Washington Helped Create Puerto Rican Crisis

On Monday, I highlighted the fiscal crisis in Puerto Rico. The island’s governor announced that it cannot fully pay back its $70 billion in outstanding debt. Much of the attention this week has focused on how Puerto Rico has mismanaged its finances. San Juan has delayed necessary reforms. But missing in most news articles is the role that Washington, D.C. has played in creating the mess.

Over at Fox News, I have a new piece describing how the federal government has contributed to the island’s problems.

For instance, the federal minimum wage contributes to Puerto Rico’s challenges:

The federal minimum wage of $7.25 an hour applies on the island. The minimum wage’s effects are well-known, but it has disproportionate influence in Puerto Rico. The island’s median income is only 40 percent of the mainland. Twenty-eight percent of Puerto Rico residents earn $8.50 an hour or less, compared to 3 percent on the mainland. So the minimum wage has greater impact in Puerto Rico. It would be like if the mainland had a $19 an hour minimum wage. The high minimum wage raises the cost of employment and prices many employers out of the market, causing unemployment to rise and thus tax revenue to dry up.  The minimum wage is a partly why the island’s unemployment rate is almost three times that of the mainland.

Similarly, the 1920 Jones Act limits Puerto Rico’s ability to import and export goods efficiently:

You Ought to Have a Look: Supreme Court, Business-as-Usual, Poison Ivy and Shark Attacks

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.

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This week, as our title suggests, we have a somewhat eclectic mix of articles worthy of your attention (and some that are not). Let’s get started.

In handing down its decision on Monday in Michigan v. EPA, the Supreme Court ruled that the U.S. Environmental Protection Agency (EPA) was remiss for not considering costs when deciding to (expensively) regulate mercury emissions from coal-fired power plants. This ruling was urged in Cato’s amicus brief, and hailed as a victory for “liberty and sound science.”

But the direct impact on the ruling as it pertains to mercury emissions is likely to be slight as most coal-fired power plants have already been modified (or shut down) in an effort to reduce mercury emissions under the EPA’s 2012 regulation. Rather, what is being debated in the ruling’s aftermath is what the implication may be on future EPA actions.

Some have argued the ruling in Michigan v. EPA was “pointless,” while other have argued that it “may be the beginning of the end of the Obama Administration’s climate agenda.” Perhaps the biggest thing that could result would be for the Supreme Court to re-evaluate its decision in the Chevron v. Natural Resources Defense Council case.  This possibility was raised by Clarence Thomas in his concurring opinion on the case.  The Wall Street Journal editors picked up on this in their review of the Michigan v. EPA decision and highlight its importance:

Which is why Justice Clarence Thomas’s concurring opinion deserves a larger audience. He makes a provocative case that the Court’s 1984 decision in Chevron v. Natural Resources Defense Council is unconstitutional. Under what has become known as “Chevron deference,” the Court defers to executive interpretations when laws are ambiguous. Justice Thomas writes that this has become a license for the executive to usurp legislative powers that are supposed to be vested in Congress.

“Perhaps there is some unique historical justification for deferring to federal agencies, but these cases reveal how paltry an effort we have made to understand it or to confine ourselves to its boundaries,” Justice Thomas writes. “Although we hold today that EPA exceeded even the extremely permissive limits on agency power set by our precedents, we should be alarmed that it felt sufficiently emboldened by those precedents to make the bid for deference that it did here.”

That’s an especially apt point coming in a year when the Supreme Court seemed to abdicate much of its obligation to police the Constitution’s separation between the executive and legislative power. A future Court ought to revisit Chevron deference in what has become an era of presidential law-making.

Here’s hoping!

And here’s how it can happen. At Cato, your obedient servants have, through the years, purposefully compiled a massive record of public comments on global warming regulation that we have filed as official responses to requests for them in the Federal Register. These include our Addendum to the Government’s second “National Assessment” of climate change. It was designed to have a look similar to the federal document, with the cover the exact same material paragraph-by-paragraph, if possible, to make comparison as simple as possible. 

Happy Second of July

Americans are preparing for the Fourth of July holiday. I hope we take a few minutes during the long weekend to remember what the Fourth of July is: America’s Independence Day, celebrating our Declaration of Independence, in which we declared ourselves, in Lincoln’s words, “a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.”

The holiday weekend would start today if John Adams had his way. It was on July 2, 1776, that the Continental Congress voted to declare independence from Great Britain. On July 4 Congress approved the final text of the Declaration. As Adams predicted in a letter to his wife Abigail:

The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forever more.

