Recent Policy Studies

• Economic Growth
  

  Crying for Argentina

  By Jaime Daremblum, American Enterprise Institute
  
  The American, 11/03/2008
  

  The steep fall in global commodity prices over the past several weeks has brought Argentina to the brink of fiscal collapse—alas, not an unfamiliar position for the South American country. For far too long, the Argentine government behaved as if commodity prices would keep rising forever. It spent like a drunken sailor and made unsustainable commitments to the public sector. Such irresponsible fiscal policies were promoted aggressively by Argentine President, Néstor Kirchner, and continued by his wife, Cristina, who in 2007 was elected to succeed her husband as president. In order to move forward, Argentine politicians must come to terms with what really caused their economic meltdown in 2001. As journalist and Latin America expert Michael Reid wrote, “What killed Argentina’s economy in 2001 was not ‘neoliberalism’ or the free-market reforms, but a fiscal policy incompatible with the exchange-rate regime, and a lack of policy flexibility.”

  
  
  
• Health Care
  

  Obama’s Plan to End Private Health Insurance

  By Grace-Marie Turner, American Enterprise Institute
  
  The American, 11/03/2008
  

  The centerpiece of Barack Obama’s healthcare plan may not seem revolutionary at first. Obama would seek to establish a new public health insurance program that would be offered alongside private insurance packages. This would give consumers a real choice in deciding whether the government or the private sector is better at providing medical coverage, he says. When explained this way, the Obama plan sounds like a nonpartisan, common-sense approach to healthcare reform. But don’t be fooled: it would lead to the deterioration of the private health insurance market, with the federal government—read: taxpayers—covering an increasingly large share of the U.S. population. Through the new National Health Insurance Exchange, participants would be able to purchase private coverage or buy into a new federal insurance program. On the surface, this arrangement seems fair. But ultimately, the federal government would heavily regulate the cost and content of private health insurance, albeit indirectly.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Fed’s Big Experiment

  By Vincent R. Reinhart, American Enterprise Institute
  
  The American, 11/03/2008
  

  Last week, the Federal Open Market Committee lowered its target for the federal funds rate by half a percentage point to 1 percent. What most people do not realize is that this target is no longer the operative instrument of U.S. monetary policy, and that the real work is being done through the massive creation of bank reserves. The main liability on the Federal Reserve’s balance sheet is now fiat money, which cannot be redeemed by the private sector. A central bank can create fiat money at will. It is not a coincidence that the country which invented paper money almost a millennium ago—China—also experienced the world’s first hyperinflation not long thereafter. But a central bank can also constrain itself. For the past 25 years, the Fed’s self-constraint of choice has been a target for the overnight federal funds rate, or the price banks charge among themselves in the trade of reserves.

  
  
  
• Budget & Taxation
  

  Don’t Raise Capital Gains Taxes

  By Lee E. Ohanian, American Enterprise Institute
  
  The American, 11/03/2008
  

  Barack Obama’s economic plan would raise federal tax rates on capital gains, dividends, and other forms of capital income. Many voters might respond with a collective shrug. These tax hikes would only affect the wealthiest Americans, right? Think again. Increasing taxes on capital income goes against current economic thinking on how to finance government spending. Indeed, taxing capital income ultimately hurts the very people it was supposed to help. It reduces investment, which reduces the amount of capital in the economy. A lower capital stock reduces economic growth, productivity, job creation, and wages.

  
  
  
• Economic Growth
  

  Foreign Aid: What Works and What Doesn’t

  By Nicholas Eberstadt, Carol C. Adelman, American Enterprise Institute
  
  Development Policy Outlook, 11/03/2008
  

  The U.S. foreign aid system is broken and must be overhauled. That was the conclusion of the congressionally mandated Helping to Enhance the Livelihood of People around the Globe Commission, on which we served and whose final report was released in December 2007. Our commission’s consensus was no surprise: in Washington today, there are few other policy conclusions that elicit such universal and bipartisan agreement. Indeed, over the years, scholars and policymakers have acquired a better understanding of whether, where, and how foreign aid can promote growth and improve public services. With very few exceptions, those insights have yet to result in a new “business model” for U.S. foreign aid. Yet a new business model is manifestly required if development assistance is to avoid endlessly repeating past mistakes—or if it is to capitalize upon important emerging opportunities.

  
  
  
• Monetary Policy/Financial Regulation
  

  More Panic

  By John H. Makin, American Enterprise Institute
  
  Economic Outlook, 11/03/2008
  

  Over the past several months as central banks and treasuries have struggled to manage a financial panic and avoid or diminish its soon-to-appear devastating impact on the global economy, I have often thought about the efforts of two great economists to understand the lessons of the Great Depression. John Maynard Keynes’s monumental General Theory of Employment, Interest and Money, published in 1936, showed how a failure to understand the nature of the demand for money contributed to the Great Depression. In their masterful 1963 work A Monetary History of the United States, Milton Friedman and Anna J. Schwartz showed the Federal Reserve’s failure to prevent a collapse in the supply of money (and thereby a devastating global depression that lasted for half a decade). The appropriate roles for monetary and fiscal policy after a financial collapse, articulated in the great scholarly works of Keynes and Friedman, provide worthy guides today.

  
  
  
• Education
  

  The Costs of Failure Factories in American Higher Education

  By Mark Schneider, American Enterprise Institute
  
  Education Outlook, 11/03/2008
  

  American higher education absorbs a larger share of gross domestic product than that of other countries, but it has not produced a particularly high proportion of college graduates. College graduation rates are actually worse than the very low benchmark of high school graduation rates, but higher education institutions are not held accountable. The costs of this abysmal performance to students and taxpayers are high. Colleges let many students begin who do not have the skills and talent needed to graduate with the expectation that even if many fail, an open access system gives students opportunities to grow and succeed. At minimum, the flow of information needs to be improved so that students and their families can choose colleges at which they will have a higher likelihood of success. We also need to consider seriously how to hold colleges and universities more accountable for their performance.

  
  
  
• Monetary Policy/Financial Regulation
  

  Systemic Risk and the Financial Crisis

  By Peter J. Wallison, American Enterprise Institute
  
  Financial Services Outlook, 11/03/2008
  

  The current financial crisis has sharpened interest—on the part of both the public and policymakers—in both stronger regulation and the extension of regulation to new areas. One of the theories for doing so is concern that the failure of one institution can, by passing its losses to others, create systemic risk. In this analysis, the current crisis is presented as an example of systemic risk becoming reality. To prevent a recurrence, greater regulation, covering a wider range of participants in the financial markets, is necessary. However, there is as yet no evidence that the current crisis was the result of systemic risk, which is characterized by a kind of contagion. Instead, the crisis appears to have arisen from the failure of traditional regulated institutions—in a particularly dramatic case of herd behavior—to limit their risk-taking.

  
  
  
• Regulation & Deregulation
  

  FDA Preemption and Patient Welfare in Wyeth v. Levine

  By John E. Calfee, American Enterprise Institute
  
  Health Policy Outlook, 11/03/2008
  

  Wyeth v. Levine, which will be heard by the Supreme Court on November 3, 2008, is a lawsuit at the boundary between the state tort liability system and Food and Drug Administration (FDA) regulation of pharmaceuticals. The essential question is whether a pharmaceutical firm that fully complies with FDA regulations, including the provision of safety information, can be sued in state courts for failure to warn about drug safety, side effects, and other concerns. Patients will be better off if FDA preemption is upheld by the Supreme Court, but the path to that conclusion lies in the facts of the case itself, in the nature of the liability system, and especially in certain features of the FDA.

