July 21, 2020 12:45PM

Portland and the Paramilitarization of the Border Patrol

Unidentified, camouflage‐​wearing federal agents carrying military‐​style equipment have been caught on video abducting people in Portland, Oregon. They do not bother to make formal arrests, read the captured their rights, or even announce the reason for detainment. The fact that the number of those abducted thus far appears small and that they have later been released without charges being filed does not make the abuse of basic civil liberties less shocking.

The deployment was ordered by Acting Secretary of Homeland Security Chad Wolf, who has said he is willing to send similar units to other cities that fail to bring an end to the post‐​George Floyd protests, a position that President Trump has affirmed. This has been done over the objections of both the governor of Oregon and the Mayor of Portland. The Oregon Department of Justice has since filed a lawsuit against multiple federal agencies alleging “unlawful law enforcement in violation of the civil rights of Oregon citizens by seizing and detaining them without probable cause.” Those of us who still believe in the importance of protecting state and local prerogatives in the face of an ever‐​encroaching federal government should be alarmed.

The fact that Wolf is an acting secretary is significant; he is able to wield this power by executive will alone and without having to go through the checks and balances constitutionally provided by Senate confirmation, a habit that Cato scholars have condemned in the past. Indeed, Wolf is the fifth to hold the position in the Trump administration and the third to do so in an acting capacity. It is an unprecedented rate of turnover for the office; nearly as many people have filled the position in Trump’s single term (five) as during the last four presidential terms combined (six). It raises the prospect of a future executive being able to cycle through acting officials in order to avoid legislative scrutiny until he or she finds one willing to grossly violate the Constitution.

Customs and Border Patrol (CBP), a division of the Department of Homeland Security, has been deeply involved in the Portland action. The Cato Institute has been a consistent critic of mission creep at CBP ever since the creation of this Frankenstein’s monster of an agency in 2003. Cato scholars have called out the agency for running inhumane detention camps, failing to punish gross criminal misconduct, and operating internal checkpoints deep inside the United States.

Indeed, few people realize that the court system has upheld CBP’s claim that the “border zone” should extend 100 miles from any national or coastal boundary, a line that encompasses nearly two‐​thirds of all Americans. Within that zone and regardless of whether you are an immigrant, CBP agents can search you without a warrant, detain you without probable cause, and even deport citizens without due process. In short, CBP enjoys very few of the checks on police power that hold state and local law enforcement to account and protect basic civil liberties.

Customs and Border Patrol has eagerly sought out opportunities to enhance these already expansive powers. For example, the particular CBP outfit responsible for the abductions in Portland is the Border Patrol Tactical Unit (BORTAC). It is CBP’s version of a SWAT team and it is ordinarily tasked with conducting high risk raids on drug cartel operations near the border. But earlier this year, CBP pushed to take these units off the border and deploy them in “sanctuary cities” to hunt down illegal immigrants. It was a trial run for the current proceedings given that the targeted cities were opposed to their presence and it brought a militarized force round to bear on a process featuring a relatively low risk of violence. It was a questionable decision that seemed to be more about discomfiting political opponents of the administration than a matter of effective law enforcement.

Worse, CBP’s nascent role as a cut‐​rate secret police force that operates at the discretion of the executive branch is merely one manifestation of the creeping, bi‐​partisan paramilitarization of the federal government. During the recent Black Lives Matter protests in Washington, DC, the Trump administration staged a force of at least 1,600 active duty military personnel at bases outside the city. Those troops remained outside. The administration did not need the military to suppress urban unrest when it had paramilitary forces ready at hand. If that sounds extreme, consider that the administration easily gathered some 3,000 non uniformed, heavily armed riot control officers from the Bureau of Prisons, some of whom were used to clear protestors from Lafayette Park so that Trump could stage a photo op in front of a nearby church.

Even the Cato Institute found itself part of the unfolding drama when armored vehicles were stationed outside the building. Cato headquarters had been vandalized during the protests (though the plywood shields eventually installed over the windows were a fairly effective deterrent). Even so, responding to petty vandalism with military vehicles mounting heavy caliber machine guns was a rather incredible and unwelcome escalation. Likewise, Acting Secretary Wolf’s justification for deploying paramilitary units to Portland was a list recounting vandalization of federal property; he didn’t bother to justify an escalation from mostly spray painted graffiti to non uniformed agents shoving people in unmarked vehicles.

