The Cato Institute

A D.C.-based public policy research organization (or "think tank") dedicated to the values of individual liberty, limited government, free markets, and peace.

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Dry Run Test Event from Cato Institute on Vimeo.

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Dry Run Test Event from Cato Institute on Vimeo.

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A Fed for Next Time: Ideas for a Crisis‐​Ready Central Bank from Cato Institute on Vimeo.

Please join us for a joint Cato Institute–Mercatus Center at George Mason University virtual conference series, A Fed for Next Time: Ideas for a Crisis‐Ready Central Bank, hosted by George Selgin and David Beckworth.

During the event, submit questions on Twitter using #CatoEcon.

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Happy Valentine's Day from the Cato Institute!

If your libertarian love cares more about free markets than flowers, share these valentines with them to say “We go together like liberty and freedom.” ❤️

It's not just love that the wall can't stop! The wall simply won't work.

What better pairing could there be? In the libertarian view, voluntary agreement is the gold standard of ALL human relationships, not just romantic ones.

Keeping that paramour of yours a secret? Not from the NSA! Go ahead and hide behind that heart; there won’t be much privacy for you. Fear and mass surveillance are a constitutionally toxic political cocktail.

…unlike the federal budget. Unfortunately, budget deficits are only getting bigger under President Trump.

The federal budget deficit was $779 billion in fiscal year 2018.

Here’s why federal debt is damaging...

Cryptocurrencies and blockchain technologies, like Bitcoin, are revolutionizing the way we think about government currency monopolies, transferring money across the globe, maintaining financial privacy and security, and verifying ownership of money or potentially everything.

Married 68 years, free market economists Rose and Milton Friedman (recipient of the 1976 Nobel Prize for Economic Science) were not just skilled economists who cared about kids, they were a charming couple who will long be remembered.

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Happy Birthday to Rosa Parks, born 106 years ago today, on February 4, 1913.

Sometimes all it takes is one person or a few people saying, “We’re not going” to light the spark of a movement or a revolution, writes @CatoInstitute EVP David Boaz.

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Remembering Dr. Martin Luther King, Jr...

Dr. Martin Luther King, Jr. provided crucial moral leadership for eradicating government-enforced racial segregation in the United States…

Born in Atlanta on January 15, 1929, Martin Luther King, Jr. was a prominent activist in the civil rights movement, a spectacular orator, and a practitioner of nonviolent resistance.

King, the son of a preacher and a preacher’s daughter, decided on the ministry around the age of 19, eventually embracing a religious version of individualism known as “personalism.” Some of King’s strong attraction to that philosophy was rooted in one of its major corollaries: if the dignity and worth of all human personalities was the ultimate value in the world, racial segregation and discrimination were among the ultimate evils.

King came of age at a time when trouble was brewing over government-enforced racial segregation. The races were strictly separated by law on streetcars, buses, and railroads; in schools; in waiting rooms, restaurants, hotels, boarding houses, theaters, cemeteries, parks, courtrooms, public toilets, drinking fountains, and every other public space. These laws were been passed during the early 20th century, despite the objections of private businesses that they would raise their costs and alienate customers. 

Inspired by American individualist Henry David Thoreau and Indian nonviolent crusader Mohandas Gandhi, Dr. King, who was awarded the Nobel Peace Prize in 1964, established militant nonviolent political action as the principal strategy for attacking segregationist laws.

“As you press on with justice, be sure to move with dignity and discipline using only the weapon of love…Always avoid violence. If you succumb to the temptation of using violence in your struggle, unborn generations will be the recipients of a long and desolate night of bitterness, and your chief legacy to the future will be an endless reign of meaningless chaos…In your struggle for justice, let your oppressor know that you are not attempting to defeat or humiliate him…you are merely seeking justice for him as well as yourself.”

Dr. Martin Luther King, Jr.

Dr. King’s most fundamental principles harked back to the natural law tradition: there are moral standards for judging the legitimacy of laws. They aren’t legitimate just because government officials say they are. 

“A man-made code that squares with the moral law, or the law of God, is a just law…But a man-made code that is inharmonious with the moral law is an unjust law…Let us not forget, in the memories of six million who died, that everything Adolph Hitler did in Germany was ‘legal,’ and that everything the Freedom Fighters in Hungary did was ‘illegal.’”

Dr. Martin Luther King, Jr.

The world King saw around him made it clear that court decisions could be as bad as laws.

