Archives: 05/2019

Tariffs Won’t Stop Illegal Immigration and Could Backfire

President Trump  announced that starting on June 10, the administration will impose a 5 percent tariff on all Mexican imports “until Mexico substantially stops the illegal inflow of aliens coming through its territory.” This tariff would escalate by 5 percent per month to an astonishing 25 percent “permanently” by October 1. This idea is a terrible policy. It will punish U.S. consumers with higher prices, and it could easily result in more illegal immigration.

Tariffs will undermine the Mexican economy and lead to more illegal immigration from Mexico.

Mexico’s exports—$195 billion to the United States—account for 38 percent of its GDP. Imposing a 25 percent tariff would make trade with Mexico unprofitable. For context, the U.S. currently has a 25 percent tariff on pickup trucks which virtually bans foreign-made pickups, as only 0.23 percent of U.S. pickups are foreign-made. An end to U.S.-Mexico trade would trigger mass layoffs in Mexico—particularly in northern Mexico. Consequentially, the Mexicans that are unemployed due to Trump’s tariffs would look to the United States for work, increasing illegal immigration and exacerbating the very problem Trump aims to ameliorate.

Indeed, President Trump is so focused on stopping immigration from Central America, which has now overtaken Mexican illegal immigration, that he has forgotten that for nearly a century, Mexicans dominated those flows. A 5 percent tariff by itself would be more than double the pre-North American Free Trade Agreement (NAFTA) tariffs, so Trump is effectively terminating NAFTA in less than 2 weeks, which would devastate the Mexican economy. This would undoubtedly cause layoffs and create Mexicans looking for work north of the border again.

While NAFTA initially may have led to more illegal immigration as Mexico’s economy adjusted, its economy has now grown to the point that Mexican immigrant population in the United States has remained flat for almost a decade, and the illegal population from Mexico has fallen by 1.5 million, meaning that more Mexicans are leaving the United States than entering it. If Trump effectively terminates NAFTA with his tariffs, a reversal of these immigration trends is a very real possibility.

The threat of Mexico closing the border will keep illegal immigration from Central America high this summer.

In normal times, illegal immigration slows in June when temperatures reach dangerous levels and falls until February. Indeed, history shows that apprehensions fall 24 percent on average from May to July. But if Central Americans believe that Mexico might suddenly close the Guatemala-Mexico border, they will likely come to the border regardless of the additional risks—undoing the seasonal pattern of illegal immigration.

We know that immigrants react to the threat of border closures. In late 2016, Trump’s election disrupted this seasonal pattern as immigrants rushed to the border to beat his inauguration based on the (unfounded) fear that Trump would end asylum. Then, in October, Trump threatened to “close the border”, but his threat only scared immigrants to migrate before the seemingly imminent border closure. Indeed, 2018 and 2019 are the only two instances in which January apprehensions were higher than the previous May’s numbers since 2003. June 2017 was the first time on record that numbers rose in June. With the more effective transportation network now, it’s entirely possible that Trump could again break these seasonal patterns and keep illegal immigration higher than it would have otherwise been.

Mexico could retaliate on immigration in a big way.

The Mexican government is already helping carry out D.C.’s agenda south of the U.S. border. Since FY 2014, the Mexican government has apprehended 692,476 Central Americans. It has stopped fast-tracking humanitarian visas for Central Americans traveling into Mexico. It is accepting thousands of Central Americans back into its country while they wait for asylum hearings north of the border. It has attempted to set up a migrant “containment” belt with federal forces at the Isthmus of Tehuantepec—the shortest point in Mexico. It is intercepting migrants trying to reach legal U.S. ports of entry. President Trump doesn’t appreciate these efforts, but he would regret it if Mexico loosened its policies to punish him for his tariffs.

The United States is unlikely to receive any major concessions from Mexico.

