Category: reason

Trump and Scott Walker’s Wisconsin Foxconn Deal Is Cronyism at Its Worst

President Donald Trump is visiting southeast Wisconsin today to celebrate the groundbreaking for the construction of what he once called, “an unbelievable [manufacturing] plant, like we’ve never seen before.”

Foxconn, a Taiwanese manufacturer perhaps best known for producing iPhones in the so-called “Foxconn City” of China’s Shenzhen province, has promised to build a massive plant in rural Wisconsin and create as many as 13,000 jobs.

The deal might look good politically for both Trump and Wisconsin Gov. Scott Walker (R), who is campaigning for re-election to a third term this fall. But the Reason video below explores some of the deal’s troubling details, including $4.5 billion in state and local subsidies and tax breaks, as well as the potential seizure of family homes via eminent domain.

The Foxconn agreement, shepherded by Walker and touted by Trump, embodies latter’s view of the executive branch as financial deal broker. For Trump, the prospect of family homes being seized to make way for a private corporation is simply the (rather low) cost of doing business.

He expressed as much as a private citizen in the wake of the Kelo v. New London decision—a case where retiring Justice Anthony Kennedy was the deciding vote—which affirmed the legal right of a Connecticut town to force home sales in order to make way for the pharmaceutical giant Pfizer because Pfizer’s use of the land would supposedly spur more economic development in the area, though Pfizer never built the facility and the lots where many homes stood remain vacant 13 years later. In a 2005 interview with Fox News, Trump told interviewer Neil Cavuto that, “I happen to agree with it 100 percent.” He continued:

If you have a person living in an area that’s not even necessarily a good area, and government, whether it’s local or whatever, government wants to build a tremendous economic development, where a lot of people are going to be put to work and make area that’s not good into a good area, and move the person that’s living there into a better place—now, I know it might not be their choice—but move the person to a better place and yet create thousands upon thousands of jobs and beautification and lots of other things, I think it happens to be good.

Trump tried to use eminent domain on several occasions as a real estate developer, once attempting to evict a 90-year-old widow to make way for a limousine parking lot for his Atlantic City hotel.

Thanks to the local government of Mt. Pleasant, Wisconsin, Foxconn will receive more than 1,000 acres of land for free, the logic being that the subsequent increase in land value will pay for itself eventually in the form of higher property taxes.

Wisconsin’s use of “tax incentives” in many cases amounts to outright subsidies. For instance, the state will reimburse Foxconn 17 cents for every dollar it pays to employees, meaning the very taxpayers losing their homes will likely subsidize the paychecks of future Foxconn workers.

For all this, Foxconn has promised 13,000 jobs and billions in additional tax revenue, figures that were finalized in a handwritten deal between Walker and Foxconn’s chairman. The Wisconsin legislature estimates that the state will break even by the year 2043.

Trump headlined a press conference in July 2017 announcing the deal, along with Walker, House Speaker Paul Ryan (R–Wisc.), and Vice President Mike Pence, whose much-touted Carrier deal in Indiana quickly cratered. Walker, who repeatedly referred to the company as “Foxcom” during the presser and at one point misidentified Sony as a partner (the plant will manufacture Sharp LCD screens), said that Trump identified the location for the plant as he flew over rural Wisconsin in his helicopter. Walker has faced criticism from voters and local media for the billions in tax incentives he’s handing to Foxconn but has told critics to “suck lemons.”

The president’s visit to the Foxconn site coincides with an ongoing feud with motorcycle producer Harley-Davidson, a Wisconsin-based company. Walker is a proud biker, and his campaign ads often feature him traversing the state on a Harley-Davidson motorcycle. That makes it a bit awkward, since Trump has declared that the company will “be taxed like never before” if it moves production overseas in reaction to the E.U.’s tariffs on motorcycles. Those tariffs were, of course, imposed in retaliation for the Trump administration’s duties on foreign steel and aluminum.

Trump’s willingness to push and pull levers like eminent domain, taxation, trade policy, and the bully pulpit to bend private companies to his will shouldn’t be a surprise to anyone who’s paid attention to his rhetoric and behavior both as a private businessman and a politician.

But that high-profile Republicans and self-professed champions of the free market such as Walker and Ryan tacitly and explicitly endorse cronyist policies on such a grand scale is yet another sign that the GOP is abandoning even the pretense of being the party of free trade and more fully embracing an increasingly incoherent ideology of corporatist populism.

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Dear Democratic Socialists Who Think You’re Having a Moment: It’s Me, a Libertarian, Who’s Been Through This.

