The Independent Institute


Students for Democratic Society?

55986706_MLI am the faculty advisor for the Florida State University Students for Liberty. I am guessing that is the reason I received an email from the FSU Students for Democratic Society which says, in part:

Anyone who has been following Donald Trump’s campaign has seen examples of Trump’s racist, xenophobic, and misogynistic, far-right ideology. Supporting the deportation of Muslims, building a wall on the US-Mexico border, and carpet bombing Syria are just a few examples of what Trump is trying to accomplish. ... On January 20th the day of Trump’s inauguration, we are interested in organizing a campus wide walk-out. Afterwards during Trump’s Inauguration ceremony, there will be a protest at the old Capitol Building organized by various progressive groups at FSU, TCC and FAMU.

I replied to the email noting the irony that an organization which claims to support “democratic society” is protesting the outcome of a democratic election. I can well-understand why people might be uneasy about the impending Trump presidency, but it is more difficult to understand why an organization that, by its name, purports to be pro-democracy, would object to the outcome of a democratic election before the person who was democratically elected has even taken office. If Trump eventually engages in anti-democratic actions after he takes office, that might merit a protest by a pro-democracy group. In this case, it appears that the SDS is anti-democratic.

Yes, I know the left-wing history of the SDS. My comment isn’t so much expressing surprise at the group’s dislike for Trump, but rather noting that the Students for Democratic Society is demonstrating by its actions that in fact, it does not support democracy.

Make No Mistake: Fidel Castro Was a Horrible Person

62871096 - portrait of fidel castro in yangiyer, uzbekistan, may 11, 1963.Cuba’s former dictator, Fidel Castro, has died at the age of 90.

When I woke up on Saturday morning to see the news, I was surprised by the reaction of many friends on social media, as well as the national media. The New York Times headline read, “Cuban Revolutionary Who Defied U.S., Dies at 90.” Al Jazeera’s headline read, “Castro: The Making of a Legend.” Others on Facebook and Twitter seemed saddened by the death of a “revolutionary.” Canadian Prime Minister Justin Trudeau called Castro a “remarkable leader.”

Let’s be clear—Fidel Castro was not a good person.

His ideas were not good.

His policies destroyed the liberties of millions of Cubans.

His government is responsible for the murders of tens of thousands of people.

His “legacy” should be one of pure shame.

I won’t delve into the history of Fidel Castro’s revolution in Cuba—but those lamenting the loss of such a “great leader” would do well to crack open a history book, or at least spend a solid 90 seconds reading Wikipedia. As opposed to restoring the freedoms lost under the U.S.-backed dictator that Castro ousted, he crushed them.

In his first decade in power, Castro’s government instituted a variety of “progressive” reforms. His backers point to programs aimed at literacy and equality. Filmmaker Michael Moore foolishly lauded Cuba’s medical system in the the film Sicko. (For a discussion of how the Cuban healthcare system actually works, see here.)

What these individuals tend to ignore, however, is the cadre of human rights abuses inflicted by the hands of the Castro regime. Systematic mass executions of ex-government officials, the internment of homosexuals, and the implementation of mass government surveillance are all a part of the Castro story. This is not to mention the myriad of show trials, executions, and punishment of any dissent from average citizens, writers, academics, journalists, and artists.

Castro’s body count varies depending on who you ask. The Cuba Archive Project has one of the most reliable data sets. The group’s records cover a period from May 1952 to the present. In order to be counted, the stories of each victim must be verified by two independent sources. To date, the Archive attributes some 10,723 deaths to the regime. Including nearly 1,000 deaths linked to “disappearances,” more than 2,000 extrajudicial killings, and over 3,100 people killed by firing squad. Some 100 minor children have been murdered by the regime via beating, the withholding of medical attention, and other methods. In addition to these killings, some 78,000 people are estimated to have died while trying to flee the country.

To those unconvinced by mass murder that Castro was a lamentable dictator, consider his government’s practice of forced blood donation. This can range from taking a person’s blood forcibly without their consent to coercing individuals to offer their blood.

