Here’s a quick Cato Daily Podcast chat with Neal McCluskey about the recent teacher uprisings in Oklahoma, Colorado, Arizona, Kentucky, and West Virginia. How justified are they?
Cato at Liberty
Cato at Liberty
The Republicans have so forgotten how to control spending, even when they try something conservative it is not really conservative. Consider the House GOP’s proposed reforms to the food stamp program in the upcoming farm bill.
The GOP wants to put work requirements on a small share of food stamp (“SNAP”) recipients. The Congressional Budget Office says: “starting in 2021 certain SNAP recipients must either be employed or in a state-government-sponsored training program unless they qualify for certain waivers. CBO estimates that this provision would reduce spending on benefits by $9.2 billion over the 2019–2028 period because it would cause some people to lose eligibility.”
That sounds like a good change, and change is needed in this program. Spending on food stamps doubled under President Bush then doubled again under President Obama, as shown in the chart below. It rose from $18 billion in 2001 to $80 billion in 2013. It has since dipped to $68 billion, but we are in the ninth year of an economic expansion so it should have fallen much more.
Anyway, the GOP bill would trim food stamps $9.2 billion over 10 years, or less than $1 billion a year. But here is the next line in the CBO report: “The federal government’s administrative costs for this provision would increase by $7.7 billion over the same period.”
The GOP plan would blow most of the cost savings on new bureaucracy! The rest of the savings would be consumed by other spending increases, according to the CBO. The scorekeeping agency finds that the plan would create an overall increase on food stamp spending over 10 years of $0.5 billion.
There are no net taxpayer savings from the Republican food stamp plan. Democratic Representative Colin Peterson said of the plan, “It mystifies me how the party that doesn’t like government wants to make it so much bigger.” Me too! Except, as I discuss here, most Republicans like government and want to make it bigger.
The proposed food stamp changes may induce some people to get jobs and job training, but federal job training programs have a poor record. Also, what the GOP envisions as $1 billion a year in spending on food-stamp job training, liberals are already pushing to make $4 or $5 billion.
The GOP food stamp changes would shuffle the deck chairs, but the CBO finds that the reduction in government dependence would be relatively tiny. By 2028, “the SNAP caseload under the bill’s proposed work requirement would be lower by about 1.2 million people in an average month than it is under current law, or about 3.7 percent of the total caseload.”
The GOP farm bill needs some real cuts—both to farm subsidies and to food stamps. Real cuts are the topic of this farm study and the focus of this Friday forum on Capitol Hill. As for food stamps, a good start would be to cut $15 billion on junk food.
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As all dedicated Alt-M readers know, I am a big fan of the Canadian banking and monetary system that flourished between Canada's Confederation in 1867 and the outbreak of the First World War. Besides thinking it was a darn good system, I also regard it as the best example, together with Scottish banking during the first half of the 19th century, of a "free" (that is, largely unregulated) banking system.
But was the pre-WWI Canadian banking system really a "free" banking system? Although Canada's commercial banks were free from many sorts of regulatory restrictions imposed on banks elsewhere, during its "free banking" era, all of Canada's banks were "chartered" banks, where, as Stephen Williamson observed in a recent twitter exchange, Parliament had to approve each charter. "To me," Stephen wrote, "that seems like a severe entry barrier."
And so it may seem to most people. Yet a closer look at the facts suggests a different and changing picture. Despite banks' need to secure Parliamentary charters, entry into Canadian banking was relatively free until at least 1890, when stiffer bank capital requirements made it harder for prospective new entrants to qualify for a charter. Canadian bank mergers were in turn made easier by the Bank Act of 1900. As a result of these two changes the number of Canadian banks fell dramatically over the course of the first quarter of the 20th century, making it increasingly less appropriate to treat Canada's banking system as an example of "free" (in the sense of "laissez-faire") banking.
Charters before and After Confederation
Although prior to Confederation the chartering of any sort of corporation in Canada was technically a Royal Prerogative, British authorities were generally inclined to ratify charters granted to banking companies by Canadian authorities, provided those charters conformed to certain regulatory provisions the British authorities favored (see Shearer 2005). But it wasn't until the 1840 Act of Union, uniting the colonies of Upper and Lower Canada into a single Province of Canada, that uniform regulatory provisions were first settled upon, which were to be imposed both on newly-formed banks and on established ones as conditions for having their charters renewed.
