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Recent Policy Studies
Foreign Policy/International AffairsBy James Phillips, The Heritage FoundationWebMemo, 07/10/2008
Iran’s missile-rattling provides one more reminder—if any were needed—that the United States and its allies need to cooperate more effectively to contain Iran’s rising power, put a higher priority on missile defense, and prevent Iran from acquiring nuclear weapons.
Crime, Justice & the LawBy Robert S. Highsmith Jr., Lindsey G. Churchill, Washington Legal FoundationLegal Backgrounder, 07/10/2008
In 2005, the Georgia General Assembly enacted tort reform legislation that affected the state’s existing laws on venue, medical malpractice claims, offers of judgment, and damage awards in certain civil actions. As part of Senate Bill 3, the General Assembly enacted O.C.G.A. section 24-9-67.1, which governs the admission of expert testimony in civil cases. In Mason v. Home Depot U.S.A., Inc. et al.,the Supreme Court of Georgia upheld the constitutionality of the statute over challenges on several fronts. The decision in Mason, both in terms of the constitutionality of the statute following a multi-faceted attack and the rigor with which the trial court applied the statute suggests that Georgia courts will construe O.C.G.A. section 24-9-67.1 to allow juries to hear helpful testimony from an expert without the traditional, formulaic constraint of a hypothetical question, while requiring experts—if their testimony is to be admissible—to base their opinions on sound, reliable principles and methods.
Health CareBy Alexander Okuliar, James P. Kidder, Washington Legal FoundationLegal Backgrounder, 07/10/2008
A recent lawsuit filed by twenty-five states and the District of Columbia against drug maker Abbott Laboratories and its French partner Fournier highlights a growing trend of state enforcers using the antitrust laws to interject themselves into the federal domain of regulating pharmaceuticals. The court’s decision will likely help resolve nagging questions about the inherent conflicts between the patent and antitrust laws, and will have far reaching implications for the drug industry.
Crime, Justice & the LawBy Thomas M. Smith, Washington Legal FoundationLegal Backgrounder, 07/10/2008
The Hon. Jack B. Weinstein, in a massive, over five hundred page decision, certified a Brobdingnagian plaintiff class – all persons in the United States who had purchased light cigarettes. Schwab v. Philip Morris USA Inc. The class encompassed tens of millions of people and sought damages estimated at some $ 800 billion. This case contains valuable lessons for class action counsel defending or proposing class certification under RICO for a consumer product. The insufficient predominance of common issues on injury, reliance, damages, causation and the statute of limitations defense were ultimately fatal to this class certification.
Budget & TaxationBy Lewis M. Andrews, Yankee Institute for Public Policy07/10/2008
In a world where an Internet course can substitute for a live teacher, where technology is cutting the length of hospital stays and allowing medical centers in other countries to compete for American patients, and where Web-enabled technology can ease the impact of government workforce reductions, the bargaining position of monopoly labor is slowly but surely eroding. Eventually, public employees will see that they too have a vested interest in the productivity changes necessary to resolve the debt crisis, especially at the local level where state legislatures have considerable latitude to restructure failing municipalities by rewriting union contracts. This has already happened in cities like Springfield, Massachusetts. Indeed, not all guarantees made to government workers are as ironclad as supposed. Even without the threat of bankruptcy, officials in Texas, Oregon, and Rhode Island have challenged longstanding labor agreements. Although politicians are afraid to discuss it, most know that a raucous showdown between government workers and taxpayers is but a few years away – and that economics dictates only the taxpayers can win.
Health CareBy Jonathan J. Miltimore, Public Interest InstituteInstitute Brief, 07/10/2008
If, as most experts agree, the problem plaguing healthcare markets is exorbitant costs, simply expanding coverage is not a real solution. Most people electing to forego healthcare coverage are doing so not because they do not want coverage, but because they cannot afford coverage. So if high healthcare costs are the problem, and healthcare costs are high because Americans are over-consuming healthcare, the question remains: Why are Americans over-consuming healthcare? The answer is surprisingly simple: Americans are over-consuming healthcare because they are not paying for it directly. Matching subsidies can and should be provided to the disadvantaged and less affluent individuals to help them purchase plans. Allowing prices to operate and giving people more control over their healthcare dollars does not mean a laissez-faire healthcare system free of government regulation and assistance. Rather, it means allowing a healthcare market to operate similarly to other markets.
