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Kim Jong-un threw a big military parade earlier today, reminding the world of his military power on the eve of the Pyeongchang Winter Olympics’ opening ceremony. Compared to the massive annual parade that takes place on April 15th (the anniversary of Kim Il-sung’s birth), today’s parade was smaller and less significant, though it did feature some interesting missile systems.

The first missile system of note was a new type of close- or short-range ballistic missile (C/SRBM) that, at first glance, looks similar to the Russian-made Iskander-M SRBM.


(New type of North Korean C/SRBM, February 8, 2018. Source: YouTube)

(Iskander-M SRBM system. Source: Wikipedia Commons)

Like the Iskander, the new North Korean system carries two missiles side-by-side in a four axle transporter-erector-launcher (TEL) vehicle. Another similarity of the two systems is fuel type: most C/SRBMs use solid rocket fuel. Although the type of fuel used in the new North Korean missile system cannot be determined from the parade video alone, it would be very unusual for a missile of its size to not use solid fuel.

The combination of the TEL and solid rocket fuel implies that the North Korean system is highly mobile and can be launched on much shorter notice than Pyongyang’s liquid-fueled Scud missiles. The new missile may have a shorter range and lighter payload than the larger Scud, but the smaller logistical footprint and shorter launch time of the new system could offer important tactical advantages.   

However, imagery analysts have noticed some external features of the new missile that are inconsistent with the design of the Iskander. Writing for NK Pro, Scott LaFoy says, “It may also be the case that this is a heavily modified Tochka system [another Russian missile]…[but] the imagery is insufficient for building a confident assessment.” Moreover, while the Iskander-M is a very accurate SRBM, the parade footage does not provide any definitive information about the accuracy of the North Korean missile.

Replacing or supplementing the Scud-based SRBM force with solid-fueled, highly-accurate C/SRBMs would be an important strategic development for North Korea. However, the images from the recent parade do not provide much information about North Korea’s the capabilities of the new missile system beyond some general inferences.

The parade also featured North Korea’s two inter-continental ballistic missiles (ICBMs), the Hwasong-14 and Hwasong-15. This is the first time that either missile has appeared in the parade, but both were successfully flight tested in 2017, so the missiles themselves don’t come as a surprise.

(Hwasong-14 on flatbed tractor-trailer, February 8, 2018. Source: YouTube)

However, the vehicles that carried the ICBMs are notable. Instead of being carried by the vehicle used during its flight tests, the Hwasong-14 was mounted on a flatbed trailer being towed by a truck. This tractor-trailer configuration was previously seen last April, but in that parade the trailer featured a large canister and equipment for erecting the canister—akin to China’s DF-31A ICBM. Both the canister and erector equipment were absent in the recent parade. The lack of a canister and erector, as well as the fact that the Hwasong-14’s rocket engine was covered up, suggest that the tractor-trailer configuration seen in today’s parade was for display purposes only. The Hwasong-15 was carried by the TEL that was used in its November 2017 flight test, but only four TELs appeared in the parade.

(Hwasong-15 on TEL, February 8, 2018. Source: YouTube)

The number of TELs in today’s parade is important because it represents a key vulnerability in North Korea’s ICBM force. All of the North Korean vehicles capable of carrying ICBMs are based on Chinese-made heavy logging trucks that were modified by the North Koreans to carry missiles, but no more than six of these trucks have been seen at one time. Kim Jong-un recently claimed that North Korea is capable of indigenously producing more large TELs for its missile forces. The TEL for the Hwasong-15 does have one more extra axle than the original logging truck, and the presence of five Hwasong-15s at the parade shows that the North Koreans can successfully modify their existing capabilities. However, the parade offers no evidence to substantiate Kim’s claim that the country can manufacture new TELs.

Looking beyond the military hardware featured in the parade, it’s important to consider the message the parade was trying to convey. Inferring the strategic intent or signal behind such actions is a very difficult task, and there is probably no one right answer, but that probably won’t stop commentators from declaring the parade a threatening display of power meant to intimidate or divide the United States and South Korea. This is a plausible explanation, but there is another way to view the parade that is equally plausible.

The recent diplomatic rapprochement between North and South Korea is a welcome change from escalating rhetoric about military action that characterized much of 2017. The military parade, which was announced shortly after the beginning of North-South dialogue, may be intended as a signal to North and South Koreans rather than the United States. Kim may be the most important individual within North Korea, but he depends on several power structures within his government for support and legitimacy. Conducting a military parade in the midst of diplomatic talks between Pyongyang and Seoul shows these power structures that Kim is not negotiating from a position of weakness and that military options for defending and advancing North Korea’s interests are not being neglected. The potential message the parade sends to Seoul is a reiteration of Kim’s bottom line that talks will not lead to denuclearization or regime change.  

Is it the economy, stupid? A preliminary analysis would have concluded that such a maxim would prevail in Costa Rica’s presidential race: unemployment is high (especially among the youth), the cost of living is one of the highest in Latin America, and public finances are at a breaking point. However, culture wars, in particular same-sex marriage, dominated the debate leading up to the first round of elections held on Sunday. How can this be explained?

From the beginning this was an atypical presidential race for Costa Rica, due to the rise of a right-wing populist candidate who led the polls for many months. With a messianic and authoritarian rhetoric of “rebuilding the country” aimed at a “direct democracy with no parties or corrupt politicians,” Juan Diego Castro, a well-known litigation lawyer and former minister of security, became the candidate of the until then miniscule and irrelevant National Integration Party.

Castro’s phenomenon showed once again something that had become evident during the previous election: Costa Rica, Latin America’s oldest democracy, is not immune to populism. The country harbors several conditions that feed such a phenomenon. There is a tremendous animosity towards the political class, which is perceived as both corrupt and inept. This resentment also affects the media, businesspeople, and the judiciary. The rise of violent crime—2017 recorded the highest homicide rate in the country’s history—and the perception that the authorities are too weak on crime, further feeds the anger.

A widespread corruption scandal, in which the incumbent Solis administration was directly involved, along with the judiciary and various opposition parties, dominated public attention for months and strengthened Castro’s candidacy. Just one month before the election, polls showed him and Antonio Álvarez Desanti, from the National Liberation Party, as the most likely candidates to move forward to the run-off on April 1.

Yet there was a January surprise. On January 9, the Inter-American Court of Human Rights responded to an inquiry from the Costa Rican government on what sort of legal protection same-sex couples should have. The Court ordered the country to modify its laws to give them the same legal protections that heterosexual couples enjoy. Due to the principle of “conventionality control” with which the opinions and rulings of the Court are endowed in the Costa Rican legal system, that opinion de jure legalized equal marriage.

The issue was not alien to the campaign. In December, a march organized by the Catholic Church in favor of the “traditional family” brought together hundreds of thousands of people in San José—including seven presidential candidates. For some reason, the fight against the so-called “gender ideology” was already receiving more attention than the economy. A poll later revealed that two thirds of Costa Ricans oppose the Court’s decision on same-sex marriage.

The effect of the Court’s opinion was immediate. Fabricio Alvarado, an evangelical preacher and the only congressional representative of the National Restoration Party, went from having 3% in the polls to leading them, after promising to withdraw Costa Rica from the Inter-American Human Rights System. Carlos Alvarado, from the incumbent Citizen Action Party (PAC), also benefitted after young progressive voters rallied to support him for being the only candidate that welcomed the opinion of the Court. Ironically, the new scenario harmed Juan Diego Castro, who in spite of his right wing populism maintained a moderate approach regarding the rights of gay people.

The Court’s decision is deeply worrisome, even for those of us who defend the equal rights of sexual minorities, since its legitimacy with public opinion—which is crucial for these issues to advance and avoid generating reactionary movements—is extremely weak. This does not mean that same-sex marriage should have waited for the approval of the majority of the population, but that the decision would have had a more solid standing if it had emanated from Costa Rican institutions. Unsurprisingly, a large segment of the population reacted negatively to the perception that a foreign court was imposing same-sex marriage on the country.

The first round of elections confirmed that this issue prevailed over any other topic—including the previously most important one, corruption. Fabricio Alvarado received nearly 25% of the vote, while Carlos Alvarado came in second place with 21.7%. Antonio Álvarez Desanti, who also tried to lash out against the so called “gender ideology” and equal marriage rights, finished third with 18.6%.

Unfortunately, missing from the debate was the economy. It is possible that the low inflation rates of the last four years (averaging an annual 1.9%) contributed to a false sensation of macroeconomic stability. A crisis is nonetheless looming given the unsustainable trajectory of public finances: the fiscal deficit reached 6.2% of GDP in 2017 and it is forecasted to rise to 7.1% this year. The central government’s debt has grown to almost 50% of GDP.

If the problem—caused by unconstrained public spending growth—is not tackled immediately, then the government’s indebtedness will push interest rates up higher—something that is already happening—thus hampering consumption and investment. Growth will fall and unemployment, already at 9.4%, will worsen. The government will asphyxiate the economy.

