Steven Kopits of Princeton Energy Advisors wrote a few criticisms of our proposal to sell Gold Cards through a market-based program that I’ve called an immigration tariff. An immigration tariff is an attempt, based largely on Nobel Prize-winning economist Gary Becker’s idea to sell visas, to create a market-based visa that accounts for many of the most trenchant criticisms of liberalized immigration The idea is simply to create a new visa called a Gold Card without numerical quotas or caps. The Gold Card would supply permanent legal residency and work permission, but cannot be used to naturalize –like a green card lite. The government would then sell those Gold Cards for a price set with three goals in mind. Those goals are to make sure that the Gold Card is a net-fiscal windfall for the federal government, to outcompete human smugglers, and to create a more flexible immigration system that responds to the U.S. market demands.

The prices that I’ve recommended for the Gold Card are designed to more than offset the worst-case scenarios as outlined by the National Academy of Sciences fiscal cost projections by age of entry and education level for individual immigrants. This is an earnest and direct answer to a forceful conservative criticism of immigration based on its supposedly negative fiscal effect. Although I dispute the notion that immigrants are a net fiscal drain, that criticism is still politically popular and must be addressed in any final policy.

In most cases the prices for Gold Cards would compete favorably with human smugglers and drive most illegal immigrants and many asylum-seekers into the Gold Card market. A legal Gold Card visa guarantees legal work and residency, so long as the migrant doesn’t commit a deportable offense, while smuggling is an expensive and risky chance at potentially working illegally in the United States with the ever-present risk of deportation and abuse in the black market. Furthermore, the prices charged by human smugglers are not so much lower than Gold Cards in my mock tariff schedule. Lastly, an immigration tariff is the most market-friendly visa that still offers some protections for the U.S. labor market, the last point being politically necessary.

Kopits also combines some criticisms of Cato’s immigration tariff with that of the IDEAL immigration plan that charges $2500 a year for a work permit. The IDEAL plan has a lot of merit and it’s worth examining in detail, but I’m going to focus on the points that Kopits raises about Cato’s immigration tariff proposal here. I take Kopits’ criticisms seriously because he is a proponent of creating a market-based visa system for the United States, he has written thoughtfully on this and other immigration issues, and he’s a smart and respectable individual. Kopits’ criticisms are in quotes below and my responses follow.

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“The fee is too low and the market is too big

Both the Cato and Ideal fees are too low, particularly as they offer permanent residency in some form. From the conservative perspective, the idea is to limit or reduce the number of immigrants and reduce tenure of migrants in the US. A low fee will not only encourage immigration, it will crush the system.”

The Gold Card is a form of specially designed permanent residency that is not a pathway to citizenship. The Gold Card does not preclude its holder from earning a green card through one of the existing legal channels and eventually naturalizing that way, but it does not provide a special path toward citizenship. The non-immigrant feature of the Gold Card is intended to cater to conservative worries that Gold Card purchasers will all naturalize and vote against them, just like they fear new immigrants and those legalized in an amnesty for illegal immigrants will vote against them. Anecdotally, this fear is an important reason why many Republicans and conservatives are skeptical of increasing legal immigration. I think their fear has all of the hallmarks of a self-fulfilling prophecy, but it’s probably come true to some extent because of Republican positions on the issue of immigration, so the Gold Card is designed to deal with that.

“Consider Cato’s $15,000 fee for young adults without high school educations. How big is the potential market? If we apply the offer to 133 low income countries globally — to Latin America, East and South Asia and Africa — then we are speaking of a gross population of 6.5 bn. If just 0.1% decided to take up the offer … well, it would be game over in a matter of days.”

If 0.1 percent of 6.5 billion people paid $15,000 for a Gold Card in one year, the tariff fees by themselves would be $97.5 billion. That’s a lot of money paid directly to the U.S. Treasury from Gold Card migrants on their first day of arrival in the United States – and it doesn’t even include the taxes that they’ll pay once they start working.

Furthermore, 0.1 percent of 6.5 billion is 6.5 million Gold Card migrants, a number equal to about two percent of the current U.S. resident population. In other words, this inflow would be equal to about the annual inflow of immigrants to New Zealand as a percentage of their population in 2016. If the rest of the U.S. immigration system remains intact after a Gold Card is adopted, that would translate to an annual inflow equal to about 2.3 to 2.4 percent of the current U.S. resident population annually. That’s a big increase in legal immigration, but close to the flow in some other OECD countries with very successful merit-based immigration systems. The daily additional average flow of Gold Card migrants in such a scenario would be about 17,808 and they’d pay over $267 million directly into the U.S. Treasury each day – assuming they were all high school dropouts under the age of 25. I doubt this would be game over for such a system, especially after a few days.

Furthermore, this doesn’t even consider the large numbers of lawful present on other less-flexible work visas like the H‑1B or OPT who would pay a lower price for a Gold Card to skip the insanely long line for green cards that afflicts so many of them – especially Indians. Green cards are preferable for these folks, but Gold Cards would be an improvement over the current situation they’re in and immediately raise revenue for the U.S. Treasury.

