Policy pieces

(Photo By Tom Williams/CQ Roll Call)

After a relatively quiet August recess, Congress returned to the Hill this week amid the specter of a multi-front battle that promises plenty of ink for headlines in the coming weeks.

With threats from Sen. Ted Cruz to shutdown the federal government over funding for Planned Parenthood, the intra-party fight between conservative hardliners and GOP leadership is almost certain to boil over.

On the foreign policy front, Republicans are pressing forward with plans to vote on a resolution condemning the Iran nuclear deal despite that President Obama has secured enough support to sustain his veto.

At present, only 21% of American voters support the deal, which means that Republican leadership intend to score a political victory by forcing Obama to openly oppose public sentiment.

Amid all the furor, Pope Francis’ visit to DC later this month is expected to stoke the fires of partisanship with both parties publicly anticipating a tongue-lashing for the other in the pontiff’s address to a joint-house gathering at the capitol.

Photo by Gage Skidmore

Yesterday, Donald Trump released his first policy white paper, unsurprisingly about the issue on which his campaign and his appeal to his supporters is most solidly based: immigration.

Brief, at times undetailed, and coming in at about 1800 words, it will not change the minds of his critics who charge that his positions have lacked specifics. At the same time, it is bold, controversial and seeks major change in every area his backers could have hoped for.

There are, however, at least three proposals that are unrealistic, unconservative, fiscally or economically irresponsible or some combination of the above.

  1. Make Mexico pay for the border wall

This first section of the plan echoes what might have been thought an off-hand debate remark by Trump, but here he doubles down on it. Mostly, this part of the paper counts the costs of illegal immigration – fiscal, economic and personal – but only briefly at the end offers a plan to actually force the Mexican government to pay for the wall.

This comes in the form of raising fees and costs on Mexicans coming to the United States:

  • Impound all remittance payments derived from illegal wages
  • Increase fees on all temporary visas issued to Mexican CEOs and diplomats (and if necessary cancel them)
  • Increase fees on all border crossing cards – of which we issue about 1 million to Mexican nationals each year (a major source of visa overstays);
  • Increase fees on all NAFTA worker visas from Mexico (another major source of overstays)
  • Increase fees at ports of entry to the United States from Mexico [Tariffs and foreign aid cuts are also options].

Notably, only one of these directly impacts illegal immigrants. Only one other actually impacts Mexican government officials – here, diplomats. His final idea will impact the Mexican economy, but only at the cost of impacting the American economy as well. (It is not the last idea Trump has to raise costs for American consumers.)

If we assume for a moment that the Mexican government cares about increased costs for migrant workers – something it seems safe to doubt – there are still three unanswered questions: 1) can Trump get all of the increases passed in Congress, 2) can they actually be raised significantly enough, and 3) how much will Mexico actually feel the hit economically?

Color me skeptical that this will make Mexico enthusiastic about picking up the tab for our border security.

Another problem with this part of Trump’s plan: he is correct that both NAFTA workers with visas and those who cross the border legally with cards who overstay make up a large number of the immigrants here illegally – in fact about 40%.

But while Trump wants to crack down on overstays by increasing the penalties on those who do it, his increases in fees fall on those who are coming here legally in the first place. His plan, then, is to disincentivize Mexican workers and others from obtaining the legal right to come here (and possibly to work) by raising the costs of doing so in order to bring down the number of illegal immigrants here in the long run.

It doesn’t take a degree in economics to realize that this will simply make it more attractive for potential Mexican migrants to eschew the legal process and come here illegally if they are desperate for work. In other words, Trump’s plan is to decrease illegal immigration by means that will also increase it.

  1. Ending birthright citizenship

Here it seems that Trump wants to amend the Constitution. The 14th Amendment, passed in 1868, enshrined what was largely practice in the United States from the time of the framers: those born within the territory of the United States are considered to be citizens.

The relevant clause reads:

“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside.”

If Trump simply wants to end birthright citizenship outright, he would be departing from hundreds of years of precedent that allowed children born to people here legally who were not yet obtained citizenship to be citizens themselves by matter of birth, granting those children many of the opportunities their parents hoped to make available to them legally.

(The Federalist’s Ben Domenech lists a number of great Americans whose right to citizenship Trump would be calling into question.)

Certainly one can argue that “and subject to the jurisdiction thereof” implies that birthright citizenship does not extend automatically to everyone born in the United States. This still requires legislation specifying that children of illegal immigrants don’t count – good luck with that, Donald – and a Supreme Court that upholds it.

