Recent Policy Studies

• Education
  

  Progress Report 2009: Homeschool Academic Achievement and Demographics

  By Brian D. Ray, Home School Legal Defense Association
  
  Report, 08/28/2009
  

  Homeschoolers are still achieving well beyond their public school counterparts—no matter what their family background, socioeconomic level, or style of homeschooling. In the study, homeschoolers scored 34–39 percentile points higher than the norm on standardized achievement tests. The homeschool national average ranged from the 84th percentile for language, math, and social studies to the 89th percentile for reading.

  
  
  
• Education
  

  What Will They Learn?

  By American Council of Trustees and Alumni, American Council of Trustees and Alumni
  
  Report, 08/28/2009
  

  In their course catalogs and mission statements, colleges frequently extol the virtues of a broad-based, “well-rounded” liberal arts education. However, these worthy sentiments often do not translate into worthy general education requirements. The disconnect is especially notable when it comes to liberal arts schools. In particular, the top Liberal Arts Colleges have allowed their general education curricula to deteriorate.

  
  
  
• Budget & Taxation
  

  Out of Control: The Explosion of Illinois State Government Spending

  By Illinois Policy Institute, Illinois Policy Institute
  
  Policy Points, 08/28/2009
  

  A sensible expenditure limit would ensure that state spending doesn’t grow beyond taxpayers’ ability to pay for it. This spending “brake” still allows government to grow, but it prevents it from speeding dangerously out of control. Instead of reaching ever deeper into the taxpayer’s wallet, government will be encouraged to focus on internal efficiencies and innovations to improve and expand services.

  
  
  
• Budget & Taxation
  

  This Bid’s for You!

  By Illinois Policy Institute, Illinois Policy Institute
  
  Policy Brief, 08/28/2009
  

  In January 2009, Chicago participated in one reverse auction event with BidBridge, which involved bidding on snow removal equipment for O’Hare airport. Eight months after this auction, the city decided to award the winning bidder for its O’Hare airport snow removal equipment on August 6, 2009. By implementing a reverse auction bid instead of relying on its traditional sealed bid auction, Chicago has saved taxpayers $1 million for the O’Hare deal. According to a BidBridge press release, “The winning bid stood at $19,586,940 – nearly $1 million less than a contested one-price format bid that occurred several months before with the four same suppliers.” More of this cost-efficient, quality-driven spending activity needs to occur at both local and state levels of government.

  
  
  
• Education
  

  Ten Myths about North Carolina’s Private Schools: A Parent’s Guide

  By Terry Stoops, John Locke Foundation
  
  Policy Report, 08/28/2009
  

  North Carolina families are beginning to recognize that finding alternatives to public schools may be the only way to guarantee that children receive a quality education. The growing disenchantment with the state’s public schools has forced financially able parents to pay twice for their child’s education – taxes to pay for public schools and tuition to pay for the private schools that their children attend. On the other hand, families that cannot afford to send their children to private schools are demanding that the state of North Carolina provide them a scholarship or tax credit that covers part or all of the cost of a private school education. Better information about North Carolina’s private schools is the first step toward persuading legislators and policymakers to increase educational options for North Carolina families.

  
  
  
• Budget & Taxation
  

  Taxing Sin

  By Richard Williams, Katelyn Christ, Mercatus Center
  
  Mercatus on Policy, 08/28/2009
  

  So-called sin taxes, even those passed with the best of intentions, have undesirable consequences because they contradict basic principles of economics, finance and, most importantly, free choice. In general, since proposals to tax lifestyle choices are concentrated on narrow consumer choices, they are rarely efficient. What’s more, taxing sin usually does not end up significantly altering the “sinful” behavior but rather rewards the very private organizations or politicians who have lobbied for the tax. Also, sin tax revenue is collected primarily at the expense of the poor and crowds out private expenditures on health care.

  
  
  
• Economic and Political Thought
  

  The Depression and the Failure of Impersonal Trust: What Have We Really Learned from the Great Depression?

