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Is the Government Spying on Reporters More often than We Think?

Cato Weekly Dispatch - Fri, 05/17/2013 - 13:44

Julian Sanchez

The Justice Department’s seizure of call logs related to phone lines used by dozens of Associated Press reporters has provoked a flurry of bipartisan criticism, most of which has cast the decision as a disturbing departure from the norm. AP head Gary Pruitt condemned the decision, part of an investigation into leaks of classified information, as a “massive and unprecedented intrusion.” Yet there’s plenty of circumstantial evidence suggesting the seizure may not be unprecedented—just rarely disclosed.

“There’s evidence that the Justice Department’s seizure of Associated Press phone records is far from unprecedented.”

The Justice Department is supposed to follow special rules when it seeks the phone records of reporters, in recognition that such snooping conflicts with First Amendment values. As Pruitt complained in an angry letter to Attorney General Eric Holder, those logs provided the government a “road map” of the stories his reporters were investigating, and there is evidence that such seizures deter anonymous sources from speaking to the press—whether they’re discussing classified programs or merely facts that embarrass the government.

Federal regulations require that the attorney general personally approve such a move, ensure the request is narrow and necessary, and notify the news organization about the request—in advance whenever possible. In this case, however, the Justice Department seems to have used an indiscriminate vacuum-cleaner approach—seeking information (from phone companies) about a wide range of phone numbers used by AP reporters—and it only notified AP after the fact.

It wouldn’t be surprising if there were more cases like this we’ve never heard about. Here’s why: The Justice Department’s rules only say the media must be informed about “subpoenas” for “telephone toll records.” The FBI’s operations guidelines interprets those rules quite literally, making clear the requirement “concerns only grand jury subpoenas.” That is, these rules don’t apply to National Security Letters, which are secret demands for information used by the FBI that don’t require judicial approval. The narrow FBI interpretation also doesn’t cover administrative subpoenas, which are issued by federal agencies without prior judicial review. Last year, the FBI issued NSLs for the communications and financial records of more than 6,000 Americans—and the number has been far higher in previous years. The procedures that do apply to those tools have been redacted from publicly available versions of the FBI guidelines. Thus, it’s no shocker the AP seizure would seem like an “unprecedented intrusion” if the government doesn’t think it has to tell us about the precedents. And there’s no telling if the Justice Department rules (and the FBI’s interpretation) allow the feds to seize without warning other types of electronic communications records that could reveal a journalist’s e-mail, chat, or Web browsing activity.

Is it paranoid to fear the Justice Department and the FBI are sidestepping the rules? Consider a case first reported in 2008, and discussed at length in a damning (but heavily redacted) 2010 report from the Justice Department’s Office of the Inspector General. In this instance, the FBI obtained nearly two years of phone records for lines belonging to Washington Post and New York Times bureaus and reporters—even though the FBI had initially requested records covering only seven months. In what the OIG called a “serious abuse of the FBI’s authority to obtain information,” agents seized these records under false pretenses, “without any legal process or Attorney General approval.” And these records remained in the FBI’s database for over three years before the OIG or the press found out.

It gets worse. The OIG report noted that the FBI had made “community of interest” requests to phone carriers; these requests sweep in not only the target’s call records, but those of people the target has spoken with—which can include reporters. Such requests can provide investigators an incredibly revealing portrait of entire social networks. Yet the OIG found that agents used boilerplate requests for information from the carriers; some claimed they submitted the requests without actually knowing exactly what “community of interest” meant, and even when they did it didn’t necessarily occur to them that they were likely to obtain reporter records through such requests. In other words, FBI agents often made these requests without fully understanding what they were requesting.

Only in January 2009 did the FBI think to ask the Justice Department’s in-house lawyers whether the press restrictions apply when reporter records are obtained through indirect means such as community of interest requests. Government lawyers said yes, but the FBI concluded it didn’t have to tell the press in the specific case it had inquired about, because agents had not “understood at the time the subpoenas were issued that the subpoenas called for reporters’ records.”

Lawmakers at a House Judiciary Committee hearing Wednesday grilled Holder about the AP investigation with little success: Holder had recused himself from this leak inquiry and was reluctant to discuss an “ongoing investigation.” But there’s plenty lawmakers can do beyond slamming Holder. Congress could demand an audit of previous government spying on reporters. Such a review would reveal whether the Justice Department believes it must disclose to its media targets when it has spied on reporters using methods other than subpoenas and whether its rules concerning obtaining reporters’ records cover internet material. This sort of audit would also cover how many journalists have been swept into government databases—directly, or indirectly under “community of interest” requests.

The real scandal may be just how much snooping on the media the current rules permit. To fully understand the AP seizures, the media and the public need a clearer picture of the rules governing all forms of spying on media—and how often such info-grabs have happened. Maybe the seizure of AP records is an extraordinary case. Or maybe the only extraordinary thing is that we’re hearing about it.

Julian Sanchez is a research fellow at the Cato Institute, where he focuses on issues of technology, privacy, civil liberties, and new media.

Hospital Lobby Fears They Might Not Get Medicaid Subsidies

Cato Weekly Dispatch - Fri, 05/17/2013 - 11:23

Michael F. Cannon

Hospitals across the nation are threatening that unless state lawmakers implement the Patient Protection and Affordable Care Act’s — Obamacare — Medicaid expansion, the law’s new taxes and spending cuts will lead to layoffs and closures.

There’s a dual irony here. First, hospitals put themselves in this position when they lobbied for that law. Second, many of the law’s erstwhile opponents, like Arizona Gov. Jan Brewer (R), Florida Gov. Rick Scott (R) and Ohio Gov. John Kasich (R) are now displaying Stockholm syndrome, taking pity on their captors and supporting the Medicaid expansion. Fortunately, many state lawmakers are refusing to punish taxpayers for the sins of the hospital lobby.

“Obamacare supporters are dangling an unlimited stream of federal money at the end of their line, yet only 25 states have taken the bait.”

Originally, Obamacare would have forced states to open Medicaid to 17 million additional people. Hospitals would have received so many subsidies, they scarcely minded the law’s new taxes and spending cuts. With near-unanimity, they “strongly urge[d]” Congress to pass the PPACA “with or without bipartisan support” as a matter of “national security, equity and fairness.” The hospital lobby hailed the law as “historic,” “a giant and essential step forward,” and a “major first step” full of “great improvements.”

Then in June 2012, seven Supreme Court justices let states choose whether to participate in the expansion.

Now, the hospital lobby is terrified. If states don’t expand Medicaid, hospitals won’t get their subsidies. Obamacare now means the same thing for hospitals that it has always meant for consumers and employers: costs are a certainty, but promised benefits may not materialize. The difference is that hospitals have only themselves to blame.

Rather than call for repeal, as one union that used to support the law has done, the hospital lobby is doubling down. According to one report, “Hospital associations have paid for television and newspaper ads, organized rallies, and choreographed legislative testimony,” demanding that state lawmakers unlock those subsidies. According to the hospital lobby’s curious logic, lawmakers who consistently oppose Obamacare will somehow be responsible for the harm that law imposes on the hospitals that support it.

Govs. Brewer, Scott and Kasich believe they must rescue their captors, and at taxpayers’ expense. Given that the expansion offers states $9 of federal cash for every $1 they spend, with no upper limit, such flip-flops are hardly surprising. Lawmakers in all 50 states basically swear two oaths of office: to uphold the law, and to grab as many federal dollars for their state as possible.

The real story here is that as many as half of the states might refuse to participate. Obamacare supporters are dangling an unlimited stream of federal money at the end of their line, yet only 25 states have taken the bait.

States have lots of reasons for rejecting the expansion, but the biggest one is the cost. My colleague Jagadeesh Gokhale projects that expanding Medicaid would cost states like Florida, Illinois, and Texas $20 billion each over 10 years. Actual costs will exceed those projections because they always do, but also because practically every politician and deficit-reduction commission in Washington has already proposed reneging on that 9-for-1 offer. To cover their ever-increasing share of the cost, states would have to raise taxes and/or cut spending for education and other services.

In dozens of states, lawmakers are fighting to rescue taxpayers from this fiscal time bomb, even at the risk of bucking the leadership of their own party. With encouragement from legislators like Rep. Stan Saylor (R), Pennsylvania Gov. Tom Corbett (R) recently announced his opposition to the expansion. Florida House Speaker Will Weatherford (R), Ohio Speaker Bill Batchelder (R), Arizona Senate President Andy Biggs (R) and Rep. Adam Kwasman (R) are standing with their GOP base and standing up to Scott, Kasich, and Brewer.

Hospitals save lives every day. In this fight, however, the hospital lobby is no different from any other hotshot that made a bad bet and then begged for a taxpayer bailout. Despite claims that the tide is turning in favor Obamacare, the movement to prevent that law’s massive expansion of the entitlement state is alive and well, even if a few big-government Republicans develop Stockholm syndrome.

Michael F. Cannon is director of health-policy studies at the Cato Institute and co-editor of Replacing ObamaCare (2012).

Obama’s War on the Young

Cato Weekly Dispatch - Wed, 05/15/2013 - 06:16

Michael D. Tanner

According to recent polls, younger Americans are increasingly disillusioned with government and cynical about the political process. Maybe they will finally realize that they are being played for patsies by the Obama administration. After all, on issue after issue, President Obama has fed younger voters a steady diet of high-minded rhetoric and then delivered policies that leave them holding the bag.

The most recent example is Obamacare.

For one, in order for the president’s health-care law to work properly, large numbers of young people will have to buy insurance. Those young and healthy individuals, with their low claims costs, are needed in the insurance pool in order to offset the expected inflow of sick people. The law prohibits insurers from denying coverage to people with “preexisting conditions,” that is, those who are already sick. Those newly enrolled sick will make the overall insurance pool more costly, and unless those costs are offset by an equal inflow of the young and healthy, we are likely to see an adverse-selection “death spiral,” in which sick people in the insurance pool drive up premiums, causing the healthiest members of the pool to drop out. The pool then becomes even sicker, leading to still higher premiums. The healthiest remaining participants drop out, and so on, until the entire market collapses.

As noxious as the individual and employer mandates are, the penalties — or taxes, according to Justice Roberts — are too low to force participation, which has the administration worried.

“Republicans should seize an opportunity as his policies crush young people.”

As Ezekiel Emanuel, the brother of Rahm, and one of the principal architects of the Affordable Care Act, wrote in the Wall Street Journal, if young people don’t participate in Obamacare in large numbers, it “could start the negative, downward spiral of exchanges full of the sick and elderly with not enough healthy people paying premiums.”

At the same time, Obamacare’s “community rating” provisions prohibit changing premiums based on health status and limit the degree to which insurers can charge based on age. Insurers cannot charge their oldest customer more than three times as much as their youngest, despite the fact that those older customers typically cost six times more in claims. Thus, premiums will rise more slowly or may even be lower for older and sicker individuals, but will shoot up for young people. In fact, a study in the American Academy of Actuaries’ magazine found that 80 percent of young adults aged 18–29 in the individual market and not eligible for Medicaid will face higher costs, even after exchange subsidies.

Even HHS secretary Kathleen Sebelius admits that “some of the older customers may see a slight decline, and some of the younger ones are going to see a slight increase.” Or, not so slight. According to a survey by the American Action Forum, healthy young people in the individual or small-group insurance markets can look forward to rate increases averaging 169 percent.

Under Obamacare, then, young people have to pay far more than is actuarially fair in order to subsidize premiums for those who are older and sicker. There is an added irony to this, given that those younger Americans are actually less likely to be able to afford higher premiums.

It’s not just Obamacare that will leave young people paying more. The president’s big-spending is also being charged to their credit card.

Each young American currently owes at least $53,242 as his share of our national debt. And if one throws in the unfunded liabilities of Social Security and Medicare, that debt rises to as much as $401,000 for each of them. (That sort of puts their college loans in perspective, doesn’t it?)

