International Economics, Development & Immigration

September 3, 2019 10:14AM

VHA Doc’s 3,000 Errors, DHS Docs’ ‘Dual Loyalties’

It has been a rough news day for government-run health care. But not nearly so rough as government-run health care has been to its victims.

First, The Washington Post reports on the matter of Robert Morris Levy, a former pathologist at the Veterans Health Admininstration hospital in Fayetteville, Arkansas who repeatedly showed up for work intoxicated and who "VA officials say...made 3,000 errors or misdiagnoses dating to 2005." Levy showed up for work one day with a blood alcohol level of 0.4 percent, five times Arkansas' legal limit. He misdiagnosed patients who actually had cancer and whose cancers spread untreated for years, leading to their deaths. "Federal prosecutors charged Levy, 53, last week with three counts of involuntary manslaughter in the deaths of three veterans. VA officials now acknowledge that he botched diagnoses of at least 15 patients who later died and 15 others whose health was seriously harmed."

Veteran Kelly Copelin, whose neck and throat cancer went misdiagnosed by a VHA hospital for 13 months. Photo credit: Bonnie Jo Mount/Washington Post

Veteran Kelly Copelin, whose neck and throat cancer went misdiagnosed by a VA hospital for 13 months. Photo credit: Bonnie Jo Mount/Washington Post.

Levy continued to practice at the VHA for 15 years in part because, according to prosecutors, he easily defeated the agency's quality controls for pathologists. While his actual error rate was "nearly 10 percent, more than 10 times the normal frequency of mistakes by pathologists," Levy was able to make his error rate appear to be 0.7 percent or at times zero. So not only did the agency not fire him for showing up to work intoxicated (neither did Arkansas' medical licensing authorities, for that matter), the VHA paid him multiple bonuses atop his $225,000 salary while his lower-income patients endured unnecessary suffering and "horrible" deaths. Your tax dollars at work.

It would have been fairly simple for the VHA to adopt quality-control measures that Levy could not have defeated and that therefore would have identified his errors earlier and saved lives. But the VHA faces insufficient incentives to adopt such measures. It does not operate in a competitive market and neither the agency nor its employees face the same sort of liability for malpractice that private actors do. In a competitive market, these sorts of horrible consequences would damage a company's reputation and cause patients to flee. But the VHA is a near-monopoly government provider with a captive clientele who typically have no other options.  As for liability, Cato adjunct scholar Shirley Svorny writes

The 1946 Federal Tort Claims Act (FTCA) shields government-employed physicians from medical malpractice claims. This includes medical professionals who work for the Department of Veterans Affairs, the Indian Health Service, the Department of Defense, and other federal agencies. The FTCA makes the federal government responsible for defending federal employees when malpractice claims arise, and makes taxpayers liable for harm due to negligence...

Shifting liability for malpractice from physicians to taxpayers shields government physicians from underwriting and oversight by private insurers. Federal agencies, such as the Department of Defense and the Indian Health Service, do often create risk-management programs. Yet government agencies have less of an incentive to reduce the risk of negligent injuries than private malpractice insurers do, because the money at risk in a malpractice suit is a common resource (federal revenues), rather than a privately owned one. Because private malpractice insurers have more at stake in a malpractice suit than government agencies do, the government’s risk-management efforts are likely to be less rigorous. Indeed, federal investigators have found that in some cases, such as community and migrant health centers, the government is ill-equipped to provide risk management. In most cases, consumers would be better off were government agencies not to shield their physicians from malpractice immunity.

As an indication of whether the remaining incentives are enough to prioritize quality and patient safety, the Post reports:

Inspector General Michael Missal’s office in recent years has identified multiple VA physicians who continued to practice even after they were found to have compromised patient care. A report this year by the Government Accountability Office found weak systems for ensuring that problems are quickly addressed when a physician’s quality of care to veterans is compromised.

Veterans thus get hit by a double-whammy. The VHA has insufficient incentive to change -- that is, to save lives -- because killing veterans really doesn't affect the bottom line of the agency or of individual physicians. A single-payer, Medicare-for-All system would subject all Americans to the same double-whammy.

