December 2018

December 31, 2018 3:34PM

Cato’s 2018 Immigration Research in Review

Cato’s immigration policy team was very busy in 2018.  My colleagues David Bier and Andrew Forrester, in addition to some contributions by myself and numerous outside authors like the stupendous Michelangelo Landgrave, worked non-stop to produce almost 180 pieces this year in the form of blog posts, op-eds, Cato research papers, and peer-reviewed academic articles.  David Bier summarized many of these pieces in a twitter thread for those on Twitter

Of those, I’m most proud of the pieces that discovered original facts and figures to illuminate the immigration issue.  With rare exceptions, the most valuable immigration policy research is that which produces original facts and figures, as too much of the debate over this topic is emotional and ungrounded.  We are trying to make the debate about the facts and contributing those that we have discovered on our own in the process. Below is a rundown of the original facts and figures that Cato scholars have calculated in 2018 by subtopic with links to our research.

The recent surge in immigrants along the border are low-skilled, poorly educated, and from Central America – but that doesn’t stop them and their descendants from learning English, converging to American wages, and joining the military at rates comparable to or higher than native-born Americans.

Border Security, the Wall, and Interior Immigration Enforcement
Much of the national immigration debate proceeds under the implicit and incorrect assumption that immigration enforcement only harms illegal immigrants. My colleague Matthew Feeney waded into the immigration debate with an excellent primer on how increased immigration enforcement, both at the border and in the interior of the United States, will infringe upon the civil liberties of American citizens and lawful permanent residents as well as an examination of legal protections that can help mitigate the lost rights.  Complementing Feeney’s paper is our finding, based on data from Travis County in Texas, that Immigration and Customs Enforcement (ICE) targeted at least 228 American citizens as illegal immigrants in that county over 12 years – or about 0.9 percent of all those detained

Related to interior immigration reform is the E-Verify program, which is an electronic eligibility for employment verification system run by the federal government.  Congress created it in an attempt to turn off the magnet that attracts illegal immigrants to the United States in the first place: higher wages and low unemployment.  In theory, E-Verify would allow employers to check the identity information of new hires against government databases to see if they are legally eligible to work and to deny illegal immigrants.  For years, members of Congress have introduced bills to make E-Verify a national mandate to be used whenever a business hires somebody – including American citizens. 

Four states have mandated E-Verify for all new hires, but only 56 percent of new hires in those states were run through E-Verify in the second quarter of 2017.  To be effective, a much higher percentage of new hires must be checked through E-Verify.  The four states that mandated E-Verify are Arizona, Alabama, Mississippi, and South Carolina.  Over time, the rate of new hires has barely budged in those states – even in South Carolina where the state conducts random audits of employers to supposedly guarantee compliance.  If those conservative states can’t effectively enforce an E-Verify mandate, there is no hope for doing so nationally. 

Our next piece of original research confirmed that California’s TRUST Act, which limited state law enforcement cooperation with ICE, dramatically reduced deportations from that state.  Although deportations from California were falling prior to the TRUST Act going into effect in 2014, deportations from California that year dropped 39 percent relative to 2013.  In the rest of the country, the number of deportations only dropped 9 percent over the same period.  

Much of the rest of our original research focused on border enforcement.  Republicans introduced a bill in 2018 to spend more on Border Patrol in the next five years than has been spent over the last 5 decades – in real terms.  A portion of that extra money would be spent on drones to patrol the border, an enforcement tool that has already been used on the border and is responsible for 0.5 percent of all border apprehensions at an astonishing cost of $32,000 per arrest.  Apprehended border crossers, whether discovered by drones or more traditional methods, spent an average of 39 hours in detention in late 2014 and 2015 or 12.8 million hours total.  Of course, all of this extra enforcement is unnecessary as the lesson of marijuana legalization on the state level shows that smuggling can more effectively be cut with better laws that allow cross-border flows rather than crackdowns

Part of the justification for more spending and technology on the border is that Border Patrol agents face severe threats on the job.  While they certainly do, it’s not nearly as dangerous as many assume.  Thirty-three Border Patrol agents died on the job from 2003 through 2017 or about one death for every 7,968 agents per year.  Six of those agents were murdered on the job while the other 27 died in accidents or in unknown circumstances.  Their on-the-job murder rate is about 1 in 43,824 per year from 2003 onwards, much lower than the 1 in 19,431 annual murder rate for Americans during the same time period.  Every one of those murders or deaths is a tragedy, but those rates do not indicate an exceedingly dangerous job.