Moreover, that debt might be a bit hard to pay off, since young people are having a very tough time finding a job in Obama’s economy. Overall unemployment in this country may finally be improving — albeit slowly — but unemployment among those under age 30 hovers around 13 percent, nearly twice as high as for the population at large. This is particularly damaging since research shows that workers who are unemployed as young adults lose valuable work experience and opportunities to develop skills. As a result, youth unemployment can lead to lower wages for many years even if young people do find a job. And many young people who are working are in low-paying jobs or jobs unrelated to their college degree.

By all accounts, the president remains personally popular with younger voters, a group he won by 23 percentage points in 2012. With a few exceptions, such as Rand Paul, Republicans have done little to reach out to these voters. Besides, young people are unlikely to respond to Republicans as long as the party resembles a cross between their curmudgeonly grandfather and the preacher from Footloose.

But there is an opening here. Despite their recent voting patterns, there is no reason to presume that young people will inevitably vote liberal or Democratic. If the GOP can bring itself to become more open, welcoming, and (especially) tolerant, it might find an audience willing to listen.

Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Why People Keep Misunderstanding the 'Connection' between Race and IQ

Cato Weekly Dispatch - Wed, 05/15/2013 - 05:54

Brink Lindsey

Last week Heritage Foundation scholar Jason Richwine, coauthor of a hotly disputed new study on the fiscal costs of comprehensive immigration reform, resigned his position in a hail of controversy over his 2009 Harvard Ph.D. dissertation. In that dissertation Richwine had argued, among other things, that American “Hispanics” are less intelligent than native-born whites as evidenced by their lower average scores on IQ tests. Richwine then attributed Hispanics’ alleged intellectual inferiority at least partly to genetic factors.

The Richwine affair is just the latest flap in a long-running dispute over the significance of IQ tests and group differences in IQ scores. It’s easy enough to shut down that debate with cries of racism, but stigmatizing a point of view as morally tainted isn’t the same thing as demonstrating that it’s untrue. Here I want to explain why Richwine’s position is intellectually as well as morally unsound.

“Jason Richwine’s IQ-based argument that American Hispanics are less intelligent than native-born whites has been called racist. It’s also wrong.”

Let’s start with the fact that there is no such thing as a direct test of general mental ability. What IQ tests measure directly is the test-taker’s display of particular cognitive skills: size of vocabulary, degree of reading comprehension, facility with analogies, and so on. Any conclusions about general mental ability are inferences drawn from the test-taker’s relative mastery of those various skills.

How justified are such inferences? Well, it depends. Without a doubt, the skills assessed on modern IQ tests are widely applicable and highly valued in contemporary American society. Accordingly, considered just as a measure of skills rather than as a proxy for underlying ability, IQ scores clearly tell us something of genuine importance. They are a reasonably good predictor not only of performance in the classroom but of income, health, and other important life outcomes.

But what about innate mental ability? Does such a thing even exist? Evidence from IQ tests provides strong support that it does. First of all, scores on the various IQ subtests are highly correlated with each other, suggesting the presence of a general underlying factor. Furthermore, IQ scores tend to stabilize around age eight and are resistant to moving around much thereafter, in keeping with a relatively fixed level of innate intellectual capacity. And studies of twins and adoptees offer substantial evidence that this capacity has a strong genetic component. The scores of twins (who are genetically identical, more or less) are much more highly correlated than those of regular siblings (who share only about half the same genes). Meanwhile, the scores of regular siblings are in turn much more highly correlated than the scores of adopted and biological children raised together.

So what’s the problem? These studies typically assume that the similarity of twins’ shared environment is the same as that of regular siblings (highly unlikely) and that adoptive families are as diverse as families generally (in fact, parents that adopt tend to be better off and better educated). When these assumptions are relaxed, environmental factors start to loom larger. In this regard, consider a pair of French adoption studies that controlled for the socioeconomic status of birth and adoptive parents. They found that being raised by high-SES (socioeconomic status) parents led to an IQ boost of between 12 and 16 points – a huge improvement that testifies to the powerful influence that upbringing can have.

A study of twins by psychologist Eric Turkheimer and colleagues that similarly tracked parents’ education, occupation, and income yielded especially striking results. Specifically, they found that the “heritability” of IQ – the degree to which IQ variations can be explained by genes – varies dramatically by socioeconomic class. Heritability among high-SES (socioeconomic status) kids was 0.72; in other words, genetic factors accounted for 72 percent of the variations in IQ, while shared environment accounted for only 15 percent. For low-SES kids, on the other hand, the relative influence of genes and environment was inverted: Estimated heritability was only 0.10, while shared environment explained 58 percent of IQ variations.

Turkheimer’s findings make perfect sense once you recognize that IQ scores reflect some varying combination of differences in native ability and differences in opportunities. Among rich kids, good opportunities for developing the relevant cognitive skills are plentiful, so IQ differences are driven primarily by genetic factors. For less advantaged kids, though, test scores say more about the environmental deficits they face than they do about native ability.

This, then, shows the limits to IQ tests: Though the tests are good measures of skills relevant to success in American society, the scores are only a good indicator of relative intellectual ability for people who have been exposed to equivalent opportunities for developing those skills – and who actually have the motivation to try hard on the test. IQ tests are good measures of innate intelligence—if all other factors are held steady. But if IQ tests are being used to compare individuals of wildly different backgrounds, then the variable of innate intelligence is not being tested in isolation. Instead, the scores will reflect some impossible-to-sort-out combination of ability and differences in opportunities and motivations. Let’s take a look at why that might be the case.

Comparisons of IQ scores across ethnic groups, cultures, countries, or time periods founder on this basic problem: The cognitive skills that IQ tests assess are not used or valued to the same extent in all times and places. Indeed, the widespread usefulness of these skills is emphatically not the norm in human history. After all, IQ tests put great stress on reading ability and vocabulary, yet writing was invented only about 6,000 years ago – rather late in the day given that anatomically modern humans have been around for over 100,000 years. And as recently as two hundred years ago, only about 15 percent of people could read or write at all.

More generally, IQ tests reward the possession of abstract theoretical knowledge and a facility for formal analytical rigor. But for most people throughout history, intelligence would have taken the form of concrete practical knowledge of the resources and dangers present in the local environment. To grasp how culturally contingent our current conception of intelligence is, just imagine how well you might do on an IQ test devised by Amazonian hunter-gatherers or medieval European peasants.

The mass development of highly abstract thinking skills represents a cultural adaptation to the mind-boggling complexity of modern technological society. But the complexity of contemporary life is not evenly distributed, and neither is the demand for written language fluency or analytical dexterity. Such skills are used more intensively in the most advanced economies than they are in the rest of the world. And within advanced societies, they are put to much greater use by the managers and professionals of the socioeconomic elite than by everybody else. As a result, American kids generally will have better opportunities to develop these skills than kids in, say, Mexico or Guatemala. And in America, the children of college-educated parents will have much better opportunities than working-class kids.

Among the strongest evidence that IQ tests are testing not just innate ability, but the extent to which that innate ability has been put to work developing specific skills, is the remarkable “Flynn effect”: In the United States and many other countries, raw IQ scores have been rising about three points a decade. This rise is far too rapid to have a genetic cause. The best explanation for what’s going on is that increasing social complexity is expanding the use of the cognitive skills in question – and thus improving the opportunities for honing those skills. The Flynn effect is acutely embarrassing to those who leap from IQ score differences to claims of genetic differences in intelligence.

Jason Richwine is the latest exemplar of the so-called “hereditarian” interpretation of IQ – namely, that IQ scores are a reliable indicator of immutable, inborn intelligence across all groups of people, and therefore that group differences in IQ indicate group differences in native intelligence. Yes, the hereditarian view lends aid and comfort to racists and nativists. But more importantly, it’s just plain wrong. Specifically, it is based on the ahistorical and ethnocentric assumption of a fixed relationship between the development of certain cognitive skills and raw mental ability. In truth, the skills associated with intelligence have changed over time—and unevenly through social space—as society evolves.

The lower IQ scores of American Hispanics cannot simply be dismissed out of hand. They are evidence of skill deficits that sharply curtail chances for achievement and success. But contrary to the counsel of despair from hereditarians like Richwine, those deficits aren’t hard-wired. Progress in reducing achievement gaps will certainly not be easy, but a full review of the IQ evidence shows that it is possible. And it will be aided by policies, like immigration reform, that encourage the full integration of Hispanics into the American economic and cultural mainstream.

Brink Lindsey is a senior fellow with the Cato Institute and the Ewing Marion Kauffman Foundation.

Blame Campaign Finance Crusaders for IRS Mess

Cato Weekly Dispatch - Wed, 05/15/2013 - 05:47

John Samples

In early 2010, the U.S. Supreme Court decided Citizens United, which prevents the federal government from suppressing speech by businesses and other groups. The decision freed up so-called “super PACs,” which are widely regarded as having had a pernicious influence on the last several political cycles.

Since Citizens United, “reformers” have demanded that the IRS “crack down” on “money in politics” by questioning the non-profit tax status of many political groups. The reformers got their wish.

The result: the huge and growing scandal in which the tax-collecting agency finds itself embroiled, with politicians on both sides of the aisle calling for investigations to be conducted and heads to roll.

“The everyday suppression of speech should not be forgotten as we properly examine whether the IRS has gotten back into the business of helping a party keep its grip on power.”

In 2010, and more so in 2012, a quantity of political spending came through social welfare groups organized under Section 501(c)(4) of the tax code. These groups are not required to reveal their donors, but they are subject to the law in other ways. For example, the tax authorities say a (c)(4) group cannot have political engagement as its primary purpose. How much politics is too much, legally speaking, for such groups? Congress has not said, and the IRS has been reluctant to act on its own. Many election lawyers assume a group can spend almost half of its revenues on politics without risking its tax status.

Some people, known loosely as “the reform community,” have little time for such legal nuances. They are outraged that (c)(4)’s refuse to disclose their donors. Since Citizens United, these putative reformers have been demanding that the IRS target (c)(4) groups and remove their tax status. This whole IRS mess, in other words, came about when a powerful pressure group was demanding the agency go after groups engaged in political speech. Many of the groups reiterated their demand for IRS action after the agency’s actions became public.

The phrase “crack down” comes from reformist rhetoric. Consider the words. My dictionary defines “crack down” as “to suppress, prevent, put an end to, restrain, keep in control.” What is being suppressed and ended? Initially, only the use of a tax status. But there is more at stake. Much of the money raised by some (c)(4)’s goes toward political speech and related efforts like getting out the vote. In the first instance, the reformers are calling for a crack-down on First Amendment rights.

But the matter is more complicated. No one has a right to (c)(4) status. The IRS decides who gets the designation. In 2010, the agency’s decision-making was much delayed, thereby slowing down the grassroots engagement that marked the run-up to the midterm elections. Did the IRS intentionally delay this process? Many might recall that the tea party was critical of taxation and in some measure, the IRS. Even if the agency had no political motive, the process itself complicated political engagement, thus biasing the federal government toward the political status quo.

Groups do not need a (c)(4) status to raise and spend money on political speech. Many seek the status to avoid disclosing their political activities. Some (c)(4) donors may fear retaliation from the government. The current IRS mess will not reduce their concerns. But many of these donors, I suspect, simply wish to avoid the abuse heaped on important supporters to disfavored causes. Such “shaming” of disclosed individuals seeks to discourage their political efforts. Recently, that abuse was directed at critics of Obamacare. Earlier, the critics of the Iraq war were vilified. I myself would seek legal shelter from such storms of abuse. What about you? Would you willingly endure the hatred and condemnation directed toward the Koch brothers or George Soros?

We should be concerned about potential IRS abuse of political groups in 2010. Past presidents did use the agency to harm their opponents. But if the IRS turns out to be innocent, all is not well. Our 50-year quest to regulate campaign finance and thereby political speech runs counter to our more enduring commitments to political freedom. The everyday suppression of speech should not be forgotten as we properly examine whether the IRS has gotten back into the business of helping a party keep its grip on power.

