Recent Policy Studies

• Family, Culture & Community
  

  The One Hundred Billion Dollar Man: The Annual Public Costs of Father Absence

  By Steven L. Nock, Christopher J. Einolf, National Fatherhood Initiative
  
  Report, 10/10/2008
  

  This study, the first of its kind, provides an estimate of the taxpayer costs of father absence. More precisely, it estimates the annual expenditures made by the federal government to support father-absent homes. These federal expenditures include those made on thirteen means-tested antipoverty programs and child support enforcement, and the total expenditures add up to a startling $99.8 billion.

  
  
  
• International Trade/Finance
  

  United States Foreign Policy and Strategic Dimensions

  By Roger F. Noriega, American Enterprise Institute
  
  Paper, 10/10/2008
  

  The United States’ foreign policy and strategic interests in the Americas have been unchanged: it has sought economic and political stability through the promotion of trade and democracy; tended to its sometimes troubled border with Mexico; and sought to suppress the production and transit of illicit narcotics. Since the end of the Cold War (during which Soviet proxies sowed instability in the region), the promising strides made by democratic, free-market governments lulled U.S. policy makers who were distracted by events in post-Soviet-dominated Europe and an emerging Asia. U.S. engagement in the last decade has been “workmanlike,” with President George W. Bush showing innate interest in the Americas. But it took the provocations of Hugo Chávez to stir the public consciousness in a new appraisal of U.S. foreign policy and strategic interests in play in the Americas.

  
  
  
• Information Technology
  

  Deregulation as Scapegoat

  By Randolph May, Free State Foundation
  
  Perspectives from FSF Scholars, 10/10/2008
  

  The financial services bailout threatens to give all deregulatory efforts a bad name. And it threatens to give those who reflexively favor more regulation, regardless of the marketplace circumstances, a new regulatory cudgel. If this reflexive approach is applied to today's communications marketplace, this would be most unfortunate.

  
  
  
• Budget & Taxation
  

  A Spending Problem

  By Cecilia Januszkiewicz, Free State Foundation
  
  Perspectives from FSF Scholars, 10/10/2008
  

  The current “affordability” process allows the committee to increase its original spending limit in a back room without any justification or opportunity for public discussion. This creates an environment where difficult legislative decisions about reducing spending are resolved by simply raising the spending limit.

  
  
  
• Budget & Taxation
  

  Transparency—A Clear Case for Including Local Governments and School Districts, Too!

  By Derek Monson, Sutherland Institute
  
  Studies, 10/10/2008
  

  Just this year, policies were enacted by Transparency in Government (SB 38, 2008) that will facilitate more open government in Utah. Guided by the Utah Transparency Advisory Board (UTAB) – a board charged with putting state financial information on a public website in an understandable format – implementation of the bill should lead to more financial transparency, which should hearten Utahns. Unfortunately, not all levels of government were included in the provisions of the bill.

  
  
  
• International Trade/Finance
  

  Trade and Raw Materials—Looking Ahead

  By Claude Barfield, American Enterprise Institute
  
  Lecture, 10/10/2008
  

  The European Union has its work cut out for it in building a coalition to combat the distortive impacts of raw material export restrictions. The balance of my presentation will consist of the following sections: (1) an explanation of why the most important strategy must be to convince exporting nations (particularly developing countries) that the unintended, negative consequences from the imposition of export restriction will often outweigh short-term gains: (2) why some suggested trade tools by developed countries, in turn, will result of negative, unintended consequences; and (3) a review of less disruptive trade tools that could be utilized.

  
  
  
• Monetary Policy/Financial Regulation
  

  A Bill That Deserved to Pass

  By Vincent R. Reinhart, American Enterprise Institute
  
  The American, 10/10/2008
  

  In the end, the financial rescue legislation was deeply flawed—but Congress was right to pass it. As a country, we have a relatively low savings rate. We rely on debt to fund our excesses. That makes us heavily dependent on money lenders. Those intermediaries use our best obligations, the mortgages on our homes, as collateral for complicated securities sold to entities with opaque balance sheets. As house prices have declined, some of our fellow citizens have walked away from their obligations, reducing the worth of mortgage-backed securities. Investors have recoiled in the face of elevated uncertainty, pushing the value of those securities well below the economic loss associated with elevated defaults. Having discouraged private sector capital infusions that would have solved the problem, the federal government must now fill the holes on financial balance sheets.

  
  
  
• Foreign Policy/International Affairs
  

  Can This Man Save the LDP?

  By Michael Auslin, American Enterprise Institute
  
  On the Issues, 10/10/2008
  

  Japan’s new prime minister, Taro Aso, faces significant challenges in his first months in office. Forced to grapple with economic downturn and partisan political paralysis, Aso must quickly devise a realistic plan to reform Japan’s economy and justify its global role if he and his Liberal Democratic Party (LDP) are to survive. The LDP’s and Aso’s fates will be decided by the next general election for the lower house of the Diet, which may come as early as this month. Most observers believe the LDP will likely lose its absolute majority in the lower house to the Democratic Party of Japan, thus leading to the first complete opposition takeover of government since 1955.

  
  
  
• Retirement/Social Security
  

  How Would Obama Change Effective Payroll Tax Rates and Social Security Progressivity?

  By Andrew G. Biggs, American Enterprise Institute
  
  Report, 10/10/2008
  

  Senator Obama has a component of his tax plan—called “Making Work Pay“—that would introduce significant progressivity into the tax side of Social Security. His plan is designed to partially or fully compensate workers for the employee share of the Social Security payroll tax—6.2 percent of the 12.4 percent total tax. Workers would receive a refundable tax credit equal to 6.2 percent of wages up to $8,000, with a maximum credit of $500 per worker and $1,000 per couple. This is the source of the “tax cuts” Obama references for lower and middle income households. The Tax Policy Center assumes the credit phases out at 5 cents for each dollar of earnings above $75,000, meaning it declines to zero at $85,000. How does this change the effective Social Security payroll tax rate?

  
  
  
• Transportation/Infrastructure
  

  Highway Trust Fund Inequities Will Get Worse in Future Years

  By Ronald D. Utt, The Heritage Foundation
  
  WebMemo, 10/10/2008
  

  Among the many contentious issues in the federal highway program is the inherently unequal distribution of trust fund revenues to the states. Under current law, the federal fuel taxes paid into the trust fund by motorists and truckers are returned to the states by a mathematical formula that attempts to match the scope and usage of each state’s surface transportation system with payments received from the federal government. But as a consequence of flaws in the formula, many states (donors) consistently receive less than they pay in while others (donees) consistently receive more. This deficiency, in turn, exacerbates regional transportation problems because the shortchanged states are typically those with above average population growth whose transportation needs exceed that of the slower growing states.

  
  
  
• Foreign Policy/International Affairs
  

  Forging a New Era in the U.S.-Japan Alliance

  By Bruce Klingner, The Heritage Foundation
  
  Backgrounder, 10/10/2008
  

  Strong trilateral cooperation between Washington, Tokyo, and Seoul is critically important. These relationships are growing in importance in light of China’s increasing military capabilities, economic weight, and political influence. Periodic political or societal flare-ups that strain relations between Japan and South Korea must not be allowed to detract from steady long-term progress in strengthening the military partnership among the three countries. While the U.S.–Japanese security alliance is in a far better position to address the 21st century threat environment than it was five years ago, much work remains.

