U.S. Chamber of Commerce Seeks to Defeat Top Free-Enterpriser Rep. Justin Amash

In 2008 the U.S. Chamber of Commerce supported TARP, the $800 billion Wall Street bailout. Early in 2009 the Chamber supported President Obama’s $800 billion “stimulus” bill. Then four months later it announced its creation of the “Campaign for Free Enterprise.” As I pointed out at the time, it would have been nice if the Chamber had discovered the virtues of free enterprise when it mattered.

Now the Chamber’s got a new campaign that seems incongruous for a “free enterprise” organization. It has endorsed the primary opponent of Rep. Justin Amash (R-MI), the most pro-free-enterprise and most libertarian member of Congress. You don’t have to take my word for that. The Club for Growth rates Amash 100 percent. The National Taxpayers Union rates him second among 435 members of Congress in fiscal conservatism. He scored 100 percent on the Freedomworks Scorecard.

So why would the Chamber of Commerce oppose him? I looked at big business opposition to Amash and several other libertarian-leaning legislators last month:

In Michigan business leaders are funding financial consultant Brian Ellis’s primary challenge to Rep. Justin Amash. Since his election in the 2010 tea party wave, Amash has emerged as the most libertarian member of the House of Representatives. He’s second to McClintock on the National Taxpayers Union spending-vote ratings. He organized a bipartisan effort to rein in the National Security Agency that came within a few votes of passing the House. He heads the House Liberty Caucus. Amash told the New York Times, “I follow a set of principles, I follow the Constitution. And that’s what I base my votes on. Limited government, economic freedom and individual liberty.”

So why wouldn’t Grand Rapids business leaders be proud to have such a widely admired young representative? They say they want a congressman who will work with others to “get things done.” Andrew Johnston, the political director of the Grand Rapids Chamber of Commerce, told the Wall Street Journal, “There is frustration among those who think his rigidity makes it difficult to move forward on legislation.” He promised that Ellis “will have access to funds that will be helpful to his campaign.”

It’s not just local businessmen. Washington lobbyists are rallying around Ellis. He’s also put $400,000 of his own money into his campaign—in the form of loans, which can be paid back out of more lobbyists’ contributions if he wins the race.

In an interview with the Weekly Standard, Ellis strikingly dismissed Amash’s principled, constitutional stand: “He’s got his explanations for why he’s voted, but I don’t really care. I’m a businessman, I look at the bottom line. If something is unconstitutional, we have a court system that looks at that.”

Most members of Congress vote for unconstitutional bills. Few of them make it an explicit campaign promise.

Amash does have the support of Freedomworks, Club for Growth, and some local business leaders such as several members of Amway’s DeVos and Van Andel families. And polls show him 20 points ahead of Ellis. But Rep. Eric Cantor had a poll putting him 30 points ahead of David Brat before he unexpectedly lost, and Ellis’s self-funding now amounts to $800,000. So Amash can’t take anything for granted.

Of course, the Export-Import Bank is now a hot issue in Congress. Amash opposes it; the Chamber vigorously supports it. So it looks like it may be tough to support free markets, oppose bailouts and corporate welfare, and receive the support of the nation’s largest business organization.

Halbig v. Burwell Would End The Disruption

The U.S. Court of Appeals for the D.C. Circuit could issue a ruling today in Halbig v. Burwell, one of four lawsuits challenging an Internal Revenue Service rule that effectively implements the Patient Protection and Affordable Care Act’s exchange subsidies where the statute does not permit: in exchanges that were not “established by the State” – i.e., federal exchanges. 

Tim JostNorman OrnsteinAvalere Healththe Urban Institute, the Robert Wood Johnson Foundation, and others who support the Obama administration’s position (we cannot say they support PPACA) predict much disruption if the courts rule against the administration. 

Over at DarwinsFool.com, I have a new post explaining how Halbig would put an end to the disruption, which is much greater than they recognize:

In 2011, the Obama administration issued an IRS rule in which it unilaterally decided to tax, borrow, and spend billions of dollars. Treasury and IRS officials apparently knew they did not have statutory authority to do it. They did it anyway.

