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Identity Politics Is America's Kryptonite

TownHall Latest columns - Sun, 08/02/2020 - 19:01
In todays America, there's no safe space from politics.

The UK and the EU Need a New Approach to Trade Remedies

Cato Recent Op Eds - Thu, 01/16/2020 - 08:34

Simon Lester

Whatever your view is on the merits of the European Union, it would be hard to dispute that it is one of the most innovative international economic arrangements ever created. Its founders had a general vision, but it took a wide range of institutional and policy innovations during implementation to make it all work.

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Seeking institutional innovation

As the UK and the EU undertake the difficult process of undoing their relationship and developing a new one, there will be a need for some additional innovation. Trying to use traditional trade agreement obligations as a replacement for this deep and complex economic relationship will be insufficient.

One area of particular difficulty will be trade remedies, which include tariffs imposed in response to import prices that are deemed too low (anti-dumping duties) and to foreign government subsidies (countervailing duties).

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As the UK and the EU undertake the difficult process of undoing their relationship and developing a new one, there will be a need for some additional innovation.

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The term ‘dumping’ is sometimes thrown around loosely in trade policy discussions, but it has a technical meaning that involves a determination of whether the export price of a product is ‘unfairly’ low. A tariff can then be imposed to counteract the impact of this pricing. With regard to subsidies, there is a calculation of the amount of the subsidy, and, similarly, a tariff is imposed to counteract it.

The EU is one of the rare trade agreements that eliminates the use of trade remedies on internal trade. As a result, trade between the UK and other EU countries is not subject to trade remedies.

I have argued previously that tariffs imposed as trade remedies are unnecessary and problematic here, and should be kept out of the UK-EU economic relationship. This relationship would be permanently soured by recurring claims of ‘unfair trade’ by one side or the other.

Nevertheless, trade remedies are an established part of domestic trade policy and are difficult to avoid. Interest groups demand them, and it is hard to have a proper debate over their merits.

The UK has already set up a Trade Remedies Authority to oversee a domestic trade remedies regime, and trade remedies are likely to be part of the future UK-EU economic relationship.

But perhaps there is room for some innovation here that can make the situation better.

One of the issues with the imposition of trade remedies is allegations of bias on the part of the domestic agencies who oversee things. These agencies are thought by many to favour the point of view of domestic industries who complain about unfair foreign trade, and to discount the arguments of importers and foreign producers.

But what if the these bias concerns could be addressed with an institutional innovation? Perhaps the trade remedy process could be moved to the international level, with neutral adjudicators, rather than domestic agency officials, deciding the issues.

The WTO and NAFTA approach to resolving trade remedy disputes

As things stand now, domestic trade remedies are subject to challenge pursuant to the rules of the World Trade Organization on these issues (the Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures).

If a government does not like how its companies were treated in a domestic trade remedy proceeding, it can bring a WTO complaint against the government responsible. As part of this complaint, the determinations by domestic agencies are reviewed to see whether — loosely speaking — they were reasoned and adequate, and consistent with WTO obligations. That process is useful, but it takes a good deal of time, and given resource constraints only a few domestic determinations  are challenged each year.

In the North American Free Trade Agreement — NAFTA — there is a unique set of rules that allow the companies subject to the trade remedy proceedings to bring a complaint against the determination themselves. A NAFTA panel will be set up to review the domestic agency’s decision for consistency with domestic law.

Going further

The WTO/NAFTA approach still allows the domestic agency to hear the case first. But instead of domestic agencies hearing the case initially, and then an international body reviewing that decision, we could start with an international body that would take the place of the domestic agency and examine each of the trade remedy elements: Whether dumping and subsidization took place, and in what amounts; and whether the domestic industry suffered injury as result.

To this end, an international Trade Remedies Tribunal could be established by the UK and the EU and staffed with experts who would evaluate all of these issues and render a decision.

If we take the traditional approach to trade remedies, it is sure to create tension between the UK and the EU. Companies subject to trade remedies generally believe the foreign agency that is imposing tariffs on them is behaving unfairly.

They see these determinations as inherently biased, and a years long process of review at the WTO is of only limited help. If, on the other hand, the initial determination was international in nature, and therefore seen as more objective, it would have more credibility.

It might seem like the wrong moment for international tribunals in UK-EU relations. The people in the UK who support Brexit are looking to get out from under institutions such as the ECJ.

But tariffs are a special situation. There is not much appetite in the UK or the EU for new tariffs, and people are going to be surprised and unhappy that a tariff-free, quota-free UK-EU relationship will still involve tariffs under the normal operation of trade remedies.

Thus, an independent tribunal that oversees these tariffs and ensures that they are legitimate and necessary could be acceptable here. This tribunal would not interfere with domestic regulation, as the ECJ does; it would only act as a check on tariffs.

Ideally, of course, there would be no trade remedies at all between the UK and the EU, as is the case now. But the political realities suggest there will be. If we can limit their abusiveness, the UK-EU relationship will be more peaceful and stable.

Simon Lester is the associate director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies in Washington.

Fixing FISA after the Carter Page Report

Cato Recent Op Eds - Wed, 01/15/2020 - 13:15

Julian Sanchez

At a Senate Judiciary Committee hearing held shortly after the release of his scathinging report on the FBI’s investigation of erstwhile Trump aide Carter Page, DOJ Inspector General Michael Horowitz had a telling exchange with Sen. Marsha Blackburn (R-Tenn):

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Blackburn:  Let me ask you this, how often do you find mistakes in a FISA Application?

Horowitz: This is actually the first time my office has done a deep dive into a particular application. We’ve done higher level reviews on the FISA process and have found various issues at a higher level, but this is the first time we’ve been able to delve in this way.

Blackburn: It’s a fairly fairly unusual occurrence?

Horowtiz: Let me put it this way, I would hope so.

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Presumably Blackburn had expected a rather different response: That the embarrassing catalog of omissions, errors, and misrepresentations that the IG’s office found in applications for FISA surveillance of Page were extraordinary and unprecedented—suggesting some special vendetta against the Trump campaign.  Horowitz’s discomfiting, candid reply deserves to be unpacked, because it implies at least three important points worth bearing in mind.  

First, while surveillance of an advisor to a presidential campaign is certainly an unusual use of the Foreign Intelligence Surveillance Act, there is no reason to suppose that Page’s case is some sort of extreme outlier. On the contrary—as common sense would suggest and Horowitz’s report confirms—investigators were acutely aware that this was an enormously sensitive case certain to draw intense scrutiny. Thus the initial FISA application targeting Page, at least, was unusually detailed, and received additional layers of review before being submitted to the Foreign Intelligence Surveillance Court (FISC). It’s reasonable to infer, then, that many of the thousands of FISA applications filed each year have defects as bad or worse than those Horowitz identified here.

Second, if we want an explanation for those errors, Horowitz’s answer suggests one more systemic than a cartoonish anti-Trump vendetta: Nobody is doing the kind of thorough investigation that would find and correct those problems. In a criminal investigation, the purpose of a so-called Title III wiretap order is to obtain evidence for a criminal prosecution. While the initial application is submitted in secret, defense attorneys will be entitled to discovery at trial, and have ample incentive to hunt for government missteps. What’s more, investigators know they need to keep track of potentially exculpatory information, which they’ll be obligated to turn over. Even in cases where no prosecution results, the target of a Title III wiretap has to be notified once the wiretap ends, and may take legal action. The purpose of FISA surveillance, by contrast, is gathering foreign intelligence, not collecting evidence for use in court: The vast, vast majority of FISA targets will never be prosecuted. Unlike a Title III, a FISA might be “successful” from the government’s perspective—because it yielded foreign intelligence information—without actually validating its initial premise that the target is a foreign agent. In short, while the FISA process looks superficially somewhat similar to its criminal counterpart on the front end, it lacks the adversarial mechanisms on the back end that constitute a critical part of the criminal process.

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The most obvious takeaway from the Horowitz report is that we need far more comprehensive “deep dive” investigations into the use of intelligence tools.

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Third, we should be wary of the temptation to think about potential FISA reforms exclusively in terms of this case, and the findings of this one report. Not merely because we don’t yet know which of the problems identified by Horowitz are most pervasive—and thus most indicative of the need for a remedy at the policy level—but because Horowitz focused almost entirely on Title I of FISA, which most closely resembles the traditional warrant process, with judges making particularized probable cause determinations. An intelligence investigation in which a FISA order was sought assuredly made use of myriad other intelligence tools, most of which involve far less oversight: Business records orders (§215), pen registers to collect communications metadata (§214), and National Security Letters for certain categories of financial or telecommunications records. Horowitz says little about these, perhaps because these other tools had not been as central to the public controversy surrounding the Page investigation. But if corners are cut to the extent documented by Horowitz even in the case of Title I orders, the most rigorously scrutinized, we can hardly suppose everything’s copasetic with authorities that effectively operate on the honor system.

Title I FISA Orders

The most obvious takeaway from the Horowitz report is that we need far more comprehensive “deep dive” investigations into the use of intelligence tools, both to discover how pervasive the defects Horowitz identified are in other Title I FISA applications, and whether there are comparable problems with other surveillance authorities. As the Inspector General’s report demonstrates, there are serious issues that will not be identified by “higher level” reviews, such as the omission of information that would tend to undermine the government’s case. But such “deep dives” need not just serve as a guide for policymakers: They can also serve as a partial remedy, precisely by replicating (imperfectly) the mechanisms and incentives that serve as checks on criminal investigations.

While, of course, it is not realistic to expect reviews this exhaustive for any significant percentage of FISA investigations, a deeper review of a representative sample of U.S. person FISA applications—not simply verification that facts asserted in the application have documentary support, but a review of the case file and correspondence for material omissions—may help to reproduce some of the incentives that exist on the criminal side. Case agents will be conscious of the possibility—the risk, if not the certainty—that they will be called to explain why some fact favorable to the target of surveillance was omitted from an application. Even if only a small fraction of FISA applications can be so reviewed, such a process would introduce an incentive to focus on potentially exculpatory information currently absent from FISA.