It was while these terms were in effect, in 1854, that the Canadian-American Reciprocity Treaty was signed, giving a big boost to Canadian trade, and generating a corresponding increase in applications for bank charters. According to Byron Walker, General Manager of the Canadian Bank of Commerce and former president of the Canadian Bankers Association, between 1855 and 1866, inclusive, "more than twenty-five charters were granted," with fifteen new banks actually coming into business.
Confederation in 1867 brought with it the necessity of framing a general bank act for the newly established Dominion of Canada, a version of which was adopted in 1870, and then revised in 1871. The revision made the Canadian Parliament responsible for both the granting and decennial renewal of bank charters.
The necessity of a charter certainly distinguished the Canadian system from its Scottish counterpart, for although three chartered banks took part in the latter system, it also included over 30 unchartered banks, most of which issued notes, and many of which were joint-stock companies. However, as Walker explains in his 1896 History of Banking in Canada, the distinction wasn't as important as one might think:
In Canada, we have had one section of the people who have been so enamored of freedom that they have desired to see banking as well as other privileges reduced to the mere necessity of applying for incorporation under a general act, together with subscription of the smallest amount of capital which seemed possible to propose. But, as a rule, people of British origin want merely all the liberty which is compatible with freedom from license. So that while, in the main, Parliament has clung to its prerogative of refusing a charter if it chose to do so, during 50 years at least, it would not have dared to exercise the power except in the event of a clearly fraudulent application for a charter. Nor would it dare, although it has the power, to give special privileges to any one bank.
To drive home the point, Walker compares the Canadian situation to that of the U.S., where the National Bank Acts allowed banks to be established anywhere without need for a special charter.
In the United States, a certain number of individuals having complied with certain requirements -- more numerous and complicated, by the way, than the Canadian requirements -- became thereby an incorporated bank, if we regard the consent of the Comptroller of the Currency as a matter of form. In Canada, when a certain number of individuals have complied with certain requirements, they are supposed to have applied for a charter, which Parliament theoretically might refuse, but which, as a matter of fact, would not be refused unless doubt existed as to the bona fide character of the proposed bank. Then, as in the United States, on complying with certain other requirements and obtaining consent of the Treasury Board (performing in this case the same function as the Comptroller of Currency in the United States), the bank is ready for business.
Other Perspectives
Readers may well doubt that we should take an established Canadian banker's word for it when he tells us that entry into banking in Canada was practically as open as it was in the U.S. But Byron Walker was hardly the only person who thought so. Here, for example, is the opinion of R.M. Breckenridge, a highly regarded historian of Canadian banking (he was commissioned to write the National Monetary Commission volume on The History of Banking in Canada) who, though a Canadian and a businessman, was not himself a banker. In Breckenridge's 1895 book on The Canadian Banking System, he says that
The disposal of bank charters, has never been marked by the fraud or partizanship which make the record of some of the American commonwealths so discreditable in this respect... . Yet charters have been easily obtained, too easily obtained. Since confederation forty-four charters have been granted, and only five proposed charters reported on adversely... . Twenty of the forty-four have been forfeited for non-user. ... Any new bank may now be chartered as soon as the projectors convince the disinterested committee of Ministers and heads of departments known as the Treasury Board, that their intentions are honest and that they have financial backing. A favorable report by the Treasury Board or the House Committee on Banking and Currency makes the bill a Government measure and ensures its passing. The Canadian banks have enjoyed no monopoly against the entrance of new competitors bona fide into banking, nor have the shareholders profited from investments in stocks which others might not obtain.
Writing in 1910, when (as we shall see), the Canadian banking system had already begun a process of consolidation, American economist Joseph French Johnson (1910, p. 86) observed, in his own National Monetary Commission volume, that, although "Some critics insist that the difficulties in the way of establishing a new bank are so great that the existing banks practically possess a monopoly," the criticism was still "not altogether justifiable." "A dozen or more new banks have been chartered since 1890," Johnson observed, "and there is no evidence whatever that Parliament has refused a charter to any set of deserving incorporators."
The Beginnings of the End: Canadian Banking Consolidation
But while entry into the Canadian banking system may be said to have long been relatively free when Walker, Breckenridge, and Johnson wrote about it, a sea change was underway. The change was a result of two modifications to Canada's banking laws. The first was the implementation of stricter minimum capital requirements included in the the Bank Act of 1890. That provision required, not only that banks meet a $500,000 capital requirement, but that that capital be fully subscribed within a year of the granting of the charter, and that at least one-half of those subscriptions be paid in, before the Treasury Board would grant the bank a certificate authorizing it to commence business.
