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Colin Grabow

Recent articles in the New York Times and Wall Street Journal highlighted difficulties facing the offshore wind industry. Among them: Jones Act protectionism and a lack of specialized vessels to assemble offshore wind turbines. While the newspapers note that a new US‐​built vessel that complies with the 1920 law should help alleviate some of these issues, they also make clear that it suffers from problems that will offset some of the vessel’s anticipated benefits.

Wind turbine installation vessels (WTIVs) play a critical role in the construction of offshore wind farms. Featuring a giant crane, these vessels typically transport turbine components such as the tower, blades, and nacelles from a port to the installation site and set them into place.

At least, that’s how it’s typically done in the rest of the world.

The Jones Act, however, means that only US‐​built and US‐​registered vessels can transport goods by water in the United States. No existing WTIVs comply with these restrictions, barring them from transporting wind turbine components to installation sites from nearby US ports.

Instead, these vessels must use a workaround. One method is operating out of a foreign port, such as in Canada. Another is for the vessel to position itself at the installation site and have the needed components transported to it by Jones Act‐​compliant “feeder barges.”

Both bring with them significant disadvantages. Canadian ports can be hundreds of miles away from wind turbine installation sites, lengthening project timelines and adding costs. Feeder vessels, meanwhile, add complexity and risk to projects. The New York Times provides an example of the downsides of this latter approach:

In early November, the first barge to leave New London loaded with turbine parts had to return still carrying three blades because of a mechanical problem transferring them to a ship. It was not until two weeks later that the barge was able to make another eight‐​hour round trip and a successful transfer.

In other words, the Jones Act forces these vessels to be inefficiently used. While frustrating under any circumstance, it’s particularly so given that WTIVs are relatively rare—fewer than three dozen are operating outside of China—and highly sought after. Chartering these vessels can cost up to $350,000 per day.

In 2020, Dominion Energy announced its decision to order a WTIV from a Texas shipyard to eliminate the need for Jones Act workarounds. Named the Charybdis, it is projected to operate at least twice as fast as installation vessels relying on feeder barges. Such efficiency gains, however, will be at least partially offset by the new vessel’s substantial price tag. Originally set to cost $500 million, that amount has since increased to $625 million.

That’s approximately $300 million more than similar vessels built overseas.

Indeed, in 2021 a vessel very similar to the Charybdis—the same model, in fact (GustoMSC NG-16000X)—was ordered from a South Korean shipyard for $330 million. Beyond its lower price, the South Korean‐​built vessel also features a more powerful crane—arguably the vessel’s most important feature—capable of lifting 2,600 metric tons compared to 2,200 metric tons for the Charybdis.

But rising costs aren’t the Charybdis’ only problem. Delays in the vessel’s construction have seen its projected delivery pushed back from late 2023 to late 2024 or early 2025.

That’s not a surprise. The shipyard building the Charybdis signed a contract to deliver two containerships in 2020, but the first ship wasn’t delivered until 2022 and the second in 2023. A hopper dredge scheduled for completion this past spring hasn’t yet been delivered either.

The Charybdis’ delayed delivery means additional headaches for US offshore wind projects. Danish energy firm Ørsted had agreed to charter the vessel for use on its Revolution Wind project off the coast of Long Island but has had to scramble for alternatives. The vessel it lined up as a replacement is both foreign‐​built and foreign‐​flagged, necessitating the continued use of Jones Act workarounds.

Even after the Charybdis is delivered, however, inefficiencies stemming from the Jones Act will continue for the foreseeable future. The Department of Energy has estimated that between four and six WTIVs are needed to meet US offshore wind energy needs. But the Charybdis is the only one under construction that will meet the Jones Act’s requirements.

One firm considered building such a second Jones Act‐​compliant WTIV but then backed out last year over concerns (apparently very well‐​placed!) that the shipyard—the same one building the Charybdis—couldn’t deliver the vessel on time. The company concluded that building such vessels for the Jones Act market wasn’t profitable.

The Jones Act has increased the cost and complexity of developing offshore wind while failing to spur the construction of WTIVs beyond a single costly and delayed vessel. For offshore wind developers, this has to be the worst of both worlds. But so long as Congress refuses to confront the maritime lobby, Jones Act‐​induced hindrances will remain a feature of offshore wind farm construction.

Paul Matzko

A new study, “A Tik‐​Tok‐​ing Timebomb,” that compares the use of political hashtags on TikTok and Instagram is being widely shared by those calling for a ban or forced sale of TikTok. The report, from the Network Contagion Research Institute, shows that political posts which run counter to Chinese national interests underperform on TikTok (owned by Chinese company Bytedance) relative to Instagram (owned by US‐​based Meta). For the authors, this suggests that Chinese authorities are algorithmically throttling content on TikTok that harms their international interests, such as posts about Tibet, the Uyghurs, and Tiananmen Square.

