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Jeffrey A. Singer

Behavioral health providers can deliver effective mental health services using telehealth technology. Yet state licensing laws block people from accessing telehealth services from providers who hold out‐​of‐​state licenses.

According to the Health Resources and Services Administration, social workers accounted for more than 239,000 of the roughly 786,000 total behavioral health workforce in 2017. Social workers comprise 45 percent of Department of Defense mental health professionals caring for military personnel and their spouses and see 42 percent of all encounters in the military that involve mental health or substance abuse problems. In the US, mental health problems continue to grow among all age groups, leading a recent gathering of seven US Surgeons General to declare it a crisis.

In 2021, Arizona lawmakers passed landmark “universal telehealth” legislation allowing any health care practitioner with an out‐​of‐​state license to provide telehealth services to Arizonans without applying for an Arizona license. Since then, six other states have passed similar laws. Unfortunately, no state counts social workers among the out‐​of‐​state health care practitioners who may provide telehealth services to their residents. So, people in those states who want to access social workers for behavioral health counseling are out of luck.

Now, social workers are seeking to convince lawmakers in 27 states to establish an interstate compact that will provide social workers with a license recognized by all states in the compact. So far, Missouri and South Dakota have joined the compact. Arizona lawmakers are considering SB 1036 during the current legislative session, which, if passed, would add Arizona to the compact. Colorado may soon join the compact as well, as its lawmakers are considering HB24-1002. When five states have joined, a compact commission will be able to establish requirements for social workers to apply for a compact license. Social workers who don’t want a compact license can opt to be licensed only in their state.

In 2019, Arizona was the first state to enact “universal license recognition,” enabling people who relocate to Arizona with out‐​of‐​state occupational or professional licenses to work without applying for an Arizona license. By 2023, 14 states passed similar laws. Unlike Arizona, some states don’t require holders of out‐​of‐​state licensees to relocate there.

Ideally, states should repeal all licensing laws and allow third‐​party certification organizations to perform licensing boards’ functions. If that is not politically feasible, all 50 states and the District of Columbia could enact universal license recognition that doesn’t require out‐​of‐​state licensees to move to their states permanently. Unfortunately, American patients will have to wait a long time before seeing anything resembling either of these two outcomes.

In the meantime, by creating a sizeable interstate compact that lets people in all member states access service providers, lawmakers are taking a big step toward liberating patients from protectionist licensing laws that are a relic of a bygone era.

Whether they pass universal license recognition laws, universal telehealth laws, or multi‐​state compacts, state lawmakers continue to create licensing law workarounds. In the process, they tacitly acknowledge that licensing laws block access to care.

Krit Chanwong and Marc Joffe

The federal government has accrued massive deficits in the last two decades. Yet it often gives fiscal advice to states, most of whom have been much more fiscally responsible. Unsurprisingly, most of this advice is bad. Take the federal government’s advice on West Virginia’s land‐​grant HBCUs for example.

On September 18, 2023, the USDA and US Department of Education sent a letter to 16 states alleging major funding disparities between the states’ land‐​grant historically black colleges and universities (HBCUs) and non‐​HBCU land‐​grant universities.

One of the letters was addressed to West Virginia Governor Jim Justice. The letter alleged that, over the last thirty years, West Virginia State University (WVSU), a land‐​grant HBCU, has been underfunded by $850 million when compared to West Virginia University (WVU), a non‐​HBCU land grant university. The letter advises West Virginia to make a “substantial state allocation toward the [HBCU] deficit” combined with a “forward‐​looking budget commitment for a two‐​to‐​one match of federal land‐​grant funding for these institutions in order to bring parity to funding levels.”

It is true that HBCU land‐​grant universities have been historically underfunded. Evidence of this is not hard to find. And it is tempting to advocate for increased investments to service this historically disadvantaged population. However, such arguments do not seem to apply to WVSU. Ever since desegregation, WVSU has ceased to be a majority‐​black institution. Moreover, in 1957, WVSU became the only land‐​grant HBCU to lose its land‐​grant status. This status was only returned in 2001. So it is unlikely that any increases in WVSU funding will advance educational equity in West Virginia.

Moreover, the USDA and the US Department of Education’s boilerplate proposal ignores some sobering realities about West Virginia’s demography. From 2010 to 2021, West Virginia’s population shrunk by 3.8 percent. Moreover, from 2010 to 2020, the percentage of residents in West Virginia aged below 18 decreased from 22.3 percent to 21.2 percent. Put simply, there are fewer people in West Virginia, and even fewer young people. These trends are unlikely to change due to the decline of West Virginia’s coal mining industry.

Both WVU and WVSU have felt the effects of West Virginia’s demographic decline. From 2020 to 2021, WVU’s total enrollment shrunk by 3 percent, from 26,269 to 25,474. During the same time, WVSU’s total enrollment shrunk by 6 percent, from 3,638 to 3,415. These declines in total enrollment were larger than national declines in college enrollments. As a result, WVU has been looking to make some significant cuts to its academic program. Increasing WVSU’s funding, then, may simply be a short‐​term (and fiscally irresponsible) bandage to a structural problem that requires more substantial reforms.

In fact, there is a high chance that increased educational funding for WVSU may increase the amount of administrative bloat. According to a 2017 study, administrative hiring in higher education has increased 50 percent faster than instructional hiring from 2001 to 2011. Any increases in WVSU funding would be likely to fund WVSU’s administrators, who may not be delivering much value to WVSU’s students.