CortezUntil the Janus decision ended mandatory public sector union dues and Associate Justice of the Supreme Court Anthony Kennedy announced his retirement, Wednesday was looking like a pretty good day for the progressive left. One of their champions, Alexandria Ocasio-Cortez, defeated the fourth most powerful House Democrat in an upset primary victory—another clear sign that the energy and enthusiasm is with the Bernie Sanders wing of the party.

Democratic socialism, the ideology with which Ocasio-Cortez identifies, appears to be having a political moment. To which I say, as a libertarian who has been through the whole an-idea-whose-time-has-finally-come experience: good luck with that, comrades. The signs are easy to misread.

Yes, Ocasio-Cortez is aligned with the Democratic Socialists of America—she even has the red rose of socialism in her Twitter profile—and ran on a democratic socialist’s platform: Medicare for all, free college tuition, a federal jobs guarantee. (She also wants to abolish ICE, but that’s not really a socialist-specific idea: we libertarians want to abolish ICE, too, whereas Sanders, who can’t quite bring himself to support the elimination of a government program, does not.)

“So-called socialist ideas might be more popular than you think,” wrote Vox‘s Dylan Scott, in a wildly optimistic piece that hailed Ocasio-Cortez as “the future” of the Democratic Party. Splinter—the new go-to site for Gawker­­­-style uncompromising leftism—celebrated the fact that the Ocasio-Cortez could help normalize “the s word.”

The most starstruck members of this ideological group probably envision their ideas making headway within the Democratic Party. Who could be against socialism, as defined by Ocasio-Cortez as “democratic participation in our economic dignity” and “the basic elements that are required for an economic and socially dignified life in the United States”? (MSNBC’s Chris Hayes, to his credit, was mildly incredulous about the future Congresswoman’s “agnostic” definition of the term.)

And yet it’s easy to imagine, when things are going your way in the elections department, it’s because you’re right and people are waking up to that fact. Ocasio-Cortez’s defeat of Rep Joe Crowley (D–N.Y.) is already being compared to upstart Dave Brat’s defeat of Republican House Majority Leader Eric Cantor in 2011. I recall that many in the media saw Brat’s victory as a sign that the Tea Party was winning—that the crony-corporatist, big-government-loving wing of the Republican Party was losing out to a libertarian insurgency. In the period of time between 2009 and 2015, a group of Republicans that appeared like they wanted to shrink government stole some power from the old guard, TIME magazine dubbed Sen. Rand Paul the most interesting man in national politics, and libertarianism was finally enjoying its political moment. Even The New York Times thought so.

We now know that this analysis was, at the very least, incomplete. While it’s true that more and more people desire cultural freedom—specifically the kind of customization, choice, and control over their own lives that a libertarian worldview provides—political libertarianism had much less support than it seemed. Voters didn’t send the Tea Party to Washington to constrain government, and they ended up caring far less about crony capitalism than they did about illegal immigration. As the libertarian-leaning Republican Rep. Thomas Massie told The Washington Examiner, he though people that backed Ron and Rand Paul were voting for libertarian ideas; once these same voters turned to Trump, he realized they were not. “I realized when they voted for Rand and Ron and me in these primaries, they weren’t voting for libertarian ideas—they were voting for the craziest son of a bitch in the race,” said Massie. “And Donald Trump won best in class, as we had up until he came along.”

Ocasio-Cortez doesn’t appear crazy: she’s an eloquent, if naïve and unspecific, defender of far-left ideas. But be cautious about attributing her success to the rising salience of democratic socialism. It could be a mere anti-incumbent insurgency, or it could be no insurgency at all, given that it’s currently a one-off. During this time of heightened concern regarding the Trump administration’s treatment of immigrant children, perhaps this majority minority district just really wanted to send a young woman of color to Congress instead of an aging white man. As FiveThirtyEight‘s Nate Silver put it:

There’s no doubt socialism—as defined in incredibly loose terms as a vast social welfare system—is gaining popularity among young Democrats. But libertarians have learned the hard way that it’s all-too easy to draw unwarranted conclusions and misdiagnose the moment. Especially when The New York Times fawns over you.

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Justice Anthony Kennedy Retires, Everyone Flips Out: Reason Roundup

The end of democracy?!?! The upcoming retirement of Anthony Kennedy, announced by the 81-year-old U.S. Supreme Court justice yesterday, has struck fear and glee into the hearts of people concerned about the future of abortion access in this country—and not without reason. It’s also spawned a fair share of apoplectic doomsaying about the future of same-sex marriage, contraception access, and democracy itself.

