Republicans Turn Progressive

What are the philosophies of the two parties in Congress today? One of them has veered far to the left. The other one, it’s not clear what defines it. Conservative? Certainly not on spending restraint or deficit control.

Nor on federal land issues. For more than a century, federal policy was to unload western lands. The government privatized 792 million acres of land between 1781 and 1940 and transferred 470 million acres to the states.

During the 20th century, progressives favoring federal control gained the upper hand. They thought that federal management would be efficient and environmentally sound. They were wrong as discussed here and here, and for a while Republicans fought back against the progressive folly.

Today, the federal government owns 640 million acres—mainly in the West—which is 28 percent of land in the nation. Federal control continues to expand as few policymakers seem interested in countering centralization.

Rather than supporting land privatization, Republicans today are embracing the opposite according to a Wall Street Journal editorial:

Democrats on the House Natural Resources Committee voted in June to mandate permanent spending of $900 million a year for the Land and Water Conservation Fund. The LWCF was created in 1964 to “assist in preserving, developing and assuring accessibility to … outdoor recreation resources.” It is funded mainly by federal oil and gas drilling royalties.

Over the years it has become a piggy bank for government to buy more private property, especially in the American West. Some of the purchase priorities are recommended by state and local governments or conservation groups, while the feds focus on buying more of the 2.6 million acres of privately owned land that remain within national park boundaries. This serves the liberal goal of locking up more acreage for political control, and the Democratic House will likely pass it this summer.

The feds do a miserable job managing the 640 million acres they already own. The National Park Service has a maintenance backlog of $12 billion. The Forest Service spent more than $2 billion last year fighting blazes that destroyed 8.7 million acres—much of it poorly managed federal forestland.

In March President Trump signed legislation that permanently reauthorized the LWCF, which means Congress will no longer be taking a fresh look at priorities and value on an occasional basis. Making its funding permanent would compound that legislative abdication. Congress is supposed to make annual judgments about what the fund needs, and its average size over the past 15 years is about $360 million a year. Providing bureaucrats a guaranteed $900 million annually is a stipend far beyond need.

Knight Institute v. Trump

The U.S. Court of Appeals for the Second Circuit has affirmed a district court’s ruling that Donald Trump may not block Americans from viewing or responding to his tweets. In an opinion largely mirroring that of the district court, Judge Barrington D. Parker determined that Trump’s use of his account in his capacity as President of the United States rendered it a limited public forum. As such, Trump’s decision to block the accounts of individual critics amounted to government viewpoint discrimination, rather than a private exercise of associational rights.

The case hinged upon whether or not Trump used his Twitter account in an official capacity. Initially, I expressed skepticism, writing;

The question turns upon our understanding of the purpose and character of Trump’s Twitter presence. Is @realDonaldTrump simply the private Twitter account of a man who happens to be president, or does it constitute a designated public forum, as asserted by Jaffer?

When Knight Institute v. Trump was first filed in June of 2017, @realDonaldTrump looked more like a leftover campaigning tool than an instrument of policy promulgation. Trump had inherited @POTUS, the official presidential account, from Barack Obama, and to the extent that Trump used his personal account to conduct official business, his proclamations seemed untethered from the positions officially taken by his administration.

However, over the past two years, as Judge Parker’s opinion notes in granular detail, @realDonaldTrump has been repeatedly employed to announce the policy positions, and Trump’s tweets are popularly understood to be the official positions of his administration. President Trump has used @realDonaldTrump to announce the withdrawal of U.S. troops from Syria, the selection of Dr. Christopher Waller for the Federal Reserve Board, and, just this past weekend, to reveal that the administration aims to re-include a citizenship question in the 2020 census. Parker also cites the White House’s designation of Trump’s tweets as “official statements,” and other government agencies’ affirmation of the official nature of Trump’s tweets, writing; “we note that the National Archives, the agency of government responsible for maintaining the government’s records, has concluded that the President’s tweets are official records.” Given this evidence, it would seem that @realDonaldTrump is far from a private, personal account, engaging the usual First Amendment prohibitions on content-based restrictions in public fora.

