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Walter Olson

In a pair of cases decided within weeks of each other in 2022, federal judges ruled that private schools’ tax‐​exempt status under section 501 (c) (3) of the tax code constituted “federal financial assistance” and thus subjected the schools to federal regulation under Title IX. For a while, it began to look as if the independence of schools that do not take federal money—among them Michigan’s Hillsdale College, as well as thousands of private and religious K‑12 institutions—was at risk. Now, in welcome news, a unanimous panel of the Fourth Circuit has reversed one of the rulings.

Donna Buettner‐​Hartsoe and her daughter sued the Baltimore Lutheran High School Association after the daughter was allegedly subjected to bullying and sexual harassment at Concordia Prep, a Lutheran high school in Towson. They sought to invoke the federal Title IX law on the grounds that the school was organized under the familiar tax exemption provisions of 501(c)(3) of the tax code, which apply to much of the nonprofit sector (including the Cato Institute).

Although considerable precedent suggested that tax exemption did not by itself constitute “federal financial assistance,” and the federal government itself had not sought to press such a claim, a Baltimore federal judge nonetheless agreed. Weeks later, a California federal judge adopted the same view in a case against a school called Valley Christian Academy. In that case, which is still pending, the judge also ruled that accepting money under the federal government’s Payroll Protection Program (PPP), which was intended to avert layoffs during the Covid pandemic, also separately constituted federal financial assistance for which it would have to submit to Title IX regulation.

Advocates were soon raising similar arguments elsewhere, including in a suit against Hillsdale College, the Michigan institution famous for spurning the federal dollar and the regulations that go with it. In December of last year, I spoke with Tunku Varadarajan for a piece he wrote on the Hillsdale College case for the Wall Street Journal. I said:

The proposition that nonprofit tax status should subject private institutions to the regulations applied to government grantees would be a radical departure from longstanding tax and legal principles and would put at risk the fundamental independence of America’s private charitable and educational sectors, to say nothing of its religious institutions.

Fortunately, back East, the Fourth Circuit panel was having none of it. In a ruling based on statutory interpretation, as opposed to the Constitution, the court marched through the text and its application over time, and distinguished cases in which federal financial assistance had been found in programs that granted students money to attend a school, thus assisting it indirectly. The court also distinguished the famous Bob Jones University case, in which a tax exemption was stripped for an institution for acting against settled public policy, as resting on an entirely different basis. (More here on why the logic of the Bob Jones case did not spread as far as some predicted.)

Let’s hope the Valley Christian Academy ruling from California is speedily reversed as well. America’s nonprofit sector should not be subjected to prolonged uncertainty about its legal status.

Colleen Hroncich

Jeana Wilson didn’t plan to get into education. But her daughter has special needs that her local school district wasn’t able to meet. She spoke with the state department of education and her daughter’s teachers, did a lot of research on individualized education plans, and joined online parent forums trying to find a solution. “That’s when a lot of moms said, ‘hey, you kind of have to piece this together yourself.’ And I saw so many moms struggling, especially ones living in underserved and lower‐​income areas where those services weren’t available,” she recalls. “And I said, ‘you know what, I’ve never taught before, but I better figure it out—for the sake of not just my daughter, but other children who need access to those services, too.’”

Three years ago, she started TwiddleU, a nonprofit organization that provides education for autistic and neurodiverse children in the greater Atlanta area. “It started off because we were trying to address learning loss during the pandemic for neurodiverse children, specifically nonverbal autistic children and children with ADHD,” Jeana says.

They initially met at a local park and community center because they were low on funds and looking for a cost‐​effective approach. They brought in a speech therapist and an occupational therapist, and it became very popular. They even received a VELA Education grant to help them get started.

“The following year we ran it out of the third floor of my house, but there are so many rules and regulations to operating anything involving children out of a home,” says Jeana. “We reached out to VELA again for the second time, and they actually gave us the funds to get into a commercial space. And it’s been phenomenal.” She expects to officially open the doors to her microschool this fall.

She also joined KaiPod for an extra boost. “Having that support is absolutely fantastic,” she says. “There are so many other blossoming microschools who are in similar positions and want to help neurodiverse children as well. And we’re just kind of holding each other’s hands, trying to get through this.”

Jeana’s background is in computer science and cybersecurity, and around ten years ago she started an IT staffing and consulting firm. “Having that entrepreneurial spirit has helped me through this venture,” she says. “I don’t get too disheartened because I’ve been through the ups and downs and the roller coasters of working through and trying to manage a business.” As a bonus, having run a staffing firm, she has access to the platforms and resources she needs to find teachers and other staff.

