What California Can Teach Harvard

A group of Asian-Americans is suing Harvard with backing from the U.S. Department of Justice, which filed papers stating: “The record evidence demonstrates that Harvard’s race-based admissions process significantly disadvantages Asian-American applicants compared to applicants of other racial groups — including both white applicants and applicants from other racial minority groups.” This is a rare case where California policy could provide positive guidance. 

The back story here is the dogma that all institutions must precisely reflect the racial or ethnic diversity of the wider population. If they do not, the reason must be deliberate discrimination and the only remedy is government action, namely, racial and ethnic preferences. This dogma ignores personal differences, effort, and choice and proclaims some groups “overrepresented.” On this basis, the University of California discriminated against Asians, a group that had suffered decades of official discrimination in California. 

Enter the California Civil Rights Initiative, Proposition 209 on the November 1996 ballot: “The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.” Administrators and politicians attacked it in apocalyptic terms, but California voters approved it 54 to 46 percent. The disaster the preference forces predicted never came about. 

As Thomas Sowell noted in Intellectuals and Race, declines in minority enrollment at UCLA and Berkeley have been offset by increases at other UC campuses. More important, the number of African-American and Hispanic students graduating from the UC system has gone up, including a 55 percent increase in those graduating in four years with a GPA of 3.5 or higher.

Proposition 209 did not mean the end of “affirmative action.” Universities could still help disadvantaged students on an economic basis, but they could not discriminate on the basis of race and ethnicity, as Asian students claim Harvard is doing. UC Davis Medical School likewise discriminated against Allan Bakke by rejecting him in favor of lesser-qualified minority candidates. In 1978, the U.S. Supreme Court ruled 5-4 in Bakke’s favor.


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

More Evidence of FDR’s Hostility Toward Free Speech

“As the supper [in May 1939] progressed, I found myself revising my previous concept of [Franklin D. Roosevelt]… I had long admired him for his sagacious statesmanship. Hearing him in this informal atmosphere, I realized how much I had idealized him. He was as neither wise nor as proud as I had supposed him to be. His glibness, his propensity for generalizations jarred me; so did his lack of prudence especially when he spoke of Boake Carter, a popular radio commentator who was an outspoken enemy of the New Deal. The President made no bones of the fact that he was having Carter ‘thoroughly investigated,’ apparently by the FBI. He was quite certain that Carter‘or whatever his real name is’had a nefarious background which, when brought to light, would put an end to his career. That Roosevelt, the statesman I had admired, should admit to such vindictiveness came as the greatest jolt of all.”

Jerry Mangione, An Ethnic at Large: A Memoir of America in the Thirties and Forties (New York: G.P. Putnam’s Sons, 1978), 248.


David T. Beito is a Research Fellow at the Independent Institute and Professor of History at the University of Alabama. His latest book, co-authored with Linda Royster Beito, is T.R.M. Howard: Doctor, Entrepreneur, Civil Rights Pioneer.

Federal Spending Drives Budget Deficit in 2018

All year long, many Americans have been dreading what the U.S. government’s fiscal state would be at the conclusion of its 2018 fiscal year, which just ended on September 30, 2018. The combination of tax cuts passed into law in December 2017 that slashed corporate income tax rates and a budget deal in February 2018 that boosted federal spending at the same time seemed to be a sure recipe for creating a massive fiscal headache for American taxpayers.

But, only one of these measures appears to have negatively impacted the U.S. government’s fiscal situation since President Trump signed both measures into law. After a four-day delay, the U.S. Treasury Department issued its final monthly treasury statement for the U.S. government’s 2018 fiscal year, where the following chart shows one expected result and one surprising result.

U.S. Government Cumulative Tax Collections and Spending by Month, Fiscal Years 2017 and 2018

The expected result is what happened with federal spending, which increased from $3.981 trillion in FY 2017 to $4.107 trillion in FY 2018. The unexpected result can be seen in the cumulative total for the U.S. government’s tax collections, which in a year of tax cuts, surprisingly rose from $3.315 trillion to $3.329 trillion. Overall, the U.S. government ran a $779 billion deficit in its 2018 fiscal year, up $113.2 billion from the $665.8 billion deficit in 2017.

According to CNS News, the national debt increased by $1.271 trillion during FY 2018, a $492 billion difference from the $779 billion deficit that the federal government reported for the year.


Craig Eyermann is a Research Fellow at the Independent Institute and the creator of the Government Cost Calculator at MyGovCost.org.

How Does Your State Rank on Individual Taxes?

Taxes are the price that regular people pay for government spending. Whether that spending goes to things and services that people want, like road repairs, schools, fire and police protection, trash pickup, public parks, or to things that people don’t really want, like sports stadiums or excessively lavish pension benefits for bureaucrats, the bill for all these things is ultimately paid through taxes.