The future president will take over with this difficult dilemma and will be far from having a parliamentary majority. The structural reforms needed to avoid a crisis will require a lot of political capital. That is why the future president should have spoken frankly to the Costa Rican people about the magnitude of the fiscal problem and the measures required to fix it. Costa Ricans, however, chose to focus on the “culture wars.”

Some officials at Immigration and Customs Enforcement (ICE) are reportedly looking into the agency joining the Intelligence Community (IC). Making ICE, which is responsible to deportations, a member of the IC would be a mistake, putting our civil liberties at risk by giving the agency increased access to vast troves of information not related to immigration enforcement.

ICE officials have been pushing for this change since the Obama administration, but the close relationship between intelligence agencies and immigration enforcement officials is nothing new. Almost one hundred years ago, one of the most notorious set of deportations in American history occurred, thanks in large part to domestic law enforcement acting like a spy agency.

In 1919 followers of the Italian anarchist Luigi Galleani sent mail bombs to dozens of prominent public figures, including Attorney General Mitchell Palmer. Although the wannabe assassins failed to kill any of their intended targets, the bombings sparked the United States’ first “Red Scare.”

Palmer, Assistant Attorney General Francis Garvan, and Bureau of Investigation (BI) director William Flynn met shortly after bombings to decide on a course of action. They concluded that mass deportations were the solution to the Red menace, and made plans for an “Anti-Radical Division.” Garvan knew just the man to run this new agency, a 24-year-old former librarian named J. Edgar Hoover.

Hoover put his librarian skills to use, creating a database that included thousands of notecards that catalogued details related to individuals, publications, and organizations. This intelligence apparatus helped agents carry out the Palmer Raids. These raids resulted in thousands of people being arrested (many without warrants) and hundreds of “radicals” being deported. 

BI agents went undercover, and local police set up “Red squads”:

Local police were encouraged to set up their own “Red squads” and share their findings with Washington. Private detective agencies, employed by the struck companies, supplied huge lists of names. Under a variety of pretexts — which included purchase, seizure, and theft — whole radical libraries were obtained. Newspapers were collected “by the bale” and pamphlets “by the ton.” Forty multilingual translators searched foreign-language periodicals for names and inflammatory quotations. Stenographers were sent to public meetings to take down the content of speeches. In Washington one-third of the BI’s special agents were assigned to antiradical work; in the field, over one-half, many of them undercover.

The BI, like its descendant the Federal Bureau of Investigation (FBI), was a law enforcement agency, but it also engaged in extensive domestic intelligence activities. Today, the FBI is one of the 17 agencies that make up the IC.

Customs and Border Protection (CBP) and ICE, the two agencies responsible for border security and deportations are not members of the IC. Yet when the president or his administration mandates a “deportation force,” “extreme vetting,” and the collection of immigrants’ social media information, immigration enforcement authorities start to look incrasingly like spy agencies.

Because ICE targets are oftentimes hard to locate, strict enforcement of immigration law requires surveillance that inevitably affects Americans and immigrants alike. Plans to access billions of license plate images and automate the monitoring of visa applicants’ online behavior will hardly leave Americans unscathed.

The fact that ICE already uses surveillance tools isn’t an argument in favor of it being a member of the IC. Homeland Security Investigations (HSI), a branch of ICE, investigates a wide range of federal crimes, including human trafficking, money laundering, and art theft. And it already has access to a plethora of information housed by the FBI, Drug Enforcement Administration (DEA), the Bureau of Alcohol, Tobacco, Firearms and Explosives, and other law enforcement agencies.

In its last days, the Obama administration expanded the National Security Agency’s powers to share signals intelligence with other members of the IC without filtering it first. This should concern the millions of innocent Americans who communicate with or employ immigrants, because details about their lives could be swept up as part of immigration investigations, as Reason’s Scott Shackford explained:

If an American citizen is suspected of a crime that ICE is investigating, officials are required to get a warrant to get access to an American’s private communications. But if they are not the subject of an investigation or their communications get collected in intelligence-gathering that’s not about fighting crime, they do not. So, weirdly, Americans have more due process protections from warrantless snooping if they’re suspected of crimes.

For the purposes of ICE surveillance, it’s very easy to imagine that an American communicating with an immigrant (here legally or not) having his or her phone calls or communications accessed without even knowing about it. So if ICE is allowed to intrude further into the realm of intelligence, that increases the number of federal officials allowed to have access to secret snooping not just of immigrants or people in foreign lands, but of Americans here at home as well.

In addition to granting more officials access to raw signals intelligence, ICE membership of the IC would almost certainly lead to ICE engaging in “parallel construction,” a practice used and encouraged by the DEA and FBI. Using parallel construction, members of the IC share intelligence with state and local law enforcement, who then use it to make arrests. These local police departments then construct their own parallel chain of events in order to conceal the fact that IC members tipped them off. This practice, which violates the right to a fair trial, should end. If ICE joins the IC, it’s likely to occur more often.

The current administration’s immigration policies require that ICE gather and analyze more information about the lives of people living in the United States. At a time when ICE is putting more American citizens’ civil liberties at risk, administration officials should resist calls to put ICE in the IC.

It appears hurricanes are a catalyst for school choice. Hurricane Katrina hit Louisiana in 2005, spurring a substantial school system reform. Hurricane Maria hit Puerto Rico in 2017, and their education secretary, Julia Keleher, recently announced that private school “vouchers will be included.” This could be a great thing. 

But Puerto Rico better not follow the heavily regulated Louisiana model.

In order to participate in the Louisiana voucher program, private schools must administer all of the standardized state tests, maintain a “quality” curriculum, and surrender their admissions processes over to the government. And of course, these state-driven regulations come with unintended consequences. As shown in figure 1 below, only a third of Louisiana private schools choose to participate in the state’s voucher program, while participation is much higher in less regulated locations. Furthermore, my colleagues and I find that the regulations in Louisiana likely reduce the quality of participating private schools. And, unsurprisingly, the participating private schools start to look a lot like government schools.

But that’s not all. The first experimental evaluation in the world ever to find negative effects of school vouchers on student achievement was in Louisiana.

“Accountability” to the government may sound enticing for Puerto Rico. After all, their elites likely wish to prevent poor families from making bad decisions. However, the perceived short-run benefit leads to actual long-run costs. Top-down accountability measures prevent high quality schools from participating at all. And worse, they nudge otherwise autonomous private schools to behave like government schools. Why entice great schools to imitate the very institutions that children are so desperately trying to escape?

Besides, since private schools must attract their customers, they already face tremendously stronger accountability pressures than government schools.

Puerto Rico has a great opportunity here. But they must do this right. If Puerto Rico mimics Louisiana, their natural disaster could very well lead to an educational disaster.

January brought a new year to our calendars—more on calendars shortly—but a look at the public schooling values and identity-based battles for the month shows that nothing much has really changed. Some of the big battlegrounds of 2017—and years before that—are still big battlegrounds at the outset of 2018. Which should come as no surprise: A new year doesn’t suddenly make diverse people abandon the cultures, histories, and values they cherish.

Let’s look at some of the recurring conflicts in January:

  • Gender: How to fairly treat both transgender students and people who are concerned about privacy, and sometimes transgenderism itself, remains probably the hottest flashpoint in public schooling today. We posted three new battles on the topic in January, including two—one in Virginia, one in California—in which efforts to instill tolerance of transgender children was seen by some as indoctrination. The California incident included the “Gender Unicorn,” which was a source of concern in North Carolina in 2016. The third battle was in Clark County, Nevada, in which a boy who said he was gay but not transgender—how should that be handled?—but who felt more comfortable changing with girls, was using the girls’ locker room. There was also an update to a conflict in Kenosha, Wisconsin. There the school district settled with a transgender student who was required to wear a green wristband to monitor his bathroom access, as well as other policies that made him feel stigmatized.
  • Punished for Challenging Schools: Early in the month education grabbed national headlines as a teacher in Vermillion Parish, Louisiana, was put in handcuffs allegedly for speaking beyond the public comment period at a school board meeting, but many feared it was really because she was criticizing the board for giving the superintendent a generous salary increase while holding teacher pay flat. In Washington State at the end of the month, a father was arrested for allegedly threatening to hurt students who bullied his daughter when he went to her school to complain about the bullying. He said he made no such threats, and that school officials stereotyped him because he is heavily tattooed. Finally, a student in Lebanon, Tennessee, was suspended after posting a video she recorded in a school classroom criticizing the school’s handling of bullying. District officials said her punishment was not for her message, but for recording in a classroom without a teacher’s permission.
  • Sex: Battles over sex education and policies such as condom distribution in schools have erupted for decades, and in January debate occurred in Indiana over legislation that would require public schools to have parents opt their children into any lessons dealing with sex. Meanwhile, the Tigard-Tualatin school board in Oregon was poised to vote on removing school-based clinics where students could obtain birth control.