John Samples is director of the Center for Representative Government at the Cato Institute and the author of The Struggle to Limit Government.

At Last, Justice for Locked-in Juveniles?

Cato Weekly Dispatch - Wed, 05/15/2013 - 05:12

Nat Hentoff

Thirty or so years ago, I reported from a New York state prison for juvenile delinquents as part of a national story on how American teenagers were being held behind bars without any consideration for their constitutional rights. To what extent has this changed in many states today?

In a Jan. 1 editorial, The New York Times provided the answer: “The juvenile justice system in the United States is supposed to focus on rehabilitation for young offenders. But for generations, it has largely been a purgatory, failing to protect them or give them the help and counseling they need to become law-abiding adults.

“Children who end up in juvenile courts often do not get due process protections like written complaints presenting the charges against them … or meaningful assistance of counsel” (“Juvenile Court Reform in Tennessee,” The New York Times).

This editorial laggardly followed a vital story about Shelby County, Tenn., and the Department of Justice that was buried inside the Dec. 18, 2012, Times. The story should have been on the front page; it had almost been entirely ignored by the media in all its forms:

“The county and the Justice Department signed an extensive agreement to overhaul the county’s juvenile justice system” (“Deal Signed in Tennessee on Justice for Youths,” Kim Severson, The New York Times, Dec. 18, 2012).

I was glad to discover that the Justice Department does remember the actual meaning of its name, after its torture rationalizations under George W. Bush and Dick Cheney and its agreement with Barack Obama’s personally directed “kill lists.”

This Dec. 17, 2012, agreement contained some “first of its kind” policies, as reported by the Times, that were the result of the Justice Department’s 2009 investigation into Shelby County’s juvenile justice system. Among the frightful distortions of the Constitution the department found:

“Black teenagers were twice as likely as white teenagers to be detained and were sent to adult criminal court for minor infractions far more often than whites.

“Black or white, teenagers locked up by the county attempted suicide at record rates and were sometimes strapped to deep, white restraint chairs and left alone up to five times longer than the law allowed.

“They languished over long weekends without proper hearings, were not read their Miranda rights and received crucial court documents just before hearings, if they received them at all …”

Tom Perez, an assistant attorney general in the Justice Department, told the Times: “What we saw was an assembly line with very little quality assurance.”

What does his boss, Eric Holder, think?

Meanwhile, President Obama, who lectured on constitutional law at the University of Chicago earlier in his career, has yet to make a comment on the life lessons of these Tennessee teenagers.

So what is changing now in Tennessee because of its agreement with the federal government? Dig this, students and parents around this land of the free:

“Some teenagers whose offenses are not serious are now issued summonses instead of being hauled to detention to await a hearing, and a model in-school program of tutoring, mentoring and counseling has been keeping students who commit minor offenses out of juvenile court altogether.

“Conditions inside the facilities have improved as well, federal investigators said. Three restraint chairs, for example, have been removed, and better suicide prevention protocols are in place.”

Wow! Those kids are beginning to get a small sense of what it is to be an American.

More changes that must still be made in the state of Tennessee include “advising teenagers of their Miranda rights and holding hearings within 48 hours to determine if children should remain in custody.”

I ask readers if your state, like Tennessee, is currently “developing a cadre of public defenders (hardly any of these kids’ families can afford private lawyers) well versed in juvenile court law and providing better medical and mental health treatment for children in detention”?

The Times report briefly cited changes taking place in other states: “Under a new program in New York called the Close To Home initiative … city teenagers who are in large juvenile facilities in other parts of the state will be sent to improved programs in their own neighborhoods.” Then parents won’t have to trek many miles to stay in touch with their kids.

But the Justice Department is still targeting other miscreant states, having sued “Meridian, Miss., and Lauderdale County, saying the school system was running a ‘school-to-prison pipeline’ in which students were jailed for infractions as minor as talking back to teachers or wearing socks that violated school dress codes.

“Some students had been shipped 80 miles to a juvenile detention center without probable cause or legal representation.”

The 2014 elections are getting nearer — not just for Congress, but at the state and local level as well. How many candidates of either party will be roused, or say a word, about why so many American teenagers are second-class citizens? Or, more accurately, why they aren’t citizens of this nation at all while imprisoned?

And, as always, I ask the media, including so-called social media, why they aren’t more involved in reporting on these youthful offenders who have been sentenced to be exiled from their Constitution.

Nat Hentoff is a nationally renowned authority on the First Amendment and the Bill of Rights. He is a member of the Reporters Committee for Freedom of the Press, and the Cato Institute, where he is a senior fellow.

U.S. Defense Cuts: An Ax Is Needed, Not a Scalpel

Cato Weekly Dispatch - Wed, 05/15/2013 - 04:59

Doug Bandow

Over the last decade America’s Republican Party put militarism before limited government. For months, GOP politicians have been denouncing the budget sequester for reducing military as well as domestic outlays.

However, conservative Republicans are beginning to acknowledge that the U.S. must take drastic steps to reign in government spending. Explained Rep. Tom Cole of Oklahoma: “Fiscal questions trump defense in a way they never would have after 9/11.”

The sequester is an inefficient and arbitrary way to cut outlays. However, the Defense Department (DOD), like the Federal Aviation Administration, played the usual Washington game of threatening to make ostentatiously unpopular reductions. Simply allowing the Pentagon to transfer money among accounts would moderate the impact.

“Washington no longer can afford to play the role of global cop.”

Much money could be saved through better management. However, the far greater problem is over-ambitious DOD objectives. Defense is a core constitutional responsibility for the federal government, but that means protecting America, not the rest of the globe.

The Pentagon budget is the price of America’s foreign policy. If Washington hopes to run the world, it must maintain a large and expensive military. In real terms Washington has been spending more on the military than during the Cold War, Korean War, or Vietnam War, all out of proportion to the current threat environment.

Washington’s principal objective should be to defend the U.S. — its people, territory, and constitutional liberties. In some narrow circumstances America’s interest may warrant defending other states. But not today.

In fact, little of what the Department of “Defense” now does actually relates to America’s defense. Washington dominates the globe and is allied with every major industrialized state, save China and Russia. The U.S. mostly subsidizes the defense of its prosperous allies from anyone and everyone.

Terrorism, a vicious, monstrous crime, thankfully poses no existential threat to the U.S. With luck and facing an unprepared foe, terrorists killed 3,000 Americans more than a decade ago. But Osama bin Laden found a repeat performance to be impossible. Terrorism is not World War III.

Moreover, terrorism is not amenable to solution by America’s traditional military tools. In fact, the Bush administration’s promiscuous war making exacerbated terrorism by creating more enemies of America. A smaller international presence would reduce the size of the target on Americans’ backs.

Economic interests are real but rarely warrant war. Stability may be a geopolitical virtue, but does not justify a neo-imperial American global presence.

Nation-building reflects the triumph of hope over experience, the belief that the Pentagon can remake other societies. Saving lives is appealing, but war is a poor humanitarian tool, witness Iraq.

There is no warrant for preserving what amounts to America’s Cold War military: numerous global alliances, hundreds of military installations, and hundreds of thousands of military personnel around the world.

The worst argument for military spending, offered by Republican politicians otherwise skeptical about government “stimulus” spending, is that cutting outlays would destroy jobs. If economic growth is the objective, the money should be left in private hands for saving and investment.

In any case, Washington no longer can afford to play the role of global cop. America’s $16.8 trillion national debt is just the start; unfunded liabilities run Uncle Sam’s total tab to more than $220 trillion.

Military outlays account for a smaller percentage of the GDP than during World War II and the Cold War, but America’s current GDP is 15 times as large as in 1940 and more than 11 times as large as in 1950. Thus, in terms of real resources the 4.6 percent of GDP devoted to the military last year was equivalent to 68 percent of the 1940 GDP.

Entitlement outlays will grow more quickly than military expenditures in coming years, but the fact that government devotes too much to Social Security is no argument for spending too much on the military. The U.S. cannot afford any budget sacred cows.

Despite the despairing rhetoric of Pentagon hardliners, the sequester is but a scalpel when a meat-ax is required. Real, inflation-adjusted expenditures jumped 76 percent during the Bush administration. They continued rising, though less swiftly, during the Obama administration.

Yet expenditures should come down naturally with the end of the Iraq war and imminent end of combat operations in Afghanistan, which together ran around $150 billion a year. If fully applied, figures Veronique de Rugy of the Mercatus Center, the sequester will only reduce real outlays to the 2006 level. That will still be greater than spending during the Cold War, when there was a Soviet Union, Warsaw Pact, and Maoist China.

Washington is on an “unsustainable” fiscal course, warned the Congressional Budget Office. Hard decisions are required. Which means big spending cuts. Including at the Pentagon.

Doug Bandow is a senior fellow at the Cato Institute.

Putting out the Welcome Mat for Prosperity

Cato Weekly Dispatch - Tue, 05/14/2013 - 06:35

Richard W. Rahn

How many new immigrants should the United States allow each year? How many guest workers? These are not easy questions, which is why there is as much fierce debate within the two parties as between them.

A little history and a few facts are useful in thinking through the problem. The United States did not even have an immigration law until 1875. There were no quotas or passports — people just got on a boat and came here. As a result, America became rich with the highest wages in the world. The system worked fine given that the United States was trying to increase the population (at least, of European origin) and had not yet created a welfare state.

“Good economists understand that immigrants who work create wealth in America, which in turn creates more and higher paying jobs for everyone.”

The two main reasons given for restricting current immigration are the myths that immigrants take away American jobs and that immigrants are more likely to go on welfare, thus putting an additional burden on the taxpayers. Rather than taking away American jobs, good economists understand that immigrants who work create wealth in America, which in turn creates more and higher paying jobs for everyone.

To explain the economics of this adequately would take more space than this entire commentary, but the truth of the assertion can be seen in the fact that high-wage countries with many immigrants such as Switzerland, Australia and Canada tend to have much higher labor force participation rates and lower unemployment rates than low-wage countries. It has been well documented that there are not enough Americans who are willing to do labor-intensive agricultural work to meet the needs of, in particular, fruit, vegetable and nut producers. At the other end of the wage scale, the United States has a substantial shortage of people trained in computer science and many of the other physical and medical sciences to meet the demands of employers. If employers cannot bring such needed workers into the United States, they will move their operations to other countries or concede the business to their foreign competitors, either of which will depress U.S. employment.

Do immigrants utilize Medicare, food stamps and other health and welfare programs more than native-born Americans? A recent study by Leighton Ku and Brian Bruen of George Washington University, which is consistent with similar studies, shows that immigrants consistently utilize welfare benefits less than their native-born counterparts. A recent static analysis by the Heritage Foundation concluded that immigrants could be more costly. However, the study assumed that immigrants will fail to move up the economic ladder, and did not account for restrictions in the proposed “Gang of Eight” bill and the benefits of immigration, so the analysis is not relevant for the current debate. What is clear is that immigrants who are working, self-supporting and paying taxes are a net benefit. Laws need to be changed or enforced to make sure that people who are not U.S. citizens do not receive welfare and free medical services (other than in emergencies), including “Obamacare.”

Polls show most Americans are in favor of immigrants who come here to work, particularly those who are willing to do jobs that Americans will not do, or those who are highly skilled and add to the competitiveness and productivity of the United States. America would be far poorer today if many of our immigrant ancestors — even the unskilled ones — had not been admitted.

The proposed immigration bill is flawed by having a quota system for guest workers rather than one based on employer demand. If the quota is lower than the demand for workers, then foreign workers and some employers will have a strong incentive to violate the law (as they now do). The push has been to make “our borders more secure,” and it is true that more needs to be done. But it also true that other than by creating a Soviet-style “Iron Curtain” and a police state, our borders can never be totally secure.