The impact of that IRS rule has been enormous. Insurers chose to participate in the PPACA’s Exchanges who otherwise would not have. Employers have reconfigured their health insurance benefits, eliminated jobs, and/or cut hours for perhaps millions of employees, including teaching assistants and restaurant workers, to comply with a mandate from which they are, by law, exempt. Millions of Americans are already paying penalties under, or have purchased coverage to comply with, an individual mandate from which they are, by law, exempt. Nearly 5 million Americans agreed to enroll in Exchange coverage with the promise of subsidies the Obama administration has no authority to offer to them, that could vanish with one court ruling or by regulatory fiat. With every unauthorized subsidy that flows from the IRS to private insurance companies, the federal debt rises above the level authorized by law, imposing an unauthorized tax burden on current and future generations.

The IRS rule has had a sweeping impact on the political process as well. It denied states—denied voters—the use of a policy lever Congress granted to them: the ability to veto the PPACA’s subsidies, employer mandate, and individual mandate. In effect, the rule disenfranchised voters in the 36 states that exercised those vetoes. Had the administration followed the law, those 36 vetoes would have led to changes in the PPACA, and possibly changes in Congress. Instead, the IRS rule altered the outcome of congressional votes and, likely, of congressional elections. Americans voted in 2012 as if there were not a gaping hole in the PPACA that would expose its full cost and destabilize its regulatory scheme. The IRS rule is still influencing congressional elections today. Potential candidates are deciding whether to enter the 2014 congressional races as if that gaping hole does not exist; as if the law Congress enacted were more popular and successful than it actually is…

The purpose of Halbig is to end the massive economic and political disruption caused by the president’s decision to ignore the clear statutory language he is sworn to uphold.

Read the whole thing.

Planning for the Unpredictable

How do you plan for the unpredictable? That’s the question facing the more than 400 metropolitan planning organizations (MPOs) that have been tasked by Congress to write 20-year transportation plans for their regions. Self-driving cars will be on the market in the next 10 years, are likely to become a dominant form of travel in 20 years, and most people think they will have huge but often unknowable transformative effects on our cities and urban areas. Yet not a single regional transportation plan has tried to account for, and few have even mentioned the possibility of, self-driving cars.

Instead, many of those plans propose obsolete technologies such as streetcars, light rail, and subways. Those technologies made sense when they were invented a hundred or so years ago, but today they are just a waste of money. One reason why planners look to the past for solutions is that they can’t accurately foresee the future. So they pretend that, by building ancient modes of transportation, they will have the same effects on cities that they had when they were first introduced.

If the future is unpredictable, self-driving cars make it doubly or quadruply so. Consider these unknowns:

  • How long will it take before self-driving cars dominate the roads?
  • Will people who own self-driving cars change their residential locations because they won’t mind traveling twice as far to work?
  • Will employers move so they can take advantage of self-driving trucks and increased employee mobility?
  • Will car-sharing reduce the demand for parking?
  • Will carpooling reduce the amount of vehicle miles traveled (VMT), or will the increased number of people who can “drive” self-driving cars increase VMT?
  • Will people use their cars as “robotic assistants,” going out with zero occupants to pick up groceries, drop off laundry, or do other tasks that don’t require much supervision?
  • Will self-driving cars reduce the need for more roads because they increase road capacities, or will the increase in driving offset this benefit?
  • Will self-driving cars provide the mythical “first and last miles” needed by transit riders, or will they completely replace urban transit?

Latvia, the Country Prof. Krugman Loves to Hate, Wins 1st Prize

I constructed a misery index and ranked 89 countries from most to least miserable based on the available data from the Economist Intelligence Unit. My methodology is a simple sum of inflation, bank lending and unemployment rates, minus year-on-year per capita GDP growth. The table below is a sub-ranking of all former Soviet Union (FSU) states contained in my misery index.