On the front end, the role of existing FISC amici could be expanded to permit discretionary intervention in applications being submitted to the Court—not merely in cases in which the FISC itself seeks their perspective—at least in cases designated “special investigative matters” because of their potential implications for religious, political, or press freedoms. The current remit of the amici is to advise the Court in cases involving “novel or significant” legal interpretations or requiring technical expertise. But civil liberties interests need not be “novel” to require an advocate to make them sufficiently salient to a judge. The participation of amici would add a dimension not typically provided by existing internal oversight, which tends to be more focused on formalistic compliance than weighing competing equities and interests.

Finally—and perhaps most importantly—the presumption that FISA surveillance will be permanently covert should be ended. Currently, the only FISA targets who normally become aware of surveillance are the small fraction the government ultimately chooses to prosecute for a crime—which is to say, those whose wiretaps did indeed produce strong evidence confirming the government’s suspicion that they were engaged in wrongdoing. A target whose surveillance proves to have been unjustified, perversely, has no remedy, because they will never learn of it. While there will doubtless be cases in which the protection of sources and methods precludes such notice—where publicizing even the identities of erroneous targets would feed too much vital information to genuine adversaries—this should no longer be the default. At the termination of FISA surveillance of a U.S. person, there should be a rebuttable presumption of notice parallel to that required by Title III surveillance, unless the government can demonstrate to the FISC that such notice would entail a concrete national security harm sufficiently grave to outweigh the target’s interests. (Here, too, FISC amici should have an opportunity to represent those interests.) As the Supreme Court wrote in Berger v. New York, the requirement that targets of a search be given notice absent exigent circumstances “would appear more important in eavesdropping, with its inherent dangers, than that required when conventional procedures of search and seizure are utilized.” Indeed, notice is an important component of what makes a search “reasonable” in Fourth Amendment terms. It was the absence of notice that particularly sparked Lord Camden’s ire in the seminal English case of Entick v. Carrington:

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[The warrant] is executed by messengers with or without a constable (for it can never be pretended, that such is necessary in point of law) in the presence or the absence of the party, as the messenger shall think fit, and without a witness to testify what passes at the time of the transaction; so that when the papers are gone, as the only witnesses are the trespassers, the party injured is left without proof.

If this injury falls upon an innocent person, he is as destitute of remedy as the guilty: and the whole transaction is so guarded against discovery, that if the officer should be disposed to carry off a bank bill he may do it with impunity, since there is no man capable of proving either the taker or the thing taken.

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While the facts of specific cases may justify delaying or waiving notice to a target, that justification should still need to be made on a case-by-case basis: It should not simply be categorically presumed that the government’s ex ante foreign intelligence purpose in seeking a wiretap automatically provides sufficient ex post grounds for leaving a target “destitute of remedy.”

Other Surveillance Authorities

While the Horowitz report says relatively little about other investigative tools deployed in the Page investigation, government acquisition of detailed financial and telecommunications metadata can in many ways be as intrusive as the collection of content. Yet multiple authorities—including the aforementioned §215, §214, and National Security Letters—permit such information to be obtained with little more than an assertion of “relevance to an investigation.” In the case of National Security Letters, judicial approval is not even required. The FBI could have used this panoply of tools to conduct incredibly revealing surveillance of Page without risking similar criticism, because they would not have needed to establish probable cause to believe he was acting as a foreign agent. It would be enough that the case agents regarded his activities as potentially relevant to their probe. That bar should be raised.

Here, current law provides a straightforward mechanism for strengthening civil liberties protections while still allowing investigators enormous flexibility. FISA’s business records authority (§215) specifies that records are presumptively relevant to an intelligence investigation if they pertain to:

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(a) a foreign power or an agent of a foreign power

(b) the activities of a suspected agent of a foreign power who is the subject of such an authorized investigation, or

(c) an individual in contact with, or known to, an agent of a foreign power who is the subject of such authorized investigation.

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All three of the aforementioned authorities should be amended to require a showing that records are relevant to the investigation and fall into one of these three quite broad categories. This would help ensure both that the net of “relevance” is not cast so wide it encompasses individuals without a concrete link to a valid investigative target, and that peripheral associates of a target are not automatically or indiscriminately subject to invasive monitoring without some specific basis for believing their records are needed, beyond the mere fact of association with a target.

In the case of National Security Records, the scope of telecommunications records obtainable should be restricted to “basic subscriber information”—such as name, address, length of service, and billing address—while more detailed “electronic communications transaction records” and “toll billing records” require use of an authority subject to judicial approval, such as §215. This should give investigators the necessary latitude—and enough initial information—to assess whether a court order should be sought without exposing a detailed roadmap of individuals’ digital activities before a judge is involved.

In Page’s case, of course, these changes would not in themselves have made much difference, since the FBI had successfully persuaded the FISC that he was probably a foreign agent. But they might have limited the collateral damage to friends and associates whose finances, phone records, and online activity all became automatically available to the government as a result. While only Page himself was directly subject to full-content FISA surveillance, everyone in contact with him would have become “presumptively” subject to extensive metadata surveillance as a result of that association.

In addition to being advisable in themselves, then, reforming these metadata authorities can be thought of as a backstop or supplement to FISA Title I reform. Even with the best imaginable procedures, the government will sometimes target people for surveillance improperly, or for longer than is justifiable. Narrowing the government’s power to acquire metadata ensures that such errors are at least not compounded by authorizing granular monitoring of their entire social universe.

Julian Sanchez is a senior fellow at Cato and focuses primarily on issues at the busy intersection of technology, privacy, civil liberties, and new media — but also writes more broadly about political philosophy and social psychology.

It’s Time to Make Congress Great Again

Cato Recent Op Eds - Wed, 01/15/2020 - 11:03

William Yeatman

In contemporary American government, the presidency is dominating Congress in our system of separate-but-competing branches. This constitutional imbalance is a growing threat to liberty, and the only solution is to make Congress great again.

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Let’s start with first principles: The Constitution sets forth our governmental structure in its first three Articles.

Article I of the Constitution establishes Congress. Article II creates the presidency. And Article III renders the Supreme Court.

Did you notice that Congress is number one?

That’s not by accident. The Founding Fathers took it for granted that Congress is first among equals within our tripartite government.

Indeed, the Founders feared Congress most of all. In Federalist 47, James Madison worried that Congress’s “impetuous vortex” would swallow up the authority wielded by its coordinate branches.

Ultimately, the Founders feared most the concentration of power, which Madison described as being the “very definition of tyranny.”

For most of its history, Congress has lived up to these expectations. Now, however, our once-grand legislature is a shell of its former self.

With respect to current events, the best evidence of Congress’s fall is the ongoing impeachment debacle.

The Founding Fathers intended impeachment to be Congress’s ultimate weapon in a permanent competition with the presidency. In Federalist 66, Alexander Hamilton wrote that impeachment is Congress’s “essential check” on “encroachments” by the executive branch.

In accordance with these expectations, past impeachments have been part and parcel of structural battles between Congress and the presidency.

Consider President Richard Nixon. Sure, Congress put him through the impeachment wringer, but lawmakers also enacted reforms to shift the balance of power towards Congress. The Legislative Reorganization Act of 1970, for example, beefed up congressional staff and resources. And the Budget Impoundment and Control Act of 1974 attempted to reassert Congress’s power over the purse.

Similarly, the 19th century impeachment of President Andrew Johnson was emmeshed within a larger struggle between the elected branches of government.

Today’s impeachment of President Donald Trump, by contrast, has nothing to do with checking executive power. Instead, it’s all about winning the presidency on behalf of the two political parties.

Getting two-thirds of the Senate to go along with removing President Trump was never going to happen, so instead House Democrats are using the impeachment inquiry to sway next November’s vote.

For their part, Senate Republicans are embracing a trial, reportedly in the hope that a drawn-out process will keep Democratic presidential candidates in the Senate off the campaign trail during the crucial first primaries in Iowa and New Hampshire.

Meanwhile, neither the House nor Senate currently is trying to enact substantive reforms that would rein in executive overreach. Rather than competing with the president, both chambers in Congress are leveraging the proceedings to conduct partisan political campaigns for the presidency.

What’s going on here? Why have the House and Senate, through the impeachment process, become willing cogs in the oily machinery of the 2020 presidential contest?

The answer involves a tectonic shift in American government, from a functioning separation of powers to one that is alarmingly out of whack. To appreciate today’s perverted impeachment process, one must understand how the president supplanted Congress as policymaker-in-chief.

Our imbalanced constitutional process results from three interrelated historical developments.

The first is that Congress, over the last century, has given away, or “delegated,” much of its policymaking initiative to the executive branch. For the most part, Congress delegates to pass the buck. When voters want something done, lawmakers could legislate policy specifics, but they’ll get blamed if they err. By delegating, Congress can escape accountability by having agencies make tough choices.

Thus, Congress has delegated into existence an alphabet soup’s worth of regulatory agencies, which are collectively known as the administrative state.

The second historical development is the centralization of power in Congress under the control of party leaders. When Congress first started giving away its power, lawmakers took pains to oversee their delegations through a system of strong committees in the House and Senate. From the New Deal to the Reagan era, powerful committee chairs vied with presidential appointees for influence at regulatory agencies.

During the last 40 years, however, Congress changed. Demographic shifts led to the end of blocs of southern Democrats and northeastern Republicans. Without these moderate voices, the two parties became more uniform in outlook.

As hive-mentalities were taking hold in Congress, opportunistic leaders, such as former House Speaker Newt Gingrich (R-GA) and Senate Majority Leader George Mitchell (D-ME), consolidated power with rules changes, procedural maneuvering, and the distribution of party resources. As power shifted from committees to party leadership, Congress lost the capacity to oversee its delegations.

This brings us to the third historical development. As Congress lost interest in managing agency policymaking, modern presidents have seized undisputed supremacy over the administrative state. Since Nixon, an unbroken succession of presidents tightened the Oval Office’s grip over agency spending and regulatory output, primarily through the administrative state’s brain—the Office of Management and Budget within the Executive Office of the President.

The upshot is that policy now flows from the White House rather than Capitol Hill. In 2018, federal agencies issued 12 rules and regulations for every law Congress passed (3,367 agency rules, compared to Congress’s 291 laws).