“Though the rights of the First Amendment guarantee that any citizen or group of citizens may engage in peaceable assembly, the South has seized upon the device of invoking injunctions to block our direct-action civil rights demonstrations. When you get set to stage a nonviolent demonstration, the city simply secures an injunction to cease and desist. Southern courts are well known for ‘sitting on’ this type of case; conceivably a two or three-year delay could be incurred…in Birmingham, we felt that we had to take a stand and disobey a court injunction against demonstrations, knowing the consequences and being prepared to meet them — or the unjust law would break our movement.”

Dr. Martin Luther King, Jr.

Dr. King aroused controversy throughout his tumultuous public career. He was jailed 14 times. He was the target of countless death threats. He was stoned, and he was stabbed. FBI Director J. Edgar Hoover warned that King was consorting with communists.  So-called liberals like President John F. Kennedy were concerned that he would provoke disorder, and Attorney General Robert F. Kennedy approved FBI bugging of King’s home, office and hotel rooms across the country. King’s home was blasted by a shotgun, and both it and a motel room where he stayed were bombed. And, on April 4, 1968, he was assassinated.

With courage and goodwill, Martin Luther King, Jr. reaffirmed the vision of a “higher law,” the idea that government laws must be judged by moral standards, a bedrock for liberty going back more than 2,000 years.

Learn more…

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Today, we're honoring Dr. Martin Luther King, Jr. He was a prominent activist in the civil rights movement, a spectacular orator, and a practitioner of nonviolent resistance. Dr. King provided crucial moral leadership for eradicating government-enforced racial segregation in the United States. #MLKDay

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Harm Reduction — Not Drug Prohibition — Is the Cure for the Opioid Overdose Crisis

Instead of doubling down on War on Drugs policies that aren't working (and might even be making the problem worse), policymakers should instead embrace harm reduction strategies...

The U.S. government’s current strategy of trying to restrict the supply of opioids for nonmedical uses is not working. While government efforts to reduce the supply of opioids for nonmedical use have reduced the volume of both legally manufactured prescription opioids and opioid prescriptions, deaths from opioid overdoses are nevertheless accelerating. Research shows the increase is due in part to substitution of illegal heroin for now harder-to-get prescription opioids. Attempting to reduce overdose deaths by doubling down on this approach will not produce better results.

Policymakers can reduce overdose deaths and other harms stemming from nonmedical use of opioids and other dangerous drugs by switching to a policy of “harm reduction” strategies. Harm reduction has a success record that prohibition cannot match. It involves a range of public health options. These strategies would include medication-assisted treatment, needle-exchange programs, safe injection sites, heroin-assisted treatment, deregulation of naloxone, and the decriminalization of marijuana.

Though critics have dismissed these strategies as surrendering to addiction, jurisdictions that have attempted them have found that harm reduction strategies significantly reduce overdose deaths, the spread of infectious diseases, and even the nonmedical use of dangerous drugs.

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Markets Empower Women

Market-driven technological and scientific innovations heighten women’s material standard of living, promote individual empowerment, reduce sexism and other forms of collective prejudice, and foster cultural change...

Over the last 200 years, economic progress has helped to bring about both dramatically better standards of living and the extension of individual dignity to women in the developed world. Today the same story of market-driven empowerment is repeating itself in developing countries.

Competitive markets empower women in at least two interrelated ways. First, market-driven technological and scientific innovations disproportionately benefit women. Timesaving household devices, for example, help women in particular because they typically perform the majority of housework. Healthcare advances reduce maternal and infant mortality rates, allowing for smaller family sizes and expansion of women’s life options. Second, labor market participation offers women economic independence and increased bargaining power in society. Factory work, despite its poor reputation, has proven particularly important in that regard.

In these ways, markets heighten women’s material standard of living and foster cultural change. Markets promote individual empowerment, reducing sexism and other forms of collective prejudice.

Women’s empowerment in many developing countries is in its early phases, but the right policies can set women everywhere on a path toward the same prosperity and freedom enjoyed by women in today’s advanced countries.

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Legalizing Marijuana Has Made the Border More Secure

Turns out, legalizing marijuana has done way more for border security than building a wall ever could...

Although President Trump cites drugs passing over the U.S.'s southern border as a major justification for erecting a border wall, new data shows that, since the legalization of marijuana, drug flow over the border has substantially decreased and fewer drugs are entering where a border wall would matter.

