Jeff Sessions’ Justice Department Goes after Affirmative Action’s Institutional Racism

Ilya Shapiro

Who could have predicted that one of President Trump’s
projects would be to root out institutional racism? Yet
that’s the upshot of an internal memo which apparently
launches a push to review university admissions policies for
race-based discrimination. The memo is still not public but the
Justice Department has said that, at least so far, the focus will
be on one complaint filed by Asian-American groups against Harvard.

There’s strong evidence
that schools are discriminating based on race in the name of
‘affirmative action.’

To be sure, the Supreme Court has said three times in the last
30 years that race can be “a factor” in admissions decisions,
to be used to achieve the “compelling interest” of
educational diversity. At least for another decade, when the
25-year clock that swing Justice Sandra Day O’Connor set in
two 2003 University of Michigan cases runs out. In
those cases, the Court struck down the use of a mechanical points
system — five points if you’re a violin virtuoso, 20
points if you’re black — but upheld the law
school’s supposedly more individualized, “holistic” review.

But invoking the word “holistic” isn’t the end
of the constitutional inquiry. As Justice Anthony Kennedy wrote for
a 7-1 majority (Justice Ruth Bader Ginsburg dissented) in the 2013
case Fisher v. UT-Austin, universities bear
“the ultimate burden of demonstrating that, before turning to
racial classifications, workable, race-neutral alternatives do not
suffice.”

Although the Supreme Court two years later okayed the University of Texas system, college
officials don’t have carte blanche just so long as they avoid
points or quotas. Even after Fisher II, a school with a
race-conscious process must show three things to pass
constitutional muster:

(1) that its program is necessary to achieve diversity; (2) that
its chosen means properly “fit” its ends; and (3) that
it provides individualized consideration, such that colleges
don’t make race the “defining feature.”

But can any school show how or when race affects admissions
decisions? Can anyone offer evidence that would enable a court to
evaluate whether the use of race is narrowly tailored to achieve
its purported goal? The black-box nature of admissions policies
makes it impossible to ascertain whether race is a thumb or brick
on the scale.

Admissions programs frustrate accountability because schools
wield “holistic review” as a shield to frustrate
scrutiny, judicial or otherwise. Holistic review can serve as a
cover for the illegitimate use of race.

For example, Princeton professor Thomas Espenshade found that Asian students applying to selective
private colleges are six times less likely to be admitted than
Hispanic students with the same academic qualifications and 16
times less likely than black students. And despite being the
fastest-growing population in America, Asians are admitted at Ivy
League schools in remarkably similar numbers and percentages
year-to-year.

That’s strong evidence that schools are discriminating
based on race. It all hearkens to the less-than-illustrious history
of the so-called Harvard Plan, which began as an alternative to
explicitly capping the number of Jewish students

Those are the sorts of things that the Justice Department should
look into. Government lawyers must open the “holistic”
black box and hold administrators’ feet to the constitutional
fire. And that’s before we even get into the harm to the
beneficiaries of racial preferences!

I have my policy disagreements with Attorney General Jeff
Sessions over the drug war and related issues, but I applaud
him here. When he was nominated, his supporters argued that he was
a civil-rights advocate who had no truck with racial
discrimination. Six months later, he’s proving their
point.

Ilya Shapiro
is a senior fellow in constitutional studies at the Cato Institute
and editor-in-chief of the Cato Supreme Court Review.

Why Trump’s Legal Immigration Reforms Would Be Bad for Americans

Alex Nowrasteh

President Trump campaigned on creating a new U.S. immigration
policy that is in the national interest. Rising to Trump’s call,
two Republican Senators — Tom Cotton of Arkansas and David
Perdue of Georgia — have introduced the RAISE Act to slash
legal immigration by 50%.

It’s easy to claim that something is in the “national interest.”
It’s much harder to justify it. In the case of these immigration
restrictions, invoking the national interest just doesn’t make
sense.

In a White House press conference announcing the bill, President
Trump said that it “will reduce poverty, increase wages.” Cotton
later chimed in by arguing that “there is a direct correlation
between the mass unskilled, low skilled migration we have seen over
the last few decades and stagnant wages and standards of living for
working Americans.”

The U.S. immigration
system needs reform, but RAISE’s push to cut of legal immigration,
without any corresponding increase in skilled immigrants, worsens
the problem.

In reality, the RAISE Act would slow wage and economic growth
and would do nothing to create a merit-based immigration policy
favoring skilled immigrants.

We’ve already seen what happens to wages when similar bills are
enacted. Congress last cut legal migration in 1964 when it
cancelled the Bracero program for Mexican farm workers. Lawmakers
believed arguments made by the United Farm Workers union, led by
Cesar Chavez, that cancelling Bracero would raise wages for
low-skilled farm workers.

However, wage growth for American farm workers actually slowed
after Congress cancelled Bracero, because farmers mechanized
agriculture and grew less labor-intensive crops rather than pay
higher wages.

It’s odd that two GOP senators would now embrace an economic
argument made by labor unions and left-wing activists like Cesar
Chavez.

The immigrants the RAISE Act would exclude and the bill’s
details are eerily similar to those in the Bracero program. The
RAISE Act would cut green cards by about 500,000 annually — a
number close to the annual admissions under the Bracero program at
its peak. Furthermore, the Bracero workers were relatively lower
skilled, just like many of the family-based immigrants the RAISE
Act would exclude. Lastly, today’s immigrants and Bracero workers
were concentrated in just a handful of states.

Furthermore, immigration’s impact on wages is overstated. A
recent National Academy of Sciences study found that “the impact of
immigration on the wages of native-born workers overall is very
small.” Most of the effect is actually concentrated on other
immigrants who compete with new immigrant arrivals.