While no one in American politics utilizes Twitter quite so adroitly as Donald Trump, this decision will nevertheless bind other politicians and state officials who make use of social media, particularly those who comingle public and private functions within the same accounts. The decision cites Packingham, but only to establish that speech on social media receives no less First Amendment protection than other speech transmitted via other mediums. While the outcome of Knight Institute v. Trump prevents Donald Trump, and other public officials, from making use of Twitter’s block feature, it has no bearing on  ongoing debates about the limits of private moderation or recent attempts to categorize platform access as a “civil right”.  

Decline in June Border Patrol Apprehensions Tracks Prior Years’ Patterns

Border Patrol apprehended 94,487 immigrants in June, according to a leak to the Washington Examiner. This constitutes a 29 percent decline compared to the 132,887 immigrants received in May. Nonetheless, apprehensions in June were higher than every month from FY 2009 to 2019 except the last two, April and May 2019 (Figure 1), and nearly three times the level in June 2018. They were also higher than March 2019, when the agency described nearly 93,000 apprehensions as a “system-wide emergency.”

Figure 1

The June decline is similar to declines almost every summer since the year 2000. The only exception was the short-lived “Trump effect” in 2017. Migrants moved up their crossing dates to before his 2017 inauguration and others stayed away until they realized little had changed. This caused numbers to rise throughout the year for the first time. Every other June saw declines in apprehensions.

Excluding 2017, the average decline from May to June for fiscal years 2000 to 2019 was 20 percent. The decline in 2019 was 29 percent (Figure 2). Three other years in the 20 years of available data had larger declines in June. The most recent was 2010, when apprehensions fell 30 percent. From May to July, the average decline was 25 percent. Six other years had apprehension declines from May to July above 29 percent. The most recent was 2014, when apprehensions fell 33 percent.

Figure 2

The seasonal declines are mostly the result of rising temperatures that make crossings much more dangerous. In 2019, however, June’s drop was larger than the average over the last two decades, which could imply that some other factors made it larger than expected. The most likely culprit is increased enforcement by Mexican authorities.

Indeed, June 2019 saw an increase in migrant apprehensions in Mexico from 23,419 in May to 29,153 in June. But that increase would explain just 15 percent of the drop in apprehensions. One might think that the increase had a deterrent effect on other new arrivals, but if Mexican apprehensions have a deterrent effect, it is a recent phenomenon. From January to May 2019, Mexican apprehensions increased by 175 percent, and U.S. apprehensions still increased by 177 percent.

Figure 3

Some deterrence, either from the Mexico’s interdiction or the U.S. Border Patrol’s inhumane treatment of immigrants, may have influenced the numbers coming to the border in June, but only very modestly. The most important factor by far was the weather. If this is the case, the flow will return as temperatures drop unless something changes. Congress needs to reform legal immigration to make illegal migration unnecessary.

RIP Ross Perot, the Billionaire Who Ran for President

Ross Perot, the billionaire entrepreneur who in 1992 became the most successful independent or third-party presidential candidate since Theodore Roosevelt in 1912, has died at 89.

Many people say that Perot, running on an anti-deficit platform, cost President George H. W. Bush reelection. I don’t think so. The most impressive political prediction I ever made was around June 1992, when I saw a poll that showed Bill Clinton running third behind Perot and Bush (it was probably the Gallup Poll shown here, with Perot 39, Bush 31, and Clinton 25). I told colleagues then, “This poll shows that Clinton will win, because third-party candidates always fade and the most important number in this poll is that only 31 percent of voters want to reelect the president.” Clinton would have won a majority if voters hadn’t had a third option.

