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Peter Van Doren

The US Court of Appeals for the Sixth Circuit last week decided that the Federal Communications Commission (FCC) lacked the legal authority to issue so-called ” net neutrality” rules.

While net neutrality sounds appealing, the actual internet experience that we have come to expect requires non-neutrality. In the early days of the internet, packets of information were basically treated alike. This was when the internet was a government-funded communications system that allowed university researchers to communicate with each other.

When the internet started to allow private internet service providers (ISPs) to connect to the government system in the 1990s, the structure of the internet became more complex. Private “backbones” supplemented the original government network, connecting through four network access points. The four access points immediately became congested with traffic, which gave the backbone operators market power over the local ISP providers. To reduce congestion and limit backbone market power, ISPs quickly developed new pathways and connections.

Thus, since the early days of the private internet there have been multiple paths for packets of information to travel. Similar packets have traveled over different pathways at different speeds and have paid differing amounts to do so. These arrangements were not anti-consumer or anti-competitive. They were simply what was required to create redundancy and overcome market power.

Despite this underlying engineering reality, “net neutrality” became a partisan issue. Democrats were in favor and Republicans opposed. And 30 years of legal maneuvering ensued. The Biden administration continued this game of regulatory ping pong by reinstating net neutrality rules in April 2024 that were repealed during the first Trump administration. The court decision blocks the reinstatement.

Net neutrality has captured the imagination of Democratic activists and the public, but its effects on the actual technical and legal evolution of the internet have been rhetorical rather than real. Repeal of the net neutrality rules will not be the death of the internet. It will simply return us to the hands-off regulatory framework that has nurtured the last three decades of the internet revolution. 

Thomas A. Berry

In April 2024, President Biden signed an unprecedented law that required TikTok to either “divest” from its parent company ByteDance by January 19, 2025, or cease operations in the United States. Such divestment would likely be infeasible because ByteDance owns much of TikTok’s code and employs many of the engineers who make TikTok run. And even if it were feasible, American TikTok users would lose access to content from outside the country, fundamentally changing the platform.

Jeffrey A. Singer

Axios reports that the Biden Administration is planning an 11th-hour move to order cigarette manufacturers to reduce the nicotine content in the tobacco cigarettes they market to consumers—possibly by as much as 95 percent. The FDA proposed the rule in 2022, and the Office of Management and Budget cleared the rule proposal on January 3, 2025.

The Food and Drug Administration has not yet issued the rule but may do so within the next two weeks.

Nicotine is the addictive component of tobacco cigarettes, but by itself is relatively harmless. The harm comes from carbon monoxide, a poisonous gas, and tobacco tar that contains carcinogens and other chemicals that harm the lungs and circulatory system. Britain’s Royal Society for Public Health claims nicotine is “no more harmful to health than caffeine.” As I have written here, what differentiates nicotine from caffeine is that it has calming as well as stimulative effects.

Tobacco cigarettes are a type of nicotine delivery system. While some smokers may enjoy the flavor of tobacco and the act of smoking, many primarily smoke for the effects of nicotine.

The rationale behind ordering cigarette makers to reduce the nicotine content of tobacco cigarettes is that it might nudge smokers to abandon smoking. In 2018, FDA researchers reported in the New England Journal of Medicine that they used a simulation model that suggested reducing the nicotine content of tobacco cigarettes by 95 percent could lower the percentage of adult smokers to 1.4 percent by 2100.

Yet one randomized controlled study of the efficacy of reducing nicotine content to such levels found:

In smokers not interested in quitting, reducing the nicotine content in cigarettes over 12 months does not appear to result in extinction of nicotine dependence, assessed by persistently reduced nicotine intake or quitting smoking over the subsequent 12 months.

Some researchers have found that reducing the nicotine content may lead to a compensatory increase in cigarette consumption or increased puff volume to attain the nicotine effect. A team of researchers at the University of Pennsylvania reported in the journal Drug and Alcohol Dependence on a novel “within-subject human laboratory study” hypothesizing “that compensatory smoking, specifically greater total puff volume, would be observed as nicotine levels decreased, thereby supporting behavioral compensation. Further, due to increased total puff volume, we hypothesized increases in CO boost as nicotine levels decreased (i.e. biochemical evidence of compensation).” They found:

As hypothesized, both total puff volume and CO boost per cigarette increased when cigarette nicotine level decreased, although the effect was modest. Subjective ratings of cigarette strength and satisfaction were significantly lower for the lower-nicotine cigarettes.

Yet, other studies, such as this 4‑day study, failed to discern any increase in the number of cigarettes smokers consumed with decreased nicotine levels. Researchers at the University of Minnesota conducted a “secondary analysis of data” from studies where cigarette nicotine content was either gradually or immediately reduced and found:

The results showed that in general, these two approaches led to minimal compensatory smoking…over the course of the experimental period, suggesting that neither of these approaches poses a major safety concern.

Policymakers also aren’t considering that mandating cigarette makers to reduce nicotine will likely stimulate a healthy black market in higher-nicotine cigarettes, benefiting drug cartels and other criminal organizations. Menthol cigarette black markets have arisen in states and countries that have banned them. Ironically, the Biden administration has delayed a decision on a federal menthol cigarette ban, yet seems poised to generate a black market in regular cigarettes.

If policymakers want more people to quit tobacco smoking, they should remove barriers to tobacco harm reduction by increasing access to e‑cigarettes, including flavored ones preferred by smokers wishing to quit, nicotine pouches, and less harmful products like heated tobacco and snus. That way, people can get the nicotine they desire without utilizing the harmful tobacco cigarette delivery system.

Brent Skorup

Romina Boccia

As a new Congress and administration descend on Washington, they will face critical decisions that will define our economic future. The choices made—or avoided—this year could determine whether the United States averts a fiscal crisis or plunges further into unsustainable territory. The time to act decisively by putting the US budget on a path to balance is now.

Last year’s reckless year-end spending package served as a grim reminder of the fiscal irresponsibility that has pushed US debt to 100 percent of GDP. The new Congress has an opportunity to start a new chapter—one that prioritizes fiscal discipline and ensures a sustainable future that enables economic growth to benefit all Americans.