Nor are these middling measures. Major economic and social policies—identical to those that Congress considered but ultimately rejected—now regularly emanate from the executive branch.

For example, Congress couldn’t pass immigration reform, net neutrality, nor a carbon dioxide cap-and-trade, but President Barack Obama achieved the same results unilaterally using the power that Congress already had given away.

Republican presidents, alas, are no less guilty of executive excess. To wit, lawmakers denied President Trump funding to build a border wall, but then he exercised his delegated authority to expand the wall without Congress.

In a celebrated law review article written when she was a professor at Harvard University, Supreme Court Justice Elena Kagan wrote that contemporary government is defined by “presidential administration” due to the president’s “comparative primacy [relative to Congress] in setting the direction and influencing the outcome of administrative process.” Today, the president doesn’t merely set the agenda; he controls its creation and execution.

In this context—where the president calls the shots and Congress is beholden to party leadership—half the legislature always is unbothered with unbound executive authority whenever “their guy” occupies the White House.

It’s a vicious feedback loop. The more powerful the president becomes, the more our party-centric Congress rationally believes that the Oval Office is the most efficient means to implement the planks of a given party’s platform.

Of course, the parties whine about executive overreach, but only when they don’t occupy the White House. Neither party seeks to claw back power from the presidency, because each side wants its respective team to exercise executive authority.

So, congressional Republicans cried foul about executive power when President Obama resorted to his “phone and pen,” but then rallied to the support of President Trump when he disregarded Congress’s “power of the purse” in funding the border wall. And Democratic lawmakers now complain about presidential power, even though they gave President Obama an ovation when he threatened to bypass Congress on climate change during the 2013 State of the Union address.

Today’s supine Congress would be unrecognizable to the Founding Fathers. They understood that a concentration of power threatens individual liberty, so they designed a government with three branches—executive, legislative, and judicial—and gave each the means to check the other. By dispersing power into competing institutions, the Founders’ constitutional design serves to protect our individual liberty. At present, this constitutional design is buckling.

As noted above, the Founding Fathers feared congressional power most of all. Federalist 62 warns that an “excess of lawmaking” is a “disease” to which “our government is most liable.” For this reason, the Constitution makes it hard to pass laws. Statutes must be passed by both chambers of Congress, and then signed by the president. It’s an arduous journey for a bill to become a law.

By contrast, it’s far easier for the president to impose a regulation. All he needs to do is pick up the phone to get the ball rolling.

Because all regulations carry the force of law, a government characterized by “presidential administration” incubates the “disease” of “excessive lawmaking” no less than a government controlled by Congress. Overweening government is a threat to liberty, regardless whether it’s flowing from the executive or legislative branch of government.

The solution, of course, is to bring balance back to our separation of powers. Congress must rediscover its institutional ambition, and once again engage in robust competition with the presidency.

So, how do we make Congress great again?

Congress might be compelled to get its act together, even if it doesn’t want to.

For almost 80 years, the Supreme Court has refused to police how much power Congress transfers to the executive branch. Under its “nondelegation doctrine,” the Court allows any delegation, as long as it is bounded by an “intelligible principle.”

In practice, however, the Court construed “intelligible principle” so broadly that the concept has no meaning. Even a phrase as nebulous as “public interest” has met the standard.

For the first time since the New Deal-era, a majority on the Supreme Court has expressed a willingness to revisit the nondelegation doctrine. Were the Court to add teeth to its “intelligible principle” test, then Congress would be forced to curtail the breadth of its delegations to the executive branch.

Turning from the Supreme Court to Congress, there are many institutional reforms that the legislature could take to empower itself vis-a-vis the presidency.

Starting with the easiest measures, Congress could remedy its anemic staffing. In fact, the current level of committee staffing is commensurate with levels from the early 1970s, even though government has grown much larger and more complex in the five decades since.

And it’s not just congressional committees that are understaffed. Congress also has starved support agencies, such as the Congressional Research Service, the Congressional Budget Office, and the Government Accountability Office. These organizations employed 6,354 professionals in 1991; in 2015, the number stood at 3,833.

Congress also could create new institutions to better compete. In the early 1980s, the president unilaterally established the Office of Information and Regulatory Affairs (within the Office of Management and Budget) to manage regulations out of the White House. Yet Congress has no commensurate capacity. There is an obvious need for Congress to create its own comparable mechanism to oversee agency rules.

Congress could adopt simple legislative fixes. For example, lawmakers used to regularly limit the clock on their delegations, such that an agency’s regulatory authority expired after a given time. These “sunset” provisions force Congress to periodically review the programs it creates, before these regimes are re-authorized.

Or lawmakers could make greater use of “resolutions of disapproval,” which allow them to veto individual regulations. Since Congress created these “legislative vetoes” more than two decades ago, lawmakers have employed this device fewer than 20 times—far less than two percent of the total number of major rules promulgated by agencies during that span.

If it wanted to get bold, Congress could pass more comprehensive reform. The Regulatory Accountability Act, for example, would require agencies to better justify rules that cost more than $100 million.

And if Congress wanted to regain the upper hand in one fell swoop, the House and Senate would get behind the REINS Act, which would require both chambers of Congress to approve all major regulations before they took effect.

These reforms are fantastic ideas, to be sure, but they’re all nonstarters for as long as love of party trumps institutional pride in Congress. You can lead a horse to water, but you can’t make it drink. Even were Congress to pass REINS, no doubt the House and Senate could find a way to avoid accountability.

Most likely, we need a new type of lawmaker, one who is cut from old cloth. Lawmakers of the not too distant past understood that the presidency—and not merely its office-holder—is the Congress’s constitutional rival. To restore crucial safeguards for “We the People,” we must Make Congress Great Again.

William Yeatman is a research fellow in the Cato Institute’s Robert A. Levy Center for Constitutional Studies.

Amtrak's Big Lie

Cato Recent Op Eds - Tue, 01/14/2020 - 15:20

Randal O'Toole

Recent articles in respected business journals report that Amtrak lost only $29.8 million in 2019 (out of $3.3 billion in total revenues) and that it expects to make a profit in 2020. This is a remarkable turnaround for a company that cost taxpayers more than $100 billion in its first 49 years of existence. Amtrak accomplished this using a simple yet apparently effective technique: It's called lying.

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Amtrak's accounting system is so full of lies that even the pro-passenger train Rail Passengers Association calls it "fatally flawed, misleading, and wrong."

The first lie is that Amtrak counts taxpayer subsidies from the states as "passenger revenues." According to Amtrak's unaudited report, 17 state legislatures gave Amtrak a total of $234 million in 2019. The taxpayers in those states were never allowed to vote on these subsidies, and the vast majority don't ride Amtrak. These subsidies are no more "passenger revenues" than the subsidies given to Amtrak by Congress. Deducting these subsidies from revenues immediately increases Amtrak's 2019 losses to $264 million.

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Amtrak's accounting system is so full of lies that even the pro-passenger train Rail Passengers Association calls it ‘fatally flawed, misleading, and wrong.’

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An even bigger lie is Amtrak's failure to report depreciation in its operating costs. Ignoring depreciation is an old railroad accounting trick aimed at misleading investors by boosting apparent profits.

A classic example was the Rock Island Railroad, which ran many fast passenger trains throughout the Midwest in the 1950s. Then Rock Island proposed to merge with another railroad, and to improve the merger terms it began deferring maintenance. By the time the federal government approved the merger, Rock Island's tracks were so decrepit that its passenger trains ran as slow as 10 miles per hour. The other railroad backed out, and Rock Island shocked the nation by going out of business.

The Interstate Commerce Commission responded by requiring railroads to include depreciation among their operating costs. This represents the amount of money railroads have to spend or save to keep their infrastructure and equipment in good shape, ensuring that investors would never again be misled by deferred maintenance.

Amtrak dutifully includes depreciation in its audited financial statements, but it never mentions it in its press releases about its finances. In 2019, depreciation amounted to $868 million, increasing total losses to $1.13 billion — 38 times as much as claimed.

Even with federal capital subsidies, Amtrak is deferring maintenance like crazy. Amtrak passenger cars have expected lifespans of 25 years, yet the average car in its fleet is well over 30 years old. The Boston-to-Washington corridor, which Amtrak has often claimed to be profitable, has a $38 billion maintenance backlog.

Fixing just these two line items in Amtrak's accounting shows that Amtrak did not come close to earning a profit in 2019, it won't earn a profit in 2020, and it never will earn a profit. This is because, after counting all subsidies, Amtrak spends four times as much to move a passenger one mile as the airlines. The difference between Amtrak and intercity buses is even greater, which means Amtrak can't compete in any market without heavy subsidies.

Of course, airlines and highways are also subsidized, and we should end those subsidies as well. But federal, state, and local subsidies to air and highway travel average around a penny per passenger mile, whereas Amtrak subsidies were 34 cents per passenger mile in 2019.

Amtrak's biggest lie is that passenger trains are somehow vital to the nation's economy. Last year, Americans traveled an average of 15,000 miles by automobile, 2,100 miles by plane, and 1,100 miles by bus. Amtrak's contribution was less than 20 miles per person. Even in the Northeast Corridor, Amtrak reluctantly admits that it carries only 6% of intercity travelers.

According to the best available estimates, Americans bicycle 8.5 billion passenger miles a year compared with 6.5 billion passenger miles on Amtrak. Being less important than bicycles, Amtrak certainly doesn't deserve the $2 billion in annual subsidies that it requires to run a supposedly almost-profitable operation.

Rather than give Amtrak billions of dollars to restore or build infrastructure that it can't afford to maintain, Congress should simply agree to pay Amtrak a given amount for every passenger mile it carries. This will give Amtrak an incentive to focus on passengers, not politics.

Over time, Congress should reduce that amount until Amtrak receives no more per passenger mile than airlines or highways. Any trains that can truly be profitable will survive, but if they do, it will be because Amtrak has found ways to efficiently transport people, not because of lies in its accounting system.

Randal O'Toole is a senior fellow with the Cato Institute and author of Romance of the Rails: Why the Passenger Trains We Love Are Not the Transportation We Need.