The Cuba Archive has credible information on at least 11 cases of forced blood extraction prior to execution. According to the Inter-American Commission on Human Rights of the Organization of States (OAS) 1967 report regarding the practice at Havana’s La Cabaña prison, an average of seven pints of blood were forcibly taken from prisoners on their way to be executed, causing “cerebral anemia and a state of unconscious paralysis.” (For perspective, the average adult has around 10 pints of blood in their body.) Victims would then be taken to the firing squad on a stretcher.

The Cuban government would then sell the blood to the North Vietnamese for around $50 a pint.

Today, Cubans are required to “donate” blood before even minor medical procedures. Year-round media campaigns encourage citizens to donate in an effort to “save lives.” In reality, the Cuban government has kept up with its history of exporting blood products. According to Cuba’s Oficina Nacionel de Estadísticas (National Office of Statistics), the country exported some $622.5 million—an average of $31 million per year—of blood products between 1995 and 2014. (It’s worth noting that these numbers may very well be understated. Other products made from blood derivatives may not be classified as blood products when exported.)

In the event that mass murder and force blood donation don’t quite do the trick, see the following.

Click here for a general discussion of the regime’s atrocities.

Click here for information on the use of “Military Units to Aid Production”—forced labor camps for conscientious objectors, homosexuals, and other “enemies of the state.”

Click here to learn about the sinking of the 13 de Marzo tugboat, which killed 41 fleeing Cubans, including 10 children.

Click here for a breakdown of the murders committed by the Castro regime between 1959 and January 2012.

When celebrating “revolutionary” thinkers, we would do well to actually know what it is that we are discussing. When it comes to Castro, those mourning his death reveal their complete and utter ignorance of history or show their total lack of appreciation for even the most basic human rights—including life.

Fidel Castro died peacefully as an old man. The same cannot be said for the thousands of Cubans who died violently and prematurely at the hands of his regime.

Tax Reform for Investment Income

39435815 - businesswoman calculating tax at desk with calculator in officeExecutive Summary

The unexpected election of an at least nominally Republican president, along with Republican control of both Houses of Congress, presents a unique opportunity for the incoming Congress to make meaningful reforms to the tax system. One major problem has been the over-taxation of corporate income. Another is the under-taxation of carried interest.

In brief, I propose:

  • Tax corporate income and dividends in such a way that the total tax burden for investors in the top personal tax rate is the same as for salary income, while giving investors in lower tax brackets some of the advantage of their lower bracket. Achieve this by adding half of “qualified” dividends (i.e. those that are “qualified” by coming from taxed US corporations) to taxable income, and taxing corporations at that rate that makes the total burden equal to the top personal rate. As shown below, this corporate rate would be 24.7% under the current top personal rate of 39.6%, or 19.8% under the 33% top personal rate proposed in 2016 by the the House leadership. Add all of non-qualified dividends to taxable income.
  • Add half of “qualified” capital gains (again “qualified” by coming from taxed US corporations) and all of non-qualified capital gains to taxable income. Abolish the distinction between short-term and long-term capital gains, since favorable treatment of long-term gains will no longer be necessary to mitigate the double taxation of corporate income. Abolishing the special treatment of long-term gains will incidentally eliminate the unwarranted favorable tax treatment of “carried interest.”
  • Allow all capital gains to be indexed for inflation, thereby removing a second rationale for special treatment of long-term capital gains.
  • Abolish the 2013 3.8% surtax on investment income, since it merely aggravates the over-taxation of investment income at present.
  • Expand the tax-deferred treatment of institutionalized savings to remove artificial restrictions on contributions and withdrawals.

Political Power Takes a Hit in J. K. Rowling’s Fantastic Beasts

fantastic_beasts_and_where_to_find_them_posterJ. K. Rowling’s entertainment and cultural empire expands with the addition of Fantastic Beasts and Where to Find Them, a well-crafted action film that will surely push the Harry Potter film franchise beyond the $8 billion gross receipts milestone. Fantastic Beasts has already earned nearly $300 million worldwide, solidifying Rowling’s role as a leading producer and now screenwriter. This is good for liberty because Rowling’s story continues her interest in promoting tolerance, vigilance against tyranny, and the courage of everyday heroes.

