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Neal McCluskey and Mustafa Akyol

We are in the midst of Banned Books Week. A creation of many groups, including publishers, librarians, and booksellers, the week is intended to shine a spotlight on challenges to books, especially in public schools and libraries. If such challenges are not what immediately come to mind when you think of “book banning” – if, rather, the term conjures images of police rounding up books from homes and hiding places – that’s because such challenges are not what true bans are.

Opposition to books in public institutions stems from serious curbs on liberty, but as one of us knows firsthand, it is not equivalent to actual book bans.

When government truly bans a book, it makes possessing, publishing, or selling that book illegal. You can also go to jail as its author.

This is what happened with Mustafa Akyol’s book Islam Without Extremes: A Muslim Case for Liberty in Malaysia. Originally released in English in 2011, the book was published in Bahasa Malay in 2017, and Mustafa, as an invitee of the publisher, travelled to Kuala Lumpur to speak about it to public audiences. But soon he was arrested by the “religion police” for basically arguing that, well, there should be no religion police.

Meanwhile, the book itself was banned in an official decision announced by Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi, with bookstores prohibited from selling any copies. To break the censorship, Cato and Mustafa offered the book’s digital copy freely on the Cato Institute website, leading to thousands of downloads.

That situation was worse than what is happening in American public schools and libraries, where banning is rife if you ask groups associated with Banned Books Week. Arguably the highest profile of those groups is free‐​speech watchdog PEN America, which has reported that in the 2022–23 school year 3,362 books in public schools met their definition of banned: “either completely removed from availability to students, or where access to a book is restricted or diminished.”

Note that there is no legal penalty for publishing a book, or a child or adult owning it, or reading it, in PEN’s definition. No one is being punished for selling it. The “banning” is removal from a public institution, or restricting minors’ access in that institution. It is not the infringement on freedom that true banning is.

It does, though, see the same entity curbing liberty as in Malaysia and elsewhere: government. But government’s role is different.

In true banning, governments deem books unacceptable for private selling, disseminating, or possession, directly infringing on the right to speak and read. This is despotism.

The governmental curb on liberty in American “banning” is not prohibiting reading or possession of specific books, but government forcing all taxpayers to pay for books it chooses, including taxpayers who find the books immoral. Compounding the infringement, public schools – government schools – often give children lists of books from which they must choose, and assign specific books to read.

When a public school or library selects a book for shelves, reading lists, or assignments, government is elevating that speech. Conversely, what it does not select, it suppresses relative to readings it deems worthy. This is not as egregious as prohibiting writing or possessing books, but government favoring and disfavoring speech is nonetheless a serious infringement on liberty and equality.

In the United States, the attack on liberty is not removal efforts, as it is when government says one cannot sell or possess a book. It is government forcing taxpayers to purchase and promulgate books of its choosing.

Marc Joffe

Two recent developments reinforce the case against new, large government‐​run rail projects. These initiatives are usually a bad deal for taxpayers given their high and unpredictable costs, long construction cycles, and disappointing ridership.

First, Prime Minister Rishi Sunak radically downsized Britain’s ambitious HS2 high‐​speed rail project intended to connect Central London with Manchester in the north of England. Estimated costs had ballooned to £106 billion (or $129 billion at the recent exchange rate).

HS2’s northern terminus will now be at Birmingham, limiting the project which was originally expected to include 335 miles of track, to just 140 miles. And the first six miles between London Euston and Old Oak Common in the London suburbs will only be built if private funding can be found.

Sunak announced his decision at the Conservative Party conference on October 4, telling attendees:

HS2 is the ultimate example of the old consensus. The result is a project whose costs have more than doubled, which has been repeatedly delayed and it is not scheduled to reach here in Manchester for almost two decades… and for which the economic case has massively weakened with the changes to business travel post‐​Covid. I say, to those who backed the project in the first place, the facts have changed. And the right thing to do when the facts change, is to have the courage to change direction. So I am ending this long‐​running saga. I am cancelling the rest of the HS2 project.