Second, the Post reports on a Journal of the American Medical Association article that alleges the Department of Homeland Security places unethical employment conditions on physicians who treat migrants in the agency's detention facilities. The authors of the JAMA article write:

[P]hysicians and other health professionals are often put into situations in which they cannot fulfil their obligations to their patients because of competing obligations imposed on them by detaining authorities; this is often referred to as the problem of dual loyalty. Given the reports of inhumane, overcrowded, and unsanitary conditions, including insufficient water and toilets, lack of clean clothing and bedding, high exposure to psychological stress, and poor medical care in many of the DHS processing and detention facilities, how can and should needed medical care for detainees be structured, especially given the dual loyalty challenges that emerge if physicians are employed by the agency in charge of detaining migrants?

First and foremost, health care professionals should insist on and adhere to clinical independence to ensure they are able to provide the highest standards of care that are in the best interests of the patient. This independence also demands that physicians and other health care professionals are not subject to retribution for reporting, both in medical charts and openly and transparently to authorities, including legislative oversight bodies, about their evaluations of conditions of detention that impede their patients’ health and the availability of quality medical care. Currently, all DHS employees, consultants, and subcontractors are required to sign nondisclosure agreements that are quite strict and clearly state that if violated, the person “…could be subject to administrative, disciplinary, civil or criminal action…” Such nondisclosure agreements could conflict with physicians’ primary duties to the health of their patients.

In addition, the Post reports, the U.S. Customs and Border Patrol refuses to provide flu shots to detained migrants, even though influenza has been a problem in its facilities and "at least three children died of the disease, according to autopsy reports." 

Yet this "dual loyalty" problem is just another manifestation of the same problem we see at the VHA. Each agency has interests that are different from and often conflict with those of their wards. The VHA and the doctors it employs value their patients but they also value stable budgets and job security. DHS, CBP, and their employees value national security but also stable budgets and job security. The main differences are: VHA employees care about their wards, while DHS and CBP employees are openly hostile to theirs; the VHA has a figuratively captive clientele, while DHS and CBP's clientele are literal captives; and yet, even so, the VHA probably does more to harm the health of its clientele. Such is the power of the principal-agent problem that it can overwhelm the agents' intentions to act in the interest of the principals.

The principal-agent problem appears in private-sector health care, too, where the interests of the insurer often conflict with those of the patient. (So does the interest of the physician, for that matter, and not only because of the insurer.) The solution to the principal-agent problem is to let principals (consumers) choose among different agents (health care providers). The resulting competition rewards health care providers who devise the best ways to align their interests with those of consumers. The reason the principal-agent problem is manageable in the markets for haircuts and auto repair is not that those services are less complicated than health care. It is because those markets are markets. In health care, government has defeated the market mechanisms -- principally, consumer choice and competition -- that would otherwise keep the principal-agent problem in check. 

There may be some scenarios where consumer choice and competition among health care providers may not work -- for example, when the patient is someone the government is holding captive. Better health care then becomes one more reason why the government should hold fewer people captive.

August 27, 2019 9:58AM

The Presidency Didn’t Get More Powers When Congress, to Its Discredit, Failed to Provide Relief to the Dreamers

In 2012 President Obama announced the policy known as DACA (Deferred Action for Childhood Arrivals), which provided lawful status to about 1.5 million people brought to the United States illegally as kids. In 2014, he announced a follow-up policy known as DAPA (Deferred Action for Parents of Americans and Lawful Permanent Residents). While there was no significant challenge to DACA, a group of states challenged the legality of DAPA. Cato filed amicus briefs in their support at the district court, circuit court, and Supreme Court. Throughout the litigation, Cato maintained that it supported DAPA as a policy matter—we were joined by several law professors along the way—but the president lacked the authority to pursue this change in the law unilaterally.

