Welcome to Cato Audio for April 2024. I'm Caleb Brown. In this month's offering, Attorney Caleb Trotter discusses what stands in the way of delivering health care across state lines. Journalist Alexander Ward takes us inside the struggles of the Biden foreign policy team. Cato's Chairman Emeritus Bob Levy details some of the most important Supreme Court cases this term. And Cato's Ryan Bourne sits down with me to discuss the war on prices. First up, this month's Cato Roundtable.
In lieu of our normal roundtable, we bring you a conversation between Cato's Gene Healy and journalist Matt Taibbi discussing breaking news, how news gets made, traditional media, and the so-called Twitter files. Thanks to all of you for being here for this conversation on free speech and the preservation of our democracy. It dies in the darkness, I'm told by The Washington Post. But lately, as Harrison alluded to, some of the biggest scoops in terms of revelations of government wrongdoing aren't coming from legacy media. They're not coming as frequently from outlets like The Post. They've been broken by independent journalists like Matt outside of institutional media.
Matt has had a long and distinguished career in journalism, longtime political reporter, columnist for Rolling Stone, winner of the 2008 National Magazine Award for columns and commentary. But in early 2020, he left Rolling Stone, a dream job, to hang out his own shingle at Substack, where his racket news is near the top of the charts with over 400,000 subscribers, unless it's gone up since the last time I looked. And as I said, he's broken some of the, since he's done that, he's broken some of the most important stories of our time. Most famous lately for... The Twitter files, where you got a look under the hood at Twitter, a trove of internal communications that showed a massive federal effort to lean on social media companies to suppress protected speech. More recently, with Michael Schellenberger, some new revelations about the intelligence community's interference in political activity, that the spying on the Trump campaign started much earlier and went a bit further than we had been told that it had been.
But let me tell you, we'll get to both of those, but let me tell you a little bit more about Matt first. I've said this before, but usually when I'm doing this sort of thing, I'll be introducing... maybe a career academic or worse, a career politician. And they, you know, they're not the most interesting people in the world most of the time. So you go looking through their truffle hunting in their official bios to try to find some little spark of adventure, something interesting about them. For Matt, you don't have to go looking. It's an embarrassment of riches right there in the resume. Around the time he graduated college, the Soviet Union conveniently collapsed and he went east.
From the official bio, he focused on participatory journalism, working in a series of jobs to show ordinary Russian life. Bricklayer in Siberia, moonshine dealer, professional clown, keeper in an elephant cage, construction worker in an orthodox monastery. He was, according to Wikipedia anyway, deported from Uzbekistan in 1992 for writing an article for the Associated Press, critical of President Islam Karimov. At the time of his deportation, Taibbi was the starting left fielder for the Uzbek national baseball team. He later moved on to Ulaanbaatar, Mongolia, where he played professional basketball and became known as the Mongolian Rodman. He even had a turn as Philip Marlowe, working for a time as an investigator in a Boston-based private detective agency.
All of which, I guess, is good background for the stories that he's been digging up. I'd like to start with the Twitter files. When you've got to look at this cache of documents, internal memoranda, communications at Twitter, tell us about how that started and what you found and which aspects of it were most concerning. Sure. First of all, thank you, Gene, for that incredibly generous introduction and for everybody for coming out.
Huge crowd. Thank you for being here. Well, it's interesting that you asked that question because Harrison was talking about conventional media. The reason that the new owner of Twitter, Elon Musk, reached out to me and then subsequently a group of other independent journalists to do what turned into a story called the Twitter Files was, among other things, because he didn't trust conventional media to report the story correctly. So he very specifically picked out independent journalists, people who weren't affiliated at least anymore with mainstream organizations. That included me. I had been at Rolling Stone. Barry Weiss, who had been at the New York Times. But I was the first one brought in. And the idea behind this, and they hadn't even looked at the files yet.
But Elon wanted the public to know the extent to which platforms like Twitter were censoring their own customers. And I think his idea behind this, at least that's how it was expressed to me, is that he wanted to restore trust in the institution by sort of opening the kimono and letting the public know what was going on. But at that time, we only had a very distant idea that there might be some kind of government angle to this. At the very extreme end, we thought maybe there would be one or two letters from the FBI. suggesting stay away from the story or that story. This is why we picked as our first subject the Hunter Biden laptop story, which we knew had been blocked by Twitter and Facebook in what I thought was a historic moment for internet platforms in this country. We didn't actually find a whole lot from the FBI with that story, but then they allowed us to look kind of freely through some other files, particularly with regard to the 2020 election, and we started to see emails all over the place saying things like flagged by DHS, flagged by FBI.
flagged by a whole variety of government agencies. And we didn't know what that meant. And it took about three weeks to a month for us to figure out that there was a very organized and extensive... I guess you would call it a content flagging operation, where tens of thousands of social media posts had been picked out by various government organizations, in particular the FBI and the Department of Homeland Security, and they had been sent to companies like Twitter, along with about two dozen others, through a pretty formal system of content management. And that became the backbone of the story that we thought was significant, because we had no idea that there was a big content moderation program going on with government. We subsequently found out that this was a...
