Update on Unaccompanied Alien Children

A new Congressional Research Service report provides a handy overview of the current state of knowledge surrounding Unaccompanied Alien Children (UAC) apprehended on the Southwest border.  Many Central American children and other family members have crossed the border and sought asylum in the United States.

UAC apprehensions so far in 2016 exceed those apprehended in 2015 but they are still below the peak year of 2014 (See Figure 1). 

Figure 1

Unaccompanied Alien Children Apprehensions

 

Source: Customs and Border Protection.

The number of apprehensions is up this year on a monthly basis.  The UAC are a small fraction of the total apprehensions (Figure 2)

Figure 2

All Apprehensions and UAC

 

Source: Customs and Border Protection.

UAC apprehensions are concentrated in just a few border sectors, most are entering through Texas (Figure 3).  A map of the border patrol sectors puts the flow in perspective (Figure 4).    

Figure 3

UAC Apprehensions by Border Sector

 

Source: Customs and Border Protection.

Figure 4

Border Patrol Sectors

 

Source: Customs and Border Protection. 

If the UAC could instead receive a worker visa or green card then they would not have to brave the difficult trip through Mexico from Central America and endure uncertainty and detention once they reach the United States.  Border Patrol wouldn’t have to waste their time apprehending these folks but could instead focus on stopping actual violent and property crime.  The lack of a legal immigration alternative for the UACs and their family already in the United States has created this situation.  An expanded legal immigration system can fix it.

For-Profit Colleges: Terrible or Target?

The Center for American Progress has a new paper out calling for the demise of the Accrediting Council for Independent Colleges and Schools (ACICS), one of the primary accrediting bodies of for-profit colleges. The paper accuses ACICS of being negligent in its accrediting practices, and as a result enabling loads of students and federal aid dollars to flow to bad schools. And ACICS may well be lax, though there is a big debate about exactly what the role of an accreditor is: college watchdog, or friendly advisor? But ACICS itself is not what I mainly want to discuss here. No, it is the evidence that for-profit schools are perhaps being unfairly targeted rather than being particularly bad actors.

The first bit of evidence is something I’ve hinted at before: lots of suits have been brought against for-profit schools, typically by state attorneys general, but few have ended in findings of guilt. As CAP’s paper helpfully itemizes, most accusations, at least for ACICS accredited schools, have been settled with “no finding or admission of fault by the college.” And in the most notable case of a court finding a for-profit guilty—the now-defunct Corinthian Colleges—the judgement was issued without a trial because Corinthian no longer existed and could not defend itself.

Many of the state AGs who have brought suits—including in California, Kentucky, and Massachusetts—have pursued higher political office. California’s Kamala Harris is running for the U.S. Senate. Kentucky’s Jack Conway unsuccessfully ran for governor in 2015. Former Massachusetts AG Martha Coakley ran for governor in 2014.

Were the suits motivated by a desire to raise the AGs’ profiles? No one but the AGs themselves knows their motivations, and they may well have concluded that the schools had intentionally done illegal things. But it is hard not to also see for-profit schools as relatively easy, unsympathetic targets. Moreover, it is possible that many schools settled not because they thought they were guilty, especially of systematic illegality, but because they did not want their names dragged through the mud anymore. In addition, unlike the AGs, they had to use their own money to defend themselves.

The CAP report also largely brushes off a contention that is crucial—but oft neglected—to understanding the seemingly poor outcomes of the proprietary sector: they work with students facing big obstacles in hugely disproportionate amounts. Writes author Ben Miller, “That argument is not necessarily accurate according to detailed reviews of literature around student default, which found that race and ethnicity do matter for default but that degree completion status is typically the strongest predictor of default.”

Of course, the abilities and personal situations of students have a ton to do with degree completion. And this is not primarily about race. Students at for-profit schools are much more likely to be African-American, but also older, low-income, and dealing with children and full-time jobs than students in other sectors, including community colleges. Indeed, a report on accreditors released by the U.S. Department of Education just yesterday reveals that among major accreditors ACICS member institutions have the highest percentage of undergraduates receiving Pell Grants, a rough proxy for income. 74 percent of students at ACICS accredited schools receive Pell, versus, for instance, 38 percent among schools accredited by the Middle States Commission on Higher Education, and 32 percent at the New England Association of Schools and Colleges.

Now, maybe the schools should choose not to work with a lot of students who face too many obstacles. But it is the federal government that gives the students much of the funding with which they pay for these schools, on the general principle that everyone should have access to college. And the feds do this without trying to meaningfully evaluate if the students are ready. So, essentially, the for-profit schools, but also the community colleges and nonselective public and nonprofit private schools, which are all seeing poor outcomes, are just doing what the feds want them to do.

