Monday, February 27, 2017

The Global Economy: Another Casualty of Homophobia

Many think of the gay rights in terms of civil rights or social policy. I would go as far as framing the gay rights movement as the civil rights movement of our time. There are few that few view gay rights in economic terms, as if there is not an economic impact to homophobia or anti-gay sentiment. As we will see shortly, the deprivation of civil liberties also leads to economic consequences, as well.



Just last week, the Journal of the American Medical Association released a study on how allowing for same-sex marriage resulted in fewer suicides of LGB adolescents (Raifman et al., 2017). The legal acknowledgment of same-sex marriage mitigated stigma behind gay, thereby reducing suicides in LGB adolescents by 14 percent. You might be thinking this is not an economic issue, but in fact, it is. When people say "children are the future," that means they are future employees in the workforce. Having happier and healthier children who grow up into being happier and healthier adults means a more vibrant workforce. This study is not the only one that shows results that can frame the issue in economic terms.

The United Nations economist Eric Lamontagne conservatively estimates that homophobia costs the global economy $119 billion annually, which is 0.1 percent of the world's GDP. World Bank consultant Mary Virginia Lee Badgett conducted a 2014 case study of homophobia in India. What she found was that homophobia could be bringing down India's GDP anywhere from 0.1 to 1.7 percent of its GDP (i.e., $2-31 billion). A 2014 report from the Williams Institute illustrates the strong correlation between homophobia and economic decline. While dated, a 2001 study from Canada shows that homophobia could be causing $1.9 to $8.1 billion of economic costs. The U.S. Senate Joint Economic Committee even makes the argument that workplace discrimination based on sexual orientation costs the economy.

Why does homophobia and anti-gay policy have such an effect on the economy? These policies come with enforcement costs, limiting job opportunities for LGB individuals, increased healthcare costs for LGB individuals that lowers life expectancy, societal stigma that makes it more difficult for LGB individuals to lead productive lives, the costs of increased likelihood of being victim of an anti-gay crime, the difficulties that a more homophobic society makes it for LGB individuals to form long-term relations, and incarceration costs for countries that have laws in which being gay or homosexual activity is punishable under the law. When you prevent productive people from participating in the labor force or make them less efficient then they could have been otherwise, that costs money.

Homophobia that translates into public policy is not just a civil rights violation or a severe moral shortcoming. Homophobia is also an unfortunate state of affairs that costs economies billions of dollars. 

Thursday, February 23, 2017

Parsha Mishpatim: A Jewish Obligation to Help the Stranger, the Refugee, and the Immigrant

It is a rare occasion when I mix Torah and politics, but this is one of those times. Donald Trump has only been President of the United States for about a month, and he has already gone for a refugee ban, a wall on the U.S.-Mexican border, and expanding the pool for those who qualify for deportation. Needless to say, it has not been a stance that has been friendly towards immigrants, refugees, or other foreigners who come on American soil. I hope Trump changes his stance, but until he does, I have to ask: What does the Torah have to say about refugees and the downtrodden? How is a Jew supposed to respond? What is the Jewish perspective that is most based in the sources? This week's Torah portion gives us some insight to that question:

וגר לא תונה ולא תלחצנו כי גרים הייתם בארץ מצרים.
And a stranger you shall neither wrong nor oppress because you were strangers in the land of Egypt. -Exodus 22:20

The Hebrew word גר (ger) came to mean "convert" in later rabbinical texts. I don't deny the ability for words to change meaning or take on new meaning, but the word ger in this context is "stranger" (also see Genesis 15:13; Genesis 23:4; Exodus 2:22). The subordinate clause of "because you were strangers in the land of Egypt" makes more sense when the word גר refers to a stranger rather than a convert.

Let's talk about those strangers for a bit. The Hebrew Bible mentions two types of strangers: the alien (גר) and the resident alien (גר תושב; ger toshav). The Hebrew word ger comes from the Hebrew word "to sojourn" (also spelled גר). The word toshav (תושב) means "to reside," which helps us distinguish between the two. We have a similar distinction in secular law, where the resident alien has a more permanent status of residency, such as a green card. Jewish law has a similar view. The ger is one who stays on a more temporary basis. The resident alien had a more permanent status in biblical-era Israelite society. Depending on your view, the resident alien either rejects idolatry or takes on the seven Noahide laws as binding (Avodah Zarah, 64b). When looking at Exodus 22:20, we are not talking about a resident alien specifically, but generally someone who is a stranger. A few interesting things when looking at the passage:

  • In Exodus 22:20, it gives us two negative commandments about what not to do to a stranger. The first is to not wrong them [לא תונה], which Rashi takes as "don't annoy them about their status." The second is to not oppress them [לא תלחצנו], whether that is in the form of not robbing the stranger (Rashi) or putting the stranger into forced labor (Rashbam). The verse makes the point to not take advantage of the stranger in their vulnerable position.
  • The reason that we are not supposed to wrong or oppress the stranger is equally interesting: "because we strangers in the land of Egypt [כי גרים הייתם בארץ מצרים]." What does this mean? Rashi says if someone vexes you about being a stranger, you can retort by saying that "you too came from strangers." Ramban said that because you were once weak and helpless in Egypt, you cannot oppress the weak without impunity, i.e., G-d hears the cry of the stranger and will exact punishment accordingly. 
  • The common thread is that what the Jew experienced in the land of Egypt was being a stranger, being considered  completely "other." The stigma and marginalization of being considered a stranger did not only lead to physical abuse, but emotional and psychological abuse. 
  • In Exodus 22:22, it says that afflicting the stranger [or any one else in society who is disenfranchised] leads to G-d's anger and wrath. Even more interesting about this verse is that it switches from "you" in the singular to the plural, meaning that if a community treats the stranger poorly, it leads to the whole community suffering punishment (Abraham ben Izra).

Let's go beyond this specific passage and look at it more broadly. When realizing the importance of how we treat the stranger in our midst, we have to remember that it not mentioned just once. The Talmud (Baba Metzia 59a) says that how we treat the stranger is mentioned in the Torah 36 times! The Torah is a concise text, so it doesn't repeat itself unless the message is important.

But wait, does this mean we have total disregard for national security? No. The land of Israel, even the biblical version, had borders that were protected. If our physical or financial security is at risk, we are not to endanger ourselves (Shulchan Aruch, Chosen Mishpat, 156:7). Ensuring secure borders is the national version of the Jewish concept of pikuach nefesh (saving a life), which is to say that we do not capriciously put our lives at risk. When looking at the case with refugees, and less so with undocumented workers, we are not carelessly putting our lives at risk, so these considerations do not apply in our current situation.