A huge fundraising issue as well. There were well over $100 million just from one agency involved in this kind of activity, for instance. So this was a very sizable program, and we were very fortunate to be able to uncover it. And what kind of speech are we talking about? Because I think people who haven't followed the story much think, first they came for Alex Jones, and I wasn't crazy, so I did nothing. Or they think it's, you know...
what the core of their term disinformation would be. But my understanding is that you have an effort in the COVID area to suppress some information that's actually true from highly credible medical sources. Yeah, and this was a big surprise for us. At first, we thought that all the things that they were trying to flag, there were some things that were sort of blatantly obviously misinformation. The most common kind of communication that the FBI would complain about would be a social media post that would say, hey, Democrats, don't forget to go out and vote on Wednesday. And this was sort of like spam that would be sent out, the whole idea being to get people to forget to vote on Tuesday. That doesn't seem terribly objectionable, but then we started to find things that were clearly protected constitutional speech.
that they were recommending, they were saying, we think this violates your terms of service. And that might be like, there was one thing that was a spoof video that someone had created making fun of the Biden administration's messaging on COVID. Essentially, it was a phony mesothelioma ad where you're looking 10 years into the future and you're saying, hey, if you got the vaccine 10 years ago, please call 1-800-THIS-LAWYER. Clearly a joke. Whether it's funny or not is up to you, but it's exactly the kind of thing that the First Amendment was designed to protect, and they were recommending that Twitter take a second look. And then we found things that were more nefarious than that. There were...
these private cross-platform programs, some of them associated with big academic institutions, that talked openly about how we have to consider suppressing true content that might promote vaccine hesitancy. So an example of that would be somebody gets the vaccine, they die of myocarditis. That's true, it happened, but we don't think it's a good story. It's not politically true, right? It's going to produce an adverse political consequence. So let's list that as a disinformation event. They actually had a term for this kind of content. They call it malinformation. It's not...
Not disinformation, not misinformation. Malinformation is something that is true, but produces an adverse result. And this, we thought, was extremely dangerous because it was a way to get around the general journalistic idea, which is, if it's true, we print it. We don't care. It's up to the public to figure out what to do with it. But now they were doing something very different entirely. How do you explain the...
Tepid and even dismissive reaction, you know, for massive covert government effort to suppress speech, it seemed to me that the reaction in a lot of the legacy media and from a lot of elite opinion leaders was sort of nothing burger, not a big deal. There were some personal, quite a few personal attacks on you. What happened to you, man? That sort of thing. This isn't helpful. Right. How do you, you know, in a...
Ten or so years before, you know, you didn't see that when the Snowden revelations came out. Whether it burnt Obama or George W. Bush, people were interested in a massive secret government surveillance program. But it seemed that the reaction to the Twitter files was very different. Yeah, and that's a fascinating thing. I think in this new era since 2016, any issue that, as we talked about before, any issue that codes as a Trump issue is sort of denounced and dismissed and set aside. I found myself sort of instantly recharacterized as a conservative Trump-leading journalist, even though there's nothing in my biography that suggests that. I wrote a book called Insane Clown President about Donald Trump. But the Washington Post, in the days after the story first broke, they described me as conservative journalist Matt Taibbi.
sort of silent edited that within a few hours after people complained. But basically, yes, I mean, there was a mysterious reaction, I thought, from a lot of people in the press who should be concerned about this because it fundamentally affects them as much as anybody else. But they didn't see it as a very dangerous issue. And what's interesting about this, if you go back to 1974, there was a big story in the New York Times by Seymour Hersh that came to be known as the Family Jewel story, where... Cy found out about this CIA program that was designed to engage in widespread illegal domestic surveillance infiltration. And I even talked to Hirsch about this when I was asking for advice about what to do about this story. And it was a very similar thing because a lot of the agencies that were involved in this domestic censorship stuff were expressly prohibited from doing so in America. A lot of them were foreign intelligence agencies or the State Department. And that story, too.
that Hirsch did, engendered a lot of hostility from other people in the media who thought it went too far, that you shouldn't write about this kind of thing because it can hurt important institutions in this country. So it got us, I think, into a very dicey area where there were people who thought that there were some secrets that don't need to get out. That's a good tie-in, speaking of the intelligence community, to your recent reporting on efforts to surveil the Trump campaign that happened much earlier than we'd originally understood. Can you tell us a little bit about what you've uncovered there? Sure, and there have been a lot of reporters on both the left and the right over the course of the last six or seven years who've hinted at this. There was a House Permanent Select Committee on Intelligence nicknamed Hipsy. They had done an investigation in 2017 and 2018 into the origins of the scandal that came to be known as Russiagate, but only a portion of their research ever got out. That was the part about the misuse of FISA and the sort of misfiled warrant on a gentleman named Carter Page. But there was a lot.
of other stuff that never got out, and people who followed the story knew that there were other things that were out there. That other shoe just didn't fully drop until last week or a couple of weeks ago when we had sources who told us a couple of major things, one of them being that there were at least 26 people around the Trump campaign who were placed under surveillance without legitimate predication well before the beginning of the opening of the FBI investigation in the summer of 2016. And the other thing was that an intelligence community assessment. of January 2017, which said that the Russians had conducted an influence campaign specifically to help Trump, that this was cooked intelligence, that they had suppressed dissenting information, that, among other things, suggested the Russians were... The actual quote was, with Hillary Clinton, it was a relationship they were comfortable with. They felt that she was manageable and reflected continuity. But the people, this small hand-picked team of people who put together this report, downgraded reliable sources, upgraded unreliable ones, and that's how that story came out. But the important thing about this is my...
feeling on this, and we haven't exactly been able to prove this out yet, is that one of the reasons that this happens is not really Trump-specific. It's just that there is widespread misuse of this particular kind of authority, this 702 FISA authority, also the unmasking authority that they use to find out which U.S. persons have been monitored abroad. I think at the end of the day, we're going to find out that that was a big reason that this happened, and that's very pertinent, I think, to Cato's mission. Yeah, there's a, if I come back to the Twitter files for a second, all this talk about the 70s and government spying, you know, brings up these sort of paranoid thrillers that were big. Days of the Condor? Yeah, Parallax View and stuff like that. And there's a story from, you know, the fallout from the Twitter files that, you know, if I didn't know it was true, I would think was crazy, which was, you know, the release of the Twitter files led to...
some hearings by Jim Jordan's committee on the weaponization, subcommittee on the weaponization of the federal government. You testified there. And the same day that you testified before the committee back in March, an IRS agent showed up at your house. Yeah. Just a hell of a coincidence. Yeah. I testified in Washington that day. I took the train home. I live in New Jersey. Got home that night and found out.
