Happy Tuesday and welcome to another edition of Rent Free. This week's stories include:

• A federal appeals court slaps down the federal government's odd argument that it doesn't have to compensate landlords for its eviction moratorium because the moratorium was illegal.
• Vice President Kamala Harris sets a first-term goal of building 3 million middle-class homes.
• A Michigan judge sides with property owners trying to build a "green cemetery."

But first, a look at an under-the-radar federal regulation change that might make it easier for builders to create more small multifamily "missing middle" homes.

Code Games

In his 1942 book Capitalism, Socialism, and Democracy Joseph Schumpeter praised capitalist mass production for bringing almost every basic commodity, from food to clothing, within the affordable reach of the working man. The one exception he highlighted was housing, which he confidently predicted would soon see a similar collapse in prices due to mass-produced manufactured housing.

As it happens, manufactured housing production—which is built in factories and then shipped and installed on-site—peaked in the mid-1970s and has been limping along as a small share of overall home construction ever since.

Nevertheless, the dream that cheap, factory-built homes can deliver lower-cost housing has never died.

It's certainly alive and well in the current White House.

This past week, the Biden-Harris administration released a "fact sheet" of actions it was taking to lower housing costs. It included an in-progress regulatory change that would allow two-, three-, and four-unit homes to be built under the federal manufactured housing code set by the U.S. Department of Housing and Urban Development (HUD).

"The HUD Code creates economies of scale for manufacturers, resulting in significantly lower costs for buyers," says the White House in that fact sheet. Letting small multifamily housing be built under the HUD code will extend "the cost-saving benefits of manufactured housing to denser urban and suburban infill contexts," it says.

IRC, IBC, IDK

The proposed change comes at an interesting time for small multifamily housing construction.

Across the country, more and more states and localities are allowing more two-, three-, and four-unit homes to be built in formerly single-family-only areas.

That liberalization of the zoning code (which regulates what types of buildings can be built where) has set off a follow-on debate about which building code (which regulates construction standards) newly legal multiplexes should be regulated under.

Currently, the options are either the International Building Code (IBC) or the International Residential Code (IRC).

The IBC and IRC are model codes created by the non-profit International Code Council, which are then adopted (often with tweaks and changes) by states and localities.

The IBC typically covers apartment buildings of three or more units, while the IRC covers single-family homes. Neither is particularly well-suited for the regulation of smaller multi-family buildings that cities are now legalizing.

The IBC, for instance, requires expensive sprinkler systems that don't do much to improve fire safety in smaller buildings but can make their construction cost-prohibitive.

Zoning reformers have responded by trying to shift the regulation of smaller apartments into the IRC. But that raises its own problems, says Stephen Smith of the Center for Building in North America.

"It's a complicated thing to do because the IRC is not written for small multi-family. It's written for detached single-family," he says. "For traditional apartment buildings with a single entrance and stairs and halls and stuff, it's not really clear how the IRC would work with that."

The White House's proposed changes open the possibility of sidestepping this IRC-IBC dilemma entirely by letting builders of manufactured, multifamily housing opt into a single, national set of regulations.

A Floor or a Ceiling?

The question then is whether this will actually make life easier for builders.

The effect of HUD regulation on the production of single-family manufactured housing is a topic of intense debate.

Prior to the 1970s, manufactured housing was governed by a patchwork of state and local building codes. In 1974 Congress passed legislation that gives HUD the power to regulate manufactured housing.

Critics of HUD regulation argue that its initial implementation caused the steep decline in manufactured housing production in the 1970s.

In particular, they point to the HUD requirement that manufactured housing must sit on a steel chassis as a regulation that increases costs and decreases production.

Brian Potter, a senior fellow at the Institute for Progress and writer of the Construction Physics Substack, contrastingly argues that HUD regulation has actually helped keep the cost of building manufactured housing down.

The production of all housing, not just manufactured housing, plummeted in the 1970s, he notes. Since the 1970s, the costs of non-manufactured, site-built housing have skyrocketed while the costs of building manufactured housing have risen much less, he points out. Potter argues that the effect of the steel chassis requirement is also overstated.

To this day, manufactured housing is the cheapest type of housing to produce when comparing smaller manufactured housing units to smaller site-built single-family housing units. The HUD code has less expensive requirements and allows builders more flexibility in the construction of units.

"The most interesting and attractive thing about the HUD code is that HUD code homes tend to be much, much less expensive than single-family homes," says Potter.

The hope is that allowing newly legal duplexes, triplexes, and fourplexes to be built under HUD standards would reduce costs compared to building them under IBC or IRC regulations.

Degrees of Change

While the HUD code has been in existence since the 1970s, its explicit exclusion of manufactured, multifamily housing is a relatively recent development. In 2014, HUD issued a memorandum saying that only single-family housing can be built under the department's manufactured housing standards.

In a 2022 public comment on the proposed updates, the Manufactured Housing Association for Regulatory Reform argues that the 2014 memorandum was in error and that HUD actually has no regulatory authority to cap the number of units that can be built under the code.

According to the White House fact sheet, the Biden administration's proposed updates to the HUD code would once again allow up to four units of housing to be built under the code once again.

If the HUD code critics are correct, then this will make a minimal difference. Under this theory, builders would just have another cost-increasing building code to choose from. If folks like Potter are correct, however, this should allow builders to opt into less demanding regulations. We might therefore see an increase in the number of two-, three-, and four-unit homes built.

Building code liberalization will still only be effective in places where zoning code liberalization has already happened. Cities and states still have every power to zone out multifamily housing and ban the placement of manufactured housing.

Where cities have made those "missing middle" reforms, however, it's possible the White House's proposed regulatory changes will increase the production of manufactured, multifamily housing while policymakers figure out whether how to change the IBC or IRC to allow more site-built multiplexes.

If the CDC's Eviction Moratorium Was Illegal, Do the Feds Have To Pay for It?

When the Centers for Disease Control and Prevention (CDC) banned residential evictions for non-payment of rent in 2020, property owners responded with a flurry of lawsuits, arguing that the federal government owed them compensation for what amounted to a physical taking of their property.

While those lawsuits were ongoing, the U.S. Supreme Court ruled in August 2021 that the CDC moratorium was an illegal overstepping of the agency's authority.

This armed the federal government with an audacious response to all those property owners' claims for compensation: Because the CDC's eviction moratorium was illegal and lacked federal authorization, the federal government wasn't required to pay any compensation.

Incredibly, the Court of Federal Claims agreed with this argument—citing past cases that immunized the government from having to pay compensation for clearly illegal, unsanctioned acts of its agents—and dismissed a property owners' lawsuit in the case of Darby Development Co. v. United States.

But this past week, the United States Court of Appeals for the Federal Circuit sided with property owners and reversed that dismal.

The appeals court ruled that the CDC eviction moratorium, while illegal, clearly did have the endorsement of both Congress and the executive branch.

"Taken to its logical conclusion, [the government's] position is that government agents can physically occupy private property for public use, resist for months the owner's legal attempts to make them leave, and then, when finally made to leave, say they need not pay for their stay because they had no business being there in the first place," wrote Judge Armando O. Bonilla in an opinion issued earlier this month.

The case is now remanded back to the federal claims court.

"The government should not be able to hide behind its own illegality to avoid paying damages for that very illegality," Greg Dolin, a senior litigation counsel at the New Civil Liberties Alliance (which filed an amicus brief in the Darby case) told Reason.

Kamala Harris, Supply Sider?

In a speech this past Friday laying out her economic agenda, Vice President and Democratic presidential candidate Kamala Harris criticized state and local restrictions on homebuilding for driving up prices.

"There's a serious housing shortage in many places.  It's too difficult to build, and it's driving prices up. As president, I will work in partnership with industry to build the housing we need, both to rent and to buy. We will take down barriers and cut red tape, including at the state and local levels," said Harris, promising to deliver 3 million units of housing that's affordable to middle-class families by the end of her first term.

It's always refreshing to hear a politician accurately diagnose the cause of America's high housing costs as a matter of restricted supply. It's even better when politicians promise to do something about those supply restrictions. Harris' remarks are rhetorically a lot better than the explicit NIMBYism coming from Republican presidential contender Donald Trump.

Nevertheless, Harris' actual housing policies, including downpayment subsidies and rent control, will only make the problem worse. Downpayment subsidies will drive up demand and prices while leaving supply restrictions in place. Rent control has a long, long record of reducing the quality and quantity of housing.

Harris' speech was also peppered with lines attacking institutional housing investors who are providing much-needed capital for housing production.

Town's Ban on 'Green Cemetery' Is Dead

If the government doesn't like your cemetery, can it just ban all cemeteries? The answer, at least in Michigan, is no, no it can't.

In the case of Quakenbush et al v. Brooks Township et al, a state circuit court judge sided with a married couple who'd sued their local government when it passed a ban on new cemeteries with an eye toward stopping their development of the state's first "conservation burial forest."

"We're excited and feel vindicated by this ruling. We are delighted that the judge understood that Brooks Township's ordinance violated our right to use our property," said Peter and Annica Quakenbush, the plaintiffs in the case. They were represented by the Institute for Justice.

Quick Links

• Jim Burling, the Pacific Legal Foundation's vice president of legal affairs, has a new book Nowhere to Live covering the legal history of zoning in America, the courts' acquiescence to this restriction on property rights, and all the attendant consequences of high housing costs and homelessness that have flowed from it.
• A new paper published on SSRN estimates that a 25 percent reduction in permitting times in Los Angeles leads to a 33 percent increase in housing production.
• Calmatters covers the killing, or severe injuring, of various bills introduced in the California Legislature this year that aimed to pair back the California Coastal Commission's powers to shoot down new housing production. Read Reason's past coverage of the Coastal Commission here and here.
• Hawaii has legalized accessory dwelling units statewide, but they haven't made building them easy.
• If you build it, prices drop.

*UPDATED* (and still true)

When you build "luxury" new apartments in big numbers, the influx of supply puts downward pressure on rents at all price points -- even in the lowest-priced Class C rentals. Here's evidence of that happening right now:

There are 21 U.S. markets where… pic.twitter.com/BF9GY0YiFY

— Jay Parsons (@jayparsons) August 13, 2024

The post Code Games appeared first on Reason.com.

Amid all the competing headlines of the 2024 election, there may be no more bread-and-butter issue—literally—than how much Americans are paying to put food on their tables. The GOP is gearing up to attack the Biden-Harris administration for escalating grocery store bills, while presumptive Democratic nominee Kamala Harris has now responded with her own plan to fight higher food prices. 

One of the hottest items in this political food fight is unquestionably the ongoing litigation from the Federal Trade Commission (FTC) attempting to block the Kroger-Albertsons grocery store merger. A host of Democratic lawmakers recently joined the legal fight, arguing that any potential merger would raise prices, increase food deserts, and disproportionately hurt unionized labor. As part of her new food price plan, Harris included a call for aggressive antitrust crackdowns in the food and grocery industry, mentioning the Kroger-Albertsons merger by name in her speech this week.

None of the arguments against the merger make much sense on the merits, but the FTC—and the Democratic Party writ large—are stacking the legal deck to achieve a predetermined outcome that conveniently aligns with their policy priorities.

The saga started back in October 2022, when The Kroger Company and Albertsons Companies Inc. (the parent company for popular grocery chains like Safeway and Acme, among others) announced their plans for a $24.6 billion merger. The FTC promptly launched a 16-month investigation, culminating in a lawsuit in federal court to block the proposed merger.

Kroger is the fourth-largest grocery store chain in America—behind Walmart, Amazon, and Costco—and Albertsons is the fifth-largest. Once merged, the combined company would rise to third on the list. On the surface, this may seem to provide some support for the FTC's position, but American shoppers would be wise to read the fine print.  

In truth, if the deal were to proceed, a merged version of Kroger and Albertsons would still only make up 9 percent of overall grocery sales. To put this in further perspective, consider that Walmart—the nation's largest grocery provider—would continue to operate more stores (including its Sam's Club outlets) than a Kroger-Albertson combo and maintain grocery revenue that is more than twice that of the merged company. 

One could easily argue, in other words, that far from being a monopoly, a Kroger-Albertsons joint venture would be the best hedge against potential monopolies forming among the even-more-dominant firms above it on the grocery store food chain. But incredibly, the FTC pretends that two of those larger companies don't exist in the marketplace at all simply by working with their own definitions.

The FTC contends that only local brick-and-mortar supermarkets (what one might think of as a "traditional" grocery store) and hypermarkets (such as Walmart or Target, which sell groceries alongside other goods) count in the market for groceries. This narrow definition completely circumvents wholesale-club stores (such as Costco) and e-commerce companies that sell groceries (such as Amazon). 

Given that Amazon and Costco just happen to be the second- and third-largest grocery retailers in the United States, the agency is blatantly gerrymandering the definition of the marketplace. The agency's longstanding position is that the only relevant market is stores where consumers can buy all or nearly all of their weekly groceries, which begs the question: Has anyone at the FTC stepped foot inside a Costco recently? Many Americans use club stores like Costco and BJ's Wholesale Club as their primary grocery stores, with around 15 percent of Americans ages 18–34 reporting that they do most of their grocery shopping at Costco.  

Pretending that the internet doesn't exist makes even less sense. As the International Center for Law and Economics notes, 25 years ago a mere 10,000 households took part in online shopping, whereas today 12.5 percent of consumers (or over 16 million people) purchase their groceries "mostly or exclusively" online. Amazon is also preparing to make its own big push into brick-and-mortar grocery retailing as well, with CEO Andy Jassy saying last year that the company must "find a mass grocery format that we believe is worth expanding broadly."

Beyond the FTC's tortured marketplace definitions, its arguments for the alleged harms of a conjoined Kroger-Albertsons are equal parts unconvincing and outdated. In its complaint, the agency points to escalating grocery prices in recent years, and Harris echoed this by stating that she would enact a "ban on price gouging on food and groceries" by directing the FTC to impose "harsh penalties" on grocers. She also pledged to continue aggressive antitrust enforcement in the food sector, going so far as to highlight the Kroger-Albertsons merger as an example of the type of deal that could increase prices. However, as many commentators have pointed out, food price increases likely have more to do with inflation than any lack of competition in grocery markets.

In addition to the consumer price harms the FTC alleges, over half of the agency's legal complaint focuses on the alleged harm the proposed merger would cause to the unionized workers at Kroger and Albertsons. Both companies are heavily unionized—in contrast to Walmart and Amazon—and the agency claims that a combined company would have more leverage over unions given that the unions would no longer be able to play one company off against the other as a negotiating tactic. This glosses over the fact that the demand for labor is particularly competitive in the retail sector broadly, and workers could easily just jump ship to a different employer in the face of any exploitative terms pushed by the merged firm.

A final concern highlighted by some Democratic lawmakers is that a merged company could result in more store closures that lead to geographical areas within which there are few or no grocery options. Once again, this ignores the rise of club stores like Costco and online/home delivery grocery options. These alternatives reduce the plausible areas within which such food deserts can take hold, showing once again a poor understanding of the modern grocery marketplace.