The use of Bureau of Prisons personnel in Washington and BORTAC in Portland is just the tip of the spear. The federal government under Presidents from both parties has been adding some 2,500 armed agents to the federal bureaucracy every year since 9/11, amounting to more than 132,000 such officers. 2,300 IRS agents carry weapons like AR‐​15s and P90s, the National Park Service buys thousands of dollars of hollow‐​point bullets each year, and US Fish and Wildlife, afraid of being left out of the fun, obtained silencers for their Glocks. (In their defense, it is hard to sneak up on a fish.)

Most of the 132,000 armed federal agents are based in the DC metropolitan area. While it might be a touch dramatic to call them a Praetorian Guard–given what that evokes of civil instability in the late imperial Roman Empire–it does not take an overactive imagination to think that having the equivalent of a dozen paramilitary divisions in the immediate vicinity of the US capital might be a bad idea for the future of our democracy. Unlike the military with its strict, professionalized chain of command and tradition of avoiding meddling in domestic political affairs, these federal forces serve at the discretion of political appointees and have shown no disinclination against involvement in partisan politics. Consider Washington and Portland—both of which, as it so happens, lie within the 100 mile “border zone”—small trials of how an administration can use paramilitary personnel to repress political dissent. Do we want to entertain even the slightest risk that some future authoritarian executive might try such methods at scale?

July 20, 2020 7:10PM

We’ll Do Anything for American Innovation, But We Won’t Do That

It seems that everywhere you turn these days you’ll find someone in Washington lamenting the collapse of American innovation and industrial output, and, naturally, proposing his own industrial policy to solve the alleged problems. This includes both President Trump and Democratic challenger Joe Biden, both of whom have promised all sorts of subsidies, protectionism and procurement mandates intended to reinvigorate the American industrial base and restore U.S. innovation supremacy. What these plans have mostly failed to emphasize, however, is how freer markets – especially the liberalization of U.S. trade and immigration restrictions – might help to achieve key industrial innovation objectives (without messy and costly central planning) or how they’ve been harmed by past U.S. government restrictions.

A new NBER Working Paper from Wharton’s Britta Glennon adds to a growing body of literature showing just how wrong‐​headed the candidates’ omission of these free market policies might very well be. In particular, Glennon shows that past U.S. restrictions on high‐​skilled immigration (implemented through caps on H1-B nonimmigrant visas) resulted not in an increase in hiring American workers but instead in a substantial offshoring of multinational corporation (MNC) jobs and R&D activities to these companies’ affiliates in more welcoming countries. Perhaps even more concerning, given recent events at home and abroad, Glennon shows that one of the biggest beneficiaries of these U.S. immigration restrictions was China, and that U.S. firms doing the most R&D offshored the most jobs.

Glennon’s conclusions are worth quoting at length (emphasis mine and citations omitted):

[F]oreign affiliate employment increased as a direct response to increasingly stringent restrictions on H-1B visas. This effect is driven on the extensive and intensive margins; firms were more likely to open foreign affiliates in new countries in response, and employment increased at existing foreign affiliates. The effect is strongest among R&D-intensive firms in industries where services could more easily be offshored. The effect was somewhat geographically concentrated: foreign affiliate employment increased both in countries like India and China with large quantities of high‐​skilled human capital and in countries like Canada with more relaxed high‐​skilled immigration policies and closer geographic proximity. These empirical results also are supported by interviews with US multinational firms and an immigration lawyer.

Despite the outsized role that multinational firms play in the economy – for example, US multinational firms are responsible for 80% of US R&D and employ about ¼ of US private employees – policy debates surrounding immigration have largely overlooked the fact that multinational companies faced with decreased access to visas for skilled workers have an offshoring option, namely, hiring the foreign labor they need at their foreign affiliates. This is the first paper to provide evidence that multinational firms do in fact utilize this option – both at the extensive and the intensive margin – and to examine the relationship between foreign affiliate employees and immigrants, in contrast to the relationship between immigrants and native‐​born workers.

The results have important implications for understanding how multinational firms respond to artificial constraints on resources and how they globally re‐​distribute those resources. The results also have important policy implications; the offshoring of jobs appears to be an unforeseen consequence of restricting skilled immigration flows. Even if H-1B immigrants displace some native workers, any policies that are motivated by concerns about the loss of native jobs should consider that policies aimed at reducing immigration have the unintended consequence of encouraging firms to offshore jobs abroad.

