As a young man, Winston Churchill took part in the Cuban War of Independence as a military observer and foreign correspondent. But, in 1954, after the coup against Jacobo Arbenz in a land in Cuba’s vicinity, he remarked: “I’d never heard of this bloody place Guatemala until I was in my 79th year.” Boris Johnson, the outgoing British prime minister, is Churchill’s admirer and biographer, but his interest in Latin America has been keener than that of his hero.

In 2018, Johnson became the first British Foreign Secretary to visit Argentina and Chile in over two decades, and Peru in half a century. Latin America, in fact, had received scant attention from frontbench Tories since the Falklands War. Johnson, however, considered that “there are realms of gold on either side of the Atlantic,” a Keats reference that spoke to the potential for free trade between the United Kingdom, the world’s fifth largest economy, and the emerging markets of Latin America.

The potential is due, of course, to Brexit, which Johnson helped to bring about in the 2016 European Union referendum. In turn, Brexit eventually brought Johnson to power and gained him an 80-seat parliamentary majority in the 2019 general election. Once outside the EU customs union, Britain gained the ability to enter, in Johnson’s words, into “unhindered and uncomplicated” free trade deals with nations across the globe. EU membership, on the other hand, had implied layer upon layer of protectionism against the outside world.

For Latin America, Brexit means the prospect of gaining access to a major European market without the rent-seeking restrictions of, say, the EU’s dirigiste Common Agricultural Policy. Latin American leaders have been slow to realize the opportunity at hand. One notable exception has been Uruguay’s current president, Luis Lacalle Pou, who met with Johnson at 10 Downing Street last May as he sought a free trade deal with Britain.

Uruguay, which leads South America in terms of per capita GDP, is a small country of 3.5 million people. Nonetheless, Lacalle’s initiative is significant because Uruguay belongs to the Southern Common Market (Mercosur), South America’s own version of a high tariff customs union that prevents its members— which also include Argentina, Brazil, and Paraguay— from trading freely with other nations on a bilateral basis.

Due to Lacalle’s insistence on liberalizing Mercosur, Argentina’s Peronist president, Alberto Fernández, suggested that Uruguay should exit the bloc. For his part, Lacalle said in 2021 that Uruguay no longer has time to wait for its Mercosur partners to trade with the rest of the world. Potentially, a UK-Uruguay trade deal— like the one Lacalle recently started to negotiate with China— could help break up Mercosur or lead to an improved version. This would provide a much-needed boost to free trade in Latin America, thus extending the Brexit dividend well beyond the Anglosphere.

Besides the British prime minister’s interest in trade with the region, he also has aimed his “Johnsonian wit” at Latin America’s despots and their first-world sympathizers. As Foreign Secretary in 2017, he said the following at the Conservative Party Conference about the then leader of the opposition, unabashed socialist Jeremy Corbyn:

…(his) response to the grisly events in Venezuela is to side with the regime simply because they are fellow leftists. He says he still admires Bolivarian revolutionary socialism. I say he’s Caracas.

In the House of Commons, Johnson mocked Corbyn’s refusal to agree to a general election in 2019 by referring to his adulation of Cuba’s late socialist gerontocrat:

(… ) maybe it’s because he’s been following the precepts of his intellectual mentor, Fidel Castro, whose adoring crowds used to serenade him, Mr. Speaker, with the cry of ‘¡revoluciones, sí, elecciones, no!’

As prime minister, Johnson betrayed many of his more libertarian instincts with lockdowns, furlough schemes, public spending hikes, and tax rises. None of this helped to prevent his recent demise at the hands of the parliamentary Conservative Party. But, as historian Andrew Roberts writes, Johnson was a transformative prime minister despite his brief term, especially for achieving Brexit and soundly defeating Corbyn.

A trained classicist, Johnson is well known for his love of Latin. As he leaves office, he also should be remembered for his open amicitia toward Latin America.

The whole idea of “core” inflation seems phony to most people ­– a poor excuse to make high inflation look better. How could anyone possibly leave costs of food and energy out of inflation measures? Don’t people have to eat and drive?