  
  
  
• National Security
  

  Securing Global Supply Chains: 10 Plus 2 Container Security Ruling Needed

  By James Jay Carafano, The Heritage Foundation
  
  WebMemo, 10/10/2008
  

  The Department of Homeland Security is about to issue a rule implementing its “10 plus 2” security initiative. It is about time. This rule describes how importers will report 10 additional items of information on cargo shipped to the United States, while the carrier provides two more data sets. The information will significantly help the department identify suspicious cargo. Not only will “10 plus 2” greatly enhance identifying high-risk cargo, but it will largely alleviate the need to scan 100 percent of the cargo sent to the United States.

  
  
  
• Foreign Policy/International Affairs
  

  Taiwan Arms Sales: Less Than Meets the Eye

  By John J. Tkacik, The Heritage Foundation
  
  WebMemo, 10/10/2008
  

  After more than seven years of waiting, there is reason to celebrate the final approval of a $6.4 billion U.S. arms sale to Taiwan. Unfortunately, there is less to this package than meets the eye. Rather than addressing Taipei’s deteriorating military balance against China’s rapidly modernizing and expanding forces, these approvals provide gasps of new oxygen to Taiwan’s aging defenses, which were starved of air initially by domestic politics and then, for the last year, by Washington’s concern about Beijing’s ire.

  
  
  
• Foreign Policy/International Affairs
  

  Shaping the NATO-EU Relationship: What the U.S. Must Do

  By Sally McNamara, The Heritage Foundation
  
  Backgrounder, 10/10/2008
  

  Since the terrorist attacks of September 11, 2001, the West has rightly invested its time, energy, and resources into combating Islamist radicals and fighting asymmetric warfare. Russia’s immoral and illegitimate invasion of Georgia on August 7, 2008, however, demonstrated that the threat of traditional military confrontation has not disappeared. Europe must, therefore, rebuild its militaries to undertake operations in both security contexts, determining what threats they are likely to face and how best to approach them. Traditionally, the North Atlantic Treaty Organization (NATO) has been the primary alliance architecture in which to discuss Europe’s security. European members of the NATO alliance, operating as sovereign and independent nations, will be better placed to serve transatlantic security interests within the Alliance, than as members of a supra-nationalized and anti-democratic institution (the European Union).

  
  
  
• Immigration
  

  Don’t Let E-Verify Perish in the Next Congress

  By Jena Baker McNeill, Matt A. Mayer, The Heritage Foundation
  
  WebMemo, 10/10/2008
  

  On September 27, Congress voted to fund E-Verify through March 2009. This is certainly a positive step for the program, but it has put the ball in the next Congress’s court to reauthorize and fund E-Verify into the future. It is also an opportunity to expand and improve on the program in conjunction with the new Administration.

  
  
  
• Immigration
  

  Reducing Illegal Immigration Through Employment Verification, Enforcement, and Protection

  By Robert E. Rector, The Heritage Foundation
  
  Backgrounder, 10/09/2008
  

  Immigration reform has many facets: It must pro¬tect national security, uphold the rule of law, strengthen citizenship, and benefit the American economy. The overall effect must be to reduce illegal immigration in to the United States. Although border security generally receives more attention, serious enforcement of current laws prohibiting the employment of illegals is also an important tool in an overall strategy to reduce illegal immigration. Since employment is the magnet that draws illegal immigrants into the U.S., it follows that the best way to reduce illegal immigration is to shrink the employment magnet. To accomplish this without resorting to the method of routinely rounding up and deporting thousands of illegal workers only to have them return and obtain another readily available job, policy should focus on the businesses that hire illegal immigrants and let general employment rules rather than individual arrests drive the reduction in illegal immigration.

  
  
  
• Family, Culture & Community
  

  Teen Sex: The Parent Factor

  By Christine Kim, The Heritage Foundation
  
  Backgrounder, 10/09/2008
  

  The statistics on teen sexuality in the United States are troubling. About 7 percent of high school students report having had sex before the age of 13. By ninth grade, one-third of high school students have engaged in sexual activity, and by 12th grade, two-thirds. Yet the majority of these teens, 60 percent overall and 67 percent among younger adolescents, regret their first experience and wish they had waited longer. Programs and policies focused on reducing teen sexual activity and the damaging results should encourage parents’ presence and involvement in the lives of their children. Policies that discourage parental involvement, such as dispensing contraceptives to teens without parental consent, contradict the weight of social science evidence and should be opposed.

  
  
  
• Economic Growth
  

  The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let It Happen

  By Arthur B. Laffer, Stephen Moore, Peter Tanous, Threshold Editions
  
  Book, 10/09/2008
  

  Arthur Laffer – the father of supply-side economics and a member of President Reagan's Economic Policy Advisory Board – joins economist Stephen Moore of The Wall Street Journal editorial board and investment advisor Peter J. Tanous to send Americans an urgent message: We risk losing the exceptional standard of living that has made us the envy of the rest of the world if the pro-growth policies of the last twenty-five years are reversed by a new president.

  
  
  
• National Security
  

  Changing Course on Navy Shipbuilding: Questions Congress Should Ask Before Funding

  By Mackenzie Eaglen, The Heritage Foundation
  
  Backgrounder, 10/09/2008
  

  For more than a decade, the U.S. Navy has invested significant time and resources in designing a multipurpose destroyer, the DDG-1000 Zumwalt, to provide superior naval surface fire support, area anti-air warfare, and anti-submarine warfare in the littorals. However, during testimony on July 31, 2008, Navy leaders rescinded their support for the President’s fiscal year 2009 budget request for a third DDG-1000 and advocated “truncating” the program. Primarily citing unforeseen threats in their argument to stop DDG-1000 procurement and to build upgraded Arleigh Burke-class destroyers, the Navy now asserts that the DDG-1000 is incapable of conducting both area defense anti-air warfare (versus point defense in which the ship defends itself with short-range surface-to-air missiles) and ballistic missile defense.The recent testimony by Admiral McCullough and Deputy Assistant Secretary Stiller has raised new questions and left other concerns unanswered. Before deciding which plan to fund in 2010, Congress should demand the appropriate information to conduct its due diligence.

  
  
  
• Budget & Taxation
  

  California Needs Credit Cards to Pay Monthly Bills

  By Adrian Moore, Reason Foundation
  
  Report, 10/09/2008
  

  Governor Arnold Schwarzenegger says California may need a $7 billion bailout (excuse me, loan) from the federal government so the state can pay its bills and employees over the next few weeks. The state “may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing,” Mr. Schwarzenegger wrote to Treasury Secretary Henry Paulson. California’s leaders constantly ask taxpayers to borrow more bond money, while they postpone tough budget decisions. Now the state might need a $7 billion bailout from the feds. Voters should send a message about fiscal discipline when asked to approve $16.8 billion in borrowing this November. And if Governor Schwarzenegger is planning to ever live up to his promises about ‘blowing up the boxes’ of state government, now seems like a pretty good time to start.