The finding that skilled foreign‐​born workers will be hired at foreign affiliates rather than in the US also has important implications for the innovative capacity of the US. Skilled immigrants have been shown to have outsized impacts on innovation in the host country through spillovers. The spatial diffusion of these spillovers disappears with distance since innovative spillovers are geographically localized. From a nationalistic perspective, this is problematic; if skilled foreign‐​born workers are at a US firm’s foreign affiliate instead of in the US, the innovative spillovers that they generate will go to another country instead. Furthermore, the finding that immigrants often are not equally innovative outside the United States has even wider welfare implications. In short, restrictive H-1B policies could not only be exporting more jobs and businesses to countries like Canada [me: and China], but they also could be causing the U.S.’s innovative capacity to fall behind….

Vice President Biden, to his credit, has elsewhere supported “expanding the number of high‐​skilled visas and eliminating the limits on employment‐​based visas by country” in order to boost “American innovation and competitiveness.” Hopefully the Team Biden folks writing the campaign’s immigration plans can talk some sense into their colleagues writing the industrial policy plans, and perhaps even explain how freer access to all global resources – whether high‐​skilled labor or essential goods like steel and machinery – can boost American companies’ innovation, output and global competitiveness while simultaneously denying potential adversaries those same advantages. As Glennon notes, multinational corporations that drive American R&D have other production options abroad, and they’ll use those options when misguided U.S. policies push them to do so.

Unfortunately, President Trump’s longstanding aversion to increased immigration or freer trade – and recent Trump administration efforts to restrict those things even further – provide little opportunity for similar liberalization hopes in the coming weeks or during any second Trump term. To paraphrase a great American poet, they’ll do anything to boost American innovation (or to counter China’s rise), but they won’t do that.

July 20, 2020 11:55AM

The New Deal and Recovery, Part 5: The Banking Crisis

Today, when we speak of ways to fight recessions, two options inevitably take pride of place: expansionary Fed policy (meaning lower interest rates or more asset purchases or both) and expansionary fiscal policy (more government spending or lower taxes or both).

But if you've been keeping up with this series, you'll know that, although the U.S. economy rebounded between March 1933 and early 1937, neither expansionary fiscal policy nor Fed actions of the sort we count on today deserve much credit for that rebound. Instead, the Treasury and the Fed played only bit parts, while the spotlight shone on FDR and his virtuoso gambol with gold.

FDR's handling of gold helped the U.S. economy recover from the Great Depression in part by getting the precious metal to flow into it, countering the persistent effects of a previous gold drain. That drain led to a nationwide banking crisis that brought the U.S. economy to its knees just before FDR took office. Before I can explain how, and to what extent, FDR's gold policies contributed to the recovery, we must step back in time to consider the causes of the banking crisis, including the part gold played in it.

Read the rest of this post »
July 20, 2020 9:49AM

On Trump’s Regulatory Agenda, Look Past the Props

In a Rose Garden event last Thursday, President Trump orchestrated quite a scene to promote his regulatory agenda. He stood between two massive pickup trucks. To the left, a blue truck sank under an immense load of weights situated in its bed—meant to symbolize the regulatory burden on the American economy. On the other side, a red truck stood tall, because the stress of the weights in its bed was being relieved by a large crane, which flew a banner that read: “Trump Administration.” 

This was the second time the president resorted to props to draw attention to his regulatory work.

During his first December in office, the White House held a similarly themed press conference in the Roosevelt Room, where Trump held a pair of scissors in front of two piles of paper bound by red tape. On one side, five towering stacks were marked with a sign reading “TODAY”; the other paper pile was miniscule in comparison, bedecked simply “1960.”

For both photo ops, Trump’s speeches focused on how his administration had far exceeded his campaign promise to cut at least two rules for every new one. Yet there’s less than meets the eye when it comes to the president’s signature (de)regulatory reform. Rather than reflecting some sort of breakthrough, these slogans (“two‐​for‐​one”!) are simply Trump‐​style branding for routine presidential practice.

All Trump is doing is rethinking the previous administration’s policies, which is what every president does every time there’s a party switch in the Oval Office. When a Democrat follows a Republican, the process entails re‐​regulation; when the roles are reversed, it’s time for deregulation. This wholesale ping‐​ponging of national policy is among the regrettable drawbacks to the vast lawmaking power that Congress has delegated to regulatory agencies since the dawn of the modern administrative state.

But just because the president is selling the sizzle, it doesn’t mean there’s no steak! Indeed, away from the limelight, his administration is preparing a juicy feast of meaningful regulatory reform. In recent pieces for the Washington Examiner, The Regulatory Review, and Real Clear Policy, I discuss this important, yet unheralded, work. Highlights include:

  • Ending a major judicial doctrine that had abetted the rise of the administrative state;
  • Compelling regulatory agencies to publicize their enforcement guidance, so regulated entities know the rules of the game; and,
  • Allowing more public participation and scrutiny for “major” regulations that cost hundreds of millions of dollars.

