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Nicholas Anthony

In the Wall Street Journal, I had a letter to the editor published on December 11 regarding the Federal Reserve’s “Doomsday Book.” As Emre Kuvvet explained in the article I had responded to,

The so‐​called Doomsday Book, an internal document used to guide the Federal Reserve’s actions during emergencies, has long been the subject of intrigue and suspicion. … The document reveals a fascinating history of diverging perspectives on the Federal Reserve’s emergency powers. Instead of adhering strictly to clear legislative boundaries to justify its actions during financial crises, the central bank appears to ground many of its decisions in the New York Fed’s belief in the Fed’s discretionary authority. It relies on precedent for many of its actions, without explicit congressional authorization in some instances.

However, the document is not just revealing of the Federal Reserve’s history. It also offers new insight into what the Federal Reserve may do next—especially as it applies to a central bank digital currency, or CBDC.

Officials have repeatedly avoided the question of whether the Federal Reserve has the authority to issue a CBDC, often repeating the line that the issue needs further investigation. Looking at Federal Reserve statements over recent years quickly reveals a consistent trend.

For example, in a 2019 letter, Federal Reserve chair Jerome Powell said there were “several significant legal questions” around the possibility of creating a CBDC. In a 2020 speech, former vice chair Lael Brainard said that the Federal Reserve was still working to “understand how the existing provisions of the Federal Reserve Act with regard to currency issuance apply to [issuing a] CBDC.” In a 2021 research paper published by the Federal Reserve, the authors wrote that considerations still need to be made “as to whether additional amendments to the [Federal Reserve Act] would be required related to the issuance of a general‐​purpose CBDC.”

In a January 2022 report, the Federal Reserve updated its position to say, “The Federal Reserve does not intend to proceed with the issuance of a CBDC without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law.” (Emphasis added.)

Setting aside that “ideal intentions” are not binding constraints, this position still avoided the question of addressing what the Federal Reserve is and isn’t legally authorized to do.

In May 2022, former vice chair Brainard was asked during a congressional hearing to add context to the Federal Reserve’s report but only repeated the official statement. Finally, in September 2022, the Department of Justice was supposed to publish a report about the Federal Reserve’s legal authority to issue a CBDC, but it ultimately kept that analysis private. Even members of Congress were kept out of the loop.

It was only during a 2023 congressional hearing that chair Powell clarified the issue slightly saying that the Federal Reserve would need congressional authorization to issue a retail CBDC, but that it’s a different story when it comes to other forms of CBDCs. As I warned at the time, although some took relief at the news, there were still questions left open. In particular, the Federal Reserve’s 2022 report proposed an intermediated CBDC—a form that blends features of both retail and wholesale CBDCs. So, the Federal Reserve’s full authority is still an open question.

Whether the Federal Reserve will publicly address its full authority is still to be seen. However, Congress should not wait another four years to get those answers. Congress should formally establish that only it has the authority to decide whether a US CBDC is created. The Doomsday Book that Emre Kuvvet uncovered makes it clear that relying on discretionary authorities rather than waiting for congressional authorization is a tried and tested path for the Federal Reserve. Congress should act before the issuance of a CBDC becomes just another page in the Federal Reserve’s history.

For those interested in learning more, here are a few resources on CBDCs and the grey area around the Federal Reserve’s authority:

Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths
House Hearing and FOIA Reveals Fed’s Stance on CBDC
The Fed’s Questionable CBDC Campaign

Colin Grabow

A recent Bloomberg story notes that Americans are facing higher prices for sweets and other goodies during the holiday season amidst rising pressure on sugar supplies. While part of this is due to droughts in sugar‐​producing regions of the United States and Mexico, the article notes that prices are also being driven higher by protectionist sugar policies. Inflated sugar prices aren’t an unfortunate byproduct of these laws—it’s their entire point.

Although inflation is a problem the world over, the US sugar market has been uniquely impacted due to its protectionist regulations. US rules cap both domestic sales and the volume of foreign supplies that can be brought in under low duties; all other sugar imports past those so‐​called tariff‐​rate quotas are subject to higher taxes. The regulations are intended to protect grower profits, especially given higher US production costs, and prevent other countries from flooding the US with sugar.

These constraints on both imports and domestic production have resulted in Americans paying nearly twice the international price of sugar. And sometimes that gap is even wider:

Despite these costs, candy makers are importing sugar at the sharply higher above‐​quota tariff rate to ensure sufficient supplies. Consumers, these firms say, will simply have to bear the added costs:

“We just found that it was better to just pay more for sugar and pass it along to the consumer than to be completely out of sugar,” said Kirk Vashaw, chief executive officer of Dum Dums lollipop maker Spangler Candy Co. “And there’s a lot of other companies that I think thought the same thing.”

But sugar protectionism’s harm goes beyond just paying more for lollipops. Factory closures and job losses are also possibilities should confectioners shift production abroad to escape US sugar protectionism:

If the sugar problems continue much longer, more companies might look to offshore output. It has happened before. In 2019, Spangler moved production for Sweethearts, the popular heart‐​shaped Valentine’s Day candy, and Necco candy wafers from Boston to Mexico after the brands’ former owner went out of business. Half of Spangler’s candy cane production was already south of the border at the time. Better automation in the US offsets the higher prices of sugar, so production costs for candy canes are similar in both countries, Vashaw said.

