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Recent Policy Studies
Crime, Justice & the LawBy Thomas Sydnor II, Progress & Freedom FoundationProgress Snapshot, 09/22/2008
During the remainder of this session, the U.S. Senate should pass S. 3325, the Enforcement of Intellectual Property Rights Act of 2008 (“ERIPA”). ERIPA would reform federal Intellectual Property Rights (IPR) enforcement efforts by providing dedicated investigators and better coordinating state, federal, and international IPR-enforcement efforts. Passing ERIPA now will create a net increase in federal revenues, grow the U.S. economy, protect consumers from dangerous goods, and attack organized crime.
Information TechnologyBy W. Kenneth Ferree, Adam Thierer, Progress & Freedom FoundationTestimony, 09/22/2008
In the name of protecting consumers from “hidden” advertisements, the Federal Communications Commission (FCC) is contemplating rules that likely would destroy the financial health and well-being of the free broadcast medium and unfairly handicap cable services vis-à-vis new media platforms. Indeed, because of the steady progress of media technology, the very rationale for FCC content regulation of broadcast and cable programming has become superannuated. Advertisers and consumers have moved on and are adapting to the 21st Century media marketplace–the Commission should, too.
Economic GrowthBy Nicole L. Cornell Sadowski, Mercatus CenterWorking Paper, 09/22/2008
There are varying viewpoints on the level to which relief agencies should be involved in the rebuilding efforts of areas which have been affected by a natural disaster. Above-average wages paid by relief agencies in the wake of Hurricane Katrina in the New Orleans metro area have highlighted the potential for government to crowd out local businesses—via employment in the short-term and investment in the long-term. This study analyzes the effect of wage increases on investment in New Orleans pre-Katrina, the extent of overall wage increases following the storm, and their estimated effects on employment and investment. Four scenarios for relief agency withdrawal from the labor market were tested. A gradual decrease through 2010 appears to result in the lowest levels of investment crowding-out, as well as producing the most favorable outcomes for other economic measures.
Regulation & DeregulationBy Bruce Yandle, Henry Wray, Mercatus CenterWorking Paper, 09/22/2008
Throughout the life cycle of the regulatory process, opportunities exist to substantially increase the net benefits of the entire system for both the near and long term. Regulatory agencies should consider more market-oriented solutions (such as performance standards and economic incentives) first and command-and-control options last and perform an assessment of the effects of major regulation on competition. Independent regulatory agencies should be subject to a congressional oversight unit, similar to the Office of Information and Regulatory Affairs. Agencies that develop voluntary standards should license the use of the agency’s seal to be used on consumer products to signal approval.
Regulation & DeregulationBy Richard A. Williams, Andrew Perraut, Mercatus CenterWorking Paper, 09/22/2008
A facilitated market solution is a deliberate assembly of stakeholders led by a private professional organization to solve a specific social problem. It has several advantages over governmental regulatory negotiations. First, solutions to social problems can come much more quickly than through the cumbersome notice-and-comment rulemaking. Next, because the involved stakeholders are not bound by antiquated laws or precedents that must be stretched, they are free to come up with novel solutions. Third, the stakeholders at hand often have all of the possible relevant data needed for decision making. Fourth, the stakeholders are those people most affected by the decisions. Finally, many regulations result from intense pressure on bureaucracies, usually to respond to a problem even when they do not have a good solution. They will produce something just to appear to be doing something about a problem without really solving it. If all sides are well represented in a privately mediated agreement, that problem is unlikely to arise.
Health CareBy Dennis G. Smith, The Heritage FoundationBackgrounder, 09/22/2008
It is popular to think that states can do nothing about the cost of health care. But policymakers have already seen the dangers of “free” money demonstrated in Missouri and Tennessee. As long as Medicaid is a matching program, the federal government will eventually insist that the states pay their share. As such, states eventually face painful decisions to restore order to their budgets. But even getting the Medicaid budget in order does not repair the damage to the private insurance market on which most American families rely. In fact, some of the Medicaid remedies, such as benefit and eligibility expansions, can disrupt the private market even further, causing a “crowd out” of existing private coverage. Governors and state legislators should ignore those who insist that the only solution is to obtain more money from the federal government and instead focus new efforts on returning competition to their states’ health insurance markets.
