201610

October 31, 2016 4:34PM

Less Populous States Stand to Gain the Most from State‐​Based Visas

In 2014, the Cato Institute published a policy analysis that argued that Congress should create a work visa program that would allow states to select some of the foreign workers that the federal government admits—a model that Canada has used for decades. All states would benefit from this approach, since they all suffer from low federal caps on visas and since they all have the best knowledge of their local labor markets. But the states that will likely benefit the most are states with lower populations.

While there is no breakdown of the total number of visas issued to workers by state, we know how many workers enter each state annually. This number is imprecise as a measure of the total number of workers in each state because it double counts people who leave the state and reenter during the year, but it is still useful for looking at the distribution of workers among the states.

Figure 1 presents the distribution of all worker entries and entries of workers under the most important category—the H temporary work visa—by grouping the states into three roughly equal baskets: 1) the very large states with more than five percent of the entire U.S. population, 2) those in the middle with 2 to 5 percent, and 3) those with 2 percent or less. As is readily apparent, the big four states—California, Texas, New York, and Florida—receive a much higher percentage of workers than their share of the population. The middle group of states receives only slightly less than their population share for all worker entries.

On the other hand, the smallest states receive not only fewer workers in absolute terms, but disproportionately less than other states compared to their population. These 34 states are home to 30 percent of all Americans, but receive just 18.6 percent of guest workers overall—an 11.4 percent difference between population share and worker share.  A similarly large gap can be seen for worker entries under the important H category.

Figure 1: Difference Between Share of All Worker Entries and Share of U.S. Population; Share of H Worker Entries and Share of the Population in 2014

 

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Sources: DHS (Entries); Census (Population)



Figure 2 breaks the third group in Figure 1—the smallest states—into two groups: 1) the 14 states with a population between 1 and 2 percent and 2) the 20 states with a population less than 1 percent of the overall U.S. population. As can be seen, it’s the higher-end of this less populous group that has the greatest disparity between population share and worker share. These are states like Iowa, Minnesota, Colorado, and Wisconsin. The 20 smallest states with populations between 0 percent and 1 of the population also had a difference, but it was a much smaller disparity—2.4 percent compared to 9 percent for states in the 1 to 2 percent range.

Figure 2: Difference Between State Share of U.S. Population and State Share of All Worker Entries and State Share of H Worker Entries in 2014

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Source: See Figure 1

We know that this unequal distribution is not explained by differences in state labor market demand since domestic workers are actually moving from larger states to the smaller states. The real explanation is that larger and smaller states have different types of labor demand.

Figure 3 groups the states in the same manner as Figure 1, but breaks the H category into its two skill classes: H-1B high skilled workers and H-2s for lower skilled agricultural and non-agricultural workers (H-2As and H-2Bs). As you can see, the less populated states received a share of lesser skilled H-2 workers in proportion to their populations, but received half as many H-1Bs as their share of the population. For the more populous states, the reverse was true—they received much more high than low skilled workers.

Figure 3: Difference Between Share of H-1B Higher-Skilled Worker Positions and State Share of U.S. Population; Share of H-2 (H-2A and H-2B) Lesser-Skilled Worker Positions and State Share of U.S. Population in 2014

 

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Sources: See Figure 1

We can take this conclusion further. Because H-1B and H-2B visas—the nonagricultural part of the H-2 class—are capped, employers actually plan to receive far more workers than they actually get under the federal system. The first step toward applying for an H visa is submitting a certification of need for a certain position to be filled by a foreign worker. The Department of Labor either approves or denies this certification. If it’s approved, then the employer submits a request to the Department of Homeland Security for visas for the workers that it wants, if there are any visas remaining.

 

This certification process allows a very rough comparison between the demand for workers and the number of workers that each state receives. It is very imprecise because other factors limit the number of certifications that can be filed. All H-1B certifications, for example, have to be filed on the same week six months before the workers arrive in the United States, so it underestimates total market demand. Yet as Figure 1 shows, smaller states received an appreciably lower share of worker entries than their shares of certifications of need. In other words, smaller states need a lot more lesser-skilled workers that they are unable to get under the current system.

Figure 4: Difference Between the Share of Certifications for H Worker Positions and Share of H Worker Entries in 2014 By State Share of U.S. Population

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Source: DOL (Certifications), DHS

Overall the statistics on certifications for H workers reveal that every state is losing under the current system. On average, the Department of Labor approved an average of 22,438 certifications of need for H worker employment in 2014, but each state received only about 6,000 H workers in 2014. It is important to remember that this discrepancy is with all the current myriad federal rules and with no year-round visa available for lesser-skilled workers at all. The demand for workers surely far exceeds this amount.

The United States has a demand for foreign workers. While reforms to the federal system would be an improvement, Congress has consistently shown that it is incapable of estimating the needs of the states.

The table below presents all of this information for all 50 states and D.C.

Table: State Share of U.S. Population, Share of All Worker Entries, Share of H Temporary Worker Positions, Share of H-1Bs, Share of H-2s, Number of H-2s, and Number of H-1Bs in 2014

  % of US Pop % of All Entries % of Hs % of H2s % of H1Bs H2 Certs. H1B Certs % H2 Certs % H1B Certs
California