“If the number of visas is capped, let’s say at 1 million to choose a number well beyond the political tolerance of Republicans, then the 150 million citizens of Mexico and Central America who represent illegal immigration across the southwest border would gain about 1% of all offered visas, with the rest going to countries like China, India, Pakistan, Indonesia and Nigeria, among many others. At the current pace, that would deter illegal immigrants from the southwest border for all of three days. Put another way, Cato’s proposed fee would either have little impact on illegal immigration or blow up the legal immigration system on contact.”

As I make clear in my policy analysis on the immigration tariff, I do not favor capping the number of Gold Cards and auctioning them. One of the benefits of a tariff whereby quantity can adjust but the price is fixed, compared to an auction where quantity is fixed but prices adjust, is that the quantity of immigrants is more flexible and can respond to changes in the U.S. labor market. This is the important benefit of a market-based visa. If the unemployment rate is low and the economy is booming, more migrants would be willing to purchase the Gold Card, but fewer will do so when unemployment is higher. After all, the big benefit of immigration is having more of them working here in the United States where they are so much more productive than in their home countries. Under an auction, the price will fall along with the U.S. employment rate, but it would probably be filled each year and provide less revenue as a result – exactly when political arguments against immigration are more likely to be salient. This seems like a more unstable political equilibrium. If the number of Gold Cards is capped annually then an auction is the best way to distribute them, but there should not be a cap on the number and a price as the mismatch would produce surpluses or shortages.

Under a numerically uncapped Gold Card, human smuggling would decline radically. According to the RAND Corporation, smuggling fees from Central America to the United States are typically between $6,000 and $10,000 but can range much higher. Most of those people would fall into the $15,000 price bracket for a Gold Card and virtually all of them would choose to come legally by paying a slightly higher price for a Gold Card with the certainty of being able to legally work and live in the United States. That certainty is worth a few thousand dollars more compared to the uncertainty of the smuggling route where fraud and coercion are rampant, contracts cannot be enforced regularly, the migrant still has only a chance of making it to the United States, and he may be detained for months, forced to wait in Mexico, and eventually deported without a refund – to say nothing of avoiding Mexico’s security services. Combined with the fact that observationally identical illegal immigrant workers initially have wages about 11.3 percent lower than legal immigrant workers, the certainty, security, ease, and higher wages offered by a Gold Card are preferable to human smuggling for most people currently being smuggled to the border.

The current headlines about the border are focused on the 676,315 people detained by Border Patrol or at ports of entry this fiscal year. From the perspective of an immigration tariff, I think the headlines would be quite different if those 676,315 people paid $10.1 billion directly to the U.S. Treasury, an average of $15,000 each, this fiscal year. This is another big advantage of selling visas: It changes the political narrative surrounding immigration. The rhetoric of invasion on the right and charity on the left gets replaced with government revenue and a shrunken black market. The disorder on the border shrinks dramatically overnight. Other than a handful of diehard restrictionists, everybody else comes out ahead on this.

“Congress is incapable of managing visa market conditions

Cato sees Congress setting visa volumes and tariffs. There is zero chance that the US Congress would post tariffs for minimum wage migrant workers at a 35% effective tax rate. Politically, that is not feasible. If Congress is to post a tariff schedule, the rates will be much lower. But, of course, this would flood the market with new entrants, prompting Republicans to put a cap on numbers at low levels — the historical pattern — which in turn would prevent the southwest border from closing. An auction would not change this outcome per se. If the number of visas auctioned is materially below the demand for labor, then the auctioned visas will be sold at some price, but employers will continue to take any labor deficit from the black market, just as they have since at least 1965. Cato’s price/​volume mechanism is not viable, because Congress would have no more competence in managing visa market conditions than it would in setting, say, gasoline prices.”

Just to be clear, my favored realistic market-based visa design is setting a price for the Gold Card and letting the quantity fluctuate. But Congress should absolutely NOT set the price for Gold Cards and set the quantity. That would lead to shortages or surpluses. In my paper, I pitch the idea as a tariff or an auction but I don’t support combining the worst aspects of both into a nonfunctional visa where price and quantity are set by Congress.

Congress has a monopoly on the issuance of visas and the marginal cost of the government’s production of them is near zero. It can issue as few or as many as it wants under any conditions or price that it sets. The negative consequences of setting the price and letting quantity adjust based on changing market conditions are more economically beneficial than setting the quantity and letting price adjust – similar to how tariffs on trade goods are preferable to quotas even though free trade is preferable to both.

I don’t see any political reason why Congress wouldn’t charge poor immigrants a one-time $15,000 tax. Congress imposes much higher taxes on poor migrants that it blocks and, frankly, the welfare of migrants or potential migrants is rarely relevant in political debate. My great fear with an immigration tariff is that Congress would charge much higher prices for each visa, not lower prices. After all, Gary Becker proposed a fee of $50,000 back in 2011. If the prices are too high then few will come and the big economic gains from the immigration tariff relative to the current system, which comes from increased legal immigration and not the extra tariff revenue, would not be realized.