So far, Mexico has not promised to fulfill any of Trump’s latest demands, and it’s difficult to imagine why they would. Trump keeps moving the goalposts and is demanding that Mexico control not just its own actions with respect to enforcement, but also the actions of Central Americans.

Moreover, Trump has already tried to force Mexico to adopt a “safe third country” agreement that would allow him to boot Central Americans requesting asylum back into Mexico without a hearing. But the internal politics in Mexico will never allow it to allow nearly 500,000 Central Americans to be deported back to its northern cities. Tijuana already experienced major protests last year over homeless Central Americans who the U.S. blocked from crossing. Mexico will not accept a deal where the United States makes Central American migration 100 percent their problem. It will bet, hopefully correctly, that the White House really doesn’t want to end trade with Mexico, just as it didn’t want to “shut down” the border with Mexico earlier this year.

Shallow Fakes

We live in a Manichean political world where every person and institution is said to be either good or evil. Facebook used to be in the good column; since November 2016, they are listed among the evil ones, oddly by both left and right. The truth: Facebook is a tremendously successful and innovative business that nevertheless makes mistakes. But beyond making its users happy, Facebook also does good. By defending free speech, for example, at a difficult time.

The case may be familiar to you. (The fact that the case is likely familiar to you is important as we shall see). Recently, someone created a distorted video of House leader Nancy Pelosi (D-CA). Many thought the distortions suggested Pelosi was drunk. She was not. The video warped her image for political purposes (or perhaps, just for fun). More bluntly, the speech in question – the edited video – was a lie.

The question is not whether political speakers lie. They do and always have. Of course, everyone believes their team upholds truth while the other team lies. As Morrisey sang, “Everyone lies, nobody minds.” Well, everyone minds the other team’s lies and somehow ignores their own.

Political speech comprises lies, truth, and much uncertainty. Who should decide which speech falls into which category? Not the elected officials and unelected bureaucrats we call “the government.” The First Amendment and the courts preclude the government from determining truth (and lies). Elected officials want to be popular and win re-election; speech critical of them works against attaining those goals. Elected officials tend to see such criticism as “lies.” I would if I were an elected official. So would you. The incentives are terrible. Censorship would be a natural response. Hence we have a First Amendment, an unnatural state-of-affairs undergirded in the United States by fifty years of tradition, that is, of judicial doctrine.

So who separates truth and lies (and the in-between) in our unnatural state of free speech? Listeners, citizens, and voters. That’s our democratic faith, or our liberal faith, or whatever you want to call it. It’s a real source of national pride, our unnatural state of speaking freely. It’s a foundation of any American nationalism worth honoring.

But people do lie, and the lies can have terrible consequences.  True enough. But our liberal faith and our unnatural state have an answer to lies: more speech. Consider the Pelosi incident. More speech revealed the lie in the video almost immediately. It is true that humans are lazy or uninterested and ignore the revelations of “more speech.” Or they seek only information that confirms their hatred and prejudices. In other words, listeners, citizens and voters often fail to live up to the demands of our liberal democratic faith. To remedy that failure shall we thus turn to “truth seeking” politicians who are too often thin-skinned and ambitious?

With social media we have a third player involved, the companies (above all, Facebook) that own and oversee these platforms for speech. The companies have a right to, and sometimes do, suppress speech on their platforms. The answer to their mistakes in this regard is…more speech. But the companies also rise to the occasion at times by defending our democratic faith in free speech. In the wake of the Pelosi incident, Facebook decided to leave the Pelosi video up on its platform. Monika Bickert, their head of content moderation at Facebook, affirmed that those who heard and saw the video should decide its truth or falsity. The alternative would have been Facebook taking down the video in the name of truth (and against lies). There are many problems with that alternative, not least Facebook would find itself fighting with, or subordinate to powerful politicians like Ms. Pelosi. So the company left the ultimate judgment to citizens and voters. They followed, in short, the American way.