Much the same can be said of California’s high‐​speed rail project. As I discussed here previously, estimated project costs have roughly tripled since it was originally sold to voters in 2008 and the completion date will be at least a decade later than the original expectation of 2020. And, with California population not growing in accordance with projections, the high‐​speed rail authority has reduced its ridership forecasts.

Perhaps California Governor Gavin Newsom can take a page from Prime Minister Sunak by truncating his own high‐​speed rail project. Newsom indicated such an intention in his 2019 State of the State speech, but rapidly backtracked after facing criticism from project advocates.

Meanwhile, in Northern California residents have been absorbing the latest bad news about one of its own rail‐​based white elephants. The six‐​mile extension of the Bay Area Rapid Transit (BART) system through downtown San Jose received a new price tag and delivery date.

The construction cost estimate was raised from $9.3 billion to $12.2 billion (or roughly $2 billion per mile), and revenue service is now not expected until 2036.

The new completion date is one year after Californians will be prohibited from buying cars with internal combustion engines. As I wrote previously, the extension will replace very few car trips and a large proportion of those theoretically would have been in electric vehicles. As a result, the BART project is an extremely inefficient way of battling climate change.

Local leaders have generally supported the BART extension despite its poor cost/​benefit profile, but perhaps now someone in power will call for a reappraisal. As with high‐​speed rail, the project has strong support from advocates and special interests. It remains to be seen whether any California official will stand up to the train lobby and take the side of the state’s beleaguered taxpayers.

Michael Chapman

During the 2020 presidential race, Joe Biden pledged to play tough with Saudi Arabia and hold it accountable for its human rights abuses – in one case, especially: the regime’s murder of journalist Jamal Khashoggi. However, as a recent Cato policy analysis by Jon Hoffmann, Pariah or Partner? details, Biden did not keep his promise after the election and is now seeking to build warmer US‐​Saudi relations.

A cushier relationship between the countries is not wise policy, according to the Cato report, which states that “Saudi Arabia actively undermines both U.S. interests and values.” One of those interests is human rights. Saudi Arabia’s human rights record should make it a pariah among nations. Let’s look at just a few of the facts about the Saudi regime.

The US State Department’s 2022 Country Reports on Human Rights: Saudi Arabia reports,

“Capital punishment may be imposed for a range of nonviolent offenses, including apostasy, sorcery, and adultery, although in practice death sentences for apostasy, sorcery, and adultery were rare and usually reduced on appeal.”
“… members of the Shia minority and members of the al‐​Huwaitat tribe were disproportionately sentenced to death.”
“Amnesty International reported that Saudi Arabia executed 148 persons in the first 11 months of 2022 and that in March, the authorities executed 81 individuals in a day—the largest mass execution in years—including 41 individuals who were from the Saudi Shi’a minority.”
“On April 11, the Sanad and THE WINA human rights organizations reported that Abdullah bin Abdulrahman al‐​Kamli, age 29, died in prison with marks indicating that he died under torture.”
“…[O]n November 10, the government resumed executions for drug‐​related crimes when it executed two Pakistani nationals for smuggling heroin, according to Amnesty International. By year’s end, a total of 20 drug‐​related executions had been carried out despite the announced moratorium [against capital punishment for drug crimes].”
“…[T]he European Saudi Organization for Human Rights (ESOHR) said it had documented 21 killings by government officials or others in prisons during the period from December 2010 to October 2021.”
“There were numerous credible reports of disappearances carried out by or on behalf of government authorities. … [A]uthorities arrested and forcibly disappeared rapper and songwriter Omar Shiboba in mid‐​March for unknown reasons without a charge. As of year’s end, his whereabouts were unknown.”
“[T]here were numerous credible reports … of torture and other cruel, inhuman, or degrading treatment or punishment by government officials and law enforcement officers, and of defendants’ confessions being obtained through torture or other mistreatment.”
“[L]awyer and activist Mut‘ib bin Zafir al‐​Amri … had been subjected to severe physical and psychological torture since 2018 by government officials in Dahban Prison, including beatings and electric shocks.”
“… [W]riter, translator, and computer programmer Osama Khaled, detained since 2020, was sentenced to a prison term of 32 years …following ‘allegations relating to the right of free speech.’”
“… U.S.-Saudi citizen Saad Almadi, age 72, was sentenced to 16 years in prison, plus a 16‐​year and 3‑month long travel ban, for tweets he primarily posted while abroad, some of which were critical of the government.”
“There were reports that authorities attempted to intimidate critics living abroad, pressured their relatives in country, and in certain instances abducted or pressured dissidents and repatriated them to the country.”
“[F]ormer interior ministry official Salem al‐​Muzaini, who is the son‐​in‐​law of exiled former senior security official Saad al‐​Jabri, was abducted from a third country in 2017, forcibly returned to Saudi Arabia, tortured, and detained.”
“T]he government uses the Kollona Amn (We Are All Security) app, which allows citizens to report others alleged to be critical online of the government, and to target female critics of the government.”
“Government authorities regularly surveilled websites, blogs, chat rooms, social media sites, emails, and text messages.”

