In Calling on Government, the Pope Underestimates Power of the Market

Pope Francis’ new encyclical, Laudato Si, advocates a new “ecological spirituality.” Yet this challenging call is diminished by the document’s tendency to devolve into leftish policy positions. The encyclical underestimates the power of market forces to promote environmental ends.

There are serious environmental problems but Laudato Si presumes rather than proves crisis is the norm. Moreover, nothing in Scripture or nature tells us how much to spend to clean up the air.

Drawing environmental lines requires balancing such interests as ecology, liberty, and prosperity. One cannot merely assume that the correct outcome in every case is more of the first.

Indeed, the Pontiff’s own goals conflict. He speaks movingly of the dignity of work and its importance for the poor. But the more expensive and extensive the government controls, the fewer and less remunerative the jobs.

Perhaps most disappointing is how the Pope seemingly views capitalism, and especially property rights, as enemies of a better, cleaner world. Yet most environmental problems reflect the absence of markets and property rights, the “externalities,” in economist-speak, which impact others.

Ted Cruz’s Dramatic Trade Policy Conversion Is a Troubling Sign

Trade Promotion Authority—legislation that sets out negotiating objectives and ensures an up-or-down vote on future trade agreements—survived a Senate cloture vote today 60-37 and will likely become law.  The Senate already passed TPA last month as part of a different trade package by a vote of 62-37.  One of the Senators that switched his vote was Ted Cruz (R-TX).

The switch was a pretty big surprise considering that Cruz had been a prominent and vocal defender of TPA just a few weeks ago.  He co-authored an op-ed in the Wall Street Journal in May praising the bill and noting how important it was to furthering free trade.  He went on record explaining at length how TPA was not only constitutional but represented an appropriate Congressional check on the power of the President.

Two Years On, the TSA Is Still Not Subject to Law

Two years ago tomorrow, the Transportation Security Administration stopped accepting comments on its proposal to use “Advanced Imaging Technology” for primary screening at airports. The end of the comment period on nude body scanning would ordinarily promise the issuance of a final rule that incorporates knowledge gained by hearing from the public. But this is no ordinary rulemaking. This is an agency that does not follow the law.

It was almost four years ago that the U.S. Court of Appeals for the D.C. Circuit ordered TSA to do a notice-and-comment rulemaking on its nude body scanning policy. Few rules “impose [as] directly and significantly upon so many members of the public,” the court said in ordering the agency to “promptly” publish its policy, take comments, and consider them in formalizing its rules.

What’s Left at the Supreme Court?

After yesterday’s colorful opinion day – involving raisins, motels, and Spiderman – the Supreme Court announced that it would be handing down more rulings on Thursday and Friday, with Monday also currently indicated as a decision day. So what’s left to decide? (Not to be confused with “why are Court decisions moving left? – a remarkably premature assessment given the cases remaining, not to mention coding issues regarding liberal/conservative.)

Employment-Based Green Cards Are Mostly for Families

The United States’ immigration system favors family reunification – even in the so-called employment-based categories.  The family members of immigrant workers must use employment based green cards to enter the United States.  Instead of a separate green card category for spouses and children, they get a green card that would otherwise go to a worker. 

In 2013, 53 percent of all supposed employment-based green cards went to the family members of workers.  The other 47 percent went to the workers themselves.  Some of those family members are workers, but they should have a separate green card category or be exempted from the employment green card quota altogether. 

Source: 2013 Yearbook of Immigration Statistics, Author’s Calculations

Driverless Money

Last week I happened to be contemplating a post having to do with driverless cars when, wouldn’t you know it, I received word that the Bank of England had just started a new blog called Bank Underground, the first substantive post on which had to do with — you guessed it — driverless cars.

