Well, no one said reforming the Jones Act was going to be easy.
A week after reports emerged that President Trump was leaning toward granting a ten year Jones Act waiver for the transport of liquefied natural gas (LNG) by non‑U.S.-flag ships, he seems to have reversed course following a meeting with congressional Jones Act advocates. The president apparently folded—bigly. The members of Congress who spoke with President Trump emerged from the White House projecting supreme confidence that a Jones Act waiver is now effectively off the table.
While it is impossible to know what swayed President Trump, it beggars belief he was convinced by arguments made on economic grounds. Quite simply, there aren’t any.
If granted, the Jones Act waiver would have allowed Americans in New England and Puerto Rico to obtain bulk amounts of cheap LNG shipped in from other parts of the United States. Such a move would bolster the number of well-paid jobs in the energy sector as well as save Americans money. Furthermore, and perhaps most notably, the waiver would not have cost one single job in the U.S. maritime sector. No U.S.-flag LNG carriers would have been put out by the waiver as none exist, nor are any being built by the few remaining major U.S. shipyards.
A press release from one of the meeting’s participants, meanwhile, offers a window into the tortured logic employed by Jones Act supporters. “We cannot let the United States become dependent on foreign countries to transport energy and critical products within the United States,” said Sen. Bill Cassidy. But under the Jones Act status quo the United States is dependent on both foreign energy—including from Russia—as well as the foreign-flag vessels that transport it. In the Louisiana senator’s muddled thinking it is apparently preferable to have those same ships transport LNG sourced from other countries rather than make a slight, temporary change to the Jones Act.
This is less a passioned defense than unthinking devotion to a powerful lobby.
The power of the Jones Act lobby was also displayed by the attendance of Alaskan Senators Dan Sullivan and Lisa Murkowski at yesterday’s gathering. Their advocacy for the Jones Act is particularly galling given that their state is one of the law’s biggest victims. Highly dependent on maritime transport, Alaska bears a disproportionate burden of the Jones Act’s high costs. Indeed, the law is so detested in Alaska that it is written into state law—the result of a 1984 referendum—that the governor must lobby Congress for its repeal. But the interests of the state’s maritime unions and related interests apparently prevail of the popular will of the people. So it goes, both in Alaska and the country as a whole.
Fortunately, President Trump still has time to redeem himself, and there is perhaps solace to be found in the fact that he has demonstrated himself capable of unpredictable policy turns and zig-zags. That he has not yet publicly committed to leaving the Jones Act untouched offers at least a sliver of hope that sanity will prevail and a waiver eventually issued. Drain this swamp, Mr. President.
Cato at Liberty
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Political Influence in Retail MJ Industry
This article from the Boston Globe describes, and implicitly criticizes, the large role of political connections in determining who can legally sell marijuana in Massachusetts:
Lobbyist Frank Perullo had good reason to believe his client’s proposal to open a medical marijuana store would receive a warm reception from the Cambridge City Council. After all, Perullo counted six of the nine councilors as his political clients, including Leland Cheung, whom Perullo served as campaign treasurer.
Cheung was ready to do his part. He planned to offer a resolution supporting the marijuana shop.
But Perullo wasn’t going to leave anything to chance at the August 2016 council meeting. So his staff sent Cheung an e‑mail labeled “talking points,” describing Commonwealth Alternative Care’s exotic marijuana products.
“LC, please see attached for this evening,” a staffer wrote, addressing Cheung by his initials. “Let me know if you have questions.”
Nothing happens quickly in Massachusetts politics, or in the business of pot, for that matter. But Perullo’s diligence — and carefully cultivated relationships — paid off. Today Commonwealth Alternative Care’s pot shop is under construction in Inman Square.
divThe Globe’s concern about political insiders benefiting at the expense of competition is understandable.
But the true villain is regulation that limits the number of legal marijuana sellers.
Absent this government-created barrier to entry, political influence would be irrelevant.
Instead, legal marijuana would be available at pharmacies, coffee shops, Walmart, stand-alone pot shops, and any place where consumers might wish to purchase it.