  
  
  
• International Trade/Finance
  

  Europe Catches Pneumonia

  By Desmond Lachman, American Enterprise Institute
  
  International Economic Outlook, 11/03/2008
  

  The current global financial market crisis will claim its share of casualties. Prominent among them may be any further expansion of the European Monetary Union. It is also more than likely that today’s global financial market crisis will mark the end of any serious challenge by the euro to the U.S. dollar as an alternate international reserve currency. Not only will a deep and long global economic recession put severe strain on the current fifteen-country euro area, it will also expose the acute external vulnerabilities of those twelve Eastern European countries that are aspiring to full euro area membership.

  
  
  
• Retirement/Social Security
  

  Still a Good Idea

  By Andrew G. Biggs, American Enterprise Institute
  
  On the Issues, 11/03/2008
  

  As the financial crisis takes its toll on the American economy and the stock market, Senator Barack Obama has used this situation to refocus attention back to Social Security reform, criticizing personal investment accounts. A careful examination of their returns shows that they would have done well even given the market’s recent losses. While it is not clear that markets will offer growth in the future, personal retirement accounts could prove a valuable way to prefund retirement benefits and reduce the cost burdens on the workers of tomorrow.

  
  
  
• Monetary Policy/Financial Regulation
  

  Another “Deregulation” Myth

  By Charles W. Calomiris, American Enterprise Institute
  
  On the Issues, 11/03/2008
  

  Media reports and the Barack Obama campaign continue to propagate the fiction that the current financial crisis was caused, in large part, by Republican deregulation. The commonly used example is the 2004 change in the Securities and Exchange Commission’s rule on net capital. The rule change, which proved unsuccessful in avoiding the problems at Lehman Brothers and Bear Stearns, was not an example of deregulation but of failed regulation. Even after documenting the many ways that Washington encouraged the housing bubble, the media and Democrats continue to search for evidence to blame it all on “deregulation.” One alleged perpetrator, the Gramm-Leach-Bliley Act, was released without charges after the record revealed that Senator Joe Biden voted for it and Bill Clinton signed it into law. More to the point, investment banks were already free—prior to the 1999 law—to invest in the same assets that have wreaked such havoc today.

  
  
  
• Monetary Policy/Financial Regulation
  

  An Artifact of Law: U.S. Prohibition of Retail Hedge Funds

  By Houman B. Shadab, Mercatus Center
  
  Working Paper, 10/31/2008
  

  The U.S. hedge fund market is one of the largest and most sophisticated hedge fund markets in the world, yet due to U.S. securities regulation, it is also one of the least accessible. In the United States, federal securities law requires individuals to be wealthy to qualify to invest in hedge funds. Nonwealthy individuals, or “retail” investors, are effectively prohibited from purchasing hedge fund securities. Wealth-based qualifications are meant to ensure that those investing in hedge funds possess enough financial sophistication to make informed investment decisions. However, the application of wealth-based qualifications to hedge fund investors is more an artifact of the specific regulatory framework under which the funds operate than a reflection of any fundamentally unique economic characteristics of the funds.

  
  
  
• Crime, Justice & the Law
  

  A More Modest Court: The Ohio Supreme Court’s Newfound Judicial Restraint

  By Jonathan H. Adler, Christina M. Adler, Federalist Society
  
  White Paper, 10/31/2008
  

  The Ohio Supreme Court has changed significantly over the past six years, in large part due to changes of court personnel. Four new justices have joined the court since 2002. Significant turnover on the court has produced significant change in the court’s approach to many legal issues, in particular the degree of deference shown to legislatively enacted policies. During the 1990s, the court developed a reputation for aggressively intervening in controversial policy matters, from tort reform to school funding, as well as for, as some contend, its embrace of dubious legal arguments. Beginning in 2002, things started to change. The replacement of several justices and public reaction to the court’s posture caused a shift in the Court’s overall orientation. Whereas the Ohio Supreme Court had previously declared various legislatively enacted tort reforms unconstitutional, it now applies a presumption of constitutionality to legislative enactments more consistently.

  
  
  
• Economic Growth
  

  Casinos No Panacea for Ohio’s Economic Malaise

  By Samuel R. Staley, Buckeye Institute for Public Policy Solutions
  
  Report, 10/31/2008
  

  They say desperate times call for desperate measures, and economic times seem truly bleak in Wilmington, Ohio. A $600 million resort and casino complex certainly seems enticing. The project would involve a 1,500 room hotel, a first class golf course, 5,000 slot machines, 150 gaming tables, and a poker room big enough for 20 tables. The resort, as proposed, would be a first class gambling establishment. Lakes Entertainment, the company developing the casino, believes the resort will create 5,000 permanent jobs averaging $34,000 per year. Despite these rosy numbers, Ohioans should recognize the limited economic potential of this project in Wilmington and other locations in the state. While the scale is large, the Wilmington casino’s impact outside Clinton County is likely to be much more modest, possibly even negative. The reason is fairly straightforward: Casinos don’t produce services and products that people outside Ohio want or will pay to travel to.

  
  
  
• Monetary Policy/Financial Regulation
  

  Nine Myths about Payday Lending

  By Tom Lehman, Marc Kilmer, Buckeye Institute for Public Policy Solutions
  
  Policy Brief, 10/31/2008
  

  The debate over Issue 5, which concerns the regulation of the payday lending industry in the state, is not only a good case study about payday lending but also about the free market and sound public policy. If you claim to be a supporter of the free market and yet support banning a service with which you personally disagree, your commitment to freedom is not very strong. The common myths being circulated about payday lending over the past year in the state of Ohio are easily dispelled by looking at readily available scholarly literature. For example, that payday lenders trap borrowers in a “cycle of debt” is simply untrue: any "cycle of debt" payday borrowers experience is not caused by payday loans. It is caused by their prior financial situation, a situation from which a payday loan may actually help them escape.

  
  
  
• Budget & Taxation
  

  The States’ Struggle for Sovereignty: The Consequences of Federal Mandates

  By Benjamin Barr, American Legislative Exchange Council
  
  ALEC Policy Forum, 10/31/2008
  

  Federalism is rooted in the concept of dual sovereignty. The Constitution created a federal government with limited and enumerated powers. In turn, the Tenth Amendment to the Constitution provides that powers not resting with the federal government “are reserved to the States respectively, or to the people.” As states become more reliant on federal mandates, the nation’s underlying system of federalism shifts from one of partnership to a master-servant relationship. At first impression, it may seem hard to see the problem with federal transfer payments to the states. After all, state taxpayers finance a good portion of federal payments to state and local governments. Upon inspection, however, large-scale federal funding of state services is a two-edged sword. Federal funds distort legislative policy preferences and priorities, place bureaucratic agencies beyond legislative control, and lock states into expensive funding commitments. Once states become habitual users of federal funds, they become dependent on them.