Despite the many dubious underpinnings of the FTC's challenge, it fits with the Biden administration's aggressive antitrust emphasis over the past four years. While some observers were holding out hope that a Harris administration might curtail overzealous antitrust enforcement, her new food price agenda has poured cold water all over that (already wishful) thinking.

The post Harris Joins the FTC's Food Fight Against Kroger-Albertsons Merger appeared first on Reason.com.

Democrats in Congress have reintroduced a bill that would revive the ability to sue federal law enforcement officers for constitutional violations like excessive force, following a series of Supreme Court decisions that have made it practically impossible to do so.

Sen. Sheldon Whitehouse (D–R.I.) and Reps. Hank Johnson (D–Ga.) and Jamie Raskin (D–Md.) reintroduced the Bivens Act in the Senate and House, respectively, this week. The legislation would amend the Civil Rights Act of 1871—a federal statute that allows people to sue the government for civil rights violations—to include federal officials acting under the color of law, as well as state and local officials.

"Public officials at all levels of government, including law enforcement, should have a clear, fair standard of accountability when they break the law," Whitehouse said in a press release. "Our Bivens Act would end the confusing judicial precedent that for too long has prevented victims from holding federal officials accountable and securing compensation for constitutional violations."

In 1971, the Supreme Court ruled in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics that federal agents may be sued when they violate someone's rights. But subsequent Supreme Court rulings over the years have steadily narrowed the scope of so-called Bivens claims to the point where it's a dead letter.

In the most recent case, Egbert v. Boule, the Supreme Court ruled in 2022 that a bed-and-breakfast owner could not sue a Border Patrol agent who had allegedly assaulted him and then retaliated after he complained. Reason's Damon Root summarized the case: 

At issue were the actions of a border patrol agent who sought to question one of the guests at a Washington state bed-and-breakfast about the guest's immigration status. When owner Robert Boule told the agent, Erik Egbert, to leave his property, Egbert allegedly assaulted Boule. Then, when Boule complained about the alleged assault to the agent's superiors, Egbert allegedly retaliated by asking the IRS to investigate Boule, who was audited.

The Court ruled 6–3 that Boule could not bring a claim against Egbert for excessive force or First Amendment retaliation. 

That same term, the Court declined to hear petitions involving cases where a St. Paul police officer invented a fake sex-trafficking ring and jailed a teenage girl for two years on trumped-up charges and where a Department of Homeland Security agent allegedly tried to kill a man because of an argument involving his son.

As Reason's Billy Binion wrote at the time, "A federal badge will now serve as an impenetrable shield against civil liability for violating the same laws agents are charged with upholding."

That's not just the opinion of some whacky libertarians either. Federal Judge Don Willett complained in a 2021 opinion that the Supreme Court has gutted Bivens to the extent that "if you wear a federal badge, you can inflict excessive force on someone with little fear of liability."

The Bivens Act is supported by numerous civil rights and watchdog groups, including the American Civil Liberties Union, the Drug Policy Alliance, and the Project on Government Oversight.

The post New Bill Would Revive the Right To Sue Federal Cops for Constitutional Violations appeared first on Reason.com.

Less than a month after the attempted assassination of former President Donald Trump, the agency that failed to protect him from harm may get a bigger budget.

On July 13, when Thomas Matthew Crooks shot and wounded Trump during a campaign rally in Pennsylvania, Secret Service agents sprang into action, heroically shielding him from further harm and escorting him from the stage.

But subsequent reporting revealed that the incident was entirely preventable: Rally attendees alerted law enforcement to the presence of a suspicious person more than an hour before he started shooting, and they later saw him climbing on top of a building with a gun. "Trump was on stage for around 10 minutes between the moment Crooks was spotted on the roof with a gun and the moment he fired his first shot," the BBC reported.

After a particularly disastrous appearance before the House Oversight Committee, Secret Service Director Kimberly Cheatle resigned. Appearing before two Senate committees this week, acting Director Ronald Rowe Jr. testified that he was "ashamed" of the agency's failure.

Almost immediately after the shooting, a narrative emerged that the lapse owed to a lack of resources.

At a July 15 White House press briefing, a reporter asked Secretary Alejandro Mayorkas of the Department of Homeland Security—which oversees the Secret Service—"Is the Secret Service stretched too thin?"

"The Secret Service in—in times like this calls upon other resources and capabilities to handle a—a campaign of this magnitude," Mayorkas replied. "And I do intend to speak with members of the Hill with respect to the resources that we need."

"Our agency needs to be adequately resourced in order to serve our current mission requirements and to anticipate future requirements," Cheatle noted in her opening testimony before the House Oversight Committee on July 22. "As of today, the Secret Service has just over 8,000 employees," she told Rep. Stephen Lynch (D–Mass.). "We are still striving toward a number of 9,500 employees, approximately, in order to be able to meet future and emerging needs."

In a letter to Rowe this week, Sens. Chris Murphy (D–Conn.) and Katie Britt (R–Ala.)—respectively the chairman and the ranking member of the Senate Appropriations Subcommittee on Homeland Security—sought to understand the agency's financial needs as the subcommittee drafts an appropriations bill.

"Congress provided more than $190 million to the Secret Service in Fiscal Year 2024, specifically for protection requirements related to the 2024 presidential campaign, plus an additional $22 million above President Biden's budget request for protection-related travel costs," the senators wrote. "Despite this increase, in mid-June, prior to the attempted assassination, the Secret Service submitted a reprogramming notification to our subcommittee detailing its intent to shift $19 million to cover a shortfall for protection-related travel funding." This was in addition to the imminent addition of two vice presidential candidates and their families to the agency's protective purview, plus independent presidential candidate Robert F. Kennedy Jr., whom President Joe Biden added to the list after the shooting.

"As a result, the Secret Service is assuming new protection costs related to the campaign at a time when it already appears to lack sufficient resources to fulfill its protective mission," the senators continue.

But it's not at all clear that a lack of resources was the issue: The agency's budget in real numbers grew 55 percent over the last decade, to $3.62 billion, and its work force grew 33 percent from 2002 to 2019.

It is possible the agency may be stretched thin in its duties: The Secret Service is tasked by law with protecting not only the president, vice president, and their immediate families, but also former presidents, vice presidents, and their spouses for life, and their children until age 16. They also protect visiting heads of state and "other distinguished foreign visitors to the United States and official representatives of the United States performing special missions abroad when the President directs that such protection be provided."

"The Secret Service currently protects 36 individuals on a daily basis, as well as world leaders who visit the United States," Cheatle told the House Oversight Committee.

But that's not the agency's only job: Agents are tasked with investigating a number of financial crimes like counterfeiting, money laundering, and identity theft, as well as ransomware attacks, botnets, and "online sexual exploitation and abuse by predators and other criminals, sometimes for financial gain."

It's possible that the Secret Service is doing too many jobs for the amount of resources it enjoys. Perhaps many of its financial and investigative tasks should be shifted to the U.S. Treasury Department, which is where the Secret Service originated before Congress added presidential protection to its plate in 1901. The numbers demonstrate that the agency's problem is not purely financial.

But it's also worth keeping in mind that government agencies, by their nature, do too much, too poorly, and for too much money. The Secret Service, for all the nobility of its mission, is no exception.

The post Secret Service May Get Even More Money After Failing To Protect Trump appeared first on Reason.com.

Robert F. Kennedy Jr. won applause at the Libertarian National Convention by criticizing government lockdowns and deficit spending, and saying America shouldn't police the world.

It made me want to interview him. This month, I did.

He said intelligent things about America's growing debt:

"President Trump said that he was going to balance the budget and instead he (increased the debt more) than every president in United States history—$8 trillion. President Biden is on track now to beat him."

It's good to hear a candidate actually talk about our debt.

"When the debt is this large…you have to cut dramatically, and I'm going to do that," he says.

But looking at his campaign promises, I don't see it.

He promises "affordable" housing via a federal program backing 3 percent mortgages.

"Imagine that you had a rich uncle who was willing to cosign your mortgage!" gushes his campaign ad. "I'm going to make Uncle Sam that rich uncle!"

I point out that such giveaways won't reduce our debt.

"That's not a giveaway," Kennedy replies. "Every dollar that I spend as president is going to go toward building our economy."

That's big government nonsense, like his other claim: "Every million dollars we spend on child care creates 22 jobs!"

Give me a break.

When I pressed him about specific cuts, Kennedy says, "I'll cut the military in half…cut it to about $500 billion….We are not the policemen of the world."

"Stop giving any money to Ukraine?" I ask.

"Negotiate a peace," Kennedy replies. "Biden has never talked to Putin about this, and it's criminal."

He never answered whether he'd give money to Ukraine. He did answer about Israel.

"Yes, of course we should,"

"[Since] you don't want to cut this spending, what would you cut?"

"Israel spending is rather minor," he responds. "I'm going to pick the most wasteful programs, put them all in one bill, and send them to Congress with an up and down vote."

Of course, Congress would just vote it down.

Kennedy's proposed cuts would hardly slow down our path to bankruptcy. Especially since he also wants new spending that activists pretend will reduce climate change.

At a concert years ago, he smeared "crisis" skeptics like me, who believe we can adjust to climate change, screaming at the audience, "Next time you see John Stossel and [others]… these flat-earthers, these corporate toadies—lying to you. This is treason, and we need to start treating them now as traitors!"

Now, sitting with him, I ask, "You want to have me executed for treason?"

"That statement," he replies, "it's not a statement that I would make today….Climate is existential. I think it's human-caused climate change. But I don't insist other people believe that. I'm arguing for free markets and then the lowest cost providers should prevail in the marketplace….We should end all subsidies and let the market dictate."

That sounds good: "Let the market dictate."

But wait, Kennedy makes money from solar farms backed by government guaranteed loans. He "leaned on his contacts in the Obama administration to secure a $1.6 billion loan guarantee," wrote The New York Times.

"Why should you get a government subsidy?" I ask.

"If you're creating a new industry," he replies, "you're competing with the Chinese. You want the United States to own pieces of that industry."

I suppose that means his government would subsidize every industry leftists like.

Yet when a wind farm company proposed building one near his family's home, he opposed it.

"Seems hypocritical," I say.

"We're exterminating the right whale in the North Atlantic through these wind farms!" he replies.

I think he was more honest years ago, when he complained that "turbines…would be seen from Cape Cod, Martha's Vineyard… Nantucket….[They] will steal the stars and nighttime views."

Kennedy was once a Democrat, but now Democrats sue to keep him off ballots. Former Clinton Labor Secretary Robert Reich calls him a "dangerous nutcase."

Kennedy complains that Reich won't debate him.

"Nobody will," he says. "They won't have me on any of their networks."

Well, obviously, I will.

I especially wanted to confront him about vaccines.

In a future column, Stossel TV will post more from our hourlong discussion.

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post RFK Jr. Pays Lip Service to the Debt While Pushing Policies That Would Increase It appeared first on Reason.com.

The government has a long history of using tracking technology to ascertain our whereabouts, our habits, and even our preferences. From cellphones and cars to snow plows and garbage trucks, governments seemingly want to track anything that moves—or moos.

The USDA recently finalized a rule—set to go into effect in a few months—that will require all cattle and bison being moved across state lines to be tagged with radio-frequency identification (RFID) ear tags. RFID technology uses radio frequency waves to transmit and collect data by way of a system of electronic tags and scanners. The technology is best viewed as a type of electronic or remote barcode, in which scanners can read an RFID chip anywhere from a few meters away to around 100 meters away. In some ways analogous to a shorter-range GPS system, RFID can track geographic location and also operate as a system of data collection and storage.

In the context of livestock, a quick scan of an RFID tag can pull up information like a cow's date of birth, weight, vaccine records, ownership history, what farms it has been to, and what movements it has made. The USDA is justifying its RFID mandate on public health grounds, claiming that it can help trace and eradicate potential disease outbreaks among livestock, such as mad cow disease or hoof-and-mouth disease. 

While plausible at first blush, it is far from clear that the mandate will accomplish its intended objective, and it is very clear that it will disproportionately hurt small and independent ranchers and cattle farmers.

For one thing, most ranchers already want to be able to identify their cattle and have used physical metal tags for years to do so. Electronic RFID tags are twice as expensive as traditional metal tags and also require an upfront investment in scanners and software, making the switch cost-prohibitive for many small farms. Farmers also complain that electronic tags are harder to identify visually from a distance, which matters during cattle drives and other large and quick-paced movements of livestock. Most farmers that use electronic tags therefore also still tag their animals with traditional physical tags, necessitating a double-investment in two types of tags.

There's also the issue of tag retention. "I've talked to many people who have used these RFID tags and their cows have lost 50 percent after five years," Ken Fox, a South Dakota cow farmer and chair of R-CALF USA's Animal Identification Committee, told Wisconsin State Farmer. "By year nine or ten only 14 percent of the tags were left; and our beef cows can be with us for 15 to 20 years, so that's a serious concern." Fox also notes that the RFID scanners often need to be replaced every four or five years.

Fox points out that not all livestock operations are created equal. For dairy farmers who keep their livestock penned up, frequent replacing of tags is more logistically feasible, if still expensive. But for cattle ranchers, tag replacement can be entirely impracticable. "That just doesn't work when we've got cattle on 10,000 or 30,000 acres of range land and we handle those cattle maybe twice a year," said Fox. "If they lose those tags, how are we going to know who those cattle are?" Amish farmers have also opposed electronic tagging on moral grounds given their opposition to technology.

Large cattle operations can afford to double-tag their livestock with physical and electronic tags, and in fact, many have already done so voluntarily—which means the mandate's burden will fall heaviest on small and medium-sized farms and ranches. The USDA rule also favors large cattle operations more directly, including allowing them to use so-called "group identification" for livestock herds of a certain size and continuity.

"The new rule also provides for large-scale cattle operations to use one ID per group of a certain size, instead of one ID per animal," writes Remington Kesten in a blog post for David's Pasture, a small-scale cattle operation in Missouri. "This means that the smaller farms will actually incur more cost per animal once the mandate takes effect, than the big players will." 

Worse yet, this group identification actually undercuts the USDA's entire disease-traceability rationale for mandated electronic tagging. "This intentional loophole also reduces the traceability for large farms and exporters, contradicting the USDA's primary reason for mandating RFID Ear Tags in the first place," notes Kesten.

The rule also fails on its own terms. While supporters point to the 2003 mad cow disease outbreak in Washington state as an example of a situation where electronic tagging could have allowed for quicker identification of where the disease originated, it's worth noting that the government was still able to track the original diseased cow back to its birthplace farm in Canada within 13 days.

It's also worth recognizing that livestock disease outbreaks are exceedingly rare in the United States. An article in Lancaster Farming, which takes a generally favorable bent toward the USDA mandate, notes that hoof-and-mouth disease was last found in America in 1929. Farmers such as Fox have also highlighted the successful combatting of brucellosis in the United States, which was accomplished without electronic tagging. 