Unless there is some sort of excessive burden, we are not meant to turn away from the stranger. Quite the contrary! As R. Ismar Schorsch put it, "the bitter taste of slavery honed Israel's moral sense." Whether we are talking about a stranger, permanent resident, convert, or refugee, the underlining ethical imperative is the same. We are not to inflict that suffering unto others. We are not to stand idly by while it happens. More importantly, we are commanded to love the stranger (Leviticus 19:33-34; Deuteronomy 10:19), which is no easy task. It's difficult enough to love your neighbor. Being close to your neighbor in proximity means that you at least have an opportunity to get to know your neighbor. It makes more sense to be kind to a member of your in-group. It helps explain why the Torah mentions 36 times how to treat the stranger: it's more difficult, but still necessary. The stranger is more of an outsider, yet we are meant to love the stranger. Why? Because we know the heart of a stranger (Exodus 23:9), and thus identify with the experience of being a stranger, of being vulnerable, of having no recourse. Also, because G-d loves the stranger, we are to love the stranger as an act of imitatio Dei (Abraham ben Ezra on Deuteronomy 10:19).

No, I haven't suddenly become a liberal or a Social Justice Warrior. While I still identify as libertarian and can see certain libertarian aspects in Judaism, I realize that Torah is neither liberal nor conservative. After all, G-d being Transcendent Oneness means that He also transcends politics, which means the Torah also transcends political ideologies. This is not about where I lie on the political spectrum. As a Jew looking at the traditional sources, I can't help but react in such a manner. Jews have been physically tormented, psychologically abused, ostracized, stigmatized, and murdered because they were strangers. Jews have been treated as less than human beings with basic dignity stripped away. That is what happens to strangers when power is left unchecked or not held to a higher standard. Whether it was being in the land of Egypt, the Crusades, the Spanish Inquisition, pogroms, or the Holocaust, the Jewish people have a profound understanding of what being treated like a stranger feels like. How strangers and refugees are treated is decidedly a Jewish issue. The Jew has been and is the archetypical stranger, and as such, should stand up for other strangers.

Not only are Jews acutely aware of what being a stranger feels like (Ramban), but we are not to inflict that on others in part because Judaism is not about "might is right" (Abraham ben Izra on Exodus 22:20). How we treat the least powerful and most vulnerable is a great reflection of how we have internalized Jewish values. That idea goes all the way back to the first Jew: Abraham. He treated wayward strangers with the utmost respect. The Talmud (Beitzah 32b) goes as far to say that if a Jew is not compassionate, that individual could not possibly be a descendant of Abraham. If you contrast that to Sodom, Sodom treated outsiders and immigrants with enough discontent where helping the outsider was punishable under the laws of Sodom. What made a Sodomite despicable was not men sleeping with other men, but rather maltreatment of the poor and needy (Ezekiel 16:49).

While the enslavement of the Israelites as told in the Torah was centuries ago, we are still meant to remember that experience of what it was to be a stranger so we don't let history repeat itself. It is so that when all is said and done, we can remind ourselves that the stranger is not some outsider, but that we are all human beings created in G-d's Image and to be treated as such.

Monday, February 20, 2017

Why Trump Should Reverse Obama-Era E-Cigarette Regulations

I need a break from critiquing Trump's latest barrage of executive orders and policy recommendations. Instead, I would like to take a look at the previous Obama administration's bad policies and see what Trump could do. The policy that is of interest today is that of electronic cigarettes, more colloquially known as e-cigarettes. At the end of his second term, the Obama administration's Food and Drug Administration (FDA) created additional regulations on e-cigarettes by extending the regulations of the Family Smoking Prevention and Tobacco Control Act of 2009 to e-cigarettes. The FDA's mentality was "if it looks like a cigarette and acts like a cigarette, it must be a cigarette." That assumption defies common sense because e-cigarettes don't contain tobacco (even though some of the nicotine for e-cigarettes can be extracted from tobacco), they don't create the problems of second-hand smoke that regular tobacco products do, and the carcinogens tars and gases in regular tobacco products are absent from e-cigarettes. Those differences right there make me wonder what the FDA was thinking or even why we need as much regulatory oversight as regular tobacco products. However, we have to contend with the reality that the regulations exist. The question is whether they should still be in play.

Let's forget for a moment that the regulatory barrier of costing $1 million for each FDA application to approve a given product, which would de facto put the 90 to 99 percent of e-cigarette producers out of business. The primary concern about e-cigarettes is the health concern, mainly that they are comparably bad for one's health as regular tobacco products. I looked at the topic of e-cigarettes about three years ago. At the time, e-cigarettes were a new phenomenon, and research on the topic was still preliminary. Even with preliminary evidence, the academic literature at the time was showing that e-cigarettes are less harmful than regular cigarettes. What more recent academic literature can we add to the list?

  • Cancer Research UK released a study earlier this month about e-cigarettes. This study is significant because it is the first one to adequately measure the long-term effects of e-cigarettes. They were not about to say that e-cigarettes are completely harmless because let's be honest: any activity comes with at least some risk, no matter how small. However, using a comparison group of those who go through nicotine replacement therapy (NRT), e-cigarettes are about as safe as NRT, which means that e-cigarettes are much safer than regular tobacco products.  
  • A 2015 study from Public Health England, which is the United Kingdom's equivalent of the U.S.' Department of Health and Human Services (HHS), shows that e-cigarettes are 95 percent safer than regular cigarettes. 
  • The University of Victoria made public its study on vaping in January 2017. Not only is there no gateway effect in terms of bringing people over to regular tobacco products, but it is as effective as other NRT devices used to quit smoking. Also, the vapor from e-cigarettes is less harmful than cigarette or cigar smoke. 
  • The Royal College of Physicians stated in its 2016 findings that "the public can be reassured that e-cigarettes are much safer than smoking."
  • A 2017 study from the Irish government shows that e-cigarettes provide smokers a better chance to quit smoking. 
  • In April 2016, seven top international tobacco experts urged the FDA to keep an open mind on e-cigarettes. They illustrated their point by synthesizing current data to show the potential harm reduction in using e-cigarettes (Levy et al., 2016). 
  • Here are a list of studies showing how e-cigarettes can assist smokers in quitting smoking: Delnevo et al., 2016; Levy et al., 2016; O'Brien et al., 2015; Polosa et al., 2015Rahman et al., 2015; Adriaens et al., 2014Polosa et al., 2014.
  • Looking at CDC data on youth tobacco use for 2011-2015, we see that e-cigarette use increased. The plus side is that e-cigarettes were substituted for cigarettes and cigars (see below), both of which have higher risk to consumers. Furthermore, cigarette consumption for youths has been on the decline since 2008, which is around when e-cigarettes started to trend in the market.




Am I here to say that e-cigarettes are harmless? No. If you haven't started smoking e-cigarettes or conventional cigarettes, I wouldn't recommend it. At the very least, nicotine has addictive qualities. However, given that current academic literature shows benefits of e-cigarettes, it seems foolhardy for the FDA to take on an abstinence-only approach with such an important health issue. The government over-emphasizes potential risk to children while ignoring the harm-reduction benefits. Even if we want to see whether a small subset of teenagers or adults are harmed in the long-run (although current evidence shows that e-cigarettes are about as safe as NRT), we would have to wait for another 40 years to be absolutely certain. In the meantime, 36.5 million smokers in the United States do not have access to a low-risk alternative to smoking, which is the leading cause of preventable death in the United States. These 36.5 million individuals risk the potential of losing an average of 20 years of their life (Holford et al., 2014). It is not realistic to prevent every smoking-related death, but rather to prevent as much as possible. That is where tobacco harm reduction comes into play (see R Street policy brief here for policy alternatives). If it remains law, Obama's e-cigarette policy has the potential to hasten the deaths of thousands of Americans. Trump said that he wanted to cut the red tape for FDA pharmaceutical approval in order to save lives. Let's hope he applies that same thought process to current e-cigarette regulations.