There is little empirical evidence to support the claim that
reducing immigration increases American wages. The most negative
empirical finding is that competition with immigrant workers from
1990 to 2010 reduced the wages of native high-school dropouts,
relative to other American workers, by 1.7%. But the average
relative wages for the 91% of American workers who are not dropouts
— including the middle class — actually rose because of
immigration during that time. Is slowing middle class wage growth
truly in the national interest?

Even critics of immigration acknowledge that it leads to
economic gains. Cotton conceded at a press conference this week
that lowering immigration would also diminish economic growth. The
NAS found immigration boosts growth, which is what drives wage
increases, productivity gains, and a higher standard of living. Is
slowing economic growth truly in the national interest?

Even more worrisome, despite talking points to the contrary, the
RAISE Act does not create a merit-based immigration system. The
bill does not increase the number of skilled immigrants; it only
cuts other categories and reforms some aspects of the
employment-based green card system for skilled workers. Is a cap in
the number of skilled immigrants truly in the national
interest?

The truth is that none of these things are in the national
interest. The U.S. immigration system needs reform, but RAISE’s
push to cut of legal immigration, without any corresponding
increase in skilled immigrants, worsens the problem.

This legislation should have taken the approximately 500,000
green cards it eliminates from other categories and instead put
those in the merit-based category.

At a minimum, the RAISE Act will diminish wage growth for over
90% of American workers and slow the economy overall – a far cry
from what’s best for the national interest.

Alex
Nowrasteh
is the immigration policy analyst at the Cato
Institute’s Center for Global Liberty and Prosperity.

Trump Isn’t Draining the Swamp, He’s Deepening It

Ryan Bourne

Drain
the swamp!
” was a powerful rallying cry during Donald
Trump’s presidential campaign. The businessman promised to
govern in the public interest, and end the revolving door between
politics and lobbying. If anyone had the chance to overturn special
carve-outs, subsidies, regulatory barriers and access generated by
special pleading, it was surely a wealthy populist insurgent
unbeholden to major donors.

Yet eight months in to the Trump presidency, there appears to be
little momentum behind his pledge to overhaul the relationship
between big vested interests and the US government.
A poll in late May
found that 32 per cent of voters thought
Trump had made the swamp worse, against 24 per cent who saw
improvement. More worryingly, the President’s arbitrary
conduct risks exacerbating crony capitalism in future.

The first ominous signs came with Trump’s cabinet
selection. Appointing
a former CEO of Exxon Mobile
to head the State Department,

a former Goldman Sachs partner
to the Treasury,
the daughter of a shipping company magnate
to the
Transportation department and
an investor in steel, automotive components and coal
to
Commerce, hardly screamed an intent to break links between business
and government.

Eight months in to the
Trump presidency, there appears to be little momentum behind his
pledge to overhaul the relationship between big vested interests
and the US government.

Assigning conventional politicians to other positions did little
to suggest major change was coming, either. A
Newsweek analysis
found that approximately 70 per cent of
Trump’s White House staff were working in DC before the start
of the administration too.

Trump’s picks for key government agencies likewise raised
eyebrows.
Professor Luigi Zingales of the University of Chicago Booth School
of Business has highlighted
how the lawyer
Walter Clayton
was appointed as Chairman of the Securities and
Exchange Commission, for example, having previously represented
many major Wall Street firms in fraud cases — and despite
being married to another Goldman Sachs employee.

True,
one of Trump’s early executive orders
sought to stop a
“revolving door” by preventing administration employees
from taking up lobbying posts for five years after their government
jobs, and for government employees to recuse themselves from
actions that affect their former employers. But this did not go
anywhere near as far as Trump had promised.

In
a Wisconsin rally last October
, he pledged to oversee similar
legislation applied to Congress too. He also promised campaign
finance reform to prevent foreign lobbyists from raising money in
US elections. No such legislation has been forthcoming.

What about policy? The Trump administration had a real
opportunity to end government-granted regulatory, spending and tax
privileges. But little progress has been made here either.

Trump has used a host of executive orders to set frameworks to
constrain the growth of regulation, and the Congressional Review
Act to eliminate many rules passed under Barack Obama. Though an
imperfect measure, there are some indications this is working. In
May, the Federal Register for 2017 stood at around 20,000 pages
(which would imply a level around 62,000 for the full year). This
was much lower than whopping 95,894 of 2016 under President
Obama.

A substantial deregulatory effort could theoretically help
reduce cronyism by reducing the scope of regulation that can be
shaped by special interests. In fact, reducing the size and scope
of government more broadly can eliminate many specific perks and
instances of favouritism towards certain sectors. Trump’s recent
budget showed this, and he is to be commended for proposing cuts,
for example, to farm subsidies, which are perhaps the most
egregious form of privilege with concentrated benefits and diffused
costs across taxpayers.

Yet the President could be going much further to eliminate
government involvement with business.

One obvious example is Trump’s
flip-flop on the Export-Import bank
— the pinnacle of
corporate cronyism. As a candidate, Trump pledged to dissolve the
bank, which divvies out loan guarantees and direct taxpayer funds
to facilitate the exports of some of the US’s biggest companies,
such as Boeing and General Electric. But in office, the President
appears to have been nobbled by its beneficiaries. He now claims it
is vital for them to have access to this kind of export
finance.

On trade, Trump has been more consistently anti-market. But more
protectionist measures, particularly those designed to insulate the
US steel industry, will adversely affect consumers and downstream
industries in order to protect one of the President’s favoured
sectors. Worse, they will embolden other sectors facing strong
foreign competition to lobby the government for similar treatment,
exacerbating cronyism.