But many people apparently do not like leaving judgments about truth to “more speech” and to Americans. Bickert was pilloried. For her part, Ms. Pelosi said Facebook acted as “willing enablers of the Russian interference in [the 2016] election.” To be blunt again, she accused Facebook of treason.

But Monika Bickert was the real American here, at least judging by our long tradition of free speech and respect for the intelligence of citizens and voters. That tradition is under fire. Perhaps it always has been. But we might wonder if our political class is abandoning freedom of speech.

Many on the right have decided that Carl Schmitt is correct when he wrote “politics is constituted by the distinction between friends and enemies.” The tech firms are perfect “enemies” for the populist right: filled with “woke” young people, located in California, and using technology few understand. The left has been abandoning free speech for a long time because “the corporations started winning” First Amendment cases. They also often judge constitutional rules by their effects on friends and enemies. In the name of that harsh doctrine, both right and left are abandoning the older faith that Americans have the right and the ability to discern truth from lies.

But there are still genuine conservatives and real liberals out there who believe in free speech. Last week Facebook paid a hefty price to be their friend.

This piece also appears at Tech Dirt.

Natural Rights vs. Human Rights: The State Department’s New Commission on Unalienable Rights

Yesterday afternoon we learned from Politico that the State Department had just “quietly published” in the Federal Register a notice that the department intends to establish a Commission on Unalienable Rights. Its aim, as the notice states, is to

provide the Secretary of State advice and recommendations concerning international human rights matters. The Commission will provide fresh thinking about human rights discourse where such discourse has departed from our nation’s founding principles of natural law and natural rights.

The Politico report goes on to cite human rights activists and former State Department officials worrying “that talk of the ‘nation’s founding principles’ and ‘natural law’ are coded signals of plans to focus less on protecting women and LGBT people.” And critics note also, correctly, that “the Trump administration’s record on human rights so far is spotty at best.”

Still, properly undertaken, this commission could help correct confusions at the core of modern human rights thinking and policy, many of which were highlighted in a new book we featured at a Cato forum a year ago, Aaron Rhodes’ The Debasement of Human Rights: How Politics Sabotage the Ideal of Freedom. Shortly thereafter, Dr. Rhodes and I summarized those issues with a piece at National Review.

In a nutshell, the modern human rights movement took shape in the aftermath of World War II, with the creation of the United Nations and the drafting of the U.N.’s 1948 Universal Declaration of Human Rights. As we wrote in the National Review piece:

Arising from political compromises between post-war progressives and some of the world’s worst tyrannies, the UDHR bows simply to “inherent dignity,” making no mention of natural law or natural rights. To be sure, it lists rights in that tradition. But it goes on with a list of so-called economic and social rights — to jobs, housing, “periodic holidays with pay” — which today dominate human-rights debate and practice.

Unlike natural rights to freedom, which require only that we be left alone, these economic and social rights, if rights at all, are not universalizable. They’re created by legislatures, requiring endless redistributive schemes. And as demand for them grows, governments grow and liberty yields. More sinister still, the original compromises that elevated these rights to the status of human rights have enabled totalitarian regimes to sit at the human-rights table. After 70 years, a toxic hypocrisy poisons the debate. Russia, China, Cuba, Islamic theocracies, even North Korea boast about their often illusory economic and social programs as evidence of human-rights compliance and their own legitimacy.

We have here, in short, a textbook example of how confused thinking, coming out of the Progressive Era, has led to confused policy, and worse. In fact, the Politico article notes that Kiron Skinner, Secretary of State Pompeo’s director of policy planning and the commission contact listed in the Federal Register notice, “drew criticism recently for seeming to suggest that China, a rising power, is such a fundamentally different culture from the United States that arguments about human rights may not have much effect in dialogue with Beijing.”

