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Policy Life Stirs in Doha: Islamists and Democracy
Doug Bandow
Big conferences can be enervating, especially when large panels are populated with establishment political figures spouting the conventional wisdom. However, the Doha Forum, which I have been attending in Doha (surprise!), Qatar, sported a burst of spontaneity at a workshop on the role of Islamists in the Middle East.
While competing discussions of economics and technology were sparsely attended, the Islamist workshop overflowed. Islamists from Bahrain, Egypt, and Tunisia made the case that Muslim fundamentalists in those countries were dedicated to democracy and intended to be inclusive of all within their societies.
Most in attendance—at least those who asked questions (or made comments in the guise of asking questions)—were skeptical. The audience included many Westerners, but fellow Arabs led the attack. Attendees from Jordan and Kuwait, which have been at the periphery of the Arab Spring, were particularly critical. A Gulf journalist complained about Islamists who said one thing for his broadcasts but behaved differently in power (no American politicians have ever behaved that way!). A young female professional complained about the treatment of women, who helped overthrow authoritarian regimes but then faced increased discrimination.
The panelists stood their ground, but they didn’t seem to win many converts. So many people wanted to comment that the session went overtime a half hour. Both sides wanted to keep going, but the translators insisted that they needed a break before the next session.
While the tension between Islamic fundamentalism and revolutionary democracy has challenged U.S. policy, it even more directly affects those who live in the Middle East. It’s one thing to toss overboard archaic monarchies if the result will be liberal societies with democratic political systems. Revolution is quite another matter if the consequence will be fundamentalist societies ruled by authoritarian democracies.
The session reached no conclusion. But it highlighted a debate that will only intensify as the Arab Spring continues to reverberate throughout the region.
View full post on Cato @ Liberty
A Look at the OAS Report on Drug Policy in the Americas
Juan Carlos Hidalgo
Last Friday, the Organization of American States released a groundbreaking report on the future of drug policy in the Americas. The OAS received the mandate to produce this document at the Summit of the Americas last year in Cartagena, Colombia, where some presidents aired their frustration with the war on drugs and even suggested legalization as an alternative to fight the cartels.
The document is based on solid premises:
- Drug violence is one of the greatest challenges facing the Americas
- The current approach is a failure isn’t working
- New policy alternatives need to be discussed and implemented
- Drug use will remain significant by 2025
These premises might seem pretty obvious, but when it comes to drug policy, stating the obvious hasn’t been the norm for those who believe in the status quo: for example, in 1988 the UN held an event titled “A drug-free world: we can do it” (consumption of marijuana and cocaine has increased by 50 percent since then). Or the latest National Drug Control Strategy, which claims that the greatest accomplishment of the Mérida Initiative with Mexico has been “the mutual fostering of security, protection and prosperity” (never mind the 60,000 people killed in drug violence in six years in Mexico).
The OAS report avoids recounting this fairy tale. It also avoids making recommendations, given the lack of consensus among its authors about where drug policy should be headed in the next 12 years. Instead, the document lays out four different interpretations of the “drug problem” and presents the scenarios of what the response should be. The report also presents the challenges facing each scenario (name in bold):
Together: Under this scenario, the problem is not drug laws but weak institutions. It foresees greater security and intelligence cooperation among nations, more expenditure in the security and judiciary apparatuses and tougher laws dealing with corruption, gun trafficking and money laundering.
Latin American countries indeed suffer from weak institutions. The shortcoming of this scenario is that prohibition actually exacerbates the problem since it inflates the profit margins of the cartels to stratospheric levels, thus increasing their corrupting and violent power. In 2010 all seven Central American countries combined spent nearly $4 billion in their security and judiciary apparatuses (a 60 percent increase in five years). And yet that fell terribly short of the estimated revenues of the Mexican and Colombian cartels which, according to a report from the Justice Department, could reach up to $39 billion a year.
The report foresees another challenge with this approach: a disparity among countries in their institution-building efforts, which would lead to the balloon effect of criminal activities. This is perhaps the main feature of the drug business in the Americas: its high capacity to adapt to changing circumstances. For example, in the early 1990s, as pressure grew on coca growers in Peru they moved to Colombia. Now, after a decade of eradication programs in that nation, they are moving back to Peru. Overall the Andean region continues to produce the same amount of cocaine as it did 20 years ago.
Over the years the common denominator of the war on drugs in Latin America has been the attempt to export the problem to your neighbor. Greater cooperation, harmonization of efforts, and same-pace institution building seems unrealistic.
Pathways: Under this scenario, the problem isn’t drugs but drug prohibition. It portends a growing number of presidents in the region calling for the adoption of a legal market for certain drugs, starting with cannabis.
