Texas Gov. Rick Perry has been beaten up in recent GOP presidential primary debates over his signing of a bill in 2001 giving in-state tuition to illegal immigrant kids in Texas. Look for the issue to come up again at tonight’s debate in New Hampshire.

In a free society, so-called DREAM Act legislation would be unnecessary. Opportunities for legal immigration would be open wide enough that illegal immigration would decline dramatically. And higher education would be provided in a competitive market without state and federal subsidies. But that is not yet the world we live in.

On the federal level, the proposed Development, Relief and Education for Alien Minors Act would offer permanent legal status to illegal immigrant children who graduate from high school and then complete at least two years of college or serve in the U.S. military. Legal status would allow them to qualify for in-state tuition in the states where they reside, and would eventually lead to citizenship.

Those who respond that such a law would amount to “amnesty” for illegal immigrants should keep a couple of points in mind.

First, kids eligible under the DREAM Act came to the United States when they were still minors, many of them at a very young age. They were only obeying their parents, something we should generally encourage young children to do.

Second, these kids are a low-risk, high-return bet for legalization. Because they came of age in the United States, they are almost all fluent in English and identify with America as their home (for many the only one they have ever known). “Assimilation” will not be an issue.

They also represent future workers and taxpayers. The definitive 1997 study on immigration by the National Research Council, The New Americans, determined that an immigrant with some college education represents a large fiscal gain for government at all levels. Over his or her lifetime, such an immigrant will pay $105,000 more in taxes than he or she consumes in government services, on average and expressed in net present value (see p. 334). In other words, legalizing an immigrant with post-secondary education is equivalent to paying off $105,000 in government debt.

According to estimates by the Immigration Policy Center, the DREAM Act as introduced in 2009 would offer immediate legalization to 114,000 young illegal immigrants who have already earned the equivalent of an associate’s degree. Another 612,000 who have already graduated from high school would be eligible for provisional status and would then have a strong incentive to further their education at the college level to gain permanent status. If all 726,000 of them studied at college and became legal permanent residents, it would be equivalent to retiring $76 billion of government debt.

In all, a potential 2.1 million kids could eventually be eligible for permanent legal residency under terms of the DREAM Act, representing a potential fiscal windfall to the government of more than $200 billion. Not to mention their potential contributions to our culture and economy.

Gov. Perry and Those DREAM Act Kids is a post from Cato @ Liberty - Cato Institute Blog

Credit: Chiapas state government website

Authorities in Mexico intercepted two semi-trucks on Tuesday containing more than 500 migrants being smuggled across the border from Guatemala and presumably headed for the United States. An x-ray of one of the trucks that revealed the migrants struck me for its resemblance to those 18th century woodcarvings of slave ships crossing the Atlantic.

That analogy shouldn’t be taken too far, of course. According to the news reports, the migrants voluntarily paid $7,000 each for the chance to be smuggled into the United States. But like the slave ships, the conditions in the trucks were horrific, putting the lives of the men, women and some children in real danger.

People across the spectrum will try to make hay from this, but to me it argues that the status quo is unacceptable. No respectable party is in favor of illegal immigration. The real debate is over how to reduce it and all the underground pathologies that accompany it.

We can continue to ramp up border and interior enforcement, as we have relentlessly for more than a decade, driving low-skilled migrants further underground while driving smuggling fees higher and higher. Or we can expand opportunities for legal entry into the United States, and by doing so shrink the underground network of smuggling and document fraud.

Like the repeal of Prohibition in 1933, real immigration reform would go a long way to eliminating the human bootlegging that was exposed in Mexico this week. A robust temporary worker program would allow foreign-born workers to enter the country in a safe, orderly, and legal way through established ports of entry. It would allow resources now going to smugglers to be collected as fees by our government and otherwise put to work in our economy. It would save the lives of hundreds of people who needlessly die each year trying to re-locate for a better job.

If Congress enacted the kind of immigration reform we have long advocated in my department at Cato, our economy would be stronger and the human smuggling networks a lot less busy.