For these FSU states, the main contributing factors to misery are high levels of unemployment and high interest rates.

The low misery index scores in Estonia and Lithuania don’t surprise me as I helped both countries establish sound money with the installation of currency boards in 1992 and 1994, respectively. Latvia, a country Paul Krugman loves to hate, takes the prize for the least miserable of the former Soviet Union countries in this sub-ranking.

House Bill Eviscerates Asylum System, Deports Child Trafficking Victims

President Obama recently asked Congress for authority to treat Central American children in the same way the government treats Mexican children. The Asylum Reform and Border Protection Act (H.R. 5137), introduced today by Reps. Chaffetz (R-UT) and Goodlatte (R-VA), Chairman of the House Judiciary Committee, goes beyond the President’s request. The bill eliminates any sort of review for juvenile victims of trafficking and the requirement that an immediate return of a child be voluntary.

Under current law, Mexican children may be immediately removed if they are:

  1. Not severe victims of trafficking,
  2. Not asylum seekers, or
  3. If they accept voluntary departure, a procedure by which the child admits that he or she has no right to be here and leaves in lieu of formal removal proceedings.

Under the proposed H.R. 5137, all children caught at the border would be subject to expedited removal, a process under which they can be removed without a hearing before a judge if they have no credible fear of persecution (8 USC 1225(b)). This process triggers an automatic 5-year bar on legal reentry (8 USC 1182(a)(9)(A)(i)). Any child caught at the border may be detained until his asylum application is adjudicated. It extends the current arbitrary one year deadline on asylum applications for adults to children.

Unaccompanied children could be detained or released under the bill while waiting for final approval of their asylum application, but the bill redefines “unaccompanied” to mean that once a child has been released to a parent, they no longer qualify for release, which means they would head right back into detention.

Worse, H.R. 5137 raises the initial standard of review for all asylum claims for children. Rather than going before a judge simply by asserting a fear, they would actually have to convince an asylum officer that their claim was “more probable than not” to be factual in order to even to go before a judge. Raising the standard that high for an initial review would bar many legitimate asylum seekers.

Even worse, H.R. 5137 allows children apprehended at the border to be removed without any asylum screening to a “safe third party country” (i.e. Mexico) without an agreement from that country, as is required by current law. If H.R. 5137 becomes law, the U.S. government would immediately start dumping Honduran, El Salvadoran, and Guatemalan children into Mexico.

The crisis along the Southwest border has prompted many Americans to want all unlawful immigrants and children removed. But this bill goes far beyond that desire. H.R. 5137 would remove many foreigners who have legal rights under our current immigration laws. H.R. 5137 would be a disastrous blow to America’s asylum system and send numerous children with legitimate asylum claims back into danger.

Mexican Immigration Policy Lowers the Cost of Central American Migration to the US

One persistent American complaint about the Mexican government’s opposition to immigration laws like Arizona’s SB-1070 is that Mexico’s immigration policy is far more restrictive than that of the United States or anything proposed in Arizona. In 2010, Representative Ted Poe (R-TX) articulately pointed out the Mexican government’s blatant hypocrisy. Brutal Mexican immigration laws were not only bad policy for Mexico but exposed an absurd level of hypocrisy.

After Representative Poe’s comments, the Mexican government passed a Migratory Act in 2011 that went into effect on November 1, 2012. This law replaced the General Law of Population that created the oppressive Mexican immigration laws Rep. Poe and others rightly critiqued. The Migratory Act made a number of significant changes:

  • Guarantees the equal treatment of migrants and Mexican nationals under Mexican law, entitling them to due process, 
  • Establishes “family unity and the best interests of children and adolescents as the principal criteria for the admission and stay of foreigners for temporary or permanent Mexican residency, alongside labor and humanitarian causes,” 
  • Establishes offices for protection of migrants’ human rights and the investigation of crimes purportedly committed against migrants, including those committed by immigration officials,
  • Simplifies entrance and residence requirements,
  • Establishes a point system for those who apply for residence,
  • Creates a 3 day regional visitors visa for people from neighboring countries, 
  • Streamlines the visa application process.