  By John V. C. Nye, Mercatus Center
  
  Mercatus on Policy, 08/28/2009
  

  Above all, what happened in the early 1930s was a loss of trust in authority, specifically a loss of faith that the institutions that ordered society could be counted on to provide stability and enable prosperity for those willing to work for it. The great western idea that suffered the greatest damage was the extent to which anonymous exchange with millions of strangers could be trusted to provide good outcomes without supervision or filtering. This idea—essentially the idea of impersonal social trust—was the most dramatic accomplishment of industrial civilization’s rise from the eighteenth to the early twentieth century.

  
  
  
• Economic and Political Thought
  

  Projections Past and Future: Economic Imagination and the Financial Crisis 2007–2012

  By Anthony J. Evans, Mercatus Center
  
  Working Paper, 08/28/2009
  

  Economists have an important voice to add to the public debate, but we need to recognize that we are not oracles and should not pretend to be. If the media ask us to forecast when the upturn will truly arrive, we should resist. We should also resist sweeping generalizations about the effect of policy. Rather, we can assess the policy response based on considered counterfactuals about what might have happened otherwise. And we can offer projections of how the economy will progress should alternative futures emerge. In the same way that you do not expect a mountain guide to tell you what will happen at the summit, you can expect insightful commentary during the ascent. Economists need not consign themselves to ex-post analysis masquerading as insight. We should build projections past and future, and in doing so help make a complex economy a little more intelligible.

  
  
  
• Economic and Political Thought
  

  Doing the Right Thing: The Private Sector Response to Hurricane Katrina as a Case Study in the Bourgeois Virtues

  By Steven Horwitz, Mercatus Center
  
  08/28/2009
  

  From their first reactions when Katrina hit to the choices they made in the weeks that followed to their role in the long run recovery, private firms and their employees have demonstrated that the capitalist order involves far more than the sort of narrow self-interest that is the bedrock assumption of many of the system’s defenders and critics. Rather than being an ethics- or virtue-free realm of contending atomistic individuals, the market order is populated with individuals with a variety of reasons for acting as they do and whose purposes encompass both satisfying their own self-interest and serving their fellow humans. As McCloskey argues, not only does capitalism encompass a broad range of bourgeois virtues, many of its features make it possible for those virtues to flower. Even in the very difficult soil of perhaps the greatest social-natural disaster in U.S. history, the bourgeois virtues were very much on display in the private sector’s response to Hurricane Katrina.

  
  
  
• Economic Growth
  

  Corruption is Bad for Growth (Even in the United States)

  By Noel D. Johnson, Courtney L. LaFountain, Steven Yamarik, Mercatus Center
  
  Working Paper, 08/28/2009
  

  Our finding that corruption is bad for growth undermines the claim that “development improves political institutions, rather than political institutions determining development.”

  
  
  
• Budget & Taxation
  

  Sales Tax Holidays: Politically Expedient but Poor Tax Policy

  By Mark Robyn, Micah Cohen, Joseph Henchman, Tax Foundation
  
  Special Report, 08/28/2009
  

  Sales tax holidays neither promote economic growth nor increase purchases. They create complexities for all involved, while inserting the political process into consumer decisions. By distracting high-tax states from addressing real problems with their tax system, holidays undermine efforts to provide legitimate relief to consumers in general and the poor in particular. Sales tax holidays are no part of sound tax policy

  
  
  
• Budget & Taxation
  

  The Excess Burden of Taxes and the Economic Cost of High Tax Rates

  By Robert Carroll, Tax Foundation
  
  Special Report, 08/28/2009
  

  The emphasis in tax policy has taken a turn towards redistribution and increasing progressivity through higher tax rates. Absent from most policy discussions, however, is recognition that the full cost of these policies exceeds the revenue raised. Virtually all taxes involve what economists call the “excess burden” of a tax and this additional burden can be substantial. While the current income tax may raise roughly $1 trillion, the actual cost to the economy is between $114 billion and $150 billion more. But, more relevant to the current policy debate is the effect of allowing the top two tax rates to increase in 2011 when the tax cuts enacted in 2001 and 2003 sunset and the recent proposal for a new high income surtax to help finance health care reform. These tax increases will push the top marginal tax rate from roughly 36 percent to over 46 percent and increase the excess burden of the income tax to over 20 percent. Moreover, the excess burden of the higher rates nearly exceeds the revenue raised; that is, the full burden of these taxes may well be nearly twice the revenue they raise.