These structural measures have nothing to do with any particular policy; instead, they improve how regulations are made, as a general matter. Although the president is almost certainly unaware of these reforms, he’s responsible for them. By making regulatory policy a first‐​term priority, he created opportunities for reform‐​minded public servants within his administration, who then proceeded apace. 

July 17, 2020 2:41PM

Why Is NPR Still Obsessing Over Prescription Numbers When They Are Not Associated With Non‐​medical Use or Addiction?

National Public Radio released an investigative report today showing that doctors and dentists are still prescribing opioids for pain management at “rates widely considered unsafe.”

This persistent focus on the number of pills doctors prescribe defies justification in light of the fact that data from the Centers for Disease Control and Prevention and the National Survey on Drug Use and Health consistently reveal no association between prescription volume and the non‐​medical use of prescription opioids or addiction.

And despite the overall prescription volume coming down dramatically since 2012 (the year the volume peaked), overdose rates continue to climb. In fact, the overdose rate climbed as prescription rates came down. We learned this week that overdoses in 2019 are up considerably over the previous year and the situation this year is exacerbated by the COVID-19 crisis.

Meanwhile, what prescription amounts that are “widely considered safe” is a matter for debate. The CDC in 2019 issued a memo claiming policymakers were misapplying and misinterpreting the opioid prescribing guidelines they published in 2016, and reminded policymakers that they were meant to be suggestive, not prescriptive. Around the same time a Department of Health and Human Services Pain Management Best Practices Inter‐​Agency Task Force issued a report calling for the individualization of pain management practices, deferring to practitioners to weigh the risks and benefits when recommending medications and dosages to their patients. And the American Medical Association in June came out against governments imposing prescription and dosage limitations.

NPR should take note of the developments over the past nine to ten years since the press and policymakers adopted the mantra that opioid prescriptions must be brought down to end the overdose crisis and change its focus to the real cause of the overdose crisis: drug prohibition.

July 17, 2020 9:04AM

For Police Accountability, Tackle The Laws That Empower Police Unions

For years labor scholars, many sympathetic to the goals of organized labor, shied away from the question of the extent to which unionization of police forces tends to insulate misbehaving police from accountability. More recently this reluctance has been set aside, and various new studies have confirmed what some of us had guessed all along: where police are unionized, they are more likely to escape without serious job repercussions after instances of misconduct or excessive force. Last month, in a short piece at ArcDigital, I briefly summed up some of these findings. Not only are individual officers accused of misconduct more likely to beat the disciplinary process, but as the authors of a Florida study put it, police unionization may “strengthen a code of silence that impedes the detection of misconduct.”

I also noted signs that a cross‐​ideological reform consensus may be forming in this area. While my own preference might be to end legal privileges for police unions entirely, I pointed to a halfway measure that might prove more politically palatable in some pro‐​union quarters, and which recently won support from Harvard labor law scholar Benjamin Sachs: to restrict the scope of police collective bargaining to economic matters, such as wages and benefits, so that states and municipalities would not be obliged to negotiate either the terms of discipline for misconduct on the one hand or policy changes (such as those restricting weaponry or the use of lethal force) on the other.

In about a third of the states, a further legal force works to reinforce many of the worst effects in protecting the jobs of errant officers: the set of state laws known as Law Enforcement Officers’ Bill of Rights. I’ve written about these laws before in this space, and now I’ve got a new piece in the Frederick News‐​Post summing up the current state of play:

Since Maryland adopted its first‐​in‐​the‐​nation law in 1974, it has spread to 15 other states, causing problems along the way. Among states with their own versions of the law are Minnesota, where a video recorded George Floyd’s asphyxiation while in police custody, and Kentucky, where officers’ fatal shooting of Breonna Taylor in her Louisville apartment has sparked widespread outrage.

Now momentum is back. Senate Judicial Proceedings Chairman William C. Smith Jr. (D‐​Montgomery) has signaled that he wants to reconsider key elements of the law.

In a more startling development, first‐​term Del. Gabriel Acevero, a Montgomery County Democrat, says he was fired from his day job with MCGEO, the union that represents many Montgomery County public employees, for refusing to back off his legislative work on LEOBR reform and other police issues. MCGEO represents some law enforcement employees and has been an ally of the powerful Fraternal Order of Police (FOP).