However, the authors of the study made two remarkably basic errors that call into question the fundamental utility of the report.

First, the authors chose a flawed methodology that failed to account for how long each platform has existed. Instagram (launch 2010) is roughly twice as old as TikTok (international launch 2017). Thus, topics that were the subject of intense public discourse in the early 2010s, but which have not been heavily featured in the decade since, will naturally underperform on TikTok versus Instagram. Yet the authors did not adjust their data collection window to reflect this fact.

Second, the authors assumed that the same people use both platforms, which led them to miss the potential for generational cohort effects. In short, the median user of Instagram is older than the median user of TikTok. Compare the largest segment of users by age on each platform: 25% of TikTok users in the US are ages 10–19, while 27.4% of Instagram users are 25–34. That roughly decade‐​modal age gap will skew the ratio of topics covered on the two platforms. Simply put, older and younger users have different interests.

To see how these errors compounded to distort the study’s findings, let’s consider just one of the ten examples proffered by the authors. The study compares the frequency of three common hashtags related to Tibet and the Dalai Lama, finding a highly skewed ratio of 37.7 posts on Instagram for every one post on TikTok. That certainly appears suspicious given the longstanding Chinese censorship of domestic activists advocating for Tibetan independence.

But bear in mind that the study’s authors were not assessing only those posts uploaded in a discrete period, like, say, in the fall of 2023. No, they were comparing the total number of posts ever posted since the platforms were created (Instagram: 2010 / TikTok: 2017).

Also, a quick peek at Google trends data show that public discourse about Tibet in the US has been in a general decline throughout the 2000s and 2010s, albeit punctuated by exponential spikes (as much as 15x) in April 2008 and December 2016, which corresponded to moments of intense Tibetan activism.

Both spikes predated the international rollout of TikTok but happened at a time when Instagram already had hundreds of millions of users. It isn’t surprising that six years’ worth of TikTok posts from a time of relatively low US interest in Tibet would be swamped by 13 years of Instagram posts from a time of intense US interest in Tibet.

Furthermore, even if one were hypothetically able to restrict the data on the Tibet hashtag to only posts made after the creation of TikTok, one would still expect to run into generational cohort effects. To put it simply, knowledge of and interest in a topic tends to persist. Millennials who were in college in 2008 during the Tibetan uprising are going to be more likely to be interested in — and thus post about — Tibet today than are members of Generation Z, some of whom were still in diapers in 2008.

None of what I’ve written here proves that TikTok did not or could not manipulate its algorithm to downgrade content unfavorable to the CCP. But it strongly suggests that this particular study is poorly designed and should not be used as serious evidence of algorithmic manipulation by TikTok. Frankly, I’m surprised by just how sloppy it is.

A better study would choose a discrete time frame (such as when both platforms actually existed) and assess the ratio of posts in that time frame on controversial issues of importance to the Chinese government. If someone does that study, I’d like to see a copy.

Even then, however, it’s important to remember that these platforms aren’t synonymous and any outcomes might be skewed by platform‐​specific differences. For example, why should we expect the ratio of non‐​political and political content to be similar? That assumes a constant level of political interest between those who use the two platforms. But that is hardly a guarantee given generational differences between their user bases, the downstream contrasts from being photo‐​first versus short‐​form video‐​first formats, and other platform‐​specific divergences.

Regardless, the fact that many major news organizations missed these basic flaws in the study and then ran credulous coverage of the report is an indictment of mood affiliation in journalism, especially when they are tasked with covering social media platforms with which they compete for the public’s attention.

Crossposted from the author’s Substack newsletter. Click through and subscribe for more content at the intersection of policy, media, and history.

Robert A. Levy

Colorado is attempting to disqualify Donald Trump from running for president by excluding him from the state’s 2024 ballot. That idea was initially advanced in an upcoming law review article by two conservative law professors, and then endorsed in a 4‑to‑3 decision by the Colorado Supreme Court. On December 27, the Colorado Republican Party asked the U.S. Supreme Court to intervene. The Supremes haven’t yet accepted the case; but most legal experts agree that they should and soon will. 

At issue is Section 3 of the Fourteenth Amendment—ratified after the Civil War to stop former confederate chiefs from holding US office. It says in relevant part: “No person shall … hold any office … who, having previously [served] … as an officer of the United States, shall have engaged in insurrection.” That text has raised a number of difficult questions. 