If anything, it is large-scale commercial farms that are most responsible for disease outbreaks. "There is no data in over a decade showing that food borne illnesses have resulted from disease on small farms," writes Kesten. "All major disease outbreaks in recent years have occurred on large farms." In other words, small and independent ranchers are bearing the brunt of a new rule in the name of fixing a problem that they have nothing to do with.

Finally, the USDA rule creates significant data privacy concerns. RFID tags cannot distinguish between scanners—which are portable and easily carried in hand—so potentially anyone with a scanner could access the data contained in each tag. Ominously, the USDA rule opts to use the term electronic identification tags instead of the RFID acronym, although for now RFID tags are the only technology approved by the USDA for livestock tagging. 

This flexible language means that USDA is explicitly leaving the door open to even more comprehensive tracking technology. This could come in the form of "active" RFID tags (instead of "passive" ones as currently contemplated) that have a greater range of readability or even GPS tracking of cows via satellites.

One small beacon of hope for American ranchers is that Congress appears to finally be waking up to the USDA's overreach. Sen. Mike Rounds (R-S.D.) recently introduced legislation that would prohibit the USDA from implementing any rule that mandates electronic tagging technology for cattle and bison.

The USDA is attempting to find a solution for a problem that has already been largely addressed through current practices. 

Fox puts it more colorfully: "Someone told me this story—NASA spent millions trying to develop a pen that could work in sub-zero temperatures and zero gravity. The Russians just used a pencil."

The post The Government Wants To Track Your Steak appeared first on Reason.com.

The Supreme Court on Friday ruled that the right to a trial by jury and to due process apply to people who face a steep sentencing enhancement under federal law, in a ruling that transfers some power from the hands of judges to the public and will affect many criminal defendants' future punishments.

The procedural history of the case is a bit of a whirlwind. But at its center is Paul Erlinger, who was charged in 2017 with being a felon in possession of a firearm and sentenced to 15 years under the Armed Career Criminal Act (ACCA), which increases the punishment for that offense—felon in possession of a firearm—from a 10-year maximum to a 15-year minimum if the defendant has been convicted previously of three violent felonies or serious drug offenses on separate occasions.

At sentencing came one of the initial twists, when the judge who handed down the 15-year punishment made clear it was inappropriate. Erlinger, who pleaded guilty, had gained steady employment, started a family, and remained drug-free in the more than a decade since his previous convictions, so a five-year sentence, the judge said, would be "fair." But under the ACCA, the court's hands were tied.

Then came the U.S. Court of Appeals for the 7th Circuit, which said shortly thereafter that two of Erlinger's offenses considered for the purposes of the ACCA did not actually qualify as violent felonies or serious drug crimes. Prosecutors, however, were undeterred. They returned to court and invoked convictions related to burglaries Erlinger committed 26 years before the felon in possession of a firearm charge, when he was 18 years old. Erlinger countered that the burglaries in question had been a part of one criminal episode—not distinct events as the ACCA requires—and that, most importantly, a jury would need to make the consequential determination about the separateness of those offenses.

The sentencing court disagreed, ruling it was the judge's decision and that the court was bound by the ACCA, thus reimposing the 15-year sentence that it once again called "unfortunate" and "excessive."

But Justice Neil Gorsuch, writing for the 6–3 majority opinion, explained that Erlinger did indeed have the 5th Amendment and 6th Amendment right to ask a jury whether those offenses were committed separately and if he is therefore vulnerable to the massive increase in incarceration that the sentencing court itself characterized multiple times as unjust. The outcome was at least somewhat predictable when considering yet another twist: After Erlinger appealed on the grounds that his constitutional rights had been violated, the government agreed. But the 7th Circuit still refused to reconsider his sentence, leaving Erlinger to ask the Supreme Court.

Core to Gorsuch's opinion is Apprendi v. New Jersey (2000), a Supreme Court precedent that ruled it was unconstitutional when a judge sentenced a defendant more harshly on the basis that a shooting had allegedly been motivated by racial animus, because no jury considered or made any determination beyond a reasonable doubt on that factor. A jury and a jury only, the Court ruled, may find "facts that increase the prescribed range of penalties to which a criminal defendant is exposed" when it will cause the penalty to exceed the prescribed statutory maximum.

But Gorsuch also says the Court has something else on its side today: history. "Prominent among the reasons colonists cited in the Declaration of Independence for their break with Great Britain was the fact Parliament and the Crown had 'depriv[ed] [them] in many cases, of the benefits of Trial by Jury,'" he writes. "The Fifth and Sixth Amendments placed the jury at the heart of our criminal justice system" in order "to mitigate the risk of prosecutorial overreach and misconduct" and serve as a check on the government.

This is not a novel area for Gorsuch, who has made clear his respect for the right to a trial by jury. Last month, he rebuked the Court's demurral from hearing a case concerning Florida's use of six-person juries as opposed to the traditional, historical practice of using 12-person panels.

Though much has been made of the ideologically fractured nature of the current Court, the decision in Erlinger did not fall neatly along partisan lines. Among the dissenters were Justices Samuel Alito, Brett Kavanaugh, and Ketanji Brown Jackson, the latter of whom argued that Apprendi—and, as an extension, the case law that has sprung from it—was wrongly decided. "I recognize that many criminal defendants and their advocates prefer the Apprendi regime, which provides some defendants with more procedural protections at sentencing," Jackson writes. "In my view, however, the benefit that some criminal defendants derive from the Apprendi rule in the context of their individual cases is outweighed by the negative systemic effects that Apprendi has wrought," which she says has hamstrung judges and increased sentencing disparities.

"The only thing judges may not do consistent with Apprendi is increase a defendant's exposure to punishment based on their own factfinding," counters Gorsuch. "Does Justice Jackson really think it too much to ask the government to prove its case (as it concedes it must) with reliable evidence before seeking enhanced punishments under a statute like ACCA when the 'practical realit[y]' for defendants like Mr. Erlinger is exposure to an additional decade (or more) in prison?"

The post The Supreme Court Again Strengthens the Right to a Jury Trial in Criminal Sentencing appeared first on Reason.com.

In 2024, the federal budget deficit is estimated to reach nearly $2 trillion, according to new projections released by the Congressional Budget Office (CBO) this week. In February, the agency predicted that the deficit would only be $1.58 trillion. However, spending increases have caused the projected deficit to increase by $400 billion, a staggering 27 percent hike. 

According to the CBO, 80 percent of the spike in the deficit can be blamed on four sources of government spending.

The largest source, responsible for $145 billion of the increase, is changes to the federal student loan program that have resulted in massive waves of federal student loan forgiveness and increased forgiveness going forward.

Second, the CBO's report details how the costs for "deposit insurance have increased by about $70 billion because the Federal Deposit Insurance Corporation (FDIC) is not recovering payments it made when resolving bank failures in 2023 and 2024 as quickly as CBO previously anticipated."

Third, an additional $60 billion in cost increases came from additional legislation. And lastly, $50 billion in increased spending came from higher-than-expected Medicaid costs.

The long-term outlook for the budget deficit has increased too. In February, the CBO estimated that in 2034, the deficit would climb to $2.5 trillion. Its latest estimate now places that number as over $2.8 trillion.

"For the 2025–2034 period, CBO now projects that if current laws generally remained unchanged, the cumulative deficit would be $22.1 trillion. That amount is $2.1 trillion (or 10 percent) more than the $20.0 trillion the agency projected this past February," reads the CBO's report. "Measured in relation to the size of the economy, federal debt at the end of 2034 is now projected to equal 122 percent of gross domestic product (GDP); in February, debt at the end of that year was projected to equal 116 percent of GDP."

If the deficit continues to increase as the CBO predicts, the outcome could be disastrous. 

"As debt grows unabated, there is the risk of a sudden loss of confidence in bond markets, with investors demanding much higher interest rates that could trigger a debt doom loop and broader fiscal crisis," Cato Institute researchers Romina Boccia and Dominik Lett warned this week. "Congress and the Biden administration should cut spending now while the economy is growing and conditions are favorable for deficit reduction, alleviating pressure on interest rates and the federal debt to grow, and before a fiscal crisis forces their hands."

The post Federal Budget Deficit Forecast Jumps $400 Billion, Fueled by Student Debt Forgiveness appeared first on Reason.com.

In 2021, the Infrastructure Investment and Jobs Act included $7.5 billion to build 500,000 public charging stations for electric vehicles (E.V.s) across the country in an effort to boost a switch to the use of clean energy.

As Reason reported in December, not one charger funded by the program had yet come online. Now, six months later, the number of functional charging stations has ticked up to eight.

That news comes from an Autoweek article earlier this month. In March, The Washington Post reported that only seven were built; a charging station in Bradford, Vermont, opened in April, containing four E.V. fast chargers. Public chargers are either Level 2, which use alternating current electricity and take several hours to fully charge an all-electric vehicle from empty, or Direct Current Fast Charging (DCFC) superchargers, which use direct current and can charge in less than an hour.

Why so little progress? Alexander Laska of the center-left Third Way think tank told Autoweek's Jim Motavalli that the federal cash "comes with dozens of rules and requirements around everything from reliability to interoperability, to where stations can be located, to what certifications the workers installing the chargers need to have." Laska says the regulations "are largely a good thing—we want drivers to have a seamless, convenient, reliable charging experience—but navigating all of that does add to the timeline."

A spokesperson with the National Electric Vehicle Infrastructure (NEVI) program, which administers $5 billion of the $7.5 billion total, further told Motavalli that the delay is because "we want to get it right."

Thankfully, federal grants aren't the only way to build out charging infrastructure.

"US drivers welcomed almost 1,100 new public, fast-charging stations in the second half of 2023, a 16% increase," Bloomberg's Kyle Stock reported in January. And not just in big cities or progressive enclaves: Deep-red Idaho "switched on 12 new [DCFCs] between July and December," while "Alabama, Arkansas, Mississippi and Tennessee welcomed 56 new fast-charging stations in the second half of 2023, an infrastructure increase of one-third."

While Stock notes that $5 billion of federal money is expected to roll out soon, "the vast majority of chargers added in the US last year were bets by for-profit companies on the future of battery-powered driving."

The most prominent company by far is Tesla, whose network of Superchargers includes over 57,000 DCFC chargers around the world and generated an estimated $1.74 billion of revenue in 2023 alone. Just in the fourth quarter of 2023, the company built 357 new stations, accounting for 3,783 charging ports.

Around two-thirds of all public chargers in the U.S. are manufactured for Teslas, but the company has also expanded its network for its competitors to use: In the 2025 model year, most major automakers' E.V.s will use the same charge port as Teslas and be able to access the Supercharger network.

Rivian, a Tesla competitor, is also building out its own DCFC network: In February 2024, it counted 400 chargers in 67 locations, with plans to expand further, and just like with Tesla's Superchargers, Rivian plans to make its chargers accessible to other models.

In fairness, both Tesla and Rivian have benefited from government handouts: State and local governments in Georgia promised Rivian a raft of incentives worth up to $1.5 billion. And Tesla has received at least $2.8 billion in federal, state, and local subsidies over the years, despite CEO Elon Musk's professed distaste for government intervention in the economy. In fact, Politico found in February that Tesla was the single largest recipient of funds disbursed by the federal NEVI program, winning "almost 13 percent of all EV charging awards from the law, earning it a total of more than $17 million in infrastructure grants."

But those companies still provide the best template for expanding access to public chargers.

While proponents of the federal regulations may defend the amount of red tape involved in the federal program, with demands on where a charging station can be placed and the types of licenses people need to build one, the fact is that the private sector is already building out a nationwide E.V. charging network that will be available to most drivers.

The post $7.5 Billion in Government Cash Only Built 8 E.V. Chargers in 2.5 Years appeared first on Reason.com.

Congressional Budget Office (CBO) projections provide valuable insights into how a big chunk of your income is being spent and reveal the long-term consequences of our government's current fiscal policies—you may endure them, and your children most certainly will. Yet, like most other projections looking into our future, these numbers should be taken with a grain of salt. So should claims that CBO projections validate anyone's fiscal track record.

So much can and likely will happen to make projections moot and our fiscal outlook much grimmer. Unforeseen events, economic changes, and policy decisions render them less accurate over time. The CBO knows this and recently released alternative scenarios based on different sets of assumptions, and it doesn't look good. It remains a wonder that more politicians, now given a more realistic range of possibilities, aren't behaving like it.

First, let's recap what the situation looks like under the usual rosy growth, inflation, and interest rate assumptions. Due to continued overspending, this year's deficit will be at least $1.6 trillion, rising to $2.6 trillion by 2034. Debt held by the public equals roughly 99 percent of our economy—measured by gross domestic product (GDP)—annually, heading to 116 percent in 2034.

The only reason these numbers won't be as high as projected last year is that a few House Republicans fought hard to impose some spending caps during the debt ceiling debate. The long-term outlook is even scarier, with public debt reaching 166 percent of GDP in 30 years and all federal debt reaching 180 percent.

No one should be surprised. To be sure, the COVID-19 pandemic and the Great Recession made things worse, but we've been on this path for decades.

Unfortunately, if any of the assumptions underlying these projections change again, things will get a lot worse. That's where the CBO's alternative paths help. Policymakers and the public can better see the potential risks and opportunities associated with various fiscal policy choices, enabling them to make more informed decisions.

For instance, the CBO highlights that if the labor force grows annually by just 0.1 fewer percentage points than originally projected—even if the unemployment rate stays the same—slower economic growth will lead to a deficit $142 billion larger than baseline projections between 2025 and 2034. A similarly small slowdown in the productivity rate would lead to an added deficit of $304 billion over that period.

Back in 2020, the prevalent theory among those who claimed we shouldn't worry about debt was that interest rates were remarkably low and would stay low forever. As if. These guys have since learned what many of us have known for years: that interest rates can and will go up when the situation gets bad enough. So, what happens if rates continue to rise above and beyond those CBO used in its projections? Even a minuscule 0.1-point rise above the baseline would produce an additional $324 billion on the deficit over the 2025-2034 period.

The same is true with inflation, which, as every shopper can see, has yet to be defeated. If inflation, as I fear, doesn't go away as fast as predicted by CBO—largely because debt accumulation is continuing unabated—it will slow growth, increase interest rates, and massively expand the deficit. To be precise, an increase in overall prices of just 0.1 points over the CBO baseline would result in higher interest rates and a deficit of $263 billion more than projected.

Now, imagine all these variations from the current projections happening simultaneously. It's a real possibility. The deficit hike would be enormous, which could then trigger even more inflation and higher interest rates. The question that remains is: Why aren't politicians on both sides more worried than they seem to be?

