Attorney General Jeff Sessions writes in Sunday’s Washington Post:

Drug trafficking is an inherently violent business. If you want to collect a drug debt, you can’t, and don’t, file a lawsuit in court. You collect it by the barrel of a gun. 

Sessions correctly understands a major source of crime in the drug distribution business: people with a complaint can’t go to court. But he jumps to the conclusion that “Drug trafficking is an inherently violent business.” This is a classic non sequitur. It’s hard to imagine that he actually doesn’t understand the problem. He is, after all, a law school graduate. How can he not understand the connection between drugs and crime? Prohibitionists talk of “drug-related crime” and suggest that drugs cause people to lose control and commit violence. Sessions gets closer to the truth in the opening of his op-ed. He goes wrong with the word “inherently.” Selling marijuana, cocaine, and heroin is not “inherently” more violent than selling alcohol, tobacco, or potatoes. 

Most “drug-related crime” is actually prohibition-related crime. The drug laws raise the price of drugs and cause addicts to have to commit crimes to pay for a habit that would be easily affordable if it were legal. And more dramatically, as Sessions notes, rival drug dealers murder each other–and innocent bystanders–in order to protect and expand their markets. 

We saw the same phenomenon during the prohibition of alcohol in the 1920s. Alcohol trafficking is not an inherently violent business. But when you remove legal manufacturers, distributors, and bars from the picture, and people still want alcohol, then the business becomes criminal. As the figure at right (drawn from a Cato study of alcohol prohibition and based on U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970 [Washington: Government Printing Office, 1975], part 1, p. 414) shows, homicide rates climbed during Prohibition, 1920–33, and fell every year after the repeal of prohibition. 

Tobacco has not (yet) been prohibited in the United States. But as a Cato study of the New York cigarette market showed in 2003, high taxes can have similar effects:

Over the decades, a series of studies by federal, state, and city officials has found that high taxes have created a thriving illegal market for cigarettes in the city. That market has diverted billions of dollars from legitimate businesses and governments to criminals.

Perhaps worse than the diversion of money has been the crime associated with the city’s illegal cigarette market. Smalltime crooks and organized crime have engaged in murder, kidnapping, and armed robbery to earn and protect their illicit profits. Such crime has exposed average citizens, such as truck drivers and retail store clerks, to violence.

Again, to use Sessions’s language, cigarette trafficking is not an inherently violent business. But drive it underground, and you will get criminality and violence. 

Sessions’s premise is wrong. Drug trafficking (meaning, in this case, the trafficking of certain drugs made illegal under our controlled substances laws) is not an inherently violent business. The distribution of illegal substances tends to produce violence. Because Sessions’s premise is wrong, his conclusion–a stepped-up drug war, with more arrests, longer sentences, and more people in jail–is wrong. A better course is outlined in the Cato Handbook for Policymakers.

History hasn’t been kind to Alexander Hamilton’s hypothesis, in Federalist 68, that “there will be a constant probability of seeing the [office of the presidency] filled by characters pre-eminent for ability and virtue.” Still, he was spot-on in No. 65, when he predicted that impeachment debates would stoke partisan rancor, driving “pre-existing factions [to] enlist all their animosities, partialities, influence, and interest on one side or on the other.”

Impeachment talk started unusually early in the Trump administration, and seems likely to get louder as we go. So far it’s been an even richer source of hyperbole and hypocrisy than the judicial filibuster.

“Congress must begin impeachment proceedings immediately,” insists MoveOn​.org, the activist group born in a 1998 campaign urging Congress to “Move On to pressing issues facing the country,” instead of impeaching Bill Clinton. They’ve lately developed an interest in presidential obstruction of justice, so today MoveOn would rather linger. Meanwhile, the American Spectator—the magazine that put itself on the map (and the Paula Jones lawsuit in play) with investigative reporting on Clinton’s sex scandals—already has a case of “impeachment fatigue.” “The times are sour and ill-mannered enough without unnecessary strife over removal of a duly elected president of the United States,” William Murchison sniffs at the AmSpec site. 

As I noted in a piece for U.S. News earlier this week, the emerging refrain on the Right is that anyone who dares mention the “I‑word” has thrown in with a vast left-wing conspiracy plotting “a coup attempt against a lawfully elected government.” That’s from Dinesh D’Souza, but Gary Bauer, Tom Tancredo, Ben Stein, Lou Dobbs, and Pat Buchanan are all singing from the same hymnal. If Trump is eventually brought down via impeachment, Buchanan charges, “this city will have executed a nonviolent coup against a constitutionally elected president.” 

