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Walter Olson

California voters decisively defeated an attempt to expand rent control, voters in eight of ten states looked favorably on abortion rights, school choice fared poorly, and Coloradans voted to impose an excise tax on firearms but not ban trophy hunting. Those were some of the notable results of last week’s crop of ballot measures around the country. I discussed them with Caleb Brown at the Cato Daily Podcast here. 

Some more details: 

It was not an especially good day for advocates of drug freedom. Dallas voted for de facto marijuana legalization and Nebraska for medical cannabis. But Florida’s big marijuana measure, while earning a majority, fell short of the supermajority required (as did the state’s abortion rights measure). Massachusetts declined to legalize psychedelics. And in California, where Proposition 36 restored many of the higher crime penalties reduced by a 2014 initiative, drug crime penalties were among those affected. 
It was a downright bad day for those of us who’d like to reform the way we hold elections. Primary reform, in particular, went down to defeat in at least five states, with the Alaska result still waiting on absentee ballots. For ranked choice voting standing on its own, it was more of a mixed bag, with Washington, DC, and several smaller municipalities saying yes but the state of Oregon declining. I’ll have more to say in another post. 
Massachusetts voters went along with a measure meant to herd rideshare drivers into unions. The Service Employees International Union plowed $7 million into the campaign, against no organized opposition. A remarkable bit of background, via Ballotpedia: in June of this year Uber and Lyft agreed to settle a lawsuit brought by the state of Massachusetts over employment practices, and as one of the terms of the settlement they agreed to drop support for an initiative campaign that would have strengthened the rights of independent contractors against regulation in the state. Legally strong-arming private entities into giving up their right to petition for redress of grievances—no dangers to civil liberties there at all, am I right? 
At the same time, Bay State voters said no to a plan to eliminate the tip credit on the state minimum wage. Restaurant workers in many states have spoken out against such schemes, which by discouraging tipping can actually reduce servers’ income. Arizona voters, on the other hand, declined to expand a tip credit. 
Minimum wage laws remain popular, and left organizers have also found that voters in even conservative states like Alaska, Missouri, and Nebraska may look favorably on costly private employer mandates if sweetened with the term “earned,” as in “earned leave.” 

Arizona voters missed a chance to do something genuinely useful, rein in their governor’s emergency powers by giving the legislature more of a say on them. Since the COVID-19 pandemic, about 10 states have moved to check emergency executive powers in this way, a reform which also has parallels at the federal level in debates over Presidents’ emergency powers. 

Romina Boccia

For nearly 90 years, a widespread misconception has shaped how Americans view Social Security. Many believe that their payroll taxes are saved in a trust fund, to be drawn down when they retire. But in reality, Social Security has never operated as a savings system. Instead, it functions as an income transfer program, where the taxes collected from today’s workers immediately fund the benefits for current retirees. This misconception about how Social Security works continues to distort the debate around its future.

Social Security was designed to transfer income, not to save it. The first recipient of Social Security, Ida May Fuller, perfectly illustrates this. Fuller paid less than $25 in Social Security taxes (about $500 today) before retiring in 1940. Her first check nearly matched what she had paid in, and over the next 35 years, she collected $23,000 in benefits—nearly 1,000 times what she contributed (or roughly $500,000 in today’s terms). This arrangement worked out great for earlier generations, but today’s workers aren’t so lucky. They are paying high taxes for a benefit that’s far lower than what they could earn if they invested the money in a balanced portfolio of stocks and bonds instead.

These issues are echoed in my new Cato paper, The Social Security Trust Fund Myth, which was published on November 13. The paper offers helpful analogies to explain how Social Security is financed, from illustrating its accounting realities in terms of a household budget to explaining the difference between real savings and IOUs and why IOUs in an intragovernmental “trust fund” provide no actual funding mechanism for paying future benefits.

The political narrative that fuels the trust fund myth has persisted since Social Security’s inception. In the 1930s, the idea of government assistance was unpopular, and policymakers needed a way to sell Social Security to a skeptical public. Positioning it as an “earned” benefit convinced Americans that they had a personal stake in the program. But in truth, it was always a government transfer program. The notion that people are simply getting back what they paid in makes it politically difficult to reduce benefits. Even slowing the growth of benefits is considered taboo, despite the program providing higher benefits in absolute terms (after factoring in inflation) to successive cohorts of beneficiaries, because initial benefits are boosted by economy-wide wage gains.