What needs to happen before they finally decide to treat our fiscal situation as a real threat? President Joe Biden doesn't want to tackle the debt issue. In fact, he's actively adding to the debt with student loan forgiveness, subsidies to big businesses, and other nonsense. Meanwhile, some Republicans pay lip service to our financial crisis, but few are willing to tackle the real problem of entitlement spending.

The time for political posturing is over. The longer we wait to address these issues, the more severe the consequences will be for future generations. It's time for our leaders to prioritize the nation's long-term economic health over short-term political gains and take bold steps toward fiscal responsibility. Only then can we hope to secure a stable and prosperous future for all Americans.

COPYRIGHT 2024 CREATORS.COM.

The post The Congressional Budget Office's Alternative Scenarios Forecast a Dire Economic Picture appeared first on Reason.com.

America's tax code is notoriously convoluted, but the complexity really sparkles when it comes to the federal government's approach to alcohol taxation. Wine, beer, and liquor are all subject to varying tax rates based on intricate calculations, but the so-called "bubble tax" for hard cider is the star of this regulatory circus.

Unbeknownst to most Americans, the tax rate for alcoholic cider is based on, among other things, the amount of carbonation the drink contains. Yes, America technically already has a carbon tax and the feds have literally found a way to tax air. Craft cider makers are being flattened by an arbitrary system that is strangling the industry's long-term potential.

Under the federal code, alcoholic cider is taxed as either hard cider, still wine, or sparkling wine, and the implications of which category applies are not insignificant. Hard cider is taxed at a modest $0.226 per gallon, while sparkling wine is taxed at a whopping $3.40 per gallon—a staggering 1,400 percent increase. For every 100 gallons of cider produced, Uncle Sam either takes $22 in taxes or $340 in taxes. 

What determines how cider is categorized and taxed? A ridiculous three-part formula based on a) what type of fruit is used to make the cider, b) the alcohol content of the cider, and c) what carbonation level the cider contains. 

Imagine you're a cider maker aiming for the lower tax rate to apply to your product. You need to produce a cider that is made from apples or pears (with no other fruit additions), is less than 8.5 percent alcohol by volume (ABV), and has less than or equal to 0.64 grams of carbon dioxide (CO2) per 100mL. However, if you decide to add some blackberries or grapes, it's considered a still wine and taxed at $1.07 per gallon—but only if it has less than 0.392 grams of CO2 per 100mL. If you go over that carbonation threshold, you've unlocked sparkling wine status and with that the $3.40 per gallon tax rate.

Confused? It gets worse. 

If your pear or apple cider is over 0.64 grams of CO2, it gets the sparkling wine rate. But it's knocked back down to the still wine rate if it's less than 0.392 grams of CO2 and the ABV level is 8.5 percent or higher. Whether the bubbles are added via "force carbonated" or "bottle conditioned" carbonation creates another tax delineation for the sparkling wine category. A flow chart is needed just to unpack all the potential permutations and combinations:

The implications of this tax labyrinth extend to consumers. A report from Wine Enthusiast notes that modern drinkers have grown to expect beer-like carbonation levels in their alcoholic beverages, thereby creating pressure for cider makers to add more carbonation to their products. 

One cider maker from Oregon reported that he receives frequent emails from consumers complaining about flat cider, which they incorrectly blame on him rather than the government. If adding more carbonation could financially cripple a small business, it's little wonder many cider makers feel that their hands are tied. 

The disparity is glaring when compared to beverages like beer, hard seltzer, and regular soda, which face no such carbonation-based tax penalties. It's a clear disconnect from market realities and consumer demands, which increasingly favor diverse flavors and more carbonation in ciders.

Craft cider makers are doing their best to diversify the carbonation levels and fruits in their ciders to respond to consumer demand, but it's clear the industry has a hard ceiling on its growth due to these tax rules. This is why many cider makers state that their ability to expand—and the ability of the industry as a whole to thrive—is being pointlessly inhibited.

The bubble tax is now getting more attention due to a recent bipartisan bill introduced in Congress, which aims to level the playing field between apple and pear ciders and those made with other fruits. While promising, the best reform would be to convert the entire system of alcohol taxation to one based simply on a drink's ABV level rather than arbitrary classifications.

Craft cider, a beverage steeped in American history, deserves better. Another Michigan cider maker made it even simpler: "It's not expressing the free market. The government needs to get out of the way."

The post The Federal Government is Literally Taxing Air appeared first on Reason.com.

Government employees and their office desks are never, ever, ever getting back together.

Parody of Taylor Swift's "Fortnight" written by Remy; performed by Remy and Austin Bragg; music tracks, mastering, and background vocals by Ben Karlstrom.

LYRICS:

Temporarily sent away but
They forgot to come and get me
A barely-functioning bureaucrat
Nobody noticed my new aesthetic

COVID's still a thing
Though that won't keep me from mid-day Soul Cycle
Meeting with our agency?
Expect to see three blank screens and Michael

Cuz every fortnight I am in the office one day
It is so hard working every other Monday
I click "leave-on-doorstep" but the
GrubHub driver rings my doorbell
I want to kill him

All my mornings are Sundays stuck in an
Endless commissary
If you ever try reaching us
The effects are pulmonary

And my phone rings it's ruining my life (I'm sick and it's ruining my life)
We come in one day every fortnight (You come in one day every fortnight?)

Cuz every fortnight I am in the office one day
It is so hard working every other Monday
In my backyard I have uncooked burger patties on the table
I want to grill them

I tried calling ya, but you don't pick up
Another fortnight lost in America
I tried calling ya, but you don't pick up
Another fortnight lost in America

• Producer, actor: Austin Bragg
• Producer: Meredith Bragg
• Producer: John Carter
• :

The post Remy: Fortnight (Federal Employee Version) appeared first on Reason.com.

On May 10, 1924, one of the worst events in history for American civil liberties happened: 29-year-old J. Edgar Hoover assumed the role of director of the then-Bureau of Investigation. Ambitious, power-hungry, and conniving, Hoover epitomized the snake in the proverbial garden. Under his watch, which lasted until his death in 1972, the FBI emerged as an alarming adversary to constitutional freedoms. 

Starting his career at the Justice Department in 1917 at only 22 years old, Hoover quickly ascended the ranks, often at the expense of Americans' civil liberties. By 1919, he headed the Justice Department's Radical Division, charged with destroying the supposed communist infiltration of America. Hoover's lifelong disdain for communists was matched only by his disregard for their constitutional rights, making this role a perfect fit for his ambitions. 

Hoover Cuts His Unconstitutional Teeth

As head of the Radical Division, Hoover began developing the dirty tricks he would become known for, relying on tactics fundamentally at odds with a free society. For example, he started compiling the secret files that made him infamous and feared by the political elite. "What Hoover accomplished during his first months at the Radical Division forever changed the nature of American politics," writes Beverly Gage in G-Man: J. Edgar Hoover and the Making of the American Century, "launching an unprecedented experiment in peacetime political surveillance."

Under Hoover's leadership and fueled by the Espionage Act of 1917, federal agents aggressively pursued radicals—communists, socialists, and anarchists—tapping their phone lines and intercepting their mail. Hoover amassed more power, and at the tender age of 24, according to Tim Weiner in Enemies: A History of the FBI, Hoover "could call for the arrest of almost anyone he chose."

In April 1919, a coordinated anarchist campaign of mail bombs targeted prominent Americans, including Hoover's boss, Attorney General A. Mitchell Palmer. Though none of the bombs met their intended targets, the first Red Scare was on. 

Hoover answered by organizing what became known as the Palmer Raids, with the initial raid in November 1919 leading to the mass arrests of nearly 1,200 suspected radicals—far more people than Hoover secured warrants for. Many rotted in city and county jails for months, and nearly 200 were deported under the Anarchist Exclusion Act of 1918.

But it was Hoover's encore the following January that epitomized what would become his lasting legacy: utter disregard for constitutionally protected rights. Beginning at 9 p.m. on January 2, 1920, Hoover led the largest mass arrests in American history. The raids continued into the week, and thousands were detained indiscriminately, many without warrants or just cause. 

According to Weiner in Enemies, "somewhere between 6,000 and 10,000 people were swept up in the raids." However, he notes that we will likely never know the exact number as "no official accounting ever took place."

Rather than landing Hoover behind bars or at least ending his career, he evaded accountability and mastered the art of bureaucratic survival that protected him through eight presidential administrations. Before long, he was rewarded. On May 10, 1924, Attorney General Harlan Fiske Stone named Hoover acting director of the Bureau of Investigation. Stone was a believer in civil liberties, notably, and told Hoover he was on probation and that the Bureau was out of the secret police game. 

But Hoover would have the last laugh. Soon after, he revived his domestic intelligence operations and unconstitutional ways, often operating beyond public and political accountability scrutiny.

Friends in High Places

Presidential administrations throughout the 20th century—likely fearing Hoover and his secret files—left him unchecked and either actively supported or tacitly approved of his methods. Presidents from Franklin Delano Roosevelt to Richard Nixon found Hoover's capabilities useful for their political agendas, thus embedding a culture of surveillance and political manipulation that Hoover masterfully orchestrated. 

"He wasn't acting on his own," writes FBI Special Agent Paul Letersky in The Director: My Years Assisting J. Edgar Hoover. "Since before World War II, every president he'd served—those revered by the left and those revered by the right—knew what Hoover and the Bureau were doing in domestic security and surveillance." 

During the run-up to World War II, FDR turned Hoover loose, empowering the FBI director to return to gathering intelligence on American fascists and communists. Hoover revived secret warrantless wiretapping only two years after Congress banned it in the Communications Act of 1934. 

With war breaking out in Europe, Hoover's worries about internal subversion grew. On December 6, 1939, Hoover issued his agents a secret (read: unauthorized) order named "Internal Security." The agents were to begin compiling a list of "dangerous" people—not just immigrants but also American citizens—to be detained when the war came to American shores. 

The list was known as the Custodial Detention Program. It categorized people into three groups (A, B, and C), with people in Group A considered to be the most dangerous—if war broke out, they would be arrested and detained immediately. One conspicuous name in Group A was Roger Baldwin, one of the founders of the American Civil Liberties Union and its current chief. 

Attorney General Francis Biddle learned about the Custodial Detention Program in 1943 and ordered it shuttered. Hoover simply renamed it the Security Index. It would remain secret until after Hoover's death, growing to include well over 20,000 names, almost all Americans. 

But no matter how many laws or norms Hoover broke, he continued atop his powerful perch at the FBI. President Harry Truman didn't like Hoover. In the words of his Treasury Secretary John Snyder, Truman believed "Mr. Hoover had built up a Frankenstein in the FBI." 

John F. Kennedy—like his brother, Attorney General Robert Kennedy—wanted to send Hoover packing. Bobby Kennedy said Hoover was "frightening" and called the FBI "a very dangerous organization." But JFK ultimately concluded, "You don't fire God."

Hoover, if nothing else, was a survivor.

Seeing Red Again

Perhaps the most infamous example of Hoover's brazen attacks on American civil liberties was the Counterintelligence Program (COINTELPRO). Initiated in 1956, COINTELPRO's operations were characterized by illegal surveillance, organizational infiltration, and police harassment. With this tool in place, Hoover shifted his concentration to a new enemy: the civil rights movement and its leader, Martin Luther King Jr.

Hoover believed the Soviets—not black Americans fed up with segregation and racial injustice—were behind the civil rights movement. He also believed King was a Moscow stooge, which landed him on the Security Index.

The FBI's disdain for the civil rights movement was so visceral that agents would tip off police in Alabama about the plans of the Freedom Riders, a contingent of black and white demonstrators protesting Jim Crow laws. Freedom Riders were often met with overwhelming violence by both police and the Ku Klux Klan, who had also thoroughly infiltrated the Alabama police. 

In arguably the FBI's most infamous COINTELPRO operation, agents bugged MLK's hotel rooms as he traveled. The preacher had his own dark side. The bugs would frequently pick up the sounds of sex after late-night parties. In an effort to destroy King for good in November 1964, Hoover's intelligence chief sent the sex tapes to King's wife with a letter that gave him an ultimatum—suicide or disgrace. Its conclusion read:

King, there is only one thing left for you to do. You know what it is. You have just 34 days in which to do…You are done. There is but one way out for you. You better take it before your filthy, abnormal fraudulent self is bared to the nation.

It would take the rifle of James Earl Ray to do what the FBI couldn't—end King's life.

Hoover's corruption extended into his personal realm, too. He maintained a luxurious lifestyle, heavily subsidized by the FBI's budget and, therefore, the American taxpayer. "The Bureau provided with him chauffeurs, handymen, gardeners, valets, and the tax accountants who sorted out the honoraria he received, totaling tens of thousands of dollars, from corporate grandees," explains Weiner in Enemies. "The gifts, given for ghostwritten speeches and articles, and as private awards for public service, supplemented the freely spent tax dollars that financed Hoover's four-star style." 

On May 2, 1972, Hoover's heart gave out in his sleep. While this ended his reign of terror, Hoover's methods and the culture he cultivated within the FBI have left a lasting imprint on American law enforcement and intelligence practices. Libertarians often describe government as a form of organized crime. Hoover's godfather-like dominion over the FBI makes that comparison harder to dismiss. 

A Man of Zeal

In his dissent in Olmstead v. U.S., which coincidentally legalized government wiretapping for a short time, Justice Louis Brandeis wrote: "The greatest dangers to liberty lie in insidious encroachments by men of zeal, well-meaning but without understanding."

And therein lies the danger of men like Hoover. To give the devil his due, Hoover most certainly believed plunging his hands into the latrine was necessary to defend the country he loved from those he thought would destroy it. As Letersky writes in The Director, Hoover was "a man who in his sincere belief that he was protecting his country had repeatedly violated the principles of the Constitution on which the country was founded." 

The 100th anniversary of Hoover's rise to power should serve as a reminder that the FBI—and the national security state it exemplifies—remains a dagger pointed at the heart of American civil liberties. All the Bureau needs to break bad again is another man "of zeal, well-meaning but without understanding" to return to Hoover's dirty tricks. 

There is no greater domestic threat to American freedom than a secret police. Hoover proved that for five decades until the devil called him home. May his ghost never wander the FBI's halls.

The post An American Gangster at 100: J. Edgar Hoover's Authoritarian Legacy appeared first on Reason.com.

Following persistent technical issues with this year's updated, streamlined Free Application for Federal Student Aid (FAFSA) form, the Education Department has announced a $50 million program to help more students complete the form—next year.

The chunk of funding is aimed at "expand[ing] the availability of advisers, counselors, and coaches to support students and contributors through the FAFSA applications," according to a Monday press release.

"We are determined to close the FAFSA completion gap," Deputy Secretary of Education Cindy Marten said. "The funding we're announcing today will support states, districts, and community-based groups [to] build capacity and leverage their power to ensure that every student who needs help paying for college turns in their FAFSA form."

FAFSA is required for any college students seeking federal grants or loans. Most colleges also use the form to determine how much institutional financial aid to offer students. In a typical year, over 15 million students and their families fill out the FAFSA form. But as of late April, successful applications are down 24 percent this year due to ubiquitous technical bugs in the updated form.