Putin's Russia Is Not the Soviet Union Reborn

Cato Recent Op Eds - Tue, 01/14/2020 - 08:51

Ted Galen Carpenter

Key Point: U.S. foreign policy must catch up with the developments of the past thirty years and reassess its relationship with Russia.

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The American public and U.S. policymakers both have an unfortunate tendency to conflate Russia with the Soviet Union. That habit emerged again with the media and political reaction to the Helsinki summit between President Trump and Russian President Vladimir Putin. Trump's critics accused him of appeasing Putin and even of committing treason for not doing enough to defend American interests and for being far too solicitous to the Russian leader. They regarded that as an unforgivable offense because Russia supposedly poses a dire threat to the United States. Hostile pundits and politicians charged that Moscow's alleged interference in the 2016 U.S. elections constituted an attack on America akin to Pearl Harbor and 9-11.

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Thirty years after the end of the Cold War, it's time the foreign policy establishment learned the difference.

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Trump’s supplicant behavior, opponents contended, stood in shameful contrast to the behavior of previous presidents toward tyrants, especially toward the Kremlin’s threats to America and the West. They trotted out Ronald Reagan’s “evil empire” speech and his later demand that Mikhail Gorbachev to tear down the Berlin Wall as examples of how Trump should have acted.

The problem with citing such examples is that they applied to a different country: the Soviet Union. Too many Americans act as though there is no meaningful difference between that entity and Russia. Worse still, U.S. leaders have embraced the same kind of uncompromising, hostile policies that Washington pursued to contain Soviet power. It is a major blunder that has increasingly poisoned relations with Moscow since the demise of the Union of Soviet Socialist Republics (USSR) at the end of 1991.

One obvious difference between the Soviet Union and Russia is that the Soviet governing elite embraced Marxism-Leninism and its objective of world revolution. Today’s Russia is not a messianic power. Its economic system is a rather mundane variety of corrupt crony capitalism, not rigid state socialism. The political system is a conservative autocracy with aspects of a rigged democracy, not a one-party dictatorship that brooks no dissent whatsoever.

Russia is hardly a Western-style democracy, but neither is it a continuation of the Soviet Union's horrifically brutal totalitarianism. Indeed, the country's political and social philosophy is quite different from that of its predecessor. For example, the Orthodox Church had no meaningful influence during the Soviet era—something that was unsurprising, given communism's official policy of atheism. But today, the Orthodox Church has a considerable influence in Putin's Russia, especially on social issues.

The bottom line is that Russia is a conventional, somewhat conservative, power, whereas the Soviet Union was a messianic, totalitarian power. That's a rather large and significant difference, and U.S. policy needs to reflect that realization.

An equally crucial difference is that the Soviet Union was a global power (and, for a time, arguably a superpower) with global ambitions and capabilities to match. It controlled an empire in Eastern Europe and cultivated allies and clients around the world, including in such far-flung places as Cuba, Vietnam, and Angola. The USSR also intensely contested the United States for influence in all of those areas. Conversely, Russia is merely a regional power with very limited extra-regional reach. The Kremlin's ambitions are focused heavily on the near abroad, aimed at trying to block the eastward creep of the North Atlantic Treaty Organization (NATO) and the U.S.-led intrusion into Russia's core security zone. The orientation seems far more defensive than offensive.

It would be difficult for Russia to execute anything more than a very geographically limited expansionist agenda, even if it has one. The Soviet Union was the world's number two economic power, second only to the United States. Russia has an economy roughly the size of Canada's and is no longer ranked even in the global top ten. It also has only three-quarters of the Soviet Union's territory (much of which is nearly-empty Siberia) and barely half the population of the old USSR. If that were not enough, that population is shrinking and is afflicted with an assortment of public health problems (especially rampant alcoholism).

All of these factors should make it evident that Russia is not a credible rival, much less an existential threat, to the United States and its democratic system. Russia's power is a pale shadow of the Soviet Union's. The only undiminished source of clout is the country's sizeable nuclear arsenal. But while nuclear weapons are the ultimate deterrent, they are not very useful for power projection or warfighting, unless the political leadership wants to risk national suicide. And there is no evidence whatsoever that Putin and his oligarch backers are suicidal. Quite the contrary, they seem wedded to accumulating ever greater wealth and perks.

Finally, Russia's security interests actually overlap substantially with America's—most notably regarding the desire to combat radical Islamic terrorism. If U.S. leaders did not insist on pursuing provocative policies, such as expanding NATO to Russia's border, undermining longtime Russian clients in the Balkans (Serbia) and the Middle East (Syria), and excluding Russia from key international economic institutions such as the G-7, there would be relatively few occasions when vital American and Russian interests collide.

A fundamental shift in U.S. policy is needed, but that requires a major change in America's national psychology. For more than four decades, Americans saw (and were told to regard) the Soviet Union as a mortal threat to the nation's security and its most cherished values of freedom and democracy. Unfortunately, a mental reset did not take place when the USSR dissolved, and a quasi-democratic Russia emerged as one of the successor states. Too many Americans (including political leaders and policymakers) act as though they are still confronting the Soviet Union. It will be the ultimate tragic irony if, having avoided war with a totalitarian global adversary, America now stumbles into war because of an out-of-date image of, and policy toward, a conventional, declining regional power. Yet unless U.S. leaders change both their mindsets and their policies toward Russia, that outcome is a very real possibility.

Ted Galen Carpenter, a senior fellow in defense and foreign policy studies at the Cato Institute and a contributing editor at the National Interest, is the author of 10 books, the contributing editor of 10 books, and the author of more than 700 articles on international affairs. This piece was originally featured in July 2018 and is being republished due to reader's interest.

Targeting the World’s Worst Religious Persecutors

Cato Recent Op Eds - Sun, 01/12/2020 - 09:35

Doug Bandow

Christmas is typically a joyous time for Christians. But many believers were not able to celebrate their most important holiday this past year. Or any other. By numbers, Christianity is the most persecuted faith.

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For example, confronting a population with more Christians than Communist Party members, the Chinese government has launched a brutal and intensive campaign against all faiths, especially when operating outside of government-controlled bodies. In the Middle East persecution is state policy in such nations as Saudi Arabia and Iran and favored activity of outside forces in Iraq and Syria.

No faith is exempt. Judaism remains a perennial target of the most malevolent actors in many societies. Yazidis, Baha’is, and other non-traditional religions are particularly vulnerable to Islamist extremists. Being the “wrong” kind of Muslim can lead to great hardship, even death, in Islamic nations.

The United States Commission on International Religious Freedom (USCIRF) makes an annual report on the status of religious liberty around the world. Persecution is surprisingly widespread. The situation is best in North and South America, though traditionally free countries, such as Canada, are moving in the wrong direction as socially conservative believers increasingly face exclusion and punishment. Africa, Asia, and the Middle East feature extensive religious cleansing and mass murder of people of faith.

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Americans of serious religious faith increasingly and justifiably worry about the security of their liberties at home as support for religious freedom becomes just become another partisan issue.

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The State Department has named nine particularly egregious offenders as “Countries of Particular Concern.” The winners of the just concluded year’s contest for worst of the worst are Burma, China, Eritrea, Iran, North Korea, Pakistan, Saudi Arabia, Tajikistan, and Turkmenistan. Although rhetorically clumsy, the label is highly substantive, reflecting severe and systematic persecution. State generally follows the commission’s recommendations, though typically offers Realpolitik leniency based on other geopolitical considerations. USCIRF’s latest assessment details the offenders’ many crimes.

Burma. One of the most tragic cases covered by the commission, Burma, also known as Myanmar, seemed headed toward a democratic future four years ago when the military relaxed its hold on power and Nobel Laureate Aung San Suu Kyi’s National League for Democracy won an overwhelming majority of parliamentary seats. But the military continues to dominate security affairs, and Suu Kyi turned out to be a Burman nationalist more worried about strengthening her party’s reelection chances than remedying widespread human rights abuses.

USCIRF reported on “widespread atrocities” against the Rohingya Muslims. Although these attacks have been particularly severe, other groups have suffered as well. Noted the commission, “Victims of severe human rights and religious freedom violations have little hope for justice; this includes Rohingya and other Muslims, Buddhists, Christians, and Hindus, as well as ethnic Kachin, Shan, Karen, Rakhine, and Chin.” In the case of some ethnic groups, the military and nonstate forces appear to be guilty of “crimes against humanity and even genocide.” The NLD-led government has restricted media freedom to report on such violations of human rights.

China. Although economic reform and engagement failed to deliver political liberalization in the People’s Republic of China, the death of Mao Zedong did yield a looser form of authoritarianism. Churches spread, and there are now more Christians than Communist Party members, especially those who join out of political ideology and not personal ambition.

But Xi Jinping, who was selected as president and party general secretary in 2012, has fostered a return to Mao and Maoism. The Commission reported that at least 800,000 and perhaps as many as two million Muslim Uighurs have been sent to reeducation camps. Even those not detained face severe repression of their religious and personal liberties.

Other believers also face serious and increasing attacks by the Chinese government. The commission reported that in 2018 the regime “effectively banned ‘unauthorized’ religious teachings and required religious groups to report any online activity. Moreover, the Chinese government continued to persecute all faiths in an effort to ‘sinicize’ religious belief, a campaign that attempts not only to diminish and erase the independent practice of religion, but also the cultural and linguistic heritage of religious and ethnic communities.” One senses the ghosts of Madame Mao and the Gang of Four with every new pronouncement from Beijing.

Eritrea. This North African country has been called the North Korea of Africa, which is not a compliment. After winning its independence from Ethiopia through a long and bitter war, Eritrea turned inward, creating a totalitarian horror.

The regime recognizes only Sunni Islam and the Orthodox, Catholic, and Evangelical Churches. USCIRF explained, “Even these official religious groups are unable to practice their faith freely because the Eritrean government regulates and interferes in their affairs. The government does not allow any other religious groups to register and treats them as illegal.” Conscripts are not allowed to practice their faith. Those arrested often are imprisoned in inhumane conditions.