Four looming fiscal deadlines in 2025 demand urgent attention: the return of the statutory debt limit, and the expiration of discretionary spending caps, key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), and expanded Obamacare subsidies. We explain these deadlines in greater depth in our new paper, “A Fiscal Agenda for the 119th Congress: The 2025 Fiscal Cliff Calls for Spending Restraint,” which was just published by the Cato Institute. In it, we call on Congress to meet these challenges with a firm commitment to fiscal responsibility and economic growth or risk greater inflation, higher interest rates, and subsequent voter backlash come the 2026 midterm elections.

The Debt Limit: An Action-Forcing Tool for Real Reform

The statutory debt limit, reinstated on January 1, 2025, presents a key turning point for Congress to adopt a credible deficit-reduction plan that will put the US budget on a path to long-term balance. While some voices, including President Trump, have floated the idea of eliminating the debt limit altogether, doing so would strip away a critical fiscal guardrail. Combined with a potential $5 trillion increase in deficits from extending TCJA provisions without offsets, this could rattle bondholders and send Treasury rates soaring, undermining economic stability.

Instead, Congress should pair any debt limit increase with concrete spending reforms grounded in fiscal targets, such as stabilizing the debt-to-GDP ratio at 100 percent or less over the next decade. To achieve this essential goal, Congress should consider authorizing an independent fiscal commission modeled after the successful BRAC (Base Realignment and Closure) process to address unsustainable entitlement spending—the main driver alongside interest costs of rising spending and debt.

While some are suggesting that the debt limit is dangerous by forcing Congress to take an uncomfortable vote to authorize the Treasury to borrow the money that Congress has appropriated, what’s actually dangerous is the unsustainable fiscal course we’re on. By leveraging the debt limit to enact meaningful reforms, Congress can make a real difference toward putting the US budget on a path to balance, and thereby signal to markets that the United States is serious about fiscal responsibility. Eliminating the debt limit without replacing it with a stricter and more effective fiscal mechanism, such as a Swiss-style debt brake, would be reckless.

Tax Cuts and Fiscal Discipline: A Defining Test for Republicans

The expiration of key TCJA provisions at the end of 2025 offers another critical test. Extending these tax cuts without offsetting spending reductions or new revenues could add an estimated $5 trillion to deficits over the next decade, further fueling inflation and interest rate increases. Republicans must resist the temptation to kick the can down the road and instead commit to extending pro-growth tax cuts within a deficit-neutral framework.

This means eliminating inefficient tax breaks and corporate welfare and pairing tax cut extensions and expansions with reductions in spending. A fiscally responsible approach to tax policy will strengthen economic growth, including by avoiding the dousing of further fuel on the deficit fire.

Discretionary Spending Caps: Holding the Line on Waste and Improper Spending

The expiration of discretionary spending caps after FY 2025 threatens to unleash unchecked growth in non-essential spending. Congress should reinstate binding caps with a modest 2 percent annual growth limit, close loopholes that allow the abuse of emergency designations and similar budget gimmicks to bypass those caps, and cut wasteful and duplicative programs as well as pet-peeve spending that is improper for the federal government to undertake.

The Expiration of Expanded Obamacare Subsidies

The expanded Affordable Care Act subsidies, extended through 2025 by the Inflation Reduction Act, are poised to expire. Congress should let them go. These subsidies have inflated federal spending while failing to tackle the root causes of high health care costs. Allowing the subsidies to expire would prevent the entrenchment of temporary programs that worsen fiscal imbalances. Instead, Congress should prioritize reforms that reduce government intervention in health care, enable market competition, and address regulatory burdens and misaligned financing issues to lower costs and improve health care for all Americans.

DOGE and the Case for a Fiscal Commission

The Department of Government Efficiency (DOGE), tasked with identifying wasteful spending and harmful regulations, sounds promising. But its recommendations, due in 2026, are only part of the solution. Pairing DOGE’s work, which will focus on executive actions, with a congressionally authorized fiscal commission, to advance legislative changes, could provide the political momentum needed to enact difficult reforms, especially to entitlement programs.

That’s where the real root of the fiscal problem lies: unfunded obligations to politically favored senior citizens who collect far more in Social Security and Medicare benefits than they paid for. Congress should stop dancing around the core issue and get serious about a path to reform.

A BRAC-like process, with Congress empowering independent experts to identify changes based on specific, narrow guidelines, could overcome legislative gridlock and bring about the future sustainability of programs like Social Security and Medicare. If successful, such a commission could help the US avoid the entitlement-driven debt crisis that’s advanced significantly since 2010, when baby boomers began retiring in large numbers.

The University of Pennsylvania’s Penn Wharton Budget Model (PWBM) researchers have stated quite bluntly that the United States has “about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation).” The sooner Congress acts, the less painful and the more gradual necessary reforms can phase in without upending our economic growth engine.

A Warning and a Path Forward

The stakes couldn’t be higher. The consequences of inaction—higher inflation, skyrocketing interest rates, and a fiscal crisis—are all too real. But by committing to responsible deficit reduction, Congress and the Trump administration can chart a path to economic prosperity.

Our just-published policy analysis provides a roadmap for achieving fiscal sustainability, including detailed recommendations on how to address these 2025 deadlines responsibly. The time for action is now. Failure to act decisively will not only burden future generations with insurmountable debt but also threaten the aspirations of millions of Americans today.

Read the summary preview of our policy analysis here.

Matthew Cavedon

Lorenzo Pierre was convicted in July 2022 for possession of a firearm by a convicted felon. Pierre appealed, arguing that his conviction, as applied, violates the Second Amendment. On appeal, a panel of the United States Court of Appeals for the Eleventh Circuit twice affirmed Pierre’s conviction, following circuit precedent. Pierre is now asking the full court to decide whether a criminal defendant may raise an as-applied Second Amendment challenge to the federal “felon-in-possession” law. 

This law imposes a categorical, lifetime ban on firearm possession for any individual who has been convicted of a crime punishable by imprisonment for a term of more than one year. Since the passage of this law, tens of thousands of such offenses—many of which society would not deem morally wrong—have been added to the books. Many of these crimes are neither particularly serious nor indicative of danger with a firearm, and the underlying conduct—such as cutting a fishing line—would not historically have sufficed to strip the perpetrator of their fundamental right to armed self-defense.