Indeed, the future is here. Guatemala’s president, Otto Pérez Molin,a has already called for the legalization of drugs. Uruguay is considering a bill that would legalize marijuana. And even in the United States, Colorado and Washington have legalized the recreational use of cannabis.
Two challenges come to mind under this scenario. First, the discussion on legalization (or regulation, as some prefer), has focused almost exclusively on marijuana. Indeed, the momentum towards a legal market of cannabis seems unstoppable: a recent poll showed that 52 percent of Americans favor legalizing the drug. Moreover, in a recent interview in Colombia’s El Tiempo, William Brownfield, assistant secretary of state for International Narcotics and Law Enforcement, said that legalizing cocaine, heroine, methamphetamine, and synthetic drugs would constitute crossing a “red line” for Washington. Tellingly he didn’t mention marijuana. As Mark Kleinman from UCLA points out, it seems as if the drug warriors in the Obama administration might have decided that “the Battle of Cannabis is lost, and are attempting to fall back to a more defensible position”. However, the problem in the Andean region, Central America, and largely Mexico isn’t marijuana, but cocaine prohibition. And the report, realistically so, foresees tough resistance from public opinion on most countries towards a legalized market for cocaine.
This leads us to the second challenge: some countries will be more enthusiastic in adopting legal frameworks for certain drugs while other will stick to prohibition. Given that narco-traficking is a transnational problem, this would create problems and tensions between governments.
It’s not a secret that the pathway toward legalization will prove a difficult one, especially because of the resistance it faces from public opinion in many Latin American counties. However, only legalization deals with the root of the problem: the black market of drugs that creates enormous profit opportunities for organized crime.
Resilience: Under this scenario, the drug problem is a consequence of a larger social problem related to poor socio-economic conditions at the local level and the lack of jobs and opportunities, especially for the youth. It also focuses on addiction as a health problem and not a criminal one.
The scenario portends countries investing in communities, establishing clinics to treat drug addicts, building sport facilities to dissuade youngsters from joining gangs and implementing “harm reduction” policies. It even envisions some sort of Marshall Plan where countries such as the United States contribute substantial financial resources in community building efforts in Latin America.
This the most unrealistic scenario. The drug problem in most of Latin America is not abuse but trafficking. Building libraries or basketball courts in poor areas won’t stop youths from joining gangs and engaging in drug running when the incomes they derive from it far exceed those they can earn from legal activities. And good legal jobs are rarely created in areas suffering from violent crime. It’s a vicious circle that is difficult to overcome short of legalization.
This scenario tackles drug abuse from a health perspective, which is positive. But this can also be the case under the legalization scenario.
Disruption: This is perhaps the most politically realistic scenario for the moment. Fed up by the constant failure of prohibition and the little advances in implementing alternatives to the war on drugs, one or a group of countries abandon the fight against international drug trafficking. They adopt a non-interventionist approach to drug smuggling, while focusing their police resources on violent crimes.
Many people speculated that this could be the case of Mexico under its new president Enrique Peña Nieto, although there is little evidence so far that his government is trying to reach accommodation with the cartels. Nor is this necessarily possible nowadays. Back in the 1970s and 80s the PRI governments—to which Peña Nieto belongs—adopted a complicit approach to drug trafficking, basically having the federal government look the other way while drugs were shipped to the North. However, back then drug trafficking was a family business conducted by an ex-policeman, Miguel Ángel Felix Gallardo. Today Mexico has up to seven powerful and violent cartels that fight against each other for control of trafficking routes. Even if the Mexican government were to adopt a non-interventionist approach to drug smuggling, that wouldn’t prevent the cartels from engaging in bloody turf wars. Drug violence might decline, since government intervention added volatility to a changing cartel landscape, but it is likely that Mexico would remain a violent country.
Moreover, the report rightly points out that, if a country decides to abandon the fight against drug trafficking, it could become a safe haven for kingpins. Drug money would likely flow into that country’s economy, potentially corrupting institutions and even civil society.
Unfortunately, given Washington’s obstinacy with prohibition, several governments in the region might be tempted to follow this scenario in the near future. They are willing to risk the growing presence of criminal organizations in order to reduce the staggering levels of violence afflicting their countries.
The OAS should be commended for this candid report. It serves the cause of having an open and honest debate on drug policy. It is now up to the leaders of the 34 nations of the Western Hemisphere to discuss which of these scenarios serve their countries better.
View full post on Cato @ Liberty
Food Aid as Industrial Policy
Simon Lester
It’s understandable that Americans would see malnourished people in other countries and want to help. Despite our recent economic woes, we are still relatively wealthy, and our instinct is to make the world a better place if we can.