“A price-based system is incompatible with permanent residency

For H2 class migrants — unskilled workers typically lacking English language skills — a price-based system is incompatible with permanent residency. On an hourly basis, permanent residency — even if promised fifteen years into the future — is worth about $4 / work hour. If we assume that migrants earn $10 / hour on average and the right to work in the US by itself is worth $3.50 / work hour, then a work visa with a residency option is worth $7.50 / hour, leaving $2.50 / hour in wages. Of course, Mexicans cannot afford this, but a residency option will force them to make wrenching trade-offs between current consumption and future residency. It will lead to penury for migrants, and by extension, to claims — readily visible to the public — that visa fees are exploitative and are impoverishing migrants. In such an event, the system will fail, just as the Bracero system failed in 1965, and for similar reasons. For this reason, residency cannot be included in a price-based program. Work visas should not be conflated with formal immigration mechanisms.”

From the migrant’s perspective, the difference between real expected future income in the United States compared their home country is most relevant in determining whether to purchase a visa. According to work by economists Michael Clemens, Claudio Montenegro, and Lant Pritchett, the lower-bound real annual wage gain adjusted for purchasing power parity (PPP) for a migrant with 9–12 years of education is $13,600. For a Mexican migrant, the real annual gain is $10,523. That wage increase beats the sheepskin effect of additional education. It’s a very good deal for the Mexican migrant to pay $15,000 upfront for an immediate annual increase in real wages of $10,523 that will continue so long as he works in the United States. They win big on this deal and, being the rational economic calculators that they are, will take advantage of it to a mutually beneficial extent.

Furthermore, this seems like a kitchen sink argument to me. The first criticism was that too many people will purchase the Gold Card while this criticism seems to be that too few will purchase a Gold Card because the price is so high and those who do purchase it will be reduced to penury. Compared to the current immigration system, this is a big improvement for migrants – to say nothing of the extra economic benefits to the United States.

There are many different ways to design a market-based visa system for the United States, either as an addition to the current immigration system or as a replacement for it. They range from IDEAL to auctions, immigration tariffs, and formulas. Political feasibility is an important consideration, but the most important consideration is whether the proposal will achieve its goals and benefit the United States more than the current system does. When those goals are met, then political feasibility should be considered in a very detailed way – but that needs to be tested against what the new system proposes and less on the current problems. In this way, a market-based visa system that raises substantial government revenue through visa sales has an attractiveness to policymakers and the public that the current system does not.

Economics is not the driving reason why Americans support or oppose immigration, but what if it was? Consider, for a moment, the scenario that Kopits lays out where about 6.5 million people in the first year under a Gold Card system individually pay the $15,000 tariff for a combined revenue increase of $97.5 billion for the U.S. Treasury. If that revenue was used to fund a tax cut or refund for the approximately 135 million native-born American workers, that would amount to about a $722 refund per American worker. Let’s ask Americans this: “If your taxes were guaranteed to fall by $724 per year by allowing in more immigrants, would you support allowing in more immigrants?” I suspect the answer would be quite different from a question that asked merely about increasing the numbers without any tax cut or refund.

I’ve got a piece in the Washington Examiner this morning on a remarkable new law enforcement tool in Britain:

It’s like, “Your papers, please,” but for things you own.

Authorities in Britain have begun trying out a new police power called unexplained wealth orders under a law that took effect last year. The police go to a court and say you’re living way above any known legitimate income. The judge then signs an order compelling you to show that your possessions (whether a house, fancy car, or jewelry) have been obtained honestly and not with dirty money. In the meantime, the boat or artwork or other assets get frozen, and you can’t sell them until you’ve shown you obtained them innocently.

The kicker: The burden of proof falls on you, not the government. If you don’t prove the funds were clean, Her Majesty may be presumed entitled to keep the goodies….

Related to the flipping of the burden of proof, the law says information dug up via one of the orders can’t then be used in criminal charges against the target.

…advocates want this to be the start of hundreds of seizure actions against other rich foreigners in the British capital.

Some are already calling for bringing a law like this to the United States, and maybe we’re halfway there already. Asset forfeiture laws, blessed by the Supreme Court, already let police seize your property on suspicion of involvement in a crime and make you go to court to get it back. We’ve been chipping away at financial privacy in this country for decades, through Know Your Customer, suspicious-activity reports, and FATCA (expatriate tax) rules.

Ironically — though recent enactments by Parliament may be changing this, too — Britain’s own peripheral territories and dependencies, including the Channel Islands, British Virgin Islands, Cayman Islands, etc. have long made a good business out of furnishing the rest of the world with the means of financial privacy.

The reversal of the presumption of innocence troubles many Britons, too. For the moment, use of the orders is limited to a few elite law enforcement agencies. One of those agencies, however, is Her Majesty’s Revenue and Customs — the tax collectors. It’s not wrong to worry about where this idea is headed.

Whole thing here.

In a recent study, I described 18 reasons why federal aid-to-state programs should be eliminated. Aid programs are federal subsidies for state and local activities such as K‑12 schools, transit, roads, and housing. 

One problem I did not explore in detail is how federal aid fuels political corruption. A Politico story the other day describes a classic case. Apparently, Senate Majority Leader Mitch McConnell has been successfully pressing the Department of Transportation (DOT)—headed by his wife—to give grants to favored projects in his home state of Kentucky. 

Corruption is a harsh word, but consider this contrast. On the one hand, Politico quotes the DOT spokesperson in response to the McConnell scandal: “No state receives special treatment from DOT … Discretionary grant programs are competitive and based on merit.”