The Cato Institute filed an amicus brief arguing that the categorical disarmament of felons violates the Second Amendment. Exceptions to constitutional rights do not move with the political winds. Congress does not have unfettered power to define what counts as a felony and then use that categorization to abridge Second Amendment rights. History—not legislatures—determines the existence of exceptions to and the scope of individual rights. 

In assessing whether a particular defendant can be disarmed, courts must compare prior convictions to historical analogs. Permanently disarming every felon simply for being a felon is unconstitutional.

Norbert Michel and Jerome Famularo

In the aftermath of the COVID-19 pandemic, the United States experienced a much higher rate of inflation than at any time during the prior few decades. Like the prices of many goods and services, the cost of housing rose rapidly, with the median home price increasing almost $100,000. (Figure 1.) Unsurprisingly, many potential homebuyers were—and still are—shocked and upset.

As they have in years past, many politicians have latched on to the anger surrounding the recent housing market turmoil. During the presidential debate, Vice President Kamala Harris said, “Here’s the thing: we know that we have a shortage of homes and housing. And the cost of housing is too expensive for far too many people.” Prior to the election, Donald Trump outlined his own solutions, and now federal officials want to implement a host of policies, ranging from subsidies to selling federal land.

But is the United States really facing a housing crisis? Or a shortage of homes? And should Americans really expect recent federal policy proposals to make housing more affordable?

This Cato at Liberty post is the sixth in a series that examines these questions. (Previous posts are here, here, here, here, and here.) While the series presents evidence that the United States is not facing a true housing crisis or shortage, nothing in the series suggests that local officials should refrain from relaxing zoning restrictions and other regulations. Elected officials should reduce rules and regulations to make it easier and less costly for people to live. Additionally, federal officials should end the many demand-side policies that place upward pressure on prices across the nation.

Just as important, nothing in the series ignores that many Americans have taken an economic beating these past few years—real wages have fallen, and prices have not reverted to pre-COVID-19 levels.

Although the rate of growth in the overall price level has moderated, the post-COVID-19 price spike still angers people. After remaining above 5 percent between June 2021 and February 2023, the annual inflation rate has been below 4 percent since June 2023 and below 3 percent since July 2024. Similarly, the median home price increased from $317,100 in 2020 to $442,600 by the end of 2022. Just as many consumers remained upset about high grocery prices after inflation moderated, few prospective buyers took comfort in the median home price falling to $415,000 by June 2024, a price well above the pre-pandemic level.

It is no surprise, therefore, that so many people have been calling for increased government intervention.

Yet if federal officials answer those calls, it will likely only further increase Americans’ economic burden. Evidence shows that over the long-term people have overcome the many federal roadblocks that increase the nominal cost of housing, but housing markets would function better in the absence of those policies.

Fortunately, federal officials have an excellent opportunity to improve the housing market because the lessons learned from the post-COVID-19 inflationary episode are directly applicable to the housing market. In both cases, federal policies distort supply and demand, resulting in harmful outcomes. The housing market is just a microcosm of what can go wrong—and how difficult it can be to fix—when the federal government interferes with markets.

Major Changes Remain Post COVID-19

Regardless of the level of anger over these recent price spikes, the COVID-19 pandemic and the government shutdowns changed the way people live and work. The rise in remote work, for example, reduced Americans’ average commuting time and increased the utility they receive from housing. (Before anyone makes an angry X post: No, we are not endorsing government shutdowns to increase Americans’ utility.)

Before the pandemic, only about 5 percent of Americans worked from home (fully remote or hybrid), a figure that rose to 60 percent by the spring of 2020. Though the share has since fallen, it appears a fundamental shift has occurred. As of November 2024, the share was still 27 percent.

As this shift occurred, many people were able relocate to areas with less expensive housing, more amenities, and more appealing climates. Many buyers also wanted more space at home because they wanted additional workspace.

Researchers from the Federal Reserve Bank of San Francisco report that this shift to remote work led to an increase in demand even after controlling for relocating. Specifically, they estimate that increased demand from remote work caused house prices to rise approximately 15 percent from November 2019 to November 2021. This figure represents more than 60 percent of the overall increase in housing prices during the period. The Fed researchers also report that “remote work has essentially identical effects on rents as it does on house prices.”

While the longer-term effects on housing from the COVID-19 pandemic remain unclear, there are important lessons to be learned from the boom-bust experience in some metro areas.

For example, housing construction boomed in Austin between 2019 and 2023, with increases in both single family and multifamily housing. In 2019, Austin added almost double the square footage in multifamily housing compared to 2018, added roughly that same amount in both 2020 and 2021, and then added 45 percent more in 2022. In 2022 and 2023, Austin increased its number of single-family homes, condos and co-ops by 85 percent and 23 percent, respectively.

Yet, Austin is now being referred to as “ground zero” as the Texas housing market faces a downturn. Nick Gerli, CEO of real estate data platform Reventure App, claims that “Austin has the highest inventory surplus of all Texas” and the market “is now oversupplied.” According to Gerli:

Investors are having difficulty earning cash flow due to high prop taxes and stagnating rents. Builders are needing to do big markdowns to sell houses, which is hurting the resale market.

Although the median home price at the state level declined (year over year), “the average Austin house price was $553,275 as of September … up 1.5 percent from a year earlier.” Figure 2 presents single-family home values, new construction, and inventory for the Austin metro area between 2019 and 2024.

This same sort of phenomenon, where a decline in home prices hurts the resale market, is occurring in the Austin rental market. After a roughly two-year construction boom added thousands of new apartments (more than 10,000 by the end of 2023), developers are pulling back because they “can no longer make the same kind of cash.”

In both Austin and Boise, Idaho, new construction of single family homes followed similar paths between 2018 and February 2022. However, the steady increase that started in 2021 ended for Boise in February 2022, while it increased for Austin until April 2023. Yet, home price growth for both metro areas remained on a similar path in both places between 2018 and 2024, with Boise’s average home price going from $247,388 in 2018 to $472,447 by August 2024 and Austin’s rising from $296,952 to $453,130. (See Figure 2). 