Perot has some obvious similarities with President Trump – a businessman with no political experience, who opposed free trade and the recent Gulf War, promised to go to Washington to “take out the trash and clean out the barn,” had a predilection for conspiracy theories, and was enough of a celebrity to announce his candidacy on Larry King’s popular CNN show. However, his big issue was the $4 trillion national debt – those were the good old days! – and the deficits being run up by both parties. And instead of insulting tweets and ranting speeches, Perot’s stock in trade was 30-minute television ads full of charts and graphs, backed up by a 50-page economic plan promising cuts in domestic spending and tax hikes on high incomes and gasoline.

Perot was reported to have spent $65 million of his own money on his campaign (the Democratic and Republican candidates got $55 million each in taxpayer money in exchange for pledges by the candidates to limit direct campaign contributions, but they still managed to raise about $60 million each in “soft money”). In one sense, Perot’s campaign was a perverse result of federal campaign finance regulations. The Federal Election Campaign Act severely restricted how much money one could contribute to a campaign – unless you were the candidate. You could spend as much of your own money on your own campaign as you wanted. So the only way that Perot could spend $65 million (he tossed around suggestions of spending $100 million) was to run for president himself. But maybe the country would have been better off if he had been able to donate that money to, say, the well-respected Sen. Warren Rudman of Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act fame. Similarly, maybe it would have made more sense for Steve Forbes to donate $38 million to supply-side evangelist Rep. Jack Kemp in 1996 rather than to run himself. 

Ross Perot did have one positive impact on American politics. He made spending, deficits, and debt a real political issue, and that surely played a role – along with the booming economy – in bringing down deficits during the Clinton administration.

Perot also demonstrated that it’s extremely difficult to run an even modestly successful presidential campaign outside the two major parties unless you are both a billionaire and a celebrity.

Illegal Immigrants – and Other Non-Citizens – Should Not Receive Government Healthcare

Last week during one of their debates, all Democratic primary candidates supported government health care for illegal immigrants. This type of position is extremely damaging politically and, if enacted, would unnecessarily burden taxpayers for likely zero improvements in health outcomes. I expect the eventual Democratic candidate for president to not support this type of proposal, but it should be nipped in the bud.

After the debate, Democratic candidate Julian Castro argued that extending government health care to illegal immigrants would not be a big deal. “[W]e already pay for the health care of undocumented immigrants,” Castro said. “It’s called the emergency room. People show up in the emergency room and they get care, as they should.” It is true that some illegal immigrants use emergency room services thanks to the Emergency Medical Treatment and Labor Act and to Emergency Medicaid, but Castro leaned heavily into a stereotype often used by nativists. According to a paper published in the journal Health Affairs, illegal immigrants between the ages of 18-64 consumed about $1.1 billion in government healthcare benefits in 2006 – about 0.13 percent of the approximately $867 billion in government healthcare expenditures that year. That’s a fraction of the cost that would be imposed on American taxpayers by extending nationalized health care to all illegal immigrants. So, with all due respect to Mr. Castro, we do not already pay for their health care just because some illegal immigrants visit emergency rooms at government expense.      

One of the reasons why immigrants individually consume so much less welfare than native-born Americans is that many of them do not have legal access to these benefits. Cato scholars have proposed making these welfare restrictions even stricter to deny benefits to all non-citizens and to not count work credit toward entitlements until immigrants are naturalized citizens – what the late Bill Niskanen called “build a wall around the welfare state, not around the country.”

Many American voters are concerned about immigrant consumption of welfare benefits. In a 2017 poll, 28 percent of Americans agreed with the statement that “Immigration detracts from our character and weakens the United States because it puts too many burdens on government services, causes language barriers, and creates housing problems [emphasis added].” That level of concern exists under current laws that restrict non-citizen access to benefits and even chill eligible non-citizen participation. I’d expect that poll result to worsen if new immigrants, especially illegal immigrants, were put on government health care program.