This misunderstanding is dangerous. Social Security is unsustainable as designed, and it faces severe financial challenges. The growing number of retirees, combined with lower fertility rates, means there are fewer workers to support those retirees. In fact, the government is expected to borrow $4.1 trillion by 2033 just to keep up with benefit payments. Waiting until the so-called trust fund runs out in nine years will only lead to more drastic adjustments, threatening the financial security of both retirees and workers.

What’s needed is a shift in the social contract—a fairer system that avoids excessively taxing younger, often poorer workers to fund extended retirements for older generations, who on average are much wealthier. Reforming Social Security to focus benefits on keeping seniors out of poverty, reducing benefits for higher earners, and slowing the growth in future benefits is crucial. This approach would relieve younger workers from higher taxes and allow them to save more for their retirements through personal accounts that they own and control.

Social Security’s Ponzi-like structure—where current contributions fund current benefits—has always been its flaw. And unlike Ponzi’s scheme, which was illegal, Social Security’s issues are legal and transparent, rooted in flawed program design and changing demographics. Addressing this sooner rather than later is the only way to avoid severe consequences for future generations that are confronted with the triple threats of an unfunded Social Security system and the specter of higher taxes and inflation.

Brandan P. Buck

A perennial yet fanciful idea, the notion of sending US Special Forces into Mexico, has once again entered American political discourse. This latest flowering of foolishness emanated from President-elect Donald Trump’s future “Border Czar” Tom Homan, who, in a recent appearance on Fox News, declared that the incoming president “will use [the] full might of the United States Special Operations” to eliminate Mexico’s drug cartels. 

While this idea is not new in Republican circles, it has become hazardous now given the Mexican drug cartels’ increased military capacity and tactical competence. Directing American Special Operations Forces against the cartels would put them up against a sizable near-peer competitor in asymmetric warfare, thus putting the US government into a position of little escalatory advantage. Such a move would not just force the American military into another quagmire; it would drop them into a morass up to their metaphorical waist. 

These recent calls for the use of Special Operations Forces against the Mexican drug cartels ignore that the latter has developed capabilities perilously close to the former. Video evidence and Mexican officials have long revealed that the various cartels, particularly Los Zetas, the Sinaloa Cartel, and Jalisco Cartel New Generation (CJNG), possess the force-multiplying equipment of a formidable asymmetric military force. Examples include the possession of armored vehicles, the use of armed Unmanned Aerial Vehicles (UAV) and Improvised Explosive Devices (IEDs), man-portable heavy weapons systems, as well as the possession of surface-to-air missiles and numerous crew-served weapons. 

Beyond equipment, the cartels, chiefly CJNG, have benefited from extensive tactical training, knowledge passed to them from Mexican military defectors, ironically enough, who were trained by US Special Operations forces.

Putting legalities and congressional consideration aside for a moment, sending US Special Operations into a direct confrontation with the Mexican cartels would pit them against a near-peer competitor, who, like the Taliban, would likely enjoy the direct or tacit support of the local populace and the luxury of hiding in punishing terrain. 

Furthermore, as seen in more significant conflicts, such as Russia’s invasion of Ukraine and the Middle East, man-portable weapons systems and armed UAVs favor those who hold territory, thereby leveling the scales between otherwise mismatched military forces. Given these constraints, in such a scenario American special operators would find themselves involved in an asymmetric war where combat parity would be all but guaranteed, thereby tempting the US government to escalate further.

In recent months, supporters of this idea have cited the US government’s near destruction of ISIS as proof of concept; however, making a model of the campaign against ISIS is a mistake. The issue at hand is not the combat prowess of the American military; it is the realities of government power and who wields the monopoly of coercion. In Syria and Iraq, the Assad regime, the Iraqi government, and their Iranian militia allies, all of whom share an opposition to ISIS, continue to wage their own campaigns against the group. These conditions do not apply to the situation in Mexico as the cartels are parastate actors that operate within the pockets of Mexico which lay beyond the authority of the central government.

If the US government uses its military power against cartel leadership, what guarantee will there be that their networks won’t regenerate as fast as they can be degraded? Furthermore, if even targeted strikes succeed over the long haul, who fills the power vacuums left in their wake? If the central Mexican state cannot do so, then the US will find itself in a situation different from the campaign against ISIS but more akin to Afghanistan, where they played whack-a-mole against the organization’s leadership and were unable to rectify the governing vacuum that sustained the group overall. 