  
  
  
• Budget & Taxation
  

  McCain and Obama Both Play Loose with Facts on Tax Issues in First Debate

  By Gerald Prante, Tax Foundation
  
  Fiscal Facts, 10/09/2008
  

  In the economic portion of the debate, both Senators Obama and McCain made some statements about taxes that played somewhat loose with the facts. First, Obama made this claim, comparing his own tax plan to Sen. McCain’s: “And in his (Sen. McCain’s) tax plan, you would have CEOs of Fortune 500 companies getting an average of $700,000 in reduced taxes, while leaving 100 million Americans out. So my attitude is, we’ve got to grow the economy from the bottom up. What I’ve called for is a tax cut for 95 percent of working families, 95 percent.” Senator Obama is mixing baselines here, and the three figures aren’t really comparable. McCain also provided some misleading information on taxes in the debate Friday night. The first instance was when he talked about his health insurance tax credit yet didn’t bother to mention that employer-provided health insurance benefits would be taxed.

  
  
  
• Budget & Taxation
  

  2009 State Business Tax Climate Index

  By Joshua Barro, Tax Foundation
  
  Background Paper, 10/09/2008
  

  The Tax Foundation presents the 2009 version of the State Business Tax Climate Index (SBTCI) as a tool for lawmakers, the media and individuals alike to gauge how their states’ tax systems compare. Anecdotes about the impact of state tax systems on business investment are plentiful. In Illinois, hundreds of millions of dollars of capital expenditures were delayed when Governor Blagojevich proposed a hefty gross receipts tax. Only when the legislature resoundingly defeated the bill did the investment resume. In 2005, Intel decided to build a multi-billion dollar chip-making facility in Arizona due to its favorable corporate income tax system. California struggles to retain businesses within its borders because Nevada provides a low-tax alternative. Anecdotes such as these reinforce what we know from economic theory: taxes matter to businesses, and those places with the most competitive tax systems will reap the benefits of business-friendly tax climates.

  
  
  
• Information Technology
  

  A Point of View: Net Neutrality Regulation in the United States

  By Barbara S. Esbin, Progress & Freedom Foundation
  
  Progress Snapshot, 10/09/2008
  

  The United States moved closer to “Net Neutrality” regulation this year when the Federal Communications Commission (FCC) found that Comcast, a cable broadband Internet service provider, violated a set of Internet policy principles the FCC adopted in 2005 by limiting peer-to-peer (P2P) traffic. The ruling was the culmination of a ten-year effort that began as a call for wholesale “open access” to the cable platform for third-party Internet service providers. Requests for open access first emerged in 1998 when the FCC considered AT&T’s acquisition of cable operator TCI. The FCC rejected open access, but the issue quickly re-emerged in a subsequent proceeding to determine the appropriate regulatory classification of cable Internet service. Depending on how the FCC categorized cable Internet service, it would either be subject to telecommunications “common carrier” requirements, “cable service” requirements, or treated as a then-unregulated “information service.”

  
  
  
• Elections, Transparency, & Accountability
  

  Sacramento Sell-Out: Even the Laws Have a Price

  By Daniel R. Ballon, Pacific Research Institute
  
  Capital Ideas, 10/09/2008
  

  In California, government owns the laws and forces people to pay for a copy. Therefore, the more legislation and regulations the state creates, the more revenue it generates. Sacramento collects nearly $1 million a year from these transactions. Legislators and regulators assert the same copyright protections on their work as artists, musicians, and performers. Unlike creative endeavors, laws are rarely original, unique, or culturally valuable. As long as they are copyrighted, however, it is illegal to make or distribute copies without permission. By selling laws for profit, the state operates a shakedown racket on its own residents. The government expects citizens and businesses to be law-abiding, yet it forbids them from distributing the very laws they must follow. Unless they pay a fee, they risk inadvertently violating an obscure law and incurring fines, lawsuits, or arrest. Because the government holds a monopoly on lawmaking, the state and its private partners can charge exorbitant prices.

  
  
  
• Health Care
  

  Presidential Prescriptions: Diagnosing the Candidates' Health Reforms

  By John R. Graham, Pacific Research Institute
  
  Report, 10/09/2008
  

  There are important differences on health reform between the two presidential candidates, especially in two areas: health insurance and medical-malpractice reform. Senator John McCain proposes dramatic, positive change that will give American families control of their health care dollars, while Senator Barack Obama proposes to continue the trend of the past four decades: delivering command of health care into government hands. Put simply: Senator McCain proposes to free you to buy the health insurance that you choose. Senator Obama proposes to trap you deeper in the status quo—one paycheck away from losing both your job and your health care, and more likely to become dependent on the state when that happens.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Comments on the Advance Notice of Proposed Rulemaking by the Environmental Protection Agency

  By Sterling Burnett, National Center for Policy Analysis
  
  Report, 10/09/2008
  

  Although the advance notice of proposed rulemaking seeks to assess the effectiveness of the Clean Air Act (CAA) as a vehicle to regulate and reduce greenhouse gas emissions in the United States, we believe it suffers from several defects. We recognize that the Environmental Protection Agency is precluded by law from considering the costs of its actions when deciding whether to issue an endangerment finding and subsequently regulate a pollutant. However, under section 202 of the CAA the agency is required to consider both cost and technical feasibility of proposed regulations of pollutants – in this case emissions of CO2 from automobile emissions. The EPA’s analysis in on this point is lacking especially as it ignores the slippery slope: the mere act of designating CO2 as a regulated pollutant from automobiles will likely trigger regulatory action under other CAA provisions. The scope of such regulations and the overall costs will be unprecedented.

  
  
  
• Health Care
  

  Waiting Your Turn: Hospital Waiting Lists in Canada, 18th Edition

  By Nadeem Esmail, Maureen Hazel, Michael A. Walker, Fraser Institute
  
  Report, 10/09/2008
  

  Canada-wide waiting times for surgical and other therapeutic treatments decreased in 2008. Total waiting time between referral from a general practitioner and treatment, averaged across all 12 specialties and 10 provinces surveyed, fell from 18.3 weeks in 2007 to 17.3 weeks in 2008. This nationwide improvement in access reflects waiting-time decreases in 7 provinces, while concealing increases in waiting times in Saskatchewan, Nova Scotia, and Newfoundland & Labrador. Despite a one week fall from the high reached in 2007, the total wait time remains high, both historically and internationally. Compared to 1993, waiting time in 2008 is 86 percent longer. Moreover, academic studies of waiting time have found that Canadians wait longer than Americans, Germans, and Swedes (sometimes) for cardiac care, although not as long as New Zealanders or the British.

  
  
  
• National Security
  

  America’s Challenges in the Middle East

  By Hillel Fradkin, Hudson Institute
  
  Lecture, 10/08/2008
  

  One may say that American interests in the Middle East remain the same, only more so. The most important reason for our interest in Gulf security and stability is well-known: the reserves of oil and natural gas to be found there. But this is often discussed in a narrow, polemical, and even totally irresponsible fashion—through slogans like “No blood for oil.” Yes, we want to protect our access to the fuels which run our economy. But the same resources fuel everyone’s economy. This is why I refer to it not only as an interest but as a responsibility.

  
  
  
• Philanthropy
  

  Conservative Philanthropy: Tactics and Vision

  By William A. Schambra, Hudson Institute
  
  Lecture, 10/08/2008
  

  Were you to believe the commentators, conservative philanthropy has been astonishingly effective, almost invincible. So it’s no surprise that it has given rise to minor industry in books on the topic. I suppose we should be flattered. But the books unhappily tend to bear titles like Justice for Sale; Buying a Movement: Right-Wing Foundations and American Politics; Axis of Ideology: Conservative Foundations and Public Policy; Who is Downsizing the American Dream?; and No Mercy: How Conservative Think Tanks and Foundations Changed America’s Social Agenda. As the titles suggest, the authors of these books are not crazy about the ends of conservative grantmaking. But they do tend to admire our means. I suspect that’s what I’m supposed to talk about today – the technology of our grantmaking, divorcing it as much as possible from the unpleasant purposes to which it’s put.