  
  
  
• National Security
  

  The New Cold War: Reviving the U.S. Presence in the Arctic

  By Ariel Cohen, Lajos F. Szaszdi, Jim Dolbow, The Heritage Foundation
  
  Backgrounder, 10/31/2008
  

  The Arctic is quickly reemerging as a strategic area where vital U.S. interests are at stake. The geopolitical and geo-economic importance of the Arctic region is rising rapidly, and its mineral wealth will likely transform the region into a booming economic frontier in the 21st century. The coasts and continental shelf of the Arctic Ocean are estimated to hold large deposits of oil, natural gas, and methane hydrate (natural gas) clusters along with large quantities of valuable minerals. With the shrinking of the polar ice cap, extended navigation through the Northwest Passage along the northern coast of North America may soon become possible with the help of icebreakers. Similarly, Russia is seeking to make the Northern Sea Route along the northern coast of Eurasia navigable for considerably longer periods of the year. Opening these shorter routes will significantly cut the time and costs of shipping.

  
  
  
• The Constitution/Civil Liberties
  

  Same–Sex Marriage and the Threat to Religious Liberty

  By Thomas M. Messner, The Heritage Foundation
  
  Backgrounder, 10/31/2008
  

  Judicial decisions redefining marriage to include same–sex unions are precipitating a coming storm of social and legal conflicts that threaten to severely burden the freedom to openly express support for marriage as a relationship between a man and a woman. The threats to religious liberty associated with same–sex marriage are acknowledged by both those who support and those who oppose redefining marriage. Decisions to redefine marriage to include same–sex unions rest on the assumption that traditional marriage laws embody unacceptable prejudices against homosexual persons. This understanding leads society to regard support for confining marriage to the relationship between a man and a woman as a form of irrational prejudice that should be purged from society.

  
  
  
• Immigration
  

  Tackling Fraud in H–1B: Work Visas Need Sensible Oversight

  By Diem Nguyen, James Jay Carafano, The Heritage Foundation
  
  WebMemo, 10/30/2008
  

  In September, USCIS released the “H-1B Benefit Fraud and Compliance Assessment,” where it found that 51 of the 246 sampled H-1B petitions (about 21 percent) were fraudulent. Some examples of fraud are petitions from businesses that do not exist, employers paying less than the required prevailing wage, or visa holders working a different job than what was stated in the petition. H-1B visas allow U.S. employers to hire foreign workers for specific periods in certain specialty occupations. Ensuring the integrity of our visa programs is a critical aspect of reforming the existing legal avenues available to foreigners coming to the United States. Getting employers the workers they need to grow the economy while addressing legitimate security concerns and ensuring the integrity of the non-immigrant visa system is vital.

  
  
  
• Budget & Taxation
  

  The Effect of the Presidential Candidates’ Tax Plans on Flow-Through Businesses

  By Robert Carroll, Tax Foundation
  
  Fiscal Facts, 10/30/2008
  

  The Presidential candidates’ tax plans would take the country in two very different directions. One aspect of their plans is how they would affect the entrepreneurial sector. This sector, which tends to be comprised of small businesses, is particularly important to the U.S. economy. It is an important source of innovation and risk-taking, it creates between 60 and 80 percent of net new jobs, it employs over half the labor force, and it generates more than one half of the nation’s gross domestic product. An often underappreciated feature of the U.S. tax system is that most small businesses are not required to pay the corporate income tax. Instead, small business income “flows through” to the owners who report it on their individual income tax returns and pay taxes due. Indeed, about 35 percent of business taxes are paid in this manner by the owners of “flow-through” businesses—sole proprietorships, partnerships and S corporations.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Yes We Have No Bananas: A Critique of the “Food Miles” Perspective

  By Hiroko Shimizu, Pierre Desrochers, Mercatus Center
  
  Report, 10/30/2008
  

  As modern food production and distribution becomes ever more complex and globalized, a “buy local” food movement has arisen. The local food movement has even coined a term, “food miles,” to denote the distance food has traveled from production to consumption and uses the food miles concept as a major way to determine the environmental impact of a food. This Policy Primer examines the origins and validity of the food miles concept. The evidence presented suggests that food miles are, at best, a marketing fad that frequently and severely distorts the environmental impacts of agricultural production. At worst, food miles constitute a dangerous distraction from the very real and serious issues that affect energy consumption and the environmental impact of modern food production and the affordability of food.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Invisible Green Hand

  By Andrew Reed, Pierre Desrochers, Mercatus Center
  
  Report, 10/30/2008
  

  Protecting the environment, both in developed and developing countries, is a popular policy topic that even crosses over into the worlds of mass media and marketing. It is hard to avoid companies advertising their green practices, but even with the surge in advertising, many see these efforts as corporations covering up their selfish actions. This Policy Primer argues that corporate self-interest and environmental stewardship are compatible. Independent businesses and entrepreneurs acting within a context that protects property rights and encourages innovation are inherently inclined towards green practices. Although the late nineteenth century is not usually associated with environmental protection, examples from both the United States and Great Britain during this period, as well as more recent examples, illustrate how market arrangements might progressively reduce the environmental impacts of economic activities.

  
  
  
• Economic and Political Thought
  

  The Idea of Change in American Politics: Meaningful Concept or Empty Promise?

  By Wilfred M. McClay, The Heritage Foundation
  
  First Principles, 10/30/2008
  

  When confronted with the suddenly omnipresent theme of "change" in present-day American politics, skeptics will likely scoff and say, "Change? So what else is new?" Still, both of the leading presidential candidates vie for the title of "change agent in chief." In fact, powerful abstract words—words like "promise," "experiment," "hope," and "change"—that are central to the commitments and aspirations of our civilization, that rightly play a role in our self-conception and our democratic political rhetoric, can over time easily be expanded or distorted into something very different from their most fundamental meanings. Our most important words can mean something if we are intentional and attentive and rigorous in our own use of them and equally demanding of our public figures, whatever their ideological standpoint may be.

  
  
  
• Budget & Taxation
  

  How the Obama and McCain Tax Plans Will Affect America’s Small Businesses

  By Guinevere Nell, The Heritage Foundation
  
  Backgrounder, 10/30/2008
  

  The tax burden faced by a small business is a major factor in its ability to succeed and expand. Senator Barack Obama would make the tax code more progressive by increasing taxes on those at the top and providing credits to those earning and paying the least. Many of the highest earners are small-business owners—who would be hurt by Senator Obama’s plan. Senator John McCain would reduce taxes for all small business. Many more businesses would suffer under Senator Obama’s plan than is currently understood by the public as well as many Members of Congress.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  CO2–Emission Cuts: The Economic Costs of the EPA’s ANPR Regulations

  By David Kreutzer, Karen Campbell, The Heritage Foundation
  
  Center for Data Analysis Report, 10/30/2008
  

  The Environmental Protection Agency’s Advance Notice of Proposed Rulemaking (ANPR) foreshadows new regulations of unprecedented scope, magnitude, and detail. This notice is not just bureaucratic rumination, but could very well become the law of the land. Jason Grumet, a senior environmental advisor to Barack Obama, has promised that a President Obama would “initiate those rulings.” These rulings offer the possibility of regulating everything from lawn-mower efficiency to the cruising speed of supertankers. Regardless of the chosen regulatory mechanisms, the overall economic impact of enforced cuts in carbon dioxide emissions as outlined in the ANPR will be equivalent to an energy tax. Even under a fairly optimistic set of assumptions, the economic impact of the ANPR is likely to be serious for the job market, household budgets, and the economy overall.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  OPEC Redux: Responding to the Russian–Iranian Gas Cartel

  By Ariel Cohen, The Heritage Foundation
  
  WebMemo, 10/30/2008
  

  Steadily and stealthily, a natural gas cartel has emerged over the last seven years. On October 21 in Tehran, the Gas Exporting Countries’ Forum agreed to form a cartel. Russia, Iran, and Qatar announced that they intend to form a yet–unnamed group to “coordinate gas policy.” The Group of Three (the “troika”) will meet quarterly to coordinate and exercise control over close to two–thirds of the world’s gas reserves and a quarter of all gas production. The United States should create a global coalition of energy consumers to oppose oil and gas cartels and to bring market principles to the natural gas industry. The U.S. Congress should also liberalize regulations to allow energy exploration in the Arctic, in the Rocky Mountains, and along the Pacific and Atlantic continental shelves, where natural gas is abundant, and expand cooperative gas ties with Canada.