The further militarization of the drug war may score some political points, but it will not address the underlying causes of Mexico’s governance problem or stem the flow of drugs across the US southern border. 

There is no doubt that the Mexican drug cartels are dangerous and depraved organizations whose command of the drug trade and other illicit activities has caused immeasurable suffering to the people of Mexico that is spilling over the border and into the United States. However, the solution to such issues cannot bear the risk of creating new sets of problems that would threaten further intervention. 

Chris Edwards

President-elect Trump is moving quickly to choose cabinet members and announce his priorities for next year. Tax policy will be on the agenda, including scaling back the green energy tax subsidies passed in the 2022 Inflation Reduction Act (IRA). The tax subsidies have ballooned in cost from $390 billion over 10 years to more than $1 trillion.

Green energy is costly to the federal budget, but it also imposes costs on the environment. Last week, I examined the Biden plan to cover Western public lands with 538,000 football fields worth of metal-and-glass solar panels.

Another environmental issue is green energy trash. Solar panels, wind turbines, and lithium batteries have limited lifespans, are only partly recyclable, and create disposal problems down the road. Federal policymakers need to balance the potential CO2 benefits of these technologies with the collateral damage, including the disposal problems.

Solar panels have a 25- to 30-year lifespan, and many panels could be replaced earlier for economic reasons. There are already hundreds of millions of solar panels installed across the country. By the late 2020s, we will start seeing vast amounts of trashed solar panels, which contain glass, silicon, copper, aluminum, plastic, silver, and other materials. Currently, 90 percent of used solar panels are landfilled rather than being recycled. 

What happens down the road if 538,000 football fields in the West are indeed covered with solar panels? Let’s say that nuclear power or another energy source evolves as a better option than large-array solar. If solar companies abandon their used structures on vast stretches of public lands, who will clean them up?

There are similar problems with wind turbines. They have a lifespan of about 20 years, and they can fail early, so there will be increasing amounts of windmill scrap to deal with. Turbine blades are generally made of fiberglass, are nondegradable, and are not easy to recycle. So used blades are starting to pile up, such as in two junkyards covering more than 30 acres in Sweetwater, Texas. There are also windmill blade dumps in Iowa and Grand Meadow, Minnesota.

What if economics turns against wind power in coming years? Maybe rooftop solar becomes a superior option, and we are left with vast numbers of worn-out windmill towers blotting the nation’s landscape. Who will dismantle them? The company with the junkyards in Sweetwater has broken promises to clean up its windmill mess.

A coal power plant near me operated 63 years before closing, and the structure will be demolished and replaced by residential and commercial buildings. The plant covered just 18 acres, so replacement is straightforward, but vast arrays of solar panels and wind turbines have shorter lives and create larger end-of-life problems. 

Lithium batteries are the central component of electric vehicles (EVs) and large grid storage systems. The lifespan of EV batteries is 10 to 20 years. Dismantling and recycling the battery materials is difficult, and the great majority of EV batteries are currently not recycled. There are differing views about the feasibility of recycling—this article says that lithium batteries are an “environmental time bomb,” whereas this article is more optimistic.

Dumping EV batteries into landfills creates risks of contaminating soil and groundwater with metals. Lithium batteries also catch fire, which are difficult to extinguish and can emit toxic fumes. There are stories across the nation about battery fires in landfills.

The environmental impacts of green energy are complex and need to be fully debated in Congress. The debate next year over the IRA’s tax subsidies is a good time to probe these green trash issues. Will taxpayers be asked to subsidize the costly recycling or landfilling of solar panels, wind turbines, and batteries? Will taxpayers have to pay for the removal of vast arrays of solar panels and wind turbines? As the energy footprint of wind, solar, and lithium batteries expands, the costs and environmental effects loom larger.

Cato scholars discuss the IRA green subsidies here and here.

David Inserra

The election is over and the losing side is scrambling to justify its defeat. An emerging narrative is that misinformation is to blame: inaccurate reporting, misleading and biased statements from politicians and government officials, conspiracy theories spread on social media, and social media companies that seemed to have favored the winning side. Fear mixes with anger over the inability for the “right” information to get out and win the day.

Sound familiar? While it describes the current reaction of some progressives, it just as easily describes conservatives in 2020 and their now mostly substantiated claims that a laptop contained all sorts of dark personal secrets and politically inconvenient information about Hunter Biden and his father.