These provisions marked a substantial change from those of the previous Bank Acts. Although the 1871 Act had also required banks to have at least $500,000 in subscribed start-up capital, only $100,000 of that amount had to be paid up. Moreover, as John Turley-Ewert points out in his excellent dissertation on the history of the Canadian Bankers Association (p. 14, n 55), because government authorities never bothered to enforce the provisions, in practice capital requirements appear to have been "meagre rather than substantial," and especially so since the 1871 Act imposed no requirements at all on private bankers, who therefore "successfully competed with the chartered banks through the 1870s and 1880s." Besides raising the paid-in component of bank capital requirements, the 1890 Act also sought to give the law some real teeth.
Despite one notorious failure, involving the Ontario-based Farmers of Canada,[1] the new law appears to have largely achieved its intended purpose of limiting bank entry. Breckenridge himself understood the new capital requirement to be
a legal step in the direction of making the organization of new banks more difficult. No new bank has entered the field since 1885. ...Of the fourteen banks chartered in 1883 to 1893 inclusive, only five could comply with the requirements of the Bank Act and actually began business; three of the five have already been put in liquidation, two in 1887 and one in 1893. It may be expected that hereafter both people and Parliament will be disposed closely to scrutinize applications for new charters. The enthusiasm for new banks...has abated... . The tendency of the number of banks to remain stationary, or even to diminish, so pronounced in English and Scotch banking,[2] is thought a factor of considerable influence in the Canadian situation.
The second modification, included in the Bank Act of 1900, was in itself a step in the direction of more rather than less freedom in banking, consisting of the relaxation of what had been a very strict policy regarding Canadian bank mergers. Before 1900, it took an act of Parliament to authorize a merger, just as it took such an act to grant charters to new banks; Parliament was not, however, inclined to approve of mergers. The 1900 revision allowed any bank to acquire another bank's assets without Parliamentary action provided the merger was approved by the Governor in Council pursuant to a recommendation of the Treasury Board. Consequently mergers become much more common: whereas from Confederation until 1900 only seven bank mergers occurred, the period between 1900 and 1926 witnessed another 27.
Because of these changes, and as Breckenridge had anticipated, the number of Canadian banks fell rapidly. In his 1929 book, The Banking System of Canada, Benjamin Beckhart observed that "The tendency toward fewer and larger banks has been perhaps the outstanding characteristic of the banking structure of Canada within recent years." While the number of Canadian banks peaked at 41 in 1885-6, Canada still had 38 banks a decade later, when Walker and Breckenridge penned their respective histories. In 1910, when Johnson wrote, the number had fallen to 29; and he had no doubt that it would fall further:
The tendency in Canadian banking...is unmistakably toward combination. The chartered banks possess no monopoly now, but the situation is such that the large banks have a great advantage over the small ones and seem destined to get most of the new business that will be created in Canada in coming years. Their prestige assures their branches are welcome in every new community. No business is too large for their resources, and none is so small as to be despised. They are able to open more new branches than their small competitors, and can much better afford, if need be, to operate them for a time at a loss. It will not be surprising, therefore, if Canada has fewer banks ten years hence than now (Johnson 1910, pp. 134-35).
By 1914 there were, in fact, just 22 chartered banks; and by 1935, when the Bank of Canada was established and granted a monopoly of note issue, only 10 were left. Because the decline reflected both a lack of new entrants and mergers, it brought with it a greater concentration of assets in a handful of banks, with the four largest in 1929 holding 77% of the total (Beckhart p. 328).
In short, by the time the Bank of Canada took over, Canada's private currency system could no longer be regarded as an essentially "free" system, differing only in degree from the Scottish system in its pre-1845 heyday. For this reason Canada's era of (relatively) free banking is best regarded as lasting only until 1914 at the latest, when consolidation, though already underway, had as yet left the system's operating principles fundamentally unchanged.
Banking without Sin
What ultimately doomed free banking in Canada, even before the advent of the Bank of Canada, was Canadian authorities' growing unwillingness to tolerate any risk of depositor or banknote-holder losses in connection with bank failures, even when those failures posed no macroeconomic threat. The government may first have hoped that stiffer capital requirements would rule-out losses stemming from bank failures. But when three banks failed between 1890 and 1900, and two of those failures -- those of the Banque Du Peuple in 1895 and of the Banque Ville Marie, in 1899 -- resulted in substantial depositor losses, its hopes were disappointed. The government's subsequent decision to encourage bank mergers was supposed to serve as an alternative and more palatable means for winding-up failing banks. Until the advent of deposit insurance many decades later the combined effect of these steps was to all but guarantee a gradual move towards banking-industry oligopoly.