In addition to the battles we saw pop up in multiple places this month, an overlooked type of conflict that is illustrative of the inescapably zero-sum nature of public schooling also occurred. We have seen it before in places such as New York City and Maryland. In Texas, a school district voted against making the Hindu holiday of Diwali a day off on the district calendar, seeing adding such a holiday as a violation of church-state separation. But don’t districts take Christmas off? Yes, but the official reason often offered is that too few kids would come to school to make being open worthwhile. At a minimum, the result of such understandable reasoning is that small religious groups suffer while big ones get what they want. Mayor Michael Bloomberg captured the problem in 2009 when he explained why he opposed a request to put two Muslim holidays on the New York City district calendar: “One of the problems you have with a diverse city is that if you close the schools for every single holiday there won’t be any school.”

If only there were a way to fix a problem like that in this new year…. Oh, right: With school choice even small minorities could much more easily get their religious needs met, because rather than having to impose their holidays on all the people of an entire district, they’d just need a school or two that shares their religion, or that is even just willing to take their holidays off.

Don’t forget to check out and “like” the Battle Map Facebook page, vote in our latest poll there, and have a happy 2018!

Last November, Border Patrol agent Rogelio Martinez died in the line of duty.  At the time, it was unclear how Agent Martinez perished and many jumped to the conclusion that he was murdered.  Texas Governor Greg Abbott (R-TX) said Martinez was killed in “an attack.”  Texas Senator Ted Cruz (R-TX) went further, arguing that Rogelio’s death shows just how insecure the border is and that the Border Patrol needs more resources.  A spokesperson for the National Border Patrol Council, the union for Border Patrol agents, said that Martinez may have been bludgeoned to death by rocks.  They all jumped the gun.

Martinez’s death remains a mystery, but an FBI investigation found no evidence of an attack.  The government records all Border Patrol agent and Customs officer deaths in the line of duty.  A total of 33 Border Patrol agents died from 2003 through 2017 (Table 1).  The ratio of agents to deaths was the lowest in 2004, but more agents died in 2012.  The annual chance of a Border Patrol agent dying in the line of duty was about one in 7,968 per year during the whole period.  Only six of the 33 Border Patrol agents who died in the line of duty were murdered.  The only confirmed murder in 2017 was of Border Patrol Agent Isaac Morales.  Twenty-six died because of accidents and Rogelio’s death is still a mystery (Table 2).   

Although Border Patrol agents do sometimes die tragically, they are less likely to be murdered on the job than the average American.  Since 2003, about 1 in 43,824 Border Patrol were murdered each year while on the job.  That compares favorably to about 1 in 19,431 Americans murdered per year over the same time.   Regular Americans were more than twice as likely to be murdered in any year from 2003 through 2017 than Border Patrol agents were.

Hopefully, investigators will soon discover how Agent Rogelio Martinez actually died.  In the meantime, the political circus surrounding his tragic death should be a lesson to all public officials and unions involved: Don’t use the death of a Border Patrol agent to argue for policy changes until you have all of the facts.


Table 1

Border Patrol Agent Deaths Per Year

  Deaths Number of Agents Agents Per Death Percent Death 2003
















































































Source:  Customs and Border Protection.

Table 2

Border Patrol Agents, Cause of Death, and Year of Death, 2003-2017

Name Year Cause of Death Rogelio Martinez 2017 Unknown (Likely Accident) Isaac Morales 2017 Assault/Murder David Gomez 2016 Accident (Health) Manuel A. Alvarez 2016 Car Accident Jose D. Barraza 2016 Car Accident Tyler R. Robledo 2014 Car Accident Javier Vega, Jr. 2014 Assault/Murder Alexander I. Giannini 2014 Car Accident David R. Delaney 2012 Accident (Health) Nicholas J. Ivie 2012 Assault/Murder Jeffrey Ramirez 2012 Accident (Health) James R. Dominguez 2012 Car Accident Leopoldo Cavazos Jr. 2012 Car Accident Eduardo Rojas Jr. 2011 Car Accident Hector R. Clark 2011 Car Accident Brian A. Terry 2010 Assault/Murder Michael V. Gallagher 2010 Car Accident Mark F. Van Doren 2010 Car Accident Robert W. Rosas Jr. 2009 Assault/Murder Cruz C. McGuire 2009 Accident (Health) Nathaniel A. Afolayan 2009 Accident (Health) Jarod C. Dittman 2008 Car Accident Luis Aguilar 2008 Assault/Murder Eric Cabral 2007 Accident (Health) Richard Goldstein 2007 Accident (Drowning) David J. Tourscher 2007 Car Accident Ramon Nevarez Jr. 2007 Car Accident David N. Webb 2006 Car Accident Nicholas D. Greenig 2006 Car Accident George B. DeBates 2004 Car Accident Travis W. Attaway 2004 Accident (Drowning) Jeremy M. Wilson 2004 Accident (Drowning) James P. Epling 2003 Accident (Drowning)


Source: Customs and Border Protection.

In January, Kabul endured three deadly attacks. On January 20, the Taliban stormed Kabul’s InterContinental Hotel, killing 30 people (mainly foreigners) in a siege that lasted 14 hours. A week later, Taliban militants drove an ambulance into a designated safe zone, killing at least 95 people and injuring 158, while ISIS claimed responsibility for attacking the Marshal Fahim Military Academy west of Kabul that killed 11 Afghan soldiers. President Trump responded by contending that there could be no negotiations with the Taliban. And though his State of the Union address only briefly discussed foreign policy, the president vowed not to stop fighting until ISIS is defeated. 

But neither the Taliban nor ISIS is the key to understanding what’s going on in Afghanistan. Even turning attention toward Pakistan as a source of Afghanistan’s instability is proving to be unsatisfactory for those concerned about the region. So what do the Kabul attacks tell us?  

Most observers of the U.S. war in Afghanistan consider the attacks a signal from Pakistan in light of current tensions within the U.S.–Pakistan relationship, which is currently at its lowest point. Pakistan’s premier intelligence agency, the Inter-Services Intelligence (ISI), has a notorious relationship with the Taliban, Haqqani Network, and other militant groups. Since the U.S. invasion of Afghanistan, both India and Afghanistan have blamed Pakistan for continued militant violence in Afghanistan. For example, Mahmoud Saikal, Afghanistan’s Ambassador to the United Nations, alleged that the Kabul Hotel attack last week was organized in Chaman, a city in the Pakistani province of Baluchistan.

And Pakistan may feel compelled to send a message because of the Trump administration’s decision to come down hard on Pakistan. For example, President Trump singled out Pakistan’s support of militant groups and accused the state of providing them safe haven in the administration’s Afghanistan strategy and National Security Strategy documents last year. The administration subsequently cut Pakistan’s security aid. Pakistan, however, continues to maintain that it has eradicated all terrorist safe havens, and also claims that its leverage with the Taliban has been decreasing.

Yet it’s unlikely that the U.S. will do much to censure Pakistan, even if it is truly complicit in these attacks. The United States will threaten to cut aid (and has periodically with little success), or designate Pakistan a state-sponsor of terror (which has never happened), or remove its designation as a non-NATO ally (which has also never happened). Pakistan, meanwhile, will threaten to close NATO supply routes (which has happened multiple times) and end intelligence sharing (which has periodically happened), with both sides threatening joint counterinsurgency operations.

Instead, the Trump administration ought to be grappling with bigger questions. It is indeed concerning that Pakistan’s fingerprints may be on these attacks, but at the end of the day the United States has very little leverage over Pakistan. As with sanctions, cutting aid to other nations rarely alters state behavior.

Instead, the U.S.’s best bet is to find a political—and diplomatic—solution for Afghanistan that involves a continued focus on Afghanistan’s domestic security forces as a means to stabilize the country, rather than honing in on Pakistan and aggravating an already tumultuous relationship. 

These attacks are rooted in the current failure of the Afghan government to keep the country secure. Violence in Kabul has been steadily increasing, even as the Taliban have become weaker since the U.S. invasion. Afghanistan is becoming a desired destination for militant groups, including the ISIS–Khorasan, an offshoot of ISIS. Afghan government administrations have been consistently weak, and Afghani citizens often blame them for not providing sufficient security. For example, after the attack on the military academy, those living in the compound primarily blamed the Afghan government, even saying that current leaders should resign if they are unable to increase security.  

With regard to the war in Afghanistan, U.S. policymakers need to grapple with two realities. First, the U.S. can’t successfully achieve a stable and sustainable end its military engagement in Afghanistan without Pakistan’s partnership. And second, a reasonable and stable political outcome must involve the Taliban. Although the president declared his unwillingness to work with the Taliban, in the past the U.S. has been open to talks with the Taliban as a way to foster peace. In fact, the United States worked closely with Germany to convince Qatar to allow the Taliban to open its office in Doha in 2012. While the President has also been pushing Afghanistan to close the Taliban’s Doha office, experts have argued that closing the office would undermine chances of peace in Afghanistan. Finally, despite appearances, the Taliban have been using diplomacy to increase their political legitimacy. By not talking with the Taliban, the U.S. risks losing any leverage it may still have to broker a suitable political agreement in Afghanistan.

