immigration sentiment is a sort of gateway drug or disease vector for new strains of ZPG thinking. In a recent a Washington Post op-ed, “Why do we need more people in this country, anyway?,” former Trump White House national security spokesperson and current “American Greatness” thinker Michael “The Flight 93 Election” Anton argues for ZPG, at least in the United States:

Does the United States — population 320 million and rising — need more people? If so, why? … We know how more immigration benefits big business and the Democratic Party. No one has yet convincingly explained how it benefits the American people as a whole. …Why do we need more people? For the extra traffic congestion? More crowded classrooms? Longer emergency room and Transportation Security Administration lines? Higher greenhouse-gas emissions?

Turns out some of the immigration restrictionists are really abolitionists, I guess. Of course, the US is not a particularly population dense nation. Immigration has many, many benefits, some of which I outline in my new The Week column. And as far as all those other “spaghetti on the wall” complaints: TSA lines, traffic congestion — those are really the result of certain policy choices, not the existence of teeming masses of human Americans I get that America’s nationalist populists have great nostalgia for the 1950s and 1960s American economy and cultural makeup. but do they also want to reduce the US population by 40% to where it was in 1965? Or maybe all of this is really a bit of political legerdemain meant to hide the fact that by seemingly calling for a ban on all immigration — Stay away all you foreign AI researchers and political refugees and striving future entrepreneurs! — for various and sundry reasons, unpleasant questions about cultural panic are avoided. I mean, TSA lines, really?


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‘AEI Education Podcast’: The JANUS decision with Gov. Bruce Rauner and Katharine Strunk - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 18:00

In the first episode of the AEI Education Podcast, host Nat Malkus discusses the Janus V. AFCSME opinion, in which the Supreme Court ruled that public sector unions may no longer require non-members to pay agency fees.

First, Nat talks to the original filer of this case, Governor of Illinois Bruce Rauner, about why he thinks the opinion is such an important victory for taxpayers and for workers’ rights. Then, Katharine Strunk, Professor at Michigan State, joins Nat to discuss what the decision means for education policy and for the future of teacher unions.

Supreme Court travel ban decision moves left’s fight with Trump from the courts to the ballot box - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 17:33

The Supreme Court’s decision Tuesday in Trump v. Hawaii – commonly referred to as the travel ban case – unmistakably reached the right result.


The court rejected some of the more outlandish attacks on the Trump administration’s immigration policies and also made clear that the left’s resistance will have to fight the president in the arena of the ballot box, rather than the courtroom – as the Constitution fundamentally requires.

In an opinion by Chief Justice John Roberts, a 5-4 majority upheld the Trump administration’s use of the power delegated to the president by an act of Congress to ban the entry of foreigners from countries deemed threats to national security.

The high court’s opinion reflected views of presidential authority, national security and congressional control over immigration that the court has repeatedly endorsed.

The high court’s opinion reflected views of presidential authority, national security and congressional control over immigration that the court has repeatedly endorsed.

The decision was not a broad expansion of executive power, as critics allege. Rather, it fell squarely in line with the Supreme Court’s leading precedents. The court soundly rejected novel and implausible arguments that would have wrenched the constitutional allocation of powers loose from its long-fixed moorings.

Critics of the travel ban made two main arguments. The first was statutory, based on a reading of the immigration laws. The second was constitutional, and relied on the Establishment Clause of the First Amendment.

The court’s rejection of the statutory argument was almost a no-brainer. Congress had by law delegated the president sweeping power over the entry over foreigners into the United States. In doing that, it had confirmed and reinforced the president’s inherent power as chief executive.

Going back at least to the Supreme Court’s 1936 decision in the case of Curtiss-Wright Export Corp., the court has consistently upheld such broad delegations of Congress’ power, especially in the sensitive areas of national security and foreign policy, with which immigration obviously intersects.

Such statutory delegations dovetail neatly with the president’s purely constitutional authorities. Liberals have usually applauded such broad transfers of congressional power to the administrative state when the subject is environmental protection or market regulation. With the boot on the other foot here, the lockstep-liberal bloc of four on the Supreme Court dissented.

Trump v. Hawaii aligns closely with another major Supreme Court precedent – the opinion of the New Deal Justice Robert Jackson in the Steel Seizure case, which arose out of President Truman’s seizure of privately owned steel mills during the Korean War.

Jackson’s view that the power of the president is at its highest point when pooled with the power of Congress fits the travel ban case perfectly. And Jackson’s opinion is also iconic for liberals. Yet it had no force for them here.

