Recent Policy Studies

• Monetary Policy/Financial Regulation
  

  SEC Makes Mark-to-Market Accounting Markedly Better

  By David C. John, James L. Gattuso, The Heritage Foundation
  
  WebMemo, 10/03/2008
  

  This week, accounting was suddenly in the national spotlight as policymakers grappled with the ongoing financial crisis. At issue was a concept known as “mark-to-market.” On Tuesday, the Securities and Exchange Commission, along with the Financial Accounting Standards Board, issued new guidance on how companies should apply mark-to-market rules to their balance sheets. Among other things, the new guidance makes clear that: firms can use their own estimates as to the value of a security—based on expected cash flows or other factors—when an active market does not exist; quotes from brokers or pricing services are not necessarily determinative as to value if an active market does not exist; and distressed or forced liquidation sales are not necessarily determinative in measuring value. These clarifications are good ones, and—without fanfare—go far to address the problems with mark-to-market.

  
  
  
• International Trade/Finance
  

  Does Trade Policy Matter?

  By Philip I. Levy, American Enterprise Institute
  
  Report, 10/02/2008
  

  Who really cares what trade policy we adopt anyway? This question has become more pressing as public support for trade has waned, as trade has become a contentious issue in the U.S. presidential campaign, and as efforts to attack remaining trade barriers have faltered. As hard as it may be, it is worth trying to reinvigorate the global trade environment. Public opinion is skeptical, and the political obstacles are substantial, but the benefits of a revitalized trade system strongly outweigh the drawbacks. Resting on our trade laurels not only would forego future gains, but would threaten the trade gains of the postwar era that we currently enjoy. This Outlook launches a new series on international economic policy issues. It is part of AEI’s new Program in International Economics.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Last Trillion-Dollar Commitment: The Destruction of Fannie Mae and Freddie Mac

  By Peter J. Wallison, Charles W. Calomiris, American Enterprise Institute
  
  Financial Services Outlook, 10/02/2008
  

  The government takeover of Fannie Mae and Freddie Mac was necessary because of their massive losses on more than $1 trillion of subprime and Alt-A investments, almost all of which were added to their single-family book of business between 2005 and 2007. The most plausible explanation for the sudden adoption of this disastrous course—disastrous for them and for the U.S. financial markets—is their desire to continue to retain the support of Congress after their accounting scandals in 2003 and 2004 and the challenges to their business model that ensued. Although the strategy worked—Congress did not adopt strong government-sponsored enterprise reform legislation until the Republicans demanded it as the price for Senate passage of a housing bill in July 2008—it led inevitably to the government takeover and the enormous junk loan losses still to come.

  
  
  
• National Security
  

  Seven Years after 9/11, U.S. Still Lacks Good Continuity Plan

  By Norman J. Ornstein, American Enterprise Institute
  
  On the Issues, 10/02/2008
  

  Seven years after the attacks of September 11, 2001, the U.S. government still lacks a succession plan in the case of another major catastrophe or terrorist attack. As the January inauguration approaches— the most vulnerable day for our constitutional government—the fact that the government has done nothing to protect our elections, our legislative branch, our presidential succession process, or our Supreme Court is troubling and shameful.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Subprime Turmoil: What’s Old, What’s New, and What’s Next

  By Charles W. Calomiris, American Enterprise Institute
  
  Report, 10/02/2008
  

  We are currently experiencing a major shock to the financial system, initiated by problems in the subprime mortgage market, which spread to securitization products and credit markets more generally. Banks are being asked to increase the amount of risk that they absorb (by moving off-balance sheet assets onto their balance sheets), but losses that the banks have suffered limit their capacity to absorb those risky assets. The result is a reduction in aggregate risk capacity in the financial system – a bank credit crunch caused by a scarcity of equity capital in banks – as losses force those who are used to absorbing risk to have to limit those exposures. This essay considers the origins of the subprime turmoil, and the way the financial system has responded to it. There are both old and new components in both the origins and the propagation of the subprime shock.

  
  
  
• National Security
  

  Iran’s Revolutionary Guards—A Rogue Outfit?

  By Michael Rubin, American Enterprise Institute
  
  Middle East Quarterly, 10/02/2008
  

  There is a tendency in Western capitals to dismiss adversarial Iranian behavior as the work of rogue regime factions, which are not representative of Tehran’s true intentions. Following a Baghdad press conference providing evidence of Iranian weapons shipments to Iraq, U.S. officials raised doubts about Iran’s actual culpability. Unfortunately, as U.S. officials again debate negotiations with the Islamic Republic, they simultaneously embrace Iranian reformists and dismiss pariah behavior as the actions of isolated rogue elements. Such an assessment is backwards, though. The Islamic Revolutionary Guard Corps represents the core of the Iranian state, and Iran’s reformists are those who, by acting on their own without either state support or any ability to deliver on promises are, in the Iranian context, the true rogue elements.

  
  
  
• Monetary Policy/Financial Regulation
  

  Action on Financial Rescue Plan Urgently Needed

  By Stuart M. Butler, Edwin Meese, The Heritage Foundation
  
  WebMemo, 10/02/2008
  

  A revised so-called “bailout” package is being readied for a Senate vote and subsequent action in the House. Action on this rescue package is urgently needed. Households across the nation are beginning to see the leading edge of the storm that is already roiling credit markets here and around the world. The sudden and dramatic drop in the value of retirement accounts after the House’s initial refusal to agree to the package was just one symptom of what is to come. Even more important, however, is the continued deterioration of the credit system. Without action, ordinary Americans will face the effects of a dramatic economic contraction, including sharp increases in unemployment.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Economic Case for Drilling Oil Reserves

  By David Kreutzer, The Heritage Foundation
  
  WebMemo, 10/02/2008
  

  Energy is critical to the operation of our economy and the maintenance and improvement of our standard of living. Restricting access to energy hurts the economy, drives income down, and, of course, drives up prices of other goods. Increasing domestic production of petroleum will affect the economy two ways: First, it will reduce the amount we spend on imported oil. Second, it will lower the price of petroleum. The two effects work together to reduce energy expenditures, reduce the trade deficit, and expand economic activity. The Artic National Wildlife Refuge and the off-limits part of the Outer Continental Shelf are estimated to contain 28 billion barrels of petroleum. In addition, the Mineral Management Service conservatively estimates there are nearly 18 billion barrels of petroleum in the restricted areas of the outer continental shelf alone.