Foreign Policy/International AffairsBy John O' Sullivan, Hillsdale CollegeImprimis, 07/10/2008
If Lady Margaret Thatcher demonstrated that truth in matters economic, she believes today that the resources of the Anglo- American political tradition of ordered liberty are not exhausted either. She believes that the virtues of that tradition—dispersed authority, open debate, popular sovereignty, spontaneous social evolution—are not dead, merely dormant. Indeed, they are flourishing in those new democracies, such as Estonia and Poland, where they have been introduced since 1989 (and where economic success is far more obvious than in countries that have clung to more centralized models). They are flourishing too in the English-speaking world outside Britain—notably in the U.S., Australia, and a reforming India. And they offer the best hope for Third World countries emerging from poverty and backwardness into a world of globalized opportunities.
Transportation/InfrastructureBy David Starkie, Institute of Economic AffairsBook, 07/10/2008
A significant theme has been relatively neglected thus far in both aviation and industrial economics is the role of the market and its interplay with the development of economic policy in the context of a dynamic but partly price regulated industry. The result provides a strong flavor of how market mechanisms, and particularly competition, can operate to successfully resolve policy issues.
EducationBy John R. Hendrickson, Public Interest InstituteInstitute Brief, 07/10/2008
Higher Education in America is facing problems that are putting the nation at risk. College tuition and costs are skyrocketing while academic performance is declining. The academic and financial problems that face higher education are real and urgent, but not all is bleak.
Budget & TaxationBy Dino Falaschetti , Hoover InstitutionHoover Digest, 07/10/2008
Economists have long debated whether deficits boost consumption during economic downturns or instead make their way into savings. Deficits do matter, but perhaps less for fiscal stimulus and more for disciplining public spending. To attract funding through debt markets, spending proposals must reasonably promise to strengthen society’s repayment ability. Moreover, debt markets continually evaluate the price at which government obligations are traded and thus transparently report on the credibility of such promises. Running deficits, not balancing budgets, can productively constrain governments by raising the price on unproductive spending while readily supporting public projects that strengthen economic performance.
Economic GrowthBy James M. Roberts, Daniel J. Leahy, The Heritage FoundationWebMemo, 07/10/2008
An examination of the rankings of oil-rich counties in the 2008 Index of Economic Freedom reveals that, for the most part, citizens of oil-producing countries are stuck in poverty. But that does not mean oil-rich countries are doomed to economic mediocrity.
Health CareBy Helen Evans, Institute of Economic AffairsResearch Monograph, 07/10/2008
Politicians will go to any lengths to persuade the voting public that the National Health Service is safe in their hands. Alternative policy models cannot be placed before the electorate unless political parties take huge risks. Yet, at the same time, we see even a Labour government drawing private finance into the health service and giving patients rights to use the private sector. Elite opinion does not, as yet, warm to a free market in healthcare. Although aspects of a market-based system are accepted, ideas of ‘market failure’ loom large - especially amongst the political class.
Elections, Transparency, & AccountabilityBy Hans A. von Spakovsky, The Heritage FoundationLegal Memorandum, 07/10/2008
Americans disagree on many areas of immigration policy, but not on the basic principle that only citizens should be able to vote in elections. To keep non-citizens from diluting citizens’ votes, immigration and election officials must cooperate far more effectively, and state and federal officials must increase their efforts to enforce the laws against non-citizen voting that are already on the books.
Crime, Justice & the LawBy Douglas E. Motzenbecker, Washington Legal FoundationLegal Backgrounder, 07/10/2008
Earlier this year, in LaRue v. DeWolff, Boberg & Associates, the U.S. Supreme Court held that an individual plan participant may seek damages for his or her own account when those damages result from a defendant’s breach of fiduciary duty under Title I of the Employee Retirement Income Security Act of 1974. LaRue will likely lead to an increase in ERISA fiduciary liability litigation, which can involve the second guessing of a defendant’s conduct in administering the employee benefit plan in question. Since LaRue increases fiduciaries’ exposure to suits for money damages, it is important that plan fiduciaries remain vigilant in administering their plans and be able to defend their investment strategies, the investment options they offer their participants, and the disclosures they make to participants about the plan and any employer securities that participants may be allowed to acquire. To this end, it is critical that fiduciaries regularly secure advice from competent portfolio managers, that they review the performance of the investment options offered by their plans, and that they engage qualified attorneys, accountants, and investment advisors to guide them accordingly.
Foreign Policy/International AffairsBy Nile Gardiner, The Heritage FoundationWebMemo, 07/09/2008
The United States, NATO and key European allies must work together to defend Israel in the face of growing intimidation from Iran and an array of international terrorist movements.
Economic and Political ThoughtBy Edwin J. Feulner, The Heritage FoundationFirst Principles, 07/09/2008
If we had to pick the thinkers more responsible than any other for planting the intellectual roots of modern conservative thought, I believe we would select Edmund Burke and Russell Kirk. They were separated by almost two hundred years but united in their adherence to the priceless principle of ordered liberty.