12.1%


14.8%


15.8%


4.7%


19.8%


8,752


172,318


4.1%


18.5%

Texas

8.1%


10.1%


8.9%


11.1%


8.9%


17,028


84,612


8.1%


9.1%

New York

6.3%


14.0%


7.3%


2.8%


14.0%


7,898


76,105


3.7%


8.2%

Florida

6.1%


6.7%


4.3%


7.9%


5.2%


20,056


29,447


9.5%


3.2%

Illinois

4.2%


3.7%


4.6%


0.8%


4.9%


2,333


50,551


1.1%


5.4%

Pennsylvania

4.1%


2.4%


4.6%


1.7%


2.6%


4,397


48,550


2.1%


5.2%

Ohio

3.7%


2.0%


2.7%


1.1%


2.0%


2,715


28,518


1.3%


3.1%

Michigan

3.2%


6.2%


2.4%


1.2%


2.8%


3,492


24,469


1.7%


2.6%

Georgia

3.1%


2.4%


4.1%


4.5%


2.5%


12,166


34,841


5.8%


3.7%

North Carolina

3.1%


2.1%


3.8%


6.2%


1.9%


18,380


24,539


8.7%


2.6%

New Jersey

2.8%


3.9%


6.0%


1.1%


6.6%


3,252


65,505


1.5%


7.0%

Virginia

2.6%


1.8%


2.8%


2.6%


2.4%


6,631


25,742


3.1%


2.8%

Washington

2.2%


2.9%


3.7%


3.5%


4.4%


10,026


32,010


4.7%


3.4%

Massachusetts

2.1%


3.7%


3.2%


1.0%


4.2%


3,230


33,473


1.5%


3.6%

Indiana

2.1%


0.9%


0.9%


0.4%


0.8%


1,980


8,028


0.9%


0.9%

Arizona

2.1%


2.8%


1.7%


17.0%


1.2%


5,710


13,382


2.7%


1.4%

Tennessee

2.1%


1.0%


1.4%


1.6%


0.7%


3,426


12,868


1.6%


1.4%

Missouri

1.9%


0.7%


1.2%


1.0%


0.7%


2,992


10,938


1.4%


1.2%

Maryland

1.9%


1.4%


1.7%


1.5%


1.5%


4,436


14,788


2.1%


1.6%

Wisconsin

1.8%


0.8%


1.2%


0.2%


0.8%


842


13,088


0.4%


1.4%

Minnesota

1.7%


1.0%


1.8%


0.6%


1.3%


1,867


18,190


0.9%


1.9%

Colorado

1.6%


1.3%


1.5%


2.2%


1.0%


5,225


12,263


2.5%


1.3%

Alabama

1.5%


0.7%


0.4%


1.1%


0.3%


1,911


2,586


0.9%


0.3%

South Carolina

1.5%


0.8%


0.9%


1.5%


0.4%


4,885


4,977


2.3%


0.5%

Louisiana

1.5%


0.9%


1.3%


5.3%


0.3%


12,106


2,450


5.7%


0.3%

Kentucky

1.4%


0.8%


1.2%


3.2%


0.4%


7,438


6,166


3.5%


0.7%

Oregon

1.2%


0.7%


0.8%


0.6%


0.7%


1,639


7,505


0.8%


0.8%

Oklahoma

1.2%


0.4%


0.4%


0.8%


0.3%


1,890


3,154


0.9%


0.3%

Connecticut

1.2%


1.1%


1.8%


0.2%


1.6%


857


20,183


0.4%


2.2%

Iowa

1.0%


0.4%


0.6%


0.5%


0.4%


1,267


5,885


0.6%


0.6%

Mississippi

1.0%


0.4%


0.5%


2.1%


0.1%


5,131


868


2.4%


0.1%

Arkansas

0.9%


0.5%


0.9%


2.0%


0.4%


5,203


5,355


2.5%


0.6%

Kansas

0.9%


0.4%


0.5%


0.6%


0.4%


1,789


4,122


0.8%


0.4%

Utah

0.9%


0.4%


0.5%


0.7%


0.4%


1,644


3,905


0.8%


0.4%

Nevada

0.9%


0.6%


0.4%


0.9%


0.2%


2,138


2,305


1.0%


0.2%

New Mexico

0.7%


0.2%


0.1%


0.1%


0.1%


241


1,328


0.1%


0.1%

West Virginia

0.6%


0.1%


0.1%


0.0%


0.1%


136


574


0.1%


0.1%

Nebraska

0.6%


0.7%


0.4%


0.3%


0.7%


1,604


3,032


0.8%


0.3%

Idaho

0.5%


0.2%


0.4%


1.0%


0.1%


4,013


1,007


1.9%


0.1%

Hawaii

0.4%


0.4%


0.1%


0.0%


0.2%


39


615


0.0%


0.1%

Maine

0.4%


0.6%


0.3%


1.4%


0.1%


1,767


1,583


0.8%


0.2%

New Hampshire

0.4%


0.3%


0.3%


0.6%


0.3%


497


2,879


0.2%


0.3%

Rhode Island

0.3%


0.2%


0.5%


0.1%


0.3%


293


4,896


0.1%


0.5%

Montana

0.3%


0.2%


0.1%


0.3%


0.0%


1,130


248


0.5%


0.0%

Delaware

0.3%


0.3%


0.5%


0.2%


0.3%


359


5,139


0.2%


0.6%

South Dakota

0.3%


0.1%


0.2%


0.4%


0.1%


1,675


479


0.8%


0.1%

Alaska

0.2%


0.2%


0.1%


0.2%


0.1%


1,194


301


0.6%


0.0%

North Dakota

0.2%


0.3%


0.2%


0.5%


0.1%


1,844


748


0.9%


0.1%

Vermont

0.2%


0.3%


0.1%


0.4%


0.1%


1,074


637


0.5%


0.1%

D.C.

0.2%


1.0%


0.5%


0.0%


0.9%


1


5,848


0.0%


0.6%

Wyoming

0.2%


0.1%


0.1%


0.3%


0.0%


594


135


0.3%


0.0%

Averages          

4,141


18,297

   

Sources: See Figure 1, Figure 4

October 31, 2016 3:20PM

Amazon Patents Police Traffic Stop Drone

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Last July, Dallas police used a robot to kill the man who fatally shot five Dallas-area police officers. Shortly after the shooting I noted that new technologies, such as robots, should prompt lawmakers to find ways to make the face-to-face interactions citizens have with officers safer and less frequent. A recent Amazon patent reveals how new technologies can play a role in improving traffic stops, one of the most common citizen-police encounters.

Amazon Technologies, Inc. recently secured a patent for small shoulder-mounted police drones. The patent abstract explains that, "The techniques and systems can include routines to provide enhanced support for police during routine traffic stops."

Drones like the one detailed in the Amazon patent could help improve traffic stops. Drones would allow police to examine a pulled-over vehicle before approaching in person. This increased situational awareness would help police officers, providing them with valuable information about how many people are in the car and whether the driver or any passengers have their hands in sight. As drone technology improves it's likely that police will be able to use similar drones to issue commands. 

If appropriate accountability policies are enacted, these small drones could serve as useful tools in police misconduct investigations. Drone footage of the Philando Castile and Samuel DuBose shootings, for example, would have been helpful to investigators.

But despite the potential for these small drones being useful in misconduct investigations and helping police during traffic stops, citizens may be concerned about the impact such drones could have on their civil liberties. Having a small drone buzzing around your car during a traffic stop may be unnerving, but unless the drone is outfitted with sophisticated surveillance tools it's unlikely that it will prompt a robust Constitutional challenge.