  
  
  
• National Security
  

  Congress Should Support the U.S. Africa Command

  By Brett D. Schaefer, Mackenzie Eaglen, The Heritage Foundation
  
  WebMemo, 10/02/2008
  

  Africa is increasingly important to U.S. economic, military, and political interests. Moreover, as indicated by the attention lavished on the region by China, Russia, Japan, and other countries, U.S. policies and interests face growing competition and challenges. AFRICOM is a critical step in recognition of the region’s rising stature among U.S. national interests. The new command promises to be a useful tool for future administrations in bolstering U.S. military and government relations in the region, enhancing stability, and cementing alliances. Congress should give AFRICOM the support and funding it needs to fulfill its mission.

  
  
  
• Economic and Political Thought
  

  The Nature of Rights in American Politics: A Comparison of Three Revolutions

  By Charles R. Kesler, The Heritage Foundation
  
  First Principles, 10/02/2008
  

  This President probably has done more to revive the language of natural rights democracy—the 18th century vernacular of American politics—than any Republican President since Abraham Lincoln. One of the complications of this revival, of course, is that American policy in the Middle East has not gone swimmingly. It is an important question, then, whether the reverses and difficulties that America has encountered in Iraq have occurred because of the ideas of natural rights and democracy or somehow in spite of those ideas. It is worth stepping back to speculate about what it means to base democratic government on the notion of natural rights, what these rights are, and what they mean for public policy. One way to make this concrete is to compare three revolutions’ theories of natural rights: the English Glorious Revolution of 1688, the French Revolution, and the American Revolution.

  
  
  
• Immigration
  

  Next Steps for Immigration and Border Security Reform: Restructuring the Work Visa

  By James Sherk, Diem Nguyen, The Heritage Foundation
  
  Backgrounder, 10/02/2008
  

  Last year, lawmakers on Capitol Hill tried and failed to pass comprehensive immigration and border security reform. The bill died largely because it tried to do too much. Granting amnesty to 12 million illegal aliens would cause rampant fraud and a tsunami of applications that would overwhelm America’s already over-stretched and backlogged immigration services. Creating a temporary worker program for the illegal aliens is an equally unworkable idea. On the other hand, lawful immigrants and foreign temporary workers (who enter the country legally with a non-immigrant status through a worker visa) are integral components of the American workforce. The appropriate approach for Congress and the Administration, as part of a responsible overall program to restructure American immigration and border security policies, is to begin by reforming existing visa policies in a manner that appropriately addresses concerns regarding security, sovereignty, citizenship, and economic growth.

  
  
  
• Elections, Transparency, & Accountability
  

  Innovators in Action 2008

  By Leonard Gilroy, Reason Foundation
  
  Report, 10/02/2008
  

  Innovators in Action 2008 showcases a set of leaders who have successfully bridged the gap between ideas and action. In the following essays by some of the most innovative policymakers and practitioners in the public sphere, several lessons emerge: competition, markets and private sector solutions work; we must challenge the status quo, for government-as-usual will not deliver the solutions our nation, states and cities need to compete in the 21st century’s global economy; when agencies and officials operate without clear goals, public service delivery suffers, an unfortunate tendency in many institutional structures; difficult challenges require bold solutions; performance is key; and reform isn’t partisan. These reformers are not interested in working within the constraints of what is, but instead are focused on the possibilities they can create by breaking from the confines of the status quo and turning toward new policy tools and paradigms.

  
  
  
• Transportation/Infrastructure
  

  Public Utility Regulation for Toll Roads?

  By Robert Poole, Reason Foundation
  
  Analysis, 10/02/2008
  

  There are two basic alternatives for regulating network utilities, such as toll roads. One is traditional public utility commission (PUC) regulation, in which the company’s charges are set for a few years at a time, via periodic rate hearings, and those rates must be justified in terms of providing scope for a “reasonable” return on investment. The other alternative is contractual: to embed regulatory provisions such as the toll regime and other performance requirements into the long-term franchise or concession agreement itself, with ongoing oversight by the transportation agency. The task for advocates of toll concessions is to educate elected officials that while toll roads are, indeed, a new form of investor-owned network utility, that does not mean we should impose traditional PUC-type regulation. Concession-based regulation, tailored to the type of project, can protect the public interest while not discouraging much-needed private investment in our highway system.

  
  
  
• Education
  

  Excellence, Not Gender Parity, Should Be Priority for STEM Faculty

  By Carrie Lukas, Independent Women's Forum
  
  Report, 10/02/2008
  

  Women have made tremendous progress in academia, but they remain a minority of faculty, particularly in science, technology, engineering, and mathematics (STEM) departments. Policymakers and feminist organizations have focused attention on this issue, used taxpayer dollars for programs designed to increase the number of women faculty members, and contemplated more aggressive government oversight to prod colleges and universities to take action to achieve greater gender balance in STEM departments. Yet research suggests that, rather than discrimination, balancing work pressures (particularly related to the tenure process) with their desire to have and raise children is a key player in generating this outcome for women. Additionally, some of the measures advocated by those who want more “balance” in STEM faculties could have adverse, unintended consequences, including undermining the position of women within faculties and creating reverse sexism.

  
  
  
• Education
  

  Title IX and Athletics: A Primer

  By Allison Kasic, Kimberly Schuld, Independent Women's Forum
  
  Report, 10/02/2008
  

  Women’s achievements in the athletic arena are certainly something that society should be proud of. But as opportunities are expanded for women on campus, it is important that men be afforded the same chance to succeed. Title IX’s enforcement mechanisms are overdue for reform. Organized sports play an integral role in our culture and society, and we cannot afford to let these problems persist. Certainly, sex discrimination has no place on the playing field. But the development and current enforcement of Title IX policies have succeeded only in replacing one form of discrimination with another. Returning Title IX to its original intent is the only way to guarantee that the chance to play is offered equitably.

