Georgia has a schoalrship donation tax credit program that makes it easier for lower-income families to afford private schooling—if that’s what they think is best for their children. The program is so popular that the cap imposed upon it by the legislature was reached within the first few hours of January 1st, this year. Over at Education Next I argue today that raising the cap would do a lot of good for Georgia children.

If you like feeling conflicted, you’ll love being a libertarian thinking about President Obama’s recent proposal – and even more recent rescinding of that proposal – to essentially end 529 college savings plans. The President proposed killing the ability to use funds saved under a 529 plan tax free to pay for college, which would have gutted the program’s real value.

On one side, a libertarian should be aggravated by such a proposal. The goal certainly seemed to be income redistribution, generating new revenues from relatively well-to-do Americans and giving it to (presumably) less well-to-do Americans with free community college and expanded “refundable” tax credits. It also seemed intended to support a divisive, rhetorical war of the “middle class” vs. “the rich” (though certainly many people who use 529s consider themselves middle class). And unlike federal grants, loans, and those refundable credits that are often essentially grants for people who don’t owe much in taxes, 529s are about people saving their own money to pay for college, not taking it from taxpayers.

On the other side, libertarians – heck, everyone – should want a simple tax code that isn’t riven with special breaks, loopholes, and encouragements to do things politicians decide are worthy but which have massive negative, unintended consequences. And when it comes to higher education, those consequences are huge, including rampant tuition inflation, awful completion rates, major underemployment, serious credential inflation, and a burgeoning academic water park industry. And where does the federal government get the authority to incentivize saving for college in the first place? Not in the Constitution.

So how should libertarians feel about the demise of the President’s 529 plan? I guess a little sad, because the Feds simply shouldn’t be in the business of encouraging college consumption. Even more, though, they should feel angry, because we are so deep in a federally driven, college-funding quagmire.

Ukraine’s military has lost control of the Donetsk airport and the rebels have launched another offensive. Fortune could yet smile upon Kiev, but as long as Russia is determined not to let the separatists fail, Ukraine’s efforts likely will be for naught.

As I point out on Forbes online: “Only a negotiated settlement, no matter how unsatisfying, offers a possible resolution of the conflict. The alternative may be the collapse of the Ukrainian state and long-term confrontation between the West and Russia.”

Ukraine’s most fervent advocates assume anyone not ready to commit self-immolation on Kiev’s behalf must be a Russian agent. However, there are numerous good reasons for Washington to avoid the fight.

1) Russia isn’t Serbia, Iraq, Afghanistan, or Libya.

While the Obama administration has resisted proposals for military confrontation with Moscow, a gaggle of ivory tower warriors has pushed to arm Ukraine, bring Kiev into NATO, and station U.S. men and planes in Ukraine. These steps could lead to war.

Americans have come to expect easy victories. However, Russia would be no pushover. In particular, Moscow has a full range of nuclear weapons, which it could use to respond to allied conventional superiority.

2) Moscow has more at stake than the West in Ukraine.

Ukraine matters far more to Moscow than to Washington. Thus, the former will devote far greater resources and take far greater risks than will the allies. The Putin government already has accepted financial losses, economic isolation, human casualties, and political hostility.

3) Alliances should enhance U.S. security, not provide foreign charity.

It’s impossible to blame Ukraine for wanting the West to protect it. But it makes no sense for the allies to do so. Adding Ukraine to NATO would dramatically degrade U.S. security by transforming a minor conflict irrelevant to Washington into a military dispute between America and Russia.

4) Security guarantees and alliance commitments often spread rather than deter conflict.

NATO advocates presume that membership would dissuade Russia from taking military action. Alas, deterrence often fails. In World War I alliances become transmission belts of war.

5) U.S. foreign policy should be based on the interest of America, not other nations.

The greatest distortion to U.S. foreign policy may come from ethnic lobbying. There’s nothing wrong with having affection for one’s ancestral homeland, like Ukraine. But U.S. foreign policy should be designed to benefit America, not other nations.

Some advocates for Kiev argue that Ukraine deserves support since France helped the American colonists win their independence. But France intervened in the American Revolution because Paris believed it was in France’s interest to weaken Britain. Going to war with Moscow would offer Americans no similar benefit.

6) It’s Europe’s turn to act.