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If these small Amazon drones are equipped with traditional cameras and don't enter a car during a traffic stop, then they will only be capturing images of material in "plain view." Nonetheless, citizens should be wary of small police drones being outfitted with surveillance technology that could raise constitutional issues, such as thermal scanners.

New technologies such as drones and body cameras will undoubtedly play an increasingly prominent role in law enforcement. Small drones like the one described in Amazon's patent could help make routine traffic stops safer for officers and citizens. However, as the ongoing debates about body cameras have demonstrated, these new technologies can only serve as tools for worthwhile criminal justice reform if they're governed by good policies. It's not hard to see how small drones could help police and citizens during traffic stops. But as police drones become more common we shouldn't forget that they can serve as platforms for a host of technologies that threaten civil liberties.

October 31, 2016 3:12PM

The Server Will Bewitch You Shortly

It’s been a little over a year since Bernie Sanders assured America that the public was “sick of hearing” about Hillary Clinton’s “damn e-mails,” and to put it mildly, the claim has not aged well. Even before Friday’s announcement that the FBI had uncovered an additional cache of e-mails from Clinton’s personal assistant Huma Abedin—and the inevitable media feeding frenzy that followed—Clinton’s use of a private e-mail server during her tenure as Secretary of State had remained a central campaign issue. If anything, the controversy had metastasized: The FBI’s investigation into Clinton’s server, culminating in a recommendation that no criminal charges be brought, was received by many as evidence of a corrupt cover-up even more disturbing the underlying offense, a clear-cut case of a Beltway elite getting a pass for conduct that would have seen a normal schlub clapped in irons. It’s this, probably more than any other alleged misdeeds, that has made “lock her up!” a popular refrain at Donald Trump’s rowdy rallies.

As a frequent critic of the FBI’s routine demands for broadened surveillance powers, it’s heartening to see people recognizing that the Bureau is not somehow immune to improper political influence. Moreover, given the Obama DOJ’s unprecedented use of the Espionage Act to prosecute whistleblowers (rather than spies)—his administration has pursued more cases under that law than all his predecessors’ combined—it’s hard not to feel a twinge of schadenfreude when the public concludes that Clinton’s “extreme carelessness” with classified information (as FBI director James Comey characterized it) must surely be criminal too. But in large part because I’m uneasy about normalizing this aggressive approach to the Espionage Act, I think it’s necessary to explain why this widespread perception is wrong, and Comey’s conclusion that “no reasonable prosecutor” would have pursued charges against Clinton on the available facts was pretty clearly right. While it’s impossible to know what other damaging revelations the newly discovered tranche of e-mails may contain, it seems unlikely they will materially alter that basic legal conclusion.

One thing to get out of the way up front: None of what follows is ultimately a defense of Clinton. Beyond the poor judgement implied by her sloppy approach to classified information, the effect (and probable intent) of Clinton’s use of a private server was to hamper government transparency by giving her improper de facto control over correspondence that should be subject to Freedom of Information Act requests—which is to my mind perhaps the most troubling aspect of her conduct. (Much as this former reporter might wish otherwise, circumventing FOIA is not a criminal offense.) This post is narrowly concerned with whether she ought to have been prosecuted under the Espionage Act, specifically 18 USC §793(f). which reads:

(f) Whoever, being entrusted with or having lawful possession or control of any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, note, or information, relating to the national defense, (1) through gross negligence permits the same to be removed from its proper place of custody or delivered to anyone in violation of his trust, or to be lost, stolen, abstracted, or destroyed, or (2) having knowledge that the same has been illegally removed from its proper place of custody or delivered to anyone in violation of its trust, or lost, or stolen, abstracted, or destroyed, and fails to make prompt report of such loss, theft, abstraction, or destruction to his superior officer—Shall be fined under this title or imprisoned not more than ten years, or both.

I’m focusing on this clause because it’s the one the FBI itself seems to have considered the only plausible basis for bringing charges. There are other statutes that apply to mishandling of classified information by military personnel or other Defense Department employees, which obviously wouldn’t apply to Clinton. And there are other clauses of the Espionage Act that criminalize “willfully” providing classified information to uncleared persons, or obtaining the same “with intent or reason to believe that the information is to be used to the injury of the United States.” Nobody has seriously suggested that Clinton was deliberately trying to make classified information available to the adversaries of the United States. But what about 793(f), which requires not “willfulness” but only “gross negligence”?

There are three main obstacles to prosecution under that clause in this case: One factual, one statutory, and one constitutional. I’ll take them in turn.

The factual problem becomes clear when you ask what specific actions a prosecutor would charge—actions that could be laid at Clinton’s feet, as opposed to those of her staff. Setting up a private e-mail server, or using it to carry on professional correspondence? That surely wouldn’t fly: Having a private e-mail account doesn’t in itself constitute “mishandling” of classified information, and plenty of officials with high security clearances have done and continue to do the same. That it was Clinton’s own server, as opposed to a Gmail account, makes no difference. Indeed, while it’s certainly relevant to one’s judgment of whether Clinton was seeking to keep her e-mails beyond the reach of FOIA requests, the private server is largely a red herring when it comes to the charge of mishandling classified information. What’s of potential legal relevance is that the server was not an appropriate “place of custody” for whatever classified material ended up there: A personal server is, in that respect, no different from a commercial e-mail account or even an official but unclassified State.gov account. Moreover, being in receipt of classified information on an insecure channel would not, in itself, satisfy the elements of an offense under the statute: A classified document sent to Clinton’s account might constitute a violation by the sender, but it would by definition have to be “removed” and “delivered” by the sender—not the recipient. So the factual obstacle here is that, once we recognize that “setting up a server” is a red herring, it’s not at all clear whether the FBI found instances of Clinton, as opposed to her staff, removing or “permitting the removal” of documents stored in classified systems. (The second prong might conceivably apply if it was sufficiently clear to Clinton that classified material had been illegally removed, though we’d then be left wondering what “superior officer” the Secretary of State is obligated to notify. The president?)

The reference above to the removal of documents is deliberate, and that brings us to the statutory obstacle to prosecution. While several sections of the Espionage Act that apply a “willfulness” standard cover any inappropriate communication of classified information, §793(f) really appears to be about the exfiltration of files or documents, not the mere discussion of classified matters. As Prof. Steve Vladeck, an expert on the Espionage Act, has observed, discussing classified subjects on an insecure channel might be grounds for a reprimand or revocation of clearance, but it has not traditionally been viewed as a criminal offense—and the language and structure of the statute, as well as the history of prosecution, bear out that interpretation.