David Yates, the director who also helmed the last four Potter films (Order of the Phoenix, The Half-Blood Prince, and the two-part Deathly Hallows), keeps audiences engaged with plenty of action involving mischievous and sometimes humorous magical creatures as well as state-of-the-art special effects. Strong performances by veteran actors Eddie Redmayne (Newt Scamander), Colin Farrell (Percival Graves), Katherine Waterston (Porpentina “Tina” Goldstein), and creative casting in supporting roles (e.g., indie rock singer Alison Sudol as Queenie and Dan Fogler as Jacob Kowalski) provide a remarkably good balance of depth, seriousness, and humor. Rowling’s screenplay seems to reflect a more complete and intentional effort at filmmaking, and audiences benefit as a result.

The story begins as Newt Scamander, the author of what will become one of Harry’s standard textbooks at Hogwarts, lands in 1926 New York City. The city is a stopover, a port of entry into the United States, and we soon find that the wizarding world of North America operates differently than the one in England. Non-magical people are called No Majs rather than muggles, and their society is governed closely by the Magical Congress of the United States, or MACUSA, led by President Seraphina Picquery (Carmen Ejogo) and Graves, her Director of Magical Security.

I couldn’t help but note how the acronym MACUSA when spoken in the movie, rhymes with Yakuza, the transnational crime network based out of Japan. While I have no evidence that this was intentional, the analogy is not too much of a stretch, given the controlling nature of some in the Congress, the harsh justice meted out to those who disobey their rules, and the regressive nature of some of the laws.

The Congress has been relentlessly purging magical beasts because they are considered universally “dangerous,” placing Newt at immediate risk since he is transporting enough creatures to fill a nature preserve in his suitcase. Newt’s motivations become central to the plot because his life’s calling is to protect, conserve, and preserve magical beasts. He sees their beauty, accepting them for what they are rather than what others want or perceive them to be. A more open-minded and sophisticated approach would result in successfully integrating these creatures into wizarding society.

When some of these animals escape onto the streets and into the shops of New York, their mischief triggers a crisis that requires the Congress to intervene and the deployment of aurors to rein in wayward wizards. Newt is betrayed by disgraced auror Tina’s naive understanding of the Congress, but then forges a partnership with tinges of romantic attraction. Her sister Queenie joins the team while No Maj Jacob Kowalski ends up stumbling into their quest and enthusiastically assists in recapturing the animals.

The wizarding world’s problem, however, is much bigger than Scamander’s escaped beasts. The city is also under attack by an Obscurace, a dark force that manifests itself in wizarding children who try to conceal their powers. An Obscurace is pure evil—uncontrollable, indiscriminately destructive, and parasitic, using children as its host. We find that Newt has encountered and defeated one before, and this puts him in a unique position for understand its power. Not surprisingly, the Obscurace’s dark power is coveted by some wizards, particularly those in positions of authority within the Congress. What starts out as an attempt to recapture and save largely benign, often lovable if annoying creatures becomes a life-or-death struggle to destroy the Obscurace before all of New York is destroyed and the wizarding world revealed to all No Maj kind.

The dark quest complements embedded social commentary, another one of Rowling’s storytelling hallmarks. Set in the middle of the Roaring Twenties, a period of cultural dynamism, growing wealth, personal excess, alcohol prohibition, and the rise of organized crime, Fantastic Beasts examines the underbelly of Western culture, political power, and corruption through the lens of a parallel magical world. For example, Newt and Tina meet with a seedy and duplicitous goblin (played by Ron Pearlman) operating out of a speakeasy as a illegal trafficker of magical creatures. The Magical Congress prohibits marriage between magical and non-magical people. Magical humans are not allowed to own magical creatures. The Congress relentlessly enforces rules that prohibit activity and behavior that might reveal their world to non-magical people, even putting to death those that break these rules and appear to jeopardize the security of their world. Fantastic Beasts has plenty of anti-authoritarian and pro-individual freedom themes and subthemes for those willing to look. At one point, Newt observes that the U.S. magical world is not that much different from the one in Britain except that it’s less advanced (less politically and socially progressive).