But there is truth in that suggestion. As I showed in a chapter on China’s Constitution in Cato’s 1998 book, China in the New Millennium, unlike in the natural rights tradition, which begins with the individual, the socialist tradition—and, in fact, progressivism too—begins with the group, its agenda carried out, in countries like China, through the Communist Party. On that understanding, “human rights” are not innate and unalienable but rather are a function of that starting point. Thus, as I wrote in that chapter, “a careful reading of [the Chinese Constitution] will show that the ‘law’ provides virtually no protection for individual rights, notwithstanding its use of the language of rights.” Indeed,

Article 51 sets out a general defeasance clause: “Citizens of the People’s Republic of China, in exercising their freedoms and rights, may not infringe upon the interests of the state, of society, or of the collective.” Given that those “interests” are boundless in principle, and vague besides, any claims that individuals might have against the state can always be trumped as a matter of constitutional law. It should hardly surprise that the Constitution elevates the interests of the state above the rights of the citizen. After all, the whole point of the Constitution is to order affairs—including the affairs of individual citizens—toward the goal of building socialism. Given that all-encompassing end, it stands to reason that individuals should not be permitted to act in ways that might compromise the end. In fact, when they do, their acts are branded as “counterrevolutionary” and subject to suppression (Article 28).

If this new commission can refocus America’s human rights thinking and policy on America’s first principles, grounded in our unalienable natural rights, the implications are far reaching, not only for the rest of the world but for America itself.

Yet Another Excuse to Raise Tariffs

Back in March, I wrote: “The Trump administration seems to be looking for every possible excuse to raise tariffs.” Yesterday they found another one. As the Washington Post reports:

President Trump on Thursday said he would impose a 5 percent tariff on all goods entering from Mexico unless it stopped the flow of illegal immigration to the United States, a dramatic escalation of his border threats that could have sweeping implications for both economies.

The White House plans to begin levying the import penalties on June 10 and ratchet the penalties higher if the migrant flow isn’t halted. Trump said he would remove the tariffs only if all illegal migration across the border ceased, though other White House officials said they would be looking only for Mexico to take major action.

After the 5 percent tariffs are imposed on June 10, the White House said it would increase the penalties to 10 percent on July 1 and then an additional 5 percent on the first day of each month for three months. The tariffs would stay at 25 percent “until Mexico substantially stops the illegal inflow of aliens coming through its territory,” a statement by the president said.

The President’s statement makes clear that this action is taken pursuant to the International Emergency Economic Powers Act. You can learn all about that statute in a good CRS report here. This is not something I’ve studied in depth before, but at first glance, it looks like the statute gives the president broad authority, making a court challenge to this action difficult; it also allows Congress to terminate a president’s action through a joint resolution, if Congress were so inclined (the reaction from members of Congress today is going to be really interesting).

As for the immigration part, these actions seem like a bad approach to me, but I’m sure my Cato immigration colleagues Alex Nowrasteh and David Bier will have more to say. With regard to trade policy more broadly, Trump is opening another front in his (many) trade wars. Acting White House Chief of Staff Mick Mulvaney seemed to be trying to minimize the prospects of trade damage when he said this: “These are not tariffs as part of a trade dispute. These are tariffs as part of an immigration problem. USMCA is a trade matter and completely separate.” But the reality is that these tariffs create a brand new trade dispute, and they will make passage of the USMCA (the renegotiated NAFTA) very difficult in Mexico, with good reason: What exactly is the point of a trade agreement to eliminate tariffs if a trading partner is going to impose tariffs anyway?

Perhaps the overarching trade policy lesson here is simply this: Trump really likes tariffs. It’s not a particularly deep lesson, but it’s a lesson nonetheless.

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The Simon Abundance Index ® 2019

“Is it OK to still have children?” That’s a question that bothers the environmental consciousness of Congresswoman Alexandria Ocasio-Cortez (D-NY). Comedian Bill Maher thinks that he has the answer. “The great under-discussed factor in the climate crisis is there are just too many of us and we use too much s*#t. Climate deniers like to say, ‘There’s no population problem, just look out the window of an airplane. So much open space down there.’ But it’s not about space, it’s about resources. Humans are already using 1.7 times the resources the planet can support,” he recently noted. There are plenty of legitimate topics in the debate about the health of the planet, but overuse of resources is not one of them.