#1: Who has standing to file suit? A Florida court said no standing for voters, but the Colorado court disagreed. #2: Does the US Constitution authorize states to define “engaging in insurrection?” If so, what are the limits? The state can’t just conjure up any definition. #3: Has the state designated a specific individual who can remove candidates from the ballot? Who, and by what process? A Michigan appellate court held that the secretary of state did not have that authority. #4: Does disqualification relate only to the general election, or also to the primaries? The Minnesota Supreme Court ruled that primary ballots are up to state party committees; and a decision on the general election was premature. #5: A few experts have even argued that Section 3 bars the president from holding office, but not running for office. Yet some states will not allow ineligible candidates to appear on the ballot. 

Those are all tough questions, which the US Supreme Court—with three Trump appointees—will have to resolve.

I suspect that the court’s decision will rest on the three most fundamental disputes: First, did Trump engage in insurrection? Special counsel Jack Smith has alleged five infractions: (1) attempts to set aside valid election results with false claims of voter fraud; (2) efforts to have Mike Pence unconstitutionally refuse to count certified votes; (3) imploring Congress to reject lawful votes; (4) incitement of a mob that would forcibly prevent vote‐​counting; and (5) deliberate inaction during the January 6 attack, despite having the duty and capacity to intervene.

The second key dispute is whether the Fourteenth Amendment’s use of the term “Officer of the United States” applies to Trump. A couple of prominent legal scholars have insisted that only appointed officers, not elected officials are covered. In fact, the trial court in Colorado refused to disqualify Trump for that reason; but the state Supreme Court disagreed. 

The term “Office of President” is used a half‐​dozen times in the Constitution. My sense is that the holder of the office must be an officer. Was President Nixon not an officer because he was elected, while his replacement, President Ford, was an officer because he was appointed? Was Vice President Rockefeller an appointed officer while his elected successor, Walter Mondale, was not an officer? 

Even more persuasive: If a president is impeached and convicted for giving aid and comfort to our enemies, the Constitution (Article I, Section 3) says he can be disqualified from holding office. Is it logical that he cannot be disqualified under Section 3 of the Fourteenth Amendment for the very same offense a day after he leaves office? I doubt it.

Finally, the third key dispute. The US Constitution is not a legal code; it’s a set of broad principles that implement a framework for governance. That’s why many constitutional provisions first must be fleshed out by Congress, in the form of enabling legislation. In this instance, Section 3 of the Fourteenth Amendment has been “enabled” by a criminal statute that sets out punishment—including disqualification from office—for rebellion or insurrection. [fn 1] Critics of the Colorado decision point out that Trump was never charged under that criminal statute. Nor was he convicted for insurrection during his impeachment trial.

True enough. But technically, Section 3 doesn’t mandate a criminal conviction; and it doesn’t require proof beyond reasonable doubt. [fn 2] Moreover, even if Trump was not convicted by the Senate, he was charged with insurrection by the House, 232‐​to‐​197; and the Senate voted to convict 57-to-43—but short of the 2/3 majority required for a guilty verdict. 

Nevertheless, 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 and considerable uncertainty regarding a non‐​criminal application of Section 3. Meanwhile, the Colorado decision has been stayed, and Trump can remain on the ballot while lawsuits are pending in more than 15 states. 

We await a Supreme Court resolution that will establish nationwide uniformity.

______________

[fn 1] 18 U.S. §2383. “Rebellion or insurrection: Whoever incites …, assists, or engages in any rebellion or insurrection against … the United States, or gives aid or comfort thereto, shall be fined … or imprisoned not more than ten years, or both; and shall be incapable of holding any office under the United States.”

[fn 2] Further: Under Section 3, Trump’s conduct need not meet the criminal standard of Brandenburg v. Ohio (“inciting or producing imminent lawless action and … likely to incite or produce such action”). Also, Section 3 need not recognize a mistake‐​of‐​insurrection defense. That is, intentional acts that amount to engaging in insurrection might be covered by Section 3, even if the actor wrongly believes no insurrection would or did occur. And claims that Trump is being denied due process would be applicable under the Fifth Amendment only if he were deprived of life, liberty, or property in a criminal proceeding.

Jeffrey A. Singer

I wrote here in 2020 and here in 2022, and I warned lawmakers in oral testimony here last March, nitazenes might soon displace illicit fentanyl/​xylazine combinations—which are fast displacing illicit fentanyl and its analogs—as the next big drug crisis. Now, a report in the UK Independent suggests my premonition is coming true.