Those are just some of the human rights abuses in Saudi Arabia reported by the US State Department for one year (2022).

On a related note, Amnesty International reported that Saudi Arabia passed a new Personal Status Law in March 2022, which “enables discrimination against women, including through male guardianship. Only men can be legal guardians under this law, and women must have a male guardian’s permission to marry and are then obliged to obey their husband.”

Twenty‐​one years ago, Cato Senior Fellow Doug Bandow wrote a policy analysis about America’s dubious alliance with Saudi Arabia, describing the nation as “a corrupt totalitarian regime.” He concluded, “Although America should not retreat from the world, it should stop supporting illegitimate and unpopular regimes where its vital interests are not involved, as in Saudi Arabia.”

That policy change is long overdue.

Adam N. Michel

Interest rates on 10‐​year Treasury bonds recently surpassed 4.7 percent after not exceeding 3.1 percent in the decade before 2022. Rising bond yields make borrowing more expensive for the federal government and increases the likelihood of a fiscal crisis.

In July, the Congressional Budget Office (CBO) assumed 10‐​year bond yields would be 3.8 percent right now, rising to 4 percent in 2024. We breached the 4 percent threshold in August.

In addition to increasing the cost of new borrowing, higher interest rates mean the US government’s $25 trillion of outstanding debt held by the public will grow more quickly as it is refinanced at higher rates. About half of the debt will need to be refinanced over the next three years.

As a rule of thumb, Brian Riedl estimates that “each additional [interest rate] percentage point would cost Washington $2.8 trillion over the decade, and $30 trillion over three decades.”

Where interest rates will eventually settle is unclear. But two things are clear. First, investors are currently demanding a higher return to lend to the federal government. Second, the federal government intends to continue borrowing—with annual deficits already projected to rise past $2 trillion within the decade.

High and rising interest rates increase the prospect of a European‐​style fiscal crisis. Sooner or later, rising interest rates will create a doom loop of more borrowing just to service interest payments on existing debt. When such an episode occurs, governments are typically forced into undertaking rapid deficit reduction efforts. They can cut spending, increase taxes, or both.

Politicians often turn to tax increases first, but tax‐​heavy fiscal adjustments often fail to address the underlying drivers of deficits and cause more economic damage, prolonging recessions. Learning from previous successful deficit reductions, Congress should focus on flattening the long‐​term path of spending.

Tax Increases or Spending Cuts?

In their 2019 book Austerity: When It Works and When It Doesn’t, Alberto Alesina, Carlo Favero, and Francesco Giavazzi summarize more than a decade of research on how countries have reduced budget deficits across 184 distinct austerity plans. The authors conclude: “Tax‐​based plans lead to deep and prolonged recessions, lasting several years. Expenditure‐​based plans on average exhaust their very mild recessionary effect within two years after a plan is introduced.” Because expenditure‐​based plans also usually include some tax increases, it’s worth noting that spending‐​cut‐​only plans may not be recessionary at all.