Atkinson Candy Co., the 91‐​year‐​old company behind Mary Jane peanut‐​butter caramels, already moved production of its “Mint Twist” Christmas candies to Guatemala in 2010. Third‐​generation candy‐​maker Eric Atkinson said he has considered moving more hard candy output away from Texas if conditions don’t improve, though he hasn’t made any concrete plans.

These are not isolated examples. In recent decades numerous companies have packed up for Mexico and even Canada to obtain this critical ingredient at competitive prices. As the president of one such firm said, “I just got tired of paying welfare to Big Sugar.”

At least these firms have options. Other businesses such as smaller bakeries or neighborhood pastry shops have little choice but to pay the higher costs—all so politically–connected sugar producers can pad their bottom line.

This sugar scam rarely attracts attention in Washington outside of farm bill reauthorizations every five years or so. The current farm bill expired this year, which means that agriculture issues could find themselves on the congressional agenda in 2024. Revisiting this protectionist nonsense should be part of the discussion.

Anastasia P. Boden

Ever since Will Baude and Michael Paulsen released their watershed law review article, scholars have been debating whether Donald Trump is disqualified from the presidency by virtue of having engaged in “insurrection.”

But the discussions have often been less about whether Trump engaged in insurrection than who can and should decide whether he did: can state election officials refuse to put him on the ballot? Should courts be the ones to determine his eligibility? Should Congress refuse to certify the vote if Trump is re‐​elected? Should it act earlier? Or should voters decide for themselves?

Many people, myself included, believe that it would be better for Trump to lose outright than to lose by being kicked off the ballot by a court, which will only imperil our already imperiled judiciary. But that hasn’t stopped people from trying their hands at lawsuits anyway.

Yesterday, the Colorado Supreme Court was the first to take Trump off of a primary ballot. It deemed Trump ineligible, enjoined the Colorado Secretary of State from putting him on the ballot, and all but guaranteed the United States Supreme Court would take up the case.

Whether one thinks the Colorado Supreme Court was right or wrong, its lengthy opinion is a triumph of judicial engagement. There’s no doubt it’s a good faith attempt to grapple with a vague constitutional provision. It’s transparent, it’s thorough (213 pages, including the three dissents), it engages with the arguments (all of them, even those that were arguably waived), and it declines to take any of the several available escape hatches that would have allowed the court to shy away from deciding the merits.

It is therefore so much more satisfying than most other cases, which manipulate standing doctrine or pick a ripeness, mootness, immunity, or abstention doctrine out of a hat to toss the case out of court.

So how did this case get to the court? A group of Republican and unaffiliated electors brought a lawsuit under the Colorado Election Code arguing that the Secretary of State is prohibited from putting Trump on the 2024 Republican presidential primary ballot because he engaged in “insurrection,” which makes him ineligible for office under Section 3 of the Fourteenth Amendment.

After a five‐​day trial in November, a Denver district court concluded that President Trump had engaged in insurrection as used in Section 3 but, nevertheless, Section 3 did not apply because the presidency is not an “office” under the United States, nor is the president an “officer of the United States” who takes “an oath … to support the Constitution of the United States.” In other words, Section 3 applies to most government officials, but not the chief executive officer of the country.

The Colorado Supreme Court affirmed in part and reversed in part, holding that 1) the electors could challenge Trump’s eligibility under the Colorado Election Code based on Section 3; 2) Section 3 is self‐​executing and Congress need not pass any legislation for it to apply; 3) the issue was not a political question requiring the court to refrain from deciding the case; 4) the district court was wrong to conclude that Section 3 does not apply to the office of the presidency; 5) the district court did not err in concluding that President Trump committed “insurrection” on January 6, 2021; and 6) Trump’s speech was not protected by the First Amendment.

Given how many hurdles the court had to jump through to get to the merits, it’s kind of amazing it did. Take, for example, the very first argument made by Trump: his attorneys argued that the electors could not sue to prevent the Secretary of State from putting him on the ballot because the Secretary has no duty to independently investigate the candidate’s eligibility. Instead, she need only rely on the political party’s statement that the person is their bona fide candidate. This is exactly the type of pedantic argument government attorneys make all the time, but the court wasn’t having it.

First, states have the authority to assess the qualifications of presidential candidates. Citing then‐​Judge Neil Gorsuch, the court wrote that states have a “legitimate interest in protecting the integrity and practical functioning of the political process” that “permits [them] to exclude from the ballot candidates who are constitutionally prohibited from assuming office.”

Second, Colorado election law does not just allow people to challenge the Secretary’s breach of affirmative duties; it allows people to sue for any wrongful act. And it would certainly be wrongful for the Secretary to put an unqualified person on the ballot when the code explicitly states that all candidates must be qualified.

The Colorado Supreme Court next dispensed with the argument that taking Trump off of the ballot would violate the free association rights of the Republican Party. If that were true, the court said, it would mean any political party could override the Constitution by putting ineligible people on the ballot (i.e., people who are too young, not a natural born citizen, etc.) and states couldn’t do anything about it.

Sure, political parties can pick who they want as their candidates, but that doesn’t mean that states must put the candidate (including ineligible ones) on the ballot.