Additionally, Figure 3 shows that the price-to-income ratio has been higher in Austin than in Boise for most of the last 12 years, and that it followed a very similar path—increasing and decreasing—in both places starting in 2020. Yet despite Austin’s large inventory of housing in 2023, its ratio remains higher than at any point prior to the pandemic and higher than the ratio in Boise, which had much less construction. Just as important, both Boise and Austin became more affordable at the same time, at a similar rate, even though Austin uniquely (compared to Boise) experienced a recent construction boom.

The point of this comparison is only that house prices can change at different rates in certain locations despite differences or similarities in new construction. That is, the supply of housing is not the sole determinant of house prices.

Further, this episode in Austin serves as a reminder that affordability for the buyer works against the seller. That is, while buyers (and renters) would love to get a lower price, sellers (and landlords) would prefer a higher price. As prices go down, it provides an added incentive to buy but less incentive to sell or build new housing.

This tension produces the best outcomes when builders are allowed to meet demand in their local markets, with as few regulatory obstructions as possible.

The other big lesson is that housing markets are dynamic and can change rapidly. A tight market, with rising prices and low inventory, can quickly morph into a market with an “oversupply” of available housing. The kinds of “shortages” discussed in the last post of this series can quickly and unexpectedly morph into (on those same terms) a “surplus.” Thus, federal policies based on “fixing” these kinds of “shortages” can easily distort local supply and demand conditions and make it more difficult for housing markets to provide the kinds of housing that people want.

Experience also demonstrates that the federal government should not be in the business of deciding the type and number of homes that people can build in their communities, or whether people should rent or buy. Federal policies that distort markets in such a manner will likely end badly just as previous federal efforts have ended.

Housing Availability Counters the Crisis Story

As our previous post argued, one problem with many of the so-called housing shortage metrics is that they do not measure the optimal demand or supply for housing. A more practical problem is that many of those metrics are based on household formation, and the aggregate count of households exhibits a considerable amount of volatility, some of which is due to the ability of individuals (both family and non-family members) to move in and out of households on a regular basis.

We make no judgment as to what household formation rates should be. We also maintain that federal officials are just as incapable of knowing when family and friends should either stop or start cohabitating and forming households. Federal officials should not provide incentives for people to speed up or slow down the rate at which they form new households, and federal housing policies are no exception to this rule—the government should not intervene in housing markets based on anyone’s preferred household formation rates. (Arguably, incentives like first-time buyer tax credits and downpayment grants only speed up the rate at which people become homeowners.)

Of course, this argument does not answer whether the United States is facing some kind of housing shortage, crisis, or market failure. To help answer that question, we suggest using population growth instead of household formation. Rather than try to estimate a “shortage” of some kind, we use changes in population to estimate basic housing availability. That is, we examine whether housing construction has broadly kept up with population growth. (Other studies have used similar population-based metrics, and we use this alternative in a working paper with S. Sayantani. It is currently under revision, but we stand by the original results, some of which we present here.)

We do not offer this measure as an improved method for estimating the equilibrium supply and demand of housing. We merely offer this measure as a better way to examine whether, as so many critics claim, the US housing market has been experiencing a crisis or a market failure. Simply put, if housing construction has kept up with population growth in the long run, it is very difficult to support the idea of a widespread shortage or market failure. Such a market would not be one in crisis.

It is still possible that more housing would benefit more people. But the underlying question of whether the housing market generally provides housing for people—or fails to provide it—is at the heart of whether the United States is experiencing a crisis or market failure.

Figure 4 presents a graphical look at two versions of this housing availability measure. The first is the annual change in population divided by the number of housing units started (in blue), and the second is the annual change in population divided by the number of housing units completed (in orange). In both cases, as the ratio decreases, it implies that a relatively higher volume of housing is being built compared to the demand created by population growth.

Figure 4 shows a decreasing trend in the ratio from about 2009 to 2021, suggesting that units started and completed steadily kept pace with annual population changes for this period. Before rising slightly in 2022, the 2021 ratio was lower (0.35) than at any point during the past five decades.

Of course, this simplistic national-level analysis ignores geographic differences and the possible effects of all kinds of other factors that might affect the housing market.

To capture some of these other factors and provide a more robust analysis, we use a 22-year panel of county-level data for 362 counties. Due to data accessibility, we estimate housing availability with annual building permits issued. We include permits for both single-family and multi-family buildings, consisting of those with up to 4 units and 5+ units, respectively.

Using this data set, we construct a county-level availability ratio, defined as the ratio of resident population change to units permitted. As with the national-level ratio, a higher availability ratio implies lower housing availability (a higher number of residents allotted per housing unit), while a lower ratio implies higher housing availability (a smaller number of residents per housing unit).

Based on this county-level ratio, availability has been improving almost steadily since 2010, with a ratio of less than 1 since 2020. Figure 5 demonstrates that housing availability worsened during the financial crisis and was the lowest (corresponding to the highest ratio) immediately following the crisis. Additionally, while availability slightly worsened in 2022, it has been better than average since 2016.

We also perform further analysis of this availability metric using a regression that controls for both location and time-varying characteristics.

Using this approach, our main result is that between 2000 and 2021, the average building units permitted per 100-unit change in resident population was approximately 93 housing units. These figures are hardly indicative of a major supply shortage or market failure across the United States—the amount of building has essentially matched the population change for the past two decades.

A bit more broadly, housing construction has kept up with the growing population, even as people chose to move into more densely populated areas and pay higher prices. Based on this evidence, anyone characterizing the US housing market as one in crisis is guilty of abusing that term.

While there is no doubt that many people would love to pay less for US housing, that preference alone does not indicate that there is a housing shortage. The same can be said for virtually any good or service. That is, even though people prefer to pay less for everything that they buy, this preference does not indicate the existence of market-wide shortages or market failures. This preference for cheaper goods does not justify federal intervention to regulate either supply or prices in any market, including housing.

Nonetheless, many groups blame high housing prices on a lack of construction and argue that federal intervention is necessary. Some of these groups focus on relaxing local zoning and other regulatory constraints to improve housing affordability. While we argue against federal intervention and agree that local officials should relax regulations that make building unnecessarily difficult and expensive, we caution against the idea that increasing the housing supply will single-handedly bring housing prices down.

