Archives: 02/2018

Responding to John R. Lott Jr. on Illegal Immigrant Criminality

John R. Lott Jr. responded to my criticism of his working paper where he claims to have found that illegal immigrants are more likely to be admitted to Arizona state adult correctional facilities than other Arizona residents.  Lott did not respond to my main criticism directly, which is that the Arizona Department of Corrections (ADC) data do not allow him to identify illegal immigrants with nearly as much precision as he claimed in his paper. 

Praising the supposedly precise ADC data, Lott claimed that the “huge advantage of using the data that will be presented here from the Arizona Department of Corrections is that over our 32.5-year period we know each prisoner who entered the prison system, their criminal convictions history, and whether he is a documented or undocumented immigrant [emphasis added].” 

Lott was so confident in his data’s ability to identify illegal immigrants that he wrote: “It is the entire universe of cases, not a sample, and thus there are no issues of statistical significance.”      

The rest of his paper depends upon the immigrants in the “non-US citizen and deportable” variable in his dataset being illegal immigrants.  We showed that that variable does not exclusively contain illegal immigrants.  Thus, Lott’s characterization of the utility of his data is false.  This is the only point in my criticism of his paper that counts and Lott did not challenge me on it in his rebuttal, except to point out that the description of the variable in question has a comma in the codebook rather than a conjunction.  I dispute that, but it is irrelevant.  I’ll take his non-response to my main point as an admission that he misinterpreted the variable and that his paper does not accurately describe illegal immigrant admissions to ADC facilities. 

Lott then spends a lot of time attempting to rebut my back-of-the-envelope (BOE) calculation for 2017, which is what I called it in my blog.  It’s hard to take any BOE calculation seriously and I even included a note at the end of the blog about how my BOE calculation is probably wrong. 

The Trump Administration and Preventive War

CNAS Senior Fellow Mira Rapp-Hooper has authored a first-rate take-down of the illogic of supposedly limited strikes (aka the “bloody nose” option) against North Korea at The Atlantic. Here are a few choice passages:

it makes little sense for American war planners to assume a “limited” strike like this would stay limited. A U.S. operation may not achieve its objectives, and even if it does, it would still leave the decision of whether or not to retaliate up to Kim. The North Korean leader would make that decision based on his own beliefs about the strike once it took place, not based on American wishes for his response. If he did decide to hit back, the result could be the most calamitous U.S. conflict since World War II.

[…]

If Kim is irrational on matters concerning his nuclear weapons and missiles, it’s reasonable to assume he’d be similarly irrational across the board. If he cannot be stopped from trying to reunify the two Koreas, further U.S. or UN sanctions are also unlikely to alter his cost calculations. Why would a first strike by America restrain him? Irrational actors are irrational in all domains—Washington does not have the luxury of picking and choosing where deterrence prevails.

The belief that Kim can’t be deterred from conquest but can be deterred once the United States has brought force against him demonstrates a highly selective strategic understanding. What form retaliation would take, again, is up to Kim. Yet [Trump national security advisor H.R.] McMaster seems to hold an erratic view of strategic dynamics that conveniently supports a use of force by the United States against North Korea, and privileges this path over all other options.

Under normal circumstances, these sorts of arguments against preventive war should rule the day. The case against the United States initiating force against any country, especially a nuclear-armed North Korea, is strong. Indeed, Korea expert Victor Cha made a similar case last week. Cha, no dove, concluded:

the United States must continue to prepare military options. Force will be necessary to deal with North Korea if it attacks first, but not through a preventive strike that could start a nuclear war.

And, while we’re on the subject of preventive war (i.e. premeditated aggression), former Colin Powell advisor Lawrence Wilkerson weighed in on the 15th anniversary of Powell’s speech to the United Nations regarding Iraq’s supposed WMD program. Wilkerson, a retired army colonel, noted the similarities between the Bush administration’s shoddy case for that war, and the Trump administration’s attempts to create a casus belli against Iran. These steps include, Wilkerson writes:

the president’s decertification ultimatum in January that Congress must “fix” the Iran nuclear deal, despite the reality of Iran’s compliance; the White House’s pressure on the intelligence community to cook up evidence of Iran’s noncompliance; and the administration’s choosing to view the recent protests in Iran as the beginning of regime change. Like the Bush administration before, these seemingly disconnected events serve to create a narrative in which war with Iran is the only viable policy.

These claims are false, these policies are flawed, and the implications are dangerous. The case for the JCPOA is strong, and the case against war with Iran is even stronger. 

Most Americans have learned from our unhappy post-9/11 wars. They are skeptical about starting new ones (and cool to expanding the existing ones). Once bitten, twice shy.

Alas, in the case of senior U.S. national security officials, it seems they are many times bitten, still not shy.