Despite making peace with Ethiopia in 2018, Eritrea has not relaxed domestic repression. The commission noted that “hundreds of people are currently imprisoned for their religious beliefs, but in the extremely secretive and closed-off society there are no official figures.” The only escape is flight, and the number of Eritrean refugees going to Ethiopia has jumped.

Iran. The self-styled “Islamic republic” grew out of the overthrow of the U.S.-backed Shah. The regime has been under siege ever since, barely surviving an invasion by Saddam Hussein’s Iraq, supported by the Reagan administration, and subsequent sanctions and threats by Washington. Unsurprisingly, religious liberty has suffered.

In 2018, USCIRF reported, Tehran heightened “its systematic targeting of Muslims (particularly Sunni Muslims and Sufis), Baha’is and Christians. The government arbitrarily detained, harassed, and imprisoned Baha’is based on their religion and continued its long-term practice of egregious economic and education persecution of the community. Hundreds of Sufis were arrested and scores were sent to solitary confinement and beaten in prison. Christians faced a dramatic uptick in arrests from previous years, and Muslim converts to Christianity continued to face severe persecution.” Jews and Shia reformers also suffered:

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Three years ago President Hassan Rouhani promised to liberalize the government’s policy toward religious minorities. However, that effort, if ever launched, was stillborn. The system has grown less tolerant. In fact, the situation today is far worse. The repressive religious order is able to suppress popular dissent only with difficulty; this battle over the regime’s survival is not helping religious liberty. The situation is likely to get worse before it improves.

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North Korea. The Democratic People’s Republic of Korea sets the global standard for repressive rule. The Kim family dynasty is treated as godly; anyone who promotes a higher loyalty to someone or something else, namely God, poses a severe threat to the system.

The commission noted, “The North Korean regime has an appalling human rights record and places unjust restrictions on its people’s inherent right to freedom of religion or belief. The North Korean government maintains totalitarian control over society.” Only a handful of official churches are allowed to exist, mostly, it is believed, for show.

In contrast, USCIRF explained, “Any expression of religion outside this heavily regulated sphere happens in secret, and anyone caught practicing religion or even suspected of harboring religious views in private is subject to severe punishment.” Defectors returned from China are most harshly punished if they have contact with Christian activists and churches active across the border. As many as 50,000 believers are thought to be imprisoned in North Korean labor camps.

Pakistan. Although the government sought to combat Islamic extremism, in 2018 “religious freedom conditions generally trended negative,” the commission stated. “During the year, extremist groups and societal actors continued to discriminate against and attack religious minorities, including Hindus, Christians, Sikhs, Ahmadis, and Shi’a Muslims. The government of Pakistan failed to adequately protect these groups, and it perpetrated systematic, ongoing, egregious religious freedom violations.”

Among the most brutal tools of religious repression are the nation’s extreme blasphemy laws, which often are used against religious minorities and manipulated as part of personal, social, and financial disputes. Religious hatred also is a vote winner. USCIRF explained that “the entry of extremist religious parties into the political arena during the election period led to increased threats and hate speech against religious minorities.” Even the best of intentions of political leaders have been frustrated by Islamist demagogues.

Saudi Arabia. President Donald Trump criticized the Kingdom of Saudi Arabia during the campaign but has since acted as if Riyadh was the superpower and America the helpless supplicant. Yet the KSA is one of the most repressive states on earth. Even after recent social liberalization, the royal regime maintains essentially totalitarian religious and political restrictions: no dissent of any kind is permitted, and dissidents abroad risk kidnapping, murder, and dismemberment.

Saudi officials have, the commission reported, pledged “to promote interfaith dialogue and the flourishing of different faith traditions as part of the kingdom’s domestic reforms,” but nothing has yet changed in practice. The regime “maintained a ban on non-Muslim public religious observance and continued to arrest, detain, and harass individuals for dissent, blasphemy, and apostasy. The Saudi government continued to violate the rights of Shi’a Muslims and non-Muslim minorities, and to advocate doctrine of religious intolerance.”

The latter is particularly important. The royals made a proverbial deal with the devil, promoting the intolerant doctrines of Wahhabism in the kingdom and around the world in return for support for the al-Saud dynasty. Yet “after more than 15 years of incremental progress, the Saudi government showed backsliding on improvements to its textbooks that continued to propagate intolerance and advocate violence against religious minorities” and others. The result is likely to be creation of more violent terrorists and murder of more innocents.

Tajikistan. This authoritarian former Soviet republic fears not only extremism, as it should, but faith, which it should not. Explained USCIRF, the government continues its “repressive policies, suppressing displays of public religiosity and persecuting minority communities, especially actual and alleged Salafists. Authorities pursued a crackdown on various attributes of faith, including restrictions on wedding and funerary banquets, and pursued extralegal bans on beards and hijabs. Higher Islamic religious education was all but decimated.” More than 2,000 mosques were closed.

Such brutality obviously is unjust. It also is likely to spur extremist thought and action. If the only way to pursue a life of faith is illegally, then the potential for illicit teaching and association is far greater.

Turkmenistan. None of the Central Asian states turned out well after independence. Alas, the commission warned, “Turkmenistan is widely considered the most closed of the former Soviet states, and this was reflected in the range and severity of the government’s religious freedom violations.”

The regime imprisoned conscientious objectors and “continued to be suspicious of all independent religious activity and maintained a large surveillance apparatus that monitors believers at home and abroad.” The government “requires religious groups to register under intrusive criteria, strictly controls registered groups’ activities, and bans and punishes religious activities by unregistered groups.”

Those accused of religious offenses often are tried in communicado, receive secret sentences, and disappear “in the state’s prisons system and are presumed to be held without any contact with the outside world.” Their fate can only be presumed, however, since “the full extent of religious persecution is unknown due to the nearly complete absence of independent news media and the threat of retaliation by the government against communities, family members, and individuals who publicize human rights and religious freedom violations.”

Unfortunately, there are plenty of also-rans in the race for the bottom. For instance, in its latest report the commission noted that globally “both state and nonstate actors increasingly used religion as a tool of exclusion to isolate, marginalize, and punish the ‘other’ through discrimination and violence.”

State also places some countries — oppressive, but behind the CPCs — on a Special Watch List. This year those nations are Comoros, Cuba, Nicaragua, Nigeria, Russia, Sudan, and Uzbekistan. Their characters vary, but the results are similar, gross interference with freedom of conscience and the ability to live out one’s faith.

All believers are a risk, but Moscow’s intolerance is curiously and narrowly focused, with Jehovah’s Witnesses the most recent target. In most cases malign governments — authoritarian, communist, or Islamist — are to blame. In Nigeria a virulent Islamic insurgency terrorizes Christians and nonviolent Muslims. Only in the case of Sudan is the ranking positive, since the overthrow of Omar al-Bashir eased oppression of non-Muslims. Khartoum used to be CPC.

USCIRF does not stop with these nations. It also surveys a number of other nations in what the commission calls Tier 1 and Tier 2. These oppressive extras are Afghanistan, Azerbaijan, Bahrain, Central African Republic, Egypt, India, Indonesia, Iraq, Kazakhstan, Laos, Malaysia, Syria, Turkey, and Vietnam.

Although the CPC designation is useful, it is merely a starting point. The U.S. and other nations of goodwill have only limited ability to reach into other societies and improve human rights, whether religious, political, or civil.

The application of general sanctions hurts people more than governments, usually without policy effect. Targeted sanctions provide moral satisfaction but have yet to ease, let alone end, persecution anywhere. Who believes that Washington’s criticism will cause Xi Jinping, heretofore the new Chinese Mao, to suddenly channel Thomas Jefferson and speak of the eternal rights to life and liberty?

Worse, U.S. policy often ignores and sometimes spurs persecution. Washington usually goes soft when its allies — Egypt and Saudi Arabia are current examples — are the oppressors. Indeed, Riyadh is notably more ruthless than Tehran, but the former’s crimes are almost never mentioned by Secretary of State and noted Evangelical Mike Pompeo. The impact of Washington’s policies can be even worse: the invasion of Iraq created chaos, sparked sectarian war, and spread persecution. The Christian community was ravaged, with many believers forced abroad, including to Syria, where they were victimized again, this time by insurgents backed by Washington. In such cases, the best the U.S. could do is adopt the Hippocratic Oath: first, do no harm.

Yet support for the oppressed matters, and not just from governments. In fact, assistance from individuals, congregations, activists, groups, and anyone else who believes in the importance of human life and dignity is critical. Such non-political efforts cannot be dismissed as hypocritical cant and pursuit of foreign policy by other means.

Private campaigns also can embarrass, hinder, impede, and shame offenders. Equally important, standing for religious liberty lets the victims know that they are not alone. Knowledge that they are backed by a genuine “international community” helps give them strength for what almost certainly will be a lengthy struggle well into the future.

Americans of serious religious faith increasingly and justifiably worry about the security of their liberties at home as support for religious freedom becomes just become another partisan issue. Yet believers in the U.S. do not know real persecution. Rather, brothers and sisters in faith abroad are the principal victims of religious intolerance, discrimination and persecution. They require the hopes, prayers, and support of good people around the globe.

Doug Bandow is a Senior Fellow at the Cato Institute. He is a former Special Assistant to President Ronald Reagan and author of several books, including Beyond Good Intentions: A Biblical View of Politics and Foreign Follies: America’s New Global Empire.

Be Skeptical about the Census

Cato Recent Op Eds - Sat, 01/11/2020 - 12:28

Matthew Feeney

This year the Census Bureau will begin conducting the constitutionally required census, which takes place every 10 years. Many readers will dutifully fill out the forms, informing the bureau about their household and providing researchers with data. In May, the bureau will begin visiting those who haven’t responded to the census.

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But why wouldn’t someone want to contribute to social science and an accurate head count? The history of the census provides ample evidence to justify such reluctance.

The census sounds harmless enough. In a representative democracy like the United States where seats in at least part of the legislature are determined by population, it’s important to know how many people live in the country and where they live. The framers of the Constitution codified the decennial census as the mechanism for determining the number of seats each state occupies in the House of Representatives. Yet the information included in the census has been used to violate civil liberties, and it would be a mistake to assume similar abuses won’t occur again.