Perhaps Trump does intend to pass legislation saying that only children born within U.S. borders to people here illegally will no longer receive birthright citizenship. He doesn’t say so. It might be possible to overlook that detail if it were be proposed in an op-ed. Unacceptably, he fails to make the distinction in his own white paper – albeit a short and vague white paper.

Even Mark Krikorian of the very conservative Center for Immigration Studies believes “ending birthright citizenship would only be possible along with amnesty for those undocumented immigrants already in the country so that their children would be citizens,” according to The Washington Post.

The story goes on to explain that “otherwise…he would be worried about the unauthorized population—unable to work and without any legal connection to their native country.”

  1. Increase prevailing wage for H-1Bs

H-1Bs are essentially work visas for foreign workers with specialized skills. By raising the minimum wage that can be paid H-1Bs, Trump is hoping to attract American citizens with specialized skills to the jobs H-1B workers would otherwise take for lower wages.

Apparently, Trump is fine with minimum wage controls as long as they shut out Mexicans and other foreign workers. Economic laws will still be in effect, of course, so prices will still go up for American consumers. (We already saw that Trump is okay with this outcome.)

On top of this, he wants to institute a “hire Americans first” requirement. This is no different economically from unions, whose entire purpose is to keep other people from competing for jobs in order to protect their own. Again, economic laws tell us this promotes inefficiency and raises prices. This is a time when the American middle class can’t afford it.

Again, these are crackdowns on foreigners here legally. It is not an attempt to discourage law-breaking. The only difference between his proposals and the minimum wage laws and unions that almost all conservatives recognize are too prevalent is the people who are shut out – even though they broke no laws.

Trump is successful businessman and he understands basic economics. It is clear that he is proposing nonsense policies because it is what some want to hear. What America really needs is a free market.

There are good and important policies in the Trump plan, such as the mandatory deportation of illegal immigrants who committed crimes here, as well as stiffer penalties for those who overstay their legal visas.

What America doesn’t need is a president whose immigration policy is overrun with anti-free-market protectionism and who stokes undue fear about people who come to this country legally, like most of our ancestors did.

AP Photo/Jacquelyn Martin, File

The doubt over an increasingly tenuous Chinese economy exacerbated by several rolling downgrades of the yuan last week in Beijing has investors and central bank officials on edge.

Given its central roll in global exports along with pride of place in international stock markets, the devaluation of the currency has experts calling for drastic action to forestall a broader global recession.

That dialogue among leading economists has included finger pointing, largely at the Federal Reserve and Chairman Janet Yellen, for its lack of response to what is being called a crisis in the making.

According to critics, the Fed is exploring new options for how to respond in the face of a potential recession, but with QE having already been exhausted few options are left on the table.

Prior to the Chinese fallout this summer, reports indicated that the Fed has strongly considered raising interest rates for the first time in almost a decade. But, should the Chinese crisis extend to global markets, few have any idea how Yellen and her colleagues might prevent ill effects on the American economy.

"Discount Medical Marijuana - 2" by O'Dea

“Getting arrested for marijuana use may be more harmful than the drug itself — at any age.” – Center on Juvenile and Criminal Justice

Last week on Conservative Intel, I asked the question whether conservatives can and should lead in the area of criminal justice reform and then considered the issue of mandatory minimum sentences. There is another area of criminal justice where reform holds a number of potential benefits conservatives should consider: marijuana decriminalization or legalization.

Indeed, many conservatives are in favor of some changes to marijuana law. Marco Rubio is just one Republican presidential candidate who is open to considering legalization.

And note, for example, that the two major pieces of legislation concerning mandatory minimum sentencing reform involve drug offenses: the Justice Safety Valve Act of 2015 and the Smarter Sentencing Act of 2015, co-introduced by Senators Rand Paul and Mike Lee, respectively.

The Justice Safety Valve Act will expand the exemption to mandatory minimums beyond only first-time offenders, which is current law – according to the judge’s discretion if he determines the offender is not a public safety risk.

And Families Against Mandatory Minimums (or FAMM) says that the Smarter Sentencing Act “reduces prison costs and populations by creating fairer, less costly minimum terms for nonviolent drug offenders.”

(Of course, there are dangers that come with putting too much discretion in the hands of judges, as discussed last week.)

