Editor’s Pick

Vanessa Brown Calder

So‐​called junk fees have become a popular topic this year, and rental housing is a particular area of interest as US markets struggle with affordability challenges. The White House selected rental housing as the focus for fee crackdowns over the summer, and a recent hearing on Competition and Consumer Rights in the Housing Market described junk fees as an affordability issue increasing costs for low‐​income renters, which may prevent them from moving to a new home.

According to the White House, junk fees in rental housing include repeated application fees and convenience fees, like fees to pay rent online or for mail sorting and trash collection, which result in a “serious burden on renters.” Other critics have suggested that fees for internet use or pet rent also qualify as “junk” and argue that these fees “confuse or deceive” consumers and take advantage of market power.

But are these fees meaningful, or are they a distraction from genuine housing issues? To begin with, the economic logic for junk fees also applies to fees in rental housing. For example, rental fees are small compared to the total amount spent on housing by renters. Whereas rental application fees typically cost between $25-$100, the national median rent is over $2,000 monthly. Application fees usually cover the costs of doing a credit or background check for a potential tenant and sometimes the time and labor associated with application processing—in other words, genuine business costs.

Moreover, attempting to control so‐​called junk fees, including rental application fees, late payment fees, pet fees, parking fees, or internet fees, would likely lead total rents to adjust upward. In this case, regulating junk fees would mean consumers are subject to a higher base rent and would be required to subsidize the preferences and behaviors of other tenants even though they intend to pay rent on time, do not have a pet, are not planning to drive or park a car, etc. In this way, eliminating junk fees would reduce tenant choice so tenants cannot opt out of services they do not require. Counterintuitively, regulating junk fees would reduce affordability for some tenants.

If regulating fees wouldn’t lower overall rents, could regulating fees at least improve transparency? Regulation requiring landlords to provide would‐​be tenants with a singular, up‐​front price counterintuitively introduces new opaqueness, as consumers may not have access to information regarding the component parts of their rent. Moreover, in a market economy, there are incentives for businesses and entrepreneurs to provide the transparency that consumers desire. Even the Biden administration’s fact sheet notes that Zillow, Apart​ments​.com, and Afford​able​Hous​ing​.com plan to provide consumers with total, upfront cost information on rental properties.

Although regulating junk fees is unlikely to reduce costs or meaningfully improve transparency, policymakers could improve housing prices more meaningfully by prioritizing other reforms. An influential study from 2003 found that zoning regulations pushed up the cost of apartments by around 50 percent in Manhattan, San Francisco, and San Jose. Notably, zoning frequently limits development to large homes on large lots, with more expensive materials and other features that are best absorbed by owners rather than renters. Zoning largely prohibits building apartments, duplexes, fourplexes, townhomes, and condos that comprise much of the rental market.

Other policies also increase the cost of rent by limiting housing supply or increasing costs, and federal lawmakers could remedy these issues. For instance, transferring just 0.1 percent of federal lands to states could result in almost 3 million new homes, eliminating or substantially reducing the housing “shortage” in fifteen Western states.

Meanwhile, reforming federal trade policy could reduce the cost of housing construction inputs, between 1.4 percent for kitchen cabinets to 22.4 percent for vinyl flooring.

Getting serious about these issues would make the most significant difference for renters. Unfortunately, in the broader scheme of things, so‐​called junk fees are more of a distraction than a solution to affordability problems.

Jeffrey A. Singer

New Zealand’s newly‐​elected center‐​right government announced yesterday that it intends to scrap a planned phase‐​in of tobacco prohibition that would ban sales of tobacco products to people born after 2009. The plan would have also cut the number of retailers permitted to legally sell tobacco by 90 percent and ordered tobacco makers to reduce the nicotine content of cigarettes they may sell. Anyone versed in the economics of prohibition would have predicted that each of those three measures would help fuel a vibrant black market with its corresponding violent crime and corruption.

This is good news for New Zealanders, where less than 14 percent of persons over age 15 smoked tobacco in 2020. They will avoid yet another state encroachment on their personal liberty along with tax increases to fund government spending on enforcing tobacco prohibition and fighting tobacco smugglers.

UK Prime Minister Rishi Sunak should take notice. Last month, his government announced plans to clone New Zealand’s tobacco prohibition plan. Announcing his plan at Britain’s Conservative Party Conference, Sunak said, “A 14‐​year‐​old today will never legally be sold a cigarette.”

