In an attempt to continue an existing scheme of protectionist quotas for theaters and television stations, European filmmakers have admitted that no one likes their movies. Right now, European countries like France require that a certain portion of movies shown to the public be of domestic or European origin. The possibility that a U.S.-EU trade agreement could end these quotas has prompted some European filmmakers to start an online petition acclaiming the virtues of cultural diversity.

The best part of the petition is the filmmakers’ claim that European civilization will fail without them:

The liberalisation of the audiovisual and film sector will lead to the destruction of all of what until now protected, promoted and helped develop European cultures.…

Those who, in the name of Europe, will have accepted this resignation will be forever guilty in the eyes of history. Cultural diversity must not be just another bargaining tool. It must remain an ambition, a legitimate demand, and a commitment.

It is not too late!

Let me paraphrase: If Europeans are allowed to consume our competitor’s product, Europe will cease to exist. I’m sure other domestic industries wish they could get away with claiming to be the guardian of national identity, though I’d be impressed if they could make it with a straight face. Maybe the U.S. automobile industry should give it a try.

In my 2008 paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” I wrote about where “internal enforcement” of immigration law leads: “to a national, cradle-to-grave, biometric tracking system.” More recently, I wrote “Internal Enforcement, E‑Verify, and the Road to a National ID” in the Cato Journal. The “Gang of Eight” immigration proposal includes a large step on that path to national identification.

National ID provisions in the 2007 immigration bill were arguably its downfall. Scrapping the national ID provisions in the current bill would improve it, allowing our country to adopt more sensible immigration policies without suffering a costly attack on American citizens’ liberties.

Title III of the “Gang of Eight” bill is entitled “Interior Enforcement.” It begins by reiterating the current prohibition on hiring unauthorized aliens. (What seems to many a natural duty of employers was an invention that dates back only as far as 1986, when Congress passed the Immigration Reform and Control Act. Prior to that time, employers were free to hire workers based on the skills and willingness they presented, and not their documents. But since that time, Congress has treated the nation’s employers as deputy immigration agents.)

The bill details the circumstances under which employers may be both civilly and criminally liable under the law and provides for a “good faith defense” and “good faith compliance” that employers may hope to use as shelter. The bill restates (with modifications) the existing requirements for checking workers’ papers, saying that employers must “attest, under penalty of perjury” that they have “verified the identity and employment authorization status” of the people they employ, using prescribed documents or combination of documents. Cards that meet the requirements of the REAL ID Act are specifically cited as proof of identity and authorization to work.

In addition, the bill would create a new “identity authentication mechanism,” requiring employers to use that as well. It would take one of two forms. One is a “photo tool” that enables employers to match photos on covered identity documents to photos “maintained by a U.S. Citizenship and Immigration Services database.” If the photo tool is not available, employers must use a system the bill would instruct the Department of Homeland Security develop. The system would “provide a means of identity authentication in a manner that provides a high level of certainty as to the identity of such individual, using immigration and identifying information that may include review of identity documents or background screening verification techniques using publicly available information.”

The bill next turns to expanding the E‑Verify system, requiring its use by various employers on various schedules. The federal government and federal contractors would have to use E‑Verify as required already or within 90 days. A year after the DHS publishes implementing regulations, the Secretary of Homeland Security could require anyone touching “critical infrastructure” (defined here) to use E‑Verify. She could require immigration law violators to use E‑Verify anytime she likes.

Employers with more than 5,000 employers would have to use E‑Verify within two years for all newly hired employees and employees with expiring temporary employment authorizations. Employers with more 500 or more employees would have an additional year, but the application of these requirements as to agricultural workers could take four years. Essentially all employers would have to use E‑Verify within four years to check the employment status of new hires.

The bill elaborately details how it intends the E‑Verify system to work, presaging thousands of pages of regulatory documents that employers will have to obey.

