April 2, 2020 4:57PM

Pandemics and Power: A Notebook

I’m a bit of a COVID-19 hawk myself — being exposed to a fatal load of virus particles by some well‐​meaning stranger in a shared public space seems to me a kind of physical aggression — but it is a truism that the moment the government begins asserting emergency powers, there is an invitation to abuse. Three examples in what’s all too likely to be a continuing series:

* Los Angeles Mayor Eric Garcetti said that if nonessential businesses were spotted operating during the shutdown order, he would tell the municipally owned utility, the Department of Water and Power, to shut off their service. Duly noted: when cities own and run utilities as L.A. does, they’ve got a really hard chain with which to yank you into line on unrelated control issues. Something to keep in mind next time some campaign tries to make “public power” look cuddly.

* From Singapore to Alsace to Sacramento and beyond, religious gatherings have been linked to outbreaks of the novel coronavirus. Notwithstanding the First Amendment’s protection of freedom to worship, existing precedent would probably direct courts to uphold a ban on religious assemblages amid a raging local epidemic so long as it were neutrally applied against gatherings of a similar level of public hazard. Leave it to New York City Mayor Bill de Blasio, however, to find the unconstitutional card to play by warning synagogues meeting in defiance of a coronavirus order that he might close them “permanently.”

No, Mr. Mayor. Even if courts let you keep them from convening just now, you don’t get to shut them down “permanently,” not in this country. When the emergency ends, as it will, their rights re‐​emerge intact.

* Also in Gotham, according to the city’s Daily News, the New York State Academy of Family Physicians is not letting a good crisis go to waste. It is “urging Gov. [Andrew] Cuomo to issue an executive order banning the sale of all tobacco products,” the excuse being that smokers, their lungs damaged by years of use, may be at more risk of severe consequences in COVID-19 infection. No mention of the possible public health implications of creating a sprawling, furtive new black market just as New Yorkers are asked to stay indoors.

April 2, 2020 4:55PM

Is Retail Marijuana Essential?

By Jeffrey Miron and Erin Partin

38 states and the District of Columbia are currently under statewide stay at home orders. While the specifications vary from state to state, the core elements are similar. Individuals are encouraged to stay inside except for essential trips, and only “essential” businesses – grocery stores, pharmacies, banks, laundromats – are allowed to remain open.

But what is an “essential” business? That question is at the heart of a campaign by recreational marijuana sellers in Massachusetts. Under the state order, medical marijuana dispensaries are deemed essential, but their recreational counterparts are not.

The Massachusetts policy makes little sense. Washington, California, Colorado, and several other states with legal recreational marijuana have deemed both medical dispensaries and retail stores “essential.” Liquor stores remain open, so access to mind‐​altering substances is not the issue either. One might believe that the marijuana from medical dispensaries is only about helping the sick, but most recreational users have little difficulty accessing “medical” marijuana. Thus the MA rule is pandering to prohibitionists.

In addition to this inequity, recreational sellers in Massachusetts face more serious risks than other small businesses. Since marijuana remains illegal under federal law, retail sellers are “ineligible for small business relief funds approved Friday by Congress and also cannot declare bankruptcy.”

Pandemic or not, prohibition is not the answer.

April 2, 2020 4:54PM

How the Telephone Consumer Protection Act Unconstitutionally Privileges Government Speech

In this time of crisis, the Supreme Court still soldiers on … somewhat. The Court cancelled its March oral argument sitting and will likely cancel the April one too. But petitions are still being filed–deadlines have been extended–and there are still cases to be decided. 

One of those cases concerns the Telephone Consumer Protection Act, a statute that is appreciated by many because it helps stop robocalls. The law makes businesses who violate the many consumer‐​oriented provisions liable to private lawsuit. This is no idle threat, either; in the last ten years 21 TCPA cases have settled for over $10 million. It is also a favorite of states’ attorneys general, who earn popularity for targeting the sources of unwanted calls.

The 1991 law was all‐​encompassing. Auto‐​dialers and pre‐​recorded calls were prohibited for political activists, local businesses, debt collectors, and charities alike. Unless a consumer has released their number willingly, they could not be called by such annoying methods. But in 2015, Congress passed a budget that contained an amendment exempting from the statute any calls made “solely to collect a debt owed to or guaranteed by the United States.”