Thursday, February 16, 2017

Why Trump Will More Than Struggle With Bringing Millions of Manufacturing Jobs Back

President Trump has been quite busy since he took office. His presidency has already started off as peculiar because he is doing something that is rare in politics: working towards keeping his campaign promises. This is not to say that a president has never kept a campaign promise, but the tenacity in which Trump has worked towards his stated campaign promises is quite unusual. Some find this sort of honesty refreshing in the world of politics, while others find it terrifying precisely because of what he promised. As a personal goal for the next four years, I will use this blog at least in part to cover his policies and how they relate back to his campaign promises. I find it important to judge Trump on the merit of his policies, both good and bad. The idea of trying to bring manufacturing jobs is no exception.

Late last month, Trump started the Manufacturing Jobs Initiative, for which he will consult with major manufacturers to find ways to "best promote job growth and get Americans back to work again." Based on his own campaigning, Trump faults "bad trade deals" such as NAFTA, as a major culprit of why manufacturing jobs fled the country. For Trump, if we could just get better trade deals and close the trade deficit, we can "make America great again" by bringing back those manufacturing jobs. Throughout his campaign, Trump presented a nostalgic vision of manufacturing as it was in the 1950's, the one where a high schooler with a C-average GPA could go down to the factory, get a job, and have a middle-class lifestyle. I hate to burst the bubble here, but that world doesn't exist anymore. What's more is that I know that world isn't coming back, certainly enough to where I can call Trump out on a false campaign promise. How so?

Trump wants to bring manufacturing jobs back, but the problem is that he misdiagnoses. Trump wants to blame trade deals and China and Mexico on why there has been a decline of manufacturing employment. Gathering statistics from the Bureau of Labor Statistics, the St. Louis Federal Reserve shows the historic trends of manufacturing employment in the United States (see below). The number of jobs peaked in 1979 with 19.5 million manufacturing jobs, and has overall declined since then. In terms of manufacturing jobs as a percent of overall jobs, the United States reached that peak in 1943, and it has been declining ever since. The United States has been on an overall, decades-long decline when it comes to manufacturing employment, even with the increase since 2010 that was caused by advanced manufacturing. The news is better when we look at overall job creation, instead of just manufacturing jobs. Even with the overall decline in manufacturing jobs, data from the Bureau Labor Statistics show that the employment growth in the agricultural and service sectors from 2004 to 2014 more than compensate for the decline in manufacturing jobs. A similar decline has been taking place in manufacturing as a percent of GDP, and that is not just for the U.S., but also Germany nd the rest of the world (see World Bank data here).



With such a decline in employment and manufacturing as a percent of GDP, you would think that Trump's characterization of a dying manufacturing sector is accurate, right? Wrong! The chart below, which is from the Brookings Institution, says plenty. Contrary to Trump's narrative of a dying manufacturing sector, the manufacturing sector has gotten larger. As the Congressional Research Service illustrates in its January 2017 report on U.S. Manufacturing, the United States provide $2.17T value-added in manufacturing (CRS, p. 2). If manufacturing were on the decline, you wouldn't see that manufacturing accounts for 77 percent of research and development dollars spent in the U.S, and you wouldn't see over a trillion dollars in foreign direct investment (FDI).


Not only is the manufacturing sector larger, but it is more successful in terms of output. In 1980, it took 25 workers to generate $1 million in manufacturing output. Adjusting for inflation, it now only takes 6 workers to generate the same output (Brookings Institution). The United States has less manufacturing jobs, but produces more in manufacturing than ever. Since 1980, U.S. manufacturing exports have grown fourfold. This hardly sounds like a decaying manufacturing sector to me.

Why has output considerably outpaced employment? It is primarily due to productivity growth, and not trade policy. According to a 2015 study from Center of Business and Economic Research at Ball State University, 85 percent of job loss in manufacturing has been due to technological development, primarily automation. Even this more pessimistic study from MIT shows that trade policy only contributed to a quarter of the manufacturing employment decline, and that the remaining 75 percent was due to technological development. Automation has rendered millions of low-skilled manufacturing jobs redundant (see here for examples of automation). This is why Trump, or anybody else for that matter, can't bring the jobs back because, as the Wharton School of Business details, there's nowhere to bring them back from.

I covered automation in a blog entry a couple of years ago and discussed how robots are going to greatly shape the job market in the future. I concluded that a) while there will be job destruction, there will also be considerable job creation, and b) there are not going to be as many jobs lost as one would think. Also, Trump plays up the lost jobs while ignoring the creation of new jobs or value that consumers derive as a result of the automation. In 1950, the United States went from having 20 million to just 3 million people living on farms, but I don't hear any complaints about higher salaries, lower food prices in inflation-adjusted dollars and percent of overall individual budget, or working less hours as a result. A similar displacement happened with the rise of computers. Yes, there was a loss in administrative jobs and jobs in other sectors, but who is willing to trade in their laptops and smartphones to go back to those times?

Unless Trump decides to ban automation or other technological progress, nothing that Trump or anyone else can do is going to reverse the trend towards automation. To illustrate just how gone these jobs are, think of this: Since 1980, the United States has lost 6.4 million, or about one third, of its manufacturing employee base. To recover just half of those lost jobs, the Brookings Institution calculates that Trump would need to increase productivity by an unprecedented 26 percent. How we approach job creation needs to be a forward-looking endeavor instead of lamenting over what used to have.

What this means is that Trump can't be blaming China or slapping tariffs on Mexico, especially given both the negative effects of tariffs and positive effects of freeing up economies. If Trump wants to properly respond to the increased automation in the manufacturing sector, he cannot halt progress, but instead will need to find ways to adapt to the not-so-new reality of manufacturing. As the Economist points out, advanced manufacturing provides good jobs, but these jobs need skills and adaptability. With the increasing prevalence of automation, if Trump wants people to work in manufacturing, it is going to take a ton of industry-related training. The Brookings Institution illustrates the importance of revamping education to train students in science, technology, engineering, and mathematics (STEM). However, given the decline in manufacturing employment, both in absolute numbers and percent of overall employment, Trump will need to focus on more than just manufacturing. He should focus on making sure people have the education to take on high-skilled jobs in the service sector, as well. He should focus on some of his other more positive campaign promises, whether it is to lower the corporate tax or to remove burdensome regulations on businesses. If Trump focused less on protectionist policies and instead focused more on liberalizing the economy to encourage further investment in the United States, there is a more-than-distinct chance that he can indeed make the American economy great again.

Monday, February 13, 2017

Should the United States Pursue a "Strong Dollar" Policy?