The legacy media wrongly ignored or refused to take seriously those claims. Political figures and dozens of former intelligence figures claimed or suggested that the laptop was a Russian disinformation operation. Social media users theorized that this was yet more proof of Trump working with and being a puppet of Russia. And social media companies, having been told repeatedly by the FBI to prepare for a Russian plot involving Hunter Biden, quickly responded to remove or suppress the truth. 

By their own definitions, these actors all spread misinformation about the laptop, which Republicans claim threw the election to Joe Biden.

The narrative now being spread is that misinformation is to blame for the Democrats’ defeat in 2024. On MSNBC’s Morning Joe the day after the election, co-host Mika Brzezinski read a text she got from a Democratic member of Congress who blamed the fact that people are turning to non-traditional sources of news like social media and podcasts, as well as “news stations that aren’t news.” The member was “shocked by the amount of misinformation that voters were repeating back to me … you cannot win when people believe lies.” Others blamed Elon Musk and X for being “disinformation propagandists.”

But every political movement blames the other side for lying, misleading the public, or otherwise spreading misinformation. And this is easy because most misinformation is highly subjective and partisan. Of course, Democratic politicians would say that Republican claims about the economy, immigration, racial and gender issues, abortion, etc., are misleading and false, just as Republicans contest the veracity of Democratic claims.

It’s also true that both sides say and believe inaccurate or misleading things. In this election, the obvious example was that migrants in Ohio were eating dogs and cats. But during COVID-19, polling found that Democrats radically misunderstood the risk of COVID, with 41% of Democrats believing that over half of those who get COVID would need to be hospitalized, while the real figure was somewhere between 1% and 5%.

But the reasons why Americans share and believe misinformation isn’t as simple as believing everything you see online. People aren’t “infected” with misinformation. But the evidence shows that they engage with false information in a variety of complex ways, including humor, criticism, and curiosity. Many users are skeptical of what they read, especially as trust in the media has fallen. This means that many citizens research or check what they read online or hear from pundits. 

Meanwhile, some users may engage with misinformation to signal they are part of a movement or a party. For partisans, they are likely to believe a piece of information because it fits their biases. 

Misinformation then isn’t exactly the problem it is made out to be. It is poorly defined, subjective, complex, and often most concentrated among existing partisans. It is a convenient boogeyman because, of course, false information is not healthy or good for our society. There certainly are cases where misinformation results in people doing harmful things. But the problem is less that any given piece of information is false or misleading—it is more that misinformation is a symptom of a deeper lack of trust in our society and institutions.

Censorship and cancel culture, noble lies of the experts, real or perceived bias within supposedly neutral fields of journalism, study, or government, and other failures of our institutions to trust citizens have backfired massively. And as trust in authority has cratered, people have grown skeptical and cynical about all information, whether true or false.

The solution then is not to reassert the authority of experts, accuse those who do not trust mainstream institutions, or blame technology for expanding speech and access to information, especially when it conflicts with the dominant narrative. This top-down approach only further alienates an already highly skeptical population.

Instead, some intellectual humility is called for. Americans have some significant political disagreements, but merely reducing the problem to insisting that the other side is gullible, stupid, or evil and needs to be silenced, regulated, or force-fed the truth is not only wrong, it is counterproductive. Greater dialogue, more speech, and empowering individuals are the only ways a liberal society can develop knowledge and make progress.

Nicholas Anthony

Millions of Americans do not have a bank account. Known as the “unbanked,” these Americans are often referred to in discussions of financial inclusion. As it stands, the latest survey from the Federal Deposit Insurance Corporation shows that there are currently 5.6 million unbanked households. However, as policymakers read the survey and begin to craft responses, they should take note of all of the data provided rather than the total number of unbanked households alone.

Given that more than 70 percent of the unbanked routinely say they are uninterested in having a bank account, perhaps it is time to redefine the term “unbanked.”

To understand why this distinction is necessary, first consider a more familiar statistic: the unemployment rate.

Although reported as just the “unemployment rate,” the official unemployment rate reflects not just the number of people who are unemployed, but rather the number of people who are unemployed and are actively seeking employment. The general idea is that including college students solely focused on their studies, full-time parents solely focused on caring for children, and the like would give an inaccurate picture of the labor market. Sure, these people do not have jobs, but at the same time they don’t want jobs.