  
  
  
• Family, Culture & Community
  

  The American Promise: Our Progress Toward a Society of Freedom and Fulfillment

  By Independent Women's Forum, Independent Women's Forum
  
  Report, 10/02/2008
  

  The American Promise is the dream of being a country that provides its citizens with limitless opportunity and where people enjoy a high quality of life in terms of health, safety, income, and well-being. America has made great strides in fulfilling this promise. As detailed in this report Americans are better off today than any other time in history on measures such as health, safety, income and employment, and well-being. However, there is a long way to go until the American promise is realized. Two areas are of particular concern and serve as stumbling blocks on the road to fulfilling America’s potential: the breakdown of the American family, and our failing public education system.

  
  
  
• Regulation & Deregulation
  

  Private Well Regulation: A Real Possibility for North Carolinians

  By Daren Bakst, John Locke Foundation
  
  Spotlight, 10/02/2008
  

  On July 18, 2008, the North Carolina legislature enacted a drought management bill (HB 2499). Throughout the bill drafting process, some legislators were concerned that the bill would allow local and state government to regulate water use and conservation from private wells (i.e., private household wells). After the bill was passed, numerous organizations explained that the bill not only did not authorize regulation but also expressly prohibited regulation of water use from private wells. These claims, quite simply, are inaccurate. This Spotlight explains why the drought bill does not prevent the regulation and metering of private wells and in fact likely authorizes regulation given the unclear language contained within the bill. An amendment to the drought management bill protecting private well owners should be one of the first actions taken by the legislature next year.

  
  
  
• Education
  

  Dropout Prevention Grants: An Update

  By Terry Stoops, John Locke Foundation
  
  Spotlight, 10/02/2008
  

  In February 2008, the John Locke Foundation argued that before legislators invest more taxpayer money on unproven dropout prevention programs, they should take the simple yet overlooked step of determining why students in North Carolina drop out in the first place. Instead, the North Carolina General Assembly voted to reestablish the Committee on Dropout Prevention and appropriate an additional $15 million to the $7 million already spent on dropout prevention grants. Our study does not suggest that the grant programs directly lowered or raised graduation rates, but they do suggest a troublesome, downward slide in district rates that the dropout grants were designed to stop. Programs should not receive additional funding or replication based on anecdotal evidence. Instead, grant recipients should be able to quantify their program’s ability to retain students and significantly increase the district or school graduation rate.

  
  
  
• Budget & Taxation
  

  Taxpayers’ Return on Investment: North Carolinians Get Little Value for Their Tax Dollars

  By Joseph Coletti, John Locke Foundation
  
  Spotlight, 10/02/2008
  

  If, as Oliver Wendell Holmes infamously said, “Taxes are the price we pay for civilized society,” and if government spending is a form of investment, it is worth asking if the price is worth it and what kind of return taxpayers are getting on their investment in government. The remaining section of this paper will cover four key areas of government spending – roads, K-12 education, health, and crime – to provide a rough estimate of Taxpayers’ Return on Investment across states and, to the extent possible, over time. North Carolina earns a D for Taxpayers’ Return on Investment, with a C- on Growth measures and a D on Performance measures. This combination puts North Carolina just ahead of Georgia, but well behind Virginia’s and South Carolina’s B grades, Tennessee’s A-, and Florida’s top rank.

  
  
  
• Budget & Taxation
  

  The New Raleigh Convention Center: A Taxpayer-Funded Money Pit

  By Michael Sanera, Clint Atkins, John Locke Foundation
  
  Regional Brief, 10/02/2008
  

  Although many Raleigh and Wake County taxpayers do not realize it, city and county officials knew from the beginning that the new Raleigh Convention Center (RCC) would require taxpayers to pay for large operational losses and even pay large subsidies to organizations to use the facility. Even before the doors opened on September 5, the losses and subsidies began to mount. This report shows that the 164 contracts already signed by RCC officials provide users with discounts totaling almost $2.3 million. Some organizations have received rooms valued at $40,000 for the price of one dollar. What is worse for taxpayers, the first six taxpayer-funded subsidies, totaling $166,720, have been approved. Thus from day one, city and county taxpayers have been on the hook for an endless flow of money into the RCC money pit.

  
  
  
• Education
  

  Performance Pay for Teachers: Increasing Student Achievement

  By Terry Stoops, John Locke Foundation
  
  Policy Report, 10/02/2008
  

  In 2006, in recognition of the need to attract and retain experienced administrators and teachers who teach subjects (Math and English/Language Arts) that are part of the state and federal accountability requirements, Guilford County Schools, the third largest school system in North Carolina, initiated Mission Possible. The program offers recruitment and performance incentives for teachers and administrators who teach in the county’s low-performing and low-income schools. The results of this study suggest that pay for performance initiatives should include policy elements aimed at improving teacher working conditions. These policy elements should focus on improving the decision-making process, maintaining a supportive teaching environment, and empowering teachers. It is also essential that researchers continue to evaluate the relationship between performance pay, working conditions, and student achievement.

  
  
  
• Regulation & Deregulation
  

  Designed to Mislead

  By Dick M. Carpenter, Institute for Justice
  
  Report, 10/02/2008
  

  Do people who design interiors “mislead” the public when they call themselves “interior designers” without government permission? Industry insiders advocating greater regulation say yes, but practicing interior designers who simply want to accurately describe what they do say no. This report tests each side’s claims. For the past 30 years, insiders in the interior design industry—led by the American Society of Interior Designers and its state affiliates—have waged a campaign in state legislatures nationwide to secure ever-greater regulation of their occupation. Using an opinion poll and a survey of leading industry magazines, we found that in fact, no one is misled by people who perform interior design work calling themselves “interior designers,” regardless of their educational background or other credentials. Indeed, imposing qualifications by law that lack any basis in evidence is what misleads the public—not designers who honestly describe what they do.

  
  
  
• Information Technology
  

  Should the U.S. Favor a Free Nationwide Wireless Network Provider?

  By Solveig Singleton, Institute for Policy Innovation
  
  Issue Brief, 10/02/2008
  

  Amid controversy about the growth of broadband in the United States and problems with Federal Communications Commission (FCC) auctions, policymakers are developing plans for a free nationwide wireless broadband network. The FCC has proposed to auction 25 megahertz of spectrum on condition it be used for a free national wireless network offering filtered content run by a single provider. Rep. Anna G. Eshoo (D-CA), has proposed a bill to do essentially the same. Both proposals resemble an earlier application by the company M2Z to operate an exclusive nationwide wireless network rejected by the FCC in 2007. This paper finds significant problems in the idea. Risks inherent in the top-down business model proposed make the plan unlikely to speed the spread of broadband effectively. The spectrum would be better put to uses supported by consumer demand expressed through markets.