That is not to say that all of Trump’s actions reflect a desire
to favour corporate interests. One certainly could not accuse Trump
of listening to big business in his decision to withdraw from the
Paris climate agreement — a decision which brought a stinging
rebuke from a range of company heads and industries keen on the
deal, and the loss of Tesla’s Elon Musk and Disney’s Robert Iger
from his business panel.

But the President’s failure to take a principled, consistent
position on the role of government in business means that these
individual decisions tend to come with strong assumptions about
motive. If Trump thinks protecting steel is acceptable, then it is
understandable why others believe his decision on Paris reflects a
desire to protect fossil fuels.

While the effect of Trump’s policies on the swamp are ambiguous,
his personal conduct is surely deepening it.

The principle that companies should be treated equally under the
law, and that government should avoid picking winners and losers,
is a mainstay of market economy. But even prior to coming to
office, Trump used the bully pulpit of his Twitter account to
praise Ford for a decision not to build a new plant in Mexico,
alongside tweets which warned ominously that companies that
“want to do business in our country, have to start making
things here again”.

He and his team seemingly changed the business decision of
United Technologies, which cancelled plans to move a plant to
Mexico, through a range of proposed US tax incentives and implicit
threats to some of the company’s revenues from government
contracts. The stock prices of other businesses have risen or
fallen based on Trump’s musings on Twitter. Just last week,
Trump and the White House made lots of noise about the Foxconn
plans in Wisconsin.

As a candidate, Trump
threatened Amazon with antitrust action
, following critical
coverage of him in the Washington Post (owned by Amazon
CEO Jeff Bezos). More recently, there have been strong indications
that
the Trump team are using implicit threats
against CNN by
hinting at interventions in the proposed merger between AT&T
and Time Warner (CNN’s parent company). All that is not to
mention the shameless use of public office to boost the value of
Trump properties, and
the use of Mar-a-Lago as a means of access
to the
President.

This behaviour all threatens worsening crony capitalism, because
companies will be more likely to base their business decisions
according to expected political reaction rather than servicing
consumer demand. Innovation and entrepreneurial activity will be
less likely — the easier path for big business will be to
become a “favourite” of the administration. Already we
have seen instances of this politicisation, with companies
re-releasing job announcements to seek the President’s
approval
and recipients of Export-Import bank funds justifying
them using Trump’s protectionist language.

As business becomes politicised, the incentive to invest more in
lobbying, government relations and political donations to meet the
demands and desires of government, rather than consumers, will be
irresistible. And if the electors perceive the negative results of
this cronyism to be a consequence of enterprise rather than
political failure, government control will ratchet up further.

Of course, the Trump presidency has a long way to run. The
Republican Congress and White House could eliminate many of the
opportunities for cronyism by shrinking regulatory agencies, and
ending direct government subsidies. But judged so far on his
government construction, policies and conduct, it is difficult to
conclude that Trump is “draining the swamp”.

Ryan Bourne
occupies the R. Evan Scharf Chair for the Public Understanding of
Economics at the Cato Institute

If Trump Wins on Steel, US Manufacturers Lose

Daniel R. Pearson

President Trump and his trade policymakers have made no secret
of their desire to restrict steel imports as part of their
focus on US manufacturing. But the broad US manufacturing community
will not be well-served by such a move. What those limitations will
actually do is increase US steel prices above their already high levels.

Steel is already one of the country’s most protected sectors. US
law allows special duties to be assessed against imports that are
priced at what the Department of Commerce has determined to be
unfairly low levels. Over 200 anti-dumping and countervailing duty orders,
which are intended to “protect” US producers from so-called unfair
competition, currently constrain imports of steel and iron products
from a long list of countries. The effect has been to raise US prices well above
global levels to the great detriment of the large
manufacturing and construction sectors in America that use steel to
make higher-value products.

Although it may not be a wise approach to public policy, it’s
true that governments often pick winners and losers. Policies
intended to help one group of constituents usually hurt another. So
wouldn’t tighter import controls on steel just shift money from
steel consumers to steel producers, while having a more-or-less
neutral effect on the economy overall? Unfortunately, no. The
reason is that the steel-consuming sector is so much larger than
the steel-producing sector.

America can have either
higher steel prices, or more manufacturing and construction jobs.
Mr. President, the choice is yours.

How high do steel prices have to be to make President Trump
happy? And how much unemployment is he willing to inflict on
workers at steel-consuming firms? For a president who campaigned on
a theme of bringing back American industrial jobs, this is a grand
irony, indeed.

A July 24, 2017, report from SteelBenchmarker™, a price reporting
service serving the steel industry, shows the US price for
hot-rolled band (hot-rolled steel in coils) to be $681 per metric
ton, 38% above the world export market price of $491. The US price
for hot-rolled band is even higher, by 19%, than the $573 price in
Western Europe. Restrictive US import policies have forced steel prices to
levels much above those enjoyed by manufacturers in a relatively
high-cost economy such as Germany.

Steel mills add $36 billion of value to the economy each
year, accounting for 0.2% of GDP. Theyemploy 140,000 workers. Taking a conservative
approach and looking just at companies that buy steel as an input
for further manufacturing, we find a broad industry producing
economic value added of just over $1 trillion — or
5.8% of GDP. Those firms employ 6.5 million workers. So downstream
manufacturers are 29 times larger than steel mills in terms of GDP
and 46 times larger in terms of employment.

Manufacturers are particularly vulnerable to artificially high
steel costs because many of them compete directly with goods
produced at lower costs in other countries. It is hard to be a
successful producer of automobiles or air conditioners, for
instance, if US policies give overseas competitors a built-in cost
advantage. Worth noting is that loss of only 2% of jobs at
steel-using manufacturers would equal the size of the entire
steel-mill workforce.