Knitting Together a National ID System

The American public detests the idea of a national ID, so no bill is going to straightforwardly create one. The authors of national ID systems continually deny the real import of what they are doing, and this bill is no exception.

Under the bill, section 274A(c)(8) of the revised immigration laws would say, “Nothing in this section may be construed to directly or indirectly authorize the issuance, use, or establishment of a national identification card.”

You can try, Congress. You can require government agencies to watch their language, and they will. But there is no honest denying that this is a national ID system.

Over years of work on this issue, I’ve recited the defining characteristics of a national ID in a way that is relatively simple but worth reviewing.

First, it is national. That is, it is intended to be used throughout the country, and to be nationally uniform in its key elements.

Second, its possession or use is either practically or legally required. A card or system that is one of many options for proving identity or other information is not a national ID if people can decline to use it and still easily access goods, services, or infrastructure. But if law or regulation make it very difficult to avoid carrying a card or using the system, this presses it into the national ID category.

The final “element” of a national ID is that it is used for identification. A national ID card or system shows that a physical person identified previously is the one presenting him- or herself on later occasions. (A Social Security Number is a national identifier, but it is not a national identifiction system because there is no biometric tie between the number and a person.)

So what do we have in the “photo tool” backed by a USCIS database of images, and in E‑Verify’s mandated use for every new hire in the country?

Why does the bill set aside a quarter billion dollars for grants to states in order to get access to “driver’s license information as needed to confirm that a driver’s license … confirms the identity of the subject of the System check”?

Why does the bill exempt state shaing of driver’s license photos from the Driver’s Privacy Protection Act?

And why does the bill spend a cool $1 billion on “fraud-resistant, tamper-resistant, wear-resistant, and identity theft-resistant social security cards,” exempting that spending from Pay-Go and other spending limits?

The photo tool and E‑Verify are a national system, uniform in their key elements (1). By using them to control access to employment, the government makes it practically required to be a part of this identity system (2). And there is no question that the photo tool and E‑Verify are for identification (3).

Title III of the Gang of Eight immigration is the path to a national ID.

There are many reasons to avoid a national ID, including their propensity to increase surveillance, the transfer of power they produce by giving governments and corporations a tool for tracking and control, and the experience of history. National ID systems’ administrative efficiencies have been applied to the awful things governments can do right along with the good things.

The bill tries to provide protections against that. It says that no agency or other entity may “utilize any information, database, or other records assembled under this subsection for any purpose other than for employment verification or to ensure secure, appropriate and nondiscriminatory use of the System.” But is that protection?

If you’ve ever seen a Social Security card that says “NOT FOR IDENTIFICATION,” you must understand mission creep. The Social Security number was meant to be solely for use in administering retirment benefits, and now it is our national identifier. If the national ID system created by the “Gang of Eight” immigration bill is not put to uses beyond employment control illegally, Congress can authorize that mission creep at any time simply by saying, “Section 274A(d)(9) is repealed.”

Today’s New York Times article by Senators Brown and Vitter (the preview of their much-touted “bank break-up” bill) starts with a very encouraging line: “governments shouldn’t pick economic winners and losers.”

Senator Brown, in particular, seems to have learned this important lesson fairly recently (auto bailout, anyone?). But putting this aside (and also ignoring the ongoing debate about the purported subsidy to large banking organizations, which should be eliminated, if it indeed exists), Senators Brown and Vitter display some disturbing, though not uncommon, misconceptions about U.S. and global banking. And, as is always the case, poorly understood and inaccurate facts create bad policy suggestions.

The first problem is the implicit assumption that large size and diversity of operations are negative traits. In fact, diversity is the key to managing risk in banking. Part of the reason why US banking has had such a checkered history relative to many other countries is because of its historical lack of geographical and product diversity – a result of the long-standing prohibitions on inter-state banking and branch banking and limitations on combining investment and commercial banking activities. One of the single biggest causes of the banking crisis in the late 1920s was a lack of geographical diversity (and, as congressional records show, States that prohibited branch banking fared the worst). Similarly, one of the primary causes of the 2008 financial crisis was a lack of asset diversity — too many banks holding too many securitized sub-prime mortgages.