That exemption engendered a constitutional challenge from the American Association of Political Consultants (AAPC), arguing that the law had become a content‐​based restriction that is presumptively invalid under the First Amendment. Content‐​based restrictions are those that ban speech based on the content of the communication. Calls to collect government debt are different from other types of calls because of what is said on the call. The Fourth Circuit agreed that the restriction was content based but oddly “fixed” that problem by striking down the debt‐​collection exemption, which means the statute now bans more speech than before.

The government petitioned the Supreme Court for review and the Court agreed to hear the case. Cato has filed an amicus brief in support of the AAPC. We argue that the exemption is a content‐​based restriction under any common‐​sense meaning of the term. Strict scrutiny is thus warranted partially because the exemption favors speech that benefits the government.

Content‐​based restrictions are heavily scrutinized by courts partially because the government is not a neutral party, and it will often pass laws benefiting a certain type of speech. Generally, the only way the government can do that is by having regulations that select between different types of speech based on the content of the communication. While this may seem like a small fight over robocalls, it’s important that the Court maintain a hard line on content‐​based restrictions. The government can’t play favorites when regulating speech because the government’s favorite is always the government.

April 2, 2020 3:46PM

Homeschooling During the COVID-19 Pandemic

As nearly one billion students around the world miss school due to the COVID-19 pandemic, parents suddenly find themselves working and learning alongside their children. While this is far from a typical or ideal homeschooling experience, it can provide an opportunity to nurture family relationships, explore new interests and skills, and get a glimpse of education without schooling.

In a recent three‐​part Cato Daily Podcast series, I spoke with host Caleb Brown about this unprecedented educational moment, including sharing strategies and resources for overcoming the challenges of unexpected, unchosen homeschooling, as well as possible outcomes as more parents seek alternatives to conventional schooling post‐​pandemic.

In the first episode, I explain that what families are experiencing right now is not authentic homeschooling. Most homeschoolers will tell you that they spend more of their time outside their homes than inside, becoming fully immersed in the people, places, and things of their community. With social distancing, all of us are separated from those community networks, mentors, classes, friends, local libraries, museums, and so on. As a homeschooling mother of four, I can tell you that this distancing is just as tough on our family as it is on families with children in a conventional school. We are all feeling the stress of separation and uncertainty, as we try to continue learning and working at home. I emphasize this point in the first podcast episode, suggesting that parents avoid replicating school at home and instead use this time to encourage their children to explore their passions and discover new ideas, using the vast network of free, online resources that are sprouting daily amidst the pandemic. If parents feel that they need to stick to a schooled routine and be the curriculum enforcer in their households, it could lead to mounting stress and frustration during a time when all of us should be focused on trying to minimize family stress and maximize health and well‐​being.

In the second podcast episode, I explain how the pandemic has loosened education‐​related regulations, including absolving some districts of compulsory attendance laws, waiving federal standardized testing guidelines, and prompting many schools to say that any coursework completed this spring will be optional. This regulatory pause can give families a chance to separate from standardized schooling expectations and instead explore the many learning resources available to them outside the conventional classroom. Parents may find, for instance, that plentiful online learning resources, including many high‐​quality, free ones such as Khan Academy and Duolingo, make it possible and pleasurable to facilitate their child’s learning without feeling like they need to be the teacher and curriculum designer. During this time at home, parents may also see that their children are discovering new talents, reading books that are meaningful to them, initiating projects, and otherwise rekindling a love of learning that may have been lost through forced schooling.

The final episode in the Cato Daily Podcast homeschooling series describes the history of the modern homeschooling movement, its changing demographics, and the wide variety of educational approaches and models that exist under the homeschooling umbrella. Drawing from insights from my Cato policy brief last fall, this episode also highlights the growing demand for educational choice and freedom—a demand that is likely to accelerate as parents disconnect from conventional schooling this spring. Education choice mechanisms, such as education savings accounts, can help to broaden the definition of education beyond schooling by enabling families to use a portion of public funds for tutors, classes, books, and curriculum materials, as well as tuition, to customize an education program that is right for each child. The regulatory and pedagogical flexibility of homeschooling allows for ultimate education personalization and experimentation, particularly as new hybrid homeschooling models emerge, and virtual learning and in‐​home microschools expand homeschooling access to more families.