  
  
  
• The Constitution/Civil Liberties
  

  The Constitution vs. International Rights: Philanthropy’s Wrong Turn

  By William Schambra, Hudson Institute
  
  Lecture, 10/08/2008
  

  One of the great promises of international human rights, as expressed in the Ford Foundation’s report Close to Home, is that they assert “the inalienability of rights in a much broader sense than has ever been expressed constitutionally” in America. Every successful American struggle against racism, from the fight against slavery on, has been rooted in the conviction that our founding documents and principles provide all we need to make progress toward equality. That’s because Americans have consented to govern themselves according to those principles. When we demand instead fulfillment of a lengthy wish list of ill-defined rights – of which most Americans have not heard, and to which they most definitely have not consented – we may be doing the cause of racial progress more harm than good.

  
  
  
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  Hudson Institute Economic Report

  By Diana Furchtgott-Roth, Hudson Institute
  
  Hudson Institute Economic Report, 10/08/2008
  

  September’s employment data provide the strongest evidence yet that the economy is now in a recession. The index of aggregate weekly hours shrank by 0.5 percent, and nonfarm payroll employment recorded a loss of 159,000 jobs, the biggest monthly decline since 2003. The unemployment rate stayed the same at 6.1 percent in September due to people withdrawing from the labor market. The labor force participation rate fell one tenth of a percentage point to 66.0 percent. Unemployment rate for adult men rose from 5.6 to 6.1 percent, while adult female unemployment rate fell from 5.3 to 4.9 percent.

  
  
  
• Family, Culture & Community
  

  Ever Wonder Why? and Other Controversial Essays

  By Thomas Sowell, Hoover Institution
  
  Book, 10/08/2008
  

  Thomas Sowell takes on a range of legal, social, racial, educational, and economic issues—along with “the culture wars”—in this latest collection of his controversial, never boring, always thought-provoking essays. From “gun control myths” to “mealy mouth media” to “free lunch medicine,” Sowell gets to the heart of the matters we all care about with his characteristically unswerving candor. Sowell skewers the “mealy mouth media” that calls terrorists “insurgents” and rioters “demonstrators.” He reveals how “the idiocy of relevance” in learning has been particularly destructive in the education of minority students at all levels. He explains how a free market and a strict construction of the 14th Amendment would never have permitted the laws that asked Rosa Parks to give up her seat to a white man. And he clarifies the confusion between equal opportunity and equal results that resides behind many kinds of “spoiled brat politics.”

  
  
  
• National Security
  

  The Transnational Dimension of Cyber Crime and Terrorism

  By Abraham D. Sofaer, Seymour E. Goodman, Hoover Institution
  
  Book, 10/08/2008
  

  The information infrastructure is increasingly under attack by cyber criminals. The number, cost, and sophistication of attacks are increasing at alarming rates. They threaten the substantial and growing reliance of commerce, governments, and the public upon the information infrastructure to conduct business, carry messages, and process information. Some forms of attack also pose a growing threat to the public, and to critical infrastructures. Much has been said about the threat posed by cyber crime, including terrorism, but little has been done to protect against what has become the most costly form of such crime: transnational attacks on computers and the information infrastructure.

  
  
  
• Budget & Taxation
  

  How Do the Presidential Candidates’ Tax Plans Affect Taxpayers’ Marginal Tax Rates?

  By Robert Carroll, Tax Foundation
  
  Fiscal Facts, 10/08/2008
  

  The Presidential candidates have proposed comprehensive tax plans that reshape tax policy in important ways. A perhaps neglected aspect of their tax plans is how they alter effective marginal tax rates, the amount of tax that people pay out of their last dollar of income. High marginal tax rates can be economically harmful because some decisions may be based more on tax considerations than on economic merit. Although Senator Obama’s plan lowers the already negative marginal tax rates for the lowest income taxpayers, most low- and moderate-income couples would see their effective marginal tax rates rise, in some cases, significantly. Senator McCain’s tax plan also changes marginal tax rates. His proposal to replace the exclusion for employer-based health insurance with a new health tax credit boosts taxpayers’ taxable incomes by their health insurance premiums which generally pushes taxpayers into higher tax brackets, but not to as great an extent as Senator Obama’s tax plan.

  
  
  
• Education
  

  Teacher Quality

  By Williamson M. Evers, Lance T. Izumi, Hoover Institution
  
  Book, 10/08/2008
  

  From reducing class size to changing curricula to increasing funding, lawmakers and education officials have been trying to find, often in vain, the silver bullet that will raise test scores and student learning. These quick-fix solutions, however, not only fail to address the public education system’s core problems but also usually have little or no basis in empirical research. For example, evidence shows little improvement in student performance as a result of states’ spending billions of dollars on class-size reduction. What the research does show is that the quality of classroom teachers has the greatest impact on the performance levels of students. High-quality teachers using proven teaching methodologies produce high-achieving students.

  
  
  
• Economic and Political Thought
  

  Controversial Essays

  By Thomas Sowell, Hoover Institution
  
  Book, 10/08/2008
  

  One of conservatism’s most articulate voices dissects today’s most important economic, racial, political, education, legal, and social issues, sharing his entertaining and thought-provoking insights on a wide range of contentious subjects. Many of the events which provoked these writings raised questions that went beyond the passing episodes involved. This was especially so where economic issues were involved, for these same fundamental issues recur in the economy over the years—and centuries—in various guises. Similarly, racial issues in the United States today involve many of the same principles that have been controversial in relations between various racial and ethnic groups in other countries and in other times. In addition to the very serious issues raised in many of these essays, there are also some lighter subjects and even the serious issues sometimes have their lighter aspects. Without a sense of humor, politics would be too painful to bear.

  
  
  
• Economic Growth
  

  Property Rights: A Practical Guide to Freedom and Prosperity

  By Laura E. Huggins, Terry Anderson , Hoover Institution
  
  Book, 10/08/2008
  

  Consider the prospect of investing in land. In the United States, we take the security of such an investment for granted, but in other countries that security is not always available. For example, though Zimbabwe has a constitution forbidding the confiscation of land without compensation, so-called land reform is taking land from people who thought they had secure title and giving it to others. As a result of this land redistribution, productivity is down and people are starving. Furthermore, citizens are being persecuted and killed. This is not to say that the distribution of land ownership is necessarily just in countries such as Zimbabwe, but it does emphasize that security of property rights is crucial to freedom and prosperity.

  
  
  
• Budget & Taxation
  

  The Flat Tax

  By Robert E. Hall, Alvin Rabushka , Hoover Institution
  
  Book, 10/08/2008
  

  First proposed 25 years ago, the flat tax has proven most influential in the unlikeliest of places: state capitals— and the capitals of other nations. On December 10, 1981, Robert Hall and Alvin Rabushka first published on the editorial page of the Wall Street Journal their proposal to replace the federal income tax with a low, simple, flat tax. The flat tax picked up considerable steam in the United States during the next few years, culminating in President Reagan’s Tax Reform Act of 1986. Two rates of 15 and 28 percent replaced multiple tax brackets with a top rate of 50 percent. From that point, the flat tax lost momentum. In 1990, in exchange for spending cuts that failed to materialize, President George H.W. Bush signed the Omnibus Budget Reconciliation Act that included a 31 percent rate on “the rich.”

