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Walter Olson

On August 8, as part of a day of election law panels at the National Conference of State Legislatures’ annual legislative summit, I spoke on proposals to toughen existing laws against voting by noncitizens. I discussed the Safeguard American Voter Eligibility Act (SAVE Act), widely seen as a Republican messaging bill that’s dead in the current Senate. As far as I can see, the bill—passed by the House on July 10 on a largely party-line 221–198 vote— starts with a couple of reasonable ideas and then runs aground on the details.

Most commentary on the bill has taken an all-or-nothing approach. Critics have damned it as the product of “xenophobia” and as legislation that “seeks to intimidate members of immigrant communities and communities of color from exercising their lawful right to vote.” They have also pointed out, in my opinion correctly, that current rates of illegal noncitizen voting appear too low to have changed any federal election outcome in any state over the past generation. On the other side, gadfly tycoon Elon Musk declared that those who oppose the bill are “TRAITORS”: “What is the penalty for traitors again?” That was sure to calm everyone down right quick.

The bill’s main provision prohibits states from registering an individual to vote in a federal election who does not provide documentary proof of US citizenship at the time (bill summary; one-pager in support by sponsor Rep. Chip Roy (R‑Tex.); analysis and critique from House Democrats).

Currently, federal laws on voter registration passed in 1993 and 2002 prohibit states from coming up with their own rules for how much proof of citizenship is enough to register, at least for federal elections. Some states would like to use stronger rules, and the area has been much litigated.

In best Washington style the SAVE Act replaces the prohibition on state use of tougher standards with a requirement that they use them.

The bill does have one other idea worth exploring. Federal agencies themselves have some of the best data about who is and isn’t a citizen. But as a Bipartisan Policy Center task force has found, states currently complain that accessing federal citizenship data is “difficult, costly, and burdensome.” The bill promises fixes to assure more access—the sort of measure that might in principle be carved off as a freestanding bill for separate consideration.

Even if database matching improves, the fact is that it’s hard for much of the population to lay hands on high-level documentary proof of citizenship. Drivers’ licenses, government employee IDs, and the like generally don’t record citizenship status. Passports are better, and so are domestic birth certificates bearing someone’s current legal name, but much of the population cannot easily lay hands on either, especially given that many married women have changed their legal names.

For all the polarized talk in this area, the SAVE Act itself acknowledges that less-than-perfect compromise solutions would be necessary. It “requires states to establish an alternative process under which an applicant may submit other evidence to demonstrate US citizenship.” Will this involve some combination of second-best documents, sworn attestations, in-person interviews, or maybe something else? The bill is sparse and vague on these crucial details. Instead, it empowers a henceforth obscure federal agency, the Election Assistance Commission, to begin issuing guidance to states on how to apply the law.

As for the rest of the bill, as critics have noted, it bristles with punitive enforcement provisions and unrealistic timelines. Beyond that, there are intrinsic dangers under our constitutional scheme—as Republicans would once have been first to warn—in letting the federal government build discretionary regulatory power over local election administration.

Don’t be afraid to ignore the rants from Musk and his opposite numbers, and mark this one as “needs more work— come back in a non-election year.”

Colleen Hroncich

When parents begin to customize their children’s education, the possibilities are nearly limitless. This is especially true with the emergence of à la carte providers, as is happening in South Florida. A recent report by Step Up for Students, a non-profit scholarship funding organization in Florida, looks at the “small but growing number of eclectic enrichment providers, single-subject operators, and tutors with a twist” that offer à la carte learning opportunities.

Eye of a Scientist, created by Dr. Neymi Mignocchi, is one of the providers highlighted in the report. Neymi received her PhD in neuroscience and integrated biology and has master’s degrees in experimental psychology and biology, but she knew all along she didn’t want to focus on academic research. “The academic world wasn’t for me—I wanted to go into educational outreach,” she explains. “My strengths were in mentoring students in the lab experience. During my program, every high school mentee that came in, they would just give them to me. I had an ease in being able to break down these very complex thoughts to children.”

She had a baby just before completing her PhD, so she decided to teach part-time to see what it was like—and to see what the kids were learning compared to her own education. She was also tutoring students because it was during COVID-19, and parents wanted support for their children who were learning online. “It got worse from when I was in high school and in middle school till now,” she says. “And I was like, what is this? Why are you only seeing two hours of science a month? That is not okay. And then your science is ‘read this and answer these three questions.’ That’s not science.”

Neymi’s teaching experiences got her thinking. “Scientists learn by doing,” she thought. “So why are these children not learning by doing?” She realized she wanted to create something that would give kids the chance to learn science the right way. Then a Montessori microschool asked her to teach a hands-on science class. She learned a lot working with the Montessori teachers and with a homeschool co-op that similarly approached her. These experiences helped her design Eye of a Scientist.

Things were coming together for Neymi by January 2021 as she was developing the methods and lessons she would use to teach various topics. “In essence, what I wanted to do is bring the laboratory to them so they can see that the whole world is a laboratory. And bring whatever topic we’re talking about to life by them doing it,” she says. “I try to keep my classes very small—10 students tops—because I feel like that keeps it very intimate.” The small size also helps her know when a child isn’t catching on or is getting distracted.

Neymi designs her classes so the kids go through the scientific method along with whatever topic they’re working on. “I’ve created three different age-dependent groups: lower elementary, higher elementary, and middle school,” she explains. “They all go through seven or eight modules, and each module is dedicated to a science field. I’ve included neuroscience and microbiology, my expertise, because I feel they should be learning how their body works, how their nervous system works, why their nervous system works the way that it does, why they think about things the way that they do, why they react to things the way that they do.”

The material for the lower elementary students is more concrete because Neymi says that’s how kids think at that age. They’re trying to make sense of the world. Lessons are more black and white, and they work on categorization. In upper elementary, she adds some “gray” into the mix—exceptions to rules, variables, etc. And they begin doing data collection with graphs and tables. In middle school, she works on teaching them to communicate their findings and think about relevance and how it fits in the world.