  
  
  
• International Trade/Finance
  

  Renegotiating NAFTA and Other U.S. Trade Agreements: Fixing What Isn’t Broken

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 10/30/2008
  

  Barack Obama’s pledge to—if elected President—rewrite the rules of trade set out in the North American Free Trade Agreement (NAFTA) caters to a protectionist agenda set on protecting special interests, not promoting America’s prosperity. The argument that NAFTA has brought nothing but woe to the U.S. economy and America’s workers is based on anecdotes and distorted data—and has gone far toward helping to misshape public perceptions about NAFTA’s real impact. Unfortunately for good policymaking, the ongoing practice of bashing NAFTA on the campaign trail may result in real changes made to an agreement that has done far more good than harm to America’s economy.

  
  
  
• Health Care
  

  The McCain Health Care Plan: A Closer Look at Cost and Coverage

  By Greg D'Angelo, Paul L. Winfree, The Heritage Foundation
  
  WebMemo, 10/30/2008
  

  The best independent research shows that the McCain plan would cover roughly half of the 45 million uninsured through an expansion of private coverage and cost-savings would be achieved by reforming perverse incentives in the health sector. However, as proposed, the plan would require considerable increases in federal expenditures. The coverage expansion would be driven by enrollment in individual private plans chosen by the consumer that could be taken from job to job. Cost-savings measures would result from an effective realignment of financial incentives. The plan would amount to a significant tax reduction, particularly for the middle class. Costs of the McCain plan could be controlled by replacing or capping the federal payroll tax exclusion for health insurance or by changing the structure of the tax credits, moving it toward budget neutrality.

  
  
  
• Health Care
  

  The Obama Health Care Plan: A Closer Look at Cost and Coverage

  By Greg D'Angelo, Paul L. Winfree, The Heritage Foundation
  
  WebMemo, 10/30/2008
  

  The best independent research shows that the Obama plan would cover roughly half of the 45 million uninsured through an expansion of public coverage; rely on soft methods of cost-savings; and require significant increases in federal expenditures. The Obama plan would reduce the number of uninsured citizens, but it would not control costs in any significant way while demanding considerable increases in federal expenditures. Coverage expansion would be driven by enrollment in public plans in which the government would set benefit levels and provider reimbursement rates. Cost-savings would not come from fundamentally realigning economic incentives but would rely on dubious “if only” propositions related to changes in health care delivery.

  
  
  
• Family, Culture & Community
  

  Slitting the Sycamore

  By Eduardo J. Echeverria, Acton Institute
  
  10/30/2008
  

  The effectiveness of Christian participation in political, economic, and social life depends upon understanding the proper relationship between the Church and the world, Christ and culture. In this monograph, Eduardo Echeverria illuminates the recent history of thought on this subject, and articulates a way of thinking about the relationship that can appeal broadly to serious Christians in today’s world. Using H. Richard Niebuhr’s schema as a starting point rather than as the definitive statement on the matter, the author adapts the categories, suggests their strengths and weaknesses, and evaluates them in light of the vision of Pope John Paul II’s “new evangelization.” Christian engagement of contemporary culture - “slitting the sycamore” - is an essential task if that culture is to be a source of vitality and sustenance.

  
  
  
• Philanthropy
  

  Who Really Cares?

  By Arthur Brooks, Basic Books
  
  Book, 10/30/2008
  

  We all know we should give to charity, but who really does? Approximately three-quarters of Americans give their time and money to various charities, churches, and causes; the other quarter of the population does not. Why has America split into two nations: givers and non-givers? Arthur Brooks, a top scholar of economics and public policy, has spent years researching this trend, and even he was surprised by what he found. Conservatives really are compassionate-far more compassionate than their liberal foes. Strong families, church attendance, earned income (as opposed to state-subsidized income), and the belief that individuals, not government, offer the best solution to social ills-all of these factors determine how likely one is to give. Charity matters—not just to the givers and to the recipients, but to the nation as a whole. It is crucial to our prosperity, happiness, health, and our ability to govern ourselves as a free people.

  
  
  
• Economic and Political Thought
  

  Beyond Distributism

  By Thomas E Woods, Acton Institute
  
  Book, 10/30/2008
  

  Troubled by rampant injustice and inequality, many conscientious Christians advocate radical economic reforms. Distributism, a program that traces its popularity to Catholic writers Hilaire Belloc and G.K. Chesterton, promotes the widespread ownership of property by tempering the market with guilds or similar associations. Thomas Woods, drawing on a wealth of historical evidence and informed by Catholic social teaching and economic insight, argues that the distributist case is severely flawed. By its nature, distributism must invoke the power of the state, a dangerous move that ultimately undermines its own objectives. Economic freedom in a market system, Woods advises, is a context more conducive to justice and human flourishing.

  
  
  
• Labor
  

  In a Rotten Nutshell: Everything You’ve Ever Wanted to Know about ACORN

  By Matthew Vadum, Jeremy Lott, Capital Research Center
  
  Labor Watch, 10/30/2008
  

  The radical community organizing group ACORN has become a major issue in the 2008 elections. Critics charge that the organization helped cause America’s current financial troubles and is now perpetrating ballot fraud on a massive scale. We know for certain that ACORN is working with labor unions to get out the vote and to pressure workers and employers to unionize workplaces. ACORN and union interests are tightly intertwined. ACORN founder and deposed former president Wade Rathke continues to serve as chief organizer of the New Orleans local of the Service Employees International Union. And as unions spend hundreds of millions of dollars this year to get out the vote for a more pro-union Congress and White House, they are counting on the officially nonpartisan ACORN to work feverishly to register pro-union voters and get them to the polls.

  
  
  
• Philanthropy
  

  ACORN: Who Funds the Weather Underground’s Little Brother?

  By Matthew Vadum, Capital Research Center
  
  Foundation Watch, 10/30/2008
  

  The Association of Community Organizations for Reform Now (ACORN) has become America’s most prominent leftwing community group. Little-known until now, ACORN has played a major role in the subprime mortgage mess that has undermined Americans’ support for free market problem-solving and set off a worldwide chain of financial troubles. It is also implicated in vote fraud schemes from coast to coast. ACORN aims to give America change that socialists can believe in – by any means necessary. It is deliberately organized to avoid scrutiny. But with an FBI probe underway, millions of dollars in back taxes owing, and a racketeering lawsuit pending, it may finally have to answer for its many misdeeds.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  James Hansen Goes Extreme

  By Amy Kaleita, Pacific Research Institute
  
  Environmental Notes, 10/30/2008
  

  NASA’s James Hansen, head of the Goddard Institute for Space Studies took his activism to another level by endorsing “ecovandalism” in a British court this September. The fact that Dr. Hansen’s status as a leading expert on climate change has recently taken some hits (he was forced to revise National Aeronautics and Space Administration’s surface temperature records after an independent researcher pointed out that Hansen’s analysis incorrectly identified the 1990s as the hottest decade on record) has not cooled his activism. When Greenpeace activists were accused of vandalizing a coal-fired power plant in 2005, Hansen testified that the proposed Kingsnorth station alone would be responsible for the extinction of no fewer than 400 species and that he viewed the Kingsnorth trial as a test case for campaigns on both sides of the Atlantic to close down coal-fired power stations.