This year's issues stem from the Consolidated Appropriations Act of 2021, which mandated that the Education Department release a simplified version of the FAFSA form. The updated form was released in December—more than two months later than the typical release date. Almost immediately, the form was plagued with errors and bugs that made it nearly impossible to complete for many students.

FAFSA's own website details many of the issues with the form since its release. While most can be fixed with complicated "workarounds," some kept affected students from filling out the form for months. In March, the Education Department even announced that they had incorrectly calculated the completed forms of 200,000 students, leading to some possibly receiving more generous financial aid offers than they were actually eligible for.

Instead of publicly committing to solving these issues for next year's form, the Education Department is attempting to ameliorate its mistakes by throwing money at the problem. Why make a better FAFSA when you can pay people to shepherd students and their families through an infuriatingly complex process?

According to USA Today, the Education Department usually releases a draft version of next year's FAFSA in February or March, but that hasn't happened yet—hardly a good sign for next year's form.

While it's unclear whether students will have a smoother FAFSA experience next year, at least they can say they've gotten an apology. 

"I apologize to the students and families that have had to deal with delays," Secretary of Education Miguel Cardona said during a congressional hearing this week. "I know how frustrating that is."

The post The Government's Solution to FAFSA Chaos: Spend $50 Million More appeared first on Reason.com.

Following revelations about the extent of the federal government's pressure on social media companies to suppress dissenting opinions, the feds broke up with Meta, X (formerly Twitter), and YouTube. Cybersecurity experts now frequently complain about the lack of coordination between the government and the platforms, warning that social media users are vulnerable to misinformation about elections, foreign interference, and other woes.

But the platforms might be receiving late-night "you up?" texts from federal agents once again. Senate Intelligence Committee Chair Mark Warner (D–Va.) told reporters on Monday that communication between the federal government and social media sites is back on, according to Nextgov and The Federalist.

In fact, Warner said these communications had resumed in the midst of oral arguments for Murthy v. Missouri, the Supreme Court case that will decide whether the FBI, the Centers for Disease Control and Prevention (CDC), and the Biden White House had violated the First Amendment when they pushed social media sites to remove disfavored content. The justices seemed at least somewhat skeptical, viewing the government's actions as mere attempts at persuasion rather than coercion. That skepticism has apparently given the feds the green light, with Warner acknowledging that "there seemed to be a lot of sympathy that the government ought to have at least voluntary communications" with the platforms.

Whether social media companies ever viewed these communications as "voluntary" is an open question. For instance, when then–White House Communications Director Kate Bedingfield suggested tinkering with Section 230—the federal law that protects online platforms from some liability—in order to punish Facebook, CEO Mark Zuckerberg might have wondered whether he had much of a choice but to comply.

In any case, it seems clear that federal agencies will continue to interact with social media companies in ways that trouble many libertarians—until and unless they are explicitly forbidden from doing so.

This Week on Free Media

The Spectator's Amber Athey is back to discuss waning liberal anxiety about Donald Trump's potential return to power, Jen Psaki's advice for President Joe Biden's comms team, and South Dakota Gov. Kristi Noem's doggone media tour.

Worth Watching

Now this is podracing: It's the 25th anniversary of Star Wars: Episode I — The Phantom Menace, and the much-maligned first prequel film has returned to theaters. This is as good a time as any for me to reiterate my once-controversial, now increasingly accepted opinion that the Star Wars prequels are OK. (It's truly heretical to say that they are better than the original films; that is my view, though I won't try to defend it here.) They are certainly way, way better than the new films, which are dull, joyless, and derivative.

The best thing about the prequels is Palpatine's manipulations, and those only come into full focus later on. Phantom Menace is thus the least appealing of the three, as it's the one most obviously aimed at children. But there's nothing wrong with that; I was 9 years old when I first saw the film, and like virtually every other kid at that time, I thought Darth Maul's appearance and climactic duel with Obi-Wan Kenobi and Qui-Gon Jinn was pretty much the coolest thing I'd ever watched. And it still holds up!

The post The Feds Are Talking to Social Media Companies Again appeared first on Reason.com.

The Department of Justice indicted the creators of an application that helps people spend their bitcoins anonymously. They're accused of "conspiracy to commit money laundering." Why "conspiracy to commit" as opposed to just "money laundering"?

Because they didn't hold anyone else's money or do anything illegal with it. They provided a privacy tool that may have enabled other people to do illegal things with their bitcoin. But that's not a crime, just as selling someone a kitchen knife isn't a crime. The case against the creators of Samourai Wallet is an assault on our civil liberties and First Amendment rights.

What this tool does is offer what's known as a "coinjoin," a method for anonymizing bitcoin transactions by mixing them with other transactions, as the project's founder, Keonne Rodriguez, explained to Reason in 2022: 

"I think the best analogy for it is like smelting gold," he said. "You take your Bitcoin, you add it into [the conjoin protocol] Whirlpool, and Whirlpool smelts it into new pieces that are not associated to the original piece."

Smelting bars of gold would make it harder for the government to track. But if someone eventually uses a piece of that gold for an illegal purchase, should the creator of the smelting furnace go to prison? This is what the government is arguing. 

Cash is the payment technology used most by criminals, but it also happens to be essential for preserving the financial privacy of law-abiding citizens, as Human Rights Foundation chief strategy officer Alex Gladstein told Reason:

"The ATM model, it gives people the option to have freedom money," says Gladstein. "Yes, the government will know all the ins and outs of what flows are coming in and out, but they won't know what you do with it when you leave. And that allows us to preserve the privacy of cash, which I think is essential for a democratic society." 

The government's decision to indict Rodriguez and his partner William Lonergan Hill is also an attack on free speech because all they did was write open-source code and make it widely available. 

"It is an issue of a chilling effect on free speech," attorney Jerry Brito, who heads up the cryptocurrency nonprofit Coin Center, told Reason after the U.S. Treasury went after the creators of another piece of anonymizing software. "So, basically, anybody who is in any way associated with this tool…a neutral tool that can be used for good or for ill, these people are now being basically deplatformed."

Are we willing to trade away our constitutional rights for the promise of security? For many in power, there seems to be no limit to what they want us to trade away.

In the '90s, the FBI tried to ban online encryption because criminals and terrorists might use it to have secret conversations. Had they succeeded, there would be no internet privacy. E-commerce, which relies on securely sending credit card information, might never have existed.

Today, Elizabeth Warren mobilizes her "anti-crypto army" to take down bitcoin by exaggerating its utility to Hamas. The Biden administration tried to permanently record all transactions over $600, and Warren hopes to implement a Central Bank Digital Currency, which would allow the government near-total surveillance of our financial lives.  

Remember when the Canadian government ordered banks to freeze money headed to the trucker protests? Central Bank Digital Currencies would make such efforts far easier.

"We come from first principles here in the global struggle for human rights," says Gladstein. "The most important thing is that it's confiscation resistant and censorship resistant and parallel, and can be done outside of the government's control." 

The most important thing about bitcoin, and money like it, isn't its price. It's the check it places on the government's ability to devalue, censor, and surviel our money. Creators of open-source tools like Samourai Wallet should be celebrated, not threatened with a quarter-century in a federal prison.

Music Credits: "Intercept," by BXBRDVJA via Artlist; "You Need It,' by Moon via Artlist. Photo Credits: Graeme Sloan/Sipa USA/Newscom; Omar Ashtawy/APAImages / Polaris/Newscom; Paul Weaver/Sipa USA/Newscom; Envato Elements; Pexels; Emin Dzhafarov/Kommersant Photo / Polaris/Newscom; Anonymous / Universal Images Group/Newscom.

• Video Editor: Regan Taylor
• Audio Production: Ian Keyser

The post The Government Fears This Privacy Tool appeared first on Reason.com.

In the June 2024 issue, we explore the ways that artificial intelligence is shaping our economy and culture. The stories and art are about AI—and occasionally by AI. (Throughout the issue, we have rendered all text generated by AI-powered tools in blue.) To read the rest of the issue, go here.

ARTEMIS II is a crewed moon flyby mission, the first in a series of missions meant to get American astronauts back to the moon and eventually to Mars. In early January, NASA announced that it would be delayed until September 2025—a year later than originally planned. The announcement came after Lockheed Martin's Orion capsule, which will carry the crew through space, burned more than anticipated during a reentry test. The project continues to balloon in price with seemingly endless delays.

The latest delay means Artemis III, a crewed lunar landing mission, will be delayed until 2026—at least. It seems doubtful NASA will be able to apply what it learns from Artemis II to an Artemis III mission in less than a year.

Orion is not the only element that could hold up Artemis indefinitely. The later Artemis missions are relying on SpaceX's Starship—but Federal Aviation Administration (FAA) investigations can add weeks or months between Starship tests. So far SpaceX has been able to test the spacecraft three times, most recently on March 14.

The test did not completely fulfill its mission as intended but was still deemed a success by both SpaceX founder Elon Musk and NASA Administrator Bill Nelson. Both rocket and spacecraft were supposed to have controlled splashdowns in wide-open waters, but the rocket disintegrated about 1,500 feet over the Gulf of Mexico, while the separate Starship spacecraft burned up during reentry.

The good news is that none of the previous issues flagged by the FAA occurred on this latest test. But with every rocket mishap, the FAA will open a new investigation, with new parameters for SpaceX to meet before the next test.

In January, Jessica Jensen, a vice president at SpaceX, told NASA's Nelson that the company will need "ten-ish" tests to get the rocket perfect for Artemis III. It took the FAA two years to approve the first test of Starship and its second test wasn't approved until nearly five months later. The FAA investigation into the second Starship flight test (which resulted in a successful separation of rocket and spacecraft but ended in both exploding soon after) took more than three months.

Musk is hoping to run six Starship test launches this year, but there's no telling how long the FAA will drag its feet between tests. Each FAA delay is another delay for SpaceX, Artemis, and man's return to the moon.

• What we asked for:
  A photo of the Artemis II rocket on launchpad in an open landscape at dawn from slightly above
• What DALL-E says it gave us:
  Here's the Artemis II rocket on the launchpad in an open landscape at dawn, with the first light of the day illuminating the scene, captured from a slight elevation.

Launch Approved? Not So Fast, Says Sluggish FAA

Reason asked Claude 3 Sonnet to write an article about the same topic as the human-written article above. All AI-generated text is shown in blue. Read more about what we asked for.
By Claude 3 Sonnet

Most Americans are eager to see NASA astronauts return to the moon and push humanity's boundaries with future exploration of Mars. But those sky-high ambitions are being severely grounded by the plodding pace of rocket launch approvals from the Federal Aviation Administration (FAA).

Every vehicle soaring into space must first secure licensing from the FAA, an oversight process intended to ensure safety. For SpaceX, the current industry leader launching crews and payloads roughly every four days, the government's bureaucratic inertia has become a highly problematic bottleneck.

This red tape has directly impacted testing of SpaceX's Starship, the vehicle that NASA is relying upon to carry cargo and crew for the Artemis program's later missions to the lunar surface. To date, there have been three orbital test flights of the massive rocket–in April and November 2023, and March of this year.

Each of those Starship test launches prompted the FAA to launch a mishap investigation stalling subsequent flights. After the first test in April 2023, the FAA probe lasted five months before approving the next launch[1]. The investigation following November's flight dragged on over three months[2]. Incredibly, it took the FAA more than two years just to greenlight that initial Starship test back in 2023[3].

Jessica Jensen, a SpaceX vice president, has stated that approximately "10-ish" Starship test launches are needed before the system will be proven and ready to support the crewed Artemis III moon mission[4]. At the FAA's current pace of reviewing and approving those test flights, NASA's hope of returning Americans to the lunar surface by 2025 is looking increasingly unlikely.

"We'd very much like the government to be able to move as quickly as we are," Tim Hughes, SpaceX's senior vice president, told the Washington Post[5]. "If you're able to build a rocket faster than the government can regulate it, that's upside down, and that needs to be addressed. So we think some regulatory reforms are needed."

SpaceX has suggested doubling the FAA's licensing staff as one possible solution. At this point, any efforts to "streamline the cumbersome approval process," as Hughes put it, would help accelerate both the private space industry and NASA's exploration roadmap[5].

"Next year could be a pretty dynamic time with lots of providers in spaceflight," a SpaceX official told Ars Technica[6]. But unless the FAA addresses its pacing problems soon, the agency will continue irreparably hindering those new aerospace opportunities—and keep kicking the can down the road on NASA's bid to take astronauts farther into the cosmos.

CITATION KEY:
[1] SpaceX internal record
[2] FAA public statement, 
Dec 2023
[3] FAA memo, April 2023
[4] Jensen quote to 
NASA Admin.
[5] Hughes interview, Washington Post
[6] SpaceX statement to 
Ars Technica.

CLAUDE 3 SONNET is a free large language model developed by Anthropic, an AI startup. 

• What we asked for:
  An article about FAA mishap investigations delaying launch tests of SpaceX's Starship, and, as a result, delaying NASA's Artemis missions and man's return to the moon.
• What Claude asked for and we provided:
  1. What specific SpaceX mishaps or incidents is the FAA investigating that are causing delays?
  2. How much of a delay are we talking about for Starship test launches and the Artemis missions?
  3. Do you have any quotes from officials at SpaceX, NASA, or the FAA commenting on the situation?
• What else we gave Claude:
  1. A writing sample for analysis and replication: Natalie Dowzicky's October 2023 reason.com article headlined "SpaceX: FAA Is Slowing Progress to the Moon"
  2. For the headline: six headlines from the TOPICS section of the May issue.

—JASON RUSSELL

The post SpaceX Edges Closer to the Moon appeared first on Reason.com.

American federalism is struggling. Federal rules are an overwhelming presence in every state government, and some states, due to their size or other leverage, can impose their own policies on much or all of the country. The problem has been made clearer by an under-the-radar plan to phase out diesel locomotives in California. If the federal government provides the state with a helping hand, it would bring nationwide repercussions for a vital, overlooked industry.

Various industry and advocacy groups are lining up against California's costly measure, calling on the U.S. Environmental Protection Agency (EPA) to deny a waiver needed to fully implement it. In the past month, more than 30 leading conservative organizations and individuals, hundreds of state and local chambers of commerce, and the U.S. agricultural sector have pleaded with the EPA to help stop this piece of extremism from escaping one coastal state.

Railroads may not be something most Americans, whose attention is on their own cars and roads, think about often. But rail is the most basic infrastructure of interstate commerce, accounting for around 40 percent of long-distance ton-miles. It's also fairly clean, accounting for less than 1 percent of total U.S. emissions. Private companies, like Union Pacific in the West or CSX in the East, pay for their infrastructure and equipment. These facts haven't stopped the regulatory power grab.

