The Cato 2019 Welfare, Work, and Wealth National Survey finds that a growing majority—64%—of Democrats have favorable views of socialism, up from 53% in 2012. Only 45% of Democrats have a positive view of capitalism, down from 55% in 2012. Instead, today a majority (54%) of Democrats have negative views of capitalism.

Full survey results and report found here.

In contrast, majorities of Republicans and independents have favorable views of capitalism and unfavorable views of socialism. But Republicans are considerably more favorable toward capitalism than independents by a margin of 77% to 52% and more unfavorable toward socialism, 85% vs. 58%.

Democrats Turn Against Capitalism and Toward Socialism during the Trump Era

Survey data over time reveals that Democrats began turning against capitalism and toward socialism during the Trump era. Historical Gallup surveys show that Democrats were about equally favorable toward socialism and capitalism in 2010 (53% vs. 53%), 2012 (55% vs. 53%), and 2016 (58% vs. 56%). After the 2016 election, however, Democratic support for capitalism started to lose out to socialism. By 2018, Gallup found 57% of Democrats had a favorable view of socialism while fewer (47%) had a favorable view of capitalism. The Cato survey conducted in 2019 finds the gap widening with 64% of Democrats who have favorable views of socialism and 45% who have favorable views of capitalism. Republicans, on the other hand, have remained resolutely in favor of capitalism and opposed to socialism since at least 2010.

50% of Democrats Say Trump Has Soured Their View of Capitalism

Attitudes toward Donald Trump may have something to do with changing Democratic opinions. Fully 50% of Democrats say that President Trump has made them “like capitalism less,” while 44% say he has had no impact on their perceptions. In contrast, majorities of independents (76%) and Republicans (64%) say Trump has not influenced their views either way.

Given that 90% of Democrats have an unfavorable view of the president, they may have lost confidence in an economic system that seemed to benefit Trump, a billionaire businessman.

Read more of the survey report here.

The Cato Institute 2019 Welfare, Work, and Wealth Survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online March 5 to 8, 2019 from a representative national sample of 1,700 Americans 18 years of age and older. The margin of error for the survey is +/- 2.2 percentage points at the 95% level of confidence.

America’s divisive, deleterious culture war started long before January 20, 2017. But during the presidency of Donald Trump, a new front in that war was opened over the question of the future of America’s role in the world. After 70-plus years as the chief architect and underwriter of the liberal post-war order, which continues to produce relative peace and prosperity, the United States—under Trump’s stewardship—has ushered in a period of doubt about the propriety and efficacy of continuing those arrangements.

In a speech today at the United Nations, Trump reiterated fealty to his America-first “doctrine,” leaving little doubt that U.S. support (financial, moral, and otherwise) for institutions, such as the World Trade Organization, the World Bank, the International Monetary Fund, the United Nations, and other consensus-driven organizations predicated on cooperation among nations can no longer be relied upon. These institutions aren’t perfect and can afford some reforms, but Trump is departing significantly from U.S. foreign and international economic policies under Democratic and Republican administrations going back to Harry Truman’s.

Certainly, times have changed and there were never any guarantees that the institutions established after the war would endure—even for as long as they have. But before a critical mass succumbs to Trump’s plausible-sounding arguments that the United States (and all other countries) would thrive if it repudiated international institutions of cooperation and turned inward, consider that the America-first, protectionist, nationalist narrative that Trump has tapped into is nothing new. It has been around, lurking under the surface for many decades, occasionally finding expression in the rhetoric of a populist office seeker here and there. But that narrative is laced with misreads and inaccuracies. It is premised on the idea that, unlike global hegemons of previous centuries, the United States has been this benevolent giant, always acting selflessly and generously.

The United States lent a hand to the victims and the vanquished of the 20^th century’s worst conflagration. Americans provided the material and wherewithal to rebuild Europe and Japan after the War. We provided resources under the Marshall Plan. We provided a nuclear umbrella, which enabled Europe and Japan and others to focus their own resources on rebuilding their industries, their economies, and their political and civil societies.

Europe and Japan rebuilt. They rebuilt their industries; they rebuilt their infrastructure; they created social welfare systems; and (in the eyes of Trump and his fellow nationalists) they had the gall to start competing with U.S. producers, while maintaining relatively high tariffs in their own markets. All along the way, they never so much as thanked us. 