  
  
  
• Health Care
  

  Californians Beware: “Healthy” San Francisco’s Tax Hikes May Be Coming Your Way

  By John R. Graham, Pacific Research Institute
  
  Capital Ideas, 10/30/2008
  

  San Francisco’s Board of Supervisors unanimously passed the Worker Health Care Security Ordinance in July, 2006, creating “Healthy San Francisco” (HSF). The measure seeks to achieve “universal” health care by taxing employers and workers who do not have health insurance. The justification for the tax is that uninsured patients flood into emergency rooms, don’t pay their bills, and become a burden on the taxpayer. San Francisco General Hospital has become “Ground Zero,” and the city has increased taxes in order to bail out this taxpayer-owned operation. According to HSF’s skimpy records, it looks like employers paid in $17.5 million by the end of August, and employees were also forced to pay about half a million dollars in enrolment fees. All the money went to the city’s public health department and community clinics; therefore it remains unclear how much was used to provide preventive or timely acute care, delivered by private physicians.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  It’s a Lock: Governor’s Veto Traps California in Obsolete Medical Research

  By K. Lloyd Billingsley, Pacific Research Institute
  
  Capital Ideas, 10/30/2008
  

  California is locked into paying for obsolete stem cell research, certain to consume billions of dollars but unlikely to come up with any of the cures Californians were led to believe would be the result of their vote for Proposition 71 in 2004. That measure funded only embryonic stem cell research but all the action is happening with an alternative technique that reprograms adult skin cells to act like stem cells. “Induced pluripotent stem cells” or iPS, have the ability to form tissue, a breakthrough for research. Not only is this technique more accessible but iPS eliminates the moral qualms inherent with embryonic cells. Senate Bill 1565, vetoed by Governor Schwarzenegger in late September, would have introduced some much needed diversity by allowing the California Institute for Regenerative Medicine to fund different kinds of stem cell research. Legislators should advance another measure that would allow the CIRM to participate in iPS research.

  
  
  
• Health Care
  

  The Top Ten Myths of American Health Care: A Citizen’s Guide

  By Sally C. Pipes, Pacific Research Institute
  
  Book, 10/30/2008
  

  How do we control the costs of health care without sacrificing quality? And how can we reach coverage that is universal, or at least nearly universal? The vast majority of solutions proposed by today’s politicians fall into one of two ideological camps. The first camp maintains that only the government can cure our health care woes. Because the problem itself is massive and complex, we need an equally massive and complex solution. With sufficient taxpayer funding, the government has the size, infrastructure, and power to deliver that solution on a national scale. The second camp believes that government is actually part of the problem. Too much regulation has caused our health care system to become sluggish, overpriced, and unresponsive to consumer demands. Rather than expand the government’s role, we should reduce it—and instead foster free-market competition by empowering consumers.

  
  
  
• Economic Growth
  

  How to Successfully Stimulate the Economy

  By William W. Beach, The Heritage Foundation
  
  WebMemo, 10/29/2008
  

  When the economy is struggling, Congress has a tendency to invoke the same tried and failed policies of the past. Typically, these policies promise hundreds of billions of dollars in government spending while doing little to actually revitalize economic activity. The first round of stimulus checks, like those rebates issued in the 1970s and 2001, were a bust, with only a small portion (perhaps less than 30 cents on every rebate dollar) used for consumption. Furthermore, prior government spending on infrastructure such as highways merely transferred—rather than created—wealth. During the current period of slow economic growth, Congress should do what it does best: set broad economic policy. Specifically, Congress should concentrate on signaling to investors and workers alike that its principal focus will be on improving pro-growth economic policy, mainly in the areas of tax, energy, and spending policies.

  
  
  
• Education
  

  Beyond No Child Left Behind: Value-Added Assessment of Student Progress

  By D. Sean Shurtleff, Jesus Loredo, National Center for Policy Analysis
  
  Brief Analysis, 10/29/2008
  

  The federal No Child Left Behind Act requires each state to evaluate every public school annually, and to make “adequate yearly progress” toward helping all students meet or exceed state standards in reading and math by 2014. However, each state defines its progress and creates its own tests. Most states measure academic achievement based on pass-fail tests that require students to attain a minimum score. Unfortunately, pass-fail test scores do not tell administrators which teachers are most effective or how much students have improved. Value-Added Assessment is an alternative methodology that evaluates educational progress based on the growth of each student’s knowledge base, rather than the attainment of particular test scores.

  
  
  
• National Security
  

  Security Aspects of the South Stream Project

  By Zeyno Baran, Hudson Institute
  
  Report, 10/29/2008
  

  South Stream is a joint project by the Russian firm Gazprom and the Italian company Eni to develop a pipeline to transport gas to European markets. If it is constructed, the impact of South Stream, projected to be the most expensive pipeline ever built, will be significant not only for Europe’s energy supplies, but also for its security and its foreign relations. The Kremlin and Gazprom view South Stream as vital to their strategic interests. South Stream is ultimately a reactive project, as it was designed only after the European Union announced its desire to establish a direct (non-Russian controlled) Caspian Sea-Middle East-EU southern gas corridor, primarily through the Nabucco pipeline. If South Stream is built, it will pull gas from Central Asia and possibly Azerbaijan in its direction, potentially leaving less Caspian supplies for Nabucco or for other east-west gas pipeline projects such as Turkey-Greece-Italy.

  
  
  
• Economic and Political Thought
  

  The New Capitalism

  By Irwin Stelzer, Hudson Institute
  
  Report, 10/29/2008
  

  When a successful investment banker turned Treasury Secretary caps his career by arranging a $700 billion bailout of the banking system after engineering the nationalization of two financial institutions so large that even the most doctrinaire socialist would have paused at the prospect of taking them onto the government’s balance sheet, when a leading neoconservative suggests, only partly in jest, that presidents of banks seeking to sell their dicey paper to the Treasury should not be allowed to earn more than the President of the United States ($400,000 annually), you know that something fundamental is going on. Which indeed, it is: the day has passed when that engine of capitalism, the financial market, will be allowed to operate more or less unimpeded by government.

  
  
  
• Crime, Justice & the Law
  

  Four Suits Deal a Weak Hand to Antitrust Plaintiffs

  By Mark J. Botti, Washington Legal Foundation
  
  Legal Backgrounder, 10/29/2008
  

  “[A]ntitrust plaintiffs may bring lawsuits throughout the Nation in dozens of different courts with different nonexpert judges and different nonexpert juries. . . .[I]t will prove difficult for those many different courts to reach consistent results. And, . . . it will also prove difficult to assure that the different courts evaluate similar fact patterns consistently. The result is an unusually high risk that different courts will evaluate similar factual circumstances differently.” As quoted here, the U.S. Supreme Court expressed a remarkable lack of confidence in the ability of the Nation’s courts to adjudicate antitrust disputes during its October 2006 term. The Court’s four antitrust decisions reflect concern that federal antitrust litigation intrudes excessively into private markets and a strong faith in the benefits delivered by free markets.