If legislators want to truly improve WVSU, they should consider integrating WVSU into the WVU system, which currently consists of five colleges (including WVU). Through integration with the WVU system, universities will only need to depend on a single vice chancellor, provost, or chief financial officer, amongst other administrative positions. A proposed 2017 integration of 12 Connecticut community colleges, for example, was estimated to save $28 million due to reductions in administrative staff. This proposal will keep WVSU economically viable, while modestly reducing West Virginia’s higher education budget.

Consolidating public higher education institutions (as well as K‑12 schools) in the face of stagnant to declining enrollment and trimming administrative staff are among the recommendations in Cato Institute’s new policy analysis, State Fiscal Health and Cost‐​Saving Strategies. The new study finds that increased state spending often fails to correlate with better policy outcomes and provides policymakers with a framework for controlling costs.

But as the study notes, states have a much more manageable debt load than the federal government. Consequently, the federal government is the last place states should turn for fiscal guidance.

Timothy Sandefur

It was on this day, 130 years ago, that the abolitionist and statesman Frederick Douglass—died at his home near Washington, DC, at the age of 77, shortly after speaking at a woman’s suffrage meeting. It was characteristic of the “Sage of Anacostia” that he had carried on with his mission up to the literal end of his life. Only a little while earlier, or so the legend goes, a young man had asked his advice about what to do with his life. “Agitate,” replied Douglass. “Agitate, agitate.”

Douglass was born into slavery on a Maryland plantation and after enduring bondage in both the city and the country, he managed to escape on the underground railroad, first to New York and then to Massachusetts. He found it hard at first to adjust to life as a free man. “I was indeed free—from slavery, but free from food and shelter as well,” he recalled in his memoirs. But in the north, he could work and provide for himself, and that sense of self‐​responsibility and economic liberty was a thrilling deliverance. “Slavery had inured me to hardships that made ordinary trouble sit lightly upon me…. The consciousness that I was free—no longer a slave—kept me cheerful.”

Devoted to self‐​improvement, he devoured books and newspapers, particularly the abolitionist paper The Liberator, which he would tack on the wall of the blacksmith shop where he operated the bellows, so he could read while working. Shortly afterward, he joined Liberator editor William Lloyd Garrison as a speaker for the abolitionist movement. But he was eventually to break with Garrison over the latter’s belief that the Constitution protected slavery, and was, therefore, a “pact with hell,” which abolitionists should shun.

Garrison thought that participating in politics under the Constitution—running for office, filing lawsuits, or even voting—lent moral credibility to the evil of a regime that he believed was rooted in slavery. The founding fathers, after all, were either slave owners themselves or had agreed to preserve slavery in a devilish compromise. Rather than seeking to reform the system from within, therefore, abolitionists should set themselves against the constitutional order, under the motto Garrison printed atop every issue of The Liberator: “No union with slaveholders.”

Although Douglass initially agreed with Garrison, denouncing the Constitution in the eloquent language that would earn him worldwide fame as an orator and author, he changed his mind in the 1840s, after spending a year in Great Britain among English abolitionists who had accomplished a great deal by participating in the political system. Douglass came to see that refusing to participate in politics really meant prioritizing one’s own sense of moral sanctity over the actual work of helping the enslaved. And upon his return to the United States, he began reading the writings of legal scholars such as Gerrit Smith, Lysander Spooner, and Joel Tiffany, who argued that the Constitution did not, in fact, protect slavery. On the contrary, they argued, it never even mentioned slavery—and far from providing it with legal guarantees, the Constitution empowered Congress to restrict, and even abolish it, if only federal officials had the will.

Thus in 1851, Douglass announced his break with the Garrisonian anarchists. The Constitution, he was now persuaded, was, in both principle and practice, an anti‐​slavery document. His argument began with two rules of interpretation. First, only the Constitution’s actual words count as law—not the desires or intentions of those who wrote it. Second—following a rule set down by the Supreme Court some years before—the Constitution should be interpreted in favor of freedom whenever possible. With these principles in mind, the Constitution’s allegedly pro‐​slavery features turned out not to secure slavery at all: the 3/​5ths clause, for example, not only didn’t protect slavery, but actually would reward any state that abolished it. The so‐​called “fugitive slave clause,” which does not actually mention slaves, could be interpreted as applying to runaway apprentices, instead. In short, Douglass thought that interpreting the Constitution as pro‐​slavery was like trying to prove you owned property by pointing to a deed that made no mention of the property.

Moreover, other provisions of the Constitution were incompatible with slavery. The Fifth Amendment forbade depriving people of liberty without due process of law. The Privileges and Immunities Clause barred the state from depriving American citizens of basic liberties. As for “We the People,” did that not include black Americans? They were just as entitled to citizenship as whites, Douglass argued—and the Constitution made no mention of “white” versus “black” people. When, in 1861, southern states felt compelled to abandon the Constitution to protect slavery—by declaring themselves no longer part of the United States—Douglass saw this as proof he’d been right: the Confederacy could point to nothing in the Constitution that protected slavery.

In recent years, it has again become fashionable to argue that the Constitution was written to preserve slavery indefinitely, by white slaveowners who did not believe black people were equally human, or that they could attain or deserve the status of citizenship. Douglass would have instantly recognized that these arguments as those of both pre‐​Civil War advocates of slavery, and of Garrison and his allies.