Marijuana laws present a potential opportunity for beneficial returns in two general areas. First, reforms could result in lower prison populations which would save governments money at various levels, thus possibly saving taxpayers money. Second, individuals using or possessing marijuana could avoid a criminal record and the prison time that would result in them falling behind in the workforce and being separated from their families.

With most drugs, it seems likely that an overarching federal policy should be adopted. Think of the trouble that might arise if cocaine were legal in, say, New Mexico but not Arizona. Both the Commerce Clause and the national security powers of the federal government could be invoked as justifications of policies enacted to avoid the potential interstate violence that smuggling might bring about.

Marijuana is a different story. Few can imagine public danger from interstate smuggling of such a mild and readily accessible drug. Therefore, it seems that federalism can work its wonders here: trial and error can help us arrive at workable policies in all parts of the country.

Recreational marijuana is now legal in Alaska, Washington and Colorado. Another 18 states have legalized it for medicinal purposes. Some states have decriminalized possession up to a certain amount.

Arguments have been made that legalization of marijuana will cause usage to drop, at least among underage teens. However, there are conflicting conclusions about whether legalization (in some capacity) has resulted in increased or decreased usage, so far. For example, an article in Forbes concludes it does not among teens. On the other hand, an article in Real Clear Policy concludes that it does among teens. (“Medical-marijuana laws, the authors conclude, ‘amplify’ rates of youth marijuana use, arguably because they allay social stigma and placate fear of a negative health outcome.”)

Decreasing usage among teens is not the only reason proponents have argued for legalization or decriminalization. There is the economic one: legal, taxed marijuana could bring in as much as $10 billion in government revenue. That’s more than 25% of what the federal government spends in foreign aid.

Supporters of legalization also point out that both alcohol and tobacco can cause personal harm and judgmental impairment that risks harm to others, yet both are legal (and regulated). Considering that marijuana is not on the same level of danger to others as heroin, to take one example, why not legalize it as well? In other words, if usage does not decline (or goes up), does that in and of itself mean that the costs outweigh the benefits?

More libertarian-leaning conservatives, at least, do not desire government to prevent individuals from using drugs that are harmful if they choose – that is up to the individual. So while there are still debates over how addictive marijuana is or whether it lowers one’s IQ, the operative question where legalization is concerned it how much it impairs the user.

The jury is still out on that. A study by the National Institutes of Health found that impairment one experiences from the THC in marijuana varies more than alcohol relative to the user’s tolerance level. Marijuana users are more aware that their judgment is impaired than people who are drunk, so they tend to compensate more. That being said, being high definitely affects the various abilities that make driving possible.

From Popular Science:

“We know that when people smoke marijuana they lose some of their peripheral vision,” Huestis says. “We know it affects the passage of time, or the idea of how rapidly time is passing. It affects balance. And one of the most interesting areas it affects is the prefrontal cortex.”

Driving is an exercise in timing, multitasking, and situational awareness — and not one well suited for the cannabinoid-impaired.

If marijuana were legalized and regulated, could cops test drivers like they do for alcohol? Because, again, one’s tolerance level determines to a greater degree than with alcohol how high one is, how much THC is in the blood is not as determinate a factor. Additionally, THC can effectively “hide” in fat cells, while still affecting judgment.

Also, are cops going to administer blood tests on the side of the road? It seems unlikely. The Popular Science article goes on to note that the most promising solution right now seems to be oral specimen testing, or saliva sampling.

Finally, as mentioned at the beginning, there is possibility of reducing the level of incarceration in America. Drug offenders make up about one-fifth of American prison population. An article in The Economist noted that drug-related offenses (not just marijuana-related) accounted “for about 20% of the increase in the incarceration rate” between 1984 and 2009.

It should be kept in mind that public policy does not have to go from complete illegality to complete legality. Consider the following from a RAND Corporation research report:

Marijuana policy should not be viewed as a binary choice between prohibition and the for-profit commercial model we see in Colorado and Washington. Legalization encompasses a wide range of possible regimes, distinguished along at least four dimensions: the kinds of organizations that are allowed to provide the drug, the regulations under which those organizations operate, the nature of the products that can be distributed, and price.

Indeed, the Center on Juvenile and Criminal Justice compared Colorado’s and Washington’s legalization models to the decriminalization models of California, Connecticut and Massachusetts.