The Constitution/Civil Liberties
To Protect and Maintain Individual Rights: A Citizen’s Guide to the Washington Constitution, Article IBy Michael Reitz, Jonathan Bechtle, Freedom Foundation07/09/2008
In order to improve public awareness of the fundamental rights we enjoy, we must refer to the state Declaration of Rights of the Washington Constitution. A review of the state’s 1889 constitutional debates, newspaper accounts of the convention, and significant cases that have dealt with the rights guaranteed in the state constitution, all prove worthy of study. When citizens are educated in the sources of their freedoms, and familiar with attempts in history to limit these freedoms, they are better equipped to recognize new encroachments.
Health CareBy Joseph Antos, American Enterprise InstituteHealth Policy Outlook, 07/09/2008
According to some politicians, health reform will bring everyone more affordable insurance, more effective and higher-quality care that provides real value, continued advances in medical technology, and relief from the fiscal pressures that the current system places on the federal budget. These are great goals, but how do advocates expect to accomplish this transformation when they do not want to talk about the ailing five-hundred-pound gorilla of the health system—Medicare? Is Congress making the task of reforming Medicare even harder by its action, and inaction, this year?
Transportation/InfrastructureBy Michael Ennis , Washington Policy CenterPolicy Note, 07/08/2008
In 1996, voters in Pierce, King and Snohomish counties authorized Sound Transit to pursue the first phase of a regional transit system known as Sound Move. In the process, Sound Transit received the authority to impose a sales tax, rental car tax and an excise tax on motor vehicles. In 2007, the agency collected about $353.4 million from taxpayers. Sound Transit’s mission is to, “plan, build and operate regional transit systems and services to improve mobility for Central Puget Sound.” But some of Sound Transit’s expenditures are not consistent with its mission and may violate state law. While special interest groups are valuable and serve important roles in public policy, they should not be given public taxes when no tangible good or service is returned. The SAO should investigate Sound Transit’s financial transactions to ensure compliance with the Washington State Constitution and the taxing authority given to the agency by the voters.
International Trade/FinanceBy Adam Lerrick, American Enterprise InstituteOn the Issues, 07/08/2008
The past year has seen an explosion in the price of food that has plunged hundreds of millions of people into poverty and privation throughout the developing world. Protest in thirty-four countries—from Mexico and Indonesia to Egypt and Côte d’Ivoire—has followed. In fourteen nations, violence has erupted. This tragedy is the result of neither a natural disaster nor an inability to produce sufficient food at reasonable cost. Bad policies in rich nations have restricted output, diverted crops from food to energy production, and stopped emerging-nation farmers from increasing capacity.
Natural Resources, Energy, Environment, & ScienceBy Daniel Ikenson, Cato InstituteTrade Policy Analysis, 07/08/2008
As China’s economy grows and diversifies, the capacity for success with the old formula is becoming more doubtful. There are too many interests to balance; too many signals to manage. Yet the leadership’s response to rising energy prices—the most pressing economic issue of our time—suggests that it has no intention of changing course anytime soon. China has long provided fuel subsidies, which have been blamed for encouraging wasteful consumption, propping up inefficient industries, degrading the environment, and forcing energy consumers in other countries to pay higher prices. But record oil and coal prices, driven in no small part by economic growth in China, have made it that much more expensive to subsidize gasoline, diesel, and electricity consumption. Add to that the growing acceptance around the world that taxing carbon emissions is the proper response to inefficient production processes and suddenly the cost of those Chinese subsidies, in direct financial terms, could double. It would seem that now is the perfect time for the government to announce the cessation of subsidies, price caps, and other interventions in energy markets, altogether.
The Constitution/Civil LibertiesBy Adam Thierer, John Morris, Progress & Freedom FoundationProgress Snapshot, 07/08/2008
Thirty years ago this week, the Supreme Court handed down its landmark First Amendment decision, FCC v. Pacifica Foundation. Spurred by a Pacifica Foundation radio station airing George Carlin’s infamous “seven dirty words” monologue, a splintered 5-4 court held that the Federal Communications Commission (FCC) was justified in levying fines on broadcasters who aired indecent content during daytime and early evening hours. The “media-as-intruder” logic of Pacifica fails; parents can accurately tailor media experiences to their individual household preferences. As society and First Amendment jurisprudence adjusts to a world of technological convergence and choice Pacifica should and will continue to wither in relevance, to be replaced by the use of parental empowerment tools and robust First Amendment protections.