Turning back to the unbanked, there is a similar distinction to be made. Much like interest in a job should be factored into the unemployment rate, so too should interest in a bank account be factored into the unbanked rate. Ideally, this interest would be quantified as the number of people who have tried to open an account in the last six months. Although this exact information is not currently available, the Federal Deposit Insurance Corporation’s biennial survey of unbanked households does have a question that asks unbanked Americans how interested they are in opening an account, and the numbers are astounding.

Over 70 percent of unbanked Americans routinely say they are not interested in having a bank account (Figure 1).

By adjusting for the number of people interested in having a bank account, suddenly the problem becomes drastically different. What were 5.6 million households being classified as unbanked suddenly shrinks to 1.6 million households.

Is this still a problem? Yes. It may be a small portion of the population, but this number shows there are 1.6 million households who want a bank account and don’t have one. That is certainly a problem for these Americans.

The difference is that now we know this is not a problem that requires overhauling the entire financial system—something many people have suggested in calls for central bank digital currencies and postal banking. Rather, it suggests that if any approach is taken, it should be targeted and limited in scope.

As policymakers read the Federal Deposit Insurance Corporation’s latest survey on the unbanked, they would be wise to keep this distinction in mind.

Romina Boccia and Dominik Lett

As Congress reconvenes post-election, a critical agenda item is likely to be an emergency funding request to replenish disaster relief funds in the wake of Hurricanes Helene and Milton. With the Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund expected to run dry soon and the Small Business Administration’s disaster loans already exhausted, calls for a multi-billion-dollar emergency package are circulating. But this cycle—reacting to each crisis with ever-larger disaster relief bills, often loaded with politically motivated add-ons—is unsustainable, especially given America’s precarious fiscal outlook. 

A more sustainable approach to disaster aid would pair relief with responsible fiscal reforms, including offsetting new spending with cuts elsewhere and discouraging development in high-risk areas through more accurate risk-based insurance pricing.

The Current Approach to Disaster Relief

The current disaster response process is reactionary, leading to rushed emergency supplementals often packed with unrelated priorities. Since 1992, Congress has designated $12 trillion as emergency-related spending. To prevent unnecessary additions to this total, Congress should keep any upcoming supplemental focused solely on urgent relief for Hurricanes Helene and Milton, avoiding the common pitfall of including unrelated spending. Taxpayers for Common Sense, for instance, warns that a relief package padded with nonessential add-ons could exceed $100 billion. Emergency aid should not become a catch-all for special interests or extraneous projects that exploit crises for financial gain.

Moreover, the existing federal disaster relief framework creates a moral hazard by incentivizing development in high-risk areas, subsidized by taxpayers who would not otherwise bear these costs. The National Flood Insurance Program (NFIP) exemplifies this problem. By providing flood insurance at subsidized rates, the NFIP encourages development in flood-prone areas by shifting the financial risk from property owners to taxpayers. This misalignment of incentives leads to escalating costs and repeated bailouts, undermining disaster preparedness and fiscal responsibility.

Privatize the National Flood Insurance Program

Congress has an opportunity—and a responsibility—to rethink federal disaster relief and implement forward-looking measures to restrain emergency spending. One key reform is transitioning to a fully private flood insurance market, coupled with targeted, means-tested subsidies. Allowing the market to set risk-based premiums would better align costs with actual risks, incentivize safer development, and minimize taxpayer burdens. The inclusion of targeted, means-tested subsidies would ensure vulnerable populations are not left without relief while also being less regressive than the current system, which disproportionately benefits wealthier households that choose to live in high-risk areas.

Addressing the NFIP’s shortcomings would also reduce the geographic redistribution of resources, wherein tax dollars are extracted from inland states and sent to a handful of coastal states. Per FEMA, just five states (California, Florida, Texas, Louisiana, and New York) and two territories (Puerto Rico and the Virgin Islands) account for nearly three-quarters of the Disaster Relief Fund’s catastrophic obligations to date. Encouraging responsible development and accurate risk assessment would make federal disaster aid more equitable and fiscally sustainable.

Offset New Emergency Spending

If Congress determines that a supplemental package is necessary to respond to Hurricanes Helene and Milton, it should avoid the temptation to include unnecessary and expensive plus-ups and side deals. Better yet, Congress should offset as much of the new spending as possible with spending cuts elsewhere. For example, Congress could prohibit FEMA from obligating further funding for outdated disasters or for programs unrelated to immediate disaster relief, such as COVID-19 funding that FEMA projected would account for $22 billion in obligations between 2025 and 2028.

