What Is and Isn’t Currency Manipulation

Do you want to know what’s not currency manipulation? The People’s Bank of China observing the value of the yuan plummet as markets respond to Trump’s tariff frenzy is not currency manipulation. 

Do you want to know what is currency manipulation? The president of the United States imploring the Federal Reserve chairman to lower interest rates for the distinct purpose of reducing the value of the dollar is currency manipulation.

For elaboration, please read my article on Forbes: Trump and Bipartisan Majority in Congress Complicit in Chinese Currency Manipulation Canard.


Disciplinary Court Recommends Termination for Officer in Garner Case

Today, in the disciplinary case against New York City police officer Daniel Pantaleo, an administrative judge found him guilty on one of two counts relating to the death of Eric Garner in 2014. He was found guilty of using a chokehold that was banned by the NYPD at the time of the incident, but he was acquitted of intentionally obstructing Garner’s airway in the process. The verdict came with a recommendation that Pantaleo, who has been working administrative detail during the investigative processes, should be fired.

The now-infamous video taken by a bystander led to two criminal investigations of Pantaleo—one local, one federal—but in neither case were criminal charges brought. With those cases closed, the U.S. Department of Justice announcing just last month that they would not seek an indictment against Pantaleo, the administrative charges were the last open case against the officer.

However, the decision to terminate will ultimately rest with the NYPD commissioner, James O’Neill. The Police Benevolent Association—the police union—is staunchly defending Panteleo and openly threatening internal revolt if the Commissioner follows the judge’s recommendation. From the New York Times report:

On Friday, the city’s largest police union called the verdict “pure political insanity,” and said Mr. O’Neill should reject the judge’s recommendation to fire Officer Pantaleo.

“The only hope for justice now lies with Police Commissioner O’Neill,” said Patrick J. Lynch, the president of the Police Benevolent Association. “He knows that if he affirms this horrendous decision, he will lose his police department.”

This open defiance underscores the political pressures that lead to departments keeping violent and other misbehaving officers on the job.

If you spend time with patrol officers, you’ll often hear of complaints about how people they arrest for violent acts against others are walking out of court without any meaningful consequences. Yet, when one of their own kills a man and failed to provide aid to him as he was dying, their union threatens insubordination and chaos if that officer isn’t protected from consequences. I agree that good officers don’t get enough credit for the service and sacrifices they give to the public, but statements like these are as responsible as any critic or protestor for the sullied reputation of police departments and their officers.

People are fired for mistakes at work all the time, and most people don’t kill anyone while making them. Pantaleo knew he wasn’t supposed to use that chokehold and employing that maneuver led to Eric Garner’s death. If the Commissioner fires Pantaleo, the NYPD rank-and-file should respect that decision.

Police officers need the trust and support of the community to solve crimes and bring criminals to justice. They cannot maintain that trust by neglecting their duty in protest if one of their own is held to account for needlessly killing a man.  

New NBER Working Paper Confirms Needle Exchange Programs Reduce HIV—Does It Also Make The Case For Safe Injection Facilities?

A recently released working paper from the National Bureau of Economic Research by Analisa Packham of Vanderbilt University examined the impact of needle exchange programs (referred to as Syringe Exchange Programs or SEPs) on the incidence of HIV as well as overdose hospitalizations or deaths. The author concluded that the openings of SEPs decrease the rate of new HIV diagnoses by 18.2 percent. But she also pointed to evidence suggesting that they may be associated with an increase in visits to hospital emergency rooms for overdose, and an increase in overdose deaths. The author concluded, “needle exchanges alone may be less effective than other interventions at stimulating recovery.”

This paper was recently cited in National Review as an argument against needle exchange programs. Without having had the chance to study or comment on the study’s methodology, I have a few remarks to make to those who see this as an argument against this proven harm reduction strategy.