Supply Factors are not a Panacea

It is true that an increase in supply would put downward pressure on prices, holding all other factors constant. This description applies to any basic supply and demand analysis. In real life, of course, many of these “other factors” tend to change. In some cases, these factors can outweigh the effects of added supply.

People often pay a premium to live in certain areas for all kinds of reasons. In any given area, there is only so much available land, and land cannot be created the same way other goods can be produced. As a result, many of the areas people want to live in are already so well developed that even relaxed zoning might have limited supply effects.

For decades, people have earned higher incomes and chosen to relocate to more densely populated areas. Building has generally kept up, but the increased supply of housing in those areas has not led to a decrease in prices. Our paper examines one instance where increased supply has slowed the rate of growth in prices, though it has not led to a decrease in prices.

Evidence From Reforms in Denver

While most studies of zoning changes in the US housing market find that relaxing restrictions leads to increased supply (although the effect on the supply of low-cost housing is mixed), the findings on the relationship between relaxed restrictions and prices are more ambiguous. For instance, some studies report that upzoning efforts have led to increased home prices, possibly because the upzoning creates positive “amenity effects” that attract higher-income households to the neighborhood.

Our own study of a 2010 zoning change in Denver shows that while zoning reforms moderated the rate of growth in home prices, they did not lead to a decline in prices.

Specifically, the average annual home price appreciation in Denver was about 4.5 percent before rezoning (between 2000 and 2009). The rate increased to about 6.6 percent after rezoning (between 2010 and 2018). Based on our estimates, rezoning reduced the average home price appreciation between 2010 and 2018—without the rezoning, home price appreciation would have potentially been 8.55 percent instead of the realized value of 6.6 percent. Thus, rezoning is associated with a continued rise in prices, but at a rate slower than what would have occurred in the absence of rezoning. (For context, adjusting Zillow data for inflation to 2018 dollars, the typical home price in the city of Denver increased from $267,015 in 2010 to $431,190 in 2018. It is more difficult to get a reliable rent series, but according to the Census Bureau’s American Community Survey data, real median rent in Denver was approximately 35 percent higher in 2018 than 2010.)

This reduction represents a sizeable impact from zoning reforms on price growth, one that would be very large over a long period if it is sustained. However, just as the rate of inflation slowed in 2022, but the price level did not fall, this kind of slower growth does not represent the improvement in affordability that many buyers might hope to realize. It certainly does not represent the type of affordability improvements that several of the groups mentioned in our previous posts are calling for.

Our next and final post summarizes the main points from the series and wraps things up. 

Alex Nowrasteh

High-profile crimes committed by illegal immigrants dominate the headlines, but the available evidence shows that illegal immigrants are less likely to be criminals than native-born Americans. The federal government rightly seeks to exclude criminal illegal immigrants from the United States and remove those who commit crimes here. However, the good news is that illegal immigrants have a significantly lower crime rate than native-born Americans, whether you measure by estimates of nationwide incarceration rates, arrest rates, or criminal conviction rates.

The best research on illegal immigrant criminality uses data from Texas, which uniquely records arrest and conviction data for illegal and legal immigrants by crime. Of all the crimes recorded, homicide is most useful for comparing the relative crime rates of illegal immigrants with other subpopulations. People tend to report homicides, so the total number of homicides committed is closest to being known even if a substantial fraction are unsolved, which isn’t true for most other violent or property crimes. 

Relatedly, homicide is a serious crime that most worries the public. Specifically in Texas, but likely in other states as well, state authorities thoroughly investigate the immigration statuses of people convicted of the most serious crimes like homicide, so there is a more accurate count of convicted and incarcerated illegal immigrant murders than illegal immigrant criminals convicted of other offenses.

In Texas, the homicide conviction rate for illegal immigrants was 3.1 per 100,000 compared to 4.9 for native-born Americans in 2022. Illegal immigrants had a homicide conviction rate 35.6 percent below that of native-born Americans in 2022. Another way of describing the data is that illegal immigrants were 7.1 percent of Texas’ population in that year and were convicted of only 5 percent of all homicides. Native-born Americans made up 82.5 percent of Texas’ population but accounted for 90.5 percent of all people convicted of homicide

For over a decade, Texas was the only state that reported detailed data on illegal immigrants arrested and convicted of crimes. That changed beginning on May 1, 2024, when Georgia Governor David Kemp (R) signed the Georgia Criminal Alien Track and Report Act of 2024 (HB 1105) into law. Among other things, HB 1105 required state officials to publish quarterly data on the number of illegal immigrant inmates who have an immigration detainer by crime. The Georgia data are different from the Texas data. The Georgia data measure inmates incarcerated in Georgia, the Texas data record criminal convictions and arrests. 

Another note is that the Georgia data are based on immigration detainers, which are holds placed by Immigration and Customs Enforcement (ICE) that request inmates be turned over to ICE for removal upon release from prison. There was a dispute over whether Georgia had sanctuary jurisdictions before HB 1105 even though the state legislature banned them, but there have been no sanctuary jurisdictions in Georgia since May 1, 2024.

As of the 4th quarter of 2024, there were 1,717 illegal immigrants incarcerated in Georgia out of an inmate population of 51,796. Illegal immigrants are 3.3 percent of the state’s incarcerated population but 3.9 percent of the state-wide population. The state-wide population data are two years old (from the 2022 American Community Survey) and estimated using my modified Gunadi residual method. That translates to an illegal immigrant incarceration rate of 399 per 100,000 illegal immigrants (Figure 1). The incarceration rate for the rest of the population, which includes native-born Americans and legal immigrants, is 478 per 100,000.

The illegal immigrant incarceration rate for homicide in Georgia was 61 per 100,000 illegal immigrants. For the rest of the population, which includes legal immigrants and native-born Americans, the incarceration rate was 90 per 100,000. The illegal immigrant incarceration rate for homicide in Georgia is 32 percent below that of the non-illegal immigrant population in 2024, very similar to the lower illegal immigrant criminal conviction rate for homicide in Texas relative to native-born Americans.

The homicide incarceration rates reported in Figure 1 include those inmates convicted of murder, murder in the second degree, homicide by vessel, involuntary manslaughter, vehicular homicide, and voluntary manslaughter. Table 1 breaks down the incarceration rates for each specific homicide offense. Illegal immigrants have a lower incarceration rate for murder, involuntary manslaughter, vehicular homicide, and voluntary manslaughter. They have a higher incarceration rate for murder in the second degree and homicide by vessel. There were only five illegal immigrants incarcerated in Georgia for murder in the second degree and homicide by vessel.

