Next week trade officials representing the more than 150 members of the World Trade Organization will gather in Geneva for a ministerial meeting. Most of the agenda will be a snoozer. The Doha Round is stuck in neutral, with no compromises in sight on agricultural protection, services trade liberalization, or anti-dumping reform. But one item of business will mark a major milestone: the admission of Russia into the club of trading nations.

As I argue in a Washington Times column this morning, and in a Cato Free Trade Bulletin co-authored with Douglas Petersen and released this week, Russia’s entry into the WTO will help to bring more rule of law to the former communist nation. It will also open its market further to U.S. exports, especially civilian aircraft, heavy machinery, computer software and hardware, and beef and poultry.

Approval by WTO members is a near certainty, but what remains an open question is whether the U.S. Congress will grant Russia permanent normal trade relations (PNTR). This will determine whether U.S. companies are granted the more favorable access to Russia’s market offered to other WTO members once it joins the organization. If Congress does not grant PNTR, Russia will join the WTO anyway, but U.S. companies will be at a competitive disadvantage.

In coming weeks, Congress will have an opportunity to welcome one of the world’s largest economies into the rules-based global trading system—and benefit the struggling U.S. economy in the bargain.

I wrote on Monday that a cybersecurity bill overwhelmingly approved by the House Permanent Select Committee on Intelligence risks creating a significantly broader loophole in federal electronic surveillance law than its boosters expect or intend. Creating both legal leeway and a trusted environment for limited information sharing about cybersecurity threats—such as the idenifying signatures of malware or automated attack patterns—is a good idea. Yet the wording of the proposed statute permits broad collection and disclosure of any information that would be relevant to protecting against “cyber threats,” broadly defined. For now, that mostly means monitoring the behavior of software; in the near future, it could as easily mean monitoring the behavior of people.

A recent—and somewhat sensationalistic—Fox News article rather breathlessly describes a newly-unveiled security system dubbed PRODIGAL, or Proactive Discovery of Insider Threats Using Graph Analysis and Learning, which “has been built to scan IMs, texts and emails … and can read approximately a quarter billion of them a day.” The article explains:

“Every time someone logs on or off, sends an email or text, touches a file or plugs in a USB key, these records are collected within the organization,” David Bader, a professor at the Georgia Tech School of Computational Science and Engineering and a principal investigator on the project, told FoxNews​.com.

PRODIGAL scans those records for behavior — emails to unusual recipients, certain words cropping up, files transferred from unexpected servers — that changes over time as an employee “goes rogue.” The system was developed at Georgia Tech in conjunction with the Defense Advanced Research Projects Agency (DARPA), the Army’s secretive research arm that works on everything from flying cars to robotic exoskeletons.

Don’t panic just yet: This is strictly being deployed on the networks of government agencies and contractors that handle sensitive information—places where every employee is well aware that their use of the network is subject to close scrutiny, and with good reason. There’s not really anything to say in principle against the use of such systems in this context, or for that matter on closed business networks where users are on clear notice that such monitoring occurs.

It would, by contrast, be a clear and quite outrageous invasion of privacy for such large-scale behavioral monitoring to be conducted on the residential or mobile broadband networks Americans rely on to provide their personal Internet connectivity—a fortiori if the goal is to share the results with the government without a court order. As I read it, however, House Intel’s cybersecurity bill would at least arguably permit precisely that.

Under the current language, as long as an Internet provider had a credible good faith belief that it was collecting and sharing behavioral information for one of several broadly defined “cybersecurity purposes”—say, by creating behavioral profiles of potential hackers, disruptive cyberactivists, or “misappropriators” of intellectual property—they’d enjoy full civil and criminal immunity for such actions. That would make any contractual promises to abstain from such monitoring unenforceable—in the highly unlikely event that ordinary users were even able to determine reliably what sort of information was being shared. It would be, to put it as mildly as possible, extraordinarily poor civic hygiene to enable the construction of this kind of quasi-public/quasi-private monitoring and profiling architecture.

This is not, I believe, the sort of thing the bill’s own architects aspire to bring about. But the abstract language employed in pursuit of technological neutrality here avoids the risk of obsolescence only by sacrificing predictability. Courts have recently begun signalling that they’re belatedly inclined to start insisting on full Fourth Amendment search warrants whenever government seeks digitally stored private contents, closing down statutory loopholes that sometimes gave investigators easier access. And now, just as one backdoor closes, a new backchannel granting access to otherwise private and protected material without any judicial process opens up? It does not take a cynic to predict that there will be a potent and persistent incentive to stretch any such channel as wide as the elastic bonds of the English language will permit.