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Be Skeptical of Income and Wealth Claims
As the 2020 presidential election campaign heats up, get ready for a torrent of claims about incomes, wealth, and inequality. The rich are grabbing all the wealth! The working class is struggling! The middle class never had it so good!
In my op-ed yesterday in The Hill, I noted that politicians and pundits are often sloppy or untruthful with data when making such claims. But a different issue is that there are pessimistic and optimistic versions of most income and wealth statistics.
Economist Joseph Stiglitz opted for the pessimistic in his recent New York Times op-ed: “Some 90 percent have seen their incomes stagnate or decline in the past 30 years.” That sounds really bad. Stiglitz provided no source for his claim, but shouldn’t we just trust him as a Nobel prizewinner?
Well, no, because a lot of other data sharply conflicts with his unsourced claim.
A recent study by Stephen Rose of the Urban Institute illustrates the wide variation in incomes data, as shown in the table. He compared six scholarly estimates of U.S. real median income growth between 1979 and 2014. The results span a huge range—from an 8 percent decrease to a 51 percent increase in a recent CBO study. Four of the six indicate solid middle-class income gains.
John Early, Ryan Bourne, and I discussed income and wealth issues at a Capitol Hill forum on Monday, which you may view here.
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Sen. Rick Scott’s Venezuela “Genocide” Hype
In media interviews on April 30, Senator Rick Scott (R‑FL) accused Venezuela’s leftist regime of engaging in genocide. It was not merely a slip of the tongue; Scott used that inflammatory term repeatedly—as he had on previous occasions. Foreign policy hawks have resorted to similar tactics to arouse public opinion and generate support for U.S. military interventions in other conflicts, and Scott appears to have that objective in mind regarding Venezuela.
Nicolas Maduro’s government is indeed a corrupt, repressive regime that has turned what was once South America’s most prosperous society into a chamber of socialistic horrors. In an effort to suppress growing political opposition, Maduro also has jailed critics and tried to silence the country’s independent press. The brutality of his security forces was on graphic display during yesterday’s opposition demonstrations when an armored vehicle deliberately plowed into a crowd of protestors. Decent people around the world should erupt in vigorous cheers if the Maduro regime finally ends up on the ash heap of history.
Nevertheless, it is a gross misuse of the term genocide to describe what is currently taking place in Venezuela. The United Nations defines genocide as acts “committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group.” Venezuela’s mounting turmoil amounts to a mundane struggle for political power, not a campaign to slaughter a hated target group.
Unfortunately, advocates of U.S. military crusades have a nasty habit of hyping disorders in certain countries. That effort was evident during the Balkan wars of the 1990s, and the emotional lobbying effort succeeded in producing U.S.-led military campaigns. The absurdity of the genocide allegation was especially evident in Kosovo. Before the onset of NATO’s air war in the spring of 1999, the Albanian Kosovar insurrection against the Serbian government had resulted in barely 2,000 fatalities in nearly two years of warfare. At least half of that total consisted of military personnel, both rebels and government security forces. If that modest total constitutes genocide, then almost any conflict (however minor) meets that standard. Yet even some proponents of U.S. military intervention later conceded that the genocide allegation was inappropriate with respect to the Kosovo conflict.
A similar campaign occurred to exaggerate the humanitarian stakes involved in Libya during the 2011 revolt against longtime dictator Muammar Qaddafi. Western politicians and their media allies contended that Qaddafi’s security forces would kill as many as 500,000 civilians. The U.S. led war, sold to the American people and the rest of the world as a humanitarian rescue mission, was a cynical cover for yet another regime-change war in the Middle East. The ouster of Qaddafi soon made the situation in Libya far more tragic, as the country became a chaotic arena for fighting among rival militias. That dreadful situation persists to this day.
Given that distressing track record, we should be doubly critical of Scott and other individuals who deploy the genocide label in a promiscuous manner. Indeed, using that term to describe garden-variety political conflicts is an insult to the victims of actual genocide, as in the Holocaust and the mass slaughters in such places as Cambodia and Rwanda. Above all, we must not allow proponents of U.S. military intervention in Venezuela to use such an emotionally laden term to generate public support for yet another unnecessary, ill-advised war.