The Consequences of Our War on Low-Skilled Immigrant Labor is a post from Cato @ Liberty - Cato Institute Blog

President Obama is making his first visit to the U.S.-Mexican border today to deliver a speech in El Paso, Texas, on the need to reform America’s immigration laws. I’ll be eagerly awaiting the president’s plan, but in the meantime, the Cato Institute has released a new study this week that examines the major objections to comprehensive immigration reform.

Titled “Answering the Critics of Comprehensive Immigration Reform,” and authored by Cato adjunct scholar Stuart Anderson, the new study draws on the latest research to address five common objections to expanding opportunities for legal immigration. The issues addressed in the study include the effect of immigration reform on government spending, welfare use, culture and language, unemployment, and incentives for illegal immigration.

After carefully weighing all those concerns, the study concludes that the arguments continue to weigh heavily in favor of expanding legal immigration as the best way to reduce illegal immigration. Here is the study’s conclusion:

The status quo is not acceptable. There is no evidence that continuing—or expanding—the current “enforcement-only” policies on immigration will be successful. The best approach is to harness the power of the market to allow workers to fill jobs legally, rather than to rely on human smuggling operations for workers to enter the United States. Addressing the situation of those now in the country illegally will achieve both humanitarian and economic objectives, including raising the wages of those now working as illegal immigrants. The primary arguments employed against comprehensive immigration reform do not stand up to a review of recent history and predictable social and economic behavior.

Here is the short-form Cato blueprint for immigration reform, and here is the long-form version (PDF).

Responding to Critics of Immigration Reform is a post from Cato @ Liberty - Cato Institute Blog

Today POLITICO Arena asks:

Given President Obama’s speech today in El Paso, Texas, is immigration a winning issue for Democrats?

My response:

Immigration will be a winning issue for Democrats only if Republicans allow it, which they’re quite capable of doing. Where’s the anti-immigrant part of the Republican base going to go — to the Democrats? Hardly. With so much else at stake, will they sit out the 2012 elections, over this one issue? Please.

If Republicans play it right, this can be a winner. No one seriously believes that the estimated 10 to 12 million illegal immigrants in the country, most working, can or should be sent back to their countries of origin. So the main issues are paving the way to legalization, better securing the borders, and providing for a rational guest worker program. If Republicans got behind a package like that, immigration would cease to be a Democratic issue. This isn’t rocket science.

Will Republicans Come to Grips With Immigration? is a post from Cato @ Liberty - Cato Institute Blog

The June issue of Cato’s monthly newsletter on immigration reform, just released, tackles the timely topic of “Immigrants and Crime: Perceptions vs. Reality.” The bulletin finds that, contrary to public perception, immigration has not caused higher crime rates, in Arizona or in the nation as a whole. In fact, one new study even suggests that a rising level of immigration in a city actually leads to lower crime rates.

According to bulletin editor and author Stuart Anderson, a Cato adjunct scholar, “National studies have reached the conclusion that foreign-born (both legal and illegal immigrants) are less likely to commit crimes than the native-born.” It’s an important fact to consider as other states look to copy Arizona’s tough new law against illegal immigration, which was in large part motivated by fears of crime.

The latest bulletin is the third in a series Cato plans to publish through 2010 and into 2011. The May issue analyzed the pluses and minuses of a Senate Democratic proposal to reform U.S. immigration law, and the April issue critiqued efforts to impose a national ID card and the E-Verify system.

You can sign up here to receive the bulletin each month by email.

Latest Immigration Reform Bulletin Examines Immigrant Crime Myth is a post from Cato @ Liberty - Cato Institute Blog

FBI crime figures reported in today’s Wall Street Journal challenge the perception that illegal immigrants have unleashed a crime wave in Arizona.

One of the clinching arguments for Arizona’s tough new law aimed at illegal immigration has been the perception in that state that crime has been rising, and that undocumented workers are largely to blame. Yet the Journal reports that the incidence of violent crime in Phoenix last year plunged 16.6 percent compared to 2008, a rate of decline that was three times the national average.