Trump’s team also argued that the expedited procedures required under the Election Code deprived him of due process. But as the court rightly pointed out, that was exactly the type of constitutional argument that Trump argued the other side was making and which can’t be made in this case. Instead, any constitutional challenges (rather than a statutory challenge based on a “wrongful act”) must be brought under the normal jurisdictional rules that apply to constitutional cases. And in any event, election challenges must move quickly given their nature, the procedures in this case were thorough, and Trump did not identify any particular ways in which he was supposedly denied a fair hearing. (Over at Reason, Ilya Somin argues that depriving someone of public office doesn’t deprive them of life, liberty, or property, and therefore the Due Process Clause doesn’t even apply.)

The court next spent a lengthy amount of time explaining why Section 3, like the other provisions of the Fourteenth Amendment, is self‐​executing (meaning it applies without any further action by Congress). This necessarily required addressing Chief Justice Salmon P. Chase’s opinion in Griffin’s Case. There, Caesar Griffin challenged his criminal conviction on the basis that the judge who had entered his conviction had served as a legislator in Virginia’s Confederate government and was therefore disqualified from holding judicial office under Section 3.

Riding circuit shortly after the Civil War, Justice Chase ruled that Section 3 is not self‐​executing. He observed that after the Civil War, several southern states had established interim governments out of necessity. If Griffin were right, it would mean that “[n]o sentence, no judgment, no decree, … no official act” issued under those governments “[would be] of the least validity.”

He concluded that it would be “impossible to measure the evils which such a construction would add to the calamities which have already fallen upon the people of these states.” Moreover, excluding a class of individuals from office without trial would violate due process.

According to the Colorado Supreme Court majority, Chief Justice Chase was dealing with special circumstances that existed during Reconstruction. And anyway, the case is non‐​binding and has been consistently criticized. There’s no reason why Section 3 should be treated any differently from the other provisions of the Fourteenth Amendment, which are self‐​executing. Congress can pass laws to implement Section 3, but it need not do so—otherwise, it could nullify the Fourteenth Amendment by simply refusing to pass legislation.

Next, the court tackled whether the case involved a political question that’s inappropriate for judicial review. Under the political question doctrine, courts refrain from getting involved if there is a “textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it.’”

The court observed that the Constitution doesn’t say who determines whether a person has engaged in insurrection. Congress is textually authorized to pass implementing regulations, but it is not textually committed to doing so. And the court would not “abdicate its duty” to decide merely because the case has political implications.

While Trump did not argue that the case is also nonjusticiable based on a lack of judicially discoverable and manageable standards (and he, therefore, waived any such argument), the court addressed it anyway “in the interest of providing a thorough review.” Determining whether someone has engaged in insurrection, it said, is no different than the type of interpretive questions it must answer in the average constitutional case. And indeed while the term seems vague, courts have interpreted the term “insurrection” in other contexts.

“In our view,” the court said, “declining to decide an issue simply because it requires us to address difficult and weighty questions of constitutional interpretation would create a slippery slope that could lead to a prohibited dereliction of our constitutional duty to adjudicate cases that are properly before us.” Whoa! This is one of the best endorsements of judicial engagement to come out of a court opinion in years.

The court then determined that Section 3 does apply to the president because (1) the presidency is an “office, civil or military, under the United States”; (2) the president is an “officer of the United States”; and (3) the presidential oath set forth in Article II constitutes an oath “to support the Constitution of the United States.” While the presidency is not explicitly mentioned, the court concluded that was so exactly because the common meaning of “office” so obviously encompasses the presidency, and indeed the Constitution elsewhere refers to the presidency as an office multiple times. Senators, representatives, and electors, by contrast, are explicitly mentioned because they are not officers.

Trump had also argued that an earlier version of the Amendment mentioned the presidency, and the framers’ choice to remove it meant they intended to exclude it. But later statements by the framers, the court said, as well as the common meaning of the phrase indicate that the terms “office” and “officer” were intended to encompass the president.

Similarly, Trump’s attorneys had argued that Section 3 does not apply to him because it speaks of people who previously took an oath to “support” the Constitution, and the president’s oath required him to “preserve, protect, and defend the Constitution.” But “preserve, protect, and defend,” the court said, is consistent with “support.” In sum, “President Trump asks us to hold that Section Three disqualifies every oathbreaking insurrectionist except the most powerful one and that it bars oath‐​breakers from virtually every office, both state and federal, except the highest one in the land. Both results are inconsistent with the plain language and history of Section Three.”

Finally, the Court addressed whether Trump had engaged in insurrection, making him ineligible for office. Using contemporaneous dictionary definitions, the district court had concluded that “an insurrection as used in Section Three is (1) a public use of force or threat of force (2) by a group of people (3) to hinder or prevent execution of the Constitution of the United States.”

The Colorado Supreme Court acknowledged that there is no precise definition; an insurrection is something more than disturbing the peace, but less than an all‐​out rebellion. Nevertheless, “any definition of ‘insurrection’ for purposes of Section Three” would at least include “a concerted and public use of force or threat of force by a group of people to hinder or prevent the U.S. government from taking the actions necessary to accomplish a peaceful transfer of power in this country.” Based on the district court’s extensive factual findings (which can only be overturned based on clear error), that standard was met.

For example, there was substantial evidence in the record that even before the November 2020 election, President Trump was “laying the groundwork for a claim that the election was rigged.” Trump invited his supporters to come to Washington on January 6 and, once there, repeatedly called on them to go to the Capitol and “fight like hell.” He told them that, given the circumstances, they weren’t subject to normal rules. They needed to “show strength,” or it would be the end of the country. He then refused to call them off, even when he was aware of the threat of violence. In fact, when told that the Capitol mob was chanting, “Hang Mike Pence,” Trump responded that perhaps the vice president deserved to be hanged.

