Recent Policy Studies

• Regulation & Deregulation
  

  For Whom the Bell Tolls: The Midnight Regulation Phenomenon

  By Jerry Brito, Veronique de Rugy, Mercatus Center
  
  Policy Primer, 01/08/2009
  

  Midnight regulations are problematic. In particular, if we accept that regulatory review is beneficial, then midnight regulations raise serious concerns. All things being equal, including the relatively fixed review staff at OIRA, a sudden increase in regulations going through the review process during the midnight period leads to a diminished review process and weakened oversight. Until now, the most common solutions to the midnight regulations problem have suggested steps that an incoming president can take to undo his predecessor’s last-minute actions. Our solution tries to mitigate the negative effects of midnight regulations by changing the incentives on the outgoing administration. We suggest that the best way to address this particular problem is to place a cap on the number of economically significant regulations OIRA can be expected to review during a given period.

  
  
  
• Economic Growth
  

  The Main Street Economic Recovery Proposal: Will It Bring Us Out of Recession?

  By Eileen Norcross, Frederic Sautet, Mercatus Center
  
  Mercatus on Policy, 01/08/2009
  

  If history is any guide, deficit spending on a grand scale doesn’t work. Unemployment remained above 20 percent for the duration of the Great Depression in spite of an active job creation policy. While there are key differences between the 1930s and today, temptation is running high to re-experiment with this model by creating jobs to prop up “aggregate” demand. Expansionist monetary policy and bad lenient housing policies have created artificially inflated prices and over investments in many sectors of the economy. This boom will end when overblown prices can fall. There is no way around it. The coming price adjustment is akin to a patient needing surgery: it will be a difficult time, but it is necessary to recover good health. Policy makers should help this process by putting their fiscal houses in order and removing barriers to resource allocation: reduce taxes, insist on fiscal prudence on the federal level, and encourage it on the state and local level by cutting, rather than increasing, public spending.

  
  
  
• Regulation & Deregulation
  

  21st Century Regulation: Discovering Better Solutions for Enduring Problems

  By Scott Farrow, et al. , Mercatus Center
  
  Report, 01/08/2009
  

  The United States needs a new regulatory framework that will better address the changed nature of the economy. Regulation that may have been appropriate in 1970 is simply inadequate in the 2000s and beyond. A population and workforce that is older, more experienced, more educated, and has much better and faster access to information is better equipped to confront and handle risks. Whereas before, observers worried about a “race to the bottom,” today’s consumers engage in a “race to the top;” their incomes and access to information lead them to demand products that are safer and cleaner.

  
  
  
• Transportation/Infrastructure
  

  Mobility First: A New Vision for Transportation in a Globally Competitive Twenty-first Century

  By Sam Staley, Adrian Moore, Reason Foundation
  
  Book, 01/08/2009
  

  Traffic congestion is a growing problem, and unless policy makers and transportation officials make some dramatic changes, it will rise to unacceptable levels by 2030. Sam Staley and Adrian Moore explain the inefficient systems and politics that cause this escalating epidemic, presenting commonsense, high-tech solutions that will ease congestion and its troubling consequences. The book considers transportation policy through the intersection of four crucial and timely elements: global, economic, and cultural competitiveness; urban development trends; demographics; and transportation engineering and design. It sets goals for congestion reduction, outlines performance standards that increase transparency, calls for the redesign of the regional transportation network, and describes sufficient investment in technology.

  
  
  
• Health Care
  

  Health Care Entrepreneurs: The Changing Nature of Providers

  By Devon M. Herrick, National Center for Policy Analysis
  
  Policy Report, 01/08/2009
  

  In health care markets where patients pay directly for all or most of their care, providers almost always compete on the basis of price and quality. And because they are not trapped in a system that pays for predetermined tasks at predetermined rates, providers are free to repackage and re-price their services—just like vendors in other markets. It is primarily in these direct-pay markets that entrepreneurs are creating many innovative services to solve the very problems about which critics of the health care system complain. In fact, these solutions are usually a necessary part of the entrepreneurs’ business models.

