Archives: 10/2016

The Choice: Legal Immigrants or Illegal Immigrants

By Alex Nowrasteh

People react to public policies by changing their behavior.  Foreigners committed to immigrating to the United States are confronted with two options – they can come legally or they can come illegally.  When visas are legally available, cheap, and plentiful they choose to come legally.  When visas are difficult to get, expensive, and few in number then many immigrants decide to come illegally.*  Employers face a similar dilemma when choosing to hire workers.

The inflow of illegal immigrants has slowed dramatically in recent years.  The poor American economy, economic growth south of the border, Mexican demographics, and heightened border security all partially explain that decline.  Another explanation is that the number of guest worker visa has increased, convincing some would-be illegal immigrants to instead enter and work legally.    

The annual number of guest worker visas issued on the E, H, L, O, P, and TN visas increased by 157 percent from 1997 to 2015.  The annual number of green cards for new arrivals also increased by 25 percent during the same time period and, although the majority are for lower-skilled family members, they also work in many of the occupations that would otherwise be filled by illegal immigrants.  The gross number of illegal immigrants making it into the United States each year also shrank during that time.

The number of guest workers, gross illegal immigrant entries, and green cards issued to new arrivals is surprisingly flat from 1997 to 2015, ranging from a high of 1.66 million in 1999 to a low of 1.17 million in 2009 (Figure 1).  The average during the entire period is 1.41 million entries a year.  The number of entries is remarkably constant even when considering the Great Recession and slow recovery, indicating that the number of entries doesn’t change nearly as much as the method of entry.  New green cards and guest worker visas are being used by many immigrants who would otherwise have entered illegally. 

Figure 1

Guest Worker Visas Issued, Green Cards for New Arrivals, and Gross Illegal Immigrant Inflows

 

Sources: State Department, Department of Homeland Security, Bureau of Labor Statistics, and Pew.

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Topics:
International Economics, Development & Immigration

Did the New York Times Violate the Law by Publishing Trump’s Tax Return, or Is the Law Unconstitutional?

By Trevor Burrus and Devin Watkins
After the New York Times published the 1995 tax returns of Donald Trump, Callum Borchers at the Washington Post and others have said it might be illegal. Trump’s lawyer claimed that publishing the returns was illegal without Trump’s consent, and, being Trump’s lawyer, he of course threatened “prompt initiation of appropriate legal action.”
 
Adding to the confusion, during a panel discussion at Harvard Law School in mid-September, Bob Woodward, associate editor of the Washington Post, and Dean Baquet, executive editor of the New York Times, presciently discussed whether they would publish Trump’s tax returns if they got ahold of them. “You know what your lawyers would tell you,” Woodward said, ”if you publish them, you go to jail.” Baquet said he would “seriously fight to publish [Trump’s] tax returns.”
 
For federal tax returns, there is a specific statute that prohibits publishing without consent (26 U.S.C. § 7213(a)(3)). But the Times only published the first page of Trump’s New York, New Jersey, and Connecticut tax returns (not the federal tax returns) so that statute would not apply. 
 
Of those states, only New York has a privacy statute that could be construed to apply to non-government employees/contractors like the Times. Not to make your brain atrophy from an overdose of legalese, but the New York statute says that
any person who, pursuant to this section, is permitted to inspect any report or return or to whom a copy, an abstract or a portion of any report or return is furnished, or to whom any information contained in any report or return is furnished, to divulge or make known in any manner the amount of income or any particulars set forth or disclosed in any report or return required under this article.
This bit of printed chloroform is a convoluted statute (welcome the study of law), but the fairest reading is that the phrase “pursuant to this section”—i.e., the entire section describing the “general powers of the tax commission”—applies only to those who are “permitted to inspect any report or return” under New York law, such as some government contractors. The other entities listed, such as those “to whom a copy, an abstract or a portion of any return is furnished,” can be anyone, even those who obtained a return not “pursuant to this section.” That includes the Times.
 
So, let’s assume that what the New York Times did was against the law. A more interesting question is: would that law be constitutional under the First Amendment? After all, prohibiting someone from divulging information to the public is clearly an abridgement of speech, so would the law fall under an exception to the general rule that the government cannot prohibit speech?
 
The most relevant case would be Bartnicki v. Vopper from 2001. That case dealt with a radio commentator who broadcast a tape of an illegally recorded conversation between a chief union negotiator and a union president. The federal statute at issue prohibited people from “willfully disclosing the contents” of any communication that the person knew or had reason to know “was obtained through an illegal interception.” The Court struck the statute down as unconstitutional because it “implicates the core purposes of the First Amendment” by imposing “sanctions on the publication of truthful information of public concern.” Publishing crucial and truthful information about a presidential candidate a month before the election certainly implicates matters of “public concern.”
 
Finally, because the New York law makes it illegal to merely “divulge or make known” tax return information,  it is broader than laws that prohibit someone from releasing a tax return that he knows (or has reason to know) was obtained illegally. In other words, it prohibits even more speech than the law in Bartnicki. Therefore, it seems likely that the law would be struck down as unconstitutional. 
Topics:
Law and Civil Liberties

Where Are All the State Tax Cuts?