Because it is difficult to conceal, marijuana is the main drug transported between ports of entry where a border wall would matter. However, Border Patrol seizure figures demonstrate that marijuana flows have fallen continuously since 2014, when states began to legalize marijuana. After decades of no progress in reducing marijuana smuggling, the average Border Patrol agent between ports of entry confiscated 78% less marijuana in fiscal year (FY) 2018 than in FY 2013. 

As a result, the value of all drugs seized by the average agent has fallen by 70% since FY 2013. Without marijuana coming in between ports of entry, drug smuggling activity now primarily occurs at ports of entry, where a border wall would have no effect. In FY 2018, the average inspector at ports of entry made drug seizures that were three times more valuable overall than those made by Border Patrol agents between ports of entry — a radical change from 2013 when Border Patrol agents averaged more valuable seizures. This is because smugglers bring mainly hard drugs through ports. By weight, the average port inspector seized 8 times more cocaine, 17 times more fentanyl, 23 times more methamphetamine, and 36 times more heroin than the average Border Patrol agent seized at the physical border in early 2018.

Given these trends, a border wall or more Border Patrol agents to stop drugs between ports of entry makes little sense. State marijuana legalization starting in 2014 did more to reduce marijuana smuggling than the doubling of Border Patrol agents or the construction of hundreds of miles of border fencing did from 2003 to 2009.

As more states — particularly on the East Coast — legalize marijuana in 2019, these trends will only accelerate. The administration should avoid endangering this success and not prosecute state-legal sellers of marijuana. This success also provides a model for addressing illegal immigration. Just as legalization has reduced the incentives to smuggle marijuana illegally, greater legal migration opportunities undercut the incentive to enter illegally. Congress should recognize marijuana legalization’s success and replicate it for immigration.

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Support for Federal Paid Leave Program Depends on Cost

Americans aren’t willing to cut spending, increase the deficit, have fewer employer-provided benefits, or reduce the number of female managers in the workforce in exchange for federal paid leave...

The new Cato 2018 Paid Leave Survey of 1,700 adults finds that nearly three-fourths (74%) of Americans support a new federal government program to provide 12 weeks of paid leave to new parents or to people to deal with their own or a family member’s serious medical condition. A quarter (25%) oppose establishing a federal paid leave program. Support slips and consensus fractures for a federal paid leave program, however, after costs are considered.

The survey found 54% of Americans would be willing to pay $200 a year in higher taxes, a low-end estimate for a 12-week federal paid leave program. However, majorities of Americans would oppose establishing a federal paid leave program if it cost them $450 a year in higher taxes (52% opposed) or $1,200 a year in higher taxes (56% opposed), the mid-range and high-range cost estimates respectively.

These low-, mid-, and high-range cost estimates are based on the most high-profile federal paid leave program proposed to date: The Family and Medical Insurance Leave Act (FAMILY Act).

The survey also did not ask questions about what paid leave policies Americans would like to see offered at private companies. Instead, the Cato 2018 Paid Leave Survey focuses on what people think about establishing a government-provided paid family leave program at the federal level.

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Bad News (And Some Good News) on Human Rights Day

Globally, human freedom in retreat, while nationalism, populism, and hybrid forms of authoritarianism gain strength....

Today, on Human Rights Day, the @CatoInstitute is pleased to release the fourth annual Human Freedom Index (HFI), the most comprehensive measure of freedom ever created for a large number of countries around the globe.

The report measures a broad array of personal, civil and economic freedoms around the world and the extent to which basic rights are protected or violated. The HFI captures the degree to which people are free to enjoy important rights such as freedom of speech, religion, association, and assembly, and also measures freedom of movement, women’s freedoms, crime and violence, and legal discrimination against same-sex relationships. 

Because freedom is inherently valuable and plays a role in human progress, it is worth measuring carefully. The Human Freedom Index, co-published by the Cato Institute, the Fraser Institute in Canada, and the Liberales Institut at the Friedrich Naumann Foundation for Freedom in Germany, ranks 162 countries based on 79 distinct indicators of personal, civil, and economic freedom, using data from 2008 to 2016, the most recent year for which sufficient data are available. The index is a resource that can help to more objectively observe relationships between freedom and other social and economic phenomena, as well as the ways in which the various dimensions of freedom interact with one another. 