  
  
  
• Monetary Policy/Financial Regulation
  

  Creating Financial Harmony: Lessons for China

  By James A. Dorn, Cato Institute
  
  Cato Journal, 01/08/2009
  

  The global financial crisis that began in the U.S. housing market is not a failure of market liberalism, but of market socialism. Prior to central banks, the international gold standard worked spontaneously to bring about a balance between the demand for and supply of money. That system was not perfect, but it did help generate sound money, limit the size of government, and expand trade. In theory, central banks can control the supply of paper money and prevent inflation, but will they have the political will to do so? Without effective constraints on central bank discretion, there is no guarantee that fiscal pressures will not lead to an abuse of the monetary authority’s power.

  
  
  
• Welfare
  

  State Sanctions and the Decline in Welfare Caseloads

  By Michael J. New, Cato Institute
  
  Cato Journal, 01/08/2009
  

  Much of the scholarship analyzing fluctuations in welfare caseloads focuses on such factors as the strength of the economy and the generosity of welfare benefits. However, with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, states obtained significantly more control over welfare policy. Despite this shift, there has been relatively little academic research on the role of state policy variation in welfare caseload fluctuations. This article provides solid evidence that strength of state sanctioning policies, which give caseworkers the ability to restrict the benefits of welfare recipients, has played a very significant role in recent welfare caseload declines. A comprehensive regression analysis of welfare caseloads from all 50 states from every year from 1996 to 2002, finds that strong state sanctioning policies are highly correlated with both large welfare caseload declines and low caseload levels.

  
  
  
• Regulation & Deregulation
  

  Cold Case Files: The Athenian Grain Merchants, 386 B.C.

  By Wayne R. Dunham, Cato Institute
  
  Cato Journal, 01/08/2009
  

  In this article, I examine the impact of the efforts of regulators in ancient Athens to reduce the retail price of grain by reducing its wholesale price. Unlike the standard example of a wholesale price control, the regulator in Athens did not establish a direct price control on the wholesale price but rather allowed the grain merchants to collude when purchasing grain from emporoi. The effect was the same as a direct wholesale price control. The reduction in wholesale price led to a reduction in the quantity supplied and a higher, not lower, retail price clearing the market.

  
  
  
• Education
  

  Parental Valuation of Charter Schools and Student Performance

  By James VanderHoff, Cato Institute
  
  Cato Journal, 01/08/2009
  

  This article finds that parents choose charter schools based on academic effectiveness and endorsement of academic goals. It thus supports a basic tenet for the belief that school choice will improve public school academic effectiveness. The New Jersey data illustrate that charter schools are not equally effective (as measured by student test scores), equally preferred (as measured by waiting lists), or equally funded. The analysis indicates that a 10 percent increase in a charter school’s test scores will increase the number of students on its wait list by at least 63 percent. The characteristics of students and schools, both regular and charters, do not generally affect the size of the wait list.

  
  
  
• Budget & Taxation
  

  Small States: Not Handicapped and Under-Aided, but Advantaged and Over-Aided

  By Swaminathan S. Anklesaria Aiyar, Cato Institute
  
  Cato Journal, 01/08/2009
  

  The literature on small states suggests several ways in which they can tackle some of their inherent disadvantages. Many of these approaches require no aid at all. Others have the potential to use existing aid flows more effectively. The future development agenda should, therefore, abandon the traditional focus on increasing aid. Rather, it should focus on ways to reduce such aid, which is already excessive.

  
  
  
• Budget & Taxation
  

  State Fiscal Crises: Are Rapid Spending Increases to Blame?