Second, is the implicit assumption that investment banking and underwriting activity are inherently more risky than loan activities. Certainly, imprudent investment banking can be disastrous. So can making risky loans. And the 2008 crisis was, at its core, a loan origination problem (a fact largely ignored by Congress because of the uncomfortable questions it raises about the two GSE’s — Fannie and Freddie).

Third, is the belief that the 2008 bank bailouts were somehow linked to the FDIC deposit insurance scheme and that if we ‘narrow’ the safety net, all future bailouts will be avoided. I am no fan of federal deposit insurance, but the bailouts were unrelated to it. TARP was a Treasury creation, passed by Members of Congress under extraordinary circumstances. The only way to ensure it doesn’t happen in future is to rein in Congress and limit their ability to (in the words of Brown and Vitter) “pick economic winners and losers”.

As it turns out, the Brown-Vitter Bill is less about bank ‘break-up’ and more a U.S. variant of the FSB’s G‑SIFI surcharge – which raises the question why it is necessary at all, except to put the U.S.’s global banks at a disadvantage, even though they are already disproportionately affected by the surcharge. Brown and Vitter’s calls for higher capital requirements are not objectionable per se, but as the ongoing problems with the Basel Accord shows, the devil is always in the details. And if you get it wrong, you risk creating exactly the systemic problems — such as an excessive reliance on sovereign bonds or mortgage-backed securities — that you were trying to avoid.

Essentially, the only way to end the perception of a government backstop is to put in place a credible system to allow large firms to fail if they make poor decisions. To this end, the Brown-Vitter Bill doesn’t add anything except more confusion.

How much does the United States spend on the military relative to our allies? A lot. 

A new Cato video, produced by Cato multimedia gurus Caleb Brown and Austin Bragg, puts this comparison in perspective. The data jumps out of the Cato infographic from last week, and shows how we are subsidizing the security of our wealthy allies who can and should defend themselves. Instead, we provide for their security while they free-ride and spend their money on everything else (including bloated welfare states). Your tax dollars at work. 

Check out the video below.

Thomas Perez, the assistant attorney general for civil rights who personifies both the Peter Principle and this administration’s flouting of the rule of law, is due this week for a vote in the Senate Health, Education, Labor, and Pensions Committee on his nomination to be Labor Secretary. If senators who understand how destructive he is don’t do more than simply vote against him, they will have missed a key opportunity not just to stop a bad nominee, but to score easy political points too.

Quin Hilyer provides a useful recap of Perez’s nefarious dealings:

• Interference with the Supreme Court case of Magner v. Gallagher, getting the City of St. Paul to dismiss its appeal to prevent what would’ve been a sharp (and probably unanimous) rebuke to the federal government regarding its use of “disparate impact” racial theories in housing policy, to the detriment of minorities and poor people everywhere;
• Refusal to comply with subpoenas from the U.S. Commission on Civil Rights;
• Dismissal of the Justice Department’s already-won prosecution of the Black Panthers for voter intimidation during the 2008 election;
• Repeatedly stating and running a department dedicated to the proposition that voting rights and other civil rights law don’t protect white people;
• Willfully misleading and lying to Congress under oath several times;
• Racial abuse of the New York fire department, to the detriment of public safety and qualified minority applicants;
• Hiring for “career” (non-political appointee) slots only attorneys who have demonstrable left-wing credentials—making Alberto Gonzales’s politicized-hiring foibles look like the model of civil service administration;
• Trampling on religious liberties to the point that the Supreme Court unanimously rejected his arguments in Hosanna-Tabor v. EEOC regarding the “ministerial exception” to employment laws;
• Conducting government business from a personal email account as much as 1,200 times (!) and now refusing to comply with congressional subpoenas to release those emails; and
• Unrelated to him personally, being nominated to lead a cabinet department whose jurisdiction overlaps with an independent agency, the National Labor Relations Board, that was improperly constituted via illegal recess appointments and has continued to issue rulings even after the government lost its case unanimously at the D.C. Circuit.

