UT-Austin’s Secret Racial Preferences Undermine Its Admissions Policy

In 2013’s Fisher v. University of Texas at Austin, the Supreme Court delivered a blow to the use of racial preferences in university admissions by reversing a lower-court opinion that had allowed the use of race in UT-Austin’s admissions policy.

That wasn’t the end of the story, however; after holding that the university bears the burden of proving that its use of racial preferences is necessary and narrowly tailored—a point on which university administrators are due no deference—the Court remanded the case back to the U.S. Court of Appeals for the Fifth Circuit. That court was to determine whether UT had offered evidence sufficient to prove that its use of race was “narrowly tailored to achieving the educational benefits” of diversity. Recall that UT-Austin’s admissions program fills most of its spots through a race-neutral Top Ten Percent Plan—which offers admission to high school graduates in the top 10 percent of their class—then fills the remaining seats with a “holistic” rating that takes into account various factors typical to admissions programs (including race for certain preferred minorities).

Well, on remand, the Fifth Circuit panel split 2-1 but once again sided with the university, holding that even if the Top Ten Percent Plan already provided a “critical mass” of minority students, the use of racial preferences was necessary to achieve some other special kind of diversity. The dissenting opinion by Judge Emilio Garza pointed out how the majority deferred, once again, to the university’s hand-waving claim that its use of racial preferences is tailored to an actual, appropriate interest, without having actually proven anything approaching what is constitutionally required.

After being denied a rehearing before the full Fifth Circuit, Abigail Fisher, the former applicant suing UT-Austin, has now petitioned the Supreme Court to hear her case once again. And Cato has again filed a brief supporting that petition. We argue that the Court should hear the case because (1) UT-Austin’s “qualitative” diversity rationale is still a complete and unjustified sham, (2) the university continues to openly flout its disregard of Supreme Court precedent governing the use of race in higher education admissions, and (3) leaving the Fifth Circuit’s shockingly deferential and judiciously lazy ruling on the books will give other schools a roadmap for circumventing the Equal Protection Clause’s limitations on the use of race.

Among other evidence we marshal is the recently discovered program of secret racial preferences run out of the university president’s office, which flouts Supreme Court precedent and belies the stated rationale of UT’s admissions policy. This is just the latest example of college administrators’ massive resistance to the Fourteenth Amendment’s charge not to discriminate based on race or ethnicity.

The Court will decide whether to take up Fisher v. UT-Austin (again) later this spring.

Cato legal associate Julio Colomba contributed to this blogpost.

You Ought to Have a Look: The Price Is Right, the Letters Are Wrong, and Climate Research Is Booming

You Ought to Have a Look is a feature from the Center for the Study of Science posted by Patrick J. Michaels and Paul C. (“Chip”) Knappenberger.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary.

The Wall Street Journal last week, in its Notable and Quotable section highlighted a set of rather enlightened tweets from a perhaps, at first glance, a rather unusual source—Pat Sajak of Wheel of Fortune fame.  Here are a couple particularly interesting/amusing ones from the WSJ coverage:

Feb. 27: New rule: you can’t trust research financed by corporations. Only government-funded research is pure and unbiased.

Feb. 20: Bad climate news. The hockey stick is frozen solid.

Feb. 15: Weather isn’t climate. Weather can be colder but climate warming. Climate is warming whether the weather is…um, uh…

Jan. 10: Tried to pay for lunch with a carbon credit. Had to switch to Visa.

Nov. 18: Thinking of bypassing the wheel & the puzzles, and determining winners by executive action. Will save a lot of time.