Governments often overreact in the wake of a crisis, and a crucial feature of such overreactions is the collection and analysis of information. During the first Red Scare, a 24-year-old J. Edgar Hoover was put in charge of the so-called “Anti Radical Division” formed by the Attorney General A. Mitchell Palmer after a string of anarchist bombings. Hoover, who previously worked at the Library of Congress, used his librarian skills in his hunt for aliens to deport. His team assembled hundreds of thousands of index cards associated with not only individuals but publications and organizations. These notecards aided Department of Justice officials, who conducted the so-called Palmer Raids in late 1919 and early 1920. The raids resulted in thousands of people being arrested without warrants, hundreds of whom were deported.

Such zeal for data collection was not isolated to the first Red Scare. Other crises have resulted in increased information gathering. And one of the best sources of information available to the government is the census.

After the Japanese navy’s air service bombed the U.S. Navy base at Pearl Harbor in December 1941, military officials reached for the census to facilitate one of the most shameful civil liberty abuses in American history: the internment of Japanese-Americans. A few months after the attack, President Franklin D. Roosevelt issued Executive Order 9066. The order authorized the secretary of war to exclude those considered national security risks from designated military areas. As result, 120,000 people of Japanese descent — the majority of whom were U.S. citizens — were moved into internment camps.

Census officials denied that the bureau had assisted Japanese internment. But in 2000 historian Margo Anderson of the University of Wisconsin and Fordham University statistician William Seltzer uncovered evidence that Census Bureau officials provided information on whereabouts of people with Japanese ancestry. In 2000, the Census Bureau director apologized, but only a few years after the apology the bureau was aiding the surveillance of another minority group.

In August 2002 and December 2003, the Census Bureau put together tabulations of Arab-Americans for Customs and Border Protection. These tabulations included information on how many Arab-Americans lived in specific ZIP codes. The creation of these tabulations was a small part of the U.S. government’s broader overreaction to the 9/11 terrorist attacks, which resulted in widespread and needless infringements on civil liberties.

We should expect that in response to the next crisis officials won’t be shy about seeking census data. This risk is more pronounced when the targets of government surveillance come from broad groups such as “Japanese-Americans” or “Arab-Americans.” The history of American surveillance reveals a list of the targets that is long and diverse. Today the administration is concerned about illegal immigrants. This misguided concern prompted the administration to seek to add a citizenship question to the 2020 census before the Supreme Court ruled against the administration.

Future administrations will have different targets. Given that anyone could one day be on the receiving end of government surveillance, it behooves us to be hesitant to volunteer intimate details about our families.

Refusing to accurately complete a census form is against the law and could result in a fine. Fortunately, the Department of Justice is hesitant to pursue census refusal cases. It’s true that the census provides researchers with valuable data, but given the history of government overreaction to crises you could forgive those who err on the side of providing less information to the Census Bureau.

Matthew Feeney is the director of the Cato Institute’s Project on Emerging Technologies.

Croatia Now Ranks among the Freest Countries in the World

Cato Recent Op Eds - Fri, 01/10/2020 - 14:42

Tanja Porčnik

With the rise of populism and hybrid forms of authoritarianism, people’s rights and freedoms are under assault in many corners of the globe. Unsurprisingly, among the countries with the most substantial deterioration in freedom in the last year are Angola, Venezuela and Tajikistan. The good news is that freedom has taken root in a diverse set of societies and it is spreading in many of them. Among them is Croatia, which for the first time ranks among the freest countries in the world by quartile.

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We recently released the fifth annual Human Freedom Index, the most comprehensive measure of freedom ever created for a large number of countries across the globe. With the index, my co-author Ian Vásquez and I cover 162 jurisdictions and use 76 distinct indicators of personal and economic freedom, applying data from 2008 to 2017, the most recent year for which sufficient data are available. Because of inherent value of human freedoms and their contribution to well-being, freedoms deserve the most vigorous defense. The report is co-published by the Fraser Institute in Canada, the Cato Institute in the United States and the Friedrich Naumann Foundation for Freedom in Germany.

In the recently released index, we again rank New Zealand and Switzerland as the two freest countries in the world while we again rank Venezuela and Syria last. Other selected countries rank as follows: Germany (8th place), Sweden (11), United Kingdom (14), the United States (15), Japan (25), Chile (28), France (33), Poland (40), Argentina (77), Kenya (79), Mexico (92), India (94), Brazil (109), Russia (114), Turkey (122), Saudi Arabia (149) and Iran (154).

How do the former Yugoslav republics rank? The freest country is Slovenia (35), followed by Croatia (37), Montenegro (53), Bosnia and Herzegovina (55), Serbia (58) and, the least free, North Macedonia (65).

The index confirms that global freedom remains in retreat as the average human freedom rating for 2017 again falls. At a country level, human freedom tumbles in more countries than not, with some 88 countries experiencing a decline in their freedom ratings compared to 70 countries increasing its freedom since last year. Within the latter group, Croatia experienced the 20th highest increase in the world by increasing its level of human freedom from 7.72 (43rd rank) in 2016 to 7.86 (37th rank) in 2017. Before this significant leap on the Index, Croatia has consistently ranked in the second quartile of countries included. In the recently released report, Croatia for the first time ranks among the freest countries in the world by quartile.

Notably, while Croatia has increased both personal and economic freedom in the last decade, it is its economic freedom that has seen flourishing recently, which resulted in the country’s jump from the 73rd position on economic freedom to 56th rank globally, with which the country surpassed Poland and Hungary and is not closely trailing Slovenia and Slovakia.

, Croatia Economic Freedom Index Ranking ,

So what advances did Croatia see during the first year of Prime Minister Andrej Plenković centre-right government to increase the country’s economic freedom? Granted, some of these strides were spillovers from 2016 when the government was led by former Prime Minister Tihomir Orešković.

First, on regulations, Croatia decreased restrictions on the sale of real property measured in days and costs required to register and transfer ownership of property; cut financial barriers to obtain a construction license; maintained commitment to the implementation of a one-stop shop business registration not only to save time and cost but also can make procedural requirements more transparent and accessible; and cut the risk that businesses become more costly due to the regulatory environment, including compliance and bureaucratic inefficiency and opacity.

Second, on the size of government, Croatia reduced the extent of government borrowing relative to borrowing by the private sector, decreased the government investment as a share of total investment in the country and reduced the degree to which the state owns and controls capital in the industrial, agricultural and service sectors.

Third, on monetary parameters, in light of pursued sound monetary policy by the Croatian National Bank (Hrvatska narodna banka – HNB) and its resistance to devaluate the Croatian currency, the kuna, in order to stimulate export demand, Croatia decreased both the average annual growth of the money supply and the standard deviation of the inflation rate.

However, not everything went in the right direction for Croatia in 2017, as the country weakened the rule of law even more than it used to be, with gaining lower scores for judicial independence, the impartiality of courts, protection of property rights and reliability of police. The inability to strengthen the rule of law is actually a common problem of former socialist economies in the Balkans.

Finally, the evidence shows the importance of freedom for development. Indeed, the Human Freedom Index report finds a strong relationship between the level of freedom and income. The freest countries in the world by quartile enjoy much higher income per person ($40,171) compared to those in the least-free quartile ($15,721). Further, looking at economic freedom specifically, extensive empirical literature reveals that it is

positively associated with not only national income but also economic growth, living standards, economic equality, alleviation of poverty and a variety of other desirable social and economic outcomes. That said, Croatians are projected to experience other positive trends than an increase in freedom to pursue their own opportunities and make their own choices.

Tanja Porčnik is a Senior Fellow of the Fraser Institute specializing in economic and human freedom studies.

The Obama Administration Wrecked Libya for a Generation

Cato Recent Op Eds - Fri, 01/10/2020 - 10:36

Doug Bandow

Libya’s ongoing destruction belongs to Hillary Clinton more than anyone else. It was she who pushed President Barack Obama to launch his splendid little war, backing the overthrow of Moammar Gaddafi in the name of protecting Libya’s civilians. When later asked about Gaddafi’s death, she cackled and exclaimed: “We came, we saw, he died.”

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Alas, his was not the last death in that conflict, which has flared anew, turning Libya into a real-life Game of Thrones. An artificial country already suffering from deep regional divisions, Libya has been further torn apart by political and religious differences. One commander fighting on behalf of the Government of National Accord (GNA), Salem Bin Ismail, told the BBC: “We have had chaos since 2011.”

Arrayed against the weak unity government is the former Gaddafi general, U.S. citizen, and one-time CIA adjunct Khalifa Haftar. For years, the two sides have appeared to be in relative military balance, but a who’s who of meddlesome outsiders has turned the conflict into an international affair. The latest playbook features Egypt, France, Jordan, Saudi Arabia, the United Arab Emirates, and Russia supporting Haftar, while Italy, Qatar, and Turkey are with the unity government.

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Such is the cost of America's promiscuous war-making

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In April, Haftar launched an offensive to seize Tripoli. It faltered until Russian mercenaries made an appearance in September, bringing Haftar to the gates of Tripoli. He apparently is also employing Sudanese mercenaries, though not with their nation’s backing. Now Turkey plans to introduce troops to bolster the official government.

Washington’s position is at best confused. It officially recognizes the GNA. When Haftar started his offensive, Secretary of State Mike Pompeo issued a statement urging “the immediate halt to these military operations.” However, President Donald Trump then initiated a friendly phone call to Haftar “to discuss ongoing counterterrorism efforts and the need to achieve peace and stability in Libya,” according to the White House. More incongruously, “The president recognized Field Marshal Haftar’s significant role in fighting terrorism and securing Libya’s oil resources, and the two discussed a shared vision for Libya’s transition to a stable, democratic political system.” The State Department recently urged both sides to step back. However, Haftar continues to advance, and just days ago captured the coastal city of Sirte.

In recent years, Libya had been of little concern to the U.S. It was an oil producer, but Gaddafi had as much incentive to sell the oil as did King Idris I, whom Gaddafi and other members of the “Free Officers Movement” ousted. Gaddafi carefully balanced interests in Libya’s complex tribal society and kept the military weak over fears of another coup. He was a geopolitical troublemaker, supporting a variety of insurgent and terrorist groups. But he steadily lost influence, alienating virtually every African and Middle Eastern government.