Sunak’s announcement came as both a surprise and a disappointment to tobacco harm reduction advocates, given the UK’s heretofore reasonable approach to reducing tobacco smoking. While nicotine is the addictive component of tobacco smoke, it is a relatively harmless stimulant, not very different from caffeine, as Scotland’s NHS Informs has stated. The other components of tobacco smoke are what produce harm to health.

The UK’s Royal Society of Public Health claims nicotine is “no more harmful to health than caffeine.” Public Health England has claimed that “vaping” with nicotine e‑cigarettes is “95 percent less harmful than tobacco smoking.” The Royal College of Physicians has issued the following statement:

• [T]he available evidence to date indicates that e‑cigarettes are being used almost exclusively as safer alternatives to smoked tobacco, by confirmed smokers who are trying to reduce harm to themselves or others from smoking, or to quit smoking completely.
• There is a need for regulation to reduce direct and indirect adverse effects of e‑cigarette use, but this regulation should not be allowed significantly to inhibit the development and use of harm‐​reduction products by smokers.
• However, in the interests of public health it is important to promote the use of e‑cigarettes, NRT [nicotine replacement therapy] and other non‐​tobacco nicotine products as widely as possible as a substitute for smoking in the UK.

So far, Brookline, Massachusetts is the only jurisdiction in the United States to have enacted a tobacco ban. Brookline bans the sale of tobacco to anyone born after the year 2000. It doesn’t take an entrepreneurial genius to figure out ways to make money legally selling cigarettes to adults from the other side of the Brookline town line.

Earlier this year, California lawmakers considered making the Golden State the first in the nation to enact New Zealand’s tobacco prohibition model into law. A bill to that effect failed to advance during this year’s legislative session. Interestingly, California’s major anti‐​smoking and anti‐​vaping groups chose not to lobby for the bill. A Cal Matters report quoted Autumn Ogden‐​Smith, director of California state legislation for the American Cancer Society Action Network, saying, “This is not the time to tackle this. We’re trying to do the clean‐​up on the flavored tobacco ban. We’re having enforcement issues.”

As I wrote here, banning menthol tobacco creates its own set of harmful unintended consequences.

New Zealand’s recent about‐​face on tobacco prohibition will hopefully put to rest similar efforts in California and other states. Let’s hope it will also cause Sunak and his Conservative Party to reconsider their plans. The UK had the right approach to reducing tobacco smoking until now: opting for evidence‐​based tobacco harm reduction instead of prohibition.

Paul Matzko

The Wall Street Journal ran another article about the decline of the local newspaper in what has become its own, depressing sub‐​genre. It hits all the usual beats: an opening story of a failing local paper that illustrates broader industry struggles — in particular, the rise of “ghost newsrooms” that employ no professional journalists — and which prevent local news from holding governments and companies to account.

This is all true and sadly familiar. But tucked away towards the back of the piece is a fascinating, embedded story‐​within‐​the‐​story. If that buried story were foregrounded, it would provide a less routine — and much more hopeful — account of the state of the news industry. It’s about a phenomenon that I call the “new news,” and which is replacing the legacy local news industry.

Deep into the article, we are introduced to Vince Tweddell, a native of Henderson, Kentucky (population 29,781), who earlier this year started his own hyper‐​local news website covering topics from the opioid crisis (“All 14 overdose deaths through Sept. caused by fentanyl”) to renewable energy (“Standing on the edge of the future: Solar comes to Henderson County”). There is enough demand for what the Hendersonian publishes — daily articles on the website, a free monthly print edition, and an upcoming subscription newsletter — that this former adjunct community college writing professor has been able to quit his teaching job and focus on the news outlet full‐​time.

But Tweddell’s story falls below the metaphorical fold, as is the author’s note that there are “several other” promising news startups like it, including some with a habit of scooping legacy news outlets on breaking news.

Yet the takeaway at the top of the article is this:

In some places—including Henderson—startups have sprouted to cover the issues that no longer appear in the local paper’s pages, but not to a degree large enough to offset the decline of established news publications, the study said.

That’s it. Don’t get too hopeful, folks. Some places. Some startups. But “not to a degree large enough.” Honestly, not sure why we even bothered to mention them. After all, the study said so. Wait, really??

Turns out, if you read the study — by the ‘State of Local News” project out of Northwestern University — that’s a misrepresentation.