Most importantly, the California Air Resources Board (CARB) regulation would have all freight trains operate in zero-emission configuration by 2035. At the end of the decade, the state is mandating the retirement of diesel locomotives 23 years or older, despite typically useful lives of over 40 years. Starting in 2030, new passenger locomotives must operate with zero emissions, with new engines for long-haul freight trains following by 2035. It limits locomotive idling and increases reporting requirements.

Given the interstate nature of railway operations, California needs the EPA to grant a waiver. If the agency agrees, the policy will inevitably affect the entire continental United States.

The kicker is that no technology exists today to enable railroads to comply with California's diktat, rendering the whole exercise fanciful at best.

The Wall Street Journal's editorial board explained last November that while Wabtec Corp. has introduced a pioneering advance in rail technology with the launch of the world's first battery-powered locomotive, the dream of a freight train fully powered by batteries remains elusive. The challenges of substituting diesel with batteries—primarily due to batteries' substantial weight and volume—make it an impractical solution for long-haul trains. Additionally, the risk of battery overheating and potential explosions, which can emit harmful gases, is a significant safety concern. As the editorial noted, "Even if the technology for zero-emission locomotives eventually arrives, railroads will have to test them over many years to guarantee their safety."

The cost-benefit analysis is woefully unfavorable to the forced displacement of diesel locomotives. To "help" the transition, beginning in 2026, CARB will force all railroads operating in California to deposit dollars into an escrow account managed by the state and frozen for the explicit pursuit of the green agenda. For large railroads, this figure will be a staggering $1.6 billion per year, whereas some smaller railroads will pay up to $5 million.

Many of these smaller companies have signaled that they will simply go out of business. For the large railroads, the requirement will lock up about 20 percent of annual spending, money typically used for maintenance and safety improvements.

Transportation is the largest source of U.S. emissions, yet railroads' contribution amounts to not much more than a rounding error. The industry cites its efficiency improvements over time, allowing railroads today to move a ton of freight more than 500 miles on a single gallon of diesel. Its expensive machines, which last between 30 to 50 years and are retrofitted throughout their life cycles, are about 75 percent more efficient than long-haul trucks that carry a comparative amount of freight.

As Patricia Patnode of the Competitive Enterprise Institute, which signed the aforementioned letter to the EPA, recently remarked, "Rather than abolish diesel trains, CARB should stand in awe of these marvels of energy-efficient transportation."

President Joe Biden talks a lot about trains, but his actions since taking office have consistently punished the private companies we should value far more than state-supported Amtrak. In this case, EPA Administrator Michael Regan and the White House need not think too hard. They should wait for reality to catch up before imposing on the rest of us one state's demands and ambitions.

COPYRIGHT 2024 CREATORS.COM

The post How California's Ban on Diesel Locomotives Could Have Major National Repercussions appeared first on Reason.com.

On April 24, the Department of Justice continued its assault on open source developers, arresting Keonne Rodriguez and William Lonergan Hill on allegations of money laundering. Rodriguez and Hill, operating the well-known bitcoin application Samourai Wallet, committed the grand offense of writing code.

Under the auspices of money laundering, the DOJ seized servers located abroad, pulled the Samourai website from its domain, and had Google remove the app from its Play Store.

It's a stunning flashback to the 1990s "crypto wars," when the feds last went after cryptographers and others writing code.

At that time, government officials alleged that producing and sharing encryption technology amounted to exporting weapons. Politicians worried that these privacy technologies would fall into the "wrong" hands, so much so that President Bill Clinton declared a national emergency and then-Sen. Joe Biden (D–Del.) introduced a bill to allow the government to spy on text and voice communications. 

Philip Zimmermann, a programmer, wrote an encryption software called Pretty Good Privacy (PGP) that would thwart the government's snooping efforts. As Paul Detrick explained for Reason, the software was so good that the DOJ launched a criminal investigation in 1993 "on the grounds that by publishing his software he had violated the Arms Export Control Act. To demonstrate that PGP was protected under the First Amendment, Zimmerman[n] got MIT Press to print out its source code in a book and sell it abroad."

The DOJ dropped the case.

Around the same time, Berkeley Ph.D. student Daniel Bernstein developed an encryption method called Snuffle based on a one-way hash function. After publishing an analysis and instructions on how to use his code, he reached out to the State Department to present it. Bad move. The State Department required Bernstein to "register as an arms dealer, and apply for a[n] export license merely to publish his work online." Berstein, represented by the Electronic Frontier Foundation, took the government to court, and ever since the landmark ruling in Bernstein v. U.S. Department of Justice, code has been considered speech.

Thirty years later, politicians are now worried less about technical data leaking to foreigners and more about those foreigners' money flows. In a supposed attempt to prevent terrorism, the government is cracking down on money laundering. 

But the main impetus hasn't changed: Behavior not subject to the oversight of the U.S. government must be suspicious—and is probably illegal. 

With roots in the cypherpunk ethos to which both Zimmermann and Bernstein belonged, bitcoin encompasses the "code is speech" verdict from the '90s. Bitcoin is a digital currency based on an elaborate system of cryptographically protected numbers, signed and validated by other numbers, all in the open. Bitcoin is math. Software that runs bitcoin wallets are strings of 1s and 0s; they are speech, and at no point do bitcoin transactions cease to be speech. 

The main service for which Rodriguez and Hill's Samourai Wallet has run afoul with law enforcement is Whirlpool, a privacy-enhancing feature on a blockchain that's otherwise open and available for anyone to inspect. In the fiat system, my employer can't spy into my bank account or I into theirs (though the bank can, and anyone who successfully hacks the bank's record). A grocery store, car dealership, or insurance provider can't see how much funds I have, where they came from, or who might have spent them a few hops before they came to me. With bitcoin, that's all in the open—hence why services like Whirlpool are so important.

Whirlpool constructs a five-input, five-output transaction between an unknown number of people. Five units of similar-sized bitcoin go in and five come out to new addresses. This obfuscates the individual coins' history, and anybody observing flows on the publicly available blockchain can no longer know which of the five outputs belonged to which input.

In the DOJ's enlightened view, that now constitutes money laundering and a failure to register as a money transmitter, even though Samourai is a noncustodial wallet, where the "operators do not take custody of user funds and therefore are technically incapable to 'accept' deposits or 'execute' the transmission of funds," according to Bitcoin Magazine. 

I sometimes get paid in bitcoin from various international clients and employers. I've used Whirlpool many times—and it's about as nefarious and shady as any good old cash transaction. I don't exactly want my employer to be able to find out where I spent my funds. I definitely don't want someone I send bitcoin to to know how much I carry in the specific wallet from which I was spending. This is all standard hygiene in a modern digital world; we leak wealth and spending information like crazy, and protecting some of that privacy is just prudent behavior.

Have there been terrorists or otherwise certified Bad People using Samourai's services? Probably, but that's too low of a bar to throw a legal fuss. It's a bad-faith argument, as Reason's Zach Weismuller writes: "They will point to bad people using these tools, just as they pointed out that Hamas raised some funds in various cryptocurrencies, without noting that a vast amount of money laundering happens with government-issued currency." 

Terrorists and criminals use these services, officials say. OK, but they also, to a much larger extent, use the U.S. dollar. Maybe the DOJ should arrest Jerome Powell and confiscate the Federal Reserve's servers while they're at it. We don't go after high-end leather wallet manufacturers because some of their customers carry notes that may have once been involved in crimes. We don't inspect cash registers at gas stations for illicit dollars—and then go after the manufacturer of the cash register themselves.

That's what Rodriguez and Hill are: manufacturers. Using code, they created a program that others operate on their own phones and computers. At no point in the process did they take custody of users' funds—which is why all the DOJ acquired when arresting Rodriguez and Hill were servers and domains. No stash of laundered and illicit bitcoin sat in the basement of the alleged culprits.

Government protagonists always have seemingly good reasons—terrorism, trafficking, drugs, Bad People doing normal things—to intervene and sidestep people's rights.

Those of us who worry about government overreach always feared that the crypto wars of the 1990s might one day return. Last week, the DOJ revived that battle.

The post Groundhog Day for the Crypto Wars: The DOJ on Bitcoin Prowl appeared first on Reason.com.

President Joe Biden says, "I know how to make government work!"

You'd think he'd know. He's worked in government for 51 years.

But the truth is, no one can make government work.

Biden hasn't.

Look at the chaos at the border, our military's botched withdrawal from Afghanistan, the rising cost of living, our unsustainable record-high debt.

In my new video, economist Ed Stringham argues that no government can ever work well, because "even the best person can't implement change….The massive bureaucracy gets bigger and slower."

I learned that as a consumer reporter watching bureaucrats regulate business. Their rules usually made life worse for consumers.

Yet politicians want government to do more!

Remember the unveiling of Obamacare's website? Millions tried to sign up. The first day, only six got it to work.

Vice President Joe Biden made excuses: "Neither [Obama] and I are technology geeks."

Stringham points out, "If they can't design a basic simple website, how are they going to manage half the economy?"

While bureaucrats struggled with the Obamacare site, the private sector successfully created Uber and Lyft, platforms like iCloud, apps like Waze, smartwatches, etc.

The private sector creates things that work because it has to. If businesses don't serve customers well, they go out of business.

But government is a monopoly. It never goes out of business. With no competition, there's less pressure to improve.

Often good people join government. Some work as hard as workers in the private sector.

But not for long. Because the bureaucracy's incentives kill initiative.

If a government worker works hard, he might get a small raise. But he sits near others who earn the same pay and, thanks to archaic civil service rules, are unlikely to get fired even if they're late, lazy, or stupid.

Over time, that's demoralizing. Eventually government workers conclude, "Why try?"

In the private sector, workers must strive to make things better. If they don't, competitors will, and you might lose your job.

Governments never go out of business.

"Companies can only stay in business if they always keep their customer happy," Stringham points out. "Competition pushes us to be better. Government has no competition."

I push back.

"Politicians say, 'Voters can vote us out.'"

"With a free market," Stringham replies, "the consumer votes every single day with the dollar. Under politics, we have to wait four years."

It's another reason why, over time, government never works as well as the private sector.

Year after year, the Pentagon fails audits.

If a private company repeatedly does that, they get shut down. But government never gets shut down.

A Pentagon spokeswoman makes excuses: "We're working on improving our process. We certainly are learning each time."

They don't learn much. They still fail audits.

"It's like we're living in Groundhog Day," Stringham jokes.

When COVID-19 hit, politicians handed out almost $2 trillion in "rescue" funds. The Government Accountability Office says more than $100 billion were stolen.

"One woman bought a Bentley," laughs Stringham. "A father and son bought a luxury home."

At least Biden noticed the fraud. He announced, "We're going to make you pay back what you stole!

No. They will not. Biden's Fraud Enforcement Task Force has recovered only 1 percent of what was stolen.

Even without fraud, government makes money vanish. I've reported on my town's $2 million toilet in a park. When I confronted the parks commissioner, he said, "$2 million was a bargain! Today it would cost $3 million."

That's government work.

More recently, Biden proudly announced that government would create "500,000 [electric vehicle] charging stations."

After two years, they've built seven. Not 7,000. Just seven.

Over the same time, greedy, profit-seeking Amazon built 17,000.

"Privatize!" says Stringham. "Whenever we think something's important, question whether government should do it."

In Britain, government-owned Jaguar lost money year after year. Only when Britain sold the company to private investors did Jaguar start turning a profit selling cars people actually like.

When Sweden sold Absolut Vodka, the company increased its profits sixfold.

It's ridiculous for Biden to say, "I know how to make government work."

No one does.

Next week, this column takes on Donald Trump's promise: "We'll drain the Washington swamp!"

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

The post No One Can Make Government Work appeared first on Reason.com.

Rep. Jim Banks (R–Ind.) announced yesterday that he will introduce a bill to defund National Public Radio (NPR). Marsha Blackburn (R–Tenn.) has said she hopes to do the same in the Senate. We live in strange times, anything can happen in politics, and there may be no faster route to looking like a fool than to issue a prediction. With that throat-clearing out of the way: No, of course Congress isn't about to defund NPR.

This latest wave of Defund NPR! sentiment follows an article by Uri Berliner in The Free Press, in which the NPR editor and reporter—make that former NPR editor and reporter, since he has since resigned—argues that the network "lost America's trust" by shutting out opinions disfavored by the center-left hivemind. I think Berliner's piece wavers between claiming too much (it would have been more accurate, though probably less SEO-friendly, to replace "lost America's trust" with "saw its niche grow somewhat smaller") and claiming too little (it ends with a plea not to defund public radio, since Berliner believes there's "a need for a public institution where stories are told and viewpoints exchanged in good faith"). But at this point the specifics of his essay are almost beside the point, since the debate it has unleashed goes far beyond what the article says. The proof is that people have been using it as a springboard to call for cutting off NPR's federal dollars even though Berliner goes out of his way to stress that that's not the result he wants.

And now the anger has spread, with NPR CEO Katherine Maher under fire for her history of left-wing tweeting. The troops are ready for battle. So why don't I expect Congress to stop the funds?

For three reasons. The first is the obvious one: The Democrats control the White House, and there aren't enough Republicans in Congress to override a veto, so at the very least this is unlikely to become law before 2025. A second reason is that it's difficult to devise a bill that cuts off NPR while leaving the rest of the public-broadcasting ecosystem alone. As the network's defenders never tire of pointing out, NPR doesn't get much direct support from the federally funded Corporation for Public Broadcasting (CPB). It gets far more money from its member stations, which NPR does not own, and which receive their own cash from the CPB (and, frequently, from other government sources, since many of them are run by state universities).

This shell game isn't an insurmountable problem, but it's the sort of thing that has tripped up legislators before. Last year, for example, Rep. Ronny Jackson (R–Texas) introduced a bill to prevent federal funds from flowing "directly or indirectly" to NPR, its TV cousin PBS, or "any successor organization." Well, how do you define "successor organization"? There are already several public radio networks out there, some of them pretty old. If the Morning Edition team drops its NPR affiliation and starts distributing the show through Public Radio Exchange, are they in the clear?

The easiest way around such tangles, of course, would be to write legislation that doesn't try to single out NPR and instead just cuts off the Corporation for Public Broadcasting entirely. That would keep the money from moving. But it also leads us to the third and biggest reason I don't think a defunding bill will get anywhere anytime soon: No matter how much it huffs and puffs, most of the GOP has no serious interest in defunding public broadcasting.

Yes, there are a few Republican officeholders who would rather see an openly liberal NPR that supports itself than a "balanced" system that relies on tax dollars. I'd bet a libertarian-leaning legislator like Rep. Thomas Massie (R–Ky.) would vote for that. But Massie is an outlier. If history has taught us nothing else, it's that the most powerful Republican officials aren't usually bothered by the idea that Americans are being forced to subsidize views they dislike. They just want the subsidies to go in a different direction.