Potent synthetic opioids known as nitazenes—some of which are 500 times stronger than morphine— have been detected in at least 20 postcodes around the UK since September, in a worrying surge in availability, The Independent can reveal.

In the late 1950s, the Swiss pharmaceutical company CIBA created nitazenes to treat pain. This class of synthetic opioids is more potent than fentanyl. The company never brought it to market. However, the World Health Organization reported that isotonitazene was found in toxicology studies in several European countries and the UK beginning in 2019. In September 2022, the Tennessee Department of Health reported that overdose deaths from nitazenes had increased four‐​fold between 2019 and 2021. Drug users in this country refer to the drug as “iso” for isotonitazene.

According to The Independent, all parts of Britain experienced a “big influx” of nitazenes this past summer. London’s Metropolitan Police seized over 150,000 nitazene tablets in a drug haul last October, the largest synthetic opioid bust to date.

A drug testing service reported that, since September, nitazenes were found in 20 samples of black market benzodiazepines (common tranquilizers such as Xanax) that were tested in “every corner of the UK.” A spokesman for the drug testing center said, “People who purchase benzodiazepines wouldn’t necessarily expect them to be adulterated with nitazenes. This creates obvious potential concerns for ill‐​effects or overdose as a result.”

Fortunately, the opioid overdose antidote naloxone also works for nitazene overdoses, though they may require larger doses.

As I wrote last year,

News reports about the growing presence of nitazenes among the mix of street drugs should come as no surprise to anyone familiar with what has come to be known as “the iron law of prohibition.”

An application of what economists call the Alchian‐​Allen Effect, the concept was applied to prohibition (alcohol, cannabis, and other illicit substances) by Richard Cowan in the 1980s, who stated it simply: “The harder the enforcement, the harder the drugs.”

Prohibition incentivizes drug dealers to create more potent forms of the drug that can be smuggled more easily in smaller sizes and divided into more units to sell.

In my testimony before the House Judiciary Committee Subcommittee on Crime and Government Surveillance last March, I stated,

I urge the Subcommittee to avoid doubling down on policies that will not only fail to stem the flow of illicit fentanyl but will fuel the development of more deadly replacements.

I also cautioned the Subcommittee,

Because most health departments have not been testing for nitazenes, we are unaware if nitazenes are becoming more prevalent among black market drugs. Yet, I wouldn’t be surprised if, two or three years from now, we are talking about the “nitazene crisis” instead of the fentanyl crisis.

Sadly, we might be talking about the “nitazene crisis” sooner than I thought.

Walter Olson

If you don’t want certain losing candidates to run around endlessly claiming your state’s election was stolen from them, one of the best things you can do is to make sure your state’s vote totals get reported in substantially complete form by the time residents go to sleep election night. One of several American states to achieve this feat, and by far the largest, is Florida.

Writing at Reason, Eric Boehm looks at how the Sunshine State, following several rounds of mostly bipartisan reform, has emerged as something of a model both in speedy reporting and in various other aspects of election administration as well. He quotes me, as well as Cato adjunct scholar Andy Craig of the Rainey Center, on the subject:

“This is no special American fetish where some people want fast results. It’s taken for granted, more or less everywhere in the democratic world, that of course we want speedy results,” says Olson. Not knowing causes practical problems—winners can’t begin the relatively short process of preparing to take office, constituents might have no idea who to contact if they need to reach their representative, and so on.

Then there are the darker threats.

“Public suspicion of the system, rightly or wrongly, seems to be directly correlated with the delay in results,” Olson says. “It opens the door for accusations of wrongdoing, whether well‐​founded or not.”

Olson points to the various, often conflicting arguments that circulated in the aftermath of the 2020 election. In places where policies required vote counting to stop overnight and begin again the day after the election, that was offered as evidence of malfeasance. In places that didn’t halt the tabulation, vote counts might drop at 3 a.m., also fueling suspicion.

I write about some of the ways states can achieve faster reporting in my forthcoming paper for the Nevada Policy Research Institute, focusing especially on the Silver State, which lags national norms considerably in the speed with which it counts votes. Such a reform goal requires purposeful effort on multiple fronts, including deadlines for mail ballot receipt, pre‐​processing, practices on curing and provisional ballots, capacity‐​building in election administration, and outreach aimed at urging mail voters not to wait until the very last minute.

Our friends Ryan Williamson and Matt Germer also tackle the issue, with a national focus, in a good recent report for the R Street Institute.