Now, you need to understand something about this project. For years it’s been tracking the closure of legacy local news outlets. It’s always made for grim reading, which had utility for legacy news outlets as they argued for various government bailouts.

But the project only just started publishing data on new news startups *this* year! And it turns out that when you look at gains and don’t just fixate on losses, this is what you get:

There are about 550 digital‐​only local news sites, many of which launched in the past decade, but they are mostly clustered in metro areas. In the past five years, the number of local digital startups has roughly equaled the number that shuttered.

In other words, we may have reached the nadir of the collapse of the traditional local news industry and are now replacing legacy newsrooms with new news startups at roughly a one‐​to‐​one ratio.

Even better, the new news outlets appear to be organized on a more sustainable footing with privately‐​sourced financing. Frequently, they’re run by former traditional journalists who find they can make a better income from their startups than they ever did working for legacy news outlets.

The startups are also independently owned at a higher rate than the shuffling newspaper conglomerates that are often run by hedge funds, which acquire legacy outlets, strip them down for parts, and leave behind “ghost newsrooms” reduced to begging for public subsidies rather than innovating to meet actual consumer demand. It’s zombie conglomerates running ghost newspapers.

Although, as the report notes, the new news revolution isn’t equally distributed. The startups are disproportionately clustered around larger towns and major metropolitan areas. And while that is a problem, it’s likely a temporary one. Think of the geographic distribution pattern of any product rollout, chain store expansion, or cultural innovation. They start from the population centers and radiate outward. Indeed, this was true for the early history of American newspapers, which began as reports on the comings and goings of merchants in harbor towns.

As I wrote in 2021, we should expect the pattern of new news startups to continue to percolate downward. It already has. It began a decade ago with journalists defecting from national outlets to start specialized publications reaching industry‐​specific audiences. It then expanded a few years ago to region‐​specific startups covering stories from mid‐​major cities like Charlotte, North Carolina that have hundreds of thousands of residents.

Now it’s arriving in county seat‐​type communities with tens of thousands of residents, like Vince Tweddell’s startup in Henderson, Kentucky. And soon we should expect similar startups — even operated on a part‐​time basis by those with deep, local knowledge — to sprout up in every town with at least a few thousand residents.

So the story‐​within‐​the‐​story is that a more sustainable, innovative, and often superior quality “new news” media is on the horizon. If you have an interest in improving local news coverage — watering the local news “deserts,” if you will — there hasn’t been a better time to invest in local news media startups in a generation. There will be growing pains; the geographic coverage will be unequal at first. But journalists no longer need to remain stuck in a 2010s doom‐​and‐​gloom mindset about the state of local news.

Crossposted from the author’s newsletter. Click through and subscribe for more posts from the intersection of history, policy, and mass media.

Scott Lincicome

Today we’ve published three new essays for Cato’s Defending Globalization project:

Trade Buys Goods, Services, and Time, by Gabriella Beaumont‐​Smith, explains that trade not only provides consumers with lower prices and expanded variety, but it also gives people the autonomy to specialize in activities they’re good at and frees up their time to invest in other activities.

Fast Fashion, Global Trade, and Sustainable Abundance, by Joy Buchanan, discusses the myriad economic and social benefits of clothing abundance, much of which is owed to globalization, and the future of more sustainable global fashion.

Technology and Innovation, Not Just Policy, Help Drive Globalization, by Colin Grabow, shows that globalization isn’t simply the choice of government officials but the realized aspiration of untold numbers of people whose work has steadily shrunk the world, expanded markets and brought us closer together.

We’ve also published the video recording of the launch event for the project, in which former US Trade Representative Robert B. Zoellick spoke on the current state and the future of globalization.

This content joins nineteen other essays and other multimedia features on the main Defending Globalization project page.

Make sure to check it all out and stay tuned for future releases.

Thomas A. Firey

US antitrust officials have been busy of late. They’re awaiting a ruling in a major case against Google, in the midst of a suit against Amazon, looking to circumvent a court ruling allowing Microsoft’s acquisition of game maker Activision Blizzard, and probing Adobe’s acquisition of cloud‐​based designer Figma and the merger of grocers Kroger and Albertsons. They’re also side‐​eyeing ExxonMobil’s deal for Pioneer Natural Resources and Cisco’s bid for cybersecurity firm Splunk.