Major entitlement programs—Medicare and Social Security—are responsible for almost all the projected non‐​interest spending growth over the next three decades. Rapid health and retirement spending growth is neither caused by a lack of revenue nor fixable with tax increases. As I estimated earlier this year, “if Treasury collected as much revenue as it did in 2000 when it had a record 2.3 percent budget surplus, the U.S. would still have a 2022 budget deficit of about 5.1 percent of GDP (compared to the actual 5.5 percent deficit).” The deficit would continue to grow toward 10 percent of GDP over the next 30 years.

Even if Congress wanted to import a European‐​style tax system—raising taxes by thousands of dollars on Americans at every income level—it would still need to rein in spending growth, which is not projected to level off in any current projection. 

In addition to being unable to fix the underlying growth rate of spending, tax increases come with economic costs that often worsen fiscal crises. In a 10‐​year review of new empirical research following the financial crisis, Valerie Ramey showed that in a majority of estimates, tax increases reduce GDP by two or three times the amount of revenue they raise.

In a 2020 report, I explained:

“Because tax increases have steep economic costs, they are less effective at reducing deficits. Alesina and his co‐​authors conclude that tax‐​based fiscal adjustments are “self‐​defeating: they slow down the economy and do not reduce the debt ratio.” Relying on taxes to close the fiscal gap can create a cycle of tax increases that slow down growth, which adds pressure to expenditure growth by increasing the use of countercyclical anti‐​poverty programs, which then requires still higher taxes to avoid a debt crisis. Additional evidence outside fiscal crises also shows that new taxes are followed by increases in spending, making deficits larger, not smaller.”

If large tax increases are self‐​defeating, it leaves spending cuts as the most effective way for Congress to address the budget crisis. Spending cuts are less likely to prolong recessions and can address the root cause of long‐​term deficits, uncontrolled spending growth.

In a review of fiscal adjustments, Andrew Biggs, Kevin Hassett, and Matthew Jensen conclude, “lasting reductions in debt stem from expenditure cuts, and less so from revenue increases…our results indicate that social transfer reductions should comprise the largest share of the consolidation; there is a stark difference between the very large transfer shares in successful consolidations and very small transfer shares in unsuccessful consolidations.”

Conclusion

If Congress is serious about fixing the long‐​term debt challenge, it must address the programs no one wants to talk about. My Cato Institute colleague Romina Boccia recently put it this way: “With Medicare and Social Security responsible for 95 percent of long‐​term unfunded obligations, according to the Treasury Financial Report, there’s simply no way any serious fiscal reform effort can leave these programs untouched.”

Alesina’s research has one more hopeful conclusion for politicians facing these tough choices. In a review of electoral outcomes following large fiscal adjustments, Alesina and co‐​authors find “no evidence that governments which reduce budget deficits even decisively are systematically voted out of office.” There really is no excuse for continuing to kick the fiscal crisis can further down the road.

Today’s rising interest rates are a warning to Congress: get your fiscal house in order to avoid a crisis. Past fiscal adjustments provide another warning: relying on tax increases to fix budget problems is a recipe to make things worse, not better.

Norbert Michel

The United Auto Workers announced it’s expanding the strike against General Motors and Ford today, just three days after Politico’s story about what many see as a major shift in the Republican Party toward supporting organized labor. But while the politics might be shifting, the economics haven’t changed.

With the GOP long on the opposite side of unions, several key Republicans now seem ready to embrace the cause. Senator J.D. Vance (R‑OH), for example, says that striking workers “deserve to get their end of the shake.” The strike also coincides with a new poll conducted by American Compass, the “conservative” think tank that’s been pushing a populist agenda.

According to Oren Cass, American Compass’s executive director, the shift has already occurred.