He did not just incite the mob, he continued to “aid the unlawful purpose of stopping the peaceful transfer of power” by demanding that Vice President Pence refuse to perform his constitutional duty, calling senators and demanding that they stop the count, and speaking to his followers. For many hours, he succeeded in his aim of delaying the count.

Trump contended that all of that was mere free speech protected by the First Amendment. But using a straightforward incitement test, the court determined that his speech was not protected. Because “(1) the speech explicitly or implicitly encouraged the use of violence or lawless action; (2) the speaker intended that the speech would result in the use of violence or lawless action; and (3) the imminent use of violence or lawless action was the likely result of the speech,” Trump had done nothing less than issue a call to arms.

Three justices dissented, but only one did so on constitutional grounds. Two justices believed that the Colorado election code and its expedited judicial hearings were ill‐​suited to tackling this complex case. Another justice dissented on the basis that deeming someone ineligible for office through the election code without any congressional action was a due process violation. Congress alone, he said, is empowered to implement Section 3.

Whatever one thinks of the outcome, the opinions are clear, easy to read, thorough, and transparent. One hopes that whatever the United States Supreme Court decides, should it take up the case, it similarly engages with the arguments in a way that the advocates and the public deserve.

Walter Olson

In a 213‐​page opinion, the Colorado Supreme Court has ruled former President Donald Trump off the 2024 state ballot citing Section 3 of the Fourteenth Amendment, which bars office to persons who having taken an official oath to support the Constitution then “shall have engaged in insurrection or rebellion against the same.”

Two factual questions that have occasioned much controversy—whether the mob actions of Jan. 6, 2021, as a legal matter constituted an insurrection and whether Donald Trump as a legal matter “engaged in” them—are addressed by the Colorado court respectively at pp. 97–103 and 103–116 of its opinion. A sample, from pp. 101–103 (citations omitted):

As the district court found, with ample record support, “The mob was coordinated and demonstrated a unity of purpose .… They marched through the [Capitol] building chanting in a manner that made clear they were seeking to inflict violence against members of Congress and Vice President Pence.” And upon breaching the Capitol, the mob immediately pursued its intended target—the certification of the presidential election—and reached the House and Senate chambers within minutes of entering the building.

Finally, substantial evidence in the record showed that the mob’s unified purpose was to hinder or prevent Congress from counting the electoral votes as required by the Twelfth Amendment and from certifying the 2020 presidential election; that is, to preclude Congress from taking the actions necessary to accomplish a peaceful transfer of power. As noted above, soon after breaching the Capitol, the mob reached the House and Senate chambers, where the certification process was ongoing. This breach caused both the House and the Senate to adjourn, halting the electoral certification process. In addition, much of the mob’s ire—which included threats of physical violence—was directed at Vice President Pence, who, in his role as President of the Senate, was constitutionally tasked with carrying out the electoral count. As discussed more fully below, these actions were the product of President Trump’s conduct in singling out Vice President Pence for refusing President Trump’s demand that the Vice President decline to carry out his constitutional duties.

In short, the record amply established that the events of January 6 constituted a concerted and public use of force or threat of force by a group of people to hinder or prevent the U.S. government from taking the actions necessary to accomplish the peaceful transfer of power in this country. Under any viable definition, this constituted an insurrection.

Three of the seven justices on the Colorado court filed individually signed dissents. In two cases, these hinged considerably on disagreements about the meaning of Colorado election law. This means that, to a large extent, they will not be the subject of Supreme Court review because the Colorado high court has the last word on what Colorado law means, even as the US Supreme Court has the last word on what the federal Constitution means.

It’s worth keeping in mind, however, that because of the distinctiveness of Colorado election laws, its ruling (assuming it stands) may not clearly apply in its logic to other states that maintain their own standards for ballot placement.

The four‐​justice Colorado majority issued its opinion per curiam (i.e. unsigned), stating in a footnote that this was “consistent with past practice in election‐​related cases with accelerated timelines.” That rationale aside, the lack of a named lead author may perhaps cut down at least marginally on the incidence of death threats, which have repeatedly been directed in large volume at other judges and their staffs following rulings against Trump.

Because the stakes are so high, it is vital for the nation, if possible, to get clear and practically workable answers as soon as possible to the question of whether Trump is disqualified. I and others have predicted that the speediest way for a case to reach the Supreme Court would be for Trump to lose a lower court ruling in some state. That has now happened.

In particular, the timing of the Colorado court’s decision, applying to the state’s primary and not simply to its November election, makes it more likely that the high court will shed some light before the 2024 presidential calendar gets too far along. We may hope that in so doing it helps lay to rest questions that have divided eminent legal scholars and for which there is sometimes no precedent closely on point.

In August I argued that even though William Baude and Michael Stokes Paulsen “have made a powerful intellectual case for their originalist reading” of Section 3, it doesn’t follow “that the Supreme Court will declare itself convinced and disqualify Trump.” It 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.

Cato colleague and B. Kenneth Simon Chair in Constitutional Studies Ilya Somin is one who believes Section 3 does apply, and he applauds the new Colorado decision and says he hopes the Supreme Court affirms it . On the argument that Trump has been ruled an offender without criminal‐​style process, Somin argues that 1) the Due Process clause applies to deprivations of life, liberty, and property, and courts have not held that candidate disqualification is any of these things; and 2) Trump did receive due process in that he was given ample chance to contest the issue during the Colorado proceedings.