As it turned out, I needn’t have worried that Bank Underground had stolen my fire. The post, you see, was written by some employees in the Bank of England’s General Insurance Supervision Division, whose concern was that driverless cars might be bad news for the insurance industry. The problem, as the Bank of England’s experts see it, is that cars like the ones that Google plans to introduce in 2020 are much better drivers than we humans happen to be — so much better, according to research cited in the post, that “the entire basis of motor insurance, which mainly exists because people crash, could … be upended.” Driverless cars therefore threaten to “wipe out traditional motor insurance.”

It is of course a great relief to know that the Bank of England’s experts are keeping a sharp eye out for such threats to the insurance industry. (I suppose they must be working as we speak on some plan for addressing the dire possibility — let us hope it never comes to this — that cancer and other diseases will eventually be eradicated.) But my own interest in driverless cars is rather different. So far as I’m concerned, the advent of such cars should have us all wondering, not about the future of the insurance industry, but about the future of…the Bank of England, or rather of it and all other central banks. If driverless cars can upend “the entire basis of motor insurance,” then surely, I should think, an automatic or “driverless” monetary system ought to be capable of upending “the entire basis of monetary policy” as such policy is presently conducted.

And that, so far as I’m concerned, would be a jolly good thing.

Of Raisins and Property Rights

Further to Ilya’s overview of today’s Supreme Court decision in Horne v. Dept. of Agriculture, it should be noted that it’s taken Marvin and Laura Horne over a decade to vindicate their rights in the raisins the government sought to take “for their benefit,” under one of the many economically foolish New Deal and later agricultural marketing schemes Congress has seen fit to enact. But in this lengthy process, the Hornes have helped the Court to settle a fundamental principle, namely, that the Fifth Amendment’s Takings Clause prohibits the government from taking both real and personal property for public use without just compensation.

At the same time, the Court is still confused in its effort to distinguish and adjudicate what have come to be called “physical” and “regulatory” takings. In Horne, the Court held, the government sought to “physically” take 47 percent of the Hornes’ raisins, much as ten years ago, in its infamous Kelo decision, the Court upheld the City of New London, Connecticut’s “physical” taking of Suzette’s Kelo’s little pink house. In other words, the government sought to take title to the Hornes’ property in their raisins.

By contrast, in a regulatory taking, the government, through regulation, takes certain otherwise legitimate uses an owner has in his property. The owner retains the title; but it’s usually a much devalued title. For almost a century, the Court has struggled to fit these regulatory takings under the Takings Clause—ever since Justice Holmes in 1922 wrote that a regulatory restriction that goes “too far” amounts to a taking requiring compensation. The three-part test the Court set forth in 1978 in its Penn Central decision only muddied those waters. In fact, we see that here when Chief Justice Roberts tries to drive home the point that in Horne we have a physical taking. In response to a point made by the dissent he writes that in such cases “‘we do not ask … whether [the taking] deprives the owner of all economically valuable use’ of the item taken”—citing one of the three Penn Central criteria.

Roberts is right: we don’t ask that when title is taken, as here. But in labeling Horne a “physical” taking, and distinguishing it from a taking that “‘deprives the owner of all economically valuable use’ of the item taken,” Roberts opens up a question: Just what does “the item” refer to? Clearly, Roberts means to refer to “the property” in the sense of the whole parcel or the underlying fee. But that is not “the item” that is taken in a regulatory taking. The owner still owns the fee. What is usually taken is certain “economically valuable uses”—but not all such uses. Indeed, in many regulatory cases the owner is entitled to compensation only when all the uses are taken. That was the case in the Court’s 1992 Lucas decision, where the regulatory restrictions left the owner with an effectively worthless title.

The nub of the matter here is really quite simple, and it was stated by James Madison in his famous 1792 essay, Property: “In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights.” In other words, it’s not simply the underlying fee that is our property. All the legitimate uses that go with it are our property as well. Thus, a taking occurs and compensation is due not simply when that last use is taken, which is what the Lucas Court effectively held, but when the first use is taken and the title is accordingly devalued. Those uses—those “items”—are our property too. Perhaps the Court will one day give us an integrated theory of property of a kind that Madison understood—before the rise of the modern regulatory state.