  
  
  
• Crime, Justice & the Law
  

  The Foreign Corrupt Practices Act Takes Aim at Medical Devices

  By James R. Ravitz, Alana Wexler, Washington Legal Foundation
  
  Legal Backgrounder, 10/29/2008
  

  Over the past two years, the U.S. Department of Justice and Securities and Exchange Commission (SEC) have begun actively using the Foreign Corrupt Practices Act (FCPA) to target U.S. medical device companies’ overseas marketing and business practices. In fact, during the 30 years following the passage of the FCPA in 1977, the SEC only brought 15 cases against medical device companies under the Act, but in the last year has already prosecuted 12 FCPA cases against device companies. Now, the SEC is investigating major medical device firms for possible FCPA violations. Thus, the message to the U.S. medical device industry is clear: take steps to effectively manage all monetary aspects of your marketing and distribution efforts in foreign countries to avoid being caught up in an FCPA enforcement action.

  
  
  
• Crime, Justice & the Law
  

  No Harm, No Foul in New Jersey: No-Injury Monitoring Rebuffed

  By John T. Chester, Washington Legal Foundation
  
  Legal Backgrounder, 10/29/2008
  

  In June 2008, the New Jersey Supreme Court in Sinclair v. Merck & Co., Inc., 195 N.J. 51 (2008), rejected an ambitious attempt to force pharmaceutical manufacturer Merck to fund a massive, nationwide medical-monitoring program for some 20 million former Vioxx users. Why were the plaintiffs rebuffed? Because they did not allege that they had sustained any physical injury as a result of their Vioxx use and, as such, failed to plead a prima facie tort claim under New Jersey law. Any other outcome would have had the effect of vastly expanding tort liability under New Jersey law, and would have invited a deluge of no-injury medical-monitoring claims with potentially dire consequences.

  
  
  
• Crime, Justice & the Law
  

  Court Should Establish Clear Rules on Categorizing “Independent Contractors”

  By Richard A. Samp, Kevin L. Kearns, Washington Legal Foundation
  
  Legal Backgrounder, 10/29/2008
  

  The U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments on November 7, 2008 in an important labor relations case. The case will require the court to determine whether a group of transportation workers should be classified as “employees” or “independent contractors.” The ultimate answer is reasonably clear: the workers in question really are employees. But the importance of the case lies in how the appeals court reaches that result. In light of the significant consequences facing a company that later is determined to have classified workers incorrectly, companies need clear guidance from the courts regarding how to make those classifications. Unfortunately, courts have applied a wide variety of tests for classifying workers as employees or independent contractors. But many courts, including the D.C. Circuit, have adopted a more promising “right-to-control test” as the overriding factor in making such classifications.

  
  
  
• Crime, Justice & the Law
  

  Shakespeare’s and DOJ’s New Guidelines on Corporate Cooperation

  By Thomas O. Gorman, Washington Legal Foundation
  
  Legal Backgrounder, 10/29/2008
  

  William Shakespeare famously suggested getting rid of all the lawyers (“The first thing we do, let’s kill all the lawyers.” Henry VI, Part II). Some may think that the Department of Justice seems to have adopted a similar approach in the newest version of its guidance on organizational cooperation – or at least getting rid of the company lawyers and their privileges. The new revisions by Deputy Attorney General Mark Filip, incorporated as a new chapter in the U.S. Attorney’s Manuel (“revisions” or “chapter”), represents a good effort to respond to Department critics on the culture of waiver. Its five key points were honed to respond to Department critics. Barring prosecutors, for example, from requesting core attorney-client privilege material is a good start. Unfortunately, the overall approach falls well short of the mark.

  
  
  
• Crime, Justice & the Law
  

  Pooshs v. Philip Morris USA Inc.

  By Daniel J. Popeo, Richard A. Samp, Washington Legal Foundation
  
  Amicus Brief, 10/29/2008
  

  On October 15, 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 a personal injury lawsuit that was filed more than 15 years after the plaintiff knew that she had suffered a serious injury and had reason to suspect that a product manufacturer was responsible. WLF argued that statutes of limitations begin to run from the date on which the plaintiff discovers that he has been injured by the defendant’s alleged wrongdoing. The fact that the plaintiff may later discover that he has suffered a second injury caused by that same wrongdoing does not re-start the clock for statute of limitations purposes, WLF argued. Because California had a one-year limitations period for filing personal injury claims, the plaintiff’s claims are time barred, WLF argued.

  
  
  
• Crime, Justice & the Law
  

  Graham County v. United States ex rel. Wilson

  By Daniel J. Popeo, John T. Boese, Washington Legal Foundation
  
  Amicus Brief, 10/29/2008
  

  On October 8, 2008, Washington Legal Foundation filed a brief in the U.S. Supreme Court urging the Court to review and reverse a lower court of appeals decision that, if left intact, would allow for more abusive lawsuits by plaintiffs’ attorneys under the False Claims Act (FCA). To prevent abusive or parasitic lawsuits from being filed, the FCA bars lawsuits based on information already publicly disclosed in the media and government reports. Although the FCA’s public disclosure bar includes a provision for administrative audits, the Court of Appeals for the Fourth Circuit ruled that the exemption applies only to federal rather than state or local audits or reports. That ruling is in conflict with other circuits that read the provision broadly to cover both federal and state audits and reports.

  
  
  
• Budget & Taxation
  

  2008 Arizona Ballot Propositions

  By The Goldwater Institute, Goldwater Institute
  
  Report, 10/29/2008
  

  Proposition 100, the Protect Our Homes initiative, would prohibit the legislature from establishing a real estate transfer tax. That is, the sale of new or existing buildings, including homes, and the sale of land, would never be subject to a tax. Many states currently impose some form of a real estate transfer tax, which is often similar to a sales tax on the final price of the building, home, or land. Proposition 101, the Freedom of Choice in Health Care Act, would preserve the rights of Arizonans to make their own health care decisions. The initiative would amend the state constitution to protect against future laws that would restrict individuals’ “freedom of choice of private health care systems or private plans of any type,” the “right to pay directly for lawful medical services,” or freedom to participate or not participate in health insurance programs.

  
  
  
• Education
  

  Charter Schools In America: Will They Be Successful?

  By Stephen M. King, Public Interest Institute
  
  Institute Brief, 10/29/2008
  

  Educational choice options are popular among taxpayers and parents not only because traditional government schools are largely inadequate in meeting achievement levels in math and reading, but also because they are not preparing students with the skills necessary to succeed in the “global economy.” As of November 2007, eight states and the District of Columbia provide taxpayer-funded scholarships, seven states offer financial incentives, such as tax credits or deductions for educational expenses, even for private school tuition, home schooling is legal in all fifty states, and virtual and/or online education is becoming increasingly popular. While charter schools are increasing in popularity, they are also vilified by the government school establishment and decried by homeschooling proponents, including the Home School Legal Defense Association. Despite the criticisms leveled at charter schools, it is a movement “whose time has come.”

  
  
  
• Education
  

  Does National Identity and Heritage Matter?