New Zealand and Switzerland are the two freest countries on this year’s index, while Venezuela and Syria rank last. The United States ranks 17, notably below its best index ranking. In 2008, the U.S. ranked 11, then fell notably until 2013, after which it rose through 2016, the latest year for which the index gathers sufficient data that is comparable globally. 

Unfortunately, more countries than not have seen their level of freedom decline, compared to 2008 or to last year’s report. Overall, the report finds global freedom fell slightly since 2008 from 7.07 to 6.89 on a ten point scale.

Over that longer period, notable deteriorations occurred in Russia, Hungary, Argentina, and, in more recent years, Turkey. Some of the largest drops in freedom in the world occurred in Greece and Egypt, further reflecting a strengthening of populism and authoritarianism that have afflicted countries on every continent in the past decade.

The good news is that over the long term, freedom has spread to a diversity of countries too, including numerous ex-socialist countries, Latin American nations, one sub-Saharan African country (Mauritius) and several Asian countries that all belong to the top quartile of the freest countries in the index. Many are on the rise, and some, like Taiwan, have seen notable increases in freedom in recent years.

Learn more, and join the conversation on Twitter with #FreedomIndex18...

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Why do we measure freedom? Because freedom is inherently valuable and plays a central role in human progress.

The United States ranks 17th in the fourth annual Human Freedom Index (HFI), the most comprehensive measure of freedom ever created for a large number of countries around the globe. Overall, the report finds global freedom has fallen slightly since 2008.

“The Rule of Law continues to be a weak point for the United States, which has relatively low ratings when it comes to such areas as the protection of property rights, the enforcement of contracts, and criminal justice,” says co-author Ian Vásquez. “The Rule of Law plays a fundamental role in upholding liberty, so anyone who cares about freedom in the United States should be concerned with its evolution.”

Explore the 2018 Human Freedom Index — released today in honor of Human Rights Day — and see how your country ranks. Then, join the conversation on Twitter with #FredomIndex18...

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Humanity is Experiencing Superabundance

Every additional human being born appears to make resources proportionally more plentiful for all of us on Earth...

A new Cato Institute study that relies on 37 years worth of data for 50 foundational commodities covering energy, food, materials, and metals to develop a new framework to measure resource availability finds that, instead of making resources scarcer, population growth has gone hand in hand with greater resource abundance. The report builds on the famous wager between biologist Paul Ehrlich and economist and former Cato Senior Fellow Julian Simon on the effect of population growth on the Earth's resources. While Ehrlich warned that population growth could deplete resources and lead to global catastrophe, Simon saw humans as the "ultimate resource" who could innovate their way out of such shortages. The Ehrlich-Simon wager tracked the real price of a basket of five raw materials between 1980 and 1990, finding as Simon hypothesized that all measured commodities decreased in price by an average of 57.6 percent, despite a population increase of 873 million. Expanding on Simon’s original insight, the new study looks at 50 different commodities and analyzes a longer time period between 1980 and 2017, finding that the real price of the commodities decreased by 36.3%. The study also introduces a new measure termed "time-price," the time that an average human must work in order to earn enough money to buy a particular commodity. They find the time-price of their basket of 50 commodities has fallen by 64.%. Put differently, commodities that took 60 minutes of work to buy in 1980 took only 21 minutes of work to purchase in 2017. Should the current trend continue, commodities could become 50 percent cheaper every 26 years.

In addition, the authors develop the concept of price elasticity of population (PEP), which allows them to estimate the effect of population growth on the availability of resources. Over the time period studied the population grew from 4.46 billion to 7.55 billion, a 69.3% increase. The PEP indicates that the time-price of the basket of commodities declined by 0.934% for every 1% of increase in population. Every additional human being born on our planet appears to make resources proportionally more plentiful for the rest of us. Using the PEP values the authors form the Simon Abundance Framework, which describes progression from decreasing abundance at the one end to increasing abundance at the other end. The authors conclude that humanity is experiencing superabundance with the time-price commodities decreasing at a faster proportional rate than the population is increasing. Finally, the authors produce the Simon Abundance Index (SAI) that represents the ratio of the change in population over the change in the time-price. Between 1980 and 2017, resource availability increased at a compounded annual growth rate of 4.32%, meaning Earth was 379.6% more abundant in 2017 than it was in 1980. The time-price of commodities could fall a further 29% over the next 37 years as humanity continues to make resources more plentiful through greater efficiency of use, increased supply, and the development of cheaper substitutes. However, for this trend to continue, market incentives and the price mechanism must endure. The world is a closed system in the way that a piano is a closed system. The instrument has only 88 notes, but those notes can be played in a nearly infinite variety of ways. The same applies to our planet. The Earth’s atoms may be fixed, but the possible combinations of those atoms are infinite. What matters, then, is not the physical limits of our planet, but human freedom to experiment and reimagine the use of resources that we have.