  By Dean Stansel, David T. Mitchell, Cato Institute
  
  Cato Journal, 01/08/2009
  

  The past two recessions have led to substantial fiscal crises for state governments. The current slowdown in economic growth is creating similar problems in many states. There has been much debate about the cause of those crises. While other factors undoubtedly also played a role, our results suggest that rapid spending increases during the preceding expansionary years played a substantial role in worsening the fiscal crises faced by states during the 2001 recession. In addition, like previous research on the 1990-91 recession, our results indicate that the mere presence of a rainy day fund did not reduce fiscal stress in the 2001 recession. It is the characteristics of that RDF that matter. These results have important implications for fiscal policy choices during expansionary years. States that restrain spending growth are likely to face less severe fiscal crises when the business cycle turns downward than those that allow spending growth to rapidly increase.

  
  
  
• The Constitution/Civil Liberties
  

  The Economic Impact of the Akaka Bill: Unintended Consequences for Hawaii

  By Sarah Glassman, Michael Head, Paul Bachman, David G. Tuerck, Grassroot Institute of Hawaii
  
  Studies, 01/08/2009
  

  Since the end of the monarchy, land ownership in Hawaii has been hotly debated. With the introduction of the Akaka Bill in 2000, land rights have moved to the forefront of policy discussion in Hawaii. The bill attempts to solve land issues through a separate sovereign entity, but will create more problems than it solves. The uncertainty surrounding the outcome of the negotiations between the state and the new Hawaiian entity and a possible surge in litigation filings would hurt business confidence and investment. The new entity would be free from state and local taxes, regulations and legal restrictions that would create a competitive advantage that would shift economic activity away from the businesses left under the jurisdiction of Hawaii. As a result, Hawaii would suffer declines in state revenue collections and require tax increases to fill the gap. As a result, citizens of Hawaii would suffer lower living standards.

  
  
  
• Economic and Political Thought
  

  Censoring and Destroying Information in the Information Age

  By J. R. Clark, Dwight R. Lee, Cato Institute
  
  Cato Journal, 01/08/2009
  

  Large amounts of information or knowledge, which could be used to improve the lives of billions of people by improving economic decisions, are being systematically suppressed and destroyed by government censorship that is supported enthusiastically by many who claim to be outraged by government censorship of any type. Few people recognize some of the most harmful forms of government censorship as being censorship. And since they don’t recognize it for what it is, many erroneously see censorship as the most effective and least costly way for government to achieve social objectives that almost everyone claims to support, such as protecting the environment, reducing waste, ensuring an adequate food supply, reducing our dependence on foreign oil, improving education, creating better jobs, and expanding the availability of high-quality health care.

  
  
  
• Economic Growth
  

  Sustained Economic Growth: Do Institutions Matter, and Which One Prevails?

  By Abdoul’ Ganiou Mijiyawa, Cato Institute
  
  Cato Journal, 01/08/2009
  

  “Good” institutions have positive effects on private investment and thus induce an increase in total factor productivity, which in turn is necessary for sustained economic growth.

  
  
  
• Monetary Policy/Financial Regulation
  

  Aggregate Supply-Driven Deflation and Its Implications for Macroeconomic Stability

  By David Beckworth, Cato Institute
  
  Cato Journal, 01/08/2009
  

  Deflation is generally considered to be inconsistent with macroeconomic stability. Any sustained decline in the price level is widely believed to be associated with weak to negative economic growth, a lower bound of zero on the policy interest rate, and an increase in financial disintermediation. However, a number of recent studies examining both historical, cross-country experience with deflation and more recent developments find that these concerns are not necessarily associated with deflation. They show that the deflationary experiences that shape the modern economic psyche, the Great Depression in the 1930s and Japan in the 1990s, are not truly representative of all deflation outcomes. These studies contend that a broader, historical perspective reveals a more nuanced view of deflation, one that requires taking seriously the possibility of both a malign deflation, a deflation originating from a collapse in aggregate demand, and a benign deflation, a deflation originating from an increase in aggregate supply.