The past sixteen years have clearly shown that America and its allies can’t defeat the Taliban. And since the Taliban and other militant actors are not conventionally strong enough to defeat U.S. and ally forces, they will continue to target civilians. In other words, if the United States hopes to stabilize Afghanistan and withdraw its troops in the next few years, it must focus on increasing Afghanistan’s domestic security, improving its relationship with Pakistan, and being open to holding peace talks with the Taliban.

In his State of the Union address, President Trump railed against America’s current legal immigration system. Given that this system first originated in 1965, it is worth considering how his policies would have altered America’s flow of immigrants had Congress adopted his proposed policies in 1965. Based on his statements and bills that he has endorsed, President Trump’s ideal immigration policies would have banned at least 57 percent of all legal immigrants since 1965, nearly 23 million people. Such an extreme policy would have radically changed America’s population, economy, and culture.

How Trump’s Plans Would Have Cut Immigration

From 1965 to 2016, nearly 40 million immigrants received legal permanent residency in the United States. President Trump’s policies—fully implemented as he intends—would have reduced that number to just 17.2 million, banning at least 22.7 million people, a majority of all legal immigrants since 1965 (Table 1). Nearly 60 percent of the banned immigrants would have been sponsored by U.S. family members—children, parents, or siblings. The rest of the reduction would come from fewer refugees and asylees, no diversity visa lottery and similar categories, and a much smaller legalization program for illegal immigrants. See Table 2 at the end for a detailed breakdown of these categories.

Table 1: Legal Immigrants by Category, 1965-2016

Sources: Department of Homeland Security; Immigration and Naturalization Service; White HouseS.354 - RAISE ActH.R.4760 - Securing America’s Future Act. *The category for spouses and minor children of residents would be preserved, but under Trump-endorsed bills, no visas would be issued (see text below)

This estimate only considers the direct effects of his policies on the categories that he would reduce, not how those reductions would affect other categories. For example, fewer legal immigrants would reduce the number of naturalized citizens. This would, in turn, result in fewer citizens who could marry foreigners and sponsor their spouses and children. Conversely, the fact that his proposed legislation would issue no visas to spouses and minor children of permanent residents would cause more immigrants to naturalize and sponsor their spouses and minor children. These two effects would at least partially offset each other.

President Trump’s Policies

Diversity visas: Under the recent White House immigration framework, President Trump would eliminate the diversity visa lottery. This analysis also includes its predecessor programs that award green cards based primarily on the applicant’s nationality. From 1965 to 1983, many legal immigrants entered under quotas for nationals of the Eastern and Western Hemispheres on a first-come-first-served basis. The president has said that he opposes the lottery because it “hands out green cards without any regard for skill,” and this criticism would apply with equal force to these earlier programs. Ending the diversity visa lottery and similar country-based programs would have banned 9 percent of all legal immigrants to the United States since 1965: 3.4 million people.

Adult children, siblings, and parents: Under the White House framework, President Trump would limit family-sponsored immigration to spouses and minor children. This would have ended categories for adult children, siblings, and parents of U.S. citizens and for adult children of legal permanent residents. Ending these categories would have banned about 23 percent of all legal immigrants from 1965 to 2016: 9.1 million people.

Minor children and spouses: Under the RAISE Act—a bill that President Trump endorsed—the president would redefine “minor child” under the immigration laws to include only those under the age of 18, down from the current 21. This would have excluded about 20 percent of all children in the spouses and minor children category as well as asylees. Additionally, while the RAISE Act would theoretically keep the spouses and minor children of residents, it would prevent them from receiving any visas because it cuts their quota by the number of parolees—foreigners granted temporary admission for humanitarian reasons—who stay for more than a year. Based on available figures and analysis, this number appears to be greater than the allotment of visas, meaning that in practice, spouses and minor children of residents would never receive green cards. These changes would have banned about 10 percent of all legal immigrants from 1965 to 2016: 4 million people.

Refugees, asylees, and Cubans: In 2017, President Trump lowered the refugee limit to 45,000. This analysis deducts any refugees admitted above this limit in any year since 1965. Moreover, in his White House framework, as well as in the Trump-endorsed Securing America’s Future Act, the president has advocated for changes to asylum that would make it much more difficult for people claiming asylum at the border to apply. Finally, President Trump has stated that he believed that the wet-foot, dry-foot policy that prevented the deportation of Cubans back to the Cuba from the mainland was “unfair.” In January 2017, President Obama ended the practice, relieving Trump of the opportunity to do so. Had these policies been adopted in 1965, the United States would have reduced legal immigration by 7 percent: 2.8 million people.

Legalization for illegal immigrants: President Trump wants to end all illegal immigration by any means necessary—a wall, more agents, more surveillance, more deportations, etc. In addition to these measures, the Trump-endorsed Securing America’s Future Act would spend more in five years on border security than Border Patrol has spent in the last 50 years. Under President Trump’s ideal policy, no illegal immigration would mean no legalization programs for future illegal immigrants. As part of his current negotiations, President Trump is willing to trade a legalization program for Dreamers, 16 percent of the illegal population, for his measures, but the illegal resident population in the United States was very low in 1965, less than 270,000. Even if assuming that a 1960s Trump was forced to make this deal, it would have yielded a legalization of less than 100,000. Had illegal immigration been ended in 1965 or no legalization programs created, 8 percent of all immigrants since 1965 would never have received residency in the United States: 3.3 million people.

Finally, this analysis makes no alterations to the flow of employment-sponsored immigrants, even though President Trump’s RAISE Act would eliminate the current categories for employment-sponsored immigrants and replace them with a points system. It is likely that half of all employer-sponsored immigrants would not have qualified under its points system, but given that other immigrants may have taken their place, it is possible that the total number would have remained similar.

Figure 1 shows the trends in legal immigrants by category from 1965 to 2016, and Figure 2 shows what the trends would look like under Trump’s ideal policy.

Figure 1: Legal Immigrants by Category, FY 1965-FY2016

Sources: Department of Homeland Security; Immigration and Naturalization Service

Figure 2: Legal Immigrants by Category under Trump Immigration Policies, FY 1965-FY2016

Sources: Department of Homeland Security; Immigration and Naturalization ServiceWhite HouseS.354 - RAISE ActH.R.4760 - Securing America’s Future Act


President Trump’s policies would have radically altered the demographics of the United States and dramatically reduced its population. With no illegal immigration since 1965, the current immigrant population in the United States would further shrink by 11.3 million, with an unknown number of fewer entrants into that population since 1965. These reductions in the number of immigrants would have had even more profound effects on U.S. population and labor force growth, as it would also eliminate the children and grandchildren of these immigrants.

Setting aside the cultural contributions of these immigrants, fewer workers would have translated into much lower economic growth. According to the National Academy of Sciences, immigrants contribute more than $2 trillion to U.S. gross domestic product—a 57 percent reduction would reduce the size of the U.S. economy by significantly more than $1 trillion. Such a counterproductive policy would have made America a smaller, weaker, and less prosperous country than it is today.


Table 2: Legal Immigrants by Category, FY 1965-2016

  Actual Policies Trump Policies Decline Percent Decline Total





Family-sponsored preferences





Unmarried adult children of citizens





Spouses & children of residents*





Married adult children of citizens





Siblings of citizens





Spouses, children, and parents





Spouses of citizens





Children of citizens





Parents of citizens





Employment-based preferences





First: Priority workers





Second: Professionals





Third: Skilled workers and unskilled workers





Fourth: Certain special immigrants





Fifth: Employment creation (investors)





Registered nurses





Pre-1992 3rd (highly skilled immigrant)





Pre-1992 6th (skilled or unskilled workers)





Pre-1992 Family of 3rd and 6th





Diversity & Country-Based





Diversity lottery





Diversity transition





Nationals of adversely affected countries





Nationals of underrepresented countries





Western Hemisphere





Hemispheric nonpreference





Western Hemisphere recaptured





Refugees & Asylees






























Nicaraguan Adjustment and Central American Relief Act (NACARA)





Cancellation of removal





Haitian Refugee Immigration Fairness Act (HRIFA)





U Visa





Registry Pre-1972





IRCA Families





IRCA Legalization





Hypothetical Trump legalization










Children born abroad to alien residents










Sources: Department of Homeland SecurityImmigration and Naturalization ServiceWhite HouseS.354 - RAISE ActH.R.4760 - Securing America’s Future Act. *The category for spouses and minor children of residents would be preserved, but under Trump-endorsed bills, no visas would be issued (see text above)

The Department of Veterans Affairs (VA) has been scandal-plagued for years. It has run up huge cost overruns on hospital projects and been guilty of appalling mismanagement and fraud related to waiting lists for veteran’s care. Congress has held hearings on the VA’s failures and passed some reforms to make it easier to fire bad employees.

But a new Washington Post story suggests that the department still doesn’t have its act together.

The piece says that the VA fired 2,537 workers last year. Maybe that sounds like a lot, but the VA has a massive 381,000 employees, indicating an annual firing rate of just 0.7 percent. By contrast, the firing rate in the U.S. private sector is 3.2 percent, or four times more than the VA firing rate.