But manufacturers aren’t the only businesses hurt by high steel
prices. Construction activities account for 42% of all US steel consumption and
employ 6.8 million workers. Raising the cost of steel will mean
fewer construction projects started and fewer workers employed, not
the best possible approach to rebuilding American
infrastructure.

What should the Trump administration do, instead of imposing new
import restrictions, to help US manufacturing and construction? Two
policy shifts could make a big difference.

The first would be to announce that the national security review
has concluded that all existing anti-dumping and countervailing
duty measures on steel should be ended. Yes, this would mean that
historically protected steel mills would face increased competition
from overseas firms. The Department of Commerce should consider how
best to facilitate the industry’s transition to free trade in
steel, a task aided by the general resilience of the US
economy.

Ending import controls would be good for the US economy. Gains
to the overall manufacturing and construction sectors would far
exceed any temporary pain borne by the steel industry.

The second policy change would be to rethink the various
adjustment assistance programs intended to help unemployed workers.
The federal government simply isn’t able to make factory jobs
reappear in every town. What it can do, though, is to empower
people as they search for opportunities by ensuring they have
access to education, vocational training and relocation
assistance.

Rather than doubling down on a failed strategy of import
protection, the Trump administration should try working with
economic forces instead of against them. This would mean embracing
the gains to manufacturing and construction that would result from
access to competitively priced steel.

The bottom line is clear: America can have either higher steel
prices, or more manufacturing and construction jobs. Mr. President,
the choice is yours.

Daniel R.
Pearson
is a senior fellow in trade policy studies at the Cato
Institute.

Washington’s Addictive Foreign-Policy Drug

Ted Galen Carpenter

Congress has overwhelmingly passed legislation imposing new
economic sanctions on North Korea, Russia and Iran. There was some
speculation that President Trump might veto the measure, both
because of concerns that it would prevent an improvement in
America’s troubled relations with Moscow and because of
stringent limitations imposed on the president’s ability to
waive sanctions in the name of national security. However, the
White House announced that the president would sign the bill—perhaps reflecting
just how much proponents of a new cold war with Russia have
intimidated the Trump team. The extent and virulence of anti-Russia
sentiment has reached alarming levels. Members of Congress and other opinion leaders in both parties have branded the alleged Russian
hacking of the 2016 election as an act of war, and one congressman
even explicitly compared it to Pearl Harbor and 9-11.

Given such hysteria and the lopsided congressional vote in favor
of the sanctions legislation, Trump’s reluctance to use his
veto power was not necessarily a manifestation of political
cowardice. Only three House members and two senators(Rand Paul and Bernie Sanders) cast
negative votes. Even Senator Mike Lee (R-Utah), who usually is
sensible on foreign policy issues, joined the legislative lynch
mob.

Policymakers need to
overcome their addiction to sanctions before it produces an immense
tragedy.

The enthusiasm for the latest sanctions initiative ignores the
longtime unimpressive record of that tactic. Some three decades
ago, the seminal scholarly work of Gary Hufbauer, Jeffrey Schott,
and Kimberly Ann Elliott, Economic Sanctions Reconsidered,
demonstrated that sanctions rarely achieve their policy goal. More
recent editions of the book confirm the basic
conclusion. Sanctions may inconvenience the targeted
regime—and create substantial suffering for innocent people
in that country—but they seldom compel the regime to
capitulate or even make major concessions. That is especially true
when the issue in question is a high-priority matter for the
country’s political leadership.

The track record in recent decades does very little to
contradict that thesis. The United States and its allies have
imposed ever-tightening sanctions on North Korea to force that
country to give up its nuclear weapons and ballistic missile
programs. Pyongyang’s repeated nuclear tests and its recent
launches of an intercontinental ballistic missile demonstrate
the utter futility of the sanctions strategy.

Washington has been equally unsuccessful in using that tactic
toward another adversary, Cuba. A succession of U.S.
administrations, beginning with Dwight Eisenhower’s,
maintained that approach for more than a half century before Barack
Obama began to normalize relations with Havana in
late 2014. Unfortunately, President Trump rescinded several of the beneficial and
realistic changes that his predecessor had made. Yet the results of
the Cuba embargo were no more impressive than the outcome of
sanctions against North Korea. Washington’s demands that the
Castro regime stop its human-rights abuses, move toward democracy,
and compensate Americans for property seized following the 1959
revolution all failed to produce any discernible results. The
Castro dynasty remains in power, the Cuban regime is still a
communist dictatorship, there has been no compensation for seized
property, and the improvement in the treatment of political
dissidents is minimal, at best.

Even the alleged success stories that sanctions proponents tout
turn out to be unimpressive. The Iran agreement is a prominent
example. Sanctions may have played a modest role in getting Tehran
to the conference table, but the agreement occurred only when the
United States and the other P5+1 powers backed off of their demand
that Iran capitulate and refrain from developing any capacity to
enrich uranium. The resulting agreement was very much a compromise
measure, and hawks in the United States vehemently condemned it as a U.S.-led surrender to Iran.

Imposing harsh measures on Russia is especially worrisome.
Moscow was quick to retaliate for congressional passage of the
latest punitive package. Vladimir Putin’s government immediately ordered a reduction in the size of
America’s embassy staff in Moscow and seized several U.S.
diplomatic properties. Moreover, the argument that Russia’s
actions were in response to the Obama administration’s
similar steps in December 2016 misconstrues the situation. Putin
made a point of assuring President-elect Trump that he would not retaliate for the December penalties. But imposition of the new sanctions triggered a decisive policy
change.

Economic sanctions appear to be the habitual favorite tool in Washington’s
foreign policy tool kit. It provides the illusion of a moderate,
middle course between a total reliance on diplomacy and resorting
to military force. Given that tactic’s pervasive lack of
effectiveness, though, policymakers need to overcome their
obsession. That is especially so when the underlying demands are
completely unrealistic.