Ian Vásquez

Argentine President Javier Milei delivered an impeccably libertarian address to the country this week, announcing major deregulation and what is surely the largest such reform package in the history of his country. Specifically, he issued a decree that repeals or reforms 300 laws that, according to Milei, will begin reversing “decades of failure, impoverishment, decadence, and anomie.”

Milei didn’t merely describe the country’s economic and social crisis. He framed his decree in historical terms, citing how Argentina put collectivist thought—whether leftist, fascist, or otherwise—in practice in the past 100 years and, through ups and downs, lost its freedom as a result. He indicted the political economy that has long prevailed in Argentina as the cause of the country’s problems. The unwillingness of politicians to deal with the underlying causes of Argentina’s recurrent crises has led them to implement an unending series of regulations that try to address the consequences.

Thus, Milei explained: “The state as a whole has become a mechanism to impede trade, work, production, savings, investment, the generation of wealth, economic growth, and, fundamentally, freedom.”

Milei is right to highlight the demise and importance of freedom. Over the past twenty years of mostly Peronist rule, Argentina’s loss of freedom has been notable. Its ranking in the new Human Freedom Index fell from 41 in the year 2000 to 77 out of 165 countries. But the spectacular decline in Argentina’s economic freedom—based on the security of private property, voluntary exchange, and the freedom to choose and to compete—greatly reduced its overall freedom. It ranked in 40th place in economic freedom in 2000 and is at an astounding 158th place now.

The index shows that Argentina has one of the most closed economies to trade in the world (163rd place) and has among the worst monetary policies (161st place). Argentina also has one of the most regulated economies in the world. The weight of the regulatory state there has increased over time, making Argentina’s ranking fall from 84th place in 2000 to 143rd place now.

From a practical, economic, and human rights perspective, Milei’s sweeping deregulation decree makes sense. It aims to reduce state favoritism and to improve growth and opportunity, especially for the least well‐​off. Also noteworthy is that, according to one analysis, 138 of the 300 regulations Milei is repealing or reforming originated under the military dictatorships of the 1960s through the early 1980s. If we include Peronist President Cristina Kirchner’s term (2007–15), more than half of the regulations being overturned originated in military or populist‐​authoritarian governments.

Milei’s decree covers a wide range of laws. Some of the deregulations include:

• Repeal of the law regulating the rental of real estate. The restrictions on length of the rents, conditions for enforcement, method of payment, were so rigid and unreasonable that the result has been a nationwide housing scarcity, high prices, and the growth of an informal rental market.

• Repeal of the supply law and the shelves law that required stores to stock their shelves according to rules governing which products (by company and by national origin) could be displayed and in which proportions.

• Repeal of the “Buy Argentina” law, equivalent to “Buy America” laws.

• End to price controls, which predictably generated scarcity.

• Repeal of Industrial Policy.

• Repeal of the law that prohibits the privatization of state‐​owned enterprises.

• Liberalization of the labor law.

• An end to the prohibition of exports.

• Authorization to transfer the shares of the national airline Aerolineas Argentinas. Milei plans to privatize the airline, which has lost billions of dollars over the years, by transferring ownership to its workers. When Milei earlier proposed this idea, the head of the pilot’s union objected by declaring “they’re going to have to kill us” if they try.

• Implementation of open skies policy.

• Strengthening of contract law to secure the freedom of contract.

• Law reform to allow for contracts made in foreign currencies to be upheld. In practice, this legalizes transactions in dollars and other currencies, including exchanging pesos for dollars and including the use of bitcoin and other cryptocurrencies.

There’s much more in the decree, but the above gives a sense of its scope and depth. Predictably, some of the interest groups that will finally be exposed to competition—e.g., employees of state‐​owned banks, unions, pharmaceutical companies—have protested the deregulations. But so far the move looks largely popular.

Argentina has such a repressed economy, however, that much more reform is still needed to improve its economic freedom to the level of the most successful countries (like much of Western Europe and North America, Japan, Taiwan, Korea, Australia, etc.). But Milei and his team know that and, in the coming days and weeks, we can expect further far‐​reaching reform proposals that will go through the congress.

Gene Healy

House Republicans are waging war against woke anti‐​Semitism, and they smell Ivy League “blood in the water” The Hill reports. Viral video of Rep. Elise Stefanik (R‑NY) roughing up three college presidents at a recent congressional hearing has already forced one, Penn’s Elizabeth Magill, to resign. And last week the House passed a resolution calling on the other two, Harvard’s Claudine Gay and M.I.T’s Sally Kornbluth, to “follow suit.” “One down. Two to go,” Stefanik crowed. OK: then what—declare victory?