Crime, Justice & the LawBy John Kelley, The Public InterestPolicy Study, 07/08/2008
Law enforcement is an important aspect of every community’s safety. Local governmental entities often find their budgets stretched to the max and face fierce competition for every tax dollar. This leads to the question of how Iowa’s law enforcement can be made more efficient and less costly. Consolidation of law enforcement and emergency response services is an effective means of coordinating communications as well as saving local taxpayer dollars.
Information TechnologyBy Daniel R. Ballon, Pacific Research InstituteCapital Ideas, 07/08/2008
The California Public Utilities Commission on Tuesday proposed relaxing 13-year old price caps on basic phone service. Yielding to the demands of public interest groups, regulators currently force telecommunications companies to offer the cheapest basic rates in the nation. But if artificially low prices are necessary to protect consumer welfare, why are consumers abandoning these plans in droves? The PUC should eliminate price caps, not expand them. Nearly all recent innovation in voice communication has taken place outside the Commission’s reach.
Health CareBy John R. Graham, Pacific Research InstituteHealth Policy Prescriptions, 07/08/2008
A benefit mandate is a state law that commands a health plan to pay for, or at least offer, a specified treatment or type of provider, removing the benefit from negotiation between beneficiaries and health plans. The unemployed American, struggling to pay health insurance premiums out of pocket, likely bears the greatest cost of state benefit mandates. He cannot pay for benefit mandates by having his wages reduced, working longer hours, or choosing to work for a firm that can switch to self-insurance from state-regulated insurance. He must become uninsured, the victim of overweening and irresponsible legislative zeal.
LaborBy Terry Neese, John Goodman, National Center for Policy AnalysisBrief Analysis, 07/08/2008
The most significant economic and sociological change of the past half-century has been the entry of women into the labor market. Public policies that govern the workplace have not kept pace with this demographic shift, however. For the most part, tax law, labor law and employee benefits law were designed decades ago on the assumption that the typical household would have a full-time working husband and a homemaker wife. These anachronistic public policies are not only out of step with the way most Americans are living their lives, they are causing considerable harm. Public policies and institutions have not kept pace with the changing role of women in the workforce. As a result, women and their families are penalized when they enter the labor market. The solution to these problems is not policies that favor women, but rather policies that increase the flexibility and fairness of the system—benefiting both men and women, and their families.
Information TechnologyBy Jerry Ellig, Mercatus CenterMercatus on Policy, 07/08/2008
Ten years ago, the Texas Public Utility Commission (PUC) reduced subsidies for rural phone service that were hidden in long-distance charges, substituting explicit subsidies funded by a surcharge on Texas telephone bills. In 2005, the Texas legislature enacted sweeping telecommunications legislation that directed the PUC to evaluate universal service programs and consider further reforms. The Texas PUC reasoned that subsidizing rural phone service by overcharging consumers for long-distance service was not sustainable. PUC correctly foresaw that with long-distance prices falling and many calls shifting to wireless phones, the revenue base was inevitably going to continue shrinking.
Economic GrowthBy Robert Nelson, Kyle McKenzie, Eileen Norcross, Mercatus CenterMercatus on Policy, 07/08/2008
Although most people probably have not heard of them, Business Improvement Districts (BIDs) have proliferated across the globe. Geographically defined zones authorized to collect taxes from businesses within their boundaries, BIDs have significantly changed urban governance and revived business areas. The property owners within a BID elect a board of directors who funnel the collected funds to various activities, which usually include sanitation, street cleaning, street improvements, additional security, and marketing for the business neighborhood. However, the BID model is very flexible and could be used to tackle other urban problems.
Budget & TaxationBy Peter Gordon, Richard Little, Mercatus CenterWorking Paper, 07/08/2008
The United States is an entity exposed to an abundance of natural hazards - floods, earthquakes, hurricanes, tornadoes, wildfires, and ice storms affect different parts of the country with different intensities, return periods, and damage potential. There has been a major increase in the cost of natural disasters over the past 15 years and a comparison of the economic losses (corrected for inflation) due to natural disasters worldwide over each decade for the past 50 years reveal a huge increase. The key socio-economic factor causing these increased losses is development in hazard-prone areas which puts increased value at risk. In the U.S., although much of the cost of natural hazard events is underwritten by private insurance, when an event is escalated to the status of “disaster” the federal government has stepped in to provide disaster assistance of various kinds. This assistance amounts to a de facto property and casualty insurance to which all U.S. taxpayers contribute.