The role of the government in any such issue is debatable. But not surprisingly, once the government gets involved, the original purpose gets distorted. In practice, after becoming a government program, the idea of giving food to poor people has been turned into an industrial policy tool. Instead of simply giving money to people to buy food from the cheapest source, the U.S. government buys food from U.S. producers and requires that it be sent overseas on U.S. ships.
Thus, government turns aid for the foreign poor into a domestic jobs program. As a result, the percentage of food aid money actually spent on food for the hungry is significantly reduced, as some of that money is now diverted to subsidizing domestic agricultural and other interests. (That, of course, is the problem with all industrial policy: it reduces overall welfare in order to help a favored few.)
Hopefully, that may change soon. From the Washington Post:
The Obama administration has proposed the first major change in three decades to the way the United States supplies food aid to impoverished nations, significantly scaling back the program that buys commodities from U.S. farmers and ships them to the needy overseas.
Under a proposal in the White House budget released Wednesday, nearly half of $1.4 billion in requested funds for the aid could instead be spent to purchase local bulk food in countries in need or to distribute individual vouchers for local purchases.
Reducing the government’s requirement to purchase U.S. food, most of which by law must be shipped on U.S.-flag vessels, will save enough money to feed an additional 4 million children, according to Rajiv Shah, administrator of the U.S. Agency for International Development (USAID).
…
Although the United States is the biggest provider of food assistance in the world, it is the only donor nation that continues to require national purchases and shipment. Government and academic studies in recent years have described the U.S. system as both wasteful and inefficient.
The proposed changes won’t completely get rid of the industrial policy aspect: “the new proposal stops well short of doing away with Food for Peace and guarantees that 55 percent of food assistance funds will still be used to purchase and transport U.S. commodities.” But it would be a start.
Of course, these kinds of programs generate support from interest groups who benefit, and who resist any change:
Attempts by previous administrations to change the program were opposed by farm-state lawmakers and the agricultural and maritime lobbies, which argued that it provided economic benefits and jobs at home. In a February letter to President Obama, 21 senators from both parties said the existing program, called Food for Peace, was “important to American farmers and shippers and developing nations around the world.”
The bottom line: If we are going to try to help the poor through government programs, let’s make sure those programs are designed to help the poor, not special interest groups.
View full post on Cato @ Liberty
New Cato Policy Analysis on Regulatory Protectionism
Sallie James
Just in time for today’s release of my and Bill Watson’s new PA, “Regulatory Protectionism: A Hidden Threat to Free Trade” comes a feature article [$] in the specialist trade (in both senses of the word) publication, Inside U.S. Trade on the likely obstacles to a U.S-EU preferential trade agreement (a recent Cato event also hosted a discussion on this topic). And, in an inadvertent PR coup for us, it focusses almost entirely on how regulations and other non-tariff barriers (NTBs) in each economy might inhibit a successful result to negotiations:
The shifting nature of domestic policies and agricultural trade between the United States and the European Union over the last several decades means that while some traditional trade irritants are no longer present, others have been introduced that will likely prove difficult to unravel in the context of trans-Atlantic bilateral negotiations. Whereas bilateral trade irritants previously centered on export subsidies and competition in third markets for commodities like wheat, now the disagreements primarily relate to non-tariff barriers (NTBs), including divergent scientific standards, food safety regulations and other issues that are hindrances to bilateral trade… But the difficulty in negotiating these issues is that, because they ostensibly relate to consumer health and safety, governments cannot easily make “trade-offs,” as they can with tariffs. Observers believe that this is the chief reason that the talks over agriculture promise to be so difficult.
Indeed. As we discuss in our paper, tariffs and other conventional trade barriers have fallen over the years, so the barriers that remain are more regulatory in nature, and more sensitive to negotiate. What we’re essentially left with is the difficult issues. They get to the heart of national sovereignty and, on a practical level, require the participation of regulatory administrators who may have very little or no trade negotiation knowledge or experience. They also have little incentive to concede their power. Whereas trade negotiators are paid to, well, negotiate, regulators are paid to inhibit commerce. They face asymmetric rewards: a huge fuss if something goes wrong, not many kudos if they remove the reins and let commerce thrive. Under those conditions, it should be no surprise that they are risk-averse. So this trade agreement will not be easy to complete. In the meantime, though, there is much the United States can do to limit the ability of regulators to shackle the economy with burdensome—and potentially illegal—requirements that limit choice and expose American businesses to retaliatory sanctions. For example, ensure WTO obligations are taken seriously and adhered to. From our paper:
Prior to implementing a new regulation, federal agencies should be required to evaluate the possibility that less trade-restrictive alternatives could meet regulatory goals as effectively as their preferred proposal. Also, the U.S. government should not dilute or bypass the multilateral rules of the WTO through bilateral or regional negotiations that accept managed protectionism. This paper uses a number of recent examples of protectionist regulations to show that the enemies of regulatory protectionism are transparency and vigilance. Policymakers should be skeptical of regulatory proposals backed by the target domestic industry and of proposals that lack a plausible theory of market failure.