“In a way, I’ve created a research methods program for kids,” Neymi says. “It’s not just about science or learning all the facts about science. It’s about learning how to do the research behind whatever science we’re covering—geology, chemistry, physics, neuroscience—whatever it is, there is a guide.”

Most Eye of a Scientist classes are held at a local park, and Neymi says many parents appreciate the outdoor aspect of it. She also found a library that has a terrific indoor lab that she’s able to use when needed. She travels to microschools to provide on-site science classes for their students. Eventually, she’d like to have her own building to create an environment that will allow her to offer a variety of programming geared toward different ages and abilities. Having her own place would also enable her to let the students do experiments that last longer than a single class period, which she’s currently able to do for students in the microschools she travels to.

Around 150 students participated in Eye of a Scientist classes last year. Florida expanded its education savings account (ESA) to make it universal in 2023, which made the classes accessible to more families. Neymi says around 60 percent were homeschoolers and 40 percent were microschoolers—the homeschool numbers have especially increased with the universal ESA.

Neymi is thrilled when she sees children catching on to the science she’s teaching them. “I just love what I do,” she emphasizes. “I hope I can continue to grow and share my love for the laboratory life with students—and inspire them to continue to believe in themselves, be confident that they can learn anything, and see the whole world as their laboratory.”

Chris Edwards

Kamala Harris selected Tim Walz as her presidential running mate. Let’s look at his record on spending and taxes as Minnesota governor since 2019.

Walz has performed poorly on Cato Institute Governor Report Cards. From a small-government perspective, his tax policies have been particularly glaring. He has repeatedly pushed for tax hikes on high earners and businesses, which has seemed more like an effort to punish taxpayers than to fill any real need for more budget revenues.

Spending

Walz signed a huge budget increase in 2023 that boosted general fund spending 36 percent from the 2022–23 biennium to the 2024–25 biennium. However, state spending increases are more reasonable when measured over Walz’s full tenure from 2019 to 2025, as shown in the chart. Annual average spending growth has been 6.0 percent, which is similar to the 50-state average growth of 5.9 percent over the same period. The Minnesota legislature was divided from 2019–2022, but Walz’s party has had full control since 2023.

An analysis of the Minnesota budget noted, “When the budget for the 2024–25 biennium was enacted in May 2023, a significant surplus from the previous biennium was anticipated to be available for one-time uses in the current biennium. After the close of the FY 2022–23 biennium, the actual surplus that carried forward into the current biennium was $13.103 billion. In the enacted budget, this one-time resource was partially allocated to one-time revenue reductions and one-time spending increases across the budget.” The revenue changes were mainly a one-time $1 billion rebate combined with net tax increases going forward.

Minnesota’s tax revenues and spending are higher than the 50-state average, measured as a percentage of income. But to its credit, the state government has relatively low debt and a large rainy day fund.

Taxes

Despite revenue growth and surpluses, Walz has pushed for tax increases on businesses, high earners, and the middle class. His proposed hikes were mainly passed when his party controlled the legislature but mainly rejected when the legislature was divided. Walz has supported tax cuts, but primarily in the form of narrow tax breaks and subsidies.

In 2019, Walz’s state budget would have added “$2 billion more in new spending, and taxes would increase by $1.3 billion to pay for it, with the rest of the money coming from an existing surplus.” But he compromised with the legislature, and the final tax increase was about $330 million annually. Walz also pushed for higher gas taxes and vehicle fees to raise about $1 billion annually for transportation, but those increases were rejected.

In 2021, Walz proposed adding a new individual income tax rate of 10.85 percent above the top rate of 9.85 percent, a surtax on capital gains and dividends, and a hike to the corporate tax rate from 9.8 percent to 11.25 percent. The proposals—which would have raised about $1.6 billion annually—were rejected by the legislature.

In 2023, Democrats took control of the legislature and Walz could enact his misguided tax policies. He signed HF 1938 raising taxes on businesses with foreign income, reducing the standard deduction for high earners, and imposing a new tax on investment income. At the same time, he handed out an array of low-income credits, a one-time rebate, and special-interest breaks for e‑bikes, green aviation fuel, film production, and other items.

The same year, Walz hit the middle class with HF 2887, which raised taxes and fees on vehicles and transportation. The increases included indexing the gas tax for inflation, increasing vehicle registration taxes, raising fees on retail deliveries, and raising sales taxes in the Twin Cities area.

Walz has declared, “Cutting taxes for the wealthiest amongst us will not guarantee opportunities in Minnesota for the wider variety of folks, and it certainly won’t grow our economy from the middle out.” But Minnesota’s high tax rates are undermining the economy and driving away the wealthy, who include highly skilled people and job-creating entrepreneurs.

IRS interstate migration data show that the state is losing about ten households earning more than $200,000 for every six that it gains, which is the fifth worst ratio among the states. At the same time, Minnesota ranks 44th on the Tax Foundation’s business tax climate index, giving companies a strong incentive to invest elsewhere. To stem the outflow of skilled people and capital, Minnesota needs to adopt a leaner government and cut individual and business tax rates.

Governors can make good candidates for national office because they have experience balancing an annual budget and making tax and spending trade-offs. But to my taste, Walz seems too intent on raising taxes in ways that undermine prosperity, while using the tax code as a subsidy machine for politically favored groups.

Notes. The spending chart data comes from NASBO, but it also closely tracks data from Minnesota government websites here and here. The spending data is for fiscal years. Cato releases a new Governors Report Card in October.

Travis Fisher

What comes to mind when you try to imagine a truly free market in electricity? Many electricity policy experts would point to the advent of wholesale electricity markets and retail choice in some regions of the United States. Some economists (me included) would go further and advocate for the complete removal of government intervention in the electricity sector.