The WaPo story describes how one VA employee who was caught essentially stealing from taxpayers kept her job:

When the VA Medical Center in Bedford, Mass., spent hundreds of thousands of dollars hiring landscapers and ordering rock salt, mulch and crushed stone, one whistleblower in the department found it suspicious that the supplies never showed up.

Turns out they were never delivered, and an employee had steered the contract to her brother’s landscaping business, according to a recent investigation by the Office of Special Counsel, an independent federal agency that investigates whistleblower claims.

The employee was allowed to keep her federal job. She was demoted only one pay grade, despite President Trump’s VA Accountability Act, which allows for quick removal of employees who violate standards or break the law in the troubled agency. …

“By allowing an employee who engaged in this conduct to remain with the agency, VA demonstrates a shocking degree of indifference to government ethical standards, procurement regulations, and public integrity,” Special Counsel Henry J. Kerner wrote to the president in a recent letter.

The landscaping scheme was brought to the OSC’s attention by a whistleblower who led investigators to nearly $1 million in “improperly spent or documented purchases” at the Bedford VA. The whistleblower disclosed suspicious, frequent and significant purchase orders for landscaping materials, such as rock salt, mulch and crushed stone, and said the majority of these orders were never delivered to the facility despite payment.

Ultimately, VA largely substantiated the whistle-blower’s allegations. VA found that Dennis J. Garneau and his daughter, Heather Garneau-Harvey, as Bedford VA employees, steered $200,000 snow removal and groundskeeping contracts to a business owned by a family member, their son and brother, respectively.

VA also found that Dennis Garneau directed purchases of more than $750,000 in “landscaping materials without appropriate verification of delivery, among other purchasing irregularities.”

More on federal mismanagement here.

Leaders of the two parties in Congress have agreed to a budget deal that raises discretionary spending a huge $300 billion over two years. While $300 billion is the headline, the deal may end up hiking spending $1.5 trillion over the next decade as the near-term increases get baked into federal budgets in later years.

The sad irony is that December’s Republican tax cut is supposed to save Americans $1.5 trillion over 10 years. But the new spending is essentially a $1.5 trillion tax hike imposed on people down the road.  

The centrist group CFRB summarizes the irresponsibility:

No one who supports this bill can consider himself or herself a deficit hawk or fiscally responsible. … This bill not only reverses the sequester cuts without sufficient pay-fors, it also includes significant further increases in discretionary spending that reverse much of the pre-sequester caps. And to add insult to injury, it also proposes further spending meant to satisfy everyone’s Christmas list.

Politico notes, “The agreement increases defense spending this year by $80 billion and domestic spending by $63 billion beyond strict budget caps, according to a summary of the deal obtained by Politico. Next year defense spending will increase by $85 billion and domestic funding will be boosted by $68 billion beyond the caps.”

As during the George W. Bush years, the eagerness of Republicans to jack up defense spending has led them to cave in on nondefense spending:

“I’m not going to say every piece of it. But obviously we’re excited about the defense numbers,” said Marc Short, the White House legislative director. White House press secretary Sarah Huckabee Sanders also told reporters the deal accomplished “our top priority,” with the defense boost.

So enjoy your tax cuts while you can because the pressure to repeal them will mount as rising spending pushes deficits over $1 trillion and ever higher levels after that.

Hands On Originals, a t-shirt printing company in Kentucky, refused to print t-shirts promoting a gay-pride event, the Lexington Pride Festival. Its owners weren’t objecting to any customers’ sexual orientation; instead, they didn’t want to print the ideological message conveyed by the shirts.

The Gay and Lesbian Services Organization nevertheless filed a complaint with the Lexington-Fayette Urban County Human Rights Commission under an antidiscrimination ordinance that bans public accommodations from discriminating against individuals based on sexual orientation. The Commission ruled against Hands On Originals, but the state district court reversed on free speech and free exercise grounds, and the court of appeals (where Cato had filed a brief supporting the print shop) affirmed.

The case is now before the Kentucky Supreme Court. Cato has again filed an amicus brief, drafted by Prof. Eugene Volokh and UCLA’s First Amendment clinic. Our brief urges the court to uphold the right of printers to choose which speech they will help disseminate and which they won’t.

In Wooley v. Maynard (1977)—the New Hampshire “Live Free or Die” license-plate case—the U.S. Supreme Court held that people may not be required to display speech with which they disagree because the First Amendment protects the “individual freedom of mind.” Wooley’s logic applies equally to Hands On Originals’ right not to print messages with which they disagree, which is an even greater imposition than having to passively carry the state motto on your car’s tag.

Thanks to Prof. Volokh and his student, Ashley Phillips, for their work on the brief, and on this blog post.

When a user clicks on a Google search result, the web browser transmits a “referral header” to the destination website, unless a user has disabled them. The referral header contains the URL of the search results page, which includes the user’s search terms. Websites use this information for editorial and marketing purposes.

In 2010, Paloma Gaos filed a class action in the Northern District of California, seeking damages for the disclosure of her search terms to third-party websites through referral headers, claiming fraud, invasion of privacy, and breach of contract, among others. She eventually settled with Google on behalf of an estimated class of 129 million people in return for an $8.5 million settlement fund and an agreement from Google to revise its FAQ webpage to explain referral headers. Attorneys’ fees of $2.125 million were awarded out of the settlement fund, amounting to 25 percent of the fund and more than double the amount estimated based on class counsel’s actual hours worked.

But no class members other than the named plaintiffs received any money! Instead, the remainder of the settlement fund was awarded to six organizations that “promote public awareness and education, and/or…support research, development, and initiatives, related to protecting privacy on the Internet.” Three of the recipients were alma maters of class counsel.

This diversion of settlement money from the victims to causes chosen by the lawyers is referred to as cy pres. “Cy pres” means “as near as possible,” and courts have typically used the cy pres doctrine to reform the terms of a charitable trust when the stated objective of the trust is impractical or unworkable. The use of cy pres in class action settlements—particularly those that enable the defendant to control the funds—is an emerging trend that violates the due process and free speech rights of class members.

Accordingly, class members objected to the settlement, arguing that the district court abused its discretion in approving the agreement and failed to engage in the required rigorous analysis to determine whether the settlement was “fair, reasonable, and adequate.” The U.S. Court of Appeals for the Ninth Circuit affirmed the settlement, so two objecting class members, including Competitive Enterprise Institute lawyer Ted Frank (a friend of ours), have asked the Supreme Court to review the case.

Cato filed an amicus brief arguing that the use of cy pres awards in this manner violates the Fifth Amendment’s Due Process Clause and the First Amendment’s Free Speech Clause. Specifically, due process requires—at a minimum—an opportunity for an absent plaintiff to remove himself, or “opt out,” from the class. Class members have little incentive or opportunity to learn of the existence of a class action in which they may have a legal interest, while class counsel is able to make settlement agreements that are unencumbered by an informed and participating class.

In addition, when a court approves a cy pres award as part of a class action settlement, it forces class members to endorse certain ideas, which constitutes a speech compulsion. The defendants receive money—essentially from themselves—to donate to a charity, and the victim class members surrender the value of their legal claims. Class members are left uncompensated, while defendants are shielded from any future claims of liability and even look better than they did before the lawsuit given their display of “corporate social responsibility.”

The Supreme Court will decide later this winter or spring whether to take up the case of Frank v. Gaos.

Thanks to research assistant Anthony Gruzdis for his help with this post.

Just as Congress is preparing to hike defense spending, a new report suggests the inefficiency that has plagued the Pentagon for decades continues unabated. Politico discusses a new audit of one of the Pentagon’s purchasing agencies:

Ernst & Young found that the Defense Logistics Agency [DLA] failed to properly document more than $800 million in construction projects, just one of a series of examples where it lacks a paper trail for millions of dollars in property and equipment. Across the board, its financial management is so weak that its leaders and oversight bodies have no reliable way to track the huge sums it’s responsible for, the firm warned in its initial audit of the massive Pentagon purchasing agent.

“Ernst & Young could not obtain sufficient, competent evidential matter to support the reported amounts within the DLA financial statements,” the Pentagon’s inspector general, the internal watchdog that ordered the outside review, concluded in issuing the report to DLA. The accounting firm itself went further, asserting that the gaping holes uncovered in bookkeeping procedures and oversight strongly suggest there are more.

Politico says that the Department of Defense “has never undergone a full audit despite a congressional mandate,” and that the “$40 billion-a-year logistics agency is a test case in how unachievable that task may be. The DLA serves as the Walmart of the military, with 25,000 employees who process roughly 100,000 orders a day on behalf of the Army, Navy, Air Force, Marine Corps and a host of other federal agencies — for everything from poultry to pharmaceuticals, precious metals and aircraft parts.”

Does the “Walmart of the military” deserve a break because $40 billion is a lot of purchases?