Many of us have had those questions or concerns that have kept us up throughout the night. Only by calling a friend, family member, or colleague to talk it through do we feel better, usually enough where we can get some sleep shortly thereafter. The Huffington Post reported President Trump recently had one of those moments. Trump reportedly made a 3am call to his National Security Advisor, General Michael T. Flynn, and asked Flynn if a strong dollar or a weak dollar is better for the economy.

On the one hand, I don't know why Trump called General Flynn. While the General has an MBA in Telecommunications, Flynn's expertise is in counterterrorism, not macroeconomics. I am also perplexed because you would think that an international businessman would at least have a basic understanding of foreign exchange rates and how they work. I do question Huffington Post's allegation because Trump was complaining about a strong dollar last month. On the other hand, it is nice to see that Trump is consulting someone on an economic issue. Regardless of whether this conversation between Trump and Flynn actually took place, the question is still a good question to ask: "Should the United States pursue a strong or weak dollar?" In everyday conversation, we hear the word "strong" and automatically equate it with being good or powerful, whereas "weak" has the connotation of being bad or inadequate. When discussing currency in foreign exchange rates, the terms "strong" and "weak" do not have the same meaning. Trump's alleged question is a good one because it is not as simple as "a strong dollar is good" and "a weak dollar is bad." As I will elaborate upon in the upcoming paragraphs, the answer to the question is more complicated than a simple "yes" or "no."

Before continuing, here is a basic explanation of foreign exchange rates. As the name suggests, the exchange rate expresses the price of a nation's currency in terms of another currency. The exchange rate can either be expressed directly in terms of the domestic currency or indirectly in terms of the foreign currency. To use the exchange rate between the United States dollar (USD) and Canadian dollar (CAD) as an example, this exchange rate has historically fluctuated between 0.6CAD/USD and 1.1CAD/USD. What we see here is how many Canadian dollars it takes to exchange for a United States dollar. When the exchange rate is something like 0.6CAD/USD, the dollar is considered weak because it takes more than one United States dollar to exchange for a Canadian dollar. If the exchange rate is 1.1CAD/USD, the dollar is considered strong because it now takes more than a Canadian dollar to purchase a United States dollar. When the United States dollar strengthens, it becomes more valuable relative to other currencies, a process known as appreciation (the opposite being depreciation). As we see from the example, any two currencies can be compared with a foreign exchange rate to express the relative value and strength of a certain currency.

There is no simple answer as to whether there should be a stronger dollar because much of whether a certain president, Congress, or business wants a stronger dollar depends on overall policy goals. There are both winners and losers under a stronger dollar. To illustrate that point, what I would like to do now is review who generally benefits and suffers under a stronger dollar, and then go into what the implications of a stronger dollar would be.

Who Benefits Under a Stronger Dollar?
  • American consumers. When the dollar appreciates, the purchasing power of American consumers abroad also increases. This affects when Americans want to purchase foreign goods, as well as when Americans travel abroad because the dollar is worth more in other countries (75 million foreigners visited the U.S. in 2014; tourist statistics also here). 
  • American producers that import and non-American producers that export. Foreign goods and services become cheaper under the strengthening of the dollar. American companies that base their business on imports, such as Wal-Mart and Target, benefit as a result of cheaper imports. 
  • Foreign companies with lots of business in the United States. Foreign companies that have a large number of sales in the United States (e.g., BASF, Airbus, Bayer) earn that revenue in dollars, which translate to gains on their balance sheets. 
Who Suffers More Under a Stronger Dollar?
  • Foreign consumers. What is true for American consumers is oppositely true for foreign consumers. An appreciation of the dollar makes American goods more expensive for those that do not use the United States dollar as their currency, as well as making tourism in America more expensive for foreigners.  
  • American producers that export and non-American producers that import. Since the dollar becomes stronger, American goods become more expensive for foreigners and thus less competitive in the global market. This also means that American companies that export their goods or services are going have a more difficult time to compete based on price. The American manufacturing sector is more likely to be adversely affected since they more heavily rely on exports. A stronger dollar means that American manufacturers will export less and have greater incentive to move production elsewhere. When the Japanese yen appreciated in the 1980s, the yen got stronger, and as a result, Japanese companies were moving production and corporate headquarters outside of Japan. This is important for Trump to keep in mind, particularly since he made a campaign promise about bringing manufacturing jobs back to the U.S.
  • American companies with lots of business abroad. American companies that have a large number of sales abroad (e.g., McDonalds, Coca-Cola, Phillip Morris) earn that revenue in other currencies, which translate to losses on their balance sheets. 
  • Foreign countries with lots of debt in U.S. dollars. Because a high percentage of foreign reserves are in U.S. dollars, drastic U.S. monetary policy has real potential to cause a global financial crisis. As the dollar rises, the cost of servicing the debt also rises, which really affects emerging countries with too much dollar-denominated debt. If the debt becomes too expensive and burdensome, it could lead to insolvency issues. 
What Should Trump Do?
Whether a strong dollar is a good idea depends where the economy is, the composition of the dollar, and why the dollar is appreciating. A strong dollar usually indicates that the American economy is doing well, but a weak dollar makes American goods look relatively cheap, which can boost the economy since foreigners will buy more American exports, especially during a recession when we need to boost employment and exports. If the Federal Reserve jacked up interest rates, it would appreciate the dollar. If inflation were out of control, that would be smarter policy than if the dollar were approaching deflation. The effects of a strong dollar also depend on what consumers spend their dollars on, and how they react as the dollar appreciates. This still doesn't quite answer what Trump should do.

Given the effects of a stronger dollar, it creates a quandary for the Trump administration. First, Trump's foreign policy is that trite, populist notion of "America First." His policy focus is less on how do we benefit everybody, and much more on how to benefit the American people above all else. As already mentioned, greater purchasing power for Americans through a stronger dollar would help.

However, we do have to remember that in addition to putting America first, Trump also harped on trade deficits during his campaign. Since a stronger dollar makes American exports more expensive, a stronger dollar widens trade deficits. If Trump's primary goal is to lower trade deficits, Trump is going to run into a bigger problem based on the policies he is planning to implement. Trump is looking to cut taxes, preserve entitlements, and increase spending in infrastructure and defense. In economic terms, using tax cuts and/or increased government spending is referred to as expansionary fiscal policy. Congress is also looking to pass the border adjustment tax, and as I explained last month, that would also lead to strengthening of the dollar. These intended policies on taxing and spending are going to lead a stronger dollar, which means that the trade deficit would get bigger under President Trump. Trump could try imposing capital controls, but that would in all probability cause financial panic in the global markets.

Trump is in a quandary because he will not be able to keep his campaign promise of reducing the trade deficit and expansionary fiscal policy, whether that is in the form of tax cuts or increased government spending. Trump will have to come to terms with what he would like to do, but based on what he has lined up, the dollar is going to become stronger.

As things currently stand, we shouldn't worry too much if the dollar is stronger. While the dollar has been appreciating, the Federal Reserve's price-adjusted Broad Dollar Index shows that the dollar has not been this strong since 2003, and is still below its peak in the 1980s. Another reason not to be worried: if the dollar gets too strong, American goods will be too expensive and foreign goods and services will look really good in comparison. In the short-run, that would increase demand for foreign goods and services, which would appreciate foreign currencies. Because of the economic concept of the J-curve, the dollar will eventually depreciate and reach enough an equilibrium to offset being too strong.

