Inflation stems from too much money chasing too few goods. U.S. consumer inflation is running at 9 percent as too much government-spawned money creation is coinciding with restrictions on the supply side of the economy.

The “Inflation Reduction Act” in front of the Senate is supposed to address inflation by reducing budget deficits with a combination of tax hikes and green subsidies. But despite its name, the Senate bill would not reduce inflation because it would damage the supply side and hardly affect deficits.

The budget modelers at Penn-Wharton estimate that the Senate bill would reduce the deficit by $86 billion in 2031, at most. That would be just 4 percent of the projected deficit that year and just 0.2 percent of U.S. GDP. So the bill’s impact on inflation through reducing deficits and demand would be close to zero.

Tax Foundation calculates that the Senate bill would reduce deficits by $178 billion over 10 years, which is just 1 percent of expected deficits over the period. Both Tax Foundation and Penn-Wharton find that the Senate bill would actually increase deficits the first few years, and thus have the opposite effect on inflation as the “reduction” promised by the bill’s title.

The figure below illustrates the Senate bill’s tiny impact even if it delivers what the sponsors promise. The reality is that the bill would likely increase deficits as new subsidies would beget more subsidies. Corporate lobbyists would push for subsidy expansion and other industries would demand similar handouts down the road.

And then there is the economy’s supply side. Raising taxes on corporations would reduce incentives to invest, and thus shrink production. The complexity of the proposed new minimum tax would exacerbate unproductive battles between the IRS and corporations. The Joint Committee on Taxation finds that half of the Senate tax hike would land on manufacturers. Money would be chasing fewer goods produced.

At the same time, the expansion of IRS enforcement unleashed by the Senate bill would cause huge headaches for small businesses and distract them from the marketplace. The IRS is a beast and jacking up its powers would be costly in terms of lost civil liberties.

Even if higher revenues generated by the Senate bill were devoted to deficit reduction, any benefits would not be worth the private-sector damage. But most of the revenues would be gobbled up by new subsidies, and given DC’s political dynamics the subsidies would keep on growing and wipe out any budget benefits over time.

This week the California State legislature passed and sent to the Governor’s desk SB57, introduced by Senator Scott Wiener, which authorizes the County and City of San Francisco, the County and City of Los Angeles, and the City of Oakland to approve safe consumption sites, dubbed “Overdose Prevention Programs” (OPPs). The authorization remains in effect until January 1, 2028. Any jurisdiction that establishes an OPP must contract with an independent third party, using private funds, to conduct a peer-reviewed study on the impacts of the program and submit results to the Governor’s office no later than January 15, 2027.

This bill was passed almost exactly one year after Rhode Island’s Governor signed similar legislation. Last November, the City of New York authorized two safe consumption sites. A privately-funded organization in Philadelphia, authorized by the City Council, has been attempting to establish a site called Safehouse since 2018, but the organization’s efforts have thus far been thwarted by the U.S. Department of Justice (DOJ).

California’s action is the latest attempt to apply a proven harm reduction tool used by much of the developed world (a total of 40 are now approved in Canada), though federally banned in the U.S. by a law called the “Crack House Statute” (21 U.S.C Sec. 856), which prohibits people from renting, leasing, using, or maintaining a place for the purpose of consuming controlled substances. Thus far the Biden DOJ has not acted against Rhode Island or New York City.

As drug overdose deaths multiply, more state and local governments are flouting federal law to save lives. Hopefully these efforts will culminate in Congress repealing the Crack House Statute and getting the federal government out of the way of people trying to save lives and prevent the spread of disease in their communities.

With the execution by drone of al-Qaeda chief, Ayman al-Zawahiri, the terrorist group is back in the news. However, beyond issuing a set of attention-getting videos filled with dire and unfulfilled threats, al-Qaeda’s record of accomplishment since 9/11 has been meager.

It has served as something of an inspiration to some Islamic extremists around the world who have wanted to glory in the success of 9/11 and to wear the al-Qaeda label. But it has exerted little control over them, and they mostly have maintained a local perspective rather than the global one al-Qaeda prefers.

For the most part, al-Qaeda tends to resemble Lee Harvey Oswald, the assassin of John F. Kennedy: a fundamentally trivial entity that got horribly lucky once.