Let’s start with Slate, which opens its piece on Kennedy’s retirement thusly:

When he heard that Supreme Court Justice Anthony Kennedy was retiring on Wednesday, a friend in his twenties told me: “Today is the darkest political moment my generation has experienced.”

“What about the day Trump was elected?” I asked in surprise.

“This is worse,” he responded. “It’s the day Trump consolidates his power.”

Or here, for instance, was the headline at Splinter:

And here is the cover of New York’s Daily News today:

The Slate piece centers on a common refrain: the fearsome tailspin launched by Kennedy’s retirement and what it could mean is a sign that “the institutions meant to constrain [the Trump administration] are proving far more pliant than we might have feared.” Some say it shows there’s too much power vested in the Supreme Court.

But this interpretation is predicated on all these doomsday predictions being true. It is, at the very least, premature, and reads a lot like the kind of narcissistic dystopian melodrama everyone loves to conjure up for their side these days. The speed with which progressive activists and serious media types reached for the Handmaid’s Tale analogies again is telling.

In any case, much of the concern (or dismissal of it) rings hollow from the ranks of those who tweet very different tunes when the court or Congress seems stacked another way…

…which isn’t to say it’s premature to start mobilizing against potentially awful picks or any negative consequences that could come from them—and people already are.

(For more on potential nominees, see this post from Eric Boehm.)

But being smart on this front takes avoiding the trap of thinking we live in uniquely democracy-challenging (or racist, or misogynistic, etc) times, and that’s not something either Democrats or Republicans are (or aim to be) good at. Obama is coming for your guns has given way to get an IUD now before SCOTUS bans them! And hysteria on both sides drives unproductive policy discussion as well as truly painful cable news segments.

For an even-handed look at Kennedy’s legacy, see this piece from Ilya Somin at The Volokh Conspiracy. As for what this could actually mean for abortion access—and politics—in this country: “Kennedy was the firewall for abortion rights for as long as he was there,” Mary Ziegler, a law professor at the Florida State University, told The New York Times.

He has been the defining force in American abortion law since the ’90s, so his absence means that Roe will be much more in peril. A decision overturning Roe is way more likely. A series of decisions hollowing out Roe without formally announcing that’s what’s going on is pretty likely, too.

As long as Kennedy was the swing vote, there wasn’t even really much of a point in asking the court to overturn Roe; now, we’re kind of in a brave new world. The question now is: ‘Who are you talking to? Who’s the swing vote? Who do you need to win over?’ It’s a complete game-changer.

But in what direction the game will go is anyone’s guess.

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Adventures in GMO labeling. After Vermont passed a law in 2014 requiring foods made from genetically modified organisms (GMOs) be labeled as such, “GMO-labeling initiatives were soon popping up on ballots all over the country, and Congress eventually passed a national labeling law in 2016,” notes The Atlantic in a new exploration of Vermont’s adventures in GMO labeling.

In the heat of political battle, both sides presented the labeling situation as do-or-die. The Organic Consumers Association, which supported labeling, likened mandatory GMO labels to a “kiss of death” and credited them for driving GMOs out of grocery stores in Europe. On the other hand, opponents of labels argued that they would unnecessarily scare shoppers, as GMOs pose no unique threat to safety despite the negative public perception of them. A GMO label, National Geographic wrote in 2016, might as well be “a skull-and-crossbones.” Tens of millions of dollars were spent in the fights, most of by food companies opposed to labeling.

And after all that?

A new study has found that Vermont’s GMO labeling law may have even decreased opposition to GMOs.

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  • Good morning from President Trump: “Russia continues to say they had nothing to do with Meddling in our Election! Where is the DNC Server, and why didn’t Shady James Comey and the now disgraced FBI agents take and closely examine it? Why isn’t Hillary/Russia being looked at? So many questions, so much corruption!”
  • Thirty-six members of Congress, including 22 Republicans and 14 Democrats, are backing new legislation to grant statehood to Puerto Rico.
  • A new Congressional Budget Office report says our national debt will double as a share of the economy in the next three decades.

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Telling the Truth on Trade With China: New at Reason

We hear quite a bit of misleading rhetoric against China these days, writes Veronique de Rugy. Let’s grant, for argument’s sake, that the Chinese overproduce steel, dump some of that steel into Canada and Europe before it makes its way to the United States, pilfer intellectual property, and have a plan to dominate the world by 2025. It’s still not a good reason to protect a few privileged American producers by slapping tariffs on the stuff other U.S. firms use to manufacture their goods—or for the government to restrict the supply of goods that households consume to raise their standard of living.