Again, the evidence—all of it—needs to be considered before singling out for-profit schools for censure. Too often, it doesn’t seem to be.

Nigeria’s Floating (Read: Sinking) Naira

On Monday afternoon, the Central Bank of Nigeria (CBN) ended the Nigerian naira’s sixteen-month peg to the U.S. dollar, sending the naira into a freefall. The currency had been pegged at 197 naira per dollar, but as the chart below shows, it had been trading at over 320 naira per dollar for months on the black market (read: free market) and currently sits at 345 naira per dollar. At the time of writing, the naira was officially trading at 282.50 naira per dollar.

The official inflation rate for Nigeria in May was 15.6 percent. However, by using changes in the black market exchange rate data and applying the Purchasing Power Parity Theory, I calculate that the annual inflation rate implied by the free market is actually much higher – currently sitting at over 56 percent (see the accompanying chart).

A managed, floating exchange-rate regime is ill-suited for a country with weak institutions and little discipline, like Nigeria. More troubles lie ahead.

Jesse Ventura and Gary Johnson

 

[Note:  Normally I have the good sense to keep my writing focused on trade policy topics.  This blogpost is an exception.  It would not be wise to place much confidence in my abilities as a political analyst.  However, I lived in Minnesota and was politically active during the 1998 gubernatorial election.  That experience left me with impressions that are shared below.]

Jesse Ventura is an intriguing individual.  In 1998 he was nominated by the Reform Party of Minnesota as their candidate for governor.  Among his several prior careers were:  Navy special-forces diver; professional wrestler; screen actor; radio and TV personality; and mayor of Brooklyn Park, a suburb of Minneapolis. He has a disdain for “politics as usual,” especially when wrangling between Democrats and Republicans results in poor use of taxpayer funds.  He has an outsized personality, a robust and brash sense humor, and enjoys the limelight. He also looks great in a feather boa.

Ventura described himself as “fiscally conservative and socially liberal,” a straightforward expression of his libertarian philosophy.  He had considerable interest in policy issues, more than is the case for some candidates in the 2016 presidential campaign.  His fiscal priorities included reforms in sales, property, and income taxes.  On social issues, he supported the right for gays to serve in the military and to marry.  He was quite open about not having all the answers, readily admitting that he hadn’t formed opinions on every aspect of state policy.

In sharp contrast to the likely Democratic and Republican nominees in the 2016 presidential race, Ventura ran against solid, mainstream nominees from both those parties.  Hubert H. “Skip” Humphrey III, Minnesota’s attorney general and son of the former U.S. senator and vice president, was the Democratic-Farmer-Labor (DFL) choice.  Norm Coleman, well regarded for his service as mayor of St. Paul, was selected by the Republicans.  Neither of them had particularly high negative ratings.  A poll conducted in late October 1998 showed 33 percent with an unfavorable view of Humphrey, and 26 percent taking a dim view of Coleman.  Ventura’s unfavorable rating was 21 percent.  (Such ratings would be envied by today’s major-party presidential candidates, both of whom are viewed negatively by some 50-60 percent of recent poll respondents.)

A June 1998 poll commissioned by Minnesota Public Radio (MPR), KARE 11 TV, and the Pioneer Press asked respondents for whom they likely would vote.  The results:

  • Humphrey       46 %
  • Coleman          30 %
  • Ventura             7 %
  • Undecided       17 %

In contrast to Ventura’s 7 percent number from June 1998, recent polling shows Libertarian Party nominee Gary Johnson receiving support of 11-12 percent for his 2016 presidential bid.  So Johnson’s candidacy as of June is doing relatively better than Ventura’s did.

A similar MPR/KARE/Pioneer Press poll conducted in late October, shortly before the election, showed:

  • Humphrey       34 %
  • Coleman          33 %
  • Ventura           23 %
  • Undecided       10 %

Ventura had increased his support by 16 percentage points, mostly coming at the expense of Humphrey (decline of 12 points).  Coleman gained 3 points.

The final results on Election Day, Nov. 3, 1998, were:

  • Ventura           37 %
  • Coleman          34 %
  • Humphrey       28 % 

Ventura gained 14 percentage points of support during the final ten days of the campaign to win election as the 38th governor of Minnesota.  This swing was aided by his performance in the debate on Oct. 24, along with creative advertising that featured a Jesse Ventura action figure and Ventura singing a campaign song to the theme from “Shaft.”

Ventura’s victory was remarkable.  As a keen observer of Minnesota politics that summer and fall, I confess to having been dumbfounded.  If I had been asked in June 1998 whether there was any chance Ventura actually would win the race, I simply would have said it was impossible.  The real question was how much support his unconventional – albeit enjoyable – campaign would draw from Humphrey and Coleman.  But Ventura did win, and he earned it.  He presented ideas and attitude that were more engaging than those being offered by two other credible candidates.