  
  
  
• Budget & Taxation
  

  The X Tax: The Progressive Consumption Tax America Needs?

  By Alan D. Viard, Robert Carroll, Scott Ganz, American Enterprise Institute
  
  Tax Policy Outlook, 01/08/2009
  

  Good tax policy should be pro-growth, simple, and fair. An income tax, unlike a consumption tax, penalizes saving, which undermines economic growth and introduces complexity. An income tax is often thought to be fairer than a consumption tax, however, because it taxes saving, which is disproportionately done by higher-income individuals. In reality, however, a consumption tax can be designed to be as progressive as the current income tax. The Bradford X tax offers an attractive, if little-known, form of progressive consumption taxation.

  
  
  
• International Trade/Finance
  

  Beware of Investment Protectionism

  By Claude Barfield, American Enterprise Institute
  
  The American, 01/08/2009
  

  As the global financial and economic crisis has deepened, trade officials have increasingly warned against a new wave of protectionism, fearing that governments will move to shield their industrial and service sectors from increased competition. Thus far, there is little evidence of a large upsurge in traditional border tariff protection. There is, however, one ominous sign of protectionism in an area that is mostly outside the scope of World Trade Organization trade rules: foreign direct investment. The leading advocate of investment protectionism is French President Nicolas Sarkozy, who has proposed the creation of a $25 billion sovereign wealth fund to shield French companies from foreign “predators.”

  
  
  
• Health Care
  

  Bias & Neglect: Public Health Insecticides & Disease Control

  By Richard Tren, Kimberly Hess, Roger Bate, Jasson Urbach, Donald Roberts, Africa Fighting Malaria
  
  Paper, 01/08/2009
  

  Insecticides are a vital component of disease control. To a great extent the modern insectborne disease burden of hundreds of millions of human infections results from failures to use the chemicals we characterize as public health insecticides (PHIs). The modern arsenal of PHIs is antiquated and limited to just 12 insecticides, most belonging to just one class of insecticides (pyrethroids). The process of becoming antiquated occurs as a result of failure to invest in research and development of new PHIs. In reality, both the failure to make safe and effective use of PHIs and the failure to develop new and more effective PHIs are due to environmental opposition, limited valuable markets, considerable regulatory hurdles and weak public health advocacy; conditions which prevail even now. Indeed, even as disease control spending by aid agencies increases by orders of magnitude, disease rates may increase as investment in insecticides is neglected. United Nations agencies such as the World Health Organization (WHO), donor nations, the private sector, and research foundations should urgently prioritize investment in the search for new PHIs, as well as support advocacy efforts to promote the use of safe and effective man-made chemicals in disease control programs.

  
  
  
• Budget & Taxation
  

  The Taxation of Carried Interest: Understanding the Issues

  By Alan Viard, American Enterprise Institute
  
  Article, 01/08/2009
  

  Congress has recently considered taxing the carried interest of private equity fund managers at ordinary rates rather than at the 15 percent rate that currently applies to a portion of this income. The proposed change is intended to promote neutrality between the labor compensation of fund managers and other types of labor income. The case for reform, though, is less compelling than initial appearances suggest. The proper treatment of carried interest raises difficult second-best questions.

  
  
  
• Budget & Taxation
  

  Corporate Tax Rates: Receipts and Distortions

  By Alex Brill, American Enterprise Institute
  
  Article, 01/08/2009
  

  The U.S. corporate tax system, with its high statutory tax rate, imposes harmful distortions and may be set at a point above its revenue-maximizing level. A dramatic reduction in the corporate tax rate would improve efficiency and global competitiveness. Depending on the magnitude of the reduction and other accompanying tax changes, the change could be revenue neutral.

  
  
  
• Information Technology
  

  Regulating Our Way to Freedom?