Humanity’s impact on the planet is deep, but that does not mean that Earth’s future is hopeless. The loss of biodiversity, as the U.N. report recently found, could become a problem, but that can be mitigated by greater urbanization and higher yield crops, thus enabling people to leave an ever-increasing portion of the countryside to flora and fauna. Pollution of rivers, lakes and oceans, which is partly driven by overuse of fertilizer and pesticide in agriculture, could be mitigated by genetically-modified crops that require little of either. Overabundance of carbon dioxide in the atmosphere and the threat of global warming could be mitigated through nuclear power production.

The one concern that we believe people do not have to worry about is the overuse of resources. Late last year, we co-authored a study titled, The Simon Abundance Index: A New Way to Measure Availability of Resources. In that paper we looked at the prices of 50 foundational commodities covering energy, food, materials and metals. Between 1980 and 2017, our findings showed, resources have become substantially more abundant. Our calculations confirmed the insights of the University of Maryland economist Julian Simon who observed in his 1981 book The Ultimate Resource that humans are intelligent beings, capable of innovating their way out of shortages through greater efficiency, increased supply, and the development of substitutes.

To arrive at our conclusions, we have come up with four new concepts: Time Price, Price Elasticity of Population, the Simon Abundance Framework and Simon Abundance Index ®. Today marks the second installment in what we hope will become an annual update of the relationship between population growth and resource availability. As was the case last year, we have looked at the prices of 50 basic commodities tracked by the World Bank and the International Monetary Fund (see Figure 1). The Simon Abundance Index ® 2019 covers the time period between 1980 and 2018.

Federal Subsidies Spur Massive Fraud

One of the problems with federal hand-out programs is that individuals take advantage of them and scam artists outright loot them. You see this in programs such as Medicaid, Medicare, school lunches, earned income tax credits, housing aid, student loans, and farm subsidies.

Daily Beast writer Evan Wright has the appalling story of Christopher Bathum, who looted addiction-treatment funds made available by the Obamacare law. The law required addiction-treatment funding by Medicare, Medicaid, and private insurance companies.

Addiction is, of course, a huge problem, but to me Wright’s article indicates that the wrong solution is throwing federal money and mandates at it. The costly Americans with Disabilities Act also played a role in Bathum’s scam.

Here are excerpts from Wright’s excellent story:

He’s a convicted sexual predator who targeted women in his care. Soon he’ll be tried for an alleged $176 million insurance fraud. He’s an exceptionally bad person, but as a businessman he was fairly typical of rehab operators in America’s $42 billion-a-year treatment industry.

His name is Christopher Bathum. Until his arrest in 2016 he ran Los Angeles-based Community Recovery, among the fastest growing rehab chains in the nation. Starting with a single treatment center in 2012, Bathum grew Community Recovery into two dozen facilities in California and Colorado, with 400 beds, medical clinics, a testing lab and a Hollywood art center and café, where patients could work and express themselves creatively.

… The most astounding aspect of Community Recovery was its price. It was free, sort of. Some were charged ten or twenty thousand dollars to enter. Many others were given scholarships. Though it turned out Community Recovery bought insurance policies for patients without telling them. To those desperate for help or a place to sleep, the details of how they got in hardly mattered. It was free enough.

The Affordable Care Act made sweeping changes to the recovery industry, which went into effect in 2012. After decades of denying coverage, insurance companies were required to pay for treatment, and at rates comparable to coverage for major illnesses. The net effect for addicts was that virtually anyone could get a policy, and it would cover up to about $3,000 per day for the first 30 days of treatment, or roughly $100,000 a month. To rehab owners, addicts, no matter how broke or hopeless, suddenly were gold mines, potentially worth up to $100,000 if they could wrangle them into treatment.