Stefanik and her colleagues have drawn attention to a serious problem: elite academia’s capture by an illiberal orthodoxy branded as “Diversity, Equity, and Inclusion” (DEI). But the GOP’s pressure campaign is doomed to backfire. Its most likely result will be to spawn a new layer of speech‐​suppressing bureaucracy on college campuses. If Republicans hate the DEI regime so much, why are they handing it a stimulus package?

Actually, at that December 5 hearing on “Holding Campus Leaders Accountable,” GOP members sounded a lot like DEI administrators themselves. Your campuses are “not a safe space,” charged Rep. Aaron Bean (R‑FL); what policies have you put in place so students can “prevent and report anti‐​Semitic behavior?” Rep. Glenn Thompson (R‑PA) demanded; “We will not tolerate the creation of a hostile environment for our Jewish students,” warned Rep. Erin Houchin (R‑IN).

They aim to force a crackdown, using the leverage of federal funding and ramped‐​up “hostile environment” investigations—in other words, more of what got us here.

Federal policy is hardly the sole driver of the “Great Awokening” in academia. But it’s been a key factor in the rise of Woke U.’s enforcement arm: campus DEI bureaucracies. As journalist Megan McCardle points out, “universities are legally required to minimize discrimination on campus, which is how their DEI offices acquired power in the first place.”

The key statutes here are Title VI of the 1964 Civil Rights Act (barring discrimination based on race or national origin in federally funded programs) and Title IX of the Educational Amendments Act of 1972 (barring discrimination on the basis of sex). Congress passed those laws hoping to expand educational opportunities for minorities and women. But in the hands of a runaway federal agency, the Department of Education’s Office for Civil Rights (OCR), they’ve become justification for comprehensive social engineering of collegiate life. As Cato’s Walter Olson noted in 2015,

using authority it claims under Title IX and other federal laws, [OCR] has arm‐​twisted the nation’s colleges and universities into stripping away procedural protections for faculty and students facing charges of sexual misconduct, sought to regulate speech as “verbal conduct,” and urged colleges to record microaggressive behaviors that do not rise to the level of harassment or assault but might add up in time to some future pattern.

Starting in the Obama administration, the OCR pursued what the political scientist R. Shep Melnick calls an “investigate and colonize” strategy, “launching expensive, institution‐​wide, reputation‐​damaging investigations against individual schools,” and securing settlements that required “large, autonomous Title IX compliance offices.” The result is a sprawling campus “Sex Bureaucracy,” devoted to “reeducat[ing] students about the meaning of masculinity and femininity.” A similar dynamic has helped foster the growth of the DEI “Race Bureaucracy” that’s lately drawn Republican fire.

Yet the current GOP approach will only further feed the bureaucratic beast. A 2019 Trump executive order extending Title VI to cover anti‐​Semitism is expected to fuel a “flood of student lawsuits.” To ensure that happens, Republicans in the House and the Senate have introduced legislation codifying the Trump directive. Meanwhile, GOP members of the House Education and Workforce Committee have called on President Biden to “move aggressively” under Title VI, “to combat all discrimination, not just the forms that fit conveniently into the woke agenda.”

What’s the Republican endgame here? “Fair and balanced” DEI? Every demographic group gets its own bias response team and dedicated codicil in the campus speech code?

This is not the way. As I wrote recently,

Reformers should have no truck with the infantilizing and un‐​American machinery of speech codes, mandatory trainings, and “bias response teams.” Instead, they should use this opportunity to disrupt and dismantle the DEI bureaucracy itself.

Even in nominally private institutions, like Harvard, MIT, and Penn, campus DEI is largely a state‐​sponsored industry. In a future post, I’ll explore some proposals for reining in the OCR and revising the legal framework that’s subsidized DEI’s growth. Instead of trying to win the campus culture wars from Washington, reformers should focus on getting government out—by undoing the damage federal policy has already done.

Jeffrey Miron

As states ease their marijuana prohibitions, several are prioritizing licenses for individuals “disproportionately impacted” by prior drug laws. This mostly means those with a prior drug conviction.

This issue arises because states limit the number of marijuana licenses. That is misguided.

Government‐​created barriers to entry keep prices high, inconvenience consumers, and allow those who get licenses to earn outsized profits. In New York, for example, six months after the state started issuing licenses, only 12 dispensaries had opened. Similarly, licensing requirement plus high taxes in California have kept the underground market five times larger than the legal one (although this partially reflects federal prohibition).

In Libertarian Land, government imposes few if any restrictions on starting a business, of any kind. That should apply to marijuana legalization.