This objection is understandable and also correct for most purposes. Yet too broad a measure of inflation can be misleading and too ambitious when Federal Reserve officials allude to that statistic as a target and a rationale for manipulating key interest rates.

The trouble is that any “all-items” index of consumer prices will frequently exaggerate the typical or “underlying” trend of inflation – typically by being dominated by extreme swings up and down in global prices of energy and food commodities. This can make apparent “headline” inflation over the past 12 months dangerously misleading as a guide to future policy for the next 12 months.

The first graph compares year-to-year changes in the all-items PCE index (for personal consumption expenditures) with two alternative measures of the less-volatile core inflation rate. One is the Fed’s preferred Core PCE index from the Bureau of Economic Analysis (BEA). The other is the Trimmed-Mean PCE index from the Federal Reserve Bank of Dallas. The Trimmed-Mean index excludes the most extreme price increases and decreases to focus on more typical and less volatile price changes.

In the consumer price index (CPI), for example, airline fares rose 12.9% in May and fell 2.5% in June, though neither number could possibly indicate a trend. The Core CPI includes airline fares and other public transportation as “services less energy” despite their evident connection with global oil prices. But such big monthly swings in airline fares (or anything else) are excluded from the Trimmed-Mean PCE inflation as too volatile to be meaningful. Prices of dental services rose 1.9% in June after falling in April, which might also be too volatile and abnormal to be included.

The note uses two graphs to illustrate the practical necessity of focusing on trimmed-mean or core PCE inflation for timing Federal Open Market Committee (FOMC) decisions to raise and lower the federal funds rate (The FOMC has never raised the fed funds rate without lowering it before long). I plan to write a follow-up, offering more charts with variables that seem to better explain past federal fund rate cycles more clearly than core inflation – namely, employment or unemployment rates and crude oil prices.

The first graph begins with June 1983 and ends with May 2022 because this has been a period of relatively moderate core inflation compared with 1973–82. Specifically: Core inflation as measured by the Trimmed-Mean never exceeded 4% since June 1983 and never fell below 1.5%.

The most important thing to understand is that the long-run average of core or trimmed inflation is no lower than it is for the all-items PCE index. Since mid-1983, all three measures averaged the same 2.4% a year. A proper core price index does not make inflation look lower over time – only less erratic.

As the black line shows, the all-items measure of inflation did not just rise much higher than core measures half a dozen times (when oil prices spiked), it also fell much lower than core inflation in the following year or longer.

The trimmed-mean and PCE core inflation rates iron-out ephemeral peaks and valleys in headline inflation, leaving multi-year averages the same. That is what is meant by using core inflation to reveal the “underlying trend” – which was 2.4% for the last 39 years and most likely for future years as well (since it is such a well-established trend).

The second graph reaches back to 1978. It compares a smoothed 12-month trend of the Trimmed-Mean PCE inflation (the blue line) with the federal funds rate (in red) on the last of those twelve months.

Because each month’s inflation average includes 12 months, Federal Reserve officials knew whether core inflation had been speeding-up or slowing for about a year whenever they raised or lowered the federal funds rate (the core CPI was first reported in 1978).

If the most dramatic of many changes in the federal funds rate had been in response to previous ups and downs in core inflation, then we would expect to see the red line peak before the blue line began slowing down instead of years later, as it did in 1981–84. Also, we would not expect the federal funds rate begin to fall before 12-month core inflation had slowed, as it did in 1980, 1989, 2000 2008 and 2019.

The six rises and falls of the federal funds rate in second graph do not look like reactions to significant changes in core inflation. They look more like ineffective attempts at cyclical fine tuning. That is, the fed funds rate always rose before all recessions – even if core inflation was flat or falling. And the funds rate subsequently fell more quickly than core inflation during all recessions except one (February to June 1982).