Monetary Policy/Financial RegulationBy Stuart M. Butler, Alison Acosta Fraser, James L. Gattuso, The Heritage FoundationWebMemo, 09/22/2008
As a general principle, the federal government should not intervene to stave off the consequences of unwise business decisions. But we experiencing one of those rare situations in which a wave of bad decisions in one sector has such dire consequences for the most basic operations of the economy that other sectors are threatened, jeopardizing the functioning of the entire economy. As they evaluate proposals, lawmakers should be guided by the following goals and strategies: do not prop up failed or failing institutions; do not try to support prices; do not allow the government to become the permanent “owner of last resort”; strictly limit legislation to the immediate need to stabilize the financial situation; avoid the “moral hazard” of encouraging other institutions to come to government for financial bailouts; carefully define the federal government’s role; limit taxpayer exposure and keep actions temporary; assure liquidity in markets but require full pricing of government insurance.
Monetary Policy/Financial RegulationBy David John, J. D. Foster, The Heritage FoundationWebMemo, 09/22/2008
The extraordinary turmoil and fear in American and other financial markets have triggered equally extraordinary policy actions and proposals in Washington and New York City. Congress and the Administration should follow key principles in structuring any new Resolution Trust Corporation (RTC)-like entity in order to meet the goal of stabilizing the market with the least danger to the taxpayer. For example, the agency should have a limited scope and lifespan; it should not take an ownership stake in financial institutions; any net profits should go to the taxpayers; companies should pay for this assistance; and the agency should operate using private entities wherever possible. Lastly, the legislation should be kept clean: this bill is the response to a major crisis and not an excuse for legislators to advance their pet projects.
International Trade/FinanceBy Daniella Markheim, Terry Miller, The Heritage FoundationBackgrounder, 09/22/2008
The 2009 rankings of trade freedom in countries around the world, developed by The Heritage Foundation as part of its annual Index of Economic Freedom and released to the public today, show many countries moving ahead on their own to lower tariffs and cut other barriers to trade. This is good news for consumers and businesses in those countries that will enjoy greater access to competitively priced goods from around the world. Countries standing still or moving backward in response to protectionist political pressures, however, are likely to find themselves falling behind, with lower growth rates and stagnating economies.
Budget & TaxationBy Brian M. Riedl, Baker Spring, The Heritage FoundationWebMemo, 09/22/2008
Funding the activities in Afghanistan and Iraq through emergency bills made sense immediately following the 9/11 attacks and in the first few years of the Iraq conflict. In 2008, however, the funding needs of the Iraq and Afghanistan conflicts have stabilized, and the need for separate emergency bills has run its course. Lawmakers should begin folding this spending into the regular budget process, while allowing for the resumption of emergency bills in the event of an unforeseen terrorist or military crisis.
Natural Resources, Energy, Environment, & ScienceBy Ben Lieberman, The Heritage FoundationWebMemo, 09/22/2008
Gasoline prices have fallen a bit since hitting $4.00 a gallon last summer, but America’s total energy bill is going to increase in the months ahead as we enter the home heating season. The costly double whammy of still-high pump prices and equally painful heating bills underscores the need for the federal government to do what it can to make energy as affordable as possible. Beyond federal assistance programs to help the poor with their high energy bills, Washington can and should do more to bring prices down by removing the restrictions on domestic energy production. Congress will soon have the chance to take an important step in this direction by allowing the current moratorium on offshore drilling to lapse.
Economic GrowthBy Rea S. Hederman, Jr., Stephen Keen, Brian M. Riedl, The Heritage FoundationBackgrounder, 09/22/2008
On almost every economic measure one could choose, economic activity is slower now than at the beginning of the year, and this record indicts, as does nothing else, the ineffectiveness of Congress’s first stimulus legislation. Stimulus bills should not become vehicles for pork projects and additional spending under the guise of undefined “stimulus.” The provisions in the second stimulus bill will do little to aid the economy since they will merely redistribute money from one sector to another, from one group of people to another. History has proven that large government spending programs are not the antidote for a slow economy. Congress should learn from its previous mistakes, including the first stimulus bill, and not consider proposals that increase the debt and do little to boost the economy.
Foreign Policy/International AffairsBy Brett D. Schaefer, The Heritage FoundationBackgrounder, 09/22/2008
The unprecedented pace, scope, and ambition of United Nations peacekeeping operations have led to numerous flaws, limitations, and weaknesses that are serious and need to be addressed. The Bush Administration and Congress need to consider carefully any requests by the United Nations for additional funding for a system in which procurement problems have wasted millions of dollars and sexual abuse by peacekeepers is still occurring. Without fundamental reform, these problems will likely continue and expand, undermining the United Nation’s credibility and ability to accomplish one of its primary missions: maintaining international peace and security.