  By John R. Hendrickson, Public Interest Institute
  
  Institute Brief, 10/29/2008
  

  “America is facing an identity crisis. The next generation of Americans will know less than their parents know about our history and founding ideals,” noted a recent report, titled, E Pluribus Unum, issued by the Bradley Project on America’s National identity. E Pluribus Unum is yet another “fire-bell in the night” reference to the decline in na¬tional identity and civic education in America. The Intercollegiate Studies Institute (ISI) in 2006 and in 2007 issued two reports that demonstrated that college students do not have a proper understanding of America’s first principles and institutions. Both reports from the Bradley Project and from ISI illustrate a serious moral problem facing the United States. It should be the top concern of all Americans to rally to the defense and preservation of America’s founding principles.

  
  
  
• Crime, Justice & the Law
  

  Do More By Doubling Up: Providing Iowa Law Enforcement Protection More Efficiently

  By Ellen Racheter, Public Interest Institute
  
  Institute Brief, 10/29/2008
  

  Law enforcement is an important aspect of every community’s safety. The first obligation of government is to protect its citizens and their private property and to uphold the rule of law. Local governmental entities often find their budgets stretched to the max and face fierce competition for every tax dollar. This leads to the question of how Iowa’s law enforcement can be made more efficient and less costly. Consolidation of any local government entities is never an easy process, whether it is school districts or emergency services, because groups do not want to lose their identities as governmental units. However, counties have begun to cut costs and make law enforcement more efficient by creating joint communication centers with other emergency and law enforcement agencies within the county. This consolidation results in taxpayer dollars being saved and more efficient means of protecting the public and responding to emergencies.

  
  
  
• Education
  

  Portfolio Assessments a Wrong Turn for Obama

  By Don Soifer, Lexington Institute
  
  Issue Brief, 10/29/2008
  

  This week, a spokeswoman for Senator Barack Obama told National Public Radio that the Senator supports the use of portfolios to assess student academic performance in place of current No Child Left Behind testing requirements. If Melody Barnes’ comments accurately reflect Obama’s view, then they represent a significant departure from previous statements, and a step in the wrong direction. A discussion draft introduced by House Education Committee Chairman George Miller last year would have permitted any state to use portfolio assessments. Maintaining standardized testing for most students, while allowing other children, like English learners, to be diverted to a secondary track where accountability is conducted by portfolio assessments, would compromise the law’s most fundamental intent. Such a flawed system would incentivize segregation and overidentification, while the rates at which students learn English and move back into the education mainstream, already desperately low in many states, would likely sink even lower.

  
  
  
• Education
  

  English Language Learners in the District of Columbia

  By Don Soifer, Lexington Institute
  
  Testimony, 10/29/2008
  

  English learners need to be considered one of our most critical school populations, and their academic success vital to the economic future of our city, and our region. Last year, 8.3 percent (4,139) of all DCPS students were designated English Language Learners. English learners here deserve the same educational opportunities as other students. Chances to exercise parental choice, as the Commission heard about this morning, provide parents with precious opportunities to improve their children’s prospects for success. But here in the nation’s capital, English learners are missing out on the opportunities available to others. The District’s current out-of-boundary school attendance policies work against English learners. English learners are also significantly under-represented in the District’s charter schools.

  
  
  
• National Security
  

  Memo to Demo’s: Missile Defense Is Our Top Military Need

  By Loren B. Thompson, Lexington Institute
  
  Issue Brief, 10/29/2008
  

  What could be worse than credit markets collapsing just as baby boomers are about to retire? Losing a million of those baby boomers, and their kids, in a nuclear attack. That danger has been with us since the dawn of the nuclear age, but it grew worse over the last eight years as the Bush Administration botched efforts to slow the spread of nuclear weapons. Because of its missteps in Iran, North Korea, Pakistan and elsewhere, we are facing a more diverse and unpredictable nuclear danger than ever before. The Missile Defense Agency has been funding several programs that could intercept hostile missiles in boost or ascent phase. The cost of these programs is so modest, and the threat to America from emerging nuclear actors is so great, that the new administration needs to figure out how to keep them going regardless of what happens to the economy in the years ahead.

  
  
  
• National Security
  

  Satellite Cancellation Raises Questions about Army Plans

  By Loren B. Thompson, Lexington Institute
  
  Issue Brief, 10/29/2008
  

  Pentagon policymakers tentatively decided this weekend to terminate a competition for the military’s next generation of communications satellites. The program was supposed to give each warfighter easy, secure access to the global information grid as part of the joint force’s migration to networked warfare. The plan now is to restart the satellite program as a less costly effort on a stretched-out schedule, but the more likely outcome is that the program simply dies for lack of support in the new administration. That would be a real tragedy, leading to the avoidable deaths of many warfighters who cannot obtain timely links via other means.

  
  
  
• Monetary Policy/Financial Regulation
  

  Community Reinvestment Act: The Risk of Unintended Consequences

  By Matthew Glans, Heartland Institute
  
  Research and Commentary, 10/29/2008
  

  The unintended consequences of government programs can have far-reaching economic and social effects. A prime example of a public program gone awry—and one of the key causes of the current credit crisis—is the Community Reinvestment Act (CRA). CRA was designed to ensure that all homeowners were treated “equally” by avoiding “redlining,” the deliberate shifting of financing away from low-income or high-risk areas. While CRA was designed to serve a positive goal, the economic implications of the new regulation were far more complicated. CRA required mortgage lenders to provide loans to riskier clients, often in stark contrast to what market forces may have dictated. This was done by incentivizing mortgage lenders to make loans for homes in certain zip codes and also by penalizing perceived failures to do enough. These new loans spawned the subprime mortgage market, a financial sector that is now embroiled in controversy, whose collapse triggered the current downward economic trend.

  
  
  
• Regulation & Deregulation
  

  EPA Advance Notice of Public Rulemaking (ANPR): Alert 4

  By Sandy Liddy Bourne, Heartland Institute
  
  Report, 10/29/2008
  

  The Supreme Court last year ruled that CO2 is a pollutant, but President George W. Bush refused to regulate it because he believed setting climate policy for the nation should be the job of Congress, not a huge administrative bureaucracy. On July 11, 2008, EPA staff released an Advance Notice of Proposed Rulemaking that would declare carbon dioxide a dangerous pollutant to be regulated. That draft has become the framework of the Obama plan. According to the U.S. Chamber of Commerce, EPA currently issues permits to 15,000 businesses under the Clean Air Act. If carbon dioxide were declared a dangerous pollutant and regulated under the Clean Art Act, more than 1.2 million new permits would have to be issued. At time when the financial markets are crashing and a downturn in the economy looms, this plan will end free enterprise as we know it. It is bad for American taxpayers and a blow to democracy.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Obama Climate Plan Would Ignore Congress, Force Large Price Hikes

  By James M. Taylor, Heartland Institute
  
  Heartland Perspectives, 10/29/2008
  

  With the United States on the precipice of a deep and prolonged economic recession, presidential candidate Senator Barack Obama’s energy advisor, Jason Grumet, is promising to deal yet another blow to the economy in the form of significantly higher energy prices. Asserting that Congress is not moving fast enough to limit carbon dioxide emissions, Grumet is promising an Obama administration would direct the Environmental Protection Agency, which is not accountable to voters for the economic pain of environmental regulations, to draft hard rules to reduce the availability of inexpensive fossil fuels. Significantly restricting the availability of inexpensive fossil fuels would deliver yet another staggering blow to the economy even as the nation faces its worst economic crisis since the Depression.