About the only thing that The Talented Mr. Perez has going for him is that his performance at his confirmation hearing wasn’t the complete disaster that Defense Secretary Chuck Hagel’s was at his (a low bar). In short, if there is ever a reason not to simply defer to the president in his choice of cabinet members or to make political hay rather than simply have a quiet vote, this is it. 

Prior to the bombing and manhunt in Boston last week, Bruce Schneier pointed to an interesting interview with Rebecca Solnit, author of the book: A Paradise Built in Hell: The Extraordinary Communities That Arise in Disaster. She talks of a concept called elite panic.

The term “elite panic” was coined by Caron Chess and Lee Clarke of Rutgers. From the beginning of the field in the 1950s to the present, the major sociologists of disaster — Charles Fritz, Enrico Quarantelli, Kathleen Tierney, and Lee Clarke — proceeding in the most cautious, methodical, and clearly attempting-to-be-politically-neutral way of social scientists, arrived via their research at this enormous confidence in human nature and deep critique of institutional authority. It’s quite remarkable.

Summarizing her research, Soltis found a portrait elites paint of the public, to which they respond in times of crisis:

Part of the stereotypical image is that we’re either wolves or we’re sheep. We’re either devouring babies raw and tearing up grandmothers with our bare hands, or we’re helpless and we panic and mill around like idiots in need of Charlton Heston men in uniforms with badges to lead us. I think we’re neither, and the evidence bears that out.

There’s no denying the importance and value of investigating and capturing the perpetrators of the bombing, and I do not do so here, but elite panic seems to have been at play in Boston. 

The lockdown—technically voluntary, but tell that to the guy in the tank (HT: Bovard)—treated the public variously as suspects, sources of interference, or targets for display of governmental authority.

Who are the elites? How does their panic manifest itself? “Elite panic” is not a tight enough concept to declare affirmatively that Boston is its examplar, but the concept is worth having in mind. The resources and resourcefulness of civil society are great and entirely accessible in times of peril. They should not be pushed aside at these times—certainly not at the business end of a gun.

Last week, the American Federation of Teachers released a blacklist of financial asset managers that fund organizations supporting education reform and/​or switching from defined-benefit to defined-contribution pension systems, such as StudentsFirst, the Show-Me Institute and the Manhattan Institute. The report urges AFT affiliates to pressure pension fiduciaries not to invest their money with such asset managers. The AFT also makes a not-so-subtle threat to go after the donors to other think tanks and education reform groups:

This report is not intended as a one-time publication. Future versions will incorporate additional political organizations and their donors. The AFT is committed to shining a bright light on organizations that harm public sector workers, especially when those organizations are financed by individuals who earn their money from the deferred wages of our teachers.

This isn’t the first time the AFT has employed strong-arm tactics, but I find it hard to muster any outrage. As this report makes clear, the AFT’s mission is not about providing the best education for children, it’s about protecting the jobs of its members. It makes perfect sense that they wouldn’t want their money going to organizations that they perceive as working against their interests (whether that perception is accurate or not). If they would rather have lower returns on their investments, that’s their prerogative.

That said, if the AFT is going to be consistent and principled, they should support public-sector “right to work” legislation so that no one who wants to teach in public schools is forced to join a union and have their mandatory dues go toward a cause that they oppose. Moreover, the unions should end the practice of having state and local governments collect dues for them, essentially using state power and tax dollars to fund causes that some taxpayers, parents, and even teachers perceive as against their interests.

Of course, they’ll never do that. Without the use of coercion, the entire machine would fall apart.