Cass recently told Politico there is “no going back to a pre‐​Trump, 1980s‐​style conservatism,” adding “It just does not have anything useful to say about the actual issues of the 2020s.” Perhaps Cass is correct about the political environment. He did, after all, work on Mitt Romney’s two failed presidential campaigns in 2008 and 2012.

Cass is dead wrong, though, on the details of the actual policy. He insists that this newly oriented conservativism is a reaction to “this weird sort of hyper libertarian economics, pro‐​capital, no matter what kind of force for, globalization and open borders and nation building and all of this stuff.” That’s a lot of stuff, but the idea that U.S. economic policy even got to the edge of becoming libertarian, much less hyper libertarian, is completely detached from reality.

Cass is quite good, though, at remaining detached from reality.

To this very day, he continues to premise his policy prescriptions on the idea that American capitalism has failed. One of his most‐​repeated lines is “A market economy that once produced widespread, broadly shared prosperity has devolved into one where wages rose only 1% in the past 50 years.” In his book, The Once and Future Worker, Cass laments that “while gross domestic product (GDP) tripled from 1975 to 2015, the median worker’s wages have barely budged.”

But the only way to legitimize these statistics is to cherry‐​pick and ignore the other 99 out of 100 ways to estimate Americans’ income growth over the past 50 years. That would be bad enough, but it’s unfathomable that Cass doesn’t know what he’s doing because so many people have explained the true income trends. (There’s a very long list.)

Or maybe that’s too harsh. Perhaps it really is just a coincidence that Cass picked a starting point of 1975, the year that produces the lowest possible (positive) growth rate going back to 1964. Or that ignoring female workers in the data dramatically worsens the picture. Even if these are just coincidences, the American Compass agenda has bigger problems.

First, it’s not at all clear that their income stagnation resonated with Trump voters, the supposed impetus for this new “conservatism.” For instance, when the authors of The Great Revolt surveyed rust belt Trump voters, they found that “a full 84 percent were actually optimistic about their own future career path or financial situation, regardless of how they felt about their community’s prospects as a whole.” (see page 20.) Even now, after the pandemic, polling by Gallup shows that “Between 81% and 90% of U.S. adults are either ‘very’ or ‘somewhat’ satisfied with their family life, current housing, education, job, community and personal health.”

Another major problem for American Compass is that their decaying Rust Belt and Appalachian town narrative is historically inaccurate. It’s not new, and there was no shortage of government intervention during the last 50 years.

In Big White Ghetto, author Kevin Williamson describes the story of Garbutt, New York, a town built on the gypsum industry (see page 18). A local historian wrote of Garbutt:

As the years passed away, a change came over the spirit of their dream. Their church was demolished and its timber put to an ignoble use; their schools were reduced to one, and that a primary; their hotels were converted into dwelling houses; their workshops, one by one, slowly and silently sank from sight until there was but little left to the burg except its name.

This passage wasn’t written in 1988. It was written in 1908.

Appalachia’s decay also started long before the 1970s, and government intervention hasn’t helped. In 1964, LIFE magazine published “The Valley of Poverty,” a special report on President Lyndon Johnson’s nascent War on Poverty. It described Appalachia, an area stretching from “Alabama to southern Pennsylvania,” as “a vast junkyard” due to the “same disaster that struck eastern Kentucky.”

The disaster? That would be the collapse of the coal industry 20 years earlier. Cass can’t blame China or Reagan for that one.

In 1965 the federal government made the region a key focus of its War on Poverty. While people can argue over whether those government programs made things worse, there’s no argument over whether those programs existed. Telling people that some kind of “market fundamentalism” caused all the problems in that region is pure propaganda.

Whatever their motivation, what Cass and his allies are selling is dangerous. They want government officials – presumably themselves – to have more control over how people produce and purchase the goods and services that meet their needs. That sort of system only works well for the politicians in charge. Until, of course, some other group of politicians is in charge.