After Justice Antonin Scalia died in 2016, the Supreme Court split 4-4 on Texas v. United States, leaving an injunction against DAPA in place. After President Trump was elected, he announced DAPA’s termination and, eventually, a suspension of DACA. A number of plaintiffs, individual and institutional, argued that ending DACA was unlawful. In other words, the administration was required to continue enforcing DACA even if it thought it was unconstitutional (let alone if it simply wanted to reverse a policy determination). Several lower courts blocked the president from winding down DACA, holding that the executive branch failed to justify its actions. The Supreme Court has granted review to determine whether the rescission of DACA was lawful.

Having sat out the lower-court litigation, Cato has gotten back involved, with an amicus brief joined by Prof. Jeremy Rabkin and co-authored by Prof. Josh Blackman (also a Cato adjunct scholar). Once again we support DACA as a policy matter—and say so explicitly on the front cover—but, as with DAPA, the president can’t change the laws unilaterally. The appealed rulings are wrong because DACA goes beyond executive power under the Immigration and Naturalization Act (INA). But even if the Court declines to reach that holding, then the INA itself violates the nondelegation doctrine as applied here.

First, two general INA provisions can’t bear the weight of this foundational transformation of immigration policy, while DACA can’t be supported by any “implicit” congressional acquiescence either. Moreover, it shouldn’t matter if Congress has stood by idly when previous presidents exercised materially different deferred-action policies. These arguments are sufficient to confirm the attorney general’s conclusion that DACA is unlawful. But even if the Court disagrees—or declines to reach that issue—the executive branch still provided adequate grounds to justify rescission.

That is, second, the attorney general reasonably determined that DACA is inconsistent with the president’s duty of faithful execution. Admittedly, his letter justifying the rescission is not a model of clarity. But it need not be. This executive-branch communication provides, at a minimum, a reasonable constitutional objection to justify DACA rescission. Specifically, it invokes the “major questions” doctrine, which is used “in service of the constitutional rule” that Congress cannot delegate legislative power to the executive branch, as Justice Neil Gorsuch described in his dissent in Gundy v. United States this past June. Here, the Court should accept the executive’s determination of how to avoid a nondelegation problem: by winding down a discretionary policy.

Cato scholars support comprehensive immigration reform, of which a DACA-type policy is only one part. But we also have an interest in preserving the separation of powers that maintains the rule of law at the heart of the Constitution’s protections for individual liberty.

No president can unilaterally rewrite laws—in conflict with the laws passed by Congress and in ways that go beyond constitutionally authorized executive power. Nor does the president acquire more powers when Congress refuses to act, no matter how shameful the congressional inaction is. Such unlawful executive actions both set back prospects for long-term reform and, more importantly for a lawsuit, weaken the rule of law.

The separation of powers prevents the president from expanding his own authority. Those same dynamics ensure that a subsequent president can reverse his predecessor’s unlawful actions that self-aggrandize executive power. Reversing the lower-court rulings in Department of Homeland Security v. Regents of the University of California, which argument the Supreme Court will hear November 12, would restore the immigration debate to the political process—exactly where it belongs.

August 23, 2019 1:25PM

Homicides in Mexico Tripled But Fewer Mexicans Came Illegally

Since 2007, Mexico has seen a massive surge of gang warfare and violence unlike anything it has witnessed since the 1980s. Intuitively, this fact should lead more Mexicans to want to flee to the United States. Yet that hasn’t happened. In fact, illegal immigration from Mexico has all but disappeared. In 2019, Central Americans have now far outnumbered their more populous neighbor.

Figure 1 illustrates the relationship between the homicide rate in Mexico and the rate at which Border Patrol agents apprehended Mexicans. The number of apprehensions per agent is the best available measure of total illegal crossings because it controls for the level of enforcement. More agents will lead to more apprehensions without more crossings.

As violence dwindled in the late 1990s and early 2000s—from its peak of 21 homicides per 100,000 residents in 1986 to 8 in 2007—Mexican crossings fell precipitously as well, dropping from a 1986 peak of 510 apprehensions per agent to 60 in 2007. Suddenly, in 2008, the homicide rate jumped and remained at least twice as high as 2007, currently standing at three times the rate that year and the highest rate of the entire period. Yet Mexican illegal crossings continued to fall and have not returned. 