“It may be said that it is quite true that the Constitution was designed to secure the blessings of liberty and justice to the people who made it,” he said in an 1860 speech, “but was never designed to do any such thing for the colored people of African descent. This is Judge Taney’s argument [in the Dred Scott case], and it is Mr. Garrison’s argument, but it is not the argument of the Constitution.” Worse yet, Douglass observed, there were even black Americans who endorsed the Dred Scott theory that the Constitution was a white‐​supremacist document. The “worst thing” about that notion, he said, was that it “forces upon [the black man] the idea that he is forever doomed to be a stranger and a sojourner in the land of his birth, and that he has no permanent abiding place here.” The truth was—and is—that the Constitution is as much a guarantee of the rights of blacks as of whites.

But Douglass was not merely a defender of the rights of black Americans like himself. He insisted on the rights of women, as well. He attended the Seneca Falls Convention of 1848, and in 1886 even spoke out in favor of women serving in the military. Still, when the Fifteenth Amendment was proposed—which guaranteed black men the right to vote, but implicitly allowed states to forbid women from voting—Douglass supported it, despite the furious condemnation of many female allies.

It was crucial, he insisted, for black men to get voting rights as quickly as possible, to defend themselves from racist white majorities. Once that was secure, he pledged that he would devote his efforts to supporting woman suffrage. And he proved as good as his word.

Frederick Douglass devoted his entire life to one central principle: the principle of equal liberty enunciated in the Declaration of Independence and protected by the Constitution. All people, everywhere, he believed, have the right to liberty, and should use whatever tools are at their disposal to secure that freedom both for themselves and for their fellow citizens.

Americans are fortunate enough to have an invaluable tool at their disposal: the Constitution of the United States, if only they will have the courage to respect and enforce it. We are, moreover, fortunate enough to have an example in a man who devoted his life’s energies to vindicating that principle for all.

Timothy Sandefur is vice president for legal affairs at the Goldwater Institute, where he holds the Clarence J. & Katherine P. Duncan Chair in Constitutional Government. He is the author of eight books, including Frederick Douglass: Self‐​Made Man (Cato Institute).

Walter Olson

Section 3 of the Fourteenth Amendment bars from “office…under the United States” any person who, having previously taken an oath to support the Constitution, “shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof.” Does this clause bar Donald Trump from the presidency, and if not, is the deficiency factual, legal, or both? Who can make a legally effective determination of disqualification? How much weight should we give concerns that a disqualification restricts democratic choice? Is it proper for the Supreme Court in reviewing the question to take into account likely public reactions or risks of political unrest, and assuming it is, what reactions or risks should we anticipate? 

We at Cato join in supporting certain values such as reason, individual liberty, and limited government, but are not expected to all reach the same conclusions when it comes to questions of application, especially when the questions as here are novel, complex, and dependent on historical scholarship. In that spirit, here is a listing in reverse chronological order of some writings by Cato scholars taking a variety of views on Section 3 questions.

Jeffrey Miron, Feb. 13, 2024. “If Section 3 keeps a popular candidate off the ballot, that will likely increase polarization and resentment amongst the candidate’s supporters, perhaps to the point of further, and worse, insurrection.”
Thomas A. Berry, “Trump’s Disqualification Case Could Set a Dangerous First Amendment Precedent,” National Review, Feb. 8. “There are multiple ways that the Court could find Trump to be disqualified for insurrection without holding his speech [at the Ellipse on January 6] to be categorically unprotected. Affirming the Colorado supreme court’s methods would unnecessarily set a dangerous precedent that could chill the speech of politicians and activists of all political persuasions.”
James Craven and Patrick G. Eddington, “Ballot Disqualification: The Stakes,” Feb. 7. “Section 3 of the Fourteenth Amendment is a powerful guardrail for democracy that was won at a high cost to our country. The court should enforce this powerful provision to disqualify Trump, and in doing so, protect both the nation and the rule of law.”
Anastasia P. Boden, “Section 3 and the Fallacy of Democratic Primacy,” Jan. 28, 2024. “Disqualifying Trump under Section 3 might be a bad idea for many reasons; it also might be wrong as a constitutional matter. But it’s neither bad nor wrong merely because of some supposed antidemocratic effect. This is one of the weakest arguments against disqualification, and yet it’s one of the most prevalent.”
Robert A. Levy, “Trump’s Disqualification: A Primer,” Dec. 28, 2023. “My bet is that Chief Justice Roberts will be concerned about political repercussions if Trump is disqualified; and even the liberal justices will lean toward allowing voters to decide whether Trump is fit to be president—especially with no criminal conviction.”
Ilya Somin, “Why Section 3 Disqualification Doesn’t Require a Prior Criminal Conviction on Charges of Insurrection,” Volokh Conspiracy blog, Dec. 26. “None of the ex‐​Confederates who were adjudged disqualified during Reconstruction had ever been convicted of any crimes related to their roles in the Civil War. That strongly suggests the original understanding didn’t require prior criminal conviction.” 
Walter Olson, “Colorado Supreme Court Rules Trump Off Ballot,” Dec. 20. “[The Court] could avail itself of numerous off‐​ramps, many of which do not require resolving the factual issues about Trump’s role in the Jan. 6 events. At the same time, our system of government is a constitutional republic, and that means the Constitution must prevail, not merely a standard of convenience.”
Anastasia P. Boden, “Agree With It or Not, Colorado Supreme Court’s Opinion Disqualifying Trump Is a Triumph of Judicial Engagement,” Dec. 20. “Whether one thinks the Colorado Supreme Court was right or wrong, its lengthy opinion is a triumph of judicial engagement.”
Ilya Somin, “Yes, Trump Is Disqualified from Office,” The Bulwark, Dec. 1. “Liberal democracies often have good reason to bar from positions of vast power people whose track record shows them to be a threat to democracy itself, or to basic liberal values.… And Trump epitomizes the sort of person who should be barred, for both legal and pragmatic reasons.”
Walter Olson, “Does Section 3 of the Fourteenth Amendment Disqualify Trump?” Aug. 25, 2023. “No one should assume that just because [William] Baude and [Michael Stokes] Paulsen have made a powerful intellectual case for their originalist reading, that the Supreme Court will declare itself convinced and disqualify Trump. Justice Antonin Scalia memorably described himself as a ‘faint‐​hearted originalist’… Stare decisis, and a general preference for continuity in law, still matters.”