Turns out Sajak, a former TV weatherman, is no stranger to global warming skepticism (or controversy). In fact, recently he wrote an article for Ricochet.com titled “I Deny I’m a Denier,” in which he derides climate change alarmists for the vicious attacks he gets whenever he expresses his less-than-alarming opinions via his @patsajak twitter feed.  He then goes on to outline why he is a “skeptic in the matter of man-made global warming”:

I’m also often reminded by my global warming (climate change?) Twitter buddies that climate is not weather. The fact that it’s extraordinarily cold in particular areas at particular times does not negate their argument. The climate—hockey stick and all—will doom us if we do not act quickly and drastically. I find the climate vs. weather argument interesting because weather events can only prove their point; they cannot disprove it. The historically calm Gulf hurricane period since Katrina—despite predictions of increasingly strong and devastating storms—can be explained away. However, it’s a safe bet that, had the last decade been marked by more violent activity, it would have been more evidence that The End Days were near. Snowless winters in England are a sign of the climate changing times, but when the snow and ice return…well, it’s weather, not climate.

So here we are. The science is settled. Extreme weather of any kind confirms it. Weather that seems to fly in the face of predictions is irrelevant. So how can one possibly deny all that? I can’t, because I’m not a scientist. But can’t I be just the teeniest bit skeptical?

The rest of Sajak’s Richochet.com post describes his treatment at the hands of his detractors. The whole thing is worth checking out. Y_U _UGHT T_ HA_E A L__K!

Even the IMF Agrees that Spending Caps Are Effective

It’s not very often that I applaud research from the International Monetary Fund.

That international bureaucracy has a bad track record of pushing for tax hikes and other policies to augment the size and power of government (which shouldn’t surprise us since the IMF’s lavishly compensated bureaucrats owe their sinecures to government and it wouldn’t make sense for them to bite the hands that feed them).

But every so often a blind squirrel finds an acorn. And that’s a good analogy to keep in mind as we review a new IMF report on the efficacy of “expenditure rules.”

The study is very neutral in its language. It describes expenditure rules and then looks at their impact. But the conclusions, at least for those of us who want to constrain government, show that these policies are very valuable.

In effect, this study confirms the desirability of my Golden Rule! Which is not why I expect from IMF research, to put it mildly.

Why We Filed a Brief Defending Offensive Speech

Here’s Boston College law professor Kent Greenfield, writing at The Atlantic about the racist-chant scandal at the University of Oklahoma:

We are told the First Amendment protects the odious because we cannot trust the government to make choices about content on our behalf. That protections of speech will inevitably be overinclusive. But that this is a cost we must bear. If we start punishing speech, advocates argue, then we will slide down the slippery slope to tyranny.

If that is what the First Amendment means, then we have a problem greater than bigoted frat boys. The problem would be the First Amendment.

Cato’s brief in Walker v. Texas Division (the Confederate flag license-plate case) pokes plenty of fun at government censors who would protect us from “offensive” speech, but this is no laughing matter. 

H/t Trevor Burrus

Regulatory Capture of Trade Agreements

This is from Ezra Klein:

I’m skeptical of the sheer size of modern trade deals and the opaque process that creates them. The negotiation process isn’t quite as secretive as some think — the congressional briefings are constant, and the advisory committees are sprawling — but it is insanely complex.

The result is that even where there is transparency, it’s a form of transparency that can only really be navigated by politically sophisticated, highly motivated actors — which is to say it’s a form of transparency that quickly becomes a venue for lobbying. That’s one reason these deals end up including so much … stuff. The process is constructed in such a way that the negotiators get a lot of special pleading from individual industries and interests. Responding to those requests feels like responding to the public, but it isn’t, and it leads to deals jam-packed with individual provisions that look a lot like giveaways.

This is a great insight about modern trade agreements.  It’s important to think of a trade agreement as just another piece of legislation.  In the past, trade agreements focused mainly on tariffs.  Now they govern a wide range of policies (“stuff”), and as a result they are susceptible to regulatory capture.  Special interest groups see them as just another way to achieve their political goals.  What this means is, as with any piece of legislation, don’t be fooled by the marketing.  Look closely at all the details.