Fortunately, Helen Krieble, a businesswoman who faced the problem of not being able to hire sufficient U.S. workers for one of her operations, came up with a very practical solution to the guest worker problem. Her basic concept has been endorsed by leading economists and political leaders, including Newt Gingrich. She understood that many foreign workers do not want to live permanently in the United States or become citizens. They would prefer to be legal and to be able to go home and come back again without difficulty. Under the Krieble proposal, a database that matches workers and employers would be created, which would be open to all who need work permits, including those who are already in the country illegally. Employers would have to show that the need is not being met by U.S. workers. An applicant would have to go through a security check, and then be issued a secure photo I.D. (once a job is secured) as a legal worker. This would not be amnesty for those who are in the U.S. illegally, but would enable them to start the process for a green card and possibly, eventual citizenship on an equal basis with those who are applying to come to the United States for the first time.

The beauty of the Krieble proposal is that it is humane without giving an unfair advantage to existing illegal immigrants. It will add to U.S. prosperity — while greatly reducing the incentives for people to come here illegally.

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

Nothing to Joke about in a Partisan IRS

Cato Weekly Dispatch - Tue, 05/14/2013 - 06:30

Gene Healy

President Obama has a sharp comedic delivery for a politician, but sometimes you wish he’d joke a little less about abuses of federal power.

He, er, slayed them in the aisles at the 2010 White House Correspondents’ Dinner, warning the Jonas Brothers to steer clear of his daughters: “Two words for you: predator drones. You will never see it coming.”

The year before, giving a commencement address at Arizona State University, Obama dryly noted that since ASU officials hadn’t offered him an honorary degree, they’d “soon learn all about being audited by the IRS.”

After the IRS scandal that broke last week, the president ought to stay away from that kind of material. Mindful of the impending release of a Treasury Department inspector general’s report on improper targeting of Tea Party groups, the IRS offered a Friday news-dump “apology” for unlawful behavior that agency leadership has known about for at least two years.

A draft of the IG’s report obtained by the Associated Press notes that in June 2011, senior IRS official Lois G. Lerner learned that agency employees had targeted applicants for 501(c)(4) tax-exempt status for having “Tea Party” or “Patriot” in their names — demanding confidential donor lists, and the like.

Lerner objected, but the modified criteria adopted as a result, flagged suspect groups for, among other things, “Educating on the Constitution and Bill of Rights” — hardly less troubling.

My colleague John Samples notes that “the long delays of approving tax status,” which began in the run-up to the 2010 midterms, may have chilled political speech: “Do any sitting members owe their offices to the IRS?” he asks.

More than one commentator saw “shades of Richard Nixon” in the burgeoning scandal, recalling our 37th president’s expletive-laden demands for IRS targeting of Democratic contributors.

White House Counsel John Dean employed slightly cleaner language in an infamous 1971 memo on “how we can use the available political machinery to screw our political enemies.”

Past presidents have found the IRS an extremely useful piece of federal machinery for that purpose. A lot of what we know about that sordid history comes from the Senate Select Committee on intelligence abuses, chaired by Sen. Frank Church, D-Idaho, in the mid-’70s.

As Chris Hayes wrote in the Nation in 2006, “Church and many Democrats had every reason to believe they would be chiefly unmasking the full depths of Nixon’s perfidy,” but soon found that presidents of both parties were culpable: “Secret documents obtained by the committee even revealed that the sainted FDR had ordered IRS audits of his political enemies.”

In “The Lawless State,” his account of the Church Committee revelations, Morton Halperin noted that “the first organized political ‘strike force’ was formed within the IRS in 1961, and was directed against right-wing political groups.”

In this case, I doubt there was ever a JFK or Nixon-style direct command from on high to harass the Tea Party. It’s more likely to be a case of “proactive” bureaucrats inspired by presidential railing against the Tea Party and Citizens United: “Will no one rid me of these meddlesome right-wing freaks?” We’ll know more as congressional investigations unfold.

Meanwhile, Obama’s recent commencement address at Ohio State University looks even more brazen. Recall that the president warned the graduates that their ability to think clearly had been undermined because “you’ve grown up hearing voices that incessantly warn of government as nothing more than some separate, sinister entity that’s at the root of all our problems … that tyranny is always lurking just around the corner. You should reject these voices.”

Not so fast.

Gene Healy is a vice president at the Cato Institute and the author of The Cult of the Presidency.

The Perils of Religious Persecution in Iran

Cato Weekly Dispatch - Mon, 05/13/2013 - 07:06

Doug Bandow

The Islamic Republic of Iran often is in the news, and usually for all the wrong reasons. Tehran is suspected of developing nuclear weapons, though U.S. intelligence agencies see no evidence of an active nuclear weapons program. Iran also has a deteriorating human rights record.

The Islamic state is a particularly inhospitable home to religious minorities—Christians, Baha’is, Jews, Sunni Muslims. Iran is Exhibit #1 for the threat posed by Islamic fundamentalists gaining control of government.

Iran is not the most tyrannical government in the Middle East. America’s ally Saudi Arabia may deserve that title. Syria is the most dangerous, having slid into a full-scale civil war.

Nevertheless, Iranian repression is increasing and the space available to regime opponents is diminishing. Observed the Washington Post: “the anti-establishment energy that drove violent protests four years ago has disappeared, quashed by the heavy-handed crackdown in 2009 that followed Mahmud Ahmadinejad’s contested reelection.”

“Iranian repression is increasing and the space available to regime opponents is diminishing.”

Genuine liberals long have been beyond the pale. Even respected Muslim leaders who differ from the dominant ruling faction face barriers to participating in the political process. Indiana University Professor Jamsheed Choksy recently warned that Iran was “expanding its crackdown on political, religious and social freedoms in advance of the June 14 [presidential] election.”

Even the United Nations has taken note. Last December the General Assembly approved a resolution, its 25th since 1985, criticizing Tehran for its brutal repression.

In February the UN released a highly critical 79-page assessment: “Report of the Special Rapporteur on the situation of human rights in the Islamic Republic of Iran.” The Special Rapporteur, Ahmed Shaheed, concluded “that there continues to be widespread systemic and systematic violations of human rights in the Islamic Republic of Iran. Reports communicated by nongovernmental organizations, human rights defenders, and individuals concerning violations of their human rights or the rights of others continue to present a situation in which civil, political, economic, social, and cultural rights are undermined and violated in law and practice.”

Naturally, the government refused to cooperative. After the report was published Iran’s Chief Justice Ayatollah Sadegh Larijani denied everything and said ratification of the UN’s Universal Declaration of Human Rights in 1948 had been a mistake.  Unsurprisingly, the Special Rapporteur learned of intimidation and reprisals, when witnesses were tortured and threatened with death for reporting Tehran’s abuses. Such an environment creates a particularly dangerous environment for any minorities, and especially religious believers whose views are considered to be fundamentally illegitimate.

Among the many groups on the receiving end of the government’s brutality are non-Muslims and even non-traditional Shia Muslims, including Gonabadi Dervishes. Explained the Special Rapporteur: “adherents of recognized and unrecognized religions face discrimination in law and/or in practice. This includes various levels of intimidation, arrest and detention. A number of interviewees maintained that they were repeatedly interrogated about their religious beliefs, and a majority of interviewees reported being charged with national security crimes and/or propaganda against the state for religious activities. Several interviewees reported that they were psychologically and physically tortured.”

Iran’s abuses go back to the 1979 Islamic revolution. Last year the U.S. Commission on International Religious Freedom noted that Iran was “a constitutional, theocratic republic that discriminates against its citizens on the basis of religion.” The State Department’s last International Religious Freedom Report, published in 2011, noted simply that “The constitution and other laws and policies do not protect religious freedom and in practice, the government severely restricted religious freedom.”

The abuses are fundamental. Observed USCIRF: “The government of Iran continues to engage in systematic, ongoing, and egregious violations of religious freedom, including prolonged detention, torture, and executions based primarily or entirely upon the religion of the accused. State noted “Reports of government imprisonment, harassment, intimidation, and discrimination based on religious beliefs.” Moreover, both reports found the situation to be deteriorating.

All laws and regulations are to be “based on Islamic criteria.” The constitution formally accords “full respect” to Christians, Jews, and Zoroastrians, who are supposed to be allowed to practice freely “within the limits of the law.” However, these three groups are not to proselytize and conversion from Islam is punished by death. Moreover, the Islamic regime cares little for constitutional niceties. Warned the USCIRF, “Even the recognized non-Muslim religious minorities protected under Iran’s constitution—Jews, Armenian and Assyrian Christians, and Zoroastrians—faced increasing discrimination, arrests, and imprisonment.”

More vulnerable are non-recognized groups, such as Baha’is, who are considered to be apostates. Noted State, “The government prohibits Baha’is from teaching and practicing their faith and subjects them to many forms of discrimination that followers of other religions do not face.” The Commission also pointed to Sufi Muslims and Jews, who had grown more fearful due to “Heightened anti-Semitism and repeated Holocaust denials by senior government officials.” Sunni Muslims are doubly vulnerable since they typically are ethnic minorities—Arabs, Kurds, and others.

Most threats to religious liberty come from the authorities. Reported State, “the government largely drove abuse of religious freedom.” Overall the situation was bleak. State warned that “Government rhetoric and actions created a threatening atmosphere for nearly all non-Shia religious groups, most notably for Baha’is, as well as for Sufi Muslims, evangelical Christians, Jews, and Shia groups that did not share the government’s official religious views.” The government-controlled media ran “negative campaigns against religious minorities,” who “reported arbitrary arrests, prolonged detentions, and confiscation of property.”

Moreover, “all religious minorities suffered varying degrees of officially sanctioned discrimination, particularly in areas of employment, education, and housing.” There was social discrimination as well, and “the government’s campaign against non-Shia allowed for an atmosphere of impunity for those elements of society that harassed religious minorities.” This behavior led to the designation by State of Iran as a Country of Particular Concern.

Increasing political opposition to the regime has intensified religious persecution. Noted the USCIRF: “Since the disputed 2009 elections, religious freedom conditions in Iran have regressed to a point not seen since the early days of the Islamic revolution. Killings, arrests, and physical abuse of detainees have increased, including for religious minorities and Muslims to dissent or express views perceived as threatening the legitimacy of the government.” Moreover, religious minorities often are charged with political offenses. Reported Choksy: “Most of the several hundred imprisoned members of religious minorities stand charged with threatening ‘national security’ and some even face capital punishment at the hands of revolutionary tribunals.”

Several religious minorities have been targeted by the regime. Baha’is, who are not recognized by the Koran and are seen as apostates, may suffer most. The UN Special Rapporteur on Freedom of Religion and Belief, Heiner Bielefeldt, called Tehran’s attacks among the most “extreme manifestations of religious intolerance and persecution.”  Human rights Special Rapporteur Shaheed said “Baha’is are the most persecuted religious minority in Iran.” Seven Baha’i leaders were arrested in 2008 and charged with “insulting religious sanctities” and anti-state propaganda. They now are serving 20-year sentences. Several more Baha’is have been arrested in recent months. Two mothers, Zahra Nik-A’in and Taraneh Torabi, are currently serving prison sentences with their infant children.

But the campaign is much broader. Iran observer Kamran Hashemi, writing in the Guardian, reported: “Iran’s state machinery now attacks the Baha’is at every level. Their leadership has been dismantled, access to higher education is denied, and business licenses are revoked. Baha’i-owned shops are sealed or burned to the ground, cemeteries are desecrated, homes are raided and property is confiscated. More than 500 have been arrested since 2004. Even their efforts to educate their own young were declared illegal.”

Christians also high on the regime’s enemies list. In 1990 Rev. Hossein Soodmand, a convert from Islam in 1960 when he was 13, was executed for apostasy. In 1994 Mehdi Dibaj was sentenced to death for apostasy. He was freed after international protests, but then Bishop Haik Hovsepian Mehr, who highlighted Dibaj’s plight, was kidnapped—perhaps by state security forces—and murdered.