Prompted by the COVID-19 pandemic, we may be on the brink of a massive educational reset. With families back in charge of their children’s education, free from the constraints of compulsory schooling, they may increasingly demand more educational choice and freedom. Some of these families will choose to opt‐​out of schooling altogether, inspired by the learning, growth, and reignited curiosity they witness in their children during this time at home. In his recent book The Politics of Institutional Reform, Stanford’s Terry Moe describes how the devastation and disruption of Hurricane Katrina in 2005 weakened long‐​held power structures and led to the creation of a nearly all‐​charter school system in New Orleans. The COVID-19 crisis, while terrible overall, may be another natural disaster that disrupts institutional control, empowers families, and reveals that children can be educated without being schooled.

April 2, 2020 1:37PM

The U.S.-China Propaganda War Over the Coronavirus

Fierce competing rhetorical barrages from Washington and Beijing about the coronavirus outbreak threaten to turn an already tense bilateral relationship utterly toxic. In a new Aspenia Online article, I discuss how both sides have acted in an irresponsible, inflammatory fashion.

An increasingly prominent narrative in the United States is that not only did the pandemic originate in China, but that Chinese officials withheld key information for weeks that could have enabled other countries to adopt measures impeding the spread of the deadly virus. Key conservative opinion leaders, such as Fox News host Sean Hannity and Arkansas Republican Senator Tom Cotton, made that allegation early on. It even gained some traction with media outlets that spurn more extreme accusations about China’s behavior. Indeed, the assertion has acquired enhanced credibility now that the U.S. intelligence community apparently reached the same conclusion. In late March, Secretary of State Mike Pompeo charged that China’s government was still withholding important information.

Beijing’s American critics also routinely refer to the coronavirus as the “Wuhan virus,” or even the “Chinese virus,” in an effort to whip‐​up greater public resentment against Beijing. President Trump himself used the latter label, which enraged Chinese leaders. Beijing demanded that Trump apologize. He declined to apologize, but he has now agreed to refrain from using that term.

The bilateral war of words has been escalating on multiple fronts. In an attempt to shift the blame for the global pandemic onto the United States, the Chinese government and state media began to promote the ugly assertion that Washington may have initiated the pandemic as part of a bioweapons program. Stories appeared in China’s media emphasizing the attendance of U.S. Army personnel at athletic games in Wuhan in October 2019, just before the first signs of the coronavirus began to appear. A furious Secretary of State Pompeo denounced the Chinese government for making such allegations.

The propaganda war is just one layer of the mounting animosity between Washington and Beijing about coronavirus issues. In a mid‐​March article published in Xinhua, the official Chinese news agency, one PRC official both alarmed and infuriated Americans when he seemed to threaten that his country might impose export controls to withhold antibiotics and other life‐​saving drugs from American consumers. Those controls, he stated, would plunge America “into the mighty sea of coronavirus.” His threat focused public attention in the United States about how the country is heavily dependent (in excess of 80 percent) on pharmaceutical ingredients from China. The heightened realization is driving a concerted media and congressional campaign to reduce that dependence on a less‐​than‐​friendly foreign power—and to reduce America’s dependence on foreign suppliers generally.

If there is a bright spot in the war of words between Washington and Beijing, it is that substantive bilateral cooperation on the coronavirus problem has continued despite the rhetorical fireworks. Still, it is likely that the highly public acrimony has done additional damage to an already fragile bilateral relationship that was deteriorating because of growing quarrels over such issues as Taiwan, the South China Sea, and trade policy. Both sides deserve blame for cynically seeking to score cheap propaganda points regarding a global public health crisis. The coronavirus pandemic should have underscored the need for and advantage of greater cooperation. Unfortunately, it appears to have done the opposite.

April 2, 2020 1:34PM

Jones Act Waiver Under Consideration to Bolster U.S. Oil Sector

The U.S. oil industry has certainly seen better days. Surging production by Russia and Saudi Arabia along with a sharp drop in demand due to the COVID-19 pandemic have pushed global oil benchmark prices to nearly $20 per barrel. The last time oil prices were that low Bill Clinton was president. Tomorrow the heads of several U.S. oil producers will meet with President Trump to make their case for some type of relief.

One of the measures reportedly under consideration is a temporary waiver of the Jones Act. It would be an excellent move. Such a waiver would cost taxpayers nothing while bolstering the oil sector’s flagging fortunes. It would also help realize Trump’s stated goals of placing America first, confronting the DC swamp, and deregulating an overburdened economy. If a fivefer is such a thing, this is it.