National SecurityBy David Heyman, James Jay Carafano, The Heritage FoundationSpecial Report, 09/22/2008
The most pressing needs for enhancing the protection of the country from transnational terrorist threats do not lie in further major reorganization of the Department of Homeland Security or revisiting its roles and missions. Rather Congress and the Administration should shift their focus to strengthening the effectiveness of the national homeland security enterprise as a whole. To be more agile, our bureaucracy must foster better decision making in Congress and in the interagency process, support the development of a new generation of professionals, and facilitate information sharing throughout all elements of the enterprise. Furthermore, to close the gaps where terrorists hide, we must empower individuals and communities and extend international cooperation throughout our homeland security activities.
ImmigrationBy James Jay Carafano, The Heritage FoundationWebMemo, 09/22/2008
Unless Congress steps in, on November 30, E-Verify is set to expire. E-Verify is a system that allows employers to verify electronically whether their newly hired employees are legally authorized to work in the United States. E-Verify should be re-authorized.
Crime, Justice & the LawBy Andrew M. Grossman, The Heritage FoundationLegal Memorandum, 09/22/2008
Lori Drew was indicted under a federal anti-computer hacking statute for impersonating a young man on MySpace to gain the trust of an emotionally troubled teen, Megan Meier, who killed herself after the cruel joke spun out of control. Convicting Lori Drew of the charges leveled against her is bad law, no matter what her transgressions have been, but the recent trend in criminal law—one of great expansion and few checks—suggests that a conviction on the government’s excessively creative legal theory is not unlikely. Even if she prevails, Drew has still had to suffer the rigors of prosecution, a burden that any person would rightly fear. If the facts are as alleged, Drew does deserve punishment, but it need not, and should not, be of a criminal nature, for the simple reason that she committed no crime.
Economic and Political ThoughtBy Guinevere Nell, James Sherk, Paul L. Winfree, The Heritage FoundationCenter for Data Analysis Report, 09/22/2008
Free markets rely on the entrepreneurial spirit, but that urge to create, innovate, and succeed is not grounded in self-centeredness. Entrepreneurs are no greedier than anyone else. On the contrary, the typical entrepreneur gives generously from the wealth he creates. Believing that government redis¬tribution of wealth is harmful for the economy does not signify supporting a society where “You're on your own.” Free markets enable entrepreneurs to become very wealthy—and they often use this wealth to benefit others.
Health CareBy Dennis G. Smith, The Heritage FoundationBackgrounder, 09/22/2008
States have the capability to increase the value of Medicaid for recipients and taxpayers alike through premium assistance. Linking public dollars to private coverage would increase access to needed services for recipients and reduce costs for taxpayers. Coverage for a family of three on Medicaid (one adult and two children) will cost $9,830 next year. In most states, this is likely to be significantly higher than the average annual premium for family coverage in the private market. Using Medicaid dollars to pay the employee share of employer-sponsored insurance would also stretch public dollars.
Health CareBy Roger Bate, Karen Porter, American Enterprise InstituteHealth Policy Outlook, 09/19/2008
Drug procurement agencies and organizations spend billions of dollars on drugs for patients in the developing world. These drugs are essential to the health of many millions of patients—but only if they are safe and effective. The World Health Organization and the Global Fund to Fight AIDS, Tuberculosis and Malaria offer “prequalification” programs designed to help drug procurers identify suppliers of safe and effective drugs. But while they do some good, both programs are flawed: they focus too little on drug quality, favor local producers that may not qualify under the more rigorous drug approval systems of the United States and Europe, and exercise little oversight of how drug procurers use their lists. Such bureaucratic bungling can mean the difference between life and death.
Foreign Policy/International Affairs
Why Entrepreneurship and Business Climate Reform Should Be the Centerpiece of Peace-Building OperationsBy Mauro De Lorenzo, American Enterprise InstituteBook Chapter, 09/19/2008
International post-conflict administrators rarely have a strategy for economic growth. They tend to focus on humanitarian action, politics, and security, usually in that order. What could be more urgent? Peace-building operations are just like ordinary economic development operations, except that virtually nothing works properly and the threat of violence is very real. In other words, they are unlike any other kind of international engagement, and perhaps the most complicated kinds of missions the international community ever attempts to mount. This requires flexibility, improvisation, and the wisdom to know when guiding principles no longer apply–including the principles argued for here. Operations can more often be successful–and less likely to require a repeat performance–if entrepreneurship and economic growth become central elements of the design of peace-building strategies.