Many of us can’t picture a free market in electricity because the laws governing the industry have been so interventionist for so long. Today’s “natural monopoly” regulations date back to the late nineteenth century and became widespread by the 1930s. Policymakers were convinced (in some cases, by the utilities themselves) to preempt the anti-competitive behavior of electricity monopolies by 1) granting them legal monopoly privilege and 2) adding significant oversight such as “rate of return” regulation to mitigate monopoly behavior.

First, especially among libertarians, there must be a better policy response to the problem of monopoly power than guaranteeing it and regulating it. Second, many reforms enacted since the 1990s were more re-regulation than de-regulation. True free-market reform of electricity regulation has never been tried. Although supporters of regulation argue that electric utilities are the poster child for “natural monopolies,” that assumption may not hold and has not been tested (maybe ever, and certainly not in the last 100 years).

One solution to the monopoly problem is to allow new, private utilities to develop and compete wherever they make sense. But to disentangle these new utilities from the massive regulatory red tape that has enveloped existing utilities for decades, they would have to be physically unconnected to existing grids.

Such networks would likely be small in geographic footprint but large in terms of electric power—think of an industrial campus with a co-located generator. Note, however, that grid-connected efforts along these lines have faced significant regulatory headwinds and will be the subject of a technical conference at the Federal Energy Regulatory Commission in the fall. Avoiding regulatory delays and administrative headaches would be a key advantage of a new, unconnected network.

Cost is the primary barrier today. Private grids would likely be more expensive than contracts with incumbent utilities, although innovations in electricity generation technology could change that calculation. Then again, some buyers may be willing to pay more to have full control over the resources they use—power from the existing grid is a mix of a variety of resources, making its environmental attributes hard to pin down.

At the societal level, the obvious upside to allowing competition is that we could finally bring a dynamic market process to the electricity industry. Who knows what innovations entrepreneurs could bring to the industry if they didn’t have to ask for permission from regulators? Allowing a brand-new category of electricity suppliers also addresses the looming challenge of sharp demand growth in the slow-moving electricity industry.

For state policymakers, private grids are a no-cost economic development plan. Rather than incentivizing new industries to locate in the state through tax credits or other subsidies, just getting out of the way of new developments would be a pro-growth policy. And if a new development fails, so be it—there’s no risk to taxpayers or ratepayers, unlike with projects built by regulated utilities.

The real winners would be consumers. To be clear, the idea of private utilities operating on islanded grids didn’t make sense until recently, when big new customers (large “loads” in electricity parlance) became subject to long interconnection delays and high up-front interconnection costs. Some electricity customers—like data centers or manufacturing facilities—want to move quickly, and their willingness to pay for more speed or reliability is likely higher now than we’ve seen in the power sector in a long time.

Although it would be wonderful if free-market competition were enshrined in federal law, the prospect of market-oriented reforms at the federal level looks bleak. Both major parties seem very comfortable with government intervention, and the contrast between the presidential tickets often boils down to different flavors of industrial policy (for example, to support renewables versus fossil fuels, to subsidize electric vehicles versus all vehicles made in the United States, to impose tariffs on specific goods or countries versus all imports, etc.).

Sometimes the state level is the place to look for new answers. And when it comes to the idea of enacting truly competitive reforms in the electricity sector, states are in control. All it would take is a modification of the statute that created the state’s public utility regulations in the first place and a clear declaration that new private utilities—if they are not connected to existing infrastructure—will not be subject to monopoly regulation.

In the worst case, no one would take advantage of the new option. In the best case, a new type of industry would develop that would be faster, more customer-focused, and more innovative than anywhere else in the country.

Disclosure: I am a volunteer advisor with the newly formed group Advocates for Consumer Regulated Electricity.

Neal McCluskey

There has been a revolution in school choice over the past few years. After decades of slowly creating programs focused on students from low-income families, with disabilities, or assigned to public schools with poor academic outcomes, we have seen an explosion of “universal” programs that place no limits on who is eligible to receive funding for private educational options. This has changed the school choice debate, moving once largely theoretical questions into reality.

Perhaps the biggest concern is who will tend to benefit from universal choice. In particular, will it mainly be used by people already educating their kids privately, and if so, does that mean it will mainly help the “rich”?

Theory goes two ways.

The pro-choice view is that absent choice programs, access to education is dominated by family income. Richer families can get better education by acquiring expensive homes in high-achieving school districts or by paying for private schools. Choice reduces the income gap by providing lower-income families money to help pay for private education.

The anti-choice worry is that universal programs will mainly be a boon for the rich. Higher-income people are more likely to be in private schools already and better able to access such schools going forward. Choice will mainly be a discount for them rather than an equalizer for lower-income families.

As long as program eligibility was constrained by income or some proxy, such as the performance of an assigned public school, it was impossible to test how choice would play out if everyone were eligible. With the arrival of universal programs, we can begin to see what will happen.

Eleven states have enacted such programs since 2021, but many are brand new or phasing universality in over a few years. None but Arizona’s has been in effect for at least a year. So our ability to look at real-world outcomes is still very narrow. It is also likely why Arizona has become the focus of many projections about what universal school choice portends.

Arizona enacted legislation making its Empowerment Scholarship Account (ESA) program universal in July 2022. After a failed referendum effort to stop it, universal eligibility went into effect at the end of September 2022. The program puts money into online accounts for individual children through the Arizona Department of Education. Families can use them to pay for private school tuition, tutoring, therapies, curricular material, and more. Those who enroll get 90 percent of the state’s per-student base funding plus some additional money for which charter schools qualify. Amounts increase for students with diagnosed disabilities based on federal disability categories, which put the average ESA at $9,819 as of the first half of fiscal year (FY) 2024.