Extending government health care to illegal immigrants and other new immigrants would probably not improve healthcare outcomes for immigrants. According to the wonderful The Integration of Immigrants into American Society report published by the National Academies of Sciences, immigrants already have better infant, child, and adult health outcomes than native-born Americans, while also having less access to welfare benefits like Medicaid. Immigrants also live about 3.4 years longer than native-born Americans do. Illegal Mexican immigrants had an average of 1.6 fewer physician visits per year compared to native-born Americans of Mexican descent. Other illegal Hispanic immigrants made an average of 2.1 fewer visits to doctors per year than their native-born counterparts.  Illegal immigrants are about half as likely to have chronic healthcare problems than native-born Americans. Overall per capita health care spending was 55 percent lower for immigrants than for native-born Americans. 

Immigrants also lower the cost of other portions of the health care system. In 2014, immigrants paid 12.6 percent of all premiums to private health insurers but accounted for only 9.1 percent of all insurer expenditures. Immigrants’ annual premiums exceeded their health care expenditures by $1,123 per enrollee, for a total of $24.7 billion. That offset the deficit of $163 per native-born enrollee. The immigrant net-subsidy persisted even after ten years of residence in the United States. 

From 2002-2009, immigrants subsidized Medicare as they made 14.7 percent of contributions but only consumed 7.9 percent of expenditures, for a $13.8 billion annual surplus. By comparison, native-born Americans consumed $30.9 billion more in Medicare than they contributed annually. Among Medicare enrollees, average expenditures were $1,465 lower for immigrants than for native-born Americans, for a difference of $3,923 to $5,388. From 2000 to 2011, illegal immigrants contributed $2.2 to $3.8 billion more than they withdrew annually in Medicare benefits (a total surplus of $35.1 billion). If illegal immigrants had neither contributed to nor withdrawn from the Medicare Trust Fund during those 11 years, it would become insolvent 1 year earlier than currently predicted – in 2029 instead of 2030.

American taxpayers should not have to pay for the health care costs of other Americans, let alone for non-citizens. For those reading this post who are very concerned about the well-being of immigrants, think of what would happen to public support for legal immigration if welfare benefits were extended in this way.  Immigrants come here primarily for economic opportunity, not for government health insurance. They tend to be healthier than native-born Americans and lower the price of health care for others as a result – but the point would likely change if the laws were different. Let’s not build public support for reducing legal immigration, or increase reluctance to expand it, by extending government health care, at enormous public cost, to people who don’t need it.

Is There Such a Thing as a Free-Market Gold Standard?

Twice recently I’ve come across arguments to the effect that, despite what some libertarians, goldbugs, cryptocurrency fans, and Fed Board candidates imagine, the idea that the historical gold standard kept governments from managing money, leaving the job to market forces, is a myth.

In his June 24th piece criticizing Facebook’s Libra Currency, which is being marketed as a sort of international stablecoin, Barry Eichengreen writes:

Mercifully, Facebook avoided the idea that a stablecoin will free us from the tyranny of the Federal Reserve. Typically, stablecoin purveyors invoke a mythical past in which the monetary unit of account was free of government manipulation and backed by tangible assets, such as gold in the 19th century. But as any historian will tell you, the 19th-century gold standard never operated this way. Governments were always involved. The gold backing of national monies was at most partial. Still, these simple facts don’t prevent the libertarian advocates of stablecoins from abusing the analogy.

More recently Greg Ip, in a WSJ article questioning Judy Shelton’s merits as a prospective Fed governor, made a similar point. “Goldbugs,” he says,

claim the gold standard takes away politicians’ and unelected central bankers’ control of interest rates, which they consider antithetical to free markets. … But it is a myth to claim the gold standard obviated discretion. Someone had to decide which metals would back the currency, and at what price, and how much gold had to be kept in reserve per unit of currency (the gold-cover ratio).

Even on gold, central bankers still had to decide interest rates. Whereas those decisions are now guided by inflation, unemployment and growth, back then they were also guided by the amount of gold in reserve. If gold was fleeing to other countries or stashed under people’s mattresses, the central bank had to raise interest rates to bring it back.