Assuming the Supreme Court agrees to review the Colorado ruling, as seems likely, we should all be prepared to accept its decision as binding.

Kayla Susalla

While public schools face ongoing funding challenges, resources are being allocated to School Resource Officers (SROs) to respond to anti‐​social behavior. Though reactive measures are important to have in place, employing police to respond to misbehavior is not only costly, it does not provide a long‐​term solution to school climate issues.

SROs are sworn law enforcement officers stationed in public schools, serving as first responders, mentors, and informal counselors. Research suggests their presence leads to increased out‐​of‐​school suspensions and arrests, affecting students of color, males, and those with disabilities at higher rates. Despite evidence highlighting the drawbacks of police in schools, their presence in public schools has been steadily increasing.

The State of SRO Spending

According to the Bureau of Justice Statistics, 4.3 percent of SRO program funding came from federal grants, 78.6 percent from school districts, and 10.2 percent from state or local grants, as well as taxes. Since the Columbine High School shooting tragedy in 1999, an estimated $1 billion has been distributed by the federal government, and $965 million in state funding. The US Department of Justice’s Community Oriented Policing Services (COPS) office currently distributes grant money to police agencies to help fund SRO programs. States spending more per pupil on SROs tend to spend less on counselors, nurses, social workers, and psychologists.

Proposed Additional Funding

In the 2023–24 legislative session, the Strengthening School Safety for Security Act was introduced, which would penalize states by withholding federal education funds if they did not possess two SROs per 500 students in each elementary and high school. The act would allocate $28 billion over four years. Another bill, the Safe Schools Act, would distribute funds originally intended for COVID-19 relief to hire SROs and add other security measures.

Given the limited, mixed research on SROs, and literature suggesting they largely respond to non‐​deadly crimes, there is concern that school policing over‐​criminalizes trivial misbehavior that could be handled by schools. Constitutionally, the federal government has no authority to intervene in education, and it should especially avoid funneling unprecedented dollars to programs that do not produce a net benefit.

It is also unclear if anti‐​social behavior in schools calls for large increases in law enforcement. A common justification for employing SROs is to respond to violent fights, yet data suggest fighting in high schools, where SROs are most concentrated, has shown a declining trend since 1993.

The Cost of Juvenile Criminal Justice Involvement

If the juvenile’s case continues through court processes, families can accumulate high lawyer and court fees. Officers can also issue a citation in lieu of formal processing. But heavy‐​hitting costs have been shown to increase recidivism, and it’s unreasonable to place large financial responsibilities on minors, who may not even be employed. Such policies could also cause financial strain on families.

When cases advance to incarceration, taxpayers, and in some states parents, get the bill. The chart below illustrates the high costs of adolescent imprisonment by state.

Juvenile Economic Exclusion

Beyond the pecuniary costs are the narrowing of opportunities to increase individual capital.

Juvenile records create lasting barriers to education opportunities, as college admissions processes often ask applicants to disclose criminal histories, including arrest records. Today, if a juvenile is incarcerated, they are ineligible for federal student loans, depriving them of a chance to dramatically increase their lifetime earnings.

As of 2021, only 22 states had automatic expungement laws for juveniles, and some require initiation from prosecutors or judges. Juveniles with records are half as likely to receive a call‐​back from an employer. A fight at school should not equate to a lifetime sentence for economic exclusion.

Alternatives to School Policing

Community‐​centered alternatives should be prioritized, as they have been shown to produce positive outcomes and are less costly for the individual and their families, as well as taxpayers. Mentoring programs such as Big Brothers Big Sisters America have demonstrated constructive results by reducing juvenile drug and alcohol use and physical altercations, while improving peer and familial relationships.

Another program, Positive Family Support (PFS), engages parents in school by hosting behavioral interventions and facilitating actionable plans for correction. PFS has been shown to decrease substance use and anti‐​social behavior.

Further, students in violation of school rules could be tasked with cleaning cafeterias or locker rooms, while engaging with a teacher or other staff member. Practices would strengthen relationships between adults and children, making it more plausible for students to reach out to a trusted adult in times of need, as well as facilitate trust, promoting greater receptivity to behavior‐​correcting interventions. As the teen mental health crisis remains a pressing issue, policies strengthening community ties and keeping kids in school are more important than ever.

Conceptualizing the consequences of one’s behavior is a part of the maturation process, and harsh punishments leading to long‐​term consequences do not provide kids with needed coping and conflict‐​resolution strategies.

For many reasons—financial and personal costs, as well as constitutional prohibitions—the federal government should get out of SRO funding, and states and school districts should think long and hard about expanding the presence of SROs.

Chris Edwards

Local government corruption is a major problem in America. Cities and counties have amassed excessive power over the private sector through permitting, licensing, zoning, and other bureaucratic approval processes. The politicians and officials who gain discretionary authority within these processes are empowered to shakedown individuals and businesses for bribes.

You see similar patterns of corruption with marijuana licenses, alcohol licenses, gun licenses, zoning adjustments, housing tax credits, building permits, and other approvals that governments keep in limited supply or that specific politicians or officials can slow‐​walk or deny.

The Department of Justice recently busted a powerful Los Angeles politician who for years lined his pockets using his discretionary power over development projects:

Former Los Angeles City Councilmember José Huizar pleaded guilty today to federal criminal charges for using his powerful position at City Hall to enrich himself and his associates, and for cheating on his taxes.