The Declaration of Independence, written by Thomas Jefferson, is the most eloquent libertarian essay in history, especially its philosophical core:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Jefferson moved smoothly from our natural rights to the right of revolution:

Religious Agencies and Adoption: A Case for Pluralism

At Reason, Scott Shackford has a valuable piece on where libertarians’ interests are likely to coincide with those of organized gay rights advocates and where they are likely to diverge, following the Supreme Court’s ruling on marriage. One flashpoint of controversy is likely to be the role of conservative religious agencies in areas of adoption that are commonly assisted with public funds (as with the adoption of older kids from foster care). 

…It is now legal all across America for gay people to adopt children, and now with same-sex marriage, they can adopt their partner’s child as well. This fight is largely over, and was actually pretty much won even before gay marriage recognition.

But there is another side, and it ties back into the treatment of religious people. Some adoption agencies are tied to religious groups who do not want to serve same-sex couples or place children in same-sex homes. They are also typically recipients of state funding for placing children, and are therefore subject to state regulation. Should they be required to serve gay couples?

Some states, such as Illinois, attempted to force them. As a result, Catholic Charities, which helped the state find adoptive and foster home services for four decades, stopped providing their services in 2011. At the time, a gay activist declared this a victory, saying “Finding a loving home for the thousands in the foster/adoption system should be the priority, not trying to exclude people based on religious dogma.”…

Some libertarians I admire have taken the view that where any public dollars are involved, private social service agencies must be held to rigorous anti-discrimination standards. While I respect this view, I don’t share it. Programs that are explicitly voucherized (such as G.I. Bill college tuition benefits, which can be used for seminary study) often go to institutions that I might find discriminatory, and the same logic can apply even with some less explicitly voucherized benefits. If a state depot is dispensing gasoline to rescuers’ boats after Katrina, and Catholic Charities-operated boats spare the need for government boats to reach some rescue targets, the “subsidy” might in fact save the taxpayers money.

Missing the Point on Refugees and Welfare

Daniel Costa of the Economic Policy Institute (EPI) criticized a piece I wrote for The Hill in which I called for the U.S. to accept more refugees.  Costa took issue for my argument to limit their access to welfare once they arrive, which I wrote in the eighteenth paragraph of my piece.  Conservatives criticized me for not mentioning welfare reform sooner in my piece.  I wrote about allowing more refugees in for the first seventeen paragraphs of my piece because that is more important than denying them welfare.

Costa, however, stooped pretty low when he wrote: “[H]opefully refugees in America will never be forced to suffer their libertarian version of humanitarian relief.”  Emphasis added.

The humanitarian relief that refugees need isn’t food stamps once they arrive to the United States – it’s an escape from violence and oppression.  Refugees aren’t fleeing Syria because their Syrian equivalent of TANF benefits expired, they are fleeing because they are being murdered.        

Costa assumes my opposition to welfare means that I oppose all support for refugees.  That is untrue.  As I mention in my original piece, civil society, private charities, churches, previous immigrants, and other groups that do aid refugees are performing a valuable service.  That aid is important in helping some, but not all, people who flee war, oppression, and dictatorship to thrive in their new country.  That voluntary aid and support should continue and the generous people who donate their own money to such causes are to be commended.  But welfare is not charity and it does not alleviate the real scarcity that affects these refugees: a lack of visas for them to come here in the first place. 

End America’s Defense Dole for South Korea

South Korean President Park Geun-hye postponed her trip to the U.S. because of a public health emergency at home. Unfortunately, the delay won’t make a future Park trip any more useful.

There is much on which the two nations should cooperate. But the military alliance is outdated. Despite having surged past the North, enjoying a 40-to-1 economic advantage and 2-to-1 population edge, Seoul continues to play the helpless dependent, unable even to command its own forces in a war.

South Korea eventually took off economically and adopted democracy. Yet through it all South Korea’s defense dependency on America persisted.

The South Korean government isn’t even willing to take over operational control, or OPCON, of its own forces in wartime. It isn’t ready, it insists. Yet North Korea commands its forces.

Of course, some South Koreans admit that they most fear shifting command would encourage Washington to withdraw its troops. Thus, their objective is to appear as helpless as possible as long as possible to retain the U.S. troop tripwire.

The present arrangement obviously is bad for America. Protecting South Korea isn’t cheap.

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