Read the whole thing here. And if you are in D.C. or near a computer next Thursday, watch our event to launch the paper.
View full post on Cato @ Liberty
New Cato Policy Analysis on Regulatory Protectionism
Sallie James
Just in time for today’s release of my and Bill Watson’s new PA, “Regulatory Protectionism: A Hidden Threat to Free Trade” comes a feature article [$] in the specialist trade (in both senses of the word) publication, Inside U.S. Trade on the likely obstacles to a U.S-EU preferential trade agreement (a recent Cato event also hosted a discussion on this topic). And, in an inadvertent PR coup for us, it focusses almost entirely on how regulations and other non-tariff barriers (NTBs) in each economy might inhibit a successful result to negotiations:
The shifting nature of domestic policies and agricultural trade between the United States and the European Union over the last several decades means that while some traditional trade irritants are no longer present, others have been introduced that will likely prove difficult to unravel in the context of trans-Atlantic bilateral negotiations. Whereas bilateral trade irritants previously centered on export subsidies and competition in third markets for commodities like wheat, now the disagreements primarily relate to non-tariff barriers (NTBs), including divergent scientific standards, food safety regulations and other issues that are hindrances to bilateral trade… But the difficulty in negotiating these issues is that, because they ostensibly relate to consumer health and safety, governments cannot easily make “trade-offs,” as they can with tariffs. Observers believe that this is the chief reason that the talks over agriculture promise to be so difficult.
Indeed. As we discuss in our paper, tariffs and other conventional trade barriers have fallen over the years, so the barriers that remain are more regulatory in nature, and more sensitive to negotiate. What we’re essentially left with is the difficult issues. They get to the heart of national sovereignty and, on a practical level, require the participation of regulatory administrators who may have very little or no trade negotiation knowledge or experience. They also have little incentive to concede their power. Whereas trade negotiators are paid to, well, negotiate, regulators are paid to inhibit commerce. They face asymmetric rewards: a huge fuss if something goes wrong, not many kudos if they remove the reins and let commerce thrive. Under those conditions, it should be no surprise that they are risk-averse. So this trade agreement will not be easy to complete. In the meantime, though, there is much the United States can do to limit the ability of regulators to shackle the economy with burdensome—and potentially illegal—requirements that limit choice and expose American businesses to retaliatory sanctions. For example, ensure WTO obligations are taken seriously and adhered to. From our paper:
Prior to implementing a new regulation, federal agencies should be required to evaluate the possibility that less trade-restrictive alternatives could meet regulatory goals as effectively as their preferred proposal. Also, the U.S. government should not dilute or bypass the multilateral rules of the WTO through bilateral or regional negotiations that accept managed protectionism. This paper uses a number of recent examples of protectionist regulations to show that the enemies of regulatory protectionism are transparency and vigilance. Policymakers should be skeptical of regulatory proposals backed by the target domestic industry and of proposals that lack a plausible theory of market failure.
Read the whole thing here. And if you are in D.C. or near a computer next Thursday, watch our event to launch the paper.
View full post on Cato @ Liberty
Identifying the Right “Depreciation” Tax Policy
Daniel J. Mitchell
I’m normally reluctant to write about “depreciation” because I imagine eyes glazing around the world. After all, not many people care about the tax treatment of business investment expenses.
But I was surprised by the positive response I received after writing a post about Obama’s demagoguery against “tax loopholes” for corporate jets. So with considerable trepidation let’s take another look at the issue.
First, a bit of background. Every economic theory agrees that investment is a key for long-run growth and higher living standards. Even Marxist and socialist theory agrees with this insight (though they foolishly think government somehow is competent to be in charge of investments).
Let’s look at two remarkable charts, starting with one that shows the very powerful link between total investment and wages for workers.
As you can see, if we want people to earn more money, it definitely helps for there to be more investment. More “capital” means that workers have higher productivity, and that’s the primary determinant of wages and salary.
Our second chart shows how the internal revenue code treats income that is consumed compared to how it penalizes income that is saved and invested. Simply stated, the current system is very biased against capital formation because of the combined impact of capital gains taxes, corporate income taxes, double taxes on dividends, and death taxes.