On the other hand, McConnell himself frequently brags about bringing home pork to Kentucky. He has never been shy about it, as the Politico story illustrates. And in the story, DOT grant recipients in Kentucky are quite sure that McConnell’s arm-twisting made the difference.

If DOT grants are supposed to be allocated on merit, but they are actually steered by self-interested power politics, that’s corruption. And that pork-barrel dynamic exacerbates inefficiencies in the aid system, such as the misuse of resources in low-value activities, as discussed in my study.

It is more efficient to fund state and local activities with state and local money, and doing so would reduce the fuel that powers corruption in Washington.

Here are excerpts from the Politico story by Tucker Doherty and Tanya Snyder:

The Transportation Department under Secretary Elaine Chao designated a special liaison to help with grant applications and other priorities from her husband Mitch McConnell’s state of Kentucky, paving the way for grants totaling at least $78 million for favored projects as McConnell prepared to campaign for reelection.

Chao’s aide Todd Inman, who stated in an email to McConnell’s Senate office that Chao had personally asked him to serve as an intermediary, helped advise the senator and local Kentucky officials on grants with special significance for McConnell — including a highway-improvement project in a McConnell political stronghold that had been twice rejected for previous grant applications.

Beginning in April 2017, Inman and Chao met annually with a delegation from Owensboro, Ky., a river port with long connections to McConnell, including a plaza named in his honor.

… Chao’s designation of Inman as a special intermediary for Kentucky — a privilege other states did not enjoy — gave a special advantage to projects favored by her husband, which could in turn benefit his political interests.

… In fact, days after launching his 2020 reelection campaign McConnell asked Owensboro’s mayor to set up a luncheon with business and political leaders at which the senator claimed credit for delivering the grant. “How about that $11 million BUILD grant?” McConnell asked the crowd rhetorically, according to the Owensboro Times. He then recalled his role in securing earlier grants to the city, adding, “It’s done a lot to transform Owensboro, and I was really happy to have played a role in that.”

… Owensboro wasn’t the only beneficiary of Inman’s assistance. He also communicated with McConnell’s office about multiple requests from county executives to meet with Chao to speak about potential projects in Kentucky, according to emails which, like the others, were obtained under the Freedom of Information Act by the watchdog group American Oversight.

The yield on 10-year Treasury securities is currently 2.1 percent. Now look at the chart below from the Wall Street Journal showing expert predictions about what the current rate would be.

The Journal reports:

• “Not a single respondent in January’s Wall Street Journal survey of economists predicted the yield on the 10-year Treasury note would fall below 2.5% this year.”
• “In October, when yields on the 10-year Treasury were near their peak of around 3.2%, none of the more than 50 respondents in The Wall Street Journal’s monthly survey of economists predicted yields would dip below 2.75% by June 2019. The average forecast was 3.39%.”

Forecasts of interest rates appear pretty awful, and this is a market where vast profits are at stake so there are big incentives to get it right. I’ve noted (here and here) that economists are also lousy at predicting economic growth.

What are the policy implications? The economy is too complex and uncertain for even the best economists to predict, so politicians stand no chance. It seems unlikely that political schemes from Washington to manage and manipulate our future economy would work.

Furthermore, while businesses are forced to eat humble pie and change direction when the economy changes, the government is a rigid institution led by people who never admit their mistakes. So when politicians move economic resources around, the resources often get stuck in low-value uses for years on end.

Note: my critique here regards macroeconomic predictions. Microeconomic analysis is different.

Skepticism of big tech companies is surging on both sides of the political spectrum, from Democratic Senator Elizabeth Warren calling for breaking up Amazon to Republican Senator Josh Hawley advocating rules that would prohibit online viewpoint discrimination. This wave of techno-progressivism finds its latest expression in Slate journalist April Glaser’s article, “Bring Back the Golden Age of Broadcast Regulation.”

Glaser argues that the problems of internet discourse—eg hate speech, haphazard content moderation, and conspiracy peddling—are so trenchant that government intervention is warranted. She calls for applying the rules that once governed mid-twentieth century radio and television broadcasting to the internet, the most important of which was the mandate that broadcasting be done in the “public interest, convenience, and necessity” as laid out in the 1934 Communications Act. Inspired by that mandate, reform-minded progressives at the Federal Communications Commission (FCC) enacted the Fairness Doctrine in 1949, which required broadcasters to provide multiple points of view when discussing political disagreements.

Glaser’s proposal is light on details about how exactly broadcast rules would be adapted for the internet, but it is heavy on assurances that any such regulations would be “light-touch.” Those who worry that inviting the feds to just “do something” could lead to violations of free speech need not be concerned. As Glaser argues, “For decades, radio and television followed regulations—hardly heavy-handed ones—meant to ensure they served the information needs of their audiences and did not actively harm political discourse.”

That would be lovely, if it were true, but not a single part of that statement is correct. The belief that government regulation of internet content providers will be effective and minimally-invasive is rooted in a poor understanding of the history of broadcast regulation. That history actually suggests the opposite, that these regulations will be ineffective, highly-intrusive, and will create significant unintended consequences.