from my wife that a note had been left in the door saying, hey, the IRS came and visited. We'd like to talk to you, but don't call us for four days. I found out that's a tactic, apparently. They like to let you worry over the weekend what it is that you've done wrong. And I thought this was too stupid to be related to any of my journalism work. So I did inform the committee that this had happened, but I didn't say anything about it publicly because I didn't want to give the impression that I was being a conspiracy theorist or anything like that. It wasn't until Jim Jordan's committee got some answers back from the Treasury that I really started to get nervous.
because it turned out that the case on me had been opened on Christmas Eve of 2022, which was a Saturday, and it was also the day of probably the biggest Twitter file story that was directly about the CIA, FBI, and the Director of National Intelligence. So if you can imagine the IRS opening a case on the afternoon of Christmas Eve on a Saturday, that's when I got nervous. It could still be a coincidence, but it's the kind of thing. I lived in Russia for a long time. It definitely struck a chord.
Just one more before we open it up for audience questions. Sort of overarching theme here. It ties in with the tepid reaction to the Twitter files, the, hey, whose side are you on sort of reaction to some of the other reporting. What do you think has happened to free speech, culture, and old-school, nonpartisan civil libertarianism in this country? How much of it is the particularly polarizing figure of Donald Trump who seems to have melted everyone's brains? And how much of it is, you know, you gave a speech at Freedom Fest where you talked about the kids today and how they grew up marinating in social media and obsessed with call-out culture.
What do you think is the mix that has led us away from a period in the 80s and 90s where the cool thing to do was to be for free speech? without reservation. Yeah, it's so interesting, isn't it? I mean, I grew up, as you say, I grew up in the 70s, 80s, and 90s. Every culture war story about speech, it was a litmus test issue for anybody who considered themselves a political liberal, which I was. I gave to the ACLU my whole life. Everything from the People vs. Larry Flint to the Parents Music Resource Center to NWA putting out their Straight Outta Compton album to Mabel Thorpe to all those things. How important those stories were at the time is up for question, but certainly you could not be.
politically liberal and be on the other side of those issues when I grew up. I didn't know anybody who thought differently when I went to college about this issue. And then when I went into the media, everybody was unanimous in believing in absolutely unfettered free speech, the First Amendment. I had the good fortune to live overseas in Russia and see what happened when a country both acquired speech freedoms and lost them in a very short period of time. So that experience weighed on me very heavily and still does, how quickly you can lose these things and how fragile it all is.
And I think Americans once believed that very strongly. They were always very conscious of that in their history. But when Donald Trump came around, I think that's when there was suddenly a brand new belief system, particularly in the news media. And that's one of the reasons that it's been very difficult to get anybody in the regular press to do stories about censorship, surveillance, any of those things, things that were big stories as recently as 2015. Gene Healy is a vice president at the Cato Institute. Matt Taibbi is a journalist at Substack.
The U.S. has an incoherent system of laws that govern so-called telehealth, consuming the services of physicians who are physically in another state. Many patients seeking the expertise of renowned out-of-state clinicians drive to so-called telemedicine parking lots in states where the clinicians hold licenses to conduct telehealth visits. Caleb Trotter of the Pacific Legal Foundation is representing Dr. Shannon McDonald and others suing the state of New Jersey for unconstitutionally interfering in the doctor-patient relationship across state lines. In this case, we raise four separate constitutional claims. A couple of them are kind of duplicative.
in response to some statements from various Supreme Court justices. And that's our first two. The primary theme of this case is based in the Constitution's Commerce Clause. And that clause has the power to regulate the national economy. And so while traditionally physician licensing is all done from state to state, every state has their own license, their own process, even though the substantive requirements are essentially identical in every state. It's medical licensing and all other professionals. That licensing process is done at the state level.
but because this case as as you noted in your introduction and dr mcdonald mentioned when we're talking about national specialists who these are the physicians who when your local doctor doesn't have the expertise or the resources to to properly handle a rare disease or or condition these are the specialists that you're referred to. And so it's fair to say that a specialist like Dr. McDonald has a national practice. In some instances, they even have global practices where they're seeing people from around the country and across the globe. And so with that national context in mind, with state-level telehealth restrictions limiting their ability to have their national practices, we feel that that implicates the Constitution's Commerce Clause and that regulatory power is most appropriately left to Congress to have a uniform rule.
for that type of national practice. And I want to be careful to distinguish this kind of national specialty practice from things like primary care that really have a much more local connection than something like this would. And so that's our primary theme of this case, our primary constitutional claim that's paired with the privileges and immunities clause of Article 4 of the Constitution. But for our purposes today, they're essentially doing the same thing. They're just both included for some technical legal reasons.
Our third claim, however, is a bit different, and that's based in the free speech clause of the First Amendment. And since what we're talking about in this case is initial upfront consultations between a potential patient and a specialist like Dr. McDonald, where really it's just a conversation to either confirm a diagnosis to see if traveling to see that physician in person for actual hands-on treatment would be appropriate. All this is a conversation. There is no treatment taking place. This isn't talk therapy, for one. It's really just a chat to see if it is worth the time and the expense.
to travel in person for treatment. And in the context of rare diseases and conditions, as Dr. McDonald and many of her colleagues have explained to me, time is particularly of the essence. Typically, someone has been diagnosed locally, and they're very quickly seeking either second opinions or referral to start treatment right away. And they might need to pursue these conversations with a number of specialists around the country.
But if it were, and telehealth, of course, allows that to be done very easily, very affordably from the comfort of home with loved ones there with you to help support you. But if someone was required to travel in person for every single one of those consultations, assuming they were well enough to do that, assuming they had the resources to do that, that would just be a very large burden on them to do so. And so telehealth makes that much more accessible. And that's just a conversation again. And then on the following side, if say they determined that treatment was appropriate and they did go for that in-person treatment.
