Will the Third Time Be the Charm as the Supreme Court Again Takes Up a Controversial Theory of Racial “Discrimination”?

Title VIII of the Civil Rights Act, also known as the Fair Housing Act (FHA), makes it illegal to deny someone housing on the basis of race and other protected characteristics. Applicable to governments, private entities, and individuals, the FHA prohibits racially discriminatory practices in most if not all transactions relating to housing.

For example, a landlord can’t refuse to rent an apartment to an otherwise qualified tenant, solely on the basis of race. Similarly, banks and credit unions can’t take a borrower’s race into account when deciding whether and on what terms to extend credit for the purpose of buying a home.

While it’s clear that the FHA bars such discriminatory intent, it remains an open question whether it covers claims of “disparate impact,” where a neutral policy disproportionately harms members of the protected class. Under this theory, a landlord insisting that all applicants pass a credit check could be held liable if it turns out that applicants from one protected group are disproportionately unlikely to have a sufficiently high credit score. That landlord would be held liable even though a satisfactory credit score is required of all potential tenants, regardless of race, and the landlord’s only intent was the (perfectly legal) desire to avoid tenants who would get behind on their rent—not to deny housing to any particular group.

In the decades since the FHA was passed, disparate impact has been used by the government and private litigants to exact tens of millions of dollars in fines and settlements from banks and developers whose facially neutral policies were alleged to have excluded members of a protected class from the housing market. The problem is that unlike with other anti-discrimination laws, such as the Americans with Disabilities Act—which expressly prohibits policies that have a disparate impact—the text of the FHA explicitly forbids only intentional discrimination.

Latest Essays in Cato’s Growth Forum

Today we add the following essays to Cato’s online growth forum:

1. Enrico Moretti wants to increase the R&D tax credit.

2. Daniel Ikenson calls for more foreign investment.

3. Scott Sumner argues for better monetary policy based on nominal GDP targeting.

4. Don Peck worries about growing dysfunction in the middle class.

5. William Galston offers a potpourri of proposals for faster, more inclusive growth.

6. David Audretsch highlights the central importance of entrepreneurship.

The remaining essays will posted next week.

Why Do Some Advocates of Small Government Want to Keep a Democrat Appointee at CBO?

Since I’ve accused the Congressional Budget Office of “witch doctor economics and gypsy forecasting,” it’s obvious I’m not a big fan of the organization’s approach to fiscal analysis.

I’ve even argued that Republicans shouldn’t cite CBO when the bureaucrats reach correct conclusions on policy (at least when such findings are based on bad Keynesian methodology).

So nobody should be surprised that I think the incoming Republican majority should install new leadership at CBO (and the Joint Committee on Taxation as well).

So why, then, are some advocates of smaller government - such as Greg Mankiw, Keith Hennessey, Alan Viard, and Michael Strain - arguing that Republicans should keep the current Director, Doug Elmendorf, who was appointed by the Democrats back in 2009?

Before answering that question, let’s look at some of what was written today for the Washington Post’s Wonkblog.

Common Core Will Fix the Nonexistent Gender Gap!

Walk around a random college campus, and the odds are good the first student you’ll run into will be female. 57 percent of college students are women, versus 43 percent men, a 14 point gap. Look at Advanced Placement exams – those College Board tests that enable high-scoring takers to get college credit – and you’ll find that 56 percent of students taking the exams are girls, creating a 13 percent gap favoring women. But fear not! University of Miami president Donna Shalala assures us that the Common Core national curriculum standards will help address the “gender-based inequities” crushing female students.

Um, what?

As the data make obvious, there is no college-readiness gap unfavorable to women. Yet Shalala proclaims that, “These uniform, more rigorous K-12 education standards have the potential to reduce gender-based inequities by ensuring that every young woman receives the educational foundation she needs to be successful in college and career.”

Okay, maybe Shalala doesn’t really mean to suggest – as the quote does – that the Core will fix overall gaps. Maybe she only means differences in subjects like computer science and engineering that, as she writes, do lean male. But as Core proponents will point out if you assert the standards are too broad, the Core only furnishes math and English guidelines, not engineering or computer science. More important, of the two areas the Core tackles, AP-taking suggests women dominate one and hold their own in the other. 62 percent of students taking the AP English exams in 2014 were female, while 48 percent of Calculus AB takers were girls. At the very least, these figures belie any accusations of systematic efforts to exclude women from college-prep courses, even if girls tend to choose different courses than boys.