By Chris Edwards

If you follow state policy issues, you may think that there has been a lot of tax cutting recently because of high-profile reforms by Mike Pence, Sam Brownback, and a few other governors. I examine those reforms in Cato’s 13th biennial fiscal report card on the governors, released tomorrow.

However, a chart from NASBO shows that recent tax cutting across the 50 states has been limited and mainly offset by tax hiking. The chart shows net state revenue changes from legislated cuts/hikes since 1979. In 2017, for example, the dollar value of hikes is expected to outweigh cuts.

NASBO

That is a disappointing because there is usually a trend toward tax cutting during economic expansions, or at least there was during the 1990s. Recent tax cuts in places such as Florida, Indiana, Maine, New York, North Carolina, and Texas have been offset by hikes in places such as Alabama, Connecticut, Delaware, Nevada, Pennsylvania, and South Dakota.

What makes the current dearth of tax cuts odd is that state legislatures have become more Republican since the 1970s. The Wall Street Journal had a chart yesterday showing that the share of state legislature seats held by the GOP has risen from 40 percent in the 1980s to 55 percent today.  

Republicans are supposed to be the tax-cutting party. That is the core of their “brand.” So why isn’t there more tax-cutting? One reason is that some Republican governors start siding with special interests over taxpayer interests after they have been in office a while. They forget that they are supposed to work for all the citizens, not just the ones lobbying for more government spending. Nevada’s Governor Brian Sandoval seems to be a good example, as I discuss in the report tomorrow.

Another problem is that in some state legislatures that are nominally Republican, some of the members have chosen that label only because it was advantageous for election and reelection. In South Carolina, Governor Mark Sanford and then Nikki Haley long pursued major tax reforms, but to little avail.

A final problem is that the Democratic Party has moved to the left on fiscal issues. Andrew Cuomo of New York is about the only Democratic governor in recent years who has been amenable to substantial tax reductions.

Learn what grades Cuomo, Haley, Sandoval, and the others earn on their recent fiscal performance in tomorrow’s report.

Topics:
Government and Politics

The Answer Is a New Government Program. What’s the Question?

By Ike Brannon

The Sunday Washington Post had a long, hagiographic article about Senator Mark Warner’s critique about how capitalism “isn’t working” for the masses and his heroic attempts to fix it that left me thinking I’m in an alternate reality.

The problem he sees is that the growing tendency of people to change jobs throughout their career has left people unprepared for retirement, and that we need to do more to make sure that workers have some sort of safety net to provide them with health care and income in their golden years.

That this was largely addressed decades ago with the introduction of Social Security and Medicare was completely missing from the article. Social Security is an incredibly progressive retirement program that provides everyone with a work history of at least ten years with a decent-sized benefit that doesn’t go up all that much for wealthier people who contributed much more. And Medicare is the largest government program there is, covering hospitalization costs, basic health costs and drug benefits for tens of millions of senior citizens. The government spends about $1.5 trillion each year on these two programs, and they make up the majority of our federal budget. There’s also plenty of evidence that they prevent seniors from indigence: the poverty rate for seniors is well below that of other age groups. 

The current Administration also added an expensive entitlement that makes it much easier for people under age 65 who do not receive health insurance to obtain it, along with a healthy subsidy. For a family of four in Washington DC there is still a subsidy for an income of $80,000, which is well above the mean household income, and Medicaid completely covers those who don’t make enough money to buy their own health insurance. What more can we possibly do to make health insurance more affordable for the working poor?

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Topics:
Government and Politics, Health Care & Welfare, Social Security

You Ought to Have a Look: Close-hold Embargos, Scientific Outsiders, and Activists Behaving Badly

By Patrick J. Michaels and Paul C. "Chip" Knappenberger

You Ought to Have a Look is a regular feature from the Center for the Study of Science.  While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic.  Here we post a few of the best in recent days, along with our color commentary. 

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With last week’s news dominated by the debates—both in front of the American people (Trump v. Clinton) and in front of the American courts (West Virginia v. EPA)—we figured we’d highlight a couple of other stories that may have not have gotten the attention that they deserved. 

First up is a piece that left us slack-jawed. “How the FDA Manipulates the Media” is an investigative journalism article Charles Seife of Scientific American that reveals a seamy world of backroom press manipulation by scientific bodies (in this case, the federal Food and Drug Administration) through a practice known as a close-hold embargo. While some organizations, including major scientific journals like Science and Nature, employ an embargo system that allows some members of the press access to articles before they are officially “published” so that they can prepare news stories, the only condition is that no one releases the story before a set date. This is why a bunch of news stories, all covering the same piece of scientific information, all hit the airwaves/intertubes at the same time.  While this type of embargo is a bit unfair to anyone who perhaps wants to comment on the story but is blindsided by it – the procedure only biased by the well-known predilections of the mainstream press.  However, the close-hold embargo is an (almost mythical) horse of a different color. Its intent is to generate loads of press, but only good press. 

Here’s a taste from Scientific American:

The deal was this: NPR, along with a select group of media outlets, would get a briefing about an upcoming announcement by the U.S. Food and Drug Administration a day before anyone else. But in exchange for the scoop, NPR would have to abandon its reportorial independence. The FDA would dictate whom NPR’s reporter could and couldn’t interview.