View this article.

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Why Are Americans Adopting Fewer Foreign Children?: New at Reason

International adoptions are currently down 80 percent since 2004, according to a report from the State Department, marking an end to the high international adoption rate that persisted throughout the ’80s, ’90s, and early aughts. The reason might not be decreased demand but, in some cases, increased government meddling.

In 2004, there were nearly 23,000 children adopted into the United States. By 2014, that number had fallen to less than 7,000, and by 2017, that number was hovering around 4,700 according to State Department estimates. There are plenty of competing theories about why this is—some scholars claim the declining role of churches (especially evangelical ones) might be the culprit. Ryan Hanlon, the vice president of the National Council for Adoption, told NPR’s Morning Edition on Monday that conflicts like World War II, the Korean War, and the Vietnam War have historically compelled people to open their homes to children in need.

Other experts agree, writes Liz Wolfe.

View this article.

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Reality Winner Accepts Harsh 5-Year Sentence for Leaking Russian Hacking Report

Bail coverReality Winner has agreed to serve 63 months in federal prison for leaking a classified document about Russian election meddling to the press.

Winner, a former National Security Agency contractor who worked near Augusta, Georgia, has been sitting in jail since last June, when she was caught passing along an NSA report detailing how Russian hackers tried to infiltrate U.S. voter registration systems prior to the 2016 presidential election. The Intercept published a news story based on the report, and Winner was tracked down as the source.

Winner was in a tough bind for two reasons.

First, she was charged under the Espionage Act. Although that law was intended to catch spies who give information to enemy governments, it does not have any exceptions for whistleblowing or divulging information in the public interest. That is why Edward Snowden fled to Russia.

Second, Winner had been denied bail. Although she was clearly no threat to others, judges accepted the argument that she might be a flight risk because of what happened with Snowden, even though she had handed over her passport and had agreed to electronic monitoring.

The fact that Winner has been behind bars since her arrest may help explain why she accepted a deal that is pretty harsh given the circumstances. Trevor Timm notes at The Intercept that Winner’s sentence is the harshest so far for a media leak from a civilian. Had she been found guilty, she would have faced a potential sentence of up to 10 years, but possibly less.

Winner will end up serving two fewer years than Chelsea Manning, who leaked a whole lot more classified information than Winner did. Manning, who originally got 35 years, is free only because of President Barack Obama commuted her sentence.

A study published in the February issue of the American Economic Review found that defendants who remained in jail before trial were more likely to plead guilty and more likely to be found guilty than defendants who were free. They also tended to receive longer sentences. The report’s authors attributed the differences partly to the “strengthening of defendants’ bargaining positions before trial.” Defendants who are not in jail can meet and talk with their attorneys whenever they want, not just when the jail permits it, and they don’t have to endure the harshness of life behind bars while they wait for the wheels of justice to turn, ever so slowly.

These disparate outcomes are part of the argument for reforming pretrial detention so fewer defendants are kept behind bars, as I explain in the cover story of Reason‘s August-September issue, which will hit mailboxes and newsstands soon.

Could Winner had gotten a better deal if judges had allowed her to remain free while she negotiated with prosecutors? John Kiriakou, a former CIA analyst, was indicted under the Espionage Act in 2012 for revealing classified information about the CIA’s role in waterboarding prisoners. He was released on bail and eventually agreed to a plea deal that included a 30-month sentence, half of what Winner faces.

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Brickbat: When We Said We Want ‘Inclusivity,’ We Didn’t Mean That

BibleThe Anvil Centre, which is owned and operated by the city government of New Westminster, British Columbia, canceled a Christian youth event after officials found that one of the speakers is a critic of B.C.s sexual identity and orientation curriculum for schools. “It sort of came to light what the event was actually about, and it’s clearly not in alignment with the City of New Westminster’s mission,” said Heidi Hughes, director of sales and marketing for the venue.

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Report: The IRS’s Customer Service Is As Terrible As You’d Expect

Improving the Internal Revenue Service’s poor customer service should be a “top priority” for the agency’s next commissioner, according to an internal IRS watchdog.

Although the IRS’s own performance measures indicate it is doing just fine, those measures don’t tell the whole story, National Taxpayer Advocate Nina Olson’s says in her mid-year report to Congress, which was released on Wednesday. Two other measures, the American Customer Satisfaction Index and the Forrester U.S. Federal Customer Experience Index, reveal “taxpayers are not being well served.”