Prior to going universal, the program had numerous avenues to qualify, including disability, assignment to a public school receiving a D or F on state assessments, and adoption into a foster family. Students also had to have attended public school for at least 45 days unless they were eligible to enter preschool, were in families earning no more than 185 percent of the poverty line and zoned for a D or F school, or had parents who were active-duty military or killed in the line of duty.

The easiest question to answer concerning universality is whether students new to the program have been transferring from public schools. Note that the data capture students who came directly from public schools, not kids who might have gone to public schools sometime, but not immediately, before receiving an ESA.

What should we expect? Initially, a skew toward kids already in private education. As I have laid out before, families already using private education are best positioned to immediately use a new, universal program. They are, after all, already enrolled. They are also likely to hear about choice expansion before families in public schools because private institutions have much more incentive to inform families of ESA funding than public. Families that are already privately educating are also more likely to be looking out for new funding than public schoolers. Finally, Arizona’s ESA was slated to start at the end of September 2022, and the referendum effort did not officially fail until September 30—well after the start of the 2022–23 school year, making ESAs mainly useable only by people already in private schools.

Over time, we would expect the skew toward higher incomes to moderate. Word about the program should spread, and those enrolled privately at launch will already be in the program.

Enrollment patterns suggest this is correct:

When the ESA first went universal in FY 2023, of 29,176 new entrants enrolling in grades 1 through 12 via universal admission, 6,157, or 21 percent, had attended public school immediately prior.
In the first quarter of FY 2024, of the 16,963 who entered, 7,970, or 47 percent, had been in public schools immediately prior.
Adding second-quarter FY 2024 to first, of 19,252 that had entered in the first half of FY 2024, 11,845, or nearly 62 percent, had been in public schools immediately prior.

What about the income levels of ESA families? We would expect them to skew high because higher-income people are more able to pay twice for education—once in taxes for public schools, again for private education—than lower-income people. So people already using private education will likely skew toward higher incomes.

The state does not report ESA user income directly, but scholars at the Brookings Institution recently examined the distribution of ESAs using zip code tabulation areas (ZCTAs) to translate zip codes into income data. Importantly, the Brookings scholars conducted their analysis before the enrollment data for the full first half of FY 2024 was available, understating switchers.

Figure 1 reproduces the Brookings breakdown of ESA use by ZCTA median household income deciles, weighted by under-18 population. We have added an estimation for the upper and lower bounds for each income decile and a vertical line for the 2022 median household income for an Arizona family of four.

ESA use has a clear skew toward upper-income ZCTAs. Is this evidence that universal choice is, as some opponents have declared, really about helping the rich?

It does not appear so.

We first must define “rich.” There is no readily agreed upon income level that constitutes being rich. A reasonable definition might be the top 5 percent of earners. In Arizona that would be households making $250,000 or more. A broader definition would be the top 20 percent of earners. In Arizona, that starts at $142,368.

The ZCTA data make it hard to pinpoint how many rich households, by our definitions, are using ESAs, in part because the starting income of the top under-18 weighted ZCTA decile—$114,968—is well below the top 5 percent of earners and the threshold for the top 20 percent. Why are top ZCTA medians much lower than top overall incomes? Within ZCTAs, many households are, obviously, earning above the ZCTA median, perhaps by quite a bit.

To assess how “rich” ESA users are, we also need some idea about the incomes of Arizona households with children. Such households tend to have higher incomes than those without, but they also need higher incomes relative to families without dependent children given their additional expenses.

As shown on the chart, the federal government reports that in 2022, the inflation-adjusted median income for an Arizona family of four was $103,676. This suggests, at least based on ZCTA median household incomes, that most ESA users are at the family median or below. Eight of the ZCTA income deciles fall below $103,676, which is about 28 percent of the way into the ninth decile. Of course, we do not know how many ESA users might be at income levels at the top end of their deciles, so this might understate the higher-income skew of users, but we also do not know how many might be at the lower ends.

While there is a clear skew toward higher incomes for ESA users, most users are in ZCTAs with median household incomes below the median for an Arizona family of four. Breaking the deciles roughly into thirds, about 18 percent of users are from the first three ($16,818 to $60,741), 40 percent from the middle four ($60,742 to $89,026), and 41 percent from the top three ($89,027 to $177,965).

What this suggests is that Arizona ESA users are not primarily rich but middle income for families. About 16 percent of users are in the top decile, and the top 5 percent of earners—our narrow definition of “rich”—likely includes a much smaller share. The top two income deciles—our broad definition—includes about 30 percent of all ESA enrollees, but that includes the median income for families, which need more money than childless households.

It is also important to note that the ESA program is hardly the only type of choice available in Arizona. As Matt Ladner writes, the state also has four tax credit programs, two of which are income-capped and one is for students with disabilities, as well as charter schools and robust public school open enrollment. And programs like ESAs help to free up open-enrollment seats in high-achieving school districts when kids living in those districts go elsewhere.

Keeping in mind the fundamental principle of choice—public funding follows all children to the education their families select—and the expectation that early users will be especially skewed toward current private schoolers, the ESA distribution is neither shocking nor outrageous. Sizeable numbers from all income strata are in the program, and the skew is likely moving less wealthy.

Research associates Kayla Susalla and Krit Chanwong contributed to this post.

Gene Healy

I am reliably informed that the Republican Party’s 2024 vice-presidential nominee, Ohio senator JD Vance, is not a libertarian. Given the standard set by Mike Pence, Paul Ryan, Sarah Palin, and er, Dick Cheney, I was braced for this news and have so far managed to contain my disappointment.

But the ongoing hue and cry within the Libertarian Temple suggests it may be much worse than I think. Some of my colleagues have even compared Vance to villains from that film they love, with the space hairdresser and the cowboy and “the Death Star thing.” (You know the one.)