Because she focuses on neurodiverse students, Jeana plans to have a wide range of offerings. For her summer programming last year, she brought in a curriculum specialist who created a customized plan for every student. “It’s so interesting when you see the range of where these children are. We had three children around the same age but on different levels in different things,” says Jeana. “She sat down with each child and met with each parent. And she found out what their goals were—where they were and where they’d like to be. Then she worked with them that entire summer, and it was so nice because I think that’s what they need.”

Given the special needs of her students, TwiddleU will also emphasize life skills. “The curriculum is very important, but we also want them to grow and become independent adults,” Jeana explains. “That’s where the occupational therapy comes in. And our teachers are phenomenal with helping with that as well. So you know simple things like being able to warm up, maybe, a bowl of mac and cheese in the microwave and operate that properly. Or to bend down and tie a shoe. You know, simple things that sometimes neurotypical people don’t think about. But those are the things that they need to succeed in life.”

The schedule at TwiddleU is also designed to meet the needs of the neurodiverse students Jeana wants to serve. The original schedule was a rather typical 9 a.m.– 3 p.m. “But we noticed the kids got so exhausted,” Jeana says. So they switched to a 10 a.m. – 2 p.m. schedule. “We noticed the shorter days worked so much better for these kids. But at the same time, I had to keep in mind we have working parents. So what we’re in the process of doing now—in addition to reopening as a fully functioning microschool—is adding before‐ and after‐​school programs for those parents.” Families also have the flexibility of choosing to attend three, four, or five days a week.

Being accessible to disadvantaged families is very important for Jeana. “It has always been my passion to help families who are low income or living in underserved areas where they don’t have access to as many therapies and assistance for their children,” she explains. So she is planning to participate in Georgia’s Special Needs Scholarship Program and the new Georgia Promise Scholarship education savings account (ESA).

Considering she never expected to get into education, Jeana’s efforts with TwiddleU are all the more amazing. She’s taking individualized education to a whole new level, and neurodiverse children in the Atlanta area are going to be the beneficiaries of her vision.

Nicholas Anthony

Under the Biden administration, the government has launched an all‐​out “war on junk fees.” This “war” has covered fees charged by airlines, concert venues, and much more. It has even spread to financial services. For instance, Senator Sherrod Brown (D‑OH) has said, “Credit card late fees are the most costly and frequently applied junk fee.”

Yet the administration has been curiously silent on all of the fees charged by the government itself. From the Internal Revenue Service to local libraries, there is no shortage of fees charged by the government. To get a better sense of these fees, the table below features 101 different late fees charged by the government. Rather than jump to restrict the freedoms of the private Americans trying to operate businesses, the administration should take some time to reflect on its own activities.

Erec Smith

Recently, the University of North Carolina‐​Chapel Hill Board of Trustees voted, unanimously, to divert money from its Diversity, Equity, and Inclusion (DEI) initiatives into public safety. This is on the heels of other institutions shuttering diversity offices and laying off or repurposing positions focused on DEI work. Are we starting to see a trend? Is this the beginning of a “Great Diversion”?

Contemporary DEI initiatives have been a point of contention for years now. Anti‐​DEI sentiment, which does not necessarily mean an aversion to the concepts of diversity, equity, and inclusion per se, grows with every exposition of DEI’s driving ideology, Critical Social Justice, which is inherently, divisive, illiberal, and, actually, racist.

However, any opposition to DEI programs is usually seen as a right‐​wing attack on anything that can improve the lives of minoritized groups. That accusation holds more water in response to calls for the eradication of DEI initiatives. But the diversion of DEI funds to another worthwhile endeavor—that is, trading one good for another good—is harder to scrutinize.

Yes, UNC‐​Chapel Hill has chosen to divert DEI’s funding to public safety to prevent disruption of university operations. Whether the good of public safety constitutes a “good for good” trade is understandably debatable. However, DEI funds can also be diverted to initiatives more clearly aligned with diversity, equity, and inclusion in the true sense of those words. Initially, I thought of outreach and immersion programs.

Outreach programs geared toward K‑12 students are created by colleges and universities in collaboration with local high schools to help students understand what is necessary to get into college, what they need to do to prepare, and what to expect when they get there. When I say “immersive,” I refer to outreach programs where students visit campuses and experience what it is to be a college student or a particular major. According to the Compass Education Group’s “Guide to Successful Outreach Programs,” students and colleges benefit from such programs in distinct ways.