The cleanest way to foreclose this is not to paste in a bunch of after-the-fact usage controls, minimization protocols, or special reports to Congress—though those aren’t bad ideas either. It’s to admit that Congress lacks psychic powers, which may entail that statutes regulating protean areas of technology have to be (or ought to be) swapped for the newer model about as often as iPhones. The specific, narrow categories of sharing everyone thinks are important and unobjectionable from a privacy perspective can be specifically, narrowly authorized now. In a decade, when we’re beaming thoughts directly to each other via quantum-entangled biomechanical brain implants, we can decide what specific statutory language solves the novel security problems of that technology, in a manner consistent with the Fourth Amendment.

Writing in today’s Washington Post, Charles Lane posits that the time is now for the U.S. Treasury to divest of its remaining 500 million shares of General Motors stock. I agree with that conclusion, but not with Lane’s rationale or his recommendation for a heavy-handed, government-imposed exit strategy.

Just to recap: the Treasury recouped $23 billion of taxpayers’ $50 billion outlay when it sold GM shares to the public in an IPO in November 2010; the outstanding 500 million shares in government coffers must be sold at an average price of $54 to recover the remaining $27 billion; the IPO price was $33; today’s price is $21.69. If all 500 million shares could be sold at today’s price, the Treasury would raise $10.8 billion, leaving taxpayers at a loss of just over $16 billion. (Of course, the sale of such a large number of shares would drive the average selling price way below today’s price, resulting in a much larger taxpayer loss.)

Lane is correct to conclude that GM’s immediate future isn’t looking quite so rosy. Demand is tanking in Europe. Concerns remain about whether GM will continue to be able to fund its $128 billion pension plan. And sales of the “game-changing” Chevy Volt have been lagging since the vehicle’s commercial introduction some 13 months ago—well before its engines demonstrated an annoying propensity to spontaneously combust. (Not to worry, says GM’s public relations team: the engines don’t seem to catch fire while being driven, only an hour or two after they’ve been parked in the garage.) Recognizing that that qualifier hasn’t been reassuring enough, GM is now offering to buy back any Chevy Volt it has ever sold, which doesn’t bode well for the bottom line, but also affirms how few of these Government Motors show pieces have even sold.

That grim analysis is the basis for Lane’s preference for government divestment now. There is more downside risk than upside potential. It is an argument based on market-timing, rather than on the principle that bad things happen when the government has a stake in the outcome of a race that it can influence. Sure, the administration would love to divest of GM at a profit to taxpayers. But the longer it is allowed to wait for that train to arrive, the greater the temptation to grease the skids.

The government should divest now. It should have divested in June, when it was first legally permissible to do so. But the administration (following, by logic, what would have been Lane’s advice at the time) rolled the dice, expecting the stock value to rise. Instead it fell. And then there was this.

But my bigger problem is with Lane’s proposal for a managed divestment. He writes:

It’s time to cut our losses. Treasury should start selling its stake in GM.

And I know just the buyer: GM. The company is sitting on more than $33 billion in cash, about triple the market value of Treasury’s 500 million shares, which is roughly $10.8 billion.

Though GM wants to dedicate much of its cash to shoring up its pension plan, it could still absorb most or all of Treasury’s shares, even if Treasury charges a modest premium over the current market price, as it should.

Lane proposes this under the guise of some perverse fealty to a “free-enterprise economy,” as it would spare shareholders from the stock price-depressing impact of an unnatural 500 million share dump. But those shareholders knew the risks they were taking when they purchased GM stock in the first place. They certainly knew that the largest single shareholder didn’t intend to hold its position for very long. Lane’s argument for protecting those shareholders in the name of free-enterprise in unconvincing, if not misplaced.

Furthermore, Lane’s zeal for sticking it to GM seems to eclipse any real commitment to free markets. Forcing GM to divert resources from where management wants to commit them in order to achieve some favorable political outcome (a smaller taxpayer loss) is just as coercive as some of the administration’s actions on the road to GM’s nationalization in the first place.

GM should not be entitled to any favors or exceptional treatment by virtue of its ownership structure. To be certain of that, it should be 100 privatized yesterday. But likewise, GM should not be subject to compensatory or otherwise countervailing policies designed to punish or remove any perceived advantage. For starters, it is impossible to measure the benefits received or the penalties suffered with any precision. Demanding that GM not be exposed to special treatment goes in both directions.