Well, in the days, the years following that, it's often necessary and appropriate for there to be follow-up conversations to check in, see how things are going, make sure recovery is going well. Some patients need periodic scans and imaging to make sure that cancers haven't recurred. And being able to do those type of imaging locally and then send the results to your out-of-state specialist is very easily done now, technologically speaking. And again, if a patient were forced to travel in person for what could easily be a phone call just to say, I've reviewed things, everything looks good, there's no other concerns. We'll see you in a year. That's the kind of thing that is precisely what telehealth makes much more accessible and affordable and easier for patients. And again, since that is simply just a conversation, this follow-up piece, as well as the consultation, what we're talking about here is speech being limited. And while, yes, in the broad sense, this is the practice of medicine, without getting too far into the First Amendment weeds, there's a big distinction between speech and conduct itself.
And in our complaint, in this case, we say that these simple conversations are on the side of speech that is protected speech under the First Amendment and that the New Jersey government should have to meet a stringently high barrier to justify these restrictions. And then our final claim, because in this case we have two physicians, but we also have some patients. One of them is a college student. The other is a teenager, as well as his father. And under the 14th Amendment's due process clause, the Supreme Court and many other courts have recognized that parents have a fundamental right to direct the lawful medical care and treatment of their children.
And since in our patient JA's case, our teenager, we use his initials in the legal documents because he's a minor. So JA, he suffered from a rare cancer. This isn't some kind of... experimental treatment that he sought with Dr. McDonald, radiation proton therapy, something that is illegal. It's just extremely, I'm sure Dr. McDonald can go into this further if she likes and correct me if I'm wrong, but it's just, it's a type of treatment that is relatively new. It's very resource intensive. There aren't a lot of specialists who have the necessary expertise, as well as there aren't all that many facilities in the country that provide it. And at the time when JA needed this treatment, it wasn't available in his home state, which at the time was New York. He's sent to New Jersey. But at the very least, it's just a, it's a.
treatment that is not widely available. There are few experts available to provide it. And so our due process claim is that his father, while he got that treatment before, now his follow-ups become necessary just to check in every year with imaging to make sure everything's going well. That by having New Jersey's telehealth restrictions in place, that is burdening their ability to continue to maintain that patient-physician relationship with Dr. McDonald.
Likewise, the government in New Jersey also has a barrier to justify that burden on their ability to pursue that treatment. And we say lawful medical care because there are, of course, some controversial types of care, experimental types of care that aren't legal in all states. And perhaps there could be a justification for different rules based on those types of treatments. But for the purposes of our case, no one argues that proton therapy is not legal, is not the standard of care, while limited to experts. And so those are the three claims. And yeah. Caleb Trotter is an attorney with the Pacific Legal Foundation.
National security reporter Alexander Ward's new book, The Internationalists, takes readers behind the scenes to reveal the struggles of President Biden's foreign policy team as they've worked to enact a coherent and effective set of policies across several global crises. He spoke at the Cato Institute in March. You know, Trump didn't necessarily win because of his foreign policy views, but he didn't lose because of them either. He was saying some unorthodox things, and not necessarily wrong things, just unorthodox things. And unorthodox for the people in this room and in this town. So what was it that he was saying that was resonating and didn't cause him to necessarily lose enough votes to lose the election? And I won't spare you his four years in the wilderness, but what it effectively came down to was a phrase you've heard before, a foreign policy for the middle class. And its base assumption is that American foreign policy will not work, will not be sustainable, unless the public is for a certain action. It seems simple, but that is kind of where they conclude it.
So what does this mean? That means, and let me give you some sort of example. So I want to talk about Ukraine in this exact moment, right? Why the U.S. should continue to defend Ukraine? Well, they initially started with democracy. We defend democracy. That's very important. And it's still a big part of it. I don't want to sway you away from it.
But the other part of it, what they're now starting to say is, well, this creates jobs. We're sending our older weapons to the Ukrainians. That means we're going to make newer weapons, which is helpful for our military. And what does that mean? Factory jobs for people in Ohio, Texas, Alabama, Kansas. That is a middle class benefit. And then they also do bring it to a broader example, a broader sentiment, where they say, well, if you don't stop the Russians in Ukraine, that means they're going to maybe eventually take NATO territory or attack NATO territory, which will require an Article 5 response, which then means we're sending American sons and daughters abroad to fight, which ends up being more expensive and, of course, costly and blood and treasure. So there are middle class arguments. So take it for what it's worth, but that's sort of the main argument there.
And what I found in reporting in this book is that while they're making these foreign policy for the middle class arguments, they end up adopting a lot more of Trump-era policies than I think even they expected to. So when I was talking to them during the transition, they were really talking, I mean, Terry Shirley said this on the record, right, the counselor of the State Department doesn't look like he's going to the Pentagon, but that he was saying, look, we're coming in to save the world. They really felt that the Trump administration, sorry, Chris, the Trump administration had totally abandoned a sense of its place in the world, had hurt our alliances, had damaged America's reputation, and that Biden's team was coming in like first responders, emergency personnel, and they were going to revive the heartbeat of American foreign policy. And then what happens? Well, on one of the early calls that I was on with Biden administration officials, we were talking about China. And they said, well, the Trump administration got it right. They got that we needed to compete against China very strongly. The only thing they really got wrong was that they did it alone. They didn't really work with allies. Setting aside the fact that towards the end of the Trump administration, especially, they were talking to allies in Europe, et cetera, about kicking out the Huaweis and the ZTEs of the world and pushing back on trade. But still, that's how they felt. So they thought, OK, they were right on that. We just got to get more allies involved. And then the response to China will be stronger. And also, maybe we should talk more about whether there are places for us to cooperate, even as while we compete.