JD Vader? I’m not convinced it’s as Dark-Sided as all that, though I definitely understand the concerns. Libertarians place great weight on economic policy, and the junior senator from Ohio has a lot of terrible, horrible, no good, very bad opinions there. As Reason’s Robby Soave recounts, Vance “embraces tariffs and protectionism. He has called for the federal government to break up Google. He has even praised Federal Trade Commission Chairwoman Lina Khan, a Joe Biden appointee waging a one-woman crusade against major tech companies”—and that’s only scratching the surface.

But as economists know, talk is cheap, compared to revealed preferences under constraints. If you just listened to the 2012 GOP veep candidate, Paul Ryan, you’d come away convinced he was an ardent fiscal hawk, instead of a reliable vote for every free-spending debacle of the George W. Bush years, from the multitrillion dollar prescription drug entitlement to the Troubled Asset Relief Program. Contra Maya Angelou, when people tell you who they are, it’s worth looking at what they actually do before you believe them.

Toward that end, with an assist from Cato’s Alana Entinger, I decided to review Vance’s legislative record on liberty issues. It’s admittedly brief, Vance having been elected in 2022, but it’s not nearly the horror show I’d been expecting: There are even a few bright spots.

If you go by votes instead of vibes, Vance looks better than advertised even on economic issues. He’s so far racked up a zero rating on the AFL-CIO scorecard, a score of 83 percent on the Club for Growth’s tally, and by another measure, “Vance has the fifth furthest-right voting record on economic issues, beaten only by Mike Lee, Rand Paul, Tommy Tuberville, and Eric Schmitt.”

But Vance’s nomination also represents a repudiation of the neoconservative consensus in GOP foreign policy. And since ambitious schemes to remake the world through military force have proven to be a very bad idea indeed for life, liberty, and property at home and abroad, libertarians ought to welcome that shift.

Vance has harshly criticized neocon adventurism and here, the record actually matches the rhetoric. Last year, he cosponsored a joint resolution ordering an end to the illegal deployment of US troops in Syria and backed repeal of the 2002 and 1991 authorizations for the use of military force in Iraq (AUMFs). More significantly, Vance cosponsored a bill to repeal the authorization that really matters: the 2001 AUMF. That resolution, passed three days after 9/11, has for nearly 25 years has served as an all-purpose enabling act for globe-spanning presidential war.

Until recently, a vote to repeal the 2001 AUMF would have been considered not just quixotic but completely disqualifying for a member of the GOP ticket. As Cato’s Justin Logan notes, for Republicans, it used be that you could “either be a party leader on foreign policy or you could be right about foreign policy, but you can’t be both. But Vance seems to be both.”

Lest you give in to irrational exuberance, Reason’s Matthew Petti has an informative piece on Vance’s foreign-policy flaws. The Ohio senator has praised Trump’s reckless and illegal assassination of Iranian General Qassem Soleimani, supports using the US military to fight Mexican drug cartels, and “share[s] the establishment view that the United States needs to get ready for a conflict with China over Taiwan.” Yet there’s a case for cautious optimism even here:

“To his credit, Vance has been a little more thoughtful about the risks of escalation than some other China hawks. ‘As a father of three young children, I really don’t want to go to war with a country that makes all of our antibiotics,’ he said in his Quincy Institute speech. “So for the neoconservatives, maybe pump the brakes for at least 10 years.’”

When it comes to Vance’s record on tech policy, there’s less for libertarians to cheer. Like many conservatives, the Ohio senator views content moderation by social media companies as a free speech issue and has made the predictable noises about weakening or removing the Section 230 liability shield. My colleagues have ably catalogued the serious problems with that approach.

But Vance is clearly right that “the government telling social media to engage in censorship” is a free speech issue—and it’s one libertarians ought to care about at least as much as they do about protecting private platforms’ right to squelch the Babylon Bee.

From early 2021 onward, the Biden-Harris administration engaged in a massive, covert effort to suppress core political speech, strong-arming social media companies to blacklist and shadowban alleged “disinformation” (much of it accurate) about the lab-leak theory, pandemic lockdowns, and COVID-19 risk. That effort “had the intended result of suppressing millions of protected free speech postings by American citizens.”

Vance has cosponsored several bills aimed at reining in the federal “censorship-industrial complex.” Those include the Free Speech Protection Act, which bars federal officials “directing online platforms to censor any speech that is protected by the First Amendment,” and the PRESERVE Online Speech Act, which would require social media companies to publicly report government requests to censor or deplatform users, an approach favored by Cato technology-policy analysts.

Libertarians should also care about the capture of critical institutions by a militant, illiberal orthodoxy that divides Americans into oppressed and oppressor classes under the banner of “diversity, equity, and inclusion” (DEI). And since DEI is effectively a state-sponsored industry, they should welcome an effort to remove some of its key supports. Vance’s Dismantle DEI Act would do just that, eliminating “all federal DEI programs and funding for federal agencies, contractors which receive federal funding, organizations which receive federal grants, and educational accreditation agencies.” (I’m less keen on the provisions in the working draft that attempt to bar private-sector DEI via amendments to Title VII. On constitutional grounds and general principle, private companies should be free to be as woke as they like, provided government’s thumb isn’t on the scale.)

On other flashpoint culture-war issues, there’s plenty in the Vance record to give libertarians pause. Last summer, he introduced a bill that would make providing so-called gender-affirming care to minors a federal felony. I have a problem with that approach, given that it rests on an overbroad theory of the Constitution’s Commerce Power. I don’t have a problem with the provisions that “block taxpayer funding for such procedures, including banning coverage of the treatments from Affordable Care Act insurance plans,” and I can’t imagine any genuine libertarian would.

What worries me more about Vance is that, as Reason’s Stephanie Slade puts it, he’s “been more willing than most on the New Right to openly declare his intent to use the state in obviously extralegal ways.” He’s called for “punitive taxation to ‘seize the assets’ of nonprofits that push a ‘woke’ agenda.… ‘Harvard University’s $120 billion endowment is ammunition for our enemies,’ he said on one occasion, ‘and we can’t let the enemy have that much ammunition or we’re going to lose.’” (The legislation he later introduced wouldn’t actually expropriate Harvard, but it would have hiked the tax on endowment investment income from 1.4 to 35 percent.)