Start with the language: Discussing classified facts known to you is not, on any ordinary use of English, an instance of “removing” information from a “place of custody,” except perhaps on the strained reading that makes the cleared individual’s brain such a “place.” For confirmation, we can look to differences in the language found in other parts of the statute, as under traditional rules of legal interpretation, differences in otherwise parallel phrases should be construed as corresponding to a difference in legal effect. Whereas §793(f) applies to a person "being entrusted with or having lawful possession or control of” classified documents, it omits the language “access to” found in §793(e). Similarly, §783(f) covers allowing the materials to be “removed… delivered… lost, stolen, abstracted, or destroyed” but not “communicated” as in (e). The reading that most naturally makes sense of those differences is that (f) is about permitting the wholesale abstraction of files & documents, not merely communicating information someone may have gleaned from having access to them (or from access to classified briefings).

Structural considerations support the same conclusion. Consider: If §793(f) covers the same conduct as the rest of the statute, with the same penalties, with the only difference being the standard of “gross negligence” as opposed to “willfullness,” the structure of the whole becomes rather puzzling. Why have a separate clause to prohibit the same conduct under two standards, rather than having a unified prohibition on doing the same thing either “negligently” or “willfully”? Why, for that matter, would it make sense to penalize communication of classified information to uncleared individuals only with a strong intent requirement if communication of the same information even to cleared persons on an insecure channel would be subject to exactly the same penalties under a lower standard of negligence? Such a reading makes the statute into a patchwork quilt riddled with redundancies rather than a coherent whole.

Finally, the history of prosecutions under the law tends to support this understanding. Again, if discussing classified matters with other cleared persons on an insecure channel—as opposed to “removing” and transmitting classified documents—were understood to be a federal crime, you’d expect it wouldn’t be hard to find instances of that crime being prosecuted. But in fact, there don’t seem to be any such cases. As Ben Wittes, a former national security reporter turned think tank scholar, wrote this summer:

People simply don't get indicted for accidental, non-malicious mishandling of classified material. I have followed leak cases for a very long time, both at the Washington Post and since starting Lawfare. I have never seen a criminal matter proceed without even an allegation of something more than mere mishandling of senstive information. Hillary Clinton is not above the law, but to indict her on these facts, she'd have to be significantly below the law.

A common refrain in discussions of the Clinton case has been that “anyone else” would have been charged in similar circumstances. Yet if you look closely at the supposedly parallel cases where lower-ranking individuals have been prosecuted for mishandling, you find that invariably the circumstances aren’t similar. You’ll find prosecutions involving classified material knowingly and intentionally provided to uncleared persons (as in the case of Gen. David Petraeus), or where large quantities of documents were literally removed from secure facilities, but I haven’t turned up any cases where conversations about classified subjects on an insecure line have been treated as a criminal matter. In a country where literally millions of individuals hold top secret clearances, we may safely assume this is not because such indiscretions never occur, but because they had not been understood to be criminal acts, and were dealt with as matters of administrative discipline.

There are, it’s worth noting, a small number of e-mail threads in which a small portion of an actual classified document does appear to have been sent to Clinton’s private account. These were apparently marked (C) for confidential, though Clinton told the FBI that, at least in the context of an e-mail (as opposed to a classified document with appropriate headers), she did not recognize that marking as a classification marking. Many have found that claim dubious, but if she testified in court that she either failed to notice it or interpreted it as a section marker (as in, text copied from a document in which it had been preceded by paragraphs A and B), I’m not sure how one would prove otherwise beyond reasonable doubt. At best, then, one would be left with a potential, albeit unprecedented, case against the staffer rather than Clinton.

At last we come to the constitutional barriers to prosecution. As Comey made clear in his testimony to Congress, while the statutory standard in §793(f) is “gross negligence,” the Justice Department has historically been reluctant to prosecute—indictments under §793(f) are vanishingly rare—without something at least approaching evidence of intent. One reason for that may be that the Supreme Court’s opinion in Gorin v. United States (1941), which suggests that the Espionage Act’s intent requirements are an important feature that save it from unconstitutional vagueness. Due process requires that the law give citizens clear notice of what conduct is criminally prohibited, and in a country that (in large part for First Amendment reasons) has never had a British-style Official Secrets Act, there would be real reason to fear it would be too easy to unwittingly commit a crime absent relatively strict intent requirements. After all, classified information is routinely (and lawfully) printed on the front pages of newspapers—it would be perverse if forwarding a New York Times article were an indictable offense—and the sheer volume of classified material means it’s often difficult for officials to keep track of whether a particular fact is classified at a given time. Add in the historical paucity of prosecutions for mere insecure discussion of classified facts and it’s easy to imagine Clinton’s attorneys successfully sinking any case with a due process argument.

At this point you may be asking the same question a conservative friend posed to me when I sketched this argument: If it’s so clear that Comey was correct, wouldn’t he and the Clinton campaign have been shouting all this from the rooftops? That did give me some pause, but there are reasons each might have incentives to be circumspect. If, as Vladeck argues in the piece linked above, the Espionage Act simply doesn’t cover a whole category of “mishandling” classified information, intelligence officials like Comey, who expect cleared persons to take their obligations seriously, might not want to advertise the fact too loudly—and may want to leave their options open for the sake of future prosecutions or threatened prosecutions. The Clinton campaign, on the other hand, probably understands that a lawyerly argument to the effect that her conduct was not technically illegal doesn’t sell terribly well on the campaign trail. Whatever the technicalities, this whole affair reflects terribly on her judgement, and they’ve likely concluded there’s no advantage to giving the issue any additional exposure, even if it’s to mount a defense. The old campaign adage “if you’re explaining, you’re losing” applies in spades here.

So do the additional e-mails recovered from Huma Abedin’s laptop change any of this? It’s certainly possible to imagine scenarios in which it might: If those e-mails contained clear evidence of intent to obstruct, or unambiguous instructions from Clinton that classified documents should be sent to her personal account. But then, one could as easily speculate about finding a confession to Vince Foster’s murder. If, instead, the e-mails include more of the same sort of correspondence the FBI has already reviewed—even if it includes more threads in which classified topics were discussed—all of the above analysis would apply.

To sum up, there’s little question that, as Clinton herself now acknowledges, the use of a private e-mail server to conduct official correspondence was a serious lapse in judgement. Individual voters can determine for themselves whether they find it disqualifying in a commander in chief. But we don’t need to resort to theorizing about political chicanery to explain why she wasn’t prosecuted for it: The simple answer is that—fortunately for all politicians—not every act of stupidity is a federal crime.