The majority opinion in the travel ban case relied heavily on a third major precedent – the Court’s 1993 decision in Sale v. Haitian Centers CouncilThat opinion, which commanded an 8-1 majority, was written by Justice John Paul Stevens, one of the court’s most committed liberals.

In the Sale case, the high court upheld the Clinton administration’s policy of ordering the Coast Guard to interdict thousands of Haitians fleeing a dictatorship in their home country and desperately attempting to find safety in the United States by risking their lives on the high seas.

Judged by the standards of common decency, the Clinton policy was far more reprehensible than anything the Trump administration has done regarding immigration. Moreover, Clinton administration actions against the Haitian boat people was condemned as a human rights violation when reviewed in 1997 by the Inter-American Commission on Human Rights. However, so long as the Sale precedent stands, it supports the legality of Trump’s travel ban.

We turn now to the more important part of the travel ban opinion – its constitutional side.

The implications of the Supreme Court’s ruling here are critical for the future of the Trump administration (and indeed, all future administrations). The court rejected the claim that President Trump had violated the Constitution because of his personal bias against Muslims.

Although earlier versions of the travel ban had applied only to Muslim countries and had granted an exception for Christians, the Trump administration revised the ban. It in the form in which the ban came before the Supreme Court, it reflected no religious or ethnic bias on its face.

Nevertheless, President Trump’s political opponents (who included the lower federal court judges in Hawaii and California) claimed that the president’s personal state of mind was subject to judicial review and could be deduced from his statements, tweets, and the like both before and after the 2016 election.

Rejecting this argument, the Supreme Court stated that if President Trump’s executive order is facially legal and can be justified on a legitimate national security basis (as the president’s order was), the federal judiciary should not block it.

“Under these circumstances, the Government has set forth a sufficient national security justification to survive rational basis review,” the court’s majority decision said. “We express no view on the soundness of the policy.”

To have allowed such an aggressive form of judicial review would have paralyzed the Trump administration and future presidents by subjecting to challenge virtually any presidential decision, even if facially legal, based on their hidden state of mind.

While Trump critics may oppose his immigration policies, the Supreme Court reminds us all that the proper forum to fight it remains the political process – by electing members of Congress, who can always retract the delegation of authority to the president, or by electing a new president, who can issue new orders.

John C. Yoo is Heller professor law at UC Berkeley School of Law and a visiting fellow at the American Enterprise Institute, and the author of the new book “Striking Power: How Cyber, Robots and Space Weapons Change the Rules of War.”  Robert J. Delahunty is a law professor at St. Thomas University.

Janus v. AFSCME | VIEWPOINT - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 17:30

On June 27, 2018, the Supreme Court delivered their decision in Janus v. AFSCME. In their groundbreaking ruling, the court stated that public-sector unions may no longer compel nonmembers to pay agency fees to the union that represents them. AEI’s Nat Malkus interviews Illinois Governor Bruce Rauner, who was one of the people to initiate the case against the American Federation of State, County, and Municipal Employees.

Whom should government serve? Kids vs. grandparents - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 17:18
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How does the government balance the interests of parents and children? How should it?

I argued in a column last month that the Trump administration’s policy of separating children from parents at the U.S. southern border is cruel and an offense against the inherent dignity of both. My Bloomberg Opinion colleague Tyler Cowen pointed out that these families are hardly the only ones broken up by U.S. public policy. He cites a 2010 study finding that over 1.2 million incarcerated Americans have children under the age of 17. “These separations can be traumatic,” Cowen argues, “and they help perpetuate generational cycles of low achievement and criminal behavior.”

In both these instances, policy turns children into collateral damage.

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In other situations, policy is clearly crafted to favor families with children. While not comparable in impact to family separation, consider the earned-income tax credit, a federal transfer payment to working, low-income households designed to supplement low earnings and encourage work. The maximum benefit given to households with more than three children is over $6,000 per year. The maximum benefit for a household with no children? A little over $500.

Channeling Bastiat: If you don’t object to free light from the Sun, why object to low-cost goods from China? - AEI - American Enterprise Institute: Freedom, Opportunity, Enterprise

Thu, 06/28/2018 - 15:53

Tomorrow, June 29, marks the 217 anniversary of the birth of the great French classical liberal economist Frédéric Bastiat (born June 29, 1801) whom economist Joseph Schumpeter called the “most brilliant economic journalist who ever lived.” Celebrating Bastiat’s birthday has become an annual tradition at CD, and I’ll start a day early with this re-post of a previous CD post from last August.