What I worry about is that Trump will use the "strong dollar/weak dollar" dichotomy to justify protectionist policies and raise the risk of trade retaliation. A drastic turn towards protectionist policy, the Federal Reserve increasing interest rates, or other forms of sudden policy can appreciate the dollar so quickly that it could send shockwaves across the global economy, especially for emerging markets. Given that the global currencies (i.e., the euro, Japanese yen, and Chinese yuan) are going through their own issues, screwing the global economy for some vague sentiment of "America first" would end up screwing over everyone, including the United States. Having stability during this volatility is a wise decision, according to macroeconomic consulting firm Capital Economics. Trump should be less focused on whether the dollar is strong because it is adequately strong at the moment, and instead should focus more on what will make for good policy. Making America great again would not be through retaliatory currency policy or protectionist trade policy, but through liberalized trade and for Congress to pass a more tempered fiscal policy than Trump was promising on the campaign trail.

Thursday, February 9, 2017

Why Women Clergy Should Have a Place in Orthodox Judaism

Last week, the Orthodox Union stirred up some controversy by releasing a response on the professional role of women in the synagogue. While it is hardly a surprise that the Orthodox Union (OU) feels this way, what is contentious is that the policy bars Orthodox female clergy, known as a  Maharat (acronym for "leader of Jewish law, spirituality, and Torah"; מנהיגה הלכתית רוחנית תורנית), from serving as clergy in over 400 of the OU's member synagogues. In its response, the OU outlines three facets that constitute its halachic methodology: legal sources, precedent, and a "relevant halachic ethos." Going off of those three concepts, the OU then goes into how Jewish law does not allow for women to become kings or communal authority figures of any kind (including judges), and also tries to argue that a woman taking on this role is a violation of modesty (צניעות; tzniut). Even though the OU's response fully recognizes that "current women's roles in society, even in Jewish society, are undoubtedly different than in the past," they still conclude that women should not be clergy. This is further emphasized that for the OU, having a "relevant halachic ethos" means having separate gender roles in which men and women have different goals. The fact that not allowing for women clergy has been tradition (מסורה ; mesorah) is what the OU defines as "a Torah ethos."

It's intriguing that the OU is riled up about the postulation that "halachic history evidences a precedent of precluding women from serving as clergy or receiving ordination" because it "always has been normative." As Tevye said in Fiddler on the Roof, "our old ways were once new," and that plays out even in the last century. There wasn't a particular precedent when the Bais Yaakov movement was started in 1917. Remember that before the Bais Yaakov movement, girls did not receive a formal primary or secondary religious education because whatever they learned, they did so in the home. This change was revolutionary, but as the Chofetz Chaim pointed out in his ruling, it was necessary. It wasn't until the 1970s that Talmud was formally taught to women in a post-secondary setting. There was a time when women studying Talmud was forbidden. The bat mitzvah did not make its debut in the Orthodox world until the latter part of the 20th century. Even the position of yoetzet halacha, who is a female authority figure who can actually render a halachic ruling in the context of taharat mishpacha (family purity laws) and ironically has more halachic authority than a Maharat in terms of making rulings, was only created within the last few years.

Those who are against the idea of female clergy base their opposition on strict gender roles between what is male and what is female. It is the idea upon which the OU bases its "halachic ethos." The changes regarding the role of women in Judaism that were mentioned in the previous paragraph were significant changes because it not only signifies that the role of gender is not absolute in the Orthodox world, but that the Orthodox world is capable of adapting such changes. As a matter of fact, the OU does implicitly acknowledge to a certain degree that gender roles can at least theoretically change:

"The existence of female scholars throughout the history of our nation is, in our understanding, ample proof that the notion of semikha for women was conceivable. However, a continuing mesorah existed that dictated against it. We find it implausible to say that the question of female ordination has never presented itself throughout the history of our mesorah." 

I can also go into how strict gender binary doesn't exist in Judaism, at least as starkly as naysayers opine. One example is with the prohibition on men wearing women's clothing, and vice versa (Deuteronomy 22:5). Not even that biblical prohibition is an absolute. If a man wears a skirt, it is prohibited because it's women's clothing. But if a man wears a kilt, which is a skirt-type garment that is very, very similar to a skirt, it's permitted. Why? Because what constitutes as "gender-bending" is baed on societal norms. Additionally, the Talmud mentions multiple times two categories of people that do not neatly fit into either male or female categories. The first is one who has male and female characteristics, or the androgynous (אנדרוגינוס). The second is the individual who is neither clearly male or female, what is known as the tumtum (טומטום). Even if you want to downplay these categories as exceptions, it does not negate the fact that the Talmudic rabbis were able to deal with a world without a black-and-white view on gender roles.

What's even better is that we do not need to look at changes made in the 20th century or Talmudic categories to see women have strong, communal roles. The Rabbis believed that Sarah had a stronger level of prophecy than her husband, Abraham (Rashi Breshit 21:12). The wife of Manoah, although unnamed, is considered to be closer to G-d than her husband (Judges 13:8-11; 13:22-23). The same goes for the unnamed Shunamite woman (II Kings 4:8-10; 4:22-23). Devorah the prophetess judged the people Israel (Gittin 88b, Baba Kamma 15a, Niddah 50a). Miriam and Hannah were also prophetesses in the Bible. Even without going into post-Talmudic texts, we can see that precedent is set for women to teach and instruct.

We can get into the legal arguments, such as the idea of communal authority (serarah) not applying when the community voluntarily accepts the person as its leader (Moshe Feinstein, Igrot Moshe, Yor'eh De'ah 4:26), as is with clergy. You can read the arguments for (also see here) and against female clergy for yourself, but at the end of the day, I believe this issue is much more about sociological issues than legal issues.

Is the Orthodox world ready for women to take on such a leadership role? What effects, both good and bad, does such a change have not only in the individual synagogue, but in the greater Orthodox world? Is the fact that a Maharat does not formally sit on a beit din, does not count for a minyan, or does not lead services enough for more religiously conservative Orthodox synagogues, or is the mere existence of female clergy divisive enough to the point where even Haredim or Centrist Orthodox Jews meeting part of the way is too unconscionable? Another way to frame that last question: is this issue irreconcilable to the point of a schism, or can there be a way for the Orthodox Left and the rest of Orthodoxy to co-exist? Was this divide inevitable, regardless of whether female clergy were ordained or not?