I don’t think so. Walmart itself has sales of almost $500 billion a year and manages to keep track of products from 10,000 suppliers. And then there is Amazon, which has annual sales of almost $180 billion. The online goliath sells 600 million different items and it ships five billion items through its Prime service a year.

So the Pentagon’s large size is not the root cause of its inefficiency and waste. Instead, it suffers from the same sorts of structural failures as other federal bureaucracies, and the same lack of congressional oversight.

More on Pentagon mismanagement here and here.

It’s been a tough week for President Trump – and it’s only Tuesday. Just when Trump nearly had the country acknowledging his omnipotence, the stock market took a record one-day plunge on Monday and then, this morning, we learned that the president’s first year in office coincided with the largest U.S. trade deficit in nine years. Lest Mr. Trump concludes that he hasn’t been protectionist enough, there is another way for him to explain (without need of contrition or humility, of course) how he presided over a bigger trade deficit in his first year than was experienced in any of President Obama’s eight.

Trade deficits are pro-cyclical and have nothing to do with trade policy. Imports rise when the economy grows. When the economy grows—and it has been growing relatively strongly this past year—households, businesses, and governments consume more. They purchase more domestic and imported goods and services. Stronger growth tends toward larger trade deficits. Maybe Trump can try that slogan on for size.

But as sure as the sun rises in the east, business writers at most of the major newspapers, magazines, and online news venues will conclude that the trade deficit is a drag on growth.  Here’s Bloomberg Markets (randomly selected): 

The [December deficit of $52.1 billion] add[s] to details for the fourth quarter, when trade was a substantial drag on the economy, and show[s] how a widening deficit may mitigate any gains in the pace of expansion in 2018. Net exports subtracted 1.13 percentage points from gross domestic product growth…

These writers rely on—and then misinterpret the meaning of—the so-called National Income Identify.  The identity tells us how we dispose of our national income. It is not a “growth formula,” as some of the president’s advisers suggest. In an op-ed last year, Commerce Secretary Wilbur Ross and trade adviser Peter Navarro wrote:

When net exports are negative, that is, when a country runs a trade deficit by importing more than it exports, this subtracts from growth… The structural problems driving the slow growth in the US economy over the last 15 years have primarily been the investment and net exports drivers in the GDP growth equation.

The reference was to the national income identity, Y = C + I + G + X - M, which says that national output is either (C)onsumed by households; consumed by businesses as (I)nvestment; consumed by (G)overnment as public expenditures; or e(X)ported. Those are the only four channels through which national output is disposed.

But the identity is not a GDP growth equation. Imports have nothing to do with GDP—except that they tend to increase when the economy is growing and decrease when the economy is contracting. But we subtract M in the identity because i(M)ports comprise a portion of C, I, and G. They are part of the aggregate spending of households, businesses, and governments. If we didn’t subtract M, then GDP would be overstated by the value of imports. But there is no inverse relationship between imports and GDP. In fact, there is a strong positive relationship between changes in the trade deficit and changes in GDP.

Although trade deficits are not meaningless, the meaning of trade deficits is aggrandized and misappropriated. It is aggrandized because we tend to look at it in isolation. By looking at the trade account (or the slightly broader current account), which is in deficit (and has been for 42 straight years), while ignoring the capital account, which is in surplus (and has been for the same period), we focus minds on the word “deficit” instead of “balance.” 

The U.S. trade deficit means only that Americans buy more goods and services from foreigners than foreigners buy goods and services from Americans. But why should that be especially relevant when that formulation excludes a third, and very important, set of transactions between Americans and foreigners: the purchases and sales of assets? Instead of saying that the United States runs a trade deficit because Americans purchase more goods and services from foreigners than foreigners purchase from Americans, we should be saying that U.S. transactions with the world are in balance because the value of Americans’ purchases of foreign goods, services, and assets equals (almost to the dollar) the value of foreigners’ purchases of U.S. goods, services, and assets.

It’s misappropriated because too many commentators tend to describe the trade account as a function of trade policy—a scoreboard to indicate whether we are winning or losing at trade. Exports are Team America’s points; imports are the foreign team’s points; the trade account is the scoreboard; the deficit means we’re losing; and we’re losing because the foreign team cheats. But that’s just not right. The trade account is a function of disparate macroeconomic policies channeled through disparate patterns of savings and consumption among countries.

Some people who understand that the term deficit is loaded, and that our transactions (goods, services, assets) with foreigners are in balance still worry that selling assets to foreigners (“selling off assets” as it’s often put) to finance current consumption is shortsighted. They worry that we are chipping away at our principle or slowly killing the golden goose. That’s a reasonable concern, but I suspect more a theoretical problem than a real one because U.S. assets are not finite and their values are not constant. Their values rise and fall according to supply and demand and the factors affecting supply and demand. New assets are created all of the time, through ingenuity and the combining of factors of production that creates value.

When foreigners buy U.S.-owned assets, such as physical factories, research centers, land, patents, etc., they do so with the intention of increasing the value of those assets and/or the returns to those assets. A U.S. owned factory that was operating at 60 percent capacity that is purchased by a foreign company, which injects new capital and fresh ideas and uses more capacity to generate more production, revenue, and profits is improving that asset to create more value-added, more jobs, a bigger tax base, and demand for locally produced parts and local services. 

In other words, just because a U.S. asset is purchased by a company that may have a foreign headquarters or just because some of the profits are repatriated to that foreign country doesn’t mean Americans are selling off the principle or are otherwise worse off.  If the operation has promise in the United States, profits will be reinvested in that operation, which will continue to provide benefits for Americans. 

Moreover, a lot of foreign investment in the United States is so-called “greenfield” investment—turning undeveloped land into factories, service centers, and other working assets. American owners sell their land to a foreign interest, which turns that land into a productive asset with tons of local benefits. Why should it matter whether the company is headquartered abroad, as long as it’s creating value in the United States?

However, it does seem important to draw distinctions among foreign purchases of debt, equities, and property and other physical assets. When we say a $500 billion current account deficit is balanced by a $500 billion capital account surplus, we haven’t yet focused on the types of assets foreigners are buying. Foreign purchases of government debt, while contributing in a more circuitous way to U.S. value added, do represent debt that has to be repaid. So, when people say running trade deficits represents a burden on future generations, it is this portion of the trade deficit that they are considering. Corporate debt must be paid back, as well, but it is not a public burden. It is a burden on the executives, employees, and shareholders of those corporations. Purchases of factories, property, equipment, patents and other real assets are not debt. They don’t have to be paid back.

In these two pieces (1 and 2), I go into greater depth about how the meaning of trade deficit has been aggrandized and misappropriated. Meanwhile, with a year of experience under his belt, maybe President Trump can begin to realize that a rising trade deficit reflects a growing economy and that government profligacy (really, the unwillingness of politicians to tax now for what they spend now or to reduce spending) is the basis for any legitimate concerns about the trade deficit.

John R. Lott Jr. responded to my criticism of his working paper where he claims to have found that illegal immigrants are more likely to be admitted to Arizona state adult correctional facilities than other Arizona residents.  Lott did not respond to my main criticism directly, which is that the Arizona Department of Corrections (ADC) data do not allow him to identify illegal immigrants with nearly as much precision as he claimed in his paper. 

Praising the supposedly precise ADC data, Lott claimed that the “huge advantage of using the data that will be presented here from the Arizona Department of Corrections is that over our 32.5-year period we know each prisoner who entered the prison system, their criminal convictions history, and whether he is a documented or undocumented immigrant [emphasis added].” 

Lott was so confident in his data’s ability to identify illegal immigrants that he wrote: “It is the entire universe of cases, not a sample, and thus there are no issues of statistical significance.”      

The rest of his paper depends upon the immigrants in the “non-US citizen and deportable” variable in his dataset being illegal immigrants.  We showed that that variable does not exclusively contain illegal immigrants.  Thus, Lott’s characterization of the utility of his data is false.  This is the only point in my criticism of his paper that counts and Lott did not challenge me on it in his rebuttal, except to point out that the description of the variable in question has a comma in the codebook rather than a conjunction.  I dispute that, but it is irrelevant.  I’ll take his non-response to my main point as an admission that he misinterpreted the variable and that his paper does not accurately describe illegal immigrant admissions to ADC facilities. 

Lott then spends a lot of time attempting to rebut my back-of-the-envelope (BOE) calculation for 2017, which is what I called it in my blog.  It’s hard to take any BOE calculation seriously and I even included a note at the end of the blog about how my BOE calculation is probably wrong. 

Lott’s focus on my BOE calculation is a sort of tacit admission of my main criticism that he misidentified the “non-US citizen and deportable” variable.  As part of his criticism of my BOE, he then tried to show that most of the people in the “non-US citizen and deportable” category are actually illegal immigrants in order to argue that his data allows a pretty good estimate of illegal immigrant crime rates.  That is an admission that the “non-US citizen and deportable” variable does not exclusively record illegal immigrants, that it includes some legal immigrant, and that he cannot reliably separate the two.  I will take this section of his rebuttal as an additional admission that the data, on which he rested his entire paper, does not identify illegal immigrants in a separate variable. 