Sadly, superficial argumentation for the Core is widespread, if rarely quite so egregious as this. More common is proclaiming that “higher standards” will, simply by virtue of being higher, drive greater achievement and make the country economically triumphant.  This despite what the research actually says about national standards.

Ironically, Core supporters love to take opponents to task for being misinformed, and they are sometimes right: Core opponents do too often ascribe curricula they don’t like, or malevolent motives, to the Core and its creators. But supporters have been just as untethered to reality despite, often, having been involved with the Core for years, unlike lots of parents forced to scramble for information after the standards suddenly showed up at their doors demanding their children.  In the case of Shalala, at the very least she signed the Shanker Institute’s “manifesto” applauding the Core – and calling for an explicit national curriculum – in 2011.

Defense of the Common Core has too often come in the form of platitudes and ungrounded assertions. This latest effort hasn’t improved upon that.

Russia Should Bury Lenin’s Body and the Rest of Communism

MOSCOW—Red Square remains one of the globe’s most iconic locales. Next to the Kremlin wall is a small, squat, pyramidal building:  Vladimir Ilyich Ulyanov Lenin’s mausoleum.

Lenin is preserved within, dressed in a black suit, his face is grim and his right fist is clenched, as if he was ready to smite the capitalists who now dominate even his own nation’s economy.  He is one of history’s most consequential individuals. Without him there likely would have been no Bolshevik Revolution, Joseph Stalin, Cold War, and Berlin Wall.

Of course, without Lenin there still would have been a Bolshevik movement. But it would have lacked his intellect, tactical skills, and, most important, determination. So feared was he by his enemies that he became Germany’s secret weapon against Russia, sent back to Russia to spread the bacillus of radical revolution.

Lenin pushed the Bolsheviks toward power as the authority of the moderate Provisional Government, which had ousted the Czar, bled away. Lenin was no humanitarian whose dream was perverted by his successors. He insisted on solitary Bolshevik rule, brooked no dissent even within the party, established the Cheka secret police, and employed terror against opponents.

Lenin was left helpless by three strokes.  He died on January 21, 1924, just 53 years old. His body lay in state for four days, during which nearly a million people passed by.

Within a week of his passing the idea of preserving his body was broached. The mausoleum started as wood and turned into the current granite and marble structure in 1929.

Communist imagery, including Lenin’s mummy, came under attack with the dissolution of the Soviet Union. Moscow’s anti-communist mayor backed burying the corpse and restoring Red Square to its pre-revolutionary state. Boris Yeltsin, the first president of non-Communist Russia, also proposed to bury Lenin. But Yeltsin’s health faltered and political strength weakened.

In 2001 Yeltsin’s successor, Vladimir Putin, expressed fear that burial would suggest the Russian people had lived under “false values” all those years. He concluded in 2011 that the decision would be made when the time was right.

Yet the same year Vladimir Medinsky, then a leading member of Putin’s United Russia Party, proposed burying the corpse next to Lenin’s mother in St. Petersburg and turning the mausoleum into a museum. In 2012 Putin appointed Medinsky Minister of Culture, suggesting support for removing Lenin’s body. However, Putin failed to act and since has ignored the issue.

While Russia cannot escape its history, it should stop glorifying the country’s turn down one of humanity’s great deadends. Although an unjust despotism, Imperial Russia could have been transformed into some form of constitutional rule.

But by entering World War I the Czarist autocracy sacrificed that opportunity. The Provisional Government, led by liberal constitutionalists and democratic socialists, put the previous regime’s commitment to war before the Russian people’s interests.

Unfortunately, the victorious Bolsheviks suppressed free markets, stole private property, crushed political dissent, murdered political opponents, imposed materialist ethics, and exalted ruthless dictatorship. The result was a sustained assault on the history, traditions, ethics, and very essence of the Russian people. Although Russians finally were able to turn back from this deadly detour, the same old authoritarianism has been born again, repackaged to make it more palatable to Russians today.