  By Robert Hahn, American Enterprise Institute
  
  The American, 01/08/2009
  

  The Internet Freedom Preservation Act does not focus on classic antitrust concerns. It would, by contrast, ask the FCC to report on the merits of restricting prices that Internet providers could charge to distribute various sorts of content—in particular, limiting the networks’ discretion to practice what economists call price discrimination. Yet, price discrimination has proved the key to increasing efficiency in industries like airlines in which huge investments must be recouped from a variety of sources with varying willingness (and ability) to pay.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Consumer Burden of a Cap-and-Trade System with Freely Allocated Permits

  By Kevin A. Hassett, Aparna Mathur, Gilbert E. Metcalf , American Enterprise Institute
  
  Working Paper, 01/07/2009
  

  In discussions over how best to implement mandatory restrictions on carbon, the most commonly discussed option is a cap-and-trade system. One critical economic question surrounding cap-and-trade is how to distribute the permits. The two main competing mechanisms are free allocations to polluters (usually based on past emissions levels, output levels, or carbon intensity) and the auction of permits. In this paper, we explore the differential economic impact of the two approaches. Our results show that the consumer price effects across regions of auctioning and free allocation are quite different. These differences arise due to the nature of electricity regulation. If permits are auctioned, regulators are likely to allow utilities to pass forward to consumers the electricity price increase due to the cost of permits. However, if permits are freely allocated, this forward shifting may not be allowed to take place. These results suggest that giving the permits away in a world where state regulators don’t allow utilities to pass forward the “cost” of free permits simply punishes consumers in those regions of the country that have moved to deregulation.

  
  
  
• Regulation & Deregulation
  

  Pharmaceutical Price Regulation: Public Perceptions, Economic Realities, and Empirical Evidence

  By oseph H. Golec, John A. Vernon, American Enterprise Institute
  
  Book, 01/07/2009
  

  Breakthrough drugs have saved millions of lives and improved the health of countless people around the world. Unfortunately, they are also expensive, leading many political leaders to call for price controls, importation, or other procedures to reduce their cost. In Pharmaceutical Price Regulation: Public Perceptions, Economic Realities, and Empirical Evidence, John A. Vernon and Joseph H. Golec argue that price controls and other cost-limiting measures will starve pharmaceutical companies of the R&D money required to develop new drugs. A drug can cost $1 billion or more before it ever appears in the marketplace--and only three out of every ten new drugs ever recoup their development costs. This groundbreaking monograph demonstrates empirically how the free-market system of drug pricing is vital to the development of new breakthrough drugs.

  
  
  
• Monetary Policy/Financial Regulation
  

  Everything You Wanted to Know about Credit Default Swaps—but Were Never Told

  By Peter J. Wallison, American Enterprise Institute
  
  Financial Services Outlook, 01/07/2009
  

  Credit default swaps (CDSs) have been identified in media accounts and by various commentators as sources of risk for the institutions that use them, as potential contributors to systemic risk, and as the underlying reason for the bailouts of Bear Stearns and AIG. These assessments are seriously wide of the mark. They seem to reflect a misunderstanding of how CDSs work and how they contribute to risk management by banks and other intermediaries. In addition, the vigorous market that currently exists for CDSs is a significant source of market-based judgments on the credit conditions of large numbers of companies—information that is not publicly available anywhere else. Although the CDS market can be improved, excessive restrictions on it would create considerably more risk than it would eliminate.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Shaky Science: Inconvenient Truths Ignored by EPA in Its Proposal to Regulate Carbon Dioxide Emissions

  By Patrick J. Michaels, Cato Institute
  
  Public Interest Comment, 01/05/2009
  

  The following document details important scientific findings on global warming that are generally not known to those involved in ongoing policy debates. A recent EPA call for public commentary on a proposed rulemaking on carbon dioxide emissions provided a remarkable opportunity to comprehensively analyze recent science that is often ignored in the push for carbon dioxide regulation. Readers are encouraged to cite the vast number of findings noted in this rather extensive paper.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Environmental Justice: Opportunities Through Markets

  By H. Spencer Banzhaf, PERC – The Property and Environment Research Center
  
  PERC Policy Series, 01/02/2009
  

  Markets are not only efficient, but they provide an opportunity for individuals and groups to enhance their welfare, given their limited resources. Consequently, undermining market outcomes may sabotage the efforts of members of the most disadvantaged groups to improve their lives. Focusing on the root problem—poverty—is likely to be a more effective way for improving the lives of the poor than improving environmental quality in poor neighborhoods.