The situation has been worsening. Barnabas Aid reported that “Persecution against Christians has increased in Iran in recent years to a point not seen since the early days of the Islamic revolution.” The group ascribed the campaign to concern “at the number of Iranian Muslims turning to Christ,” which has led Tehran to increase “the number of raids on church services, the harassment and threatening of church members, and the arrest and imprisonment of worshippers and church leaders.” According to the Hudson Institute’s Nina Shea, “over the past two years more than 300 Christians have been arrested and detained arbitrarily in Iran.”

Internal political tensions with the approaching presidential election may also be to blame. Kiri Kankhwende of Christian Solidarity Worldwide said that any faith other than Shia Islam is “interpreted as a challenge to the very state itself.” As a result, “There has been a noticeable increase in the harassment, arrests, trials and imprisonments of converts to Christianity, particularly since the beginning of 2012. In October seven members of an underground church in Shiraz were arrested and charged with evangelizing, disturbing the peace, threatening national security, and using the internet to harm the state.  More then 50 Christmas celebrants were arrested in Tehran, though most were released after interrogation. Rev. Vruir Avanessian, an ethnic Armenian, was taken to the infamous Evin House of Detention, but released the following month.”

Two other Christian ministers have become cause célèbre. Convert Youcef Nadarkhani was arrested in 2009, threatened with execution if he didn’t recant his faith, and then sentenced to death. He was ultimately retried and acquitted, released, rearrested, and then again released earlier this year.

Rev. Saeed Abedini, a convert from Islam who became an American citizen in 2010, was arrested in 2005 for his work with underground evangelical congregations but released. He has visited several times over the years and was detained in 2009, but released after promising to avoid involvement with house churches. Last year he returned to Iran to visit family and help build an orphanage and was arrested again. In January he was sentenced to eight years imprisonment—to be served at Evin Prison, noted for its brutal conditions—for threatening Iran’s national security. Two Christian converts were arrested on December 31, imprisoned at Evin, and charged with threatening national security.

Iran’s small Jewish community suffers through a public environment dominated by anti-Semitism and Holocaust denial. Overt persecution was on display in 2000 when 13 Iranian Jews, including a rabbi, butcher, and teenager, were tried for allegedly spying for America and Israel. Ten of the 13 were convicted on dubious charges; the only good news was that all received prison terms. In the preceding 21 years since the Islamic revolution 17 Iranian Jews had been executed for allegedly spying.

Zoroastrianism is Iran’s oldest religion, but that has not insulated it from Islamic radicals. Although its adherents are thought to number under 100,000, and perhaps under 50,000, reported Choksy, “Communal gatherings are routinely monitored by fundamentalist Muslim authorities who allege that Zoroastrianism ‘threatens national security and subverts the Islamic revolution’.” Moreover, added Choksy, “Like members of the Christian, Jewish and Baha’i minorities, Zoroastrian activists who protest the theocracy’s excesses are sent to Tehran’s notorious Evin prison on charges of sedition.”

Although based on Shia Islam, Sufism, a more spiritual interpretation, has come under great pressure from the Shia Islamic government in Tehran. The Menatollahi Gonabadi Sufi order is believed to have more than two million members, and has been called a “danger” to Islam by the ruling faction. Reported Radio Free Europe/Radio Liberty: Members of the Gonabadi order “have come under increasing state pressure over the past four years; three of their houses of worship have been demolished.”

Sunni Muslims have been prevented from building their own mosque in Tehran and have been forcibly prevented from gathering for prayer in rented facilities. Sunnis report that there situation has been worsening in recent years.

The government also has targeted dissenting majority Shia clerics (as well as women and journalists). This is the most striking evidence that cynical political objectives are driving some if not much religious persecution.  Over the last four years Shia clerics have been prohibited from questioning the 2009 election or the government’s brutal response to demonstrators. Moreover, noted the Commission, “a number of senior Shia religious leaders who have opposed various religious and political tenets and practices of the Iranian government also have been targets of state repression, including house arrest, detention without charge, trial without due process, torture, and other forms of ill treatment.” If that can happen to a member of the majority religious group, the extreme vulnerability of religious minorities is obvious.

The regime even targets lawyers who defend religious minorities. Last October human rights lawyer Mohammad Ali Dadkhah began serving a nine-year sentence in Evin prison,. He was convicted for “membership in an association [the Centre for Human Rights Defenders] seeking to overthrow the government and propaganda against the system.” The UN High Commissioner for Human Rights, Navi Pillay, protested the case. His spokesman, Rupert Colville, explained that “The case against [Dadkhah] is widely believed to be linked to his work as a human rights defender.” Dadkhah is the fourth CHRD member imprisoned in the last 18 months. Previously he was tortured and imprisoned for 74 days in 2009. Punishing those who defend human rights activists brings back nightmares of the Soviet Union.

The West’s leverage over Iran is minimal. Some activists have criticized the Obama administration for not doing more, but it is not clear what more could be done, given the sanctions already imposed regarding the nuclear issue.

There may be a better hope of using international popular pressure. Explained Choksy, “Despite their heavy-handed actions, the Islamic Republic’s hard-liners seek to present their rule as benevolent and humane,” and therefore the regime has been “exhibiting rising concern about negative public perceptions of its rule.”

Individuals, groups, and activists, especially those which have not been at the forefront of the campaign to sanction and even bomb Iran, should press the Iranian government and other entities, from media to business, and protest the manifold violations of human rights. Visiting officials should be embarrassed by protestors. The regime should understand that its fight against sanctions for its nuclear activities continues to be undermined by its brutality at home.

Ahmed Shaheed, the UN Special Rappoteur, confirmed that public pressure works. In March he noted that “At least a dozen lives were saved because of the intervention of international opinion.” More such action is needed.

Iranians suffered under the Shah’s rule for a quarter century before being liberated by the Iranian revolution. Which, sadly, imposed an even more oppressive tyranny. The Iranian people are overdue for a revolution which truly liberates.

Doug Bandow is a senior fellow at the Cato Institute.

Immigration's Clear Benefits

Cato Weekly Dispatch - Mon, 05/13/2013 - 05:41

Alex Nowrasteh

As the Senate considers a comprehensive immigration reform package, fiscal conservatives are riven on the budget effects of the legislation. The Heritage Foundation has released a study claiming an immigration amnesty will cost the U.S. Treasury $6.3 trillion. Many other free-marketeers — of which I am one — decry that report’s methodology as ignoring the economic growth effects and resulting tax revenues of open immigration.

While the Senate bill is not perfect, it’s an improvement over the current immigration system — but the Heritage study’s gargantuan price tag does not hold up in the face of ample evidence of the economic benefits of immigration.

The Congressional Budget Office plans to “dynamically score” the fiscal impact of the Senate’s bill. This is a major win for rational analysis of any legislation, and something that free-marketeers have pushed for years — including analysts at Heritage.

“Peaceful and healthy people are a boon for the economy and don’t bust government budgets.”

A proper dynamic score will capture the economic benefits and analyze their impact on tax revenues — not just taxes paid by immigrants, but by Americans who become more productive because of reform. More immigration will increase the size of the economy by adding more workers and entrepreneurs, which will then increase the amount of capital and construction, thus boosting gross domestic product. That larger economy will then increase tax revenues, all else remaining equal.

But how much bigger would the economy be?

A 2009 study prepared for the Cato Institute employed a dynamic economic model called USAGE to estimate the economic change caused by immigration reform. It found that a bill similar to that proposed in the Senate added $180 billion to U.S. household income a year.

Another paper commissioned by Cato employed a similar analysis using a model called the GMig2. The study found that immigration reform would increase U.S. GDP by $1.5 trillion in 10 years.

That model also ran a simulation in which all unauthorized immigrants were removed from the U.S. economy — a policy favored by Heritage’s study. The result was a $2.6 trillion decrease in estimated GDP growth over the same decade, confirming the commonsense observation that removing workers, consumers, investors, and entrepreneurs from America’s economy will make us poorer.

The Cato studies provide dynamic tools that count the unambiguous economic gains from increased immigration as part of any reform. The consensus among economists is that immigration is good for the vast majority of Americans and the immigrants themselves, and makes both the U.S. and world economies larger and more productive.

A Reagan-era amnesty confirms that legalized immigrants experienced wage increases of up to 15 percent just by working legally. Those higher wages are a result of more productive workers who then pay higher taxes. But employers, shareholders, consumers, real estate owners, and most workers also see their incomes and productivity increase from immigration.

If conservative opponents of immigration reform are honestly concerned about its fiscal impact, let’s see their suggestions for minimizing that. Here is one: Reform the welfare state and wall it off to noncitizens. Cato will soon release a policy analysis detailing specific legal changes that would achieve that goal.

Dynamically scoring the fiscal and economic impacts of immigration reform will reveal what free-marketeers have known all along: Peaceful and healthy people are a boon for the economy and don’t bust government budgets. Heritage has a proud tradition of pushing for dynamic scoring of tax proposals. It’s unfortunate that it neglects its intellectual heritage here.

Alex Nowrasteh is an immigration policy analyst at the Cato Institute.

Electoral College Was Framers' Antidote to Popular Vote

Cato Weekly Dispatch - Mon, 05/13/2013 - 04:34

Robert A. Levy

Article II of the Constitution gives states broad authority to decide how their electoral votes are selected and divided among the candidates. In 48 states, the candidate who gets the most votes wins all of the state’s electoral votes.

“The Framers meticulously crafted an electoral model that reduced sectionalism and reinforced minority rights.”

But the Constitution doesn’t require that rule. Maine and Nebraska have implemented district-by-district voting. One electoral vote goes to the winner in each congressional district, and the remaining two electoral votes are awarded to the winner of the statewide popular vote…

But is it a good idea? The Framers meticulously crafted an electoral model that reduced sectionalism and reinforced minority rights. Instead, popular voting would favor regions with high voter density and large states over small. “One man, one vote” may be the rallying cry of a democracy; but that is not our form of governance.

We are a constitutional republic; political outcomes are not always determined by majority rule. … For example, it takes two-thirds of Congress to override presidential vetoes, approve treaties, impeach a president, or expel a member of Congress.

Yes, there are downsides to district-by-district voting. First, it would increase the number and influence of marginal candidates who have little chance to win statewide majorities. Recall 1992, when Ross Perot captured nearly 19 percent of the national vote, but not a single state. If he had won a significant percentage of electoral votes, the election would have been thrown into the House of Representatives.

Second, winner-take-all eliminates the pernicious effect of gerrymandering from presidential elections. Under a district-based system, gerrymandering would impact presidential outcomes as well as congressional results. Third, less populated and closely divided states might attract candidates if the law provided for winner-take-all, but not if electoral votes were narrowly split.

Finally, a practical problem: district-by-district voting would have to be enacted by state legislatures. Because the dominant party would probably lose electoral votes, repeal of winner-take-all would be an uphill battle.

Robert Levy is chairman of the board at the Cato Institute and author of The Dirty Dozen: How 12 Supreme Court Cases Radically Expanded Government and Eroded Freedom.

Fast Growth Will Save Lives Not the Food Security Bill

Cato Weekly Dispatch - Sun, 05/12/2013 - 07:37

Swaminathan S. Anklesaria Aiyar

Amartya Sen wants to estimate the number of deaths caused by the delay in passing the Food Security Bill. He thinks this may shame Opposition politicians into ceasing disruption of proceedings in the Lok Sabha. “To capture people’s attention, you have to have a number,” he says.

Fine, but let’s hope Sen will also estimate deaths caused by faulty policies that historically kept India’s GDP growth slow, and have once again slowed growth today. He loves to emphasise that for any given GDP growth, better social investment will improve outcomes. Why not equally emphasise that, for any given level of social investment, faster growth will also improve outcomes and reduce deaths?

Sen gained fame by estimating that 100 million women were “missing” because of gender discrimination that led to excess female mortality. He looked at the male-female ratio in China, South Asia, West Asia and North Africa, and asked what would have happened if these regions had the same sex ratio as in Western countries where women and men receive equally good care. He calculated that these countries would have had more than 100 million extra women.