Yet, despite this full plate, these officials are launching another probe into a serious threat to the US economy: Big Sandwich.

Last week, The Hill reported that the Federal Trade Commission is examining the Subway sandwich chain’s acquisition by private equity firm Roark Capital. Roark already holds sandwich makers Jimmy John’s, McAlister’s Deli, and Schlotzky’s, as well as Arby’s.

Consumers may think the deal could allow Roark to bring the latter chains’ quality to Subway, which has had its problems. But the FTC apparently fears Roark would gain market power over hoagies, grinders, and subs.

(At this point, I want to note this is not The Onion.)

The Subway investigation is just the latest step in a dramatic recent shift in US antitrust policy. For decades, regulators eyed such dealings with one over‐​arching question in mind: Will it benefit or harm consumers? Historical evidence shows this “consumer welfare standard” has delivered considerable benefits to Americans.

But in the last few years, there has been a push for antitrust to broaden its scope and consider “bigness,” in and of itself, economically dangerous regardless of its effect on consumers—a viewpoint termed “Neo‐​Brandeisianism.” Prominent politicians of both major political parties have embraced this view, and it has been operationalized by Biden administration appointees Lina Kahn at the FTC and Jonathan Kanter at the Department of Justice’s Antitrust Division.

Problem is, when neo‐​Brandeisians try to explain what those dangers are, their predictions don’t jibe with reality. My colleague Peter Van Doren describes some of the academic research on Neo‐​Brandeisians’ bad predictions here.

In the next issue of Regulation, University of Missouri law professor Thom Lambert and law clerk Tate Cooper look at some of the dangers of Neo‐​Brandeisianism; I’ll post a link to it here as soon as it’s available. Until then, enjoy this backpage essay by Regulation contributing editor Ike Brannon, who tongue‐​in‐​cheek predicted 18 months ago that neo‐​Brandeisians would attack a (hypothetical) merger of Ponderosa and Bonanza restaurants for creating a dangerous Big TV‐​Themed‐​Steak monopoly. Ike got the specific restaurant sector wrong, but his hyperbolic humor has proven to be prescient.

Adam N. Michel

OpenAI released Chat GPT‑3 a year ago this month. The subsequent diffusion of ever more sophisticated artificial intelligence (AI) computer models drives near‐​daily innovations (and corporate intrigue), such as breakthroughs in biomedical research and improvements to autonomous transportation systems.

Techno‐​optimists believe these AI models are poised to revolutionize work and leisure. However, many of the same optimists, like Sam Altman, CEO of OpenAI, fear that AI’s transformations could “break capitalism” through a “shift of leverage from labor to capital,” and undermine the role of traditional work in our economy. Such worry has led the likes of Bill Gates to suggest new taxes on the income earned by AI or robots to slow the economic transition and fund new income‐​transfer programs.

Contrary to that narrative, empirical evidence does not support the worker displacement theory. New taxes on capital will make achieving the positive gains promised by AI or any other future innovation less likely. If the revenue is used to fund new income‐​support programs, it could also undermine labor supply.

Workers Are Not Losing a Competition with Capital

Historically, economic and technological changes have stoked fears of widespread worker displacement. Yet, time and again, these fears have not fully materialized. From the Luddite movement’s opposition to mechanized looms during the Industrial Revolution to the anticipated job losses following the personal computer’s introduction, these fears have consistently proven unfounded. Instead, each innovation has ultimately improved workers’ wages and conditions.

Neoclassical economists attribute economic output to the combination of capital, labor, and technological innovations. Capital and labor’s contribution to output is described by an elasticity or, more colloquially, each component can be thought of as earning a share of national income. If, over time, capital became more important for economic output, capital’s share of income would increase. Figure 1 uses data from the US Bureau of Economic Analysis to show that the labor share of net income (net of taxes and depreciation) is within its historical range, fluctuating above and below the average of 69 percent.

Labor’s share increased slowly from 1930 through 1970 and remained above 69 percent through 2005, as it declined slightly before returning to the century‐​long average. In 2022, the labor share was 68 percent, and in the second quarter of 2023, labor’s share of net income increased to 70 percent.

In the neoclassical model, there is a limit to how much additional work or investment can be induced by policy. In the medium term, the number of workers and machines is finite. Thus, long‐​run growth is primarily driven by technological progress, which combines with labor and capital to increase productivity and allow the same workers to work more efficiently with new and better tools (capital).