The measures of core inflation in these graphs are based on the PCE index rather than the CPI. The CPI suffers fixed weights, which means the relative importance of items does not change with consumer behavior (gasoline remains just as important if people switch to telecommuting or EVs). The Core CPI is also too heavily dominated by lagging estimates of housing rents and rental equivalence which report last year’s contracts as this year’s inflation. And it includes airline fares among non-energy prices, though they are obviously affected by fuel costs.

The only comparative disadvantage of PCE inflation is that it comes out long after the CPI and, unfortunately, a few days after the next FOMC decision on interest rates.

Trimmed-Mean PCE inflation was 4% on a year-to-year basis in May, and PCE core inflation likewise rose at a 4% annual rate from February to May. That may sound low, but it is nearly double the average since June 1983. Trimmed-mean PCE inflation can and should be reduced to 2%, as the Fed suggests.

Much of what is included in core inflation reflects domestic markets and is therefore potentially affected by domestic financial conditions. The all-items CPI, by contrast, is mostly global and therefore dominated by foreign events like war and sanctions.

In May, the average 12-month CPI inflation was 8.8% in the EU and 9.6% for 28 countries in the OECD. The Fed did not cause that global infection and cannot cure it. Most of core inflation, by contrast, is home grown. Improved supply incentives and restrained growth of spending should be able to cut 4% core inflation in half without much problem, as we did from mid-1983 to 1998, with only a brief recession related to the Gulf War and (as always) a higher fed funds rate.

A new lawsuit by the Cato Institute could answer the question of whether the Supreme Court was wrong to accept assertions from former President Trump that his 2017 travel ban was based on security concerns, not animus against Muslims. Despite rescinding the ban, President Biden has still refused to disclose documents that Trump told the Court were the basis of his decision to ban immigrants from certain majority Muslim countries.

In a 5–4 decision, the Court’s majority found that the ban was based not on Trump’s open animus against Muslims, but instead on a Department of Homeland Security (DHS) report that supposedly detailed national security concerns. But the majority simply accepted this report as legitimate without ever seeing it. Indeed, DHS has allowed no one outside the Executive branch to see it.

After President Biden rescinded the ban—which he called “discriminatory”—I filed a Freedom of Information Act (FOIA) request on behalf of the Cato Institute for the DHS report. DHS ignored it, so now Cato is suing. It will be the first time Biden’s DHS will have to either justify keeping the report a secret from the public or else release it. Even if DHS refuses to release the report, the court can order it to do so.

Given that DHS’s new leadership labeled the ban “cruel” and “harmful,” DHS should have been forthcoming with the report that purportedly supported it. But not so far. DHS initially claimed not to be able to find the report. Cato appealed that determination and won, which should have forced DHS officials to look again. They chose not to, so now they will face Cato in court.

DHS has not said why it has not released the report, but it shouldn’t worry about being blamed for misleading the Supreme Court. The blame will fall exactly where it should: on Donald J. Trump. Lest anyone forget, it was Trump who instigated the Muslim ban. It was Trump who, in his words, “morphed” it into a ban on select majority-Muslim countries so he could blunt a constitutional challenge.

How did the Supreme Court ignore this back story and uphold the ban as constitutional? First, it adopted a laughably low bar, the so-called “rational basis test” under which courts would have accepted nearly any justification except perhaps for the one Trump stated initially: “Islam hates us.” And where did Trump find a suitable replacement for his initial justification? From the DHS report that the department still refuses to disclose.

The most discriminatory executive action taken against immigrants by any U.S. president, the Court’s opinion asserted, “reflects the results of a worldwide review.” The ban was purportedly “based on [the President’s] findings—following a worldwide, multi-agency review—that entry of the covered aliens would be detrimental to the national interest.” The justices refer to this review or report at least 16 times in their majority and dissenting opinions.

According to former President Trump, the DHS report reviewed the adequacy of the local vetting systems “in more than 200 countries.” DHS came up with a set of baseline requirements that every country must implement (e.g., having electronic passports), and then it purportedly compared each country against this baseline, banning those that failed the baseline requirements.