In part, that is because the very idea of a singular “public interest” has always been a convenient fiction, albeit one that wears poorly in a pluralistic society. For example, under the banner of advancing the public interest, the FCC once required radio stations to give away free airtime to religious groups (most of which went to mainline Protestants, Roman Catholics, and the larger Jewish denominations) since it seemed obvious to the commissioners that there was a singular public interest in promoting a vague baseline religiosity. Agnostics, atheists, and members of smaller religious groups need not apply.

In practice, the public interest standard became a tool for advancing the private interests of a narrow, politically well-connected elite by appealing to majoritarian values and at the expense of minority interests. In one of her early newsletters, Ayn Rand excoriated the public interest standard as an excuse covering “the right of some men (those who, by some undefined criterion, are the public) to sacrifice the interests of other men (of those who, for unspecified reasons are not the public).” (“Check Your Premises: Have Gun, Will Nudge,” The Objectivist Newsletter, vol 1, no 3, March 1962.)

Rand’s words were meant particularly for FCC Chairman Newton Minow, who, in what may be the only famous speech by an FCC commissioner, had described television as a “vast wasteland” and called for limits on the number of game shows, Westerns, and cartoons aired. Sorry, kids, Chairman Minow thinks a “steady diet for the whole country” of the Flintstones or Bonanza is “obviously not in the public interest,” so no Saturday morning cartoon marathon for you! Minow might not have been wrong about the merits of Hanna-Barbera cartoons, but the idea that he and a handful of telecommunications lawyers sitting on the FCC should have a say in deciding that question “for the whole country” was fundamentally undemocratic.

But what was most dangerous about the public interest standard was not the aesthetic preferences of a FCC commissioner or even the religious airtime requirement. The more serious danger was the routine weaponization of the public interest standard to advance private or partisan interests. For example, during the early 1940s, the Roosevelt administration pushed for a ban on newspaper ownership of radio stations, ostensibly because of the public’s interest in preventing cross-media consolidation, but also to prevent anti-New Deal newspaper owners from having a radio platform from which to criticize the President’s policies. The FCC during Richard Nixon’s administration would use a similar rule to try and pressure the Washington Post into abandoning its investigation of the Watergate scandal.

But the ultimate example of the disconnect between the well-meaning intent of the public interest standard and its abuse for partisan advantage was the John F. Kennedy administration’s use of the Fairness Doctrine to silence conservative political dissent on the airwaves in the 1960s. Conservative radio broadcasting surged in the early 1960s as a result of the rise of non-network, independent radio stations that were cash-strapped and willing to air people whose politics were too radical for network radio. Conservative broadcasters—the most prominent of which had as many weekly listeners as Rush Limbaugh would a generation later—constantly attacked the Kennedy administration’s policies, like his failure to provide air support at the Bay of Pigs, opening trade with Eastern Bloc nations, and ratifying the Nuclear Test Ban Treaty.

The administration’s plan for dealing with these conservative irritants involved, among other measures, using the regulatory power granted to the executive branch to intimidate their donors and hosts. First, a special campaign of targeted Internal Revenue Service audits challenging their tax-exempt status stemmed the flow of donations to the offending broadcasters. Then, the selective application of the Federal Communication Commission’s Fairness Doctrine pressured station owners into dropping conservative programming altogether. All of this was coordinated from the Oval Office and the Attorney General’s office, part of it even caught on tape.

Subsequently, in July 1963, FCC Chairman E. William Henry announced a “clarification” of the Fairness Doctrine that mentioned only conservative positions and rhetoric when clarifying which kinds of speech would be targeted. The White House promptly organized a front organization, the Citizens Committee for a Nuclear Test Ban Treaty, that could lodge Fairness Doctrine-based requests for response time whenever a conservative broadcaster criticized the proposed treaty. The FCC also passed an enhancement of the Fairness Doctrine rules called the Cullman Doctrine, which required stations to not only offer response time slots contingent on the responding group paying for the airtime, but to give that airtime for free if interest groups said they could not afford to pay. (Unsurprisingly, no one ever said they could afford to pay.)

With the help of the Fairness Doctrine, the administration blunted criticism of the Nuclear Test Ban Treaty, which passed the Senate that fall. Kennedy was assassinated not long after, but the partisan use of the Fairness Doctrine continued apace. During the presidential campaign of 1964, the Democratic National Committee commissioned a team of operatives—including a former FCC lawyer who had been in charge of Fairness Doctrine enforcement—to garner free pro-Lyndon Johnson airtime any time a station aired broadcasters who spoke of their support for Barry Goldwater. As the lead operative later reported, the Fairness Doctrine campaign had secured more than 1,700 free broadcasts boosting Johnson and been highly effective at “inhibiting the political activity of these Right Wing broadcasts.”

From 1949 to 1963, the Fairness Doctrine had existed only on paper. It is notable that the first two actual applications of the Fairness Doctrine each expressly advanced partisan interests. Later in the decade, other liberal interest groups would also use the Fairness Doctrine to force stations to offer balanced programming or even, in the case of segregationist television station WLBT in Jackson, Mississippi, to convince the FCC to revoke their broadcasting license. But the Fairness Doctrine was never used to balance liberal programming with conservative voices. It had become entirely a tool for advancing liberal speech and political candidates at the expense of conservative speech and candidates.