These are questions I cannot answer for certain because I do not have the clairvoyance to do so, nor can I dictate how recalcitrant centrist and Haredi rabbis will be on the issue. What I can say is that for those who bemoan the existence of female clergy, I dare you to either speak with Orthodox female clergy or go to a service with a Maharat present to experience it for yourself. I can tell you from having a Maharat at my own synagogue that the fears are decidedly overblown and unfounded. This is not simply a matter of the Maharat being an inspiration for girls and women to want to be more Torah-observant. The whole point of a Maharat is to teach Torah and Avodat Hashem, which she does. I would contend that a Maharat is actually better than a rebbetzin: a rebbetzin gets the position vis-à-vis the nepotism of being the rabbi's wife. A rebbetzin may or may not get the hang of it over time. A Maharat goes through multiple years of halachic training that includes laws on tzniut, as well as pastoral training, which makes her more capable and competent to handle the day-to-day operations. What's more is that certain people will be more comfortable consulting with female clergy than with male clergy on certain halachic questions. Depriving both women of the opportunity to serve the Jewish community and congregants of the contributions that female clergy can offer is a disservice. Another disservice is the OU trying to ban such proliferation while using the slippery slope fallacy or a fanciful version of the argumentum ad antiquitatem, instead of talking with a Maharat or congregants of a Maharat to better understand the issue before rendering a ruling. The fact that the OU did not take its own advice of "go and see what the people are doing (Eruvin 14b)," which the OU cited in its own response, shows how divorced the OU's decision is from observable reality and changing trends.

This is not the first time the OU has made such a controversial ruling regarding gender. A similar phenomenon happened with the mechitzah in the mid-20th century. At this time, there were a significant number of synagogues that were not using the the mechitzah. However, the OU pressured Orthodox synagogues to make a mechitzah contingent upon OU membership. Who knows how the Orthodox world would have evolved in terms of gender roles if the OU did not exert such pressure? Maybe the mechitzah would have become a thing in the past for all synagogues except the most Haredi. Maybe the divisiveness on gender issues would have caused a schism sooner. Maybe the OU's ruling on the mechitzah was merely superfluous. We'll never know, but it does seem that the OU thinks that it can repeat history. However, what the OU might not realize is that much to its chagrin, the Jewish world is more influenced by the greater world than it can imagine. In secular society, the role of women has changed, and that has spilled over even into the Orthodox world. How one conceptualizes gender has changed in the past half-century (especially with the women's rights movement), and if the OU thinks it doesn't have bearing with regards to female clergy, it is sorely mistaken, especially given that there is a obvious and growing demand for female clergy. The divisiveness does not ultimately from those synagogues who want female clergy, but from the OU declaring by fiat what constitutes as Orthodoxy, which only serves to act as a wedge by two groups of Orthodox Jews that should be working more collaboratively instead of perpetuating in-fighting. Such declarations do not resolve complex issues in the Orthodox world, but exist to exacerbate the already-existing tension.

What can be concluded here is that Judaism not only allows for women to take roles of teaching and instruction, but even more importantly, Judaism can handle a world in which gender roles do not exist in absolutes. Yes, there will be challenges to make sure that it doesn't turn into egalitarianism or that the divide between genders is completely lost. And yes, the Jewish tradition teaches us to be mindful of gender differences, even if the reminders are symbolic in nature. However, Judaism has been able to withstand changes to gender roles that were considered revolutionary at the time, and I think that it is able to do so again with female clergy.

Monday, February 6, 2017

Was Congress Right to Repeal Obama's "Stream Protection Rule" for Coal Companies?

With his flurry of executive orders, the focus of what has happened since the latest presidential administration has been on President Trump. I would like to take a break from that, however brief it might be, and focus on Congress. You think when you hear the word "Repeal" these days, it is referring to Obamacare. Based on what Congress did last week, their focus was on repeal an obscure environmental law from the Obama administration called referred to as the "stream protection rule."

The steam protection rule (SPR) was created with the intention of stopping the coal industry from dumping coal mining waste into streams and rivers near coal mines. A pertinent facet of coal mining is mountaintop removal mining. There are times where the only way to get at coal buried underground is blow up the tops of mountains. This creates debris, which is then dumped into valleys below and can affect waterways. The 1977 Surface Mining Control and Reclamation Act was created to remedy the situation of this sort of pollution. The issue is that the rules surrounding "stream buffer rules" had not been updated since 1983. While the Bush administration made an attempt to update the rule (it was later struck down in court), the rule had not been officially updated until December 2016 under President Obama. The rule under the Obama administration would have required streams and mining areas to their previous pristine state prior to the mining operations, as well as maintain a buffer zone that blocks coal mining within 100 feet from streams.

However, Congress was able to find a way to repeal the bill shortly after its enactment. What makes Congress' move interesting is that they are using the Congressional Review Act (CRA) to repeal the SPR. While Congress can repeal whatever distasteful piece of Obama-era legislation with the CRA, the major catch is that only applies to legislation approved within the past 60 legislative days, which means it does not apply to earlier Obama-era legislation. There is at least some symbolism going after this obscure coal-mining law because it shows a more proactive Republican government that is willing to make changes that it deems positive. It was also an easy reach in comparison to the difficulty repealing regulations under the EPA's rule-making process. This begs the question: what sort of impact does it have on the environment, as well as the coal industry? Environmentalist groups such as the Sierra Group aren't happy about the repeal, while the coal industry was lambasting Obama back in 2016 because they claimed that Obama's bill would do nothing to protect streams while at the same time kill the coal industry.

The Surface Mining Reclamation and Enforcement Office (SMREO) published the SPR in the Federal Register back in December 2016. The details published in the Federal Register include the costs and benefits as a result of passing the SPR, which have been modified since the July 2015 draft Regulatory Impact Analysis. Since we live in a reality in which the SPR has been repealed, when covering costs and benefits, I will cite the SMREO in context of effects of a repeal instead of an enacted SPR.

Environmental Impact of SPR Repeal
As a result of the repeal, the SMREO points out that there will be a number of environmental protections that will no longer be afforded between now 2020 and 2040, including:
  • Restoration of 22 miles of intermittent and perennial streams per year (total of 440 miles)
  • Improved water quality of 263 miles of intermittent and perennial streams per year downstream of mine sites, or a total of 5,260 miles. While 5,260 miles sounds like a lot, there are still 3.5 million miles of stream in the United States, which means that the SPR would have only affected 0.15 percent of streams in the United States.
  • Improved reforestation of 2,486 acres of land per year, which is total of 49,720 acres. We also have to keep this acreage in the context of the overall forest average size of the U.S. As of 2012, the United States has 766 million acres. Assuming improved reforestation means that we now lose 49,720 acres of forest, this would mean that the repeal would reduce American forests by a mere 0.0065 percent.
  • The carbon reduction in 2020 as a result on the SPR would have been 2.6 million short tons. Since the U.S. coal industry accounted for 1,364 million metric tons (1,504 million short tons), or 71 percent of carbon dioxide emissions associated with electricity generation, the SPR would have meant a 0.17 percent carbon emission reduction from the U.S. coal industry in 2020.