The issue of border security has made its way into the 2012 GOP presidential race and candidates are jockeying to separate themselves from the pack. The topic garnered some attention at the Republican national security debate on November 22. An Associated Press story today examines the candidate’s platforms on the topic and as the title implies, rightly concludes securing the border is impossible. I am quoted in the article and make exactly that point:

Mitt Romney and Newt Gingrich have promised to complete a nearly 1,950-mile fence. Michele Bachmann wants a double fence. Ron Paul pledges to secure the nation’s southern border by any means necessary, and Rick Perry says he can secure it without a fence — and do so within a year of taking office as president.

But a border that is sealed off to all illegal immigrants and drugs flowing north is a promise none of them could keep.

“Securing the border is a wonderful slogan, but that’s pretty much all it is,” said Ted Galen Carpenter, a senior fellow at the libertarian Cato Institute. “Even to come close would require measures that would make legal commerce with Mexico impossible. That’s an enormous price for what would still be a very leaky system.”

The bottom line is the border is simply too big to control. Attempting to fully police the border must pass a simple cost-benefit analysis, and it is not clear that our current policy passes that test. And yet, the candidates all agree securing the border is necessary to combat terrorism, illegal immigration, and drug violence stemming from Mexico.

The candidates have little reason to reexamine that assumption. Not only is it politically advantageous to call for securing the border, but it is a convenient one-size-fits-all solution to those three broader policy issues. They have calculated that this is what voters want to hear.

But it is an illusory solution. Laws protecting the border must exist and be enforced, but it is not clear that this alone, even if done more effectively or efficiently, will prevent terrorists or illegal immigrants from entering the United States. And the “securing the border” panacea certainly will not end the flow of drugs into the United States.

Curiously, while the GOP candidates all express worries about terrorism and illegal immigration, the subject of the war on drugs has hardly been discussed. Although drug violence in Mexico is the only major security problem the Untied States faces on any of its borders, the issue has not produced serious consideration thus far. Rep. Ron Paul (R‑TX) has been the only candidate to offer a thoughtful, consistent approach the issue, calling for an end to the failed policy.

The candidates should be pressured to answer why Washington continues to spend billions of dollars to wage the war on drugs each year with little to show for it. The power of the drug cartels has reached the point that the Mexican government no longer controls some areas of the country. And there are worrying signs that the violence is beginning to bleed across the border into the United States.

Our prohibitionist efforts have failed and a new policy is needed. Only by removing the lucrative black-market drug trade and thus effectively defunding the Mexican drug cartels can we begin to end the violence and illegal activity that plagues Mexico and the southern U.S. border region.

That is the substantive discussion that should be taking place in the GOP debates, rather than the posturing and repeated faux policy prescriptions to secure the border.

Today AEI’s Rick Hess and Stanford’s Linda Darling-Hammond—two folks who don’t always see eye to eye—have a New York Times op-ed that decries federal micromanagement in education, then lays out four things they think Washington should do.

If only they’d stopped at lamenting micromanagement.

Let’s take their four should-do’s in order:

First is encouraging transparency for school performance and spending. For all its flaws, No Child Left Behind’s main contribution is that it pushed states to measure and report achievement for all students annually.…To track achievement, states should be required to link their assessments to the National Assessment of Educational Progress (or to adopt a similar multistate assessment). To shed light on equity and cost-effectiveness, states should be required to report school- and district-level spending…

This sounds great, but the key is in the doing, and there is precious little evidence Washington can force real transparency. NCLB is exhibit A: Yes, the law required states to break out data for all students and numerous subgroups, but the underlying information was essentially a lie, with states setting very low performance thresholds and calling it “proficiency.” And despite what many NCLB supporters will tell you, when you break down NAEP data—as I have done—there is little support for the notion that traditionally underperforming groups, or anyone else, have done better with NCLB than without it.

How about requiring common standards, both for academics and spending?

Even if you started with excellent, challenging academic standards, they would quickly be gutted at the behest of teacher unions, administrator associations, and probably even parents if many kids and schools didn’t meet them and were punished as a result. We’ve seen it many times, and there’s nothing about being federal that inoculates government against concentrated benefits and diffuse costs; the people most directly effected by a policy having the greatest political power over it. And financial data? As Adam Schaeffer has found, there are countless ways to hide the truth about district finances, and there’s little reason to believe that Washington will be either willing or able to sustainably force clarity.

One last thing: Where in the Constitution is the federal government authorized to demand “transparency”? Nowhere.

Second is ensuring that basic constitutional protections are respected. No Child Left Behind required states to “disaggregate” assessment results to illuminate how disadvantaged or vulnerable populations…were doing. Enforcing civil rights laws and ensuring that dollars intended for low-income students and students with disabilities are spent accordingly have been parts of the Education Department’s mandate since its creation in 1979.