The most important change related to Mexican immigration to the United States was the large increases in temporary work visas issued under the H-2A agricultural and H-2B nonagricultural programs. Figure 2 shows the number of H-2 and H-2B workers admitted from Mexico for each year from 1979 to 2019. In the late 1990s, the number of guest workers admitted legally started to rise, and in the post-2009 recession period, they have skyrocketed. Now that workers have a way to cross legally, they don’t need to cross illegally.

Most of the uptick in violence in Mexico is from gangs. Guest workers allow normal Mexican workers to obtain enough resources to relocate their families or otherwise insulate themselves from the gang wars. It also makes more violent communities more tolerable if adequate food and shelter are not also an issue, leading fewer to seek to enter illegally. Overall, this economic-focused strategy has clearly succeeded, and as I point out in my recent policy analysis, Congress should look to replicate it for Central America.

August 15, 2019 2:49PM

President Trump’s DHS Sides with Cato on How to Measure Immigrant Welfare Use

The federal government released the final version of the public charge rule this week.  My colleague David Bier covered it extensively while some of our other Cato research on immigrant welfare use and how to reduce it was also prominently featured.  Unexpectedly, the published public choice rule contained a gem that seems to settle a long-running methodological disagreement between Steven Camarota of the Center for Immigration Studies (CIS) and myself on how best to measure immigrant use of welfare.

First, some background.  Cato has published two studies of immigrant welfare use since 2013.  Cato published the first such paper in 2013 that was written by Professor Leighton Ku, Director of the Center for Health Policy Research, and Brian Bruen, Lead Research Scientist & Lecturer in George Washington University's School of Public Health and Health Services, Department of Health Policy.  Their paper found that:

[L]ow-income non-citizen immigrants, including adults and children, are generally less likely to receive public benefits than those who are native-born. Moreover, when non-citizen immigrants receive benefits, the value of benefits they receive is usually lower than the value of benefits received by those born in the United States. The combination of lower average utilization and smaller average benefits indicates that the overall cost of public benefits is substantially less for low-income non-citizen immigrants than for comparable native-born adults and children.

Later in 2013, my former colleague Sophie Cole and I wrote another paper on how Congress could build a more effective wall around the welfare state by denying all benefits to non-citizens.  That paper relied on some of the original empirical research by Ku and Bruen.  Our ideas and others were eventually incorporated into an excellent bill introduced by Representative Grothman (R-WI) in 2018.    

Last year, we published another paper that updated Ku and Bruen’s work with some minor changes.  We expanded their analysis to the rest of the welfare state and presented findings that removed the controls from their first study.  We found that “[o]verall, immigrants are less likely to consume welfare benefits and, when they do, they generally consume a lower dollar value of benefits than native-born Americans.”

Each time we’ve published these papers, Steven Camarota or others have criticized them in print.  I’ve also criticized their work when they publish their immigrant welfare cost estimates.  Here are just some of the exchanges.  The most substantive outstanding methodological disagreement that remains between us was whether to count the welfare benefits used by individuals only or to include the welfare consumed by anybody in an immigrant-headed household too. 

We’ve long thought that counting individual-level welfare consumption was the best method as welfare consumed by native-born American spouses and children is not welfare consumed by immigrants.  Controlling for the unit receiving the welfare benefit is required to make apples-to-apples comparisons between native and immigrant welfare use.  Since households vary in size and many contain immigrants living with natives, looking at individuals is the best way to control for that.  Furthermore, a person’s eligibility for welfare and for determining the value of most welfare programs depends upon the applicant’s individual circumstances.

Camarota and CIS have long argued that the welfare consumed by an immigrant-headed household is the appropriate measure, even if that includes welfare consumed by some native-born spouses and children.  Camarota argues that some of that welfare spending only occurred because of the immigrant being present here.  This methodological choice matters quite a bit in the final analysis, with household measures reporting a higher welfare use rate and dollar value of consumed benefits while individual-level assessments generally find lower levels of benefit consumption.