Sanctions will not compel North Korea to give up its nuclear and
ballistic missile programs. Pyongyang’s leadership elite
believes that it needs such capabilities to deter Washington from contemplating forcible
regime change. Given U.S. actions against such nonnuclear adversaries as Serbia, Iraq, and
Libya, that is not an irrational conclusion.

Likewise, new sanctions against Tehran for violating
the spirit” of the P5+1 accord is
thoroughly counterproductive. Even the Trump administration had to
concede, however reluctantly, that Iran has
abided by the actual terms of the agreement. Imposing sanctions is
not likely to cause President Rouhani’s relatively moderate
government to become more cooperative. Indeed, that step may
strengthen the power of Iranian hardliners who wish to repudiate
the agreement and move to build a nuclear deterrent.

Most worrisome of all, sanctions will only inflame Moscow and
intensify an already worrisome new cold war. Russia is not likely
to concede that it meddled in America’s 2016
elections—and, in fact, there are serious doubts about those allegations. The chances
that Russia will abandon its secessionist allies in eastern Ukraine
are not much better, and there is virtually no possibility that
Russia will
reverse its annexation
of Crimea. The chances of that happening
are about the same as Israel giving up the Golan Heights or Turkey
withdrawing from occupied northern Cyprus and repudiating the
puppet Turkish Republic of Northern Cyprus.

Economic sanctions have the dubious quality of being
simultaneously provocative and ineffectual. The latest
manifestation likely will cause serious trouble for the United
States on multiple fronts. Policymakers need to overcome their
addiction to sanctions before it produces an immense tragedy.

Ted Galen
Carpenter
, a senior fellow in defense and foreign policy
studies at the Cato Institute, is the author of 10 books, the
contributing editor of 10 books, and the author of more than 650
articles on international affairs.

Is Donald Trump Doomed to Repeat History in the Middle East?

Emma Ashford

As a presidential candidate, Donald Trump made waves when he
publicly declared that the Iraq War had been a disaster for America, causing chaos in the
Middle East. With the rise of ISIS, a refugee crisis, and
substantial unrest across the region, it’s not hard to see
why the majority of Americans now agree with him.

Yet the Trump administration appears poised to make many of the
same mistakes in its increasingly belligerent approach to Iran, a
strategy virtually guaranteed to increase tensions and worsen
regional conflicts.

This month’s internal turmoil inside the Trump White House
over whether or not to recertify Iran’s
compliance with the 2015 nuclear deal is only the most recent
example of the administration’s steps towards a tougher
approach against Iran.

In reality, Iran is complying with the terms of the deal.
But administration officials have repeatedly sought to shift the
goalposts, arguing that Iran is instead violating the
“spirit” of the agreement.

Indeed, though the details are not yet clear, the
administration’s ongoing Iran policy review is widely
expected to result in a more assertive and belligerent approach to
Iran. In recent testimony, Secretary of State Rex Tillerson told Congress that the
administration intended to support “elements inside of Iran
that would lead to a peaceful transition of that
government.”

And while others have refuted the idea that regime change is
under consideration, the administration’s Iran hawks —
from Secretary of Defense James Mattis to CIA Director Mike Pompeo
— have repeatedly described Iran as “the single
most enduring threat to stability and peace in the Middle
East.”

***

Whether it takes the form of “ripping
up” the nuclear deal, adding new sanctions, or pushing back
militarily against Iran in conflicts in Syria, Iraq, or Yemen, it
seems likely that the new administration is headed for a collision
with Iran. Yet the assertions and arguments made in favor of taking
a harder line against Iran are profoundly misleading.

For starters, the idea that Iran is a threat to the United
States comparable to that of the late Soviet Union — an idea
expressed in several recent articles – is laughable. The Soviet
Union was a suprastate of almost 300 million people with a massive
army and civilization-ending nuclear arsenal. Iran, by comparison,
has around 82 million citizens and no nuclear weapons.

Iran may be able to threaten American citizens abroad, but it is
fundamentally unable to harm the U.S. through military means.

Another common misconception is the idea that Iran is the root
of all regional problems.

It is certainly true that Iran’s regional influence has
grown in recent years, particularly in Iraq. But that growing
influence is due less to Iranian revisionism and more to the U.S.
invasion of Iraq, which removed a regime that acted as a check on
Tehran.

And while Iran’s behavior in regional conflicts like Syria
is reprehensible, it has not alone caused the chaos currently
gripping the Middle East.

A variety of factors, including the failed Arab Spring
revolutions, the U.S. War in Iraq, and malicious meddling by other
regional states from Saudi Arabia to Qatar, have all contributed to
today’s turmoil.

Even the idea that the Iranian people seek external support for
regime change is flawed.

Certainly, many Iranians are hungry for more democratic rights.
But the leaders of Iran’s 2009 Green movement protests have
been clear that they want to improve the system from inside, not overthrow
it. There is no true domestic support for the National Council of Resistance of Iran (NCRI),
the group most commonly presented as an alternative by
regime-change hawks.

***

In the absence of domestic support, attempts to
conduct “regime change from within,” as some
administration officials have suggested, is a recipe for failure at
best, and disaster at worst.

Ultimately, it remains baffling that the Trump administration
— faced with historically high levels of unrest in the Middle
East — would voluntarily seek to undermine one of the
region’s few relatively stable and semi-democratic
states.

Donald Trump was right about Iraq during the campaign: the 2003
U.S. invasion was a massive, unforced strategic error. Yet it is a
mistake his administration seems poised to make again, albeit on a
smaller scale.

If the president forgets history, he is likely only to worsen
the chaos in the Middle East.