Clark Packard and Alfredo Carrillo Obregon

Last week the House Select Committee on the Chinese Communist Party (Select Committee) released a lengthy report with a number of recommendations for responding to China’s economic challenges to the United States. Like virtually all comprehensive reports with concrete policy recommendations, the Select Committee’s report was a mixed bag.

Cato’s Scott Lincicome and Clark Packard recently explained that while Beijing does pose very real geopolitical and economic challenges to the US, revoking China’s Permanent Normal Trade Relations (PNTR) status is a bad idea. That said, the Select Committee did make a number of worthwhile recommendations for addressing Beijing’s economic practices.

Join Allies to Pursue WTO Case against China

The Select Committee recommends directing the United States Trade Representative (USTR) to join with like‐​minded allies in bringing a comprehensive dispute against China at the World Trade Organization (WTO). The Committee suggests the dispute should focus on Beijing’s “subsidization, support for state‐​owned enterprises, and non‐​market economy policies and practices.” Rather than imposing costly tariffs and signing the largely toothless “Phase One” deal with China that alienated close trading partners, Washington should have joined longstanding allies like Japan, the European Union, Korea and others to pursue a more ambitious WTO case after the Trump administration released its Section 301 report into Chinese international trade and investment practices.

As Cato scholars have long argued, certain Chinese economic practices directly violate the country’s various WTO commitments. A 2018 Cato Policy Analysis by former WTO Appellate Body Chairman James Bacchus, along with Simon Lester and Huan Zhu, provides a sound roadmap for the scope of a WTO challenge, including challenging China’s inadequate intellectual property protections and enforcement; abuse of trade secrets; the forced transfer of technology as a condition for doing business in the country; and Chinese economic subsidies.

Despite pervasive myths about the WTO’s ineffectiveness at disciplining state capitalism, China has a decent (albeit imperfect) record of complying (by removing offending measures) with adverse rulings from the WTO. To be sure, there are gaps in the WTO’s rules, particularly with respect to subsidies, but a WTO dispute is a worthwhile endeavor. (To be truly effective, such a move would require the United States to lift its longstanding hold on WTO Appellate Body nominees, which has essentially crippled the dispute settlement system).

To be sure, even if successful, a WTO dispute is not a panacea to holistically transform the Chinese economy. But it may actually work to change Chinese practices on the margin and to rally allies in defense of the rules‐​based trading system. The United States cannot afford to lose more vital time in pursuing solutions via WTO dispute settlement.

Pursue Trade Liberalization

The Select Committee recommends pursuing a free trade agreement (FTA) with Taiwan and suggests other potential FTAs with Japan and the United Kingdom. Likewise, the report suggests renewing the Generalized System of Preferences (GSP), which unilaterally cuts tariffs on certain products coming to the United States from about 120 developing countries, including a number of Chinese competitors in Asia. More trade liberalization is certainly a welcome suggestion, but policymakers need to go much further.

For political reasons, the United States hasn’t negotiated and implemented an FTA with a new trading partner in more than a decade even as the rest of the world, including China, continues to pursue such agreements.

Over time, a stalled trade agenda will hurt US competitiveness and will erode US influence around the world. Simply put, the United States needs to get back in the FTA game and a good place to start would be rejoining the Trans‐​Pacific Partnership (TPP), now dubbed the Comprehensive and Progressive Trans‐​Pacific Partnership (CPTPP). Taiwan and the United Kingdom have both applied to join CPTPP (Japan is already a member of CPTPP). If the US were to rejoin CPTPP, it should work to quickly facilitate Taipei and London’s accession to the trading bloc.

Withdrawing from TPP was a tremendous economic and strategic error by the Trump administration. The original motivations for TPP—economic benefits, creation of new high‐​quality trade rules, and geopolitics—have proven sound. Today, American exporters are on the outside looking in: they face significantly higher barriers in growing Asian markets, while American consumers face higher tariffs and other trade restrictions than consumers in TPP countries.

Perhaps most tragically, the United States forfeited its economic leadership role in the Asia‐​Pacific region, ceding the ground to China. The imperative to rejoin the agreement grows every day as China’s influence and assertiveness in the region grows, as shown by Beijing’s ability to complete negotiations on the Regional Comprehensive Economic Partnership (RCEP) agreement.

Likewise, reauthorizing GSP, which lapsed in 2020, is a good idea. Now that GSP’s tariff savings are gone, some companies that relocated China‐​based manufacturing to GSP beneficiary countries like Indonesia, Thailand, and Cambodia are moving production back into China. Reauthorizing this program, which enjoys broad bipartisan support, would halt this troubling trend while boosting GSP countries’ economies and their relations with the United States.