Reorienting FEMA’s priorities to focus on immediate and medium-term needs would also enhance efficiency. Currently, old disasters make up a significant chunk of FEMA’s yearly budget. Between 2025 and 2028, for example, FEMA projected spending $156 million on Hurricanes Katrina, Rita, and Wilma from 2005. As disasters and disaster designations proliferate, the number of emergencies on FEMA’s plate will grow, as will annual spending needs. Accordingly, FEMA will be better able to manage current emergencies without overextending its resources if it narrows its focus. At a minimum, recurring disaster relief spending on old emergencies should have to compete with other spending priorities under spending caps.

Pair Relief with Budget Reform

To enhance future fiscal restraint over emergency spending, Congress should pair any new emergency relief funding with procedural budget reforms. See this one-pager for a set of commonsense budget reforms that would improve the budget process and promote more responsible fiscal planning.

Key recommendations include:

Offset emergency spending by implementing a mechanism to offset new emergency expenditures with spending cuts elsewhere, promoting fiscal responsibility and encouraging forward-thinking budget planning.
Raise voting thresholds for emergency spending to increase the number of votes required to approve new emergency spending, deterring misuse and ensuring bipartisan consensus.
Limit executive emergency declarations by restricting presidential emergency declarations to 30 days unless extended by Congress, preventing emergency spending abuse without legislative oversight.
Enhance transparency by requiring public reporting on executive emergency expenditures, allowing taxpayers and legislators to see how funds are used during emergencies.
Correct budget baseline distortions by removing emergency spending from budget baselines to prevent temporary emergency funds from inflating long-term spending projections and creating a bias toward higher spending.
Justify and track emergency spending by mandating that lawmakers provide justification for new emergency designations and requiring annual tracking of these costs to strengthen fiscal oversight.

It’s time for Congress to break the cycle of reactionary disaster deficit spending. Pairing emergency relief with these substantive reforms would ensure that taxpayer dollars are used in a more responsible and effective manner. The current knee-jerk reaction to every disaster that involves passing a blockbuster supplemental spending package is unsustainable in an environment with diminishing fiscal space. Congress needs a forward-looking approach that promotes personal responsibility, market-driven risk management, and stringent fiscal oversight.

Travis Fisher, Adam N. Michel , and Joshua Loucks

Full Republican control of Washington creates an opportunity to repeal many of the previous administration’s most costly laws and regulations. The misleadingly named Inflation Reduction Act (IRA) should be at the top of the list, not only because it is a disastrous environmental policy but also because it will be a necessary offset for a fiscally responsible extension of the expiring 2017 tax cuts.

The energy and climate provisions of the IRA are already burning through taxpayer dollars at rates much higher than initially projected. These subsidies will likely cost over $1 trillion by 2032 and as much as $4 trillion by 2050, and some of the most lucrative tax credits have no expiration date.

If Republicans are serious about ending federal intervention in energy markets, repealing the entire IRA energy subsidy framework—including for existing projects—is the only way forward. Full, retroactive repeal will make it harder for future federal subsidy schemes to take root. On the other hand, partial repeal will leave the IRA framework in place for a future Congress to pick up where the Biden administration left off.

The 119th Congress has a fleeting opportunity to dismantle the IRA’s energy infrastructure and level the playing field so that consumers, not bureaucrats, can drive future energy innovation. Anything short of full IRA repeal should be seen as a failure. Like extricating a cancer, leaving portions of the law behind will only temporarily halt its infectious growth.

Full IRA Repeal Will be Painful for Rent-Seekers—Good

Reformers will face significant opposition to a full IRA repeal, from industry groups and environmentalists and within their own ranks. Earlier this year, 18 House Republicans wrote to support the IRA tax credits, arguing they are critical to “ensuring certainty for industry and the energy sector.” Industry lobbyists have repeated the talking point that much of the IRA-related spending is occurring in many conservative districts of IRA critics.

This is by design. The flood of taxpayer money into new projects across the country obscures the real costs of tying American jobs to federal subsidies while ignoring the hidden burdens placed on businesses and taxpayers.