Passed in 1920, the Jones Act restricts the waterborne transportation of goods from one U.S. point to another to vessels that are U.S.-flagged, U.S.-built and at least 75 percent U.S.-owned and crewed. U.S.-built ships, however, are up to five times more expensive than those constructed abroad while the operating costs of U.S. ships are significantly higher than those under foreign flags. There also aren’t many of them. Of the tens of thousands of ships in the world, a mere 99 comply with the Jones Act’s restrictions. This combination of high costs and limited numbers makes for extremely high shipping rates.

Perhaps no one can better attest to this than U.S. energy companies. Jones Act shipping rates are so high that shipping a barrel of oil from Alaska to the Gulf Coast has been shown to cost three times more than shipping the same oil on a foreign‐​flag ship to the U.S. Virgin Islands (which are exempt from the law) despite the latter voyage taking twice as long. Jones Act‐​compliant ships are so expensive that oil can be shipped to East Coast refineries from Saudi Arabia for three times cheaper than sending it from the Gulf Coast.

As a result, Americans buy more Saudi oil and less U.S. oil, which must be instead sold to more distant customers. Last year California refineries even bought oil from as far away as Nigeria instead of Louisiana largely due to transportation costs. This is costly, inefficient, and hurts the bottom line of U.S. oil producers.

Even those who profit from the Jones Act admit to its high costs and distortionary effects. “Jones Act is more expensive. Everybody knows that,” said the CEO of Overseas Shipholding Group, which owns a number of Jones Act tankers, in 2017. “If there was not a Jones Act, then there probably would be more movements of crude oil from Texas to Philadelphia.”

If President Trump wants to place a needed shot in the arm of U.S. oil producers, a Jones Act waiver would be just the ticket. But to issue such a waiver the president would have to show that it is in the interest of national defense. Under U.S. law waivers on purely economic grounds are not allowed.

Fortunately, this should not be much of an obstacle. As the Wall Street Journal reported last month, at least one motive behind Russia’s decision to ramp up oil production is to harm U.S. shale oil producers. That would make this a geopolitical play by Moscow aimed at a vital U.S. industry. Reduced dependence on Saudi crude would also have obvious national security benefits. One doesn’t have to squint too hard to see the rationale for issuing a Jones Act waiver.

Unfortunately, while the logic for such a waiver might be impeccable, it also seems improbable. After all, we’ve been here before. Last spring President Trump was said to be leaning in favor of granting a Jones Act waiver that would have allowed New England and Puerto Rico to bring in shipments of U.S. liquefied natural gas using foreign‐​flag ships (no ships capable of transporting bulk LNG exist in the small Jones Act fleet). Once word got out though, Jones Act supporters—among Washington’s most powerful special interests—who benefit from the law’s high costs and limited competition dispatched several senators to the White House to pressure the president against such a move. Trump folded, and the waiver was never issued.

But with the nation’s economy reeling, perhaps common sense will finally prevail.

April 1, 2020 4:09PM

Employment in Federal Health Agencies

Some pundits are blaming the slow federal response to Covid‐​19 on budget cuts and supposedly shrunken federal bureaucracies. Bloomberg columnist Noah Smith claimed, “Recently, though, the U.S. has allowed its civil service to shrink and its salaries to become less competitive with the private sector, outsourcing many of the bureaucracy’s functions.”

However, budgets for the CDC and NIH have risen substantially, as I charted here. And while the claim about salaries is debatable, it is not correct that overall federal compensation including benefits is uncompetitive.

What about the size of the federal workforce? Smith includes a chart showing that the overall government workforce in the nation is declining as a share of the overall U.S. workforce. But a more relevant issue these days is the size of the federal health workforce.

The chart below shows the total number of employees in the NIH, CDC, and FDA from 1998 to 2019, sourced from OPM.

NIH employment dipped over the past decade but is a bit higher than 20 years ago.

CDC employment increased almost one‐​third over the past 15 years.

FDA employment soared two‐​thirds from 2007 to 2016 but has dipped slightly since then.

Are more employees better? The NIH mainly hands out grants to researchers, an activity in which productivity has probably increased as technology has improved. Thus, more workers would likely not be needed even as the budget increased.

As for the FDA, more employees may be a negative to the nation since one of the agency’s activities is to hinder the introduction of new medicines and devices. In this crisis, the agency’s blockage of private‐​sector virus testing was hugely damaging.

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Note: Data are for September of each year except 2019 which is June.

David Kemp assisted with this blog.