  
  
  
• Regulation & Deregulation
  

  A Two-Pronged Approach to Insurance Regulation Reform

  By Lawrence A. Hunter, Institute for Policy Innovation
  
  Issue Brief, 10/02/2008
  

  Members of Congress have recognized that insurance companies, like banks, should be afforded an opportunity to choose an optional federal charter, which would improve U.S. domestic insurance companies’ ability to compete with their global rivals. Rather than stifling regulatory competition by centralizing regulation and eliminating choice among regulators in the name of reform, Congress should enhance and expand regulatory competition by allowing insurance companies to choose between state and federal regulation under an optional federal charter and to have their domicile-state regulation recognized by all other 49 states if they elect to remain state-regulated.

  
  
  
• Labor
  

  Union Pension Funds Go Green (But It’s Not the Color of Money)

  By Ivan Osorio, Capital Research Center
  
  Labor Watch, 10/02/2008
  

  Organized labor officials are using their control over union pension funds to promote their own political agenda at the expense of rank-and-file union members. By promoting shareholder resolutions that advance environmentalist causes, among other “progressive” goals —as part of the unions’ “corporate campaign” strategy—unions are building a stronger political coalition, but they may be violating their fiduciary responsibility to their own members. As environmental causes become the object of ever more shareholder resolutions, and as these are backed by union pension funds, union leaders are putting their members’ retirement security at unnecessary risk.

  
  
  
• Budget & Taxation
  

  Would the Proposed Bailout Affect Local Property Tax Collections?

  By Joseph Henchman, Tax Foundation
  
  Fiscal Facts, 10/01/2008
  

  It is unlikely that the bailout proposal, if enacted, would significantly harm state and local property tax revenues. While it is true that the federal government or one of its creations would probably find itself in possession of property pending disposition, and while it is true that federal property is generally exempt from state and local taxes, past experience suggests that state and local governments need not worry.

  
  
  
• National Security
  

  Current Trends in Islamist Ideology

  By Zeyno Baran, et al., Hudson Institute
  
  Book, 10/01/2008
  

  The importance of the subject of the Muslim Brotherhood partially derives from the importance of another related subject: the worldwide Islamic phenomenon and movement variously known as Islamism, Salafism, radical Islam, militant Islam, political Islam and the like. Since the events of 9/11, we have all learned that understanding this movement properly—broadly, deeply and accurately—is a very great necessity. Nevertheless, over the past few years the Brotherhood has not stood in the foreground of discussion and reflection. The purpose of this volume is to address—or rather, to begin to redress—that oversight or neglect.

  
  
  
• Economic Growth
  

  Hudson Institute Economic Report

  By Diana Furchtgott-Roth, Hudson Institute
  
  Hudson Institute Economic Report, 10/01/2008
  

  In addition to the financial turbulence on Wall Street, this week’s data show that economics is indeed the dismal science. The second quarter GDP growth rate was revised downward to 2.8 percent from the preliminary estimate of 3.3 percent. New orders for manufactured durables decreased 4.5 percent in August while the more important measure of new orders for core capital goods, which excludes aircraft and defense capital goods, fell 2.01 percent. Shipments of new orders for manufactured durable goods and core capital goods declined 3.5 percent and 1.7 percent respectively.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Should Water Be Privatized? Yes

  By Terry L. Anderson, PERC – The Property and Environment Research Center
  
  Report, 10/01/2008
  

  “No one washes a rental car” is a truism that suggests that ownership is crucial to stewardship. We also might say, “No one conserves water” for the same reason—too often it’s not clear who benefits from conserving water because it is unclear who owns the water. As long as water’s cheap, why fix the leaky faucet or switch to an efficient irrigation system? Making the ownership link is relatively easy, because water is already claimed by someone, either a municipality, individual farmers or a government agency. In practice, however, claims compete with one another, especially when water is scarce. Miners and farmers on the Western frontier in the 19th century devised the prior-appropriation system to resolve conflict by moving water to higher-valued uses, and trades between farmers have gone on for a century. The recent drought in the Southeast has raised a red flag about scarcity. The best mechanism for allocating water is to clarify the ownership among municipal, agricultural, industrial and environmental users and allow trades.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Hunting for Habitat: A Practical Guide to State-Landowner Partnerships

  By Donald R. Leal, J. Bishop Grewell, PERC – The Property and Environment Research Center
  
  Book, 10/01/2008
  

  The Masseys’ Colorado ranch is not run as a traditional ranch. Taking land out of wheat production, Massey and his sons have reseeded it with legumes, grasses, and flowering plants. They have planted willow saplings and set fires to encourage native vegetation. They have dug water holes, developed springs, and created ponds, and they keep their cattle away from some prime grazing land. The Masseys’ success at improving wildlife habitat has won them a burgeoning consulting business and attracts hunters who are willing to pay a premium price. This manual explains the details of ranching for wildlife. Our goal is to provide a better understanding of the programs. It is our hope that with more knowledge people who are skeptical of ranching for wildlife may become advocates for well-designed programs in their own states.

  
  
  
• Education
  

  Green Schools Don’t Make Grade

  By H. Sterling Burnett, National Center for Policy Analysis
  
  Report, 10/01/2008
  

  The U.S. House recent approved $20 billion to build public schools that meet “green” standards. Without presenting any evidence, green school boosters have testified that such schools use less energy (thus freeing up educational dollars) and improve student health, attendance and performance. However, the state of Washington (the biggest adopter of green schools) has experienced higher had than expected costs, and the energy savings and other projected benefits are either small or nonexistent. Nor did green schools reduce absenteeism. At Spokane’s three new green schools, the average absence rate per student is slightly higher than the rate for the district as a whole.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Drill, Baby, Drill

  By Pete du Pont, National Center for Policy Analysis
  
  Report, 10/01/2008
  

  Energy is essential in America, and 40% of what we use comes from oil and 23% from natural gas. That comes to about 21 million barrels of oil and 64 billion cubic feet of natural gas each day. Domestic oil production is declining—down nearly half since 1970—so imports are up, from one-third of what we needed in 1970 to just under 60% today. So we need to discover and access more of our own energy resources. The good news is that huge resources of oil and gas exist offshore. If full access to these resources were permitted, together they could replace America's imported oil for some 25 years, and no doubt reduce the price of oil, gas and gasoline.