Figure 1 and Table 1 do not include controls for race, ethnicity, age, sex, or any other common variables used to analyze and compare crime data. With any combination of those controls, the relative illegal immigrant incarceration would be even lower. There are at least two other reasons why the above data likely overstate the relative illegal immigrant incarceration rate. First, the rest of the population includes legal immigrants who have a lower incarceration rate than native-born Americans and illegal immigrants in other studies of immigrant criminality. Lumping the lower crime legal immigrant population in with native-born Americans lowers the incarceration rate for that population by a likely significant amount since legal immigrants are almost 7 percent of Georgia’s population. Second, the population data are from 2022, not 2024 (the year of the inmate data). The illegal immigrant population in Georgia is higher in 2024 than in 2022, which means the incarceration rates are likely lower for illegal immigrants than reported above.

However, there is at least one reason why the illegal immigrant incarceration data could be understated. First, there are 804 people incarcerated in Georgia whose immigration statuses are not determined, and some of them will turn out to be illegal immigrants. There are 91 people with ICE detainers whose birthplaces are recorded as “United States,” some of whom may turn out to be US citizens, while many are probably not accurately reporting their places of birth. Regardless of the ultimate immigration statuses of those undetermined inmates, the finding of an additional incarcerated illegal immigrant would increase their incarceration rates reported above, but the extent of that increase is unknown.

There is also an important ambiguity that could increase or decrease the relative illegal immigrant incarceration rates in Georgia. Some of the inmates currently identified as illegal immigrants will likely turn out to have been misidentified and are actually legal immigrants or native-born Americans. This has happened before, and citizens have even been accidentally removed from the United States. However, some inmates who do not have detainers could also be illegal immigrants and their statuses will be discovered upon further investigation by state and federal officers. The net effect is unknown and could affect the incarceration rates in either direction.

Another potential wrinkle is the data are for “Active Offenders,” which includes those classified as inmates at the Georgia Department of Corrections. For the purposes of this post, I assume that means the incarcerated population, although it also includes those out to court, on reprieves, conditional transfers, or who have escaped. That classification shouldn’t affect the results but it is worth noting.

It’s important that we now have publicly available data about illegal immigrant incarcerations from Georgia. HB 1105 was passed after University of Georgia student Laken Riley was murdered in February 2024 by Jose Ibarra, an illegal immigrant from Venezuela. Ibarra was convicted and sentenced to life in prison without the possibility of parole. None of the above data lessen the tragedy of Riley’s murder, nor are the relative crime rates an argument for leniency— criminals should be punished for their crimes regardless of where they are from. 

However, the above numbers do indicate that illegal immigrants are not a disproportionate criminal threat, they do not increase crime rates overall, and extra enforcement of normal immigration laws will not lower crime rates. Ibarra and other illegal immigrant criminals should be punished, but their crimes are not good reasons to punish others with the same immigration status who did not commit crimes and who are part of a subpopulation that is less crime-prone than other subpopulations and all residents of Georgia.

Georgia should start reporting criminal convictions and arrests in their state by crime with more detailed data that separate legal and illegal immigrants as Texas does, just as I recommend here, and Texas should start publicly reporting their incarceration data for illegal and legal immigrant inmates. Regardless, every state should report both sets of data. 

This isn’t the final word on the relative scale of illegal immigrant criminality in the United States or even in the state of Georgia. But it’s more evidence consistent with other findings that illegal immigrants have a lower crime rate than native-born Americans or, in this case, the rest of the population.

Michael Chapman

Although the incoming Trump administration says it will cut taxes, reduce regulations, and slash wasteful government spending—all of which are good things—it also intends to enact an industrial policy to bolster US manufacturing, using interventionist tools such as tariffs, subsidies, Buy American rules, and similar commands—all of which are bad things and inherently anti-liberty.

“On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25 percent tariff on ALL products coming into the United States,” wrote Trump on Truth Social. The president-elect has also threatened to impose a 60 percent tariff on all goods imported from China. 

Government intervention in the economy, to nearly any degree, never works well because the government is incapable of knowing all the information that goes into, for instance, making cars or anticipating what consumers want. All that data only works harmoniously (and spontaneously) in a free market. As economist Friedrich Hayek explained, “The free market constitutes an information-gathering process, able to call up and put to use widely dispersed information that no central planning agency, let alone any individual, could know as a whole, possess or control.”

Thus, it is no mystery why the government did not invent the iPhone or Uber.

You’d think that real estate tycoon Donald Trump and venture capitalist JD Vance understood that, and perhaps they quietly do. But their proposed meddling in the market through industrial policy is a form of what Ludwig von Mises, Hayek’s mentor, called interventionism, or “a hampered market” economy. (Bear in mind that the Biden, Obama, and Bush administrations also implemented industrial policies.)

With interventionism, the government “seeks to influence the market by the intervention of its coercive power,” wrote Mises. “It desires that production and consumption should develop along lines different from those prescribed by the unhindered market, and it wants to achieve its aim by injecting into the working of the market orders, commands, and prohibitions….”

Those commands—espoused by Trump-Vance and Biden-Harris—can include price controls, tariffs, immigration restrictions, subsidies, licensing, minimum wage rates, and other steps. The government says it is protecting certain domestic industries hurt by unfair trade or a “market failure.” Its list of victims may include, for instance, US steel, Detroit automakers, semiconductor businesses, or solar panel manufacturers.

Industrial policy advocates also often claim they are serving the “national interest” or “national security”—hence they lecture, “Buy American” (instead of buy what you want). When Trump imposed tariffs on imported steel and aluminum in his first term, he repeatedly said it was for “national security” reasons. President Biden recently said the same in denying the purchase of US Steel by Nippon Steel. 

In a Cato White Paper, Scott Lincicome defines industrial policy as a broad government plan to fix market failures, which focuses on manufacturing, imposes industry-specific support (e.g., tariffs or subsidies), and requires that outcomes “be generated within national borders.” This policy is often termed economic nationalism or economic protectionism. Lincicome quotes economic historian Ellis Hawley, “By industrial policy I mean a national policy aimed at developing or retrenching selected industries to achieve national economic goals.”