Health CareBy Tomas J. Philipson, Anupam B. Jena, American Enterprise InstituteBook, 09/19/2008
Governments are struggling to control burgeoning health care-related expenditures without compromising the quality of health care. Is the use of cost-effectiveness analysis to guide health care technology adoption wise? Although reimbursement criteria may satisfy government health budgets today, they threaten to stifle the innovation that will generate new breakthroughs in health care technologies tomorrow. Such criteria benefit current patients by lowering the cost of health care in the short term, but they also hurt future patients by limiting producers’ incentives for further medical innovation. How can policymakers reward innovators adequately—and thereby secure the welfare of future patients—while ensuring that current patients have access to much-needed new treatments?
Natural Resources, Energy, Environment, & ScienceBy Newt Gingrich, Vince Haley, American Enterprise InstituteBook, 09/19/2008
We can safely reap the benefits of America’s own natural resources and technology in gas, oil, coal, wind, solar, biofuels and nuclear energy. The pinch Americans are feeling at the pump is not a blip in the economy but a looming crisis—affecting not only the price of gas, but the price of food, the strength of our economy, and our national security. To meet this crisis, Gingrich lays out a national strategy that will tap America’s scientists, engineers, and entrepreneurs, and require Congress to unlock our oil reserves and remove all the impediments and disincentives that unnecessary government regulation has put in the way of American energy independence.
EducationBy Frederick M. Hess, American Enterprise InstituteBook, 09/19/2008
The Future of Educational Entrepreneurship examines the challenge of creating innovative and productive entrepreneurial activity in American education. In the course of exploring these challenges, the book considers a number of crucial issues and circumstances: existing “barriers to entry” that prohibit or obstruct entrepreneurial efforts; the availability—and frequent lack—of venture capital for fueling entrepreneurial activities; the effort to sponsor and create a sufficiently large population of talented educational entrepreneurs; and questions about research, development, and quality control in the burgeoning entrepreneurial sector. A field that is likely to grow in size and importance in the years to come, educational entrepreneurship receives much-needed attention, analysis, and elucidation in this lively, wide-ranging book.
Crime, Justice & the LawBy Martin C. Calhoun, Washington Legal FoundationLegal Backgrounder, 09/19/2008
The track record of federal judges applying the Daubert standard over the last fifteen years shows that they can usually learn enough about the science to reach an informed decision about whether an expert’s testimony is based on reliable scientific methods and has a valid scientific connection to the inquiry at issue. By “shifting the focus [of admissibility determinations] to the kind of empirically supported, rationally explained reasoning required in science,” the Daubert trilogy “has greatly improved the quality of evidence upon which juries base their verdicts.” However, too many juries in too many states still render verdicts based on expert testimony that is not supported by sound science and would not satisfy Daubert’s exacting standards of reliability.
Crime, Justice & the LawBy Dick Thornburgh, Brendon P. Fowler, Washington Legal FoundationLegal Backgrounder, 09/19/2008
In light of the immense difficulties facing private plaintiffs who seek to hold Purdue liable for injuries suffered as a result of their own illegal activity, it is alarming that the Commonwealth of Kentucky itself would nonetheless try to attribute the societal costs for that same illegal activity to Purdue and, in effect, seek to require Purdue to “make whole” the state and its public health services, following injuries and costs inflicted by the illegal activities of third parties. Extrapolated to its logical conclusion, the eventual consequence of this and other such state-filed suits would be to hold all manufacturers absolutely responsible for any costs incurred by the state related to the illegal alteration and diversion of lawful products by criminals. The underlying premise of Kentucky’s suit that manufacturers are responsible for and must therefore anticipate and halt any illegal actions by the ultimate users of their products should be rejected.
Monetary Policy/Financial RegulationBy John L. Walker, Mark Chorazak , Washington Legal FoundationWorking Paper, 09/19/2008
The rise of sovereign wealth funds is striking. Their sizable investments have wooed Wall Street, but have set off alarm bells in Washington and on Main Street. Much of the concern rests on their opaque profiles, as well as the perception that their investments have nefarious motives behind them. This Working Paper has provided background on these increasingly prominent and controversial investment vehicles and has examined the primary legal and regulatory structures equipped to review their investments in U.S. banking and financial institutions, as well as the issues that the interplay of these structures may raise.