Later, President Richard Nixon considered using Fairness Doctrine complaints to force the major television networks to give his administration’s policies more favorable coverage by, for example, being less critical of the slow pace of withdrawal from the Vietnam War. In the end, however, Nixon used other means to get what he wanted, but the fact that he had those tools at his disposal gave him leverage in back-room negotiations with network executives.

The realization that the tools used to suppress conservative speech by the Kennedy administration and the DNC in the early 1960s could be used by the Nixon administration to suppress liberal speech in the early 1970s led several operatives from the earlier censorship campaign to rue their involvement. This is a crucial test for any proposed government regulation. Do not imagine only the utility that your side or your interests might gain from its application; think also about the damage that could be done by the other side through that rule when they inevitably take their turn in power. If that prospect scares you, then reconsider the regulation.

To apply that test to today, imagine if the Trump administration had the same regulatory powers over the internet at its disposal as Kennedy had over broadcasting. What would a Trump-appointed FCC Chairman, told to keep internet discourse fair and balanced, currently be doing? Imagine that Chairman, after a Trump tweetstorm complaining about the Washington Post’s unfair coverage, launching an investigation into the ratio of conservative to liberal reporting on the Post’s website. Or consider the kind of pressure that pro-Trump conservative activists could place on Facebook or Twitter with the implicit threat of a federal investigation into algorithmic bias against conservative accounts.

It is naive to think, as Glaser writes, that regulation of the internet “wouldn’t mean that the feds would decide what is and is not acceptable speech on the platforms.” That statement directly contradicts the following sentence, that it “could mean rules against broadcasting hateful views or disinformation to large audiences.” You can either have the government play censor and ban hate speech or not; you can’t have both.

If intent were all that mattered, Glaser’s call for banning hate speech and disinformation would at least sound plausible. The government says no hate speech, the platforms comply, bada bing, bada boom, problem solved! Yet again, realize that regulations are only as good as the regulators responsible for enforcing them. How might an investigation into the “fake news” problem during the 2016 election look different depending on whether Hillary Clinton or Donald Trump was sitting in the White House today? If there is one key lesson from the history of the Fairness Doctrine to bear in mind, it is that good intentions paved the road to regulatory hell. It is entirely possible that rules meant to promote good information and discourage hate speech could be twisted to promote disinformation and protect hate speech.

There is also a cautionary tale from the history of broadcast regulation about the chilling effect that content regulation has on radical political speech. During the height of the anti-Radio Right censorship campaign in the 1960s, many radio station owners confronted with Fairness Doctrine complaints didn’t respond by adding liberal points of view; instead, they dropped the conservative programs altogether and simply avoided any content that touched on hot button issues. And if they did still air programs touching on “controversial issues of public importance,” as the Fairness Doctrine ostensibly encouraged, they frequently framed any disagreement over that issue as a binary option between mainstream, respectable points of view. Radicals from both Left and Right were drastically underrepresented.

A great deal of political speech that is broadcast today could not have existed under that regulatory framework. You could not have the Daily Show or the Late Show if every time Trevor Noah or Stephen Colbert criticized the President the network had to give the administration free response time. Single point-of-view editorial shows—from Rachel Maddow to Tucker Carlson—would be less common given the resulting obligation to provide contrasting opinions.

That this kind of programming exists at all is a product of the decision in the late 1970s to exempt satellite and cable broadcasting from the kind of close regulatory scrutiny applied to network broadcasts. Otherwise, cable television would look more like network television, with a tendency to appeal to the lowest common public denominator rather than to diverse constituencies. Given the outcomes from the history of broadcast regulation, if similar rules were applied to the internet there is every reason to expect a similar chilling effect on the major platforms.

The final problem that I will mention with regulating the internet like broadcasting is that the basic legal arguments for broadcasting regulation do not apply to the internet. Even back in the 1930s, the courts recognized that the public interest standard represented an infringement on perfectly free speech. First, the government decided which applicants received station licenses, choosing who got the opportunity to transmit their speech in the first place. Second, they made license renewal contingent on whether their speech was acceptable or not. These rules privileged the speech of certain groups at the expense of others.

For example, early socialist-run radio stations were labeled as propaganda not in the public interest and ultimately pressured into selling their stations to the major, milquetoast networks. The public interest standard was used to undermine both the Popular Front movement and anti-New Deal conservatives during the 1930s. Then in the 1960s, it would hinder the rise of both the New Left and the New Right.

These infringements on the First Amendment were justified ex post facto on the basis of the scarcity principle, the idea that since broadcast spectrum was naturally finite, the government was forced to ration it out in an orderly manner to prevent signal overlap and to promote a diversity of opinion. That principle rested on several assumptions questionable even in the early twentieth century, but it was at least a plausible-sounding argument.

However, the scarcity principle could not apply less to the internet. There are no natural limits on the amount of internet speech that is possible, no digital spectrum that must be divvied up and managed by government regulators lest it all run out. And so there is no reason to treat internet media as fundamentally different than any other category of media. The best corollary to the internet is not radio or television but print media.