Trump’s trade agenda is pure industrial policy (as was Biden’s and Obama’s). In addition to tariffs on imports from Canada and Mexico, Trump is targeting China’s electric cars. “They’re going to pay a 100 percent or maybe even a 200 percent tariff because we’re not going to let them come into our country and destroy what’s left of our auto industry,” Trump told the Detroit Economic Club in October. (He didn’t mention that the cost of that tariff, which is a tax, is largely passed on to American consumers.) 

That’s one type of industrial policy: Washington intervenes in the car market to try to force a desired result. It shields domestic automakers from competition, which reduces the supply of cars, which raises prices for autos. Thus, US consumers are denied the freedom to buy the car they want at market prices. The consumer, moreover, is the last thing on the industrial policymaker’s mind. As Trump said, “we’re not going to let them [vehicles] come into our country.” In other words, the government will decide what car choices are available to you.

It is anti-freedom. As Mises explained, “Either the consumers’ demand as manifested on the market decides for what purposes and how the factors of production should be employed, or the government takes care of these matters.” An industrial policy means that the government will handle certain matters by force. It will use restrictive measures.

The 2024 Republican Party platform lists some of those restrictions: 

Republicans will support baseline Tariffs on Foreign-made goods, pass the Trump Reciprocal Trade Act, and respond to unfair Trading practices.
Republicans will revive the US Auto Industry by reversing harmful Regulations, canceling Biden’s Electric Vehicle and other Mandates, and preventing the importation of Chinese vehicles.
Republicans will strengthen Buy American and Hire American Policies, banning companies that outsource jobs from doing business with the Federal Government.
Our Policy must be to revive our Industrial Base, with priority on Defense-critical industries. Equipment and parts critical to American Security must be MADE IN THE USA.

That fits Lincicome’s industrial policy definition to a T. It is economic protectionism (tariffs) designed to achieve national economic goals (revive industrial base). Yet by targeting certain industries for protection (and banning others) in the name of “security,” the policy seeks to pick winners and losers. This is a doomed strategy, as Hayek’s knowledge problem makes clear.

Hayek understood that “society and the economic process are now so complex that they are beyond the capabilities of any planner or planners to comprehend,” wrote Eamonn Butler in his monograph on the Nobel laureate. Winners and losers are determined by the marketplace—not by a bureaucracy in DC.

Another example of industrial policy is the Merchant Marine Act or Jones Act. Although it was implemented in 1920 under Democratic President Woodrow Wilson, the Act has been supported by Republican and Democrat administrations since then, Biden and Trump included. The law, citing national security, mandates that the sea transport of cargo between US ports must be performed by vessels that are US-built, US-owned, and US-crewed. 

In his first administration, Trump considered a 10-year waiver on the Jones Act but changed his mind after meeting with some lawmakers. “The president’s decision to maintain the Jones Act is a victory for American jobs and National Security,” said Sen. Roger Wicker (R‑MS) at the time. Sen. John Kennedy (R‑LA) stated, “I am confident that he [Trump] realizes how important the Jones Act is to Louisiana’s maritime industry and that no changes will be made. Our maritime industry is part of the lifeblood of Louisiana and the Gulf Coast economy. It would be foolish to push aside those jobs in favor of foreign-made and foreign-crewed ships.”

Again, “national security” and save us from “foreign-made” ships. That’s protectionism. And insulating the US maritime industry from the discipline of the market does not make the industry more competitive or America necessarily safer. Because of the Jones Act, “the US has the highest shipping costs in the world,” according to Cato’s Colin Grabow. (On Dec. 18, Trump tweeted an article defending the Jones Act, which suggests he will maintain the measure in his second term.)

The Jones Act has evaded real reform for nearly 100 years because of the special interests—not consumers—that have protected it (including political forces in coastal states like Louisiana and Mississippi). As Mises reminds us, “nearly every restrictive measure brings advantages to a limited group of people while it affects adversely all others, or at least a majority of others. The interventions, therefore, may be regarded as privileges, which are granted to some at the expense of others.”

By design, industrial policy is targeted protectionism: the government grants privileges to certain industries claiming that these restrictive measures will help restore manufacturing, create jobs, and strengthen the nation. This policy is anti-liberty because, among other things, it is anti-consumer.

“The ultimate target of protectionism is fellow citizens peacefully spending their own money,” says economist Donald J. Boudreaux, a Cato adjunct scholar. “These fellow citizens are treated as enemies whose voluntary actions must be curtailed.” However, industrial policymakers don’t directly criticize their fellow American consumers. They blame imports and unfair competition. E.g., “Foreigners are stealing our markets! Stop them!”

But as Boudreaux explains, “Our modern prosperity exists only insofar as consumers are free to spend their money in whatever peaceful ways they choose. It is this freedom that enables consumers to reveal which particular goods and services they want eagerly enough to justify being produced. The further this freedom is restricted, the more meager is the knowledge about how resources can best be used.”

And that’s why industrial policy is misguided and destructive: because there is no way the government can comprehend or calculate the billions of decisions that consumers make when they buy and sell stuff all over the country every second of every day. If an administration tries to do that, say, with an industrial policy, it only creates problems and then often uses more authoritarian means to enforce its flawed policy.

As Mises made clear, “What the interventionist aims at is the substitution of police pressure for the choice of the consumers. All this talk: the state should do this or that, ultimately means: the police should force consumers to behave otherwise than they would behave spontaneously.”

We saw this, for instance, with the subsidies and tax credits the Biden administration offered to persuade people to buy EVs (and manufacturers to make them). The incoming Trump administration plans to impose tariffs on Chinese-made EVs to nudge US consumers towards other auto brands. There are similar industrial policies concerning energy, batteries, chemicals, medical goods, cranes, washing machines, sneakers, canned tuna, tobacco, and even paper clips. The list goes on and includes producer subsidies, such as loans, grants, and tax breaks.

All this intervention is bad news, whether from the left or the right. As Butler wrote, “One of the most powerful themes of The Road to Serfdom is that even modest economic planning has the effect of slowly but inexorably eroding the values and attitudes which are vital if freedom is to exist. … [W]hen the government starts to protect the monopolies and special privileges of particular groups for whatever reason, then the erosion of liberty has begun.” 