The Supreme Court heard oral argument in Trump v. Anderson last week. When the Justices issue their decision, check in at Cato for a range of well‐​reasoned perspectives.

Thomas A. Berry and Nathaniel Lawson

In March 2020, the City of Seattle imposed the first in a series of emergency orders responding to the threat of COVID-19. The orders prohibited landlords from evicting tenants for nonpayment, expired leases, or any other reason unless the tenant presented “an imminent threat to the health or safety of neighbors, the landlord, or the tenant’s or landlord’s household members.”

Under the Fifth and Fourteenth Amendments, states cannot take private property for public use without providing just compensation. A group of rental property owners in Seattle sued the city, arguing that the moratoriums amounted to uncompensated takings. Each of the owners rented out property covered by the moratoriums, and each lost the right to control their own property as a result of the orders.

But the US Court of Appeals for the Ninth Circuit rejected the owners’ takings claims, based on its interpretation of the Supreme Court case Yee v. City of Escondido (1992). According to the Ninth Circuit, Yee held that the government can change the terms and duration of a tenant’s lease without compensating a landlord, so long as the landlord originally opened the property to the tenant voluntarily.

Now the owners are asking the Supreme Court to take their case, and Cato has filed an amicus brief supporting their petition.

In our brief, we explain that the Ninth Circuit completely misinterpreted Yee, which merely stated that an ordinance setting a maximum rent did not amount to a physical taking. The owners in Yee were not trying to evict any of their tenants. And unlike Seattle’s orders, the ordinance at issue in Yee allowed the owners to evict tenants for many reasons, including nonpayment of rent, violation of the law, expiration of the lease, or an owner’s wish to change the use of the property.

As our brief recounts, the Ninth Circuit’s misinterpretation of Yee has serious practical consequences. Local governments enacted numerous eviction moratoriums during the pandemic. These moratoriums allowed tenants to continue occupying rental properties regardless of missed payments, bad behavior, or the owner’s desire to change the use of the property. And general rent control laws similarly restricting evictions have proliferated in recent years.

Such laws and ordinances have reduced property values and caused many small‐​time landlords to struggle to meet their bills. The rental housing industry is worth $3.4 trillion and employs 17.5 million jobs, so these added costs weigh down an already struggling economy.

This financial impact on landlords has caused a reduction in available rental housing, perversely increasing rents for tenants and leading to the gentrification of cities. It has also caused landlords to neglect necessary maintenance, harming the quality of housing that tenants receive. Given that more than a third of housing units are occupied by renters, a huge proportion of the population suffers when rents increase and the quality of rental housing decreases.

Property rights are essential to economic prosperity, and the right to exclude is the sine qua non of property ownership. The Supreme Court ought to take this case, reverse the Ninth Circuit, and reiterate that the government cannot infringe on property owners’ rights to exclude without paying just compensation.

Colleen Hroncich

When her two‐​year old daughter taught herself to read, Amber Okolo‐​Ebube knew she had to ensure she had a good education. She started doing research online and discovered homeschooling. She fell in love with the idea but didn’t think she’d be able to persuade her husband. She was shocked when he agreed—which he recently admitted was because it was less expensive than the other options she’d been considering.

Amber didn’t just love the idea of homeschooling; she loved the reality of it. Eventually, she began looking for a homeschool co‐​op that would fit her family. “I looked around for one that would be multicultural, which means different intellectual abilities, different economic backgrounds, different races,” she explains. “I’m American and my husband’s Nigerian. We have different cultures, and I didn’t want my kids to just be in one little tiny bubble. And I didn’t find that. So I created Leading Little Arrows. And as I started putting it out there, families started flocking.”

Founded in Arlington, TX, Leading Little Arrows offers two complimentary programs. The hybrid school meets Tuesdays and Thursdays. At the beginning of the year, they test the children to see where they are academically and build a learning plan from that. In December, they do another evaluation where they discuss their strengths, where they need to improve, and goals. The kids have group learning with students at similar levels and breakaway time for one‐​on‐​one support. Parents receive a letter with activities that they can do with their children at home to reinforce what they’re learning at school.

On Fridays, there’s a tutorial program that helps kids learn through STEM, art, and nature studies. Classes are led by paid teachers, but a parent must stay on‐​site. Amber has a hospitality host who makes the parents breakfast and coffee to give them a break from the busyness of life. “They talk to the other families, and they learn so much from each other. It’s just a good relaxing time for them so they can kick off the weekend and start Monday strong,” she says. “If we notice that one family is consistently late, our hospitality host will alert me, and then I reach out to them to see what’s going on. Because if you’re consistently late, something’s happening before you get there.” Once she finds out if there’s a problem, the community pitches in with things like meals or babysitting to help them catch their breath.