… In his plea agreement, Huizar admitted to leading the CD-14 Enterprise, which operated as a pay‐​to‐​play scheme in which Huizar – assisted by others – unlawfully used his office to give favorable treatment to real estate developers who financed and facilitated bribes and other illicit financial benefits.

Specifically, Huizar and other city officials demanded and accepted cash bribes, casino gambling chips, prostitution and escort services, political contributions, flights on private jets and commercial airlines, stays at luxury hotels and casinos, expensive meals, tickets to concerts and sporting events, and other benefits.

Huizar also admitted to accepting a $600,000 bribe in the form of collateral from a billionaire real estate developer for Huizar to confidentially settle a pending sexual harassment lawsuit against Huizar by a former staffer.

Local government corruption is prevalent across the nation, as the following examples illustrate. The common elements are excessive regulatory control over private activities, slow and nontransparent bureaucracies, and discretionary power over approvals provided to individual politicians and officials.

In Chicago, dozens of aldermen have been found guilty of corruption over the decades. One study found that the crimes typically involved “schemes to extract bribes from builders, developers, business owners or those seeking to do business with the city or state. The bribe‐​payers either assumed or were told that payment was necessary to receive zoning changes, building permits, or similar city or state action.… at the heart of most convictions is a payoff for something that is a sweetheart contract or a law or permit necessary to do business. This has been the main pattern of corruption in the city and the state for over 150 years.”
In Boston, restaurant liquor licensing has long attracted corruption. The government’s strict limits on the number of licenses “creates a pent‐​up demand, which results in licenses selling for a great deal — in some neighborhoods, north of $350,000. To get one, a restaurateur needs not only money but also connections: Businesses must be approved by the local neighborhood association and local elected officials.”
In New York City, many sorts of permitting and licensing have been scandal‐​plagued for decades. The New York Police Department, for example, was engulfed in scandal a few years ago with officers speeding up usually slow gun‐​license approvals in exchange for cash and gifts.
In Los Angeles, two officials in the liquor control agency ran a shakedown scheme that targeted karaoke bar owners. Clients would pay the pair to fast‐​track their liquor license applications, and the pair would demand favors from bar owners while threatening to target them for enforcement raids.
In Pennsylvania, there has been a flood of pay‐​to‐​play scandals—in cities such as Scranton, Harrisburg, Reading, and Allentown—under which officials have extorted cash or campaign contributions for licenses, permits, and other approvals from the government.
In Massachusetts, California, and some other states that have legalized marijuana, there have been numerous corruption scandals because “legalization” has been only partial with strictly limited numbers of licenses available. The high value of the licenses has created large incentives for bribery and shakedowns.
In Dallas, the low‐​income housing tax credit (LIHTC) was at the center of the largest public corruption scandal ever in the city. Fourteen people were convicted of bribery, extortion, and related crimes, including developers, a state representative, the Dallas mayor pro tem, and the city planning commissioner. The politicians and bureaucrats would routinely shakedown developers for bribes in return for zoning changes and allocations of limited housing tax credits.

I discuss these and other corruption scandals here and here.

The solution to local government corruption is simple: deregulation. If Americans want less government corruption, they must reduce the government’s power over private activities.

Ian Vásquez

Global freedom hit a high point in 2007, followed by a slow decline until 2019. That period coincided with the aftermath of the global financial crisis and the rise of authoritarian populism and other forms of illiberalism around the world. With the onset of the COVID-19 pandemic in 2020, freedom fell significantly and dropped to a slightly lower point in 2021. The decline affected 90 percent of the world’s population and set global freedom back more than two decades.

That’s the picture that the Human Freedom Index 2023, published today by the Cato Institute and the Fraser Institute, paints about the global evolution of personal, civil, and economic freedoms. The report uses eighty‐​six distinct indicators across a range of freedoms for 165 jurisdictions for 2021, the most recent year for which internationally comparable data are available.

The United States ranks 17th on the index with its rating falling over time. In 2000, it ranked 7th. Not all countries deteriorated compared to 2000, the first year for which we have sufficient data. Taiwan (in 12th place) and Estonia (5th place) notably increased their level of freedom, for example.

As my coauthors Fred McMahon, Ryan Murphy, and Guillermina Sutter Schneider and I note, the contest between liberty and power has been ongoing for millennia. The report aims to help document that endless battle and to try to make sense of it in its current forms.

The tragic loss of freedom in Hong Kong—symbolized by the sham trial of Jimmy Lai that began there this week—is a dramatic example. As part of its crackdown on the traditional liberties of the territory, the Chinese regime has jailed the dissident billionaire for having advocated in favor of free expression and other basic rights.

The index captures Hong Kong’s fall. In the last decade and a half, only two other jurisdictions—Nicaragua and Syria—have lost more freedom than Hong Kong. As recently as 2010, Hong Kong held 3rd place. It has plummeted to forty‐​six, with pronounced declines in the rule of law, freedom of expression, and freedom of association and assembly.

It now ranks 146th in freedom of assembly and association. Given the large deterioration in Hong Kong’s personal and civil freedoms and given the strong relationship we generally find between personal and economic freedom, we should expect further declines in Hong Kong’s economic liberties as well.