And the Abraham Accords, ain't that a thing? That worked out pretty well. Why don't we stay talking to the Israelis, have them reach out to a bunch of countries in the Middle East still, try to normalize those relations. And oh, by the way, we don't. That whole Israeli-Palestinian conflict thing, put that to the side. But maybe we can bangshot it. If we get these normalization deals going, and especially with the Saudis, maybe eventually we can get the Palestinians on the path to a state. So two examples, but sort of surprising not only to me in the reporting, but actually for them. They didn't expect, as they did a review, to adopt so many, not only just those two, but other elements of a Trump foreign policy as they were going. Now to some of the main aspects that you'll read about in the book. So Afghanistan comes along.
Biden makes the decision to withdraw. He does so. We knew that from the campaign. We knew that's what he wanted to do. They did do a four-month review, and to their credit, from everyone I talked to, the State Department, the Pentagon, et cetera, they all said they felt heard. Biden heard the Pentagon's case to stay. They heard the State Department's case that allies didn't want the U.S. to make the decision to leave unilaterally, but Biden made the case to leave. He made the decision, so everyone executed. The original sin of this, right, and we're setting aside the fact that Trump made the deal with the Taliban, which Biden felt he needed to, or at least said he needed to follow. The original sin of this is when Biden is making the decision, there's an intelligence assessment that says it will take 18 to 24 months for the Taliban to take over Afghanistan. Now, what does that mean?
That means that all the things the administration was planning to do, which meant getting Americans out, Afghan allies of Americans out, figuring out what that means for the embassy there, if the Taliban were to be in charge, all of that was not necessarily dilly-dallying. They weren't dilly-dallying. They were slow-walking it, just to tell if they had more time. So the Taliban, of course, starts sweeping across the country. That timeline starts to shrink, and then they have to improvise. And one could argue they improvised decently well, in the sense of they were able to, with commercial partners and other allies, get 120,000, 125,000 people out in the greatest airlift in American history.
Of course, we must also, and this is where the nuance comes into play, must remember 13 service members were killed. There was horrendous humanitarian strife outside of the airport. There's a gentleman I chronicle in the book, a guy named Sam Aronson, who I recommend, if you get the book for any reason, get it to hear Sam's story. He's making life or death decisions for full Afghan families to the point that you'll have one person say, I have the papers, I can get in on the plane. And he says, yes, you do, but your family doesn't. So either you come and you'll never see your family again or you stay behind with your family and possibly die.
So anytime the Biden administration says, yes, we made the right strategic decision to leave, we handle the airlift very well, we're a professional team, all those things can be true, but it's hard to make the case that this was an overly successful withdrawal when you have instances like that. They learned some lessons, though. The main one being you need allies to be involved with your decision, you need to work with them constantly, to be in touch with them constantly, and also if there's a changing intelligence picture, we need to let the world know. So John Feiner, the Deputy National Security Advisory, is one of the first in the White House to get the intelligence that the Russians are coming, that they're really planning for something in Ukraine. And he walks over to Jake Sullivan's office and he goes, look what's happening here. We need to start making things happen. We need to respond quickly. And they basically do, they set up a tiger team, right, to figure out all the main components of the response. But the main ones are develop sanctions with allies, tell our allies what we know, tell the Ukrainians what we know, develop a military assistance response and a genuine diplomatic response, which was if the Russians have issues, if they're threatening the Ukrainians for certain diplomatic issues, let's talk to them. Let's hear them out. Let's see if it's real. Of course, they wanted to be caught trying, though, mostly. They didn't expect the Russians to actually make a deal, but it leads to a more legitimate cause.
to resist the Russians if we were willing to, we even the U.S., to negotiate in good faith, and the Russians weren't. And then, so, of course, the response ends up being, arguably, at the beginning, pretty strong, right? I mean, you can quibble with, maybe we should have sent weapons earlier, the U.S. should have sanctioned the Russians, but the administration thought that wasn't the right response, and still, at the end, with Western support... The Ukrainians were very well defended. Of course, they defended themselves safely for a long time. The reason we're sort of in this conversation now about is it going well or not is because the counteroffensive didn't go really as planned and we're having the congressional strength that we're having. And I mentioned the Israel Hamas stuff sort of already, but that was sort of in part what led us here. Hamas didn't have to do what they did. They did what they did. And so now we're sort of, but a lot of critics would say the administration, because they neglected, they let the Israeli-Palestinian conflict to fester in general, that it led to a situation like an October 7th, but not necessarily directly responsible. So what does all this mean?
Well, it means a couple of things. One is, even though the title is called The Internationalists, they are not fully internationalists. They have adopted some elements of, the narrative is that Trump nationalism, let's say, although I would say a more restrained, probably, idea of America's engagement. And in that sense, we are now, as we head to the election, in this space where there is going to be, regardless of who wins, Trump or Biden, there is going to be some shift in American foreign policy history. With Biden, a few degrees. With Trump, a pretty big one. And so while many people are saying, I'm now basically arguing that this will be an election between the internationalists and the nationalists, well, to a certain extent, yes. But to a certain extent, it just means the degrees to which American foreign policy is going to change.
because you will have still a focus on alliances and transatlanticism with Biden. You're probably not going to have that much with Trump. There will still be some focus on restrictive immigration with Biden. Definitely a lot more with Trump. You'll have, yeah, et cetera, et cetera. We can go through the list, and I won't make sure I leave enough for Emma and Chris to talk about. But that's kind of the main conclusions in the book, is that I think you will get a deeply reported inside look at what they were thinking about when it came to Afghanistan and Ukraine and some other important decisions. You'll notice how, even though they called climate change an existential crisis, they barely did anything about it. You'll see some of the divisions within the team. You'll also see what I think is, even though they've tried to be boring,
what will end up being just in the history of American foreign policy, a fairly consequential and arguably, and this is overused in the think tank world, but an inflection point in terms of how the fact that Biden being the avatar of traditional American foreign policy, and while he's still very close to it, was in agreement with the Jake Sullivan's and those of the world to start to move away to something a little different. Alexander Ward is author of The Internationalists. At the Cato Institute Policy Perspectives 2024 City Seminar in Naples, Florida, Cato Chairman Emeritus Robert A. Levy gave a Supreme Court preview of the seven most important cases facing the Supreme Court this term. So our first pending case is called Loper Bright Enterprises v. Raimondo, which addresses what's called the Chevron Doctrine. Part one of the doctrine goes like this. If Congress has passed a law that directly addresses an issue and the intent of Congress is clear, then the statute controls. But part two.