Other legal changes to Mexican laws in 2008 reduced the punishment for illegal entry from up to ten years in prison to a maximum fine of 5000 pesos. The Mexican government also introduced temporary visas, valid for up to a year, for agricultural laborers from Guatemala and Belize working in Mexico’s southern states. In 2010, undocumented migrants were guaranteed the right to report human rights violations and receive medical treatment without prosecution.

Mexican Immigration Laws, Central American Free-Movement Zones, and the Increase in Central American Immigration

One unintended consequence of Mexico’s more liberalized immigration laws, partly in response to legitimate American criticism, is that now the migration of people from Central America to the United States through Mexico is much cheaper than it used to be. The biggest hurdle for Central American migrants used to be the militarized Southern Mexican border and the abuse by corrupt police, which the Migratory Act of 2011 mitigates.

Mexico isn’t the only country that changed its immigration and border control policies in recent years. In June 2006, El Salvador, Honduras, Guatemala, and Nicaragua signed the Central America-4 (CA-4) Border Control Agreement that created a common passport and obliterated border controls and movement restrictions between those four nations. The removal of political barriers to movement has decreased the costs of migrating northward toward the United States.

Liberalized Mexican and Central American immigration laws and border controls likely play a role in lowering the cost of migrating to the United States. Ironically, American complaints that partly spurred Mexican immigration policy changes are likely a contributing factor of the recent increase in Central American migration.

In Memory of Carlos Ball

I’m sad to report that Venezuelan journalist and Cato adjunct scholar Carlos Ball passed away last week. He was 75. Carlos was a champion of liberty and a long-time friend to so many of us in the freedom movement in the Americas. His life was a testimony to the power of ideas, and he lived it true to his classical-liberal convictions.

Carlos was a co-founder of CEDICE, the market-liberal think tank in Caracas that celebrated its 30th anniversary this year and with whom Cato has worked closely for many years (and that has been severely harassed by the Chavista regime). In the 1980s, Carlos was the editor of El Diario de Caracas, an important daily that was critical of government policies. It was when Carlos represented Venezuelan journalists at an Inter-American Press Association conference in 1987 in San Antonio, Texas and denounced then-President Lusinchi’s attacks on freedom of the press, that Lusinchi demanded that Carlos be fired from the newspaper, conditioning the renewal of the license of the popular television station RCTV—part of the same media company—on that outcome. Carlos was let go from the paper, he was criminally charged by the government, and was told by the judge presiding his case that “I have orders from above.” It was at that time that Carlos left Venezuela, moving to Florida where he would live the rest of his life. RCTV received a 20-year license. It was the expiration of that license in 2007—that Hugo Chavez refused to renew, thus shutting down the television station—that triggered the massive student uprising against the government that year. (As a result, Chavez lost a constitutional referendum and temporarily slowed down his accumulation of power.)

The idea that Venezuela was doomed to repeat such experiences and that the country would only lose more freedoms if economic freedom was not also respected was a long-time theme in Carlos’s writings. In that regard, he was among a very small group of Venezuelan intellectuals who decades ago warned against the ideology of socialism predominant in the political system and much of Venezuelan society. Indeed, he very correctly viewed Hugo Chavez’s regime as a logical, though more extreme, extension of what had come before. “Chavez,” he wrote, “has intensified, accelerated and exacerbated corruption, the concentration of power, the violation of property rights” and the power of the bureaucracy in people’s lives. In a 1992 essay, Carlos wrote that the “fatal date” for his country was January 1976, when President Perez nationalized the petroleum industry. That “meant a radical change; for the first time since the death of General Gomez [1935], political and economic power was again concentrated in the same hands: in those of the head of state.”

He would later write: “Without that concentration of wealth in political hands, Chavez would never have been able to Cubanize Venezuela because it was the economic power of oil that allowed the government to crush the individual liberties of the Venezuelans.” How right he was.