Glaser’s justification for why social media ought to be regulated by the government is that “like radio or television, social media plays a central role in providing people with the information they need to participate meaningfully in political life.” But that standard is equally true of newspapers. Think of the importance of whichever your preferred paper of record to your civic knowledge and participation.

Glaser also argues that the internet is different because of the prevalence of conspiratorial and hateful nutters. But there too, you can find plenty of corollaries from the history of the newspaper industry. You cannot, for example, tell the story of the Spanish-American War without speaking of “yellow journalism.” Across the grand scope of American history, newspapers have been as prone to conspiracy theorizing and disinformation as internet-based media is today.

Yet despite the manifest failings of newspapers, we generally recognize the necessity of protecting press freedom. I cannot imagine that even Glaser would welcome applying old broadcast regulations to newspapers, whether print or digital. I certainly would look amiss at calls for the government to require Slate or any other magazine to publish a certain quota of religious or Right-of-center content in the service of promoting fairness and balance.

That is because when James Madison wrote the Bill of Rights codifying the freedom of the press, he was not using the term in the sense we do today to refer to journalism. ‘Press’ quite literally meant the printing press. In contrast to much of Europe, where protections for speech did not always extend to the printing press, in America anybody with a press could print whatever they wished, regardless of how the British crown or established clergy or the general public felt about what they said. Among the ideals that American was founded upon was the immodest proposition that the best response to bad speech is more speech, not censorship. It is a fundamentally democratic proposition, one that is as appropriate for the digital age as it was for the 1780s.

Enforcement of the U.S.-Mexico-Canada Agreement (USMCA) has proven to be an important stumbling block to its ratification in the United States. Democratic law makers have demanded that enforcement provisions be strengthened, particularly with regard to labor and environment provisions. Specifically, some have asked for the correction of a major flaw in the NAFTA state-to-state dispute settlement chapter, under which the appointment of dispute panels had been blocked (in part due to the absence of a roster of panelists to draw from). U.S. Trade Representative Lighthizer stated in congressional testimony that this issue had been addressed in the renegotiated text. In a response to a question from Sen. Ron Wyden (D‑OR), asking “Would you be opposed to clarifying that the text of Chapter 31 of the revised NAFTA is not meant to allow panel blocking?,” Lighthizer said:

The text of Chapter 31 of the United States – Mexico – Canada Agreement (USMCA) is not meant to allow panel blocking. Indeed, panels have been successfully formed under Chapter 20 of the NAFTA (its precursor). As we move forward with Congressional consideration of the USMCA, we look forward to discussing this and any other issues related to enforcement with you and your colleagues.

However, as we have pointed out on multiple occasions, it’s not clear that the problem of panel blocking has been resolved by the new USMCA text. Notably, Lighthizer did not say it has been, instead emphasizing that the agreement “is not meant to allow panel blocking,” which is vague enough to suggest it does not preclude it.

To add another healthy dose of skepticism to Lighthizer’s claim, a draft [$] of the Statement of Administrative Action, which was submitted on May 30^th (the final version of which will be part of the implementing legislation), seems to suggest he has something else in mind when it comes to enforcement. Two relevant aspects are as follows.

First, on the problem of the roster, the draft SAA states:

b. Dispute Settlement: Nominations for Dispute Settlement Roster

Article 31.8 of the USMCA requires that by the date of entry into force of the USMCA the Parties establish a roster of up to 30 individual[sic] who are willing to serve as panelists. USTR will consult with the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate (“Trade Committees”) as it considers nominees for the roster of panelists and will provide the Trade Committees with the names of the experts it is considering, and detailed background information on each, at least 30 days before submitting the names of any nominees.

On its face, this appears to suggest that a roster will be established by the date of entry into force of the USMCA. However, there may be a problem ensuring that this happens. The problem is, there is nothing that guarantees that USTR will submit the names of nominees. Furthermore, even if they are submitted and a roster is established, there is no guarantee that the roster will be maintained.

In comments to the House Ways and Means Committee on enforcement of the agreement, we suggested two options for Congress to address this problem. First, they can call on the U.S. Trade Representative to reopen the USMCA and introduce new language to Chapter 31 that addresses the three principles we highlighted in a recent paper: the roster should not be a hurdle to appointing panelists; an independent third party can act as a facilitator in the panel appointments; and, in the absence of an independent third party, the complainant should have the power itself to appoint, in order to prevent the respondent from delaying panel formation. And second, Congress could call on the U.S. Trade Representative to work with Canada and Mexico to establish a roster of panelists right now, thus ensuring a roster is in place upon entry into force of the agreement.

Second, on the issue of enforcement more generally, the SAA devotes substantial attention to the use of Section 301 of the Trade Act of 1974 as an enforcement tool. The document states, at length:

c. Enforcement of U.S. Rights

Legislative authority currently exists for the Executive Branch fully to enforce U.S. rights under Chapter 31. Section 301 of the Trade Act of 1974, as amended, authorizes the United States Trade Representative (“USTR”) to take specific action, subject to the President’s direction, and to take all “appropriate and feasible action” in the President’s power that the President directs the USTR to take to enforce U.S. rights under trade agreements such as the USMCA.