But repeal should be a bipartisan priority because IRA-induced investment and new jobs are a mirage. Since the original flurry of announced new manufacturing projects in the year after Joe Biden’s industrial and climate policies were passed, the Financial Times reports that over 40 percent of them have been delayed, paused, or canceled. And the jobs that have been created cost taxpayers an estimated $2 million to $7 million each.

If the subsidies aren’t ending up in workers’ pockets, where are they going? Corporate owners and executives—not taxpayers or workers—are the primary beneficiaries of federal favoritism. Politically connected corporations like NextEra Energy and First Solar, Inc. have received billions at taxpayers’ expense. Additionally, more than $1 billion of Biden’s IRA subsidies are also going to Trina Solar, China’s largest solar manufacturer.

Rent-seekers will fight hard against the full repeal of the IRA. But why would the 119th Congress want to ensure certainty and stability for the failed investments flowing to foreign companies at American taxpayer expense? Lasting reform requires the opposite. It requires a decisive shift away from politically directed energy investments. 

Subsidies don’t just incinerate taxpayer dollars; they incentivize private investment to shift toward politically popular energy sectors and away from cost-effective and reliable ways to supply energy to American consumers. Attempts to centrally plan markets through subsidies or other industrial policies will stifle true innovation and limit prosperity because many productive entrepreneurs will become subsidy harvesters.

Repealing all IRA energy subsidies—including for existing projects—may be painful for well-connected firms that have decided to build their businesses on the backs of American taxpayers. This is not an argument for palliative “certainty” for existing subsidized industries. Subsidy-dependent industries should get the clear message that the taxpayer-funded gravy train is over. Ripping out subsidies root and branch will clearly signal that, in America, markets will drive the energy sector forward.

The short-term project disruptions will be far less damaging than continued and never-ending market interventionism through government subsidies and favoritism. If this malignancy isn’t cut out now, the rent-seeking enabled by the IRA will continue to infect healthy markets, weakening the American energy sector for decades.

As one IRA supporter recently wrote, “Clean energy is now big business, and influential companies stand to lose billions if the Inflation Reduction Act is repealed.” Yes, and these big businesses deserve to lose the billions of taxpayer dollars they hoped to gain from the IRA—it was never their money to begin with.

The Path Forward

Free and competitive energy markets that allow for innovation and entrepreneurship have been and always will be the best path forward for energy security, reliability, and cost-effectiveness. Government subsidies like the IRA increase inefficiencies and result in cronyism among businesses and government leadership.

No Republicans voted for the IRA in 2022. Rather than take a scalpel to the law, Congress has a rare opportunity to undo all of it. A weak, partial repeal of the IRA will only perpetuate interventionist policies for years to come. The IRA is a watered-down Green New Deal, and the response can’t be further dilution—it needs to be a full rejection.

The window for Democrats in Congress to pass the partisan IRA two years ago was narrow and fleeting. The window to undo this poorly conceived legislation through full repeal is just as narrow. The new Congress should waste no time in rejecting the Green New Deal-lite.

Scott Lincicome

One of the main motivations behind Cato’s ongoing Defending Globalization project was that most public discussions of “globalization” miss what it actually is. When we hear the word, we typically think of things like container ships, wonky terms like trade deficit, or dry governmental agreements like NAFTA. Politicians and pundits, meanwhile, speak of “globalization” as some sort of artificial thing, created a few decades ago by “elites” in government, academia, and the corporate sector—a thing that hurts far more people than it helps, especially outside of places like Manhattan, Silicon Valley, or Washington, DC.

Yet little of this is correct. Instead, real globalization isn’t really a thing at all. It’s billions of humans freely cooperating for mutual gain in billions of ways, without direction from any one person, company, or government. It’s around us all the time; its benefits far outweigh its costs; and it’s been going on since the dawn of recorded history. 

But this globalization is also mostly invisible, so most of us take it for granted, accept the conventional wisdom, and miss all the people whose daily lives are intertwined with, and often depend on the 21st-century global economy. We don’t see the faces behind the T‑shirts we buy, the faces behind the video games we play, or the faces behind the car we just bought. But they’re always there, and Cato’s new Faces of Globalization series wants to help you see some of them, in ways that challenge what many people think about trade, migration, and our daily lives.