  
  
  
• Education
  

  A Primer on Pennsylvania Cyber Schools

  By Nathan A. Benefield, Jessica K. Runk, Commonwealth Foundation for Public Policy Alternatives
  
  Policy Brief, 10/29/2008
  

  An increasing number of parents are choosing Pennsylvania’s cyber charter schools for their children every year. Despite their popularity among parents and demonstrated academic successes, cyber schools have come under attack from public school boards and some lawmakers. Several pieces of legislation have been introduced in the General Assembly that would limit cyber schools’ independence and drastically reduce funding for students. These pieces of legislation are in response to claims that cyber schools are ‘unaccountable’ and that they take too much money from traditional public school districts. Studies have demonstrated the important role of parents in the educational process of their children. Cyber schools have become a viable, cost-efficient, accountable, and quality educational option for tens of thousands of students and their families. Instead of seeking to hinder their progress and expansion, Pennsylvania public school officials and policymakers should embrace these innovative and effective public school alternatives.

  
  
  
• Monetary Policy/Financial Regulation
  

  How EESA Might Impact Property and Casualty Insurance: An Analysis of New Powers and Authorities

  By Eli Lehrer, Competitive Enterprise Institute
  
  WebMemo, 10/29/2008
  

  This paper explores the ways that the Emergency Economic Stabilization Act (EESA) might impact the insurance industry. ESSA appears to establish the possibility of a federal backstop, may increase federal oversight of insurance, and could lead to the revisiting of some of the Bush administration’s recommendations for on Optional Federal Charter. It’s difficult to say if the Act will have positive or negative implications from the standpoint of those who favor a free market for insurance. Nothing in the law mandates that the government use the Troubled Assets Relief Program like a high-level national catastrophe fund, give the Office of Stability Regulation any responsibilities related to insurance, or address insurance in its regulatory modernization report. The most important consequences of the Act for property and casualty insurance markets will likely become apparent only when Treasury moves to make use of the vast powers EESA grants.

  
  
  
• Immigration
  

  If It’s Fixed, Don’t Break It: Moving Forward with E-Verify

  By Janice Kephart, Center for Immigration Studies
  
  Backgrounder, 10/28/2008
  

  The E-Verify program is well on its way to fixing a 20-year-old problem of determining legal employment eligibility in a manner employers can support. Arguably E-Verify is the most successful programmatic upgrade to U.S. interior border systems, assisting employers in abiding by the law and weeding out those that don’t. Fast, efficient, and easy to use, E-Verify helps employers have confidence that their hiring choices are within the law and less likely to be disrupted by a worksite raid. Enabling employers to make better decisions about the legality of their hires also helps the federal government better prioritize enforcement tools. Illegal immigrants are dissuaded from applying for jobs that use E-Verify, thus making it less likely — the more prevalent in use E-Verify becomes — that illegals will settle into a job, only later to be arrested and land in deportation hearings that lead to family disruption while simultaneously draining enforcement and immigration court resources.

  
  
  
• National Security
  

  May the Best Ideas Win

  By Joseph William DeMarco , Hoover Institution
  
  Hoover Digest, 10/28/2008
  

  No part of Harry Truman’s security program troubled Eisenhower more than its cost. So, he set out to develop an overarching U.S. strategy. The key step was an exercise code-named Project Solarium— a collection of three multifaceted task forces drawn from U.S. government specialists, both military and civilian. When Eisenhower left office in 1961, America’s world position was preeminent and the country had achieved something close to “peace with strength”. Eisenhower handed President John F. Kennedy an elaborate, sophisticated system for national security management and strategy. There is no evidence that such high-level strategy meetings occur today, even in light of what has been dubbed the global war on Islamic extremism. The new administration’s strategy must go beyond the customary National Security Strategy rhetoric and embrace what Eisenhower knew to be true: the United States must clearly present concise priorities and well-defined strategy to its people and to the world.

  
  
  
• Foreign Policy/International Affairs
  

  China Calling

  By Christopher Starling, Hoover Institution
  
  Hoover Digest, 10/28/2008
  

  Considering that China’s first priority is to sustain its expanding economy, it is clear what its rulers seek from Africa. China’s role in Africa is broad and complex, and it will continue to expand; policy makers in the United States need to take this into account. The news media frequently highlight critical views of China’s involvement in Africa, including charges that Beijing practices neocolonialism or controls Africa’s resources while failing to stimulate African economies. But this is only part of the tale. Africans recognize colonialism and reject it. They want to avoid having to choose sides once again, as they did during the Cold War, or to repeat a cycle of dependency on external actors. China is not interested in exercising sovereignty over foreign countries. Its interests in Africa are primarily commercial.

  
  
  
• Foreign Policy/International Affairs
  

  Into Africa

  By James J. Hentz, Hoover Institution
  
  Hoover Digest, 10/28/2008
  

  The United States has launched a noble experiment in national security. AFRICOM, the U.S. Africa Command, is an ambitious rethinking of the military’s role not only in Africa but in the world at large. The new separate command for Africa is intended to move beyond Cold War arrangements, which saw the continent divided among three U.S. regional military commands, and to tackle both new and lingering geopolitical problems. Africa Command was created in February 2007 and began initial operations last October; it is scheduled to assume responsibility for all military relationships, programs, and activities in Africa this fall under its first commander, U.S. Army General William E. “Kip” Ward. Will it succeed? To do so, AFRICOM will have to break free of four bad habits of the U.S. government, each of which tends to reinforce the others. So far, it has broken free only of the first: overlooking Africa and its needs.

  
  
  
• Foreign Policy/International Affairs
  

  Moscow’s Leading Question

  By Paul R. Gregory, Hoover Institution
  
  Hoover Digest, 10/28/2008
  

  To understand the upper circles of power in Russia requires assembling a complex jigsaw puzzle of public statements, rumors, and actions. Having only a few pieces of the puzzle won’t do. And even if all the pieces are present, they remain almost impossible to fit together without some sort of guide. In Russia, perhaps more than elsewhere, the past may be this guide. The facts, as we know them, are that there has been a formal transfer of constitutional power from Vladimir Putin to Dmitry Medvedev, an ostensible power-sharing arrangement whose true nature has yet to be revealed; Russia has become prosperous, largely because of petrodollars; the “commanding heights” of the economy have been renationalized; and democracy and press freedom have withered. Also striking is the remarkable power shift from the private oligarchs of the immediate post-Soviet era to today’s “KGB state,” a powerful creation with a culture unconstrained by law.

  
  
  
• Health Care
  

  Alive and Working: How Access to New Drugs Has Slowed the Growth in America’s Disability Rates

  By Frank R. Lichtenberg, Manhattan Institute
  
  Medical Progress Report, 10/28/2008
  

  Rising numbers of Americans have been classified as disabled. In particular, between 1995 and 2004, the number of Americans receiving benefits under two federal disability programs—Social Security Disability Insurance (SSDI) and Supplemental Security Income—rose 30 percent. Policymakers, who face ever-rising costs and severe budget constraints, are searching for ways to reduce expenditures—or at least, to slow their rate of growth. In this regard, measures to keep working-age Americans off disability rolls—for instance, through access to medical innovations—should be particularly welcome. The following report examines whether innovation in one form of medical treatment, prescription drugs, has helped reduce the growth in disability rates. The existence of a significant inverse relationship between disability recipiency and drug vintage implies that, if mean drug vintage had not increased—that is, if people used the same drugs in 2004 that they had used in 1995—the SSDI recipiency rate would have increased more than it actually did.