  
  
  
• Budget & Taxation
  

  The Case for Corporate Income Tax Cuts

  By Mehreen Younis, National Center for Policy Analysis
  
  Brief Analysis, 10/01/2008
  

  Globalization and capital mobility are increasing tax competition among countries. Lower tax rates increase after-tax returns to capital, raising economic growth rates. They can also make economies more attractive for foreign investment. Furthermore, lower taxes on capital are generally associated with increased government tax revenues. Thus, countries around the world have been cutting taxes on income from capital, such as personal income taxes on capital gains and dividends, and the corporate income tax levied on profits. These countries are reaping the benefits of increased business investment and economic growth. In recent years, the United States has reduced some taxes on capital, but high corporate income tax rates are hurting its ability to compete for capital. The result is less investment and lower wages than would otherwise have been the case. The United States should follow Europe and the rest of the world and cut its burdensome corporate income tax.

  
  
  
• The Constitution/Civil Liberties
  

  State Attorneys General Must Be Mindful of Separation of Powers

  By John Suthers, Geoff Blue, Washington Legal Foundation
  
  Legal Backgrounder, 09/30/2008
  

  The traditional role of state attorneys general in protecting their constituents from economic and environmental hazards was to enforce the civil and criminal laws passed by their respective state legislatures, to contest federal positions they deemed contrary to states’ rights and principles of federalism, and to competently represent the state officials and agencies that are their clients. As to litigation, the only proper consideration for attorneys general was whether the law had been violated and whether there was sufficient evidence to prove it in court. But it is apparent that some state attorneys general have found this job description too limiting. Encouraged by various interest groups, several state attorneys general have come to view their role as including litigation for the purpose of affecting public policy change. This development is a threat to the separation of governmental powers and has the potential to seriously undermine free enterprise.

  
  
  
• Information Technology
  

  We Interrupt This Program … Is FCC’s Product Placement & Integration Proposal Necessary and Legal?

  By Linda A. Goldstein, Kim S. Brown, Washington Legal Foundation
  
  Legal Backgrounder, 09/30/2008
  

  In June, the Federal Communications Commission (the “Commission”) issued a Notice of Inquiry and Proposed Rule Making to solicit public comment as to whether its current sponsorship identification rules sufficiently address the escalating use of commercial messages in traditional television programming. Many of the Commission’s concerns seem to stem from a perspective that viewers are not sophisticated enough to appreciate that advertisers often pay to have their products embedded in televised entertainment. The Commission must recognize that embedded advertisements provide advertisers with a legitimate forum to demonstrate their wares and are a valuable source of income to producers. Consumers also reap the rewards in the quality entertainment that embedded ads help to fund. The Commission should be mindful of possible First Amendment infractions.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Is CO2 Regulated Under Federal Law?: Implications Of Georgia Court Ruling

  By F. William Brownell, Allison Wood, Jim Rubin, Washington Legal Foundation
  
  Legal Opinion Letter, 09/30/2008
  

  The Georgia Superior Court ruling in Longleaf Energy Associates v. Friends of the Chattachoochee has generated much national attention since it is the first judicial ruling that directly addresses the argument that CO2 is “subject to regulation” under the Clean Air Act. The same matter is now pending in other state courts as well as at the Environmental Appeals Board. Even though the Longleaf decision is not legal precedent, it has been and will be offered by environmental groups in administrative permit challenges across the country. If the case is not reversed on appeal, it could have a dramatic impact in Georgia, not just on major industrial facilities such as power plants or manufacturing facilities, but on smaller facilities as well. For consumers this will mean higher prices for products and services and reduced electrical reliability. For Georgia itself, it will mean an exponential increase in permitting responsibilities for the Georgia DEP.

  
  
  
• Crime, Justice & the Law
  

  State High Court Should Adopt 3rd Restatement on Products Liability

  By Stephen A. Fogdall, Washington Legal Foundation
  
  Legal Opinion Letter, 09/30/2008
  

  In the eleven years since the American Law Institute promulgated the Restatement (Third) of Torts: Products Liability, the Pennsylvania Supreme Court has twice had the opportunity to adopt the new Restatement, which rejects a strict liability standard and substitutes a more sensible negligence standard. Both times the Court has sent decidedly mixed signals about its willingness to make this change. Now the Court has another chance to finally take this step. Earlier this year it agreed to hear the appeal of I.U. North America, Inc., (IUNA) in Bugosh v. I.U. North America, a failure-to-warn case based on asbestos exposure. IUNA is a distributor of products, not a manufacturer. If the Pennsylvania Supreme Court has been waiting for the right moment finally to abandon 402A and adopt Section 2’s manifestly more sensible approach that moment has arrived with Bugosh.

  
  
  
• Philanthropy
  

  Recent “Donor Intent” Lawsuits Raise Issues for Charitable Giving

  By Meredith K. Knueve, Washington Legal Foundation
  
  Legal Backgrounder, 09/30/2008
  

  Cases are being litigated all over the country regarding the question of “donor intent” and the use to which nonprofit institutions are putting charitable donations. Often it is the heirs of such donors who raise the issue of whether the donors’ intentions are being honored. In turn, the charitable recipients of the funds question whether the heirs are entitled to involve themselves in the details of the manners in which the charitable institutions meet the donors’ restrictions. The only clear solution on a going-forward basis seems to be to make the terms of gifts clearer. With adept drafting today, donors should address on paper what shall be the outcome if the institution to which they are donating is unable to fulfill every last detail. Quite likely such donors will be willing to negotiate the terms of their gifts to suit the ever-changing needs of the institutions.