Fantastic Beasts also continues Rowling’s explorations in the abuse of power. Those in authority try to usurp the Obscurus to expand their power, and, in the process, destroy any hope for redemption for the unwitting host (who is a socially marginalized character). Tolerance and the role of ordinary people standing up to evil remain front and center in the actions of the lead characters. Newt is no superhero; he is a bookish researcher, with a great deal of empathy for the plight of humans and beasts. The fallen auror Tina doesn’t have special powers or abilities (for a wizard), but she has a passion for justice and protecting the abused.

While the action in Fantastic Beasts is well timed and choreographed, and the plot is sufficiently layered and complex to keep many in suspense until the closing scenes, the characters are not particularly well drawn or layered. This may be intentional, to emphasize the unremarkable and everyday nature of the heroes. The only major character with a clearly defined arc is the No Maj, Jacob Kowalski, a World War I veteran who returned to mundane factory work but aspires to open his own bakery. He is brought into the journey by happenstance, but discovers a entirely new world with all its beauty and danger. As Jacob’s memories are about to be erased for the sake of preserving wizarding kind, Dan Fogler poignantly conveys Jacob’s feeling of loss and the injustice of the act even as he accepts its necessity.

These limitations in character development, however, don’t distract significantly from the film. Fantastic Beasts and Where to Find Them fits well into the pantheon of J. K. Rowling’s world, one that is largely consistent with the skepticism of power, the value of individual leadership and courage, and the importance of tolerance and understanding as a foundation for civil society. These are also values that map well over Millennials, as research by Anthony Gierzynski and Kathryn Threlkeld has shown in Harry Potter and the Millennials: Research Methods and the Politics of the Muggle Generation. Having them built into a solid, imaginative action film with dazzling special effects certainly doesn’t hurt.

The White Man’s Burden: More Drinking, Drugs, and Suicides Since 2000

46586331_mlMore nonsense has been written about White nationalism/supremacy in the wake of Donald Trump’s election than anyone should have to read. So, it is a pleasure to find some actual data analysis on the role of the non-college educated white citizen in the success of the Trump candidacy, especially versus Mitt Romney’s failed 2012 campaign.

The Economist has determined that health status explains the Trump vote better than being a non-college educated white citizen does. Health status is inversely related to voting for Trump: The sicker you are, the more likely you are to have voted for Trump. Non-college educated whites are also likely to be sicker, so the two variables are not independent. Nevertheless:

Although we could not find a single factor whose explanatory power was greater than that of non-college whites, we did identify a group of them that did so collectively: an index of public-health statistics. The Institute for Health Metrics and Evaluation at the University of Washington has compiled county-level data on life expectancy and the prevalence of obesity, diabetes, heavy drinking and regular physical activity (or lack thereof). Together, these variables explain 43% of Mr. Trump’s gains over Mr. Romney, just edging out the 41% accounted for by the share of non-college whites.

(“Illness as an Indicator,” The Economist, November 19, 2016)

The Pharmaceutical Industry and Access to Medicines

44323995 - medicines arranged in shelves at pharmacyHaving written critically about a decision made by Doctors Without Borders/Médecins Sans Frontières (MSF) to reject a donation of vaccines by Pfizer, Inc., I am grateful for a new report which ranks research-based pharmaceutical companies on a number of measurements of how they make medicines available to patients in low-income countries.

Jointly funded by the Bill & Melinda Gates Foundation and British and Dutch taxpayers, the Access to Medicine Index ranks 20 large drug makers. It is a very thorough report:

The Access to Medicine Index analyses the top 20 research-based pharmaceutical companies on how they make medicines, vaccines and diagnostics more accessible in low- and middle-income countries. It highlights best and innovative practices, and areas where progress has been made and where action is still required.

The 2016 Index used a framework of 83 metrics to measure company performances relating to 51 high-burden diseases in 107 countries.