  
  
  
• Education
  

  A Primer on America’s Schools

  By Terry M. Moe, Hoover Institution
  
  Book, 10/08/2008
  

  How can America get off the treadmill of perpetual reform and succeed in improving its schools? There is no easy answer. But one requirement is surely fundamental: policymakers must know what to do. They must have good ideas that are well supported by theory and evidence, and they must know how to put these ideas into action. As things now stand, this requirement has not been met. In the practice of school reform, the ideas that find their way into policy— about lowering class size, for instance, or putting teachers through a more rigorous credentialing process, or spending more money—are popular for reasons that have nothing to do with their true efficacy.

  
  
  
• Economic and Political Thought
  

  Liberty Versus the Tyranny of Socialism: Controversial Essays

  By Walter E. Williams, Hoover Institution
  
  Book, 10/08/2008
  

  In this selected collection of his syndicated newspaper columns, Walter E. Williams once again takes on the left wing’s most sacred cows with provocative insights and brutal honesty. He offers his sometimes controversial views on education, health, and more, always with an uncompromising reverence for personal liberty and the principles laid out in our Declaration of Independence and Constitution. Do we want socialized medicine? Do peace treaties produce peace? What’s wrong with education? What’s discrimination? Do we really care about children? Is this the America we want? Although many of these essays focus on the growth of government and our loss of liberty, many others demonstrate how the tools of free market economics can be used to improve our lives in ways ordinary people can understand—not just in the realm of trade and the cost of goods and services but in such diverse areas as racial discrimination, national defense, and even marriage.

  
  
  
• Economic Growth
  

  Bits, Bytes, and Balance Sheets: The New Economic Rules of Engagement in a Wireless World

  By Walter B. Wriston, Hoover Institution
  
  Book, 10/08/2008
  

  The Internet has changed everything. It is altering the way institutions, both public and private, are managed, and the way individuals react to one another, their workplace, and their government. From an economic and business perspective, the race to win is between those who “get it” and those who don’t. Wriston explores the consequences of the changes produced by the new economy of the Internet, defining the new rules and examining some of the promising initiatives under way to create a system of measuring and valuing assets that reflects our new economic realities. In today’s economy, intellectual capital is more important than physical capital—and in fact, the very source of wealth and how it is created has changed—and that businesses must adapt to this change or perish.

  
  
  
• National Security
  

  Managing American Hegemony: Essays on Power in a Time of Dominance

  By Kori Schake, Hoover Institution
  
  Book, 10/08/2008
  

  In thinking about American power, says Kori Schake, the first concern is its relevance: Who cares? Does it really matter whether the United States is an empire or a colossus or merely the strongest power in the order? If we are profligate with our power, would it make any difference? Understanding why we have succeeded is essential to making sound choices about what to sustain and how to approach the task. Our strategic challenge will be persuading others to share the burdens of maintaining the existing order that has served us all so well. The costs are relatively low because nearly all the states in the international order voluntarily acquiesce to U.S. predominance. When they stop believing, as a few have, that U.S. power is a force for the general good, the cost of maintaining order increases.

  
  
  
• Immigration
  

  Pay to Stay

  By Gary S. Becker, Hoover Institution
  
  Hoover Digest, 10/08/2008
  

  Is it so outlandish to suggest that we sell the right to live in the United States? Outlandish or not, such a policy would benefit legal and illegal immigrants alike. No one knows how many illegal immigrants are in the United States. Figures vary widely, but the Department of Homeland Security estimated there were close to 12 million in 2006. There is great disagreement about what should be done about them. At one extreme are those who call for catching and evicting as many illegal residents as possible. Yet this seems highly unrealistic; the United States will not apprehend and return millions of people to Mexico or other countries. Nor is it desirable to go to the other extreme, offering blanket amnesty to all illegal residents, for amnesty now would encourage future illegal immigration in the hope of a further amnesty. Amnesty makes a mockery of immigration laws and rewards those who came illegally.

  
  
  
• National Security
  

  The Need for Missile Defense

  By Peter Brookes, Hoover Institution
  
  Policy Review, 10/08/2008
  

  Despite Iran’s runaway nuclear program, North Korea’s atomic assistance to Syria, and robust ballistic missile production and testing by Russia and China, a missile defense system for protecting the homeland and U.S. interests overseas remains a controversial idea in some corners. It should not be. The security challenge arising from the proliferation of ballistic missiles and the dangerous payloads they might carry, including weapons of mass destruction like nuclear arms, is a threat that — in fact — may be growing.

  
  
  
• Economic and Political Thought
  

  The Futility of Class Warfare

  By Bradley R. Schiller, Hoover Institution
  
  Policy Review, 10/08/2008
  

  The “race card” was once an effective ploy in electoral politics. That card still gets played on occasion. But with white voters receding into the minority in so many jurisdictions, the race card is increasingly viewed as not just an unfair play, but an inefficient one as well (as Hillary Clinton learned). The preferred ploy of Democrats these days is the “class” card. Democrats have increasingly tried to redefine the “them vs. us” struggle in terms of class rather than color. As they tell the story, economic prosperity is a zero-sum game. Income gains attained by the “rich” come at the expense of the “poor.”

  
  
  
• Economic and Political Thought
  

  Leviathan Then and Now

  By Peter Berkowitz , Hoover Institution
  
  Policy Review, 10/08/2008
  

  Until relatively recently, students of politics and ideas generally regarded Thomas Hobbes’s Leviathan (1651) as the outstanding work of political philosophy in the English language. Over the past several decades, however, professors of political science and philosophy have largely relegated Hobbes’s masterpiece to the back shelves. At best, they tend to view Leviathan as an historical artifact, an early and influential stepping stone on the way to the development of those Kantian-inspired theories — Rawlsian and Habermasian at the forefront — that aim to vindicate the rights-based, progressive welfare state and dominate academic teaching and research. This demotion of Hobbes’s masterpiece is unwarranted and impedes understanding of Leviathan. The demotion rests on the assumption, common among today’s scholars of political ideas, that after millennia of confusion and error they have at long last constructed the complete and adequate — or soon-to-be-complete and very nearly adequate — theoretical approach to politics.

  
  
  
• National Security
  

  Mohamed v. Jeppesen Dataplan, Inc

  By Daniel J. Popeo, Richard A. Samp, Washington Legal Foundation
  
  Report, 10/07/2008
  

  On September 8, 2008, Washington Legal Foundation (WLF) filed a brief in the U.S. Court of Appeals for the Ninth Circuit, urging it to affirm dismissal of an American Civil Liberties Union lawsuit that challenges the Central Intelligence Agency’s (CIA) “extraordinary rendition” program – the program under which suspected terrorists captured overseas are transported to other countries for purposes of interrogation. WLF argued that the CIA has convincingly demonstrated that allowing the case to go forward would create unacceptable risks that highly classified information would be disclosed, and that the disclosure would cause serious damage to national security. WLF argued that the judicial branch is simply not the appropriate forum for airing these types of issues; those who disagree with the extraordinary rendition program should instead take their concerns to Congress or the Executive Branch.