The lesson here seems obvious enough. In banking as in other enterprises, genuine competition is a matter of creative destruction, where the "creative" part calls for relative ease of entry, while "destruction" means that badly managed banks are allowed to fail, even if that means that creditors sometimes bear losses. The occasional liquidation of individual banking firms, and the losses suffered by those firms' shareholders and creditors, are part of the cost of having a robust and stable yet nonetheless dynamic banking system. If they go too far in their attempts to avoid such costs, regulatory authorities could end up undermining, rather than bolstering, the banking system's long-term integrity.
As the late Allan Meltzer remarked, “Capitalism without failure is like religion without sin.” For a quarter century or so, Canada's banking authorities left Canada's banks and bank customers to the mercies of the old-time capitalist religion. By so doing they allowed one of the world's most brilliant banking systems ever to flourish, albeit at the cost of exposing Canada's bank patrons, not only to bank failures, but to occasional banking swindles. But Canadian authorities eventually found the trade-off impossible to tolerate, preferring to stamp out sin altogether, even if that meant transforming Canada's competitive though imperfect banking system into an immaculate banking cartel.
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[1]Established for the express purpose of advancing credit to farmers on more favorable terms than those offered by existing chartered banks, the Farmers Bank struggled to raise the necessary capital. Wishing to see the bank succeed, William Fielding, Canada's Liberal Finance Minister, first granted its promoters several extensions, and then, in 1906, instructed the Treasury Board to issue the bank a certificate to begin business solely on the basis of a sworn oath to the effect that the necessary capital had been raised, by the bank's general manager, W. R. Travers, despite having been warned by persons in a position to know that Travers' claim was false. The Farmers Bank suspended payments on December 19, 1910, its failure having been due, according to a royal commission, to its management's "gross extravagance, recklessness, incompetency, dishonesty, and fraud." Although that same commission absolved Fielding of negligence, Travers was eventually found guilty of having violated the Bank Act, for which he was sentenced to six years in prison.
[2]The consolidation referred to here was a consequence of the passage of Peel's Bank Charter Acts of 1844 and 1845, which effectively ended new entry into the banknote issuing business in the United Kingdom.
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More from Alt-M on Canadian free banking:
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If you thought that the congressional spending orgy would slow down after the bloated omnibus bill passed in March, you were wrong. Republicans are preparing to bring to the House floor a farm bill that will cost taxpayers at least $867 billion over 10 years.
While this is a “farm bill,” one-quarter of the spending will be for farm subsidies and three-quarters for food stamps. The latter is officially called “nutrition” spending. But since almost one-quarter of food stamp spending is for junk food, that label is as absurd as calling Social Security’s Ponzi-style accounting a “trust fund.”
The essence of the farm bill is a giant log roll. Much of the spending likely does not have majority support in Congress or among the public, so politicians mash together hand-outs to different groups in a broad farm-food omnibus. As the number of farmers has fallen over the decades, politicians have had to buy off an increasing number of special interest groups to pass the “farm bill.” The Congressional Research Service recently discussed how the farm bill logroll developed:
The economic depression and dust bowl in the 1930s prompted the first “farm bill” in 1933, with subsidies and production controls to raise farm incomes and encourage conservation. … The 1973 farm bill was the first “omnibus” farm bill; it included not only farm supports but also food stamp reauthorization to provide nutrition assistance for needy individuals. Subsequent farm bills expanded in scope, adding titles for formerly stand-alone laws such as trade, credit, and crop insurance. New conservation laws were added in the 1985 farm bill, organic agriculture in the 1990 farm bill, research programs in the 1996 farm bill, bioenergy in the 2002 farm bill, and horticulture and local food systems in the 2008 farm bill.
We’re subsidizing horticulture now? What’s next—subsidies for grocery stores, restaurants, flower shops, and landscape architecture?
Even with the wide-ranging logroll in the current House bill, supporters may have difficulty getting enough votes. Many Democrats are objecting to modest changes in the food stamp program, while some Republicans are objecting to the high spending on both farm and food subsidies. We will see what happens in coming weeks.
Join us Friday at noon on Capitol Hill for a briefing on the farm bill featuring myself, Daren Bakst of the Heritage Foundation, and Scott Faber of the Environmental Working Group.
CBO’s cost estimate of the farm bill is here.
Logrolling is explained here.
