ICE’s ‘Non-Detained’ Aren’t All Home Free

Many are in federal, state or local jails. Many will be deported once their sentences end

Letter to The WSJ. 

"Texas Republican Rep. Tony Gonzales paints a frightening picture in his op-ed “Criminal Migrants Run Free in My District” (Oct. 22), but his argument relies on a misreading of government data. In a letter to Mr. Gonzales last month, Immigration and Customs Enforcement reported that 662,566 noncitizens with criminal histories were on its national docket. The congressman’s claim that “approximately 647,000” of those noncitizens “weren’t detained,” however, is false.

The ICE letter notes that 647,572 noncitizens are on the agency’s “non-detained” docket. “Non-detained,” in this context, doesn’t mean those people aren’t detained—it means they aren’t in ICE detention. Many on the non-detained docket are in federal, state or local jails. Many will be deported once their sentences end. Despite the heightened attention given to ICE’s non-detained docket, the issue isn’t new. The data “includes individuals who entered the country over the past 40 years or more,” according to the Department of Homeland Security.

Fiona Harrigan

Associate editor, Reason"

How to Build on Trump’s Tax Success

The expiration of Trump’s tax cuts next year gives Congress the chance to write an even more pro-growth code

By Kevin Brady and Douglas Holtz-Eakin. Excerpts:

"From 1960 to 2000, per capita gross domestic product rose 2.3% annually. Since then, it has downshifted to 1.4%."

"On average the TCJA [The 2017 Tax Cuts and Jobs Act] stimulated U.S. investment by 20%. Every $1 cut in corporate taxes increases economic production by an estimated 44 cents. Workers saw a 9% increase in inflation-adjusted earnings between Jan. 1, 2018, and Dec. 31, 2020—the fastest growth since the government began publishing data in 1979."

"They created Section 199A—or what they called the 20 Percent Small Business Tax Deduction—which allows pass-through owners to deduct 20% of their business’s income. This deduction reduced the effective tax rate to 80% of the statutory tax rate, supported 2.6 million jobs, raised employee compensation by $161 billion and added $325 billion to output."

Climate Coercion Meets Washington State Voters

Two ballot measures would roll back rules that raise energy prices

WSJ editorial. 

"Progressive climate dreams tend to crash and burn when voters are confronted with their real costs. That collision is playing out in Washington state this year in a pair of ballot measures that would repeal extreme climate policies.

Prop. 2066 would strike down large parts of rules designed to cripple natural-gas use by consumers. The first rule by the state Building Code Council in 2023 made it cost-prohibitive to put natural-gas appliances in new buildings. The Building Industry Association of Washington says the rule will raise the cost of a single-family home with gas appliances by $15,000-$20,000.

The ballot measure would also push back against a March law that lets Washington’s largest natural gas and electricity provider, Puget Sound Energy (PSE), shift the costs of meeting the state’s climate goals onto consumers. It also mandated that PSE by Jan. 1, 2027 file a plan to “achieve all cost-effective electrification of end uses currently served by natural gas.”

Both climate measures reveal the animus of the left to any fossil fuels, even natural gas that is reducing CO2 emissions as it replaces coal. Washington state contributes a mere 1.5% of all U.S. emissions, and the rules would have no effect on the climate.

But they would punish Washington residents already hurt by rising prices. Prop. 2066 attracted the second most signatures of any initiative petition in state history. An October poll by Cascade PBS and Elway Research found 51% of registered voters supported the initiative while 28% opposed it.

The second ballot initiative, Prop. 2117, would repeal the state’s carbon credit system and stop state agencies from implementing future cap-and-trade programs. Implemented in January 2023, the current system aims to reduce greenhouse gas emissions on a radical schedule that requires a 95% cut below 1990 levels by 2050. Businesses that emit more than 25,000 metric tons of carbon a year are covered. They can purchase a diminishing supply of credits in quarterly auctions—the most recent of which had a price of $29.88 per credit.

The cap-and-trade auctions provided a $2 billion windfall for politicians, which explains why opponents of Prop. 2117 have poured more than $16 million into fighting it. But as in California, cap-and-trade is raising energy costs for consumers. In January the Association of Washington Businesses estimated that the program has raised the price of gasoline by $0.45 a gallon. Average Washington gas prices are the fourth highest in the nation at $4.05 a gallon.

Supporters of Prop. 2117 are being greatly outspent, and the Cascade PBS/Elway poll found it trailing 46%-31%. But the rest were undecided, and Washington voters have rejected costly climate measures in the past. They shot down ballot initiatives to create a carbon tax in 2016and an emissions fee in 2018.

Lawmakers in Olympia are living in an energy fantasy land in which they pretend they can bend the world’s climate at little cost. They’re deceiving the public on both counts. The state’s energy use is likely to double in 20 years, and that probably underestimates demand from artificial intelligence. Voters can send a message about reality by passing both ballot measures."

The Data Don’t Lie, and Tariffs Don’t Work

Economic freedom produced the economic miracle of the 19th century—and it can do so again

Letter to The WSJ. 