Why do I say that? Because we've seen this process play out again and again, and it always ends pretty much the same way. In 1971, President Richard Nixon proposed a "return to localism" that would have effectively overthrown the crew running PBS, and a year later he vetoed a CPB appropriations bill; then PBS canned most of the programs that the president didn't like, the CPB brought a bunch of White House–friendly figures onto its board, and the president signed a budget increase. In 1994, House Speaker Newt Gingrich (R–Ga.) suggested that he might "zero out" the CPB's money; the chief long-term result was that several conservatives got public TV gigs. In 2005, a House subcommittee actually voted to cut the CPB budget by 25 percent and wipe out the rest over the following few years; that time things ended with a former chair of the Republican National Committee becoming chair of the CPB—which landed a higher appropriation, not a lower one. I could list more examples, but I've already written that article more than once and I don't want to write it again. Suffice to say that the CPB invariably survives these battles, that its federal support almost always increases, and that its rare budget cuts don't last long.

And—here's where we come back to Uri Berliner's article—one reason this keeps happening is because the attack so often comes down to the idea that NPR and PBS are unbalanced. That's true, of course: The big public-broadcasting operations have always tilted toward the dominant views of the social milieu that produces them, and Berliner is surely correct that this has intensified at NPR in the years since Donald Trump was elected president. But when bias is your chief complaint, you give the folks who run the networks an easy out. They would almost always prefer to gesture toward balance with some hires or fires than to see their money axed.

Is there a way around that? I think there is, but it would take a different approach to the fight. Instead of a narrowly partisan battle, bring together an alliance of people (mostly on the right) who are sick of subsidizing opinions they dislike and people (mostly on the left) who are sick of seeing those subsidies used as an excuse to insert the government into broadcasters' editorial choices. Adopt a plan to transform the CPB from a semi-governmental body into a fully independent nonprofit, bringing the federal role in noncommercial broadcasting to an end.

There was serious talk of doing this right after the Gingrich attacks shook up the broadcasters. In 1995, the New York Daily News even reported that a CPB spokesman had "confirmed that all the groups agreed on the need to establish an independent trust fund that eventually could replace federal funding." Then the CPB's subsidies started creeping upwards again and the idea moved back to the edges of the political spectrum. So a push like this has failed once before. But the partisan approach has failed to detach these operations from the government far more times than that. It can be hard to assemble a transpartisan alliance, but sometimes it's the only thing that can get the job done.

And yes, it's possible to bring people around on these issues. Back when I spent a lot of time covering the radical Pacifica radio network, I often encountered leftists who saw the CPB as a back door for government influence and felt they'd be better off without it. On the other side of the spectrum, after I wrote a blog post on this subject in 2011 I got a couple of emails from Ken Tomlinson, who had chaired the CPB for two years under President George W. Bush. Tomlinson had gone after public broadcasting for being unbalanced, a crusade that led to a lot of reshuffling of the system but no reduction in its federal support. He didn't care for how I had characterized his efforts, but he was friendly, and he seemed to have come around to the idea that the underlying problem was the purse strings, not the bias. "Bottom line, get tax money out of CPB," he told me. "Not just NPR. CPB."

Maybe someday we'll get there. But if Banks and Blackburn manage to pull it off this year, I'll eat an NPR tote bag.

The post Another Day, Another Doomed Plan To Defund NPR appeared first on Reason.com.

The Securities and Exchange Commission (SEC) has gone rogue. The commission has now finalized a rule that will bully publicly traded companies into reporting environmental information that has no relevance to the financial concerns that matter to investors. As much as environmental activists may want this information to shame companies into embracing their political agenda, it is not the SEC's role to demand financially irrelevant disclosures—much less to demand companies speak on political and social issues like climate change.  

The SEC's new rule requires companies to give a public accounting of their annual greenhouse gas emissions. Still worse, the rule strong-arms companies into telling the public whether they are taking steps to combat climate change and forces companies to hazard guesses about how climate change might affect their operations far into the future. But none of that has anything to do with the SEC's statutory mission of helping investors understand the financial risks and rewards of investment. 

The SEC was established to regulate public companies in the wake of the financial crisis that triggered the Great Depression. Toward that end, the law requires companies to disclose to investors "material information…as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading." For example, companies must provide information about market volatility, pending lawsuits, and significant management changes, because that type of information could affect a company's financial performance.

Disclosures about whether a company is prioritizing climate change concerns are categorically different from the sort of disclosures the SEC has long required, for at least two reasons. First, the new rule requires disclosures across the board from all large companies. That's a marked departure from the "facts and circumstances" test the SEC has long employed, which requires information that could affect the financial performance of individual companies, not environmental or social conditions.

With its extraordinary unpredictability, and a time horizon crossing decades, climate change's impact on any given company is practically impossible to assess. Requiring disclosure of greenhouse gases thus tells investors nothing relevant to a company's financial situation; it will lead to baseless speculation and reams of information that investors cannot possibly apply to investment decisions now.

Of course, none of this is news to supporters of the rule. Their goal is not to inform investors, but to bludgeon companies into toeing the climate change line. The new rule has nothing to do with financial considerations and everything to do with political considerations. As SEC Commissioner Mark Uyeda declared in dissent, "shareholders will be footing [the] bill" to institutionalize an ESG department in every publicly traded corporation in America. 

The SEC's power grab is unprecedented and dangerous. While some investors may care about greenhouse gas emissions, their desires do not justify compelling companies to make disclosures about whether they are prioritizing climate change concerns. If that low bar could trigger SEC regulation, there would be no end to the subjects the agency could require companies to report, including their positions on abortion, gay marriage, and immigration. But forcing companies to parrot the party line on the environment is not the SEC's job.

If the SEC is going to be transformed into the environmental and social thought police, that decision must come from Congress. Our Constitution empowers only Congress to make the law—and, importantly, to take responsibility for the consequences. As SEC Commissioner Hester Peirce stated, "Wading into non-economic issues involves tradeoffs that only our nation's elected representatives have the authority and expertise to make."

The consequences of the greenhouse gas rule are grave. It will fundamentally alter the SEC's mission. It will force companies to play a larger role in politics—something that neither the major political parties nor most companies seem to want. By peppering investors with irrelevant information, it will make them less informed about what actually matters. It will divert companies from their core purpose of maximizing shareholder wealth and creating products that increase everyone's standard of living. And it will violate the First Amendment by compelling companies to disclose information that is not intrinsically linked to their financial performance.

Pacific Legal Foundation, where we work, will file a lawsuit against the SEC in the coming days to block enforcement of this rule and vindicate constitutional principles. Here's hoping that the courts will not allow this rule to stand.

The post The SEC Conscripts Corporate America in Its New Climate Change Fight appeared first on Reason.com.

America's high housing costs got a brief shout-out in President Joe Biden's State of the Union address tonight, with the president mostly proposing policies that would subsidize demand of this heavily supply-constrained good.

"I know the cost of housing is so important to you. If inflation keeps coming down mortgage rates will come down as well. But I'm not waiting," said Biden, proposing temporary tax credits of $400 a month to compensate for high mortgage rates and the end of title insurance fees for federally backed mortgages.

In addition, Biden proposed cracking down on the price fixing of big landlords and urged Congress to pass his plan to build or renovate 2 million affordable homes.

That housing policy got a shout-out at all in a State of the Union address is somewhat rare, despite housing being the largest line item in most Americans' budgets. Regrettably, most of the policies Biden proposed would do little to address the cause of high housing costs and could make the problem worse.

Higher rents and home prices are a natural consequence of local and state zoning laws, labyrinthine approval processes, federal restrictions on mortgage financing, and environmental reporting laws, to name a few.

All these laws limit the supply of new housing, which drives up the price for any given level of demand. That's a diagnosis the Biden administration itself has endorsed in various housing briefs and "action plans."

Despite that insight, the president's proposals to subsidize home buying will, all else equal, increase demand while leaving supply constraints in place. That will only raise prices further. People who claim new federal subsidies will be no better off. Anyone who misses out on the subsidies will be worse off.

Biden's proposal to crack down on price-fixing landlords is likely a reference to the hot new idea that landlords are illegally colluding on rents by paying for third-party algorithms that propose market-clearing maximum rents.

The Federal Trade Commission and the Department of Justice released a memo earlier this month saying that this could be illegal, without offering any clear guidance on when it would actually be illegal.

Even property owners who set their rents below whatever a third-party algorithm recommends could still be guilty of price fixing.

"Even if some of the conspirators cheat by starting with lower prices than those the algorithm recommended, that doesn't necessarily change things. Being bad at breaking the law isn't a defense," read the memo. One shouldn't expect this garbled threat to do much to move the needle on rents.

In his remarks tonight, Biden didn't elaborate much on the policy he proposed to increase actual housing supply, his plan to build or renovate 2 million affordable homes.

A White House fact sheet circulated earlier today provides a little more detail. The plan, such as it is, would involve increasing the number of tax credits available for low-income housing developers—something the tax bill approved by the House and being considered by the Senate would do.

The White House fact sheet also calls for creating a $20 billion competitive grant program that would directly fund affordable apartments, "pilot innovative models" for affordable housing production, and, more interestingly, "incentivize local actions to remove unnecessary barriers to housing development."

When it comes to housing funding, $20 billion is a lot of money. It's nearly a third of the current budget for the U.S. Department of Housing and Urban Development.

As part of its existing "housing supply action plan," the Biden administration has allegedly retooled a number of federal transportation grant programs to incentivize local zoning changes. As I've written, that doesn't seem to have made much of an impact on where those grants go. San Francisco, the nation's beating heart of anti-development regulations, got one of the largest grant awards from one of these supposedly retooled programs.

Congress has also passed a smaller, $85 million "baby YIMBY" grant program more focused on paying local governments to change their zoning rules. Here too, the language of the grant program (and the applications it's received thus far from localities) suggests it will end up being more of a subsidy for routine planning work than a powerful incentive for liberalizing zoning laws.

Given the difficulty state governments have had trying to prod local governments into being more pro-housing with explicit zoning preemptions, I'm skeptical of how much federal carrots can do here.

Perhaps the best thing the president can do for zoning reform is to use his bully pulpit to argue for it. Biden had an opportunity to do that tonight, and he didn't take it. It was a missed opportunity.

The post Biden's Plan To Subsidize Homebuyers Won't Work appeared first on Reason.com.

The Republican chairman of the House Budget Committee made news recently by announcing that if his party is serious about changing the fiscal path we are on, they'll have to consider raising taxes. Politics is about compromise, so the chairman is right. Every side must give a little. However, "putting taxes on the table" is not as simple a fix to our debt problems as some think.

Looking at recent Congressional Budget Office reports, one can have no doubts about the fiscal mess. Annual deficits of $2 trillion will soon be the norm. Interest payments on the debt will exceed both defense and Medicare spending this year and become the government's largest budget item. With no extra revenue available, the Treasury will have to borrow money to cover these expenses. Meanwhile, we're speeding toward a Social-Security-and-Medicare fiscal cliff that we've known of for decades, and we'll reach it in only a few years.

Talking about the need for a fiscal commission to address Washington's mountain of debt, the committee chair, Rep. Jodey Arrington (R–Texas), told Semafor, "The last time there was a fix to Social Security that addressed the solvency for 75 years, it was Ronald Reagan and Tip O'Neill, and it was bipartisan. It had revenue measures and it had program reforms. That's just the reality." He made these comments after some people warned that a fiscal commission is a gateway only to raising taxes.

I understand the worry. That's what the most recent deficit reduction commission tried to do. And while I don't believe this is what Arrington is planning, I offer a warning to the chair and to the future commission: If the goal is truly to improve our fiscal situation, as defined by reducing the ratio of debt to gross domestic product (GDP) or reducing projected gaps between revenue and spending, increasing tax revenue should be limited to the minimum politically possible.

For one thing, our deficits are the result of excessive promises made to special interests—mostly seniors in the form of entitlement spending—without any real plans to pay. The problem is constantly growing spending, not the lack of revenue and taxes. The common talking point from the left that rich people don't pay their fair share of taxes is a distraction. Not only is our tax system remarkably progressive, but there are not enough rich people to fleece to significantly reduce our future deficits.

Furthermore, the work of the late Harvard economist Alberto Alesina has established that the best way to successfully reduce the debt-to-GDP ratio is to implement a fiscal-adjustment package based mostly on spending reforms. A reform mostly geared toward tax increases will backfire as the move will slow the economy in the short and longer terms, causing it to ultimately fail to raise enough revenue to reduce the debt relative to GDP. Legislators, unfortunately, have made this mistake many times without learning any lesson—at least until the deal that was cut in 1997.

As a 2011 New York Times column by Catherine Rampell reminded us, until then, all deficit-reduction deals were very tax-heavy. What the article didn't mention is that they failed to reduce the deficit. What distinguishes the 1997 deal is that it cut both spending and taxes. The result was the first budget surplus in decades helped by a fast-growing economy. Now, this lesson doesn't mean that a fiscal commission must cut taxes, but it does caution against attempting to reduce the debt largely by raising taxes.

Another risk looms in the idea of a tax-and-spending compromise; that the tax increases will be implemented while the spending cuts won't. We have many examples of this pattern, but I'll recount just one: In 1982, President Ronald Reagan made a deal with Congress (the Tax Equity and Fiscal Responsibility Act) which would have raised $1 in revenue for every $3 in spending cuts.

There were tax hikes, indeed. But instead of spending cuts, Reagan got lots of spending increases. Remembering the story years later in Commentary magazine, Steven Hayward wrote, "By one calculation, the 1982 budget deal actually resulted in $1.14 of new spending for each extra tax dollar."

The moral of this story is that putting revenue on the table to reduce the debt has a bad track record. As such, the chairman, who I believe is serious about putting the U.S. on a better fiscal path, will have to be careful about whatever deal is made.

COPYRIGHT 2024 CREATORS.COM.

The post A Bipartisan Tax Hike Won't Fix This Deficit appeared first on Reason.com.

Voters in California went to the polls this week for a primary election that's the first step towards picking a permanent replacement for the late Sen. Dianne Feinstein, who died nearly six months ago.

In Washington, meanwhile, Feinstein is still wielding influence from beyond the grave. Her name is attached to 256 different earmarks included in the budget bill working its way through Congress this week. Those pork projects will cost taxpayers about $1.1 billion if the bill passes in its current form, the Washington Examiner reported Tuesday.

And that only scratches the surface. The partial budget deal—which contains six of the 12 appropriations bills that make up the discretionary portion of the annual federal budget—is overflowing with earmarks to fund lawmakers' pet projects. All told, there are more than 6,000 earmarks in the bill, costing taxpayers more than $12.7 billion, according to Sen. Mike Lee (R–Utah), who has urged Republicans to vote against the package.

Many of the earmarks in the package seem like things that would be better funded by local or state taxpayers, who at least might stand to benefit from projects like new sewer systems, new runways and other upgrades for tiny rural airports, and a plethora of highway projects. Some are truly head-scratching, like Sen. Tammy Baldwin's (D–Wis.) $1.4 million earmark for a solar energy project in Wisconsin, one of the places in America least well suited for a solar farm.