If Ukraine matters geopolitically, it is to Europe. But most NATO members continue to shrink their militaries. It is time Europe did the military heavy-lifting.

7) A negotiated settlement is the only solution. 

Unfortunately, weaker parties often must make accommodations. During the Cold War Finland maintained its domestic liberties by not antagonizing the Soviet Union.

The world is similarly unfair to Ukraine today. Military victory is unlikely. Stalemate threatens Ukraine with economic crisis.

The allies hope that sanctions will force Russia to concede. But Putin won’t retreat voluntarily.

Massive public discontent could spark a popular revolution. However, foreign penalties more often cause people to rally around their governments. As of last month Putin’s popularity was at 85 percent.

Moreover, the prospect of Weimar Russia should cause Ukrainians and their friends in the West to be careful what they wish for. A Russia in crisis likely would not be democratic and docile.

Moscow could say no. If so, it is better to find out now than to do so only after suffering through an extended Cold War lite.

The Ukraine-Russia conflict is an unnecessary tragedy. Thankfully the ongoing battle doesn’t much threaten America. However, the only ending in something other than disaster is likely to come through negotiation. Instead of acting as a belligerent party, Washington should focus on shaping a diplomatic solution.

The Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws against employment discrimination. Along with enforcing these laws—most notably, Title VII of the Civil Rights Act, which outlaws discrimination on the basis of race, color, religion, sex, or national origin—the EEOC tells employers how not to discriminate. For example, the EEOC’s Best Practices for Eradicating Religious Discrimination in the Workplace instructs that an employer should “avoid assumptions or stereotypes about what constitutes a religious belief” and that managers “should be trained not to engage in stereotyping based on religious dress and grooming practices.” 

It’s passing strange, then, that the government is now arguing before the Supreme Court not only that employers can do these things, but that they must, or face liability under Title VII, in the context of reasonable accommodations that companies have to make for religious practice. Discerning when such accommodations are necessary can be difficult because people practice religion differently—and often in their own personal, non-obvious way. 

Title VII has thus traditionally been understood to leave it to the employee to determine when a company policy conflicts with his or her religious practice and then to request an accommodation. This interpretation leaves employers free to pursue neutral policies up to the point that they have actual knowledge of such a conflict. 

In the last several years, however, the EEOC has apparently taken the position that employers must pry into their employees’ religious practices whenever they have an inkling of suspicion that an accommodation may be needed. Abercrombie & Fitch is one company that has found out just how impossible a situation this puts employers into. When Abercrombie decided not to hire Samantha Elauf as a sales associate based on her violation of the company’s “Look Policy”—a branding guide that, among other things, prohibits the wearing of clothing generally not sold by the store, like Elauf’s black headscarf—the company found itself on the wrong end of a government lawsuit. 

A federal district court ruled for the EEOC even though Elauf never informed them that she would need a religious accommodation. The U.S. Court of Appeals for the Tenth Circuit reversed, holding that an employer must actually know about a religious practice before it can be held liable for discriminating on that basis. The Supreme Court took the case at the EEOC’s request and Cato has now filed a brief in support of Abercrombie. 

We argue that employers must have actual knowledge of the potential need for a religious accommodation before they can be held liable for violating Title VII because the EEOC hasn’t offered any coherent alternative and because employers already know how to use this tried-and-true actual-knowledge standard. In addition, the burden of identifying the need for accommodations has to be on the employee because, after all, it’s their religion, and thus they are in a significantly better position to identify conflicts than employers—who aren’t mind-readers and shouldn’t have to rely on crude stereotypes or pry into employees’ personal lives. 

An opposite rule would create an awkward and uncomfortable scenario all-around. The EEOC’s position is short-sighted; if the agency somehow prevails, it will have done what federal agencies do best: turn minimal burdens for some people into heavy burdens for everyone.

The Supreme Court will hear argument in EEOC v. Abercrombie & Fitch Stores, Inc. on February 25.

By now we have all heard of the disruptive force that is the ridesharing company Uber. The company, which is beating traditional taxi companies at their own game, has caused headaches for competitors and regulators alike. Moreover, as Eduardo Porter argues in his New York Times column, Uber also brings the entire regime of occupational licensing into question.