Indeed, one of the reasons why the right kind of tax reform will generate more prosperity is that double taxation of saving and investment is eliminated. With either a flat tax or national sales tax, economic activity is taxed only one time. No death tax, no capital gains tax, no double tax on dividends in either plan.
All of this background information helps underscore why it is especially foolish for the tax code to specifically penalize business investment. And this happens because companies have to “depreciate” rather than “expense” their investments.
Here’s how I described depreciation in my post on corporate jets.
If a company purchases a jet for $20 million, they should be able to deduct – or expense – that $20 million when calculating that year’s taxable income… A sensible tax system defines profit as total revenue minus total costs – including purchases of private jets. But today’s screwy tax code forces them to wait five years before fully deducting the cost of the jet (a process known as depreciation). Given that money today has more value than money in the future, this is a penalty that creates a tax bias against investment (the tax code also requires depreciation for purchases of machines, structures, and other forms of investment).
And I also addressed the issue when writing about the economic illiteracy in one of the Obama-Romney debates.
Now let’s see what some experts on the topic have to say.
Here’s some very sage analysis from Alan Viard of the American Enterprise Institute.
…a deal that cuts the corporate rate could end up doing more harm than good. The problem is that Congress and the Obama administration are thinking of pairing the rate cut with a slow-down of companies’ depreciation deductions. That’s a bad combination. A key goal of corporate tax reform should be to reduce the tax penalty on business investment. Investments in equipment, factories, and other forms of capital help power the long-run economic growth that boosts wages and living standards for American workers. …If depreciation is slowed down enough to offset the full revenue loss from the rate cut, then there’s no reduction in the investment penalty, on balance. The depreciation changes take back with the left hand everything that the rate cut gives with the right hand. …In fact, the policy makes the tax penalty on new investments bigger. …Why is this bad combination being considered? Maybe because the rate cut is easy to understand and the harm of slower depreciation is easy to overlook. …Yes, let’s cut the corporate tax rate. But, let’s not slow down depreciation to pay for it.
Amen. Proposals to lower America’s destructively high corporate tax rate are needed, but I don’t want politicians “paying for” the change with other policies that are similarly harmful to growth and competitiveness.
Margo Thorning of the American Council for Capital Formation adds some wisdom with her column in today’s Wall Street Journal.
…proposals that would increase the tax burden on capital-intensive industries—which are contributing to U.S. economic growth and employment—should be viewed with caution. …stretching out depreciation allowances reduces a company’s annual cash flow and raises the “hurdle rate” that new investments would have to meet before they are approved. For capital-intensive firms in sectors such as energy, manufacturing, utilities and transportation, the trade-off between delayed cash flow and lower corporate income-tax rates may result in cutbacks in capital spending. …Each additional $1 billion in investment is associated with 23,000 new jobs, according to data from the Department of Commerce and the Bureau of Labor Statistics. …Rather than drawing out depreciation schedules, a better, pro-growth approach to corporate tax reform would be to allow all investment to be expensed—in other words, deducted from income in the first year.
I share Margo’s concerns, which is why I’m very suspicious when the President says he wants to lower the corporate tax rate and “reform” the system.
Last but not least, Matt Mitchell (no relation) of the Mercatus Center recently added his two cents to the discussion.
The idea that “accelerated” depreciation is a loophole can be traced back to Stanley Surrey, the Harvard law professor whose work in the 1950s, 60s, and 70s influenced many…, including Senator Bill Bradley. …immediate expensing would mean abandoning “the attempt to tax business income.” That’s because it would essentially turn the corporate income tax into a corporate consumption tax. And that may be a good thing. Capital taxation is notoriously inefficient. This is one reason why Robert Hall and Alvin Rabushka permitted immediate 100 percent expensing in their famous flat consumption tax.
You should realize, by the way, that the distorted view of what’s a loophole doesn’t just apply to depreciation. The Joint Committee on Taxation (the same folks who basically assume that the revenue-maximizing tax rate is 100 percent) also tells lawmakers that it’s a loophole if you don’t double-tax capital gains, or if you allow people to avoid double taxation by utilizing IRAs.
With advice like that, no wonder the tax code is a mess.
Anyhow, congratulations are in order. If you’ve made it this far, you almost surely know more about depreciation than every single politician in Washington. Though, to be sure, that’s not exactly a big achievement.
View full post on Cato @ Liberty
A History of Foreign Policy from a Libertarian Perspective
Leonard Liggio is currently the Executive Vice President of Academics at the Atlas Economic Research Foundation, a Distinguished Senior Scholar at the Institute for Humane Studies, and a Research Professor at George Mason University’s School of Law.