According to the Phoenix Police Department, the downward trend in crime has continued into 2010 even as the “illegal immigrant crime wave” story reverberates on cable TV and talk radio. As the Journal story reports:

In Phoenix, police spokesman Trent Crump said, “Despite all the hype, in every single reportable crime category, we’re significantly down.” Mr. Crump said Phoenix’s most recent data for 2010 indicated still lower crime. For the first quarter of 2010, violent crime was down 17% overall in the city, while homicides were down 38% and robberies 27%, compared with the same period in 2009.

Arizona’s major cities all registered declines. A perceived rise in crime is one reason often cited by proponents of a new law intended to crack down on illegal immigration. The number of kidnappings reported in Phoenix, which hit 368 in 2008, was also down, though police officials didn’t have exact figures.

The new crime figures confirm what I wrote in a column in today’s Washington Times under the headline, “Unfounded fear of immigrant crime grips Arizona,” and what I explored in a longer think piece, “Higher Immigration, Lower Crime,” in Commentary magazine a few months ago.

The president and Congress need to fix our immigration system, but we need to do it in the right way and for the right reasons.

New Crime Stats Contradict Anti-Immigrant Hype is a post from Cato @ Liberty - Cato Institute Blog

The controversy over America’s immigration policy does not allow for easy answers, as the post below by Roger Pilon demonstrates. Even among those of us who advocate limited government and free markets, there is room for debate about what our immigration policy should be and the order in which needed reforms should be pursued.

Roger gives a welcome nod to the argument for “a serious guest-worker program,” which I’ve argued is essential to any successful reform effort. He also acknowledges that its implementation should be in concert with serious enforcement rather than delayed indefinitely by demands that we “control the border first.”

One place where I differ with my dear colleague is in his assertion that: “We no longer control our southern border, and Congress seems unable or unwilling to do anything about it.”

I’m not sure there ever was a time, at least in recent decades, that the U.S. government exerted “control” over the southern border in the sense that illegal entry was largely prevented. Sealing a 2,000-mile border remains a daunting challenge to those who advocate it.

If anything, our border with Mexico is more under control today than at any time in recent years. According to estimates by the Pew Hispanic Center and the Department of Homeland Security, the number of people living in the United States illegally has dropped by more than 1 million in the past two years. That strongly implies that the net inflow of illegal immigrants across the border has declined sharply.

The main reason for the drop in net illegal immigration is probably the recession, but increased enforcement has arguably played a role as well. According to a recent paper by Dr. Raul Hinojosa-Ojeda of UCLA, the federal government has dramatically increased the resources it spends to “control the border.”

Consider: The U.S. Border Patrol’s annual budget has shot up by 714 percent since 1992, from $326 million to $2.7 billion. During the same period, the number of Border Patrol agents stationed along the southwest border has grown from 3,555 to 17,415. Hundreds of miles of fencing has been constructed along the border, much of it across private property.

If this is the mark of a government “unwilling to do anything,” I would shudder at the cost and intrusion of a more concerted effort.

The bottom line is that our “enforcement only” approach to controlling the border has failed, and it will continue to fail until we create a legal alternative to illegal immigration.

Let’s Get Serious about Immigration Reform is a post from Cato @ Liberty - Cato Institute Blog

The latest catch phrase in the immigration debate is that we must “get control of our borders” before we consider actually changing the current immigration law that has made enforcement so difficult in the first place.

In his Washington Post column yesterday, George Will wrote that “the government’s refusal to control [the U.S.-Mexican] border is why there are an estimated 460,000 illegal immigrants in Arizona and why the nation, sensibly insisting on first things first, resists ‘comprehensive’ immigration reform.”

On the other side of the political spectrum, Democrats in Congress this week unveiled the outlines of an immigration bill that would postpone any broader reforms, such as a new worker visa program or legalization of workers already here, until a series of border security “benchmarks” have been met.

Requiring successful enforcement of the current immigration laws before they can be changed is a non sequitur. It’s like saying, in 1932, that we can’t repeal the nationwide prohibition on alcohol consumption until we’ve drastically reduced the number of moonshine stills and bootleggers. But Prohibition itself created the conditions for the rise of those underground enterprises, and the repeal of Prohibition was necessary before the government could “get control” of its unintended consequences.