Despite—or perhaps because of—the small size, children with special needs are thriving. Amber says around 85 percent of her students have some type of neurodivergence or emotional disturbance. Initially, Amber put her daughter who has autism and some other special needs in the public school system because she didn’t have confidence in herself. While her daughter had phenomenal teachers, Amber kept running into red tape trying to get her the services she needed. “My viewpoint on homeschooling was always if we can do better than what the public school system can do, then we will keep them at home,” says Amber. “And it came to a point where I could do better for her at home than what the school system did.”

“I felt that my daughter was a square and they were trying to put her in a round hole. Instead of just trying to jam her to fit in it, they were trying to shave the sides off to make her a circle. And that just wasn’t who she was,” Amber recalls. “Thankfully, I didn’t have to have teachers that kind of talked down to me, but I’ve seen that. I’ve seen where parents in the school system kind of lose their power and lose their voice. And I have to remind the families that are coming out of the school system, ‘Hey, these are your kids, and you are allowed to advocate for them even in the public school system.’ And I think that what we’re seeing with this wave of grassroots microschools and homeschools is that parents are starting to realize, ‘Wait a minute. I have a voice and I don’t have to just bow down to what a district says. I know my child best.’”

Leading Little Arrows is in the process of moving from Arlington to Irving. The Friday tutorial recently made the switch and the hybrid school will move in the fall. Because things are, as Amber puts it, a “well‐​oiled machine,” she’s also opening a brand new campus in the fall. The new one will be in Fort Worth, which is about an hour from her home.

For parents or teachers who are considering starting their own learning centers, Amber is very encouraging. “I always tell people to start small. But not small thinking. Just look at what you have in your hands. What do you have around you?” she says. “If you’re thinking about doing it, just start. Even if it’s just a play date once a week. Even if it’s just you partnering with your local library to do a program once a month. That’s more than doing nothing.”

Leading Little Arrows was recently a quarterfinalist for the Yass Prize, which included a $100,000 award, and was previously a VELA Education Fund recipient. Amber says she couldn’t have predicted this when she started and doesn’t know what’s going to happen in the next 10 years. But she’s looking forward to the journey.

Daniel Raisbeck and Gabriela Calderon de Burgos

Initial Victories

Javier Milei’s first two months in office supplied a steady stream of good news to libertarians worldwide. There was the presidential decree that deregulates large swathes of the economy, the brilliant speech at Davos—endorsed by the likes of Tesla’s Elon Musk and historian Niall Ferguson— and the government’s introduction of its “omnibus” law, a bill designed, among other things, to privatize dozens of state‐​owned companies.

The only initial setback for Milei’s government was a January 30 court ruling that declared the presidential decree’s labor reform unconstitutional. Nonetheless, the government took this in stride while it adapted certain parts of the omnibus bill so as to ensure its approval in Congress. The entire content on fiscal matters, for instance, was removed, a measure some libertarians celebrated since the law had originally included tax hikes.

A buoyant mood turned outright cheerful on February 2, when the Lower House of Congress approved the omnibus bill in general terms by a 144 to 109 margin. Milei seemed to be sailing smoothly toward a full recovery of Argentina’s lost “model of freedom,” as he termed the country’s successful, nineteenth century experiment with free trade and free markets.

A Rude Awakening

Nonetheless, the narrative changed abruptly on February 5, when the Lower House voted on the omnibus bill article by article and a majority rejected its key elements, among them the privatization scheme and increased penalties for the use of violence in protests. In effect, Milei’s honeymoon period came to an abrupt end with the onset of political reality.

After all, Milei’s party, Liberty Advances, only controls around 15 percent of the lower house of Congress and under 10 percent of the Senate. Even with the support of the Republican Proposal, the party of former president Mauricio Macri, a Milei ally, the government’s legislative forces fall well short of any type of majority. In fact, the omnibus bill was only set to pass due to the support of smaller parties linked to several provincial governors.

Since Milei ordered the bill to return to committee, the government will start from square one when it comes to measures that, unlike the content of the December “mega‐​decree,” require legislative approval. At the moment, therefore, the government’s ability to pass its agenda has become more uncertain.

A Blessing in Disguise

Regardless, Milei should treat his recent legislative defeat as a blessing in disguise. The contretemps offers an opportunity to rethink his political strategy. Milei should focus on the one, fundamental measure that is most urgent for Argentina, and at the same time neither requires the approval of Congress nor is liable to being reversed by any future government.

That is, Milei should finally act on his flagship campaign promise of dollarizing Argentina’s economy and shutting down the central bank.

As we argued recently, the government’s current strategy of keeping the peso in order to dilute both the debt and the deficit might serve to solve Argentina’s fiscal problem on paper. The corollary is the necessary dilution of peso holders’ savings and purchasing power. The dilemma exposes the fundamental flaw of Finance Minister Luis Caputo’s economic plan: it involves maintaining high inflation levels—the most pernicious of taxes— for the sake of the government’s balance sheet. This despite Milei’s unequivocal campaign promise of “destroying” inflation, which had already reached triple digits when he won the presidential election in November.

Balanced budgets are, of course, desirable and necessary, to the extent that, as Warren Buffett has proposed, politicians who run deficits should be ineligible for reelection. Nonetheless, the methods through which balance is achieved matters as much as the achievement itself. After all, the Soviet Union reported fiscal surpluses for over 60 years prior to its eventual economic and moral collapse.