Vance has also mused that perhaps, instead of “deconstruct[ing] the administrative state,” conservatives “should just seize the administrative state for our own purposes.” I’m very much against that, for reasons I laid out at length in a recent feature article for Reason. I mean, imagine if ideologues started using the administrative state as a weapon against their culture-war enemies—that would be really bad!

In truth, that particular norm was already busted. What’s new and dangerous is the emerging view on the right that payback takes precedence over structural reform. If that’s Vance’s view, it’s a strike against him.

All told, Vance’s record is a mixed bag from a libertarian perspective. How you rank him relative to past Republican vice presidential candidates depends on what you give the most weight. On war and foreign policy, Vance is a vast improvement over what came before (he’s certainly got Cheney beat). On economic policy, he’s clearly more hostile to markets than, say, Pence and Palin—and arguably the worst of the bunch. When it comes to “electoral integrity” issues, there’s no “arguably” about it: If you want to make the case that Vance is beyond the pale, you should put your emphasis here. Even if “Our Democracy” merits only one cheer, the peaceful transfer of power is important, and it’s best not to court constitutional crisis with bogus legal theories about the vice-president’s vote-counting powers. Yet Vance has said that if he’d been veep on January 6, he’d have “told the states … we needed to have multiple slates of electors.” On that front, Mike Pence definitely has him beat.

Finally, as a culture-war provocateur, Vance outdoes even Sarah Palin in gratuitous abrasiveness. He seems to revel in his ability to offend the sort of forward-thinking cosmopolites who put up “In This House” yard signs.

If I can be permitted some vibes of my own, I suspect that the last factor accounts for a lot of the libertarian hostility toward Vance. For going on a decade now, American politics has largely been a reaction to Donald Trump. And when he came down that escalator, he took up rent-free residence in the libertarian mind as well. One significant faction went full, barking #MAGA; another shifted hard in the opposite direction, toward blue-team “mood affiliation.” The latter camp, understandably disturbed by rising illiberalism on the right, has become fixated on making clear that “we’re not like those people.” I sense a drift toward a sort of “Yard-Sign Libertarianism,” in which left-wing cultural sensibilities have become an essential part of the libertarian package. Count me out.

“Politics isn’t about policy” for most people, but it should be for libertarians. When it’s not, style starts to trump substance, and you may find yourself edging away from “low-status opinions” and playing up fashionable ones, or decoding hidden authoritarian messages in plain-vanilla conservative rhetoric. For instance, if you can detect “overtones of blood-and-soil nationalism” in Vance’s acceptance speech—-where he praised his immigrant in-laws, stated the innocuous truth that “America is not just an idea,” and said he wants to be laid to rest in a Kentucky cemetery alongside seven generations of his family—I really don’t know what to tell you. Maybe adjust the sensitivity dials on your fascism detector?

“Vance is weird”-style arguments may or may not work for the Dems, but—and I say this with great affection—that line of criticism is unavailable to libertarians. Not everybody wants to freeze their head in the hopes of getting resurrected in an immortal cyborg body. Some Americans would prefer to be buried with their ancestors in a family plot. As a libertarian, I say to each his own.

Jeffrey Miron

The United States recently arrested two Mexican drug kingpins. Will this reduce violence or generate other beneficial effects?

According to a recent Cato Research Brief, just the opposite:

Our findings suggest that [kingpin] Don Berna’s extradition caused an average of 1.2 more homicides within 250 meters of a school each year from 2009 to 2013. Further analysis suggests that each additional homicide within 250 meters of a school led to a 1.1 percent decline in math test scores. 

These results on violence echo an earlier brief, which found

that the capture of a DTO [Drug Trafficking Organization] leader in a municipality [in Mexico] increases its homicide rate by 80 percent.

The obvious forecast is thus that violence will increase in Mexico in response to these recent kingpin arrests.

And prohibitionists will then cite the increase as reason to escalate the war on drugs.

This article appeared on Substack on August 8, 2024.

Clark Packard

Late last week, the US Department of Commerce announced that it had denied Vietnam’s petition to change its status to a market economy from a “nonmarket economy” for antidumping and countervailing duties calculations, which generally inflates duties on products deemed to be dumped and/​or subsidized. Vietnam filed the petition for reclassification on the eve of President Biden’s September 2023 visit to Hanoi, during which the two countries emphasized the need to enhance the bilateral relationship and strengthen trade and investment ties.

Despite last fall’s lofty rhetoric, however, the Commerce Department’s decision makes clear that there will be no substantive changes in the bilateral economic relationship. This is an economic and strategic mistake.

First a little background: In the early 1980s, Vietnam’s centrally planned economy was in disarray. It was one of the poorest countries in the world, and inflation was rampant. Shortly thereafter, however, Vietnam began a series of market-oriented economic reforms that proved wildly successful. According to a 2018 International Monetary Fund report, the reforms lifted about 40 million people out of poverty, with the poverty rate dropping from nearly 60 percent to 14 percent by 2014. The report further noted that between 1990 and 2017, Vietnam’s economy was the world’s second-fastest growing economy, trailing only China.

Amid these reforms, Congress in 2001 granted Hanoi normal trade relations status, but just a year later, the United States classified Vietnam as an nonmarket economy during an antidumping case involving Vietnamese catfish. In 2007, the United States supported Vietnam’s accession to the World Trade Organization (WTO) but insisted that Hanoi’s nonmarket economy status continue for 12 years or until the country’s policies moved in a more market-oriented direction. Seventeen years later, the Commerce Department now states that despite some reforms there is still too much government intervention in ways that “distort Vietnamese prices and costs and ultimately renders them unusable for the purpose of antidumping duties.” Though the Commerce Department claims the process for reaching its decision is quasi-judicial and justified it on the basis of a six-factor test, decisions about nonmarket economy status ultimately are—as Cato scholars have previously noted—largely arbitrary and political.