According to Compass, outreach programs can achieve the following for students: clarify career goals, assistance with access to resources, assistance with the application process, academic advising, introduction to a college’s academic support services, and, obviously, better prepare students for college‐​level work. This kind of outreach can assuage any “culture shock” that may set in among students from marginalized communities. It can also introduce students to the necessary merits for college success at a younger age, thus demystifying academic merits.

The benefits to participating colleges include greater student readiness, better resource management, and increases in enrollment, retention, and, of course, diversity. Regarding diversity, Compass does not mince words: “Helping these students prepare for and transition to postsecondary education helps colleges meet their diversity goals.” Redistributing money from DEI initiatives to outreach programs that can be geared toward underrepresented students may be a better way to achieve diversity, equity, and inclusion. Perhaps outreach programs are the new—and more effective—DEI initiative.

Several colleges already have outreach programs that, typically, take place in the summer. However, with sufficient funding, these programs can become more robust. In fact, non‐​profit organizations exist to do that. For example, The Hidden Genius Project, started by five black professionals, “trains and mentors Black male youth in technology creation, entrepreneurship, and leadership skills to transform their lives and communities.” This project has locations all over the country and offers a variety of programs to introduce students to entrepreneurs, leaders, and technologists through either single or multiday events or deeper and longer immersion into a professional culture. What’s more, this project’s effects align with concepts important to DEI initiatives, like cultural representation.

Hidden Genius alum, Tehillah Hephzibah says,

Growing up, I was never really in a place where a majority of the people looked like me. In the program, I enjoyed being around people who look more like myself and connecting with them. Throughout my life, all of the schools I attended were predominantly white or Hispanic students so joining The Hidden Genius Project was a sigh of relief and comfort for me.

Another program graduate, Brandon Bazile, shares a similar sentiment.

As a Black man who has only ever had at most two other Black boys in my grade, to suddenly having a group of Black males who look like me was eye‐​opening. Being taught and surrounded by excellent Black minds, inspired me to believe that I could always better myself, which was a feeling I had never felt before.

This program is a clear source of agency and empowerment for young black students, a goal DEI proponents claim to have.

MIT’s Introduction to Technology, Engineering and Science (MITES) is an outreach program that has strong partnerships with universities nationwide. The program “provides transformative experiences that bolster confidence, create lifelong community, and build an exciting, challenging foundation in STEM for highly motivated 7th–12th grade students from diverse and underrepresented backgrounds.” As with the Hidden Genius Project, representation and confidence building are some of the most salient effects of MITES.

Indigo Davitt‐​Liu, a graduate of the program, stated, “I’ve always loved math, but I always saw STEM kids as a group removed from me, a type of person I could never be. Through this program, I realized the true amount of diversity there is in STEM fields. I now see myself as part of a STEM community.” Also similar to the Hidden Genius Project, MITES immerses students in environments indicative of a given STEM field. This immersion helps students gain merits they would not have otherwise. MITE graduate Moses Stewart says,

MITES connected me with so many other brilliant and passionate people and gave me an avenue to explore a brighter future for myself. It gave me the opportunity to learn about career paths that would have otherwise been inaccessible. And, to apply and assert myself in challenging courses. Most of all, it gave me guidance and helped me grow into someone who is more confident, hard‐​working, and optimistic about the future.

The outcomes of MITES, the Hidden Genius Project, and comparable programs strongly suggest that funding for DEI programs that have proven to be more ineffective than effective could be put to better use elsewhere.

I must be clear, current DEI initiatives are often undergirded by Critical Social Justice, an ideology that frames the world into an oppressor/​oppressed dichotomy and insists that oppressive forces are present in every human interaction. Surely, funds should be diverted to initiatives that don’t promote divisiveness, resentment, and even a kind of racism. However, I believe diverting funds to immersive outreach programs for K‑12 students is so important that even DEI initiatives steeped in classical liberal values cannot be justified. Workshops on the history and nature of discrimination, cultural differences, and policy are important and should take place, but these things need not be expensive or necessarily whole offices.

No matter what ideological foundation a DEI program has, funds are better spent on programs like The Hidden Genius Project and MITES.