The recovery boom was on. Community Recovery was one of hundreds of new rehabs that opened in Southern California. So many popped up that the hundred-mile stretch of coastline from Orange County to Malibu was nicknamed “Rehab Riviera.” Similar booms took place in Florida and in the more ski-friendly parts of Utah. While Affordable Care made it possible to get treatment in any state, apparently many addicts when given the choice would rather try to get sober in scenic areas than in fly-over places like Pittsburgh or Omaha.

… Community Recovery was a luxury rehab for the people. Many patients lived in hilltop mansions with pools and spas. It abounded with fun activities—surfing, hiking, yoga, paintball fights, go-kart racing, zip-line adventures, and (pseudo) Native American healing sessions that Bathum led in smoke-filled teepees.

… In late 2015 LA Weekly reporter Hillel Aron published an astonishing exposé. It revealed that Bathum never finished college and faked his persona as a psychotherapist. Prior to running rehabs, Bathum had been a pool-cleaner. He had four felony convictions for committing fraud on eBay. He had a major drug problem, meth and heroin. A few weeks before Aron’s story ran, Bathum had overdosed in a Malibu motel while shooting drugs with patients. There was a photograph of Bathum being loaded into an ambulance during his overdose. Aron unearthed a lawsuit filed by a former patient from Seasons in Malibu who claimed Bathum offered her drugs in exchange for sex. Patients from Community Recovery stepped forward to say Bathum had sexually assaulted them. Some told their stories on 20/20. Bathum went on 20/20, too, and gave an absurd, seemingly methed-out interview in which he denied their allegations and claimed the photo him overdosing at the motel was a simple case of identity theft.

All of it should have led to the immediate shut-down of his rehab. Hundreds of patients remained in his care. Authorities did nothing.

… Bathum’s rehabs operated under a perverse legal loophole: he ran them as unlicensed “sober living homes.” As such, they were protected by the Americans with Disabilities Act, which included an obscure provision that gave recovering addicts status as a protected class. Their inclusion as a protected class was done to prevent neighborhoods from discriminating against recovering addicts who wanted to live together in “sober living homes.” Such homes were defined as places where no medical treatment or therapy could be offered. But since the Americans with Disabilities Act prevents state agencies from inspecting sober living homes, it’s nearly impossible to know what’s going on inside them.

… His behavior was outrageous, yet Bathum exemplified a unregulated industry. The Affordable Care Act poured money into an already broken system. Industry revenues jumped from slightly more than $20 billion to about $42 billion today.

 

More Breakfast Science to Sink Your Teeth Into

A newly-published study on 5,000 British children reveals that those from higher socioeconomic groups or from white backgrounds perform more exercise than do children from lower socioeconomic groups or from certain ethnic backgrounds including Indian, Pakistani, Bangladeshi and Black Caribbean/African. The amount of exercise correlated inversely with levels of overweight and obesity (i.e., the more exercise a child took, the slimmer they were likely to be).

Not mentioned by the authors of the study is that their data also correlate inversely with the consumption of breakfast (children from lower socioeconomic groups tend to skip breakfast more than do children from higher socioeconomic groups).

The cereal companies like to claim that the association of breakfast-skipping with overweight and obesity means that eating breakfast makes a person slim. That is a false claim. Indeed, experiments show repeatedly that eating breakfast increases the numbers of calories a person ingests.

Socioeconomic status is the great determinant of weight in children, and children from higher socioeconomic groups tend to take more exercise and eat healthier food and lead more ordered lives (which includes eating breakfast), while children from lower socioeconomic groups tend to take less exercise, eat unhealthier food, and lead more chaotic lives (which promotes breakfast-skipping). The association of breakfast-skipping with overweight and obesity, therefore, is only an association, and children from higher socioeconomic groups are slimmer despite their ingestion of breakfast, and children from lower socioeconomic groups are larger despite skipping breakfast.

The cereal companies exploit this paradox to promote the consumption of an unhealthy meal. Which is regrettable.

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