Now, this was a very simplistic calculation, ignoring the many factors influencing female mortality other than sex discrimination. Indeed , this explains why Sen published this article in the New York Review of Books: any top economic journal may have rejected it for want of economic rigour.

His critics included economist Emily Oster, who suggested that the high incidence of hepatitis B in women in Asian countries, rather than discrimination, could be the main cause for high mortality. A separate careful review by demographer Ansley Coale suggested that the number of “missing women” might be far lower at 60 million. These criticisms didn’t dent Sen’s reputation at all. Despite its lack of rigour, Sen’s calculation of 100 million missing women caught the public imagination because it highlighted, in simple language, the enormity of social disasters that can flow from gender discrimination. What mattered was not the precision of data but the magnitude of the social disaster.

We need similar estimates of social disasters caused by lack of economic growth. Back in 2009, I wrote a paper for the Cato Institute titled “Socialism Kills: The Human Cost of Delayed Economic Reform in India”. (http:// www.cato.org/publications/development-briefing-paper/socialism-kills-human-costdelayed-economic-reform-india ). In the same spirit of inquiry as Sen, I estimated the number of “miss ing children”, “missing literates” and “missing non poor” as a result of delayed economic reform and the consequent poor growth performance of India.

The paper noted that for three decades after Independ ence, India suffered from the slow Hindu rate of growth of 3.5%. This accelerated with mild reforms in the 1980s and more comprehensive reforms from 1991 onwards. The paper considered what would have happened if the reforms had started just one decade earlier in 1971, pro duced faster growth, and produced the better social out comes actually observed in India with faster growth.

The paper calculated elasticities — the rate at which infant mortality, literacy and poverty had changed with economic growth. Using these elasticties, the paper cal culated what social outcomes might have been if the reform process and faster growth had begun in 1971. The results were startling. With faster growth, infant mortality would have fallen much faster. So, between 1971 and 2008, 14.5 million infants would have been saved from death.

The numbers for literacy were equally startling. India would have achieved almost 100% literacy by 2007. That would have meant an additional 261 million literates.

What about poverty? Delayed reform and slower growth kept an additional 109 million people below the poverty line. This calculation used the old Lakdawala poverty line — the more recent Tendulkar poverty line would yield a far larger number. Insum, delayed reform, resulting in slower economic growth, led to a huge social disaster — 14.5 million “missing children” , 261 million “missing literates” and 109 million “missing non-poor”.

Critics can say these calculations are simplistic: social indicators are affected by many factors other than growth. Yes, but exactly the same criticism was made of Sen’s calculation of “missing women,” yet this did not affect the relevance or importance of his paper.

I invite Sen and others to rework my calculations. Maybe some critic will estimate, for instance, that Nehru-Indira socialism killed only say 10 million children and not 14.5 million. That will not change the fact that it was a monumental social tragedy.

The proportion of people saying they are hungry in any month fell from 15 per cent in 1983 to 2% in 2004. The 2011-12 survey will probably show it at just 1%. This has been achieved by faster growth, and it eclipses anything the Food Security Bill will achieve.

Swaminathan Anklesaria Aiyar is a Research Fellow at the Cato Institute’s Centre for Global Liberty and Prosperity.

When We Began

Cato Weekly Dispatch - Fri, 05/10/2013 - 06:51

Dalibor Rohac

Strange Rebels. 1979 and the Birth of the 21st Century
By: Christian Caryl
New York: Basic Books, hardcover; $28.99, 432 pages

The 1970s were not a glamorous period of human history. From today’s perspective, they were a decade of questionable taste in clothing, hairstyles, music, and architecture. There was a general sense of economic and political unease in the West. But there are good reasons to study the 1970s, argues Christian Caryl in his latest book, Strange Rebels. Most importantly, it was a decade in which the overall malaise prompted cataclysmic events that have irrevocably shaped the world in which we live today.

Christian Caryl is a journalist of the old school. A senior fellow at the Legatum Institute (full disclosure: I worked as an economist there until February 2013) and a contributing editor at Foreign Policy magazine, his book demonstrates the breadth of his experience in journalism (he served as bureau chief for Newsweek and US News in Tokyo and Moscow, respectively). A riveting read, it is interspersed with gripping anecdotes and an admirable attention to detail. Its main thesis—that our current world would be unimaginable without the unique concatenation of world events that occurred in a very short period of time in 1979—is both novel and compelling.

“Even in 2013, many people are still in need of a healthy dose of skepticism about the ability of big, unchecked governments to deliver good outcomes.”

What exactly happened in 1979? Well, for one, Margaret Thatcher won Britain’s general election in May, ending a decade of economic stagnation, rampant inflation and excessive unionism. In the years that followed, she and her colleagues would fix the British economy, and turn an overregulated state in decline into an economic powerhouse. More importantly, she would change the conversation about economic policy in the West. Government ownership of industry, unionism and naïve Keynesian stabilization policies, which formed the basis of the post-war economic consensus in Western Europe, would be intellectually discredited for the years to come—though they would unfortunately resurface in the aftermath of the financial crisis of 2008.

Although not discussed explicitly in the book, Thatcher’s example inspired pro-market reformers around the world, including those in Eastern Europe. In 1989, for transitional economies for Eastern Europe, a rapid return to free markets was the only credible option and alternative to pipedream fantasies of seeking a “third way” between capitalism and communism.

Speaking of Eastern Europe, in June 1979 Pope John Paul II visited Poland, on a trip that heralded troubles for the communist regime. When he learned about the forthcoming visit, Leonid Brezhnev called Edward Gierek, the secretary of the Polish communist party, to persuade him to cancel Pope’s trip and recommended that the Pope declare himself indisposed. Canceling the visit was a nonstarter, however, so Brezhnev concluded the conversation abruptly. “Do what you want, so long as you and your party don’t regret it later,” he said, before hanging up.

Unsurprisingly, the pope was a massive hit in his home country. One million people showed up for his homily on Victory Square in Warsaw. For Poles, many of whom “had spent much of their lives watching television broadcasts or attending public rallies where the only language to be heard was the ponderous idiom of Marxism-Leninism,” this was a turning of the tide, which would later give rise to an organized opposition movement and finally to the downfall of communism.

Eight months earlier, in November 1978, Deng Xiaoping took over the Politburo Standing Committee, after outmaneuvering Mao’s chosen successor, Hua Guofeng. In the years that followed, incremental economic reforms would be adopted, reflecting Deng’s idea that “initiative cannot be aroused without economic means.” Without liberalizing its political realm, China would slowly open up to foreign investment and trade, leading to the most astonishing episode of economic growth in human history.

Caryl notes that 1979 was marked by two other events that have left a profound mark on our present era. On January 16, 1979, the Shah of Iran boarded a plane to Aswan, Egypt, never to return. His hasty departure, depicted as a “holiday,” was the climax of more than a year of violent protests, which ultimately led to the demise of the U.S.-backed monarchy and installation of an Islamic Republic.

Finally, on Christmas Eve 1979, Soviet forces entered Afghanistan. The decision came after the Communist-controlled central government in Kabul started to lose control of the situation in the country. Afghan communists ascended to power through a coup that deposed president Mohammed Daoud, cousin of the former monarch Mohammed Zahir Shah. The utopian Marxist agenda was at odds with the principles guiding the poor tribal society, and the Communists’ claim to power soon became tenuous.

But why the Soviets decided to become involved in what would become a catastrophic ten-year war catastrophe is unclear. None of the participants of the December 12 meeting in the Kremlin is alive. The only remaining document from the meeting is a memorandum, handwritten by Konstantin Chernenko and signed by members of the Politburo, which talks vaguely about “measures to be taken” in order to redress the “situation in A.”

In any event, both the Iranian Revolution and the Soviet occupation of Afghanistan would affirm the role that political Islam would play in international affairs. Moreover, they highlight the unintended consequence of Cold War Soviet and U.S. foreign policies in places that had never been central to the policy agendas of Moscow or Washington.

As an old-school journalist, Caryl is somewhat reluctant to offer lessons from the events he describes so skillfully. That may leave the reader somewhat confused as to what is the unifying argument of the volume. Caryl’s story is framed as one of a “great backlash”—but backlash against what? In the epilogue, 1979 is correctly described as a year when people around the world started to revolt against the dominant ideas of “societal progress,” presumably including excessively big government, the planned economy, and forced secularism.

It would have been helpful to stress that those ideas, rather than being tied to human progress, were incarnations of a very specific, hubristic notion about the role of government in improving societies, dubbed as “constructivist rationalism” by Friedrich von Hayek. Even in 2013, many people are still in need of a healthy dose of skepticism about the ability of big, unchecked governments to deliver good outcomes.

Dalibor Rohac is a policy analyst at the Center for Global Liberty and Prosperity at the Cato Institute.

The Minimum Wage Is a Jobs and Freedom Killer

Cato Weekly Dispatch - Fri, 05/10/2013 - 06:41

James A. Dorn

President Obama’s proposal to increase the minimum wage to $9 per hour and index it is misguided. It would reduce job opportunities for low-skilled workers (especially minorities), incentivize employers to switch to labor-saving methods of production, increase unemployment of low-productivity workers in low-income households and do nothing to address the underlying causes of poverty.

The legal minimum wage reduces both economic and individual freedom. It makes it illegal for workers to accept (or to keep) a job paying less than the minimum wage, and it prohibits employers from hiring anyone at less than the legal minimum — even if workers are willing to work.

If the prevailing market wage for low-skilled workers is $7.25 per hour and Congress mandates a minimum of $9 per hour, then workers who produce less than that will not be retained or hired. In the long run, as businesses shift to labor-saving methods of production, more low-skilled jobs will disappear than in the short run.

“The best way to stimulate the economy is by expanding free markets.”

In anticipation of a $9-per-hour minimum wage, small businesses are already making plans to shift to automated equipment, self-service tablets and new software to save on higher-priced low-skilled workers. More jobs will be created for skilled workers but at the expense of destroying jobs for low-skilled workers.

Politicians promise workers $9 per hour, but that promise cannot be kept if employers fire (or don’t hire) workers who produce less than $9. Most important, if low-skilled workers lose their jobs or can’t find jobs at the legal minimum, their actual earnings will be zero.

Evidence shows that when the real (inflation-adjusted) minimum wage exceeds the prevailing market wage for unskilled workers, there will be fewer jobs and a higher unemployment rate — especially in the longer run. If a person with low productivity is prevented from getting a job by the minimum wage, she may go on welfare. Without a job, she will be handicapped and become dependent on government. Rather than develop good work habits and improve her opportunities to move up the income ladder, she will be at a dead end.

High unemployment rates for teenage workers, especially blacks, are a direct consequence of the legally mandated minimum wage. The minimum wage also leads to lower participation rates for low-skilled workers as they become discouraged and drop out of the workforce.

Proponents of the minimum wage focus on workers who retain their jobs but ignore those who lose their jobs or can’t find jobs. They also assume that employers can cover the higher minimum by raising prices or paying out of “excess profits.” But most small businesses cannot increase prices and are making only a normal return on their invested capital. Large franchise restaurants, retailers and manufacturers have more leeway. Most are already paying more than the minimum wage. They may favor an increase in the minimum wage in order to reduce competition from small businesses, just as unions favor a higher minimum wage to protect their jobs.

If employers do raise prices, consumers will have less money to spend on other goods and services, so there will be fewer jobs elsewhere. Likewise, if the minimum wage cuts into profits, there will be less investment, and job growth will slow. The best way to stimulate the economy and create jobs is to increase economic growth by expanding free markets, not by increasing government power through a higher minimum wage.

James A. Dorn is a monetary specialist at the Cato Institute and editor of the Cato Journal.

FBI's Latest Proposal for a Wiretap-Ready Internet Should Be Trashed

Cato Weekly Dispatch - Fri, 05/10/2013 - 06:33

Julian Sanchez

The FBI has some strange ideas about how to “update” federal surveillance laws: They’re calling for legislation to penalize online services that provide users with too much security.