Germany’s Free Democrats Are More than “Pro-Business”

The effort to form a coalition government in Germany may finally be coming to an end. Chancellor Angela Merkel’s original plan after last September’s election fell apart when the liberal Free Democrats (FDP) decided to not join a coalition due to the fiscally irresponsible demands of other parties. It’s unfortunate that major American media regularly refer to the FDP as “pro-business” (or occasionally “business-friendly”). See, for instance, the New York Times, the Wall Street Journal, the Washington Post, the Associated Press, and Reuters. It’s not exactly wrong, but it’s incomplete and misleading. The party would be better described as pro-market rather than pro-business, and it’s also liberal on such issues as gay marriage, marijuana legalization, the dangers of surveillance. It pushed its coalition partners, Merkel’s Christian Democratic Union and the allied Christian Social Union, to end conscription in 2011. 

In the United States such a party would be called libertarian, or maybe “fiscally conservative and socially liberal.” In the rest of the world it’s called liberal. A helpful description for American readers might be “the free-market liberal FDP.”

In this case Wikipedia does a better job than the journalists: “The FDP strongly supports human rights, civil liberties, and internationalism. The party is traditionally considered centre-right. Since the 1980s, the party has firmly pushed economic liberalism, and has aligned itself closely to the promotion of free markets and privatisation.”

A merely pro-business party might join the European People’s Party (along with most Christian Democratic parties) or the Alliance of Conservatives and Reformists in Europe (along with the Conservative Party of the United Kingdom) in the European Parliament. Instead it’s part of the Alliance of Liberals and Democrats for Europe, as well as the broader Liberal International.

The FDP has been part of a governing coalition for most of Germany’s post-1945 history, usually in coalition with the CDU/CSU but during the 1970s with the Social Democratic Party. It is the most pro-trade party in Germany, strongly endorsing projects such as the Comprehensive Economic and Trade Agreement between Canada and the European Union, and the Transatlantic Trade and Investment Partnership agreement between the United States and the EU (on hold since President Trump’s inauguration). It supports the EU but wants to demand more fiscal responsibility among EU member states. It rejects federal minimum wage laws, advocates more competition in heavily regulated industries and professions, and promotes a smaller and more efficient welfare state, perhaps with a negative income tax and individually funded health and retirement systems.  Because of its liberal social policies and support for entrepreneurship and globalization, the FDP did better among 18-to-24-year-old voters in last fall’s election than any other age group.

Unfortunately, the United States lacks a (classical) liberal party, one committed to freer markets and more personal freedom. Germany has one, and “pro-business” doesn’t capture its ideology or its appeal.


Fred Roeder is an economist from Berlin and chief strategy officer of Students For Liberty.

The Fourth Amendment Still Applies Online

The Fourth Amendment guards against unreasonable searches and seizures by requiring (with limited exceptions) that government agents first obtain a warrant before they go snooping around or confiscating someone’s property. But what exactly does this mean in the modern world of smartphones, wi-fi, and extended Socratic dialogues with Siri? If the New York-based U.S. Court of Appeals for the Second Circuit is to be believed, it means that the government can monitor and collect your internet traffic if this information is merely “likely” to be “relevant” to an ongoing criminal investigation.

That is exactly what happened to Ross Ulbricht, the creator of a website known as “Silk Road,” which enabled users to anonymously buy and sell goods and services. In the course of an investigation into illegal activities associated with the website, the government obtained five “pen/trap” orders authorizing law enforcement to collect IP (internet protocol) addresses for any internet traffic going to or from Ulbricht’s wireless router and other electronic devices. These orders were obtained in lieu of a warrant under a statutory “relevance” standard that falls well short of the Fourth Amendment’s requirement for probable cause.

How could this standard possibly not be constitutionally insufficient? The Second Circuit relied on the “third party doctrine,” ruling that there was no Fourth Amendment issue because users voluntarily conveyed their information to ISPs (internet service providers) and third-party servers, and thus assumed the risk that it would later be turned over without their permission or knowledge. This doctrine, which was developed in the days of pay phones and file cabinets, cannot be fairly extended to online activity given that internet access is—for all intents and purposes—a necessity of modern life for any functioning member of society. Recognizing this simple fact undermines any claim that users have somehow assumed the risk of disclosure to the government, which would have assumed that these users had any real choice in the matter to begin with.

The court also reasoned that because pen/trap devices only reveal IP addresses associated with the user’s online browsing, the collected information doesn’t count as “content” worthy of protection—despite the direct correlation between individual IP addresses and websites, along with the ample information that can be gleaned from knowledge of an individual’s browsing history. The court seemed to conclude that there was no content revealed because an IP address only uncovers the website visited rather than any individual webpage within that site. This superficial approach utterly ignores digital reality.

Finally, the court failed to recognize that the statute authorizing pen/trap data seizure imposes virtually no limits on government attorneys’ discretion. These orders are exceedingly broad in scope and available to nearly any government agency conducting a criminal investigation. Worse still, the court’s role in approving the orders is merely ministerial, with the statute mandating that “the court shall enter an ex parte order authorizing the installation” of these devices.