Another dramatic example is Argentina. Over the past twenty years of mostly populist‐​Peronist rule, Argentina’s level of freedom steadily declined, and its ranking fell from forty‐​one in 2000 to seventy‐​seven in the current report. But it was in terms of economic freedom that the country saw a complete collapse—falling from a ranking of 40th in 2000 to 158th in the new index. We should not be surprised by the disastrous economic results or by the rise of a libertarian Javier Milei as president.

The index reports many more findings and presents a wealth of information. Explore the levels of freedom in your country, the relationship between various freedoms and prosperity, regional freedom differences, the level of women’s freedoms, the distribution of freedom around the world, and much more here.

Jeffrey A. Singer

Massachusetts Governor Maura Healey asked the Massachusetts Department of Public Health to report on whether it would be feasible for the Bay State to sanction overdose prevention centers (OPCs). As I wrote in a Cato briefing paper last February:

OPCs have a more than 30‐​year track record of preventing overdose deaths, HIV and hepatitis, and other diseases, and of helping people with substance use disorder find treatment. As of August 2022, 147 OPCs are providing services in 91 communities in 16 countries. They continue to gain acceptance as an effective tool for reducing the dangers of using drugs obtained through the increasingly deadly black market. Congress should remove federal barriers to OPCs in the United States.

The Massachusetts DPH agrees with me. The report it just released concluded:

Faced with the urgency of the overdose crisis, OPCs represent an evidence‐​based, life‐​saving tool that is aligned with a comprehensive, public health approach to reducing harm and improving wellbeing in the Commonwealth. OPCs are also well supported among people who use drugs, agencies and staff of existing harm reduction programs, and a majority of Commonwealth voters. After considering existing resources and capacity, DPH believes that OPC establishment is feasible and necessary, pending legislative action to extend legal protections, and recommends that OPCs be pursued as an additional tool to address the harms of substance use.

However, 21 U.S.C. Section 856, the so‐​called “crack house statute,” stands in the way. This federal law makes it illegal for an entity to knowingly permit the use of federally banned substances on its premises. The Massachusetts DPH report notes this unfortunate fact:

Unless there are changes to federal law, OPC activities will remain prohibited at the federal level and subject to the discretion of federal law enforcement.

In testimony before the House Judiciary Committee Subcommittee on Crime and Government Surveillance last March, I called on Congress to repeal the “crack house statute” to remove federal obstacles blocking harm reduction organizations from saving lives in their communities with this proven harm reduction strategy.

On November 30, 2021, the Mayor of New York City and the New York City Department of Health permitted OnPointNYC, a private non‐​profit harm reduction organization, to open two OPCs, one in Washington Heights and the other in East Harlem, in defiance of federal law. In July of this year, the organization reported reversing more than 1000 overdoses—those are 1000 people who might not be alive today. Kailin See, the implementation lead for the two OPCs in New York City, discussed their success—and the surrounding community’s acceptance of them—in a Cato online event last March.

The federal government has yet to take any steps to shut down the two New York City OPCs.

During the summer of 2021, Rhode Island lawmakers authorized privately funded OPCs in the Ocean State, and the first one is slated to open in early 2024.

Last May, Minnesota lawmakers authorized OPCs and also repealed the state’s drug paraphernalia laws.

As more state and local governments defy the federal ban, Congress will find it increasingly difficult to ignore the reality that OPCs save lives and that many states and communities want to permit them. The authors of the Massachusetts DPH report believe the same thing:

Unless there are changes to federal law, OPC activities will remain prohibited at the federal level and subject to the discretion of federal law enforcement. However, enacting a state law that expressly permits OPCs may lead to federal policy development that will reduce exposure to federal enforcement or potentially to changes in federal law as with the legalization of marijuana. Notably, OPCs have operated in NYC since 2021 without federal enforcement intervention and Rhode Island plans to open its first state‐​regulated OPC in March 2024.

The report went on to recommend,

For these reasons, DPH recommends that Massachusetts enact statutory language offering protection against arrest, charges, or prosecution of property owners, managers, employees, volunteers, clients or participants, and state, city or town government employees acting in the course and scope of employment pursuant to §32, §32A‑D, 32I, § 34 § 40 of M.G.L. c. 94C or § 1–3 of M.G.L. c. 271A, including for attempting, aiding and abetting, or conspiring to commit a violation of any of those sections. Additionally, individuals and entities should be protected from property forfeiture and civil and administrative penalty, including, but not limited to disciplinary action by a professional licensing board, credentialing restrictions, contractual or civil liability, or other employment action. Protection should not extend to gross negligence or willful or wanton misconduct, and should relate solely to the approval, participation, or operation of an OPC.

Hopefully, Governor Healey and Massachusetts lawmakers will take these recommendations to heart.

The Massachusetts DPH report is a beautiful holiday gift for harm reduction advocates. Hopefully, it will boost morale and energize efforts to remove federal obstacles to this proven strategy for reducing overdose deaths as we head into the new year.

Marc Joffe

The Contra Costa Transportation Authority (CCTA) has announced plans to install a new type of transit system in a suburban area 45 miles northeast of San Francisco. The system, created by transportation startup Glydways, offers some compelling efficiencies, but its application in a relatively low‐​density area does not appear to be cost‐​effective. As such, CCTA’s plan merits a hard look from both local and federal taxpayers who will be obliged to fund it.