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Time for a Reasoned Debate over Monetary Policy
The following letter was sent to the editors of the Wall Street Journal in response to a April 22nd opinion piece by Judy Shelton entitled “The Case for Monetary Regime Change.”
Judy Shelton, a long-time participant at Cato’s Annual Monetary Conference, may be nominated for one of the open seats on the Federal Reserve Board. In her recent Wall Street Journal op-ed, “The Case for Monetary Regime Change” (April 22), Shelton recognizes the limits of monetary policy and the case for a rules-based monetary regime in place of the present system of discretionary government fiat money. If she is nominated by President Trump and confirmed by the Senate, she will be a strong voice for sound money and for considering fundamental reform (see, e.g., https://www.cato.org/cato-journal/springsummer-2018/case-new-international-monetary-system). Indeed, in her WSJ article, she suggests that “intellectually fair-minded people should be able to debate the pros and cons of alternative monetary approaches without rancor.” I hope the White House, Congress, and Federal Reserve are listening. She concludes by welcoming “the Fed’s newfound ‘patience’ in appraising economic and financial developments.” However, she could strengthen her argument by noting that “patience” is not a substitute for a credible, long-run monetary rule in bringing about macroeconomic stability and reducing regime uncertainty.
James A. Dorn
Vice President for Monetary Studies
Cato Institute
The Secret Safe Injection Facility That Is Saving American Lives
I have written here, here, and here about efforts by a nonprofit in Philadelphia named “Safehouse” to establish a Safe Injection Facility in the neighborhood of Kensington, where IV drug use is rampant and out in the open, and overdoses are soaring. That effort is being impeded by threats from the Department of Justice that it will enforce federal law prohibiting such sites. The specific law at issue is known as the “Crack House Statute,” passed in the 1980s. Leaders in other major US cities who also want to set up Safe Injection Facilities, including Seattle, San Francisco, New York, and Boston, are closely monitoring the situation before proceeding with their own plans.
In my Policy Analysis on harm reduction I wrote of the impressive results that Safe Injection Facilities (also called “safe consumption sites” and “overdose prevention sites”) have had throughout much of the developed world since the 1980s. Now in operation in over 120 cities in Europe, Canada, and Australia, these facilities have dramatically reduced the spread of HIV, hepatitis, and other blood-borne diseases, dramatically reduced overdose deaths, and have brought many addicts into rehab programs. Darwin Fisher, the Program Coordinator of “Insite” in Vancouver, BC, the oldest Safe Injection Facility in North America (since 2003), gave an impressive presentation of how that facility has worked to save lives at Cato’s conference on harm reduction last March. You can see that presentation here.
The Policy Analysis also mentioned a Safe Injection Facility secretly operating in the US since 2014, notwithstanding the federal prohibition. A 2017 paper in the American Journal of Preventive Medicine that kept the name and location of the site confidential, reported it was well-accepted by the community, had at least four documented overdose reversals, and had no deaths associated with its operation. Dr. Barrot Lambdin, a senior epidemiologist with RTI International, an independent non-profit research institute in North Carolina, gave a data update on this secret Safe Injection Facility at an international conference on harm reduction held in Porto, Portugal on April 29, 2019. He did not disclose the name or location of the facility.
One objection raised by residents of communities where these sites are proposed is that they don’t want to see IV drug users on the streets of their neighborhoods. But proponents respond that Safe Injection Facilities actually bring such people indoors, injecting their drugs out of the view of the community. Dr. Lambdin reported that since the facility’s opening in September 2014, nearly 8,400 public injections were prevented.
Dr. Lambdin also reported the number of overdose reversals has now increased to 26.
Because the site is illegal, it is only able to operate part time—five or six days a week for eight or ten hours a day. And it accepts participants by invitation only. The surrounding community has cooperated by helping the facility maintain secrecy.