  
  
  
• International Trade/Finance
  

  Sovereign Wealth Funds: New Voluntary Principles a Step in the Right Direction

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  The rise of sovereign wealth funds carries implications for global financial market stability and the national interests of countries receiving these funds. Newly released principles should help to ensure that SWFs are managed effectively, make sound investment decisions, and are more transparent. As the collaborative process to establish the GAPP indicates, the growing trade and investment ties that bind the economies of the world together are more likely to promote responsible economic behavior than to entice mayhem. Investment is about creating wealth, not destroying it. Erecting barriers to foreign investment would stifle that creative process, leaving all countries poorer.

  
  
  
• Foreign Policy/International Affairs
  

  Diplomacy in an Age of Faith: How Failing to Understand the Role of Religion Hinders America's Purposes in the World

  By Thomas Farr, Terry Miller, The Heritage Foundation
  
  Heritage Lecture, 01/02/2009
  

  The American foreign policy establishment has failed to grasp the significance of the resurgence of religion around the world. It has missed the opportunity to incorporate the U.S. policy of advancing religious freedom to root democracy so that it matures and consolidates, particularly in highly religious societies, and as a means of diplomatically fighting the war against terrorism.

  
  
  
• International Trade/Finance
  

  New CFIUS Regulations Support U.S. National and Economic Security Concerns

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  On November 14, the U.S. Treasury Department released the Final Regulations implementing the Foreign Investment and National Security Act of 2007 (FINSA) which expands the authority, scope, and size of the Committee on Foreign Investments in the United States (CFIUS) and requires increased congressional oversight of CFIUS decisions. In general, the new rules over FINSA implementation increase the transparency of the CFIUS process and should reduce the level of uncertainty that foreign investors face. Similarly, requirements for additional communication between CFIUS and Congress over CFIUS investigations should help to reduce Congress’ uncertainty over the safety of foreign acquisitions. The new implementing regulations may need to be fine-tuned over time, but they are likely to result in a sound balance between America’s national and economic security concerns.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The Oil-Price Roller Coaster: Global Challenges for the Obama Administration

  By Ariel Cohen, Owen Graham, The Heritage Foundation
  
  Backgrounder, 01/02/2009
  

  After the current economic slump, a tight transportation-fuel (petroleum) market is likely to return in the years ahead due to global demand, heightened political risks, and increasing resource nationalism by oil producing governments. This perfect storm of supply and demand turbulence may have temporarily subsided, but two major implications remain. First, oil-producing states will return to accruing more global influence in the years to come, wielding the energy weapon, pressuring consumer nations, and placing constraints on the foreign policy options for the United States and its allies. Second, the world could face a major supply crunch by 2015 or even before. These trends are far-reaching and have major implications for national security and energy policies, and must be anticipated by the incoming Obama Administration.

  
  
  
• International Trade/Finance
  

  America Should Support the Trans-Pacific Strategic Economic Partnership

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  In March 2009, the United States, Australia, and Peru will sit down with member countries of the Trans-Pacific Strategic Economic Partnership (P-4) to negotiate the potential expansion of the P-4 trade agreement. The P-4 is a high-standard, comprehensive agreement that lowers tariffs and non-tariff barriers to trade while preserving national sovereignty. The agreement promotes sound labor and environmental standards, greater regulatory transparency, and the protection of intellectual property rights and is WTO-compliant. For the United States in particular, international trade has played an important part in America’s struggle to stay above water during the current economic turmoil: Between the second quarter of 2007 and the second quarter of 2008, trade has accounted for almost 60 percent of U.S. GDP growth. America depends on international trade—trade that can be made freer with the new Administration’s support of negotiations under the Trans-Pacific Strategic Economic Partnership.