Trump and his fellow nationalists might argue that the world has been ungrateful. They might argue that the world has taken advantage of the United States, that the United States has impeded its own development and potential by making prosperity accessible to others. Trump says: No longer will that be tolerated. Those trade deficits we’ve allowed to accrue over the years? No more! Those rules—under the General Agreement on Tariffs and Trade and the World Trade Organization—that we put forward and foolishly agreed to live by ourselves? No more. At least, no more without major changes that tilt the playing field in favor of the United States so that we can begin to recoup the billions upon billions of dollars stolen from us by a cheating, ungrateful world. In fact, Trump and those who think like him may think the United States should be entitled to special dispensation at the WTO because of America’s foundational role, our generosity, and the fact that we opted not to enslave and colonize the world after 1945.

Of course, this is all a naïve and wrongheaded view of history, economics, diplomacy and statecraft. The notion that we live in a zero sum, Hobbesian world where there is limited scope for cooperation is the bogus premise behind the entire America-first platform. The notion that the United States had no interest in helping to strengthen Europe and Japan to resist Soviet expansionism and to afford U.S. exports is too ridiculous to even bother to discuss.

All U.S. presidents since 1945 have had recourse to this more contentious approach to international relations, but none chose that path. Instead, they all preferred the rule of law and supported the institutions underpinning those rules. When people in other countries are free and can prosper, that is unequivocally good for Americans. When Americans can engage in commercial transactions with foreigners, we are all better off. Rules that foster exchange and cooperation are essential. To blow up the system because you may calculate that the United States will lose the least (a sort of limited nuclear war type of doctrine) becomes a plausible course of action to nationalists who think in zero-sum terms.

Washington’s cadre of pro-trade, multilateral, internationalists—among whom I count myself—has failed to convince President Trump and those who favor his America-first brand of economic nationalism that trade is a win-win proposition and that the post-war liberal order underpinning globalization, while not perfect, should be salvaged and renovated, rather the wrecked. We need to do better.

At the UN today, Trump claimed: “The future does not belong to globalists. The future belongs to patriots.” But the smartest patriots know that liberty at home is nourished by economic growth, which is fostered by trade, globalization and its well-functioning institutions.

This morning Democratic presidential hopeful Sen. Bernie Sanders (D‑VT) proposed a new wealth tax. According to The New York Times, the plan would cut the wealth of a typical billionaire in half within 15 years. Sanders reasoning? He asserted:“I don’t think that billionaires should exist.” He explained that the purpose of the plan is to “significantly reduce income and wealth inequality in America by telling the wealthiest families in this country they cannot have so much wealth.”

However, the Cato 2019 Welfare, Work, and Wealth National Survey released this morning finds that 82% of Americans think billionaires should be allowed. Less than a fifth (17%) think people should not be allowed to become billionaires.

These results are consistent with the same survey’s finding that 84% of Americans say there’s “nothing wrong with a person trying to make as much money as they honestly can.”

Full survey results and report found here.

Sanders’ view of billionaires is out of line with a majority of his own party. A strong majority (73%) of Democrats think people should be allowed to become billionaires, while 27% think they should not. Majorities of independents (79%) and Republicans (93%) also think that people should be allowed to become billionaires.

Although most Democrats would not go so far as to say billionaires should not exist, most support some form of wealth redistribution, which may benefit Sanders in the primary. The survey found that 58% of Democrats agree that “wealth should be taken from the rich and given to the poor.” However, most Americans disagree. Instead 62% of all Americans, including 64% of independents and 83% of Republicans oppose the redistribution of wealth.

Read more of the survey report here.

The Cato Institute 2019 Welfare, Work, and Wealth Survey was designed and conducted by the Cato Institute in collaboration with YouGov. YouGov collected responses online March 5 to 8, 2019 from a representative national sample of 1,700 Americans 18 years of age and older. The margin of error for the survey is +/- 2.2 percentage points at the 95% level of confidence.

Sign up here to receive forthcoming Cato Institute survey reports.

Presidential candidate Bernie Sanders has proposed an annual wealth tax on families with net wealth above $32 million. The tax is even more aggressive than the one proposed by Elizabeth Warren.