  
  
  
• National Security
  

  Al-Marri v. Pucciarelli Fourth Circuit Incorrectly Interprets “Enemy Combatant”

  By Levi C. Pearson, Washington Legal Foundation
  
  Legal Backgrounder, 09/30/2008
  

  Ali Saleh al-Marri has been charged with a variety of crimes in association with al Qaeda. A federal appeals court ruling upheld the government’s ability to designate him as an enemy combatant while also ruling al-Marri didn’t receive sufficient respect for his habeas corpus rights. Based on the Rapp Declaration the government will likely disclose additional information possessed by law enforcement agencies. If the government does so and al-Marri again refuses to rebut the evidence presented against him, then there should not be any grounds to challenge the district court once again denying al-Marri’s habeas petition.

  
  
  
• Budget & Taxation
  

  VA Benefits at a Crossroads: Time to Find Solutions

  By Tim S. McClain, Washington Legal Foundation
  
  Legal Backgrounder, 09/30/2008
  

  Social spending on veterans has provided tremendous returns for the nation. The original GI Bill of 1946 is a good example of targeted social spending and allowed an entire generation of World War II veterans to access higher education and realize upward social mobility. The new Post 9/11 GI Bill holds promise to do the same for this generation of veterans. Congress and the nation must decide the focus of Veterans Affairs disability benefits, whether the Dole-Shalala recommendations of rehabilitation, training and return to the workforce are appropriate, or the current system of lifetime compensation for potential lost earnings capacity. Whichever direction is appropriate, Congress and America must decide how best to compensate veterans for their sacrifices in service to our nation.

  
  
  
• Health Care
  

  Government Retiree Health Benefits: Wisconsin’s Ticking Time Bomb

  By Christian Schneider , Wisconsin Policy Research Institute
  
  Report, 09/30/2008
  

  According to local government annual finance reports, 27 local governments in Wisconsin are saddled with a combined $6 billion unfunded liability to pay for “Other Postemployment Benefits” (OPEB). Often times, as part of their employment packages, local governments offer to pay health benefits for retired employees. Until now, local governments paid what they owed on a year-to-year basis. But new accounting rules require local governments to divulge the level of their long-term benefit liability. And in some cases, the local government OPEB liabilities are stunning – in some cases, dwarfing the government’s total annual budget. WPRI issued a report that made several recommendations on how to deal with ongoing OPEB liabilities. Now that the magnitude of these unfunded liabilities is becoming known, these recommendations are even more apt: bring health care benefits into line with available funding; debt finance the liability; pay it forward; and bar elected officials from taking part.

  
  
  
• Transportation/Infrastructure
  

  Paying for Our Paving: Why Leasing the Turnpike Makes Good Economic and Public Policy Sense

  By Commonwealth Foundation, Commonwealth Foundation for Public Policy Alternatives
  
  Policy Brief, 09/30/2008
  

  Now, more than ever, Pennsylvania needs alternative means of financing and managing our infrastructure and mass transit systems. That is why we are encouraging the General Assembly and Governor to embrace Public-Private Partnerships. Of course, Public-Private Partnerships are not limited to leasing the Turnpike—competitively contracting mass transit operations and partnerships for new construction should also be pursued immediately. It is not often that Pennsylvania lawmakers can choose between raising taxes and fees, and reducing costs and improving services. Yet a Public-Private Partnership on the Turnpike offers that opportunity. In the absence of the ideal user-based transportation funding system, we have concluded that a Public-Private Partnership on the Turnpike is in the best short- and long-term interests of taxpayers and the driving public.

  
  
  
• Transportation/Infrastructure
  

  Safeguarding and Rebuilding America’s Physical Infrastructure: The Indispensable Role of Markets

  By Robert Poole, Center of the American Experiment
  
  Transcript, 09/30/2008
  

  In doing what needs to be done in safeguarding and rebuilding our bridges and highways, some in this room surely support one kind of tax increase or another—while others surely don’t. But whatever side you’re on, I would submit that the free market case Bob makes ought to be viewed as bringing substantial value to the table regardless of whatever decisions elected officials eventually make about taxes.

  
  
  
• National Security
  

  Why the Navy Wants to Rethink Its Next Destroyer

  By Loren B. Thompson, Lexington Institute
  
  Issue Brief, 09/30/2008
  

  In mid-summer the Navy outraged some of its strongest supporters on Capitol Hill by proposing to end a next-generation destroyer program after building only two vessels, potentially squandering billions of dollars in development money. The service said threats had changed in a way that made the new destroyer, designated DDG-1000, less relevant to future needs. It also claimed that the long-range guns around which the ship was designed were not needed because the service had other ways of providing fire support to forces ashore.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Climate Change Policy: Challenging the Activists

  By Colin Robinson, Institute of Economic Affairs
  
  Book, 09/30/2008
  

  There is currently a consensus amongst the political establishment – and amongst the intellectual communities that feed into it – that detailed and wide-ranging government intervention is necessary to combat the effects of climate change. This monograph challenges that consensus. The authors look in detail at a number of the underlying assumptions and proposals of the policy activists and find that there is enormous uncertainty relating both to the economics and to the science of climate change. As one author shows, the policy activists have form: alarmists have been wrong, time and time again, about ecological disasters. However, the authors of this monograph have more humility than their critics. They do not argue that there is no threat from climate change, merely that the level of uncertainty is huge. Given this uncertainty, and the historic failure of central planning to do anything other than undermine economic welfare, the editor, Colin Robinson, one of the country’s leading energy economists, argues that it is prudent to proceed with caution. The flexibility of the market economy will deal better than central planning with any problems arising from man-made climate change. The wide ranging array of regulations, taxes, subsidies and artificially created incentives proposed by climate change activists should be rejected.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  EPA Testimony GHG Migration

  By Michael R. Fox, Heartland Institute
  
  Testimony, 09/30/2008
  

  Based upon highly technical and thoroughly researched subjects within the manmade global warming issues, we have clearly demonstrated scientific corruption and exaggerations on the highest levels. As it stands at present, there is no demonstrable evidence showing that man-made CO2 is contributing in any measurable way to the current period of modest global warming. In fact we appear to be entering a period of no warming at all, and for the last 7 years modest cooling. A hypothesis which predicts CO2 causes warming, cannot explain recent cooling period while CO2 increases. The hypothesis is falsified, and no man-made CO2 mitigation is necessary. We request that the EPA not proceed with rule-making for CO2 mitigation.

  
  
  
• Economic Growth
  

  Upwardly Mobile America?