I’m not kidding. The proposal was revealed in The Washington Post last week — and a couple days ago, a front-page story in The New York Times reported the Obama administration is preparing to back it.

Why? Federal law enforcement agencies like the FBI have long feared their wiretap capabilities would begin “going dark” as criminals and terrorists — along with ordinary citizens — shift from telephone networks, which are required to be wiretap-ready under the 1994 Communications Assistance for Law Enforcement Act (CALEA), to the dizzying array of online communications platforms available today.

While it’s not yet clear how dire the going-dark scenario really is, the statutory “cure” proposed by the FBI — with fines starting at $25,000 a day for companies that aren’t wiretap capable — would surely be worse than the disease.

“Instead of being decided by what’s best for the vast majority of users, communications architectures would be determined by what makes things easiest for law enforcement to wiretap.”

The FBI’s misguided proposal would impose costly burdens on thousands of companies (and threaten to entirely kill those whose business model centers on providing highly secure encrypted communications), while making cloud solutions less attractive to businesses and users. It would aid totalitarian governments eager to spy on their citizens while distorting business decisions about software design. Perhaps worst of all, it would treat millions of law-abiding users with legitimate security needs as presumed criminals — while doing little to hamper actual criminals.

It Stifles Innovation

The FBI’s plan would effectively make an entire category of emerging secure platforms — such as the encrypted voice app Silent Circle or the Dropbox-like cloud storage service Spider Oak — illegal overnight. Such services protect user confidentiality by ensuring that not even the company’s employees can access sensitive data; only the end users retain the encryption keys needed to unlock their content.

This is hugely attractive for users who might otherwise be wary about relying on cloud services — whether they’re businesses negotiating multi-million dollar mergers, lawyers and therapists handling confidential documents, activists in authoritarian states, or just couples looking to back up their newborn photos.

But if the FBI gets its way, companies won’t be able to adopt that “end to end” encryption model, or offer their users the security it provides. A wiretap interface is essentially an intentional security vulnerability, as network engineer Susan Landau points out — which means requiring companies to be wiretap-capable is also mandating them to design less secure services.

That comes with a potentially large economic downside — and not just to cloud companies: If cloud providers can’t promise iron-clad confidentiality, corporations may well keep operating their own outdated systems, even though shifting to a secure cloud solution would be more efficient and less expensive.

It’s Tech-Ignorant

Typically, the FBI is claiming that they just want internet platforms to be subject to the same requirements as phone networks (which are familiarly accessible to them under CALEA).

But as a group of renowned computer scientists point out in an important new paper, “Going Bright: Wiretapping without Weakening Communications Infrastructure,” this misleading analogy ignores key differences between the architectures of these networks.

For one, online platforms are altered and updated far more frequently than phone networks — and there are a hell of a lot more online services than there are phone carriers. That means an interception mandate imposes a greater burden on a larger number of much smaller firms.

It also means that as platforms evolve, the code firms deploy to provide wiretap functionality is bound to have vulnerabilities. This provides hackers with ample incentive to simultaneously compromise an entire user base — and the sweetly ironic prospect of doing so through a law enforcement interface would be irresistible to them.

More fundamentally, the internet is a decentralized packet-switched network that operates very differently from a centrally-switched phone network — and many types of online communication follow the same design principle. For example, video-chat services like Skype rely on a peer-to-peer design that doesn’t require a centralized hub to route calls. Because it doesn’t depend on a single company’s servers to handle all the traffic, this architecture makes the service resilient and allows it to scale more easily — as well as more difficult for repressive regimes to block.

But the lack of a central hub also makes peer-to-peer communications inherently trickier to intercept. And threatening hefty fines for companies that can’t reliably provide access to user communications could easily deter companies from choosing the approach, even when it makes the most sense on economic or engineering grounds.

Instead of being decided by what’s best for the vast majority of users, communications architectures would be determined by what makes things easiest for law enforcement — essentially trading off the costs of the rare and tiny fraction of users who might be criminals with the the benefits of the many.

That’s utterly at odds with the spirit of permissionless innovation that has made the internet such a spectacular engine of economic and cultural growth.

And Ironically, It Won’t Really Protect Us

But if slowing innovation and weakening security is the price of catching terrorists and child pornographers, isn’t it a price worth paying?

Not if it doesn’t work.

Once it’s clear that online companies can’t promise true security, the most sophisticated and dangerous criminals will simply implement their own client-side encryption. DIY encryption may be too difficult or inconvenient for ordinary users, who benefit from services that take the hassle out of security — but the criminals the FBI is most interested in will doubtless find it worth the extra trouble.

As security researcher Matt Blaze and Susan Landau noted here in Wired, criminals, rival nation states, and rogue hackers routinely seek out and exploit vulnerabilities in our computers and networks … much faster than we can fix them. We don’t need to add wiretapping interfaces as new and “particularly juicy” targets to this cybersecurity landscape.

What we need to do is urge the FBI to find other ways to gather the evidence it needs — approaches that don’t indiscriminately compromise user security and online innovation. Instead of looking to Congress to add new vulnerabilities, the Bureau could focus on becoming better hackers of existing systems (for example, by exploiting bugs as backdoors).

In short, the FBI proposal is all cost for little to no benefit. The Obama administration needs to dump this ill-conceived scheme on the trash heap where it belongs.

Julian Sanchez is a research fellow at the Cato Institute.

Resist the Data Siren Song

Cato Weekly Dispatch - Wed, 05/08/2013 - 12:46

Neal McCluskey

It seems easy: collect data, process data, publish data, and everyone becomes better informed and wiser. It’s seductive, and it was clear listening to President Barack Obama and Senator Marco Rubio (R-FL) that both are under data’s spell when it comes to budget-busting higher education. But the main college problem isn’t a shortage of useful information — it’s massive federal student aid discouraging its use.

In his State of the Union address, Obama celebrated federal student aid but then lamented that “taxpayers cannot continue to subsidize the soaring cost of higher education.” His solution? Change college accreditation to include measures of “affordability and value,” and publish information such as loan default rates to help consumers become better informed.

Rubio’s take on the affordability problem was almost identical: laud student aid, lament price inflation, and declare that “we must give students more information on the costs and benefits of the student loans they are taking out.”

“Our root college problem isn’t too little information. It is too much federal government.”

But Rubio is doing more than talking. He has co-sponsored a bill with Senator Ron Wyden (D-OR) that would create a massive database of individual-level education and earnings information. The data would eventually be used to tie student outcomes to schools. But useful information is already in abundance, yet every year millions of students major in things with little prospect for good pay, or attend schools with poor outcomes.

The infamous U.S. News and World Report rankings have many flaws, but a degree from a top-25, national university almost certainly carries more weight than from a 30th-ranked regional. U.S. News also furnishes four- and six-year graduation rates for most schools, as well as lots of financial aid information. And U.S. News is hardly alone in the college-evaluation game, with numerous outlets ranking schools based on varying criteria.

What about the employment and earnings prospects for different fields of study? In addition to the Bureau of Labor Statistics furnishing data for myriad occupations, PayScale.com provides breakdowns of starting and mid-career earnings for numerous majors. Bachelor’s in psychology? The average starting salary is $35,200. Music? That kicks off at $34,600. Petroleum engineering? $98,000.

Despite such information being readily available, every year throngs of new grads walk off with diplomas in poorly paying areas. According to federal figures, in the 2009-10 academic year there were 97,216 bachelor’s degrees awarded in psychology, 91,842 in performing and visual arts, but only 72,654 in all varieties of engineering.

The root problem isn’t that useful information isn’t out there. It’s that too many students don’t heed it. They have too little future orientation, and more importantly, pay big parts of their bills with other people’s money. Some is from the Bank of Mom and Dad, but a huge amount is from taxpayers who haven’t any ability to say “no.” Inflation-adjusted aid ballooned from $4,071 per-student in the 1983-84 academic year to $14,745 in 2011-12, and is given away with almost no regard for a student’s academic record, major, or institution.

Unfortunately, the problem with new federal data collection isn’t just that it would address a nonexistent failure, or fail to attack hugely distorting subsidies. It would also introduce new dangers. For one thing, while the Wyden-Rubio bill says data collected will never be “personally identifiable,” such promises have been defeated before through “re-identification” techniques. And who knows what might be created in the future to bypass privacy protections?

Then there are all the shenanigans that could be justified using cherry-picked data. Already we’ve seen some in Washington demonize for-profit institutions while lionizing community colleges, despite the fact that the former often perform better than the latter. But community colleges seem cute, and their loan-default rates are lower because they get most of their subsidies directly rather than through students.

Finally, while we want people only pursuing studies they can afford, why should politicians decide that majoring in engineering is inherently more valuable than poetry? There may be huge, non-financial benefits to many majors, and politicians shouldn’t put their thumbs on the scale for any of them.

“More data” is a Siren song many federal politicians can’t seem to resist. But resist they must, because our root college problem isn’t too little information. It is too much federal government.

Neal McCluskey is associate director of the Cato Institute’s Center for Educational Freedom and author of the book Feds In The Classroom: How Big Government Corrupts, Cripples, and Compromises American Education.

Krugman's Still Wrong

Cato Weekly Dispatch - Wed, 05/08/2013 - 06:26

Michael D. Tanner

Paul Krugman has never been shy about proclaiming that he is right and everyone else is wrong — and not just wrong, but “knaves and fools.” Lately, however, one begins to worry that he might actually hurt himself, so vigorously has he been patting himself on the back for his opposition to “austerity” (defined as any cut in government spending, anytime, anywhere).

On his latest victory lap, Krugman is celebrating two things. First, a group of researchers from the University of Massachusetts Amherst discovered a small error in a widely cited paper by Carmen Reinhart and Ken Rogoff that showed economic growth was lower in countries with higher debt loads. Many of those who favor reduced government spending (including me) have cited Reinhart and Rogoff positively. Therefore, Krugman declares, the entire idea of austerity has been “sold on false pretenses.”

“Professor Krugman should pause briefly from congratulating himself to take a look at a few unfortunate facts.”

Second, European economies have sputtered. Krugman blames this on sharp spending cuts, which would be the opposite of the Keynesian stimulus spending that he favors. If only European governments had listened to him, Krugman suggests, instead of to all those knaves and fools, and spent more, their economies would be humming along by now.

Professor Krugman should pause briefly from congratulating himself totake a look at a few unfortunate facts.

Let’s deal with the Reinhart and Rogoff kerfuffle first.

For all the attention it has received, the Amherst researchers did not actually disprove Reinhart and Rogoff’s conclusion. Reinhart and Rogoff found that economies grew slower during periods of high debt (defined as government debt greater than 90 percent of GDP) than they did during times of lower debt.

The researchers from UMass, on the other hand, found that — wait for this — economies grew slower during periods of higher debt than they do during times of lower debt.

The UMass researchers did find a smaller difference in growth rates (one percentage point versus 1.3 points for the preferred median rates in Reinhart and Rogoff), but that hardly suggests that we are in dire need of more debt.

Besides, Reinhart and Rogoff’s model always provided a sort of faux precision to the debt argument. While the UMass researchers agreed that higher debt is correlated with lower growth, they found no evidence of Reinhart and Rogoff’s assertion that growth drops off dramatically above 90 percent of GDP. Did anyone really believe that debt equal to 89 percent of GDP was fine, while 91 percent of GDP sent the economy into a free fall? The point is that governments cannot amass an unlimited amount of liabilities without economic consequences.

Numerous studies besides Reinhart and Rogoff’s have shown this, including ones by the European Central Bank, the IMF, and the Bank for International Settlements. No doubt knaves and fools all.

More important, however, debt has never been the most important measure of government’s burden on the economy. As Milton Friedman pointed out, the real burden of government is spending, regardless of whether that spending is financed through debt or taxes. Too much debt is clearly bad, but substituting taxes for the debt does not make the problem substantially better.