Fast forward to 2016.  Gary Johnson definitely is not a clone of Jesse Ventura.  Johnson was a successful businessman who served two terms as a Republican governor of New Mexico.  He is notably less flamboyant than Ventura, but probably more accustomed to explaining libertarian concepts to a broad audience.  It’s clear that the odds are against an outright win by Johnson.  Having lived through an “impossible” victory, though, I’d rate Johnson’s prospects as better than that – perhaps “highly improbable” would be the right term. 

Of course, the electoral college may make it feasible for Johnson to have a very meaningful effect on the outcome of the election, even if he doesn’t garner the most votes nationwide.  Consider the hypothetical situation in which he wins his home state of New Mexico, which has five electoral votes.  If the major party candidates split the remaining electors evenly, no one would receive the 270 votes needed for election.  In that scenario, the outcome would be decided by state delegations in the House of Representatives. 

Ventura and Johnson know each other.  Ventura endorsed Johnson’s candidacy when he ran for the White House as the Libertarian nominee in 2012, and has encouraged people to vote for him again this year.  Ventura has a substantial following across the country, so may be in a position to take other steps on behalf of the Johnson campaign.  Who knows?  Perhaps that might include coaching him on proper use of a feather boa.

It should be an interesting campaign.

Daniel R. Pearson is a senior fellow in the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies.

What’s at Stake in Britain’s EU Referendum?

On Thursday, Britain will vote on whether or not to leave the European Union (EU). As things stand, the race is too close to call: a week ago, “Leave” were surging in the polls; this week, things have swung back towards “Remain.” But neither side has managed to build a lead beyond the pollsters’ margin for error, and veteran political campaigners suggest it will all come down to turnout. So what is really at stake as Britons submit their “Brexit” ballot papers?

To me, the case for Brexit is rooted in the idea of self-government, and the democratic accountability that goes along with that. The question facing British voters is, fundamentally, whether their parliament should be sovereign and their laws supreme, or whether such powers should continue to be pooled at the European level.

In other words, this is a constitutional referendum. It is not a choice between rival political platforms, or between rival sets of politicians; nor, indeed, does the result of the referendum have any immediate legal consequences. Rather, this is an opportunity for British voters to decide how they should be governed in future. Once the result is in, it will be up to the British government, and to parliament, to determine policy going forward.

This point is important, because it undercuts a lot of the fears people have about Britain leaving the EU. There is no denying, for example, that the Leave campaign has taken some unsavory positions on immigration, and promised unrealistic “bread and circuses” once Britain leaves the EU. But Leave are, emphatically, not a government in waiting.

Then there’s the government-backed Remain campaign, who have scarcely let an opportunity to scaremonger about the economic consequences of Brexit pass them by. From their increasingly shrill and outlandish claims, you would think that a vote for Brexit meant surrounding Britain with naval mines and never letting anything—whether goods, services, capital, or people—cross the border again.

That scenario is, of course, absurd. In reality, post-Brexit Britain is likely to rejoin the European Free Trade Area (EFTA), which it left in 1973 to become an EEC member, alongside Switzerland, Norway, Iceland, and Liechtenstein. These countries participate fully in the EU’s single market, without being subject to its political union. They are also free from the EU’s Common Agricultural Policy (which horribly distorts produce markets), its Common Fisheries Policy (which has helped to deplete European fish stocks), and its Common External Tariff (which prevents EU member states from trading freely with other countries).

The arguments against this “Norway option,” as it is often called, are well-rehearsed, but mostly without foundation. Yes, EFTA members have to contribute to the EU budget—but they do so at a far lower per capita level than full EU members. And yes, EFTA members have to adhere to a lot of EU regulation—but, again, far less than full EU members. More to the point, EFTA members have independent representation on the global trade and standards bodies that inspire most of this regulation in the first place, while EU member states are represented collectively by the European Commission. As a result, EFTA countries arguably have more say over the actual content of EU regulation than individual EU member states do.

There is, inevitably, a flaw in this plan: EFTA members, whether through parallel membership of the European Economic Area, or through a series of bilateral agreements with the EU (as is the case for Switzerland), must accept the free movement of people within the area covered by the European single market. And given how much Britain’s Leave campaign has focused on reducing immigration, that might prove a political tough sell—despite clear evidence that EU migrants are a boon to the British economy.

On the Road

If you haven’t heard much from me on these pages of late, it’s because I spent most of the last two weeks traveling back and forth, and so had little time for blogging.