Because the Second Circuit has stretched both the third-party doctrine and the content/non-content distinction far beyond their logical limitations, Cato—along with the Reason Foundation, Competitive Enterprise Institute, and R Street Institute—has filed an amicus brief asking the Supreme Court to take this case and firmly establish that the internet doesn’t constitute some sort of Constitution-free zone.

The case is Ullbricht v. United States.

Washington Post Fact Check: Tax Cuts Didn’t Raise Federal Borrowing 84%

“Trump’s tax cuts are rocketing us into the debt ceiling,” wrote Catherine Rampell in The Washington Post on February 1, because “withholding from employee paychecks will drop starting no later than mid-February. Individual income tax revenue will therefore be about $10 billion to $15 billion less per month than the CBO previously estimated.” The suggestion that the debt crisis could be blamed on a mere $10-15 billion cut in monthly withholding got a Twitter shout-out from budget hawk Stan Collender, who must know that errors in monthly budget estimates are commonly larger than that.

This was followed two days later by Heather Long’s extremely misleading Washington Post story, “The U.S. Government Is Set To Borrow Nearly $1 Trillion This Year, an 84 Percent Jump from Last Year.” The article goes on to say, “Treasury mainly attributed the [$436 billion debt] increase to the ‘fiscal outlook.’ The Congressional Budget Office was blunter. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.” According to that link to another Post story, “CBO said that the tax law is expected to lower tax receipts by $10 billion to $15 billion per month. Even though the tax cut law went into effect January 1, the large drop in tax receipts didn’t kick in yet because companies won’t start using new withholding tables until sometime in February.” Fiscal 2018 began last October, so lower withholding tax can affect no more than 8 of the remaining months. Contrary to the Rampell-Long theory, the CBO’s revenue loss of $80-120 billion can’t explain her alleged $436 billion increase in Treasury borrowing.”

Where did all that added debt come from? What Ms. Long initially called “the exact” figure of $955 billion is later explained as “determined from a survey of bond market participants.” Asking about 23 bond dealers to guess Treasury “net marketable borrowing” is far from an official estimate, and it isn’t a measure of the deficit.

Trump’s Bombast On Iran & North Korea Makes War More Likely

Neatly defining President Trump’s foreign policy has never been easy, characterized as it is by contradictory impulses, fragmentary ideas, and strains of paradox. However, on the two most arresting national security issues at the top of Trump’s agenda—Iran and North Korea—his approach is plain: aggressive confrontation is good; diplomacy is bad.

The problem is that, even if Trump himself is not determined to go to war with either of these countries, he is making it far more likely.

Last month, Trump once again waived nuclear-related sanctions on Iran, consistent with our obligations under the Joint Comprehensive Plan of Action (JCPOA), the 2015 agreement that provided economic sanctions relief in exchange for Iran significantly rolling back its nuclear program and subjecting it to an intrusive international inspections regime. However, Trump vowed it would be the last time he acts to uphold the deal.

The president’s antipathy toward the JCPOA is not rational. Indeed, there is a virtual consensus—including the International Atomic Energy Agency (IAEA), our European allies, China, Russia, and the U.S. military and intelligence community—that Iran is complying with the terms of the deal and that it is working as designed. If Trump’s effort to upend the JCPOA leads to its collapse, it would unburden Iran from the deal’s restrictions and rob the international community of unprecedented visibility into Iran’s program.

In a New York Times op-ed marking 15 years since Colin Powell’s United Nations speech making the case for war with Iraq, retired Army Colonel Lawrence Wilkerson, who helped draft the speech as Powell’s chief of staff, warns, “the Trump administration is using much the same playbook [as the Bush administration did with Iraq] to create a false choice that war is the only way to address the challenges presented by Iran.”

Though Wilkerson uses the phrase “Trump administration,” it is important to note that most of the president’s own cabinet is not with him on this. Indeed, Secretary of Defense James Mattis, Secretary of State Rex Tillerson, National Security Adviser H.R. McMaster, Chairman of the Joint Chiefs Gen. Joseph Dunford, and Commander of U.S. Strategic Command Gen. John Hyten, among others, all believe that staying in the deal is in the U.S. national interest, while undermining it presents unnecessary risks. Indeed, these voices have successfully dissuaded Trump from withdrawing from the deal thus far.

Is Manufacturing Employment Something To Celebrate?

In his State of the Union speech, President Trump said, “Since the election, we have created 2.4 million new jobs, including 200,000 new jobs in manufacturing alone.” Is the latter good news?

Politicians seem to have a fetish for manufacturing. But economists tend to be unconcerned about the composition of employment across sectors.

Proponents of the virtues of manufacturing believe governments should actively seek to encourage it, as manufacturing has historically enjoyed fast productivity growth. They bemoan the large fall in manufacturing employment since 1979, arguing that if more resources and employment had been directed to the sector, faster growth and higher living standards would have resulted.

A new paper by Robert Lawrence suggests this reasoning is precisely backward. His evidence suggests there is a direct tradeoff between manufacturing employment and productivity growth.