Porter notes that Uber has made the public much more aware of the anti-consumer inefficiencies in the regulated taxicab industry. The medallion system limits the number of taxis on the roads. Thus, the supply of cabs is much less than demand, which reduces the incentives for taxi owners to innovate and care about consumers. Uber, outside of this licensing regime, has thrived while providing wages that are on par with (or more than) licensed taxi drivers. This is possible because drivers (which are not in short supply) do not benefit from the limited number of medallions; only the medallion owners benefit. 

Porter cites the research of University of Minnesota economist and occupational licensing expert Morris Kleiner. Kleiner’s work describes how the labor market has changed since the early 1950s from blue collar and unionized to white collar and licensed. Protectionism has not declined. It has been transformed. 

The mischief created by occupational licensing appears to be a concern even for Democrats. The Obama administration has sought to streamline the licensing process nationwide, and the president’s Council of Economic Advisors seeks to subject licensure to cost-benefit analysis. 

For more from Morris Kleiner, see his recent essay from the Cato Reviving Economic Growth forum, or my other blog posts on his work.

Greece’s parliamentary elections could reshape Europe. In voting for the radical left the Greek people have reinvigorated home rule and democracy across the continent.

Greece has been in economic crisis seemingly for eternity. Even in the Euro the system could not generate the growth necessary to repay the debt: the economy was hamstrung by enervating work rules, corrupting political influences, profiteering economic cartels, and debilitating cultural norms.

The inevitable crisis hit in 2009. Athens couldn’t make debt payments or borrow at affordable rates. Nor could Greece devalue its currency to make its products more competitive. The European “Troika” (European Central Bank, European Commission, and International Monetary Fund) developed a painful rescue plan.

Syriza, meaning Coalition of the Radical Left, arose to challenge the two establishment parties. Headed by Alexis Tsipras, Syriza won 36.2 percent and 149 seats, two short of a majority, on Sunday.

Syriza offered dreamy unreality: free health care and electricity along with food subsidies, pension increases, salary hikes, and more public sector jobs. Billions in new revenue is to magically appear.

Most important, Syriza promised international debt renegotiation. Current debt runs a crushing $270 billion, or 175 percent of GDP (up from 109 percent in 2008).

European officials expressed hope that Tsipras would move to the center after winning office. But abandoning the promises that got him elected would wreck his credibility. Doing so also would threaten the unity of Syriza, a heterogeneous collection of smaller parties.

However, Athens does not have much time to win concessions. The current bailout plan expires at the end of February. Without a replacement program Greek banks would no longer have access to the European Central Bank.

Athens has few other revenue sources. Since the Syriza government cannot print Euros, it would have no way to fund a budget estimated to be in the red even before any new spending. Moreover, Athens would face default on its debt payments and a possible financial crisis.

At this point the only answer might look like exiting the Euro, or “Grexit,” which would allow Athens to print money freely. The process would be difficult, but would free Greeks to learn from their mistakes and find their own path.

Still, Syriza says it remains committed to a negotiated settlement within the Eurozone. But European leaders so far insist that the bail-out essentials cannot be renegotiated.

Syriza assumes its creditors are bluffing because they want to keep Greece in the Euro. That’s no longer clear, however. Greece accounts for just two percent the Eurozone’s collective GDP. The prospect of Greece’s departure no longer triggers panic elsewhere in Europe.

Indeed, if the EU does not hang tough, it will encourage other hard-hit governments to demand similar concessions. Moreover, a slowing economy has reduced the German public’s willingness to act as the Europe’s banker of last resort.

The political consequences might be more important than the economic impact. Grexit would return economic decisions to Athens.

Leaving also might stop further continental consolidation. The 19-member Eurozone is unstable because the unified monetary policy is not matched by unified budgetary policy. Eurocrats have been trying to expand their control. Moreover, while the Eurozone is separate from the 28-member European Union, a fracturing of the first would exacerbate tensions in the second.

A Eurocratic elite, consisting of politicians, academics, businessmen, journalists, bureaucrats, and lobbyists based in Brussels and national capitals, favors European consolidation in part because the system suppresses public accountability. But now popular opposition is exploding.

Euroskeptic parties did well in last year’s election for the European Parliament and having been gaining votes in national contests as well. If Syriza successfully flouts the Brussels consensus popular opposition to the EU as well as Euro is likely to grow.

As I note in Forbes online: “Europe will survive, whatever the fate of Greece, the Euro, and the EU. But the latest election in the birthplace of democracy offers hope for greater popular accountability and control across the continent. For this Tsipras and Syriza deserve Europe’s thanks irrespective of what happens next in Greece.”