In the mid-1800s, the French government imposed tariffs on numerous imported foreign goods, on everything from sewing needles to locomotives, to protect French industries from more efficient foreign rivals that could produce and sell goods to French consumers at a lower cost than domestic producers. Around that time, French economist Frederic Bastiat published a now-famous satirical proposal to the French government titled “The Candlemakers’ Petition” that was intended to help members of the French Parliament understand that protectionism and mercantilist trade policies would make France weaker economically and “not great again.” Sound familiar? When it comes to opposition to free trade and support for protectionism, not too much has changed in the last 172 years.

Below is a shortened and edited version of Bastiat’s classic economic essay:

Petition of the Manufacturers of Candles, Waxlights, Lamps, Candlelights, Street Lamps, Snuffers, Extinguishers, and the Producers of Oil, Tallow, Resin, Alcohol, and, Generally, of Everything Connected with Lighting

To the Members of the Chamber of Deputies. Gentlemen:

Your chief care is the interest of the producer. You desire to protect him from foreign competition and reserve the domestic market for domestic producers.

We are suffering from the intolerable competition of a foreign rival, who has an advantage so far superior to ours for the production of light that he floods our domestic market with it at a fabulously reduced price. The moment he provides his product, our consumers abandaon us and rush to our rival; and an important domestic industry, having countless ramifications, is rendered completely stagnant. This rival, who is none other than the sun, wages an economic war war mercilessly against us.

What we pray for is that you to pass a law ordering the shutting of all windows, skylights, dormer-windows, outside and inside shutters, curtains, blinds, bull’s-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or through which the light of the sun enters houses, to the disadvantage of the manufacturers that have accommodated our country — a country that, in gratitude, ought not to abandon us now to foreign competition.

If you close access to natural light, and create a demand for artificial light, which of our French manufacturers will not be benefit by such protectionism?

If more tallow is consumed, then there must be more oxen and sheep; and, consequently, we will see the multiplication of meadows, meat, wool, and hides.

If more oil is consumed, then we will stimulate more cultivation of the poppy, olive, and rape. These rich and soil-exhausting plants will come at the right time to enable us to avail ourselves of the increased fertility that the rearing of additional cattle will impart to our lands.

Our heaths will be covered with resinous trees. Numerous swarms of bees will, on the mountains, gather perfumed treasures, now wasting their fragrance on the desert air, like the flowers from which they emanate. Thus, there is no branch of agriculture that shall not greatly develop.

The same remark applies to navigation. Thousands of vessels will proceed to the whale fishery; and in a short time, we shall possess a navy capable of maintaining the honor of France, and gratifying the patriotic aspirations of your petitioners, the undersigned candlemakers and others.

Only have the goodness to reflect, gentlemen, and you will be convinced that there is perhaps no Frenchman, from the wealthy coalmaster to the humblest vendor of lucifer matches, whose lot will not be improved by the success of this our petition.

As long as you exclude, as you do, coal, iron, corn, foreign fabrics, in proportion as their price approximates to zero, what inconsistency it would be to admit the light of the sun, the price of which is already at zero during the entire day!

Economic Lessons:

1. If you wouldn’t object to receiving free light from the Sun, then you shouldn’t object to receiving free goods from China, Mexico or Japan. And even though free goods aren’t usually available, you shouldn’t object to Americans being able to buy cheap goods from China, Mexico, and Japan at prices below those offered by domestic producers.

2. If you wouldn’t object to the Sun “dumping” free light on the US economy every day, then you shouldn’t complain about foreign producers “dumping” low-cost goods on the US economy at prices allegedly below the cost of production.

3. Suppose the Sun is able to provide free light to Americans only because the citizens/taxpayers of the Sun subsidize the production of light on their star. If you wouldn’t object to free light from the sun that is only made available for free due to somebody subsidizing that production, then you shouldn’t object to goods being made available to Americans at low prices that result from foreign subsidies.

4. If you wouldn’t be so foolish to think that the Sun is stealing our jobs, prosperity, and wealth by providing free light, you likewise shouldn’t be so foolish to think that China is stealing our jobs, prosperity, and wealth by providing us with low-cost consumer goods.

5. f you don’t object that the Sun provides massive amounts of free light to Americans but doesn’t buy any products “Made in the USA,” then you shouldn’t object to the fact that Americans buy (import) more products from China than we sell (export) to the Chinese.