Crime, Justice & the LawBy John T. Boese, Washington Legal FoundationLegal Opinion Letter, 09/19/2008
By adopting, for the first time, the definition of reckless disregard announced by the Supreme Court last year in a non-FCA statutory scheme in Safeco, the Court of Appeals has made an important statement about the meaning of the FCA’s “reckless disregard” standard found in 31 U.S.C. § 3729(b) when applied to ambiguous regulations or funding requirements. This decision should pave the way for more summary dispositions of FCA cases based on ambiguous regulations or contractual requirements.
Budget & TaxationBy Scott A. Hodge, Tax FoundationFiscal Facts, 09/19/2008
The accounting firm KPMG has released its annual survey of corporate and indirect tax rates for 2008, and what it says about America’s tax competitiveness is not good. The survey shows that the U.S. continues to have one of the highest overall corporate tax rates in the world. Of the 106 countries surveyed, only The United Arab Emirates (55 percent), Kuwait (55 percent), and Japan (40.69 percent) impose a higher corporate tax rate than the combined rate of 40 percent in the U.S.
Health CareBy Robert Carroll, Tax FoundationFiscal Facts, 09/19/2008
Health care costs and tax policy are major preoccupations of the American people, and that is reflected in the proposals of the presidential candidates. Senator McCain’s tax credit approach to health insurance would give every citizen a powerful incentive to purchase health insurance: $2,500 (individual coverage) or $5,000 (family coverage), no matter what the cost of the insurance. Moreover, it reduces systemic biases in our health care system that have contributed to high cost growth. The improved efficiency that should result from the McCain credit, combined with a powerful incentive to purchase health insurance and a beneficial effect for low-income people, would seem to make this policy particularly attractive to both sides of the political spectrum. Few government programs kill two birds with one stone, but the McCain health credit seems to be one that could.
Transportation/InfrastructureBy Wendell Cox, Joseph Vranich, Reason FoundationPolicy Brief, 09/19/2008
High speed rail could possibly be a valuable transportation mode. In California it might effectively serve legitimate public or environmental purposes or be a financial success. But the current proposal is untenable, based upon overly optimistic financial claims, exceedingly optimistic ridership projections, understated cost forecasts, bloated assumptions with respect to greenhouse gas emissions, insufficient attention to environmental impacts, and unachievable travel times between major markets.
Economic GrowthBy Gerald W. Scully , National Center for Policy AnalysisPolicy Report, 09/19/2008
Up to a point, government spending on public goods—such as national defense and protection of property—can raise the economic growth rate. However, as government spending rises, the tendency is to increase spending on nonproductive income transfers—such as subsidy and welfare programs. Research indicates that the high levels of taxation required to pay for such income transfers inhibit economic growth, whereas lower taxes can raise the rate of economic growth.
Economic GrowthBy Hoover Institution, Hoover InstitutionFacts on Policy, 09/19/2008
The seasonally adjusted consumer price index for urban consumers increased 5.6 percent between July 2007 and July 2008. This is the highest annualized increase since 1991 and more than double the Federal Reserve’s implicit annual inflation target rate of 1.5 to 2.0 percent. During the early summer of 2008, energy prices accounted for at least 50 percent of the overall increase in the consumer price index.
EducationBy Hoover Institution, Hoover InstitutionFacts on Policy, 09/19/2008
Since the turn of the century, private school enrollment has held steady at 11 percent in elementary and secondary schools.
Foreign Policy/International AffairsBy Andrew Rossos, Hoover InstitutionBook, 09/19/2008
Throughout history, every power that aspired to dominate the Balkans—from the ancient Romans to Bulgaria, Greece, and Serbia in the age of imperialism and nationalism in the nineteenth and twentieth centuries—has sought to control Macedonia. During the long struggle for Macedonia, though some ethnic Macedonians adopted or had to adopt the national identity of one of the competing nations, most chose a Macedonian identity. Macedonia’s struggle to establish a distinct national identity goes on even today. The author concludes that Balkan acceptance of a Macedonian identity, nation, and state has become a necessity for stability in the Balkans and in a united Europe.