An overview of farm subsidies is here.
Contract law is premised on a “meeting of the minds”: the common agreement between two parties to strike a mutually beneficial bargain to which they both assent. When unions and employers spar over wages and working conditions, they align their divergent interests in a manner that is fair to both parties.
California, alone among the 50 states, is dissatisfied with the fairness of this procedure. Instead, it requires a “mandatory mediation and conciliation process” for agricultural employers. Under this law, unions need not use their market power to negotiate with the employer. Instead, a state-sanctioned “mediator” drafts the agreement and imposes its terms on the parties. Such “contracts” dictate not simply wage rates or benefits packages, but the full spectrum of employment policies in a particular workplace.
And particularity here is the precise issue: the power of the state injects itself into the employment relationship not by setting general standards of conduct applicable to all employers, as with minimum wage laws or workplace safety standards, but by singling out employers for idiosyncratic treatment. This is not a “collective bargaining agreement,” but a mini-labor code applied to a single employer, who must now compete in the marketplace under a regulatory regime unique to him.
There are no safeguards to ensure that similarly situated employers or unions will be treated as similarly. Indeed, the law by its terms singles out a single industry for no discernable reason (other than possible rent-seeking by agricultural unions). Arbitrary burdens violate the core principle of the Fourteenth Amendment, which guarantees each of us the equal protection of the laws. A law for me but not for thee is no law at all.
An employer named Gerawan Farming challenged this imposition on its rights, but the California Supreme Court failed to recognize the constitutional principle at stake. Gerawan now petitions the U.S. Supreme Court to review its case. Cato has joined in a brief with the Pacific Legal Foundation urging the Court to take the case and require unions in California to vindicate their interests in the same manner as unions in the rest of the country: at the bargaining table.
Last week Secretary Carson’s Department of Housing and Urban Development (HUD) proposed changes to federal rental assistance programs. There were a variety of changes in the HUD proposal, but so far reactions have focused mainly on tenant rents. This narrow focus on a single element of the proposal doesn’t do the full proposal justice.
The three major changes are the ability to institute work requirements, the changes to tenant rents, and reductions in paperwork and monitoring. A few words on each, below.
1) Work Requirements
The proposal allows housing authorities to institute work requirements. Despite concerns from activist groups like the National Low-Income Housing Coalition (NLIHC), the proposal does not allow housing authorities to apply work requirements to the elderly, disabled, or minors.
According to the Center for Budget and Policy Priorities, 60 percent of households on public assistance are elderly or disabled. These households would be exempt. Of the remaining households, some are already working and so ostensibly they would not need to change their behavior.
In short, if all housing authorities adopted strong work requirements a minority of HUD households would be impacted, perhaps 13 — 18 percent. Work requirements are likely more of a symbolic change that expands the universe of what’s possible under government rental assistance than a provision that would dramatically change rental assistance.
2) Rent Changes
This change has drawn a lot of attention. The increase from 30 to 35% of income for rent is not ideal from a policy standpoint, because it reduces tenant incentives to earn additional dollars (or to report additional dollars if they are earned).
If rents need to be raised, the change from $50 to $150 for minimum rent is superior to the increase from 30 to 35% of income for rent. In fact, HUD would likely be better off moving all of their units to flat rate rents, similar to how minimum rents are structured.
HUD’s view is that rent changes must be made as a result of budgetary constraints. Indeed, changes in rent due to budget constraints are not unprecedented in HUD housing. In 1981, Congress increased rent from 25 to 30% of income for HUD rental assistance programs for this reason.
One important point: where the rent changes result in a financial hardship, tenants are exempt under the proposal. Examples of financial hardship include A) risk of being evicted, B) financial issues (like lose their job, a death in the family, a change in circumstances) C) tenants have lost eligibility for other welfare benefits, or are waiting to find out if they’re eligible for them, etc. Despite activists’ concerns the proposed reform would put people out on the street, it looks as though it’s designed not to.
3) Less Paperwork, Less Monitoring
There are a couple of changes related to reducing paperwork and bureaucracy in the program. The first is changing the rent calculation from adjusted income to gross income. Determining what counts as income for tenants is a very complicated process which leads tenants of similar economic circumstances to be treated differently. That’s a fairness issue, one among many in the provision of housing benefits. It’s nice to see an attempt to simplify and treat tenants similarly.
Finally, HUD rental assistance recipients currently have to recertify their income annually. The proposal changes the certification to be less frequent, from annually to once every three years. The idea is to give low-income tenants greater ability to grow their income while eliminating paperwork. Both libertarians and liberals should find this element of the proposal at least somewhat appealing.