Economic Impact of SPR Repeal
  • If passed, the coal industry would have had to pay an estimated $80 million annually in compliance costs, which would have been 0.1 percent of annual revenues (SMREO). Between 2020 and 2040, that would have meant $1.6 billion lost.
  • The SPR would have also reduced coal production by 700,000 tons annually (SMREO). In 2015, the U.S. produced 896,941,000 tons. The SPR would have meant a 0.78 percent reduction in coal production in comparison to 2015 production numbers. However, since coal production has been experiencing a decline in production ever since its peak in 2007, which means it will have bigger impact on production in terms of percentage.
  • Ironically enough, the SPR would have increased employment by 124 full-time equivalent (FTE) in the coal industry (SMREO). However, the reason for the increased employment would not have had to do with actual production, but hiring employees in relation to implementing the SPR. 
    • Between 2020 and 2040, there would have been an annual loss of 156 FTE (3,120 total jobs) in coal production, but a gain of 250 FTE for jobs (or 5,000 total jobs) related to SPR implementation. 
    • The National Mining Association unsurprisingly disagrees with these estimations, and estimated in its October 2015 report on SPR that between 112,757 and 280,809 jobs would be lost.
This obscure law brings up two motifs in the greater public policy arena. First, do we always have to pit environmental concerns over economic concerns, or can we take into account both? I believe that ideally, we should have policy that accounts for both, but there will be occasions where either the environment or economy take precedence. Second, we need to find a way to distinguish between necessary regulation and heavy-handed regulation such as the Clean Power Plan. Granted, I think that most regulations are burdensome, but there are times in which we do find ourselves needing some government regulation. This last statement will probably make some libertarians and other proponents of smaller government shriek. At the same time, I am proponent for limited government, not a non-existing government. Even for someone such as myself who believes that the best government is the one that governs least, proponents of limited government need to be able to state when government regulation is necessary without steering from general principles of smaller government, less regulations, and greater economic freedom. The Stream Protection Rule is one of those cases.

As you saw with the environmental and economic impacts, the net impacts of either are not that big in the grand scheme of things. This means neither that the economy would have fallen far apart, and nor would have the environment as a result of the SPR. While the effects are modest, the SPR still acts as a microcosm of the greater debate surrounding cleaner energy. With that being said, in spite of my strong belief in limited government, I find this to be a case for the government to step in for two reasons.

One is that water scarcity has been an issue for a while, and has not gotten better. Granted, government policy has contributed to the problem by underpricing water and thereby creating a shortage (see Economist articles on water management here and here), but we are going to need all the access to clean water we can get. I'm not saying that we should preserve water above all else. But given how essential water is to human life, I would like it if we didn't add to the list of conflicts over water that have already taken place.

The second reason I have less of an issue with the SPR is because in spite of whatever the cumulative effects of regulation are on the coal industry, they are not the coal industry's biggest concern. The Energy Information Administration's latest projections show that coal is on the decline (see below). Even without the SPR, the coal industry was projected to lose 15,000 jobs by 2040. Coal will remain relevant, but it will not have the clout in the American energy sector that it once had.


What is the reason for this decline? By and large, it is market forces. For one, as the Institute for Energy Economics and Financial Analysis (IEEFA) puts it in its analysis of the 2017 coal market, "The industry [is] saddled with a fundamental problem it has failed to address after being riddled with bankruptcies: too many companies are mining too much coal for too few customers."

Production is expected to decline by up to 40 million tons in 2017, according to the IEEFA. The IEEFA also brings up how coal prices aren't increasing enough to stimulate new investment or benefiting shareholders, which might something to do with the fact that coal is not as cost-effective as it used to be. Coal's main competitor is natural gas, and hydraulic fracturing has made natural gas cost-effective, has brought energy prices down, and natural gas emits significantly less carbon than coal does. Plus, President Trump wants to "unleash $50 trillion in untapped shale, oil, and natural gas reserves," which will not do any favors for the coal industry. Additionally, renewable energy is becoming and will continue to become more cost-efficient, which will further displace coal mining. More cost-efficient and cleaner alternative energy sources will cut into coal's long-term market share. U.S. coal exports have been dropping since 2012, which also cuts into coal's demand. The Brookings Institution found that automation has been increasing in the coal industry, which puts a damper on coal mining employment (see below). And if that wasn't enough, the demand for electricity has been slightly declining over the past few years, according to the EIA.



Perhaps the Right-leaning Heritage Foundation is right in that the regional differences are distinct enough where the state government should handle the regulations instead of the federal government. However, I don't think making that distinction in legislation would save the coal industry. I'm sure that President Trump and the Republican Congress will do with they can to repeal or modify previously enacted legislation in order to try to bolster the coal industry's position in the energy market, but the IEEFA acknowledges that regulatory relief would not likely increase coal production. I understand that the coal industry is trying to stop the hemorrhaging, but the coal industry is going off a cliff. As much as regulations can and do play a role in the coal industry, the truth is that the coal industry is less relevant than it once was, and repealing the Stream Protection Rule is not going to ultimately change the coal industry's projected path.


4-6-2017 Addendum: The Right-leaning American Action Forum explains why the decline in coal is mostly due to markets, and not due to regulations. 

Thursday, February 2, 2017

Why Trump's Refugee and Travel Ban Is Downright Pointless and Possibly Harmful

President Trump has been making waves since sworn in office, particularly through his plethora of executive orders. One executive order was unacceptable enough for a number of Americans where there were protests throughout the United States. That executive order was with regards to banning refugees. This executive order, entitled "Protecting the National from Foreign Terrorist Entry Into the United States," has three main features: 1) indefinitely banning Syrian refugees from entering the United States (exemption created for religious minorities, e.g., Christians), 2) banning all refugees for at least 120 days, and 3) most significantly, banning all immigration for seven Muslim-majority countries for at least 90 days: Iraq, Iran, Syria, Libya, Somalia, Sudan, and Yemen. The figure below is from a Washington Post article on who all is affected.



It is not a Muslim ban in the sense that it is blocking citizens from all Muslim-majority countries from entering the United States (over 40 Muslim-majority nations are not covered), and it's why I won't refer to the executive order as a "Muslim ban."  Aside from the fact that Trump called for a Muslim ban as a campaign promise and still called for one after the election, there is still the concern that Trump asked top adviser Rudy Giuliani how to go about a Muslim ban legally, and part of his response was to make it about danger, instead of religion. While the ban does not cover the vast majority of Muslims, the intent of a "Muslim ban" is still in play because Trump is trying to achieve it within the current boundaries of the law.

I would like to mention that it would hardly be unique for the United States to ban individuals with certain passports. As the Economist illustrates, Henley and Partners has a ranking of passport visa restrictions for each country. Many of the seven Muslim-majority countries in the executive order at the bottom of this ranking. While this list only includes those visiting with a passport or visa, the United States would not be unique in not allowing visitors or citizens from these countries to enter the country.

Another point worth addressing is that Trump is trying to justify the executive order by saying that his policy is similar to what Obama did in 2011. As Politifact points out, that is not the case. One of the major differences in Trump's ban and that of Obama's is that the people included in the ban from the Muslim-majority countries include both 500,000 individuals with green cards (at least initially...they're now assessed on a case-by-case basis. In either case, going after those with green cards was a poor life choice), as well as those with dual citizenship in those countries. Second, Trump has provided zero evidence that he is responding to any specific event, whereas Obama was at least responding to a foiled terrorist attack. Third, the travelers from the seven Muslim countries were only revoked of certain travel privileges under Obama, as opposed to Trump downright blocking travel and immigration. Finally, Obama never said that the seven countries are terrorist threats.