The IRS claims live representatives answered roughly 80 percent of toll-free phone calls from customers during the 2018 filing season. But according to Olson, IRS personnel answered just 29 percent of those calls. Many of the other calls involved an automated system or ended when the customer hung up.

The IRS says 90 percent of customers who called on the toll-free line were satisfied with their experience, but that number is misleading as well. As The Hill reported, the only people surveyed were those who actually spoke to a live representative, meaning the people most likely to be unsatisfied with their customer service experience didn’t get the chance to say so.

Olson cites cuts to the IRS’s budget as well as “the need to implement several significant new laws” as reasons the agency has been stretched thin. She lauds a bill passed by the House of Representatives in April that she says “would direct the IRS to develop a comprehensive customer service strategy within one year,” calling it “a step in the right direction.”

Customer service deficiencies aside, Olson says the agency’s biggest challenge is implementing the Tax Cut and Jobs Act of 2017. She is confident, however, that the IRS “will deliver what it has been asked to do.”

Olson’s report was released one day before President Donald Trump’s nominee to lead the IRS, Charles Rettig, will appear before the Senate for his confirmation hearing. If confirmed, Rettig will lead the IRS through 2022.

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Could Sen. Mike Lee Replace Justice Anthony Kennedy on the Supreme Court?

Supreme Court Justice Anthony Kennedy has written his final opinion and will retire from the bench later this summer. Sen. Mike Lee (R-Utah) has an idea about who might be a suitable replacement.

“If somebody asked me if I would consider that, I would not say no,” Lee told reporters on Wednesday, not long after news broke that the 82-year-old Kennedy would be retiring. That’s quite a change from two years ago, when Lee quickly shot down rumors that he would be interested in a Supreme Court appointment.

Lee might very well be asked. His is one of 25 names on the White House’s official list of potential Supreme Court picks—a list that was originally put together by Donald Trump’s campaign prior to the 2016 election and was most recently updated, according to the White House website where the list now resides, last November. Trump on Wednesday indicated that Kennedy’s replacement would be drawn from that list, which also includes Lee’s brother Thomas, who currently sits on the Utah Supreme Court.

It’s likely that we will know the identify of Trump’s second Supreme Court nominee pretty soon. A spokesman for Senate Majority Leader Mitch McConnell (R-Ky.) indicated that Kennedy’s replacement could be confirmed before the midterm elections in November, and rank-and-file Republicans want confirmation hearings to be held sometime in August or September. Everything else that might be on the congressional agenda for the second half of the year—although there wasn’t much—seems to have been knocked down a peg.

How serious is Lee’s bid to be the first sitting senator named to the Supreme Court since Hugo Black in 1937? He’s probably not a front-runner, as even he acknowledged Wednesday, noting that his lack of judicial experience would likely count against him.

Still, conservatives have plenty of reasons to like the prospect of a Justice Mike Lee. “I think the single best choice the president could make to fill this vacancy is Senator Mike Lee,” Sen. Ted Cruz (R-Texas) told CNN on Wednesday. “I think he would be extraordinary.” When he was seeking the White House in 2016, Cruz indicated that Lee would be his top pick to fill the vacancy that then existed on the high court.

Lee has been short-listed for the Court by the Heritage Foundation, a conservative think tank. He has received positive reviews from conservative legal experts and top Republican donors (the details of which were explored by The Washington Post in April 2016, when Lee’s name was bubbling around the GOP primary field as a possible SCOTUS pick) and would surely enjoy broad support from his fellow Senate Republicans. And Lee’s history of sharply criticizing NSA spying and his support for criminal justice reform would make it “at least possible that one or more liberal-minded senators might give him some degree of support,” as Reason‘s Damon Root noted around the same time.

If Republicans see this Supreme Court vacancy as a chance to overturn Roe v. Wade and ban abortion—and there are some indications that they do—Lee again fits the bill. He authored the bill that banned abortions after 20 weeks in Washington, D.C.

Possibly the best argument for Lee: He is just 44. That would make him the youngest justice since the 1960s, allowing Republicans to reshape the Court until the middle of the century, assuming that Lee would serve at least 30 years.

Losing one of the few senators with libertarian sympathies would be a blow for those who want to see Congress reassert itself as a coequal branch of government responsible for checking, rather than enabling, the power of the executive branch. Still, libertarians would be hard pressed to find much reason to complain about Lee sitting on the Supreme Court, where he could fill Kennedy’s “swing vote” role and steer the court in an originalist direction.

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