They found, among other things (and, again, in some contradiction to other studies) the following:

  • All five states experienced substantial declines in marijuana possession arrests. The four states with available data also showed unexpected drops in marijuana felony arrests.
  • States that decriminalized marijuana for all ages experienced the largest decreases in marijuana arrests or cases, led by drops among young people and for low-level possession.
  • Marijuana decriminalization in California has not resulted in harmful consequences for teenagers, such as increased crime, drug overdose, driving under the influence, or school dropout. In fact, California teenagers showed improvements in all risk areas after reform.

The study concludes by recommending that states “move toward full legalization, regulation, and taxation of marijuana production, sale, possession, and use.”

We may not agree with the behavior or marijuana use, but if a teen does something stupid – as teens do while growing up and learning to be more responsible – and then gets caught, should he have that on his record? This could incentivize learning more criminal behavior because legitimate employment will be harder to come by and knowledge of crime is readily available in prison.

Crime, including marijuana-related crime, disproportionately affects minorities, particularly black men. Although the Center on Juvenile and Criminal Justice found racial disparities in arrest rates both before and after the changes in marijuana law, the reforms did more or less proportionately bring down arrest rates among African-Americans.

As I said in last week’s article, crime certainly needs to be punished. But what should be a crime? Is marijuana a danger to society? In free societies, there are always dangers. Is the danger enough to warrant criminalization? Is the trade-off that criminalization brings worth it? Are the costs of prison time and a criminal record – their effects on families and employment opportunities – outweighed by the benefits of keeping marijuana illegal? Where is the best balance to be found?

These are the questions conservatives should and are beginning to ask. The founders’ genius implementation of federalism may hold the key to finding the answers.

“We’d much rather see people order their own lives than have government do it for them. No conservative should be happy to see large numbers of his compatriots under direct government control.” – Rachel Lu

President Obama made news this week by commuting the sentence of 46 non-violent federal drug offenders. But he’s not the only one departing from the “tough on crime” stance that dominated both sides of the aisle in the 80s and 90s. Today both sides of the aisle are thinking of swinging the policy pendulum back in the other direction.

Is this an area where conservative reforms are desirable and where conservative can lead? The Federalist’s Rachel Lu lists 7 reasons why conservatives should stand for reforming America’s criminal justice system, including fiscal and personal responsibility and our support for stable families and freedom.

Of course, true conservatives believe in justice, accountability and moral order, as well as public safety. Are there ways in which Americans can be as safe or safer as a result of reform?

There are at least a couple areas in which conservatives could consider reform: mandatory minimum sentencing and marijuana laws. I’ll discuss the first of these here.

Mandatory minimum sentence recently has become a topic of conversation on the Right. Rand Paul has called for reform, co-introducing the Justice Safety Valve Act of 2015, which would apply to all federal mandatory minimums. Mike Lee co-introduced the more narrowly tailored Smarter Sentencing Act of 2015.

Newt Gingrich supported mandatory minimum sentence reform during his presidential run in 2012, after writing the following in an op-ed in 2011:

There is an urgent need to address the astronomical growth in the prison population, with its huge costs in dollars and lost human potential… We can no longer afford business as usual with prisons. The criminal justice system is broke, and conservatives must lead the way in fixing it.

Rick Perry closed three prisons while governor of Texas. Even John Boehner is on record as being for sentencing reform.

Mandatory minimum sentencing is the requirement that certain laws be punished by a minimum amount of prison time. If a lot of people are convicted of crimes that call for long sentences, it can result in a large incarcerations rate over time, which means more prisons are built and maintained. That costs money – hence why Rick Perry touted the fact that he closed the prisons in Texas.

Spending a lot of money in an effort to keep dangerous people out of society may very well be a worthwhile trade-off, one that liberals have a hard time understanding. As Thomas Sowell has mentioned from time to time, liberals have difficulty understanding why we might have high numbers of people in prison at the same time as having low rates of crime.

That said, The Washington Post’s Reid Wilson reported that Texas’ reforms had saved the state $3 billion as of late-2014. How was Texas’ system reformed? Legislators knew they couldn’t do away with mandatory minimums without being accused of going soft on crime.

“[I]nstead of building new prisons, Wilson writes, “[They] built a treatment system.” Inmates who violated parole would stay in the treatment facilities instead of the more expensive prisons. This is intended to “[get] an offender’s attention without locking them up.”