  By Stephen Moore, American Enterprise Institute
  
  The American, 09/29/2008
  

  With the U.S. economy in a fragile state, politicians are again debating the age-old question: Should America’s economic policies be geared to increasing the rate of economic growth or to promoting economic fairness through income redistribution? During this election year, some have argued that the last quarter-century has given rise to a new “gilded age” in which the privileged have done supremely well but the lower income earners have made no progress. A different view sees an upwardly mobile society in which those who get ahead fastest do so through their hard work, risk-taking, and grit. Income mobility studies track what happens to the economic fortunes of real people and families over time. It turns out the middle class and the poor have experienced much bigger gains over the last several decades than originally thought. What’s more, their gains have been even larger than those of the rich.

  
  
  
• Foreign Policy/International Affairs
  

  What Do Structural Changes in the Revolutionary Guards Mean?

  By Ali Alfoneh, American Enterprise Institute
  
  Middle Eastern Outlook, 09/29/2008
  

  In 2007, the Islamic Revolutionary Guards Corps (IRGC) changed command. Major General Mohammad Ali Jafari became the new commander in chief, only the seventh in the organization’s history. He immediately implemented a major restructuring to move the IRGC’s primary focus from external defense to internal security. The changes are more cosmetic than actual, but they do signal a renewed crackdown on reformism and civil society.

  
  
  
• Monetary Policy/Financial Regulation
  

  Panic

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 09/29/2008
  

  The time had come—indeed the time had long since passed—for the Federal Reserve and the U.S. Treasury, together with other G7 central banks and treasuries, to move from a reactive, piecemeal approach in the face of a global financial crisis to a proactive, systemic approach. There is a simple solution to the fundamental housing-bubble problem that lies behind the panic. An institution that makes a mortgage loan should be required to keep that loan on its balance sheet. That will mean higher interest rates on mortgages, but that is unavoidable. If policymakers understand why that is so, the problem need not be repeated. If they do not, we will have another housing bubble.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Bailout Package: Vital and Acceptable

  By Stuart M. Butler, Edwin Meese, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  Swift action is needed to deal with the “toxic” mortgage-backed securities that are causing credit markets to seize up. The package of emergency steps now before Congress is intended to address that problem and restore America’s credit markets while protecting the taxpayer as much as possible from the cost of dealing with the crisis. The constitutional questionability of some provisions is worrying, as is the centralization of power. The situation is so grave, however, that we must take unusual measures now and accept some negotiated arrangements that remain very troubling, provided they are limited in extent and time and are not accepted as a permanent part of our government.

  
  
  
• National Security
  

  The Defense Trade Cooperation Treaties with the United Kingdom and Australia Advance the American Interest

  By Ted R. Bromund, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  The Senate Foreign Relations Committee (SFRC), chaired by Senator Joe Biden (D–DE), announced last week that it was delaying consideration of bilateral defense trade cooperation treaties between the United States and the United Kingdom and between the U.S. and Australia. These treaties are important to advancing U.S. defense and security cooperation with two of its closest allies. They also offer important benefits to U.S. industry and the American military. The SFRC and the Bush Administration must work together to resolve the concerns that led to this delay, and the SFRC must give early consideration to both treaties.

  
  
  
• Transportation/Infrastructure
  

  Reforming State Transportation Policy: Washington State’s Efforts to Implement Performance-Based Policies

  By Michael Ennis, The Heritage Foundation
  
  Backgrounder, 09/29/2008
  

  While some lawmakers are reluctant to relinquish their control over funding transportation projects to a performance-based system, other legislators and state departments of transportation should welcome the new approach. Performance audits can separate areas that are working from those that are not. This information then becomes extremely valuable when deciding how to allocate finite public resources. The current political system and the uncertainty over whether those decisions will actually reduce traffic congestion will put state leaders further behind in meeting the growing demand on their transportation infrastructure. A Washington-style performance audit, not political agendas, is the key to learning what is working and what is not, so that transportation resources are allocated in a strategic and efficient way.

  
  
  
• Foreign Policy/International Affairs
  

  Taiwan’s Defense Hobbled by U.S. Arms “Freeze”

  By John J. Tkacik, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  President Bush’s failure to submit congressional notifications for the multibillion-dollar Taiwanese arms tranche raises the prospect that he is washing his hands of Taiwan’s security concerns. As Taiwan engages Beijing directly with new initiatives across the Taiwan Strait, its leaders now lack the single most important asset they need to negotiate successfully with Beijing: a strong military defense. The clock is winding down on the current U.S. congressional session, so it is looking increasingly likely that the decision to meet Taiwan’s defense needs will fall to the next Administration. If a President Obama or a President McCain fails to withstand China’s pressure on Taiwan, the rest of democratic Asia must prepare itself for a major blow to American leadership in the Pacific and accommodation of China as rule-maker.

  
  
  
• National Security
  

  U.S. Strategy Must Address Afghan-Pakistan Tension

  By Lisa Curtis, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  Heightening tensions between U.S. and Pakistani forces along the Afghan-Pakistani border threaten to play into al-Qaeda’s agenda of fueling anti-American sentiment among the Pakistani population and causing confusion within the ranks of the Pakistani military about the primary threat to their country. Coalition military strategy must preserve the ability of military forces to defend themselves and defeat al-Qaeda and the Taliban. Additionally, this strategy must promote cooperation with Pakistan to jointly address transnational terrorist threats in the region. Finally, the U.S. must proactively support a comprehensive regional strategy that enhances cooperation between Afghanistan and Pakistan.

  
  
  
• The Constitution/Civil Liberties
  

  The Housing Bailout: Constitutional Infirmities Remain, but a Ray of Hope

  By Andrew M. Grossman, Robert Alt, Todd F. Gaziano, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  The secretary of the Treasury’s original bailout plan was met with concern by constitutionalists for its shortcomings in adherence to fundamental principle. In particular, the plan was criticized for its inattention to the federal government’s enumerated powers, the lack of meaningful standards to cabin the extremely broad grant of discretion to the Treasury secretary (the “nondelegation” problem), limitations on judicial review over the exercise of that discretion, and other separation of powers problems. These failings render the Treasury proposal, and those so far that have built on it, unconstitutional. The Republican Study Committee proposal suggests that Congress can put together a plan that does not violate our fundamental law. Those who, for reasons of economic policy, favor the leadership/White House proposal must correct its legal flaws if they seek, in good faith, to uphold their duty to the Constitution and the people.