I did, however, participate in some interesting events while I was away.  The first of these was “Futures Unbound,” the second installment so far of Cato’s annual Summit on Financial Regulation, held at the Drake Hotel in Chicago on June 6th.  I gave a talk there on the regulatory role of private clearinghouses.  I also had the pleasure, the night before, of taking part in a speakers’ dinner that was also attended by two distinguished (and very fun!) members of the CMFA’s Council of Academic Advisors, George Kaufman of Loyola University Chicago and Randy Wright of the University of Wisconsin.

After the Chicago event I headed straight to London, where I’d been invited to give the Institute of Economic Affairs’ annual Hayek Lecture.  Before the lecture Philip Booth, the Institute’s Editorial and Programme Director, interviewed me briefly on the necessity of central banks.  The main event took place that evening at Church House, a few blocks away from the IEA’s offices in Westminster; and I was pleased to find that in arranging for that commodious venue the Institute hadn’t overestimated the audience for my topic, which included many good friends from all over Europe.

Alas, much as I would have liked to linger with that crowd, I had to be whisked away, first for some dinner, and thence to a Heathrow hotel, where I could rest a little before catching an early flight to the States, where I took part in the second in what I hope will be a long-lived series of Liberty Fund conferences co-sponsored by them and Cato’s Center for Monetary and Financial Alternatives. This one, on “Liberty and Currency: The U.S. Asset Currency Reform Movement,” took place (appropriately enough) on Jekyll Island, under the direction of CMFA Adjunct Scholar (and occasional Alt-M contributor) Jeff Hummel,  with David Henderson serving as discussion leader.  The other distinguished participants included Rutgers’ Hugh Rockoff and U.C.S.D.’s Lawrence Broz.  Like every other Liberty Fund conference I’ve attended, this one was great fun.  Unfortunately, it’s unbuttoned proceedings were so in part (as is also always the case) because they were both confidential and unrecorded, so I’m unable to share any part of them with you.*

After Jekyll Island it was across the Atlantic again, this time to Zurich, where I took part in the ETH Risk Center’s conference on “Alternative Financial and Monetary Architectures.”  Others who spoke there included William R. White, another member of the CMFA’s Council of Academic Advisors, as well as “Limited Purpose Banking” champion (and write-in U.S. presidential candidate) Laurence Kotlikoff.  Although this event’s proceedings were also not recorded, the ideas I presented were a somewhat modified version of ones I presented at a Cato Monetary Conference a few years ago.

After the Zurich conference, I lingered for a day in Zurich, where I was able, by sheer luck, to dine with Cato Senior Fellow Jerry O’Driscoll, who happened to be on his way to an event in Lichtenstein. That dinner was a splendid and relaxing conclusion to a sometimes taxing itinerary — and the next-best thing to being back home again, with my very best friend.

Penelope compressed


*Those interested in taking part in future Liberty Fund-CMFA events are encouraged to write to me expressing their interest.  Please note, however, that these events are generally open only to academics and other holders of graduate degrees.

[Cross-posted from Alt-M.org]

Sotomayor’s Dissent

Yesterday, the Supreme Court decided the case of Utah v. Strieff, which involved the power of the police to detain and search citizens, and what the courts should do when the police break the law in the course of their investigations.  Washington Post reporter, Robert Barnes, writes, “the low profile case more likely will be remembered for a fierce and personal dissent from Justice Sotomayor, who said the ruling would exacerbate illegal stops of minorities.”  He’s right.

Here’s an excerpt from Sotomayor’s dissenting opinion:

[T]his case tells everyone, white and black, guilty and innocent, that an officer can verify your legal status at any time. It says that your body is subject to invasion while courts excuse the violation of your rights. It implies that you are not a citizen of a democracy but the subject of a carceral state, just waiting to be cataloged. We must not pretend that the countless people who are routinely targeted by police are “isolated.” They are the canaries in the coal mine whose deaths, civil and literal, warn us that no one can breathe in this atmosphere. See L. Guinier & G. Torres, The Miner’s Canary 274–283 (2002). They are the ones who recognize that unlawful police stops corrode all our civil liberties and threaten all our lives. Until their voices matter too, our justice system will continue to be anything but.

Regular visitors to the Cato web site will already be very familiar with many of the points Sotomayor made in her opinion.  We have been trying to draw more attention to the problem of confrontational police stops since the death of Amadou Diallo in 2000.  Sotomayor cites several scholars that have presented their research findings at Cato.  Last year, Professor James Jacobs discussed his book, The Eternal Criminal Record.  In 2014, Professor Alice Goffman, discussed her book, On the Run, at a Cato forum titled Lessons from Ferguson.

To stay ahead of the news, keep following Cato’s work. 

Related items, here, here, and here.