The United States shall enforce its rights under the USMCA through consultations and the dispute settlement mechanism provided for in Chapter 31 when possible. However, a decision by Canada or Mexico to prevent or unreasonably delay formation of a dispute settlement panel would not prevent the Executive Branch from enforcing U.S. rights. In this circumstance, the USTR’s determination on whether the USMCA partner breached USMCA obligations or impaired U.S. rights under the USMCA would be based on the USTR’s evaluation of the relevant legal and factual issues, including the fact that the USMCA partner failed to cooperate in the dispute settlement process.

Once the USMCA enters into force, an interested person may file a petition with the USTR requesting section 301 action in any case in which the person considers that another USMCA government has failed to honor a provision of the Agreement or has caused the nullification or impairment of benefits that the United States could reasonably have anticipated under the Agreement. Alternatively, the USTR may, on his or her own initiative, institute a section 301 proceeding.

If the USTR decides to initiate an investigation under section 301 with respect to alleged Canadian or Mexican practices, section 303(a) of the Trade Act requires the USTR initially to attempt consultations with the government of the relevant USMCA country to resolve the matter. If the case involved a possible breach of the USMCA or impairment of U.S. rights under the USMCA, and if consultations have failed to produce a mutually acceptable solution, then section 303(a) requires that the matter be submitted to the formal dispute resolution procedures of the Agreement, or to the applicable dispute settlement procedures of another trade agreement to which the United States and the other USMCA country are parties. The USTR will seek information and advice from the private sector, including form the petitioner, if any, in preparing U.S. presentations for consultations and formal dispute resolution procedures.

Section 301 provides the USTR with authority to take appropriate retaliatory action in the event that a panel report upholds a U.S. allegation that another USMCA government has breached the Agreement or nullified or impaired U.S. benefits and the other government does not take satisfactory remedial action or provide satisfactory compensation.

There are few things worth highlighting here. First in its description of enforcement under the USMCA, USTR seems to be emphasizing and prioritizing the use of unilateral enforcement tools, as it tries to make the case that enforcement authority exists even without a functioning state-to-state dispute settlement mechanism. The contrast with the draft SAA for the Trans Pacific Partnership (TPP) is interesting, as the TPP SAA did not mention Section 301 in the context of dispute settlement at all.

Second, it is interesting that “a decision by Canada or Mexico to prevent or unreasonably delay formation of a dispute settlement panel” is singled out as the problem. As far as we know, these countries have never done this. Instead, it was the United States that prevented a panel being appointed. Thus, the key question to ask here is, what happens if the United States takes a decision to delay the formation of a panel? If the United States were to do so again, perhaps Canada or Mexico would retaliate by doing the same thing. But the real concern here is whether USTR will allow panels to be appointed.

Third, and most troubling, is the statement that a breach of the obligations “would be based on the USTR’s evaluation of the relevant legal and factual issues, including the fact that the USMCA partner failed to cooperate in the dispute settlement process.” At the core of all this, it seems as though Lighthizer is looking to create a shift away from neutral adjudication, and towards unilateral determinations and enforcement. That would be a major step backwards for the rule of law in international trade agreements.

There is still time to address these issues before USMCA is ratified. Members of Congress are working with the administration to address these enforcement issues. Ideally, they will be able to fix the flaws in NAFTA so that the USMCA actually works the way that it was intended: The three parties will be held to account for the obligations they have agreed to.

President Trump has decided to blame Mexico for the border crisis, rescinding and then reiterating his threat to impose tariffs on America’s neighbor to the south if it doesn’t stop migrants from Central America’s Northern Triangle from coming. Yet Mexico’s enforcement of immigration laws against Central Americans has been more vigorous than the United States for some time.

In 2018, Mexico deported more immigrants back to the Northern Triangle than the United States did, and it deported nearly all the immigrants who it apprehended in that year. The United States did not. It’s just not true that Mexico is less vigorous in its anti-immigration efforts than the Trump administration.

Indeed, from 2004 to 2018, Mexico deported 1.7 million Central Americans back to the Northern Triangle countries of Guatemala, Honduras, and El Salvador. The comparable U.S. figure was just 1.1 million. As Figure 1 shows, the gap has narrowed in recent years, but in 2018, Mexico still deported 6,177 more Northern Triangle migrants than the United States did in that year. Mexico also deported more in 2015, 2016, and 2017.

The United States is a richer country with a much larger immigrant population from the Northern Triangle than the Mexico (3 million compared to 80,000, according to the United Nations), yet it has still not deported nearly as many as its poorer neighbor to the south.

Moreover, Mexico deported 1.75 million of 1.85 million apprehensions during the same period, meaning that 94 percent of apprehensions are removed (Figure 3). Meanwhile, the United States has routinely apprehended at the border far more Central Americans than it has deported in recent years (Figure 2). The U.S. deported 1.1 million Central Americans from 2004 to 2018, while it apprehended 1.7 million at the border alone (about 10 percent are apprehended in the interior).

President Trump is wrong to blame Mexico for the U.S. inability to enforce its own immigration laws or deter Central Americans. Mexico is carrying out more deportations of Central Americans than the United States is, and it is more likely to deport those who it apprehends than the United States is. The United States should work with Mexico to make legal immigration options more readily available for Central Americans to deter illegal immigration.