…This kind of deal offered by the FDA—known as a close-hold embargo—is an increasingly important tool used by scientific and government agencies to control the behavior of the science press. Or so it seems. It is impossible to tell for sure because it is happening almost entirely behind the scenes. We only know about the FDA deal because of a wayward sentence inserted by an editor at the New York Times. But for that breach of secrecy, nobody outside the small clique of government officials and trusted reporters would have known that the journalists covering the agency had given up their right to do independent reporting.

Documents obtained by Scientific American through Freedom of Information Act requests now paint a disturbing picture of the tactics that are used to control the science press. For example, the FDA assures the public that it is committed to transparency, but the documents show that, privately, the agency denies many reporters access—including ones from major outlets such as Fox News—and even deceives them with half-truths to handicap them in their pursuit of a story. At the same time, the FDA cultivates a coterie of journalists whom it keeps in line with threats. And the agency has made it a practice to demand total control over whom reporters can and can’t talk to until after the news has broken, deaf to protests by journalistic associations and media ethicists and in violation of its own written policies.

By using close-hold embargoes and other methods, the FDA, like other sources of scientific information, are gaining control of journalists who are supposed to keep an eye on those institutions. The watchdogs are being turned into lapdogs. “Journalists have ceded the power to the scientific establishment,” says Vincent Kiernan, a science journalist and dean at George Mason University.

And if you think this taste is bad, the whole article will make you ill. Sickening, but eye-opening. Perhaps take an alka seltzer first, but you really ought to have a look.

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Topics:
Energy and Environment

Capture and Ignorance in Financial Regulation

By Mark A. Calabria

After spending some years in both legislative and regulatory policy roles, I’ve come to even more strongly believe that almost everything you really need to understand regulation can be found in Peltzman’s classic 1976 extension of Stigler’s original economic model of regulation. Almost everything. What I find lacking is recognition of the importance of both outright ignorance of the “correct” policy solution, along with cognitive biases on the part of policymakers. While I reach slightly different conclusions for the structure of policy implementation, I follow Rachlinski and Farina(2002) in framing the inquiry around two models of government error: Public Choice and Cognitive Failure.

While still largely ignored within mainstream academia, the central framework of Public Choice theory, that actors in the political realm pursue rational self-interest, appears to have been largely embraced by popular political commentators from Senator Elizabeth Warren to Presidential Candidate Donald Trump. The notion that “the system is rigged” clearly resonates with the public. For some the obvious solution has been to further insulate regulators from the political process: witness the structure of the Consumer Financial Protection Bureau (CFPB) created by the Dodd-Frank Act.

The “protecting” of regulators from the political process is, however, based upon the belief that the “correct” policy is obvious and is simply being blocked because regulators are “captured” by those they regulate. Insulate the regulators, and like magic, you get the right policy.

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Topics:
Finance, Banking & Monetary Policy

Of Millionaire “Fugitives” and the Rule of Law

By Ilya Shapiro and Frank Garrison

Megaupload.com was once the 13th most popular website on the internet, with more than 82 million unique visitors and a billion total page views during its seven-year operation. The site allowed people to store files on the cloud for later use—and some users inevitably stored copyrighted TV shows, films, songs, and software. In 2012, the U.S. government charged the site’s owner, Kim Dotcom, and its operators with conspiracy to commit copyright infringement. The defendants are currently resisting extradition to the United States (Dotcom lives in New Zealand), as is their right under extradition treaties.

In 2014, the seemingly frustrated government moved to seize the defendants’ considerable assets in a civil-forfeiture action, claiming that the assets are probably connected to the alleged criminal activity. The government had a major problem, however, as the assets that they were seeking to seize were not located in the United States, but in Hong Kong and New Zealand. Under traditional rules of in rem jurisdiction—a legal theory that allows courts to gain jurisdiction over property—the court must have “control” over the property to entertain the claims, which the district court did not have in this case.

The district court, however, ignored fundamental principles of statutory construction, and agreed with the government’s argument that a federal statute—conferring only venue to the district courts in cases where property was located outside of the United States—also expanded the court’s jurisdiction and fundamentally altered the traditional requirement that courts have control over the property to assert jurisdiction over it.

This misreading of the statute also created a serious constitutional issue under Article III. It is a fundamental constitutional rule that federal courts can’t issue mere “advisory” opinions. When a court lacks control over property located in a foreign country, it necessarily relies on another sovereign to enforce that order, making it advisory as to how the other sovereign should enforce the judgement.

To make matters worse, the court here also “disentitled” the defendants from presenting evidence that their property was not subject to seizure. Under civil-forfeiture laws, the government can take property without an underlying criminal conviction based only on the allegation of a crime. Those whose property has been seized can get it back by proving that their property is “innocent.” The government, however, is preventing the defendants from even making that argument. Using the “fugitive disentitlement” doctrine, the government is blocking the defendants from challenging the forfeiture.

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Topics:
Law and Civil Liberties, Telecom, Internet & Information Policy

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