For most states in the United States, the primary means by which state governments take money from their residents is through income taxes. As part of its 2019 State Business Tax Climate Index, the 81-year-old nonpartisan Tax Foundation has ranked U.S. states according to their individual income tax burden, which is the heaviest-weighted component of their state business tax climate index. The following map shows where each state has ranked according to state income taxes going into 2019.

Tax Foundation Individual Tax Component Rankings, 2019

When Healthy Policy Neglects Economic Principles, Patients Suffer

The healthcare sector of the U.S. economy is extraordinarily dynamic and complex, providing constant challenges for policymakers and regulators working to improve healthcare markets. However, recent research and policies suggest the greatest challenges for policymakers might be their misunderstanding of economic fundamentals.

Earlier this year, the Annals of Internal Medicine journal published a paper which found the prices increased for nearly 100 drugs while they were in a shortage between 2015 and 2016. The paper also notes these “price hikes” (price increases) were less severe in markets with comparatively more competitors (defined as more than three drug providers).

Although the authors consider these findings “mysterious,” they confidently offered policy recommendations to correct “the imbalance between supply and demand.” As they stated in their conclusion, “If manufacturers are observed using shortages to increase prices, public payers could set payment caps for drugs under storage and limit price increases.”

The situation described above, and the folly of its policy prescription, are no mysteries for anyone who understands basic economics.

Proposition 47 Backstory to Mac Attacks?

Customers at the Apple store in Sacramento’s Arden Fair Mall last weekend noticed an armed police officer standing at the door. This was a response to a wave of Apple store robberies in northern California, including four at the Apple store in nearby Roseville in 30 days. In July, in similar style, four thieves stole $27,000 of Apple products from the Apple store in Fresno’s Fashion Fair Mall.

This recent crime wave may have been inspired by Prop 47, which lowered sentences for drug possession, theft, shoplifting, identity theft, receiving stolen property, writing bad checks and check forgery. The 2014 ballot measure changed these offenses from felonies that can bring prison terms to misdemeanors that often bring minimal jail sentences, if thieves are charged at all.

As we noted, in San Francisco last year criminals pulled off nearly 30,000 car break-ins and police made arrests in only 1.7 percent of the cases. That could easily have proved inspiring to those now ripping off Apple stores, and these thefts are more than simple property crime. The stolen items all belong to people, whether consumers or business owners. Meanwhile, violent criminals also enjoy new government incentives.

Proposition 57, California’s 2016 Public Safety and Rehabilitation Act, expanded parole possibilities for nonviolent offenders and was supposed to reduce the prison population and save taxpayers money. Instead, it burns up more taxpayer dollars and gives some of the worst violent offenders a shot at early release. Those include convicted double murderer Daniel Marsh of Davis, one of the most depraved criminals in state and national history. Despite no new exculpatory evidence, Prop 57 was applied retroactively and his conviction reversed pending a “transfer hearing.”

Next week, a Yolo County judge will rule whether Marsh serves only until age 25, which would amount to nine years for two murders. SB 1390, signed by Gov. Jerry Brown on September 30, bars the prosecution in adult court of those ages 14-18, whatever the gravity of their crime.


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Will Justice Kavanaugh Roll Back Russian Influence?

“The Summer of 82” was quite the show in Washington, with Trump Supreme Court nominee Brett Kavanaugh cast as a drunken sexual predator and accuser Christine Blasey Ford playing a Ph.D. who doesn’t know the meaning of “exculpatory evidence.” In the thrilling denouement, Kavanaugh gets confirmed but Ford fans warn that millions will die and the nation will become The Handmaid’s Tale. As he performs with the Supremes, Justice Kavanaugh might have something else in mind.

As we noted, John Yoo and Robert Delahunty found no major Kavanaugh opinions on abortion, gay marriage and such. Instead, Kavanaugh’s record “creates a deeper challenge to liberalism: rolling back the administrative state,” which the authors describe as “the great threat to individual liberty today.” As Yoo and Delahunty explain, “progressives have evaded the Constitution’s checks and balances on the federal government by unceasingly expanding its regulatory reach, transferring the actual authority to make the rules from Congress to unelected bureaucrats, and then demanding that judges defer to the results virtually without question.”

In his opinion on Consumer Finance Protection Bureau (CFPB), Kavanaugh ruled that the new federal agency, created during a recession, “violated the Constitution because it vested all power over consumer finance in the country in one person, but insulated him from removal by the president.” Before the CFPB, no federal agency exercising executive authority was ever headed by a single person, and a federal judge agreed with Kavanaugh that the CFPB is unconstitutionally structured. That raises a question about another curious practice.

Despite the massive federal bureaucratic state, presidents find it necessary to appoint various “Czars” to deploy executive authority and supposedly solve problems. “Czar” derives from Russian royalty and like those powerful aristocrats the American czars have no mandate from the masses. Perhaps Justice Brett Kavanaugh and his colleagues on the Supreme Court will have occasion to rule whether the presidential czars have any justification in the Constitution.