Furthermore, it’s telling that this section of Lott’s response sounds awfully like he’s making the assumptions that he so criticized in the “primitive” studies that he claimed were inferior to his own because he had the real data:

Before we proceed, there are a couple of numbers to put together.  The percentage of Arizonans that are lawful permanent residents and non-immigrants on other visas is lower than the national average — about 12% lower. If lawful permanent residents in Arizona are deported in proportion to their share of the state population, they would account for less than 8.8% of deportations.  Also note that temporary foreign workers are not very numerous, accounting for only about 12.6% of the estimated number of undocumented immigrants in the United States (=1.42 million/11.3 million).  Assuming that they are deported at the same rate as illegal aliens, lawful permanent residents and temporary foreign workers would together account for 10.5% of all deportations.

Lott’s criticism of my BOE calculation (which I even criticized in my Cato blog in a note acknowledging comments by Dara Lind) notwithstanding, the 219 times that he uses the phrase “undocumented” in his working paper to describe certain admitted prisoners, needs to be amended to read “a mix of undocumented and legal immigrants in unknowable proportions” to be accurate.  That he did not challenge me on this point is a tacit admission that my criticism regarding his misidentification of the “non-US and deportable” variable stands and that the findings in his paper should be significantly discounted.    

CNAS Senior Fellow Mira Rapp-Hooper has authored a first-rate take-down of the illogic of supposedly limited strikes (aka the “bloody nose” option) against North Korea at The Atlantic. Here are a few choice passages:

it makes little sense for American war planners to assume a “limited” strike like this would stay limited. A U.S. operation may not achieve its objectives, and even if it does, it would still leave the decision of whether or not to retaliate up to Kim. The North Korean leader would make that decision based on his own beliefs about the strike once it took place, not based on American wishes for his response. If he did decide to hit back, the result could be the most calamitous U.S. conflict since World War II.


If Kim is irrational on matters concerning his nuclear weapons and missiles, it’s reasonable to assume he’d be similarly irrational across the board. If he cannot be stopped from trying to reunify the two Koreas, further U.S. or UN sanctions are also unlikely to alter his cost calculations. Why would a first strike by America restrain him? Irrational actors are irrational in all domains—Washington does not have the luxury of picking and choosing where deterrence prevails.

The belief that Kim can’t be deterred from conquest but can be deterred once the United States has brought force against him demonstrates a highly selective strategic understanding. What form retaliation would take, again, is up to Kim. Yet [Trump national security advisor H.R.] McMaster seems to hold an erratic view of strategic dynamics that conveniently supports a use of force by the United States against North Korea, and privileges this path over all other options.

Under normal circumstances, these sorts of arguments against preventive war should rule the day. The case against the United States initiating force against any country, especially a nuclear-armed North Korea, is strong. Indeed, Korea expert Victor Cha made a similar case last week. Cha, no dove, concluded:

the United States must continue to prepare military options. Force will be necessary to deal with North Korea if it attacks first, but not through a preventive strike that could start a nuclear war.

And, while we’re on the subject of preventive war (i.e. premeditated aggression), former Colin Powell advisor Lawrence Wilkerson weighed in on the 15th anniversary of Powell’s speech to the United Nations regarding Iraq’s supposed WMD program. Wilkerson, a retired army colonel, noted the similarities between the Bush administration’s shoddy case for that war, and the Trump administration’s attempts to create a casus belli against Iran. These steps include, Wilkerson writes:

the president’s decertification ultimatum in January that Congress must “fix” the Iran nuclear deal, despite the reality of Iran’s compliance; the White House’s pressure on the intelligence community to cook up evidence of Iran’s noncompliance; and the administration’s choosing to view the recent protests in Iran as the beginning of regime change. Like the Bush administration before, these seemingly disconnected events serve to create a narrative in which war with Iran is the only viable policy.

These claims are false, these policies are flawed, and the implications are dangerous. The case for the JCPOA is strong, and the case against war with Iran is even stronger. 

Most Americans have learned from our unhappy post-9/11 wars. They are skeptical about starting new ones (and cool to expanding the existing ones). Once bitten, twice shy.

Alas, in the case of senior U.S. national security officials, it seems they are many times bitten, still not shy.

The effort to form a coalition government in Germany may finally be coming to an end. Chancellor Angela Merkel’s original plan after last September’s election fell apart when the liberal Free Democrats (FDP) decided to not join a coalition due to the fiscally irresponsible demands if other parties. It’s unfortunate that major American media regularly refer to the FDP as “pro-business” (or occasionally “business-friendly”). See, for instance, the New York Times, the Wall Street Journal, the Washington Post, the Associated Press, and Reuters. It’s not exactly wrong, but it’s incomplete and misleading. The party would be better described as pro-market rather than pro-business, and it’s also liberal on such issues as gay marriage, marijuana legalization, the dangers of surveillance. It pushed its coalition partners, Merkel’s Christian Democratic Union and the allied Christian Social Union, to end conscription in 2011. 

In the United States such a party would be called libertarian, or maybe “fiscally conservative and socially liberal.” In the rest of the world it’s called liberal. A helpful description for American readers might be “the free-market liberal FDP.”

In this case Wikipedia does a better job than the journalists: “The FDP strongly supports human rights, civil liberties, and internationalism. The party is traditionally considered centre-right. Since the 1980s, the party has firmly pushed economic liberalism, and has aligned itself closely to the promotion of free markets and privatisation.”

A merely pro-business party might join the European People’s Party (along with most Christian Democratic parties) or the Alliance of Conservatives and Reformists in Europe (along with the Conservative Party of the United Kingdom) in the European Parliament. Instead it’s part of the Alliance of Liberals and Democrats for Europe, as well as the broader Liberal International.

The FDP has been part of a governing coalition for most of Germany’s post-1945 history, usually in coalition with the CDU/CSU but during the 1970s with the Social Democratic Party. It is the most pro-trade party in Germany, strongly endorsing projects such as the Comprehensive Economic and Trade Agreement between Canada and the European Union, and the Transatlantic Trade and Investment Partnership agreement between the United States and the EU (on hold since President Trump’s inauguration). It supports the EU but wants to demand more fiscal responsibility among EU member states. It rejects federal minimum wage laws, advocates more competition in heavily regulated industries and professions, and promotes a smaller and more efficient welfare state, perhaps with a negative income tax and individually funded health and retirement systems.  Because of its liberal social policies and support for entrepreneurship and globalization, the FDP did better among 18-to-24-year-old voters in last fall’s election than any other age group.

Unfortunately, the United States lacks a (classical) liberal party, one committed to freer markets and more personal freedom. Germany has one, and “pro-business” doesn’t capture its ideology or its appeal.

Fred Roeder is an economist from Berlin and chief strategy officer of Students For Liberty.

The Fourth Amendment guards against unreasonable searches and seizures by requiring (with limited exceptions) that government agents first obtain a warrant before they go snooping around or confiscating someone’s property. But what exactly does this mean in the modern world of smartphones, wi-fi, and extended Socratic dialogues with Siri? If the New York-based U.S. Court of Appeals for the Second Circuit is to be believed, it means that the government can monitor and collect your internet traffic if this information is merely “likely” to be “relevant” to an ongoing criminal investigation.

That is exactly what happened to Ross Ulbricht, the creator of a website known as “Silk Road,” which enabled users to anonymously buy and sell goods and services. In the course of an investigation into illegal activities associated with the website, the government obtained five “pen/trap” orders authorizing law enforcement to collect IP (internet protocol) addresses for any internet traffic going to or from Ulbricht’s wireless router and other electronic devices. These orders were obtained in lieu of a warrant under a statutory “relevance” standard that falls well short of the Fourth Amendment’s requirement for probable cause.

How could this standard possibly not be constitutionally insufficient? The Second Circuit relied on the “third party doctrine,” ruling that there was no Fourth Amendment issue because users voluntarily conveyed their information to ISPs (internet service providers) and third-party servers, and thus assumed the risk that it would later be turned over without their permission or knowledge. This doctrine, which was developed in the days of pay phones and file cabinets, cannot be fairly extended to online activity given that internet access is—for all intents and purposes—a necessity of modern life for any functioning member of society. Recognizing this simple fact undermines any claim that users have somehow assumed the risk of disclosure to the government, which would have assumed that these users had any real choice in the matter to begin with.

The court also reasoned that because pen/trap devices only reveal IP addresses associated with the user’s online browsing, the collected information doesn’t count as “content” worthy of protection—despite the direct correlation between individual IP addresses and websites, along with the ample information that can be gleaned from knowledge of an individual’s browsing history. The court seemed to conclude that there was no content revealed because an IP address only uncovers the website visited rather than any individual webpage within that site. This superficial approach utterly ignores digital reality.

Finally, the court failed to recognize that the statute authorizing pen/trap data seizure imposes virtually no limits on government attorneys’ discretion. These orders are exceedingly broad in scope and available to nearly any government agency conducting a criminal investigation. Worse still, the court’s role in approving the orders is merely ministerial, with the statute mandating that “the court shall enter an ex parte order authorizing the installation” of these devices.