  
  
  
• Health Care
  

  How a Public Health Plan Will Erode Private Care

  By Robert E. Moffit, The Heritage Foundation
  
  Backgrounder, 01/02/2009
  

  When it comes to the deadly details, millions of Americans could be in for an unpleasant surprise. During the election campaign, President-elect Barack Obama promised—repeatedly—that Americans who already had health insurance would not face any changes in their coverage and that their costs would go down, saving the typical family $2,500 annually in premiums. It turns out, however, that these promises cannot be fulfilled. Under the health reform plan that the President-elect has outlined, including variations of his basic approach that have been refined by Senator Max Baucus (D-MT) and former Senator Tom Daschle (D-S.D.), President-elect Obama’s pick for Secretary of Health and Human Services, millions of Americans will indeed lose their existing coverage, and the promised premium savings are unlikely to materialize.

  
  
  
• International Trade/Finance
  

  The Future of the WTO Doha Round

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  The two biggest problems impeding progress in the Doha Round are: (1) continued disagreement over the special safeguard mechanism, used to protect domestic farmers in developing countries from agricultural import surges; and (2) voluntary sector-specific agreements to make deep cuts in manufacturing tariffs.

  
  
  
• International Trade/Finance
  

  Time to End “Zeroing” in Trade Dumping Calculations

  By Daniella Markheim, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  The United States refuses to accept WTO recommendations that America’s anti-dumping methodology be brought into compliance with international trade rules. The longer America defies or ignores these recommendations, the more likely complainants will be allowed to impose retaliatory duties or other punitive measures against U.S. products. The United States insists that the law is being misinterpreted and plans to use the WTO Doha Round of multilateral trade negotiations to permit zeroing in WTO rules. Fortunately, for the cause of free and fair trade, the effort has met with strong opposition.

  
  
  
• Foreign Policy/International Affairs
  

  Indonesian President’s Praise of Natsir Raises Questions

  By Walter Lohman, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  In the case of President Yudhoyono’s praise of Natsir, one can only conclude that either the need to accommodate Islamist sentiment is much greater than Indonesia’s friends abroad appreciate or that he is miscalculating the strength of the Islamists and unnecessarily appropriating beliefs he doesn’t himself hold.

  
  
  
• National Security
  

  National Security Resolutions for 2009

  By James Jay Carafano, The Heritage Foundation
  
  WebMemo, 01/02/2009
  

  The United States should resolve to help make the world a better place with initiatives that keep Americans safe, free, and prosperous in the coming year. This paper presents a short list of commitments Washington can offer.

  
  
  
• National Security
  

  Toward an Alternative Strategic Security Posture

  By Baker Spring,
  
  WebMemo, 01/02/2009
  

  On December 12, the Congressional Commission on the Strategic Posture of the United States released its interim report. Individuals both within the commission and outside it fervently desire to rid the world of nuclear weapons. The commission recognizes, however, that this goal is “extremely difficult to attain and would require a fundamental transformation of the world political order.” The commission’s recommendations regarding global nuclear disarmament are not only qualified; they are conditioned on taking other steps regarding the broader strategic posture of the United States. Included in these are steps to field robust missile defenses and preserve U.S. conventional superiority. In this context, those who strongly favor nuclear disarmament should recognize that robust strategic defensive measures—including ballistic missile defenses—and conventional superiority can create a circumstance where nuclear disarmament is appropriate.