Emma Ashford
is a research fellow at the Cato Institute.

A Cracking Foundation

Ilya Shapiro

Could President Donald Trump’s bizarre attack on Attorney
General Jeff Sessions be the moment that the resistance was waiting
for? Not the travel ban, not tweetstorms about media covfefe, not
anything else that’s gone down in this six-month presidency (and
forget anything from the campaign because that was already priced
into the election). Is calling the AG “weak” and “beleaguered,” and
otherwise expressing repeated frustration and disappointment with
him, what we’ll point to as the moment when the Trump’s motley
coalition began to fray?

Donald Trump could count on a solid floor of support for (or
despite) pretty much anything in terms of policy initiatives,
political strategery, and personal behavior — but not going
after the first major politician who endorsed him, lending
conservative credentials to his campaign? It’s not implausible
that, between an erratic CEO and a chief law enforcement officer
laser-trained on “bad hombres” — whether drug-dealers or
foreigners, or both — the Make America Great Again supporters
will side with the latter.

The president’s attack on
Attorney General Sessions could undermine his support, but it won’t
end his presidency.

That’s not even mentioning the erstwhile Tea Partyers,
conservatives and others who boarded the Trump Train simply because
its conductor isn’t Hillary Clinton. Plus establishment
Republicans; despite high-profile #NeverTrump defections, issues
like judicial nominations continue allowing Trump to keep the GOP
remarkably united. To many of these folks, Sessions is “one of us”
while Trump is just an empty vessel suitable both for pursuing
certain political goals and thumbing one’s nose at the cloying
progressive elite.

Now, I’m not exactly Jeff Sessions’s biggest fan. He’s an
honorable man — unfairly smeared by the left for being an
Alabamian with a genteel drawl and the middle name Beauregard
— but his views on issues ranging from the drug war to
immigration are harmful to the nation’s best interests as I see
them. Democrats really should’ve focused on civil asset forfeiture
during his confirmation process instead of assorted racism
canards.

So I’m not taking Sessions’ side in his spat with Trump because
he’s standing up for sound public policy; I’m just saying that
impugning the competence and integrity of a solidly conservative
attorney general could be a bridge too far.

But probably not. It’s more likely that the caravan will move on
and pundits will focus on the latest celebrity the president
denigrates or next “international incident” he creates by not
shaking someone’s hand — or shaking it too long. Lately, the
master of misdirection has gotten everyone riled up about the issue
of transgender rights in the military even as his administrative
agencies are toiling away at deregulation (good!). There’s also
health care and tax policy (which is what Trump should be using his
tweety pulpit for).

No, Trump is more likely than not to survive this, possibly
after the sort of closed-door meetings where these kinds of
high-level differences are normally hashed out. That’s perhaps the
most inexplicable aspect of this whole imbroglio: if you don’t like
what your cabinet-level subordinate is doing, going public with
your dissatisfaction is counterproductive unless you’re about to
fire him — in which case it’s merely pointless.

And it’s not like the post-Hillary alternative is any better; is
any Trump voter attracted by the likes of Nancy Pelosi, Bernie
Sanders, Chuck Schumer or Elizabeth Warren? Such a gerontocratic
leadership hasn’t been seen since the late Brezhnev years —
which seems to be where the Democratic National Committee politburo
is getting its economic ideas. They accuse Trump of running
policies straight from the 1930s without realizing that their
“Better Deal” borrows more from the Socialist Party platform of
that time than FDR’s New Deal ever did.

More serious is the charge that a president’s public undermining
of an attorney general delegitimizes government institutions and
weakens the rule of law. This is a framing several reporters
offered me this week, but it’s far too early for that. The Justice
Department is far more resilient than any of these personalities.
If Sessions and deputy AG Rod Rosenstein — who helped
orchestrate FBI Director James Comey’s departure — get too
covered in mud, Associate Attorney General Rachel Brand is more
than capable of righting the ship.

In short, Donald Trump’s presidency will end long before our
system of government can suffer any real damage. Along the same
lines, the shaking of his support over the Sessions affair —
the cracks in his base, if you will — is real, but it’ll take
a whole lot more to get his approval rating to the point where
Republican defections prevent governance altogether or open the
door to the political remedy of impeachment.

Ilya Shapiro
is a senior fellow in constitutional studies at the Cato Institute
and editor-in-chief of the Cato Supreme Court Review.

Don’t Sacrifice Privacy on the Altar of Convenience

Matthew Feeney

We all hate long lines, whether we’re at train stations,
airports, or grocery stores. Researchers and governments are hard
at work to ease frustrating line congestion via facial recognition
technology. Facial scanners may reduce time spent standing in
boring lines, but they also threaten our privacy, which we
shouldn’t sacrifice on the altar of convenience.

In the United States, the Department of Homeland Security (DHS)
is taking steps to implement facial scanning systems at airports.
Facial scan trials are already underway in six
airports, with more deployments planned by early next year at
“high-volume”international airports. The
scanners are part of a biometric entry-exit plan that aims in part
to confirm the identity of travelers leaving the U.S.

Two airlines—Delta and JetBlue—allow travelers to
use facial scanners at select airports. From the Associated
Press
:

DHS officials hope to defray costs through partnerships with
airlines that are incorporating biometrics to boost efficiencies.
Two airlines in the pilot program—Delta and
JetBlue—tout identity-verification technology’s
convenience for other ends: Delta for speeding baggage handling,
JetBlue for eliminating boarding passes. Both carriers say they
will not retain customers’ face scan files.

In their privacy impact
assessment
for the facial scanning scheme DHS bluntly states,
“the only way for an individual to ensure he or she is not
subject to collection of biometric information when traveling
internationally is to refrain from traveling.” The same
assessment also points out that Customs and Border Protection (CBP)
can share facial recognition information with state, local, and
federal agencies.