Illegal immigration is the Prohibition debate of our day. By essentially barring the legal entry of low-skilled immigrant workers, our own government has created the conditions for an underground labor market, complete with smuggling and day-labor operations. As long as the government maintains this prohibition, illegal immigration will be widespread, and the cost of reducing it, in tax dollars and compromised civil liberties, will be enormous.

We know from experience that expanding opportunities for legal immigration can dramatically reduce incentives for illegal immigration. In the 1950s, the federal government faced widespread illegal immigration across the Mexican border. In response, the government simultaneously beefed up enforcement while greatly expanding the number of workers allowed in the country through the Bracero guest-worker program. The result: Apprehensions at the border dropped by 95 percent. (For documentation, see this excellent 2003 paper by Stuart Anderson, a Cato adjunct scholar and executive director of the National Foundation for American Policy.)

If we want to “get control” of our border with Mexico, the smartest thing we could do would be to allow more workers to enter the United States legally under the umbrella of comprehensive immigration reform. Then we could focus our enforcement resources on a much smaller number of people who for whatever reason are still operating outside the law.

To ‘Control the Border,’ First Reform Immigration Law is a post from Cato @ Liberty - Cato Institute Blog

• Arnold Kling: “The case for auditing the Fed is obvious.”

• The key to reducing illegal immigration: A robust temporary-worker program.

• Surprise! The “financial reform” bill is full of kickbacks to well connected cronies: “The public needs to understand that, far from protecting the little guy and sticking it to the fat cats, this bill keeps good, old-fashioned political patronage alive and well.”

• When did this happen? “Historians find long-lost clause of U.S. Constitution giving federal authorities unlimited jurisdiction over the American palate.” Oh wait, it didn’t.

• Podcast: “The New Old Urban Renewal” featuring Eileen Norcross.

Tuesday Links is a post from Cato @ Liberty - Cato Institute Blog

Arizona’s harsh new law against illegal immigration is being justified in part as a measure to combat crime. The murder of an Arizona rancher in March, allegedly by somebody in the country without documentation, galvanized support for the bill.

The death of the rancher was a tragedy, and drug-related violence along the border is a real problem, but it is a smear to blame low-skilled immigrant workers from Latin America for creating a crime problem in Arizona.

The crime rate in Arizona in 2008 was the lowest it has been in four decades. In the past decade, as the number of illegal immigrants in the state grew rapidly, the violent crime rate dropped by 23 percent, the property crime rate by 28 percent. (You can check out the DoJ figures here.)

Census data show that immigrants are actually less likely to commit crimes than their native-born counterparts, as I unpacked a few months ago in an article for Commentary magazine titled, “Higher Immigration, Lower Crime.”

Misguided Fears of Crime Fuel Arizona Immigration Law is a post from Cato @ Liberty - Cato Institute Blog

One of the more common complaints I hear about illegal immigration is that low-skilled workers from Mexico and Central America allegedly bring with them a wave of crime and incarceration expenses, especially to southern California.

Those complaints are hard to square with the mounting evidence that immigrants, even low-skilled, illegal immigrants, are no more prone to commit crimes than native-born Americans. The latest data point comes from Los Angeles, where the Wall Street Journal reports this morning: “Violent crime in Los Angeles hit its lowest level in more than half a century last year, one of a growing number of U.S. cities reporting its streets were remarkably safe in 2009.”

I tried to connect the dots on immigration and crime in a recent article I wrote for Commentary magazine, titled “Higher Immigration, Lower Crime.” My conclusion was entirely consistent with the latest crime report from Los Angeles:

As a rule, low-skilled Hispanic immigrants get down to the business of earning money, sending remittances to their home countries, and staying out of trouble. In comparison to 15 years ago a member of today’s underclass standing on a street corner is more likely waiting for a day’s work than for a drug deal.

Los Angeles Crime Rate Declines Again Despite Complaints about Immigrants is a post from Cato @ Liberty - Cato Institute Blog

Yesterday, the Wall Street Journal published an article by John Yoo that criticized the Obama administration’s decision to prosecute Khalid Sheik Mohammed (KSM) and several of his fellow Guantanamo prisoners in civilian court.  Yoo makes too many claims for me to respond to in a blog post, but let me address a few.