  
  
  
• Budget & Taxation
  

  Towards Understanding the Full Burden of High Tax Rates

  By Robert Carroll, Tax Foundation
  
  Fiscal Facts, 08/27/2009
  

  The emphasis in tax policy has taken a turn towards redistribution and increasing progressivity through higher tax rates. Absent from most policy discussions, however, is recognition that the full cost of these policies exceeds the revenue raised. Virtually all taxes involve what economists call the “excess burden” of a tax and this additional burden can be substantial. While the current income tax may raise roughly $1 trillion, the actual cost to the economy is between $114 billion and $150 billion more. But, more relevant to the current policy debate is the effect of allowing the top two tax rates to increase in 2011 when the tax cuts enacted in 2001 and 2003 sunset and the recent proposal for a new high income surtax to help finance health care reform. These tax increases will push the top marginal tax rate from roughly 36 percent to over 46 percent and increase the excess burden of the income tax to over 20 percent. Moreover, the excess burden of the higher rates nearly exceeds the revenue raised; that is, the full burden of these taxes may well be nearly twice the revenue they raise.

  
  
  
• Foreign Policy/International Affairs
  

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

  By Christopher J. Coyne, Matt E. Ryan, Independent Institute
  
  The Independent Review, 08/27/2009
  

  In criticizing the aid community’s rhetoric, development economist P. T. Bauer notes, “To call official wealth transfers ‘aid’ promotes an unquestioning attitude. It disarms criticism, obscures realities, and prejudges results. Who can be against aid to the less fortunate?” Nowhere is Bauer’s critique more relevant than in the continued delivery of foreign aid to the world’s worst dictators. We have little evidence that this aid does any good, but clear indications that it causes real harm. Nevertheless, the governments of developed countries continue to provide this aid to the worst of the worst.

  
  
  
• Monetary Policy/Financial Regulation
  

  The Road Ahead for the Fed

  By John B. Taylor, John D. Ciorciari, Hoover Institution
  
  Book, 08/27/2009
  

  The Federal Reserve is the single most important economic policy institution in the United States. Its recent unprecedented actions and interventions have raised serious concerns in many quarters about inflation, as well as the independence and effectiveness of the Fed. In The Road Ahead for the Fed, a group of expert contributors examine the recent actions of the Federal Reserve and discuss how the Fed arrived at this position, how it can best deal with the road ahead, and how it might reduce the likelihood of crisis-driven interventions in the future. The authors suggest directions for the Fed going forward by drawing on past political, historical, and market principles. They then explain how the Fed arrived at its current unprecedented position and offer practical suggestions on how to exit. And although they concur that market-based mechanism and regulatory reforms will help keep the Fed on the road to good monetary policy in the future, they offer a range of views about whether to emphasize markets or government reform.

  
  
  
• Labor
  

  The Case Against the Employee Free Choice Act

  By Richard A. Epstein, Hoover Institution
  
  Book, 08/27/2009
  

  In The Case against the Employee Free Choice Act, Richard Epstein examines the Employee Free Choice Act (EFCA) and explains why it is a large step backward in labor relations that will work to the detriment of employees, employers, and the public at large. In making his case, Epstein shows how the three major components of EFCA—the card check method of union recognition, compulsory interest arbitration, and increased penalties for employer unfair labor practices—will only exaggerate the flaws of the current system and undermine the long-term set of labor practices. He presents powerful and principled reasons to explain why the decline of union membership has little to do with the supposed flaws of the current system and everything to do with globalization and technology. In addition, he demonstrates the significant constitutional challenges to both the card check and arbitration provisions.

  
  
  
• International Trade/Finance
  

  Mad about Trade: Why Main Street America Should Embrace Globalization

  By Daniel Griswold, Cato Institute
  
  Book, 08/27/2009
  

  If you look at where nearly all of the clothes in your closet were manufactured, as Dan Griswold does at the opening of Mad about Trade, the picture is clear. China, Canada, Bangladesh, Vietnam, Peru, Korea, Egypt, India, Mexico, Thailand, and more—a United Nations of pants, shirts, ties, and jackets. In every sense of the word, trade suits us exceedingly well. Politicians and pundits can rage against free trade and globalization, but much of what they convey is myth. Griswold embraces the global marketplace and shows how free trade is the American family’s best friend.