Economic GrowthBy James Gwartney, Robert Lawson, Seth Norton, Fraser InstituteBook, 09/18/2008
The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to compete, and security of privately owned property. Hong Kong once again tops international rankings for economic freedom, with Singapore a close second and New Zealand in third spot. Zimbabwe and Angola had the lowest economic freedom ratings of the 141 countries measured. Research shows that individuals living in countries with high levels of economic freedom enjoy higher levels of prosperity, greater individual freedoms and longer life spans. Globally, developing nations need to focus on improving levels of economic freedom to reduce poverty. The nations of sub-Saharan Africa nations need to increase levels of economic freedom particularly by: 1) removing trade barriers; 2) building the rule of law to protect property rights, encourage investment, and reduce corruption; and 3) simplifying business regulations by eliminating unnecessary regulatory barriers, reducing the need for pay-offs and thus corruption, and lowering the administrative costs of business.
Economic and Political ThoughtBy Murray L. Weidenbaum, Transaction PublishersBook, 09/17/2008
Given the high levels of professionalism in many think tanks, a fundamental change in the attitude of their management is important. The compelling need is less for the wielder of policy than for the lucid synthesizer of relevant research and analysis. Likewise, society needs sensitivity to the long-term concerns of the citizenry more urgently than rapid response to the opportunities of the moment. Future competition, particularly among the major think tanks, could well be centered, not on achieving greater visibility, but on developing responses to economic, environmental, and national security problems that are likely to be adopted and carried out.
LaborBy Keith Godin, Milagros Palacios, Niels Veldhuis, Fraser InstituteReport, 09/17/2008
The recent decline in economic performance, coupled with an increasing concern over the effects of globalization and an aging population, have produced great interests in the way the labor market functions. The study is divided into two main sections: labor market performance measures for the U.S. states and Canadian provinces, and labor market characteristics and regulation. Regarding labor market performance, Delaware ranked first for Gross Domestic Product (GDP) out of the 60 U.S. and Canadian jurisdictions studied. Overall, U.S. states outperformed Canadian provinces in terms of GDP per worker. In regards to average work days lost per 1,000 workers, there were 27 (of 60) jurisdictions, including two Canadian provinces, that tied for first place, all losing zero work days. The bottom-ranked jurisdiction overall was Newfoundland and Labrador, with an average of 439.9 work days lost per 1,000 workers. Canadian provinces tend to have a higher average of work days lost from labor disputes than U.S. states.
Natural Resources, Energy, Environment, & ScienceBy Fred L. Smith, et al., Competitive Enterprise InstituteBook, 09/17/2008
Environmental policy in the 20th century swung between promotional and precautionary approaches. Throughout, policymakers neglected the ability of private parties to advance environmental values. As a result, streams, airsheds, aquifers, and wildlife have suffered far more harm than otherwise would have occurred. Elements of a private environmental protection system already exist, helping empower people to play a direct role in environmental conservation. The challenge, as in welfare reform, is less to proscribe than to empower. It is not to decide the optimal, but to encourage exploration and innovation and to unleash the creative energies of the American people toward solving our environmental problems.
WelfareBy Peter Saunders, et al., Centre for Independent StudiesPamphlet, 09/17/2008
Big government has brought us unsustainable welfare bills, ever more intrusive government regulation of personal behavior, and an increasingly infantilized population. This provocative essay collection suggests a solution to these problems: let people choose different ways of being treated by the government based on how much responsibility they are prepared to take for their lives. Declaring dependence people would admit they relied on government for their material well-being. They would receive greater welfare entitlements, but trade them for more government intervention in their lives. Their admission of diminished responsibility could even cost them the vote. Declaring independence, though, people would relinquish the right to government services and income support in exchange for lower taxes and greater personal freedom, in addition to the pride of open self-reliance.
Health CareBy Shirley Svorny, Cato InstitutePolicy Analysis, 09/17/2008
In the United States, the authority to regulate medical professionals lies with the states. To practice within a state, clinicians must obtain a license from that state's government. State statutes dictate standards for licensing and disciplining medical professionals. They also list tasks clinicians are allowed to perform. One view is that state licensing of medical professionals assures quality. In contrast, I argue here that licensure not only fails to protect consumers from incompetent physicians, but, by raising barriers to entry, makes health care more expensive and less accessible. Institutional oversight and a sophisticated network of private accrediting and certification organizations, all motivated by the need to protect reputations and avoid legal liability, offer whatever consumer protections exist today.