According to Yoo, “The treatment of the 9/11 attacks as a criminal matter rather than an act of war will cripple American efforts to fight terrorism.  It is in effect a declaration that this nation is no longer at war.”  That is an odd thing to say for several reasons.  First, it is all over the news: We are still very much at war.  Second, even if Obama pulled U.S. troops out of Afghanistan and Iraq, would the United States really be “crippled” in the fight against bin Laden?  ”Crippled”  suggests the U.S. is on the verge of joining Costa Rica or Belize in terms of our military strength.  Farfetched.  Third, the Bush administration also treated the 9/11 attacks as a criminal matter when it indicted and prosecuted Zacarias Moussaoui in civilian court.  Yoo seems to think that that call was mistaken, but did it ”cripple” the U.S.?  Did the Bush administration, in effect, declare that the U.S. was “no longer at war”?  Of course not.  So why does Yoo make that claim now?  Odd.

Next, Yoo complains that by bringing KSM to New York for a civilian trial, the prisoner will get to “enjoy the benefits and rights that the Constitution accords to citizens and resident aliens.”  This is another odd statement because the benefits of a civilian trial (public trial, jury trial, calling witnesses, confronting adverse witnesses, etc) are not limited to citizens and resident aliens.  After all, Asian tourists and illegal immigrants from Mexico, to take two examples, are not “citizens” or “resident aliens.”  If a federal prosecutor were to accuse them of a crime, they would get a trial in civilian court.  A claim that the government could deny, say, a nonresident alien from China a civilian trial would be totally at odds with American constitutional law.  Yoo may disagree with that law, but if he does, he should have made that clear because he left a misleading impression.

Third, Yoo calls the Moussaoui trial a “circus” because it provided Moussaoui with a “platform to air his anti-American tirades.”  Well, to start, just because Yoo calls a trial a “circus” does not make it so.  The federal judge in the Moussaoui case did what we would expect a good American judge to do–that is, give the person who is accused of the crime a fair opportunity to speak and to offer a defense.   At the same time, the  judge must maintain order in the courtroom and anyone who becomes disruptive (including the accused) can be removed.  The potential problem of  a “tirade” is nothing new and is not, of course, limited to persons who share bin Laden’s twisted worldview.  Some recent examples include the Unabomber and the shooter at the Holocaust museum.  In short, it is a weak argument to critique our system of civilian trials because the defendant may want to insist on saying something that is unpopular, unpleasant, or incoherent.  And, at the time of sentencing, a trial judge can respond, as Judge William Young did when he sentenced Richard Reid to life behind bars.

For more on the subject of military commissions, go here and here.  For more on John Yoo, go here and here.

John Yoo on Civilian Trials for Terrorism Cases is a post from Cato @ Liberty - Cato Institute Blog

CNN wrote an exciting headline on Wednesday: “Homeland Security Chief Seeks to Repeal Real ID Act.” What they left out was that the replacement would be . . . the REAL ID Act.

Intentionally or not, Secretary of Homeland Security Janet Napolitano has created the impression that the national ID law might go away. But simply renaming the Department of Homeland Security’s national ID program is not a repeal of REAL ID.

The REAL ID revival bill that has been circulating is the same national identification and tracking system with a few of the sharpest corners taken off and the hope of federal money held out to up-to-now recalcitrant states. The REAL ID revival bill would corral every American citizen into the national ID system to try and attack illegal immigrants.

Bills to repeal REAL ID were introduced in the previous Congress, but they did not move because the Bush administration and Chertoff DHS would have eagerly demagogued the issue. Those political conditions no longer hold. And just 10 months ago, Secretary Chertoff delayed the implementation of REAL ID without bringing any political repercussions to the Bush administration whatsoever. Secretary Napolitano can do the same if Congress fails to truly repeal REAL ID, as it should.

“. . . and Replace It with REAL ID” is a post from Cato @ Liberty - Cato Institute Blog

Federal Study Supports School Vouchers

Last week, a U.S. Department of Education study revealed that students participating in a Washington D.C. voucher pilot program outperformed peers attending public schools.