The Dollar, Oil Prices and Exports: Lessons of Recent History

Business news pages are suddenly full of hand-wringing about how the rising dollar threatens to slash U.S. exports and economic growth.  “The strong dollar is the biggest threat to economic recovery,” warns one reporter.  Others quote White House chief economist Jason Furman saying “the strong dollar is undoubtedly a headwind” for the U.S. economy.

It’s not that simple.

dollar and exports

The graph above compares real U.S. exports with the trade-weighted exchange rate.  The dollar was rising much faster in 1995-2000, when both exports and the economy were growing at an impressive pace.  Exports eventually fell with recession, as always.  But it is much harder to blame the recession on exchange rates than on interest rates – the Fed pushed the fed funds rate 4.7 percentage points above core inflation.   

From 2001 to 2007, the dollar fell and exports rose.  That pattern might appear to justify recent lobbying for a lower dollar were it not for the familiar connection between oil prices and the dollar.  As the dollar fell, the price of West Texas crude soared from $19 a barrel in December 2001 to over $133 in June-July 2008.  Every postwar recession except 1960 was preceded by a spike in oil prices, and the Great Recession turned out to be no exception.

The dollar weakened at the start of this recovery, but related inflation cut average real wages by 1.5% in 2011 and 0.6% in 2012.   As the dollar firmed up, by contrast, real wages rose by 0.7 % in 2013 and 0.8% in 2014.

The recent rise in the dollar has merely brought it back to about where it was in 1998 or 2006, which were not bad years.  The latest exchange rate gyrations are dominated by self-inflicted wounds to the euro and yen, but U.S. exports to the EU are only 1.3% of GDP, and exports to Japan are 0.4% of GDP.

U.S. multinationals have complained about “translation losses” – the fact that profits of subsidiaries in Europe or Japan will be less valuable when translated into dollars.  But that is equally true for earnings of European and Japanese firms too (and for their stock prices when translated into dollars). And multinationals often leave foreign earnings abroad, due to the uniquely foolish U.S. tax if offshore earnings are brought home.  

The weakened euro and yen will raise the cost of living and cost of production for citizens of the afflicted countries (including the price of oil and other commodities).  It is true that such expertly planned impoverishment of such large economies can scarcely benefit the global economy. If other countries want to make their money less trustworthy and less desirable, however, there is not much we can do about that.  

Upcoming Fiscal Deadlines

The federal government’s debt ceiling will return on Monday following a 14 month suspension. This is the first of many important fiscal deadlines that Congress must consider before the end of the calendar year. These deadlines represent opportunities for Congress to control spending growth and reform entitlement programs.

Below is a list of the major fiscal deadlines:

  • Debt Ceiling: The federal debt ceiling limits the amount of outstanding federal debt. When the debt ceiling returns on March 16, it will be approximately $18.1 trillion. Congress is not expected to raise the limit this weekend, so the Treasury Department will have to use its flexibility to fit the debt within that limit. With these Treasury procedures, the Congressional Budget Office expects that congressional action can be put off until October or November.
  • Sustainable Growth Rate: The Sustainable Growth Rate (SGR or “doc fix”) was passed in 1997 and attempts to control Medicare spending growth. If Medicare grows faster than the legislated formula, reimbursements to doctors are cut. However, Congress has never let the cuts go into effect. The current relief from cuts expires on April 1. If Congress doesn’t act, reimbursements would be cut by 20 percent. Congress is expected to pass a short-term patch, the 18th time it will have done so in 13 years.
  • Budget Resolution: The House of Representatives and the Senate are supposed to pass the annual budget resolution by April 15. The budget resolution sets the broad trajectory of spending for the upcoming fiscal year. Both chambers are expected to release their budget drafts during the week of March 16 to give themselves several weeks to work through this process and provide an opportunity to reconcile the two proposals.
  • Highway Trust Fund: The Highway Trust Fund will become insolvent on May 31. For a number of years, the Highway Trust Fund has spent more than it collects in revenue from the federal gas tax. Its current annual imbalance is $14 billion. Congress will need to figure out a way to balance the trust fund’s spending and revenue.