International Trade/FinanceBy Robert Krol, Cato InstituteTrade Briefing Paper, 09/17/2008
The expansion of international trade has provided considerable benefits to the United States and its trading partners. Yet the growth of trade also raises concerns about its impact on domestic firms and their workers. This study finds that: income growth accounts for two-thirds of the growth in global trade in recent decades, trade liberalization accounts for one-quarter, and lower transportation costs make up the remainder; trade expansion has fueled faster growth and raised incomes in countries that have liberalized; competition from trade delivers lower prices and more product variety to consumers; international trade directly affects only 15 percent of the U.S. workforce; expanding trade does not explain most of the growing gap between wages earned by skilled and unskilled workers; and, finally, trade barriers impose large, net costs on the U.S. economy.
Economic GrowthBy Bret Swanson, Progress & Freedom FoundationProgress on Point, 09/17/2008
The ascent of China after some 500 years of inward-looking stagnation is the central phenomenon of today’s global economy. China is not yet the richest nation on earth, but, in Adam Smith’s words, it is the most thriving. In a replay of a young America’s relationship with England, moreover, China is now on a path to challenge the United States in every measure of national power. By catching up with the U.S. economy, China will be able to transform its large army into a technologically advanced large army. What seems undeniable is that the next hundred years will be a Chinese century. The biggest question for politicians and business leaders in the U.S. is whether, through a recommitment to entrepreneurial capitalism, it will be another American century as well.
Regulation & DeregulationBy Jeffrey A. Eisenach,, Progress & Freedom FoundationProgress on Point, 09/17/2008
The American model for broadband policy has been widely criticized. Upon inspection, however, the criticisms simply do not hold up. Next generation broadband networks are manifestly not natural monopolies in most places; and, with the exception of a single highly publicized but deeply flawed Organization for Economic Cooperation and Development penetration metric, the performance of American broadband markets compares well with the performance of markets in other nations. Indeed, by forbearing from application of access regulation to next generation networks, American policymakers have set the stage for continuing investment and innovation that promises to make North American broadband markets the envy of the world. Regulators elsewhere would do well to take notice, as their continued pursuit of mandated access regulation is likely to result in the perpetuation of infrastructure monopolies and their attendant economic disadvantages.
Health CareBy Jason Clemens, Adam Frey, Pacific Research InstituteHealth Policy Prescriptions, 09/17/2008
Most studies examining the costs and benefits of a single-payer system (fully funded by taxpayers) ignore a key component: the significant economic costs of taxes. As the health care debate continues, it is imperative that policy makers, the media, and the public be fully and accurately informed. The costs associated with taxes, namely efficiency costs, compliance costs, and administrative costs, all need to be included in reform evaluations that include the introduction of new taxes or extension of existing taxes. Ignoring these costs leads to inaccurate results and faulty conclusions and will hinder genuine efforts to improve health care in the United States.
Economic and Political ThoughtBy Lawrence J. McQuillan, et al., Pacific Research InstituteReport, 09/16/2008
As the most economically free state, South Dakota’s business climate is thriving and companies are relocating and opening plants in the state. A full list of all 50 states and their rankings and the data underlying the rankings can be found in the latest edition of the U.S. Economic Freedom Index: 2008 Report. The Index scores states based on 143 variables, including regulatory and fiscal obstacles imposed on businesses and residents. The states that are the least economically free are clustered in the densely populated states of the Northeast. South Dakota, Minnesota, Illinois and Wisconsin made big leaps in relative economic freedom from 2004 to 2008. An economic-freedom renaissance has been undergoing in the Upper Midwest. States heading in the wrong direction include Texas, Alaska, Delaware, Arizona and North Carolina.
Commerce & Infrastructure
The Political Economy of Post-Katrina Recovery: Public Choice Style Critiques from the Ninth Ward, New OrleansBy Emily Chamlee-Wright, Virgil Henry Storr, Mercatus CenterWorking Paper, 09/16/2008
Residents and other stakeholders in New Orleans’ Ninth Ward communities critique the post-Katrina policy environment. We argue that the criticism emanating from Ninth Ward communities is similar in significant ways to the public choice critique of the state, particularly in its affinity with rent seeking explanations for why government response has been so disappointing. Despite relative government inaction with regards to Katrina, many respondents still held out hope that government policies and programs might bring about recovery. We argue that this puzzle is addressed, at least in part, by an overestimation of government’s capacity (if not inclination) to successfully re-engineer societies from the ground up.