Here there’s a slight connection to the Constitution: under the Fourteenth Amendment Washington has the duty to ensure that states and districts do not discriminate. But the presumption underlying what Darling-Hammond and Hess argue—that test data can reveal discrimination—is dubious. Can and should disparities in group scores really be laid exclusively at the feet of schools, districts, and states? Aren’t myriad factors involved in academic outcomes, many of which are outside the control of government?

Third is supporting basic research. While the private market can produce applied research that can be put to profitable use, it tends to underinvest in research that asks fundamental questions. When it comes to brain science, language acquisition or the impact of computer-assisted tutoring, federal financing for reliable research is essential.

We hear this one a lot, and in theory it makes some sense: people won’t risk their money on research that has no discernable payoff. The problem is few people ever contemplate the full cost of government funding “basic” research, or the unintended consequences.

The main concern is that putting money into things with no discernable payoff might yield just that—no payoff. So we hear about successes—government got us to the moon!—but rarely about how much has been lost in failed efforts. People don’t shy away from funding basic research just because they’re shortsighted. It’s also because they factor in risk.

Then there’s this: while we would like to think that all scientists are superhumanly selfless, they are not. They are as self-interested as the rest of us. Perhaps that’s why Austan Goolsbee—yes, Obama administration Austan Goolsbee—found in 1998 that much government R&D funding translated not into more breakthroughs, but higher wages for researchers.

What about the presumption that private markets wouldn’t put money into “brain science” or new tutoring techniques? Highly dubious. Education companies would have strong incentives to invest in research that could make them more efficient and effective because that would increase their profit margins. The problem is, it is almost impossible to run for-profit schools in the United States, which can’t meaningfully compete against “free” government schools. In Chile, however, we see burgeoning evidence that profit can lead to greater scale—which is crucial for research—and better outcomes.

Of course, there’s nothing in the Constitution authorizing the feds to finance research.

Finally, there is value in voluntary, competitive federal grants that support innovation while providing political cover for school boards, union leaders and others to throw off anachronistic routines.

Again, sounds good, but as Hess and Darling-Hammond themselves admit:

The Obama administration’s $4.35 billion Race to the Top competition tried to do some of this, but it ended up demanding that winning states hire consultants to comply with a 19-point federal agenda, rather than truly innovate.

It’s easy to say that Washington should enable district and union leaders to ignore political concerns, but federal policy is as much government policy as state and local, and government at all levels is a creature of politics. Government and politics cannot be separated, and to expect one governmental level to be above politics while the others are below it is, to say the least, extremely optimistic. And again, there’s no constitutional authority to issue education grants.

Darling-Hammond and Hess are right that Washington has meddled far too much in education. They are on thin ice in asserting that different meddling will work much better.

“What we obtain too cheap,” Thomas Paine famously wrote, “we esteem too lightly”—and it turns out that the converse holds true as well. It’s a well known and robustly confirmed finding of social psychology that people tend to ascribe greater value to things they had to pay a high cost to obtain. So, for instance, people who must endure some form of embarrassing or uncomfortable hazing process or initiation rite to join a group will report valuing their participation in that group much more highly than those admitted without any such requirement—which is one reason such rituals are all but ubiquitous in human societies as a way of creating commitment. Studies suggest that people are more likely to read automobile reviews after purchasing a new car than before—suggesting that people are sometimes less concerned with spending money in the most judicious fashion than with convincing themselves, after the fact, that they have done so. More morbidly, relatives of soldiers killed in action sometimes become much more fervent supporters of the war that cost them a loved one—because the thought that such a grave loss served no good purpose is too much to stomach.

I suspect that this phenomenon may help explain the dispiriting state of affairs described by an airline industry insider in an important Wired piece on airport security. The short version: we’ve spent some $56 billion on “enhancing” airport security over the past decade, with almost no actual security enhancement to show for it. We’re spending huge amounts of money and effort on burdensome passenger screening that doesn’t seem very effective, while neglecting other, far more vulnerable attack surfaces. It is, when you think about it, a somewhat strange priority given the abundance of highly vulnerable domestic targets. Reinforced cockpit doors and changed passenger behavior pretty much made a repeat of a 9/11-style suicide hijacking of a domestic flight infeasible—at negligible economic and privacy cost—long before we started installing Total Recall style naked-scanners, which makes explosives the real remaining risk. Yet the notable bombing attempts by passengers we’ve seen since 9/11 have (a) originated outside the United States, and (b) been foiled by alert passengers after the aspiring bomber slipped through the originating country’s formal screening process.