According to The Washington Post, the study found that “students who used the vouchers received reading scores that placed them nearly four months ahead of peers who remained in public school.” In a statement, education secretary Arne Duncan said that the Obama administration “does not want to pull participating students out of the program but does not support its continuation.”

Why then did the Obama administration “let Congress slash the jugular of DC’s school voucher program despite almost certainly having an evaluation in hand showing that students in the program did better than those who tried to get vouchers and failed?”

The answer, says Cato scholar Neal McCluskey, lies in special interests and an unwillingness to embrace change after decades of maintaining the status quo:

It is not just the awesome political power of special interests, however, that keeps the monopoly in place. As Terry Moe has found, many Americans have a deep, emotional attachment to public schooling, one likely rooted in a conviction that public schooling is essential to American unity and success. It is an inaccurate conviction — public schooling is all-too-often divisive where homogeneity does not already exist, and Americans successfully educated themselves long before “public schooling” became widespread or mandatory — but the conviction nonetheless is there. Indeed, most people acknowledge that public schooling is broken, but feel they still must love it.

Susan L. Aud and Leon Michos found the program saved the city nearly $8 million in education costs in a 2006 Cato study that examined the fiscal impact of the voucher program.

To learn more about the positive effect of school choice on poor communities around the world, join the Cato Institute on April 15 to discuss James Tooley’s new book, The Beautiful Tree: A Personal Journey Into How the World’s Poorest People Are Educating Themselves.

Obama Announces New Direction on Immigration

The New York Times reports, “President Obama plans to begin addressing the country’s immigration system this year, including looking for a path for illegal immigrants to become legal, a senior administration official said on Wednesday.”

In the immigration chapter of the Cato Handbook for Policymakers, Cato trade analyst Daniel T. Griswold offered suggestions on immigration policy, which include:

• Expanding current legal immigration quotas, especially for employment-based visas.
• Creating a temporary worker program for lower-skilled workers to meet long-term labor demand and reduce incentives for illegal immigration.
• Refocusing border-control resources to keep criminals and terrorists out of the country.

In a 2002 Cato Policy Analysis, Griswold made the case for allowing Mexican laborers into the United States to work.

For more on the argument for open borders, watch Jason L. Riley of The Wall Street Journal editorial board speak about his book, Let Them In: The Case for Open Borders.

In Case You Couldn’t Join Us
Cato hosted a number of fascinating guests recently to speak about new books, reports and projects.

• Salon writer Glenn Greenwald discussed a new Cato study that examines the successful drug decriminalization program in Portugal.

• Patri Friedman of the Seasteading Institute explained his project to build self-sufficient deep-sea platforms that would empower individuals to break free of national governments and start their own societies on the ocean.

• Dambisa Moyo, author of the book Dead Aid, spoke about her research that shows how government-to-government aid fails. She proposed an “aid-free solution” to development, based on the experience of successful African countries.

Find full-length videos to all Cato events on Cato’s events archive page.

Also, don’t miss Friday’s Cato Daily Podcast with legal policy analyst David Rittgers on Obama’s surge strategy in Afghanistan.

Week in Review: Successful Voucher Programs, Immigration Debates and a New Path for Africa is a post from Cato @ Liberty - Cato Institute Blog

G-20 Summit Agrees to International Spending Plan

The Washington Post reports, “Leaders from more than 20 major nations including the United States decided Thursday to make available an additional $1 trillion for the world economy through the International Monetary Fund and other institutions as part of a broad package of measures to overcome the global financial crisis.”

Cato scholars Richard W. Rahn, Daniel J. Ikenson and Ian Vásquez commented on the London-based meeting:

Rahn: “President Obama of the U.S. and Prime Minister Brown of the U.K. will be pressing for more so-called stimulus spending by other nations, despite the fact that the historical evidence shows that big increases in government spending are more likely to be damaging and slow down recovery than they are to promote vigorous economic expansion and job creation.”

Vásquez: “The push by some countries for massive increases in spending to address the global financial crisis smacks of political and bureaucratic opportunism. A prime example is Washington’s call to substantially increase the resources of the International Financial Institutions… There is no reason to think that massive increases of the IFIs’ funds will not worsen, rather than improve, their record or the accountability of the aid agencies and borrower governments.”