Technological progress flows from new ideas employed by entrepreneurs that allow people to use existing resources more efficiently. Capital and labor are complements and substitutes. Thus, in theory, productivity‐​increasing technologies could increase either worker or the capital contribution to income. These new technologies have always replaced some jobs but, in the process, created entirely new industries and increased demand for labor. Empirical evidence of labor shares across countries demonstrates that technological progress has not altered the power dynamics between labor and capital—as reflected in the relatively stable labor share of income in Figure 1.

Other research also consistently finds that pay and productivity (correctly measured) have increased at almost identical rates for many decades. Less complex measures similarly confirm that despite significant technological disruptions, it is easier to find a job today than five decades ago, as measured by a low unemployment rate and corroborated by more recent data on job openings.

What if AI is more than just a tool that increases productivity? What if general artificial intelligence (AGI)—something that has not been fully realized—could replace the role of the entrepreneur, actively coming up with new ideas that increase productivity? Even in this science fiction world, new ideas must combine with labor and capital to produce income. Historically, new ideas have not radically shifted the labor‐​capital dynamic, regardless of where they come from.

In the face of an unknown future, it is tempting to claim that “this time is different.” That AI’s productivity increases will permanently shift productive processes away from workers, replacing them forever with machines and software. This could be true. But the long history of economic progress shows that the benefits of more efficient use of capital are broadly shared by workers.

Don’t Tax the Future

The premise that workers lose from dynamic, technological progress is historically wrong. The policy solutions to the perceived technological disruption will also undermine the promised benefits of the AI revolution (and the next innovation not yet conceived). The most common policy proposals have been regulatory restrictions, but higher taxes on the income earned by investments in AI could be just as harmful.

Higher taxes on capital income can come in many forms—taxes on capital gains, corporate income, wealth—but they all function similarly; they tax the productive deployment of resources. Capital, such as tools, machines, or computers, are owned by people who delay consumption to save and earn a return on their investment. The return on investment is made up of a payment for waiting to consume and a payment for successful risk‐​taking, such as investing in an unproven AI algorithm.

If there is no return to saving, people will immediately consume more of their income. Thus, higher taxes on capital income negatively affect both of these margins—taxes result in less available capital and less willingness to take risks. The diminished incentive to take risks also extends to highly skilled workers who are often compensated with stock options—claims on the firm’s future returns.

Both theoretical and empirical economic literature confirm that capital taxes are some of the most economically costly ways to raise government revenue, resulting in fewer startups, less venture capital funding, fewer new patents (a measure of innovation), and slower economic growth. If policymakers increased taxes on income earned from personal computers in the workplace or spellcheck algorithms for fear of lost jobs, there would have been less innovation in personal computing. 

Technologists working to deploy their new ideas are often the very people most worried about how the innovation will disrupt markets and cause economic dislocations. Innovation can cause short‐​term disruptions, but the resulting economic progress provides the resources to create new jobs that result in higher living standards and increased well‐​being. Even in a worst‐​case world in which this time is different, taxing the returns to capital still depresses investment, which ultimately undermines future growth. 

Slowing or stopping economic progress with higher taxes or new regulations does not protect against future disruptions. Economic stagnation is also disruptive. Pay raises and career advancement are easier in a growing, dynamic economy where employers compete to hire and train new talent. Higher taxes on capital income rob future generations of the necessary resources to improve their lives.

By understanding AI as a complement to human labor rather than only a threat, policymakers can avoid counterproductive taxes or other policies that risk stifling the innovation that historically has proven to enhance, not diminish, the lives of people at every income level.

Romina Boccia

I’ve excitedly been following former Senator Rob Portman’s advocacy for a congressional fiscal commission to address unsustainable spending that’s driving the US deeper into a debt crisis. From speaking out on behalf of a commission approach at a recent House Budget Committee hearing to advocating for it in writing as part of a series of essays by the Peter G. Peterson Foundation, Portman is a leading voice on the issue.

Which is why it’s so important that the senator gets his facts straight.

In his testimony and published essay, Portman claims:

“After Base Closure Commission recommendations were made, Congress took up or down on the whole package of bases with no ability to amend them [sic].”

The Base Realignment and Closure, or BRAC, commission did not force Congress to take an affirmative up or down vote before its recommendations would go into effect. Instead, BRAC used a mechanism that might best be described as allowing for congressional silent approval.