Shorter lines, no ticket
turnstiles, and stores without checkouts sound great, but they come
at a significant cost when they rely on facial
recognition.

Although CBP does mention that all newly captured photos will be
deleted after 14 days it’s worth keeping in mind that CBP
could extend this time period in the wake of a terrorist attack or
other emergency

In the United Kingdom,
government-backed facial
recognition technology
could be used to ease congestion at
London Underground stations. The goal is for participating
passengers to simply walk by cameras rather than wait at cumbersome
ticket turnstiles. The technology, built by Bristol Robotics
Laboratory, is reportedly accurate enough to distinguish between
identical twins. According to Bristol Robotics Laboratory’s
Professor Lyndon Smith, the technology could be commercially
available in 2019.

The United Kingdom is one of the most surveilled countries in
the developed world, and the data collected as part of this
proposed scheme will be in the hands of Transport for London, a
local government body. We shouldn’t be surprised if London
Underground’s facial recognition data finds its way into the
hands of law enforcement.

Such data sharing between Transport for London and London police
would hardly be unprecedented. A 2014 report from London’s
Metropolitan Police Service (MPS) stated that Transport for London
sends MPS license plate data for national security purposes:

The Mayor’s Crime Manifesto, published in April 2012, made a
commitment to make Transport for London Automatic Number Plate
Recognition data available to the Metropolitan Police Service for
the purposes of preventing and detecting crime.

[Transport for London] collects [Automatic Number Plate
Recognition] data from the central London Congestion Charging Zone
and the London-wide Low Emission Zone camera networks and processes
it for the purpose of enforcement and traffic monitoring. This data
is already transferred to the MPS for the purposes of National
Security.

In May 2015, the London mayor announced that MPS had
access to license plate data for criminal—not only national
security—investigations:

The Mayor, Boris Johnson, has more than doubled the number of
high-tech cameras used by the Police (MPS) to help identify
criminals and bring them to justice. Around 2,300 Automatic Number
Plate Recognition (ANPR) cameras are now in use for policing
purposes in London after the MPS were granted access to 1,300
Transport for London cameras which were developed to enforce the
Congestion Charge Zone and the Low Emission Zone. Each camera takes
a digital reading of passing traffic, allowing speedy
identification and collecting real-time data on the precise
whereabouts of stolen cars or vehicles involved in crime. This
vital information enables the police to detect more criminals, and
deter and disrupt criminality on London’s streets. The move to
incorporate Transport for London’s ANPR cameras into the Met’s
network was one of the Mayor’s 2012 Manifesto pledges and part of
his drive to bear down on crime in the capital.

A similar access policy will no doubt be in place once the
London Underground’s facial recognition system is up and
running.

Chinese companies are developing facial recognition technology
that can not only identify people but may one day be able to
predict crimes. A
Singaporean company, Xjera Labs, has built surveillance technology that can
identify vehicles as well
as people
. It also allows users to search CCTV footage for
particular activity, such as a street fight.
Xjera Labs’ technology is used by police in Singapore as well
as Chinese schools
. This may strike some as creepy and
intrusive, but many people see benefits. Chinese researchers have
built ATMs that use facial
recognition to determine identity. Thanks to facial recognition,
one cafe owned by the Chinese e-commerce company Alibaba does not need self-checkout
kiosks
, let alone human check-out assistance.

These innovations from the United Kingdom and China or others
like them will find their way to the United States, where around
half of adults are already part of a facial
recognition network.

Shorter lines, no ticket turnstiles, and stores without
checkouts sound great, but they come at a significant cost when
they rely on facial recognition.

The increased use of facial recognition will enable law
enforcement to more easily track your lawful movements. When merged
with CCTV, body camera, and drone technology facial recognition
will allow law enforcement to identify law abiding citizens. The
widespread use of facial recognition will open the door for
increased tracking and surveillance as well as the stifling of
First Amendment-protected activities.

We shouldn’t think of facial recognition as a necessarily
nefarious technology. It would be great to live in a world where
there are fewer airport and shopping lines and our privacy is
protected. And we could, provided that lawmakers take steps to
limit the facial recognition data government collect and citizens
don’t hurry to sacrifice their privacy for convenience.

Matthew
Feeney
is a policy analyst at the Cato Institute.

Democrats’ Disastrous New Health Rx

Michael D. Tanner

As Republicans continue to stumble and bumble in what is likely

a doomed attempt to repeal and replace ObamaCare
, there has
been an increasingly desperate search for a bipartisan alternative.
But that Kumbaya moment isn’t going to happen any time soon.

After all, health-care reform is a matter of deep ideological
conviction for both parties.
Most Republicans understand that the desire for universal health
insurance
cannot repeal the basic laws of economics. They might
be too timid to unwind ObamaCare, but most understand that
government and health care are a poor mix. And Democrats? If
anything, Democrats want to double down on their call for
government control of the health-care system.

Democrats, in fact, have moved far to the left on health care.
In the 2016 presidential primaries,
Bernie Sanders proposed “Medicare for All.”
Most Democrats,
including Hillary Clinton, distanced themselves from the idea.
Today, the idea of “single-payer” health care is rapidly becoming
part of Democratic orthodoxy.

Just last weekend, New York Sen. Kirsten Gillibrand
told The Wall Street Journal
that she now supports a
single-payer system. And her colleague, Senate Minority Leader
Chuck Schumer, declared “single-payer is on the table” for
Democrats. Sanders may have lost the battle for his party’s
nomination, but he is clearly winning the war over its future
direction.

Democrats want to double
down on their call for government control of the health-care
system.