  
  
  
• Education
  

  Demography Defeated: Florida's K-12 Reforms and Their Lessons for the Nation

  By Dan Lips, Matthew Ladner, Goldwater Institute
  
  10/07/2008
  

  Jeb Bush campaigned for governor on a clear and bracing set of education reforms in 1998. Having won office, he immediately pursued a dual-track strategy of education reform: standards and accountability for public schools, and choice options for dissatisfied parents. Florida lawmakers followed these reforms with additional measures, including instruction-based reforms; the curtailing of “social promotion,” which advances students to higher grades regardless of academic achievement; merit pay for teachers; and additional choice measures. This study examines the 10-year impact of these reforms and finds remarkable improvement in Florida’s test scores. In 1999, when these reforms were enacted, nearly half of Florida fourth-graders scored “below basic” on the NAEP reading test, meaning that they could not read at a basic level. But by 2007, less than a decade after the education reforms took effect, 70 percent of Florida’s fourth-graders scored basic or above.

  
  
  
• Family, Culture & Community
  

  Abortion Essentials

  By James D. Agresti, Just Facts Foundation
  
  Report, 10/07/2008
  

  This page contains essential facts about the issue of abortion, including the topics of: Science; Politics and Taxpayer Funding; Women’s Health; Media; Parental Consent & Notification; Partial Birth; Constitution & Law; and Live Births.

  
  
  
• Information Technology
  

  Public Interest Ex Parte Comment on Intercarrier Compensation and Universal Service

  By Jerry Ellig, Mercatus Center
  
  Testimony, 10/07/2008
  

  The Federal Communications Commission (FCC) announced on September 4 that it is seeking comments in its Biennial Review of telecommunications regulations. These regulations include regulation of interconnection and access charges. In addition, the commission faces a court-imposed November 5 deadline to issue a final order justifying its intercarrier compensation rules governing local calls to dialup Internet Service Providers. In addition to transferring wealth from telephone customers in general to a subset of local phone companies and their customers, intercarrier compensation at current rates diminishes overall consumer welfare. This occurs for two reasons: (1) the charges apply to services whose demand is price-sensitive, such as long-distance and wireless, and (2) the charges are usually per-minute charges, which act as a tax on usage.

  
  
  
• Economic and Political Thought
  

  The Austrian School

  By Jesus Huerta de Soto, Institute of Economic Affairs
  
  Book, 10/07/2008
  

  The Austrian School is a concise but comprehensive exposition of the main tenets of the modern Austrian School of Economics while also providing a detailed explanation of the differences between the Austrian and the neoclassical (including the Chicago School) approaches to economics. The book also includes: reviews of the contributions of the main Austrian economists, critical analysis of the major objections to Austrian economics and an evaluation of its likely future development; complete exposition on the concepts and implications of entrepreneurship and dynamic competition; a new concept of dynamic efficiency (as an alternative to the standard Paretian criterion) and a generalized definition of socialism (as a systematic aggression against entrepreneurship); and evaluation of the role of Spanish Scholastics of the 16th century as forerunners of the Austrian School, as well as the influence and contributions of the main Austrian Scholars of the 19th and 20th centuries.

  
  
  
• Economic and Political Thought
  

  Power Against People: A Christian Critique of the State

  By Philip Vander Elst, Institute of Economic Affairs
  
  Report, 10/07/2008
  

  Ever since that period in European history known as the ‘18th century Enlightenment,’ the idea has firmly taken root in Western culture that the power of the State should be harnessed and mobilized for beneficial purposes. Whether the objective has been the elimination of poverty or the education of the people, the furtherance of social harmony or the achievement of greater equality of opportunity, there has long been a general tendency amongst most people – including Christians – to view Government as a positive force for good and the best vehicle for achieving positive social change. Confronted by some problem or injustice, most people today typically look to the State for a solution and blame politicians when things go wrong. The purpose of this paper is to challenge this mentality by inviting readers to look more closely at the coercive nature of the State and its negative record in history.

  
  
  
• Education
  

  Regular Assessment Integral to English Learner Success

  By Don Soifer, Lexington Institute
  
  Issue Brief, 10/07/2008
  

  It has become common, when discussing education in the No Child Left Behind (NCLB) era, to describe students, often English Language Learners in particular, “filling in bubbles on standardized tests.” Such conversations frequently consider whether the time students spend taking tests is excessive, whether the English-language exams are understandable to speakers of other languages, and, ultimately, whether “teaching to the test” is the right direction to steer American schools. Given the significance of NCLB’s historic requirements linking federal school funding to students’ performance on standardized tests, such questions are vital. For English learners, this change has been especially dramatic, because that is the sector of American public education which for decades has had the least emphasis on students’ academic performance. It is with their interests in mind that the National Council of La Raza has repeatedly called for requiring schools to assess all English learners, and count their scores equally in their broader accountability determinations.

  
  
  
• National Security
  

  Missile Defense: The World Has Changed

  By Loren B. Thompson, Lexington Institute
  
  Lecture, 10/07/2008
  

  Today marks the beginning of a new federal fiscal year, and it doesn’t take great insight to grasp that this year’s budget deliberations are likely to be a bit different from those of previous years. For starters, many believe that the economy is teetering on the edge of collapse, and that after eight years of rapid growth in public and private debt, a prolonged period of de-leveraging has begun. If that is true, then policymakers are likely to look to the nation’s defense posture for some of the savings necessary to put government expenditures into closer alignment with tax receipts. So now is a good time to ask which military missions deserve to receive the highest priority going forward, and which can become bill-payers for more pressing needs. Lexington Institute is sponsoring today’s conference in part because we believe ballistic missile defense is one of the missions which must continue to receive highest national priority.

  
  
  
• National Security
  

  Future Security: Keeping TSAT On Track Is Essential

  By Loren B. Thompson, Lexington Institute
  
  Issue Brief, 10/07/2008
  

  Under Bush, U.S. defense outlays have risen to nearly half of the global total. As a result, President Bush is leaving a gift for his successor amidst the wreckage of his administration. It is a series of networking initiatives such as the Joint Tactical Radio System and the Army’s Future Combat Systems that will enable America’s military to regain the initiative in global security if President Obama or President McCain have the good sense to appreciate what they have inherited. Foremost among these visionary initiatives is Transformational Satellite Communications, better known as TSAT (“Tee-Sat”). TSAT is a constellation of five communications satellites linked to tens of thousands of portable receivers that would deliver internet-like connectivity to every U.S. warfighter in the world – flexibly and securely, no matter where they are and what their circumstances.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Wind Farms in the Ocean? Maybe Not

  By John Dale Dunn, Heartland Institute
  
  Report, 10/07/2008
  

  While we hear of the great potential of wind turbines at sea, the reality reminds us of the experience of every American rancher and farmer who was in business before 1940 and depended on windmills, which were high maintenance and unreliable at their best. The offshore wind farms of Europe are a mess and getting worse. Offshore is a niche, says Ditliv Engel, chief executive of the company Vestas, which makes sea-based turbines. “Looking ahead, it will basically be onshore.” In the meantime, the Lisa A, a key rig for an offshore Robins Rigg Wind Farm in the Irish Sea, is languishing at sea, the key for a 180 mgw project—though 180 mgw is hardly worth the trouble, since the actual output at 30 to 35 percent of capacity is less than 10 percent of a standard coal-fired plant.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Subsidies Make the Energy World Go ’Round

  By John Dale Dunn, Heartland Institute
  
  Report, 10/07/2008
  

  The green energy and alternative energy movements are on the march. The subsidies for solar, wind, geothermal, and hydro energy are in place and poised for any program that passes the test—is it something other than old reliable coal and oil? Although the U.S. Energy Information Administration reports that federal energy subsidies have risen from $8 billion to $16 billion annually in the past seven years, there has been no change in total energy production in America, and very little change in the proportions of sources. Clearly our consumption is not up that much so the dramatic increase in energy prices has to do with the world demand and the value of the dollar. America is conserving or using less for a growing economy over the past decade. No time for panic and scare mongering.