Economically, the decision will continue the practice of inflating antidumping duties on products from Vietnam, which will burden American consumers with higher prices while fostering further political cronyism and uncertainty. Indeed, the most vociferous opponents of reclassification were protectionist legislators and those politicians representing businesses that profit from the inflated antidumping and countervailing due to Vietnam’s nonmarket economy status.

More broadly, the Commerce Department’s decision is a strategic misstep in the context of ongoing tensions between Washington and Beijing. In recent years, particularly since the Trump-era tariffs on Chinese imports (which the Biden administration has maintained), Vietnam has emerged as a key alternative manufacturing and supply chain hub, especially for tech products. This shift is largely driven by companies seeking to diversify their operations away from China and mitigate potential geopolitical risks. Last year Apple, for instance, announced it would move production of its popular MacBooks from China into Vietnam. And earlier this year, Tim Cook, the company’s CEO, visited Hanoi where he announced more component parts would be purchased from Vietnamese firms.

Today, Vietnam is the eighth-largest trading partner for the United States—and its importance is rising at a rapid clip. Indeed, as Figure 1 demonstrates, two-way trade volumes between the United States and Vietnam have increased dramatically in recent years.

As Scott Lincicome and I noted in a 2023 Cato paper recommending better approaches to US-China economic tensions, Washington should prioritize cultivating deeper trade and investment ties with Asian countries, including Vietnam. Rejoining the Comprehensive and Progressive Trans-Pacific Partnership, of which Vietnam is a member, is a wise idea. So, too, is reclassifying Vietnam’s nonmarket economy status.

Rhetorically, most of Washington’s policy community is rightly worried about several Chinese economic practices. Yet when policymakers have an opportunity to strengthen the US’s economic and strategic position vis-à-vis China, shortsighted protectionism and parochialism continue to triumph.

David J. Bier

Many people wrongly believe that immigration is critical to the illicit supply of fentanyl in the United States. However, proponents of this view have offered little more than speculation to support it. New data obtained by the Cato Institute via a Freedom of Information Act (FOIA) request calls this belief into question. The new dataset shows that US citizens comprised 80 percent of individuals caught with fentanyl during border crossings at ports of entry from 2019 to 2024.

The FOIA dataset contains individual records regarding each person encountered by officials at US ports of entry from whom fentanyl was seized. Figure 1 shows the citizenship of individuals arrested with fentanyl from fiscal year (FY) 2019 to 2024, as of June. Overall, the dataset reveals that out of 9,473 individuals associated with a fentanyl seizure, 7,598 were US citizens (80.2 percent).

The data are most relevant to understanding fentanyl seizure activity because the vast majority of fentanyl is seized at ports of entry, not between the ports where people cross illegally. Figure 2 breaks down fentanyl seizures by location. From FY 2015 to 2024, 88 percent of all fentanyl was seized at ports of entry, basically the same as in FY 2024. Another 4 percent was seized at vehicle checkpoints on highways after the ports. Only 8 percent was seized by Border Patrol on patrol, and many of those seizures came from vehicle stops as well. The seizure data supports the qualitative assessments of the Drug Enforcement Agency, Customs and Border Protection (CBP), and the Office of National Drug Policy based on investigative work. Even Bill Barr, while serving as attorney general under President Donald Trump, agreed.

Drug trafficking organizations hire US citizens because they are guaranteed the right of entry into the United States and are subject to less scrutiny at ports than individuals without citizenship. Data from the US Sentencing Commission reinforces the impression that US citizens are the primary method for fentanyl cross-border drug trafficking. From 2018 to 2023, US citizens accounted for 2,315 of the 2,905 convicted drug traffickers in southwest border districts (80 percent). The number of US citizens involved in fentanyl trafficking has risen more rapidly than it has for other traffickers since 2018.

These statistics naturally do not include the drugs that evaded detection or the traffickers who were not caught. However, just as surveyors do not need to interview every person in the country to learn that the country is politically divided, we do not need to see all people crossing the border to make conclusions about broad trends. Border Patrol apprehensions of immigrants crossing illegally constitute a significant sample size to make a reasonable inference about the unseen market.

From October 2018 to June 2024, Border Patrol made 8.5 million arrests and recorded 1,341 fentanyl “seizure events.” It is likely that half of these were of US citizens being stopped in vehicles at Border Patrol checkpoints or during highway patrols. Border Patrol also finds and records abandoned fentanyl as “seizure events.” It appears that fentanyl seizures occur during less than 1 in 12,000 Border Patrol encounters with border-crossing immigrants. Fentanyl smuggling is quite rare among the border-crossing population, and the flows that evade detection are much smaller than the number who are arrested.

It is logical to hire smugglers to bring drugs through legal crossing points because the probability of detection is so much higher when crossing illegally. CBP estimates that it seized only 2.98 percent of cocaine—the only drug it analyzed—that went through US ports of entry. This compares to its interdiction effectiveness rate for immigrants crossing illegally of over 75 percent (Figure 4). Even if CBP is far less effective at stopping crossers than it believes, there remains an incentive to attempt smuggling at ports of entry.

Eliminating Immigration Won’t End Fentanyl Smuggling

Many people believe that simply eliminating immigration is an easy answer to the overdose crisis in the United States, but these numbers cast cold water on this strategy. In fact, the overdose crisis worsened significantly during the years when legal and illegal immigration were greatly restricted (Figure 5). In 2020, when immigration of all types was radically restricted by President Trump, fentanyl overdose deaths increased by 56 percent. They spiked another 22 percent in FY 2021 when President Biden maintained Trump’s restrictions on legal entry and attempted to enforce his Title 42 asylum ban.