Budget & TaxationBy Rossen Valchev, Antony Davies, Mercatus CenterWorking Paper, 09/16/2008
The purpose of this analysis was to empirically estimate the size and nature of the theoretically suggested negative impact of Federal Matching Funds (FMFs) on the state of Texas’s economic growth and tax revenues. The data strongly supports both of these theories and this has numerous implications for public policy at the state level in Texas. While most state legislators in the United States seem to regard FMFs as free money for their state budgets, this analysis shows that this is certainly not the case. By introducing lasting structural distortions in the local economy, increased FMFs actually decrease economic growth. The optimal fiscal policy for the Texas government would then be to abandon most efforts to receive FMFs and focus instead on state issues.
Foreign Policy/International AffairsBy Anthony J. Langlois, Karol Edward Soltan, Mercatus CenterBook, 09/16/2008
The political project of extending democracy to the global level is seen as the next major challenge for proponents of democracy. This volume considers some of the difficulties which need to be overcome for this extension to take place. The issues discussed include: philosophical and theoretical questions about the nature of democracy and the justification of its values; pressing political considerations, such as the crucial role of elections in democracy promotion; legal developments, such as the role of international law and judicial networks; and the nature of the global political space as democratization brings challenges to the ways in which systems have traditionally been organized. Global Democracy and its Difficulties will appeal to a range of academics, scholars and students who work across fields such a political theory, international law, comparative politics and political economy. It will be of particular interest to those with an interest in the political, economic, legal and moral aspects of democratization.
The Constitution/Civil LibertiesBy Brian C. Anderson, Adam D. Thierer, Manhattan InstituteBook, 09/16/2008
The alternative-media revolution of the last twenty years has smashed the liberal monopoly over news outlets and created a true marketplace of ideas. Rather than fight back with their own beliefs, today’s liberals work relentlessly to smother this new universe of political discourse under a tangle of campaign finance reform and media regulations. Anderson and Thierer debunk the principal arguments made in support of a counter-revolutionary effort, exposing the McCain-Feingold Act of 2002 and recent Federal Election Commission and Federal Communication Commission regulations of the blogosphere and airwaves as devastating muzzles on free speech. A Manifesto for Media Freedom is both a wake-up call for all Americans who care about their most fundamental rights and a strategy to guarantee an unfettered marketplace of ideas.
Budget & TaxationBy Terry Miller, Anthony B. Kim, The Heritage FoundationWebMemo, 09/16/2008
High corporate tax rates are undermining U.S. international competitiveness. The global economy demands that companies be flexible and swift in order to remain competitive. High tax rates deprive companies of both the means and the incentive to take advantage of new market opportunities or technological changes that can improve productivity. Whichever way the American people vote at the polls, it is a fact of the market that domestic and international investors will have the final say on economic growth. A cut in the corporate tax rate will lead to more investment and a growing economy. Failure to act will lead investors to look elsewhere, and the American people will suffer as a result.
Foreign Policy/International AffairsBy Ray Walser, The Heritage FoundationWebMemo, 09/16/2008
Venezuelan President Hugo Chávez continues to pursue a course of regional provocation aimed at inflaming relations between the U.S. and Venezuela. Like his iconic mentor, Fidel Castro, Chávez thrives on mounting tensions and confrontation with the U.S. It is through confrontation that he attains political identity and larger-than-merited international standing. Like Fidel Castro, Chávez aspires to build and lead an anti-U.S., anti-Western coalition. Unlike Castro, however, Chávez is in possession of significant petroleum power and has varied sources of international support. There is danger that Chávez, like Castro, will invite Russia to serve as a guarantor of Venezuela’s security and subsequently draw Russia, either willingly or unwillingly, into additional confrontations with the U.S.
LaborBy Scott Dilley, Sonya Jones, Freedom FoundationReport, 09/16/2008
Center-left politicians appear poised to elevate themselves to the highest positions of power in our country, thanks in great measure to campaign warchests filled with funds from employee paychecks. Of course, most of those political “donations” are involuntary, but union leaders expect to see a return on their investment. Recently, FOXNews reported Senator Barack Obama as having stated that, in the event of his election, “We will pass the Employee Free Choice Act,” an act that would banish secret-ballot voting to certify a union. Unions enjoy disproportionate power in lawmaking chambers and in the court of public opinion because of their easy access to money from employees’ paychecks. Taxpayers need to start questioning the financial stranglehold the collective bargaining process has on public budgets. In short, everyone loses: the taxpayer from being overcharged, and society as a whole from having its resources misallocated.