October 31, 2016 2:46PM

Some Long‐​Awaited Answers on the Long‐​Term Impact of Cash Assistance

By Charles Hughes

In the search for ways to reform the flawed current welfare system, some form of basic income guarantee has received more attention. My colleague Michael Tanner has reviewed some of the related pros and cons, but most of those studies confined themselves to the immediate to short-run impact on work, leaving many important questions unanswered. A new paper from Daniel Price co-authored with Jae Song offers one of the first studies to analyze the long-term impact of cash assistance from the negative income experiments that took place last century. Their findings suggest “unintended and unexpected long-term consequences for recipients” and ambiguous effects on their children. It’s important to understand these effects when considering ways to try to address the many problems with the troubled status quo.

In the 1960s and 1970s, when interest in a basic income was at a peak, there were large-scale evaluations of the idea of unconditional cash transfers in the Seattle and Denver Income Maintenance Experiments (SIME and DIME, respectively). Recipients were given an unconditional cash transfer that was phased out as earned income rose, for a period of either three or five years. There were a host of studies analyzing the impact on poverty, work impact, and other measures, but these were more focused on the short-term effects.

This paper is so important because, as the authors explain, “virtually no other research has been conducted on the impact of cash assistance—or, indeed, any other type of government assistance—on beneficiaries themselves long after the assistance has ended.” Some of this is due to data limitations, and the authors are able to combine SIME/DIME date with administrative records from the Social Security Administration and the Washington State Department of Health.

The impact on poverty and material hardship is more straightforward and easier to measure, but some of the effects on work effort and other measures are still not as well understood. In this paper the authors find some evidence that participation did seem to have an impact on both work and earnings later in life for adult recipients. Participation reduced the probability a worker was active in any given year by 3.3 percentage points, and decreased average earnings by $1,800 (about 7.4 percent of mean annual earnings).

Another way to put it: for each $1 in additional government transfers, the authors find that an individual’s discounted lifetime earnings are $4.50 lower. 

Impact on Propensity to Work and Earnings for Parents, by Age

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Source: Price and Song (2016).

Notes: Each data point represents the estimate and 95% confidence interval of the coefficient on a dummy for financial treatment status in one regression, limiting the sample to data from individuals when they are a certain age. Earnings variables are based on one observation per year for all years between 1978 and 2013.

These effects are mostly concentrated towards the end of a person’s working life between ages 50 and 60. Song and Price suggest three channels that might explain this pattern of some reduced work effort during the experiment, minimal effect immediately after, and then larger effects decades later as former participants near retirement age. If these adults saved some of those transfers, they might be more able to reduce work hours or retire earlier. If they worked less, the wages they were able to command might be lower because they had less time to develop their skills and human capital. Or it could change their preferences, by making them place more importance on leisure time that they were able to increase during the experiment.

This could have significant implications for discussions about how to address some of the worst shortcomings of the current welfare system. The substantial reductions in earnings and work effort should be incorporated into how we think about the ramifications of these programs.

The parents weren’t the only ones affected by these programs, their children were too. There is a wide range of plausible effects on the children: parental benefit receipt could the probability of their children also receiving benefits and reducing work effort. It’s also possible that the additional income from transfers will allow parents to invest more in their children and increase their human capital and earning potential later in life.

In this long-term analysis, the authors find “little evidence of an effect on children for any variable studied.” These include probability of applying for disability, propensity to work, and impact on annual earned income. The results for children should be considered with caution due to the number of tests that they run on child outcomes. These findings cut both ways, in a sense: it doesn’t seem to be the case that parents getting sizable cash assistance during the program duration discouraged work for their children, but there also weren’t substantial positive effects on children’s eventual work outcomes due to more investment or other effects of having higher household income. In their words:

Taken as a whole, our results suggest that cash assistance could have unintended and unexpected long-term consequences for recipients without significantly improving their children’s earning potential or decreasing their propensity to use government benefits. On the other hand, in our context, we can rule out the idea that cash assistance creates a welfare culture that decreases children’s earned incomes or their dependency on disability benefits by a large amount.

Impact on Propensity to Work and Earnings for Children, by Age

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Source: Price and Song (2016).

Notes: Data from Denver families only. Each data point represents the estimate and 95% confidence interval of the coefficient on a dummy for financial treatment status in one regression, limiting the sample to data from individuals when they are a certain age. Earnings variables are based on one observation per year for all years between 1978 and 2013.

These findings highlight why experiments with rigorous evaluation are so important because there are significant effects that aren’t yet fully understood. Studies like this can produce surprising results and new evidence that forces policymakers and researchers to update how they think about these issues. There are some aspects of cash assistance and a basic income guarantee that the authors can’t analyze here, for example these experiments treated a small share of people within their respective cities and the impact of a community wide experiment could be significantly different. The one thing we do know is that much more research in this sphere is needed to understand the limitations and unintended consequences involved.

October 31, 2016 1:47PM

Muslim Immigration and Integration in the United States and Western Europe

Muslim immigrant assimilation in the United States is proceeding well. American Muslims have either similar or greater socio-economic status and levels of education than the average American. They are also active in civil and political society. However, this is not the case in Europe where Muslim immigrants tend to have worse labor market outcomes, are less well educated, and less socially integrated. The lack of assimilation and integration in Europe is affected by policies regarding multiculturalism, welfare, labor market regulation, citizenship, and guest worker laws that make integration more costly.

Integration in Europe

Social opinions show how Muslims in Europe are less integrated than in the United States. In Europe, there is a wide gap between Muslim and non-Muslim acceptance of homosexuality (Figure 1) and abortion (Figure 2) according to three surveys published in 2007 and 2009. The acceptance gap on these issues is the smallest in the United States – meaning that Muslims in the United States have opinions that are closer to the general public than in European countries (Figure 3).    

Figure 1

Is Homosexuality Morally Acceptable?

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Sources: Pew and Gallup.

Figure 2

Is Abortion Morally Acceptable?

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Sources: Pew and Gallup.

Figure 3

Acceptance Gap

 

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Sources: Pew and Gallup.

Opinions on social issues are just one aspect of this gap in assimilation but an important one for judging how assimilated immigrants are into Western culture.  Although there are many other areas that could be compared, opinions of abortion and homosexuality show that Muslim Europeans are less well-assimilated than Muslims in the United States.