As I discuss here, the number of European countries with Sanders- or Warren-style wealth taxes has fallen from 12 in 1990 to just 3 today, and those 3 countries have cut their rates in recent years. The Europeans found that wealth taxes induced widespread avoidance, evasion, and capital flight. They raised little revenue and became riddled with exemptions.

The economists helping Sanders and Warren design their plans are doing the candidates a disservice by feeding them fairy tales about government revenues. Sanders claims his tax would raise $4.35 trillion over 10 years (about $435 billion a year), while Warren claims hers would raise $2.75 trillion over 10 years (about $275 billion a year).

But European wealth taxes typically only raised about 0.2 percent of gross domestic product a year, which would be about $40 billion in the United States. The wildly exaggerated estimates of Sanders and Warren apparently assume that virtually all wealth above the thresholds would be taxed, but that is not the real world, as the European experience shows.

Reporters should ask Warren and Sanders whether farmland would be taxed under their plans. Obviously, the farm lobby would never let that happen, thus blowing a hole in theoretical wealth tax revenues. If a wealth tax were imposed, there would be a massive flow of money into tax-exempt farmland, which in turn would wreak havoc on the farming industry. Rich people would jack up their borrowing to shrink their net wealth tax bases, and then proceed to purchase much of Kansas.

If by some fluke a President Sanders or Warren did get a wealth tax enacted, it would be repealed within a year or two as the economic damage and administrative nightmare became clear to even the most ill-advised politicians.

How illegal immigrants affect crime is one of the most contentious subareas of debate in the entire immigration issue. Cato scholars have produced much original research on this topic, finding that illegal and legal immigrants both have lower incarceration rates than native-born Americans and lower criminal conviction rates in the state of Texas, the only state where data are available. We’ve also found that local government participation in immigration enforcement programs doesn’t affect crime rates.

Academic researchers have also stepped into the fray. Sociologists Michael Light and Ty Miller found that a higher illegal immigrant population does not increase violent crime rates. Those two researchers then teamed up with Purdue sociologist Bryan C. Kelly to look at how higher illegal immigrant populations affected drug arrests, drug overdose deaths, and DUI arrests. They found large and significantly associated reductions in drug arrests, drug overdose deaths, and DUI arrests with no significant relationship between increased illegal immigration and DUI deaths. Further research by other criminologists also found that illegal immigrants report engaging in less crime prior to and following their first arrest than legal immigrants and native-born Americans.

A recent paper by Christian Gunadi, an economist at the University of California Riverside, also found that illegal immigrants are 33 less likely to be institutionalized than native-born Americans despite possessing characteristics usually associated with higher crime rates. Gunadi’s study is especially heartening to read as he started with methods adapted by Michelangelo Landgrave and myself, improved upon them, and came to a result that is similar to ours. Gunadi found a smaller difference between native-born and illegal immigrant incarceration rates, that they are one-third below natives rather than 50 percent below, but there’s no arguing with his better methods. It’s especially gratifying to see the academy take notice of our empirical methods developed in policy briefs and improve upon them for peer-reviewed journals.

Another recent working paper by Annie Laurie Hines and Giovanni Peri used fluctuations in immigration enforcement policy and its effect on deportations to see how local crimes rates were affected. If illegal immigrants were more crime-prone than other groups, then the reduction of deportations and immigration enforcement should have resulted in relative increases in crime rates or a slower rate of decline. Nothing of the sort occurred. Similar to other research on how Secure Communities affected crime, the pace of deportations did not affect the crime rate.

The impact of immigration on crime is an important topic for further research. It’s wonderful to see serious academics like those above dive into investigating how illegal immigrants affect crime. I’ll be keeping a close eye on these research developments as they occur.

Janice Smyth’s parents purchased some land in Falmouth, Massachusetts in 1975, hoping to one day build a retirement home there. Unfortunately, they died before they could commence building and the land passed to Janice. For 40 years, the land has been zoned residential and either Janice or her parents paid property taxes. Janice herself paid $70,000 to various professionals to prepare plans and applications to develop the property.