If the statute is silent or ambiguous, the courts will defer to any reasonable interpretation by the agency. So in the Loper case, the court is going to decide whether to overrule the Chevron Doctrine or at least clarify whether imprecise statutory provisions warrant deference by the court to agency interpretations. Now, that may sound like a minor matter, but the Chevron Doctrine has been targeted by conservatives and libertarians for decades because, we argue, it lets Congress off the hook. It gives far too much discretion to unelected officials. Over the years, Chevron has been the fuel driving the administrative state. And as you've heard, and as I'm pleased to report, Cato's amicus brief opposing the Chevron doctrine was cited twice during Supreme Court oral argument. Hopefully, it'll be Chevron. Rest in peace. So next, we revisit the perpetual controversy over gun control. In Rahimi v. United States, the court will decide whether a federal statute barring possession of firearms by persons under a domestic violence restraining order flouts the Second Amendment. Now, Rahimi is clearly a bad dude.
with a record of violence. But the 2022 Bruin decision, that's just two years ago, directs that any gun restrictions must be consistent with this nation's historical tradition of firearms regulation. So unless the court can find an analogous regulation that existed in 1791 when the Second Amendment was ratified, it may be forced either to throw out Rahimi's conviction for gun possession or to modify its Bruin standard, which is less than two years old. Prior to Bruin, the court followed a two-step approach in Second Amendment cases. Step one, examine whether a proposed regulation is consistent with the text, history, and tradition of gun laws. Step two, assess the costs and benefits of firearms restrictions. Bruin employed step one only and concluded that New York did not meet the history-based test. And accordingly, the court in Bruin invalidated a 1913 New York law.
and held that Americans have a right to carry outside the home for self-defense without proving that they had a special need to do so. Now, that was a big deal, both because Bruin was the first case to expressly extend the right to carry beyond the home and because the court overhauled its Second Amendment framework. So we will see if the court backs off from its exclusive reliance on history and tradition. I personally would hope that it will do so. Okay, moving on to a completely different topic, Moore versus the United States. This is about taxation of unrealized income. More specifically, whether Congress can tax income earned overseas but not repatriated to the United States. Basically, the court authorizes three types of federal taxes. Income taxes are specifically authorized by the 16th Amendment. Indirect taxes on asset transfers like sales taxes, excise taxes.
for example, a federal gasoline tax, they have to be uniform across the states. And direct taxes, those that are applied to individuals or their property, they have to be apportioned to the states by population. That's why we don't have a federal property tax. So the Moors in this case argue that a tax on their foreign earnings is not an income tax because the earnings haven't been realized through repatriation to the United States. And they argue that a property tax on those earnings cannot qualify as a direct tax because it would not be apportioned by population.
Now, what's really going on here is that Elizabeth Warren would like to tax all wealth attributable to unrealized gains. She hopes that this case will advance her trillion-dollar redistributionist agenda, even though until now, federal taxes on property have been deemed unconstitutional by most legal experts. Never mind that a wealth tax would create numerous other problems. How do you value illiquid assets such as art, privately held companies, whether you should include the present value pension benefits, and why the same income? should be taxed a fourth time when it's already been subject to taxes on corporate earnings, dividends when they're distributed, and the investor's estate. No wonder that Sweden and Denmark, Finland, the Netherlands all tried and then abandoned wealth taxes. Both the Constitution and good economics say we should follow their lead.
The next two cases involve content filtering by social media companies. The first is actually a consolidation of two lawsuits, one from Florida, one from Texas. Liberals, as you've heard, want more filtering to screen out what they believe to be misinformation and offensive speech. Conservatives, they want less filtering because of a perceived, maybe even an actual, bias against conservative views. And as a result, there's been considerable pressure on Congress, from the left and the right, to impose new rules for content screening. But the two sides are very far apart on the changes they'd like to see.
And naturally, any government meddling is going to have First Amendment implications. When content modification rules were challenged in Texas and Florida, federal appellate courts came up with opposite holdings. And so the Supremes are going to have to resolve the difference. In the Texas case, two trade associations want the Supreme Court to overturn a law that bars social media companies from blocking content based on a user's viewpoint. They argue that the law abridges.
the First Amendment rights of these companies to remove hate speech and political disinformation and violent videos and other harmful content. The U.S. Court of Appeals upheld the Texas regulations, but the trade groups had better success here in Florida. Here, they challenged the state's Stop Social Media Censorship Act, which was passed after Trump was suspended from Twitter in the wake of January the 6th. The act provided that social media companies could not ban political candidates or journalistic enterprises, and the appellate court in that case invalidated the law on First Amendment grounds. Whenever speech is restricted based on its content, the government has a heavy burden to justify its regulations, and I doubt that either Texas or Florida have met that burden.
There is another social media case pending, and the issue there is whether the Biden administration improperly pressured tech companies to take down posts about public health and about election integrity. The appellate court concluded that the White House and the CDC likely coerced the platforms to make moderation decisions, and that is the key question. Was there coercion? The Republican attorneys general in Louisiana and Missouri who brought the case relied on a well-settled legal principle. The government is prohibited by the Constitution.
from forcing people to express certain views. And they may not circumvent that prohibition by compelling private parties to act as the government's censor. Still, it is equally well settled that government officials can advocate for the public policies they prefer. That is the essence of politics. So it's okay to jawbone social media companies, but it's not okay to compel their cooperation. The Supreme Court will be telling us whether the Biden administration has crossed that line. Robert E. Levy is Chairman Emeritus of the Cato Institute.