A great diversion is in order. DEI programs have proven relatively ineffective at enhancing diversity, equity, and inclusion, thus proving to be a waste of money. Continuing to spend money on these programs is indefensible, especially when better ways to help our students abound. The day after UNC‐​Chapel Hill diverted funds away from its DEI initiatives, Virginia Commonwealth University and George Mason University did away with required DEI courses for students. The tide is turning when it comes to diversity, equity, and inclusion. Let’s make sure it turns in a healthy and generative direction.

Travis Fisher

Disclaimer: I served as a staff economist at the Federal Energy Regulatory Commission from 2006 to 2013 and as a commissioner adviser from 2018 to 2020.

On Monday, the Federal Energy Regulatory Commission (FERC) issued a “watershed” new ruling addressing electricity transmission and the need to expand America’s power grid. The commission claims the new ruling, titled Order No. 1920 (a nod to FERC’s statutory roots), will cost‐​effectively ensure a more reliable grid. However, if the rule is effective in getting a new wave of transmission projects built, it will be a gift to developers of solar and wind projects at the expense of consumers and taxpayers. In any case, the rule is a step away from true competition and a step toward a convoluted, partisan mess.

What Order No. 1920 Does

This new rule establishes a minimum 20‐​year planning horizon for regional transmission expansion (largely to accommodate new wind and solar facilities). Despite some sugarcoating from FERC, this plan: (1) mandates that regional transmission plans socialize the cost of the most aggressive climate and renewable energy goals of some states and corporate customers at the expense of consumers and taxpayers everywhere, (2) derives from no clear authority granted by Congress, and (3) was rushed to avoid further scrutiny under the Congressional Review Act.

In other words, FERC is unlawfully supporting climate goals that Congress never approved. The need to upgrade electrical infrastructure in the United States is not controversial, but the political methods employed in this ruling are. FERC, an ostensibly independent agency tasked with ensuring reliable power at “just and reasonable” rates, goes far beyond that narrow task with this new ruling.

FERC Commissioner Mark Christie said the following about Order No. 1920 at the May 13, 2024, open meeting: “This is not about promoting reliability. This rule is a shell game designed to disguise its true agenda, which is about the money. It’s a 1,300-page vehicle to socialize the trillion‐​dollar cost of the rule’s sweeping policy agenda.” For the record, the trillion‐​dollar cost estimate is not hyperbole, and much of the cost is hidden in tax credits.

Is FERC Doing What Congress Can’t?

Senate Majority Leader Chuck Schumer (D‑NY) gave away the shell game. When asked about the new rule, Schumer stated, “We always had FERC in the back of our minds because it could be done without congressional Republican approval.” He added that “FERC is doing just about everything we asked,” regarding the new rules that bolster the Inflation Reduction Act (IRA). Notably, Congress was unable to subsidize transmission in the IRA by including a lucrative investment tax credit (although the IRA did offer some new grants related to transmission).

This is not the first political push for more transmission at FERC when Congress comes up short. Partisan leaders both past and present have found FERC to be an easier vehicle than Congress for enacting energy policy. Although convenient politically, this directly violates FERC’s independent and nonpolitical role. Both major parties have tried to politicize FERC—President Trump’s Department of Energy proposed a fiercely partisan rulemaking in 2017, which was unanimously rejected, and rightly so. The difference seems to be that Democrats are more effective at turning their preferred policies into FERC rules. Much like Order No. 1000, FERC’s recent rulemaking promises to socialize the cost of state and corporate decarbonization policies.

Order No. 1920 Probably Won’t Enhance Reliability or Reduce Costs

Uncertainties around Order No. 1920’s cost‐​effectiveness and ultimate impact are reason enough to oppose it. With this rulemaking, FERC has again failed to address its role in the ever‐​increasing cost of electricity and ever‐​weakening grid reliability. Commissioner Christie said during the open meeting:

This rule could not come at a worse time for consumers. It is indisputable that power bills are rising faster than the overall inflation rate, which is itself very high. It is indisputable that transmission rates are now the fastest‐​rising part of those power bills.… It’s an historic failure to stay within our legal authority. And, worst of all, it’s an historic failure to meet our basic obligations under the Federal Power Act to protect consumers.

Commissioner Christie is correct. Over the past 12 months, US electricity costs have risen 5 percent, which is nearly 2 percentage points higher than the overall Consumer Price Index. A common refrain from FERC is that the agency does not regulate retail sales of electricity—while technically true (the agency regulates wholesale markets), FERC cannot pretend its rulemakings have no impact on the cost of delivered power, especially when transmission costs continue to grow as a share of the total cost of electricity, as Commissioner Christie aptly noted.