"In responding to our op-ed “No, Tariffs Don’t Fuel Growth” (Oct. 17), Robert Lighthizer has a big problem. His protectionist policies were put to the test starting in the middle of 2018, and they failed even on their own terms. The economic growth rate slumped in 2019, exactly as the Congressional Budget Office predicted. Manufacturing employment as a share of total nonfarm employment continued to decline. The promised reduction in the trade deficit didn’t happen. Evidence has consistently shown that the wages paid to workers whose jobs were “saved or created” by recent tariffs are only one-tenth the cost the tariffs have imposed on the economy.

Desperate for evidence that protectionism can generate prosperity, something it failed to do in the 20th and 21st centuries, Mr. Lighthizer and other protectionists claim that tariffs in the 19th century caused the American economic miracle. Left out of their story is that the federal government couldn’t tax income prior to 1913 and an excise tax on whiskey caused a rebellion. Tariffs were the dominant source of federal revenues for the entire 19th century, funding more than three-quarters of the federal government. Mr. Lighthizer says he doesn’t want to argue about data because in the 19th century the economy grew faster when tariffs were falling.

Economic freedom, not protective tariffs, produced the economic miracle of the 19th century. If we will give it a chance in the 21st century, it will do it again.

Phil Gramm and Prof. Donald Boudreaux"

America Can’t Do Without Fracking

Shale is crucial to the U.S. economy, and it allows Washington to buttress our allies across the globe

By Daniel Yergin. Excerpts:

"the first two decades of this century . . . The U.S. was then the world’s largest importer of oil. Today it is energy-independent with, S&P Global estimates, more than 70% of its oil and more than 80% of its natural gas produced through fracking."

"For more than four decades every president aspired to it, but their goal seemed unattainable."

"In recent years, however, America has achieved energy independence on a net basis. U.S. output is closing in on 13.5 million barrels of crude oil a day, exceeding that of perennial big producers Saudi Arabia and Russia by several million barrels per day. Add what are called natural-gas liquids, and the U.S. produces around 20 million barrels per day.

Textbooks used to hold that commercial production of shale was impossible. Innovation and investment over decades have proved otherwise."

"battery-powered and plug-in hybrid electric vehicles will account for about 2% of the U.S. on-road light-vehicle fleet in 2024. If fracking were banned, the U.S. would need to import extraordinary amounts of oil to fuel our gasoline- and diesel-powered cars. In 2008, before shale-oil production began in earnest, the net bill for importing petroleum was $388 billion—more than 40% of the total merchandise trade deficit. Today the same bill, by contrast, is virtually nothing."

"If the U.S. were to start importing again, the price of oil would doubtless rise, as we would be forced to compete for supplies with countries such as China"

"The U.S. also exports a large amount of liquefied natural gas, mostly produced from shale. Without it, LNG’s positive effect on the trade balance would disappear too."

"In previous decades, such upheavals as Ukraine’s war against Russia and Israel’s war with Iranian proxies would have spiked global prices. In recent years the scale of U.S. production has helped offset any such surges." 

Nobelists for Harris Are Unburdened by Proof

Economists who sign letters of support for the Democrat should be ready to present their evidence

By Kevin Hassett and Casey B. Mulligan. Excerpts:

"For Mr. Trump, there is ample evidence that his tax cuts and deregulatory efforts had salutary effects. In their recent paper reviewing the academic research on those policies, economists Michael Faulkender and Aaron Hedlund concluded that “pro growth tax reform works.”"

"To advance equality, environmental protection and other social goals, Mr. Biden and Ms. Harris in 2020 proposed an ambitious lineup, particularly in taxes, health insurance, regulation and energy policy. They mostly got their way in all these areas but taxes."

"The redistribution elements, including redistribution to favored interest groups, would primarily discourage work, we found. The green energy and other productivity-reducing regulations would reduce real wages. Altogether, we expected the U.S. economy to be put on a path with 5% less inflation-adjusted per capita income from work by 2025 relative to the Trump-policy baseline. Half of this would come from a failure of employment and work hours to keep up with the population of people 16 or older. The other half would come from reduced real hourly wages.

The nearby chart shows what actually happened to inflation-adjusted real employee compensation per person 16 or older. It is an index taking the value of 100 for the first quarter of 2017. Although we don’t know for sure what would have happened if Mr. Trump had begun a second term in 2021, our chart shows a linear trend from the first quarter of 2017 through the fourth quarter of 2019. The trend is a good model of what happened after the second full quarter of the pandemic into late 2021. 

Then inflation hit and employee compensation—and national income more broadly, which isn’t shown in the chart—couldn’t keep up. That’s when we began to see the deleterious effects of Mr. Biden’s policies. By the second quarter of 2024 (the most recent national accounts), real per capita income from work remained 4.6% below the trend. That’s remarkably close to the 5% we predicted.

Also as we predicted, the 4.6% shortfall is due to both low employment and low real wages. But the real-wage part accounts for three-fourths of the shortfall, whereas we expected it to be half."