In Argentina’s case, the root cause of the country’s economic problems is politicians’ unfettered fiscal profligacy, with chronic deficits monetized by means of a subservient central bank. At this point, however, addressing the fiscal question without taking the monetary problem head on is a mistake. We are not alone in our assessment. 

Cavallo’s Sound Warning

Domingo Cavallo is a former finance minister of Argentina who knows a thing or two about slashing inflation rapidly. As an architect of the country’s “convertibility” system of the 1990’s, which fixed the peso’s exchange rate to the dollar (albeit with significant design flaws), Cavallo helped to reduce Argentina’s annual inflation levels from 2,600 percent in 1989–1990 to 25 percent in 1992 and under 1 percent by 1998. In a blog post published on January 31, Cavallo wrote the following:

“The best way to generate expectations of an accelerated decrease (in inflation) in 2024 is for President Milei to reassume his sermonizing on dollarization, so that, by 2025, no trace of exchange rate controls remains and there is a stabilization plan that can eradicate inflation, just as the convertibility plan did in 1991.”

Cavallo adds the following, crucial warning:

“No one will believe that the dollarization proposal is serious as long as the free purchase and sale of dollars remains illegal. It is essential that a free exchange rate be allowed to operate without any type of interference from the central bank, so that any natural or legal person may sell or buy foreign currency.”

Ending exchange rate controls is certainly urgent, as is the elimination of the central bank’s control over all trade operations. As we wrote on January 19, it makes little sense for Milei’s government to uphold the central bank’s monopoly on the sale of dollars in the midst of a deregulation spree. Once importers and other economic actors are allowed to buy foreign currency in a free market, the central bank’s limited amount of dollars—a theoretical obstacle to dollarization— becomes irrelevant. As in the case of Milei’s successful elimination of rent controls, the end of government intervention will produce abundant, pent‐​up supply.

Cavallo raises a further concern about the real exchange rate, which takes into account the price of goods in the two countries being compared to gain a better picture of the value of both currencies. Argentina’s real exchange rate, he writes, has decreased despite lower inflation levels in January compared to December, when Caputo adjusted the official dollar‐​peso rate from ARS $400 to ARS $800 (compared to a black market, “blue dollar” rate of around ARS $1,000 at the time). A further reduction of the real exchange rate in February, Cavallo wrote, could lead to “pressure for further devaluation” in March. Milei, however, was elected on a platform that promised a strong and stable currency, not further devaluations.

Hence the concern with Milei’s reticence about dollarization, which he has only mentioned in recent months to confirm his past pledge to end the peso monopoly, but only eventually and without any details in terms of when or how to do so. In practice, however, the government’s plan is inconsistent with dollarization and its immediate effect of precluding any manipulation of a national currency.

The “Lack of Dollars” Fallacy

Financial journalist Julián Guarino added some context to Cavallo’s pronouncement:

“Casa Rosada [the government] and Caputo are feeding inflation to clean up the Central Bank’s balance sheet by diluting the debt and public spending (the Treasury). But, at the same time, inflation is defying all expectations. In other words, the government is driving inflation, which contradicts the government’s supposed aim of reducing inflation. This is why all eyes are on the central bank.”

Guarino further comments that, under the assumption that dollarization requires the central bank to hold net reserves equal to all liabilities on its balance sheet, “the Milei‐​Caputo plan could come up short by failing to amass sufficient dollars [to dollarize], which would be the worst‐​case scenario.”

The Caputo plan is falling short, albeit not for the alleged “lack of dollars” in Argentina. As we have written repeatedly, Argentines—namely individuals and businesses—have plenty of dollars (well over 50 percent of GDP), which they deliberately keep outside of the formal financial system. The inflow of even a portion of these assets into deposits—as likely would occur with the mere announcement of dollarization— would cover the entirety of the monetary base, which stood at around USD $12 billion at the official exchange rate on February 8.

Nonetheless, the essential point that Milei and his advisers should understand now is that the central bank already has more than enough dollars to dollarize.

The reason is that dollarization is a two‐​step process. As Steve Hanke and Francisco Zalles recently wrote concerning the first step:

“…with the exception of peso notes and coins outstanding, a stroke of the pen is all that is required to redenominate peso assets and liabilities into greenbacks.”

The second, parallel step involves dollarizing the circulating currency (peso notes and coins outstanding). In this sense, Hanke and Zalles explain that, contrary to the theory that the central bank needs a certain amount of net reserves to dollarize, “it is gross liquid foreign‐​exchange reserves that are relevant, not net reserves.” In terms of this key metric:

“As of December 31 and at Argentina’s official exchange rate, the BCRA [Banco Central de la República Argentina] reported ‘International Reserves’ of AR $18,654 billion pesos (US $23.1 billion), significantly more than the AR $7,435 billion (US $9.2 billion) in ‘Banknotes and Coins in Circulation.’”

Since international reserves are “liquid unencumbered gross reserves,” their stock “is more than adequate to successfully convert Argentina’s stock of peso notes and coins into U.S. dollars.” (Emphasis added)

Concerning the conversion of the USD $9 billion or so of circulating currency into dollars, Milei’s government should keep in mind that this involves a process in and of itself. As such, all banknotes and coins will not be dollarized at a moment’s notice. Rather, the conversion of the circulating currency into dollars takes place over a period of time during which both currencies circulate simultaneously, at the exchange rate at which dollarization is announced.

As we wrote previously, in 2000, Ecuador dollarized all sucres (the former national currency) in circulation within a nine‐​month period mandated by the government. In El Salvador, citizens voluntarily converted 90 percent of colones (the former national currency) into dollars within a 24‐​month period that began in 2001.