Consumer advocates have been asking FERC to grapple with these cost impacts for years, to no avail. In other words, the commission has never understood how its rules impact the all‐​in cost of electricity paid by retail customers and taxpayers, so we have no reason to believe its claims that Order No. 1920 is cost‐​effective.

Further, there is no evidence that pushing the grid toward additional intermittent resources like wind and solar will enhance reliability or reduce costs. The exact opposite is more likely to be true. It is pure political propaganda to frame transmission expansion as a reliability imperative rather than a handout to developers of solar and wind projects. FERC Chairman Willie Phillips said the following in a news release:

Over the last dozen years, FERC has worked on five after‐​action reports on lessons learned from extreme weather events that caused outages that cost hundreds of lives and millions of dollars. We must get beyond these after‐​action reports and start planning to maintain a reliable grid that powers our entire way of life. The grid cannot wait. Our communities cannot wait. Our nation cannot wait.

Those of us who worry about grid reliability agree with the words above, but the logic is backward. As Robert Bryce has pointed out many times, if we expect extreme weather to worsen, there is no good reason to build a grid around weather‐​dependent resources.

FERC is right, of course, to point out that state and federal laws mandating decarbonization and electrification are “key drivers of Long‐​Term Transmission Needs.” (Paragraphs 432, 440, 442, and 481 of the final rule.) But let’s not pretend that these laws—or the FERC rulemakings that enable them—will promote grid reliability. According to the North American Electric Reliability Corporation (the reliability watchdog that reports to FERC), these policies are a growing risk to grid reliability.

Conclusion

Increasing the society‐​wide cost of energy—either directly through higher electricity prices or indirectly by magnifying taxpayer‐​funded IRA subsidies—is not only undesirable but goes against the mission of FERC. With this week’s rulemaking, the commission has decided to shape energy policy (which is the job of Congress, not independent agencies) rather than adhere to its mission of ensuring reliability while keeping energy costs reasonable. This naked partisanship is an argument for reducing the role of agencies like FERC in the energy sector at a minimum, optimally abolishing FERC and agencies like it, and devolving their legitimate functions to markets.

If FERC truly wanted to pay homage to the 1920s, it would not have issued a 1,363-page rule that imposes burdensome regulations. Rather, it would heed the wise words of 1920s President Calvin Coolidge in promoting the idea that “this country would not be a land of opportunity, America could not be America, if the people were shackled with government monopolies.” With this new rule, FERC adds yet another heavy chain to the shackles of government monopoly.

Cato research associate Joshua Loucks contributed to this article.

Neal McCluskey and Colleen Hroncich

On May 17, 1954, something necessary but not sufficient for American liberty happened: The US Supreme Court struck down de jure racial segregation in public schools. After the Civil War ended legal prohibitions against black Americans receiving even basic literacy, finally Brown v. Board of Education took the next step, declaring forced government separation in public schools anathema. But that only brought African Americans up to a better but still unfree status quo—government-controlled education—and not real educational freedom.

Of course, the road from Supreme Court declaration to desegregation was not an easy one. Many southern states refused to comply with the ruling, and the concrete structures of centuries of rank governmental and social discrimination, from segregated housing to yawning economic inequality, remained firmly in place. And, yes, “freedom of choice,” in the form of supposed choice of public schools, and vouchers for students to attend segregated private schools as public schools were shuttered, were part of this resistance.

But choice—freedom—was not the enemy.

As desegregation proceeded, and especially as it turned to mandated integration through such means as compelled busing, many African Americans embraced choice not just to get the education they wanted for their children, but for the inherent good of self‐​determination.

For one thing, African Americans lost a lot during desegregation. Compelled separation by race was repugnant but blacks had true community schools, not just with children from the community, but teachers and administrators as well. As one woman from Wilmington, North Carolina, reminisced about her once all‐​black alma mater, “We were in a cocoon bathed in a warm fluid, where we were expected to excel.”

But when integration of the school was mandated, “We went from our own land to being tourists in someone else’s. It never did come together.” Meanwhile, tens of thousands of black educators lost their jobs, a process Horace Tate, long‐​time head of the Black Georgia Teachers and Education Association, referred to as “outergration.” As “black schools” were closed, white administrators and, often, white politicians, took over.