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

Trump’s Ethanol Plans Double Down on Bad Environmental Policy

[This post was co-authored by Arthur R. Wardle; revised October 12.]

When Washington began subsidizing production of ethanol in the midst of 1970s’ fuel shortages, the aim was to reduce U.S. dependence on imported oil, especially from OPEC countries. But the United States no longer relies heavily on OPEC. In fact, America is now on track to become a net oil exporter. Thanks to the shale revolution and more drilling offshore, U.S. oil production has grown significantly, while imported oil as a share of total domestic oil consumption has plummeted.

Yet, instead of terminating the Renewable Fuel Standard (RFS) — which mandates a sharp increase in renewable fuel consumption by 2022 — the Trump administration has doubled-down on biofuels. President Trump has said that he supports ramping up ethanol production even further by allowing gasoline containing 15 percent ethanol to be sold year-round. Doing so would expand ethanol use and encourage the EPA to ratchet that percentage up in subsequent years. Not surprisingly, the president made his announcement in Iowa, a major corn-belt state.

Gasoline nowadays typically contains just 10 percent ethanol (E10). The EPA currently bans selling richer ethanol blends during the summer because of concerns that it contributes to smog on hot days and damages the engines of older vehicles and some boats, motorcycles, and lawn mowers. The lifecycle emissions of ethanol are difficult to measure, but a comprehensive meta-analysis in the American Journal of Agricultural Economics found the greenhouse gas benefits of ethanol to be almost zero. For other pollutants like nitrogen oxides (NOx) and ozone, ethanol actually is worse than gasoline.

Jerry Brown’s ATF

As his final term winds down, recurring California governor Jerry Brown has been busy touting his tax hikes, the delta tunnels, and the bullet train, among other projects. He also found time to speak out on Supreme Court nominee Brett Kavanaugh. “There’s no doubt that he was a heavy drinker and he told the exact opposite statement,” Brown told reporters. “So his lies, I think, are relatively well-proved and I hope the FBI can figure that out.” This marks a change of sorts for Brown. 

In 2011, police busted state finance director Ana Matosantos for drunk driving. Matosantos took full responsibility for her “reckless and irresponsible” actions and offered to resign. Governor Brown declined the offer and kept Matosantos on the job. 

The governor has twice vetoed bills that would ban smoking on beaches and parks. These measures were designed to reduce litter and prevent wildfires, but Brown thought they were too coercive and the fines too high. So he gave smokers and tobacco companies a break. 

In September, Brown signed a bill barring anyone under 21 from purchasing a rifle or shotgun. As Craig DeLuz of the Firearms Policy Coalition explained: “Governor Brown just told millions of people under 21 that they can fight and die for our state and country with machine guns, but they can’t buy a gun for self-defense in their homes. That’s nuts.” It’s also a change of sorts for Brown. During the 1970s, AIM militant Dennis Banks was involved in a gun battle at a South Dakota courthouse. Banks fled to California and Governor Jerry Brown refused to extradite the fugitive. 

Criminals do not follow gun laws, and those as young as 14 can now kill innocent victims and escape prosecution in adult court, which Brown enabled by signing Senate Bill 1391. As the Davis Enterprise noted, this was a blow to crime victims and their families. Daniel Marsh murdered Oliver Northup and Claudia Maupin at age 15. Maupin’s granddaughter Sarah Rice told the Enterprise, “we were holding on to a very small glimmer of hope that the governor and his team would have heard us begging for the safety of our families and our community.” 

Last year Jerry Brown commuted the sentences of nine convicts convicted of murder or attempted murder. Crime victims and their families might watch how many of California’s convicted murderers he pardons before leaving office. 


K. Lloyd Billingsley is a Policy Fellow at the Independent Institute and a columnist at The Daily Caller.

FDA Still Hooked on Meddling in Nicotine Markets

Back in April, the Food and Drug Administration announced plans to reduce nicotine levels in cigarettes to help current smokers quit and prevent future generations from starting. In an op-ed I wrote for Inside Sources, I argued such efforts are unlikely to help and will likely cause considerable harm.

At the time, lawmakers also pressured the FDA to regulate e-cigarettes, worried they were steering younger generations into nicotine addiction. In the same op-ed, I warned that regulating e-cigarettes, like regular cigarettes, “will also lead to serious harm guided by good intentions.”

Unfortunately, more “good intentions” have followed.

In early September, the FDA began an anti-vaping campaign to deter teens from vaping and issued information requests to e-cigarette companies to determine how popular these products were among younger demographics. Two weeks later, the agency gave five e-cigarette producers 60 days to present it, “with robust plans on how they’ll [the producers] convincingly address the widespread use of their products by minors.”

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