Interest groups in the United States have focused on the possibility of including provisions in trade agreements with the intent of countering currency manipulation. The concern is that another country may choose to reduce the value of its currency relative to the U.S. dollar in order to encourage its businesses to export more goods to the United States. Such currency realignment also would tend to make it more expensive for the devaluing nation to import products from this country.

It’s true that an adjustment in currency exchange rates – regardless of the reason for the adjustment – can have an effect on trade flows. U.S. industries that export to foreign customers, or compete with imported goods in the domestic marketplace, understandably would prefer that currency relationships not become skewed against their commercial interests. Currency stability improves the business climate by making it easier to build long-term relationships with customers and suppliers. 

However, currency exchange rates have fluctuated throughout recorded history. Sometimes those changes may be driven by a government’s conscious desire to devalue its currency. More often the variability in exchange rates reflects fundamental economic realities. Economies that experience growing productivity and rising prosperity should not be surprised to find that market pressures cause their currencies to strengthen. The reverse is true for countries that are growing slowly or not at all. 

A shift in exchange rates changes a country’s “terms of trade,” which is a term used by economists to describe the ratio of a country’s export prices to its import prices. From a U.S. perspective, if another country sets its currency at an artificially low level relative to the dollar, the U.S. terms of trade will improve. The United States will be able to obtain a greater value of imports for the same value of exports. Exporting the same number of airplanes and soybeans as before will pay for the importation of larger quantities of shoes, coffee, and automobiles. 

The country that chooses to undervalue its currency will be placing an artificially low value on the output created by workers and capital in its domestic economy. It will, in effect, be selling its exports for less than their true economic worth, thus transferring wealth to the United States. People in this country experience meaningful increases in their standards of living at the expense of the country that has devalued.

Yes, most buyers like to get a good deal. An increase in affordable imports generally doesn’t strike consumers as a bad thing. Assuming those imports don’t compete too directly with goods and services produced widely in the United States (think of coffee, bananas, shoes, clothing, diamonds, rare earth metals, etc.), they tend to be well accepted even by people with mercantilist tendencies. Some imports that do compete directly with U.S. products – such as crude oil or cars – also may not raise strong political objections, either because domestic demand is larger than can be served solely by domestic supplies, or because consumers desire a variety of choices.

The politics of affordable imports become more complicated when those products compete directly with goods and services produced in the importing country. Competition always is a challenge, whether it comes from other domestic firms or from overseas. Firms often struggle to deal with forces as diverse as changing technology or changing consumer tastes and preferences. Not all firms survive forever. Rather, the process of creative destruction keeps the economy in an ongoing state of reinvigoration and renewal. There’s no doubt, though, that an increase in imports can create adjustment headaches for import-competing U.S. companies and their workers.

The good news is that the United States already has a policy framework with which to address unfairly priced imports, regardless of whether those imports relate to currency undervaluation. U.S. trade remedy laws allow industries to seek antidumping or countervailing duty (AD/CVD) protection against imports that may be injuring domestic producers. From a free-trade perspective, it’s important to understand that U.S. trade remedy laws leave a lot to be desired. They generally are seen to be relatively protectionist – slanted in favor domestic industries over imports. 

However, trade remedies are a better policy response (even though suboptimal) to currency manipulation than would be the case for special provisions in trade agreements. Trade remedies are relatively selective. They are applied only to unfairly priced imports that are troublesome to U.S. industries, and only after those producers have demonstrated that they’ve been injured. On the other hand, currency provisions included in trade agreements would apply to all imports from the offending country. American consumers would end up paying more even for tea and T‑shirts, for which there is little or no U.S. production. Given the broad negative implications of using trade agreement provisions to counteract currency manipulation, U.S consumers would be much better off dealing with the narrower negative consequences of AD/CVD measures.

A concluding thought: Since currency undervaluation by other countries serves to transfer wealth to the United States, should we consider finding some diplomatic way to thank them? Such a gesture likely would do far more good than including misguided currency provisions in trade agreements. It might help prompt policymakers around the world to rethink the plusses and minuses of allowing currencies to get out of alignment.

(For more detail on issues surrounding currency manipulation, see this article from Forbes​.com by my colleague, Dan Ikenson.)