The new public charge rule produced by President Trump’s Department of Homeland Security (DHS) sides with Cato on this dispute for the purposes of estimating future immigrant welfare use and for tallying past usage.  Here is just one example of what DHS wrote:


This final rule also clarifies that DHS will only consider public benefits received

directly by the alien for the alien’s own benefit, or where the alien is a listed beneficiary

of the public benefit. DHS will not consider public benefits received on behalf of

another. DHS also will not attribute receipt of a public benefit by one or more members

of the alien’s household to the alien unless the alien is also a listed beneficiary of the

public benefit.


This isn’t a surprise as academics measure welfare use on the individual level and DHS counts welfare use by looking at individual’s immigration statuses, not by the fanciful “immigrant-headed” method which is probably statistically meaningless.  However, it is nice to have President Trump’s DHS side with Cato’s methodological choices in evaluating immigrant welfare use.  I look forward to CIS changing its methods in future iterations of its immigrant welfare research.    





August 15, 2019 12:57PM

Macri Is the Only One Responsible for His Downfall

The Wall Street Journal described it as a “setback,” but the appropriate term is a “shellacking.” Mauricio Macri’s chances of being reelected in Argentina are pretty much over after he finished 12 points behind the Peronist ticket of Alberto Fernández and former president Cristina Fernández de Kirchner in Sunday’s mandatory presidential primaries. Even though Macri might still think he can make a miraculous comeback, the markets are already writing him off for the election in October. Thus, it’s not too soon to write his presidential obituary.

The case against Macri is straightforward. Nearly four years after coming to power, the economy is contracting, inflation is among the highest in the world, poverty is rising, and the country has once again been bailed out by the IMF. Even Macri’s sympathizers struggle to find positive data to support his case for reelection.

Granted, Macri inherited an economic mess after 12 years of populist rule by Fernández de Kirchner and her late husband Nestor. He won the election in 2015 by a slim margin. He didn’t have a majority in Congress. He had to face powerful unions. Furthermore, in the past one hundred years there has not been a single non-Peronist president that has successfully completed a presidential term.

Dismantling currency and price controls, cutting back subsidies, reducing overall spending, bringing the deficit under control, and taming inflation was not going to be easy. The question from the beginning was, what kind of approach would Macri adopt to reforms? He opted for gradualism. Macri was quick to lift currency controls and return Argentina to international bond markets, but he failed in cutting spending. Thus, the fiscal deficit remained high, taxes continued to be punitive, and high inflation endured.

In December 2016, one year after he came to power, the joke making the rounds was that Macri was a Harry Potter-style president: he could only survive while the magic lasted. Unfortunately, his ultimate act of magic was not pursuing structural reforms but indebting the country: public debt—both foreign and domestic—skyrocketed. Back then I warned in my weekly column in Costa Rica’s La Nación that sooner or later the magic will end.

The magic dust evaporated in May 2018 when the peso lost 20% of its value in a week. This was caused by a couple of unforced errors: the readjustment of inflation targets and the introduction of a new capital gains tax. Facing meltdown, Macri was forced to negotiate a bailout with the dreaded IMF—at $57 billion, the highest ever. Inflation soared due to the devaluation of the peso, and the economy went into recession. Even though Macri accelerated some spending cuts after the agreement with the IMF, he increased taxes and even reinstated price controls.

By the time he launched his campaign for reelection, it was difficult to call Macri a “reformist.” His main goal during his years in power has been to fight for his reelection. In the end, as Sunday’s result attests, it looks like he will not even achieve that.

August 13, 2019 12:48PM

E‑Verify Is Not an Effective Immigration Enforcement System, as Mississippi ICE Raids Show

Last week, Immigration and Customs Enforcement raided many meat processing plants in Mississippi and arrested 680 suspected illegal immigrants. The raids were front page news as some of their children were pleading on television for the government to release their parents. Political pundits were busy excusing the raids and calling for more or highlighting the plight of the families left behind and the supposed hypocrisy of immigration enforcers who aren’t targeting President Trump’s properties. 