With these nuances aside, I would like to touch upon whether indefinitely banning Syrians or invoking a ban on the seven Muslim-majority countries has merit.

Why Did Trump Select Those Seven Countries?
Part of the executive order is a temporary travel ban on seven Muslim-majority countries: Iraq, Iran, Syria, Libya, Somalia, Sudan, and Yemen. During his campaign, Trump reacted to the San Bernardino and the Orlando nightclub shootings by saying we need a ban to stop this violence. For Trump, perhaps it's because these seven countries are the same ones that Obama had selected for the Visa Waiver Program Improvement and Terrorist Travel Prevention Act of 2015, which gives a sense of continuity from the last administration's policy. Three of the countries are even designated as State Sponsors of Terrorism by the State Department. Plus, I'm sure that for proponents of this ban, they will naturally argue that it is only targeting dangerous nations, and the fact that all those nations are Muslim is incidental, as well as secondary to the national security concerns.

However, if Trump is reacting to past terrorist attacks, it doesn't make sense as to why he would select those countries. The San Bernardino attack was perpetrated by an American citizen of Pakistani descent and his Pakistani-American wife. The Orlando gay nightclub shooting was done by an American of Afghani descent. Muhammad Youssef Abulazeez, the perpetrator in the 2015 Chattanooga shootings, was a Kuwaiti with Jordanian and Palestinian parents. Even the 9-11 attackers were predominantly Saudi. There have been no lethal post-9-11 terrorist attacks from terrorists coming from the seven countries. As Politifact points out, there were only three cases in which nonlethal, post-9-11 terrorist attacks were carried out by individuals from Somalia and Iran.

Even if you can point out that some of the seven countries are hotspots for terrorists, the terrorists that have been perpetrating attacks on American soil have come from other countries not on Trump's list. Using data from the New America Foundation, the Wall Street Journal points out that 45 percent (or 80 out of 180) of the terrorists perpetrating terrorist attacks post-9-11 are from the United States, and that only 10 out of 180 of these terrorists came from the countries on Trump's list. Both Pakistan and Saudi Arabia are even bigger threats than the countries Trump has been gunning for, and my guess is that political and business ties to the United States (particularly with Saudi Arabia) would explain why certain countries did not make the list. Saying that a given country has a terrorist problem is not the same thing as refugees or other nationals from that country are going to carry out an attack on American soil when they arrive, and the data show that to be the case (more on that below).

Indefinitely Banning Syrian Refugees or Temporarily Banning Any Refugees
Should the Syrian refugee program be indefinitely suspended? Short answer: No. I wrote about banning Syrian refugees a little over a year ago. I concluded that it made no sense to ban Syrian then, and I stand by that assessment. A few facts worth mentioning or re-mentioning regarding banning refugees:
  • Only 25.6 percent of the refugees are males of "military age," i.e., 18 to 59 years of age, which means that it's primarily not "letting in soldiers."  
  • Not only is there a vetting process for refugees, but it is the most stringent of vetting processes, as 2015 testimony to Senate Homeland Security Commission shows. It would be easier for a terrorist to sneak in by using a student visa, business visa, a travel visa, or even cross the U.S.-Mexican border than it is to use refugee status.
  • Using post-9-11 data, the probability that a refugee would be remotely involved with a terrorist organization is about 0.001%.
  • Leaving refugees in refugee camps causes more long-term issues than finding them a new country. Additionally, allowing Syrian refugees has real potential to help America's economy. Remember when all those refugees came to America in the late-nineteenth and early-twentieth century to make America even greater? Same idea here.

Refugees as a Threat to National Security
There is another factor that makes me wonder about how much his executive order is going to actually help with national security, and it is assessing the threat of refugees to national security. From 1975 to 2015, there have only been 20 refugees that attempted or committed terrorist acts on U.S. soil. From those attacks, there have only been three Americans killed on American soil, and that was back in the 1970s. Since 1975 (see Global Terrorism Database for yourself), there have been zero American deaths on American soil at the hands of foreign terrorists from the seven countries Trump selected. Even including 9-11 into the math, a 2016 Cato Institute policy analysis shows that the odds of an American being killed by an immigrant terrorist on American soil is one in 3.64 billion! The odds of getting struck by lighting are 1 in 174,226, which means that you are about 21,000 times more likely to get struck by lighting than get killed by a refugee while on American soil. What this means is that Trump is making a huge deal out of a virtually nonexistent problem, which makes it all the more nonsensical given the scrutiny refugees undergo during the vetting process.



Postscript: Good national security policy entails making sure that costs are kept at a minimum and that the benefit would be huge. In this case, it's reverse, the benefit is minimal (if existing at all) and the cost is great, not just to our budget, but also to the integrity of what this nation stands for. Going back to the previously mentioned Cato Institute analysis on Terrorism and Immigration, there are threats to national security, but based on the data, they don't merit anything like banning refugees or arbitrarily halting travel or immigration from the countries Trump has selected.

Much like with Trump's idea to build a concrete wall, Trump has fixated on a simplistic, yet ineffective idea to maintain this country's national security (see this wonderful analysis by Right-leaning Center for Strategic and International Studies report on how poorly written and targeted this executive order is). On top of all that I previously mentioned, the executive order has a few other unintended consequences: it gives off the impression that America is too weak to handle a small handful of refugees, it puts strain on U.S.-Iraqi relations (remember that global intelligence campaigns against terrorists involve allies), and it sends the message that the American government does not like Muslims, which will only fuel ISIS' rage. Refugees also undermine ISIS by letting the world know just how bad they really are (Refugees also have intel on ISIS) and also deprives ISIS of funding vis-à-vis taxation and extortion, so why lose an advantage in fighting ISIS by pushing refugees away? Additionally, this executive order will probably erode trust between local law enforcement and Muslim communities, which, as FBI Director James Coney points out, is vital for counterterrorism efforts. This point about trust is all the important to remember since nearly half of post-9-11 attacks were perpetrated by American citizens.

This brings me to my final point: rather than alienating liberal, moderate, or non-practicing Muslims, we need policy that brings us as a people closer together. Remember that citizens of Cuba and the Soviet Union were fleeing their home country because of the oppression. I can tell you that being from those parts of the world did not mean that they were Communist. A similar argument can be used for Iranians fleeing the Ayatollah last century, and it can be applied here. So many of the Syrians are fleeing oppression and want a better way of life. Rather than shut out those in need, we should show the world how great America really is. It is easier for these terrorist groups to indoctrinate Muslims already in the United States than it is to try to sneak people into the country, which is why we shouldn't give Muslims reason to succumb to radical Islam. As a matter of fact, allowing for Muslims to immigrate to the United States is one of the more effective ways we have at reducing radical Islam because what better way to change the hearts and minds of Muslims by letting them experience the American way of life, thereby showing it is nowhere near the threat that ISIS and other extremists make it out to be? I'm not asking for open borders (especially with this president), but rather to reassess the situation not only because building bridges typically works better than burning them, but also because it would improve the overall state of our national security.