White political majorities, just by size if not also entrenched power, exerted influence sufficient to control many integrated public schools. This, too, exasperated some African Americans. Indeed, no less a desegregation icon than Kenneth Clark, of the famous “doll test” integral to the Brown decision, called for the creation of myriad new, independent schools of choice to give black people power in education they could not exert in politically controlled, bureaucratic district schools.

Even today, some African Americans simply want to attend schools run by black people, staffed by black people, suffused with black culture, and serving black children. Indeed, many may resent what seemed to be the underlying academic assumption for mandated integration: for black children to learn, they must be in the same buildings as large numbers of white children. The refrain might be familiar: Who says that for black children to learn they must be sitting next to white children?

There’s good news for black families who are looking for different educational environments for their children. Inspired in part by the increase in black homeschoolers and in part by the expanding availability of school choice programs, education entrepreneurship in the black community is growing.

For example, Anthony Brock and his brother opened Valiant Cross Academy, an all‐​male school in Montgomery, Alabama, in 2015. “It’s the birthplace of the civil rights movement. It’s also known as the cradle of the Confederacy,” Anthony explains. “There’s so much change happening right here in Montgomery. Right now we have 200,000 residents, and we’re averaging about 70 homicides a year. And most of those are African American males.” So he and his brother felt called to open a school that would reach young black men and put them on a better path.

The desire for community. The desire for empowerment rather than assignment to undesirable schools. Both likely explain why school choice, including independent charter schools and private choice vehicles, such as vouchers and education savings accounts, typically garner more support from African Americans than other racial and ethnic groups. They are also likely the reasons why black families disproportionately choose charter schools over conventional public schools.

Of course, many black families and children no doubt want to attend integrated schools and might well be very comfortable in the minority. And they should have the ability to seek that out unrestrained by the government. This is in keeping with what Brown helped to drive forward: freedom for African Americans.

Clark Neily

“I have a theory: Qualified immunity has already been bitten by one of the walkers in the Walking Dead, and it’s in the zombification process.”

So said David French on last week’s episode of The Dispatch’s Advisory Opinions podcast while discussing a recent Fifth Circuit decision denying qualified immunity to a pair of Houston police officers in an utterly bizarre false‐​arrest case. Though he doesn’t elaborate, the idea seems to be that qualified immunity’s vital essence has been drained over the years, leaving the dead‐​on‐​its‐​feet doctrine to stagger around menacing victims of government misconduct and searching for brains to eat.

It’s a whimsical image, and I hope David’s right. But here’s an even simpler take: judicial enthusiasm for qualified immunity is starting to wain because not only is it a legal, practical, and moral failure that flies in the face of bedrock conservative convictions about limited government and personal responsibility, it’s an embarrassment to boot—as this latest Fifth Circuit case vividly illustrates. Here are the facts in a nutshell.

The plaintiff, whom we’ll call GS for “Good Samaritan,” is an Uber driver and former police officer who sees a pickup truck careening across I‑610 in Houston in the wee hours of the morning, and suspects, correctly, that the driver is stinking drunk. Worried the other motorist might kill someone, GS calls 911, manages to get the truck stopped and performs a lawful citizen’s arrest when the driver tries to flee on foot across the highway. Two officers arrive at the scene and conduct separate interviews of GS and DD (“Drunk Driver”), while also administering a field sobriety test to DD, which he fails spectacularly.

The two officers then release both men, allowing the obviously intoxicated DD to drive home in his pickup truck. Two days later, the officers, Michael Garcia and Joshua Few, swear out a thoroughly rotten probable‐​cause affidavit in which they credit DD’s incoherent and contradiction‐​riddled story that GS impersonated a police officer during the encounter on the highway. Warrant in hand, they then go to GS’s house at 3 a.m., wake him up with a ruse, and arrest him for felony impersonation of a police officer—for which he is duly charged and prosecuted until the charges are quietly dropped a few months later.

GS sues a passel of defendants, including officers Garcia and Few, who promptly—and predictably (“How are we supposed to know you can’t make bogus arrests based on fraudulent warrant applications?”) assert qualified immunity. The district court rejects that defense, and, in a surprise twist, the Fifth Circuit (which is hands down the most QI‐​friendly court in the country) not only affirms the denial of qualified immunity but does so with an uncharacteristic tone of dismay and disdain for the officers’ unseemly attempt to avoid accountability for their blatant misconduct.