In our last national debate over impeachment, the coup was on the other foot (sorry!). Congressional Democrats used the term liberally, railing against the GOP attempt to remove Bill Clinton for perjury and obstruction of justice. “A partisan coup d’etat,” cried Rep. Jerrold Nadler (D‑NY); a “Republican coup d’etat,” echoed John Conyers (D‑MI). Rep. Maxine Waters (D‑CA) pronounced herself appalled by “the raw, unmasked, unbridled hatred and meanness that drives this impeachment coup d’etat, this unapologetic disregard for the voice of the people.’’

All three are, of course, still in Congress today, ready to weigh in Trump’s current predicament. Nadler has affirmed that “impeachment[’s] a possibility”; “Auntie Maxine” is leading the charge, and while it doesn’t appear that Conyers has used the “I‑word” yet, it’s surely just a matter of time, given that he’s tried to impeach nearly every Republican president over his five-decade career, (while giving Democrats a pass for similar behavior). 

It’s hard to take the coup comparison seriously or literally. A leading constitutional law casebook observes that: 

Because of the twelfth and twenty-fifth amendments, the successor to the president will most likely be a member of his own party.… Because in the case of Clinton, Democrat Al Gore would have become the next president, charges of usurpation or coup d’etat are ungrounded. 

In the as-yet unlikely event of Donald Trump’s impeachment and removal, he’d be replaced by his hand-picked, lawfully elected, and obsequiously loyal running mate, Mike Pence. Some “coup.”

Our last two serious efforts at presidential impeachment arguably presented greater democratic deficiencies than Trump’s case would. Nixon’s resignation elevated Gerald Ford, who’d never stood before a national electorate, having been installed via the 25th amendment after Vice President Spiro Agnew resigned on corruption charges. And when the House Republicans set the Clinton impeachment in motion in October 1998, they faced a president with a 65 percent approval rating and a public overwhelmingly opposed to their efforts. In fact, it was a lame-duck Republican Congress that impeached Bill Clinton, a month and a half after the GOP lost five seats in the House.

I don’t recall folks like Gary Bauer genuflecting to the “will of the people” when they were trying to oust Clinton. Back then, doing the unpopular thing was an example of “grace under pressure and political courage,” per Pat Buchanan. Today, it’s a corrupt elite’s desperate attempt to overturn the results of the last election.

True, the impeachment remedy is in tension with pure democracy: “countermajoritarian,” like independent judicial review. It’s perfectly valid to argue that impeachment shouldn’t be done cavalierly, and that contemplating it in the first months of a new administration is premature. But if you only cry “coup” when your party’s president is in the dock, maybe sacred democratic principles aren’t what you’re actually worried about.

The 2010 Patient Protection and Affordable Care Act, also known as Obamacare, may perhaps be the most contentious and polarizing law we’ve seen enacted in the past several decades. For seven years, Democrats have remained convinced they like it and Republicans confident that they don’t.

But once we get past the partisanship and polarization, what do Democrats and Republicans think about the fundamental regulations that constitute the core of Obamacare? These core regulations include pre-existing conditions rules that require insurance companies cover anyone who applies (guaranteed issue) and charge people the same rates regardless of pre-existing conditions (community rating).

All government policies and their ostensible benefits come with a price. What are Americans willing to pay?

As I’ve previously written, the Cato Institute 2017 Health Care Survey found that while Americans initially support core Obamacare regulations of community rating and guaranteed issue, support plummets if such regulations harm access to high quality medical services, require higher premiums or higher taxes. That being said, Americans appear to care more about their access to high quality medical services than they care about higher taxes, higher premiums, or universal coverage for those with pre-existing conditions.

Democrats are unique, however. They are the only group who says they’d be willing to pay more if it guaranteed coverage to those with pre-existing conditions. Six in 10 Democrats say they’d be willing to personally pay higher taxes and 58% say they’d pay higher premiums so that insurance companies wouldn’t charge people higher rates based on pre-existing conditions (community rating). Similar shares say they’d pay higher taxes (60%) and premiums (51%) so that insurance companies would cover anyone who applies (guaranteed issue).

Yet, the survey found that Democrats turn against the core regulations in Obamacare if they threaten their access to medical services and treatments, limit their access to top hospitals and surgeons, or require them wait several months to see a specialist.