  • Needle exchange programs are a time-tested, proven method of reducing HIV and hepatitis ever since they were first implemented in this country in the 1980s. The principal goal of the program was to reduce the spread of deadly blood-borne infectious diseases. This latest working paper from the NBER provides yet more evidence of the efficacy of needle exchange programs for the reduction of HIV transmission.
  • While many needle exchange programs refer clients to rehab programs, people have to be motivated to enter and stay in such programs. And not all rehab programs are the same. Some, like 12-step abstinence programs, have a high drop out rate. Other programs, like Medication Assisted Treatment, sometimes are more effective, depending upon the degree of social support and adjunctive psychotherapy.
  • Not every illicit substance user is an addict in need of “recovery.” Many are recreational users. In fact, many who begin recreational use of illicit drugs after the age of 25 are not addicted, and the majority of illicit drug addicts recover without treatment by the time they reach 30.
  • Needle exchange programs were never touted as a means to reduce overdose or overdose deaths—just the spread of disease. However, very recently, many needle exchange programs have started handing out naloxone to their clients to use in the event of an overdose, which still may be problematic if a drug user is alone at the time of overdose.
  • This is precisely why Safe Injection Facilities, also known as Safe Consumption Sites or Overdose Prevention Sites, are being promoted in the US. Unfortunately, they are prohibited by federal law—“Crack House Statute”—which prevents several major US cities from establishing them. The Department of Justice is, at this moment, preventing a non-profit group in Philadelphia from opening a “Safehouse” for IV drug users in its Kensington district.
  • Safe Injection Facilities work effectively in more than 102 major cities in Europe, Canada, and Australia—since the early 1990s—to reduce overdose deaths precisely because there are people standing close by with naloxone while a drug user injects in a clean and safe environment. Furthermore, the used needle and syringe are collected after each use so they cannot be sold or shared with others out on the street. Recent studies from the University of Pittsburgh and the Canadian Institutes of Health are among the several studies that demonstrate Safe Injection Facilities reduce overdose deaths and save lives. We had a panel on Safe Injection Facilities that featured the program director of North America’s oldest such facility in Vancouver, BC at a harm reduction conference held at the Cato Institute last March. You can view that panel here. The clean, safe, compassionate, and non-judgmental environment these facilities provide is also conducive for referrals to rehab and other social services.
  • Harm reduction and addiction recovery are not the same thing. The strategy of harm reduction begins with the understanding that there will never be a drug-free society. It seeks to reduce the harm that results from the non-medical use of licit and illicit drugs. Needle exchange programs were never created for “stimulating recovery,” but rather as programs designed to reduce the harm to people who continue to use. It is therefore inappropriate to judge the efficacy of needle exchange programs as a means of attaining recovery.

For these reasons, my immediate reaction to this latest NBER study is to conclude that it found, as did many other studies that preceded it, that needle exchange programs are an effective way to reduce the spread of HIV. It also pointed out the shortcomings of needle exchange programs, which is precisely why harm reduction advocates point to the need to federally decriminalize Safe Injection Sites. 

Rather than making the case against needle exchange programs, I find this study augments the argument for Safe Injection Facilities. 

Private Pay Growth Tops Federal in 2018

The Bureau of Economic Analysis has released data on worker pay for calendar 2018. The data show that compensation for U.S. private-sector workers grew faster than for federal civilian government workers last year.

Average wages for private workers increased 3.2 percent in 2018, outpacing the increase for federal workers of 2.7 percent. Total compensation (wages plus benefits) for private workers increased 3.2 percent in 2018, topping the increase for federal workers of 2.9 percent

That is good news for private-sector workers, but their pay still falls far short of pay for federal workers, on average. Federal workers had average wages of $94,463 in 2018, or 49 percent more than the private average of $63,306. Federal workers had average total compensation of $135,971 in 2018, or 80 percent more than the private average of $75,381.

Experts agree that federal government workers have a large advantage in their gold-plated benefits packages. Federal pension and health benefits are excessively generous.

The chart shows the growth in average federal and private-sector compensation since 2000. Federal compensation grew much faster than private compensation until a brief federal wage freeze under President Obama. But since the freeze ended, federal compensation has resumed its upward trajectory. Over the past five years, federal compensation has grown 18 percent compared to growth of 13 percent in the private sector.

This study examines federal compensation issues in detail, and the underlying BEA data are in section 6 tables here.

Trump Is Promising Visas for Guatemalans—Here’s How He Can Deliver

President Trump is promising Guatemala that if its legislature signs off on a “Safe Third Country” agreement to accept asylum seekers who come to the United States, he will increase the number of H-2A temporary agricultural work visas for Guatemalans. His Acting Secretary of Homeland Security Kevin McAleenan was down in Guatemala promising Guatemalan legislators that the United States will “double or triple” the 4,000 H-2A visas that Guatemalans received in 2018.

This is a very important conceptual shift from this administration. Increasing legal immigration options to prevent illegal immigration should be the government’s single-minded focus right now. But the administration appears to be making promises that it cannot deliver. H-2A visas already have no numerical limit, so there are no visas or cap space to “hand over” to Guatemalans.

Businesses need a reason to hire Guatemalans, and the administration has not yet provided any new incentive to do so. A small adjustment in the H-2A rules for Guatemalans could provide that incentive.

In 2018, Mexicans received 92 percent of all H-2A visas, while Guatemalans received only 2 percent—or 3,936. For comparison, Border Patrol is on pace to apprehend more than 200,000 Guatemalans this year. The reason that nearly all H-2As go to Mexicans is because foreign workers cannot apply directly for a visa. Employers must first recruit and sponsor them, and right now, businesses are almost exclusively recruiting H-2A workers from Mexico.

Employers prefer Mexican H-2A workers for several reasons. Mexico is closer, so some employers can bus workers to their worksites, which is cheaper than flying workers in from other countries. Mexican consular officials operate under the belief that Mexicans are less likely to overstay their visas, so they deny visas to Mexicans about half as often as they deny them for Guatemalans. This effectively means that employers need to recruit twice as many Guatemalans to get the same number of workers here.

But the most important reason is that H-2A recruiters are already operating in Mexico. The marginal cost of expanding recruitment there is virtually zero, while transitioning to a new country would require new investments. There is simply no reason for them to move to Guatemala, and the Trump administration so far has not provided any reason for them to do so.