Furthermore, some people who suffered from mental illnesses were able to avoid jail by particiating in pre-trial diversion programs which were “overseen by officers who specialize in mental health and drug treatment.” Wilson summarizes:

Crucially, the reforms gave prosecutors who recommend sentences and the judges who impose them a third option besides prison or parole…

For anyone concerned that crime rates must necessarily rise if prisons are closed and the incarceration rate drops, an article in US News and World Report states, “In the last five years, the Lone Star State’s imprisonment rate declined by 10 percent, while crime has dropped 18 percent.”

The piece goes on to note that “states that have recently sought to cut their incarceration rates have seen their crime rates drop by a greater amount than others where prison populations have expanded.” Correlation is not causation, but it at least shows that crime can drop alongside incarceration rates.

On the other hand, some reports show that mandatory minimum sentencing laws contributed to the drop in the overall drop in crime in the 1990s.

Evan Bernick and Paul Larkin at the Heritage Foundation make a great point:

[T]he arguments against mandatory minimum sentences are, at their core, just a sleight of hand. The principal objection to mandatory minimum sentences is not that they are mandatory, but that they are severe or that they are required for drug offenses. No one would object to a mandatory 30-day sentence for possession of heroin or a mandatory one-year sentence for rape… Critics are concerned less about the mandatory nature of federal sentences than they are about their length and their use in drug cases.

I suspect that many opponents of mandatory minimum sentences would willingly concede that this is indeed their point, while maintaining their opposition at least until some other way of ensuring less severe sentences those cases were found.

Additional arguments against doing away with mandatory minimums include the potential for discrimination in sentencing if judges are given too broad discretion, as well as the possibility that the sentences will become too lenient. Public policy could find ways around especially the latter problem, but it must take them into account first.

And that is the whole point of the conversation now: if punishment is too harsh or does not sufficiently take into account the possibility of repentance and the potential of human beings who are willing to turn their lives around, it must be reformed.

At the same time, if the arguments are correct, it means that the “tough on crime” movement swung the pendulum too far in the direction of punishment and away from lenience. A reform movement that isn’t careful could swing it back too far in the other direction and thereby not punish or deter crime and endanger the public safety.

What are the solutions currently being considered by Congress? Again, two of the major pieces of legislation aimed at reforming mandatory minimum sentencing are the Justice Safety Valve Act and the Smarter Sentencing Act.

The former allows judges to waive the mandatory minimum whenever that term does not fulfill the goals of punishment and other sentencing criteria, such as: to keep the public safe, prevent unwarranted sentencing disparities between similarly-blameworthy offenders who commit similar crimes, and to deter others from committing crimes.

The latter would require courts to ignore the mandatory minimum in drug-related cases if the defendant had no more than one prior criminal history point.

Both the federal and state governments could also consider reforms like those instituted in Texas.

Without a doubt, justice must be served and public safety and order maintained. However, is it necessary that a man who commits a non-violent drug offense in his 30s be required to stay in prison until his 60s?

Putting people in prison, the majority of whom are males, often means disrupting families, especially minority families. Because children from broken families are more likely to fall into crime themselves, it can become a cycle.

There is no avoiding punishing crimes, including with incarceration, and neither should there be. However, are the human costs from the loss of individual potential, as Gingrich mentioned, to family breakdown too high to justify long sentences for non-violent crimes? This is the sort of question that should at least be discussed.

Photo by Missy Schmidt

Patent law has existed in America since the beginning, spurring innovation in the market by, among other things, protecting the intellectual property rights of inventors against larger companies who might want to steal the idea or stamp out the competition.

Lawmakers are looking to strengthen patent law with a new piece of legislation called the Innovation Act (H.R. 9) but it may end up doing more harm than good.

The Innovation Act is meant to crack down on “patent trolls” who file lawsuits against legitimate businesses whose patents include vague language. Fortunately, most suits are thrown out as frivolous, but it only takes one to make a patent troll rich, as the average successful suit awards $1.3 million.

This could bankrupt small businesses and upstart inventors, discouraging them from bringing great new products and services to the market. H.R. 9 was drafted to put a stop to this practice by requiring more specific details about the patent, the infringing party and more.

Without a doubt, protecting property rights and spurring innovation are conservative principles. Chuck Muth, writing in Townhall, supports the act, writing:

“[H.R. 9] does not affect the patent process or legitimate patent litigation; it only guarantees that certain safeguards are implemented that place the burden on patent trolls to prove their claim before they can extort hard-working job creators.”

Sounds good so far, but let’s examine it further.