In response to a question by Justice Sotomayor during oral argument, Solicitor General Noel assured the Court that the president’s personal feelings had no effect on the process because DHS was able “to construct and apply this neutral standard to every country in the world.” In other words, the ban was just an objective application of neutral security criteria, not a fulfillment of Trump’s discriminatory campaign promise.

But the Supreme Court never verified that the DHS report did any of this, and we have at least two very good reasons to doubt the claim’s veracity. First, President Trump’s proclamation identifying the banned countries lists the nine baseline criteria that DHS’s report supposedly applied equally to every country. Under a neutral application of those criteria, however, dozens of other countries—including many non-Muslim countries—should have failed.

Second, although the justices never saw the actual report, they did know that it was just 17 pages. Did DHS analyze the vetting systems of more than 200 countries in 17 pages across nine security metrics as the president claimed? It certainly did not. Yet the majority justices said that they it would not question DHS’s “thoroughness” because “a simple page count offers little insight into the actual substance of the final report”—the very substance that DHS has sought to hide and Cato’s lawsuit now seeks to uncover.

This is not the first FOIA request DHS has rebuffed on this subject. When the Brennan Center in New York requested the same document in 2017, DHS acknowledged that it existed and was 17 pages. But the department asserted that the report was confidential and exempt from FOIA disclosure. To date, no court has issued a final decision in that case, and the Biden administration has never been made to respond to it. More importantly, now that it has repudiated the ban, DHS has no legitimate reason to continue hiding the requested documents.

If Donald Trump were to become president again, the Muslim ban could be quickly reimposed. Without the benefit of the report, no one challenging the ban—politically or legally—would be able to completely discredit the justification that Trump gave the court last time. DHS should reveal whether the former President misled the Supreme Court and, if so, how he did it, before it’s too late.

Harm reduction advocates, including myself, have long argued for reforming current federal policy regarding methadone medication assisted treatment (MAT) for opioid use disorder. In the U.K., Canada, and Australia, primary care practitioners have been prescribing take-home methadone to treat opioid addiction or dependence since the 1960s, and numerous pilot programs in the U.S. have found that the same approach can work successfully here.

The Drug Enforcement Administration (DEA) and Substance Abuse and Mental Health Services Administration (SAMHSA) regulate methadone outpatient treatment programs (OTPs) in the U.S. and, among the onerous regulations is the requirement that patients present to the clinic each day to receive oral methadone from a clinic staff member and swallow it in front of them. This policy is an outgrowth of the stigma long-attached to people addicted to some drugs—that such people are deceitful and manipulative and might use or sell take-home methadone. (Fortunately, people addicted to nicotine or alcohol do not suffer such distrust.)

It’s not hard to discern a problem with this approach. Methadone clinics can be few and far between and, in many cases, NIMBYism prevents clinics from proliferating. Patients seeking MAT must often travel several miles every day to stay on the program, an often-impossible demand. Yet the DEA has for years allowed primary care practitioners to prescribe take-home buprenorphine (a Schedule III opioid) for MAT.

Because of lockdowns and social distancing requirements during the COVID pandemic, in March 2020 SAMHSA permitted methadone clinics to dispense up to 28 days’ worth of take-home methadone to clinic participants as an emergency measure. In March of this year, citing “sufficient evidence to conclude that this exemption has enhanced and encouraged use of OTP services,” SAMSHA extended the take-home rule, and stated it is “considering mechanisms to make this flexibility permanent.”

Yesterday a National Institutes of Health news release reported on a study published the same day in JAMA Psychiatry by researchers led by the National Institute on Drug Abuse, National Institutes of Health, and the Centers for Disease Control and Prevention. They reported the emergency take-home methadone program “was not associated with harms” and “add[ed] evidence to support take-home treatment for opioid use disorder.”

In a recent blogpost I once again urged lawmakers to enact legislation permitting health care practitioners to prescribe take-home methadone to their patients with opioid use disorder. Such a measure would not only be supported by the evidence, but it would make methadone MAT much more accessible and practical for patients who need and seek help. To that end, Rep. Donald Norcross (D‑NJ) has introduced H.R. 6279, the Opioid Treatment Access Act of 2022, which has bipartisan support. While the measure is a step in the right direction, the bill has flaws.