Regulation & Deregulation
Public Interest Comment on Average Fuel Economy Standards, Passenger Cars and Light Trucks; Model Years 2011–2015By Patrick McLaughlin, Mercatus CenterPublic Interest Comment, 07/08/2008
The Department of Transportation (DOT) has proposed a new rule that would significantly increase the national corporate average fuel economy (CAFE) standards in years 2011-2015. The proposed rule is intended to force the fuel economy in the US towards a fleet-wide average of 35 miles per gallon or better by the year 2020. The proposed changes in the CAFE standard could have the unintended consequence of induced technological lock-in. To reduce the chances of inducing technological lock-in, DOT should delay the largest increases in the CAFE standard until after 2015. Delaying the increases in the CAFE standards will allow the best possible long run technology to prevail in the market.
Regulation & DeregulationBy Richard Williams, Mercatus CenterWorking Paper, 07/08/2008
Federal economists have a wide variation of influence on regulations in health, safety and environmental regulations. Many economists do not communicate their results in a useful way to decision makers. Economic analysis is important for public policy; and economists can, in the right circumstances, improve social welfare if their analysis is objective and used in decision making. Some of the insights that economists have about their agency should be helpful in increasing the impact that economic analysis should have on regulations.
LaborBy James Sherk, Patrick Tyrrell, The Heritage FoundationBackgrounder, 07/07/2008
The Labor Department’s Wage and Hour Division uses highly inaccurate methods to estimate prevailing wages for the Davis–Bacon Act. Davis–Bacon rates in Virginia (except for the Washington, D.C., Metro area) are 26 percent below market wages. The Department’s Bureau of Labor Statistics already estimates wages using accurate scientific methods. Congress should require the Department to use these surveys to set Davis–Bacon rates.
LaborBy James Sherk, Patrick Tyrrell, The Heritage FoundationBackgrounder, 07/07/2008
The Labor Department’s Wage and Hour Division uses highly inaccurate methods to estimate prevailing wages for the Davis–Bacon Act. Davis–Bacon rates in South Dakota average 12 percent below market wages. The Department’s Bureau of Labor Statistics already estimates wages using accurate scientific methods. Congress should require the Department of Labor to use these surveys to set Davis–Bacon wage rates.
Elections, Transparency, & AccountabilityBy Emily Chamlee-Wright, Daniel Rothschild, Mercatus CenterMercatus on Policy, 07/07/2008
During and after Katrina, hundreds of thousands of people from across Mississippi and Louisiana were displaced to all fifty states. Some communities, notably Houston, Atlanta, and Baton Rouge, took especially large numbers of evacuees. What was initially seen as a temporary evacuation has turned into a mass migration, illustrating the uncertainty affecting host cities. Because of this uncertainty, rigid top-down structures that are, by their nature, unable to adapt to the rapidly changing environment associated with a sudden influx of people are poorly suited to leading response. Rather, by preparing for a sudden influx of people, placing an emphasis on creating communities and resuming normalcy, and making clear commitments about what services the host city will provide and when, host cities and their guests will be best suited to adapt to changing circumstances.
Retirement/Social SecurityBy Andrew G. Biggs, American Enterprise InstituteWorking Paper, 07/07/2008
While Social Security is projected to begin running deficits within the next decade and become insolvent during the early 2040s, a significant degree of uncertainty accompanies these projections. This uncertainty causes some to argue for delay in addressing projected deficits. Moreover, some proposed reforms would increase uncertainty regarding future system financing. What about policies to index Social Security taxes or benefits to changes in the ratio of workers to beneficiaries, allowing for auto-correction for changing demographic factors that impact system finances?
LaborBy James Sherk, Patrick Tyrrell, The Heritage FoundationBackgrounder, 07/07/2008
The Labor Department’s Wage and Hour Division uses highly inaccurate methods to estimate prevailing wages for the Davis–Bacon Act. Davis–Bacon rates in Nebraska average 13 percent below market wages. The Department’s Bureau of Labor Statistics already estimates wages using accurate scientific methods. Congress should require the Department of Labor to use these surveys to set Davis–Bacon wage rates.
LaborBy James Sherk, Patrick Tyrrell, The Heritage FoundationBackgrounder, 07/07/2008
The Labor Department’s Wage and Hour Division uses highly inaccurate methods to estimate prevailing wages for the Davis–Bacon Act. Davis-Bacon rates in Florida average 25 percent below market wages. The Department’s Bureau of Labor Statistics already estimates wages using accurate scientific methods. Congress should require the Department of Labor to use these surveys to set Davis–Bacon wage rates.
Foreign Policy/International AffairsBy Ray Walser, The Heritage FoundationWebMemo, 07/07/2008
The safe rescue of Ingrid Betancourt and three Americans is a stunning success that symbolizes the huge gains made under the U.S.-funded Plan Colombia program and is a major black eye for the Revolutionary Armed Forces of Colombia.