Of greatest concern to Washington, Libyan agents organized terrorist attacks against the U.S.—bombing an American airliner and a Berlin disco frequented by American soldiers—leading to economic sanctions and military retaliation. However, those days were long over by 2011. Eight years before, in the aftermath of the U.S. invasion of Iraq, Gaddafi repudiated terrorism and ended his missile and nuclear programs in a deal with the U.S. and Europe. He was feted in European capitals. His government served as a non-permanent member of the UN Security Council from 2008 to 2009. American officials congratulated him for his assistance against terrorism and discussed possible assistance in return. All seemed forgiven.

Then in 2011, the Arab Spring engulfed Libya, as people rose against Gaddafi’s rule. He responded with force to reestablish control. However, Western advocates of regime change warned that genocide was possible and pushed for intervention under United Nations auspices. In explaining his decision to intervene, Obama stated: “We knew that if we waited one more day, Benghazi…could suffer a massacre that would have reverberated across the region and stained the conscience of the world.” Russia and China went along with a resolution authorizing “all necessary measures to prevent the killing of civilians.”

In fact, the fears were fraudulent. Gaddafi was no angel, but he hadn’t targeted civilians, and his florid rhetoric, cited by critics, only attacked those who had taken up arms. He even promised amnesty to those who abandoned their weapons. With no civilians to protect, NATO, led by the U.S., bombed Libyan government forces and installations and backed the insurgents’ offensive. It was not a humanitarian intervention, but a lengthy, costly, low-tech, regime-change war, mostly at Libyan expense. Obama claimed: “We had a unique ability to stop the violence.” Instead his administration ensured that the initial civil war would drag on for months—and the larger struggle ultimately for years.

On October 20, 2011, Gaddafi was discovered hiding in a culvert in Sirte. He was beaten, sodomized with a bayonet, shot, and killed. That essentially ended the first phase of the extended Libyan civil war. Gaddafi had done much to earn his fate, but his death led to an entirely new set of problems.

A low level insurgency continued, led by former Gaddafi followers. Proposals either to disband militia forces or integrate them into the National Transitional Council (NTC) military went unfulfilled, and this developed into the conflict’s second phase. Elections delivered fragmented results, as ideological, religious, and other divisions ran deep. Militias were accused of misusing government funds, employing violence, and kidnapping and assassinating their opponents. Islamist groups increasingly attempted to impose religious rule. Violence and insecurity worsened.

In February 2014, Haftar challenged the General National Congress (GNC). Hostilities broadly evolved between the GNC/GNA, backed by several militias, which controlled Tripoli and much of the country’s west, and the Tobruk-based House of Representatives, which was supported by Haftar and his Libyan National Army. Multiple domestic factions, forces, and militias also were involved. Among them was the Islamic State, which murdered Egyptian Coptic (Christian) laborers.

The African Union and the United Nations promoted various peace initiatives. However, other governments fueled hostilities. Most notable now is the potential entry of Turkish troops.

In mid-December, Turkey’s parliament approved an agreement to provide equipment, military training, technical aid, and intelligence. (The Erdogan government also controversially set maritime boundaries with Libya that conflict with other claims, most notably from Cyprus, Egypt, Greece, and Israel.) Ankara introduced some members of the dwindling Syrian insurgents once aligned against the Assad regime to Libya and raised the possibility of adding its “quick reaction force” to the fight.

At the end of last month, the Erdogan government introduced, and parliament approved, legislation to authorize the deployment of combat forces. President Erdogan criticized nations that backed a “putschist general” and “warlord” and promised to support the GNA “much more effectively.” While noting that Turkey doesn’t “go where we are not invited” (except, apparently, Syria), Erdogan added that “since now there is an invitation [from the GNA], we will accept it.”

But Haftar refused to back down. Last week, he called on “men and women, soldiers and civilians, to defend our land and our honor.” He continued: “We accept the challenge and declare jihad and a call to arms.”

Turkish legislator Ismet Yilmaz supported the intervention and warned that the conflict might “spread instability to Turkey.” More likely the intervention is a grab for energy, since Ankara has devoted significant resources of late to exploring the Eastern Mediterranean for oil and gas. Libya has oil deposits, of course, which could be exploited under a friendly government. Perhaps most important, Ankara wants to ensure that its interests are respected in the Eastern Mediterranean.

However, direct intervention is an extraordinarily dangerous step. It puts Turkey in the line of fire, as in Syria. Ankara’s forces could clash with those of Russia, which maintains the merest veneer of deniability over its role in Libya. And other powers—Egypt, perhaps, or the UAE—might ramp up their involvement in an effort to thwart Erdogan’s plans.

In response, the U.S. attempted to warn Turkey against intervening. “External military intervention threatens prospects for resolving the conflict,” said State Department spokeswoman Morgan Ortagus with no hint of irony. Congress might go further: some of its members have already proposed sanctioning Russia for the introduction of mercenaries, and Ankara has few friends left on Capitol Hill. Nevertheless it is rather late for Washington to cry foul. Its claim to essentially a monopoly on Mideast meddling can only be seen as risible by other powers.

The Arab League has also criticized “foreign interference.” In a resolution passed in late December, the group expressed “serious concern over the military escalation further aggravating the situation in Libya and which threatens the security and stability of neighboring countries and the entire region.” However, Arab League is no less hypocritical. Egypt, the UAE, Jordan, and Saudi Arabia, all deeply involved in the conflict, are members of the league. And no one would be surprised if some or all of them decided to expand their participation in the fighting. Egyptian president Abdel Fatah al-Sisi insisted: “We will not allow anyone to control Libya. It is a matter of Egyptian national security.”

Although the fighting is less intense than in, say, Syria, combat has gone high-tech. According to the Washington Post: “Eight months into Libya’s worst spasm of violence in eight years, the conflict is being fought increasingly by weaponized drones.” ISIS is one of the few beneficiaries of these years of fighting. GNA-allied militias that once cooperated with the U.S. and other states in counterterrorism are now focused on Haftar, allowing militants to revive, set up desert camps, and organize attacks. Washington still employs drones, but they rely on accurate intelligence, best gathered on the ground, and even then well-directed hits are no substitute for local ground operations.

The losers are the Libyan people. The fighting has resulted in thousands of deaths and tens of thousands of refugees. Divisions, even among tribes, are growing. The future looks ever dimmer. Fathi Bashagha, the GNA interior minister, lamented: “Every day we are burying young people who should be helping us build Libya.” Absent a major change, many more will be buried in the future.

Yet the air of unreality surrounding the conflict remains. In late December, President Trump met with al-Sisi and, according to the White House, the two “rejected foreign exploitation and agreed that parties must take urgent steps to resolve the conflict before Libyans lose control to foreign actors.” However, the latter already happened—nine years ago when America first intervened.

The Obama administration did not plan to ruin Libya for a generation. But its decision to take on another people’s fight has resulted in catastrophe. Hillary Clinton’s malignant gift keeps on giving. Such is the cost of America’s promiscuous war-making.

Doug Bandow is a senior fellow at the Cato Institute. He is a former special assistant to President Ronald Reagan and the author of several books, including Foreign Follies: America’s New Global Empire.

Want to Create an Immigration System That Works? Look to Airbnb

Cato Recent Op Eds - Thu, 01/09/2020 - 18:27

Ryan Bourne

Plenty of foreigners would value the opportunity to work in the UK for a short period. Lots of UK citizens, meanwhile, would prefer some time out of the labour market to upskill, care for a loved one, or even travel. Yet today these two groups have no means of trading their desires. We have what economists call “a missing market”.

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Economists view movements of people for work as synonymous with international trade. Barriers to immigration prevent workers moving to where they are most productive, making the global economy poorer. But as Brexit showed, completely “open borders” appears a politically unsustainable proposition.

Voters want migration controlled. They see their country more as a club than part of a global labour market. So although most evidence suggests immigration enriches the economy, voters place heavier weight on the welfare of adversely affected domestic citizens, the localised impact on public services, or perceptions of cultural damage, than on aggregate benefits including to migrants themselves.

Hence the Conservatives have pledged to end free movement for EU citizens after Brexit. They’ve promised instead an “Australian-style, points-based system”, applied equally to all countries. Our Government would rank potential migrants according to certain characteristics for determining visa eligibility, including educational achievement, language skills, work experience, or having a job offer.

Such a bureaucratic approach — setting conditions and allowing all who fulfil them to enter — is one of three broad ways to “control” immigration. The others are quotas (imposing a crude cap on immigrant numbers) or prices (some financial barrier to entry). Most real-life systems are hybrids of these approaches.

Economically, though, not all immigration controls are created equal. Capping numbers creates obvious absurdities. Suppose a limit is set at 99,999 people per year. Would the UK benefit if an international footballer was denied a Premier League job as number 100,000? The answer is, clearly, no.

Nor is the Government likely to do well at centrally planning the labour market through a points-based system. Already ministers are talking up a separate visa route for NHS nurses. Agriculture will surely follow. Whitehall has no knowledge of migrant’s potential for entrepreneurship, nor can it second-guess businesses’ needs in an environment in an ever-changing economy.

Is there a market-based immigration policy that could harness most of the benefits of immigration, address some stated public concerns, while avoiding these destructive economic impacts? There is. And it comes back to our “missing market” above.

One of the most valuable assets we UK citizens have is our permanent “right to work” in a high-wage economy. Yet this is an effective property right we own but can’t currently trade.

Suppose instead we had the option to “rent out” this right, leasing it to a foreigner for a contractually agreed period. Technology now exists such that the Government could do for work permits what Airbnb has done for our homes — making ownership of our “right to work” a marketable asset. Just as leasing your home on Airbnb temporarily disables you from living in it, leasing out your work right would temporarily prevent you from working.

If such trade were allowed, the foreigner would get the time-limited right to work in the UK in return for the UK citizen (likely to be in temporary need) getting a cash sum they’d prefer. As a voluntary trade, both sides would be better off. Most gains from immigration would still be realised, but with more of the surplus accruing to participating UK citizens.