Market prices are under siege, seemingly from all sides. The war on prices is waged most obviously with damaging government price controls and the harmful effects of central bank monetary mismanagement, as we saw with the recent inflation. Yet these bad policies are propped up by widespread, misguided public beliefs about the causes of inflation, the effects of price controls, and the inherent morality of market prices. Cato's Ryan Bourne sat down with me for this Cato audio exclusive to discuss his forthcoming book, The War on Prices. Ryan, first there was inflation. Did we have Trumpflation? Was that a...
I don't think we've had Trumpflation. We had so-called Trumpflation, so-called Bidenflation, so-called Greedflation. Shrinkflation. Were there any other inflations that I haven't mentioned? I'm not sure if there are any other inflations. Shrinkflation, I guess, but that was a different type of issue that Joe Biden has referred to in his recent State of the Union speech. I mean, the big picture point here that you're making is since March 2020, the country has printed $5 trillion. The money supply went up by $5 trillion. We tend to know that over time that manifests itself in a higher price level. So we've seen inflation at the highest level that we've seen since the 1970s. And as always, when you have big inflation, the political incentives are there to cast the blame onto other actors.
Initially, when that inflation hit, we heard from Federal Reserve Chair Jay Powell that this was all transitory. It was all to do with what was going on in particular sectors due to the pandemic. Then when it became clear that that wasn't the case, we moved on to blaming Vladimir Putin and the invasion of Ukraine. Then when it became clear that this just wasn't about energy prices, you saw the witch hunt manifest itself on companies. Then we heard that this was all due to corporate greed and various junk fees and price gouging and monopoly power. This is something that we've come to expect when you see a vast increase in unexpected inflation. It's a deflection of responsibility for the fact that the...
The federal government combined, the Federal Reserve overseeing a loose monetary policy during the pandemic, accentuated by the fact that Congress was spending trillions and trillions of dollars in relief bills at a time when the economy was finding it difficult to produce goods and services, manifested itself in much higher prices. We see, you know, obviously this giant increase in spending accompanied by a giant increase in accommodative monetary policy occurred for the most part in 2020. And then Donald Trump was not in office by the time the inflation really took hold. And so the politics of this are always... It's almost like musical chairs, right? The music stopped, we got the inflation, and there was Joe Biden standing there. Yeah, that's right. And I think we would have always seen a high inflation from 2022 onwards as a result of the money supply having gone up by $6 trillion between March 2020 and early 2021. So that was kind of baked into a certain extent already. With those lags in the time it takes for money to feed through into product markets and higher prices, Joe Biden was the unfortunate beneficiary, or whatever the opposite of beneficiary is in this case, of that rising price level. That said...
You know, the Biden administration then came in, passed the American Rescue Plan, another 1.2 trillion of spending at a time when the economy really didn't need that. You know, it was already running kind of full capacity, as it were. So that gave Republicans a real opportunity, I think, to say, well, actually, the spending that Congress is doing has been signed off by President Biden, has accentuated this and made it much worse than it needed to be. And I think there's some kind of economic logic to that. So, yes, Joe Biden was unfortunate in the fact that the money supply had wrapped up massively just prior to him entering office. But his macroeconomic policy did not adjust.
to deal with the fact that we had these inflationary forces. And indeed, a lot of people, I think, were kind of in denial. Under many different macroeconomic schools of thought, inflation looked likely. So the old monetarists would say, oh my gosh, look what's going on with the money supply. The money supply has gone up by $6 trillion in just over a year.
The old school Keynesians would say, wow, we're really accentuating budget deficits at a time when the economy's capacity for producing goods and services is impaired by the pandemic and the Ukraine war. And people who think this is all about expectations of future deficits, the so-called fiscal theory of the price level crowd, were screaming at the fact that we're running these huge deficits and look like we had no intention of paying them back. So under any major macroeconomic school of thought, there looked a risk of inflation. And so I don't think it's totally unfair to say that the Biden administration should have adjusted its macroeconomic policy to reflect that. All of the complaints about inflation and the various competing boogeymen that are either contributing to it or making it happen, we, of course, would say that increasing the money supply by many trillions of dollars within a year or two would probably be the place to start. But this is, of course, in addition to all the other complaints about prices more generally, inflation is just a particularly salient one right now. A lot of the complaints that we hear on a regular basis, even during relatively low inflationary times, are just not borne out by the economic evidence. Can you talk about the book, The War on Prices?
and what some of the big themes are. Yeah, so obviously the hook for this book is the fact that we've just lived through the highest inflation since the 1970s. And I've been really struck during this period how a lot of the myths and misconceptions about inflation and what causes inflation and how we should deal with inflation that we thought were put to bed in the 1980s have kind of resurfaced. So this idea that you can have these cost shocks that are the ultimate cause of inflation, this idea that workers bidding for higher pay, individual companies trying to set their prices higher can actually cause inflation and not just... affect who benefits or loses when you have an inflationary period. And a lot of this stuff just doesn't take the broader macroeconomic situation seriously. I was in Congress a couple of years ago now testifying about whether monopoly power had led to inflation in the United States. And the committee chair at the time, Jim Himes, said to me, well, you know, ultimately businesses can decide on their prices. So is it not true as a matter of logic that to the extent we're seeing higher prices from businesses, it's businesses causing inflation?