Indeed, 62% of Democrats would oppose regulations that ban insurance companies from charging higher rates to people based on pre-existing conditions if it limited their access to medical tests and treatments. Similarly, 65% of Democrats would oppose the community rating rule if it required they wait several months before getting in to see a specialist for medically necessary care. And 54% would oppose if it limited their access to top rated medical facilities.

Similarly, two-thirds of Democrats would oppose regulations requiring insurance companies cover anyone who applies if these harmed the quality of health care in the US.

Why should we care about these results? Academic research examining the impact of these regulations find that they do come with significant costs to the quality of health care—limiting access in the exchanges to top hospitals and surgeons and to medical services and treatments that people need.

Moreover, threats to the quality of health care constitute the one cost that Americans of all partisan persuasions would be unwilling to accept.

This doesn’t mean Americans would oppose other methods to help those with pre-existing conditions obtain the health care they need. Instead, they may support other policies that achieve this goal so long as they don’t come at the expense of quality in the U.S. health care system, raise premiums or hike taxes.

For too long, the national dialogue has focused almost exclusively on the cost versus coverage debate. This misses a third and incredibly important dimension that is a top priority of the American public: health care quality in the United States. Health care regulations and proposed reforms must be assessed not only according to their impact on cost and coverage, but also their impact on Americans’ access to timely high-quality medical care.

Survey results and methodology can be found here. The Cato Institute in collaboration with YouGov conducted two health care surveys online February 22–23, 2017. The first survey interviewed 1,152 American adults with a margin of error of ± 2.93 percentage points. This survey asked about community rating. The second survey interviewed 1,103 American adults with a margin of error of ± 2.85 percentage points. This survey asked about guaranteed issue. The margin of error for items used in half-samples is approximately ± 5.1 percentage points.

On Monday, the Treasury Department released the first of four planned reports on the U.S. financial system. While the 150-page report, focusing on banks and credit unions, includes a number of observations and recommendations worth discussing, there is one page I’d like to highlight here. It’s a single chart. And yet it speaks volumes about the current state of regulation in the financial sector. Here’s the chart:

Those in Washington often talk about the “alphabet soup” of federal agencies. We do love our acronyms here. But this chart shows that the financial sector has a complete soup all of its own. There are nine federal regulators who oversee the financial sector. Additionally, each state has its own regulators, typically one each for securities, insurance, and banking. Plus, there are the self-regulatory organizations—quasi-private bodies whose decisions can have the effect of law on the companies and individuals they oversee. A single organization can be subject to as many as six regulators. An organization that does business in multiple states can potentially be subject to regulation in each of them, in addition to regulation at the federal level.

There are two key problems with this kind of overlapping and duplicative regulation. First, there is the compliance burden. A broker-dealer in the securities markets, for example, must (with the help of expensive lawyers) thoroughly review and understand the regulations and rules issued by the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Financial Industry Regulatory Authority, the Municipal Securities Rulemaking Board, the National Futures Association, and at least one state securities board. This requires not only understanding the rules of each regulator, but also how they intersect with one another. The broker-dealer must then (with the help of expensive lawyers) devise a series of compliance protocols to ensure that each of its employees, in each of their separate duties, acts within the confines of the regulations. 

Second, such a high compliance cost creates barriers for new companies and new products. If a bank wants to try offering a new type of loan, it must ensure that the new product complies with all of the rules of every one of its regulators. Anyone with a bank account has probably noticed the massive changes new technology has brought to the financial sector. Being able to deposit a check using a smart phone is a great convenience. But before any bank rolled out that service, their lawyers had to ensure that the application’s features complied with all existing regulation. Furthermore, the bank had to consider whether any one of its regulators was likely to introduce new regulation that would affect the proposed service. There may be (and I would guess it is very likely there are) many products that consumers would like that banks are unwilling to offer because of the high cost of compliance and risk of getting that compliance wrong.

These barriers are even more challenging to new companies looking to enter the market. The technological changes that have made mobile banking possible have also opened the door to new ways of exchanging value outside of traditional banks. Anyone with a new idea will want to vet this idea with regulators before investing too much capital. And yet to conduct a vetting process, the entrepreneur will need to contact not one but often a half dozen regulators, each of whom might express a different view of the proposed product and a different set of concerns. 