Economists Martin Ravallion and Michael Lokshin have developed such a proposal. Under their scheme, a government auction website would announce start dates and work permit durations for bidding. Eligible UK citizens could register, setting their minimum asking price for giving up their right to work, with foreign buyers registering maximum bids.

Software would then “clear” the market, setting the final price such that demand and supply intersect. Those who bid at least the discovered market price would be matched anonymously with UK citizens willing to sell at or below it. Transactions would be complete when payments were transferred through a clearing system to the seller.

After the work permit expires, British participants would regain the right to work. Such a rental scheme brings obvious benefits. An unchanged potential number of workers would somewhat alleviate fears about migrants taking jobs. Much of the black market in foreign labour would be eliminated too — now UK citizens, rather than human traffickers, would be capturing the financial gain.

What’s more, UK citizens, would, in effect, now benefit from the option of a time-limited, out-of-work “basic income”. This additional social protection, fully funded by market activity, could be used to retrain, move, cope with unemployment, raise children, or remunerate people for caring for the ill, disabled, or elderly.

Other details would need to be thrashed out. UK eligibility might be restricted to those with strong employment histories, to stop it compounding social problems associated with long-term unemployment. Some secondary market for people whose situations change will be necessary. Other considerations include whether family members of foreign work permit holders would be able to live in the UK, the lengths of permits, and whether rental payments constitute taxable income.

But these are details for a market that’s clearly viable. According to Oxford University’s Migration Observatory, an average of 150,000 immigrants per year (between 2012 and 2016) had stays of just three to 12 months for work or study. Between 1990 and 2017, a large majority of non-UK nationals who left the country had lived here for five years or fewer.

A work permit rental scheme wouldn’t be the complete answer. People migrate for non-work reasons too. But if we want to maintain the economic gains of market-based immigration for work, while flipping the economic interests of poorer groups affected by or opposed to it, then Boris should harness technology to create a market in work permits. Airbnb points the way.

Ryan Bourne is the R Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute.

Regime Change Rarely Succeeds. When Will the U.S. Learn?

Cato Recent Op Eds - Thu, 01/09/2020 - 16:25

Benjamin Denison

Even after watching the chaos produced in Afghanistan, Iraq and Libya following regime change, some in Washington have continued to advocate similar policies toward VenezuelaIranNorth Korea and elsewhere. The belief that removing a foreign government can quickly and easily promote U.S. interests by force still resonates, as we have most recently seen in the response to the escalating tensions with Iran. And that is far from the only example.

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The recently released Afghanistan Papers highlight how, for years, overly optimistic policymakers misled the public about the prospects of building a viable Afghan state. Implicit in most of the documents is a feeling that, with the correct strategy or more investment, the war in Afghanistan could have succeeded.

Yet the Afghanistan war was not exceptional. It simply continued the trend of regime change leading to adverse outcomes rather than greater U.S. security.

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Regime change operations are a roll of the dice that are unlikely to produce a winner.

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Forcible regime change, or using military force to overthrow a foreign government, can be enticing when a regime appears to be threatening U.S. security. The logic is that when a regime continues to work against U.S. interests, replacing the regime can be a quick and easy way to change this pattern rather than sustained military action or diplomatic negotiation.

The problem, however, is that a resounding amount of research has shown that regime change rarely succeeds. Regardless of the goal, regime change mostly fails to produce better economic conditions, build lasting democracy or promote more stable relations to advance U.S. interests. From Haiti and the Dominican Republic in the 1910s, to South Vietnam in the 1960s, to Iraq in the 2000s, the United States failed to achieve these goals over 110 years of regime-change missions.

And when regime change does not achieve these goals, it can provoke a civil war — as it did in Congo following the regime change mission in Léopoldville (now Kinshasa) in 1960 to oust Prime Minister Patrice Lumumba — degrade respect for human rights and create more instability. Worse, rather than being a quick and easy policy success, the instability created after a regime is deposed often leads to lengthy nation-building projects that policymakers never intended.

There have been some successful cases of regime change, such as in Germany and Japan after World War II. Some argue that regime change succeeded in these cases because of sustained and substantial economic investment, such as the Marshall Plan, or because of the correct state-building strategy. These earlier successes had more to do with the preconditions in both countries, such as previous experience with democracy, a robust existing government bureaucracy or high economic modernization. Rather than prototypical cases of regime change, they are exceptions that prove the rule: Even with the best conditions present, regime change is difficult and requires massive investment.

Unfortunately, proponents of forcible regime change continue to claim that it can be quick and cheap and will not expand into the lengthy and costly missions that have taken place in Afghanistan and elsewhere. Instead of admitting that they do not know what local conditions will look like after a change of regime, policymakers often ask local opposition movements, who tell them what they want to hear rather than an unbiased picture of what is most likely to happen. This encourages over-optimistic assumptions and biased thinking about how the mission will go, and less consideration of the costs if it turns out differently.

To avoid future quagmires, policymakers need to recognize that regime change operations are a roll of the dice that are unlikely to produce a winner. Given the human, economic and security costs that accompany these poor odds, policymakers must instead ask whether regime change would still be worth it if it is not the quick mission they envision.

Following the mission to oust Moammar Gaddafi in Libya in 2011, President Barack Obama resisted calls to overthrow Bashar al-Assad in Syria, in part, because there was no credible guarantee it would not devolve into the same chaos as found in Libya or Iraq. Similarly, instead of focusing on how desirable regime change in a particular country might be, policymakers need to ask whether the small chance of success is worth the high probability that regime change will produce a dysfunctional state that still poses a security threat.

As the fallout from the killing of Iranian Maj. Gen. Qasem Soleimani continues to unfold, regime-change advocates will once again argue this is the first step toward removing the current regime in Tehran. But a key lesson to take from the Afghanistan Papers and more than a century of history is that a better strategy for regime change will not improve the chances that it will succeed. Instead, only by avoiding regime change altogether can the United States avoid future Afghanistan-like quagmires.

Benjamin Denison is a postdoctoral fellow with the Center for Strategic Studies at the Fletcher School of Law and Diplomacy at Tufts University, and the author of the just released Cato Policy Analysis &ldquoThe More Things Change, the More They Stay the Same: The Failure of Regime-Change Operations.”

How to Take the Shackles Off African Businesses

Cato Recent Op Eds - Thu, 01/09/2020 - 14:32

Tanja Porčnik

Though African nations have enhanced economic freedom since the beginning of the new millennium, most have a long way to go before fully embracing the rule of law and economic liberalisation, which would unquestionably spur economic growth and prosperity.

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The Fraser Institute’s annual Economic Freedom of the World report measures the degree to which the policies and institutions of countries support economic freedom. Essentially, the report measures economic freedom through a lens of personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately owned property.

The 2019 report, which ranks 162 countries and territories, finds stark differences among African countries, with Mauritius being the freest at ninth place and Libya the least free at 161. Despite its immense wealth in mineral and natural resources, Africa is the most economically unfree continent. Indeed, seven out of 47 African countries that are included in the report are among the bottom 10 when it comes to economic freedom, and more than half of them rank in the lowest quartile. Why should these findings worry Africans?

Economic freedom matters. According to more than 1,000 researchers in top peer-reviewed academic journals, people living in countries with high levels of economic freedom have higher levels of income, experience more rapid economic growth, have lower poverty rates, enjoy more political rights and civil liberties, and see lower gender and income inequalities. For example, countries in the top quartile of economic freedom had an average per capita GDP of $36,770 in 2017, compared with $6,140 for bottom quartile nations.

Unfortunately, 28 out of 47 scored African nations fall into this bottom quartile. In the top quartile, the average income of the poorest 10% is eight times higher than in the bottom quartile. Unsurprisingly, in the top quartile only 2% of the population live in extreme poverty, defined as living on less than $1.90 a day, compared with 27% in the lowest quartile.

Indisputably, development in Africa is contingent upon the promotion of economic freedom. To achieve this end African countries need strong rule of law and secure property rights, lower and simpler regulation, the African Continental Free Trade Area (AfCFTA), openness to foreign direct investment, stable currencies and good governance.

Africa has a unique problem: its informal economy accounts for as much as 80% of the region’s GDP and as much as 80% of employment. Research consistently shows that for business owners in Africa among the main factors pushing people out of the formal economy are overzealous regulatory mandates, high taxes, bureaucracy, corruption and weak rule of law. All of them are a reflection of low levels of economic freedom.

Here is the reality: African economies will keep underperforming until businesses that today operate outside the legal framework opt to transfer into the formal economy. Why is this important? The path to unlocking prosperity in Africa is paved with the building blocks that formalise the economy. Registered businesses create more jobs, record higher investment, enjoy legal protection against fraud, and have access to credit and capital, which creates opportunities for higher productivity and growth.

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Africa is the most economically unfree continent and that is what keeps it poor

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To attract businesses into the formal economy, African governments must increase economic freedom by doing two things: establish secure property rights and strengthen the rule of law, and scale back on regulatory mandates and taxes.

First, with private property protections it is crucial to emphasise that formal land titles not only tackle widespread property fraud but are also a prerequisite for Africans to be able to leverage their assets to engage in economic activities such as borrowing money, starting a business or assuring their business.

Importantly, establishing secure property rights for assets that are informally held would, as the Peruvian economist Hernando de Soto estimates, unlock $10-trillion of “dead capital” across the developing world, much of it in Africa. To unshackle this wealth, governments in Africa need to foster a more robust rule of law.

Second, high taxes and onerous regulations, such as lengthy and costly registration requirements, licensing and inspection requirements, are discouraging entrepreneurs in African nations from starting businesses and expanding them, or even pushing them into the informal economy.

Though economic freedom in Africa is higher than ever before, the continent has a long way to go before fully embracing free and open markets. Crucially, Africans need to muster the determination to stand up to their ruling elites, who generally oppose reforms towards economic liberalism. For better or worse, with these choices the future is in the hands of Africans themselves.

Tanja Porčnik is a senior fellow of the Fraser Institute specializing in economic and human freedom studies.

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