  
  
  
• Regulation & Deregulation
  

  Principles for Property Mitigation Discounts

  By Eli Lehrer, Competitive Enterprise Institute
  
  WebMemo, 08/27/2009
  

  Mitigation makes sense. Better built properties deserve mitigation discounts and, in a well-functioning market, will almost always get them. Legislators should be wary of efforts to mandate specific mitigation discounts without paying attention to the myriad other factors that can play a major role in determining the value of various mitigation measures. Insofar as they act to promote mitigation, legislatures should make the free market an ally. The market will promote a holistic focus on mitigation. Mitigation discounts for home adaptations are part of an effective mitigation policy, which should also include decision-making mechanisms for about zoning, development, open space conservation, and a host of other issues. Simply installing storm shutters does not always make things better. Letting market forces work does.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  The High Cost of Cash for Clunkers

  By Todd Myers, H. Sterling Burnett, National Center for Policy Analysis
  
  Brief Analysis, 08/27/2009
  

  Congress gave in to pressure to expand CARS despite the fact that it will accomplish little if anything to prevent climate change or reduce Americans’ dependence on foreign oil. While the reduction in air pollution may be substantial, before the federal government decides to continue or expand the program in the future, it should carefully assess what it has and can be realistically accomplished, and what the cost is relative to other policies that could be used to reach the same goals.

  
  
  
• Crime, Justice & the Law
  

  How Tort Reform Cut Florida Workers’ Compensation Costs

  By N. Michael Helvacian, National Center for Policy Analysis
  
  Brief Analysis, 08/27/2009
  

  Florida’s experience shows the ability of tort reform to reduce litigation costs without harm to the injured. Applied nationwide, such reforms could potentially shave billions of dollars off the nation’s health care bills while improving the quality of patient care.

  
  
  
• Monetary Policy/Financial Regulation
  

  Storming Wall Street: A Comparison of the Two Plans to Overhaul Financial Services Regulation in the 21st Century

  By Anthony Randazzo, Reason Foundation
  
  Policy Brief, 08/27/2009
  

  President Obama’s reform proposal for financial services regulation falls short of addressing the most important problem with the current regulatory system: taxpayer protection for private sector failure. The codification of bailouts and the too-big-to-fail policy extends some of the very problems that contributed to the financial crisis and recession. The private sector should be put on notice: there will be no more bailouts. The Republican plan also has some failings, but largely gets it right on “too big to fail.” The use of bankruptcy law is a much better option than resolution authority that will have to be funded by taxpayer dollars or inequitable fees charged to all Tier 1 firms or perhaps the whole industry. It will be important, though, for the bankruptcy process to be transparent, unlike the Obama administration’s recent plan for General Motors, which prepackaged a deal irrespective of the rights of bondholders and forced it through court proceedings.

  
  
  
• Transportation/Infrastructure
  

  Gridlock and Growth: The Effect of Traffic Congestion on Regional Economic Performance

  By David T. Hartgen, M. Gregory Fields, Reason Foundation
  
  Policy Study, 08/27/2009
  

  Most studies of productivity have focused on central business district access; this study suggests that other sites may be more important in the regional economies. Regional productivity seems to depend more on access to other locations than on access to downtown. Not only is regional productivity more sensitive to access to non-central business district points, but the cost of congestion relief for those points may be less too. An implication of this study is that current transportation plans may be placing too much focus on downtowns. In mid-sized cities where car use is overwhelmingly predominant the impact of suburban transportation improvements will be particularly effective in spurring regional economic performance. Clearly, the role of suburbs, malls and universities in regional economic performance needs to be more fully explored.

  
  
  
• Economic and Political Thought
  

  Whatever Happened to the Work Ethic?

  By Steven Malanga, Manhattan Institute
  
  City Journal, 08/27/2009
  

  What would Tocqueville or Weber think of America today? In place of thrift, they would find a nation of debtors, staggering beneath loans obtained under false pretenses. In place of a steady, patient accumulation of wealth, they would find bankers and financiers with such a short-term perspective that they never pause to consider the consequences or risks of selling securities they don’t understand. In place of a country where all a man asks of government is “not to be disturbed in his toil,” as Tocqueville put it, they would find a nation of rent-seekers demanding government subsidies to purchase homes, start new ventures, or bail out old ones. They would find what Tocqueville described as the “fatal circle” of materialism—the cycle of acquisition and gratification that drives people back to ever more frenetic acquisition and that ultimately undermines prosperous democracies.