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Cheers to Repeal Day!

The end of Prohibition is worth toasting...

On December 5, 1933, the Twenty-First Amendment to the Constitution was ratified, supposedly ending our nation’s failed experiment with alcohol prohibition.

Prohibition brought with it violence, organized crime, unsafe alcohol practices, and denial of basic civil liberties — and it almost killed the cocktail.

Yet, 85 years later, we continue to feel the lingering effects of Prohibition, both in policy and in culture —  from blue laws, dry counties, and state-run liquor stores to the selection of alcoholic beverages available and the culture surrounding them.

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The U.S. Economy Still Hasn’t Fully Recovered from the Great Recession

Ten years after the Great Recession of 2007-2009, U.S. real GDP, productivity, and other aggregate economic indicators remain well below their historical trend levels...

For nearly 250 years, the United States has recovered from enormous economic and political shocks, including the Civil War, two World Wars, the Great Depression, and the high inflation and oil crises of the 1970s. Following each of these events, the U.S. economy returned to its previous economic trend.

In sharp contrast to this historical record of recovery, ten years after the Great Recession of 2007-2009, the U.S. economy shows no sign of recovering as it did following previous downturns — an unprecedented failure.

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Ten Reasons the Amazon Subsidies Hurt More Than They Help

Some New York and Virginia workers will be winners from the Amazon deal, but business subsidies are a loser for citizens overall...

Amazon has chosen New York City and Arlington, Virginia, for new corporate headquarters after the cities ponied up more than $2 billion in subsidies to the retail giant.

As with much of government spending, the costs of corporate pork to society are large but diffuse, while the benefits to the recipients are direct and visible.

Workers in the two cities will be winners as labor demand gets boosted, but business subsidies make losers of taxpayers, other businesses and good governance.

Ten Harmful Consequences of Handouts for Amazon

Fairness. Subsidies give Amazon an unfair edge other tech firms in New York City and Northern Virginia.

Alternatives. New York and Virginia would have generated more durable growth by cutting business taxes across the board by $2 billion. That would have boosted investment by many businesses, and thus created more balanced prosperity.

Diversity. Industry clusters such as Silicon Valley are successful not because they have big companies, but because they have a start-up culture that nurtures growth companies with venture capital. Rather than favoring big companies, state and local politicians would better spur growth by reducing tax and regulatory barriers to spawn a diversity of new companies.

Corruption. Allowing politicians to hand-out business subsidies at their discretion generates corruption because the hand-outs get swapped for campaign cash and outright bribes.

Bureaucracy. Amazon-style subsidy deals are jobs programs for accountants and lawyers.

Lobbyists. The high-profile Amazon win will inspire more companies to shake down politicians for subsidies. 

Dependency. Just as welfare undermines individual productivity, corporate welfare undermines business productivity. 

Bad Decisions. Subsidies induce companies to make bad decisions that backfire.

Politics. High-profile subsidy deals are politically risky. 

Priorities. State and local governments face serious problems that may sink their economies in coming years such as large unfunded pension costs. They should fix those problems rather than trying to micromanage the economy.

Rather than subsidizing big businesses, the states should aim to create a diverse business ecosystem — an Amazon, if you will — by cutting taxes and regulations for all types of investment. If states adopt low tax rates and repeal unneeded regulations on zoning, licensing, and other activities, growth will take care of itself.

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Free Markets, Not Government, Should Moderate Social Media Comments

Social media companies can come up with sensible-sounding policies, but there will always be tough calls...

Twitter recently re-activated conservative commentator Jesse Kelly’s account after telling him that he was permanently banned from the platform.

While some might be infuriated with what happened to Kelly’s Twitter account, we should be wary of calls for government regulation of social media and related investigations in the name of free speech or the First Amendment. Companies such as Twitter and Facebook will sometimes make content moderation decisions that seem hypocritical, inconsistent, and confusing. But private failure is better than government failure, not least because unlike government agencies, Twitter has to worry about competition and profits.

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