These regulatory schemes are no laboratories of democracy. This chart shows a stunning pile-up of regulators and regulations. It is one thing to talk about how regulation is stifling innovation and growth. It is another to see such a stark illustration of what this web actually looks like.

The Republican National Committee, in the person of Chairwoman Ronna Romney McDaniel, informs me that I “have been selected to represent the Commonwealth of Virginia as a member of The President’s Club.” I know that this is an important responsibility because it comes with a Priority Mail BRE and a request for $750. There’s a lot of boilerplate in the letter about “fake news” and the Democrats and their “radical left-leaning allies.” (Really, if they’re radical, surely they’re more than “left-leaning.” Why not just come out and say it — they’re left-wingers!)

But I’m particularly struck by this line:

I believe you share President Trump’s objectives of smaller government, fiscal discipline, lower taxes, secure borders, conservative judges, a stronger military and unrestrained freedom.

Seriously — President Trump’s objective is “unrestrained freedom”?

Some of those objectives I can see. Fiscal discipline is a presumptuous claim when you’ve promised not to touch the biggest spending programs. Some of the administration’s programs might make government smaller, but others clearly would not. But seriously, “unrestrained freedom”?

For nearly two years now Donald Trump’s main policy themes have been to close our borders, to deport millions of our neighbors and co-workers, and to stop Americans from buying products made overseas. He has bullied, subsidized, and threatened businesses into making uneconomic decisions. He has also talked at length about his desire to limit freedom of speech, frustrated as he is that “our press is allowed to say whatever they want.” While Republicans and Democrats in Congress and the states work on criminal justice reform Attorney General Jeff Sessions steps up the drug war. Trump’s acceptance speech at the Republican National Convention was described in Reason as “easily the most overt display of authoritarian fear-mongering I can remember seeing in American politics.”

The idea that President Trump’s objectives include “unrestrained freedom” is ludicrous even in the context of political fundraising letters.

Goldman Sachs CEO Lloyd Blankfein tweeted Tuesday: “Arrived in China, as always impressed by condition of airport, roads, cell service, etc. US needs to invest in infrastructure to keep up.”

This raises an interesting question which I consider in my recently released paper: how do we know how much infrastructure investment is needed in the US?

From an economic perspective, the answer is certainly not “invest to the point where our airports feel as high quality as China’s.” But absent real markets, the amount “needed” is difficult to quantify — an example of the “knowledge problem” associated with central planning.

What level of congestion would drivers tolerate before they were willing to finance road expansion, for example? Eliminating all congestion would be prohibitively expensive. So how far should expansion go? How often should a road be repaired? How much transportation should be by train?

Markets are good at finding the optimal mix of infrastructure spending over time and rewarding those that are better at satisfying demand. Governments, even with the best of intentions, lack the necessary knowledge to find that mix.

Cost–benefit analysis of new projects can be undertaken to decide where scarce resources deliver the highest returns. But that is a very imperfect methodology, and does not tell us anything about “how much” should be invested overall.

In this vacuum, different proxies for how much “should” be invested are cited:

• The American Society of Civil Engineers estimates how much it would cost to improve the infrastructure to a set standard as measured by eight different criteria
• Public investment levels are compared with other countries, or to previous periods of US history
• International surveys of infrastructure quality or capacity are compared
• Quality indicators are tracked over time

But all of these measures have problems from an economic perspective.

There is an obvious self-interested component to the estimates of engineers. But more importantly, sub-measures on quality tell us little about demands and future needs for infrastructure. Part of the survey may be associated with improving the quality of transit systems, for example. But what if driverless cars render them obsolete?

Public investment levels across countries or historically likewise tell us little about what we need to invest today in this country in particular. And international surveys tend to ignore important considerations: many cross-country comparisons of transport infrastructure, such as the World Economic Forum’s Global Competitiveness Report, involve subjective survey answers across countries, meaning that results are shaped by expectations. More objective indices, such as the capacity measures examined by the Kiel Institute (where the US ranks very highly), ignore the quality of that infrastructure.

Of course, you can track quality measures over time too. We know, for example, that the proportion of bridges which are structurally deficient has been falling over the past two decades, but measures of congestion have been rising. This could be highly indicative and used to inform spending decisions. But in some situations allowing physical infrastructure to age or deteriorate may be sensible given the falling demand for its use. As I outline in detail in my new paper, there are many examples of politicians prioritizing things other than economic growth in deciding levels and distribution of transport funds too.