  
  
  
• Monetary Policy/Financial Regulation
  

  FDIC Is Putting Taxpayers at Huge Risk

  By Matthew Glans, Heartland Institute
  
  Report, 10/07/2008
  

  Many pro-market economists have been explaining for years that the Federal Deposit Insurance Corporation (FDIC) banking system creates an intolerable risk for banks and the economy. They say the federal government’s guarantee for deposits, low reserve requirements on deposits, and the small FDIC Deposit Insurance Fund have created a moral and financial hazard for the nation’s banks. If the recent credit and banking crisis has shown anything, it is that the moral hazard of government guarantees can provoke financial disasters that jeopardize the economy. A free-market banking system would encourage investors, insurers, and savers to reward banks with stronger equity positions and less subprime mortgage debt. Transitioning from FDIC banking insurance to a free-market deposit insurance system will not only make our banks sounder but will also protect taxpayers from billion-dollar bank failures. The focus of reform should be to move deposit insurance gradually away from FDIC and into the private market.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Farmers to Bear Brunt of Global Warming Legislation

  By James M. Taylor, Heartland Institute
  
  Environment & Climate News, 10/07/2008
  

  Farmers around the world will soon be paying a steep price for global warming legislation, according to the Carbon Sense Coalition (CSC), an international group of citizens and scientists concerned about the economic and social costs of over-the-top global warming legislation. CSC Chairman Viv Forbes, an Australian rancher and soil scientist, warns global warming legislation will inevitably include restrictions on emissions from farm animals. Once global warming activists have their legal mandates to restrict carbon dioxide, it is only a matter of time before activists target farmers and subject them to the brunt of punishment under any carbon reduction scheme, Forbes said.

  
  
  
• Monetary Policy/Financial Regulation
  

  Anatomy of a Train Wreck: Causes of the Mortgage Meltdown

  By Stan J. Liebowitz, Independent Institute
  
  Policy Report, 10/07/2008
  

  This report concludes that, in an attempt to increase home ownership, particularly by minorities and the less affluent, virtually every branch of the government undertook an attack on underwriting standards starting in the early 1990s. This weakening of underwriting standards succeeded in increasing home ownership and also the price of housing, helping to lead to a housing price bubble. The price bubble, along with relaxed lending standards, allowed speculators to purchase homes without putting their own money at risk. The recent rise in foreclosures is not related empirically to the distinction between subprime and prime loans since both sustained the same percentage increase of foreclosures and at the same time. Nor is it consistent with the “nasty subprime lender” hypothesis currently considered to be the cause of the mortgage meltdown. Instead, the important factor is the distinction between adjustable-rate and fixed-rate mortgages.

  
  
  
• Budget & Taxation
  

  Congress Should Develop Smart, Cost-Effective Natural Catastrophe Policy

  By Eli Lehrer, Competitive Enterprise Institute
  
  Report, 10/07/2008
  

  Given one more hurricane season like that of Katrina and Rita, American taxpayers will be looking at billion dollar burdens if pending “natural catastrophe” legislation is enacted. As Congress moves towards a conference on National Flood Insurance Program reforms, members need to keep not only costs in mind, but public safety, fairness, budgetary priorities and sound environmental stewardship as well. Government has a role in making the country more storm resistant but, the new cost figures should remind Congress that it shouldn’t mortgage the country to provide subsidies for coastal residents.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Will More Drilling Increase U.S. Energy Security?

  By Iain Murray , Competitive Enterprise Institute
  
  Report, 10/07/2008
  

  I have stressed repeatedly that “drill, baby, drill” is a slogan, not a comprehensive energy security policy, yet Mr. Abraham insists on treating it as such. A comprehensive policy must include increased investment in infrastructure, alternative sources of electricity to meet the demand for electric cars that will help ensure that we do not need any more than 8 million barrels per day by 2030, and so on. Yet increased domestic oil drilling must form a part of such a comprehensive policy, to help reduce the effects of hostile governments cutting off supply and to provide increased resilience to price volatility caused by natural disasters. The rest of the world recognizes this, with even the European Union energy commissioner backing drilling in the Arctic.

  
  
  
• Economic Growth
  

  Private Equity: Capitalism’s Misunderstood Entrepreneurs and Catalysts for Value Creation

  By David Haarmeyer, Independent Institute
  
  Report, 10/07/2008
  

  Leveraged buyout firms, which have grown rapidly in recent years, create economic value by curbing the resource waste and corporate malfeasance that can hold back or sink public companies. Unfortunately, ignorance about what they do, the threat they pose to incompetent corporate managers and poor money managers, and biases against highly profitable financial enterprises may provoke a legal and regulatory backlash that would discourage the economically beneficial activities that they and other types of private-equity partnerships undertake.

  
  
  
• Economic and Political Thought
  

  Was Keynes a Liberal?

  By Ralph Raico, Independent Institute
  
  Report, 10/07/2008
  

  If genuine liberalism relies on free markets and civil society to solve economic and social problems, then the “Keynesian Revolution” signaled its abandonment. Why, then, do many historians consider John Maynard Keynes—a neomercantilist and welfare statist—to have been a great liberal in the tradition of Locke, Smith, and Jefferson? There is no doubt that throughout his life Keynes endorsed various broad cultural values, such as tolerance and rationality, that are often referred to as “liberal,” and, of course, he always called himself a liberal (as well as a Liberal—that is, a supporter of the British Liberal Party). But none of this carries great weight when it comes to classifying Keynes’s political thought.

  
  
  
• Foreign Policy/International Affairs
  

  With Friends Like These, Who Needs Enemies? Aiding the World’s Worst Dictators

  By Christopher J. Coyne, Matt E. Ryan, Mercatus Center
  
  Working Paper, 10/06/2008
  

  Despite rhetoric supporting liberal values and institutions, the governments of developed countries provide continued development and military assistance to the world’s worst dictators. This aid sustains the status quo and imposes significant costs on ordinary citizens. This paper reviews the foreign aid provided to the worst living dictators. We consider arguments for the continued provision of aid as well as reasons why aid fails to improve the situations in countries ruled by these dictators. The main conclusion is that if the goal of developed countries is to foster liberal economic, political and social institutions abroad, they should cease providing aid to the world’s worst dictators.

  
  
  
• Transportation/Infrastructure
  

  Big Yards or Green Space?