Glydways’ system uses small driverless vehicles (with a capacity of up to four passengers) on a narrow, dedicated guideway. Because the vehicles use rubber tires, there is no need to install rail tracks. Vehicles are available on demand, typically within two to five minutes of being summoned on the Glydways app.

The Glydways solution addresses several criticisms of traditional rail transit projects, which involve large (often empty) vehicles operating on fixed schedules piloted by operators entitled to generous pension benefits. Projects of this type, including New York’s Second Avenue Subway and BART’s Silicon Valley extension, not only cost billions to build but they are also expensive to operate.

As such, Glydways offers much needed innovation in public transportation, perhaps because it is looking at the challenge from a startup lens. Formed in 2019, the company has raised over $70 million from a group of investors that includes Bill Gates and Vinod Khosla. Their solution is an interesting attempt to apply ideas pioneered by Uber and Waymo to the requirements of public transit.

But innovation alone is no assurance that government will use taxpayer money effectively. Incentives also have a role to play. When companies simply sell products and services to a public agency, they do not have a strong motive to economize. Indeed, they often benefit from cost overruns.

But the CCTA project promises to resolve this incentive problem by using the public‐​private‐​partnership (or P3) model. The P3 charged with delivering the East Contra Costa County Dynamic Personal Micro Transit (DPMT) project includes Glydways and four other companies, along with CCTA and the local public sector bus operator.

Under a P3, companies are supposed to take some ownership of the project. If a P3 truly transfers risk to the corporate partners, their interests better align with those of the taxpayer. In a transportation context, risk transfer means that private sector players should be required to absorb construction cost overruns, excess operational costs, and lower‐​than‐​expected fare revenues. But from the CCTA press release, it is not clear what risk Glydways and the other companies will be expected to shoulder.

And the risks are substantial. Because this is a system that has yet to be tried in a real‐​world setting, a lot can go wrong with the vehicles and the dispatching technology. The unattended vehicles will be especially vulnerable to vandalism, which, unfortunately, is common in the San Francisco Bay Area.

Further, the cost and ridership projections for DPMT do not look promising. A 2021 presentation listed an annual ridership estimate of seven million, which works out to about 20,000 rides per weekday. The same presentation provided a capital cost estimate of $451 million. That seems like a lot of money to transport not too many people, and this is before operating costs are considered.

Further, if these numbers were re‐​estimated in 2024, they will probably look worse. General inflation has pushed up costs for all construction projects. Meanwhile, ridership on the connecting mass transit line (known as eBART) is running about half of 2019 levels. Since the ridership model for DPMT appears to be based on 2019 transit utilization rates, it is likely that a new model based on post‐​COVID transit use would project more modest ridership.

Potential utilization for DPMT is limited by the area’s relatively low population density. The four cities that would be served by the new transit system average about 4000 people per square mile, compared to over 7500 in Oakland and 17,700 in San Francisco.

Applying a new transit solution to this area sounds intriguing, but the relatively limited number of potential users may be more economically served by a new multi‐​use trail with shared e‑scooter and e‑bike stations.

Chris Edwards

Many American cities need more low‐​income housing, but governments reduce supply and raise construction costs with regulations, taxes, and bureaucracy. The Wall Street Journal reports on a Los Angeles low‐​income project, Lorena Plaza, that has taken 17 years to complete because of neighborhood opposition, lawsuits, and zoning and environmental rules. The Plaza’s 49 units are costing $34.2 million to build, or about $700,000 each.

The Journal describes state and local barriers to efficient apartment construction but does not address a major federal barrier—the low‐​income housing tax credit (LIHTC). The federal tax break is supposed to aid housing construction, but it adds many costs and complexities, as it likely did for Lorena Plaza.

Vanessa Calder and I described LIHTC failings in a 2017 study. The federal government distributes the credits to the states, which award them to developers to construct apartment buildings. The developers must cap rents for the units they set aside for low‐​income tenants. The states submit qualified allocation plans (QAPs) to the federal government, which micromanage LIHTC allocations and housing projects in huge detail. Virginia’s QAP and related 238‐​page manual here give a sense of the intense bureaucracy. LIHTC rules are so complex that one guidebook spans 1,790 pages.

California’s Treasurer lists LIHTC applications here. Click on the link for Lorena Plaza and open the Excel file of 17 spreadsheets. The “instructions” sheet is 411 rows, the “checklist” is 1,245 rows, the “application” is 1,053 rows, the “points system” is 701 rows, etc. Aside from the wasteful bureaucracy needed to deal with all this paperwork, the mass of rules for low‐​income housing projects stifles cost‐​saving innovations.

The financial structures of tax‐​credit deals are more complex than market‐​based deals, which also raises costs. Further, tax credit allocations are based on estimated costs, which encourages developers to inflate their estimates and provides little incentive to find cost savings during construction. Finally, the occupancy regulations of LIHTC properties impose substantial long‐​term administrative and compliance costs.

The LIHTC is a corporate tax break that mainly benefits investors, banks, and developers, not low‐​income tenants. There is “minimal federal oversight” of the costly program, notes the GAO, which I suspect is because the credit is so complex that the IRS has decided not to devote auditing resources to it. The lack of oversight has contributed to large amounts of abuse and corruption.

As lawmakers look to simplify the federal tax code, the LIHTC is ripe for repeal. Housing affordability is a serious problem, but state and local regulatory reform is the solution, not federal tax subsidies.

For further reading, see Low‐​Income Housing Tax Credit: Costly, Complex, and Corruption‐​Prone.