Alan Reynolds

“Soaring Bond Yields Threaten Fed Goal of a Soft Landing” is the headline of a front‐​page Wall Street Journal story by Nick Timiraos, who writes that, “If the recent climb in borrowing costs—along with the accompanying slump in the stock market and [a 5%] stronger dollar—continues, that could meaningfully slow U.S. and global economies over the next year. The swiftness of the recent rise also increases the risk of financial market breakdowns.”

The author proposes a list of hypothetical explanations. But all of them are entirely domestic, as if each country’s financial markets were isolated and disconnected from the internet or telephones. The list of explanations or solutions also leaves the Fed powerless to do anything more than stand still.

As Figure 1 indicates (using OECD data), the market for government bonds is global. Changes in the yields of bonds of major countries are generally synchronized as investor arbitrage seeks the best returns, adjusted for exchange rate risk.

Figure 1:

The black line shows the rise in the UK bond yield from 3.7% in April to about 4.6% in September was just as large as the rise in US yield from 3.5% to 4.4%. That seems inconsistent with the Journal’s purely domestic “likeliest causes” of rising yields being due to “expectations about better U.S. growth and concerns [about] huge federal deficits.”

Yet synchronized global movements in yields are also inconsistent with an alternative theory that US yields rose because of “reduced demand for Treasuries from foreigners.”

The article quotes an economist saying, “It’s perplexing. No fundamental explanation is convincing.” But that is simply because all visible efforts at explanation assumed (1) the US is a closed financial system, and (2) the Federal Reserve had nothing to do with the rise of yield on US and competing foreign bonds.

If limited to those dubious assumptions, then the Fed must now be helpless to alleviate this unexplainable exogenous shock to domestic bond yields.

But the US has had a lot of experience with inverted yield curves — times when the Fed pushed the federal funds rate above the bond yield. The most stubborn postwar experiment with that “higher for longer” strategy was in 2006–2007, just before the Great Recession. Two earlier experiments (using the discount rate rather than fed funds) were in 1920–21 and 1928–29.

Inverted yield curves can easily be fixed in a week or two. Just keep the federal funds rate lower than the 10‐​year bond yield and have the FOMC offer sensible “forward guidance” that this policy will continue for the foreseeable future. The Fed probably did flatten the yield curve quickly enough by cutting the funds rate in 2019, but the pandemic lockdowns of March 2020 made that impossible to prove.

Keeping the fed funds rate lower than the US bond yield might not lower worldwide bond yields appreciably (since that also depends on foreign economic conditions and policies). But it would surely ensure a softer landing than we saw in 1970, 1974, 1980, 1981–82, 1991, 2001, or 2007–2009.

David Inserra

Large portions of the EU’s sweeping “Digital Services Act” (DSA) went into force at the end of August. In addition to several controversial provisions for freedom of expression, the DSA requires member states to establish dispute resolution tribunals that will adjudicate social media content moderation decisions. Of course, having member states establish these tribunals makes it likely that they will reflect the interests of EU governments.

This is in contrast to Meta’s attempt at content moderation oversight by its Oversight Board, which is private and mostly independent.

In 2020, Meta established an independent organization known as the Oversight Board to “help Facebook answer some of the most difficult questions around freedom of expression online: what to take down, what to leave up, and why.” The Oversight Board has the power to review and even overrule content‐​moderation decisions made by Meta, as well as issue non‐​binding recommendations on Meta’s policies.

The Board is comprised of 22 members from around the world, including a former prime minister, human rights leaders, journalists, judges, and think tank experts, including Cato’s First Amendment scholar John Samples. To date, the Board has decided fifty‐​two cases looking at specific content and three broader policy advisory opinions. For full disclosure, I recently worked on Meta’s content policy teams and directly supported Meta’s efforts on the Oversight Board.

But unlike the Oversight Board, which is a private and mostly independent body established by Meta, the new DSA dispute tribunals are required by EU law. This means they are more likely to be influenced or connected to government.