The Need to Dollarize Now

A prudent option for Argentina would be to mandate a 24‐​month period for the dollarization of all pesos in circulation at the determined exchange rate. How can the government ascertain the latter? Hanke and Zalles propose an official announcement of dollarization followed by a 30‐​day period in which the exchange rate would settle freely. The prevalent rate at the end of said period would be the official dollarization rate.

An alternative at this moment—given that exchange rate controls remain in place— would be to announce dollarization at a rate slightly above the “blue dollar” rate, which is the closest available figure to a free‐​market rate of exchange.

In terms of converting circulating pesos to dollars, any logistical challenge is clearly surmountable. In Ecuador, for instance, the government relied on the Coca‐​Cola Company’s supply network to exchange dollars for sucres in remote rural areas.

However, Milei’s government must dollarize soon to avoid the possibility of dollarization being incomplete at the time of the next election. The potential victory in 2027 of an anti‐​dollarization candidate could derail the process, or at least lead to an attempt to sabotage dollarization while pesos still circulate. Luckily, however, Milei has had an electoral mandate to dollarize since the very first day of his term in office.

As Cavallo argues, a prompt dollarization would lead to a sharp decrease in inflation. If the process is complete well before the 2027 presidential election, this alone—ceteris paribus—should win Milei a second term in office. Nonetheless, even if Milei is not reelected, dollarization and the subsequent end to high inflation will cement his legacy in the long term. Once accustomed to the use of a strong currency, few if any Argentines will accept the reintroduction of the peso or any other means of exchange that politicians can manipulate at will.

In Ecuador, for instance, dollarization has enjoyed approval levels of 90 percent and above for years; the dollar’s popularity even outstripped by far that of left‐​wing strongman Rafael Correa during his heyday. Hence the utter failure of Correa’s attempt to de‐​dollarize. Given the not unlikely scenario of Peronism’s eventual return to power in Argentina, Milei should make sure that dollarization has taken place well within the limits of his current term.

How to Dollarize: The Constitutional Question

While the main objection to dollarization in Argentina has been financial (and erroneous)—the supposed lack of dollars—the only potential obstacle is constitutional and political. As Article 75 of Argentina’s constitution states, “it pertains to Congress” to:

“Establish and regulate a federal bank with the power to issue currency, as well as other national banks…” (Section 6)
“Have currency stamped, fix its value and that of foreign ones…” (Section 11)
“Provide what is conducive… to the defense of the value of the currency.” (Section 19)

From a legal perspective, some commentators argue that Congress’s mandate to “establish” a federal bank “with the power to issue currency” precludes the possibility of dollarization since it would be unconstitutional. However, economist Emilio Ocampo rightly points out that—beyond Congress’s obvious, century‐​long violation of the mandate to defend the Argentine currency’s value— the aforementioned legal arguments fail to take into account the myriad ways in which dollarization can take place.

Consider the fact, for instance, that the National Bank of Panama, which is a state‐​owned commercial bank (not a central bank), mints balboa coins that are of equal denomination to the coins that circulate in the United States: cents, nickels, dimes, quarters, half dollars, and dollar coins. In a strict sense, then, Panama, a dollarized country since soon after its independence from Colombia in 1903, still issues a national currency, albeit with a fundamental restriction: it is limited to coins that are equivalent to their American counterparts.

Argentina could do the same in order for Congress to meet the constitutional mandate to ensure that a currency is “stamped,” and its value “fixed.” It could do so, for instance, through the state‐​owned Banco de la Nación Argentina, a commercial bank, even after its intended privatization. Ocampo makes the additional point that the central bank was never established as a “federal bank.” Hence, Milei could shut down the central bank by executive order, much in the same way as he got rid of ministries, secretariats, and undersecretariats.

Since the Argentine government already fixes an official exchange rate without needing to go through Congress, it also could set the rate at which all pesos would cease to circulate (for instance, during the suggested 24‐​month‐​period.) In other words, it is perfectly feasible for Argentina to dollarize without Congress’s approval and without removing Congress’s constitutional mandate to issue currency.

Indeed, Argentina’s dollarization is the one, certain way to ensure that, in the future, Congress can meet its constitutional duty—set out in the original, classical liberal version of 1853—to defend the currency’s value. Without moves to dollarize soon, a lasting return to the model of freedom which Milei was elected to restore will become out of reach.

Walter Olson

On page 250 of his report, special counsel Robert Hur explains why it’s not inconsistent as a legal matter for the federal government to pursue charges against Donald Trump but not Joe Biden in the respective cases arising from their classified document retention after leaving office:

With one exception, there is no record of the Department of Justice prosecuting a former president or vice president for mishandling classified documents from his own administration. The exception is former President Trump. It is not our role to assess the criminal charges pending against Mr. Trump, but several material distinctions between Mr. Trump’s case and Mr. Biden’s are clear. Unlike the evidence involving Mr. Biden, the allegations set forth in the indictment of Mr. Trump, if proven, would present serious aggravating facts.

Most notably, after being given multiple chances to return classified documents and avoid prosecution, Mr. Trump allegedly did the opposite. According to the indictment, he not only refused to return documents for months, but he also obstructed justice by enlisting others to destroy evidence and then to lie about it. In contrast, Mr. Biden turned in classified documents to the National Archives and the Department of Justice, consented to the search of multiple locations including his homes, sat for a voluntary interview, and in other ways cooperated with the investigation.

So far as I can see, there is one standard of justice at work here, not two.