Although the plight of families and discrepancies in enforcement based on possible political sensitivities is worth investigating, the long-term lesson from the Mississippi raids is that E-Verify does not stop the hiring of illegal immigrants. Mississippi passed a mandate that required all firms to run all new hires through E-Verify at the point of hire as of July 1, 2011. According to the promises made by E-Verify proponents, there should have been zero illegal immigrants employed in Mississippi – yet ICE had to raid some plants there. Rather than showing the strength of government immigration enforcement efforts, the raids in Mississippi show that E-Verify mandates are incapable of preventing illegal immigrants from working. 

This post will explain how E-Verify functions (I won’t say “works”), how illegal immigrants get around the system, how immigration restrictionists want to reform E-Verify, and why the real solution is increasing legal immigration.


E-Verify is a government system whereby employers enter the identity information of new hires into an online portal. The system compares these data with information held in the Social Security Administration and Department of Homeland Security databases. The employee is work authorized if the databases decide that the data are valid. A flag raised by either database returns a “tentative non-confirmation,” requiring the employee and employer to sort out whatever error has been flagged. If the employee and employer cannot correct the errors, the employee receives a “final non-confirmation” and the employer must terminate the worker.

The states of Alabama, Arizona, Mississippi, and South Carolina have mandated E-Verify for all new hires. Arizona was the first state to mandate it on January 1, 2008, South Carolina mandated it on July 1, 2010, Mississippi on July 1, 2011, and Alabama on April 1, 2012. In those four states, the law demands that every employer must run every new hire’s identity information through the E-Verify system. Cheerleaders for the E-Verify system, who have repeatedly presented it as a silver bullet that will solve illegal immigration, have yet to confront the reality that this system did not prevent the hiring of illegal immigrants in Mississippi or too many other places.

How E-Verify Fails

E-Verify’s bark is worse than its bite. After the Arizona government first mandated it in 2008, the illegal immigrant population of Arizona fell dramatically until illegal immigrants discovered how to get around the system. Since then, E-Verify mandates have had negligible effects on illegal immigrant populations in states where it was mandated. Don’t take my word for it. Former Arizona state Republican Senator Rich Crandall said that E-Verify “was the great hope that never was . . . it was promised as the silver bullet to immigration problems. E-Verify was going to solve our challenges with immigration.”

The first reason E-Verify fails is that illegal immigrant workers use other people’s identification to get work authorized. If an illegal immigrant gives a legal person’s identification to their employer to check through E-Verify, the system approves the identification – which means the illegal worker is approved. Many of these workers pass by using stolen identities, as in the case of the Mississippi raids, but many also “borrow” identities from willing lenders. This is an illustrative example:

An unauthorized immigrant from Zacatecas, Manuel had first settled in the San Francisco Bay Area and sought work in construction. However, because the construction industry in San Francisco is unionized, Manuel had discovered that potential employers would check his I-9 form with E-Verify, a federal database that matches Social Security cards and names. So Manuel contacted an uncle in Zacatecas who had obtained a Social Security card in the early 1970s when he had first migrated to California—to ask about using his card. His uncle, who had returned to Mexico permanently with no plans to reenter the United States, agreed.

When next applying for work, Manuel presented his uncle’s Social Security card and a fake legal permanent resident card (green card) bearing his uncle’s name—which he had purchased from a local vendor—to the employer. The employer, in turn, was able to verify that the SSN was on file with the Social Security Administration (SSA) and that it matched the uncle’s name. This ploy allowed Manuel the luxury of finding work in a sector of the economy normally closed to the unauthorized. In entering a unionized construction job, Manuel benefited from more comfortable work conditions and employer-provided benefits. Moreover, in contrast to what he had earned in agriculture—typically about $25,000 a year—Manuel was able to earn $60,000 to $80,000 a year in construction.

It's difficult enough to stop identity theft, and virtually impossible to stop it when the person voluntarily lends his identity to somebody else.