In short, a fair analysis of the proposal requires greater nuance than what’s being offered.
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Yesterday the New York Times reported that in early April Ukraine’s president, Petro Poroshenko, ordered his chief federal prosecutor to halt four anticorruption investigations involving Ukrainians connected to Paul Manafort, Donald Trump’s former campaign chairman and a central figure in Robert Mueller’s investigations here in the United States.
Perhaps not coincidentally, Ukraine announced on April 30 that it had received 210 Javelin antitank missiles, purchased from the United States to bolster its fight against Russian proxies in the Donbass region of Ukraine. Though the State Department initially approved the sale in December and Pentagon gave its blessing in March, Trump himself was reluctant to arm Ukraine given the potential effect on the U.S. relationship with Russia.
The burning question is whether anyone in the Trump administration suggested this course of action to Ukraine. Ukraine, of course, is free to pursue whatever policies it deems necessary to defend itself from encroachments by Russia. But to use arms sales to interfere with the Mueller investigation would represent obstruction of justice on a truly epic scale.
To be sure, Ukraine already had plenty of motivation to help the Trump administration. If Ukraine shuttered the investigations to curry Trump’s favor, it was only one of several efforts designed to garner American support. Concerned that Trump’s affection for Vladimir Putin would translate into anti-Ukraine policies, Ukraine has gone out of its way to butter up Trump since he took office. Ukraine has promised U.S. construction firms contracts for future infrastructure projects in Donbass, brokered a $80 million coal deal with the U.S., signed a $1 billion deal with GE Transportation for new locomotives, and hired former Republican National Committee chairman Haley Barbour to help Ukraine lobby the Trump administration.
But even if this has nothing to do with the Mueller investigation, the sale of Javelin missiles to Ukraine reflects both poor judgment on the part of the Trump administration and a longstanding neglect of the potential negative consequences of American arms sales.
Arming Ukraine makes little strategic sense. A couple hundred antitank missiles will not alter the military balance between Ukraine and Russia in Donbas in any meaningful way. Russia can quickly move additional forces and equipment to the region at will. The bigger danger is that arming Ukraine will in fact prompt Russia to do just that, thereby risking an intensification of the conflict and potentially leading to more casualties than the 10,000 already suffered. It is clear, in fact, that this is exactly how Russia sees things. In December after the State Department approved the sale, Russian Foreign Ministry spokesperson Maria Zakharova said, “The United States is, in fact, encouraging the resumption of large-scale bloodshed in Donbass, where the situation is already on the edge due to continuing shelling from the Kiev-controlled side…Washington, in fact, becomes an accomplice in the killing of people.”
Arming Ukraine also raises the political stakes and risks turning Ukraine into a test of the president’s foreign policy effectiveness, increasing the likelihood of the United States getting entangled more deeply in the conflict. It seems clear that encouraging greater U.S. involvement is a key element of Ukraine’s strategy. Major General Volodymyr Havrylov, Ukraine’s defense attaché to the U.S., told a reporter that the missiles were “a political symbol that allows others to understand that Ukrainian security is important to the U.S.” The risk of entanglement is not trivial given the presence of powerful advocates for doing more in the U.S. Congress. Senator Bob Corker, chairman of the Senate Foreign Relations Committee approved of the sale back in December, telling the press that “This decision was supported by Congress in legislation that became law three years ago and reflects our country’s longstanding commitment to Ukraine in the face of ongoing Russian aggression.”
More broadly, the dangers generated by U.S. arms sales go well beyond Ukraine. Ukraine is just one of many risky customers to whom the United States has sold advanced weapons over the past fifteen years. In pursuit of short-term foreign policy influence and economic gains, the United States has turned a blind eye to what happens after the deals are done. Among the list of questionable clients are countries like Saudi Arabia, which has used American weapons in its disastrous intervention in Yemen; Iraq, whose army managed to provide the Islamic State with three army divisions’ worth of American tanks, armored vehicles, and infantry weapons; and Nigeria, whose human rights record, internal conflicts, and overall state fragility call into serious question whether it will use its latest purchase of Super Tucano attack aircraft in a responsible manner.
Time will tell if the smoke surrounding the sale of Javelin missiles to Ukraine stems from collusion to obstruct the Mueller investigation or simply misguided foreign policy making. Either way, arming Ukraine reflects a reckless approach to the use of arms sales that the Trump administration seems all too eager to embrace.