The city of Falmouth had different ideas, however. Being a coastal community, the city passed the Falmouth Wetlands Protection Bylaw in 1998, creating various “no disturbance zones” around wetlands and coastal banks. In 2008, the city strengthened its bylaw and, as a result, the only developable part of Mrs. Smyth’s land is a 115 square foot section in the northwest corner. Mrs. Smyth applied for variances and even agreed to build a house half the size of the original plan, but the city wouldn’t budge. Her property that had been worth $700,000 was assessed at $60,000, a 91.5 percent reduction in value.

Mrs. Smyth sued, alleging that the denial of the permit was a regulatory taking under the Fifth Amendment. Regulatory takings are different from the simplest form of a taking—that is, when the government just takes physical possession private property. Regulatory takings, by contrast, occur when various regulatory actions strip substantial value from a piece of property. They’re a little harder to define, and it doesn’t help that the Supreme Court’s jurisprudence on regulatory takings is muddled.

Mrs. Smyth won at the trial court, but the Massachusetts appellate court overturned the verdict. According to the court, since Mrs. Smyth’s lot could possibly still be used “as a park or a playground” and because it may still be attractive to neighboring landowners to purchase as a “privacy” buffer, the property retained too much value to justify a takings claim.

The Massachusetts Supreme Judicial Court denied the appeal, so Mrs. Smyth has appealed to the Supreme Court. Cato has joined the Mountain States Legal Foundation in filing a brief supporting Mrs. Smyth’s petition. We argue that, rather than using the ad hoc balancing test of the Penn Central decision—a notoriously convoluted multi-part test—the Supreme Court should recognize that Mrs. Smyth incurred a “total taking” under the case of Lucas v. South Carolina Coastal Council.

The language in Lucas is clear: “When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is to leave his property economically idle, he has suffered a taking.” Mrs. Smyth’s property is the only remaining undeveloped lot in the residential neighborhood. She or her parents have been taxed for 40 years as if the lot were prime residential property. When regulations have halted any development of a property, a categorical taking has occurred. No multi-part test is required. The Supreme Court should take the case to clarify that, if governments want to preserve environmental features, they shouldn’t be able to force all the costs on innocent property owners.

The Environmental Protection Agency and Army Corps of Engineers recently announced the official repeal of an Obama administration definition of which streams, wetlands, rivers, and lakes are under the jurisdiction of the federal government for purposes of the Clean Water Act. Under the Act, “polluters” must obtain permits for discharge of substances into “navigable waters.” Implementation of the law requires a definition of “pollution” and “navigable waters.” Congress provided a definition and examples of pollution but was less helpful about “navigable waters,” defining them simply as “waters of the United States.”

Ever since the enactment of the Clean Water Act in 1972, the lack of definitional clarity in the statute and ambiguity about what constitutes a “water of the United States” has resulted in a legal struggle over the limits of federal authority to regulate pollution discharges into water. Jonathan Adler’s article in the Summer issue of Regulation summarizes the convoluted history of the struggle over the regulatory definition of “waters of the United States” and provides a framework for evaluating the proper role of states and the federal government in water pollution control.

Many environmentalists believe that broad assertions of federal regulatory authority increase environmental benefits and less federal authority results in environmental degradation. The New York Times, for example, said that the repeal of the Obama administration rule “has implications far beyond the pollution that will now be allowed to flow freely into waterways.”

In contrast, Adler argues the federal government should focus its efforts on situations in which “pollution crosses state lines and the affected states are unable to resolve the conflict on their own.” Thus, he is concerned that the proposed Trump administration replacement for the repealed rule does “not specifically identify interstate waters as ‘waters of the United States.’”

Environmentalists’ second reason for advocating extensive federal regulation of water pollution is their belief that states will cater to polluters, allowing intrastate water and wetland degradation in return for jobs, income, and development. Adler argues that the evidence on state environmental regulation does not support this belief. For example, “the history of state wetland regulation … paints quite a different picture. Not only did states not wait for the federal government to begin regulating wetlands, but … many states have adopted programs that reach beyond federal requirements.”

So, in Adler’s view, while the Trump administration’s proposed replacement falls short because it neglects a legitimate role for the federal government in regulating interstate waterways, placing limits on the federal role in water pollution policy will not lead to the degradation that environmentalists foresee.