The term “patent troll” is often used interchangeably with the more legalese term “non-practicing entity.” Non-practicing entities a responsible for somewhere between two-thirds and 90 percent of the patent suits filed – depending on who you ask – and that percentage is rising.

That sounds like a huge problem, except that non-practicing entities and patent trolls are not really the same thing. To quote Darrell Issa, “a troll is impossible to define unless you’ve been mugged by one.”

As Bloomberg BNA noted:

“Generally, a non-practicing entity is recognized as a broad term referring to a company that owns patents but does not design or manufacture a product or process. By that definition, non-practicing entities may include universities, startups, technology transfer offices, and research institutions.”

Indeed, the Association of Public and Land-grant Universities doesn’t support the Innovation Act because it is too broad, the bill does not promote technology transfer.

Opponents of the bill acknowledge that an exemption was carved out for universities (at least in the Senate version), “but that carve-out itself may be too broad because some universities license patents to other non-practicing entities that then bring suits.”

The other potential victims of a poorly-written patent bill are, again, small businesses. As The Hill’s Robert N. Schmidt writes:

“Disclosure of all plaintiff interested parties requires both investors and licensors to be disclosed by small businesses.  This discourages commerce in two ways.  First, it will require…investors to break one of their major priorities: anonymity; discouraging early stage investing, when funding is hardest to obtain.  Secondly, it will dampen licensing activities.  Licensees need time to incorporate the licensed invention into their product.  H.R. 9 requires the disclosure of the license, showing the licensee is adding a new feature, alerting their competition of their business plans.  The licensee may also be liable for legal costs, adding significant risk to the cost of the license.  Both these features encourage potential licensees to illegally infringe, rather than doing the right thing and taking a license.”

The difficulty of this process is in making patents claims more burdensome for patent trolls without making them more burdensome for legitimate patent holders, particularly small businesses and universities. As the Innovation Act shows, that isn’t an easy needle to thread.

It’s a good idea that must be done right.

Photo by Roger H. Goun

Hillary Clinton came out swinging Monday with an overview of her new economic agenda in which she took very specific shots at the top tier of the GOP field.

The plan, though not long on specifics, focuses on three pillars of economic advancement: “strong growth, fair growth and long-term growth” with key plays to traditional Democrat constituencies.

With specific mention of Jeb Bush’s “work longer hours” comments of last week, Hillary argued that American workers need raises not more work, hinting at an increase in the national minimum wage.

She also took a swipe at Marco Rubio’s proposed tax cuts arguing that it amounts to further enriching the wealthy at the expense of the federal budget.

Rounding out her critique of the GOP top-three, Hillary blasted Scott Walker for “stomping on workers’ rights” in his dismantling of public-sector collective bargaining in Wisconsin.

Republicans were quick to hit back, however. Bobby Jindal, for example, said the plan would take America down the path toward Greece.

Hillary’s new economic agenda faces an uphill battle for legitimacy, however, in that her opposition from the left in Bernie Sanders has already staked important ground in these areas.

Likewise, the air of hypocrisy is not lost on many voters who recall the Clinton Foundation having taken donations from many of the same corporations whom she argued have failed workers.

“Quoting the most-revered champion of free-market economics since Adam Smith has become a little like quoting the Bible: There are sometimes multiple and conflicting interpretations.” – Stephen Moore


Issues and public discussions of them ebb and flow depending on the news cycle. Immigration – legal, but mostly illegal – has returned due to Donald Trump’s crude remarks about Mexican immigrants and the fatal shooting in San Francisco by an illegal immigrant.

With it, and as with every issue, we can expect the return of certain memes, quotes and arguments. One such go-to quote is from Milton Friedman. It goes like this:

“It’s just obvious that you can’t have free immigration and a welfare state.”

Or like this:

“[I]t is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both.”

Friedman said both, but many people who quote him misconstrue, ignore or are unaware of his point on this issue. Let’s examine what he said in context. Giving a lecture that is easy to find on Youtube, Friedman asked rhetorically why people would say that turn-of-the-century immigration to the United States is a good thing, but that same type of free immigration today isn’t.

Why is it that free immigration was a good thing before 1914 and free immigration is a bad thing today? …. There’s a sense in which free immigration, in the same sense as we had it before 1914 is not possible today. Why not?

Because it is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. If you have a welfare state, if you have a state in which every resident is promises a certain minimal level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then it really is an impossible thing.