Yet, to defend against an enemy, or monster, that scarcely existed, the United States has waged wars in the Middle East that have cost trillions of dollars and led to the deaths of hundreds of thousands while erecting a massive security apparatus at home.

For further commentary on this issue, see: How a cottage terrorism industry made a lion out of an al-Qaeda mouse (Responsible Statecraft)

Last week’s reports that the Securities and Exchange Commission (SEC) is probing whether one of the world’s largest cryptocurrency exchanges is listing unregistered securities once again highlights the unsettled state of crypto regulation in the U.S. It’s high time that policymakers provide clear, practical answers to the perennial questions of whether cryptocurrencies are securities and, if so, what to do about it. In the briefing paper, “Practical Legislation to Support Cryptocurrency Innovation,” released today, Jennifer Schulp and I propose legislative amendments for doing just that. Our framework provides (1) a clear test for whether crypto tokens are securities and (2) a common-sense registration option for those that are but whose projects are on the path to decentralization.

Crypto rules should be tailored to the specific risks of cryptocurrencies: fraud, deception, and manipulation by developers, sellers, or promoters who remain active managers of a crypto project. Our test for whether a crypto token is a security therefore is based on whether the token’s developers, sellers, or promoters will be exercising managerial control over the project. This test is consistent with longstanding precedents (including the oft-cited Howey test) and the goals of securities laws, which seek to protect against risks that managers have information that investors do not and act against investors’ best interests.

We propose that Congress clarify that securities laws do not apply to decentralized crypto tokens. This means that securities laws would not apply to tokens where the developer, seller, or promoter does not promise to undertake efforts necessary to deliver the token and its benefits, i.e., act like a manager. For example, such efforts could include building software or promoting its adoption by users or merchants. Where developers promise to do these things, the crypto project is centralized, and it’s appropriate to apply securities safeguards. However, if the project can work as intended without managers’ efforts, it’s decentralized, and securities laws would not apply to sales of its tokens.

Cryptocurrencies aspire to move beyond the need for centralized bodies that securities laws were designed to regulate, in effect mitigating managerial risks with technology. However, as SEC Commissioner Hester Peirce has put it, the current regime has “created a regulatory Catch 22”: startup crypto projects may be insufficiently decentralized to avoid securities laws, but compliance with those laws makes it difficult for such projects to sell their tokens to raise the money and build the user networks they need in order to decentralize over time. Our framework seeks to avoid this dilemma by proposing a tailored registration option for decentralizing projects to provide relevant information to crypto token purchasers.

Importantly, projects must be on the path to decentralization to be eligible for the tailored disclosure option. This means they must be developing a system with technical attributes that support decentralized operations: an open-source, permissionless, publicly readable, and cryptographically secure distributed ledger capable of validating stores or transfers of tokens without intermediaries. Eligible projects can register by posting to a public website information that would be useful to token purchasers, including:

• who the developers, sellers, and promoters are;
• how many tokens the developers, sellers, and promoters hold;
• relevant technical documents (such as white papers and yellow papers) and marketing materials;
• a link to the project’s public code repository, as well as a block explorer (a tool for searching the project’s transaction history);
• information on how the project will achieve decentralization;
• the protocols for recording and validating transactions and the applicable consensus mechanism;
• the governance mechanism for updating the project’s code;
• any promised benefits of the token; and
• the known or reasonably foreseeable risks of holding the token, including a concise risk statement to be provided during public token sales.

Eligible projects would remain subject to securities law protections against fraud, untrue statements, and material omissions, which would cover misleading disclosures and undisclosed managerial efforts. Moreover, under our proposal, where developers make additional promises beyond those contemplated in their registration, they would lose eligibility for this streamlined framework, as those subsequent promises create additional risks and fail the framework’s securities test anew.

Cryptocurrencies’ fundamental innovation is the capacity to mitigate risks through decentralized technology. When they do, they should not be subject to superfluous compliance steps. To incentivize projects that realize this potential, Congress should provide a practical test for whether projects are decentralized, along with a tailored disclosure pathway for projects on the way there.

At 1 a.m. they left us at the bridge in Juárez. I asked them why they would throw us to the streets at night with children, and an agent said, ‘That’s your problem, that is not my problem.’