If policymakers want to encourage supply chain diversification away from China while at the same time strengthening US influence in the Asia‐​Pacific region, they need to provide concrete, durable, binding and enforceable frameworks. Half‐​hearted measures like the Indo‐​Pacific Economic Framework (IPEF) and one‐​off sectoral agreements simply aren’t up to the serious task of outcompeting China in the 21st century.

Provide Full Expensing of R&D Investments

The Select Committee recommends “[e]nacting legislation providing full expensing of R&D investment in annual tax returns ….” This is a very good recommendation. As part of the 2017 Tax Cut and Jobs Act (TCJA), domestic firms making investments in R&D are allowed to deduct those costs from their tax liability for the year in which the investments occur instead of amortizing the deductions over many years. Unfortunately, this provision began to phase out in 2023 and will do so entirely by 2026.

Because of inflation and the time value of money, a dollar today is worth more than it will be in the future. Unless full expensing is made permanent, this policy will raise the cost of R&D, resulting in less innovation and fewer new technologies. At the epicenter of US‐​China competition is a battle for technological supremacy in the 21st century and one way policymakers can encourage technological breakthroughs is by making full expensing permanent.

Expand Immigration

The Select Committee notes that China is churning out science, technology, engineering, and mathematics (STEM) graduates at a much more rapid pace than the United States. The report then notes matter‐​of‐​factly, “It is clear the United States needs more individuals working on research and development in critical and emerging technologies.” That is true but the committee’s recommendations are largely small‐​ball technocratic approaches to the issue.

The ability to attract and retain talented foreigners has long been one of the United States’ greatest strengths—and a true asymmetrical advantage over China historically. Yet sclerotic immigration policy in the US risks undermining that advantage.

Research shows that immigrants are particularly prevalent in and essential for important high‐​tech industries such as semiconductors and artificial intelligence. Immigration is crucial if the United States is to continue leading the technology sector, which is at the nexus of the geopolitical competition with China. Openness to immigration is essential to keeping R&D‑intensive multinationals in the United States and out of China.

Cato immigration scholars have documented how the US is losing scientists to China and how the US should welcome Chinese immigrants. While the Select Committee is certainly right directionally, policymakers need to be much bolder and simplify and expand the immigration process.

Conclusion

The Select Committee is rightly concerned with certain Chinese economic policies that distort international trade and investment. Yet the United States will never outcompete China in the 21st century if policymakers insist on mimicking Beijing’s heavy‐​handed intervention. Instead, policymakers should trust America’s traditional strengths: openness to international trade, immigration and market‐​based innovation.

Travis Fisher

The Environmental Protection Agency’s (EPA’s) greenhouse gas (GHG) rule for power plants was published in May 2023 and the original comment period closed in August. However, the EPA published a supplement to its original proposal, and that comment period just closed.

The full text of my comment in the EPA docket is available here.

The supplemental notice solicited comments on (1) reliability issues associated with the rulemaking and (2) EPA’s Initial Regulatory Flexibility Analysis (IRFA), which the EPA originally failed to publish but is required under the Regulatory Flexibility Act.

For short, let’s call this year’s proposal the Clean Power Plan 2.0 (CPP 2.0) because it’s the second effort by the EPA to promulgate a Clean Power Plan using section 111 of the Clean Air Act. The first effort started in 2014 and was ultimately overturned by the Supreme Court in the case West Virginia v. EPA.

Like the first CPP, the EPA’s selection of the best system of emission reduction (BSER) in CPP 2.0 is also arbitrary, capricious, and unsupported by the available data. The original plan was all about shifting generation, mostly from coal to renewables. The Supreme Court said that’s not authorized under the statute.

This time, EPA’s BSER includes burning low‐​GHG hydrogen at natural gas‐​fired power plants and using carbon capture and storage/​sequestration (CCS). Neither technology is “adequately demonstrated,” as required by the Clean Air Act, and it is unclear whether the EPA will change course in its forthcoming final rule.

Developments since the original proposal was published—like the cancellations of offshore wind projects and carbon dioxide pipelines—have further eroded the justification for the EPA’s proposed BSER. They also raise concerns regarding whether the EPA has adequately assessed the CPP 2.0’s impacts on the cost and reliability of electricity.

In my comments, I urge the EPA to reconsider its proposal. The shortcomings of CPP 2.0 are so numerous and complicated that the best path forward is for the EPA to go back to the drawing board. At the bare minimum, the EPA should improve its rulemaking by issuing a new supplemental notice focused on developing an objective, accurate assessment of the rule’s impact on the cost of electricity.