In this lecture from a Laissez-Faire Supper Club meeting in 1981, Liggio gives a history of foreign policy beginning in England during the Enlightenment and spanning all the way up to the Cold War. He makes the case that government intervention abroad through the centuries has been just as disastrous and has been fraught with just as many unintended consequences as government intervention in domestic policy.
View full post on Libertarianism.org
Obama’s Perilous Foreign Policy Path
Malou Innocent
To both a greater and lesser degree of success, foreign policy scholars have tried to explain the disconnect between President Obama’s soaring idealism of America’s role in the world and his halting political caution about it in discrete situations. That vacillation has drawn criticism, both for being too meddlesome and for not being meddlesome enough.
Daily Caller contributor Adam Bates ably sums up the president’s incoherence as “not based on any particular logic or worldview beyond the president’s own desire to distance himself from America’s foreign policy past without bothering to actually change any policies.” Indeed. As this author has written in the past, specifically on counterterrorism policies,
On the one hand, Obama openly rejected Bush’s ‘with us or against us’ approach to foreign affairs. On the other hand, Obama’s sophisticated demeanor opened him to criticism, with hawks condemning him as too weak and easily manipulated by America’s enemies.
The administration has supported policies that have failed to deliver tangible benefits to the American people (Libya), continued to prop up brutal regimes (Bahrain, Saudi Arabia, and Egypt), and helped tether our country to the region’s parochial quarrels (Afghanistan, Pakistan, and perhaps ever-more-so in Syria). Despite seemingly courageous attempts to distance itself from failed policies of the past, the Obama administration has managed to drift into strategic purgatory.
View full post on Cato @ Liberty
Still Contemptuous of the Court, TSA Doesn’t Even Try to Justify its Strip-Search Machine Policy
Jim Harper
It took the Transportation Security Administration 20 months to comply with a D.C. Circuit Court of Appeals order requiring it to issue a justification for its policy of using strip-search machines for primary screening at airports and to begin taking comments from the public.
In that time, it came up with a 53-page (double-spaced) notice of proposed rulemaking. That’s 2.65 double-spaced pages per month.
This may be the most carefully written rulemaking document in history. We’ll be discussing it next week at an event entitled: “Travel Surveillance, Traveler Intrusion.” Register now!
The TSA’s strip-search machine notice will be published in the Federal Register tomorrow, and the public will have 90 days to comment. The law requires the agency to consider those public comments before it finalizes its policies. If the comments reveal the TSA’s policies to be arbitrary or capricious, the policies can be struck down.
But what is there to comment on? The TSA’s brief document defends a hopelessly vague policy statement instead of the articulation that the court asked for. And as to the policy we all know it’s implementing, TSA hides behind the skirts of government secrecy.
When the court found that the TSA was supposed to take comment from the public, it wanted a clearer articulation of what rules apply at the airport. The court’s ruling itself devoted several paragraphs to the policy and how it affects American travelers.
[T]he TSA decided early in 2010 to use the scanners everywhere for primary screening. By the end of that year the TSA was operating 486 scanners at 78 airports; it plans to add 500 more scanners before the end of this year.
No passenger is ever required to submit to an AIT scan. Signs at the security checkpoint notify passengers they may opt instead for a patdown, which the TSA claims is the only effective alternative method of screening passengers. A passenger who does not want to pass through an AIT scanner may ask that the patdown be performed by an officer of the same sex and in private. Many passengers nonetheless remain unaware of this right, and some who have exercised the right have complained that the resulting patdown was unnecessarily aggressive.
The court wanted a rulemaking on this policy. In the jargon of administrative procedure, the court demanded a “legislative rule,” something that reasonably details the rights of the public and what travelers can expect when they go to the airport.
Instead, the TSA has produced a perfectly vague policy statement that conveys nothing about what law applies at the airport. In the regulations that cover screening and inspection, the TSA simply wants to add:
(d) The screening and inspection described in (a) may include the use of advanced imaging technology. For purposes of this section, advanced imaging technology is defined as screening technology used to detect concealed anomalies without requiring physical contact with the individual being screened.
Not a word about the use of strip-search machines as primary screening. Nothing about travelers’ options. Nothing about signage. Nothing about the procedures for opt-outs. Nothing about what a person can do if they have a complaint. It’s not a regulation. It’s a restatement of “we do what we want.”
That’s contemptuous of the court’s order requiring TSA to inform the public, take comments, and consider those comments in formulating a final rule. TSA is doing everything it can to make sure that the airport is a constitution-free zone, and this time it’s lifting a middle finger to the D.C. Circuit Court of Appeals.