How the public will react to the Democrats’ desire for
government-run health care remains to be seen.
According to a recent Pew poll
, only a third of Americans
support a single-payer system (although that number rises to 52
percent among Democrats and 64 percent among liberals). Americans
clearly want everyone to have access to health care — we are
a compassionate people — but they’re not rushing to put the
government in charge.

After all, Americans can just look to Bernie’s model, Medicare,
with its $50 trillion in unfunded future liabilities, and recognize
that a single-payer system would be prohibitively expensive. Recall
that Bernie’s campaign proposal would’ve cost more than $30
trillion over its first 10 years.

Earlier this summer, California legislators abandoned an effort
to establish a statewide single-payer system, after the
legislature’s own estimates said it would cost some $400 billion
per year — more than the state’s entire budget.
In New York, a proposal for a state single-payer system
was
estimated to cost $226 billion per year.

Of course, in the face of this unaffordable tide of red ink,
Democrats will point out that other countries with single-payer
systems spend less on health care than the United States. But that
comes with a price of its own: limits on the availability of care.
Some developed countries ration care directly. Some spend less on
facilities, technology or physician incomes, leading to long waits
for care.

Such tradeoffs aren’t inherently bad, and not all health care is
of equal value. Plus, the United States imposes its own form of
rationing by price. No health-care system anywhere in the world
provides everyone with unlimited care. However, Americans have
always believed that such determinations are most appropriately
made by patients rather than the government.


The recent tragedy of young Charlie Gard in the United Kingdom

may have had as much to do with the British legal treatment of
parental rights as it did with rationing by the National Health
Service, but is emblematic of the type of government interference
with health decisions that Americans are unlikely to tolerate.

Moreover, the US investment in health care helps drive medical
innovation and technology around the world. There’s a reason why
more than half of all new drugs are patented in the United States,
and why 80 percent of non-pharmaceutical medical breakthroughs,
from transplants to MRIs, were introduced first here. Just imagine
what would’ve happened if the government had imposed
single-payer-style price controls on health care a hundred years
ago. How many life-saving drugs or vital medical technologies would
not exist today?

The ongoing health-care circus in Washington may seem to be full
of sound and fury, signifying nothing. But it’s really about who
should control some of the most personal and important decisions in
a person’s life — millions of individual consumers or the
government bureaucracy. The Democrats have chosen their side in
this debate. Now, let’s see what the Republicans think.

Michael Tanner is a senior fellow at the Cato Institute.

Don’t Expect the Market to Pay Just Deserts

Ryan Bourne

In a post on Tim Montgomerie’s new website, Unherd,
Charlotte Pickles highlights polling
from the US and UK showing
which groups of rich people the public believe are “deserving” of
wealth.

The results are perhaps unsurprising: high-skilled engineers and
scientists, inventors of new products and services, owners of
technology firms and founders of manufacturing companies were all
regarded as deserving; sports stars, pharmaceutical companies,
Hollywood actors and senior bankers were seen as undeserving. The
results for chief executives and real estate investors were
ambiguous.

What should we make of this? On one level, the results are an
interesting reflection of what “society” views as just deserts. But
this becomes much more problematic when the implied reaction is
that “something must be done about it” from a policy
perspective.

That’s because we should not expect market transactions to
follow claims of moral desert. Yet it does not follow that setting
maximum wages, fixing pay ratios with others or redistributing
large amounts of income in that pursuit would be good for society
or produce just outcomes either.

As Friedrich Hayek wrote in Law, Legislation and
Liberty
, “the manner in which the benefits and burdens are
apportioned by the market mechanism would in many instance have to
be regarded as very unjust if it were the result of deliberate
allocation to particular people. But this is not the case.” In a
free market, the distribution of income depends not on what an
individual “deserves” but the value of particular activities as
determined by supply and demand.

That is the main problem with the way many people on the
political Left judge market outcomes and inequality – they assume
that a market judgment is akin to a moral one. “Surely it is
morally wrong that a footballer earns so much more than a teacher
or a nurse?” is a frequent lament. And to be fair, some on the
political Right make this same mistake too, seemingly claiming that
all returns to labour or investments are deserved or just and that
those on low incomes deserve their relative misfortune.

Both views are misguided. In fact, prices and wages are
important not because they reflect desert, but because they provide
information to producers about which products, services, individual
skills and attributes are desired. Prices reflect the aggregation
of individual transactions, and the supply and demand decisions of
millions of individuals across different sectors, which
subsequently lead to the commitment of new investments and shifting
resources to areas where they are most valued.

The arguments against fixing people’s wages or seeking to
redistribute vast amounts of income are therefore nothing to do
with assuming the status quo reflects “just deserts” or the
inherent morality of market outcomes. No, the argument against
having government or some central planner, or even majority opinion
in this case, determining who gets what, is based on the
unachievability of, and inefficiency caused by, central planning to
achieve “just” income levels.

First, by fixing or ignoring prices, resources will be
misallocated away from where they are most productively used,
making us all poorer overall. Second, the state faces a huge
knowledge problem – it is virtually impossible for it to judge how
much success or failure is attributed to skill, wise or bad
investments etc as opposed to luck and, hence, how to redistribute
accordingly. Even if we set out to link pay or at least post-tax
incomes with “desert”, we could not. And, third, the state would
have to make vast intrusions against economic liberty and our
freedom to pursue our own wants and desires in any attempt to
structure economic outcomes according to desert.

All this is not to say that a form of social insurance would be
unacceptable given the ebbs and flows of capitalist activity. Hayek
himself argued for a basic safety net. But attempting to make
income and wealth outcomes reflect a majoritarian view of “desert”
would be both unattainable in practice whilst inflicting vast
economic damage.

Ryan Bourne occupies the R. Evan Scharf Chair for the Public Understanding of Economics at the Cato Institute