The second reason E-Verify fails is that states don’t enforce their mandates. In 2017, only 45 percent to 53 percent of all new hires in Mississippi were run through the E-Verify system despite the universal mandate (some data sources report slightly different numbers). The majority of the plants raided actually used E-Verify, including the Peco Foods plant in Bay Springs that stated that it “adheres strongly to all local, state and federal laws.” Mississippi’s E-Verify compliance rates are the lowest of all states with mandates, but its compliance rates aren’t too dissimilar from other states with mandates. If Arizona, Mississippi, Alabama, and South Carolina won’t enforce their own E-Verify mandates on the state level, there’s no hope that the federal government will do a better job nationwide.

The cynical public choice-influenced economist in me thinks that E-Verify is popular among immigration restrictionist politicians because it doesn’t work but it makes the politician look like a tough enforcer. Thus, many will get the political benefits of being an immigration restrictionist without forcing their districts to pay a heavy economic cost. 

After all, very few interior immigration enforcement methods will be effective, so they might as well pick the ones that don’t impose enormous costs on valued constituents. That probably explains why only a handful of businesses were shut down in Arizona despite the legal authority to do so, and they were all bankrupt anyway. Essentially, the I-9 program and E-Verify incentivize illegal immigrants to use other identities to get valuable jobs. If there was no I-9 or E-Verify requirement then the demand for fake identities among illegal immigrant could collapse and the black market in documents would crater.

Although the evidence is slim, one of the potential ways in which E-Verify might lower the cost of enforcement is by helping ICE conduct worksite and I-9 audits from a distance. If that’s true, and that’s a mighty big if, that is a slim benefit compared to the silver bullet program that was supposed to turn off the wage magnet attracting illegal immigrants

E-Verify Doesn’t Work – Now What?

There are a couple of ways to make E-Verify less of a total failure. The first is to attach biometrics to it, such as linking state driver's license pictures to the federal identity database and forcing employers to check those at the point of hire. Arizona, Maryland, Wyoming, Wisconsin, North Dakota, Mississippi, Florida, Idaho, Iowa, and Nebraska are already participating in the RIDE initiative that links state photo identification to federal databases accessed by E-Verify. This increases employer responsibility and opens them up to a wide variety of lawsuits over workplace discrimination. Furthermore, it only works if the worker is using an identity with a driver's license or other state photo identity. 

The second way to make E-Verify less likely to fail is to link it with some form of a national identity card that likely includes biometric information like fingerprints. Everybody in the United States would have to be issued one of these and present them at the point of hire in order to exclude illegal immigrants from employment. Many immigration restrictions like Dan Stein of the Federation of American Immigration Reform already favor a national biometric identity card, but their goal is much easier to politically achieve if half-way measures like E-Verify are fully mandated and fail. 

When President Ronald Reagan's first attorney general, William French Smith, argued for a national ID card to limit illegal immigration, the president reportedly scoffed, “Maybe we should just brand all the babies.” The prospect of a national ID card that includes our individual biometric data is terrifying. Nothing good will come from such a system, but plenty of bad things could happen as a result of it. It’s best to oppose E-Verify now rather than see it fail in a nationwide mandate and then be replaced by a national biometric identity card. Immigration restrictionists should go back to the drawing board and come up with something that works. 

Reducing Illegal Immigration

The only way to reliably reduce the incentive of some employers to hire illegal immigrants is to allow more immigrants to work legally in the United States, either temporarily on guest-worker visas or permanently on green cards. The government has dramatically increased the number of H-2 visas for temporary workers from Mexico while the number of Mexicans crossing the border illegally has collapsed – probably because they can now enter legally. 

Since the big expansion in H-2 visas around the Great Recession, the stock of Mexican workers in the United States has continually fallen as some of those who leave are replaced by legal workers. Reforming H-2 visas so migrants can work in year-round occupations such as meatpacking and dairy, as well as expanding H-2 opportunity to people in other countries will further reduce the flow of illegal immigrants and, eventually, their stock. 

More visas reduced Mexican illegal immigration in the 1950s and early 1960s and they’ve been doing so for almost 20 years. It's time to bring back a proven system for reducing illegal immigration and ignore quick-fix technological schemes like E-Verify that overpromise, underdeliver, and require other expensive policy reforms to become marginally effective.