It is possible, even in a relatively short document, to articulate how billions of dollars spent on exposing the bodies of millions of law-abiding Americans makes the country better off. What’s amazing about the document is how little it says. TSA doesn’t even try to justify its strip-search machine policy. Instead, it plays the govenment secrecy trump card.
Here is everything TSA says about how strip-search machines (or “AIT” for “advanced imaging technology”) make air travel safer:
[R]isk reduction analysis shows that the chance of a successful terrorist attack on aviation targets generally decreases as TSA deploys AIT. However, the results of TSA’s risk-reduction analysis are classified.
Balderdash.
Under Executive Order 135256, classification is permitted if “disclosure of the information reasonably could be expected to result in damage to the national security, which includes defense against transnational terrorism.”
“If there is significant doubt about the need to classify information,” the order continues, “it shall not be classified.”
Assessing the costs and benefits of TSA’s policies cannot possibly result in damage to national security. The reason I know this? It’s already been done, publicly, by Mark G. Stewart of the University of Newcastle, Australia, and John Mueller of the Ohio State University. They published their findings in the Journal of Homeland Security and Emergency Management in 2011, and national security is none the worse.
Walking through how well policies and technologies produce security can be done without revealing any intelligence about threats, and it can be done without revealing vulnerabilities in the policy and technology. But the TSA is playing the secrecy trump card, hoping that a gullible and fearful public will simply accept their authority.
I anticipated that the agency might try this tactic when the original order to engage in a public rulemaking came down in mid-2011. In a Cato blog post, I wrote:
Watch in the rulemaking for the TSA to obfuscate, particularly in the area of threat, using claims to secrecy. “We can’t reveal what we know,” goes the argument. “You’ll have to accept our generalizations about the threat being ‘substantial,’ ‘ever-changing,’ and ‘growing.’” It’s an appeal to authority that works with much of the American public, but it is not one to which courts—a co-equal branch of the government—should so easily succumb.
If it sees it as necessary, the TSA should publish its methodology for assessing threats, then create a secret annex to the rulemaking record for court review containing the current state of threat under that methodology, and how the threat environment at the present time compares to threat over a relevant part of the recent past. A document that contains anecdotal evidence of threat is not a threat methodology. Only a way of thinking about threat that can be (and is) methodically applied over time is a methodology.
The TSA published nothing, and it hopes to get past the public and the courts with that.
Its inappropriate and undeniably overbroad use of secrecy will be in our comments to the agency and the legal appeal that will almost certainly follow.
Crucially, agency actions like this are subject to court review. When the TSA finalizes its rules, a court will “decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” Sooner or later, we’ll talk about whether TSA followed the court’s order, the lawfulness of wrapping its decision-making in secrecy, and the arbitrary nature of a policy that has no public justification.
View full post on Cato @ Liberty
Obama’s Trade Policy Should Be Judged on Its Accomplishments, Not Its Promise
Daniel J. Ikenson
There has been more buzz about the prospects for trade liberalization this year than at any time since the first term of the second president Bush. It appears that some may be mistaking the chatter for actual accomplishment.
For example, trade policy made the front page of Saturday’s Washington Post in a story that is much less about the substantive issues, or the obstacle-strewn path to meaningful liberalization, or the political leadership that will be required to surmount those obstacles than it is a paean to President Obama’s alleged metamorphosis into a champion of free trade.
But before anyone awards the president the Nobel Trade Prize for a job yet done, consider this: in four-plus years, this administration has concluded zero trade agreements, while launching 13 WTO cases against various trade partners. For 50 months, enforcement and domestic protectionism—not liberalization—have dominated the trade agenda.
Yet, the absence of evidence that this administration can deliver meaningful new trade agreements doesn’t seem to curb the enthusiasm of Bruce Stokes, a long-time trade policy observer, whose comment serves as the emphatic final sentence of the Washington Post tribute: “They appear to have moved from a risk-averse first term to creating a legacy in international economic and trade policy.” A legacy? Really? Shouldn’t the bar be raised just a smidge before we coronate President Obama this generation’s Cordell Hull?
For starters, wouldn’t the president have delegated someone capable and experienced to take ownership of the trade agenda if he were really committed to leaving a trade policy legacy? U.S. trade representative Ron Kirk announced more than one year ago that he would be leaving his post early in a second Obama administration. Yet there is nobody vetted and ready to take the reins of trade policy. Kirk’s official resignation came at the end of last month—though he has been hanging around to help out on account of … “sequestration.”