Indeed, the panel begins the opinion with a snarky parenthetical, noting that it affirms the district court’s denial of qualified immunity “(Obviously”), and concludes with a scathing critique of the officers and their counsel that is honestly a bit difficult to process for anyone familiar with the Fifth Circuit’s work in this area:

It is unclear which part of this case is more amazing: (1) That officers refused to charge a severely intoxicated driver and instead brought felony charges against the Good Samaritan who intervened to protect Houstonians; or (2) that the City of Houston continues to defend its officers’ conduct. Either way, the officers’ qualified immunity is denied, and the district court’s decision is AFFIRMED.

As noted, the panel’s indignant tone is striking, particularly in light of the extraordinary largesse routinely shown to members of law enforcement by the Fifth Circuit, including granting qualified immunity to cops who deliberately tased a gasoline‐​soaked man, burning him to death in front of his wife and son, and to guards who kept a prisoner in a frigid open sewer of a prison cell for nearly a week. (Notably, the grant of qualified immunity in the latter case was so egregious that the Supreme Court reversed the Fifth Circuit without briefing or argument. Cato filed its famous cross‐​ideological amicus brief in support of that result.)

Where on earth could officers Garcia and Few and their lawyers have gotten the idea that even patently absurd assertions of qualified immunity in defense of breathtakingly unprofessional behavior by law enforcement might find receptive ears on the Fifth Circuit? It boggles the mind. (Not.)

So. What if anything does the Fifth Circuit’s remarkable volte‐​face in this recent case tell us about the status of qualified immunity: Has it really joined the ranks of the walking dead, “[like] some ghoul in a late‐​night horror movie”?

Unfortunately not. Despite constantly mounting evidence of qualified immunity’s utter jurisprudential illegitimacy—including recent scholarship that indicates the as‐​enacted (but subsequently bowdlerized) text of § 1983 explicitly rejected background immunity doctrines of any kind—and a growing chorus of academic and judicial critics, qualified immunity continues to fulfill its mission of letting rights‐​violating government officials off the hook for their misconduct and ensuring they never have to justify themselves to a jury of their fellow citizens.

But here’s the thing: Even though qualified immunity hasn’t been formally overruled or dialed back, one gets the distinct impression that it has fallen into disfavor among its berobed friends—that it has come to resemble not a zombie so much as the drunken guest at a party whose initially amusing antics are now causing the hosts to blush and wish they had never invited him to the party. If so, that would be progress. And if judges of the Fifth Circuit and other courts express contempt for government lawyers whose unseemly requests for qualified immunity underscore what a garbage policy it has always been—well, that too is progress.

Congress or the Supreme Court should formally rid us of this unjust, unlawful, and immoral doctrine. (Obviously.) And the more well‐​deserved scorn we heap upon it now, the sooner that day may come. (Hint, hint.)

Nicholas Anthony

Governments around the world are weighing whether to launch central bank digital currencies, or CBDCs. But are CBDCs even a good idea? That was one of the questions NPR hosts Paddy Hirsch and Adrian Ma asked this week on the Indicator from Planet Money.

As Hirsch pointed out, “[CBDCs] are generating a frisson of excitement in some quarters. But in others, they are sounding alarms.” Among central bankers, CBDCs are very much the latest craze. Just look at how interest has skyrocketed in recent years (Figure 1). Or look at how central bankers have been featured at conferences around the world just to discuss CBDCs.

Yet, for others, the rise of CBDCs has been deeply concerning. On financial privacy alone, Ma framed the issue well, saying, “When you spend your dollars today, those transactions are generally private. As in, the government does not know about them unless it asks, and even then, it’s not a cinch to find out what you’ve been doing with your money. That could change if we had a digital currency controlled by the central bank.” As Norbert Michel and I have explained in the past, those concerns are only the beginning. CBDCs pose risks to financial freedom, markets, and even cybersecurity.

Considering the risks here, the question “Are CBDCs a good idea?” is easy to answer. No, they are not a good idea. Without being able to offer substantial benefits that are not already offered by the market, the risks posed by CBDCs are not worth incurring.

Speaking of the market, Hirsch and Ma also shared an important note about cryptocurrency. Many listeners likely raised an eyebrow when seeing the show’s title, “Is ‘Government Crypto’ a Good Idea?” Given that CBDCs are nearly the opposite of cryptocurrency in terms of their respective principles (Table 1), it’s unfortunate that the title used the term “government crypto.”