The raids in Mississippi show that E-Verify is a weak and failed program. If E-Verify lived up to its expectations, those workers would never have been employed in Mississippi in the first place. Immigration restrictionists might complain that the E-Verify laws weren’t well-enforced, but that’s silly, as illegal immigrants are here working because the immigration laws aren’t well-enforced either. The current version of those laws can’t be well-enforced without doing significant economic damage and violating the civil liberties of tens of millions of people. Expecting E-Verify to enforce itself and eliminate the incentive to work here illegally is the triumph of wishful thinking over reality. As the Mississippi raids show, immigration restrictionists need to ditch E-Verify and go back to the drawing board if they aren’t going to embrace liberalized legal migration. At a very minimum, E-Verify's biggest supporters should acknowledge the failure of their program in Mississippi.

August 13, 2019 10:45AM

Don’t Cry for Me, Democratic Socialists

When debating socialists, it often feels as if you’re trying to hit a moving target.

Socialism in action, in the words of Robert Lawson and Ben Powell, “sucks.” But as my former colleague Kristian Niemietz explains through a litany of historical examples, countries once claimed to show another way is possible are quickly dismissed as “not real socialism” when things inevitably turn sour.

Debating socialism is more complex still in the contemporary United States. That's because today’s self-declared “democratic socialists” are trying to re-define what socialism means entirely.

Gone is the lofty aim of collective ownership of the means of production and exchange. Instead, democratic socialism à la Bernie Sanders and Alexandria Ocasio-Cortez combines a commitment to a massively expanded welfare state with a range of microeconomic interventions, support for alternative business-ownership models, labor market regulation, and economic planning in pursuit of environmental goals.

When asked where this "democratic socialism" has been tried and worked, Sanders, Ocasio-Cortez and others cite Scandinavian countries such as Denmark. The Nordic economies are said to happily combine an extensive welfare state with good social outcomes.

But while Scandinavian countries have extensive social insurance, they are robust market economies that spurn highly intrusive economic controls and regulations. That’s why in 2015, the Danish Prime Minister made clear: “Denmark is far from a socialist planned economy. Denmark is a market economy.”

In Sweden, good social outcomes and low inequality predated the welfare state. There is lots of evidence that there the economy grew much more slowly between the 1970s and 1990s when the state was more economically interventionist (as I outlined on Fox Business when prominent democratic socialist Bhaskar Sunkara highlighted that era as something to aspire to). Indeed, Johan Norberg has explained how Sweden has fundamentally shifted away even from a democratic socialist model in recent decades.

If contemporary Nordic economies are not “democratic socialist” then, do any other countries indicate what the American fate might be under these types of policies?

A recent J.P. Morgan research note broadened the search and:

looked for countries that, relative to the U.S., are characterized by:

  • Higher personal and corporate tax rates, and higher government spending
  • More worker protections restricting the ability of companies to hire and fire, and less flexibility for companies to set wages based on worker productivity and/or to hire foreign labor
  • More reliance on regulation, more constraints on real estate development, more anti-trust enforcement and more state intervention in product markets; and a shift away from a shareholder-centric business model
  • More protections for workers and domestic industries through tariff and non-tariff barriers, and more constraints on capital inflows and outflows

It concluded:

I couldn’t find any country that ticked all these democratic socialist boxes, but I did find one that came close: Argentina, which has defaulted 7 times since its independence in 1816, which has seen the largest relative standard of living decline in the world since 1900, and which is on the brink of political and economic chaos again in 2019.

My Cato colleague Marian Tupy once outlined the dramatic decline in relative Argentinian economic performance over the 20th century in this summary table below.


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The country is of course in the news today due to economic turmoil triggered by its unexpected election result. Its currency is plunging and the economy is in deep recession with high unemployment and inflation at nearly 56 percent.

True, Argentina hasn’t suffered the complete and utter economic and social collapse experienced by "real socialism" in Venezuela, the Soviet Union, North Korea et al. But its economic model has led to a prolonged and fairly dramatic decline. That’s why Jeff Miron and I have described “democratic socialism” as the “scenic route to serfdom.”