  
  
  
• Foreign Policy/International Affairs
  

  Mbeki’s Ouster Opens the Door for Enhanced U.S.–South Africa Cooperation

  By Thomas M. Woods, Ray Walser, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  South African President Thabo Mbeki has finally been ousted by his political rivals in the ruling African National Congress, and for many the move comes none too soon. Mbeki leaves a less than stellar legacy: he is perceived broadly as an arrogant pseudo-intellectual who endangered the country’s fight against HIV/AIDS, disingenuously promoted black economic empowerment that merely helped widen the gap between South Africa’s rich and poor, and propped up Robert Mugabe as one of Africa’s remaining dictators while millions of Zimbabweans fled violence and hunger. Mbeki also never missed an opportunity to embarrass the U.S and relished his self-appointed position as a leader within the developing world and purveyor of anti-Western Marxist theology. The U.S loses little with Mbeki’s departure and stands to gain in its strategically important relationship with South Africa.

  
  
  
• Budget & Taxation
  

  House Tax Extenders Bill Is Bad for Business and the Economy

  By Rea S. Hederman, Nicolas Loris, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  The tax extenders legislation that passed the House 257-166 on September 26 has significant problems. The tax cuts and increased spending in the bill are being offset by tax increases on businesses. There are also hidden costs in the bill that will likely increase deficits in future years. Elements of the bill that raise taxes, increase the deficit, increase energy prices, or complicate the tax code should be eliminated. In a sluggish economy, tax increases will only slow the economy more as the costs to business and individuals increase.

  
  
  
• Health Care
  

  State Medicaid Reform First—Before Payment Increases

  By Dennis G. Smith, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  Congress needs to get serious about Medicaid. To borrow a medical analogy: If a state is the patient, and Congress is its doctor, giving states a temporary increase in the Federal Medical Assistance Percentage (FMAP) to treat the problems associated with Medicaid is malpractice. Medicaid needs surgery, and increasing the FMAP is like giving it two aspirins instead. The temporary relief is not a cure and will actually make things worse for the program and states when it wears off.

  
  
  
• Crime, Justice & the Law
  

  COPS Reform: Why Congress Can’t Make the COPS Program Work

  By David B. Muhlhausen, Brian Walsh, The Heritage Foundation
  
  Backgrounder, 09/29/2008
  

  Created in the middle of President Bill Clinton’s first term, the Community Oriented Policing Services (COPS) program promised to put 100,000 new state and local law enforcement officers on the street by the year 2000. Critics said that COPS would fail to meet this goal. Critics also said that state and local governments would do what they always do when the federal government subsidizes any responsibility of state or local governments— stop paying for it themselves. The critics were right on both counts. The COPS program has an extensive track record of poor performance and should be eliminated.

  
  
  
• National Security
  

  Putin’s Navy, Chávez’s Ambition, and the Caribbean Adventure

  By Ray Walser, Mackenzie Eaglen, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  Almost half a century after the Cuban missile crisis, the Russian navy is coming to the Americas. There is a sense of discomfort and dissatisfaction with the voyage of the Russian flotilla and concern about where U.S.-Russian and hemispheric relations are headed. The real security challenges include: preventing illicit maritime activity; combating narcotics trafficking; preventing transnational terrorism; dealing with illegal mass migration; and developing responses to natural disasters and humanitarian crises. Subsequently, the White House, Pentagon, and Congress need to do the following: remain vigilant and monitor closely the return of Russian military assets to the Western Hemisphere; consider a bipartisan response to the creation or reestablishment of permanent Russian bases or intelligence facilities in Venezuela, Nicaragua, or Cuba; and redouble U.S. diplomatic efforts to work with Brazil, Chile, and others to avoid injecting a competitive arms race and a hostile military presence into South America.

  
  
  
• International Trade/Finance
  

  Chinese Investment (Mostly) Welcome

  By Derek Scissors, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  As China becomes an investment fixture, there will be more competition over broadly desired assets. If China wants free and fair access to American and European companies and what they own, it should grant the same access to its resources and corporate sector. This is much easier said than done, but given the amount of money involved, it is worth a protracted struggle. What must be quickly achieved is greater transparency from China’s State Administration for Foreign Exchange (SAFE) as well as state firms. SAFE declines to discuss even the existence of offshore arms through which purchases are made. Just a quarterly report of SAFE’s holdings would go far. If transparency can be achieved, China’s outward investment would be a large net positive for business, reintroducing capital otherwise tucked away.

  
  
  
• Monetary Policy/Financial Regulation
  

  An Initial Review of the Bailout Agreement

  By Alison Acosta Fraser, Todd F. Gaziano, The Heritage Foundation
  
  WebMemo, 09/29/2008
  

  Despite improvements made on a package of actions to address the alarming financial situation we face, the current draft bill has not addressed several serious constitutional issues, at least three of which warrant particular concern. With regard to the sweeping delegation of discretion to the Treasury Secretary (the “legislative delegation” problem), the latest text has not narrowed the scope of his authority. There is a possibility that the courts would strike down the law if it is challenged as an improper delegation of legislative authority—i.e., that the law provides no “intelligible principle” to guide and direct the Secretary’s actions.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Sustainable Development in Urban Planning: The Case for a Market-Based Approach

  By Samuel R. Staley, Skaidra Smith-Heisters, Leonard C. Gilroy, Reason Foundation
  
  Privatization Watch, 09/29/2008
  

  In principle, sustainable development can be achieved through any number of means; in practice, sustainable development has substituted highly centralized and prescriptive planning for decentralized, market decision making. Local community leaders, policymakers, and professional planners who want to encourage sustainable development policies consistent with property rights and markets should consider the following approaches and strategies. 1) Develop strong performance criteria for sustainable development. By making performance criteria explicit, errors and problems within the framework will be more transparent, and avenues for reform will be more evident. 2) Adopt a realistic understanding of the way economic markets work. 3) Recognize the institutional limits of implementing sustainable development programs within a legislative decision-making framework. 4) Embrace technological innovation as a key component for achieving sustainable development, recognizing that current technologies are likely to evolve or become obsolete as resources become more or less scarce.