As I point out on Forbes online, “Burying Vladimir Lenin would be a powerful symbolic gesture to close an era. That still might not help the West understand what Vladimir Putin is, but it would emphatically show what he is not. And that would be no small feat at a time of dangerously rising tensions between Russia and the West.”

Someday Russians will be free. Liberation will come only through the Russian people’s own efforts, however, not from the West. Only they can make their own future. The day liberty arrives will be the real Russian Revolution.

Bring China and Its Neighbors under the INF Missile Treaty

As U.S. relations with Russia go from bad to worse, even old agreements seem at risk.  Such as the INF (Intermediate-Range Nuclear Forces) Treaty.

The 1987 pact essentially cleared Europe of mid-range missiles (between 500 and 5500 kilometers).  But the State Department recently charged Moscow with violating the treaty.

The INF treaty has been to America’s advantage, since it does not cover U.S. military allies, such as Britain and France.  Even more important, the U.S. has no potentially hostile neighbors with such a capability, while Russia faces China, India, Iran, North Korea, and Pakistan.

Moscow officials have suggested that they may leave the agreement at some point.  To forestall that possibility the U.S. and Moscow should seek to include China and other regional powers in the pact.   

Although relations between Moscow and Washington obviously are strained, the U.S. should approach Russia about amending the INF Treaty to allow deployments in Asia, unless otherwise agreed.  The two governments should simultaneously propose that Beijing and its neighbors accede to the pact. 

Admittedly, winning signatures from other nations, especially China, would not be easy. The PRC believes its short- and medium-range missiles serve a significant security role. 

However, the PRC’s more aggressive approach to Asia-Pacific territorial issues has antagonized neighboring states.  Japan, South Korea, and Taiwan, in particular, are likely to become increasingly interested in developing countervailing missile capabilities. 

In the future the PRC may face a plethora of countervailing weapons deployed by several states. Then Beijing might view a ban as more to its liking. 

Negotiations over expanding the INF Treaty would make Beijing a full global partner on arms control, recognizing the country’s rising international status.  Although the PRC has tended to view such limits as a means of maintaining U.S. “hegemony,” Washington could suggest accession as the best means to forestall any further increase in U.S. military presence in the region as part of the famed “pivot” or “rebalance.” 

Some analysts instead advocate responding to the PRC’s military build-up by withdrawing from the pact and introducing comparable missiles.  As an alternative, David W. Kearn, Jr. of St. John’s University suggested enhancing U.S. offensive capabilities in the region and defensive responses to missile attacks. 

However, as I point out in China-US focus, “nearby nations should be responsible for maintaining regional security.  American policymakers should use expansion of the INF Treaty as a means to reduce U.S. defense obligations.”

China’s growing missile force challenges America’s dominance in Asia—most directly the ability to project power—not America’s survival at home.  The most likely contingency is an attack on Taiwan, which is quite different from a strike on the U.S.  The Cold War justification for America’s extensive military presence in the region has disappeared.

America’s friends and neighbors, no less than China, have prospered and are able to defend themselves.  That obviously is best for the U.S., since Beijing will always have an incentive to spend and risk more in its own neighborhood than will America. 

Restricting Washington’s role also would reduce the potential for a superpower confrontation over less than vital interests.  Ironically, America’s conventional superiority inflates the danger of a great power confrontation.  Explained Kearn:  “in a crisis or a conflict, regional adversaries may have incentives to escalate (or threaten escalation) against U.S. forces in the region or U.S. allies to de-escalate the crisis and ensure regime survival once the United States has become involved.”

Expanding the INF Treaty to Asia would help reduce growing military tensions and dampen geopolitical competition, especially over territorial issues.  Achieving this end won’t be easy, but it is an area where the U.S. and Russia can cooperate.  While China might initially be wary of joining such an effort, a new arms control regime would ultimately offer Beijing significant benefits as well.

Today in Cato’s Growth Forum

There are five new essays today in the Cato Institute’s online growth forum:

1. Ryan Avent argues against restrictive zoning.

2. Jagadeesh Gokhale makes the case for tax and entitlement reforms.

3. Michael Strain wants to put America back to work.

4. Karl Smith thinks about how to counter slowing labor force growth.

5. Robin Hanson calls for the meta-policy of decision markets.