There is a key difference between members of Congress having to go on the record in favor of a commission’s recommendations and simply doing nothing to prevent the recommendations from taking effect. Forcing members of Congress to take an affirmative vote of approval before fiscal commission recommendations can go into effect poses a far larger barrier than allowing politicians to stand by as proposals get implemented in the absence of an affirmative act of disapproval.

BRAC capitalized on the power of default settings. As the Congressional Research Service described the process:

“The BRAC statute provided for expedited congressional procedures to disapprove commission recommendations regarding base realignments and closures, with a straight up or down vote and no possibility for amending the list. Upon receiving the commission’s recommendations from the President, Congress would need to pass a joint resolution of disapproval of the recommendations within 45 days, or else the commission’s recommendations would go into effect.”

Here’s how BRAC worked in a bit more detail:

1. The BRAC Commission submits a list of recommended base closures and realignments to the president.
2. The president reviews the recommendations and decides whether to approve or disapprove the list in its entirety. The president cannot make changes to the list.
3. If the president approves the BRAC Commission’s list, it is then sent to Congress for a 45‐​day review period.
4. During this review period, Congress has the option to pass a joint resolution disapproving the BRAC recommendations. If both the House and Senate pass the resolution and it is signed by the president, the BRAC list would be rejected, and the closures and realignments would not take place.
5. If Congress does not pass a joint resolution disapproving the BRAC list within the 45‐​day review period, the recommendations go into effect, and the implementation process begins.

I agree with former Senator Portman that we’ll need to empower a fiscal commission to address the seemingly insurmountable and politically intractable problem of reforming major old‐​age benefit programs. Medicare and Social Security are jointly responsible for 95 percent of all US government long‐​term unfunded obligations. There is no solution to the US debt crisis that avoids entitlement reform.

US entitlement programs operate on default settings that allow for spending to grow on autopilot, based on eligibility criteria that were established decades ago, and irrespective of the availability of the necessary resources to fund them. Today’s politicians do not have to lift another finger to increase government spending. Spending grows automatically under current law.

Default settings are powerful mechanisms, harnessed in a variety of contexts from automatic retirement savings to subscription‐​based services. Now, US entitlement program default settings are working to the detriment of American workers and taxpayers as rising spending gobbles up more and more economic resources. This happened because demographic changes, from an aging population to declining fertility, have turned the entitlement funding pyramid upside down, with fewer workers at the bottom of the pyramid funding a growing share of retirees at the receiving top end.

It’s about time that members of Congress leveraged the power of default settings in American taxpayers’ favor. Designing a fiscal commission after the successful BRAC model, by allowing Congress to avoid a politically suicidal vote to fix the growing debt crisis, is the most promising approach for establishing a commission that will succeed.

So, let’s establish a BRAC‐​like fiscal commission, and let’s also be sure to set it up in accordance with how BRAC actually worked.

Colleen Hroncich

Meh. This seems to be the best way to summarize how people feel about school—they don’t love it, they don’t hate it. But the overall view is negative. Meanwhile, research shows that students become less engaged the longer they stay in school. And a survey of high school dropouts found nearly 50 percent said they left school because classes weren’t interesting or relevant to their lives or future goals.

But what if school was different? What if it was more tailored to individual needs and interests? What if there was a wide variety of educational options that parents could choose from to customize their children’s education?

Believe it or not, this world already exists—and the Friday Feature series on the Cato at Liberty blog highlights examples of it each week. Hybrid and microschools that often combine the best elements of homeschooling and in‐​person education. Homeschooling resources that help parents ensure their kids are getting the education they seek. Traditional schools that are taking an unconventional approach to learning. Public policies, like education savings accounts (ESAs), which let parents use a portion of state education dollars to pay for a variety of learning options. And education entrepreneurs who are creating these innovative resources.

The education system is being transformed. School choice programs that allow funding to follow students to private schools have been around for decades. The first modern voucher program was enacted in Milwaukee in 1990. Arizona can claim credit for the first tax credit scholarship (1997) and ESA (2011).

But recent years have seen a rapid expansion. Early programs were limited to students who met certain qualifications, like income limits or special needs. In 2020, not a single state had a universal school choice program, but there are now 10 states with universal or nearly universal programs.