Related resources here. Coincidentally, reporter Leandra Bernstein has written a valuable report for Sinclair (quoting colleague Trevor Burrus) on the politics of these laws, including repeated (and depressingly bipartisan) efforts to take the idea national by enacting a federal LEOBR that would force the idea on the majority of states that have not chosen to enact it.

Attempts to pass a Police Officers’ Bill of Rights began in Congress in 1971 and continued for decades with the encouragement of police unions. Former Delaware Sen. Joe Biden repeatedly sponsored legislation to create a national Police Officers Bill of Rights beginning in 1991, several weeks after the Rodney King beating in Los Angeles.

The legislation largely focused on worker protections and employee rights, according to a statement by the Biden campaign. The 1991 bill included language to limit the time and circumstances under which an officer could be questioned and required the officer to be informed about the nature of the investigation before being questioned. Former New York Police Commissioner Lee P. Brown argued at the time that Biden’s bill would “erode advances that have been made in holding police officers and their supervisors accountable for the use of excessive force and other forms of misconduct.”

Between 2000 and 2007, Biden teamed up with Kentucky Republican Sen. Mitch McConnell four times to enact a nationwide bill of rights for police. The State and Local Law Enforcement Discipline, Accountability, and Due Process Act. The bill included many of the protections for police officers provided by state LEOBORs. It also allowed officers accused of wrongdoing to review their evidentiary files before submitting to questions.

With both McConnell and Biden on the ballot this fall, one hopes reporters will press them on whether their minds have changed in the years since.

July 16, 2020 5:38PM

About 20,000 U.S. Employers Are Affected by Trump’s Travel Bans This Year

President Trump banned nearly all permanent immigration and temporary workers last month for the remainder of the year. His order will affect as many as half a million workers and immigrants if consulates reopen, other COVID-19 travel restrictions are lifted, and migration resumes to last year’s levels. It will also affect about 20,000 U.S. employers seeking to hire foreign workers over the next six months.

Tables 1 through 5 show the number of petitions that the government has approved for individual employers to sponsor workers for visas or status, the share of workers who fit into those categories who are outside the United States (and subject to the ban), the number of employers who received labor certification or labor condition application approvals from the Department of Labor (DOL) allowing them to petition for workers, and the number of employers who received approved petitions from U.S. Citizenship and Immigration Services (USCIS). The years reflect the most recent data publicly available.

The H-1B category for high skilled workers represents the largest number of employers with 59,427 employers receiving labor condition application approvals and 29,012 employers receiving petition approvals for initial or new workers in 2019 (Table 1). Only 38 percent of their H-1B initial hires were abroad. The H-2B nonagricultural category had about 5,000 employers receive labor certification application approvals in recent years. The most recent year’s data for 2017 show 3,788 employers who received petition approvals (Table 2). Nearly all H-2B workers came from abroad.

The employment‐​based second and third preference categories saw 924 employers receive labor certification approvals for workers abroad (Table 3), and 776 of them were eligible to petition for their employees to receive immigrant visas to travel here. The L-1 category data are older but show 7,020 employers in 2018 receiving approvals for initial L-1 petitions (Table 4). Almost 100 percent of L‐​1s are abroad because the program exists to allow multinationals to transfer foreign employees to U.S. jobsites. The J-1 Summer Work and Travel Program is even older—from 2015—but the size of the program has been similar in recent years. In 2015, nearly 16,000 employers hired J‐​1s under the Summer Work and Travel Program (Table 5). Nearly all hires appear to have occurred abroad, but no public data on the share is available.

Using the employment data from the most recent years shows about 55,000 unique employers across all these programs. Assuming that the share of hires abroad reflects the share of employers who exclusively hiring workers abroad, a little more than 6 months would normally see a little less than 20,000 distinct employers submit petitions, sponsor, or hire for foreign workers in these categories.[1] 

Note that this doesn’t include a small number of employers of EB-1 category for the highest skilled immigrant visa applicants. It also excludes the employers of a large number of J-1 visa holders in programs other than the Summer Work and Travel Program. 

The United States government is harming its own industries, making the country less competitive and attractive for businesses who employ millions of Americans. This policy choice makes no sense and cannot be justified economically.

[1] The raw data for the J-1 Summer Work and Travel Program is not available, but very few J-1 employers (197 of 15,889) hire under the H-2B program, which covers similar lower‐​skilled jobs, so it is fair to assume little overlap with other categories.