-35-year-old man from Honduras (interviewed by Physicians for Human Rights)

In the dead of night, Customs and Border Protection (CBP) is expelling thousands of immigrant infants and toddlers into Mexican border cities that the U.S. State Department says are too dangerous for American tourists. New statistics obtained via a Cato Freedom of Information Act request show that as of May 31, CBP had used its Title 42 “health” authority to expel 30,806 children ages 3 and under—with about 41 percent of these expulsions occurring at midnight or later.

According to CBP’s agreements on repatriation with the Mexican government, no deportations should occur between 10pm and 5am, and anyone with special needs should not be deported between 8pm and 7am. But under Title 42, these restrictions are not being followed. CBP is expelling even very young children to Mexico in the middle of the night. The Biden Administration is actually expelling more children at night than even the Trump Administration did.

The results have been horrific. Many expelled children are then kidnapped by cartels, while others are sent back across to the United States by their parents with family members or smugglers as “unaccompanied” kids. Figure 1 shows the number of toddlers and infants that CBP has expelled for each month since Title 42 started under Trump in March 2020. Two-thirds of the expulsions have been of immigrant toddlers from Honduras and Guatemala, though several countries are represented.

Figure 2 shows the number of expulsions by time of the day for each month from March 2020 to May 2022. The most noticeable jump in nighttime expulsions occurred from August 2021 to September 2021 when the share of infants and toddlers expelled to Mexico increased from 16 percent to 40 percent (of expulsions that listed the time). Note that the percentage increased far more than the absolute number of expulsions between those two months, implying perhaps that a policy change was responsible for the increase. Although the absolute number of expulsions has declined since then, the share being expelled has consistently remained above 50 percent.

The reason to focus on toddlers is that they are the most vulnerable people coming to the border, but older children are also being expelled. CBP expelled 125,907 juveniles under age 18 from March 2020 to May 2022—about 29 percent of those expulsions occurred after midnight. It is not entirely clear why toddlers are more likely to be expelled after midnight than older children, but it could be because Mexican immigration officials aren’t around at those times to object to expulsions of very young children.

Journalist Ryan Devereaux is one of the few reporters to have investigated this phenomenon of late-night expulsions. In April last year, he reported:

As Animal Político, a Mexican news outlet, noted in an investigation published in February, nighttime removals have been happening in some the “most remote and dangerous” locations for migrants on the border for more than a year now. Williams added that KBI is “regularly seeing” expulsions at 2 in the morning. “It’s uniquely frustrating to us as an organization because we fought for years to restrict the hours of repatriation here,” she said. “They’re supposed to be from 5 a.m. to 10 p.m., and now it’s any time.” When people are expelled in the middle of the night, there are no Mexican immigration officials to receive them, Williams explained. While on paper there are populations that the Mexican government will not accept, “when they’re sending them back at 2 in the morning, there’s not a Mexican official on the south side to object to it.”

Human Rights First has listed dozens of known instances of crimes being committed against families sent back to Mexico. Here are some:

Those kidnapped include a Honduran asylum seeker and her three-year-old child who were kidnapped and held for a month after DHS transported them from McAllen and expelled them to Nuevo Laredo, a Guatemalan asylum seeker and his four-year-old son abducted and held for ransom after being expelled by DHS to Nuevo Laredo, a five-year-old Honduran girl kidnapped with her mother in Nuevo Laredo, and a one-year-old Honduran girl and her parents kidnapped the same day they were expelled to Nuevo Laredo in April 2021.

America would benefit from more people of all ages. The United States should be exhausting every legal way to let people into the country legally and let people stay legally. This would keep children from harm and uphold U.S. asylum law, and it would reduce illegal immigration and illegal residence. The United States has never needed people like it needs them now. Birth rates and labor market participation are down, and job openings have never been higher, yet the U.S. government policy toward immigrants has not adjusted.

Over the past several years, there’s been a lot of media and federal government focus on alleged or actual Russian attempts to influence American domestic politics. Former Air Force linguist and analyst Reality Winner was jailed for leaking a document that showed fairly clear evidence of such Russian interference. But what about more prosaic yet classic Soviet/​Russian influence operations, the type where they try to get others to launder a Kremlin propaganda line?

That very old tactic seems to be at the center of a federal indictment unsealed late last week.