In the 1800s perhaps it seemed reasonable to design the education system the way it is—with students assigned to specific schools based on where they lived. Transportation and communication were difficult then. But we no longer live in that world. There’s no reason to limit students’ educational options to a school they happen to live near—or to the hours between 8 a.m. and 3 p.m., Monday through Friday.

The Friday Feature is meant to be a resource for people who are looking for better educational solutions. Parents who are seeking the best education for their children, teachers who want to create their own place of learning where they have flexibility and autonomy, and policymakers who want to support these efforts can find inspiration each week in the Cato Friday Feature.

If you’re new to the series or have missed any, we’ve got you covered. All this week, the Cato Institute’s Center for Educational Freedom will be having a Friday Feature Marathon on X (Twitter) to help spread the word about educational options and how they can spread even more with school choice. Stay tuned!

Gabriella Beaumont-Smith

As I wrote about recently, Mexico’s President Andres Manuel Lopez Obrador issued a decree banning genetically engineered (GE) corn for human consumption, creating serious implications for US‐​Mexico trade.

In August 2023, formal consultations failed, which resulted in the establishment of a dispute settlement panel under the United States‐​Mexico‐​Canada Agreement (USMCA). On November 17, the US filed its first submission (dated October 25) to the panel, which is best summarized in this paragraph:

“After permitting the importation and sale of GE corn in Mexico for decades without experiencing any adverse effects on human, animal, or plant life or health, and after recommitting to fair, open, and science‐​based trade under the … USMCA … Mexico suddenly and completely reversed its policy. There was no new science. There was no new risk assessment. There was only a change in government.”

The US is completely right that this policy reversal is scientifically unfounded and only an example of a protectionist agenda established by a new government.

Mexico’s arguments are yet to be released so the timeline for the case’s conclusion is unclear. However, the US has already tried engaging with Mexico on this issue for four years. The longer the case goes unresolved, the worse the turmoil for Mexican farmers, American farmers, other businesses, and consumers.

Walter Olson

The multiple prosecutions of former President Donald Trump have occasioned a torrent of comment but relatively few debates calmly airing arguments from both sides.

I’m happy to report that I participated in one such debate on October 19 at the University of Maryland in College Park, sponsored by the school’s Federalist Society chapter. Taking the other side, more critical of the prosecutions than I, was attorney Gene Hamilton, currently vice president and general counsel of America First Legal and formerly an official in the Department of Justice under Trump. Prof. Michael Spivey of the government department moderated with great skill, and an overflow crowd of 100 or so students attended, with thoughtful questions and a high civility level on all sides.

By agreement we discussed only the federal prosecutions of Trump, that is to say, the ones pursued by special counsel Jack Smith, and thus did not address the Georgia and New York state‐ proceedings. In my comments, I advanced some themes I’ve sounded in this space, such as that the presumption against indicting former presidents is a sound one but can be overcome, that the charges against Trump over his attempt to overturn the 2020 election do not somehow amount to criminalizing speech or advocacy, and that while laws such as conspiracy to defraud the United States and conspiracy against protected rights may sound open‐​ended, Smith’s team can point to recent precedent applying the laws in question to plausibly similar conduct. (For the current state of play on some of those questions, see prosecutors’ recent filing rebutting Trump’s attempt to get the case thrown out.)

Most of our time, however, wound up being spent on the Mar‐​a‐​Lago documents case. Hamilton’s firm has been seeking to develop the theory that the Presidential Records Act of 1978 is unconstitutional as an invasion of core presidential powers. (Among other provisions, the Nixon‐​era law requires presidents to turn over papers to the National Archives on leaving office, whether those papers were created by themselves or others.)

It is true that the Supreme Court has not squarely addressed this question, and also true that separation‐​of‐​powers analysis based on ideas of core presidential power has made some headway with commentators and judges of late. And while Trump’s own statements about the PRA have been confused at best, there is nothing wrong with lawyers’ developing a better defense of his interests than he has done himself.

I myself nonetheless expressed doubt that the high court will see fit to strike down most or all of the PRA. More fundamentally, I said, even if it did, such a ruling would not rescue Trump from criminal liability under either the national security or the obstruction‐​of‐​justice branches of the charges. Hamilton took the view that public support for the prosecution would be undercut were it established that the National Archivist had not been substantially justified in the document demands that led after several rounds of dispute to the obstruction charges.

I’m glad that the Federalist Society is offering a venue for these important debates, which are of keen interest and relevance to its membership and to all of us.