Labor Markets        

In Europe, Muslims were less likely to have a job than non-Muslims in 2009, while they were more likely to have one in the United States (Figure 4). 

Figure 4

Do You Have a Job?

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Source: Gallup.

Immigrants in Europe are more likely to be unemployed than natives in every country except Hungary and Slovakia. Figure 5 shows the gap in native-born and Muslim unemployment. In the United States, immigrants have a lower unemployment rate than natives. However, in most European countries the unemployment rate for immigrants is far above that of natives – by almost 11 percentage points in Belgium.

Figure 5

Unemployment Gap between Immigrants and Natives

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Source: OECD.

Virtually all Muslims in Western Europe are immigrants or the descendants of recent immigrants from outside of the EU. The employment gap, measured by subtracting the non-EU immigrant employment rate from the EU-15 employment rate, shows an even wider gap for the predominantly Muslim immigrants (Figure 6). There are other immigrants in Europe from outside of the EU that are included in this figure.    

Figure 6

Employment Gap between Non-EU Immigrants and Native-EU Citizens, 2015

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Source: OECD.

Figure 7 addresses that problem by showing that immigrants to the EU-OECD from the Middle East and North Africa, who are predominately Muslim, fare the worst in the labor market. European labor market controls and regulations explain the differences between American and European outcomes.

Labor market regulations make it expensive for firms to hire new workers, incentivizing employers to hire workers they know and are familiar with. Since immigrants are some of the most unfamiliar workers in any labor market, regulations in Europe result in lower employment rates for Muslim immigrants. There is empirical literature documenting their relatively poor labor market integration going back decades (Kogan, 2004; Fleischmann and Dronkers, 2010; Kogan, 2010). Less employment means less hope for the future, fewer opportunities for integration, and a general sense of unease in their new societies. European labor market regulations are crushing job opportunities for Muslim immigrants and their descendants.    

Figure 7

EU-OECD Unemployment Rate by Region of Origin, 2015

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Source: OECD.

A plethora of rules across countries, from minimum wages to collective bargaining to severe punishments for firing employees, all increase the cost of hiring workers (OECD EPL Database, 2013). In France, employees must be rehired if they were fired unfairly, which includes cases where the firing was done to “save money or boost profits.” In these inflexible labor markets, firms have an incentive to keep their workforces small and to entrust responsibilities to experienced employees rather than to hire unknown or unproven job seekers who are more likely to be immigrants. 

Muslim immigrant workers are generally less skilled and productive than European workers, meaning they earn a lower wage, but minimum wages prevent such legal bidding down. Labor market regulations are categorized and ranked by the OECD on a 0 to 6 scale ranging from no labor market protections to total government control. Averaging the categories shows that the United States’ labor market is significantly less regulated than Europe (Figure 8). This explains part of the employment and unemployment gap between Muslim immigrant and native Europeans.

Figure 8

Labor Market Regulations

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Source: OECD.

Baked into the OECD labor market regulations are rules to protect trade unions, which are more powerful in most European countries than in the United States (Bisin et al., 2011). Unions exist to raise the wages of their members by decreasing the supply of labor available to employers. Immigrants increase the supply of labor so unions favor rules that exclude them from employment, benefiting the economic “insiders” who already have union jobs at the expense of the “outsiders” who are more likely to be Muslim immigrants (Lindbeck and Snower, 2001). 

The empirical literature supports the theory that inflexible labor markets disproportionately harm the employment prospects of immigrants. Bisin et al. (2011) find a statistically robust negative relationship between trade union density and the immigrant employment rate. They also find some evidence that employment protections and minimum wages reduce immigrant employment. Kogan (2006) finds that “liberal welfare regimes” with decentralized industrial-labor relations and high labor market flexibility lead to better employment outcomes for male immigrants. Gebel and Giesecke (2011) add that extensive employment protections for permanent workers increase both unemployment for low-skilled workers as well as the incidence of temporary contracts between employers and low-skilled workers. 

The United States is the least regulated labor market among the developed countries analyzed (Figure 8). American labor markets are much less rigid than their European counterparts and thus significantly less likely to disadvantage immigrants in employment, Muslim or otherwise. This partially explains the higher employment of immigrants in the U.S. labor market (Figure 5) and the higher rate of Muslim employment in the U.S. relative to the general public (Figure 4). 

Welfare

Many European countries have generous welfare states that provide extensive aid to the poor, including immigrants. This creates two significant obstacles to integration. The first is that welfare programs reduce the incentive to work. Work provides useful skills and experience, facilitates social relationships and cultural understanding, provides an incentive to learn the language and culture of the new country, and supplies hope for the future. Since many immigrant families have a large number of dependents, the incentive to collect means-tested aid rather than find employment is stronger than for natives who tend to have fewer dependents at home (Bratsberg et al., 2010). The inherent unpleasantness of work and the added difficulty of working in a new country that restricts employment because of onerous labor market regulations make welfare a particularly attractive alternative.

Figure 9 shows that EU countries spend more on social welfare as a percent of GDP than the United States. The total quantity of social welfare spending as a percent of GDP isn’t as important as how it’s spent. Benefits to working-age Europeans and immigrants will have a worse impact on the labor force than benefits to retired workers. Hansen and Lofstrom (2003) found that immigrants in Sweden were more likely to use welfare services than natives even when accounting for the negative effect of assimilation on welfare participation. 

Figure 9

Social and Welfare Spending as a Percent of GDP, 2014

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Source: OECD.

In addition to working in a country with a smaller welfare state, poor immigrants to the United States are less likely to use means-tested welfare benefits than natives and, when they do, the dollar value of their consumption is lower than for poor natives. Borjas (1999) finds different welfare policy between American states negatively-selects immigrants but Zavodny (1997) and Kashoul (2005) find otherwise. However, the perception that immigrants overconsume welfare certainly holds an important place in partisan debate and contributes to anti-immigration sentiment (Hussey and Pearson-Merkowitz, 2013) or an anti-welfare opinion.  

Guest Workers and Quasi-Citizens

Some European countries established guest worker visas for lower-skilled workers after World War II to allow the temporary migration of workers to aid in post-war reconstruction and to fuel a rapidly recovering economy. The European governments intended the guest workers to migrate for work and to eventually resettle in their home countries, perhaps after several trips back and forth via circular-migration. This is in contrast to the United States where most Muslim immigrants originally entered as skilled workers who sent for their similarly educated and skilled relatives.    