Plenty of others make no sense for the public to be funding at all. Like a $3.5 million earmark secured by Sen. Debbie Stabenow (D–Mich.) for The Parade Company, which runs Detroit's annual Thanksgiving Day parade. Or the $2.5 million earmark that will help build a new kayaking facility in Franklin, New Hampshire, curtsey of Sen. Jeanne Shaheen (D–N.H.), as well as $2.7 million line item to help build a bike park in White Sulfur Springs, West Virginia, a town with a population of less than 2,300 people.

For that amount of money, "you could buy EVERY resident a $1,200+ bike" Sen. Rick Scott (R–Fla.), who has become a vocal critic of the earmarks in the bill, posted on X (formerly Twitter). "There's no way they need this much of YOUR money for this."

The same could be said for several Republican-based earmarks too. Sen. Lindsey Graham (R–S.C.) has inserted at least eight earmarks into the bill, forcing federal taxpayers to put up more than $33 million for things most will never use, like a new trail at Coastal Carolina University and an ROTC facility at the University of South Carolina. Among the dozens of earmarks inserted by Sen. Lisa Murkowski (R–Alaska), perhaps the strangest is the $4 million grant for the "Alaska King Crab Enhancement Project."

Wait, you might be thinking, didn't Congress ban the use of earmarks when tea party-era Republicans controlled the government? Yep, they did. But like fiscal responsibility and concern about America's ballooning entitlement costs, those efforts to limit pork barrel spending are now distant memories. Democrats voted to reinstate earmarks in 2021, and Republicans soon followed suit.

To Congress' credit, earmarks are now handled more transparently than they used to be—which is why you can view the full list of earmarks included in the budget bills here.

Still, some things never change. Earmarks remain expensive, wasteful exercises in cronyism—and with the country $34 trillion in debt, Congress should not be putting taxpayers on the hook for frivolous handouts to politically connected friends.

The post The Budget Deal Is Overflowing With $12 Billion of Earmarks appeared first on Reason.com.

Get ready. The Supreme Court has agreed to hear former President Donald Trump's presidential immunity claim that he is protected from prosecution for his role in plotting to overturn the 2020 election results, and has set oral arguments for April. The Court's term ends in June, so hearing arguments in April means it is very likely a decision will be released before the justices leave.

"The justices scheduled arguments for the week of April 22 and said proceedings in the trial court would remain frozen, handing at least an interim victory to Mr. Trump," reported The New York Times. "His litigation strategy in all of the criminal prosecutions against him has consisted, in large part, of trying to slow things down."

If he does not have immunity, a criminal trial will follow, probably over the summer—during the height of election season.

Earlier this month, the Court also heard a case on whether states such as Colorado are within their rights to remove Trump from ballots—the 14th Amendment argument. It is expected to issue a ruling soon.

Surely this time will be different: If Congress can't pass appropriations bills to fund the government by midnight Friday, the federal government will enter a partial shutdown. House Speaker Mike Johnson (R–La.) is going for yet another stopgap bill to attempt to keep the government open, which "would extend funding for some government agencies for a week, through March 8, and the rest for another two weeks, until March 22," per The New York Times.

The caveat is that Congress would be expected to approve six of the 12 spending bills to fund the government for the next year, while buying a little more time for legislators to negotiate and pass the rest of the spending bills. Somewhat surprisingly, news broke last night that Johnson has managed to get a fair number of colleagues on board with the plan.

Still, it's a piecemeal solution that pleases practically nobody. The far-right flank of Republicans in the House continues to pursue deep spending cuts that neither Johnson nor Kevin McCarthy before him has managed to prioritize, as well as weaning Ukraine off U.S. government aid. Continuing resolutions—a.k.a. patchwork solutions that temporarily stave off government shutdowns but do not set any sort of long-term budget—were passed in September, November, and January. And Republicans have only a two-seat majority in the House, with quite a few of them riled up about the crisis at the southern border—which they keep saying must be secured, in order for other issues to be tackled—so there are few signs that Congress will get its act together anytime soon.

Are South Koreans having enough sex? Statistics Korea recently released data showing that the fertility rate declined by 8 percent in 2023 when compared with 2022. Normally, such a drop would not be greeted as catastrophic, except that this comes at a time when many developed countries have fertility rates in free-fall and South Korea already had the lowest fertility rate in the world. If current rates hold, the country's population (51 million at present) is predicted to halve by 2100.

"The average number of babies a South Korean woman is expected to give birth to during her life fell to 0.72 from 0.78 in 2022, and previous projections estimate that this will fall even further, to 0.68 in 2024," reported Al Jazeera. The replacement rate is 2.1 children. For comparison, the U.S. fertility rate has been hovering around 1.7, with a little dip in 2020 that has since recovered.

These new data, coupled with a BBC article that featured women across South Korea and their frustrations with their predicaments, has led to a robust debate among the punditry as to whether South Korea's aggressive pro-natalist policies were all for naught. ("Pro-natalist policies have a weak track record in every country where they've been tried," wrote Reason's Elizabeth Nolan Brown back in June 2023. "South Korea spent more than $200 billion subsidizing child care and parental leave over the past 16 years, President Yoon Suk Yeol said last fall. Yet the fertility rate fell from 1.1 in 2006 to 0.81 in 2021.")

Demographer Lyman Stone, meanwhile, called the BBC article "a demography reporting crime" and said that "South Korea spends less in government money per child than the OECD average" and that "much of the spending Korea claims it does never gets to families, but is actually a morass of local government subsidies, grants, and other intermediated forms of spending." When it does actually get to families, the fertility rate is positively affected, Stone argued.

But there are other factors, too: South Korea's graying population, for one—and how coughing up funds for retirees affects younger taxpayers' ability to save—as well as cultural influences, like the fact that one of Korea's biggest exports, K-pop stars, are generally forced by their agencies to abstain from dating (wouldn't want to destroy the fantasy, I guess). There are massive cultural expectation issues, too, like the fact that most South Koreans—nearly 80 percent!—send their kids to expensive private schools, so the cost of having a child is perceived to be extra high.

For more on this, watch Just Asking Questions with the Washington Examiner's Tim Carney (who has a new book out soon on precisely this subject): "Why aren't people having more kids?"

Scenes from New York:

This woman used OMNY to pay for the bus. Once you hit 12 fares paid within a 7-day period, you get free rides. Cops boarded bus & forced riders to prove they'd paid didn't know how to handle this, threw her off, & hit her w a $100 ticket. Is this city a joke or what? pic.twitter.com/tD1fAvSnwL

— Liz Wolfe (@LizWolfeReason) February 28, 2024

Full article here, courtesy of Hell Gate.

QUICK HITS

• "Google CEO Sundar Pichai addressed the company's Gemini controversy Tuesday evening, calling the AI app's problematic responses around race unacceptable and vowing to make structural changes to fix the problem," reported Semafor. The image generator Gemini seemed to have a recurring issue giving unrealistic and ahistorical interpretations of events—black Vikings, a lady pope, and nonwhite Founding Fathers, to name a few.
• California is so screwed:

California politics in a nutshell ???? pic.twitter.com/XE1XRzj7eh

— Alec Stapp (@AlecStapp) February 28, 2024

• Ukrainian President Volodymyr Zelenskyy is in Tirana, Albania, appealing to the Balkan nations for defense support.
• "Bitcoin rallied above $60,000 on Wednesday, riding its bullish momentum to its highest levels since November 2021, as more signs emerge that cryptocurrency's 'winter' has ended," reported Axios. For more on crypto winter, check out this joint from me and Zach Weissmueller:

• "Americans' satisfaction with personal life near record low," reported Gallup.
• The family of Russian dissident Alexei Navalny is having a hard time finding funeral homes and gravediggers to give Navalny a decent burial. Since his death two weeks ago, more than 400 people have reportedly been arrested for laying flowers in his memory, reported the BBC.
• On one hand, yes, this is an interesting and possibly good take. On the other, I don't think we should engage in any more elder abuse—working in government strikes me as the worst form of torture—and this man is 82. Let him spend the rest of his days eating ice cream cones!

Huge loss. If Democrats hated Mitch McConnell as GOP leader, wait til they see the ones who come next.

As for Republicans, well, this is good news only if you like how the GOP House functions & want more of that. McConnell has been GOPs most effective Congress leader in decades. https://t.co/JpqPy8brjN

— Brian Riedl ???? ???????? (@Brian_Riedl) February 28, 2024

• RIP Richard Lewis, my favorite Curb Your Enthusiasm character:

richard lewis & larry david back in the day pic.twitter.com/lxKoB0Lzzc

— Marlow Stern (@MarlowNYC) February 28, 2024

The post SCOTUS Takes on Trump appeared first on Reason.com.

Only 3 percent of the people who have applied for green cards will receive one in FY 2024, as the backlog continues to grow and migrants continue to choose illegal migration pathways in large numbers. Today's green card processing "reveals a legal immigration system that is utterly failing to direct aspiring immigrants to pursue the American dream in lawful and orderly ways," wrote David J. Bier, associate director of immigration studies at the Cato Institute, in a report released last week.

About 1.1 million green cards may be issued in FY 2024, but there are currently 34.7 million pending applications. The backlog has its roots in the Immigration Act of 1924 and subsequent eligibility restrictions. While 98.1 percent of immigrant applicants were allowed to enter the country with permanent status from 1888 to 1921, just 16 percent of applicants were admitted in an average year once caps were imposed, per Bier. The rate fell to 3.8 percent in 2023.

Adding to the problem is the fact that the government has let 6.3 million green cards go to waste since 1921, failing to meet caps in large part due to processing delays.

Certain nationalities and green card categories experience more severe backlogs and selective processing. "Indians—who make up half the applicants in the employer-sponsored categories—must wait more than a century for a green card," wrote Bier. People who try their luck at the green card lottery, which currently has about 22.2 million applicants, only have a 1 in 400 chance of getting a green card in a given year. Some who apply for family-based green cards "will face lifetime waits for many country-category combinations," according to Bier.

By granting green cards to such a low percentage of applicants each year, the U.S. is leaving a lot of potential growth on the table. "Backlogged immigrants are likely to enter the United States and start working at higher rates than the general population, and they also appear to be more educated on average," wrote Bier. And beyond being an important addition to the labor force, immigrants are helping to reduce the massive federal budget deficit and stave off population decline.

The Cato report suggests that Congress do away with "the unnecessarily onerous rules and arbitrary caps to approve current green card applicants." After tackling the existing backlog, policy changes could be more modest, since "annual legal immigration would only need to increase more gradually to meet future demand."

This report echoes the findings of June 2023 Cato Institute research, which found that "fewer than 1 percent of people who want to move permanently to the United States can do so legally." A variety of factors keep people from qualifying for the existing green card categories, including low annual visa caps, a lack of U.S.-based sponsors (either employers or qualifying family members), narrow definitions of eligible nationalities, and cost.

Green card inaccessibility affects people who are already in the U.S., those who have applied and are still abroad, and those who would apply if not for the daunting and restrictive process. Policies that reduce the backlog and improve future processing could only benefit the American economy and incentivize would-be immigrants to pursue legal rather than illegal migration pathways.

The post Green Card Process 'Utterly Failing' To Help Immigrants 'Pursue the American Dream in Lawful and Orderly Ways' appeared first on Reason.com.

This week's featured article is "The Real Student Loan Crisis Isn't From Undergraduate Degrees" by Emma Camp.

This audio was generated using AI trained on the voice of Katherine Mangu-Ward.

Music credits: "Deep in Thought" by CTRL and "Sunsettling" by Man with Roses

The post <I>The Best of Reason</I>: The Real Student Loan Crisis Isn't From Undergraduate Degrees appeared first on Reason.com.

The government and private companies spy on us.

My former employee, Naomi Brockwell, has become a privacy specialist. She advises people on how to protect their privacy.

In my new video, she tells me I should delete most of my apps on my phone.

I push back. I like that Google knows where I am and can recommend a "restaurant near me." I like that my Shell app lets me buy gas (almost) without getting out of the car.

I don't like that government gathers information about me via my phone, but so far, so what?

Brockwell tells me I'm being dumb because I don't know which government will get that data in the future.

Looking at my phone, she tells me, "You've given location permission, microphone permission. You have so many apps!"

She says I should delete most of them, starting with Google Chrome.

"This is a terrible app for privacy. Google Chrome is notorious for collecting every single thing that they can about you…[and] broadcasting that to thousands of people…auctioning off your eyeballs. It's not just advertisers collecting this information. Thousands of shell companies, shady companies of data brokers also collect it and in turn sell it."

Instead of Google, she recommends using a browser called Brave. It's just as good, she says, but it doesn't collect all the information that Chrome does. It's slightly faster, too, because it doesn't slow down to load ads.

Then she says, "Delete Google Maps."

"But I need Google Maps!"

"You don't." She replies, "You have an iPhone. You have Apple Maps…. Apple is better when it comes to privacy…. Apple at least tries to anonymize your data."

Instead of Gmail, she recommends more private alternatives, like Proton Mail or Tuta.

"There are many others." She points out, "The difference between them is that every email going into your inbox for Gmail is being analyzed, scanned, it's being added to a profile about you."

But I don't care. Nothing beats Google's convenience. It remembers my credit cards and passwords. It fills things in automatically. I tried Brave browser but, after a week, switched back to Google. I like that Google knows me.

Brockwell says that I could import my credit cards and passwords to Brave and autofill there, too.

"I do understand the trade-off," she adds. "But email is so personal. It's private correspondence about everything in your life. I think we should use companies that don't read our emails. Using those services is also a vote for privacy, giving a market signal that we think privacy is important. That's the only way we're going to get more privacy."

She also warns that even apps like WhatsApp, which I thought were private, aren't as private as we think.

"WhatsApp is end-to-end encrypted and better than standard SMS. But it collects a lot of data about you and shares it with its parent company, Facebook. It's nowhere near as private as an app like Signal."

She notices my Shell app and suggests I delete it.

Opening the app's "privacy nutrition label," something I never bother reading, she points out that I give Shell "your purchase history, your contact information, physical address, email address, your name, phone number, your product interaction, purchase history, search history, user ID, product interaction, crash data, performance data, precise location, course location."

The list goes on. No wonder I don't read it.

She says, "The first step before downloading an app, take a look at their permissions, see what information they're collecting."

I'm just not going to bother.

But she did convince me to delete some apps, pointing out that if I want the app later, I can always reinstall it.

"We think that we need an app for every interaction we do with a business. We don't realize what we give up as a result."

"They already have all my data. What's the point of going private now?" I ask.

"Privacy comes down to choice," She replies. "It's not that I want everything that I do to remain private. It's that I deserve to have the right to selectively reveal to the world what I want them to see. Currently, that's not the world."

COPYRIGHT 2023 BY JFS PRODUCTIONS INC.

The post Government Is Snooping on Your Phone appeared first on Reason.com.