This shouldn’t be terribly surprising: when a terror group has already managed to get an operative into the United States, a domestic flight (that can’t be turned into a missile) would be one of the stupider, riskier targets to select, given the enormous array of much softer target options that would be available at that point, even assuming pre‑9/​11 airport security protocols. As far as I’m aware, the last time a passenger successfully detonated a bomb on a U.S. domestic flight was in 1962. This presents something of a puzzle: Why have we focused so disproportionately on this specific attack vector, at such disproportionate cost, when the terrorists themselves have not? Why haven’t we reallocated scarce resources to security measures (such as better screening of airline employees) that would provide greater security benefit at the margins? One possibility is that, having accustomed ourselves to submitting to the hassle and indignity of ever more aggressive passenger screening, we become more disposed to believe that these measures are necessary.

It’s become commonplace to refer to many aspects of airport screening—the removal of shoes, the transparent plastic baggies for your small allotment of shampoo—as “security theater.” Security guru Bruce Schneier coined the term to refer to security measures whose ritualistic purpose is to make passengers feel safer, even though they do almost nothing to actually increase safety. But on reflection, this seems wrong. It probably holds true in the immediate aftermath of a high-profile attack or disaster. Once the initial heightened fear subsides, however, these visible and elaborate security measures probably do more to increase our perception of risk than to assuage our fears. It is, after all, something of a cliche that hyperprotective parents tend to end up raising children who see the world as a more dangerous place. Overreacting to childhood illnesses is one reliable way of producing adult hypochondriacs down the road.

Security theater, then, isn’t only—or even primarily—about making us feel safer. It’s about making us feel we wouldn’t be safe without it. The more we submit to intrusive monitoring, the more convinced we become that the intrusions are an absolute necessity. To think otherwise is to face the demeaning possibility that we have been stripped, probed, and made to jump through hoops all this time for no good reason at all. The longer we pay the costs—in time, privacy, and dignity no less than tax dollars—the more convinced we become that we must be buying something worth the price. Hence, the Security Theater Cycle: the longer the ritual persists, the more normal it comes to seem, the more it serves as psychological proof of its own necessity.

The House passed a bill last week eliminating the Presidential Election Campaign Fund, which the Tax Foundation calls a “voluntary tax that stirs little enthusiasm.” It would also save a whopping $14 million by eliminating the Election Action Committee and transferring certain functions to other federal agencies.

The Republican-sponsored bill passed on a straight party-line vote with the exception of Rep. Walter Jones’ (R‑NC) no vote. Eliminating the fund would result in the transfer of $200 million to the U.S. Treasury for deficit reduction. From a fiscal standpoint, $200 million in deficit reduction isn’t even worthy of a yawn. And based on press reports, floor debate centered on whether Republicans were really just trying to disenfranchise Democratic voters. Seriously, didn’t the GOP leadership have anything more substantial to bring to the floor?

I went looking for bills introduced in the House that would eliminate programs. The conservative Republican Study Committee’s Sunset Caucus has a list of bills sponsored by their members that would cut spending (see here). Although there are some worthy bills that the GOP leadership ought to at least get to the floor, I wasn’t overwhelmed by the offerings.

One that did look particularly good is a bill from Rep. Duncan Hunter (R‑CA) that would “eliminate ineffective and unnecessary federal education programs.” I’d say that describes the entire Department of Education. However, as soon as I saw the bill’s title – The Setting New Priorities in Education Spending Act – I immediately knew that it would be a joke. Sure enough, the Congressional Budget Office’s scoring of the bill shows that I was, unfortunately, correct:

H.R. 1891 would amend the Elementary and Secondary Education act of 1965 to eliminate more than 40 discretionary grant programs. For 2011, the Department of Education allocated $413 million in funding from amounts appropriated in the Department of Defense and Full-Year Continuing Appropriations Act, 2011 (P.L. 112–10) to programs that would be eliminated by H.R. 1891. Under current law, however, the funds allocated to those programs may be used for other grant programs that would not be eliminated by the bill.

Because annual appropriations to the Department of Education can be used for other programs, enacting the bill would not have a significant effect on spending from the appropriation provided for 2011. Furthermore, the authorizations for all of the programs specified in the bill have expired, so CBO estimates the bill would have no impact on such authorization levels. However, savings would accrue – as compared to 2011 appropriations levels – if the total amounts provided in 2012 and subsequent years are lower than the current-year funding for the department.

Note to Duncan Hunter: Why bother?