For example, it only allows board certified addiction specialists to prescribe take-home methadone. In some regions of the country, such specialists are hard to find (there are only two in Wyoming). And primary care practitioners should be able to prescribe methadone—as they have been doing in the U.K., Canada, Australia, and in U.S. pilot programs—if the goal is to meaningfully improve access to MAT. Another drawback of H.R. 6279 is that it adheres to the SAMSHA criteria regarding the amount of take-home methadone that may be prescribed and the benchmarks that patients must meet to receive take-home methadone. Clinicians understand that no two patients are the same—that clinical contexts vary. Lawmakers must not tie their hands when they are treating their patients. Clinicians should be allowed to prescribe take-home methadone according to their best clinical judgment based upon individualized assessments of their patients.

While H.R. 6279 is a welcome step in the right direction, it needs improving. The new evidence showing take-home methadone is safe and effective will hopefully provide the impetus toward that end.

Last week saw the launch of a project in which several of us at Cato were closely involved. The National Constitution Center commissioned a set of three “Restoring the Guardrails of Democracy” essays on how best to strengthen the institutional basis of American democracy. The essays were developed by separate teams: Team Progressive, Team Libertarian, and Team Conservative.

Team Libertarian consisted of Cato colleagues Clark Neily and Ilya Somin and me. Team Progressive consisted of law professors Ned Foley of Ohio State and Franita Tolson of the University of Southern California, while Team Conservative consisted of Sarah Isgur, Jonah Goldberg, and David A. French, all of The Dispatch.

Each essay carried a group byline but it’s not amiss to point out that of the three sections in the Team Libertarian report, I handled the section on election law and procedure, Clark Neily the section on the role of the jury, and Ilya Somin the section on the benefits of “foot voting” and choice between governments.

One of the fun conditions of the project is that we did not in any way collaborate with the other teams or get an advance look at what they were going to argue in their essays. So some recommendations overlap between teams, others conflict, and yet others simply don’t engage. For example, Team Libertarian reached a similar conclusion to Team Progressive on reform of the Electoral Count Act, but a conclusion mostly opposite from theirs on whether government should seek to regulate false statements about elections.

Participant Ilya Somin of Team Libertarian, who teaches at George Mason/​Scalia law and is a Cato adjunct scholar, has already written both an overview and a followup post at Volokh Conspiracy on the project. You can also watch a video panel on the launch featuring Clark Neily, Ned Foley, and Sarah Isgur, with Jeffrey Rosen of NCC moderating. The Team Libertarian paper is also on SSRN. 

I expect I’ll have more to say in future posts, but first I want to spend more time reading the three essays in each others’ light. In the mean time, have a look and feel free to spread the word with your reactions. The three essays, again, are here: Progressive, Conservative, Libertarian.

At the House hearing at which I testified, Congressman Chip Roy (R‑TX) asked, “How many people immigrate to other countries each year?” Center for Immigration Studies’ Robert Law—former chief of the Office of Policy and Strategy for U.S. Citizenship and Immigration Services—told him that the United States grants more green cards than “the rest of the world combined.” Fortunately, I was able to respond and explain that this is wildly inaccurate. The United States definitely does not permit more immigration than the rest of the world combined, and it is not close.

At the time, I explained that at least ten times more immigrants went to other countries than went to the United States during the most recent 5‑year period available, but new numbers from the United Nations (UN) show that even this figure was too generous to the United States. From July 2019 to July 2020, the UN estimates that the United States accounted for none of the growth in the global immigrant population: 0 percent of the net increase of 9 million immigrants worldwide were immigrants in the United States in 2020. According to the UN estimates (using Census Bureau data), the U.S. immigrant population stopped growing altogether from July 2019 to July 2020.