Because the Second Circuit has stretched both the third-party doctrine and the content/non-content distinction far beyond their logical limitations, Cato—along with the Reason Foundation, Competitive Enterprise Institute, and R Street Institute—has filed an amicus brief asking the Supreme Court to take this case and firmly establish that the internet doesn’t constitute some sort of Constitution-free zone.

The case is Ullbricht v. United States.

“Trump’s tax cuts are rocketing us into the debt ceiling,” wrote Catherine Rampell in The Washington Post on February 1, because “withholding from employee paychecks will drop starting no later than mid-February. Individual income tax revenue will therefore be about $10 billion to $15 billion less per month than the CBO previously estimated.” The suggestion that the debt crisis could be blamed on a mere $10-15 billion cut in monthly withholding got a Twitter shout-out from budget hawk Stan Collender, who must know that errors in monthly budget estimates are commonly larger than that.

This was followed two days later by Heather Long’s extremely misleading Washington Post story, “The U.S. Government Is Set To Borrow Nearly $1 Trillion This Year, an 84 Percent Jump from Last Year.” The article goes on to say, “Treasury mainly attributed the [$436 billion debt] increase to the ‘fiscal outlook.’ The Congressional Budget Office was blunter. In a report this week, the CBO said tax receipts are going to be lower because of the new tax law.” According to that link to another Post story, “CBO said that the tax law is expected to lower tax receipts by $10 billion to $15 billion per month. Even though the tax cut law went into effect January 1, the large drop in tax receipts didn’t kick in yet because companies won’t start using new withholding tables until sometime in February.” Fiscal 2018 began last October, so lower withholding tax can affect no more than 8 of the remaining months. Contrary to the Rampell-Long theory, the CBO’s revenue loss of $80-120 billion can’t explain her alleged $436 billion increase in Treasury borrowing.”

Where did all that added debt come from? What Ms. Long initially called “the exact” figure of $955 billion is later explained as “determined from a survey of bond market participants.” Asking about 23 bond dealers to guess Treasury “net marketable borrowing” is far from an official estimate, and it isn’t a measure of the deficit.

The first Table shows that OMB and CBO estimates show the FY 2018 deficit falling by 11-34% from the $66 billion in FY 2017. The median guesstimate in the last New York Fed’s email Survey of Primary Dealers, by contrast, is a FY2018 deficit of $750 billion. It’s a very small sample of non-expert opinion, and we don’t know the range and variance of forecasts or the Survey’s forecasting record.

Note well, however, that the Washington Post writer’s unexplained $955 billion private estimate of net borrowing is much larger than the 23 Primary Dealers’ wildcard estimate of a $750 billion deficit. Why? The reason is explained in the Table’s Footnote 5: “For FY2018, the restoration of extraordinary measures used during the 2017 debt limit impasse artificially adds to the ‘other means of financing’ which shows a larger net borrowing assumption.” Extraordinary measures include such things such as suspending debt issuance for civil service and USPS retirement benefits and redeeming certain securities instead of issuing new ones.

In case anyone missed the connection Rampell and Long were insinuating–that tax cuts nearly doubled FY2018 borrowing–an Axios summary of Long’s report was headlined: “After Tax Cuts, U.S. Borrowing To Spike 84% This Year to Nearly $1 Trillion.”

Aside from the mathematical implausibility of blaming an alleged $436 billion increase in borrowing on a JCT-estimated $103.5 billion tax cut (see the second Table), it was inexcusable for the Washington Post to publish the bizarre $955 billion net borrowing estimate without divulging that (1) it was a median estimate from an email survey of 23 bond dealers, and that (2) that dubious unofficial FY2018 estimate was also artificially inflated by “extraordinary measures” taken during debt limit impasse.

Neatly defining President Trump’s foreign policy has never been easy, characterized as it is by contradictory impulses, fragmentary ideas, and strains of paradox. However, on the two most arresting national security issues at the top of Trump’s agenda—Iran and North Korea—his approach is plain: aggressive confrontation is good; diplomacy is bad.

The problem is that, even if Trump himself is not determined to go to war with either of these countries, he is making it far more likely.

Last month, Trump once again waived nuclear-related sanctions on Iran, consistent with our obligations under the Joint Comprehensive Plan of Action (JCPOA), the 2015 agreement that provided economic sanctions relief in exchange for Iran significantly rolling back its nuclear program and subjecting it to an intrusive international inspections regime. However, Trump vowed it would be the last time he acts to uphold the deal.

The president’s antipathy toward the JCPOA is not rational. Indeed, there is a virtual consensus—including the International Atomic Energy Agency (IAEA), our European allies, China, Russia, and the U.S. military and intelligence community—that Iran is complying with the terms of the deal and that it is working as designed. If Trump’s effort to upend the JCPOA leads to its collapse, it would unburden Iran from the deal’s restrictions and rob the international community of unprecedented visibility into Iran’s program.

In a New York Times op-ed marking 15 years since Colin Powell’s United Nations speech making the case for war with Iraq, retired Army Colonel Lawrence Wilkerson, who helped draft the speech as Powell’s chief of staff, warns, “the Trump administration is using much the same playbook [as the Bush administration did with Iraq] to create a false choice that war is the only way to address the challenges presented by Iran.”

Though Wilkerson uses the phrase “Trump administration,” it is important to note that most of the president’s own cabinet is not with him on this. Indeed, Secretary of Defense James Mattis, Secretary of State Rex Tillerson, National Security Adviser H.R. McMaster, Chairman of the Joint Chiefs Gen. Joseph Dunford, and Commander of U.S. Strategic Command Gen. John Hyten, among others, all believe that staying in the deal is in the U.S. national interest, while undermining it presents unnecessary risks. Indeed, these voices have successfully dissuaded Trump from withdrawing from the deal thus far.

Still, the president has other allies, including UN Ambassador Nikki Haley and CIA Director Mike Pompeo—and Wilkerson is right that they are employing familiar tactics. The Guardian reported in August that “U.S. intelligence officials are under pressure from the White House to produce a justification to declare Iran in violation of a 2015 nuclear agreement, in an echo of the politicization of intelligence that led up to the Iraq invasion.” In November, Pompeo selectively released documents from the Bin Laden raid meant to suggest an operational connection between Iran and al-Qaeda, not unlike the efforts of some Bush administration officials in the lead up to Iraq. Haley’s theatrical speech in December, complete with a Hollywood-worthy backdrop of Iranian missiles, was short on evidence, didn’t stand up to scrutiny, and was reminiscent of Powell’s dramatic UN presentation, with vials of anthrax as visual aids.

To a certain extent, the real value of the JCPOA is not the technical limitations it imposes on Iran’s nuclear program. Rather, the real value of the deal is that it erects a psychological barrier to the United States going to war with Iran for utterly deficient reasons. This barrier seems to frustrate Trump, who despises limitations on his authority.

Whether the president has such designs or not, there should be no doubt that he is making war more likely—a war that Wilkerson rightly points out, “would be 10 to 15 times worse than the Iraq war in terms of casualties and costs.”

The approach to North Korea is perhaps even more troubling. Last week, President Trump decided to revoke his planned nomination of Victor Cha as Ambassador to South Korea. Why? Because Cha voiced concerns about the prospect of a limited U.S. military strike against Pyongyang on the grounds that it would escalate uncontrollably to full-scale war in Northeast Asia, likely featuring tit-for-tat nuclear strikes, killing millions in short order.

These objections, which Cha later spelled out in a Washington Post op-ed, were enough to banish him from the Trump administration. Until this incident, most observers assessed the administration’s loose talk of war with North Korea was merely a bluff intended to frighten Pyongyang into capitulation or pressure China to do more to rein in its churlish client. But the dismissal of Cha suggested otherwise.

Adding to the concern, “the White House has grown frustrated,” the New York Times reported Thursday, over “the Pentagon’s reluctance to provide President Trump with options for a military strike against North Korea.” The Pentagon “is worried that the White House is moving too hastily toward military action on the Korean Peninsula that could escalate catastrophically,” the Times added. “Giving the president too many options, the officials said, could increase the odds that he will act.”

Congress, too, is beginning to try to check the president on this: a group of Democratic senators sent a letter to Trump reminding him that he lacks legal authority to attack North Korea (though this hasn’t deterred the president in the past).

It is deeply worrisome that both Congress and the executive branch feel the need to actively contain Trump’s aggressive inclinations on these fronts. Unfortunately, the president is as much a product as he is a driver of America’s political and media zeitgeist, which has inflated the threat from Iran and North Korea to pathological proportions. In reality, neither regime poses a clear and present danger to the security of the United States, certainly not one requiring military action. The fever pitch surrounding each is more of our own making than anything else and Trump’s hawkish approach is by no means imposed on him by circumstances.

The question is whether the president can be convinced of this before his bombast begets a war nobody wants to fight.