  
  
  
• Health Care
  

  Maybe We Should Spend More on Healthcare

  By James V. DeLong, American Enterprise Institute
  
  The American, 08/27/2009
  

  So what should be done about healthcare costs? Many things, including a phase-out of employment-based health insurance in favor of other policies; elimination of mandates that require insurance coverage of designated procedures; availability of programs that combine health savings accounts with catastrophe insurance; availability of policies across state lines; reform of the tort system; reform of cost accounting procedures that create dysfunctional incentives for industry participants; availability of high deductibles so that insurance can be insurance rather than socialized medicine; a second look at our policy of forcing the young to subsidize the geezers, who are after all the wealthiest segment of the population, and who can afford to spend more on healthcare because other demands on their income are less. It is a long list. Take care of these reforms and total spending will take care of itself. Spending may become higher or lower—who knows?—but it will better represent a reasonable assessment of value for money. These reforms will also forestall the most worrisome aspect of the current “spend too much” panic: the urge to cut costs at the expense of the future.

  
  
  
• Health Care
  

  Here’s Why the Public Plan Won’t Work

  By Joseph R. Antos, Jeet Guram, American Enterprise Institute
  
  The American, 08/27/2009
  

  The president’s rhetoric on choice and competition is closer to the mark than his policies. Consumers do need meaningful health insurance choices—rather than a one-size-fits-all plan dictated by a federal insurance commissioner. Competition would promote efficiency and innovation—but trading 50 sets of state regulations for federal regulations that are even more restrictive would eliminate the private competitors. Instead of letting a thousand flowers bloom, the president wants to uproot the garden. Let’s level the playing field in health insurance, but let’s do that by lowering the regulatory barriers to meaningful competition. That means less government, not more. Voters are extremely leery of a further extension of government control into their lives, and healthcare is as personal as it gets. That is the unmistakable message coming from congressional town hall meetings this summer. Policymakers would be well advised to listen.

  
  
  
• Labor
  

  The State of the American Worker 2009

  By Karlyn Bowman, American Enterprise Institute
  
  Report, 08/27/2009
  

  The vast majority of workers are highly satisfied with their jobs. There has been little change in the responses since survey organizations started measuring them regularly in the 1970s.

  
  
  
• Health Care
  

  Shattered Lives: 100 Victims of Government Health Care

  By Amy Ridenour, Ryan Balis, National Center for Public Policy Research
  
  Monograph, 08/27/2009
  

  There’s no such thing as a free lunch, but the government keeps trying to sell us one anyway. And so it is with government-run health care. Sold to the public in the guise of “free,” it is in fact more costly than any private alternative, for its price tag is more than financial. Those who chose to rely on government health care frequently pay not just in taxes, but in a more costly currency: pain, fear, suffering and death. In the pages that follow you will find 100 stories telling the tales of people who paid a costly price within their nation’s government-run health care system.

  
  
  
• Foreign Policy/International Affairs
  

  How to Save the U.S.-Japan Alliance

  By Bruce Klingner, The Heritage Foundation
  
  Backgrounder, 08/27/2009
  

  The U.S.-Japan alliance remains crucial, but it is underperforming and weaker than generally perceived. A failure by America’s leaders to understand, appreciate, and take necessary transformative measures raises the risk of crises in Asia and around the world. There are issues that could easily lead to a stagnant alliance unable to adapt to a rapidly changing Asian security environment.

  
  
  
• Health Care
  

  The Public Health Insurance Option: Unfair Competition on a Tilting Field

  By John S. Hoff, The Heritage Foundation
  
  Backgrounder, 08/27/2009
  

  Advocates of a “public option” government insurance plan assure us that it would compete with private insurers on a level playing field. In reality, the “competition” would be rigged, the government plan would likely capture a large percentage of the insurance market, and the result would be a giant step toward a single-payer, nationalized health care system much like those in Europe and Canada.