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December 31, 2018 3:25PM

What Are the Expected Results of California Board Quotas?

Beginning in 2019, California is set to implement a new law that requires companies fill around 40 percent of corporate board positions with women.[1] This means California is following the lead of european countries including Norway, Belgium, France, Germany, Iceland, Italy, and Spain which have legislated similar reforms for corporate boards.

The California mandate may face federal and state legal challenges. However, assuming the law is implemented, observers will no doubt be interested to see whether it accomplishes its objectives. For example, will the law improve corporate leadership representation for women?

A study published today in The Review of Economic Studies sheds light on possible outcomes of California’s policy. The study reviews the effects of Norway’s 2003 reform which similarly requires companies fill 40 percent of corporate board positions with female directors, or be dissolved. As the study recounts,

“In theory, quotas can be an effective tool to improve gender equality… Because qualified women might be harmed by an absence of networks to help them climb the corporate ladder, quotas can provide the initial step up that women need to break this cycle. If discrimination is the key factor for the under‐​representation of women, quotas might help overcome business prejudice (and improve efficiency) by forcing more exposure to talented women in positions of power (Beaman et al 2009, Rao 2013).”

But rather than finding quotas improved corporate leadership representation for women, the study found quotas were helpful for the elite women that were appointed to corporate boards, but not female workers generally. For example, the authors find “no evidence of improvements for women working in firms most affected by the reform,” and board quotas were also not helpful to women who were qualified to be on boards but not selected for them.

Indeed, the authors find that “overall, seven years after the board quota policy fully came into effect, we conclude that it had very little discernible impact on women in business beyond its direct effect on the women who made it into boardrooms.”

In summary, if the law is intended to simply increase nominal women on corporate boards, this is likely to occur. But if California’s quotas are intended to help working women generally, or meaningfully change the trajectory of working women’s careers? If Norway is any indication, they probably won’t.

For more information on the results of corporate board quotas please see the Cato paper, The Nordic Glass Ceiling.

[1] Two female directors are required for boards consisting of 5 directors, and three female directors are required for boards consisting of 7 directors.

December 31, 2018 10:56AM

Fentanyl Test Strips

As explained here,

There is a new tool to help battle the opioid epidemic that works like a pregnancy test to detect fentanyl, the potent substance behind the escalating number of deaths roiling communities around the country.

The test strip, originally designed for the medical profession to test urine, can also be used off‐​label by heroin and cocaine users who fear their drugs have been adulterated with the synthetic opioid fentanyl. The strips are dipped in water containing a minute amount of a drug and generally provide a result within a minute—with one line indicating positive for fentanyl, and two lines negative.

The federal government opposes distribution of these strips:
The moves have encountered opposition. Elinore McCance‐​Katz, head of the federal government’s Substance Abuse and Mental Health Services Administration, said the approach relied on the flawed premise that drug users would make rational choices.
The government’s position, therefore, is that

diva) we have to outlaw drugs because people are not rational enough to use them safely;

b) if prohibition makes it difficult for users to determine potency and quality, that is unfortunate;
c) but if users respond to this uncertainty by taking steps that reduce the risks, we cannot trust them to do that since they might not get it exactly right.
And people wonder why we have an opioid epidemic.
December 28, 2018 5:21PM

NYT Report Pushes Credit Card Companies To Monitor Gun Buyers

To some of its advocates, the cause of gun control is precious enough to be worth jettisoning not just the rights protected by the Second Amendment but many other individual liberties, including — as recent New York controversies suggest — First Amendment rights of speech and association and Fourth Amendment rights against search and seizure. Now, if a New York Times article is any indication, comes the turn of financial privacy.

In an advocacy piece imperfectly dressed up as a news story, New York Times financial reporter Andrew Ross Sorkin observes that some perpetrators of mass public shootings have bought guns and ammo using credit cards, and asks why credit card companies and banks should not be made to stop this. How? Well, they could “create systems to track gun purchases that would allow them to report suspicious patterns” and “prevent [customers] from buying multiple guns in a short period of time.” Invoking the Patriot Act — you knew that was coming, didn’t you? — the piece goes on to ask why the sweeping financial‐​snooping powers bestowed on the feds by that act should not be deployed against everyday civilians who purchase more guns than would seem fit for them to buy.