One measure that shows little recent progress is affordability, as measured by pricing arrangements that take into account different abilities to pay in different countries. I find this approach odd, because any drug company maximizes profits by engaging in fine price differentiation. This means charging a low price in low-income countries, rather than shunning the market.

Government Failure in Health Systems Is Widespread

41672305_mlThe Commonwealth Fund has published yet another survey comparing health care in the United States to health care in other countries. The title conveys its emphasis: US Adults Still Struggle With Access To And Affordability Of Health Care.

Really? As I’ve previously written, I agree utterly with the Commonwealth Fund scholars that health care in the United States is delivered inefficiently and over bureaucratized. Nevertheless, the suggestion that U.S. health care is the worst overall is not consistent with the data.

The latest survey compares 11 developed democracies. The relationship between government control of health care and various measures of health status is not at all clear, despite other countries having so-called “universal” health systems.

When it comes to actual access to care, 35 percent of low-income Americans (with household incomes below one-half the median income) had to wait six or more days to see a primary-care doctor or nurse the last time they needed care. However, so did 38 percent of low-income Germans and 32 percent of low-income Swedes.

On Virtue Signaling

45263942_mlAccusations of virtue signaling have become all the rage in certain quarters in recent years, especially on social media. And one can easily see why: the accusation is a cheap, easy, universally applicable way of disparaging someone’s expressed opinion or belief, essentially a dismissal of that opinion or belief as mere posturing in quest of approval by like-minded listeners or readers. And sometimes no doubt such an accusation is in order.

But it can scarcely be used indiscriminately without losing whatever force it might have in particular instances. If I express an opinion or belief that has moral valence—a statement whose content can be placed somewhere on the scale from vicious to virtuous—it certainly does not follow that my only reason for making the statement is to attract approval by “the right people.” It is entirely conceivable that I am simply expressing my opinion or belief in utter disregard of how anyone else might receive it, stating it ruat caelum (though the heavens fall). People do have opinions and beliefs with moral valence, and it is stupid to dismiss every expression of them as virtue signaling. Such dismissal is a rhetorical device more applicable to mere debating than to a substantive discussion.

Apocalypse—Probably Not Now

41601948 - people crowd walking on busy street on daytimePeople my age have a wider perspective than most when we think about politics and government. When I hear young friends talking as if Donald Trump’s election portends the end of civilization and every good thing it has fostered, I recall vividly how it felt to live in the USA from 1963 to 1974, a time of mass political turmoil and conflict, of large-scale military slavery, of assassinations of a president and other leading political figures, of millions in the streets protesting a seemingly endless, terribly destructive war, of domestic violence, riots, bombings, and arson, of martial law (when I lived in Baltimore in the spring of 1968), of political leaders so heinous that they beggar the imagination.

That such terrible things happened back then does not mean that equally terrible things cannot happen again. Of course, they might, and the U.S. government has a knack for finding a way to turn any situation into devastation and the suppression of people’s liberties. So the future may turn out to be very dark, indeed, but if so, that future will have to develop in a way that people are scarcely well justified in forecasting at the moment.

The Trump Transition and a Red Apocalypse?

10487405 - white house, washington dc usaPolitical observers and the media, unlike scattered groups of progressives, have accepted a Trump presidency as fact and are now focused on the transition from President Obama and its progressive executive branch. Many may be surprised to realize Donald Trump even had a transition team, given the attention to his bombastic and provocative campaign rhetoric. It’s increasingly clear, however, despite the recent shake-up at the top of the transition pecking order, many people have been working steadily behind the scenes for months to put people in key positions of influence by January in anticipation of a Trump win. I was planning to ignore much of this until I recognized several names on the leadership team, prompting me to dig deeper.

While I have not held a position in the Executive Branch, in my 30-plus years of policy work I have briefed senior executives on policy issues in both the Bush and Obama administrations, worked with federal staff and elected officials, and helped scope out legislative agendas for members. I have also worked directly with two key people on the current transition team, am familiar with many of their organizations, and know several others by reputation and through reading. So, here are a few thoughts, recognizing that all the following could change tomorrow because transition processes are very dynamic and we can only guess at Trump’s real management style.