Figure 1 shows that in the 1990s, the U.S. did account for the majority of the growth in the world immigrant population (defined, for consistency across countries, as people living outside their birth country). From 1990 to 1995, nearly two-thirds (63 percent) of the growth in the global immigrant population came from U.S. immigrant population growth. From 1995 to 2000, it was 52 percent. It then dropped to a quarter from 2000 to 2005. By 2015 to 2020, it was down to 7.5 percent. But from 2019 to 2020, the United States stopped being a net contributor to world immigrant population growth.

Figure 2 shows the net increase in immigrants worldwide and the net increase in immigrants in the United States during each period since 1990. The increase in immigration outside of the United States was the main contributor to the decline in the U.S. share of global immigration. However, U.S. immigrant population growth also declined in absolute terms from a high of nearly 6.4 million from 1995 to 2000 down to 2.5 million from 2015 to 2020 (and a negative roughly 30,000 from 2019 to 2020).

The UN uses a slightly different definition of an “immigrant” than the U.S. Census Bureau. In order to allow for comparisons between countries that have different citizenship rules, the UN includes all people born outside of the country, even though some of those people may receive citizenship at birth, either by being born citizen parents or in an overseas territory. It also treats people born in territories as immigrants if they move to a home country (and vice versa). But these differences do not change the overall picture: accounting for them increases the U.S. share of global immigrant population growth by only about a half a percentage point.

It is also true that the UN data only measure the net increase in the immigrant population—that is, inflows minus outflows—not just the gross inflow of immigrants to the United States or worldwide. The UN does not have comprehensive data on flows of immigrants, but the Organisation for Economic Co-operation and Development (OECD) does have data on flows for 37 countries from 2016 to 2019. These data show that the United States accounted for just 12 percent of the immigration flow among those countries in 2019, and that is without data for more than 150 countries including the Gulf States which lead the world in foreign-born share of their populations.

Robert Law did specify that he was talking specifically about permanent residents. But even if we limit this analysis, the United States does not come close to a majority of the flow of legal permanent residents worldwide. In fact, in 2020, U.S. immigrants accounted for just 14 percent of immigrants becoming permanent residents in just the OECD—down from 27 percent in 2009. At no point during this time did the U.S. share ever approach a majority of all permanent residents. Again, this dataset leaves out more than 150 other countries. The U.S. share of total legal permanent immigrants is almost certainly well below 10 percent worldwide.

The new data from the UN shows that the United States does not permit more immigration than the rest of the world combined. Indeed, the United States ranks low in terms of net immigration and foreign-born share of the population compared to other wealthy countries, and it is losing the race for talent around the world. Other countries are increasing immigration, and the United States has gone the opposite direction. Congress and the administration need to seize the opportunity to change this dynamic.

Unsurprisingly, airline fares generally rise and fall with jet fuel prices which, in turn, mirror global crude oil prices. Yet airline fares are part of the “core” Consumer Price Index (CPI), which supposedly excludes food and energy.

Futures prices for crude oil and grain have soared since last December when Russia began to amass troops around Ukraine. That rise in global commodity prices, in turn, has greatly increased costs of producing and distributing everything from plastics to fertilizer and meat. And, of course, so-called “core” transportation services, such as airfares.

In the CPI, airline fares rose 34.1% over the past 12 months, while energy prices rose by 41.6% and gasoline prices by 59.9%. All those prices reflect the impact of war and sanctions on global scarcity and soaring prices for oil and natural gas.

The core CPI excludes only gasoline, fuel oil, propane, kerosene, firewood and home electricity and gas bills. But that narrow list leaves many indirect energy costs in the core measure, such as airfare.

As former Fed Vice-Chair Alan Blinder noted, “food and energy prices seep into virtually all other prices, albeit in muted form. What product doesn’t include energy in its cost, either directly (to keep the lights on) or indirectly (via delivery trucks)?”

Airline fares in the CPI rose 12.9% in the month of May, then fell 2.5% in June. A proper measure of core inflation, such as the Dallas Fed’s Trimmed-Mean PCE inflation, would strip out both of those extreme monthly gyrations. But the core CPI does not.