The target, a Russian national named Aleksandr Ionov, was head of the Russian state-funded Anti-Globalization Movement of Russia (AGMR), which the indictment alleges worked with “the Russian Federation (Federal’naya Sluzhba Bezopasnosti Rossiyskoy Federatsii, “FSB”)…to use members of U.S. political groups as foreign agents of Russia within the United States, without notification to the Attorney General.” Foreign nationals who intend to lobby or otherwise engage politically on American soil are required to register with the Attorney General under the nearly century-old Foreign Agents Registration Act (FARA).

Ionov and his FSB handlers tried to evade FARA by developing relationships with three US-based organizations, which I identified through online and related research late last week as likely being the African People’s Socialist Party (APSP), the Uhuru House, and Yes California. FBI raids on the first two of the organizations were executed in St. Louis, Missouri and St. Petersburg, Florida, as the AFSP’s leadership confirmed via social media and a press conference.

The indictment alleges (p. 3) that “IONOV provided financial support to these groups on behalf of the FSB; directed these groups to publish pro-Russian propaganda, as well as other information designed to cause dissension in the United States and to promote secessionist ideologies; coordinated and funded direct action by these groups within the United States that was designed to further Russian interests; and coordinated coverage of these groups’ activities in Russian media outlets.”

Of note on p. 11 of the indictment is this passage:

On or about August 13, 2015, defendant IONOV caused electronic messages to be sent to UIC‑2 directing UIC‑2 to write a petition to the United Nations ‘ASAP’ alleging that the United States had committed genocide against African people in the United States and also directing UIC‑2 to send the petition to the UN office in New York and to the websites of the White House and Change​.org.

Change​.org is a petition website generally associated with political causes typically of concern to left-leaning political activists and voters, not just in the United States but globally.

Whether the FBI is targeting Change​.org itself is unknown at this juncture, but if it is it would be a deeply alarming development from a First Amendment standpoint. And the fact that the FBI has taken an interest in a speech-centric political advocacy platform like Change​.org as a potential vehicle for foreign influence operations may itself have a chilling effect on those considering using Change​.org or similar platforms to push for specific political reform proposals. 

Assuming the allegations asserted in the indictment by DoJ with respect to Ionov are valid, the case against him seems fairly straightforward. But the APSP and the Uhuru House and its related political movement can only be described as fringe, bit players on the American political scene whose previous statements and stances already mirrored the Kremlin’s line decades before Aleksandr Ionov came along. It makes one wonder why the FBI targeted such marginal groups with little to no impact on the broader political process, and whether an unstated goal of the raids was to put the entire domestic political advocacy community on notice that a domestic group with foreign connections is considered fair game for FBI scrutiny even if legitimate First Amendment activity is involved.

Whether the raids on the APSP and Uhuru House will lead to indictments against individuals in those organizations is something only time will tell.

“Dual enrollment has been a wild boost to my life and my career,” says Noah Adalbert, a recent graduate of Geneva College in western Pennsylvania.

Through dual, also called concurrent, enrollment programs, high school students can take college classes while still in high school. Colleges typically offer classes at a reduced rate for high schoolers, and many states and high schools offer full or partial funding for dual enrollment.

Noah took full advantage of dual enrollment opportunities and was able to transfer in 42 credits when he enrolled full time in college. This allowed him to graduate in just three years, which he estimates saved him around $15,000. There were other benefits beyond the financial impact. “Dual enrollment really helped prepare me for the rigors of college,” he says. “I was so comfortable with the college workload that I was miles ahead on day one.”

Dual enrollment policies vary by state. Around 82 percent of public high schools offer dual enrollment; most of those offer at least partial state or district funding. In some states, private and homeschooled students are also eligible for dual enrollment funding through their local school districts. But the reduced tuition price means it’s worth looking into dual enrollment even if you don’t have access to funding.

Education savings accounts (ESAs), which allow families to access a portion of state education dollars to use for a variety of educational expenses, can generally be used for dual enrollment classes. As more states enact ESAs, this will open tremendous opportunities for students who otherwise might miss out.

There is evidence that participating in dual enrollment increases the likelihood of attending and graduating from college. This seems reasonable since, as Noah found, dual enrollment helps students understand the college workload before they get there. Moreover, successful dual enrollment participation looks good on a high school transcript when applying to college.

Students who are interested in participating in dual enrollment can check with their local four-year or community colleges. There are also online options, which provide additional flexibility and access for students who have tricky schedules or don’t live near a college campus.