So far so good, but this is where Friedman begins to depart from many of the people who like to quote him. He goes on:

[N]obody would come unless he, or his family, thought he would do better here than he would elsewhere. And, the new immigrants provided additional resources, provided additional possibilities for the people already here. So everybody can mutually benefit.

Friedman here is applying classical economic theory to labor: exchanges in the free market occur when both parties believe they can benefit. Welfare distorts that principle, because immigrants are not necessarily required to consider what they can contribute in exchange for their needs.

But here’s the kicker, which I’ll let Friedman deliver in his own words:

Look, for example, at the obvious, immediate, practical example of illegal Mexican immigration. Now, that Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as its illegal.

That’s an interesting paradox to think about. Make it legal and it’s no good. Why? Because as long as it’s illegal the people who come in do not qualify for welfare, they don’t qualify for social security, they don’t qualify for the other myriad of benefits that we pour out from our left pocket to our right pocket. So long as they don’t qualify they migrate to jobs. They take jobs that most residents of this country are unwilling to take. They provide employers with the kind of workers that they cannot get. They’re hard workers, they’re good workers, and they are clearly better off.

Most people use Friedman’s quote free immigration and the welfare state to argue for stopping illegal immigration, when, according to his argument, illegal immigration is not the problem.

He suggests that illegal immigration, economically, is good. Economically, then, it makes sense from a Friedmanite perspective to leave the borders open and not to grant amnesty.

He doesn’t support illegal immigration, however. The proper understanding of Friedman’s position is to recognize that he doesn’t oppose immigration, he opposes the welfare state.

The proper use of the quote – “It’s just obvious that you can’t have free immigration and a welfare state” – is to assume that the free flow of labor is a good thing economically and that a welfare state is not. In other words, it should be used to support shrinking the welfare state, not immigration.

Unfortunately, this interpretation is often lost on conservatives. Jim DeMint and Robert Rector from Heritage, after essentially getting Friedman’s argument about legal immigration right…

[A]fter amnesty, current unlawful immigrants would receive $9.4 trillion in government benefits and services and pay more than $3 trillion in taxes over their lifetimes. That leaves a net fiscal deficit (benefits minus taxes) of $6.3 trillion.

…go on to propose a solution that is nonsensical based on Friedman’s logic, at least in the current welfare state status quo:

We should move to streamline our legal immigration system, encourage patriotic assimilation to unite new immigrants with America’s vibrant civil society, fulfill promises to secure our borders and strengthen workplace enforcement.

This would bring more people who could legally receive welfare, while restricting the flow of people who legally cannot and are less likely to receive it.

Of course, the United State must maintain its territorial sovereignty and secure its borders for reasons such as drug trafficking, violence, terrorism threats and the need to simply know who is here. So what is the answer? It is quite simple. To Rector and DeMint’s solution must be added “reform and shrink the welfare state.”

As Stephen Moore wrote in the Wall Street Journal:

Republicans and conservatives might want to coalesce around a position of tight welfare and generous immigration rules. That is something Milton Friedman would no doubt regard as the ideal outcome. As another late great economist—William Niskanen, a member of President Reagan’s Council of Economic Advisers and chairman of the Cato Institute—once put it: “Better to build a wall around the welfare state than the country.”

CIB022715-ObamacareWith Obamacare front and center once again at the Supreme Court, its fate is as doubtful as ever since the infamous case two years ago in which the Supremes upheld the law’s legality.

The result of King v. Burwell in next week’s hearing before the Court has analysts in a frenzy, says Bloomberg Politics‘ Joshua Green. The challenge is to predict what may come of the reported 9.6 million Americans who have already enrolled in coverage under Obamacare and who rely on the potentially unlawful subsidy to afford it.

Stuart Butler, a decades-long Republican health care analyst, is warning that the upending of Obamacare, void of a suitable replacement, could act like a giant rug being yanked out from under millions of Americans with no better alternative for health care coverage.

Butler pointed out in a recent column that the U.S. health care market were its own economy, it would be the sixth largest in the world – larger even than that of United Kingdom. He warns, therefore, that “a market without subsidies will trigger a premium ‘death spiral’ in those states [without exchanges]: With subsidies gone and premiums pushed higher, younger and healthier patients will likely drop coverage.”

The danger, therefore, to Republicans now in control of Congress is how they can continue to advocate for the end of Obamacare and still manage the almost certain fall-out among voters who will feel the pain of lost coverage. Which party they will blame in the 2016 election cycle is the question of the hour.