Although I’m neither a goldbug nor sold on Libra (the workings of which remain something of a mystery), and I’m happy to concede there has never been such a thing as a pristine free-market gold standard, I think that Eichengreen and Ip exaggerate the role government authorities played in “manipulating” or otherwise managing the historical gold standard. Moreover, I believe that the role of some governments was sufficiently small to justify treating their nations’ gold standards as “free market” systems, meaning ones in which market forces, including bankers’ pursuit of profits, rather than government-dictated policies, ruled the roost.

New Evidence From British Columbia Provides a Strong Case for Harm Reduction Strategies

A study published last month in the peer-reviewed journal Addiction by researchers at the British Columbia Centre for Disease Control and the British Columbia Centre on Substance Use found that harm reduction strategies were responsible for the province’s opioid-related overdose death rate being less than half of what it otherwise would have been between April 2016 and December 2017.

The researchers noted that 77 percent of opioid-related overdose deaths during that time frame involved illicit fentanyl. Vancouver has long been a major port of entry for fentanyl and fentanyl analogs, produced in China and other parts of East Asia, often using historic seaborn drug trade routes

During the 23 months ending December 2017 there were 2,177 overdose deaths in British Columbia, according to the British Columbia Centre for Disease Control. Using mathematical modeling methodology to estimate monthly overdose and overdose-death risk along with the impact of harm reduction interventions, the researchers concluded an estimated 3,030 overdose deaths were averted.

The three harm reduction strategies investigated were take-home naloxone kits, safe injection sites, and “opioid agonist therapy”— known in the U.S. as Medication Assisted Treatment (which includes methadone, buprenorphine, hydromorphone, and heroin assisted treatments in British Columbia). The researchers employed counterfactual simulations with the fitted mathematical model to estimate the number of deaths averted for each harm reduction strategy as well as the three strategies in combination. 

While the harm reduction strategies combined for more than 3000 deaths averted, the number of lives saved by each strategy taken in isolation broke down as follows: 

  • 1,580 (1,480-1,740) deaths averted by take-home naloxone
  • 230 (160-350) deaths averted by safe injection sites
  • 590 (510-720) deaths averted due to opioid-agonist therapy

All three interventions worked in synergy to greatly reduce the death rate, but the widespread distribution of naloxone saved the most lives. 

Michael Irvine, the study’s lead author, told Canadian Broadcasting Company reporters that in recent years the overdose crisis has been driven by a prevalence of fentanyl and fentanyl analogs. 

Among the developed nations, Canada has been one of the hardest hit by the overdose crisis on a per capita basis, with overdose deaths in Vancouver, BC approximating those of some of the worst-hit states in the U.S. as recently as 2017. This recent study gives us reason to conclude that, had British Columbia not embraced harm reduction strategies, the per capita overdose rate would have far-exceeded that of the U.S.

Canadian policymakers are being urged to curtail the prescription of opioids to patients in pain, despite the fact that more than three-quarters of overdose deaths involve fentanyl and, as in the U.S., the majority of overdose deaths involve multiple other drugs as well, including cocaine, heroin, benzodiazepines, and alcohol. This approach is driven by the failure to recognize there is no correlation between the number of prescriptions written for patients and the incidence of non-medical use of prescription opioids or prescription opioid use disorder. 

The Canadian government has also given in to pressure by the U.S. government to double down on its war on drugs. But in the U.S., researchers have learned that overdoses from the non-medical use of licit and illicit drugs has been on a steady exponential increase since the 1970s–the only variation being which particular drug is in vogue in any particular era–with no evidence of any slowing. It appears to be a result of sociocultural and psychosocial factors. There is no reason to believe things are much different in Canada.

Efforts to approach this problem by doubling down on supply-side interventions and the War on Drugs are doomed to fail—and will only cause more people to die. Fighting a war on drugs is like playing a game of “Whac-a-Mole.”

If the British Columbia experience should teach policymakers anything, it should be that harm reduction is the most effective way to end the overdose crisis. Ending prohibition would be the most consequential form of harm reduction.