  1. This White House is shaping up to be the left’s worst nightmare, a Red Apocalypse. Trump campaigned as a pragmatic populist—and I have seen little to suggest he has personally become more principled—but his appointment of VP elect Michael Pence to manage the overall transition suggests the people put in key management and policy positions will be largely principled conservatives. He has worked for the free-market Indiana Policy Review Foundation (a think tank I have worked with extensively), run a radio talk show, and has consistently drummed the conservative line. This suggests his hand will direct the appointment process and shape policy implementation, but as a former congressman, he is also in tune with the need to work with Congress to move an agenda forward.
  2. If Trump attempts to run government like he does his business, these appointees will have a lot of leeway and discretion in designing, interpreting, and implementing policy. Trump is not known for micromanagement. He delegates, focusing on macro performance and strategic issues and problems, rather than managing and dictating the details of his business operations. He will likely focus on the three or four main issues he emphasized in his campaign—immigration, jobs, international trade—and leave the rest to key managers and policymakers. This means that political and other appointees will matter a lot in a Trump Administration. This bodes well for innovation and free markets in some areas (but not others).
  3. A Trump Administration will most likely be “kinder and gentler” than people think. Former Ohio Treasurer and Secretary of State Ken Blackwell appears to have been appointed to direct domestic policy issues and areas. I worked with Ken and his senior staff while at the Buckeye Institute as Vice President for Research and then President between 1994 and 2004. Ken is undoubtedly a steadfast social conservative, but he is also very principled and respectful of those who disagree with him. He actively reached across aisles to put together coalitions. I believe he would use this lens for managing the transition of key staff. He is deeply interested and dives down deep into policy and examines all the angles of a policy position and then commits to the one that he believes is the right one. I saw him in a number of circumstances where he could have backed off a strong free-market policy stance but instead held his ground. He is likely to look for candidates with similar qualities. The Trump transition team leaders are not shrinking violets or people prone to compromise on core values or principles. 
  4. Extensive policy knowledge, understanding, and experience are not an anomaly. Shirley Ybarra is another example. She appears to have a key role in directing the transition for the U.S. Department of Transportation, a department that will be integral in any new spending on infrastructure. I worked with Shirley closely for a number of years while at Reason Foundation, and she has deep, deep knowledge of transportation issues and policy. She is also pro-market, and her network is extensive. I have less personal knowledge of others, but David Malpass is a serious economist with extensive policy experience and a strong free-market bent. Myron Ebell (EPA) has extensive knowledge of environmental policy and is a key staff member of the free-market Competitive Enterprise Institute. Similarly, Andrew Bremberg has a solid background in heathcare policy. On the downside, for libertarians at least, are others such as Dan DiMicco, who is leading the charge for renegotiating trade agreements such as NAFTA. While I disagree with him on trade, as CEO of Nucor he at least has deep knowledge of the interworkings of these trade deals in specific industries (although protectionist tariffs would benefit his industry substantially).

None of this is to suggest Trump will lead an Executive Branch even remotely libertarian. Several of the key transition staff are free market, but a hard conservative line is likely to emerge in the Department of Justice, Office of the Attorney General, and law enforcement. This will probably create challenges for protecting civil liberties. We have yet to see what foreign policy will look like, but Trump has signaled opposition to specific wars, not military intervention more generally as a political tactic. So, libertarians should brace and prepare for the worst even as a few rays of light crack through on economics, environmental, and healthcare policy.

Nevertheless, the transition team leadership suggests this will not be a presidency that is unhinged or unprincipled, unlike the campaign. Presidential Trump will appoint more than 4,000 people to executive positions in the federal agencies and departments. Just 1,200 require Senate confirmation. Another 1,400 serve in confidential and policy roles that do not require Senate confirmation or approval. And still others are executives who work in appointed positions that are below leadership levels requiring confirmation. While much of the media attention has focused on the top, high-profile members of the transition team, clearly most policy will be interpreted and implemented by those completely off the media radar. So, the key people in charge of the transition team and the vetting of candidates for particular departments will be critical.