The most prominent name floated for U.S. Trade Representative has been the OMB’s Jeff Zients, the person most closely associated with President Obama’s proposal to subsume the USTR under the enforcement-centric Commerce Department—again, not exactly the substance of trade legacy-building. Members from both parties in Congress have demanded a better candidate if the president expects his trade agenda to be taken seriously.
Accomplishments, not rhetorical intentions, should serve as the basis for our judgments. Anyone can announce initiatives. President Obama is quite proficient at reciting litanies of initiatives. But it remains to be seen how he handles the situation when the deals require his confronting allied interests and dismantling their protectionist perches. In fairness, the administration’s trade negotiators have been working hard toward a Trans-Pacific Partnership agreement with 10 Pacific-rim nations. But let’s see where this goes before we start writing history. There’s still a lot of ham left on that bone.
The administration has verbally committed to completing the TPP negotiations by the end of this year and the just-announced Transatlantic Trade and Investment Partnership negotiations with Europe by the end of next year—both virtual impossibilities given where things stand in those negotiations and between the White House and Congress. So we already have a credibility problem.
Both sets of agreements are likely to include provisions that penetrate deeper than usual into the domestic regulatory space of all countries involved. Understandably, this is generating resistance—particularly to U.S. demands for extra investor and intellectual property protections. Some of the groups that were instrumental in defeating SOPA and PIPA legislation last Congress are beginning to mobilize in response to concerns that the TTIF could be a backdoor to IP-based restrictions that affect internet use and data sharing, among other issues. U.S. negotiators are making serious demands on matters they claim to be central to 21st century trade, yet they appear unwilling to give ground on the 18th century protectionism still afforded U.S. textile and footwear producers.
I bring attention to these details not to pick a fight about Obama’s trade record, but to emphasize that facts matter. So do characterizations. Readers should know about growing resistance to U.S. demands that threaten to prolong or derail the TPP and TTIP negotiations. Readers should know that if the talks break down or produce less ambitious outcomes, that there is probably more to the story than the official U.S. account, which will pin the blame on foreign intransigence. Readers should know that the U.S. government engages in all sorts of protectionist policies and then relies on media to characterize trade as a zero-sum contest between U.S. producers and foreign producers. Under this rubric, U.S. protectionism is presented as a necessary response and it becomes patriotic to support our own trade barriers—the very protectionism that hurts us the most.
Consider this quote from the Washington Post story above about the administration’s decisions to pursue these trade agreements:
To the Obama administration, it’s the logical response to sluggish job growth, the failure of the Doha round of global trade talks and the fear that trade restrictions incubated in places such as China and India could become the global norm unless countered.
Yes, local content rules and preferences granted indigenously created technologies are emerging threats to the trading system, but this would be a good place in the story to point out that “Buy American” provisions were incubated in the United States well before the founding of either the Republic of India or the People’s Republic of China, and they have been emulated around the world. What about the massive subsidies bestowed upon U.S. green industries and farmers? This tendency to portray the United States as wearing the cape or the white hat in a world full of trade scofflaws infantilizes readers, making it harder to dismantle our own barriers.
Furthermore, the administration has barely begun to do anything substantive with respect to securing Fast Track negotiating authority from the Congress, which it will need to get any trade agreements approved by the legislature. Congress is largely in the dark about what the administration has been negotiating in the TPP. The administration’s cavalier attitude toward this potentially arduous process betrays either a lack of understanding or concern that Congress, if it grants that authority, will attach all sorts of conditions that may render moot the past couple years of negotiations on the TPP.
Not until the penultimate paragraph of the Washington Post story is the depth of President Obama’s embrace of trade revealed:
The lackluster pace of job creation here and among allies in Europe created a try-anything attitude on both sides of the Atlantic. China’s rise has led to a broader U.S. effort to deepen relationships with Asian nations that share many of the same anxieties about their behemoth neighbor.
Alas, President Obama has not found religion on trade after all. He’s merely run out of options. The TPP was motivated from the outset as a means to regain some of the influence—on policy and institution-building in the Asia-Pacific—presumed to have been lost to China, as America toiled in Iraq and Afghanistan. Persistently high unemployment, despite four years of stimulus, subsidies, and bloated federal spending, had finally led the administration to its last resort: trade liberalization.
So there you have it. A president who has settled on trade agreements as a last resort to spur investment and create jobs shouldn’t inspire too much confidence that he’s in it for the long haul and that he’ll be willing to make the tough political decisions ahead, particularly if the economy starts to improve and his affection for trade agreements proves fleeting.
Who knows, maybe the Washington Post story convinced the White House that it’s already done enough good on the trade front and the moment for real liberalization has already passed.
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