Thomas A. Berry

The Fourth Amendment guarantees that “no Warrants shall issue, but upon probable cause.” If an arrest warrant is issued without probable cause that a crime has been committed, the person arrested can sue for “malicious prosecution.” But what if a person is charged with multiple crimes, some of which are supported by probable cause but some of which are not? In that situation, can a person still sue for malicious prosecution? That is the important question the Supreme Court will answer this year, and the answer should be “yes.”

Jascha Chiaverini ran a jewelry shop in Ohio. One day a seller came to Chiaverini’s shop and sold a ring and earring for $45. The seller affirmed that he was the lawful owner of the jewelry. Later that day, Chiaverini received phone calls from a couple alleging that their jewelry had been stolen and that they believed Chiaverini had their jewelry. Eventually two officers came to the store, interviewed Chiaverini, and concluded that the recently purchased jewelry had been stolen. Chiaverini was not charged with a crime on that day. Soon after, he was given conflicting instructions by the police to both hold the jewelry as evidence and return it to the couple.

More than two weeks after this initial interview, one of the officers edited their original police report to include a confession by Chiaverini that he suspected the jewelry was stolen at the moment he bought it. But Chiaverini had said no such thing. On the basis of this false report, Chiaverini was charged with felony money laundering. He was also charged with two misdemeanors, for retaining stolen property and for a licensing violation.

Chiaverini was arrested, strip‐​searched, and held in jail for four days. All the charges were eventually dropped, but Chiaverini’s reputation was irreparably damaged. Chiaverini then sued the officers and the city for malicious prosecution. But the US Court of Appeals for the Sixth Circuit held that his claim could not proceed, even if there was no probable cause for the money laundering charge. Under a rule followed by no other circuit, “malicious prosecution” claims cannot proceed in the Sixth Circuit if there is probable cause for any of the other charges brought at the same time. The Sixth Circuit found that there was probable cause for Chiaverini’s two misdemeanor charges, meaning he could not recover for the false felony charge.

Now the Supreme Court has taken Chiaverini’s case, and Cato has filed an amicus brief supporting him (with thanks to a team of attorneys from Loevy & Loevy who took the lead on drafting our brief: Steve Art, David B. Owens, Megan Porter, Lauren Carbajal, Annie Prossnitz, Alyssa Martinez, and Meg Gould). In our brief, we make two key points as to why the Supreme Court should reject the Sixth Circuit’s restrictive approach.

First, courts already have the means to determine whether the addition of a false criminal charge to a warrant listing other legitimate charges inflicted any additional harm on the defendant. That tool is the concept of “but‐​for causation,” which asks whether the defendant would have still suffered the same injury if a certain event had not occurred. In this case, a but‐​for causation inquiry would ask whether Chiaverini suffered any additional harm because of the felony charge that he would not have suffered if he had only been charged with two misdemeanors.

In many cases, the answer will be “yes,” and the person charged should be allowed to recover damages. Misdemeanor charges often don’t result in pre‐​trial detention at all, or at least result in shorter detention times than felony charges. The trial court should be allowed to determine whether Chiaverini spent more time in jail than he would have but‐​for the felony charge. The court should also be allowed to determine whether Chiaverini suffered any other unique injuries solely due to the felony charge. And the court should be able to reward him damages if so.

Second, our brief points out that the Sixth Circuit’s rule gives police and prosecutors a perverse incentive to overcharge defendants, because the more charges are brought the greater likelihood that at least one will be found to have probable cause. Overcharging is already a serious problem in the criminal justice system, a problem that has led defendants to accept lengthy plea‐​bargain sentences when faced with the risk of decades in prison. Police and prosecutors should not be allowed to insulate themselves from potential liability by bringing even more charges than they otherwise would.

The Supreme Court should reverse the Sixth Circuit and allow Chiaverini a fair chance to recover for the ordeal he was put through.

Patrick G. Eddington

Former president Donald Trump has repeatedly attacked what he generically refers to as the Washington, DC “deep state”—usually an inference about the FBI’s misuse of the Foreign Intelligence Surveillance Act (FISA) to target his 2016 presidential campaign. On Valentine’s Day, National Security Adviser Jake Sullivan made it clear that it’s not some nebulous, governmental Illuminati‐​style cabal seeking to retain the power to spy at scale on Americans. It’s the Biden administration itself.

Just after 6:30 p.m. yesterday—and after House Speaker Mike Johnson (R‑LA) once again canceled a vote on an extremely controversial FISA reauthorization bill—The Intercept’s Ken Klippenstein posted a clip from the White House press conference where Sullivan was asked whether Biden would veto any FISA reform bill that requires a warrant to access data collected on Americans. Since the Office of Management and Budget has not issued an official state of administration policy on any FISA bill as yet, Sullivan declined to directly answer the question. Instead, he claimed that any warrant requirement to access FISA data on Americans would not be “in the national interest” of the United States.

The national security adviser to the president of the United States, a man who absolutely has President Biden’s ear and undoubtedly knows his thinking on this issue, is claiming that requiring the FBI, NSA, and CIA to abide by the Fourth Amendment vis‐​à‐​vis access to FISA Section 702 data is “not in the national interest.”

That’s a story that should’ve been, but was not, front page news today in every American media outlet.

It should also tell FISA reformers in the House and Senate something else. They will need a bipartisan veto‐​override majority to pass any reform bill over what now seems like an inevitable Biden veto if the final reform bill does mandate warrants to access FISA Section 702 data on Americans.