  
  
  
• Economic and Political Thought
  

  Governing by the Founder’s Constitution: The Presidency of Warren G. Harding

  By John Hendrickson, Public Interest Institute
  
  Policy Study, 01/02/2009
  

  Warren G. Harding may not have had the philosophical political understanding of Calvin Coolidge or Herbert Hoover, but he did understand the importance of governing by the Constitution. Harding rejected the progressive view of the “Living” Constitution and he believed in the principle of equality of opportunity, which was soundly identified by Abraham Lincoln. Harding’s presidency was based on governing and advocating policies based upon constitutional government, something which should be remembered more often in presidential history.

  
  
  
• Family, Culture & Community
  

  Nonprofit and Faith-based Organizations: The Face of Future Government Reform

  By Stephen M. King, Public Interest Institute
  
  Institute Brief, 01/02/2009
  

  There is growing support for nongovernmental actors to operate in policy areas once dominated by govern¬ment. These actors, including nonprofit (NP) and faith-based organizations (FBO), are increasing in numbers and influence. Since 2001, the federal government, especially under President Bush’s first administration, and development of the White House Office of Faith-Based Organizations and Community Initiatives (FBOCI), and along with many cooperative state and local government efforts, has tried to meet many of the public’s demands for social and welfare services through the use of faith-based organizations.

  
  
  
• Education
  

  School Choice in America and Iowa: The Time for Change is Now

  By Stephen M. King, Public Interest Institute
  
  Institute Brief, 01/02/2009
  

  Statistics abound that show American K-12 government-schooled students are falling behind in the basics: reading, writ¬ing, mathematics, and science. According to the 2006 Program for International Student Assessment, U.S. 15-year-olds scored below average in science and math. Further, a recent Heritage Foundation report provided performance scores from U.S. high schools, based on the U.S. Department of Education’s (DOE) National Assessment of Educational Progress (NAEP) data. The results are disappoint¬ing. Thirty-nine percent of American 12th graders scored “below basic” on the 2005 NAEP math exam; 47 percent of 12th graders cannot demonstrate “an adequate understanding of important events in American history;” and only 66 percent of 12th grade students scored “basic” or above on the 2006 NAEP civics exam.

  
  
  
• Economic and Political Thought
  

  A Work of Recovery

  By Larry P. Arnn, Hillsdale College
  
  Imprimis, 01/02/2009
  

  The Autumn of 2008 has brought events in politics and economics that touch upon the meaning of our country and how it shall be governed in the future. These events are, as Lincoln said of the results of the Civil War, both “fundamental and astounding.” They bring us another step away from the principles and institutions that have made our country both good and great. It is time now for recovery, both economic and political. The two are related, but I will speak here mainly of political recovery, which will in the end determine economic policy for many years. The goal of that recovery, I will argue, is simple to state: we must recover the art of constitutional government.

  
  
  
• Education
  

  Our Fading Heritage: Americans Fail a Basic Test on Their History and Institutions

  By American Civic Literacy Program, Intercollegiate Studies Institute
  
  American Civic Literacy Program, 01/02/2009
  

  Seventy-one percent of Americans failed the 2008-2009 civic literacy test, with an overall average score of 49 percent.

  
  
  
• Health Care
  

  “Evidence-Based Medicine”: Rationing Care, Hurting Patients

  By Twila Brase, American Legislative Exchange Council
  
  The State Factor, 01/02/2009
  

  Looming on the visible horizon of American health care is a new attempt to control the practice of medicine and limit—indeed, ration—patient access to health care services. While doctors often refer to it as “cookbook medicine,” this quickly advancing technocratic strategy is best known by the name “evidence-based medicine” (EBM). Although treatment decisions have long been an accepted amalgamation of medical science, personal expertise, ethics, patient preference and the physician’s best clinical judgment in the care of an individual patient, EBM proponents from both sides of the political aisle are rapidly moving to standardize patient care into universal, one-size-fits-all practice directives. As this report makes clear, the EBM initiative involves a technocratic takeover of the practice of medicine through centralized decision making, guideline development, clinical surveillance, and pay-for- performance.