Which brings us to the question of European “austerity.” Krugman continues to insist that European countries’ austerity has been devastating, and that spending cuts must therefore be resisted. The “case for keeping [the U.K] on the path of harsh austerity isn’t just empirically implausible, it appears to be a complete conceptual muddle,” he wrote this week, and “austerity policies have greatly deepened economic slumps almost everywhere they have been tried.”

But there have actually been few spending cuts in Europe, so it makes little sense to blame them for poor performance. A new study by Constantin Gurdgiev of Trinity College in Dublin compared government spending as a percentage of GDP in 2012 with the average level of pre-recession spending (2003–2007). Only three EU countries had actually seen a reduction: Germany, Malta, and Sweden. Not surprisingly, two of those three, Germany and Sweden, are among those countries that have best weathered the economic crisis. Those countries that have suffered most, Greece, Italy, Spain, and Portugal, have all seen spending increases.

And what about Great Britain, which has been Krugman’s No. 1 exhibit for the dangers of austerity? Compared with pre-recession levels, British government spending is up by 2.5 percent of GDP, a 29 percent increase in nominal spending.

Krugman belittles those who cite countries such as the Baltic nations or Switzerland, whose governments really have cut spending and seen robust economic recoveries. But how does he account for Iceland, considering he himself once called it “a post-crisis miracle?”

Iceland actually slashed spending from 57.6 percent of GDP in 2008 to 46.5 percent in 2012, a nearly 20 percent reduction. Yet, while Iceland was one of the countries hardest hit by the international banking crisis of 2008 and the recession that followed, the economy started growing rapidly again in 2010.

What most of Europe has seen in abundance is tax increases — exactly the sort of thing Krugman has advocated in the United States. In fact, overall, European countries have raised taxes by $9 for every $1 in spending cuts.

One might conclude that it was these tax hikes, rather than nonexistent spending cuts, that are responsible for Europe’s economic slowdown. Something to keep in mind the next time Paul Krugman — or President Obama, for that matter — calls for yet another tax hike on the rich.

None of this makes Krugman either a knave or a fool. But it does make him wrong.

Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Graduates, Your Ambition Is the Problem

Cato Weekly Dispatch - Wed, 05/08/2013 - 06:19

Roger Pilon

Civic education in America took a hit on Sunday when President Obama, giving the commencement address at The Ohio State University, chose citizenship as his theme. The country’s Founders trusted citizens with “awesome authority,” he told the assembled graduates. Really?

Actually, the Founders distrusted us, at least in our collective capacity. That’s why they wrote a Constitution that set clear limits on what we, as citizens, could do through government.

Mr. Obama seems never to appreciate that essential point about the American political order. As with his countless speeches that lead ultimately to an expression of the president’s belief in the unbounded power of government to do good, he began in Columbus with an insight that we can all pretty much embrace, at least in the abstract. Citizenship, Mr. Obama said, is “the idea at the heart of our founding—that as Americans, we are blessed with God-given and inalienable rights, but with those rights come responsibilities—to ourselves, to one another, and to future generations.”

“Obama’s commencement speech at Ohio State on Sunday would have perplexed the Founders.”

Well enough. But then he took that insight to lengths the Founders would never have imagined. Reading “citizenship” as standing for the many ways we can selflessly “serve our country,” the president said that “sometimes, we see it as a virtue from another time—one that’s slipping from a society that celebrates individual ambition.” And “we sometimes forget the larger bonds we share, as one American family.”

Not for nothing did he invoke the family, that elemental social unit in which we truly are responsible to one another and to future generations—by law, by custom, and, ideally, in our hearts. But only metaphorically is America a family, its members bound by tendrils of intimacy and affection. Realistically, the country is a community of individuals and private institutions, including the family, with their own interests, bound not by mutual love but by the political principles that are set forth in the Constitution, a document that secures and celebrates the freedom to pursue those interests, varied as they might be.

Alas, that is not Mr. Obama’s vision. “The Founders left us the keys to a system of self-government,” he went on, “the tool to do big and important things together that we could not possibly do alone.” And what “big and important things” cannot be done except through government? On the president’s list are railroads, the electrical grid, highways, education, health care, charity and more. One imagines a historical vision reaching as far back as the New Deal. Americans “chose to do these things together,” he added, “because we know this country cannot accomplish great things if we pursue nothing greater than our own individual ambition.”

Notice that twice now Mr. Obama has invoked “individual ambition,” and not as a virtue. For other targets, he next counseled the graduates against the “voices that incessantly warn of government as nothing more than some separate, sinister entity that’s the root of all our problems, even as they do their best to gum up the works.”

The irony here should not go unnoticed: The opponents that the president disparages are the same folks who tried to save the country from one of the biggest pieces of gum now in the works: Mr. Obama’s own health-care insurance program, which today is filling many of its backers with dread as it moves toward full implementation in a matter of months.

None of that darkens Mr. Obama’s sunny view of collective effort. What does upset him, still, is the run-up to the 2008 financial crisis: “Too many on Wall Street,” he said, “forgot that their obligations don’t end with their shareholders.” No mention of the Federal Reserve, or Fannie MaeFNMA +0.12% Freddie MacFMCC -0.24% the Community Reinvestment Act, or the many other “big and important things” government undertook before the crisis hit, things that explain the disaster far better than any Wall Street greed. None of that fits in Mr. Obama’s morality play. For that matter, neither do the Constitution’s checks and balances. When the president laments that “democracy isn’t working as well as we know it can,” he is not talking about those big, misbegotten public projects but about the Washington gridlock that has frustrated his grander plans.

From George Washington to Calvin Coolidge, presidents sought mostly to administer the laws that enabled citizens to live their own lives, ambitiously or not. It would have been thought impertinent for a president to tell a graduating class that what the country needs is the political will “to harness the ingenuity of your generation, and encourage and inspire the hard work of dedicated citizens … to repair the middle class; to give more families a fair shake; to reject a country in which only a lucky few prosper.”

A more inspiring message might have urged graduates not to reject their own country, where for two centuries far more than a lucky few have prospered under limited constitutional government—and even more would today if that form of government were restored.

Roger Pilon is vice president for legal affairs at the Cato Institute and director of Cato’s Center for Constitutional Studies.

Prodding China to Pressure North Korea: How US Policy Should Change

Cato Weekly Dispatch - Wed, 05/08/2013 - 06:15

Ted Galen Carpenter

Evidence mounts that China is becoming increasingly frustrated and annoyed with its North Korean ally. Not only did Beijing vote in favor of the two most recent rounds of sanctions that the UN Security Council imposed on Pyongyang, but statements by Chinese leaders directed to Kim Jong-un’s regime have become noticeably more pointed and caustic. China’s Foreign Ministry explicitly condemned North Korea’s nuclear test in February, and Beijing issued escalating criticism of the DPRK’s shrill rhetoric and saber rattling directed against the United States, South Korea, and Japan. In early April, Chinese President Xi Jinping warned that “no one should be allowed to throw the region, even the whole world, into chaos for selfish gains.” Foreign Minister Wang Yi, relating a conversation with UN Secretary General Ban Ki-moon, said bluntly: “We oppose provocative words and actions from any party in the region and do not allow troublemaking on China’s doorstep.” Observers in East Asia and the United States viewed those comments as a rebuke to North Korea.

Beijing’s attitude has certainly shifted away from the one-time pervasive equation of China’s relations with North Korea as being “as close as lips and teeth.”  The Obama administration apparently perceives that change as well.  An April 5 story in the New York Times reported that the administration, “detecting what it sees as a shift in decades of Chinese support for North Korea,” was now “pressuring” Xi’s government “to crack down on Pyongyang or face a heightened American military presence in its region.” National Security Adviser Tom Donilon expressed optimism that China’s position regarding North Korea’s disruptive behavior was “evolving” — and apparently in a beneficial direction.

“If the Obama administration wants China to be more proactive in preventing North Korea from disrupting the peace of the region, it needs to alter the incentive structure.”

China’s policy is undoubtedly the crucial variable in dealing with the North Korean crisis. China provides its dysfunctional ally with approximately half of the food supplies and 80 to 90% of the energy supplies that it needs. If Beijing ever decided to sever that aid pipeline, Kim’s regime would be in very serious trouble. 

But Chinese leaders are reluctant to take such a drastic step, lest the North Korean state implode and create multiple problems for China. The most immediate risk would be a humanitarian crisis, with desperate refugees pouring across the border into China. The broader strategic risk would be the disappearance of the North Korean territorial buffer between the Chinese homeland and the rest of Northeast Asia, which consists of US allies.

Pyongyang’s current fomenting of tensions, while disturbing to Beijing, is not sufficient to impel Xi’s government to take stronger action, given that risk. The Times’s observation that China might face a stronger US military presence in the region if North Korea is not reined-in is correct, but even that outcome might not be enough to get Beijing to get tough with its ally. Indeed, since the end of Mao Zedong’s rule, Chinese leaders have regarded the US military role in East Asia with mixed emotions. They do suspect that one motive for Washington’s policy is to contain China’s growing influence in the region, but they also regard that presence as a leash on key countries, especially Japan, who might otherwise play more active, assertive security roles of their own.

If the Obama administration wants China to be more proactive in preventing North Korea from disrupting the peace of the region, it needs to alter the incentive structure. Although Chinese leaders may be somewhat ambivalent about the overall US military presence in East Asia, they certainly do not want US bases perched on the Chinese border if North Korea collapses and a united Korea emerges. They saw how Washington exploited East Germany’s collapse to incorporate a united Germany in NATO, and they desire no repetition in their neighborhood. As a “carrot” to offer Beijing, the United States should explicitly agree that if Korean reunification takes place under Seoul’s leadership, there will be no attempt to move US troops or bases into former North Korean territory. Since Washington’s defense treaty with Seoul would have no rationale without a North Korean threat, the Obama administration should further commit to phasing-out all existing US bases on the Peninsula and terminating the alliance itself within three years of reunification.

The “stick” in such a carrot-and-stick strategy should be to exploit one of China’s greatest worries: that other East Asian nations, especially Japan, might match Pyongyang’s emergence as a nuclear-weapons state. Washington has gone to great lengths to alleviate any concerns that Beijing might have on that score. A succession of US administrations have strongly discouraged either Seoul or Tokyo from even considering that option. Indeed, it was intense US pressure that caused the South Korean government of Park Chung-hee to terminate its very active nuclear development program in the late 1970s. And in every recent crisis involving North Korea, US officials have re-emphasized Washington’s firm commitment to defend its allies by whatever means necessary. 

That commitment implies that there is, therefore, no need for the East Asian allies to develop deterrents of their own. Such a smothering strategy provides an indirect, but very real, assurance to Beijing that it need not fear either South Korea or Japan going nuclear. It is a misguided strategy. Although further proliferation in Northeast Asia would hardly be a good development, having nuclear weapons in the hands of stable democratic countries like Japan and South Korea does not pose a credible threat to US security or global peace.

US officials should inform their Chinese counterparts that if North Korea insists on crashing the global nuclear weapons club, the United States will no longer stand in the way of Seoul and Tokyo following suit. While we should not encourage Japan and South Korea to build their own nuclear arsenals, neither should we seek to prevent them from doing so, if they conclude that their national security requires that step. Washington should respect whatever decision they reach, and that new stance should be made emphatically clear to the Chinese government.

It is not certain that such a carrot-and-stick approach would finally cause Chinese leaders to take whatever action is necessary to end North Korea’s dangerous, destabilizing behavior. But the current US strategy has not done so, and there is little evidence that continuing that strategy will achieve any better results in the future. A new approach offers at least the prospect of getting the one power that might be able to end the North Korean crisis to overcome its reluctance and indecision and finally take the necessary steps.

Ted Galen Carpenter, a senior fellow at the Cato Institute, is the author of nine books on international affairs, including (with Doug Bandow) The Korean Conundrum: Washington’s Troubled Relations with North and South Korea (Palgrave Macmillan).
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