As a result, these tribunals will likely be yet another way in which the EU will attempt to dictate content policy decisions to social media companies. These decisions will vary from tribunal to tribunal and certainly differ from social media companies’ current policies, not to mention the laws or speech protections of countries outside the EU.

Furthermore, this approach has the EU member states dictate the way content moderation appeals and disputes must be handled rather than allowing different platforms to develop their own solutions. For example, Reddit and Wikipedia both have processes that handle content moderation disputes differently than Meta or its Oversight Board. As social media companies continue to change and innovate, this requirement may also inhibit the growth of new solutions.

With an increasing amount of content policy jurisprudence built around the EU, these regulations will inevitably impact the broader content policies governing users in the US and beyond. As my colleague Jennifer Huddleston recently wrote, what happens in Brussels doesn’t stay in Brussels, and so the growth of EU content moderation schemes under the DSA can affect Americans and what some have termed “a free speech recession.”

While the DSA model raises concerns for freedom of expression, even the underlying Oversight Board model is not fully understood yet. Critically, how well has the Oversight Board completed its stated purpose of “protect[ing] free expression by making principled, independent decisions about important pieces of content and by issuing policy advisory opinions on Meta’s content policies?”

Answering this question will require a more comprehensive analysis of the Oversight Board’s processes, cases, rationales, decisions, and overall impacts on freedom of expression online. Some of the major elements of the Oversight Board worth exploring, both on its own merits as well as how the model might work more generally, include:

Processes and organization: How is the Board organized and operated? What is its decision‐​making process? What does it see as its mission and values?
Cases, priorities, and rulings: What cases has the Board taken (and not taken)? What is it prioritizing? What themes or precedents is the Board establishing in its decisions?
Scalability and impact on content moderation: How broadly or narrowly has Meta’s content moderation been changed or affirmed because of Board decisions? What content policy changes have been made because of the Board’s rulings?
Impact on expression: Has the Board supported greater expression or more restrictions of speech online?

The promise of the Oversight Board is certainly greater for freedom of expression than EU regulations and tribunals that are likely to push government views and limit future innovations in content moderation, but more research is required to determine just how impactful the Board has been.

Jon Hoffman

Twenty Democratic senators signed an open letter to President Biden today supporting the administration’s move to help broker normalization between Saudi Arabia and Israel, but also signaling their concerns over providing Saudi Arabia with a formal security guarantee and help developing their civilian nuclear program.

The letter strongly suggests its authors worry that such a deal will not advance US interests and could result in heightened regional tensions or Washington’s further entanglement in the Middle East:

“We are concerned about reports that Saudi Arabia is requesting a security guarantee from the United States in exchange for normalization with Israel. Historically, security guarantees through defense treaties have only been provided to the closest of U.S. allies: democracies that share our interests and our values. Further, the U.S. has long refrained from committing our nation to treaty‐​backed security guarantees in the volatile Middle East, a region rife with conflict. A high degree of proof would be required to show that a binding defense treaty with Saudi Arabia – an authoritarian regime which regularly undermines U.S. interests in the region, has a deeply concerning human rights record, and has pursued an aggressive and reckless foreign policy agenda – aligns with U.S. interests, especially if such a commitment requires the U.S. to deploy substantial new permanent resources to the region.”

The letter echoes themes I detail at length in my recent policy analysis, Pariah or Partner? Reevaluating the U.S.-Saudi Relationship. Entering into a mutual security agreement with Saudi Arabia would represent a catastrophic miscalculation. A security guarantee for Saudi Arabia would entrap Washington as Riyadh’s protector despite a fundamental disconnect between the interests and values of the United States and the kingdom. Washington must not pay the costs of normalization while sacrificing its own interests in the process.

Washington’s ongoing support for actors like Saudi Arabia has resulted in a vicious cycle: by committing itself to propping up the underlying sources of regional instability, the United States repeatedly finds itself having to confront challenges that are largely the product of its own presence, policies, and partners in the Middle East.