The travel ban at ports of entry was critical to facilitating the increase in fentanyl supply, leading to more deaths. US consumers preferred heroin until 2020, but with travel greatly restricted, cartels needed to get more product across with fewer trips. Fentanyl enabled this. Because it is 50 times more potent than heroin, it can supply the same market with 50 fewer crossings. The result was that fentanyl went from comprising a third of combined fentanyl and heroin seizures to over 90 percent when the travel ban ended, where it has remained (Figure 6).

Fentanyl is relatively easy to conceal in pockets, luggage, and vehicles because it is so potent. The prospect of easy cash has motivated an increasing number of Americans to participate in this illegal trade, tragically leading to the deaths of thousands of their fellow countrymen.

Detection Technology Is Not the Answer

Many people propose installing more effective screening tools at ports of entry to detect and interdict fentanyl. Unfortunately, greater detection technologies are not the answer to America’s drug problem. We have several lines of evidence supporting this conclusion.

First, marijuana was smuggled successfully into the United States for decades, despite being orders of magnitude easier to detect than any other drug. Marijuana is bulky, pungent, and extremely difficult to conceal. For this reason, it largely could not enter through lawful channels. It is also far less valuable per pound, so there is less financial upside to smuggling. Nonetheless, as I detail in my policy analysis on this subject, nothing abated the smuggling of marijuana––not doubling the Border Patrol, not building 600 miles of fencing, not the collapse of illegal immigration during the Great Recession. It was not until state-level legalization that the supply of Mexican marijuana disappeared. Changes in consumer demand ended trafficking, not enforcement.

Second, an unprecedented increase in seizures would not affect the availability of fentanyl unless drug cartels chose not to increase supply in response. We already know that they will. After the Border Patrol more than doubled in size, marijuana seizures rose alongside that increase, but marijuana availability remained the same, and its potency increased. Since the value of drugs on the Mexican side of the border is at most a tenth of the value of drugs on the US side, the interdiction rate would have to increase from its current 3 percent to nearly 90 percent just to double the price. But thanks to higher manufacturing output in Mexico, the fentanyl price has fallen so quickly that this historic effort would not necessarily even show up in a higher street price.

Third, there is almost no limit to how potent synthetic opioids can become. Even if CBP obtains a much higher rate of detection for fentanyl, drug manufacturers could swiftly shift to nitazenes, which are already showing up in the United States and are 20 times more potent than fentanyl. Nitazenes could supply the same fentanyl market with 5 percent of the current number of smuggling trips (or 5 percent as much weight). Of course, provoking such a shift in potency would result in even more tragedies. But shifts like this have already happened repeatedly in the drug market, including the shift from heroin to fentanyl.

Fourth, in the unlikely event that Mexican smuggling routes were sealed off, smugglers would adopt other methods. They would send it over in mailed packages, as they did before the rise of Mexican smuggling. Supposing all smuggling ended, Americans would just manufacture it domestically. Where there is demand, there will be supply.

Conclusion

Policymakers should focus on reducing demand for fentanyl rather than futilely trying to reduce supply. Cato scholars who predicted the fentanyl crisis have proposed many concrete ideas short of ending drug prohibition itself: Legalize fentanyl test strips to empower drug consumers to screen out fentanyl. Eliminate controls on methadone treatment. Allow doctors to treat addiction without risking jail time or losing their medical license. Reschedule diamorphine to allow for its use in treatment.

People have become so distracted by the immigration issue as an easy solution to the fentanyl problem that they are ignoring real solutions. People are dying because politicians have decided that empowering cartels to flood the market with fentanyl is better than deregulating addiction treatment, which would subsequently dry up demand for illicit drugs. Other countries have adopted better drug policies and have achieved better outcomes. None of those outcomes came from restricting immigration.

Marc Joffe

With electric vehicle sales growing more slowly than hoped, EV makers are reining in plans to build new car and battery factories. This is coming as a disappointment to North Carolina and other states that have offered lavish incentive packages to lure EV manufacturers to build and expand plants.

The first quarter of 2024 saw a surprising drop in EV sales and market share from the prior quarter. The decline, which cyclical factors can partially explain, appears to have been reversed in the second quarter. But EV sales growth has slowed from earlier in the 2020s and it no longer seems inevitable (if it ever did) that EVs will quickly replace internal combustion engine vehicles on the nation’s roads.

Some EV makers are taking this market signal to scale bank investments in plant capacity. That can frustrate state and local government officials who offer subsidies and tax breaks to induce manufacturers to add capacity in their jurisdictions.

That’s the case in Chatham County, NC (west of Raleigh) where Vietnamese EV maker VinFast was supposed to build a giant facility that would start operating in July 2024. The state, county, and local entities offered VinFast an incentive package totaling $1.254 billion to build its new plant in the county.

But the plant did not open last month. Indeed, VinFast has pushed back the opening to 2028 and downsized the plant by 20 percent.

While the community awaits the deferred benefits of this facility, the state has already spent over $96 million of taxpayer money and condemned two businesses, as well as a church erected in 1888. Although the Fifth Amendment is supposed to limit the application of eminent domain to “public use,” the Supreme Court expanded the definition of “public use” to include private activities furthering a “public purpose” in its 2006 Kelo decision.

North Carolina is not the only state whose EV incentives are producing less-than-expected results. In Georgia, Rivian Automotive has suspended work on a plant that originally attracted $1.467 billion of incentives. Meanwhile, Ford has reduced the size of an EV battery plant in Marshall, Michigan by almost half. The incentive package for the Marshall facility originally totaled $1.700 billion.

In a dynamic economy like ours, surprises are to be expected. The downsides (and upsides) of those surprises should belong to companies and their voluntary investors, not taxpayers forced to subsidize billion-dollar corporations by over-eager state and local governments searching for highly visible political wins.

Next month, Scott Lincicome, Krit Chanwong, and I will publish a new Cato policy analysis examining state and local subsidies and suggesting possible solutions.