And the answer I gave that day was, this just doesn't take consumers or competition seriously. If an individual business sets their price too high, then competitors have a big incentive to undercut them. They can't dictate the market price of their goods or service. At the same time, consumers have to be able and willing to pay the higher price for a good or service. And that can only manifest itself in a macroeconomic sense where everybody's increasing prices if there's a bigger money supply and people have more money to spend on goods and services. So as I was thinking about this, I kind of realized, well, a lot of the errors of logic made in thinking through this inflation actually apply to...
concerns that we hear about prices in individual markets too. The idea that landlords can just set rents wherever they like. The idea that business people can just set the wages of their workers at a really suppressive level and minimize their wage costs, irrespective of what's going on in the broader economy. So I thought what we really needed to do was have a book. split up into three sections, inflation, prices, and price controls, and value, how economists think about value, and really walk through what the myths and misconceptions about this inflation have been, the broader logic and history that we've seen behind price controls and the effects that they have, and then how economists actually think about the worth and morality of the market price system. That's broadly the book. It's split into those three sections.
I think it's really important because I think one consequence of coming out of this inflation is that this intellectual environment whereby a lot of people think that just individual businesses, individual actors in the economy can cause higher prices or higher inflation, combined with the fact that we have seen a rollout of rent control and higher minimum wages and a whole range of other price controls, anti-price gouging legislation, water price regulation, oil and gas price regulation in certain parts of the world at the same time, there's a drumbeat at the moment for more government control or direction of prices and businesses pricing structures. I think unless we get to the real roots of the theoretical and empirical mistakes behind that agenda. I think when the next inflation comes around, the environment would be ripe for people re-advocating terrible ideas like price controls again. And the United States is not alone here, right? We have some inflationary problem in the US and somebody thinks of the bright idea of giving people cash to buy the things that have been made more expensive by inflation and just don't consider the consequences. Singapore has just announced something very similar and other countries still, cash handouts, politically good, economically questionable.
Yeah. Well, people conflate inflation, which is a macroeconomic phenomenon, with just the cost of living. Inflation, by definition, is a sustained increase in the general price level. Over time, over a period of time, once it's worked its way through, it raises all prices proportionately. That only comes around when you see a bigger money supply relative to the production of goods or services. It can be caused by a higher money supply, money supply going up, or the production of goods or services suddenly collapse. Both lead to a big spike in the price level, which manifests.
in the short term, obviously through higher inflation. The cost of living is obviously something related to that in that if you have a big inflation, all prices are going up. The prices that people are paying for the goods and services that they need is going up. But the cost of living is slightly different in that you can get a rising cost of living without an inflation. If certain goods and services, housing, for example, is made more expensive by the fact that we have very tight zoning and land use planning regulations that doesn't allow supply when there's increasing demand, that pushes up the price of housing, pushes up people's cost of living, but doesn't lead to a general inflation, which is more of a macroeconomic phenomenon.
This distinction matters, I think, because I think politicians ultimately are partly responsive to the general public. I think a lot of people in the general public presume that the way to mitigate inflation is for government to take action to reduce their cost of living, for government to control certain prices that they think are too high and that businesses are ripping them off, or to lower taxes. or to lower interest rates, right? Because those things manifest themselves in the cost of living for individuals. But we have to make this distinction absolutely clear because inflation is a very, very different beast and requires very, very different solutions to high prices, which are a result of supply and demand factors in individual markets. Who are some of the essayists that are featured in your book? Yeah, we've got some brilliant people across a range of topics. So writing on inflation, we've got David Beckworth on the myth that this inflation was just caused by...
the pandemic and Ukraine war. We've got Brian Kutzinger, another academic economist writing on the myth of the wage price spiral. Stan Voyger from the American Enterprise Institute writing on how this pandemic has put to bed the ideas of MMT. Then you get into the prices and price controls essays. A couple of great essays by Peter Van Doren from the Cato Institute on oil and gas price and water price regulation. Michael Cannon on healthcare prices. Jeff Myron on rent control. And me on junk fees and anti-price gouging legislation. But then we've got the broader essays on how economists think about
value and how that relates to price. So Deirdre McCloskey has three different essays within this, including a brilliant essay on the faults of the labor theory of value. Vanessa Brown-Corder has an excellent essay on the gender pay gap. And we've got a great essay by Laya Palagashvili on dynamic pricing as well. So as you can see, this is an incredibly broad book, covers a whole range of different topics. And I think it's the most comprehensive book that I've seen out there on prices and price controls as a broad economic phenomenon. I should note, the book is available for pre-order.
now, but what's the official release date so that people can wave it around and take photos of it and post it to social media and talk about how great it is? The official release date is the 14th of May. You're right. The book is available now. All good book stores and no doubt some very bad ones as well. But you can order it online from all the normal places, Amazon, Barnes & Noble, and the like. And I'll just say that there's been a few different...
kind of pre-reviews, people who've given us blur quotations from the book. So Tyler Cowen, a George Mason University professor, has said this is a go-to book on price controls. We've had an excellent review from Jason Furman, former chief economist of President Obama's Council of Economic Advisers, who said this was a really rigorous book, why he didn't agree with every conclusion. He thought it was the type of rigorous economics that was really needed in this debate. So we're very excited about this being released, and it's available for pre-order now. Ryan Bourne is editor of the forthcoming Cato book, The War on Prices, available for pre-order now.
Human innovation, whether it be new ideas, inventions, or systems, is the primary way people create wealth and escape poverty. The health and wealth of the modern world rests on the shoulders of unsung heroes whose work has saved millions, if not billions, of lives. Heroes of Progress is a new book from the Cato Institute. It takes readers on a journey through the lives of 65 of the most important people who have ever lived. From intellectuals who changed public policy for the better to business people whose innovations helped millions rise from poverty or scientists whose medical breakthroughs eliminated diseases and ended pandemics. Heroes of Progress is available this month at online retailers and at cato.org.
That will do it for this edition of Cato Audio. I'm Caleb Brown. Talk to you again next month.