Ikenson: “Certainly it is crucial to avoid protectionist policies that clog the arteries of economic recovery and help nobody but politicians. But it is also important to keep things in perspective: the world is not on the brink of a global trade war, as some have suggested.”

Ikenson appeared on CNBC this week to push for a reduction of trade barriers in international markets.

With fears mounting over a global shift toward protectionism, Cato senior fellow Tom Palmer and the Atlas Economic Research Foundation are circulating a petition against restrictive trade measures.

Obama Administration Forces Out GM CEO

President Obama took an unprecedented step toward greater control of a private corporation after forcing General Motors CEO  Rick Wagoner to leave the company. The New York Post reports “the administration threatened to withhold bailout money from the company if he didn’t.”

Writing for the Washington Post, trade analyst Dan Ikenson explained why the government is responsible for any GM failure from now on:

President Obama’s newly discovered prudence with taxpayer money and his tough-love approach to GM and Chrysler would both have more credibility if he hadn’t demanded Rick Wagoner’s resignation, as well. By imposing operational conditions normally reserved for boards of directors, the administration is now bound to the infamous “Pottery Barn” rule: you break it, you buy it. If things go further south, the government is now complicit.

Wagoner’s replacement, Fritz Henderson, said Tuesday that after receiving billions of taxpayer dollars, the company is considering bankruptcy as an option. Cato scholars recommended bankruptcy months ago:

Dan Ikenson, November 21, 2008: “Bailing out Detroit is unnecessary. After all, this is why we have the bankruptcy process. If companies in Chapter 11 can be salvaged, a bankruptcy judge will help them find the way. In the case of the Big Three, a bankruptcy process would almost certainly require them to dissolve their current union contracts. Revamping their labor structures is the single most important change that GM, Ford, and Chrysler could make — and yet it is the one change that many pro-bailout Democrats wish to ignore.”

Daniel J. Mitchell, November 13, 2008:  ”Advocates oftentimes admit that bailouts are not good policy, but they invariably argue that short-term considerations should trump long-term sensible policy. Their biggest assertion is that a bailout is necessary to prevent bankruptcy, and that avoiding this result is critical to prevent catastrophe. But Chapter 11 protection may be precisely what is needed to put American auto companies back on the path to profitability. Bankruptcy laws specifically are designed to give companies an opportunity — under court supervision — to reduce costs and streamline operations.”

Dan Ikenson, December 5, 2008: “The best solution is to allow the bankruptcy process to work. It will be needed. There are going to be jobs lost, but there is really nothing policymakers can do about that without exacerbating problems elsewhere. The numbers won’t be as dire as the Big Three have been projecting.”

Cato Links

• Is Portugal an example for the future of drug policy? Cato released a new case study this week by Salon writer Glenn Greenwald entitled, “Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies.”

• As the North Atlantic Treaty Organization celebrates its 60th birthday, there are signs of mounting trouble within the alliance and increasing reasons to doubt the organization’s relevance regarding the foreign policy challenges of the 21st century. In a new study, Cato scholar Ted Galen Carpenter argues that NATO’s time is up.

• Should immigration agents target businesses knowingly hiring illegal immigrants? Cato scholar Jim Harper weighs in on a Fox News debate.

• Cato scholar Gene Healy warns, “Beware of the Cult of Obama,” in this week’s Washington Examiner column.

• Sign up today for  Cato University 2009: Economic Crisis, War, and the Rise of the State.

Week in Review: ‘Saving’ the World, Government Control and Drug Decriminalization is a post from Cato @ Liberty - Cato Institute Blog

The Obama Administration plans to shift immigration enforcement from workers to employers, but the whole policy of “internal enforcement” of immigration law is the problem, says Cato scholar Jim Harper.

According to Harper, aligning legal immigration rates with the demand for new workers in the country is the only solution to the problem of illegal immigration.

He appeared on Fox News this week to debate this issue.

For more videos, subscribe to Cato’s YouTube channel.

Should Immigration Agents Target Businesses Knowingly Hiring Illegal Immigrants? is a post from Cato @ Liberty - Cato Institute Blog