Germany’s guest worker program operated from 1955 to 1973 (Anil, 2006). Although the workers came from many nations inside of Europe, Turkey quickly became the largest origin country (Anil, 2006). Of the 14 million guest workers who entered Germany, only 11 million returned (Anil, 2006). As soon as the guest worker program was canceled, the migrants sent for their families to join them in Germany. The Netherlands had a similar experience whereby workers, mainly Turkish and Moroccan (Buijs, 2009), and their families entered the country (Doomernik, 2012). France had a similar experience with mostly North and West African migrants. In 1974, the guest workers who had remained were legally permitted to bring over their families and gain citizenship (Salem, 2013). In Britain, this happened even sooner, with an immigration ban being instituted in 1962. Although it prevented more workers into the country, it created a system for the workers who were present to bring in their families (Leiken, 2015). To beat the ban, this “secondary migration” occurred hastily and on a great scale (Leiken, 2015).

The Dutch response to the labor migration that turned permanent was a series of multicultural programs that encouraged immigrants to retain their own culture rather than to assimilate. The German response was to treat the immigrant communities as just guest workers until the 1990s, separating them from German society (Salem, 2013). Indeed, until the German government passed citizenship reforms that granted birthright citizenship to children of immigrants who had lived on German soil for eight years and eased naturalization, these immigrants were largely in citizenship limbo (Anil, 2006).  

Citizenship remains a key component of integration. Without it, immigrants are limited in how they can interact with civil society. Citizenship gives one a greater sense of belonging (de Rooij, 2012) and can fuel both political and professional participation with others. Muslims have had a different experience in the United States because they have been able to naturalize ever since they’ve started arriving in increasing numbers since the 1960s (Salem, 2013).  

When the guest worker programs were canceled in Europe, many of the workers made the rational choice to stay and work illegally rather than return to poverty in their home countries. When guest worker programs operate, workers go back and forth secure in the knowledge that they can return for economic opportunity. When the programs end then those same workers refuse to leave because they will then never be able to return legally, thus turning a temporary worker flow into a permanently settled population. Interestingly, extending citizenship to these former guest workers or not terminating the program in the first places creates a circular flow with relatively few permanently settled residents. Increasing labor market regulations and a growing welfare state eventually pushed them out of the labor market but not out of the country. Multicultural policies separated the migrants from their neighbors while citizenship laws kept them and their descendants in a legal underclass. The United States avoided virtually all of these mistakes through not having a federal integration policy that emphasized cultural fads and by mandating birthright citizenship. Though Europe in recent years has moved away from multiculturalism towards assimilation, multicultural policy of the 1970s and 80s has left a lasting effect on integration to the present.

Cultural Barriers to Assimilation in Europe

Different histories and cultural attitudes toward immigration in Europe and the United States also help explain the different outcomes (Leiken, 2015). Immigration is engrained into the founding and continuous formation of the United States, but in a Europe defined by near-homogeneous ethnically-demarcated nation-states, immigration is recent and more troubling (Leiken, 2015). European multicultural policies made assimilation and integration more costly and helped to legitimize parallel communities. The Netherlands responded to waves of migration through “inclusionary” policies such as the Ethnic Minorities Policy of 1983 that spent government funds on religious institutions, educational programs, and immigrant media, for which immigrant communities could coexist with the native Dutch in autonomy. The result was separation (Vasta, 2007).

In Britain, multiculturalism emerged to counter discrimination, and encouraged new British subjects to live differently if they chose to (Malik, 2015), including a preservation of their cultural identity at the cost of social inclusion (Leiken, 2015). Germany’s self-conflicting identity of traditional German ethnocentrism and liberal multiculturalism both welcomes immigrants to stay without an incentive to integrate with ethnic Germans. Over time an ethnic identifier for being German might fade away and be replaced with a sense of “Germanness” like in the United States whereby being an American is not an issue of ethnicity but more of certain values, allegiances, and history.  German policies halted that process.  As a result, the large Turkish population’s social sphere remains within the Turkish community (Leiken, 2015), where Turks have become more religious and isolated (Malik, 2015), and employment opportunities continue to deteriorate.

Western Europe finds itself in a struggle between the ideals of modern universal tolerance and national ethnic-based identities that predate the current waves of immigration. European governments have made many mistakes in dealing with this issue. Inclusive programs to help these new ethnic and religious minorities created coexisting societies that run parallel to mainstream society, rather than in cohesion with their adopted homeland. The negative impact on citizenship as an institution has spilled over into other facets of life for Muslim immigrants, including employment, economic mobility, education, social acceptance, and political life.

Political Participation

In the United States, Muslims are about as politically active as their fellow countryman but not so in Western Europe. Muslim Americans are more likely to have a college degree than Americans generally while Muslim immigrants to Europe are much less well educated than native Europeans so the education difference could explain the difference (Angenendt et al., 2007). People who earn higher educations tend to be more politically active (Ayers & Hofstetter, 2008). They more readily embrace their American identity and have confidence in American institutions (Angenendt et al., 2007). Less educated European Muslims are more isolated, less economically successful, and they are less interested in participating in politics and civil society.  They have less faith in European institutions and fewer resources to devote to community building.  

Religion

Americans are more tolerant of religious differences and are more likely to recognize the positive role of religion than Europeans (Foner and Alba, 2008). Religious immigrants in the United States frequently use religion as a bridge to social inclusion and taking up American identity. For instance, religious membership serves the instrumental purpose of providing “refuge, respectability, and resources” to first- and second-generation immigrants looking for identity and sense of belonging, leadership, upward mobility, and an entryway into political life (Foner and Alba, 2008).

Europeans are less religious and there are fewer legal protections for religion. Broadly, European secularists either seek a rejection of religion from all public life or seek to promote a diversity of religious views (Mandaville, 2009). The “thick” secular view, as exemplified by the French government, seeks to marginalize religious expression as much as possible and prevent it from entering the public sphere through actions like the burqa ban (Mandaville, 2009). 

The United Kingdom is more tolerant of religious differences than France. Interestingly, some Muslims support the official establishment of the Anglican Church on the grounds that it recognizes a positive role for religion in public life (Koenig, 2005). Cooperation between the government and religious organizations is not unique to the UK. In Germany, religious groups have a strong incentive to incorporate and thereby form nationally recognized and hierarchical religious organizations that receive subsidies but Muslims have not taken advantage of that system (Warner and Wenner, 2006).  