The piece notes with apparent approval that “several payment systems — including PayPal, Square and Apple Pay — already [have] established rules that ban the sale of guns and gun‐​related items using their systems” but says no banks have done so. (Following an earlier Sorkin report, Bank of America and Citibank announced that they would discontinue relationships with gun companies — all part of the burgeoning movement that has been called financial no‐​platforming, in which payments providers like Patreon and PayPal, following pressure groups’ demands, refuse to serve lawful but disapproved clients and causes.)

While credit card companies have developed sophisticated real‐​time measures to prevent fraud, Sorkin notes, they have shown little interest in preventing customers from purchasing lawful products or reporting them to law enforcers for doing so. I feel I can speak confidently for millions of customers in saying that’s exactly how I would like them to handle things.

Sorkin’s report leans heavily on such sources as Kevin Sullivan, “a former New York Police fraud investigator who consults with banks as president of the Anti‐​Money Laundering Training Academy” — not exactly what I would deem a disinterested source, since the higher the stack of suspicious activity reports mounts toward the skies, the more business for him.

The piece mentions one reason gun dealers are reluctant to pass on to banks information about what products their customers buy: someone else might come into possession of the list and know to pitch guns to those names. It doesn’t spell out nearly as clearly what might seem a bigger fear about a who‐​bought‐​guns data file, namely that it would go a long way toward identifying owners once confiscation of existing weaponry gets on the table as a proposal. The ACLU may not care about gun rights, but as Sorkin concedes, one of its policy analysts gets to much the same point by a different route: “The implication of expecting the government to detect and prevent every mass shooting is believing the government should play an enormously intrusive role in American life.”

David French at National Review has gone deeper into the problems with the proposal, and rather than duplicate his points I will instead close by adding one more. Besides working directly on the willingness of some big companies to bend to progressive opinion, and inspiring new laws and regulations, there is a third mechanism: trial lawyers, who already sue multiple parties after mass shooting events, might pursue legal claims against credit card providers for facilitating the atrocities. Through the magic of confidential litigation settlement, image‐​sensitive big companies might then make big policy concessions to get out from under the resulting litigation risk and bad publicity — without anyone having had to enact a new law or regulation.

Arm‐​twisting payments handlers into monitoring and reporting on private citizens’ gun purchases? The time to say no is now.

December 28, 2018 4:53PM

Did Rand Paul Persuade Trump to Withdraw from Syria?

In the Washington Post, Josh Rogin warns us that “Rand Paul is quietly steering U.S. foreign policy in a new direction.” Indeed, the Post’s overwrought headline is 

Welcome to the world of President Rand Paul

Rogin goes on:

Several U.S. officials and people who have spoken directly to Trump since his Syria decision tell me they believe that Paul’s frequent phone conversations with Trump, wholly outside the policy process, are having an outsize influence on the president’s recent foreign policy decisions. The two golf buddies certainly are sounding a lot alike recently.…

Paul told CNN on Dec. 23 that he had talked to Trump about Syria and was “very proud of the president.” That night on Twitter, Trump quoted Paul as saying, “It should not be the job of America to replace regimes around the world… The generals still don’t get the mistake.”

If Paul did in fact persuade the president to withdraw U.S. troops from one of the seven military conflicts we’re currently engaged in, Bravo. He tried to keep us out of the Syrian conflict back in 2013. That’s not Rogin’s view, though. He grumbles:

Of course, there’s nothing wrong with a senator advising the president on foreign policy. Hawks such as Sen. Tom Cotton (R‐​Ark.) and Lindsey O. Graham (R-S.C.) do it all the time. But the Trump‐​Paul bromance is troubling because Trump may be taking Paul’s word over that of his own advisers. 

Well, presidents are allowed to choose their own advisers. But how is it “troubling” that Trump might take advice from Senator Paul, but it’s fine to take advice from Senators Cotton and Graham? And by the way, check the quote above: how is a president’s conversation with a member of the Senate Foreign Relations Committee “wholly outside the policy process”?

Of course, Paul isn’t responsible for the fact that Trump is unable or unwilling to set a clear policy, implement it in an orderly manner, articulate a defense of it without using “alternative facts” and words like “suckers,” and make an inspirational, presidential speech to troops in a combat zone. It’s better to withdraw from unnecessary wars inarticulately than to stay in them with a 500‐​page report.