The United States must decide whether it will continue underwriting actors such as Saudi Arabia and the artificial status quo in the Middle East, or whether it will recognize the failures of its own policies and limit its involvement to a level commensurate with US interests. The United States should approach Saudi Arabia as it would any other state that does not share our interests or our values: from arm’s length.

It is good to see so many senators asking tough questions about the administration’s thinking here. They should keep asking them. More of their colleagues ought to join them.

Ian Vásquez

This week Katalin Karikó and Drew Weissman received the Nobel Prize in Physiology or Medicine for their discoveries that led to the development of mRNA vaccines used against COVID-19. Moderna and Pfizer‐​BioNTech produced those vaccines, saving millions of lives and helping to reopen the world. According to the Nobel Assembly, the awardees “contributed to the unprecedented rate of vaccine development during one of the greatest threats to human health in modern times.”

I celebrated that achievement in my column in El Comercio (Peru) this week, reposted here, by reviving a great article that Scott Lincicome wrote in December of 2020 just as the vaccines were about to come online. The COVID vaccines, Scott rightly pointed out, were a triumph of globalization.

The much‐​deserved Nobel Prize to Karikó and Weissman highlights that truth. As I wrote:

It was the flow of people, ideas, capital, goods and services that made it possible to discover and produce a vaccine in record time…

First, [this is a story] about immigrants. Karikó is Hungarian and went to work in Philadelphia, where she met Weissman at the University of Pennsylvania. Her work there, however, was undervalued, so Karikó went to a job at BioNTech. This German‐​based company was, in turn, founded by a Turkish immigrant and a German woman of Turkish descent. Pfizer, founded in the 19th century by German immigrants to the United States, collaborated with BioNTech to produce the vaccine. Its CEO is a Greek immigrant to the United States.

Moderna’s co‐​founder and chairman of the board, meanwhile, is of Armenian descent, born in Lebanon and immigrated first to Canada and then to the United States. The company’s other executives, like those at Pfizer, hail from numerous countries.

Global capital markets also played a role by providing the massive funding needed for the biotech and pharmaceutical companies that developed and distributed the vaccines. When Chinese researchers publicly shared the genetic map of the virus in early January 2020—without seeking permission from the Chinese authorities—the international scientific community also played a role, immediately getting to work on creating possible COVID tests and vaccines.

The production and distribution of the vaccine required complex international collaboration in terms of logistics, shipping, storage, and supply chains that were adaptive but based precisely on the knowledge, technology, and networks built up by decades of global commerce.

None of the above could have been accomplished by a preconceived government plan. The production and distribution of the vaccines really were a triumph of globalization.

Read my article in Spanish here, or, better yet, read Scott’s longer article on which it is based, here. For a more complete view of the blessings of globalization at a time during which it is coming under attack by both the left and the right, see the essays in Cato’s new project, “Defending Globalization.”

Jeffrey Miron

This article appeared on Substack on October 4, 2023.

What should libertarians think about government shutdowns due to Congressional failure to approve new spending bills? Libertarians oppose most spending affected by shutdowns, so one might assume they are on board.

That is not my view. While shutdowns suspend some government expenditures, the effect is temporary. Furloughed employees, for example, get back pay when the shutdown ends.

No evidence shows that shutdowns have slowed the path of government growth after reopening. Even the temporary reduction is small, since many discretionary programs continue, as does entitlement spending (which is more than half of federal expenditure).

The same caution applies to using tax cuts to shrink government. Milton Friedman famously argued that all tax cuts are good because they “starve the beast.” Even if Congress cuts taxes now, however, it can raise them later, which is what seems to happen in practice.

More broadly, process or institutional “fixes” to big government are unlikely to succeed. State balanced budget amendments do not seem to restrain spending, and requiring fiscal scoring from external agencies like the CBO leads to gimmicks that circumvent accountability. If the electorate wants more spending, politicians will find a way.

The only way to shrink government, significantly and sustainably, is to convince more people that smaller government is better.