No, in order to really get more responsive infrastructure investment to need, we need more markets in infrastructure provision and to remove the artificial barriers which prevent private investments. A greater use of user fees, such as tolling and congestion pricing, for example, could lead to a greater link between demands and funding.

Read more about all this in my paper here.

Megyn Kelly is probably kicking herself for not delaying her interview of Vladimir Putin. Had she waited just a few days, she could’ve brought a leaked copy of the latest NSA estimate of the timeline, motivations, and targets of alleged Russian hackers during the 2016 election cycle to her chat with Putin and asked a lot of pointed questions about it. Even though that opportunity never materialized, she and other journalists still have the chance to ask some equally important questions of American officials about this rather interesting document and the young woman responsible for sharing it with the world. What follows are some of my suggested lines of inquiry for our friends in the Fourth Estate.

The Leaker: Reality Leigh Winner

As I read The Intercept’s story, I kept asking myself one question, over and over: did this young woman learn nothing from Ed Snowden? 

This extract from the arrest warrant affidavit contains details that, if accurate, speak to a total lack of awareness of or concern for the kind of “insider threat” detection measures that now exist in most, if not all, Intelligence Community components:

Why did Winner not use a truly secure means of contacting The Intercept? Why did she select this particular document? Why did she not contact a whistleblower advocacy organization for legal advice before even contemplating such a rash act?

The Media Outlet: The Intercept

In a statement published a short time ago, The Intercept claimed that

On June 5 The Intercept published a story about a top-secret NSA document that was provided to us completely anonymously. Shortly after the article was posted, the Justice Department announced the arrest of Reality Leigh Winner, a 25-year-old government contractor in Augusta, Georgia, for transmitting defense information under the Espionage Act. Although we have no knowledge of the identity of the person who provided us with the document, the U.S. government has told news organizations that Winner was that individual.

That statement is at odds with the search warrant affidavit quoted above, which claims that Winner was in “email contact” with the “News Outlet” (The Intercept).

Who’s telling the truth here vis a vis Winner’s alleged email contact with The Intercept–the Department of Justice or the paper? Could Winner have emailed the wrong reporter at The Intercept, and the actual story authors were in the dark that she’d contacted the paper? Did Winner’s email bounce? And why did Intercept staff share an exact copy of the purloined document with NSA officials in the first place? Why didn’t they simply read key passages of the document over the phone, or include extracts in an email to NSA officials?

Given the fact that Winner printed the document and thus left investigators a digital trace of her actions, perhaps The Intercept’s decision to share a scanned version of the document wouldn’t have mattered–but maybe it would have, and why endanger a source (annonymous or otherwise) by behaving in such an irresponsible way with the document?

The Document: Some Answers, More Questions

The NSA report that Winner leaked contained a number of new details about the alleged Russian hacking campaign, including a flow chart that lays out in greater detail the precise mechanism used by the attackers in not only the spearphishing campaign but their attempts to actually gain access voter-related data and possibly voting machines themselves. Here’s the key paragraph from the story, which quotes Alex Halderman, director of the University of Michigan Center for Computer Security and Society, at length:

“Usually at the county level there’s going to be some company that does the pre-election programming of the voting machines,” Halderman told The Intercept. “I would worry about whether an attacker who could compromise the poll book vendor might be able to use software updates that the vendor distributes to also infect the election management system that programs the voting machines themselves,” he added. “Once you do that, you can cause the voting machine to create fraudulent counts.”

How long has the Intelligence Community known that Putin ignored Obama’s warnings not to interfere in our election? How much of the vulnerability-related information has been shared with municipalities that employ voting technology susceptible to the kinds of attacks described by NSA? Are states and localities currently assessing whether their electronic voting machine and voter roll infrastructure is vulnerable to these kinds of attacks?

When I worked for then-Rep. Rush Holt (D‑NJ), one of his major concerns was the security–or lack thereof–of electronic voting machines and the infrastructure that supports them. It’s been nearly 10 years since Holt had Princeton professor and computer scientist Ed Felton conduct a live hack of a Diebold voting machine for the House Committee on Administration, an event that should have served as a wake-up call about the potential for digital election fraud by one or more hostile actors. The leaked NSA assessment underscores that such cyber vulnerabilities in our election process remain. Whether one accepts or rejects the Intelligence Community assessment that Vladimir Putin ordered his intelligence services to interfere in our election is almost beside the point now. What’s clear is that this digital vulnerability is real and we ignore the implications at our peril.