  By Elizabeth Kopits, Virginia McConnell, Margaret Walls, Cato Institute
  
  Report, 10/06/2008
  

  Our results suggest why we may not see many clustered subdivisions on the urban-rural fringe without government regulations requiring such clustering. Households appear to value strongly their own private lots. While we do find in our analysis that households value having more open space in their subdivisions, and they value having a lot that is adjacent to subdivision open space, they do not value those amenities nearly as much as a larger lot. Thus, reducing private acreage to provide more public subdivision open space tends to lead to overall reductions in house prices, all else equal.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Value of ‘Cooling Off’

  By Brian Daugherty, Denise Dickins, Cato Institute
  
  Report, 10/06/2008
  

  Firms often find it both efficient and effective to hire accounting overseers who have previously served as members of the firm’s external audit engagement team. The Sarbanes-Oxley Act of 2002 mandated that an auditing firm’s independence is impaired if a former member of a public company’s audit engagement team (without regard to level, tenure, or extent of involvement) accepts a supervisory accounting position or financial reporting oversight role with the audit client, unless that individual observes a one-year “cooling off” period. We question whether investors prefer this “one size fits all” mandate, or whether a company-specific disclosure alternative would have equal or greater value relevance. As evidenced by investors’ reactions to other accounting-related disclosures, company-specific disclosures are indeed a likely effective and efficient solution to auditor independence issues.

  
  
  
• Monetary Policy/Financial Regulation
  

  Clearing Up Misconceptions on Clearing

  By Craig Pirrong, Cato Institute
  
  Report, 10/06/2008
  

  Serious attempts to undermine exchange market power must involve measures designed to handle the liquidity network effect—through mandated market linkages, for instance—and constrain the ability of clearers to exploit scale economies and charge supracompetitive prices. A dual track is required because scale economies in both activities foster market power; addressing one without confronting the other is clearly inadequate and will almost certainly make matters worse. But regulators would be advised to tread very carefully, as the devil is truly in the details. Poorly conceived and implemented efforts could result in outcomes worse than the admittedly imperfect status quo.

  
  
  
• Crime, Justice & the Law
  

  Legal Barriers to Innovation

  By Gillian K. Hadfield, Cato Institute
  
  Report, 10/06/2008
  

  Few commentators, outside of the practicing bar and the judiciary, find much to recommend the modern system of professional regulation of lawyers. Legal scholars concerned about access to justice have often been scathing about what they perceive as self-serving claims by the American Bar Association that legal regulation is in the public interest. Without a significant shift in the United States, the American legal profession is likely to grow increasingly out of step with the needs of a transformed global economy. American lawyers have long dominated in international legal circles, largely because of their greater orientation to problem solving and strategy in the provision of traditional legal services. Truly innovative lawyering for the new economy, however, needs a far less restrictive and myopic regulatory model.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Global Warming: Collecting the Data

  By Patrick J. Michaels, Cato Institute
  
  Report, 10/06/2008
  

  All historical temperature records agree: the planet is warmer than it was. But those histories are subject to a number of biases, some of which are obvious while others are very subtle. The most obvious bias is that weather stations in cities do not need “global warming” in order to report warmer temperatures. The city’s ever-increasing amounts of bricks, buildings, and pavement retain heat, absorb more of the sun’s energy, and impede the flow of ventilating winds. Mathematical simulations of climate tend to project a constant rate of warming, once warming from changes in greenhouse gases begins and is established. Indeed, the observed rate of warming (either with or without our adjustment) has tended to be constant. Our revised temperature record suggests that the warming of the 21st century will be around 1.4ºC (2.5ºF), which is at the extreme low end of the range of projections currently given by the United Nations’ Intergovernmental Panel on Climate Change.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  A Looming Policy Disaster

  By Jason Scott Johnston, Cato Institute
  
  Report, 10/06/2008
  

  After decades of activism by environmentalists, American policymakers are embracing the notion that climate change is a serious problem and that the United States must take action to lower greenhouse gas emissions. The recent wave of global warming legislation and litigation represents a triumph for climate change activists. But it is in no way a rational, economically sound response to the problems potentially raised by global warming. Instead, the legislation and litigation seem to be products of an adversarial campaign that has presented a very one-sided and hence misleading story about global warming science, about the likely costs and benefits of global warming on Americans’ health and welfare, and about the ability of the United States to act alone to alter possible future paths of global warming.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Big Bailout—What Next?

  By Warren Coats, Cato Institute
  
  Report, 10/06/2008
  

  The administration has told us that American financial markets are in a perilous state because of recent and prospective losses of financial institutions that threaten the adequacy of their capital and because of the illiquidity and presumed market underpricing of Mortgage Backed Securities (MBSs). Both of these have increased banks’ demand for liquidity and tightened bank lending standards. A credit crunch, which would worsen an economic slow down, could result if markets for normally liquid assets such as MBSs and bank capital are not restored.

  
  
  
• Foreign Policy/International Affairs
  

  A “Third Neighbor” Strategy for Asia

  By Michael Auslin, American Enterprise Institute
  
  Report, 10/06/2008
  

  As the United States loses ground in Asia, the struggle for influence is heating up, with small states caught between authoritarian and democratic nations alike. The pressure being put on these small states provides a rare opportunity for the United States to play the role of an honest broker, working to reduce tensions and promote liberalism. By adopting a new “third neighbor” strategy, the next U.S. president could begin to rebuild America’s position in Asia, interacting more effectively with emerging democracies, engaging older allies more fully, and helping friends pursue regional stability more successfully.

  
  
  
• Monetary Policy/Financial Regulation
  

  Investment Bank Regulation

  By Peter J. Wallison, American Enterprise Institute
  
  Testimony, 10/06/2008
  

  In cases where investors see themselves as bearing no risks for lending to a private, shareholder-owned company, strong regulation is essential. That is the only way that the government can protect itself against loss. If investment banks had been left free of government oversight, they would not—in my view—have been able to borrow the funds that created their extraordinary leverage. If our solution to today’s crisis is to regulate hedge funds, private equity funds, finance companies, institutional lenders, pension funds, leasing companies, and insurance companies—and anyone else who participates in the capital markets without any government backing—we will simply be assuring ourselves of many more financial crises in the future.

  
  
  
• Economic Growth
  

  September’s Jobs Report Is Grim

  By Rea S. Hederman, James Sherk, The Heritage Foundation
  
  WebMemo, 10/06/2008
  

  The Department of Labor Statistic’s September report on employment heightened concerns about an economy tipping into a recession. In September, the economy lost 159,000 jobs while the employment rate held constant at 6.1 percent. September is the 10th straight month of the private labor market contracting. This jobs report is not surprising in light of the overall downturn of the economy. The economy is slipping off the edge and could be headed into another recession. The government should not enact legislation that does little to support the economy, like the elements of the second proposed stimulus bill. The government should also be careful in creating a lot of burdensome regulation that will restrict growth when the economy does turn around.

  
  
  
• Foreign Policy/International Affairs
  

  Averting Disaster in Argentina: The Case for Economic Freedom

  By James M. Roberts, The Heritage Foundation
  
  Backgrounder, 10/06/2008
  

  The irresponsible economic policies pursued by the government of Argentina in the wake of its sovereign debt default in 2001, and its debt-restructuring offer in 2005, provide a vivid case study of the root causes of Argentina’s steadily declining scores in the annual Index of Economic Freedom published by The Heritage Foundation and The Wall Street Journal. The Kirchners should take note of and implement the steps needed to correct all of the deficiencies described in the 2008 Index of Economic Freedom, for the good not only of their own citizens but of all South America. The government must also be honest about the true rate of inflation and cease efforts to manipulate the value of the peso. The government of Argentina has an obligation to its citizens to reach some sort of agreement with all external creditors so that it can regain full access to world financial markets.