Along with an introductory video on the docuseries, we’ve published today three on-location installments:

From Textile Town to Ghost Town to Car Town: West Point, Georgia. Tiny West Point was once an American “textile town” crippled by globalization. But today, the very same economic forces that challenged West Point decades ago are fueling its rebirth—and supporting the lives of thousands of American workers in the process. The region’s evolution shows that the global economy’s story doesn’t end after a disruptive event; it’s constantly changing—and usually for the better.
More Than Just a “Cheap T‑Shirt”: Guatemala Textiles. A common criticism of globalization is that its costs aren’t worth the “cheap T‑shirts” we get in return. But those shirts help American families stretch their budgets and serve as a lifeline for millions of the world’s poorest people. We traveled to an apparel factory in Guatemala to tell some of these people’s stories and to show how globalization has lifted more than a billion humans out of abject poverty since 2000.
Globalization for Fun and Profit: The Digital Gaming Economy. Digital trade is globalization’s hottest area today, and gaming is a huge part of that trend. Millions of people regularly compete, collaborate, and conduct business in massive virtual worlds that seamlessly cross international borders. They are the new, fresh faces of 21st-century globalization and part of an industry over three times the size of music and movies combined.

Each webpage above provides not only the full Faces video, but also related Defending Globalization content and a brand new “Dig Deeper” explainer on some of the key concepts covered in the film you’re watching. We hope you find the docuseries both entertaining and educational. Here’s a teaser of what you’ll find:

You can watch all of the Faces of Globalization videos here.

Neal McCluskey

When it comes to the most important issues in the just-completed presidential election, education was not likely among them, coming in sixth in recent Gallup polling behind the economy, concerns about democracy, and a few other issues. The topic got only fleeting mentions in presidential debates and was never brought up by moderators. And education is rightly small in federal elections: It is a matter reserved to individuals, communities, and states by the Constitution, though there are many things Washington is doing in education that need to end.

So how was education important? While it does not show up as a distinct issue in polling, there seems to be a growing conclusion that one of the things that cost Vice President Harris votes was the question of transgender athletes, specifically players born biologically male competing in women’s sports. It is an issue at both the collegiate and K‑12 levels, and some people believe the Biden administration has threatened schools that prohibit transgender girls from playing girls’ sports under Title IX regulations that interpret protections based on “sex” to include gender identity. The administration says it is working on separate regulations for sports, but opponents argue the current rules sweep up all school activities.

Whatever the nuances of the regulations, this is largely an education fight, with sports embedded in our government-dominated education system, especially when it comes to elementary and secondary-aged kids. Around 87 percent of school-aged children attend public schools, which makes the vast majority of school athletes subject to federal rules. That dominance also means even privately educated athletes will be directly impacted by public school rules if they want to compete for state championships.

The sports fight, while somewhat distinct because direct competition is heavily influenced by physical differences, is a subset of the overall culture war we have seen burning especially hot in education over the last four years. It has been fueled by many cultural and social factors, but a fundamental problem is government dictating the values that will apply to all children.

This is most clear when it comes to federal regulations, which seek to impose one “solution” nationwide. You cannot even move to a different state to get education you think is right. When the Biden administration tried to impose its view of “right” with Title IX, it guaranteed that a difference of values—equality of participation versus equality of competition—would become a divisive national battle of values, requiring all Americans to fight politically for what they thought was best for their children.

Leaving decisions to states or districts is better than national imposition—smaller units can craft policies more consistent with the values predominant in specific communities—but states and districts often themselves contain people with conflicting values and desires. This is a major reason that educational freedom—often reduced to “school choice”—is crucial. It fundamentally changes decisions from top-down, winner-take-all, to free and individualized.

Do you as an educator or parent value equality of competition over equality of participation? Go to a school that shares that valuation and competes against like-minded institutions. Feel the other way? Do the same. And as long as you can make those choices without having to sacrifice education tax dollars, it is a free decision, not a political imposition.

The good news is that we have been making considerable headway toward the freedom model of education, and it has, at least this year, accompanied declining conflict. Of course, one year is not a trend, and correlation is not causation, but we can look to other countries to see that embracing choice in education has reduced wrenching social conflict. And yes, three state referenda seeking to expand educational freedom failed on election day, but polling typically shows majority support for choice, while the challenges to securing choice through referenda are largely peculiar to the referendum model itself, in which special interests such as teacher unions have especially outsized influence.

Restructuring education from a government-controlled to a choice-driven system will not end values-based conflicts. Wherever two or more people get together, disagreements will likely occur. But it will lower the political stakes, and thus the heat, and enable people to more peacefully coexist.