However, the hosts did well to acknowledge the contradiction during the show. Ma said, “Of course, ‘government crypto’ is kind of a misnomer because, like we said, the whole point of cryptocurrency was that it was supposed to decentralize money. Now governments are talking about centralizing money even more than it already is.”

Ma is right. It’s no coincidence that the skyrocketing interest in CBDCs seen in Figure 1 occurred shortly after Meta announced its cryptocurrency project. Furthermore, it’s no coincidence that jurisdictions around the world have been pushing forward on CBDCs while simultaneously clamping down on cryptocurrency.

Central bankers and other government officials have even said as much. Abroad, Juda Agung, the assistant governor of Bank Indonesia, said, “A CBDC would be one of the tools to fight crypto.” Here at home, Daleep Singh, former economic advisor to President Joe Biden, said, “One of the efforts we made was to … push our government to launch a digital dollar, which I think is the single best step … because it would crowd out the ecosystem of crypto.” Similar anti‐​cryptocurrency motivations can be seen across China, the European Central Bank, France, Ghana, India, Israel, and more in the Human Rights Foundation’s CBDC Tracker.

So whether your concerns rest with preserving privacy, improving financial freedom, or embracing innovation, it seems clear that a CBDC is not a good idea.

Scott Lincicome

Today we’ve published two new essays for Cato’s Defending Globalization project:

The More Resources We Consume, the More We Have by Marian L. Tupy, explains that globalization supercharges the process of knowledge creation and knowledge dissemination, thereby leading to greater resource abundance.

How Global Markets Helped the Video Game Industry by Juan Londoño, shows that globalization has made video games more abundant and accessible and has opened avenues for gamers to monetize their hobby.

This content joins twenty‐​eight other essays and additional multimedia features on the main Defending Globalization project page.

Make sure to check it all out and stay tuned for future releases.

Nicholas Anthony

President Biden’s “war on junk fees” is only picking up steam. On May 9, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing to focus on fees charged for financial services, and it unfortunately showcased many of the core problems with this “war.”

Senator Sherrod Brown (D‑OH) opened the hearing by claiming corporate greed was the reason for inflation and that financial services are plagued by junk fees that are “surprise, often last‐​minute charges that drive up the cost of products [with] no justification.”

There is a case to be made if financial institutions are handing customers receipts that say one price, but then charge those same customers something much higher behind their backs without any notice. In most cases, that would be fraud. Yet that doesn’t seem to be what he had in mind. Instead, Senator Brown pointed to credit card late fees saying, “Credit card late fees are the most costly and frequently applied junk fee.”

Yet late fees do not seem to track with Senator Brown’s definition of junk fees. For instance, how can a late fee be considered a surprise or without justification? As a penalty, late fees are common. As Representative Brad Sherman (D‑CA) pointed out earlier this year, if “you don’t pay the IRS on time, you expect a fee.” So late fees are hardly a surprise—especially considering the possibility of being charged fees must be disclosed up front. The justification is clear: a late fee is meant to recoup costs incurred due to a payment coming in late and discourage customers from being late in the future.

So, it’s a mystery how “late fees” can be termed “junk fees,” according to the senator’s definition. And it’s an even greater mystery how this definition can be used to restrict late fees in the private market and yet officials remain silent on late fees charged by the government (Table 1).

At a broader level, this example captures a wider issue with the Biden administration’s war on junk fees—something my colleagues Ryan Bourne and Sophia Bagley have described at length. The administration might wish the term “junk fee” was an established term to describe fees that are objectively wrong, but the administration has instead used it in practice to essentially describe anything it doesn’t like.

Senator Tim Scott (R‑SC) addressed this issue well at the hearing when he warned against taking the “politically expedient” route in calling for price controls:

Sure, it might be easy, or even politically expedient, to slap a label of “junk” or “excessive” on additional costs for legitimate products and services in an effort to villainize business in America…. But it is long past time that Democrats stopped playing political games with price controls and trying to micromanage the business operations.

Senator Scott is right. It’s too easy to fall back on the idea that the government simply needs to set the right price and everything will be okay. That’s not how things work in practice. The world is far too complicated and information changes far too much for any singular entity to plan the entire economy. Furthermore, as Ryan Bourne’s new book, The War on Prices, demonstrates, it doesn’t matter if we are talking about financial services or health care, price controls are bad policy.

Are you interested in learning more about how price controls distort the market? Ryan Bourne’s latest book, The War on Prices, is available here and features 24 chapters that will walk you through price controls large and small.