  
  
  
• Natural Resources, Energy, Environment, & Science
  

  Blaming Oil Speculators: A Costly Diversion from Real Solutions to Rising Oil Prices

  By Ben Lieberman, J.D. Foster, The Heritage Foundation
  
  WebMemo, 08/27/2009
  

  Oil speculation is not the long-term cause of high or volatile oil prices, and ill-advised market restrictions may well prove counterproductive.

  
  
  
• Immigration
  

  Controlling Illegal Immigration: State and Local Governments Must Do More

  By Matt A. Mayer, The Heritage Foundation
  
  Special Report, 08/27/2009
  

  Politicians should focus their efforts on securing the border, deporting apprehended aliens, and increasing the legal avenues for foreign workers to come to the United States. Congress can repeal the laws that prevent state and local action from securing driver’s licenses and identification cards, prohibiting access to non-emergency public benefits, ending access to higher-education benefits, and restricting voting to citizens.

  
  
  
• Budget & Taxation
  

  New Budget Estimates Show Unsustainable Spending and Debt

  By Brian M. Riedl, The Heritage Foundation
  
  WebMemo, 08/27/2009
  

  The OMB’s new budget spending estimates are alarming and absolutely unsustainable-and are the true cause of these appalling levels of deficit and debt.

  
  
  
• Budget & Taxation
  

  The Economy Hits Home: Entitlements

  By The Heritage Foundation, The Heritage Foundation
  
  The Economy Hits Home, 08/27/2009
  

  Why every American born today owes $184,000 and what to do about it.

  
  
  
• National Security
  

  Why Congress Cares About Engine Competition for the Joint Strike Fighter

  By Mackenzie M. Eaglen, The Heritage Foundation
  
  WebMemo, 08/27/2009
  

  Pentagon officials must follow the law and require all major programs and subsystems to compete, including the F-136 Joint Strike Fighter alternate engine.

  
  
  
• Immigration
  

  E-Verify: Challenges & Opportunities

  By Jena Baker McNeill, The Heritage Foundation
  
  Testimony, 08/27/2009
  

  An effective immigration policy will be one that has the effect of reducing illegal immigration in the United States. At the same time, policies must center on three goals: keeping America free, keeping it safe, and keeping it prosperous. We should not compromise one to gain another; all three can and should be met with respect to America’s immigration policies. E-Verify is a tool that meets these requirements.

  
  
  
• Foreign Policy/International Affairs
  

  Captive Nations Past and Present

  By Helle C. Dale, The Heritage Foundation
  
  Heritage Lecture, 08/27/2009
  

  Captive nations are not a thing of the past. Communist and other totalitarian regimes like China and North Korea violate individual rights and freedoms in almost every capacity, and allegedly democratic governments like Venezuela do so as well. Confronting these nations on the international stage is a challenge that the United States, as the world’s freest and most powerful nation, must continue to meet.

  
  
  
• Foreign Policy/International Affairs
  

  The U.N.’s Arms Trade Treaty: A Dangerous Multilateral Mistake in the Making

  By Ted R. Bromund, Steven Groves, The Heritage Foundation
  
  Backgrounder, 08/27/2009
  

  The treaty contemplated by the U.N.’s October 2008 arms trade resolution would be a license to almost all states, no matter how irresponsible, to buy and sell arms. It would endanger U.S. arms export control policy, clash with the Constitution, offer a dangerous justification for dictatorial rule, and make it illegal under international law for the U.S. to support freedom fighters abroad.

  
  
  
• Education
  

  Choosing the Right College

  By John Zmirak, Intercollegiate Studies Institute
  
  Book, 08/27/2009
  

  Choosing the Right College is the indispensable resource for students—and their parents—who want to know what really goes on at America’s top schools. Bypassing the irrelevant data and straight-from-the-brochure accounts of campus life that are typical of other college guides, Choosing the Right College uses on-campus sources to turn up the best—and worst—aspects of nearly 140 leading colleges and universities. It also shows how you can get a real education at virtually any school. You’ll learn about: the quality of curricula; the rigor and vigor of major academic departments; the intellectual freedom that prevails—or not—on each campus; the schools that have safe campuses and wholesome living arrangements—and those that don’t; the professors to seek out, and the courses that ought to be avoided entirely; the statistics (usually unreported) you need to pay attention to; the most overpriced colleges—and the good values you may not know about.