So here is an example of a Safe Injection Facility saving lives, and well-accepted by the surrounding neighborhood, in spite of federal impediments. Imagine how many more lives it could save if it could operate around the clock, out in the open, and advertise for walk-ins. Imagine how many hundreds or even thousands of lives would be saved if the “Crack House Statute’ was repealed.
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Peace, War, and Liberty: Understanding U.S. Foreign Policy
Americans have debated how to engage with the world since our nation’s founding. These discussions often went well beyond questions of war and peace, and of what was required to keep us safe and prosperous; we have also pondered what we can and should do to advance the cause of liberty globally.
In recent years, however, more and more Americans have come to doubt our capacity for accomplishing great things, or even the wisdom of trying. The trauma of 9/11, followed by nearly two decades of inconclusive military interventions, casts a cloud over the conduct of U.S. foreign relations. The Cold War once seemed to unite Americans around a single, common purpose; today, foreign policy is subject to the same “blue team vs. red team” dynamics that cripple honest, frank discussions of domestic policy. The status quo prevails, driven mostly by inertia.
In Peace, War, and Liberty: Understanding U.S. Foreign Policy, I try to shake up this tired consensus. I explore U.S. global engagement and reaffirm America’s unique role as an exemplar of human freedom. I hope that the book gets wide exposure. If it doesn’t, it will be entirely my fault. There are already several podcasts (including here, here, and here), to help get the word out, and a few other promotions planned, so now I’m hoping people will read it, like it, and recommend it to friends.
Some of the material may be familiar. There are shades of The Power Problem, published nearly ten years ago, plus some of the ideas explored in the edited volumes that have come out in the interim, including Terrorizing Ourselves, with Benjamin H. Friedman and Jim Harper; and Our Foreign Policy Choices, with Emma Ashford and Travis Evans.
But there is also quite a bit of original content. The book is split in two parts. The first half discusses the history of U.S. foreign policy, with a particular focus on the tension between limited, constitutional government and individual liberty, which flourishes during peacetime, and the growth of government and the erosion of liberty, which occurs mostly when the country is at war. I enjoyed the opportunity to dig more deeply into a few cases, including the debate over continental expansion in the mid-19th century, and the anti-imperialists’ apparent last gasp in the late-19th and early-20th. I relied on some favorite go-to sources, including Walter McDougall’s Promised Land, Crusader State, and Richard Immerman’s Empire for Liberty, but am also grateful for David Mayers’s Dissenting Voices in America’s Rise to Power and Stephen Kinzer’s The True Flag. I will be pleased if more people become acquainted with some classic speeches, including John Quincy Adams’s address on July 4, 1821; William Graham Sumner’s “The Conquest of the United States by Spain”; and Dwight David Eisenhower’s “Chance for Peace” – which are now all posted at Libertarianism.org.
The second half of the book focuses on contemporary U.S. foreign policy and the principles that should guide it. The United States is blessed by favorable geography and a vibrant economy. This gives us strategic depth and the luxury of choice. We are safer than we think, but too often fixated on what Ben Friedman calls the “Terrible ‘Ifs’”. Americans should beware of perilous partners and free riders, but remain committed to peaceful engagement with the rest of the world. Preserving our security should go hand-in-hand with advancing our prosperity and championing human liberty. It isn’t an either-or proposition. America once served as a beacon for others, and human freedom flourishes in many places where U.S. soldiers have never set foot. We need to become comfortable again with the many instruments of American power and influence, and retain our healthy skepticism of preventive action, which inevitably leads to unintended consequences. We also need a new appreciation for the importance of trade, which isn’t merely beneficial on economic grounds, but can also serve the cause of peace.
I’d like to thank everyone involved in the project, especially Grant Babcock, Tess Terrible, and the entire Libertarianism.org team, as well as my colleagues in Cato’s Defense and Foreign Policy Studies Department, including John Glaser and Ted Galen Carpenter, who read early drafts and suggested areas to expand or cut. Eleanor O’Connor kept everything on track. Now that the book is officially out, I welcome feedback from others. It is available at Libertarianism.org, plus from all of your favorite booksellers, and in several formats, including paperback, Kindle, and audiobook.