Moreover, the increase in H-2A visas for Mexicans has played a major role in decreasing illegal immigration from Mexico, so it would not benefit the United States to encourage employers to stop hiring Mexicans in favor of Guatemalans.

So what can the government do? Right now, the H-2A program only allows employers to hire workers for “seasonal” positions. The H-2A law bans year-round jobs, which are a majority of all agricultural jobs, and include entire industries like dairies and livestock. Cows need milking the entire year, so the dairy industry cannot use the H-2A visa. The government should offer a waiver of the seasonality requirement for H-2A workers from Guatemala.

This change would require congressional action, but fortunately, there is already bipartisan support for waiving the seasonality requirement. Rep. Dan Newhouse (R-WA) and Rep. Henry Cueller (D-TX) have managed to insert into the Department of Homeland Security appropriations bill an amendment removing the seasonality requirement for all countries, not just Guatemala, in each of the last three years.

Unfortunately, the GOP Senate has so far not agreed to the amendment, and Congress has left it out of the full government funding bills. Perhaps with a border crisis and the White House’s prodding, this could change. But for it to reduce illegal immigration or benefit Guatemala, Congress would need to limit the change only to Guatemalans. The president’s desire for a Guatemalan deal could encourage him to prod Congress to do so. 

New York Threatens Legislative Crusader With Unregistered-Lobbyist Fines

As part of a one-woman crusade to call attention to sexual abuse, with the goal of getting New York to ease its law on the filing of abuse lawsuits, Kat Sullivan bought billboards, started a website, and hired a plane to pull a banner. Now, according to press reports, New York’s state ethics agency, the Joint Commission on Public Ethics, has been after her with repeated warnings that she may have exceeded a $5,000 limit on expenditures for advocacy of legislation.  From Chris Bragg’s reporting in the Albany Times-Union:

JCOPE staffers have left eight voicemails for Sullivan over the past year. She has taken part in often lengthy phone calls with investigators more than a dozen times, and has received three official letters. She’s been part of a dozen more email threads with JCOPE staff, totaling 65 pages. She paid a lawyer $1,900 to speak to the agency….

Sullivan, who also made expenditures in Massachusetts and Connecticut in pursuit of her cause, denies that her New York-related spending exceeded $5,000.

On July 12, JCOPE sent Sullivan what’s known as a “15-day letter” threatening her with the launch of a formal investigation that could result in fines of up to $25,000 per violation — and there could be many. While the letter says she has until Monday to respond in writing, commissioners “may vote to commence an investigation prior to receiving your written response.”…

JCOPE spokesman Walter McClure….[said] that JCOPE has procedures for “handling potential unregistered lobbying” and treats all people and entities “allegedly involved in that unregistered lobbying the same way.”

“We will enforce the law and pursue the required disclosure,” McClure said.

Pssst! Lobbying is speech!


Kamala’s Conundrum

During Wednesday night’s Democratic presidential debate, Tulsi Gabbard tore into Kamala Harris for her track record as a prosecutor in San Francisco and later as California’s Attorney General. The attack was sharp and effective, earning Gabbard an outsize share of the post-debate commentary. Its thrust was entirely fair, too, as any number of articles have demonstrated, including Lara Bazelon’s recent takedown in The New York Times titled Kamala Haris Was Not a Progressive Prosecutor.

The real significance of Gabbard’s critique, however, lies not in the proposition that Harris was a particularly unprofessional or malign prosecutor, but rather in the fact that she seems to have been a rather ordinary prosecutor who simply did her job the way most prosecutors do. And if that makes a former-prosecutor-turned-presidential-candidate look like a monster, then perhaps that says more about prosecutors in general than it does about Kamala Harris in particular.

Gabbard’s gut-punch underscores the difficult position that modern prosecutors find themselves in as the key players in a substantially immoral and increasingly indefensible criminal justice system. A near-universal blind spot of career prosecutors like Harris is their failure to appreciate the fact that law and morality can—and in our system frequently do—diverge.

Is it hypocritical for a person who has used marijuana to prosecute someone for possessing or selling it? Plainly yes, as Gabbard suggested in calling out Harris for doing precisely that. But enforcing bogus laws is not just hypocritical, it can be immoral as well. Consider the Fugitive Slave Act of 1850, a federal law that, among other things, required citizens of free states to assist in the capture and return of escaped slaves. Or eugenics laws adopted by more than half the states during the 20th century that subjected tens of thousands of law-abiding citizens, mostly young women, to forced sterilization and a childless future. Then there’s Shreveport, Louisiana’s ordinance making it a crime to wear saggy pants. Some 726 men, 96 percent of them black, were arrested under that law between its adoption in 2007 and its repeal in June of this year, after a Shreveport officer shot and killed 31-year-old Anthony Childs while trying to arrest him for wearing pants that didn’t come up to his waist. All of those laws were immoral, and participating in their enforcement constitutes a manifestly immoral act.