Walter Olson

Following my 2024 and 2022 examples, I’ve compiled this catalog of my writings, televised panels, and podcasts since December 2023 on topics of election law and process. As before, I’ve included discussions of former President Trump’s legal entanglements when they bear closely on questions of election law, as with the Jan. 6 prosecutions, but not otherwise:

“Trump’s Immunity Claims Aren’t Likely To Let Him Escape Accountability” (Jan. 4, 2024)
“Hard Questions from the D.C. Circuit on Presidential Immunity” (Jan. 10, 2024)
“To Head Off Strongman Governance, Keep Presidential Power in Check” (Jan. 30, 2024)
“Two Scholars Revisit Trump’s Election Fraud Claims” (Feb. 2, 2024)
“Bogus Claims of Widespread Voter Suppression Make Things Worse” (CQ Researcher, Feb. 16, 2024)
“Cato Scholars on Section 3 Disqualification” (Feb. 16, 2024)
“Efficient, Timely and Reliable: A Framework for Election Law in Nevada” (Mar. 5, 2024)
“How the Electoral College Works to Cabin Fraud and Misconduct” (Mar. 12, 2024)
“Defending Election Integrity with Walter Olson” (“Free the Economy” podcast from the Competitive Enterprise Institute with host Richard Morrison, Mar. 14, 2024)
“Ensuring Election Speed, Efficiency, and Security” (Cato Daily Podcast with interviewer Caleb Brown, Apr. 5, 2022)
“Illegal Alien Voting Isn’t Swaying Federal Elections” (Apr. 22, 2022, summarizing Apr. 11 UnPopulist piece)
“Update: Does the First Amendment Protect Trump in the January 6 Cases?” (Apr. 26, 2024)
“Must California Take Two Months To Resolve a House Race?” (May 10, 2024)
“Shedding Light on the Incidence of Illegal Noncitizen Voting” (May 22, 2024)
“Does Ranked Choice Voting Help or Hurt?” (Federalist Society webinar, Jun. 6, 2024)
“Dispelling Misinformation About Ranked-Choice Voting and Ballot Question 3” (Vote Nevada webinar, Jun. 9)
“Election Policy Roundup” (beliefs that elections were stolen linked to willingness to countenance political violence; Illinois legislature’s ballot access stunt; vote by mail; climate of intimidation; Jul. 10, 2024)
“Biden Bows Out of 2024 Race” (Jul. 22, 2024, and related Cato Daily Podcast interview with Caleb Brown, Jul. 24)
“Election Policy Roundup II” (national electoral commissions; RCV and turnout; evolving partisan implications of turnout; Wales bans political lies; Lodi, Calif. ballot harvesting scandal; Aug. 1, 2024)
“Toughening Laws on Noncitizen Voting: Evaluating the SAVE Act” (Aug. 9, 2024)
“Will the Losing Side Derail Certification of the 2024 Election?” (Aug. 16, 2024)
“We Can Mend Our National Division” (with Michael Sozan and Cissy Jackson; Baltimore Sun, Aug. 18, 2024)
“Where the Candidates Stand on Election Policy” (Aug. 29, 2024)
“Overcoming Political Divisiveness and Restoring National Unity with Walter Olson” (Rational Egoist podcast with Michael Liebowitz, Sept. 9, 2024)
“Why Is the Electoral College Such a Durable Institution?” (Sept. 10, 2024, summarizing Sept. 4 interview with Reuvain Borchardt, Hamodia)
“Trump’s 2020 Stolen Election Claims Are Wrong on the Merits” (Sept. 16, 2024)
“Election Policy Roundup” (catastrophizing routine list maintenance; Bob Bauer forum; Electoral College partisan edge fades; threat to prosecute search engine; Oregon motor-voter foul-up; Oct. 1, 2024)
“Open Primaries Versus a Nonpartisan Universal Primary” (Oct. 11, 2024)
“Florida Moves to Ban Campaign Ad as ‘Sanitary Nuisance’ ” (Oct. 14, 2024)
“Dispelling the Fear and Loathing over Ranked-Choice Voting” (Cato Daily Podcast with Caleb Brown, Oct. 17, 2024)
“How Primary Reform Stalled—and Why It’s Back” (Oct. 18, 2024)
“Elon Musk’s ‘Raffle’ Is Far More Dubious than ‘Zuckerbucks’” (The Dispatch, Oct. 25, 2024)
“Trump Looks for Sycophants While Harris Floats Unserious Election Reform” (The Dispatch, Oct. 29, 2024)
“A Look Back at the Panic Over Big Money in Politics” (reviewing Big Money Unleashed: The Campaign to Deregulate Election Spending by Ann Southworth, Reason, Oct. 30, 2024)
“Election Policy Roundup” (states’ preparation for election crises; new writings and quotes; frivolous West Virginia resolution; Minnesota election deepfake law; more Freedom To Vote Act problems; Oct. 31, 2024)
“Primary Reform: Why Top Four / Top Five?” (Nov. 4, 2024)
“Ballot Issues in 2024” (Cato Daily Podcast with Caleb Brown, Nov. 7, 2024)
“A Setback for Election Reformers?” (Nov. 20, 2024, and related)
“Election Policy Roundup” (“rigged-election” talk falls quiet; a dubious DC noncitizen voting anecdote (and more); lawfare against media covering elections; more on campaign deepfake laws; Blue Dogs take an interest in change; Native communities saved Alaskan reform; Nov. 25, 2024)
“America’s Election System Dodged Disaster This Time—Here’s How We Can Protect It Next Time” (Free Society, Winter 2024)
“The Equal Rights Amendment Isn’t Part of the Constitution” (Dec. 18, 2024, and related Church Coffee podcast with Rob Woodside)
“State VRAs Bring Problems of Their Own” (Jan. 3, 2025)

Was my prediction in the first linked piece that Trump’s immunity claims would not excuse him from accountability my most embarrassing miss? Maybe, but note my observation that accountability in practice would come down to whether Trump’s behavior as a seeker of office would be classed as official or not, a question left unresolved by the Supreme Court in its eventual ruling and unlikely to be resolved any time soon.