Due to European religious institutions and government favoritism toward established churches, Muslims in Europe are at a de facto and de jure disadvantage compared to their American co-religionists who inhabit a much more religiously diverse, open, and free religious marketplace.  The American view of religion as a force for social cohesion contrasts sharply with religion practiced the more secular, state-dominated, and alien established churches of Europe.  

Conclusion

The results of Muslim immigration to the United States and Western Europe vary significantly. Muslims and their descendants are assimilating well in the United States while that is not the case in Europe.  Since the end of guest worker programs in the 1970s, Muslim immigrants have struggled to fully integrate into much of European society. The relatively stricter labor markets and large welfare states have decreased the economic well-being of immigrant groups. European governments have strived for tolerance through pretty-sounding policies that have stifled integration, too often separating immigrant populations from the larger society. Those policies along with damaging welfare and labor market regulations should be reversed. 

Special thanks to Cole Blondin and Martin Stillman for their excellent research and writing assistance on this piece.    

October 31, 2016 12:20PM

Of Agencies and Amendments

Following my recent blog on Obama’s Housing Toolkit, Michael Hamilton took exception with the question: “Who better to determine local needs than property owners and concerned citizens themselves?” and suggested that this type of local-centric thinking raises questions about the reach and influence of constitutional protections for property rights. 

But the Obama Toolkit does not propose protecting or amending constitutional rights. At the federal level, it suggests spending $300 million to modernize cities’ housing regulation, when the only modernization required is a reduction in zoning regulation. Theoretically, this reduction in regulation should cost nothing.

Although the language in the report is anything but explicit, given HUD’s historical preference for withholding funding from communities that fail to do the agency-approved urban policy action du jour, it’s not a stretch to suggest we could see a similar carrot-and-stick approach used by HUD in the granting of “Local Housing Policy Grants.” Actually, HUD is already punishing or rewarding municipalities this way, through the euphemistically-titled Affirmatively Furthering Fair Housing, Community Development Block Grants, Home Investment Partnerships, Emergency Solutions Grants, and other programs.

But simply because this method is employed with regularity, or even with worthy aims, doesn’t mean that we have to favor it. This carrot-and-stick approach is, for one thing, usually unconstitutional. Sadly, an unconstitutional approach is unremarkable in the climate of complete rejection/ignorance of constitutional law in which we exist.

It isn’t that cities or even “concerned citizens” aren’t often inimical to reducing regulation; they are. Property values are bolstered by zoning regulation, giving citizens every incentive to support restrictive zoning. The question is whether we would like federal or state administrative agencies involved in policing this.

But if you remain unmoved on the merits of (un)constitutionality alone, HUD’s ability to effectively and impartially police local municipalities is unproven (see: HUD’s involvement in Westchester, NY). It’s not as if HUD goes after the real zoning or affordability problems (see: San Francisco, CA). In other words, this is just bad policy.

On the other hand, local governments should be prohibited from enacting many types of zoning regulations, and one way to do that is to use higher levels of government—state or federal—to help protect people against arbitrary deprivations of property rights. That’s actually more of a “bottoms up” philosophy, individuals asserting rights, than a top-down one, expanding federal or state agency policing powers.

So, again: is there anything that can be done by the federal or state government to reduce regulations? Probably not constitutionally via agency blackmail but yes, there are things that could be done that are not suggested in Obama’s Housing Toolkit.

The federal government could overturn Euclid v. Ambler, which legitimized zoning regulations via police powers to begin with, or any of the cases that have expanded zoning regulations following it.

The people could amend the Constitution to protect property owners from regulatory takings, though it’s not obvious this would be necessary: a casual reader of the Constitution has good reason to believe that the Fifth Amendment already covers this quite well when it states that "private property [shall not] be taken for public use, without just compensation."[1] At the federal level, the Constitution really doesn’t need an addendum; it just needs adherents and adherence.

The same thing goes for states. Amending state constitutions to include language that forbids irrational local zoning regulation is fine, though that’s not what is proposed. Using the state equivalent of the Tax & Spend Clause to justify any and all state agency overreach, which is what we often see in practice, is not.

In summary, the federal government’s role is to preserve [property] rights; it is not to create new programs, new schemes, and new mechanisms for controlling cities to ensure that municipalities finally spawn the elusive urban utopia of planner’s fantasies. Property rights should be thought of as originating with the individual -- yes, even with property owners who happen to be concerned citizens. Though there is much to be admired in the report overall, this does not seem to be the position of the Obama Housing Toolkit when it comes to federal or state oversight.




1. The takings clause is sometimes used to compensate citizens for full takings (e.g. eminent domain) and less often to protect citizens against regulatory takings (e.g. zoning regulation).

October 31, 2016 11:15AM

Venezuela’s Inflation – Zero Hedge Repeats the Errors Printed Ad Nauseam in the Financial Press

With each passing day, I find myself reading wildly inaccurate reports about Venezuela’s inflation. I have already had to take no less than the Wall Street Journal to task for its misreporting. Now, it's Zero Hedge’s one and only Tyler Durden's time. On October 27th, he asserted that Venezuela was on the cusp of hyperinflation. Durden’s assertion is dead wrong.

Durden relies on the International Monetary Fund (IMF) for his inflation data, as well as estimates for Venezuela’s inflation. This is a big blunder, as the IMF’s reports on Venezuela contain no indication of their methodology. Indeed, it’s clear from reading their reports that they’re using a finger-in-the-wind method to measure current inflation and forecast future inflation. Durden says that Venezuela’s end of year inflation will be 481 percent, a far cry from Venezuela’s current 74.4 percent annual inflation rate courtesy of the Johns Hopkins-Cato Institute Troubled Currencies Project. The Hopkins-Cato project uses changes in black market (read: free market) exchange rates and the principle of purchasing power parity (PPP) to translate exchange rate changes into deadly accurate inflation rate estimates. 

As the accompanying chart shows, Venezuela’s inflation is not about ready to break out in hyperinflation, but has decelerated dramatically from annual rates exceeding 700 percent in 2015 to today’s still punishing rate of 74.4 percent. 

By the way, for those who play fast and loose with the word “hyperinflation,” the hyperinflation threshold is 12,875 percent, year over year. For those who are seriously interested in the topic, see the only documented treatment of all the 56 hyperinflations in the world: Steve H. Hanke and Nicholas Krus, "World Hyperinflations" in The Handbook of Major Events in Economic History, ed. Randall Parker and Robert Whaples (London: Routledge Publishing, 2013).

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Once again, the 95 percent rule reigns – 95 percent of what you read in the financial press is either wrong or irrelevant.