Rogin concludes by bemoaning “dangerous … isolationism [and] retreat.” “Isolationism” is a term that the foreign policy establishment throws around any time anyone questions whether all seven wars are actually wise. The New York Times also uses the term, reporting that the Syrian withdrawal “has been condemned across the ideological spectrum,” “with the exception of a few vocal isolationists like Senator Rand Paul.” And a few realists and noninterventionists like my colleagues John Glaser and Christopher Preble. And about half the American people.

December 26, 2018 12:05PM

Off‐​Hours Marijuana Use

In the wake of Massachusetts’ recent marijuana legalization, 

State Senator Jason Lewis plans to introduce legislation next month that would prevent workers from losing their jobs solely for consuming marijuana on their own time.

Despite supporting marijuana legalization, libertarians should oppose this legislation.

First, employers should be free to fire employees for any reason, subject only to any contractual relation between the two.

In addition, leaving employers free to fire workers for off‐​hours use will enhance public support of legalization. A common concern is that employee marijuana use might generate work accidents or other unproductive behavior. Employers can address this concern, in part, by testing for at‐​work use.

But the line between off‐​hours and at‐​work use is murky, so creating a legal distinction will be messy. This implies on‐​going concern that some employees use at‐​work, weakening support for legalization.

Market dynamics, moreover, will discourage employers from testing for off‐​hours use unless such testing truly predicts employee productivity. Testing is costly, and if many employees find it annoying, employers who use it will face higher wage costs.

The right policy is therefore freedom for marijuana users and freedom for employers who, for whatever reason, prefer employees who do not use marijuana off‐​hours.



December 24, 2018 3:54PM

The American Idea Is Still Alive

Trying to stay positive in this season of rising trade tensions and plunging stock markets, I return to a Washington Post story from a few weeks ago by Jenna Johnson from Ohio, where a General Motors plant is likely to close in 2019. That’s obviously not positive news for workers, suppliers, and others affected by the plant closing. What was encouraging was the attitudes Johnson found when she interviewed people at an auto‐​parts store:

Eight miles northwest of the General Motors assembly plant expected to close next year, two workers and a customer at an auto‐​parts store pointed fingers: Americans just don’t want to drive small cars like those produced at the plant. Gas prices are low, making big vehicles even more attractive. And GM can get cheaper labor elsewhere.

But none of the three men pointed a finger at President Trump, who had promised residents here and throughout the industrial Midwest that he would stop the closure of factories. At one political rally in the area last year, he even urged residents to stay put and not sell their homes.

“It’s a company. Why should the president of the United States be allowed to tell a company what to do?” said Michael Hayda, 64, a former factory worker and a driver at the store who is registered as a Democrat and voted for Trump in 2016.

We sometimes forget that many Americans retain that old American regard for free enterprise and limited government. Others in the store had the same attitude:

His co‐​worker Bill McKlveen, another Democrat who voted for Trump, agreed and noted that auto‐​industry workers have been getting pink slips for decades, long before Trump took office.

And even a customer who would like to see Trump impeached said he doesn’t fully fault the president.

“There’s only one law we all obey, and that’s the law of supply and demand,” said Paul Niemi, 68, who fixes wood pallets for a living and was motivated by Trump to vote for the first time earlier this month, selecting a straight Democratic ticket in the midterm election.

Not everybody agreed. Factory worker Tara Gress complained, “It’s a big company. They don’t care. . . . It’s a business. We’re numbers. It doesn’t matter. All of the begs and pleads for this community, it’s not going to make a difference.” Still, those attitudes — plants are closing because of supply and demand, and it isn’t the president’s business to tell companies what to do — are part of what has given us the world’s most dynamic economy for most of the past two centuries. 

For all the talk about socialism, Americans still prefer free enterprise. It’s not good that 37 percent of Americans told Gallup they had a positive image of socialism, but 79 percent had a positive view of free enterprise and 86 percent of entrepreneurs.

In 2017 Gallup found that 67 percent of Americans believed big government was a bigger threat to the future than big business was. Only 26 percent picked big business, and 5 percent said big labor. And when it comes to presidents telling companies what to do, well, almost no one in the new Gallup poll thinks the federal government has too little power: just 8 percent, about where it’s been since 2002.

The men the Post interviewed in Warren, Ohio, display an American sense of life – an attitude of individualism, self‐​reliance, economic opportunity, and skepticism toward power and government. Something to appreciate in this season.